VARIABLE INSURANCE PRODUCTS III, 485APOS, 2000-06-30

VARIABLE INSURANCE PRODUCTS III
485APOS, 2000-06-30

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NEW PORTFOLIO
FILING

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT (No. 33-54837)
UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 18 [X]

and

REGISTRATION STATEMENT (No. 811-7205)
UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 18 [X]

Fidelity Variable Insurance Products Fund III
(Exact Name of Registrant as Specified in Charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address Of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number: 617-563-7000

Eric D. Roiter, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)

It is proposed that this filing will become effective

( ) immediately upon filing pursuant to paragraph (b).
( ) on ( ) pursuant to paragraph (b).
( ) 60 days after filing pursuant to paragraph (a)(1).
( ) on ( ) pursuant to paragraph (a)(1) of
Rule 485.
( ) 75 days after filing pursuant to paragraph (a)(2).
(X) on September 13, 2000 pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

( ) this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

SUBJECT TO COMPLETION. PRELIMINARY PROSPECTUS DATED June 30, 2000.
The information in this prospectus is not complete and may be changed.
We may not sell these securities until the registration statement
filed with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any state where the
offer or sale is not permitted.

THE FUND OFFERS ITS SHARES ONLY TO SEPARATE ACCOUNTS OF INSURANCE
COMPANIES THAT OFFER VARIABLE ANNUITY AND VARIABLE LIFE INSURANCE
PRODUCTS. THE FUND MAY NOT BE AVAILABLE IN YOUR STATE DUE TO VARIOUS
INSURANCE REGULATIONS. PLEASE CHECK WITH YOUR INSURANCE COMPANY FOR
AVAILABILITY. IF THE FUND IN THIS PROSPECTUS IS NOT AVAILABLE IN YOUR
STATE, THIS PROSPECTUS IS NOT TO BE CONSIDERED A SOLICITATION. PLEASE
READ THIS PROSPECTUS TOGETHER WITH YOUR VARIABLE ANNUITY OR VARIABLE
LIFE INSURANCE PRODUCT PROSPECTUS.

Like securities of all mutual funds, these securities have
not been approved or disapproved by the Securities
and Exchange Commission, and the Securities and
Exchange Commission has not determined if this
prospectus is accurate or complete. Any
representation to the contrary is a criminal offense.

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
INITIAL CLASS
DYNAMIC CAPITAL
APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Investing in domestic and foreign issuers.

(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

(small solid bullet) Realizing capital gains without considering the
tax consequences to shareholders.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market, or economic developments. Different
parts of the market can react differently to these developments.

(small solid bullet) FOREIGN EXPOSURE. Foreign markets can be more
volatile than the U.S. market due to increased risks of adverse
issuer, political, regulatory, market, or economic developments and
can perform differently from the U.S. market.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Initial Class after Initial
Class has been in operation for one calendar year.

OPERATING EXPENSES

The annual class operating expenses provided below for Initial Class
of the fund are based on estimated expenses. The annual class
operating expenses do not take into account any fees or other expenses
of any variable annuity or variable life insurance product.

Management fee 0.58%

Distribution and Service None
(12b-1) fee

Other expenses 0.61%

Total annual class operating 1.19%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE INITIAL CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.50%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets primarily in common stocks.

FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.

FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates, and
management.

Because the fund is designed for those in tax-qualified retirement
plans and non-profit organizations, FMR's investment strategies may
result in the realization of capital gains without consideration for
the tax consequences to shareholders.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

EQUITY SECURITIES represent an ownership interest, or the right to
acquire an ownership interest, in an issuer. Different types of equity
securities provide different voting and dividend rights and priority
in the event of the bankruptcy of the issuer. Equity securities
include common stocks, preferred stocks, convertible securities, and
warrants.

PRINCIPAL INVESTMENT RISKS

The following factors can significantly affect the fund's performance:

STOCK MARKET VOLATILITY. The value of equity securities fluctuates in
response to issuer, political, market, and economic developments. In
the short term, equity prices can fluctuate dramatically in response
to these developments. Different parts of the market and different
types of equity securities can react differently to these
developments. For example, large cap stocks can react differently from
small cap stocks, and "growth" stocks can react differently from
"value" stocks. Issuer, political, or economic developments can affect
a single issuer, issuers within an industry or economic sector or
geographic region, or the market as a whole.

FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign operations
can involve additional risks relating to political, economic, or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial, and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. All of these factors can make foreign investments,
especially those in emerging markets, more volatile and potentially
less liquid than U.S. investments. In addition, foreign markets can
perform differently from the U.S. market.

In response to market, economic, political, or other conditions, FMR
may temporarily use a different investment strategy for defensive
purposes. If FMR does so, different factors could affect the fund's
performance and the fund may not achieve its investment objective.

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

A class's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates Initial Class's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
However, NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the Securities and Exchange Commission
(SEC). The fund's assets are valued as of this time for the purpose of
computing Initial Class's NAV.

To the extent that the fund's assets are traded in other markets on
days when the NYSE is closed, the value of the fund's assets may be
affected on days when the fund is not open for business. In addition,
trading in some of the fund's assets may not occur on days when the
fund is open for business.

The fund's assets are valued primarily on the basis of market
quotations. Certain short-term securities are valued on the basis of
amortized cost. If market quotations are not readily available or do
not accurately reflect fair value for a security or if a security's
value has been materially affected by events occurring after the close
of the exchange or market on which the security is principally traded
(for example, a foreign exchange or market), that security may be
valued by another method that the Board of Trustees believes
accurately reflects fair value. A security's valuation may differ
depending on the method used for determining value.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Insurance companies offer variable annuity and variable life insurance
products through separate accounts. Separate accounts - not variable
product owners - are the shareholders of the fund. Variable product
owners hold interests in separate accounts. The terms of the offering
of interests in separate accounts are included in the variable annuity
or variable life insurance product prospectus.

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Initial Class is the class's NAV.
Initial Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The Board of Trustees that oversees the fund may refuse to sell shares
of the fund or may stop offering shares of the fund for a period of
time or permanently if required by law, required by regulatory
authorities, or in the best interests of shareholders of the fund.

The price to sell one share of Initial Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Normally, Fidelity will process redemptions by the next business day,
but Fidelity may take up to seven business days to process redemptions
if making immediate payment would adversely affect the fund.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

Under certain circumstances (for example, at the request of a
shareholder), redemption proceeds may be paid in securities or other
property rather than in cash if FMR determines it is in the best
interests of the fund.

The fund offers its shares to separate accounts of insurance companies
that may be affiliated or unaffiliated with FMR and/or each other. The
fund currently does not foresee any disadvantages to variable product
owners arising out of the fact that the fund offers its shares to
separate accounts of insurance companies that offer variable annuity
and variable life insurance products. Nevertheless, the Board of
Trustees that oversees the fund intends to monitor events to identify
any material irreconcilable conflicts that may possibly arise and to
determine what action, if any, should be taken in response.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund earns dividends, interest, and other income from its
investments, and distributes this income (less expenses) to
shareholders as dividends. The fund also realizes capital gains from
its investments, and distributes these gains (less any losses) to
shareholders as capital gain distributions.

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Initial Class shares of the fund.

TAX CONSEQUENCES

Variable product owners seeking to understand the tax consequences of
their investment should consult with their tax advisers or the
insurance company that issued their variable product, or refer to
their variable annuity or variable life insurance product prospectus.

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Dynamic Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity Management & Research (U.K.) Inc. (FMR
U.K.), in London, England, serves as a sub-adviser for the fund. FMR
U.K. was organized in 1986 to provide investment research and advice
to FMR. FMR U.K. may provide investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for the fund.

(small solid bullet) Fidelity Management & Research (Far East) Inc.
(FMR Far East) serves as a sub-adviser for the fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
FMR Far East may provide investment research and advice on issuers
based outside the United States and may also provide investment
advisory services for the fund.

(small solid bullet) Fidelity Investments Japan Limited (FIJ), in
Tokyo, Japan, serves as a sub-adviser for the fund. As of September
28, 1999, FIJ had approximately $16.3 billion in discretionary assets
under management. FIJ may provide investment research and advice on
issuers based outside the United States for the fund.

Beginning January 1, 2001, FMR Co., Inc. (FMRC) will serve as a
sub-adviser for the fund. FMRC will be primarily responsible for
choosing investments for the fund. FMRC is a wholly-owned subsidiary
of FMR.

J. Fergus Shiel is Vice President and manager of VIP Dynamic Capital
Appreciation, which he has managed since inception. He also manages
other Fidelity funds. Since joining Fidelity in 1989, Mr. Shiel has
worked as an analyst and manager.

From time to time a manager, analyst, or other Fidelity employee may
express views regarding a particular company, security, industry, or
market sector. The views expressed by any such person are the views of
only that individual as of the time expressed 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.

The fund pays a management fee to FMR. The management fee is
calculated and paid to FMR every month. The fee is calculated by
adding a group fee rate to an individual fund fee rate, dividing by
twelve, and multiplying the result by the fund's average net assets
throughout the month.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.30%.

FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FMR may, from time to time, agree to reimburse a class for management
fees and other expenses above a specified limit. FMR retains the
ability to be repaid by a class if expenses fall below the specified
limit prior to the end of the fiscal year. Reimbursement arrangements,
which may be discontinued by FMR at any time, can decrease a class's
expenses and boost its performance.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Initial Class's
shares.

Initial Class has adopted a Distribution and Service Plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 that recognizes
that FMR may use its management fee revenues, as well as its past
profits or its resources from any other source, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of Initial Class shares and/or support services
that benefit variable product owners. FMR, directly or through FDC,
may pay significant amounts to intermediaries, such as insurance
companies, broker-dealers, and other service-providers, that provide
those services. Currently, the Board of Trustees has authorized such
payments for Initial Class.

If payments made by FMR to FDC or to intermediaries under the
Distribution and Service Plan were considered to be paid out of
Initial Class's assets on an ongoing basis, they might increase the
cost of a shareholder's investment and might cost a shareholder more
than paying other types of sales charges.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

FMR may allocate brokerage transactions in a manner that takes into
account the sale of shares of the Fidelity(registered trademark)
Variable Insurance Product funds, provided that the fund receives
brokerage services and commission rates comparable to those of other
broker-dealers.

No dealer, sales representative, or any other person has been
authorized to give any information or to make any representations,
other than those contained in this prospectus and in the related
statement of additional information (SAI), in connection with the
offer contained in this prospectus. If given or made, such other
information or representations must not be relied upon as having been
authorized by the fund or FDC. This prospectus and the related SAI do
not constitute an offer by the fund or by FDC to sell shares of the
fund to or to buy shares of the fund from any person to whom it is
unlawful to make such offer.

You can obtain additional information about the fund. The fund's SAI
includes more detailed information about the fund and its investments.
The SAI is incorporated herein by reference (legally forms a part of
the prospectus). A financial report will be available once the fund
has completed its first annual or semi-annual period. The fund's
annual and semi-annual reports include a discussion of the fund's
holdings and recent market conditions and the fund's investment
strategies that affected performance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

The SAI, the fund's annual and semi-annual reports and other related
materials are available from the Electronic Data Gathering, Analysis,
and Retrieval (EDGAR) Database on the SEC's web site
(http://www.sec.gov). You can obtain copies of this information, after
paying a duplicating fee, by sending a request by e-mail to
[email protected] or by writing the Public Reference Section of the
SEC, Washington, D.C. 20549-0102. You can also review and copy
information about the fund, including the fund's SAI, at the SEC's
Public Reference Room in Washington, D.C. Call 1-202-942-8090 for
information on the operation of the SEC's Public Reference Room.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742414.100 VDCAI-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS
DYNAMIC CAPITAL
APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Investing in domestic and foreign issuers.

(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

(small solid bullet) Realizing capital gains without considering the
tax consequences to shareholders.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class after Service
Class has been in operation for one calendar year.

OPERATING EXPENSES

The annual class operating expenses provided below for Service Class
of the fund are based on estimated expenses. The annual class
operating expenses do not take into account any fees or other expenses
of any variable annuity or variable life insurance product.

Management fee 0.58%

Distribution and Service 0.10%
(12b-1) fee

Other expenses 0.61%

Total annual class operating 1.29%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.60%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets primarily in common stocks.

FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

A class's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates Service Class's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
However, NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the Securities and Exchange Commission
(SEC). The fund's assets are valued as of this time for the purpose of
computing Service Class's NAV.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class is the class's NAV.
Service Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Dynamic Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.30%.

FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class's
shares.

Service Class of the fund has adopted a Distribution and Service Plan
pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
the plan, Service Class of the fund is authorized to pay FDC a 12b-1
fee as compensation for providing services intended to result in the
sale of Service Class shares and/or support services that benefit
variable product owners. Service Class of the fund may pay FDC a 12b-1
fee at an annual rate of 0.25% of its average net assets, or such
lesser amount as the Trustees may determine from time to time. Service
Class of the fund currently pays FDC a 12b-1 fee at an annual rate of
0.10% of its average net assets throughout the month. Service Class's
12b-1 fee rate for the fund may be increased only when the Trustees
believe that it is in the best interests of variable product owners to
do so.

FDC may reallow to intermediaries (such as insurance companies,
broker-dealers, and other service-providers), including its
affiliates, up to the full amount of the Service Class 12b-1 fee, for
providing services intended to result in the sale of Service Class
shares and/or support services that benefit variable product owners.

In addition, the Service Class plan specifically recognizes that FMR
may make payments from its management fee revenue, past profits, or
other resources to FDC for expenses incurred in connection with
providing services intended to result in the sale of Service Class
shares and/or support services that benefit variable product owners,
including payments of significant amounts made to intermediaries that
provide those services. Currently, the Board of Trustees of the fund
has authorized such payments for Service Class.

Because 12b-1 fees are paid out of Service Class's assets on an
ongoing basis, they will increase the cost of a shareholder's
investment and may cost a shareholder more than paying other types of
sales charges.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742415.100 VDCAS-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS 2
DYNAMIC CAPITAL
APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Investing in domestic and foreign issuers.

(small solid bullet) Investing in either "growth" stocks or "value"
stocks or both.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

(small solid bullet) Realizing capital gains without considering the
tax consequences to shareholders.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class 2 after
Service Class 2 has been in operation for one calendar year.

OPERATING EXPENSES

The annual class operating expenses provided below for Service Class 2
of the fund are based on estimated expenses. The annual class
operating expenses do not take into account any fees or other expenses
of any variable annuity or variable life insurance product.

Management fee 0.58%

Distribution and Service 0.25%
(12b-1) fee

Other expenses 0.61%

Total annual class operating 1.44%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS 2 OF THE FUND TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES
LENDING COSTS, BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS
A PERCENTAGE OF ITS AVERAGE NET ASSETS, EXCEED 1.75%. THIS ARRANGEMENT
CAN BE DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets primarily in common stocks.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO seeks capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

A class's net asset value per share (NAV) is the value of a single
share. Fidelity normally calculates Service Class 2's NAV as of the
close of business of the NYSE, normally 4:00 p.m. Eastern time.
However, NAV may be calculated earlier if trading on the NYSE is
restricted or as permitted by the Securities and Exchange Commission
(SEC). The fund's assets are valued as of this time for the purpose of
computing Service Class 2's NAV.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class 2 is the class's NAV.
Service Class 2 shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class 2 is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class 2 shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Dynamic Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.30%.

FMR pays FMR U.K. and FMR Far East for providing sub-advisory
services. FMR Far East pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class 2's
shares.

Service Class 2 of the fund has adopted a Distribution and Service
Plan pursuant to Rule 12b-1 under the Investment Company Act of 1940.
Under the plan, Service Class 2 of the fund is authorized to pay FDC a
12b-1 fee as compensation for providing services intended to result in
the sale of Service Class 2 shares and/or support services that
benefit variable product owners. Service Class 2 of the fund currently
pays FDC a 12b-1 fee at an annual rate of 0.25% of its average net
assets throughout the month.

FDC may reallow to intermediaries (such as insurance companies,
broker-dealers, and other service-providers), including its
affiliates, up to the full amount of the Service Class 2 12b-1 fee,
for providing services intended to result in the sale of Service Class
2 shares and/or support services that benefit variable product owners.

In addition, the Service Class 2 plan specifically recognizes that FMR
may make payments from its management fee revenue, past profits, or
other resources to FDC for expenses incurred in connection with
providing services intended to result in the sale of Service Class 2
shares and/or support services that benefit variable product owners,
including payments of significant amounts made to intermediaries that
provide those services. Currently, the Board of Trustees of the fund
has authorized such payments for Service Class 2.

Because 12b-1 fees are paid out of Service Class 2's assets on an
ongoing basis, they will increase the cost of a shareholder's
investment and may cost a shareholder more than paying other types of
sales charges.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742416.100 VDCA2-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
INITIAL CLASS
EMERGING ASIA PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 5 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 5 FUND MANAGEMENT

6 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in equity and debt
securities of Asian emerging market issuers.

(small solid bullet) Normally investing at least 65% of total assets
in securities of Asian emerging market issuers.

(small solid bullet) Investing principally in equity securities.

(small solid bullet) Potentially investing up to 35% of total assets
in securities of companies (other than Asian emerging market issuers)
that derive, or will derive, a significant portion of their revenues
or profits from business in Asian countries generally, or debt
securities of governments of Asian countries or their agencies or
other political subdivisions (other than Asian emerging market
issuers).

(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Asian countries with emerging markets as a
whole.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) STOCK MARKET VOLATILITY. Stock markets are
volatile and can decline significantly in response to adverse issuer,
political, regulatory, market or economic developments. Different
parts of the market can react differently to these developments.

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.

(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market, or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory, and political uncertainties and can be extremely volatile.

(small solid bullet) GEOGRAPHIC CONCENTRATION IN ASIA. Most Asian
economies are characterized by over-extension of credit, currency
devaluations and restrictions, rising unemployment, high inflation,
decreased exports, and economic recessions. International trade,
government policy, and political and social stability significantly
affect economic growth. The markets in Asia can be extremely volatile.

(small solid bullet) ISSUER-SPECIFIC CHANGES. The value of an
individual security or particular type of security can be more
volatile than the market as a whole and can perform differently from
the value of the market as a whole. Lower-quality debt securities
(those of less than investment-grade quality) can be more volatile due
to increased sensitivity to adverse issuer, political, regulatory,
market, or economic developments.

In addition, the fund is considered non-diversified and can invest a
greater portion of assets in securities of individual issuers than a
diversified fund. As a result, changes in the market value of a single
issuer could cause greater fluctuations in share price than would
occur in a more diversified fund.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Initial Class after Initial
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service None
(12b-1) fee

Other expenses 3.85%

Total annual class operating 4.58%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE INITIAL CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.75%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests the fund's assets primarily in equity and debt
securities of Asian emerging market issuers. FMR normally invests at
least 65% of the fund's total assets in securities of Asian emerging
market issuers. Asian emerging market issuers are those issuers
located in an Asian country with an emerging market. Asian countries
with emerging markets include Hong Kong, India, Indonesia, Korea,
Malaysia, Pakistan, the Philippines, the People's Republic of China,
Singapore, Sri Lanka, Taiwan, Thailand, Vietnam, Burma, Laos and
Cambodia. FMR intends to invest the fund's assets principally in
equity securities.

FMR may invest up to 35% of the fund's total assets in (i) securities
of companies (other than Asian emerging market issuers) that derive,
or will derive, a significant portion of their revenues or profits
from business in Asian countries generally or (ii) debt securities of
governments of Asian countries or their agencies or other political
subdivisions (other than Asian emerging market issuers).

FMR normally diversifies the fund's investments across different Asian
countries with emerging markets. In allocating the fund's investments
across countries, FMR will consider the size of the market in each
country relative to the size of the markets in Asian countries with
emerging markets as a whole.

Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.

In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable, or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay current interest but
are sold at a discount from their face values. Debt securities include
corporate bonds, government securities, and mortgage and other
asset-backed securities.

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular group of countries, the fund's performance
is expected to be closely tied to economic and political conditions
within that group of countries and to be more volatile than the
performance of more geographically diversified funds. Because FMR may
invest a significant percentage of the fund's assets in a single
issuer, the fund's performance could be closely tied to the market
value of that one issuer and could be more volatile than the
performance of more diversified funds. When you sell your shares of
the fund, they could be worth more or less than what you paid for
them.

The following factors can significantly affect the fund's performance:

INTEREST RATE CHANGES. Debt securities have varying levels of
sensitivity to changes in interest rates. In general, the price of a
debt security can fall when interest rates rise and can rise when
interest rates fall. Securities with longer maturities and mortgage
securities can be more sensitive to interest rate changes.

Investing in emerging markets can involve risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of economic development;
political stability; market depth, infrastructure, and capitalization;
and regulatory oversight can be less than in more developed markets.
Emerging market economies can be subject to greater social, economic,
regulatory, and political uncertainties. All of these factors can make
emerging market securities more volatile and potentially less liquid
than securities issued in more developed markets.

ASIA. Asia includes countries in all stages of economic development,
from the highly developed economy of Japan to the emerging market
economy of the People's Republic of China. Most Asian economies are
characterized by over-extension of credit, currency devaluations and
restrictions, rising unemployment, high inflation, decreased exports,
and economic recessions. Currency devaluations in any one country can
have a significant effect on the entire region. Recently, the markets
in each Asian country have suffered significant downturns as well as
significant volatility. Increased political and social unrest in some
or all Asian countries could cause further economic and market
uncertainty.

ISSUER-SPECIFIC CHANGES. Changes in the financial condition of an
issuer, changes in specific economic or political conditions that
affect a particular type of security or issuer, and changes in general
economic or political conditions can affect the credit quality or
value of an issuer's securities. The value of securities of smaller,
less well-known issuers can be more volatile than that of larger
issuers. Lower-quality debt securities (those of less than
investment-grade quality) tend to be more sensitive to these changes
than higher-quality debt securities.

Lower-quality debt securities involve greater risk of default or price
changes due to changes in the credit quality of the issuer. The value
of lower-quality debt securities often fluctuates in response to
company, political, or economic developments and can decline
significantly over short periods of time or during periods of general
or regional economic difficulty.

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Initial Class is the class's NAV.
Initial Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Initial Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Initial Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Emerging Asia is a mutual fund, an investment that pools
shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. Currently, FIIA is primarily
responsible for choosing investments for the fund.

(small solid bullet) Fidelity International Investment Advisors (U.K.)
Limited (FIIA(U.K.)L), in London, England, serves as a sub-adviser for
the fund. As of September 28, 1999, FIIA(U.K.)L had approximately $2.6
billion in discretionary assets under management. FIIA(U.K.)L may
provide investment research and advice on issuers based outside the
United States and may also provide investment advisory services for
the fund.

Beginning January 1, 2001, FMR Co., Inc. (FMRC) will serve as a
sub-adviser for the fund. FMRC may provide investment research and
advice and may also provide investment advisory services for the fund.
FMRC is a wholly-owned subsidiary of FMR.

Yosawadee Polcharoen is manager of VIP Emerging Asia, which she has
managed since inception. She also manages other Fidelity funds. Since
joining Fidelity in 1992, Ms. Polcharoen has worked as a research
analyst and manager.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Initial Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742417.100 VEAI-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS
EMERGING ASIA PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 5 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 5 FUND MANAGEMENT

6 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in equity and debt
securities of Asian emerging market issuers.

(small solid bullet) Normally investing at least 65% of total assets
in securities of Asian emerging market issuers.

(small solid bullet) Investing principally in equity securities.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class after Service
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service 0.10%
(12b-1) fee

Other expenses 3.85%

Total annual class operating 4.68%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.85%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class is the class's NAV.
Service Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Emerging Asia is a mutual fund, an investment that pools
shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742418.100 VEAS-red-0900

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS 2
EMERGING ASIA PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 5 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

6 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing primarily in equity and debt
securities of Asian emerging market issuers.

(small solid bullet) Normally investing at least 65% of total assets
in securities of Asian emerging market issuers.

(small solid bullet) Investing principally in equity securities.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) INTEREST RATE CHANGES. Interest rate increases
can cause the price of a debt security to decrease.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class 2 after
Service Class 2 has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service 0.25%
(12b-1) fee

Other expenses 3.85%

Total annual class operating 4.83%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS 2 OF THE FUND TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES
LENDING COSTS, BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS
A PERCENTAGE OF ITS AVERAGE NET ASSETS, EXCEED 2.00%. THIS ARRANGEMENT
CAN BE DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EMERGING ASIA PORTFOLIO seeks long-term capital appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class 2 is the class's NAV.
Service Class 2 shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class 2 is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class 2 shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Emerging Asia is a mutual fund, an investment that pools
shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class 2's
shares.

FDC may reallow to intermediaries (such as insurance companies,
broker-dealers, and other service-providers), including its
affiliates, up to the full amount of the Service Class 2 12b-1 fee,
for providing services intended to result in the sale of Service Class
2 shares and/or support services that benefit variable product owners.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742419.100 VEA2-red-0900

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
INITIAL CLASS
JAPAN PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 5 FUND MANAGEMENT

5 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Initial Class after Initial
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service None
(12b-1) fee

Other expenses 1.63%

Total annual class operating 2.36%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE INITIAL CLASs OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.75%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular country, the fund's performance is
expected to be closely tied to economic and political conditions
within that country and to be more volatile than the performance of
more geographically diversified funds. When a shareholder sells shares
of the fund, they could be worth more or less than what the
shareholder paid for them.

The following factors can significantly affect the fund's performance:

GEOGRAPHIC CONCENTRATION. Political and economic conditions and
changes in regulatory, tax, or economic policy in a country could
significantly affect the market in that country and in surrounding or
related countries.

JAPAN. The Japanese economy is currently in a recession. The economy
is characterized by government intervention and protectionism, an
unstable financial services sector, and relatively high unemployment.
Economic growth is dependent on international trade, government
support of the financial services sector and other troubled sectors,
and consistent government policy. The United States is Japan's largest
single trading partner, but close to half of Japan's trade is
conducted with developing nations, almost all of which are in
Southeast Asia.

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Initial Class is the class's NAV.
Initial Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Initial Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Initial Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Japan is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

William Kennedy is manager of VIP Japan, which he has managed since
inception. He also manages another Fidelity fund. Since joining
Fidelity in 1994, Mr. Kennedy has worked as an analyst and manager.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Initial Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742423.100 VJAFI-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS
JAPAN PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 5 FUND MANAGEMENT

5 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class after Service
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service 0.10%
(12b-1) fee

Other expenses 1.63%

Total annual class operating 2.46%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.85%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular country, the fund's performance is
expected to be closely tied to economic and political conditions
within that country and to be more volatile than the performance of
more geographically diversified funds. When a shareholder sells shares
of the fund, they could be worth more or less than what the
shareholder paid for them.

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class is the class's NAV.
Service Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Japan is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

William Kennedy is manager of VIP Japan, which he has managed since
inception. He also manages another Fidelity fund. Since joining
Fidelity in 1994, Mr. Kennedy has worked as an analyst and manager.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742424.100 VJAFS--red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS 2
JAPAN PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 3 INVESTMENT DETAILS

4 VALUING SHARES

SHAREHOLDER INFORMATION 4 BUYING AND SELLING SHARES

5 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

5 TAX CONSEQUENCES

FUND SERVICES 5 FUND MANAGEMENT

5 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of Japanese issuers.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) GEOGRAPHIC CONCENTRATION IN JAPAN. The Japanese
economy is currently in a recession. International trade and
government policy can significantly affect economic growth.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class 2 after
Service Class 2 has been in operation for one calendar year.

OPERATING EXPENSES

The annual class operating expenses provided below for Service Class 2
are based on estimated expenses. The annual class operating expenses
do not take into account any fees or other expenses of any variable
annuity or variable life insurance product.

Management fee 0.73%

Distribution and Service 0.25%
(12b-1) fee

Other expenses 1.63%

Total annual class operating 2.61%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS 2 OF THE FUND TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES
LENDING COSTS, BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS
A PERCENTAGE OF ITS AVERAGE NET ASSETS, EXCEED 2.00%. THIS ARRANGEMENT
CAN BE DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests at least 65% of the fund's total assets in
securities of Japanese issuers. FMR normally invests the fund's assets
primarily in common stocks.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular country, the fund's performance is
expected to be closely tied to economic and political conditions
within that country and to be more volatile than the performance of
more geographically diversified funds. When a shareholder sells shares
of the fund, they could be worth more or less than what the
shareholder paid for them.

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP JAPAN PORTFOLIO seeks long-term growth of capital.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class 2 is the class's NAV.
Service Class 2 shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class 2 is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class 2 shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Japan is a mutual fund, an investment that pools shareholders'
money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

William Kennedy is manager of VIP Japan, which he has managed since
inception. He also manages another Fidelity fund. Since joining
Fidelity in 1994, Mr. Kennedy has worked as an analyst and manager.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FIIA or FMR Far East in
turn pays FIJ for providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class 2's
shares.

FDC may reallow to intermediaries (such as insurance companies,
broker-dealers, and other service-providers), including its
affiliates, up to the full amount of the Service Class 2 12b-1 fee,
for providing services intended to result in the sale of Service Class
2 shares and/or support services that benefit variable product owners.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742425.100 VJAF2-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
INITIAL CLASS
EUROPE CAPITAL APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

5 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Europe.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market, or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.

(small solid bullet) GEOGRAPHIC CONCENTRATION IN EUROPE. Both
developed and emerging market countries in Europe will be
significantly affected by the tight fiscal and monetary controls
required to join the European Economic and Monetary Union (EMU). The
markets in Eastern Europe remain relatively undeveloped and can be
particularly sensitive to political and economic developments.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Initial Class after Initial
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service None
(12b-1) fee

Other expenses 3.36%

Total annual class operating 4.09%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE INITIAL CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.75%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR normally invests at least 65% of the fund's total assets in
securities of issuers that have their principal activities in Europe.
Europe includes Austria, Belgium, Belarus, Bulgaria, the Czech
Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary,
Ireland, Italy, Latvia, Lithuania, Luxembourg, the Netherlands,
Norway, Poland, Portugal, Russia, Slovakia, Slovenia, Spain, Sweden,
Switzerland, Turkey, and the United Kingdom. FMR normally invests the
fund's assets primarily in common stocks.

FMR normally diversifies the fund's investments across different
European countries. In allocating the fund's investments across
countries, FMR will consider the size of the market in each country
relative to the size of the markets in Europe as a whole.

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular group of countries, the fund's performance
is expected to be closely tied to economic and political conditions
within that group of countries and to be more volatile than the
performance of more geographically diversified funds. When a
shareholder sells shares of the fund, they could be worth more or less
than what the shareholder paid for them.

The following factors can significantly affect the fund's performance:

EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union (EU), and many are also members of the EMU, which requires
compliance with restrictions on inflation rates, deficits, and debt
levels. Unemployment in Europe is historically high. Many Eastern
European countries continue to move toward market economies. However,
their markets remain relatively undeveloped and can be particularly
sensitive to political and economic developments. The tight fiscal and
monetary controls necessary to join the EMU can significantly affect
every country in Europe.

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Initial Class is the class's NAV.
Initial Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Initial Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Initial Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Europe Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

Ian Hart is portfolio manager of VIP Europe Capital Appreciation,
which he has managed since inception. He also manages other Fidelity
funds. Since joining Fidelity in 1994, Mr. Hart has worked as a
research analyst and manager.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East pays FIJ for
providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Initial Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742420.100. VEURI-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS
EUROPE CAPITAL APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

5 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Europe.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market, or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class after Service
Class has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service 0.10%
(12b-1) fee

Other expenses 3.36%

Total annual class operating 4.19%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS OF THE FUND TO THE EXTENT THAT TOTAL OPERATING
EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES LENDING COSTS,
BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS A PERCENTAGE OF
ITS AVERAGE NET ASSETS, EXCEED 1.85%. THIS ARRANGEMENT CAN BE
DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular group of countries, the fund's performance
is expected to be closely tied to economic and political conditions
within that group of countries and to be more volatile than the
performance of more geographically diversified funds. When a
shareholder sells shares of the fund, they could be worth more or less
than what the shareholder paid for them.

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class is the class's NAV.
Service Class shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Europe Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East pays FIJ for
providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class's
shares.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742241.100. VEURS-red-0600

FIDELITY(REGISTERED TRADEMARK)
VARIABLE INSURANCE PRODUCTS
SERVICE CLASS 2
EUROPE CAPITAL APPRECIATION PORTFOLIO

PROSPECTUS
SEPTEMBER 13, 2000

(FIDELITY_LOGO_GRAPHIC)(registered trademark)
82 DEVONSHIRE STREET, BOSTON, MA 02109

CONTENTS

FUND SUMMARY 3 INVESTMENT SUMMARY

3 PERFORMANCE

3 OPERATING EXPENSES

FUND BASICS 4 INVESTMENT DETAILS

5 VALUING SHARES

SHAREHOLDER INFORMATION 6 BUYING AND SELLING SHARES

6 DIVIDENDS AND CAPITAL GAIN
DISTRIBUTIONS

6 TAX CONSEQUENCES

FUND SERVICES 7 FUND MANAGEMENT

7 FUND DISTRIBUTION

FUND SUMMARY

INVESTMENT SUMMARY

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

Fidelity Management & Research Company (FMR)'s principal investment
strategies include:

(small solid bullet) Normally investing at least 65% of total assets
in securities of issuers that have their principal activities in
Europe.

(small solid bullet) Normally investing primarily in common stocks.

(small solid bullet) Allocating investments across countries
considering the size of the market in each country relative to the
size of the markets in Europe as a whole.

(small solid bullet) Using fundamental analysis of each issuer's
financial condition and industry position and market and economic
conditions to select investments.

PRINCIPAL INVESTMENT RISKS

The fund is subject to the following principal investment risks:

(small solid bullet) FOREIGN EXPOSURE. Foreign markets, particularly
emerging markets, can be more volatile than the U.S. market due to
increased risks of adverse issuer, political, regulatory, market, or
economic developments and can perform differently from the U.S.
market. Emerging markets can be subject to greater social, economic,
regulatory and political uncertainties and can be extremely volatile.

When a shareholder sells shares of the fund, they could be worth more
or less than what the shareholder paid for them.

PERFORMANCE

Performance history will be available for Service Class 2 after
Service Class 2 has been in operation for one calendar year.

OPERATING EXPENSES

Management fee 0.73%

Distribution and Service 0.25%
(12b-1) fee

Other expenses 3.36%

Total annual class operating 4.34%
expensesA

A EFFECTIVE SEPTEMBER 18, 2000, FMR HAS VOLUNTARILY AGREED TO
REIMBURSE SERVICE CLASS 2 OF THE FUND TO THE EXTENT THAT TOTAL
OPERATING EXPENSES (EXCLUDING INTEREST, TAXES, CERTAIN SECURITIES
LENDING COSTS, BROKERAGE COMMISSIONS, AND EXTRAORDINARY EXPENSES), AS
A PERCENTAGE OF ITS AVERAGE NET ASSETS, EXCEED 2.00%. THIS ARRANGEMENT
CAN BE DISCONTINUED BY FMR AT ANY TIME.

FUND BASICS

INVESTMENT DETAILS

INVESTMENT OBJECTIVE

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

PRINCIPAL INVESTMENT STRATEGIES

FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.

DESCRIPTION OF PRINCIPAL SECURITY TYPES

PRINCIPAL INVESTMENT RISKS

Many factors affect the fund's performance. The fund's share price
changes daily based on changes in market conditions and interest rates
and in response to other economic, political, or financial
developments. The fund's reaction to these developments will be
affected by the types of securities in which the fund invests, the
financial condition, industry and economic sector, and geographic
location of an issuer, and the fund's level of investment in the
securities of that issuer. Because FMR concentrates the fund's
investments in a particular group of countries, the fund's performance
is expected to be closely tied to economic and political conditions
within that group of countries and to be more volatile than the
performance of more geographically diversified funds. When a
shareholder sells shares of the fund, they could be worth more or less
than what the shareholder paid for them.

The following factors can significantly affect the fund's performance:

FUNDAMENTAL INVESTMENT POLICIES

The policy discussed below is fundamental, that is, subject to change
only by shareholder approval.

VIP EUROPE CAPITAL APPRECIATION PORTFOLIO seeks long-term capital
appreciation.

VALUING SHARES

The fund is open for business each day the New York Stock Exchange
(NYSE) is open.

SHAREHOLDER INFORMATION

BUYING AND SELLING SHARES

Only separate accounts of insurance companies that have signed the
appropriate agreements with the fund can buy or sell shares of the
fund.

The price to buy one share of Service Class 2 is the class's NAV.
Service Class 2 shares are sold without a sales charge.

Shares will be bought at the next NAV calculated after an order is
received in proper form.

The price to sell one share of Service Class 2 is the class's NAV.

Shares will be sold at the next NAV calculated after an order is
received in proper form.

Redemptions may be suspended or payment dates postponed when the NYSE
is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.

DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS

The fund normally pays dividends and capital gain distributions at
least annually, in February.

Dividends and capital gain distributions will be automatically
reinvested in additional Service Class 2 shares of the fund.

TAX CONSEQUENCES

Insurance company separate accounts generally do not pay tax on
dividends or capital gain distributions from the fund.

FUND SERVICES

FUND MANAGEMENT

VIP Europe Capital Appreciation is a mutual fund, an investment that
pools shareholders' money and invests it toward a specified goal.

FMR is the fund's manager.

As of March 31, 2000, FMR had approximately $639.1 billion in
discretionary assets under management.

As the manager, FMR is responsible for choosing the fund's investments
and handling its business affairs.

Affiliates assist FMR with foreign investments:

(small solid bullet) Fidelity Management & Research (Far East) Inc.
(FMR Far East) serves as a sub-adviser for the fund. FMR Far East was
organized in 1986 to provide investment research and advice to FMR.
FMR Far East was organized in 1986 to provide investment research and
advice to FMR. FMR Far East may provide investment research and advice
on issuers based outside the United States and may also provide
investment advisory services for the fund.

(small solid bullet) Fidelity International Investment Advisors
(FIIA), in Pembroke, Bermuda, serves as a sub-adviser for the fund. As
of September 28, 1999, FIIA had approximately $3.6 billion in
discretionary assets under management. FIIA may provide investment
research and advice on issuers based outside the United States and may
also provide investment advisory services for the fund.

The group fee rate is based on the average net assets of all the
mutual funds advised by FMR. This rate cannot rise above 0.52%, and it
drops as total assets under management increase.

For May 2000, the group fee rate was 0.2763%. The individual fund fee
rate is 0.45%.

FMR pays FMR U.K., FMR Far East and FIIA for providing sub-advisory
services, and FIIA in turn pays FIIA(U.K.)L. FMR Far East pays FIJ for
providing sub-advisory services.

FMR will pay FMRC for providing sub-advisory services.

FUND DISTRIBUTION

The fund is composed of multiple classes of shares. All classes of the
fund have a common investment objective and investment portfolio.

Fidelity Distributors Corporation (FDC) distributes Service Class 2's
shares.

FDC may reallow to intermediaries (such as insurance companies,
broker-dealers, and other service-providers), including its
affiliates, up to the full amount of the Service Class 2 12b-1 fee,
for providing services intended to result in the sale of Service Class
2 shares and/or support services that benefit variable product owners.

To receive payments made pursuant to a Distribution and Service Plan,
intermediaries must sign the appropriate agreement with FDC in
advance.

For a free copy of any of these documents or to request other
information or ask questions about the fund, call Fidelity at
1-888-622-3175.

INVESTMENT COMPANY ACT OF 1940, FILE NUMBER, 811-7205

Fidelity and Fidelity Investments & (Pyramid) Design are registered
trademarks of FMR Corp.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

1.742422.100. VEUR2-red-0600

SUBJECT TO COMPLETION. PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
DATED JUNE 30, 2000. THE INFORMATION IN THIS STATEMENT OF ADDITIONAL
INFORMATION IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE
SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION IS EFFECTIVE. THIS STATEMENT OF ADDITIONAL
INFORMATION IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.

FIDELITY(registered trademark) VARIABLE INSURANCE PRODUCTS
DYNAMIC CAPITAL APPRECIATION PORTFOLIO, EMERGING ASIA PORTFOLIO,
EUROPE CAPITAL APPRECIATION PORTFOLIO, AND JAPAN PORTFOLIO
FUNDS OF VARIABLE INSURANCE PRODUCTS FUND III
INITIAL CLASS, SERVICE CLASS, AND SERVICE CLASS 2
STATEMENT OF ADDITIONAL INFORMATION
SEPTEMBER 13, 2000

This statement of additional information (SAI) is not a prospectus. An
annual report for each fund will be available once the fund has
completed its first annual period.

To obtain a free additional copy of a prospectus, dated September 13,
2000, please call Fidelity at 1-888-622-3175.

TABLE OF CONTENTS PAGE

Investment Policies and 3
Limitations

Special Considerations 10
Regarding Canada

Special Considerations 10
Regarding Europe

Special Considerations 11
Regarding Japan

Special Considerations 11
Regarding Asia Pacific
Region (ex Japan)

Special Considerations 12
Regarding Latin America

Special Considerations 12
Regarding Russia

Special Considerations 13
Regarding Africa

Portfolio Transactions 13

Valuation 14

Performance 14

Additional Purchase and 27
Redemption Information

Distributions and Taxes 18

Trustees and Officers 18

Control of Investment Advisers 22

Management Contracts 22

Distribution Services 25

Transfer and Service Agent 26
Agreements

Description of the Trust 26

Appendix 27

For more information on any Fidelity fund, including charges and
expenses, call Fidelity at the number indicated above for a free
prospectus. Read it carefully before investing or sending money.

(fidelity_logo_graphic)(registered trademark) VIP3IS2-redb-0600
82 Devonshire Street, Boston, MA 02109 1.742426.100

INVESTMENT POLICIES AND LIMITATIONS

The following policies and limitations supplement those set forth in
the prospectus. Unless otherwise noted, whenever an investment policy
or limitation states a maximum percentage of a fund's assets that may
be invested in any security or other asset, or sets forth a policy
regarding quality standards, such standard or percentage limitation
will be determined immediately after and as a result of the fund's
acquisition of such security or other asset. Accordingly, any
subsequent change in values, net assets, or other circumstances will
not be considered when determining whether the investment complies
with the fund's investment policies and limitations.

A fund's fundamental investment policies and limitations cannot be
changed without approval by a "majority of the outstanding voting
securities" (as defined in the Investment Company Act of 1940 (the
1940 Act)) of the fund. However, except for the fundamental investment
limitations listed below, the investment policies and limitations
described in this SAI are not fundamental and may be changed without
shareholder approval.

INVESTMENT LIMITATIONS OF VIP DYNAMIC CAPITAL APPRECIATION PORTFOLIO

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(1) with respect to 75% of the fund's total assets, purchase the
securities of any issuer (other than securities issued or guaranteed
by the U.S. Government or any of its agencies or instrumentalities, or
securities of other investment companies) if, as a result, (a) more
than 5% of the fund's total assets would be invested in the securities
of that issuer, or (b) the fund would hold more than 10% of the
outstanding voting securities of that issuer;

(2) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940;

(3) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;

(4) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities or
in connection with investments in other investment companies;

(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or securities of other investment companies) if, as
a result, more than 25% of the fund's total assets would be invested
in the securities of companies whose principal business activities are
in the same industry;

(6) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);

(7) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or

(8) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(i) The fund does not currently intend to sell securities short,
unless it owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.

(ii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.

(iii) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (3)).

(iv) The fund does not currently intend to purchase any security if,
as a result, more than 10% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

(v) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)

The extent to which the fund may invest in the securities of a single
issuer or a certain number of issuers is limited by the
diversification requirements imposed by Section 817(h) of the Internal
Revenue Code, which are in addition to the diversification
requirements described above in limitation (1).

With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 10% of its net assets were invested in illiquid securities, it
would consider appropriate steps to protect liquidity.

Pursuant to certain state insurance regulations, any repurchase
agreements or foreign repurchase agreements the fund enters into will
be secured by collateral consisting of liquid assets having a market
value of not less than 102% of the cash or assets transferred to the
other party.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 10.

INVESTMENT LIMITATIONS OF VIP EMERGING ASIA PORTFOLIO

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(1) issue senior securities, except in connection with the insurance
program established by the fund pursuant to an exemptive order issued
by the Securities and Exchange Commission or as otherwise permitted
under the Investment Company Act of 1940.

(2) borrow money, except that the fund may borrow money for temporary
or emergency purposes (not for leveraging or investment) in an amount
not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings). Any borrowings
that come to exceed this amount will be reduced within three days (not
including Sundays and holidays) to the extent necessary to comply with
the 33 1/3% limitation;

(3) underwrite securities issued by others, except to the extent that
the fund may be considered an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities or
in connection with investments in other investment companies;

(4) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities, or securities of other investment companies) if, as
a result, more than 25% of the fund's total assets would be invested
in the securities of companies whose principal business activities are
in the same industry;

(5) purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not
prevent the fund from investing in securities or other instruments
backed by real estate or securities of companies engaged in the real
estate business);

(6) purchase or sell physical commodities unless acquired as a result
of ownership of securities or other instruments (but this shall not
prevent the fund from purchasing or selling options and futures
contracts or from investing in securities or other instruments backed
by physical commodities); or

(7) lend any security or make any other loan if, as a result, more
than 33 1/3% of its total assets would be lent to other parties, but
this limitation does not apply to purchases of debt securities or to
repurchase agreements.

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(i) In order to qualify as a "regulated investment company" under
Subchapter M of the Internal Revenue Code of 1986, as amended, the
fund currently intends to comply with certain diversification limits
imposed by Subchapter M.

(ii) The fund does not currently intend to sell securities short,
unless its owns or has the right to obtain securities equivalent in
kind and amount to the securities sold short, and provided that
transactions in futures contracts and options are not deemed to
constitute selling securities short.

(iii) The fund does not currently intend to purchase securities on
margin, except that the fund may obtain such short-term credits as are
necessary for the clearance of transactions, and provided that margin
payments in connection with futures contracts and options on futures
contracts shall not constitute purchasing securities on margin.

(iv) The fund may borrow money only (a) from a bank or from a
registered investment company or portfolio for which FMR or an
affiliate serves as investment adviser or (b) by engaging in reverse
repurchase agreements with any party (reverse repurchase agreements
are treated as borrowings for purposes of fundamental investment
limitation (2)).

(v) The fund does not currently intend to purchase any security if, as
a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

(vi) The fund does not currently intend to lend assets other than
securities to other parties, except by (a) lending money (up to 15% of
the fund's net assets) to a registered investment company or portfolio
for which FMR or an affiliate serves as investment adviser or (b)
acquiring loans, loan participations, or other forms of direct debt
instruments and, in connection therewith, assuming any associated
unfunded commitments of the sellers. (This limitation does not apply
to purchases of debt securities or to repurchase agreements.)

For purposes of limitation (i), Subchapter M generally requires the
fund to invest no more than 25% of its total assets in securities of
any one issuer and to invest at least 50% of its total assets so that
no more than 5% of the fund's total assets are invested in securities
of any one issuer. However, Subchapter M allows unlimited investments
in cash, cash items, government securities (as defined in Subchapter
M) and securities of other investment companies. These tax
requirements are generally applied at the end of each quarter of the
fund's taxable year.

The extent to which a fund may invest in the securities of a single
issuer or a certain number of issuers is limited by the
diversification requirements imposed by Section 817(h) of the Internal
Revenue Code, which are in addition to the diversification
requirements described above in limitation (i).

With respect to limitation (v), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 10.

For purposes of normally investing at least 65% of VIP Emerging Asia's
total assets in securities of Asian emerging market issuers, FMR
interprets "total assets" to exclude collateral received for
securities lending transactions.

INVESTMENT LIMITATIONS OF VIP EUROPE CAPITAL APPRECIATION PORTFOLIO

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

(iv) The fund does not currently intend to purchase any security if,
as a result, more than 15% of its net assets would be invested in
securities that are deemed to be illiquid because they are subject to
legal or contractual restrictions on resale or because they cannot be
sold or disposed of in the ordinary course of business at
approximately the prices at which they are valued.

With respect to limitation (iv), if through a change in values, net
assets, or other circumstances, the fund were in a position where more
than 15% of its net assets was invested in illiquid securities, it
would consider appropriate steps to protect liquidity.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 10.

For purposes of normally investing at least 65% of VIP Europe Capital
Appreciation's total assets in securities of issuers that have their
principal activities in Europe, FMR interprets "total assets" to
exclude collateral received for securities lending transactions.

INVESTMENT LIMITATIONS OF VIP JAPAN PORTFOLIO

THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:

(5) purchase the securities of any issuer (other than securities
issued or guaranteed by the U.S. Government or any of its agencies or
instrumentalities or securities of other investment companies) if, as
a result, more than 25% of the fund's total assets would be invested
in the securities of companies whose principal business activities are
in the same industry;

THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE
CHANGED WITHOUT SHAREHOLDER APPROVAL.

For the fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
on page 10.

For purposes of normally investing at least 65% of VIP Japan's total
assets in securities of Japanese issuers, FMR interprets "total
assets" to exclude collateral received for securities lending
transactions.

The following pages contain more detailed information about types of
instruments in which a fund may invest, strategies Fidelity Management
& Research Company (FMR) may employ in pursuit of a fund's investment
objective, and a summary of related risks. FMR may not buy all of
these instruments or use all of these techniques unless it believes
that doing so will help a fund achieve its goal.

AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be,
"affiliated persons" of the fund under the 1940 Act. These
transactions may involve repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50
largest U.S. banks (measured by deposits); municipal securities; U.S.
Government securities with affiliated financial institutions that are
primary dealers in these securities; short-term currency transactions;
and short-term borrowings. In accordance with exemptive orders issued
by the Securities and Exchange Commission (SEC), the Board of Trustees
has established and periodically reviews procedures applicable to
transactions involving affiliated financial institutions.

BORROWING. Each fund may borrow from banks or from other funds advised
by FMR or its affiliates, or through reverse repurchase agreements. If
a fund borrows money, its share price may be subject to greater
fluctuation until the borrowing is paid off. If a fund makes
additional investments while borrowings are outstanding, this may be
considered a form of leverage.

CASH MANAGEMENT. A fund can hold uninvested cash or can invest it in
cash equivalents such as money market securities, repurchase
agreements or shares of money market funds. Generally, these
securities offer less potential for gains than other types of
securities.

CENTRAL CASH FUNDS are money market funds managed by FMR or its
affiliates that seek to earn a high level of current income (free from
federal income tax in the case of a municipal money market fund) while
maintaining a stable $1.00 share price. The funds comply with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of their investments.

COMMON STOCK represents an equity or ownership interest in an issuer.
In the event an issuer is liquidated or declares bankruptcy, the
claims of owners of bonds and preferred stock take precedence over the
claims of those who own common stock.

CONVERTIBLE SECURITIES are bonds, debentures, notes, preferred stocks
or other securities that may be converted or exchanged (by the holder
or by the issuer) into shares of the underlying common stock (or cash
or securities of equivalent value) at a stated exchange ratio. A
convertible security may also be called for redemption or conversion
by the issuer after a particular date and under certain circumstances
(including a specified price) established upon issue. If a convertible
security held by a fund is called for redemption or conversion, the
fund could be required to tender it for redemption, convert it into
the underlying common stock, or sell it to a third party.

Convertible securities generally have less potential for gain or loss
than common stocks. Convertible securities generally provide yields
higher than the underlying common stocks, but generally lower than
comparable non-convertible securities. Because of this higher yield,
convertible securities generally sell at prices above their
"conversion value," which is the current market value of the stock to
be received upon conversion. The difference between this conversion
value and the price of convertible securities will vary over time
depending on changes in the value of the underlying common stocks and
interest rates. When the underlying common stocks decline in value,
convertible securities will tend not to decline to the same extent
because of the interest or dividend payments and the repayment of
principal at maturity for certain types of convertible securities.
However, securities that are convertible other than at the option of
the holder generally do not limit the potential for loss to the same
extent as securities convertible at the option of the holder. When the
underlying common stocks rise in value, the value of convertible
securities may also be expected to increase. At the same time,
however, the difference between the market value of convertible
securities and their conversion value will narrow, which means that
the value of convertible securities will generally not increase to the
same extent as the value of the underlying common stocks. Because
convertible securities may also be interest-rate sensitive, their
value may increase as interest rates fall and decrease as interest
rates rise. Convertible securities are also subject to credit risk,
and are often lower-quality securities.

DEBT SECURITIES are used by issuers to borrow money. The issuer
usually pays a fixed, variable or floating rate of interest, and must
repay the amount borrowed at the maturity of the security. Some debt
securities, such as zero coupon bonds, do not pay interest but are
sold at a deep discount from their face values. Debt securities
include corporate bonds, government securities, and mortgage and other
asset-backed securities.

EXPOSURE TO FOREIGN MARKETS. Foreign securities, foreign currencies,
and securities issued by U.S. entities with substantial foreign
operations may involve significant risks in addition to the risks
inherent in U.S. investments.

Foreign investments involve risks relating to local political,
economic, regulatory, or social instability, military action or
unrest, or adverse diplomatic developments, and may be affected by
actions of foreign governments adverse to the interests of U.S.
investors. Such actions may include expropriation or nationalization
of assets, confiscatory taxation, restrictions on U.S. investment or
on the ability to repatriate assets or convert currency into U.S.
dollars, or other government intervention. Additionally, governmental
issuers of foreign debt securities may be unwilling to pay interest
and repay principal when due and may require that the conditions for
payment be renegotiated. There is no assurance that FMR will be able
to anticipate these potential events or counter their effects. In
addition, the value of securities denominated in foreign currencies
and of dividends and interest paid with respect to such securities
will fluctuate based on the relative strength of the U.S. dollar.

It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. In addition, the costs
associated with foreign investments, including withholding taxes,
brokerage commissions and custodial costs, are generally higher than
with U.S. investments.

Foreign markets may offer less protection to investors than U.S.
markets. Foreign issuers are generally not bound by uniform
accounting, auditing, and financial reporting requirements and
standards of practice comparable to those applicable to U.S. issuers.
Adequate public information on foreign issuers may not be available,
and it may be difficult to secure dividends and information regarding
corporate actions on a timely basis. In general, there is less overall
governmental supervision and regulation of securities exchanges,
brokers, and listed companies than in the United States. OTC markets
tend to be less regulated than stock exchange markets and, in certain
countries, may be totally unregulated. Regulatory enforcement may be
influenced by economic or political concerns, and investors may have
difficulty enforcing their legal rights in foreign countries.

Some foreign securities impose restrictions on transfer within the
United States or to U.S. persons. Although securities subject to such
transfer restrictions may be marketable abroad, they may be less
liquid than foreign securities of the same class that are not subject
to such restrictions.

American Depositary Receipts (ADRs) as well as other "hybrid" forms of
ADRs, including European Depositary Receipts (EDRs) and Global
Depositary Receipts (GDRs), are certificates evidencing ownership of
shares of a foreign issuer. These certificates are issued by
depository banks and generally trade on an established market in the
United States or elsewhere. The underlying shares are held in trust by
a custodian bank or similar financial institution in the issuer's home
country. The depository bank may not have physical custody of the
underlying securities at all times and may charge fees for various
services, including forwarding dividends and interest and corporate
actions. ADRs are alternatives to directly purchasing the underlying
foreign securities in their national markets and currencies. However,
ADRs continue to be subject to many of the risks associated with
investing directly in foreign securities. These risks include foreign
exchange risk as well as the political and economic risks of the
underlying issuer's country.

The risks of foreign investing may be magnified for investments in
emerging markets. Security prices in emerging markets can be
significantly more volatile than those in more developed markets,
reflecting the greater uncertainties of investing in less established
markets and economies. In particular, countries with emerging markets
may have relatively unstable governments, may present the risks of
nationalization of businesses, restrictions on foreign ownership and
prohibitions on the repatriation of assets, and may have less
protection of property rights than more developed countries. The
economies of countries with emerging markets may be based on only a
few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt
burdens or inflation rates. Local securities markets may trade a small
number of securities and may be unable to respond effectively to
increases in trading volume, potentially making prompt liquidation of
holdings difficult or impossible at times.

FOREIGN CURRENCY TRANSACTIONS. A fund may conduct foreign currency
transactions on a spot (i.e., cash) or forward basis (i.e., by
entering into forward contracts to purchase or sell foreign
currencies). Although foreign exchange dealers generally do not charge
a fee for such conversions, they do realize a profit based on the
difference between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign
currency at one rate, while offering a lesser rate of exchange should
the counterparty desire to resell that currency to the dealer. Forward
contracts are customized transactions that require a specific amount
of a currency to be delivered at a specific exchange rate on a
specific date or range of dates in the future. Forward contracts are
generally traded in an interbank market directly between currency
traders (usually large commercial banks) and their customers. The
parties to a forward contract may agree to offset or terminate the
contract before its maturity, or may hold the contract to maturity and
complete the contemplated currency exchange.

The following discussion summarizes the principal currency management
strategies involving forward contracts that could be used by a fund. A
fund may also use swap agreements, indexed securities, and options and
futures contracts relating to foreign currencies for the same
purposes.

A "settlement hedge" or "transaction hedge" is designed to protect a
fund against an adverse change in foreign currency values between the
date a security is purchased or sold and the date on which payment is
made or received. Entering into a forward contract for the purchase or
sale of the amount of foreign currency involved in an underlying
security transaction for a fixed amount of U.S. dollars "locks in" the
U.S. dollar price of the security. Forward contracts to purchase or
sell a foreign currency may also be used by a fund in anticipation of
future purchases or sales of securities denominated in foreign
currency, even if the specific investments have not yet been selected
by FMR.

A fund may also use forward contracts to hedge against a decline in
the value of existing investments denominated in foreign currency. For
example, if a fund owned securities denominated in pounds sterling, it
could enter into a forward contract to sell pounds sterling in return
for U.S. dollars to hedge against possible declines in the pound's
value. Such a hedge, sometimes referred to as a "position hedge,"
would tend to offset both positive and negative currency fluctuations,
but would not offset changes in security values caused by other
factors. A fund could also hedge the position by selling another
currency expected to perform similarly to the pound sterling. This
type of hedge, sometimes referred to as a "proxy hedge," could offer
advantages in terms of cost, yield, or efficiency, but generally would
not hedge currency exposure as effectively as a direct hedge into U.S.
dollars. Proxy hedges may result in losses if the currency used to
hedge does not perform similarly to the currency in which the hedged
securities are denominated.

A fund may enter into forward contracts to shift its investment
exposure from one currency into another. This may include shifting
exposure from U.S. dollars to a foreign currency, or from one foreign
currency to another foreign currency. This type of strategy, sometimes
known as a "cross-hedge," will tend to reduce or eliminate exposure to
the currency that is sold, and increase exposure to the currency that
is purchased, much as if a fund had sold a security denominated in one
currency and purchased an equivalent security denominated in another.
Cross-hedges protect against losses resulting from a decline in the
hedged currency, but will cause a fund to assume the risk of
fluctuations in the value of the currency it purchases.

Successful use of currency management strategies will depend on FMR's
skill in analyzing currency values. Currency management strategies may
substantially change a fund's investment exposure to changes in
currency exchange rates and could result in losses to a fund if
currencies do not perform as FMR anticipates. For example, if a
currency's value rose at a time when FMR had hedged a fund by selling
that currency in exchange for dollars, a fund would not participate in
the currency's appreciation. If FMR hedges currency exposure through
proxy hedges, a fund could realize currency losses from both the hedge
and the security position if the two currencies do not move in tandem.
Similarly, if FMR increases a fund's exposure to a foreign currency
and that currency's value declines, a fund will realize a loss. There
is no assurance that FMR's use of currency management strategies will
be advantageous to a fund or that it will hedge at appropriate times.

FOREIGN REPURCHASE AGREEMENTS. Foreign repurchase agreements involve
an agreement to purchase a foreign security and to sell that security
back to the original seller at an agreed-upon price in either U.S.
dollars or foreign currency. Unlike typical U.S. repurchase
agreements, foreign repurchase agreements may not be fully
collateralized at all times. The value of a security purchased by a
fund may be more or less than the price at which the counterparty has
agreed to repurchase the security. In the event of default by the
counterparty, the fund may suffer a loss if the value of the security
purchased is less than the agreed-upon repurchase price, or if the
fund is unable to successfully assert a claim to the collateral under
foreign laws. As a result, foreign repurchase agreements may involve
higher credit risks than repurchase agreements in U.S. markets, as
well as risks associated with currency fluctuations. In addition, as
with other emerging market investments, repurchase agreements with
counterparties located in emerging markets or relating to emerging
markets may involve issuers or counterparties with lower credit
ratings than typical U.S. repurchase agreements.

FUNDS' RIGHTS AS SHAREHOLDERS. The funds do not intend to direct or
administer the day-to-day operations of any company. A fund, however,
may exercise its rights as a shareholder and may communicate its views
on important matters of policy to management, the Board of Directors,
and shareholders of a company when FMR determines that such matters
could have a significant effect on the value of the fund's investment
in the company. The activities in which a fund may engage, either
individually or in conjunction with others, may include, among others,
supporting or opposing proposed changes in a company's corporate
structure or business activities; seeking changes in a company's
directors or management; seeking changes in a company's direction or
policies; seeking the sale or reorganization of the company or a
portion of its assets; or supporting or opposing third-party takeover
efforts. This area of corporate activity is increasingly prone to
litigation and it is possible that a fund could be involved in
lawsuits related to such activities. FMR will monitor such activities
with a view to mitigating, to the extent possible, the risk of
litigation against a fund and the risk of actual liability if a fund
is involved in litigation. No guarantee can be made, however, that
litigation against a fund will not be undertaken or liabilities
incurred.

FUTURES AND OPTIONS. The following paragraphs pertain to futures and
options: Combined Positions, Correlation of Price Changes, Futures
Contracts, Futures Margin Payments, Limitations on Futures and Options
Transactions, Liquidity of Options and Futures Contracts, Options and
Futures Relating to Foreign Currencies, OTC Options, Purchasing Put
and Call Options, and Writing Put and Call Options.

COMBINED POSITIONS involve purchasing and writing options in
combination with each other, or in combination with futures or forward
contracts, to adjust the risk and return characteristics of the
overall position. For example, purchasing a put option and writing a
call option on the same underlying instrument would construct a
combined position whose risk and return characteristics are similar to
selling a futures contract. Another possible combined position would
involve writing a call option at one strike price and buying a call
option at a lower price, to reduce the risk of the written call option
in the event of a substantial price increase. Because combined options
positions involve multiple trades, they result in higher transaction
costs and may be more difficult to open and close out.

CORRELATION OF PRICE CHANGES. Because there are a limited number of
types of exchange-traded options and futures contracts, it is likely
that the standardized contracts available will not match a fund's
current or anticipated investments exactly. A fund may invest in
options and futures contracts based on securities with different
issuers, maturities, or other characteristics from the securities in
which the fund typically invests, which involves a risk that the
options or futures position will not track the performance of the
fund's other investments.

Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match a
fund's investments well. Options and futures prices are affected by
such factors as current and anticipated short-term interest rates,
changes in volatility of the underlying instrument, and the time
remaining until expiration of the contract, which may not affect
security prices the same way. Imperfect correlation may also result
from differing levels of demand in the options and futures markets and
the securities markets, from structural differences in how options and
futures and securities are traded, or from imposition of daily price
fluctuation limits or trading halts. A fund may purchase or sell
options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to
attempt to compensate for differences in volatility between the
contract and the securities, although this may not be successful in
all cases. If price changes in a fund's options or futures positions
are poorly correlated with its other investments, the positions may
fail to produce anticipated gains or result in losses that are not
offset by gains in other investments.

FUTURES CONTRACTS. In purchasing a futures contract, the buyer agrees
to purchase a specified underlying instrument at a specified future
date. In selling a futures contract, the seller agrees to sell a
specified underlying instrument at a specified future date. The price
at which the purchase and sale will take place is fixed when the buyer
and seller enter into the contract. Some currently available futures
contracts are based on specific securities, such as U.S. Treasury
bonds or notes, and some are based on indices of securities prices,
such as the Standard & Poor's 500SM Index (S&P 500(registered
trademark)). Futures can be held until their delivery dates, or can
be closed out before then if a liquid secondary market is available.

Futures may be based on foreign indexes such as the CAC 40 (France),
DAX 30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).

The value of a futures contract tends to increase and decrease in
tandem with the value of its underlying instrument. Therefore,
purchasing futures contracts will tend to increase a fund's exposure
to positive and negative price fluctuations in the underlying
instrument, much as if it had purchased the underlying instrument
directly. When a fund sells a futures contract, by contrast, the value
of its futures position will tend to move in a direction contrary to
the market. Selling futures contracts, therefore, will tend to offset
both positive and negative market price changes, much as if the
underlying instrument had been sold.

FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract
is not required to deliver or pay for the underlying instrument unless
the contract is held until the delivery date. However, both the
purchaser and seller are required to deposit "initial margin" with a
futures broker, known as a futures commission merchant (FCM), when the
contract is entered into. Initial margin deposits are typically equal
to a percentage of the contract's value. If the value of either
party's position declines, that party will be required to make
additional "variation margin" payments to settle the change in value
on a daily basis. The party that has a gain may be entitled to receive
all or a portion of this amount. Initial and variation margin payments
do not constitute purchasing securities on margin for purposes of a
fund's investment limitations. In the event of the bankruptcy of an
FCM that holds margin on behalf of a fund, the fund may be entitled to
return of margin owed to it only in proportion to the amount received
by the FCM's other customers, potentially resulting in losses to the
fund.

Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.

LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. Each fund intends to
file a notice of eligibility for exclusion from the definition of the
term "commodity pool operator" with the Commodity Futures Trading
Commission (CFTC) and the National Futures Association, which regulate
trading in the futures markets, before engaging in any purchases or
sales of futures contracts or options on futures contracts. The funds
intend to comply with Rule 4.5 under the Commodity Exchange Act, which
limits the extent to which the funds can commit assets to initial
margin deposits and option premiums.

In addition, each fund will not: (a) sell futures contracts, purchase
put options, or write call options if, as a result, more than 25% of
the fund's total assets would be hedged with futures and options under
normal conditions; (b) purchase futures contracts or write put options
if, as a result, the fund's total obligations upon settlement or
exercise of purchased futures contracts and written put options would
exceed 25% of its total assets under normal conditions; or (c)
purchase call options if, as a result, the current value of option
premiums for call options purchased by the fund would exceed 5% of the
fund's total assets. These limitations do not apply to options
attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.

The above limitations on the funds' investments in futures contracts
and options, and the funds' policies regarding futures contracts and
options discussed elsewhere in this SAI may be changed as regulatory
agencies permit.

LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a
liquid secondary market will exist for any particular options or
futures contract at any particular time. Options may have relatively
low trading volume and liquidity if their strike prices are not close
to the underlying instrument's current price. In addition, exchanges
may establish daily price fluctuation limits for options and futures
contracts, and may halt trading if a contract's price moves upward or
downward more than the limit in a given day. On volatile trading days
when the price fluctuation limit is reached or a trading halt is
imposed, it may be impossible to enter into new positions or close out
existing positions. If the secondary market for a contract is not
liquid because of price fluctuation limits or otherwise, it could
prevent prompt liquidation of unfavorable positions, and potentially
could require a fund to continue to hold a position until delivery or
expiration regardless of changes in its value. As a result, a fund's
access to other assets held to cover its options or futures positions
could also be impaired.

OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures
contracts are similar to forward currency exchange contracts, except
that they are traded on exchanges (and have margin requirements) and
are standardized as to contract size and delivery date. Most currency
futures contracts call for payment or delivery in U.S. dollars. The
underlying instrument of a currency option may be a foreign currency,
which generally is purchased or delivered in exchange for U.S.
dollars, or may be a futures contract. The purchaser of a currency
call obtains the right to purchase the underlying currency, and the
purchaser of a currency put obtains the right to sell the underlying
currency.

The uses and risks of currency options and futures are similar to
options and futures relating to securities or indices, as discussed
above. A fund may purchase and sell currency futures and may purchase
and write currency options to increase or decrease its exposure to
different foreign currencies. Currency options may also be purchased
or written in conjunction with each other or with currency futures or
forward contracts. Currency futures and options values can be expected
to correlate with exchange rates, but may not reflect other factors
that affect the value of a fund's investments. A currency hedge, for
example, should protect a Yen-denominated security from a decline in
the Yen, but will not protect a fund against a price decline resulting
from deterioration in the issuer's creditworthiness. Because the value
of a fund's foreign-denominated investments changes in response to
many factors other than exchange rates, it may not be possible to
match the amount of currency options and futures to the value of the
fund's investments exactly over time.

OTC OPTIONS. Unlike exchange-traded options, which are standardized
with respect to the underlying instrument, expiration date, contract
size, and strike price, the terms of OTC options (options not traded
on exchanges) generally are established through negotiation with the
other party to the option contract. While this type of arrangement
allows the purchaser or writer greater flexibility to tailor an option
to its needs, OTC options generally involve greater credit risk than
exchange-traded options, which are guaranteed by the clearing
organization of the exchanges where they are traded.

PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the
purchaser obtains the right (but not the obligation) to sell the
option's underlying instrument at a fixed strike price. In return for
this right, the purchaser pays the current market price for the option
(known as the option premium). Options have various types of
underlying instruments, including specific securities, indices of
securities prices, and futures contracts. The purchaser may terminate
its position in a put option by allowing it to expire or by exercising
the option. If the option is allowed to expire, the purchaser will
lose the entire premium. If the option is exercised, the purchaser
completes the sale of the underlying instrument at the strike price. A
purchaser may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary
market exists.

The buyer of a typical put option can expect to realize a gain if
security prices fall substantially. However, if the underlying
instrument's price does not fall enough to offset the cost of
purchasing the option, a put buyer can expect to suffer a loss
(limited to the amount of the premium, plus related transaction
costs).

The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right
to purchase, rather than sell, the underlying instrument at the
option's strike price. A call buyer typically attempts to participate
in potential price increases of the underlying instrument with risk
limited to the cost of the option if security prices fall. At the same
time, the buyer can expect to suffer a loss if security prices do not
rise sufficiently to offset the cost of the option.

WRITING PUT AND CALL OPTIONS. The writer of a put or call option takes
the opposite side of the transaction from the option's purchaser. In
return for receipt of the premium, the writer assumes the obligation
to pay the strike price for the option's underlying instrument if the
other party to the option chooses to exercise it. The writer may seek
to terminate a position in a put option before exercise by closing out
the option in the secondary market at its current price. If the
secondary market is not liquid for a put option, however, the writer
must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes. When writing an option on
a futures contract, a fund will be required to make margin payments to
an FCM as described above for futures contracts.

If security prices rise, a put writer would generally expect to
profit, although its gain would be limited to the amount of the
premium it received. If security prices remain the same over time, it
is likely that the writer will also profit, because it should be able
to close out the option at a lower price. If security prices fall, the
put writer would expect to suffer a loss. This loss should be less
than the loss from purchasing the underlying instrument directly,
however, because the premium received for writing the option should
mitigate the effects of the decline.

Writing a call option obligates the writer to sell or deliver the
option's underlying instrument, in return for the strike price, upon
exercise of the option. The characteristics of writing call options
are similar to those of writing put options, except that writing calls
generally is a profitable strategy if prices remain the same or fall.
Through receipt of the option premium, a call writer mitigates the
effects of a price decline. At the same time, because a call writer
must be prepared to deliver the underlying instrument in return for
the strike price, even if its current value is greater, a call writer
gives up some ability to participate in security price increases.

ILLIQUID SECURITIES cannot be sold or disposed of in the ordinary
course of business at approximately the prices at which they are
valued. Difficulty in selling securities may result in a loss or may
be costly to a fund. Under the supervision of the Board of Trustees,
FMR determines the liquidity of a fund's investments and, through
reports from FMR, the Board monitors investments in illiquid
securities. In determining the liquidity of a fund's investments, FMR
may consider various factors, including (1) the frequency and volume
of trades and quotations, (2) the number of dealers and prospective
purchasers in the marketplace, (3) dealer undertakings to make a
market, and (4) the nature of the security and the market in which it
trades (including any demand, put or tender features, the mechanics
and other requirements for transfer, any letters of credit or other
credit enhancement features, any ratings, the number of holders, the
method of soliciting offers, the time required to dispose of the
security, and the ability to assign or offset the rights and
obligations of the security).

INDEXED SECURITIES are instruments whose prices are indexed to the
prices of other securities, securities indices, currencies, or other
financial indicators. Indexed securities typically, but not always,
are debt securities or deposits whose value at maturity or coupon rate
is determined by reference to a specific instrument or statistic.

Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest
rates are determined by reference to the values of one or more
specified foreign currencies, and may offer higher yields than U.S.
dollar-denominated securities. Currency-indexed securities may be
positively or negatively indexed; that is, their maturity value may
increase when the specified currency value increases, resulting in a
security that performs similarly to a foreign-denominated instrument,
or their maturity value may decline when foreign currencies increase,
resulting in a security whose price characteristics are similar to a
put on the underlying currency. Currency-indexed securities may also
have prices that depend on the values of a number of different foreign
currencies relative to each other.

The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which
they are indexed, and may also be influenced by interest rate changes
in the United States and abroad. Indexed securities may be more
volatile than the underlying instruments. Indexed securities are also
subject to the credit risks associated with the issuer of the
security, and their values may decline substantially if the issuer's
creditworthiness deteriorates. Recent issuers of indexed securities
have included banks, corporations, and certain U.S. Government
agencies.

INTERFUND BORROWING AND LENDING PROGRAM. Pursuant to an exemptive
order issued by the SEC, a fund may lend money to, and borrow money
from, other funds advised by FMR or its affiliates. A fund will lend
through the program only when the returns are higher than those
available from an investment in repurchase agreements, and will borrow
through the program only when the costs are equal to or lower than the
cost of bank loans. Interfund loans and borrowings normally extend
overnight, but can have a maximum duration of seven days. Loans may be
called on one day's notice. A fund may have to borrow from a bank at a
higher interest rate if an interfund loan is called or not renewed.
Any delay in repayment to a lending fund could result in a lost
investment opportunity or additional borrowing costs.

INVESTMENT-GRADE DEBT SECURITIES. Investment-grade debt securities are
medium and high-quality securities. Some may possess speculative
characteristics and may be more sensitive to economic changes and to
changes in the financial conditions of issuers. A debt security is
considered to be investment-grade if it is rated investment-grade by
Moody's Investors Service, Standard & Poor's, Duff & Phelps Credit
Rating Co., or Fitch IBCA Inc., or is unrated but considered to be of
equivalent quality by FMR.

ISSUER LOCATION. FMR determines where an issuer or its principal
activities are located by looking at such factors as the issuer's
country of organization, the primary trading market for the issuer's
securities, and the location of the issuer's assets, personnel, sales,
and earnings. The issuer of a security is considered to be located in
a particular country if (1) the security is issued or guaranteed by
the government of the country or any of its agencies, political
subdivisions, or instrumentalities; (2) the security has its primary
trading market in that country; or (3) the issuer is organized under
the laws of that country, derives at least 50% of its revenues or
profits from goods sold, investments made, or services performed in
the country, or has at least 50% of its assets located in the country.

LOANS AND OTHER DIRECT DEBT INSTRUMENTS. Direct debt instruments are
interests in amounts owed by a corporate, governmental, or other
borrower to lenders or lending syndicates (loans and loan
participations), to suppliers of goods or services (trade claims or
other receivables), or to other parties. Direct debt instruments
involve a risk of loss in case of default or insolvency of the
borrower and may offer less legal protection to the purchaser in the
event of fraud or misrepresentation, or there may be a requirement
that a fund supply additional cash to a borrower on demand.

Purchasers of loans and other forms of direct indebtedness depend
primarily upon the creditworthiness of the borrower for payment of
interest and repayment of principal. If scheduled interest or
principal payments are not made, the value of the instrument may be
adversely affected. Loans that are fully secured provide more
protections than an unsecured loan in the event of failure to make
scheduled interest or principal payments. However, there is no
assurance that the liquidation of collateral from a secured loan would
satisfy the borrower's obligation, or that the collateral could be
liquidated. Indebtedness of borrowers whose creditworthiness is poor
involves substantially greater risks and may be highly speculative.
Borrowers that are in bankruptcy or restructuring may never pay off
their indebtedness, or may pay only a small fraction of the amount
owed. Direct indebtedness of developing countries also involves a risk
that the governmental entities responsible for the repayment of the
debt may be unable, or unwilling, to pay interest and repay principal
when due.

Investments in loans through direct assignment of a financial
institution's interests with respect to a loan may involve additional
risks. For example, if a loan is foreclosed, the purchaser could
become part owner of any collateral, and would bear the costs and
liabilities associated with owning and disposing of the collateral. In
addition, it is conceivable that under emerging legal theories of
lender liability, a purchaser could be held liable as a co-lender.
Direct debt instruments may also involve a risk of insolvency of the
lending bank or other intermediary.

A loan is often administered by a bank or other financial institution
that acts as agent for all holders. The agent administers the terms of
the loan, as specified in the loan agreement. Unless, under the terms
of the loan or other indebtedness, the purchaser has direct recourse
against the borrower, the purchaser may have to rely on the agent to
apply appropriate credit remedies against a borrower. If assets held
by the agent for the benefit of a purchaser were determined to be
subject to the claims of the agent's general creditors, the purchaser
might incur certain costs and delays in realizing payment on the loan
or loan participation and could suffer a loss of principal or
interest.

Direct indebtedness may include letters of credit, revolving credit
facilities, or other standby financing commitments that obligate
purchasers to make additional cash payments on demand. These
commitments may have the effect of requiring a purchaser to increase
its investment in a borrower at a time when it would not otherwise
have done so, even if the borrower's condition makes it unlikely that
the amount will ever be repaid.

Each fund limits the amount of total assets that it will invest in any
one issuer or in issuers within the same industry (see each fund's
investment limitations). For purposes of these limitations, a fund
generally will treat the borrower as the "issuer" of indebtedness held
by the fund. In the case of loan participations where a bank or other
lending institution serves as financial intermediary between a fund
and the borrower, if the participation does not shift to the fund the
direct debtor-creditor relationship with the borrower, SEC
interpretations require a fund, in appropriate circumstances, to treat
both the lending bank or other lending institution and the borrower as
"issuers" for these purposes. Treating a financial intermediary as an
issuer of indebtedness may restrict a fund's ability to invest in
indebtedness related to a single financial intermediary, or a group of
intermediaries engaged in the same industry, even if the underlying
borrowers represent many different companies and industries.

LOWER-QUALITY DEBT SECURITIES. Lower-quality debt securities have poor
protection with respect to the payment of interest and repayment of
principal, or may be in default. These securities are often considered
to be speculative and involve greater risk of loss or price changes
due to changes in the issuer's capacity to pay. The market prices of
lower-quality debt securities may fluctuate more than those of
higher-quality debt securities and may decline significantly in
periods of general economic difficulty, which may follow periods of
rising interest rates.

The market for lower-quality debt securities may be thinner and less
active than that for higher-quality debt securities, which can
adversely affect the prices at which the former are sold. Adverse
publicity and changing investor perceptions may affect the liquidity
of lower-quality debt securities and the ability of outside pricing
services to value lower-quality debt securities.

Because the risk of default is higher for lower-quality debt
securities, FMR's research and credit analysis are an especially
important part of managing securities of this type. FMR will attempt
to identify those issuers of high-yielding securities whose financial
condition is adequate to meet future obligations, has improved, or is
expected to improve in the future. FMR's analysis focuses on relative
values based on such factors as interest or dividend coverage, asset
coverage, earnings prospects, and the experience and managerial
strength of the issuer.

A fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise to exercise its rights as a security
holder to seek to protect the interests of security holders if it
determines this to be in the best interest of the fund's shareholders.

PREFERRED STOCK represents an equity or ownership interest in an
issuer that pays dividends at a specified rate and that has precedence
over common stock in the payment of dividends. In the event an issuer
is liquidated or declares bankruptcy, the claims of owners of bonds
take precedence over the claims of those who own preferred and common
stock.

REAL ESTATE INVESTMENT TRUSTS. Equity real estate investment trusts
own real estate properties, while mortgage real estate investment
trusts make construction, development, and long-term mortgage loans.
Their value may be affected by changes in the value of the underlying
property of the trusts, the creditworthiness of the issuer, property
taxes, interest rates, and tax and regulatory requirements, such as
those relating to the environment. Both types of trusts are dependent
upon management skill, are not diversified, and are subject to heavy
cash flow dependency, defaults by borrowers, self-liquidation, and the
possibility of failing to qualify for tax-free status of income under
the Internal Revenue Code and failing to maintain exemption from the
1940 Act.

REPURCHASE AGREEMENTS involve an agreement to purchase a security and
to sell that security back to the original seller at an agreed-upon
price. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate
or maturity of the purchased security. As protection against the risk
that the original seller will not fulfill its obligation, the
securities are held in a separate account at a bank, marked-to-market
daily, and maintained at a value at least equal to the sale price plus
the accrued incremental amount. The value of the security purchased
may be more or less than the price at which the counterparty has
agreed to purchase the security. In addition, delays or losses could
result if the other party to the agreement defaults or becomes
insolvent. The funds will engage in repurchase agreement transactions
with parties whose creditworthiness has been reviewed and found
satisfactory by FMR.

RESTRICTED SECURITIES are subject to legal restrictions on their sale.
Difficulty in selling securities may result in a loss or be costly to
a fund. Restricted securities generally can be sold in privately
negotiated transactions, pursuant to an exemption from registration
under the Securities Act of 1933, or in a registered public offering.
Where registration is required, the holder of a registered security
may be obligated to pay all or part of the registration expense and a
considerable period may elapse between the time it decides to seek
registration and the time it may be permitted to sell a security under
an effective registration statement. If, during such a period, adverse
market conditions were to develop, the holder might obtain a less
favorable price than prevailed when it decided to seek registration of
the security.

REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a
fund sells a security to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase that
security at an agreed-upon price and time. The funds will enter into
reverse repurchase agreements with parties whose creditworthiness has
been reviewed and found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of fund assets and may be
viewed as a form of leverage.

SECURITIES OF OTHER INVESTMENT COMPANIES, including shares of
closed-end investment companies, unit investment trusts, and open-end
investment companies, represent interests in professionally managed
portfolios that may invest in any type of instrument. Investing in
other investment companies involves substantially the same risks as
investing directly in the underlying instruments, but may involve
additional expenses at the investment company-level, such as portfolio
management fees and operating expenses. Certain types of investment
companies, such as closed-end investment companies, issue a fixed
number of shares that trade on a stock exchange or over-the-counter at
a premium or a discount to their net asset value. Others are
continuously offered at net asset value, but may also be traded in the
secondary market.

The extent to which a fund can invest in securities of other
investment companies is limited by federal securities laws.

SECURITIES LENDING. A fund may lend securities to parties such as
broker-dealers or other institutions, including Fidelity Brokerage
Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange
(NYSE) and a subsidiary of FMR Corp.

Securities lending allows a fund to retain ownership of the securities
loaned and, at the same time, earn additional income. The borrower
provides the fund with collateral in an amount at least equal to the
value of the securities loaned. The fund maintains the ability to
obtain the right to vote or consent on proxy proposals involving
material events affecting securities loaned. If the borrower defaults
on its obligation to return the securities loaned because of
insolvency or other reasons, a fund could experience delays and costs
in recovering the securities loaned or in gaining access to the
collateral. These delays and costs could be greater for foreign
securities. If a fund is not able to recover the securities loaned, a
fund may sell the collateral and purchase a replacement investment in
the market. The value of the collateral could decrease below the value
of the replacement investment by the time the replacement investment
is purchased. Loans will be made only to parties deemed by FMR to be
in good standing and when, in FMR's judgment, the income earned would
justify the risks.

Cash received as collateral through loan transactions may be invested
in other eligible securities. Investing this cash subjects that
investment, as well as the securities loaned, to market appreciation
or depreciation.

SHORT SALES "AGAINST THE BOX" are short sales of securities that a
fund owns or has the right to obtain (equivalent in kind or amount to
the securities sold short). If a fund enters into a short sale against
the box, it will be required to set aside securities equivalent in
kind and amount to the securities sold short (or securities
convertible or exchangeable into such securities) and will be required
to hold such securities while the short sale is outstanding. The fund
will incur transaction costs, including interest expenses, in
connection with opening, maintaining, and closing short sales against
the box.

SOVEREIGN DEBT OBLIGATIONS are issued or guaranteed by foreign
governments or their agencies, including debt of Latin American
nations or other developing countries. Sovereign debt may be in the
form of conventional securities or other types of debt instruments
such as loans or loan participations. Sovereign debt of developing
countries may involve a high degree of risk, and may be in default or
present the risk of default. Governmental entities responsible for
repayment of the debt may be unable or unwilling to repay principal
and pay interest when due, and may require renegotiation or
rescheduling of debt payments. In addition, prospects for repayment of
principal and payment of interest may depend on political as well as
economic factors. Although some sovereign debt, such as Brady Bonds,
is collateralized by U.S. Government securities, repayment of
principal and payment of interest is not guaranteed by the U.S.
Government.

SWAP AGREEMENTS can be individually negotiated and structured to
include exposure to a variety of different types of investments or
market factors. Depending on their structure, swap agreements may
increase or decrease a fund's exposure to long- or short-term interest
rates (in the United States or abroad), foreign currency values,
mortgage securities, corporate borrowing rates, or other factors such
as security prices or inflation rates. Swap agreements can take many
different forms and are known by a variety of names.

In a typical cap or floor agreement, one party agrees to make payments
only under specified circumstances, usually in return for payment of a
fee by the other party. For example, the buyer of an interest rate cap
obtains the right to receive payments to the extent that a specified
interest rate exceeds an agreed-upon level, while the seller of an
interest rate floor is obligated to make payments to the extent that a
specified interest rate falls below an agreed-upon level. An interest
rate collar combines elements of buying a cap and selling a floor.

Swap agreements will tend to shift a fund's investment exposure from
one type of investment to another. For example, if the fund agreed to
exchange payments in dollars for payments in foreign currency, the
swap agreement would tend to decrease the fund's exposure to U.S.
interest rates and increase its exposure to foreign currency and
interest rates. Caps and floors have an effect similar to buying or
writing options. Depending on how they are used, swap agreements may
increase or decrease the overall volatility of a fund's investments
and its share price.

The most significant factor in the performance of swap agreements is
the change in the specific interest rate, currency, or other factors
that determine the amounts of payments due to and from a fund. If a
swap agreement calls for payments by the fund, the fund must be
prepared to make such payments when due. In addition, if the
counterparty's creditworthiness declined, the value of a swap
agreement would be likely to decline, potentially resulting in losses.
A fund may be able to eliminate its exposure under a swap agreement
either by assignment or other disposition, or by entering into an
offsetting swap agreement with the same party or a similarly
creditworthy party.

TEMPORARY DEFENSIVE POLICIES. Each fund reserves the right to invest
without limitation in preferred stocks and investment-grade debt
instruments for temporary, defensive purposes.

WARRANTS. Warrants are instruments which entitle the holder to buy an
equity security at a specific price for a specific period of time.
Changes in the value of a warrant do not necessarily correspond to
changes in the value of its underlying security. The price of a
warrant may be more volatile than the price of its underlying
security, and a warrant may offer greater potential for capital
appreciation as well as capital loss.

Warrants do not entitle a holder to dividends or voting rights with
respect to the underlying security and do not represent any rights in
the assets of the issuing company. A warrant ceases to have value if
it is not exercised prior to its expiration date. These factors can
make warrants more speculative than other types of investments.

ZERO COUPON BONDS do not make interest payments; instead, they are
sold at a discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be more volatile than other types of
fixed-income securities when interest rates change. In calculating a
fund's dividend, a portion of the difference between a zero coupon
bond's purchase price and its face value is considered income.

SPECIAL CONSIDERATIONS REGARDING CANADA

POLITICAL. Canada's parliamentary system of government is, in general,
stable. However, from time to time, some provinces, but particularly
Quebec, have called for a revamping of the legal and financial
relationship between the federal government in Ottawa and the
provinces. To date, referendums on Quebec sovereignty have been
defeated, but the issue remains unresolved. The Supreme Court of
Canada decided in August 1998 that if there was a "clear answer" to a
"clear question" in a referendum, then the federal government would be
obliged to negotiate with Quebec.

ECONOMIC. Canada is a major producer of commodities such as forest
products, metals, agricultural products, and energy related products
like oil, gas, and hydroelectricity. Accordingly, changes in the
supply and demand of industrial and basic materials, both domestically
and internationally, can have a significant effect on Canadian market
performance.

In addition, Canada relies considerably on the health of the United
States' economy, its biggest trading partner and largest foreign
investor. The expanding economic and financial integration of the
United States and Canada will likely make the Canadian economy and
securities market increasingly sensitive to U.S. economic and market
events.

CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. Since Canada let its currency float in 1970, its
value has been in a steady decline against the U.S. dollar. While the
decline has helped Canada stay competitive in export markets, U.S.
investors have seen their investment returns eroded by the impact of
currency conversion.

SPECIAL CONSIDERATIONS REGARDING EUROPE

On January 1, 1999, eleven of the fifteen member countries of the
European Union (EU) fixed their currencies irrevocably to the euro,
the new unit of currency of the European Economic and Monetary Union
(EMU). At that time each member's currency was converted at a fixed
rate to the euro. Initially, use of the euro will be confined mainly
to the wholesale financial markets, while its widespread use in the
retail sector will follow the circulation of euro banknotes and coins
on January 1, 2002. At that time, the national banknotes and coins of
participating member countries will cease to be legal tender. In
addition to adopting a single currency, member countries will no
longer control their own monetary policies. Instead, the authority to
direct monetary policy will be exercised by the new European Central
Bank.

While economic and monetary convergence in the European Union may
offer new opportunities for those investing in the region, investors
should be aware that the success of the union is not wholly assured.
Europe must grapple with a number of challenges, any one of which
could threaten the survival of this monumental undertaking. Eleven
disparate economies must adjust to a unified monetary system, the
absence of exchange rate flexibility, and the loss of economic
sovereignty. The Continent's economies are diverse, its governments
decentralized, and its cultures differ widely. Unemployment is
historically high and could pose political risk. One or more member
countries might exit the union, placing the currency and banking
system in jeopardy.

POLITICAL. For those countries in Western and Eastern Europe that were
not included in the first round of the EU implementation, the
prospects for eventual membership serve as a strong political impetus
for many governments to employ tight fiscal and monetary policies.
Particularly for the Eastern European countries, aspirations to join
the EU are likely to push governments to act decisively.

At the same time, there could become an increasingly widening gap
between rich and poor within the aspiring countries, those countries
who are close to meeting membership criteria, and those who are not
likely to join the EMU. Realigning traditional alliances could alter
trading relationships and potentially provoke divisive socioeconomic
splits. Despite relative calm in Western Europe in recent years, the
risk of regional conflict or targeted terrorist activity could disrupt
European markets.

In the transition to the single economic system, significant political
decisions will be made which will effect the market regulation,
subsidization, and privatization across all industries, from
agricultural products to telecommunications.

ECONOMIC. As economic conditions across member states vary from robust
to dismal, there is continued concern about national-level support for
the currency and the accompanying coordination of fiscal and wage
policy among the eleven EMU member nations. According to the
Maastricht treaty, member countries must maintain inflation below
3.3%, public debt below 60% of GDP, and a deficit of 3% or less of GDP
to qualify for participation in the euro. These requirements severely
limit member countries' ability to implement monetary policy to
address regional economic conditions. Countries that did not qualify
for the euro, such as Greece, risk being left farther behind.

FOREIGN TRADE. The EU has recently been involved in a number of trade
disputes with major trading partners, including the United States.
Tariffs and embargoes have been levied upon imports of agricultural
products and meat that have resulted in the affected nation levying
retaliatory tariffs upon imports from Europe. These disputes can
adversely affect the valuations of the European companies that export
the targeted products.

CURRENCY. For U.S. investors, investing in any foreign currency
entails an additional risk that is not faced when investing in the
domestic market. However, investing in euro-denominated securities
entails risk of being exposed to a new currency that may not fully
reflect the strengths and weaknesses of the disparate economies that
make up the Union. This has been the case in the first six months of
1999, when the initial exchange rates of the euro versus many of the
world's major currencies steadily declined. In this environment, U.S.
and other foreign investors experienced erosion of their investment
returns in the region. In addition, many European countries rely
heavily upon export dependent businesses and any strength in the
exchange rate between the euro and the dollar can have either a
positive or a negative effect upon corporate profits.

GERMANY. The German economy is heavily industrialized, with a strong
emphasis on manufacturing and exports. Therefore, Germany's economic
growth is heavily dependent on the prosperity of its trading partners
and on currency exchange rates. Germany is closely tied to a number of
Eastern European emerging market economies and weakness in these
economies will likely dampen demand for German exports. Germany
continues to struggle with its incorporation of former East Germany
and the country as a whole faces high labor costs and high
unemployment.

FRANCE. In recent years, the country's economic growth has been hit by
a series of general strikes. France's strong labor unions reacted
negatively to government cuts driven by the country's effort to meet
EMU membership criteria. Recently, unions have demanded a lower
retirement age and a shorter work week. Economic growth also is
limited by the country's pay-as-you-go pension system; spending on
pensions accounts for about 10% of GDP.

NORDIC COUNTRIES. Faced with stronger global competition, the Nordic
countries-Norway, Finland, Denmark, and Sweden-have had to scale down
their historically generous welfare programs, resulting in drops in
domestic demand and increased unemployment. Major industries in the
region, such as forestry, agriculture, and oil, are heavily resource
dependent and face pressure as a result of high labor costs. Pension
reform, union regulation, and further cuts in liberal social programs
will likely need to be addressed as the Nordic countries face
increased international competition.

UNITED KINGDOM. The United Kingdom continues to be overtly less
enthusiastic about EMU than other countries in Europe and has not
committed itself to joining the euro. While the UK views independence
from the EMU as a competitive advantage, the country may not benefit
from its independence if economic conditions on the continent improve.
If the continental European stock markets make more compelling
prospects for economic growth, there is concern that the UK market may
lag its European counterparts.

EASTERN EUROPE. Investing in the securities of Eastern European
issuers is highly speculative and involves risks not usually
associated with investing in the more developed markets of Western
Europe.

The economies of the Eastern European nations are embarking on the
transition from communism at different paces with appropriately
different characteristics. Most Eastern European markets suffer from
thin trading activity, dubious investor protections, and often, a
dearth of reliable corporate information. Information and transaction
costs, differential taxes, and sometimes political or transfer risk
give a comparative advantage to the domestic investor rather than the
foreign investor. In addition, these markets are particularly
sensitive to political, economic, and currency events in Russia and
have recently suffered heavy losses as a result of their trading and
investment links to the troubled Russian economy and currency.

SPECIAL CONSIDERATIONS REGARDING JAPAN

Fueled by public investment, protectionist trade policies, and
innovative management styles, the Japanese economy has transformed
itself since World War II into the world's second largest economy.
Despite its impressive history, investors face special risks when
investing in Japan.

ECONOMIC. Since Japan's bubble economy collapsed eight years ago, the
nation has drifted between modest growth and recession. By mid-year
1998, the world's second largest economy had slipped into its deepest
recession since World War II. Much of the blame can be placed on
government inaction in implementing long-neglected structural reforms
despite strong and persistent prodding from the International Monetary
Fund and the G7 member nations. Steps have been taken to deregulate
and liberalize protected areas of the economy, but the pace of change
has been disappointedly slow.

The most pressing need for action is the daunting task of overhauling
the nation's financial institutions and securing public support for
taxpayer-funded bailouts. Banks, in particular, must dispose of their
huge overhang of bad loans and trim their balance sheets in
preparation for greater competition from foreign institutions as more
areas of the financial sector are opened. Successful financial sector
reform would allow Japan's financial institutions to act as a catalyst
for economic recovery at home and across the troubled Asian region.

FOREIGN TRADE. Much of Japan's economy is dependent upon international
trade. The country is a leading exporter of automobiles and industrial
machinery as well as industrial and consumer electronics. While the
United States is Japan's largest single trading partner, close to half
of Japan's trade is conducted with developing nations, almost all of
which are in Southeast Asia. For the past two years, Southeast Asia's
economies have been mired in economic stagnation causing a steep
decline in Japan's exports to the area. Japan's hope for economic
recovery and renewed export growth is largely dependent upon the pace
of economic recovery in Southeast Asia.

NATURAL RESOURCE DEPENDENCY. An island nation with limited natural
resources, Japan is also heavily dependent upon imports of essential
products such as oil, forest products, and industrial metals.
Accordingly, Japan's industrial sector and domestic economy are highly
sensitive to fluctuations in international commodity prices. In
addition, many of these commodities are traded in U.S. dollars and any
strength in the exchange rate between the yen and the dollar can have
either a positive or a negative effect upon corporate profits.

NATURAL DISASTERS. The Japanese islands have been subjected to
periodic natural disasters including earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the nation's populace and industries.

SPECIAL CONSIDERATIONS REGARDING ASIA PACIFIC REGION (EX JAPAN)

Many countries in the region have historically faced political
uncertainty, corruption, military intervention, and social unrest.
Examples include the ethnic, sectarian, and separatist violence found
in Indonesia, and the nuclear arms threats between India and Pakistan.
To the extent that such events continue in the future, they can be
expected to have a negative effect on economic and securities market
conditions in the region.

ECONOMIC. The economic health of the region depends, in great part, on
each country's respective ability to carry out fiscal and monetary
reforms and its ability to address the International Monetary Fund's
mandated benchmarks. The majority of the countries in the region can
be characterized as either developing or newly industrialized
economies, which tend to experience more volatile economic cycles than
developed countries. In addition, a number of countries in the region
have historically faced hyperinflation, a deterrent to productivity
and economic growth.

CURRENCY. For U.S. investors, investing in any currency entails an
additional risk that is not faced when investing in the domestic
market. Some countries in the region may impose restrictions on
converting local currency, effectively preventing foreigners from
selling assets and repatriating funds. While flexible exchange rates
through most of the region should allow greater control of domestic
liquidity conditions, the region's currencies generally face
above-average volatility with potentially negative implications for
economic and security market conditions.

NATURAL DISASTERS. The Asia Pacific region has been subjected to
periodic natural disasters such as earthquakes, monsoons, and tidal
waves. These events have often inflicted substantial economic
disruption upon the populace and industry of the countries in that
region.

CHINA AND HONG KONG. As with all transition economies, China's ability
to develop and sustain a credible legal, regulatory, monetary, and
socioeconomic system could influence the course of outside investment.
Hong Kong is closely tied to China, economically and through China's
1997 acquisition of the country as a Special Autonomous Region (SAR).
Hong Kong's success depends, in large part, on its ability to retain
the legal, financial and monetary systems that allow economic freedom
and market expansion.

SPECIAL CONSIDERATIONS REGARDING LATIN AMERICA

As an emerging market, Latin America has long suffered from political,
economic, and social instability. For investors, this has meant
additional risk caused by periods of regional conflict, political
corruption, totalitarianism, protectionist measures, nationalization,
hyperinflation, debt crises, and currency devaluation. However, much
has changed in the past decade. Democracy is beginning to become well
established in some countries. A move to a more mature and accountable
political environment is well under way. Domestic economies have been
deregulated and have enjoyed sound levels of growth. Privatization of
state-owned companies is almost completed. Foreign trade restrictions
have been relaxed. Large fiscal deficits have been reduced and
inflation controlled. Nonetheless, the volatile stock markets of 1998
have clearly demonstrated that investors in the region continue to
face a number of potential risks.

POLITICAL. While investors recently have benefited from friendlier
forms of government, the Latin American political climate is still
vulnerable to sudden changes. Many countries in the region have been
in recession and have faced high unemployment. Corruption remains part
of the political landscape. This could lead to social unrest and
changes in governments that are less favorable to investors. The
investor friendly trends of social, economic, and market reforms seen
over the past several years could be reversed. Also, as has
historically been the case, the stock markets may be subject to
increased volatility as some countries approach elections: Argentina,
Chile, Mexico, and Peru.

SOCIAL UNREST. Latin America continues to suffer from one of the most
inequitable distributions of wealth in the world, as well as rampant
delinquency and street crime. The recent reforms and the move to
democracy, which were initially welcomed by the population, so far
have failed to significantly improve the living conditions of the
majority of people. This could lead to social unrest, occasional labor
strikes, rebellion, or civil war.

ECONOMIC. Many countries in the region have experienced periods of
hyperinflation which adversely impacted and may continue to impact
their economies and local stock markets. Despite signs that inflation
has been tamed, the risk of hyperinflation persists.

FOREIGN TRADE. One key to the recent economic growth in the region has
been the reduction of trade barriers and a series of free-trade
agreements. These are currently under pressure given the recent
macro-economic imbalances between many trading partners. One example
would be Mercosur, which includes Argentina, Brazil, Uruguay, and
Paraguay. As long as the economies perform well and the regimes
maintain similar economic and currency policies, all will benefit from
this agreement. However, the recent devaluation of Brazil's currency,
combined with recessions in the region, has created tension between
the largest trading partners, Brazil and Argentina. This could
threaten the pace of vital trade integration and regional economic
stability.

CURRENCY. For U.S. investors, investing in any foreign market entails
the risk of currency fluctuations; any weakness in the local currency
could erode the investment returns to U.S. investors upon currency
conversion. As is typical of emerging markets, Latin America has a
long history of currency devaluation, evidenced by the Mexican peso
crisis and the more recent Brazilian devaluation. The region remains
exposed to currency speculators, particularly if the economic or
political conditions worsen. Countries where the currency is
artificially pegged to the dollar are most at risk. For example,
predatory speculation may shift to Argentina if the cost of
maintaining the currency board reaches an unsustainable level given
the negative impact of the Brazilian devaluation, the economic
recession, the deterioration of the foreign trade balances, and the
mounting fiscal deficit.

SOVEREIGN DEBT. Although austerity programs in many countries have
significantly reduced fiscal deficits, the region is still facing
significant debt. Interest on the debt is subject to market conditions
and may reach levels that would impair economic activity and create a
difficult and costly environment for borrowers. In addition,
governments may be forced to reschedule or freeze their debt
repayment, which could negatively impact the stock market.

NATURAL RESOURCES DEPENDENCY. Commodities such as agricultural
products, minerals, and metals account for a significant percentage of
exports of many Latin American countries. As a result, these economies
have been particularly sensitive to the fluctuation of commodity
prices. As an example, Chile has been affected by the change in the
prices of copper and pulp, which has adversely affected its economy
and stock market. Similarly, because the U.S. is Mexico's largest
trading partner - accounting for more than four-fifths of its exports
- any economic downturn in the U.S. economy could adversely impact the
Mexican economy and stock market.

NATURAL DISASTERS. The region has been subjected to periodic natural
disasters, such as earthquakes and floods. These events have often
inflicted substantial damage upon the populations and the economy.
More recently, weather disorders attributed to the "El Nino" effect
have placed a serious drag on the economy of some countries, such as
Peru and Ecuador.

FINANCIAL REPORTING STANDARDS. As is typical of many emerging markets,
many companies in the region are still controlled by families and
their associates. Accordingly, these owners may not always act in the
best interests of public shareholders. In addition, rules for
disclosing financial information are less stringent, which increases
the difficulty of accessing reliable and viable information.

SPECIAL CONSIDERATIONS REGARDING RUSSIA

Investing in Russian securities is highly speculative and involves
greater risks than generally encountered when investing in the
securities markets of the U.S. and most other developed countries.
Over the past century, Russia has experienced political and economic
turbulence and has endured decades of communist rule under which tens
of millions of its citizens were collectivized into state agricultural
and industrial enterprises. For most of the past decade, Russia's
government has been faced with the daunting task of stabilizing its
domestic economy, while transforming it into a modern and efficient
structure able to compete in international markets and respond to the
needs of its citizens. However, to date, many of the country's
economic reform initiatives have floundered as the proceeds of IMF and
other economic assistance have been squandered or stolen. In this
environment, there is always the risk that the nation's government
will abandon the current program of economic reform and replace it
with radically different political and economic policies that would be
detrimental to the interests of foreign investors. This could entail a
return to a centrally planned economy and nationalization of private
enterprises similar to what existed under the old Soviet Union. As
recently as 1998, the government imposed a moratorium on the repayment
of its international debt and the restructuring of the repayment
terms.

Foreign investors also face a high degree of currency risk when
investing in Russian securities. In a surprise move in August 1998,
Russia devalued the ruble, defaulted on short-term domestic bonds, and
declared a moratorium on commercial debt payments. In light of these
and other recent government actions, foreign investors face the
possibility of further devaluations. In addition, there is the risk
the government may impose capital controls on foreign portfolio
investments in the event of extreme financial or political crisis.
Such capital controls would prevent the sale of a portfolio of foreign
assets and the repatriation of proceeds.

Many of Russia's businesses have failed to mobilize the available
factors of production because the country's privatization program
virtually ensured the predominance of the old management teams that
are largely non-market-oriented in their management approach. A
combination of poor accounting standards, inept management, endemic
corruption, and limited shareholder rights pose a significant risk,
particularly to foreign investors.

Compared to most national stock markets, the Russian securities market
suffers from a variety of problems not encountered in more developed
markets. Among these are thin trading activity, inadequate regulatory
protection for the rights of investors, and lax custody procedures.
Additionally, there is a dearth of solid corporate information
available to investors.

The Russian economy is heavily dependent upon the export of a range of
commodities including most industrial metals, forestry products, oil,
and gas. Accordingly, it is strongly affected by international
commodity prices and is particularly vulnerable to any weakening in
global demand for these products.

SPECIAL CONSIDERATIONS REGARDING AFRICA

Africa is a highly diverse and politically unstable continent of over
50 countries and 840 million people. Civil wars, coups, and even
genocidal warfare have beset much of this region in recent years.
Nevertheless, the continent is home to an abundance of natural
resources, including natural gas, aluminum, crude oil, copper, iron,
bauxite, cotton, diamonds, and timber. Wealthier African countries
generally have strong connections to European partners; evidence of
these relationships is seen in the growing market capitalization and
foreign investment. Economic performance remains closely tied to world
commodity markets, particularly oil, as well as agricultural
conditions, such as drought.

Several Northern African countries have substantial oil reserves and,
accordingly, their economies react strongly to world oil prices. They
share a regional and sometimes religious identification with the oil
producing nations of the Middle East and can be strongly affected by
political and economic developments in those countries. As in the
south, weather conditions have a strong impact on many of their
natural resources, as was the case in 1995, when severe drought
adversely affected economic growth.

Several African countries have active equity markets, many established
since 1989. The oldest market, in Egypt, was established in 1883,
while the youngest, in Zambia, was established in 1994. The mean age
for all equity markets is 40 years old. A total of 1,830 firms are
listed on the respective exchanges. With the exception of the
relatively large and liquid South African stock market, sub-Saharan
Africa is probably the riskiest of all the world's emerging markets.

During the past two decades, sub-Saharan Africa has lagged behind
other developing regions in economic growth. The area attracts only a
modest share of foreign direct investment and remains highly dependent
on foreign aid. The financial markets are small and underdeveloped and
offer little regulatory protection for investors. Except for South
Africa, the most fundamental problem in all of the countries in the
region is the absence of an effective court system to ensure the
enforceability of contracts. Investors in the area generally face a
high risk of continuing political and economic instability as well as
currency exchange rate volatility.

SOUTH AFRICA. South Africa has a highly developed and industrialized
economy. It is rich in mineral resources and is the world's largest
producer and exporter of gold. The nation's new government has made
remarkable progress in consolidating the nation's peaceful transition
to democracy and in redressing the socioeconomic disparities created
by apartheid. It has a sophisticated financial structure with a large
and active stock exchange that ranks 19th in the world in terms of
market capitalization. Nevertheless, investors in South Africa face a
number of risks common to other developing regions. The nation's heavy
dependence upon the export of natural resources makes its economy and
stock market vulnerable to weak global demand and declines in
commodity prices. The country's currency reserves have been a constant
problem and its currency can be vulnerable to devaluation. There is
also the risk that ethnic and civic conflict could result in the
abandonment of many of the nation's free market reforms to the
detriment of shareholders.

PORTFOLIO TRANSACTIONS

All orders for the purchase or sale of portfolio securities are placed
on behalf of each fund by FMR pursuant to authority contained in the
management contract. FMR is also responsible for the placement of
transaction orders for other investment companies and investment
accounts for which it or its affiliates act as investment adviser. In
selecting broker-dealers, subject to applicable limitations of the
federal securities laws, FMR considers various relevant factors,
including, but not limited to: the size and type of the transaction;
the nature and character of the markets for the security to be
purchased or sold; the execution efficiency, settlement capability,
and financial condition of the broker-dealer firm; the broker-dealer's
execution services rendered on a continuing basis; the reasonableness
of any commissions; and, if applicable, arrangements for payment of
fund expenses.

If FMR grants investment management authority to a sub-adviser (see
the section entitled "Management Contracts"), that sub-adviser is
authorized to place orders for the purchase and sale of portfolio
securities, and will do so in accordance with the policies described
above.

Generally, commissions for investments traded on foreign exchanges
will be higher than for investments traded on U.S. exchanges and may
not be subject to negotiation.

Futures transactions are executed and cleared through FCMs who receive
commissions for their services.

Each fund may execute portfolio transactions with broker-dealers who
provide research and execution services to the fund or other
investment accounts over which FMR or its affiliates exercise
investment discretion. Such services may include advice concerning the
value of securities; the advisability of investing in, purchasing, or
selling securities; and the availability of securities or the
purchasers or sellers of securities. In addition, such broker-dealers
may furnish analyses and reports concerning issuers, industries,
securities, economic factors and trends, portfolio strategy, and
performance of investment accounts; and effect securities transactions
and perform functions incidental thereto (such as clearance and
settlement).

The selection of such broker-dealers for transactions in equity
securities is generally made by FMR (to the extent possible consistent
with execution considerations) in accordance with a ranking of
broker-dealers determined periodically by FMR's investment staff based
upon the quality of research and execution services provided.

For transactions in fixed-income securities, FMR's selection of
broker-dealers is generally based on the availability of a security
and its price and, to a lesser extent, on the overall quality of
execution and other services, including research, provided by the
broker-dealer.

The receipt of research from broker-dealers that execute transactions
on behalf of a fund may be useful to FMR in rendering investment
management services to that fund or its other clients, and conversely,
such research provided by broker-dealers who have executed transaction
orders on behalf of other FMR clients may be useful to FMR in carrying
out its obligations to a fund. The receipt of such research has not
reduced FMR's normal independent research activities; however, it
enables FMR to avoid the additional expenses that could be incurred if
FMR tried to develop comparable information through its own efforts.

Fixed-income securities are generally purchased from an issuer or
underwriter acting as principal for the securities, on a net basis
with no brokerage commission paid. However, the dealer is compensated
by a difference between the security's original purchase price and the
selling price, the so-called "bid-asked spread." Securities may also
be purchased from underwriters at prices that include underwriting
fees.

Subject to applicable limitations of the federal securities laws, a
fund may pay a broker-dealer commissions for agency transactions that
are in excess of the amount of commissions charged by other
broker-dealers in recognition of their research and execution
services. In order to cause a fund to pay such higher commissions, FMR
must determine in good faith that such commissions are reasonable in
relation to the value of the brokerage and research services provided
by such executing broker-dealers, viewed in terms of a particular
transaction or FMR's overall responsibilities to that fund or its
other clients. In reaching this determination, FMR will not attempt to
place a specific dollar value on the brokerage and research services
provided, or to determine what portion of the compensation should be
related to those services.

To the extent permitted by applicable law, FMR is authorized to
allocate portfolio transactions in a manner that takes into account
assistance received in the distribution of shares of the funds or
other Fidelity funds and to use the research services of brokerage and
other firms that have provided such assistance. FMR may use research
services provided by and place agency transactions with National
Financial Services Corporation (NFSC) and Fidelity Brokerage Services
Japan LLC (FBSJ), indirect subsidiaries of FMR Corp., if the
commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services. FMR may also place agency transactions with REDIBook ECN LLC
(REDIBook), an electronic communication network (ECN) in which a
wholly-owned subsidiary of FMR Corp. has an equity ownership interest,
if the commissions are fair, reasonable, and comparable to commissions
charged by non-affiliated, qualified brokerage firms for similar
services.

FMR may allocate brokerage transactions to broker-dealers (including
affiliates of FMR) who have entered into arrangements with FMR under
which the broker-dealer allocates a portion of the commissions paid by
a fund toward the reduction of that fund's expenses. The transaction
quality must, however, be comparable to those of other qualified
broker-dealers.

Section 11(a) of the Securities Exchange Act of 1934 prohibits members
of national securities exchanges from executing exchange transactions
for investment accounts which they or their affiliates manage, unless
certain requirements are satisfied. Pursuant to such requirements, the
Board of Trustees has authorized NFSC to execute portfolio
transactions on national securities exchanges in accordance with
approved procedures and applicable SEC rules.

The Trustees of each fund periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio
transactions on behalf of the fund and review the commissions paid by
the fund over representative periods of time to determine if they are
reasonable in relation to the benefits to the fund.

A fund may pay both commissions and spreads in connection with the
placement of portfolio transactions.

The Trustees of each fund have approved procedures in conformity with
Rule 10f-3 under the 1940 Act whereby a fund may purchase securities
that are offered in underwritings in which an affiliate of FMR
participates. These procedures prohibit the funds from directly or
indirectly benefiting an FMR affiliate in connection with such
underwritings. In addition, for underwritings where an FMR affiliate
participates as a principal underwriter, certain restrictions may
apply that could, among other things, limit the amount of securities
that the funds could purchase in the underwritings.

From time to time the Trustees will review whether the recapture for
the benefit of the funds of some portion of the brokerage commissions
or similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at
present no other recapture arrangements are in effect. The Trustees
intend to continue to review whether recapture opportunities are
available and are legally permissible and, if so, to determine in the
exercise of their business judgment whether it would be advisable for
each fund to seek such recapture.

Although the Trustees and officers of each fund are substantially the
same as those of other funds managed by FMR or its affiliates,
investment decisions for each fund are made independently from those
of other funds or investment accounts managed by FMR or its
affiliates. It sometimes happens that the same security is held in the
portfolio of more than one of these funds or investment accounts.
Simultaneous transactions are inevitable when several funds and
investment accounts are managed by the same investment adviser,
particularly when the same security is suitable for the investment
objective of more than one fund or investment account.

When two or more funds are simultaneously engaged in the purchase or
sale of the same security, the prices and amounts are allocated in
accordance with procedures believed to be appropriate and equitable
for each fund. In some cases this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to
participate in volume transactions will produce better executions and
prices for the funds. It is the current opinion of the Trustees that
the desirability of retaining FMR as investment adviser to each fund
outweighs any disadvantages that may be said to exist from exposure to
simultaneous transactions.

VALUATION

Each class's net asset value per share (NAV) is the value of a single
share. The NAV of each class is computed by adding the class's pro
rata share of the value of the applicable fund's investments, cash,
and other assets, subtracting the class's pro rata share of the
applicable fund's liabilities, subtracting the liabilities allocated
to the class, and dividing the result by the number of shares of that
class that are outstanding.

Portfolio securities are valued by various methods depending on the
primary market or exchange on which they trade. Most equity securities
for which the primary market is the United States are valued at last
sale price or, if no sale has occurred, at the closing bid price. Most
equity securities for which the primary market is outside the United
States are valued using the official closing price or the last sale
price in the principal market in which they are traded. If the last
sale price (on the local exchange) is unavailable, the last evaluated
quote or closing bid price normally is used. Securities of other
open-end investment companies are valued at their respective NAVs.

Fixed-income securities and other assets for which market quotations
are readily available may be valued at market values determined by
such securities' most recent bid prices (sales prices if the principal
market is an exchange) in the principal market in which they normally
are traded, as furnished by recognized dealers in such securities or
assets. Or, fixed-income securities and convertible securities may be
valued on the basis of information furnished by a pricing service that
uses a valuation matrix which incorporates both dealer-supplied
valuations and electronic data processing techniques. Use of pricing
services has been approved by the Board of Trustees. A number of
pricing services are available, and the funds may use various pricing
services or discontinue the use of any pricing service.

Futures contracts and options are valued on the basis of market
quotations, if available.

Independent brokers or quotation services provide prices of foreign
securities in their local currency. Fidelity Service Company, Inc.
(FSC) gathers all exchange rates daily at the close of the NYSE using
the last quoted price on the local currency and then translates the
value of foreign securities from their local currencies into U.S.
dollars. Any changes in the value of forward contracts due to exchange
rate fluctuations and days to maturity are included in the calculation
of NAV. If an event that is expected to materially affect the value of
a portfolio security occurs after the close of an exchange or market
on which that security is traded, then that security will be valued in
good faith by a committee appointed by the Board of Trustees.

Short-term securities with remaining maturities of sixty days or less
for which market quotations and information furnished by a pricing
service are not readily available are valued either at amortized cost
or at original cost plus accrued interest, both of which approximate
current value.

The procedures set forth above need not be used to determine the value
of the securities owned by a fund if, in the opinion of a committee
appointed by the Board of Trustees, some other method would more
accurately reflect the fair value of such securities. For example,
securities and other assets for which there is no readily available
market value may be valued in good faith by a committee appointed by
the Board of Trustees. In making a good faith determination of the
value of a security, the committee may review price movements in
futures contracts and ADRs, market and trading trends, the bid/ask
quotes of brokers and off-exchange institutional trading.

PERFORMANCE

A class may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is
not intended to indicate future returns. Each class's share price and
return fluctuate in response to market conditions and other factors,
and the value of fund shares when redeemed may be more or less than
their original cost.

RETURN CALCULATIONS. Returns quoted in advertising reflect all aspects
of a class's return, including the effect of reinvesting dividends and
capital gain distributions, and any change in a class's NAV over a
stated period. A class's return may be calculated by using the
performance data of a previously existing class prior to the date that
the new class commenced operations, adjusted to reflect differences in
sales charges but not 12b-1 fees. A cumulative return reflects actual
performance over a stated period of time. Average annual returns are
calculated by determining the growth or decline in value of a
hypothetical historical investment in a class over a stated period,
and then calculating the annually compounded percentage rate that
would have produced the same result if the rate of growth or decline
in value had been constant over the period. For example, a cumulative
return of 100% over ten years would produce an average annual return
of 7.18%, which is the steady annual rate of return that would equal
100% growth on a compounded basis in ten years. Average annual returns
covering periods of less than one year are calculated by determining a
class's return for the period, extending that return for a full year
(assuming that return remains constant over the year), and quoting the
result as an annual return. While average annual returns are a
convenient means of comparing investment alternatives, investors
should realize that a class's performance is not constant over time,
but changes from year to year, and that average annual returns
represent averaged figures as opposed to the actual year-to-year
performance of a class.

In addition to average annual returns, a class may quote unaveraged or
cumulative returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative returns
may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a
series of redemptions, over any time period. Returns may be broken
down into their components of income and capital (including capital
gains and changes in share price) to illustrate the relationship of
these factors and their contributions to return. Returns may be quoted
on a before-tax or after-tax basis. Returns and other performance
information may be quoted numerically or in a table, graph, or similar
illustration.

NET ASSET VALUE. Charts and graphs using a class's NAVs, adjusted
NAVs, and benchmark indexes may be used to exhibit performance. An
adjusted NAV includes any distributions paid by a fund and reflects
all elements of a class's return. Unless otherwise indicated, a
class's adjusted NAVs are not adjusted for sales charges, if any.

MOVING AVERAGES. A fund may illustrate performance using moving
averages. A long-term moving average is the average of each week's
adjusted closing NAV for a specified period. A short-term moving
average is the average of each day's adjusted closing NAV for a
specified period. Moving Average Activity Indicators combine adjusted
closing NAVs from the last business day of each week with moving
averages for a specified period to produce indicators showing when an
NAV has crossed, stayed above, or stayed below its moving average.

Each class may compare its return to the record of the S&P 500, the
Dow Jones Industrial Average (DJIA), and the cost of living, as
measured by the Consumer Price Index (CPI), over the same period. The
S&P 500 and DJIA comparisons would show how each class's return
compared to the record of a market capitalization-weighted index of
common stocks and a narrower set of stocks of major industrial
companies, respectively. Each fund has the ability to invest in
securities not included in either index, and its investment portfolio
may or may not be similar in composition to the indexes. The S&P 500
and DJIA returns are based on the prices of unmanaged groups of stocks
and, unlike each class's returns, do not include the effect of
brokerage commissions or other costs of investing.

INTERNATIONAL INDEXES, MARKET CAPITALIZATION, AND NATIONAL STOCK
MARKET RETURN

The following tables show the total market capitalization of certain
countries according to the Morgan Stanley Capital International
indexes database, the total market capitalization of Latin American
countries according to the Morgan Stanley Capital International
database, and the performance of national stock markets as measured in
U.S. dollars by the Morgan Stanley Capital International stock market
indexes for the twelve months ended April 30, 2000. Of course, these
results are not indicative of future stock market performance or the
funds' performance. Market conditions during the periods measured
fluctuated widely. Brokerage commissions and other fees are not
factored into the values of the indexes.

MARKET CAPITALIZATION. Companies outside the United States now make up
nearly two-thirds of the world's stock market capitalization.
According to Morgan Stanley Capital International, the size of the
markets as measured in U.S. dollars grew from $8,199.5 billion in 1999
to $9,629.1 billion in 2000.

The following table measures the total market capitalization of
certain countries according to the Morgan Stanley Capital
International indexes database. The value of each market is measured
in billions of U.S. dollars as of April 30, 2000.

TOTAL MARKET CAPITALIZATION

Australia $210.1 Japan $2,489.1

Austria $19.4 Malaysia $86.1

Belgium $71.1 Netherlands $501.9

Canada $412.3 Norway $33.8

Denmark $75.6 Singapore $74.9

France $1,029.2 Spain $249.7

Germany $822.6 Sweden $301.1

Hong Kong $182.2 Switzerland $556.7

Italy $405.3 United Kingdom $1,863.6

United States $9,470.9

The following table measures the total market capitalization of Latin
American countries according to the Morgan Stanley Capital
International database. The value of each market is measured in
billions of U.S. dollars as of April 30, 2000.

TOTAL MARKET CAPITALIZATION - LATIN AMERICA

Argentina $20.5

Brazil $118.4

Chile $36.5

Colombia $3.0

Mexico $104.9

Venezuela $7.5

Peru $7.0

Total Latin America $297.8

NATIONAL STOCK MARKET PERFORMANCE. Certain national stock markets have
outperformed the U.S. stock market. The first table below represents
the performance of national stock markets as measured in U.S. dollars
by the Morgan Stanley Capital International stock market indexes for
the twelve months ended April 30, 2000. The second table shows the
same performance as measured in local currency. Each table measures
return based on the period's change in price, dividends paid on stocks
in the index, and the effect of reinvesting dividends net of any
applicable foreign taxes. These are unmanaged indexes composed of a
sampling of selected companies representing an approximation of the
market structure of the designated country.

STOCK MARKET PERFORMANCE MEASURED IN U.S. DOLLARS

Australia -10.03% Japan 28.94%

Austria -25.53% Malaysia 68.11%

Belgium -22.95% Netherlands 0.92%

Canada 46.39% Norway -3.23%

Denmark 17.39% Singapore 4.16%

France 27.95% Spain 5.57%

Germany 19.03% Sweden 88.06%

Hong Kong 11.38% Switzerland -9.35%

Italy -1.14% United Kingdom -6.06%

United States 9.55%

STOCK MARKET PERFORMANCE MEASURED IN LOCAL CURRENCY

Australia 2.19% Japan 16.75%

Austria -13.54% Malaysia 42.91%

Belgium -10.55% Netherlands 17.17%

Canada 48.95% Norway 11.19%

Denmark 36.84% Singapore 5.02%

France 48.55% Spain 22.57%

Germany 38.20% Sweden 100.17%

Hong Kong 11.94% Switzerland 2.44%

Italy 14.78% United Kingdom -3.34%

United States 9.55%

The following table shows the average annualized stock market returns
measured in U.S. dollars as of April 30, 2000.

STOCK MARKET PERFORMANCE

Five Years Ended Ten Years Ended
2000 2000

Germany 17.73% 11.52%

Hong Kong 11.71% 18.62%

Japan 0.03% 2.22%

Spain 25.58% 13.31%

United Kingdom 16.02% 14.45%

United States 25.47% 18.55%

PERFORMANCE COMPARISONS. A class's performance may be compared to the
performance of other mutual funds in general, or to the performance of
particular types of mutual funds. These comparisons may be expressed
as mutual fund rankings prepared by Lipper Inc. (Lipper), an
independent service located in Summit, New Jersey that monitors the
performance of mutual funds. Generally, Lipper rankings are based on
return, assume reinvestment of distributions, do not take sales
charges or trading fees into consideration, and are prepared without
regard to tax consequences. In addition to the mutual fund rankings, a
class's performance may be compared to stock, bond, and money market
mutual fund performance indexes prepared by Lipper or other
organizations. When comparing these indexes, it is important to
remember the risk and return characteristics of each type of
investment. For example, while stock mutual funds may offer higher
potential returns, they also carry the highest degree of share price
volatility. Likewise, money market funds may offer greater stability
of principal, but generally do not offer the higher potential returns
available from stock mutual funds.

From time to time, a class's performance may also be compared to other
mutual funds tracked by financial or business publications and
periodicals. For example, a class may quote Morningstar, Inc. in its
advertising materials. Morningstar, Inc. is a mutual fund rating
service that rates mutual funds on the basis of risk-adjusted
performance. Rankings that compare the performance of Fidelity funds
to one another in appropriate categories over specific periods of time
may also be quoted in advertising.

A class's performance may also be compared to that of each index
representing the universe of securities in which the fund may invest.
The return of each index reflects reinvestment of all dividends and
capital gains paid by securities included in each index. Unlike a
class's returns, however, each index's returns do not reflect
brokerage commissions, transaction fees, or other costs of investing
directly in the securities included in the index.

VIP Dynamic Capital Appreciation may compare its performance to that
of the Standard & Poor's 500 Index, a market capitalization-weighted
index of common stocks.

VIP Emerging Asia may compare its performance to that of the Morgan
Stanley Capital International AC (All Country) Asia Free ex Japan
Index, a market capitalization-weighted index of over 500 stocks
traded in 11 Asian markets, excluding Japan. Effective October 1,
1998, the country of Malaysia was removed from this index. The index
returns reflect the inclusion of Malaysia prior to October 1, 1998.

VIP Europe Capital Appreciation may compare its performance to that of
the Morgan Stanley Capital International Europe Index, a market
capitalization-weighted index that is designed to represent the
performance of developed stock markets in Europe. The index returns
for periods after January 1, 1997 are adjusted for tax withholding
rates applicable to U.S.-based mutual funds organized as Massachusetts
business trusts. Stocks are selected for the Morgan Stanley Capital
International (MCSI) index on the basis of industry representation,
liquidity, sufficient float, and avoidance of cross-ownership.

VIP Japan may compare its performance to that of the Tokyo Stock
Exchange Index, a market capitalization-weighted index of over 1300
stocks traded in the Japanese market.

A class may be compared in advertising to Certificates of Deposit
(CDs) or other investments issued by banks or other depository
institutions. Mutual funds differ from bank investments in several
respects. For example, a fund may offer greater liquidity or higher
potential returns than CDs, a fund does not guarantee an investor's
principal or return, and fund shares are not FDIC insured.

Fidelity may provide information designed to help individuals
understand their investment goals and explore various financial
strategies. Such information may include information about current
economic, market, and political conditions; materials that describe
general principles of investing, such as asset allocation,
diversification, risk tolerance, and goal setting; questionnaires
designed to help create a personal financial profile; worksheets used
to project savings needs based on assumed rates of inflation and
hypothetical rates of return; and action plans offering investment
alternatives. Materials may also include discussions of Fidelity's
asset allocation funds and other Fidelity funds, products, and
services.

Ibbotson Associates of Chicago, Illinois (Ibbotson) provides
historical returns of the capital markets in the United States,
including common stocks, small capitalization stocks, long-term
corporate bonds, intermediate-term government bonds, long-term
government bonds, Treasury bills, the U.S. rate of inflation (based on
the CPI), and combinations of various capital markets. The performance
of these capital markets is based on the returns of different indexes.

Fidelity funds may use the performance of these capital markets in
order to demonstrate general risk-versus-reward investment scenarios.
Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with
the security types in any capital market may or may not correspond
directly to those of the funds. Ibbotson calculates returns in the
same method as the funds. The funds may also compare performance to
that of other compilations or indexes that may be developed and made
available in the future.

In advertising materials, Fidelity may reference or discuss its
products and services, which may include other Fidelity funds;
retirement investing; brokerage products and services; model
portfolios or allocations; saving for college or other goals; and
charitable giving. In addition, Fidelity may quote or reprint
financial or business publications and periodicals as they relate to
current economic and political conditions, fund management, portfolio
composition, investment philosophy, investment techniques, the
desirability of owning a particular mutual fund, and Fidelity services
and products. Fidelity may also reprint, and use as advertising and
sales literature, articles from Fidelity Focus(Registered trademark),
a quarterly magazine provided free of charge to Fidelity fund
shareholders.

Each fund may be advertised as part of certain asset allocation
programs involving other Fidelity or non-Fidelity mutual funds. These
asset allocation programs may advertise a model portfolio and its
performance results.

A class may present its fund number, Quotron(trademark) number, and
CUSIP number, and discuss or quote the fund's current portfolio
manager.

VOLATILITY. A class may quote various measures of volatility and
benchmark correlation in advertising. In addition, the class may
compare these measures to those of other funds. Measures of volatility
seek to compare a class's historical share price fluctuations or
returns to those of a benchmark. Measures of benchmark correlation
indicate how valid a comparative benchmark may be. All measures of
volatility and correlation are calculated using averages of historical
data.

MOMENTUM INDICATORS indicate a class's price movements over specific
periods of time. Each point on the momentum indicator represents a
class's percentage change in price movements over that period.

A fund may advertise examples of the effects of periodic investment
plans, including the principle of dollar cost averaging. In such a
program, an investor invests a fixed dollar amount in a fund at
periodic intervals, thereby purchasing fewer shares when prices are
high and more shares when prices are low. While such a strategy does
not assure a profit or guard against loss in a declining market, the
investor's average cost per share can be lower than if fixed numbers
of shares are purchased at the same intervals. In evaluating such a
plan, investors should consider their ability to continue purchasing
shares during periods of low price levels.

As of April 30, 2000, FMR advised over $35 billion in municipal fund
assets, $141 billion in taxable fixed-income fund assets, $148 billion
in money market fund assets, $631 billion in equity fund assets, $21
billion in international fund assets, and $42 billion in Spartan fund
assets. The funds may reference the growth and variety of money market
mutual funds and the adviser's innovation and participation in the
industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the
purpose of researching and managing investments abroad.

ADDITIONAL PURCHASE AND REDEMPTION INFORMATION

Under certain circumstances (for example, at the request of a
shareholder), a fund may make redemption payments in whole or in part
in readily marketable securities or other property, valued for this
purpose as they are valued in computing each class's NAV, if FMR
determines it is in the best interests of the fund. Shareholders that
receive securities or other property on redemption may realize a gain
or loss for tax purposes, and will incur any costs of sale, as well as
the associated inconveniences.

DISTRIBUTIONS AND TAXES

The following information is only a summary of some of the tax
consequences affecting insurance company separate accounts invested in
the funds. No attempt has been made to discuss tax consequences
affecting variable product owners. Variable product owners seeking to
understand the tax consequences of their investment should consult
with their tax advisers or the insurance company that issued their
variable product, or refer to their variable annuity or variable life
insurance product prospectus.

Each fund intends to qualify each year as a "regulated investment
company" under Subchapter M of the Internal Revenue Code so that it
will not be liable for federal tax on income and capital gains
distributed to insurance company separate accounts invested in the
fund. In order to qualify as a regulated investment company, and avoid
being subject to federal income or excise taxes at the fund level,
each fund intends to distribute substantially all of its net
investment income and net realized capital gains within each calendar
year as well as on a fiscal year basis, and intends to comply with
other tax rules applicable to regulated investment companies. If a
fund failed to qualify as a "regulated investment company" in any
year, among other consequences, each insurance company separate
account invested in the fund would fail to satisfy the diversification
requirements of Section 817(h) of the Internal Revenue Code.

Each fund also intends to satisfy the diversification requirements of
Section 817(h) of the Internal Revenue Code and the regulations
thereunder. These diversification requirements, which are in addition
to the diversification requirements of Subchapter M, place certain
limitations on the assets of an insurance company separate account
that may be invested in the securities of a single issuer or a certain
number of issuers. Because Section 817(h) and the regulations
thereunder treat the assets of each fund as the assets of the related
insurance company separate account, each fund must also satisfy these
requirements. If a fund failed to satisfy these requirements, a
variable annuity or variable life insurance product supported by an
insurance company separate account invested in the fund would not be
treated as an annuity or as life insurance for tax purposes and would
no longer be eligible for tax deferral.

Foreign governments may withhold taxes on dividends and interest
earned by a fund with respect to foreign securities. Foreign
governments may also impose taxes on other payments or gains with
respect to foreign securities. If, at the close of its fiscal year,
more than 50% of a fund's total assets is invested in securities of
foreign issuers, the fund may elect to pass through eligible foreign
taxes paid and thereby allow shareholders to take a deduction or, if
they meet certain holding period requirements with respect to fund
shares, a credit on their tax returns.

TRUSTEES AND OFFICERS

The Trustees, Member of the Advisory Board, and executive officers of
the trust and funds, as applicable, are listed below. The Board of
Trustees governs each fund and is responsible for protecting the
interests of shareholders. The Trustees are experienced executives who
meet periodically throughout the year to oversee each fund's
activities, review contractual arrangements with companies that
provide services to each fund, and review each fund's performance.
Except as indicated, each individual has held the office shown or
other offices in the same company for the last five years. All persons
named as Trustees and Members of the Advisory Board also serve in
similar capacities for other funds advised by FMR or its affiliates.
The business address of each Trustee, Member of the Advisory Board,
and officer who is an "interested person" (as defined in the 1940 Act)
is 82 Devonshire Street, Boston, Massachusetts 02109, which is also
the address of FMR. The business address of all the other Trustees is
Fidelity Investments, P.O. Box 9235, Boston, Massachusetts 02205-9235.
Those Trustees who are "interested persons" by virtue of their
affiliation with either the trust or FMR are indicated by an asterisk
(*).

*EDWARD C. JOHNSON 3d (70), Trustee, is President of VIP Dynamic
Capital Appreciation, VIP Emerging Asia, VIP Europe Capital
Appreciation, and VIP Japan. Mr. Johnson also serves as President of
other Fidelity funds. He is Chief Executive Officer, Chairman, and a
Director of FMR Corp.; a Director and Chairman of the Board and of the
Executive Committee of FMR; Chairman and a Director of Fidelity
Management & Research (U.K.) Inc. and of Fidelity Management &
Research (Far East) Inc.; Chairman (1998) and a Director (1997) of
Fidelity Investments Money Management, Inc.; Chairman and
Representative Director of Fidelity Investments Japan Limited (1997);
and a Director of FDC and of FMR Co., Inc. (2000). Abigail Johnson,
Vice President of VIP Dynamic Capital Appreciation, is Mr. Johnson's
daughter.

ABIGAIL P. JOHNSON (38), is Vice President of certain Equity Funds
(1997), and is a Director of FMR Corp. (1994). Before assuming her
current responsibilities, Ms. Johnson managed a number of Fidelity
funds. Edward C. Johnson 3d, Trustee and President of the Funds, is
Ms. Johnson's father.

J. MICHAEL COOK (57), Member of the Advisory Board (2000). Prior to
Mr. Cook's retirement in May 1999, he served as Chairman and Chief
Executive Officer of Deloitte & Touche LLP, Chairman of the Deloitte &
Touche Foundation, and a member of the Board of Deloitte Touche
Tohmatsu. He currently serves as an Executive in Residence of the
Columbia Business School and as a Director of Dow Chemical Company
(2000), HCA-The Healthcare Company (1999), and Children First (1999).
He is a member of the Executive Committee of the Securities Regulation
Institute, a member of the Advisory Board of Boardroom Consultants,
past chairman and a member of the Board of Catalyst (a leading
organization for the advancement of women in business), and a Director
of the STAR Foundation (Society to Advance the Retarded and
Handicapped). He also serves as a member of the Board and Executive
Committee and as Co-Chairman of the Audit and Finance Committee of the
Center for Strategic & International Studies, a member of the Board of
Overseers of the Columbia Business School, and a Member of the
Advisory Board of the Graduate School of Business of the University of
Florida.

RALPH F. COX (68), Trustee, is President of RABAR Enterprises
(management consulting-engineering industry, 1994). Prior to February
1994, he was President of Greenhill Petroleum Corporation (petroleum
exploration and production). Until March 1990, Mr. Cox was President
and Chief Operating Officer of Union Pacific Resources Company
(exploration and production). He is a Director of Waste Management
Inc. (non-hazardous waste, 1993), CH2M Hill Companies (engineering),
and Bonneville Pacific (independent power and petroleum production).
In addition, he is a member of advisory boards of Texas A&M University
and the University of Texas at Austin.

PHYLLIS BURKE DAVIS (68), Trustee. Mrs. Davis is retired from Avon
Products, Inc. where she held various positions including Senior Vice
President of Corporate Affairs and Group Vice President of U.S. sales,
distribution, and manufacturing. She is currently a Director of
BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing), and the TJX Companies, Inc. (retail stores), and
previously served as a Director of Hallmark Cards, Inc., Nabisco
Brands, Inc., and Standard Brands, Inc. In addition, she is a member
of the Board of Directors of the Southampton Hospital in Southampton,
N.Y. (1998).

ROBERT M. GATES (56), Trustee (1997), is a consultant, author, and
lecturer (1993). Mr. Gates was Director of the Central Intelligence
Agency (CIA) from 1991-1993. From 1989 to 1991, Mr. Gates served as
Assistant to the President of the United States and Deputy National
Security Advisor. Mr. Gates is a Director of Charles Stark Draper
Laboratory (non-profit), NACCO Industries, Inc. (mining and
manufacturing), and TRW Inc. (automotive, space, defense, and
information technology). Mr. Gates previously served as a Director of
LucasVarity PLC (automotive components and diesel engines). He is
currently serving as Dean of the George Bush School of Government and
Public Service at Texas A&M University (1999-2000). Mr. Gates also is
a Trustee of the Forum for International Policy and of the Endowment
Association of the College of William and Mary. In addition, he is a
member of the National Executive Board of the Boy Scouts of America.

DONALD J. KIRK (67), Trustee, is Executive-in-Residence (1995) at
Columbia University Graduate School of Business. From 1987 to January
1995, Mr. Kirk was a Professor at Columbia University Graduate School
of Business. Prior to 1987, he was Chairman of the Financial
Accounting Standards Board. Mr. Kirk previously served as a Director
of General Re Corporation (reinsurance, 1987-1998) and as a Director
of Valuation Research Corp. (appraisals and valuations, 1993-1995). He
serves as Chairman of the Board of Directors of National Arts
Stabilization Inc., Chairman of the Board of Trustees of the Greenwich
Hospital Association, Director of the Yale-New Haven Health Services
Corp. (1998), Vice Chairman of the Public Oversight Board of the
American Institute of Certified Public Accountants' SEC Practice
Section (1995), and as a Public Governor of the National Association
of Securities Dealers, Inc. (1996).

MARIE L. KNOWLES (53), Member of the Advisory Board (2000). Beginning
in 1972, Ms. Knowles served in various positions with Atlantic
Richfield Company (ARCO) (diversified energy) including Executive Vice
President and Chief Financial Officer (1996-2000); Director
(1996-1998); and Senior Vice President (1993-1996). In addition, Ms.
Knowles served as President of ARCO Transportation Company
(1993-1996). She currently serves as a Director of Phelps Dodge
Corporation (copper mining and manufacturing), URS Corporation
(multidisciplinary engineering, 1999), and America West Holdings
Corporation (aviation and travel services, 1999). Ms. Knowles also
serves as a member of the National Board of the Smithsonian
Institution and she is a trustee of the Brookings Institution.

NED C. LAUTENBACH (56), Trustee (2000), has been a partner of Clayton,
Dubilier & Rice, Inc. (private equity investment firm) since September
1998. Mr. Lautenbach was Senior Vice President of IBM Corporation from
1992 until his retirement in July 1998. From 1993 to 1995 he was
Chairman of IBM World Trade Corporation. He also was a member of IBM's
Corporate Executive Committee from 1994 to July 1998. He is a Director
of PPG Industries Inc. (glass, coating and chemical manufacturer),
Dynatech Corporation (global communications equipment), Eaton
Corporation (global manufacturer of highly engineered products) and
ChoicePoint Inc. (data identification, retrieval, storage, and
analysis).

*PETER S. LYNCH (57), Trustee, is Vice Chairman and a Director of FMR;
and a Director of FMR Co., Inc. (2000). Prior to May 31, 1990, he was
a Director of FMR and Executive Vice President of FMR (a position he
held until March 31, 1991); Vice President of Fidelity
Magellan(registered trademark) Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). In addition, he
serves as a Trustee of Boston College, Massachusetts Eye & Ear
Infirmary, Historic Deerfield (1989) and Society for the Preservation
of New England Antiquities, and as an Overseer of the Museum of Fine
Arts of Boston.

WILLIAM O. McCOY (66), Trustee (1997), is the Interim Chancellor for
the University of North Carolina at Chapel Hill. Previously he had
served from 1995 through 1998 as Vice President of Finance for the
University of North Carolina (16-school system). Prior to his
retirement in December 1994, Mr. McCoy was Vice Chairman of the Board
of BellSouth Corporation (telecommunications, 1984) and President of
BellSouth Enterprises (1986). He is currently a Director of Liberty
Corporation (holding company, 1984), Duke-Weeks Realty Corporation
(real estate, 1994), Carolina Power and Light Company (electric
utility, 1996), the Kenan Transport Company (trucking, 1996), and
Dynatech Corporation (electronics, 1999). Previously, he was a
Director of First American Corporation (bank holding company,
1979-1996). In addition, Mr. McCoy served as a member of the Board of
Visitors for the University of North Carolina at Chapel Hill
(1994-1998) and currently serves on the Board of Visitors of the
Kenan-Flager Business School (University of North Carolina at Chapel
Hill, 1988).

GERALD C. McDONOUGH (_), Trustee and Chairman of the non-interested
Trustees, is Chairman of G.M. Management Group (strategic advisory
services). Mr. McDonough is a Director and Chairman of the Board of
York International Corp. (air conditioning and refrigeration) and
Associated Estates Realty Corporation (a real estate investment trust,
1993). Mr. McDonough served as a Director of ACME-Cleveland Corp.
(metal working, telecommunications, and electronic products) from
1987-1996 and Brush-Wellman Inc. (metal refining) from 1983-1997. He
also served as a Director of Commercial Intertech Corp. (hydraulic
systems, building systems, and metal products) from 1992-2000 and
CUNO, Inc. (liquid and gas filtration products) from 1996-2000.

MARVIN L. MANN (67), Trustee (1993), is Chairman Emeritus of Lexmark
International, Inc. (office machines, 1991) where he still remains a
member of the Board. Prior to 1991, he held the positions of Vice
President of International Business Machines Corporation ("IBM") and
President and General Manager of various IBM divisions and
subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals,
1993), Imation Corp. (imaging and information storage, 1997). He is a
Board member of Dynatech Corporation (electronics, 1999).

*ROBERT C. POZEN (54), Trustee (1997), is Senior Vice President of
VIP Dynamic Capital Appreciation, VIP Emerging Asia, VIP Europe
Capital Appreciation, and VIP Japan. Mr. Pozen also serves as Senior
Vice President of other Fidelity funds (1997). He is President and a
Director of FMR (1997), Fidelity Management & Research (U.K.) Inc.
(1997), Fidelity Management & Research (Far East) Inc. (1997),
Fidelity Investments Money Management, Inc. (1998), and FMR Co., Inc.
(2000); and a Director of Strategic Advisers, Inc. (1999). Previously,
Mr. Pozen served as General Counsel, Managing Director, and Senior
Vice President of FMR Corp.

THOMAS R. WILLIAMS (71), Trustee, is President of The Wales Group,
Inc. (management and financial advisory services). Prior to retiring
in 1987, Mr. Williams served as Chairman of the Board of First
Wachovia Corporation (bank holding company), and Chairman and Chief
Executive Officer of The First National Bank of Atlanta and First
Atlanta Corporation (bank holding company). He is currently a Director
of National Life Insurance Company of Vermont and American Software,
Inc. Mr. Williams was previously a Director of ConAgra, Inc.
(agricultural products), Georgia Power Company (electric utility), and
Avado, Inc. (restaurants).

RICHARD A. SPILLANE, JR. (49), is Vice President of VIP Emerging
Asia, VIP Europe Capital Appreciation, and VIP Japan. He serves as
Vice President of certain Equity Funds and Senior Vice President of
FMR (1997). Since joining Fidelity, Mr. Spillane is Chief Investment
Officer for Fidelity International, Limited. Prior to that position,
Mr. Spillane served as Director of Research.

J. FERGUS SHIEL (43), is Vice President of VIP Dynamic Capital
Appreciation (2000), and other funds advised by FMR. Prior to his
current responsibilities, Mr. Shiel managed a variety of Fidelity
funds.

ERIC D. ROITER (51), is Secretary of VIP Dynamic Capital Appreciation,
VIP Emerging Asia, VIP Europe Capital Appreciation, and VIP Japan. He
also serves as Secretary of other Fidelity funds (1998); Vice
President, General Counsel, and Clerk of FMR (1998); and Vice
President and Clerk of FDC (1998). Prior to joining Fidelity, Mr.
Roiter was with the law firm of Debevoise & Plimpton, as an associate
(1981-1984) and as a partner (1985-1997), and served as an Assistant
General Counsel of the U.S. Securities and Exchange Commission
(1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at
Columbia University Law School (1996-1997).

ROBERT A. DWIGHT (42), is Treasurer of VIP Dynamic Capital
Appreciation, VIP Emerging Asia, VIP Europe Capital Appreciation, and
VIP Japan. Mr. Dwight also serves as Treasurer of other Fidelity funds
(2000) and is an employee of FMR. Prior to becoming Treasurer of the
Fidelity funds, he served as President of Fidelity Accounting and
Custody Services (FACS). Before joining Fidelity, Mr. Dwight was
Senior Vice President of fund accounting operations for The Boston
Company.

MARIA F. DWYER (41), is Deputy Treasurer of VIP Dynamic Capital
Appreciation, VIP Emerging Asia, VIP Europe Capital Appreciation, and
VIP Japan. She also serves as Deputy Treasurer of other Fidelity funds
(2000) and is a Vice President (1999) and an employee (1996) of FMR.
Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance
for MFS Investment Management.

JOHN H. COSTELLO (54), is Assistant Treasurer of VIP Dynamic Capital
Appreciation, VIP Emerging Asia, VIP Europe Capital Appreciation, and
VIP Japan. Mr. Costello also serves as Assistant Treasurer of other
Fidelity funds and is an employee of FMR.

The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended December 31, 2000, or
calendar year ended December 31, 1999, as applicable.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION
FROM A Edward C. Johnson 3d** J. Michael Cook ***** Ralph F. Cox Phyllis Burke Davis Robert M. Gates
FUND

VIP Dynamic Capital $ 0 $ 10 $ 10 $ 10 $ 10
Appreciation B, +

VIP Emerging Asia B, + $ 0 $ 2 $ 2 $ 2 $ 2

VIP Europe Capital $ 0 $ 2 $ 2 $ 2 $ 2
Appreciation B, +

VIP Japan B, + $ 0 $ 5 $ 5 $ 5 $ 5

TOTAL COMPENSATION FROM THE $ 0 $ 0 $217,500 $211,500 $217,500
FUND COMPLEX*, A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION
FROM A E. Bradley Jones **** Donald J. Kirk Marie Ned Peter S. Lynch **
FUND L. Knowles ****** C. Lautenbach ***

VIP Dynamic Capital $ 10 $ 10 $ 10 $ 10 $ 0
Appreciation B, +

VIP Emerging Asia B, + $ 2 $ 2 $ 2 $ 2 $ 0

VIP Europe Capital $ 2 $ 2 $ 2 $ 2 $ 0
Appreciation B, +

VIP Japan B, + $ 5 $ 5 $ 5 $ 5 $ 0

TOTAL COMPENSATION FROM THE $217,500 $217,500 $ 0 $ 54,000 $ 0
FUND COMPLEX*, A

</TABLE>

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
COMPENSATION TABLE

AGGREGATE COMPENSATION
FROM A William O. McCoy Gerald C. McDonough Marvin L. Mann Robert C. Pozen ** Thomas R. Williams
FUND

VIP Dynamic Capital $ 10 $ 12 $ 10 $ 0 $ 10
Appreciation B, +

VIP Emerging Asia B, + $ 2 $ 3 $ 2 $ 0 $ 2

VIP Europe Capital $ 2 $ 3 $ 2 $ 0 $ 2
Appreciation B, +

VIP Japan B, + $ 5 $ 6 $ 5 $ 0 $ 5

TOTAL COMPENSATION FROM THE $214,500 $269,000 $217,500 $ 0 $213,000
FUND COMPLEX*, A

</TABLE>

* Information is for the calendar year ended December 31, 1999 for 236
funds in the complex.

** Interested Trustees of the funds are compensated by FMR.

*** During the period from October 14, 1999 through December 31, 1999,
Mr. Lautenbach served as a Member of the Advisory Board. Effective
January 1, 2000, Mr. Lautenbach serves as a Member of the Board of
Trustees.

**** Mr. Jones served on the Board of Trustees through December 31,
1999.

***** Effective March 16, 2000, Mr. Cook serves as a Member of the
Advisory Board.

****** Effective June 15, 2000, Ms. Knowles serves as a Member of the
Advisory Board.

+ Estimated

A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1999, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $75,000; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,735; William O. McCoy, $53,735; and Thomas
R. Williams, $62,319.

B Compensation figures include cash, and may include amounts required
to be deferred and amounts deferred at the election of Trustees.

Under a deferred compensation plan adopted in September 1995 and
amended in November 1996 and January 2000 (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 fees. Amounts
deferred under the Plan are treated as though equivalent dollar
amounts had been invested in shares of a cross-section of Fidelity
funds including funds in each major investment discipline and
representing a majority of Fidelity's assets under management (the
Reference Funds). The amounts ultimately received by the Trustees
under the Plan will be directly linked to the investment performance
of the Reference Funds. Deferral of fees in accordance with the Plan
will have a negligible effect on a fund's assets, liabilities, and net
income per share, and will not obligate a fund to retain the services
of any Trustee or to pay any particular level of compensation to the
Trustee. A fund may invest in the Reference Funds under the Plan
without shareholder approval.

As of the public offering of shares of each fund, 100% of each fund's
total outstanding shares was held by __________. FMR Corp. is the
ultimate parent company of __________. By virtue of their ownership
interest in FMR Corp., as described in the "Control of Investment
Advisers" section on page 29, Mr. Edward C. Johnson 3d, President and
Trustee of the fund, and Ms. Abigail P. Johnson, may be deemed to be a
beneficial owner of these shares.

CONTROL OF INVESTMENT ADVISERS

FMR Corp., organized in 1972, is the ultimate parent company of FMR,
Fidelity Management & Research (U.K.) Inc. (FMR U.K.), Fidelity
Management & Research (Far East) Inc. (FMR Far East) and FMR Co., Inc.
(FMRC). The voting common stock of FMR Corp. is divided into two
classes. Class B is held predominantly by members of the Edward C.
Johnson 3d family and is entitled to 49% of the vote on any matter
acted upon by the voting common stock. Class A is held predominantly
by non-Johnson family member employees of FMR Corp. and its affiliates
and is entitled to 51% of the vote on any such matter. The Johnson
family group and all other Class B shareholders have entered into a
shareholders' voting agreement under which all Class B shares will be
voted in accordance with the majority vote of Class B shares. Under
the 1940 Act, control of a company is presumed where one individual or
group of individuals owns more than 25% of the voting stock of that
company. Therefore, through their ownership of voting common stock and
the execution of the shareholders' voting agreement, members of the
Johnson family may be deemed, under the 1940 Act, to form a
controlling group with respect to FMR Corp.

At present, the principal operating activities of FMR Corp. are those
conducted by its division, Fidelity Investments Retail Marketing
Company, which provides marketing services to various companies within
the Fidelity organization.

Fidelity International Limited (FIL), a Bermuda company formed in
1968, is the ultimate parent company of Fidelity International
Investment Advisors (FIIA), Fidelity Investments Japan Limited (FIJ)
and Fidelity International Investment Advisors (U.K.) Limited
(FIIA(U.K.)L). Edward C. Johnson 3d, Johnson family members, and
various trusts for the benefit of the Johnson family own, directly or
indirectly, more than 25% of the voting common stock of FIL. FIL
provides investment advisory services to non-U.S. investment companies
and institutional investors investing in securities throughout the
world.

The funds, FMR, FMRC, FMR U.K., FMR Far East, FIJ, FIIA, FIIA(U.K.)L,
and Fidelity Distributors Corporation (FDC) have adopted a code of
ethics under Rule 17j-1 of the 1940 Act that sets forth employees'
fiduciary responsibilities regarding the funds, establishes procedures
for personal investing, and restricts certain transactions. Employees
subject to the code of ethics, including Fidelity investment
personnel, may invest in securities for their own investment accounts,
including securities that may be purchased or held by the funds.

MANAGEMENT CONTRACTS

Each fund has entered into a management contract with FMR, pursuant to
which FMR furnishes investment advisory and other services.

MANAGEMENT SERVICES. Under the terms of its management contract with
each fund, FMR acts as investment adviser and, subject to the
supervision of the Board of Trustees, directs the investments of the
fund in accordance with its investment objective, policies and
limitations. FMR also provides each fund with all necessary office
facilities and personnel for servicing the fund's investments,
compensates all officers of each fund and all Trustees who are
"interested persons" of the trust or of FMR, and all personnel of each
fund or FMR performing services relating to research, statistical and
investment activities.

In addition, FMR or its affiliates, subject to the supervision of the
Board of Trustees, provide the management and administrative services
necessary for the operation of each fund. These services include
providing facilities for maintaining each fund's organization;
supervising relations with custodians, transfer and pricing agents,
accountants, underwriters and other persons dealing with each fund;
preparing all general shareholder communications and conducting
shareholder relations; maintaining each fund's records and the
registration of each fund's shares under federal securities laws and
making necessary filings under state securities laws; developing
management and shareholder services for each fund; and furnishing
reports, evaluations and analyses on a variety of subjects to the
Trustees.

MANAGEMENT-RELATED EXPENSES. In addition to the management fee payable
to FMR and the fees payable to the transfer, dividend disbursing, and
shareholder servicing agent, pricing and bookkeeping agent, and the
costs associated with securities lending, each fund or each class
thereof, as applicable, pays all of its expenses that are not assumed
by those parties. Each fund pays for the typesetting, printing, and
mailing of its proxy materials to shareholders, legal expenses, and
the fees of the custodian, auditor, and non-interested Trustees. Each
fund's management contract further provides that the fund will pay for
typesetting, printing, and mailing prospectuses, statements of
additional information, notices, and reports to shareholders; however,
under the terms of each fund's transfer agent agreement, the transfer
agent bears the costs of providing these services to existing
shareholders of the applicable classes. Other expenses paid by each
fund include interest, taxes, brokerage commissions, the fund's
proportionate share of insurance premiums and Investment Company
Institute dues, and the costs of registering shares under federal
securities laws and making necessary filings under state securities
laws. Each fund is also liable for such non-recurring expenses as may
arise, including costs of any litigation to which the fund may be a
party, and any obligation it may have to indemnify its officers and
Trustees with respect to litigation. Each fund also pays the costs
related to the solicitation of fund proxies from variable product
owners.

MANAGEMENT FEES. For the services of FMR under the management
contract, VIP Dynamic Capital Appreciation, VIP Emerging Asia, VIP
Europe Capital Appreciation, and VIP Japan each pays FMR a monthly
management fee which has two components: a group fee rate and an
individual fund fee rate.

The group fee rate is based on the monthly average net assets of all
of the registered investment companies with which FMR has management
contracts.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
GROUP FEE RATE SCHEDULE EFFECTIVE ANNUAL FEE RATES

Average Group Assets Annualized Rate Group Net Assets Effective Annual Fee Rate

0 - $3 billion .5200% $ 1 billion .5200%

3 - 6 .4900 50 .3823

6 - 9 .4600 100 .3512

9 - 12 .4300 150 .3371

12 - 15 .4000 200 .3284

15 - 18 .3850 250 .3219

18 - 21 .3700 300 .3163

21 - 24 .3600 350 .3113

24 - 30 .3500 400 .3067

30 - 36 .3450 450 .3024

36 - 42 .3400 500 .2982

42 - 48 .3350 550 .2942

48 - 66 .3250 600 .2904

66 - 84 .3200 650 .2870

84 - 102 .3150 700 .2838

102 - 138 .3100 750 .2809

138 - 174 .3050 800 .2782

174 - 210 .3000 850 .2756

210 - 246 .2950 900 .2732

246 - 282 .2900 950 .2710

282 - 318 .2850 1,000 .2689

318 - 354 .2800 1,050 .2669

354 - 390 .2750 1,100 .2649

390 - 426 .2700 1,150 .2631

426 - 462 .2650 1,200 .2614

462 - 498 .2600 1,250 .2597

498 - 534 .2550 1,300 .2581

534 - 587 .2500 1,350 .2566

587 - 646 .2463 1,400 .2551

646 - 711 .2426

711 - 782 .2389

782 - 860 .2352

860 - 946 .2315

946 - 1,041 .2278

1,041 - 1,145 .2241

1,145 - 1,260 .2204

Over 1,260 .2167

</TABLE>

The group fee rate is calculated on a cumulative basis pursuant to the
graduated fee rate schedule shown above on the left. The schedule
above on the right shows the effective annual group fee rate at
various asset levels, which is the result of cumulatively applying the
annualized rates on the left. For example, the effective annual fee
rate at $836 billion of group net assets - the approximate level for
May 2000 - was 0.2763%, which is the weighted average of the
respective fee rates for each level of group net assets up to $836
billion.

The individual fund fee rate for each of VIP Dynamic Capital
Appreciation, VIP Emerging Asia, VIP Europe Capital Appreciation, and
VIP Japan is set forth in the following table. Based on the average
group net assets of the funds advised by FMR for May 2000, each fund's
annual management fee rate would be calculated as follows:

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Group Fee Rate Individual Fund Fee Rate Management Fee Rate

VIP Dynamic Capital 0.2763% + 0.30% = 0.5763%
Appreciation

VIP Emerging Asia 0.2763% + 0.45% = 0.7263%

VIP Europe Capital Appreciation 0.2763% + 0.45% = 0.7263%

VIP Japan 0.2763% + 0.45% = 0.7263%

</TABLE>

One-twelfth of the management fee rate is applied to each fund's
average net assets for the month, giving a dollar amount which is the
fee for that month.

FMR may, from time to time, voluntarily reimburse all or a portion of
a class's operating expenses (exclusive of interest, taxes, certain
securities lending costs, brokerage commissions, and extraordinary
expenses), which is subject to revision or discontinuance. FMR retains
the ability to be repaid for these expense reimbursements in the
amount that expenses fall below the limit prior to the end of the
fiscal year.

Expense reimbursements by FMR will increase a class's returns, and
repayment of the reimbursement by a class will lower its returns.

SUB-ADVISERS. On January 1, 2001, FMR will enter into a sub-advisory
agreement with FMRC on behalf of VIP Dynamic Capital Appreciation, VIP
Europe Capital Appreciation, and VIP Japan pursuant to which FMRC will
have primary responsibility for choosing investments for each fund. On
January 1, 2001, FMR will enter into a sub-advisory agreement with
FMRC on behalf of VIP Emerging Asia pursuant to which FMRC may provide
investment research and advice and may also provide investment
advisory services for the fund.

Under the terms of the sub-advisory agreements for VIP Dynamic Capital
Appreciation, VIP Europe Capital Appreciation, and VIP Japan, FMR will
pay FMRC fees equal to 50% of the management fee payable to FMR under
its management contract with each fund. Under the terms of the
sub-advisory agreement for VIP Emerging Asia, FMR will pay FMRC fees
equal to 50% of the management fee payable to FMR with respect to that
portion of the fund's assets that will be managed by FMRC. The fees
paid to FMRC will not be reduced by any voluntary or mandatory expense
reimbursements that may be in effect from time to time.

On behalf of VIP Dynamic Capital Appreciation, FMR has entered into
sub-advisory agreements with FMR U.K. and FMR Far East. On behalf of
VIP Emerging Asia, VIP Europe Capital Appreciation, and VIP Japan, FMR
has entered into sub-advisory agreements with FMR U.K., FMR Far East,
and FIIA. On behalf of VIP Emerging Asia, VIP Europe Capital
Appreciation, and VIP Japan, FIIA, in turn, has entered into a
sub-advisory agreement with FIIA(U.K.)L. On behalf of VIP Emerging
Asia and VIP Japan, FIIA, in turn, has entered a sub-advisory
agreement with FIJ. Pursuant to the sub-advisory agreements, FMR may
receive from the sub-advisers investment research and advice on
issuers outside the United States and FMR may grant the sub-advisers
investment management authority as well as the authority to buy and
sell securities if FMR believes it would be beneficial to the funds.

On behalf of each fund, FMR Far East has entered into a sub-advisory
agreement with FIJ pursuant to which FMR Far East may receive from FIJ
investment research and advice relating to Japanese issuers (and such
other Asian issuers as FMR Far East may designate).

For providing non-discretionary investment advice and research
services the sub-advisers are compensated as follows:

(small solid bullet) FMR pays FMR U.K. and FMR Far East fees equal to
110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs
incurred in connection with providing investment advice and research
services.

(small solid bullet) FMR pays FIIA a fee equal to 30% of FMR's monthly
management fee with respect to the average net assets held by the fund
for which the sub-adviser has provided FMR with investment advice and
research services.

(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to 110% of
FIIA(U.K.)L's costs incurred in connection with providing investment
advice and research services.

(small solid bullet) FIIA pays FIJ a fee equal to 105% of FIJ's costs
incurred in connection with providing investment advice and research
services.

(small solid bullet) FMR Far East pays FIJ a fee equal to 100% of
FIJ's costs incurred in connection with providing investment advice
and research services for a fund to FMR Far East.

For providing discretionary investment management and executing
portfolio transactions, the sub-advisers are compensated as follows:

(small solid bullet) FMR pays FMR U.K. and FMR Far East a fee equal to
50% of its monthly management fee with respect to the fund's average
net assets managed by the sub-adviser on a discretionary basis.

(small solid bullet) FMR pays FIIA a fee equal to 57% of its monthly
management fee with respect to the fund's average net assets managed
by the sub-adviser on a discretionary basis.

(small solid bullet) FIIA pays FIIA(U.K.)L a fee equal to a percentage
of the fund's monthly average net assets managed by FIIA(U.K.)L on a
discretionary basis. The fee rate is based on the monthly average net
assets managed by FIIA(U.K.)L on behalf of FIIA pursuant to
sub-advisory arrangements less any assets managed by FIIA(U.K.)L on
behalf of FIIA on which a reduction is applicable to the sub-advisory
fee paid to FIIA(U.K.)L (Average Group Assets). The fee rate is
calculated on a cumulative basis pursuant to the graduated fee rate
schedule below.

Average Group Assets Annualized Fee Rate

from $0 - $500 million 0.30%

$500 million - $1 billion 0.25%

over $1 billion 0.20%

FIIA(U.K.)L's fee will not exceed 50% of the fee that FIIA receives
from FMR for services provided on behalf of the fund.

(small solid bullet) FIIA pays FIJ a fee equal to a percentage of the
fund's monthly average net assets managed by FIJ on a discretionary
basis. The fee rate is based on the monthly average net assets
managed by FIJ on behalf of FIIA pursuant to sub-advisory arrangements
less any assets managed by FIJ on behalf of FIIA on which a reduction
is applicable to the sub-advisory fee paid to FIJ (Average Group
Assets). The fee rate is calculated on a cumulative basis pursuant to
the graduated fee rate schedule below.

Average Group Assets Annualized Fee Rate

from $0 - $200 million 0.30%

$200 million - $500 million 0.25%

over $500 million 0.20%

FIJ's fee will not exceed 50% of the fee that FIIA receives from FMR
for services provided on behalf of the fund.

Currently, FIIA is primarily responsible for choosing investments for
VIP Emerging Asia.

DISTRIBUTION SERVICES

Each fund has entered into a distribution agreement with FDC, an
affiliate of FMR. FDC is a broker-dealer registered under the
Securities Exchange Act of 1934 and a member of the National
Association of Securities Dealers, Inc. The distribution agreements
call for FDC to use all reasonable efforts, consistent with its other
business, to secure purchasers for shares of each fund, which are
continuously offered at NAV. Promotional and administrative expenses
in connection with the offer and sale of shares are paid by FMR.

The Trustees have approved Distribution and Service Plans on behalf of
Initial Class of each fund, Service Class of each fund, and Service
Class 2 of each fund (the Plans) pursuant to Rule 12b-1 under the 1940
Act (the Rule). The Rule provides in substance that a mutual fund may
not engage directly or indirectly in financing any activity that is
primarily intended to result in the sale of shares of the fund except
pursuant to a plan approved on behalf of the fund under the Rule. The
Plans, as approved by the Trustees, allow Initial Class, Service
Class, Service Class 2, and FMR to incur certain expenses that might
be considered to constitute direct or indirect payment by the funds of
distribution expenses.

Pursuant to the Service Class Plan for each fund, FDC is paid a 12b-1
fee at an annual rate of up to 0.25% of Service Class's average net
assets determined at the close of business on each day throughout the
month. Currently, the Trustees have approved a 12b-1 fee for Service
Class of each fund at an annual rate of 0.10% of its average net
assets. This fee rate may be increased only when, in the opinion of
the Trustees, it is in the best interests of variable product owners
to do so.

Currently, FDC may reallow to intermediaries (such as insurance
companies, broker-dealers, and other service-providers), including its
affiliates, up to the full amount of 12b-1 fees paid by Service Class
for providing services intended to result in the sale of Service Class
shares and/or support services that benefit variable product owners.

Pursuant to the Service Class 2 Plan for each fund, FDC is paid a
12b-1 fee at an annual rate of 0.25% of Service Class 2's average net
assets determined at the close of business on each day throughout the
month.

Currently, FDC may reallow to intermediaries (such as insurance
companies, broker-dealers, and other service-providers), including its
affiliates, up to the full amount of 12b-1 fees paid by Service Class
2 for providing services intended to result in the sale of Service
Class 2 shares and/or support services that benefit variable product
owners.

Under each Initial Class Plan, if the payment of management fees by
the fund to FMR is deemed to be indirect financing by the fund of the
distribution of its shares, such payment is authorized by the Plan.
Each Initial Class Plan specifically recognizes that FMR may use its
management fee revenue, as well as its past profits or its other
resources, to pay FDC for expenses incurred in connection with
providing services intended to result in the sale of Initial Class
shares and/or support services that benefit variable product owners.
In addition, each Initial Class Plan provides that FMR, directly or
through FDC, may pay significant amounts to intermediaries, such as
insurance companies, broker-dealers and other service-providers, that
provide those services. Currently, the Board of Trustees has
authorized such payments for Initial Class shares.

Under each Service Class and Service Class 2 Plan, if the payment of
management fees by the fund to FMR is deemed to be indirect financing
by the fund of the distribution of its shares, such payment is
authorized by the Plan. Each Service Class and Service Class 2 Plan
specifically recognizes that FMR may use its management fee revenue,
as well as its past profits or its other resources, to pay FDC for
expenses incurred in connection with providing services intended to
result in the sale of Service Class and Service Class 2 shares and/or
support services that benefit variable product owners, including
payments of significant amounts made to intermediaries that provide
those services. Currently, the Board of Trustees has authorized such
payments for Service Class and Service Class 2 shares.

Prior to approving each Plan, the Trustees carefully considered all
pertinent factors relating to the implementation of the Plan, and
determined that there is a reasonable likelihood that the Plan will
benefit the applicable class of the fund and variable product owners.
In particular, the Trustees noted that each Initial Class Plan does
not authorize payments by Initial Class of the fund other than those
made to FMR under its management contract with the fund. To the extent
that each Plan gives FMR and FDC greater flexibility in connection
with the distribution of shares of the applicable class, additional
sales of fund shares or stabilization of cash flows may result.
Furthermore, certain support services that benefit variable product
owners may be provided more effectively under the Plans by insurance
companies and their affiliates with whom variable product owners have
other relationships.

Each Service Class and Service Class 2 Plan does not provide for
specific payments by the applicable class of any of the expenses of
FDC, or obligate FDC or FMR to perform any specific type or level of
distribution activities or incur any specific level of expense in
connection with distribution activities.

The Glass-Steagall Act generally prohibits federally and state
chartered or supervised banks from directly engaging in the business
of underwriting, selling or distributing securities. FDC believes that
the Glass-Steagall Act should not preclude a bank from performing
shareholder support services, or servicing and recordkeeping
functions. FDC intends to engage banks only to perform such functions.
However, changes in federal or state statutes and regulations
pertaining to the permissible activities of banks, as well as further
judicial or administrative decisions or interpretations, could prevent
a bank from continuing to perform all or a part of the contemplated
services. If a bank were prohibited from so acting, the Trustees would
consider what actions, if any, would be necessary to continue to
provide efficient and effective shareholder services. In such event,
changes in the operation of the funds might occur, including possible
termination of any automatic investment or redemption or other
services then provided by the bank. It is not expected that
shareholders would suffer any adverse financial consequences as a
result of any of these occurrences. In addition, state securities laws
on this issue may differ from the interpretations of federal law
expressed herein, and banks and other financial institutions may be
required to register as dealers pursuant to state law.

Each fund may execute portfolio transactions with, and purchase
securities issued by, depository institutions that receive payments
under the Plans. No preference for the instruments of such depository
institutions will be shown in the selection of investments.

FDC may compensate intermediaries that satisfy certain criteria
established from time to time by FDC relating to the level or type of
services provided by the intermediary, the sale or expected sale of
significant amounts of shares, or other factors.

TRANSFER AND SERVICE AGENT AGREEMENTS

Each class of each fund has entered into a transfer agent agreement
with FIIOC, an affiliate of FMR. Under the terms of the agreements,
FIIOC performs transfer agency, dividend disbursing, and shareholder
services for each class of each fund.

For providing transfer agency services, FIIOC receives an asset-based
fee paid monthly with respect to each account in a fund.

The asset-based fees are subject to adjustment if the year-to-date
total return of the S&P 500 exceeds a positive or negative 15%.

FIIOC pays out-of-pocket expenses associated with providing transfer
agent services. In addition, FIIOC bears the expense of typesetting,
printing, and mailing prospectuses, statements of additional
information, and all other reports, notices, and statements to
existing shareholders, with the exception of proxy statements.

Each fund has entered into a service agent agreement with FSC, an
affiliate of FMR. Under the terms of the agreements, FSC calculates
the NAV and dividends for each class of each fund, maintains each
fund's portfolio and general accounting records, and administers each
fund's securities lending program.

For providing pricing and bookkeeping services, FSC receives a monthly
fee based on each fund's average daily net assets throughout the
month.

The annual rates for pricing and bookkeeping services for domestic
equity funds are 0.0365% of the first $500 million of average net
assets, 0.0155% of average net assets between $500 million and $3
billion, 0.0040% of average net assets between $3 billion and $25
billion, and 0.00075% of average net assets in excess of $25 billion.
The fee, not including reimbursement for out-of-pocket expenses, is
limited to a minimum of $60,000 per year.

The annual rates for pricing and bookkeeping services for
international funds are 0.0600% of the first $500 million of average
net assets, 0.0440% of average net assets between $500 million and $3
billion, 0.0021% of average net assets between $3 billion and $25
billion, and 0.00075% of average net assets in excess of $25 billion.
The fee, not including reimbursement for out-of-pocket expenses, is
limited to a minimum of $60,000 per year.

For administering each fund's securities lending program, FSC is paid
based on the number and duration of individual securities loans.

DESCRIPTION OF THE TRUST

TRUST ORGANIZATION. Dynamic Capital Appreciation Portfolio, Emerging
Asia Portfolio, Europe Capital Appreciation Portfolio, and Japan
Portfolio are funds of Variable Insurance Products Fund III, an
open-end management investment company organized as a Massachusetts
business trust on July 14, 1994. On December 30, 1996, Variable
Insurance Products Fund III changed its name from Fidelity Advisor
Annuity Fund to Variable Insurance Products Fund III. Currently, there
are eight funds in Variable Insurance Products Fund III: Balanced
Portfolio, Growth & Income Portfolio, Growth Opportunities Portfolio,
Mid Cap Portfolio, Dynamic Capital Appreciation Portfolio, Emerging
Asia Portfolio, Europe Capital Appreciation Portfolio, and Japan
Portfolio. The Trustees are permitted to create additional funds in
the trusts and to create additional classes of the funds.

The assets of the trust received for the issue or sale of shares of
each fund and all income, earnings, profits, and proceeds thereof,
subject to the rights of creditors, are allocated to such fund, and
constitute the underlying assets of such fund. The underlying assets
of each fund in the trust shall be charged with the liabilities and
expenses attributable to such fund, except that liabilities and
expenses may be allocated to a particular class. Any general expenses
of the trust shall be allocated between or among any one or more of
the funds or classes.

SHAREHOLDER LIABILITY. The trust is an entity commonly known as a
"Massachusetts business trust." Under Massachusetts law, shareholders
of such a trust may, under certain circumstances, be held personally
liable for the obligations of the trust.

The Declaration of Trust contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
trust or fund. The Declaration of Trust provides that the trust shall
not have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation,
or instrument entered into or executed by the trust or the Trustees
relating to the trust or to a fund shall include a provision limiting
the obligations created thereby to the trust or to one or more funds
and its or their assets. The Declaration of Trust further provides
that shareholders of a fund shall not have a claim on or right to any
assets belonging to any other fund.

The Declaration of Trust provides for indemnification out of each
fund's property of any shareholder or former shareholder held
personally liable for the obligations of the fund solely by reason of
his or her being or having been a shareholder and not because of his
or her acts or omissions or for some other reason. The Declaration of
Trust also provides that each fund shall, upon request, assume the
defense of any claim made against any shareholder for any act or
obligation of the fund and satisfy any judgment thereon. Thus, the
risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which a fund
itself would be unable to meet its obligations. FMR believes that, in
view of the above, the risk of personal liability to shareholders is
remote. Claims asserted against one class of shares may subject
holders of another class of shares to certain liabilities.

VOTING RIGHTS. Each fund's capital consists of shares of beneficial
interest. Shareholders are entitled to one vote for each dollar of net
asset value they own. The voting rights of shareholders can be changed
only by a shareholder vote. Shares may be voted in the aggregate, by
fund, and by class.

The shares have no preemptive or conversion rights. Shares are fully
paid and nonassessable, except as set forth under the heading
"Shareholder Liability" above.

The trust or a fund or a class may be terminated upon the sale of its
assets to, or merger with, another open-end management investment
company, series, or class thereof, or upon liquidation and
distribution of its assets. Generally, the merger of the trust or a
fund or a class with another operating mutual fund or the sale of all
or a portion of the assets of the trust or a fund or a class to
another operating mutual fund requires approval by a vote of
shareholders of the trust or the fund or the class. The Trustees may,
however, reorganize or terminate the trust or a fund or a class
without prior shareholder approval. In the event of the dissolution or
liquidation of the trust, shareholders of each of its funds are
entitled to receive the underlying assets of such fund available for
distribution. In the event of the dissolution or liquidation of a fund
or a class, shareholders of that fund or that class are entitled to
receive the underlying assets of the fund or class available for
distribution.

CUSTODIANS. Brown Brothers Harriman & Co., 40 Water Street, Boston,
Massachusetts, is custodian of the assets of VIP Emerging Asia. State
Street Bank and Trust Company, 1776 Heritage Drive, Quincy,
Massachusetts, is custodian of the assets of VIP Dynamic Capital
Appreciation. The Chase Manhattan Bank, 1 Chase Manhattan Plaza, New
York, New York, is custodian of the assets of VIP Europe Capital
Appreciation and VIP Japan. Each custodian is responsible for the
safekeeping of a fund's assets and the appointment of any subcustodian
banks and clearing agencies. For VIP Dynamic Capital Appreciation and
VIP Emerging Asia, The Chase Manhattan Bank, headquartered in New
York, also may serve as a special purpose custodian of certain assets
in connection with repurchase agreement transactions. The Bank of New
York, headquartered in New York, also may serve as a special purpose
custodian of certain assets in connection with repurchase agreement
transactions.

FMR, its officers and directors, its affiliated companies, Members of
the Advisory Board, and Members of the Board of Trustees may, from
time to time, conduct transactions with various banks, including banks
serving as custodians for certain funds advised by FMR. The Boston
branch of VIP Emerging Asia's custodian leases its office space from
an affiliate of FMR at a lease payment which, when entered into, was
consistent with prevailing market rates. Transactions that have
occurred to date include mortgages and personal and general business
loans. In the judgment of FMR, the terms and conditions of those
transactions were not influenced by existing or potential custodial or
other fund relationships.

AUDITORS. PricewaterhouseCoopers LLP, 160 Federal Street, Boston,
Massachusetts, serves as independent accountant for VIP Emerging Asia
and VIP Japan. The auditor examines financial statements for the funds
and provides other audit, tax, and related services.

Deloitte & Touche LLP, 200 Berkeley Street, Boston, Massachusetts,
serves as independent accountant for VIP Dynamic Capital Appreciation
and VIP Europe Capital Appreciation. The auditor examines financial
statements for the funds and provides other audit, tax, and related
services.

APPENDIX

Fidelity, Fidelity Investments & (Pyramid) Design, Fidelity Focus, and
Magellan are registered trademarks of FMR Corp.

The third party marks appearing above are the marks of their
respective owners.

The term "VIP" as used in this document refers to Fidelity Variable
Insurance Products.

PART C. OTHER INFORMATION

Item 23. Exhibits

(a) (1) Declaration of Trust, dated July 14, 1994, is incorporated
herein by reference to Exhibit 1 to the Registration
Statement filed on July 29, 1994.

(2) Supplement to the Declaration of Trust, dated December 30,
1996, is incorporated herein by reference to Exhibit 1(b) of
Post-Effective Amendment No. 8.

(b) Bylaws of the Trust, as amended and dated May 19, 1994, are
incorporated herein by reference to Exhibit 2(a) of Fidelity
Union Street Trust's (File No. 2-50318) Post-Effective Amendment
No. 87.

(d) (1) Management Contract between Fidelity Advisor Annuity Growth
Opportunities Fund (currently known as Growth Opportunities
Portfolio) and Fidelity Management & Research Company, dated
November 18, 1994, is incorporated herein by reference to
Exhibit 5(b) of Post-Effective Amendment No. 1.

(2) Management Contract between Fidelity Advisor Annuity Income &
Growth Fund (currently known as Balanced Portfolio) and
Fidelity Management & Research Company, dated November 18,
1994, is incorporated herein by reference to Exhibit 5(c) of
Post-Effective Amendment No. 1.

(3) Management Contract between Growth & Income Portfolio and
Fidelity Management & Research Company, dated January 1,
1997, is incorporated herein by reference to Exhibit 5(g) of
Post-Effective Amendment No. 7.

(4) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on
behalf of Fidelity Advisor Annuity Growth Opportunities Fund
(currently known as Growth Opportunities Portfolio), dated
November 18, 1994, is incorporated herein by reference to
Exhibit 5(i) of Post-Effective Amendment No. 1.

(5) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on
behalf of Fidelity Advisor Annuity Income & Growth Fund
(currently known as Balanced Portfolio), dated November 18,
1994, is incorporated herein by reference to Exhibit 5(j) of
Post-Effective Amendment No. 1.

(6) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on
behalf of Growth & Income Portfolio, dated January 1, 1997,
is incorporated herein by reference to Exhibit 5(m) of
Post-Effective Amendment No. 7.

(7) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Advisor Annuity Growth Opportunities Fund
(currently known as Growth Opportunities Portfolio), dated
November 18, 1994, is incorporated herein by reference to
Exhibit 5(m) of Post-Effective Amendment No. 1.

(8) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on
behalf of Fidelity Advisor Annuity Income & Growth Fund
(currently known as Balanced Portfolio), dated November 18,
1994, is incorporated herein by reference to Exhibit 5(n) of
Post-Effective Amendment No. 1.

(9) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on
behalf of Growth & Income Portfolio, dated January 1, 1997,
is incorporated herein by reference to Exhibit 5(i) of
Post-Effective Amendment No. 9.

(10) Management Contract between Mid Cap Portfolio and Fidelity
Management & Research Company, dated November 19, 1998, is
incorporated herein by reference to Exhibit d(10) of
Post-Effective Amendment No. 13.

(11) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (U.K.) Inc. on
behalf of Mid Cap Portfolio, dated November 19, 1998, is
incorporated herein by reference to Exhibit d(11) of
Post-Effective Amendment No. 13.

(12) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Management & Research (Far East) Inc. on
behalf of Mid Cap Portfolio, dated November 19, 1998, is
incorporated herein by reference to Exhibit d(12) of
Post-Effective Amendment No. 13.

(13) Sub-Advisory Agreement between Fidelity Management & Research
Company and Fidelity Investments Money Management, Inc. on
behalf of Balanced Portfolio, dated January 1, 1999, is
incorporated herein by reference to Exhibit d(13) of
Post-Effective Amendment No. 13.

(14) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Growth
Opportunities Portfolio is incorporated herein by reference
to Exhibit d(14) of Post-Effective Amendment No. 17.

(15) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Balanced
Portfolio is incorporated herein by reference to Exhibit
d(15) of Post-Effective Amendment No. 17.

(16) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Growth &
Income Portfolio is incorporated herein by reference to
Exhibit d(16) of Post-Effective Amendment No. 17.

(17) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Mid Cap
Portfolio is incorporated herein by reference to Exhibit
d(17) of Post-Effective Amendment No. 17.

(18) Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Balanced Portfolio, dated January 1, 2000, is
incorporated herein by reference to Exhibit d(18) of
Post-Effective Amendment No. 17.

(19) Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Growth & Income Portfolio, dated January 1, 2000,
is incorporated herein by reference to Exhibit d(19) of
Post-Effective Amendment No. 17.

(20) Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Growth Opportunities Portfolio, dated January 1,
2000, is incorporated herein by reference to Exhibit d(20) of
Post-Effective Amendment No. 17.

(21) Research Agreement between Fidelity Management & Research
(Far East) Inc. and Fidelity Investments Japan Limited on
behalf of Mid Cap Portfolio, dated January 1, 2000, is
incorporated herein by reference to Exhibit d(21) of
Post-Effective Amendment No. 17.

(22) Form of Management Contract between Dynamic Capital
Appreciation Portfolio and Fidelity Management & Research
Company, is filed herein as Exhibit d(22).

(23) Form of Management Contract between Emerging Asia Portfolio
and Fidelity Management & Research Company, is filed herein
as Exhibit d(23).

(24) Form of Management Contract between Europe Capital
Appreciation Portfolio and Fidelity Management & Research
Company, is filed herein as Exhibit d(24).

(25) Form of Management Contract between Japan Portfolio and
Fidelity Management & Research Company, is filed herein as
Exhibit d(25).

(26) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Dynamic
Capital Appreciation Portfolio is filed herein as Exhibit
d(26).

(27) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Emerging Asia
Portfolio is filed herein as Exhibit d(27).

(28) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Europe
Capital Appreciation Portfolio is filed herein as Exhibit
d(28).

(29) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and FMR Co., Inc. on behalf of Japan
Portfolio is filed herein as Exhibit d(29).

(30) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Dynamic Capital Appreciation Portfolio is
filed herein as Exhibit d(30).

(31) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Emerging Asia Portfolio is filed herein as
Exhibit d(31).

(32) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Europe Capital Appreciation Portfolio is
filed herein as Exhibit d(32).

(33) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (U.K.)
Inc. on behalf of Japan Portfolio is filed herein as Exhibit
d(33).

(34) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Dynamic Capital Appreciation
Portfolio is filed herein as Exhibit d(34).

(35) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Emerging Asia Portfolio is filed
herein as Exhibit d(35).

(36) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Europe Capital Appreciation Portfolio
is filed herein as Exhibit d(36).

(37) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity Management & Research (Far
East) Inc. on behalf of Japan Portfolio is filed herein as
Exhibit d(37).

(38) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment
Advisors on behalf of Emerging Asia Portfolio is filed herein
as Exhibit d(38).

(39) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment
Advisors on behalf of Europe Capital Appreciation Portfolio
is filed herein as Exhibit d(39).

(40) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company and Fidelity International Investment
Advisors on behalf of Japan Portfolio is filed herein as
Exhibit d(40).

(41) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Emerging Asia Portfolio
is filed herein as Exhibit d(41).

(42) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Europe Capital
Appreciation Portfolio is filed herein as Exhibit d(42).

(43) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity International Investment
Advisors (U.K.) Limited on behalf of Japan Portfolio is filed
herein as Exhibit d(43).

(44) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity Investments Japan Limited on
behalf of Emerging Asia Portfolio is filed herein as Exhibit
d(44).

(45) Form of Sub-Advisory Agreement between Fidelity International
Investment Advisors and Fidelity Investments Japan Limited on
behalf of Japan Portfolio is filed herein as Exhibit d(45).

(46) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan
Limited on behalf of Dynamic Capital Appreciation Portfolio
is filed herein as Exhibit d(46).

(47) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan
Limited on behalf of Emerging Asia Portfolio is filed herein
as Exhibit d(47).

(48) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan
Limited on behalf of Europe Capital Appreciation Portfolio is
filed herein as Exhibit d(48).

(49) Form of Research Agreement between Fidelity Management &
Research (Far East) Inc. and Fidelity Investments Japan
Limited on behalf of Japan Portfolio is filed herein as
Exhibit d(49).

(e) (1) General Distribution Agreement between Fidelity Advisor
Annuity Growth Opportunities Fund (currently known as Growth
Opportunities Portfolio) and Fidelity Distributors
Corporation, dated November 18, 1994, is incorporated herein
by reference to Exhibit 6(b) of Post-Effective Amendment No.
1.

(2) General Distribution Agreement between Fidelity Advisor
Annuity Income & Growth Fund (currently known as Balanced
Portfolio) and Fidelity Distributors Corporation, dated
November 18, 1994, is incorporated herein by reference to
Exhibit 6(c) of Post-Effective Amendment No. 1.

(3) General Distribution Agreement between Growth & Income
Portfolio and Fidelity Distributors Corporation, dated
December 19, 1996, is incorporated herein by reference to
Exhibit 6(c) of Post-Effective Amendment No. 9.

(4) General Distribution Agreement between Mid Cap Portfolio and
Fidelity Distributors Corporation, dated November 19, 1998,
is incorporated herein by reference to Exhibit (e)(8) of
Post-Effective Amendment No. 13.

(5) Amendments to the General Distribution Agreement between
Variable Insurance Products Fund III and Fidelity
Distributors Corporation on behalf of Growth Opportunities
Portfolio and Balanced Portfolios, dated March 14, 1996 and
July 15, 1996, are incorporated herein by reference to
Exhibit 6(a) of Fidelity Court Street Trust's (File No.
2-58774) Post-Effective Amendment No. 61.

(6) Form of Service Contract between Fidelity Distributors
Corporation and "Qualified Recipients" with respect to
Initial Class shares is incorporated herein by reference to
Exhibit 6(e) of Post-Effective Amendment No. 12.

(7) Form of Service Contract between Fidelity Distributors
Corporation and "Qualified Recipients" with respect to
Service Class shares is incorporated herein by reference to
Exhibit 6(f) of Post-Effective Amendment No. 12.

(8) Form of Service Contract between Fidelity Distributors
Corporation and "Qualified Recipients" with respect to
Service Class 2 shares is incorporated herein by reference
to Exhibit e(7) of Post-Effective Amendment No. 17.

(9) Form of General Distribution Agreement between Dynamic
Capital Appreciation Portfolio and Fidelity Distributors
Corporation is filed herein as Exhibit e(9).

(10) Form of General Distribution Agreement between Emerging Asia
Portfolio and Fidelity Distributors Corporation is filed
herein as Exhibit e(10).

(11) Form of General Distribution Agreement between Europe Capital
Appreciation Portfolio and Fidelity Distributors Corporation
is filed herein as Exhibit e(11).

(12) Form of General Distribution Agreement between Japan
Portfolio and Fidelity Distributors Corporation is filed
herein as Exhibit e(12).

(f) (1) The Fee Deferral Plan for Non-Interested Person Directors and
Trustees of the Fidelity Funds, effective as of September 15,
1995 and amended through January 1, 2000, is incorporated
herein by reference to Exhibit (f)(1) of Fidelity
Massachusetts Municipal Trust's (File No. 2-75537)
Post-Effective Amendment No. 39.

(g) (1) Custodian Agreement and Appendix C, dated August 1, 1994,
between The Chase Manhattan Bank, N.A. and Variable Insurance
Products Fund III on behalf of Balanced Portfolio and Growth
& Income Portfolio are incorporated herein by reference to
Exhibit 8(a) of Fidelity Investment Trust's (File No.
2-90649) Post-Effective Amendment No. 59.

(2) Appendix A, dated February, 22, 2000, to the Custodian
Agreement, dated August 1, 1994, between The Chase Manhattan
Bank, N.A. and Variable Insurance Products Fund III on behalf
of Balanced Portfolio and Growth & Income Portfolio is
incorporated herein by reference to Exhibit g(6) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective
Amendment No. 69.

(3) Appendix B, dated March 16, 2000, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A.
and Variable Insurance Products Fund III on behalf of
Balanced Portfolio and Growth & Income Portfolio is
incorporated herein by reference to Exhibit g(7) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective
Amendment No. 69.

(4) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated August 1, 1994, between The Chase Manhattan Bank, N.A.
and Variable Insurance Products Fund III on behalf of
Balanced Portfolio and Growth & Income Portfolio is
incorporated herein by reference to Exhibit g(4) of Fidelity
Charles Street Trust's (File No. 2-73133) Post-Effective
Amendment No. 65.

(5) Custodian Agreement and Appendix C, dated September 1, 1994,
between Brown Brothers Harriman & Company and Variable
Insurance Products Fund III on behalf of Growth Opportunities
Portfolio and Mid Cap Portfolio are incorporated herein by
reference to Exhibit 8(a) of Fidelity Commonwealth Trust's
(File No. 2-52322) Post-Effective Amendment No. 56.

(6) Appendix A, dated August 11, 1999, to the Custodian
Agreement, dated September 1, 1994, between Brown Brothers
Harriman & Company and Variable Insurance Products Fund III
on behalf of Growth Opportunities Portfolio and Mid Cap
Portfolio is incorporated herein by reference to Exhibit g(6)
of Fidelity Advisor Series I's (File No. 2-84776)
Post-Effective Amendment No. 50.

(7) Appendix B, dated March 16, 2000, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman &
Company and Variable Insurance Products Fund III on behalf of
Growth Opportunities Portfolio and Mid Cap Portfolio is
incorporated herein by reference to Exhibit g(3) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective
Amendment No. 69.

(8) Addendum, dated October 21, 1996, to the Custodian Agreement,
dated September 1, 1994, between Brown Brothers Harriman &
Company and Variable Insurance Products Fund III on behalf of
Growth Opportunities Portfolio and Mid Cap Portfolio is
incorporated herein by reference to Exhibit g(4) of Fidelity
Commonwealth Trust's (File No. 2-52322) Post-Effective
Amendment No. 68.

(9) Form of Custodian Agreement and Appendix C between The Chase
Manhattan Bank, N.A. and Variable Insurance Products Fund III
on behalf of Europe Capital Appreciation Portfolio and Japan
Portfolio are filed herein as Exhibit g(9).

(10) Form of Appendix A to the Custodian Agreement between The
Chase Manhattan Bank, N.A. and Variable Insurance Products
Fund III on behalf of Europe Capital Appreciation Portfolio
and Japan Portfolio is filed herein as Exhibit g(10).

(11) Form of Appendix B to the Custodian Agreement between The
Chase Manhattan Bank, N.A. and Variable Insurance Products
Fund III on behalf of Europe Capital Appreciation Portfolio
and Japan Portfolio is filed herein as Exhibit g(11).

(12) Form of Addendum to the Custodian Agreement between The Chase
Manhattan Bank, N.A. and Variable Insurance Products Fund III
on behalf of Europe Capital Appreciation Portfolio and Japan
Portfolio is filed herein as Exhibit g(12).

(13) Form of Custodian Agreement and Appendix C between Brown
Brothers Harriman & Company and Variable Insurance Products
Fund III on behalf of Emerging Asia Portfolio are filed
herein as Exhibit g(13).

(14) Form of Appendix A to the Custodian Agreement between Brown
Brothers Harriman & Company and Variable Insurance Products
Fund III on behalf of Emerging Asia Portfolio is filed herein
as Exhibit g(14).

(15) Form of Appendix B to the Custodian Agreement between Brown
Brothers Harriman & Company and Variable Insurance Products
Fund III on behalf of Emerging Asia Portfolio is filed herein
as Exhibit g(15).

(16) Form of Addendum to the Custodian Agreement between Brown
Brothers Harriman & Company and Variable Insurance Products
Fund III on behalf of Emerging Asia Portfolio is filed herein
as Exhibit g(16).

(17) Form of Custodian Agreement, and Appendix C between State
Street Bank and Trust Company and Variable Insurance Products
Fund III on behalf of Dynamic Capital Appreciation Portfolio
are filed herein as Exhibit g(17).

(18) Form of Appendix A to the Custodian Agreement between State
Street Bank and Trust Company and Variable Insurance Products
Fund III on behalf of Dynamic Capital Appreciation Portfolio
is filed herein as Exhibit g(18).

(19) Form of Appendix B to the Custodian Agreement between State
Street Bank and Trust Company and Variable Insurance Products
Fund III on behalf of Dynamic Capital Appreciation Portfolio
is filed herein as Exhibit g(19).

(20) Form of Addendum to the Custodian Agreement between State
Street Bank and Trust Company and Variable Insurance Products
Fund III on behalf of Dynamic Capital Appreciation Portfolio
is filed herein as Exhibit g(20).

(21) Fidelity Group Repo Custodian Agreement among The Bank of New
York, J. P. Morgan Securities, Inc., and Variable Insurance
Products Fund III on behalf of Growth Opportunities
Portfolio, Balanced Portfolio, Growth & Income Portfolio and
Mid Cap Portfolio dated February 12, 1996, is incorporated
herein by reference to Exhibit 8(d) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.

(22) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between The Bank of New York and Variable Insurance Products
Fund III on behalf of Growth Opportunities Portfolio,
Balanced Portfolio, Growth & Income Portfolio and Mid Cap
Portfolio, dated February 12, 1996, is incorporated herein by
reference to Exhibit 8(e) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No.
31.

(23) Fidelity Group Repo Custodian Agreement among Chemical Bank,
Greenwich Capital Markets, Inc., and Variable Insurance
Products Fund III on behalf of Growth Opportunities
Portfolio, Balanced Portfolio, Growth & Income Portfolio and
Mid Cap Portfolio, dated November 13, 1995, is incorporated
herein by reference to Exhibit 8(f) of Fidelity Institutional
Cash Portfolios' (File No. 2-74808) Post-Effective Amendment
No. 31.

(24) Schedule 1 to the Fidelity Group Repo Custodian Agreement
between Chemical Bank and Variable Insurance Products Fund
III on behalf of Growth Opportunities Portfolio, Balanced
Portfolio, Growth & Income Portfolio and Mid Cap Portfolio,
dated November 13, 1995, is incorporated herein by reference
to Exhibit 8(g) of Fidelity Institutional Cash Portfolios'
(File No. 2-74808) Post-Effective Amendment No. 31.

(25) Joint Trading Account Custody Agreement between The Bank of
New York and Variable Insurance Products Fund III on behalf
of Growth Opportunities Portfolio, Balanced Portfolio, Growth
& Income Portfolio and Mid Cap Portfolio, dated May 11, 1995,
is incorporated herein by reference to Exhibit 8(h) of
Fidelity Institutional Cash Portfolios' (File No. 2-74808)
Post-Effective Amendment No. 31.

(26) First Amendment to Joint Trading Account Custody Agreement
between The Bank of New York and Variable Insurance Products
Fund III on behalf of Growth Opportunities Portfolio,
Balanced Portfolio, Growth & Income Portfolio and Mid Cap
Portfolio, dated July 14, 1995, is incorporated herein by
reference to Exhibit 8(i) of Fidelity Institutional Cash
Portfolios' (File No. 2-74808) Post-Effective Amendment No.
31.

(27) Schedule A-1, dated March 29, 2000, to the Fidelity Group
Repo Custodian Agreements, Schedule 1s to the Fidelity Group
Repo Custodian Agreements, Joint Trading Account Custody
Agreement, and First Amendment to the Joint Trading Account
Custody Agreement, between the respective parties and
Variable Insurance Products Fund III on behalf of Growth
Opportunities Portfolio, Balanced Portfolio, Growth & Income
Portfolio and Mid Cap Portfolio, is incorporated herein by
reference to Exhibit g(11) of Fidelity Magellan Fund's (File
No. 2-21461) Post-Effective Amendment No. 48.

(28) Form of Fidelity Group Repo Custodian Agreement among The
Bank of New York, J.P. Morgan Securities, Inc., and Variable
Insurance Products Fund III on behalf of Dynamic Capital
Appreciation Portfolio, Emerging Asia Portfolio, Europe
Capital Appreciation Portfolio and Japan Portfolio is filed
herein as Exhibit g(28).

(29) Form of Schedule 1 to the Fidelity Group Repo Custodian
Agreement between The Bank of New York and Variable Insurance
Products Fund III on behalf of Dynamic Capital Appreciation
Portfolio, Emerging Asia Portfolio, Europe Capital
Appreciation Portfolio and Japan Portfolio is filed herein as
Exhibit g(29).

(30) Form of Fidelity Group Repo Custodian Agreement among
Chemical Bank, Greenwich Capital Markets, Inc., Variable
Insurance Products Fund III on behalf of Dynamic Capital
Appreciation Portfolio, Emerging Asia Portfolio, Europe
Capital Appreciation Portfolio and Japan Portfolio is filed
herein as Exhibit g(30).

(31) Form of Schedule 1 to the Fidelity Group Repo Custodian
Agreement between Chemical Bank and Variable Insurance
Products Fund III on behalf of Dynamic Capital Appreciation
Portfolio, Emerging Asia Portfolio, Europe Capital
Appreciation Portfolio and Japan Portfolio is filed herein as
Exhibit g(31).

(32) Form of Joint Trading Account Custody Agreement between The
Bank of New York and Variable Insurance Products Fund III on
behalf of Dynamic Capital Appreciation Portfolio, Emerging
Asia Portfolio, Europe Capital Appreciation Portfolio and
Japan Portfolio is filed herein as Exhibit g(32).

(33) Form of First Amendment to Joint Trading Account Custody
Agreement between The Bank of New York and Variable Insurance
Products Fund III on behalf of Dynamic Capital Appreciation
Portfolio, Emerging Asia Portfolio, Europe Capital
Appreciation Portfolio and Japan Portfolio is filed herein as
Exhibit g(33).

(h) Not applicable.

(i) Not applicable.

(j) Not applicable.

(k) Not applicable.

(l) Not applicable.

(m) (1) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth & Income Portfolio: Initial Class is incorporated
herein by reference to Exhibit m(1) of Post-Effective
Amendment No. 15.

(2) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth Opportunities Portfolio: Initial Class is incorporated
herein by reference to Exhibit m(2) of Post-Effective
Amendment No. 15.

(3) Distribution and Service Plan pursuant to Rule 12b-1 for
Balanced Portfolio: Initial Class is incorporated herein by
reference to Exhibit m(3) of Post-Effective Amendment No. 15.

(4) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth & Income Portfolio: Service Class is incorporated
herein by reference to Exhibit m(4) of Post-Effective
Amendment No. 15.

(5) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth Opportunities Portfolio: Service Class is incorporated
herein by reference to Exhibit m(5) of Post-Effective
Amendment No. 15.

(6) Distribution and Service Plan pursuant to Rule 12b-1 for
Balanced Portfolio: Service Class is incorporated herein by
reference to Exhibit m(6) of Post-Effective Amendment No. 15.

(7) Distribution and Service Plan pursuant to Rule 12b-1 for Mid
Cap Portfolio: Initial Class is incorporated herein by
reference to Exhibit m(7) of Post-Effective Amendment No. 15.

(8) Distribution and Service Plan pursuant to Rule 12b-1 for Mid
Cap Portfolio: Service Class is incorporated herein by
reference to Exhibit m(8) of Post-Effective Amendment No. 15.

(9) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth & Income Portfolio: Service Class 2 is incorporated
herein by reference to Exhibit m(9) of Post-Effective
Amendment No. 16.

(10) Distribution and Service Plan pursuant to Rule 12b-1 for
Growth Opportunities Portfolio: Service Class 2 is
incorporated herein by reference to Exhibit m(10) of
Post-Effective Amendment No. 16.

(11) Distribution and Service Plan pursuant to Rule 12b-1 for
Balanced Portfolio: Service Class 2 is incorporated herein by
reference to Exhibit m(11) of Post-Effective Amendment No.
16.

(12) Distribution and Service Plan pursuant to Rule 12b-1 for Mid
Cap Portfolio: Service Class 2 is incorporated herein by
reference to Exhibit m(12) of Post-Effective Amendment No.
16.

(13) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Dynamic Capital Appreciation Portfolio: Initial Class is
filed herein as Exhibit m(13).

(14) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Emerging Asia Portfolio: Initial Class is filed herein as
Exhibit m(14).

(15) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Europe Capital Appreciation Portfolio: Initial Class is
filed herein as Exhibit m(15).

(16) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Japan Portfolio: Initial Class is filed herein as Exhibit
m(16).

(17) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Dynamic Capital Appreciation Portfolio: Service Class is
filed herein as Exhibit m(17).

(18) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Emerging Asia Portfolio: Service Class is filed herein as
Exhibit m(18).

(19) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Europe Capital Appreciation Portfolio: Service Class is
filed herein as Exhibit m(19).

(20) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Japan Portfolio: Service Class is filed herein as Exhibit
m(20).

(21) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Dynamic Capital Appreciation Portfolio: Service Class 2
is filed herein as Exhibit m(21).

(22) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Emerging Asia Portfolio: Service Class 2 is filed herein
as Exhibit m(22).

(23) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Europe Capital Appreciation Portfolio: Service Class 2 is
filed herein as Exhibit m(23).

(24) Form of Distribution and Service Plan pursuant to Rule 12b-1
for Japan Portfolio: Service Class 2 is filed herein as
Exhibit m(24).

(n) Multiple Class of Shares Plan for VIP Funds dated December 16,
1999 is incorporated herein by reference to Exhibit o(1) of
Post-Effective Amendment No. 16.

(p)(1) Code of Ethics, dated January 1, 2000, adopted by each fund,
Fidelity Management & Research Company, Fidelity Investments
Money Management, Inc., FMR Co., Inc., Fidelity Management &
Research (U.K.) Inc., Fidelity Management & Research (Far
East) Inc., Fidelity Investments Japan Limited, Fidelity
International Investment Advisors, Fidelity International
Investment Advisors (U.K.) Limited, and Fidelity Distributors
Corporation pursuant to Rule 17j-1 is incorporated herein by
reference to Exhibit (p)(1) of Fidelity Commonwealth Trust's
(File No. 2-52322) Post-Effective Amendment No. 69.

Item 24. Trusts Controlled by or under Common Control with this Trust

The Board of Trustees of the Trust is the same as the board of other
Fidelity funds, each of which has Fidelity Management & Research
Company, or an affiliate, as its investment adviser. In addition, the
officers of the Trust are substantially identical to those of the
other Fidelity funds. Nonetheless, the Trust takes the position that
it is not under common control with other Fidelity funds because the
power residing in the respective boards and officers arises as the
result of an official position with the respective trusts.

Item 25. Indemnification

Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification
shall be provided to any past or present Trustee or officer. It states
that the Trust shall indemnify any present or past trustee or officer
to the fullest extent permitted by law against liability, and all
expenses reasonably incurred by him or her in connection with any
claim, action, suit or proceeding in which he or she is involved by
virtue of his or her service as a trustee or officer and against any
amount incurred in settlement thereof. Indemnification will not be
provided to a person adjudged by a court or other adjudicatory body to
be liable to the Trust or its shareholders by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of his
or her duties (collectively, "disabling conduct"), or not to have
acted in good faith in the reasonable belief that his or her action
was in the best interest of the Trust. In the event of a settlement,
no indemnification may be provided unless there has been a
determination, as specified in the Declaration of Trust, that the
officer or trustee did not engage in disabling conduct.

Pursuant to Section 11 of the Distribution Agreement, the Trust
agrees to indemnify and hold harmless the Distributor and each of its
directors and officers and each person, if any, who controls the
Distributor within the meaning of Section 15 of the 1933 Act against
any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss,
liability, claim, damages, or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person
acquiring any shares, based upon the ground that the registration
statement, Prospectus, Statement of Additional Information,
shareholder reports or other information filed or made public by the
Trust (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be
stated or necessary in order to make the statements not misleading
under the 1933 Act, or any other statute or the common law. However,
the Trust does not agree to indemnify the Distributor or hold it
harmless to the extent that the statement or omission was made in
reliance upon, and in conformity with, information furnished to the
Trust by or on behalf of the Distributor. In no case is the indemnity
of the Trust in favor of the Distributor or any person indemnified to
be deemed to protect the Distributor or any person against any
liability to the Issuer or its security holders to which the
Distributor or such person would otherwise be subject by reason of
willful misfeasance, bad faith or gross negligence in the performance
of its duties or by reason of its reckless disregard of its
obligations and duties under this Agreement.

Pursuant to the agreement by which Fidelity Investments Institutional
Operations Company, Inc. ("FIIOC") is appointed transfer agent, the
Registrant agrees to indemnify and hold FIIOC harmless against any
losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from:

(1) any claim, demand, action or suit brought by any person other
than the Registrant, including by a shareholder, which names FIIOC
and/or the Registrant as a party and is not based on and does not
result from FIIOC's willful misfeasance, bad faith or negligence or
reckless disregard of duties, and arises out of or in connection with
FIIOC's performance under the Transfer Agency Agreement; or

(2) any claim, demand, action or suit (except to the extent
contributed to by FIIOC's willful misfeasance, bad faith or negligence
or reckless disregard of duties) which results from the negligence of
the Registrant, or from FIIOC's acting upon any instruction(s)
reasonably believed by it to have been executed or communicated by any
person duly authorized by the Registrant, or as a result of FIIOC's
acting in reliance upon advice reasonably believed by FIIOC to have
been given by counsel for the Registrant, or as a result of FIIOC's
acting in reliance upon any instrument or stock certificate reasonably
believed by it to have been genuine and signed, countersigned or
executed by the proper person.

Item 26. Business and Other Connections of Investment Advisers

(1) FIDELITY MANAGEMENT & RESEARCH COMPANY (FMR)
82 Devonshire Street, Boston, MA 02109

FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held,
during the past two fiscal years, the following positions of a
substantial nature.

Edward C. Johnson 3d Chairman of the Board and
Director of FMR; Chief
Executive Officer, Chairman
of the Board, and Director
of FMR Corp.; Chairman of
the Board and Director of
Fidelity Investments Money
Management, Inc. (FIMM),
Fidelity Management &
Research (U.K.) Inc. (FMR
U.K.), and Fidelity
Management & Research (Far
East) Inc. (FMR Far East);
Director of Fidelity
Management & Research Co.,
Inc. (FMRC); Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.

Robert C. Pozen President and Director of
FMR; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMRC, FMR
U.K., and FMR Far East;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.

John Avery Vice President of FMR and of
funds advised by FMR.

Robert Bertelson Vice President of FMR and of
a fund advised by FMR.

John H. Carlson Vice President of FMR and of
funds advised by FMR.

Robert C. Chow Vice President of FMR and of
a fund advised by FMR.

Dwight D. Churchill Senior Vice President of FMR
and Vice President of Bond
Funds and Money Market Funds
advised by FMR; Senior Vice
President of FIMM and
President of Fidelity
Investments Fixed Income
Division.

Laura B. Cronin Vice President of FMR and
Treasurer of FMR, FIMM, FMR
U.K., FMRC and FMR Far East.

Barry Coffman Vice President of FMR and of
a fund advised by FMR.

Arieh Coll Vice President of FMR.

Catherine Collins Vice President of FMR.

Frederic G. Corneel Tax Counsel of FMR.

William Danoff Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Scott E. DeSano Vice President of FMR.

Penelope Dobkin Vice President of FMR and of
a fund advised by FMR.

Walter C. Donovan Vice President of FMR.

Bettina Doulton Senior Vice President of FMR
and of funds advised by FMR.

Stephen DuFour Vice President of FMR and of
a fund advised by FMR.

Maria F. Dwyer Vice President of FMR and
Deputy Treasurer of the
Fidelity funds.

Margaret L. Eagle Vice President of FMR.

William R. Ebsworth Vice President of FMR.

David Felman Vice President of FMR and of
funds advised by FMR.

Richard B. Fentin Senior Vice President of FMR
and Vice President of a fund
advised by FMR.

Karen Firestone Vice President of FMR and of
funds advised by FMR.

Michael B. Fox Assistant Treasurer of FMR,
FIMM, FMR U.K., and FMR Far
East; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FMR U.K.,
FMR Far East, and FIMM.

Gregory Fraser Vice President of FMR and of
funds advised by FMR.

Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, FMRC, and
Strategic Advisers, Inc.;
Secretary of FIMM; Vice
President and Deputy General
Counsel of FMR Corp.

David L. Glancy Vice President of FMR and of
funds advised by FMR.

Barry A. Greenfield Vice President of FMR.

Boyce I. Greer Senior Vice President of FMR
and Vice President of Money
Market Funds and Bond Funds
advised by FMR; Vice
President of FIMM and
Executive Vice President of
Fidelity Investments Fixed
Income Division.

Bart A. Grenier Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Robert J. Haber Vice President of FMR.

Richard C. Habermann Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Fred L. Henning Jr. Senior Vice President of FMR.

Bruce T. Herring Vice President of FMR.

Robert F. Hill Vice President of FMR and
Director of Technical
Research.

Frederick Hoff Vice President of FMR.

Abigail P. Johnson Senior Vice President of FMR
and Vice President of funds
advised by FMR; Director of
FMR Corp.; Associate
Director and Senior Vice
President of Equity Funds
advised by FMR.

David B. Jones Vice President of FMR.

Steven Kaye Senior Vice President of FMR
and of a fund advised by FMR.

Francis V. Knox Vice President of FMR;
Compliance Officer of FMR
U.K. and FMR Far East.

Harris Leviton Vice President of FMR and of
a fund advised by FMR.

Bradford E. Lewis Vice President of FMR.

Peter S. Lynch Vice Chairman of the Board
and Director of FMR and FMRC.

Richard R. Mace Jr. Vice President of FMR and of
funds advised by FMR.

Shigeki Makino Vice President of FMR.

Charles A. Mangum Vice President of FMR and of
funds advised by FMR.

Kevin McCarey Vice President of FMR and of
funds advised by FMR.

James McDowell Senior Vice President of FMR.

Neal P. Miller Vice President of FMR and of
a fund advised by FMR.

Jacques Perold Vice President of FMR.

Stephen Petersen Senior Vice President of FMR
and Vice President of funds
advised by FMR.

Alan Radlo Vice President of FMR.

Eric D. Roiter Vice President, General
Counsel, and Clerk of FMR
and Secretary of funds
advised by FMR.

Lee H. Sandwen Vice President of FMR.

Patricia A. Satterthwaite Vice President of FMR and of
funds advised by FMR.

Fergus Shiel Vice President of FMR and of
funds advised by FMR.

Richard A. Silver Vice President of FMR.

Carol A. Smith-Fachetti Vice President of FMR.

Steven J. Snider Vice President of FMR and of
funds advised by FMR.

Thomas T. Soviero Vice President of FMR and of
a fund advised by FMR.

Richard Spillane Senior Vice President of FMR;
Associate Director and
Senior Vice President of
Equity Funds advised by FMR;
Previously, Senior Vice
President and Director of
Operations and Compliance of
FMR U.K.

Thomas M. Sprague Vice President of FMR and of
funds advised by FMR.

Robert E. Stansky Senior Vice President of FMR
and Vice President of a fund
advised by FMR.

Scott D. Stewart Vice President of FMR.

Beth F. Terrana Senior Vice President of FMR.

Yoko Tilley Vice President of FMR.

Joel C. Tillinghast Vice President of FMR and of
a fund advised by FMR.

Robert Tuckett Vice President of FMR.

Jennifer Uhrig Vice President of FMR and of
funds advised by FMR.

George A. Vanderheiden Senior Vice President of FMR
and Director of FMR Corp.

Jason Weiner Vice President of FMR and of
a fund advised by FMR.

Steven S. Wymer Vice President of FMR and of
a fund advised by FMR.

(2) FMR CO., INC. (FMRC)
82 Devonshire Street, Boston, MA 02109

FMRC provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.

Edward C. Johnson 3d Director of FMRC; Chairman of
the Board and Director of
FMR U.K., FMR, FMR Corp.,
FIMM, and FMR Far East;
President and Chief
Executive Officer of FMR
Corp.; Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.

Robert C. Pozen President and Director of
FMRC, FIMM, FMR, FMR U.K.,
and FMR Far East; Senior
Vice President and Trustee
of funds advised by FMR;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.

Brian Clancy Vice President of FMRC.

Laura B. Cronin Treasurer of FMRC, FMR U.K.,
FMR Far East, FMR, and FIMM
and Vice President of FMR.

Jay Freedman Assistant Clerk of FMR; Clerk
of FMR Corp., FMR U.K., FMR
Far East, FMRC, and
Strategic Advisers, Inc.;
Secretary of FIMM; Vice
President and Deputy General
Counsel of FMR Corp.

Peter S. Lynch Vice Chairman of the Board
and Director of FMR and FMRC.

(3) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
25 Lovat Lane, London, EC3R 8LL, England

FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.

Edward C. Johnson 3d Chairman of the Board and
Director of FMR U.K., FMRC,
FMR, FMR Corp., FIMM, and
FMR Far East; President and
Chief Executive Officer of
FMR Corp.; Chairman of the
Executive Committee of FMR;
Chairman and Representative
Director of Fidelity
Investments Japan Limited
(FIJ); President and Trustee
of funds advised by FMR.

Robert C. Pozen President and Director of FMR
U.K.; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FIMM, FMR, FMRC,
and FMR Far East; Director
of Strategic Advisers, Inc.;
Previously, General Counsel,
Managing Director, and
Senior Vice President of FMR
Corp.

Laura B. Cronin Treasurer of FMR U.K., FMR
Far East, FMR, and FIMM and
Vice President of FMR.

Michael B. Fox Assistant Treasurer of FMR
U.K., FMR, FMR Far East,
FMRC, and FIMM; Vice
President of FMR U.K., FMR
Far East, and FIMM; Vice
President and Treasurer of
FMR Corp. and Strategic
Advisers, Inc.

Simon Fraser Senior Vice President of FMR
U.K. and Director and
President of FIIA.

Jay Freedman Clerk of FMR U.K., FMR Far
East, FMR Corp., FMRC, and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President and Deputy General
Counsel of FMR Corp.

Susan Englander Hislop Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.; Assistant
Secretary of FIMM.

Francis V. Knox Compliance Officer of FMR
U.K. and FMR Far East; Vice
President of FMR.

(4) FIDELITY MANAGEMENT & RESEARCH (Far East) INC. (FMR Far East)
Shiroyama JT Mori Bldg., 4-3-1 Toranomon Minato-ku, Tokyo 105,
Japan

FMR Far East provides investment advisory services to Fidelity
Management & Research Company and Fidelity Management Trust Company.
The directors and officers of the Sub-Adviser have held the following
positions of a substantial nature during the past two fiscal years.

Edward C. Johnson 3d Chairman of the Board and
Director of FMR Far East,
FMR, FMR Corp., FIMM, and
FMR U.K.; Director of FMRC;
Chairman of the Executive
Committee of FMR; President
and Chief Executive Officer
of FMR Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.

Robert C. Pozen President and Director of FMR
Far East; Senior Vice
President and Trustee of
funds advised by FMR;
President and Director of
FIMM, FMR U.K., FMRC, and
FMR; Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.

Robert H. Auld Senior Vice President of FMR
Far East.

Laura B. Cronin Treasurer of FMR Far East,
FMR U.K., FMR, FMRC, and
FIMM and Vice President of
FMR.

Michael B. Fox Assistant Treasurer of FMR
Far East, FMR, FMR U.K., and
FIMM; Vice President of FMR
Far East, FMR U.K. and FIMM;
Vice President and Treasurer
of FMR Corp., and Strategic
Advisers, Inc.

Jay Freedman Clerk of FMR Far East, FMR
U.K., FMR Corp., FMRC, and
Strategic Advisers, Inc.;
Assistant Clerk of FMR;
Secretary of FIMM; Vice
President and Deputy General
Counsel of FMR Corp.

Susan Englander Hislop Assistant Clerk of FMR Far
East, FMR U.K., and
Strategic Advisers, Inc.;
Assistant Secretary of FIMM.

Francis V. Knox Compliance Officer of FMR Far
East and FMR U.K.; Vice
President of FMR.

Billy Wilder Vice President of FMR Far
East; President and
Representative Director of
FIJ.

(5) FIDELITY INVESTMENTS MONEY MANAGEMENT, INC. (FIMM)
1 Spartan Way, Merrimack, NH 03054

FIMM provides investment advisory services to Fidelity Management &
Research Company. The directors and officers of the Sub-Adviser have
held the following positions of a substantial nature during the past
two fiscal years.

Edward C. Johnson 3d Chairman of the Board and
Director of FIMM, FMR, FMR
Corp., FMR Far East, and FMR
U.K.; Director of FMRC;
Chairman of the Executive
Committee of FMR; President
and Chief Executive Officer
of FMR Corp.; Chairman and
Representative Director of
Fidelity Investments Japan
Limited (FIJ); President and
Trustee of funds advised by
FMR.

Robert C. Pozen President and Director of
FIMM; Senior Vice President
and Trustee of funds advised
by FMR; President and
Director of FMR, FMR U.K.,
FMRC, and FMR Far East;
Director of Strategic
Advisers, Inc.; Previously,
General Counsel, Managing
Director, and Senior Vice
President of FMR Corp.

Dwight D. Churchill Senior Vice President of
FIMM; President of Fidelity
Investments Fixed Income
Division; Senior Vice
President of FMR and Vice
President of Bond Funds and
Money Market Funds advised
by FMR.

Laura B. Cronin Treasurer of FIMM, FMR Far
East, FMR U.K., FMRC, and
FMR and Vice President of FMR.

Anthony M. DuBon Vice President of Fidelity
Investments Fixed Income
Division.

Robert Duby Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Dorothy T. Egan Vice President of Fidelity
Investments Fixed Income
Division.

George A. Fischer Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Michael B. Fox Assistant Treasurer of FIMM,
FMR U.K., FMR Far East, and
FMR; Vice President and
Treasurer of FMR Corp. and
Strategic Advisers, Inc.;
Vice President of FIMM, FMR
U.K., and FMR Far East.

Jay Freedman Secretary of FIMM; Clerk of
FMR U.K., FMR Far East, FMR
Corp., FMRC, and Strategic
Advisers, Inc.; Assistant
Clerk of FMR; Vice President
and Deputy General Counsel
of FMR Corp.

Kevin E. Grant Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Boyce I. Greer Vice President of FIMM;
Executive Vice President of
Fidelity Investments Fixed
Income Division; Senior Vice
President of FMR and Vice
President of Money Market
Funds and Bond Funds advised
by FMR.

Stanley N. Griffith Assistant Secretary of FIMM,
Vice President of Fidelity
Investments Fixed Income
Division.

Susan Englander Hislop Assistant Secretary of FIMM;
Assistant Clerk of FMR U.K.,
FMR Far East, and Strategic
Advisers, Inc.

Susan L. Johnson Vice President of Fidelity
Investments Fixed Income
Division.

Robert A. Litterst Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Michael J. Marchese Vice President of Fidelity
Investments Fixed Income
Division.

Diane M. McLaughlin Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Charles S. Morrison Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

David L. Murphy Vice President of FIMM;
Senior Vice President of
Fidelity Investments Fixed
Income Division; and Vice
President of Taxable Bond
Funds.

Cynthia C. Strauss Vice President of Fidelity
Investments Fixed Income
Division.

John J. Todd Vice President of Fidelity
Investments Fixed Income
Division and of funds
advised by FMR.

Jennifer Toolin McAuliffe Vice President of Fidelity
Investments Fixed Income
Division.

(6) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (FIIA)
Pembroke Hall, 42 Crow Lane, Pembroke HM19, Bermuda

The directors and officers of FIIA have held, during the past two
fiscal years, the following positions of a substantial nature.

Anthony J. Bolton Director of FIIA, Fidelity
International Investment
Advisors (U.K.) Limited
(FIIA(U.K.)L), Fidelity
Investment Management
Limited (FIML (U.K.)),
Fidelity Investment Services
Limited (FISL (U.K.)), and
Fidelity Investments
International (FII).

Simon Fraser Director and President of
FIIA and Senior Vice
President of FMR U.K.

Richard Ford Director and Vice President
of FIIA.

Simon Haslam Director and Chief Financial
Officer of FIIA, FISL
(U.K.), and FII; Director
and Secretary of
FIIA(U.K.)L; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.);
Director of FIJ.

David J. Saul Director of FIIA; Previously,
President of FIIA, Director
of Fidelity International
Limited, and numerous
companies and funds in the
FIL group.

Keith Ferguson Director of FIIA.

Richard Horlick Director of FIIA.

K.C. Lee Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.

Frank Mutch Director of FIIA.

Richard Ford Director of FIIA.

Peter Phillips Director of FIIA and Fidelity
Investments Management (Hong
Kong) Limited.

Matthew Heath Secretary of FIIA.

Terrence V. Richards Assistant Secretary of FIIA.

Rosalie Sheppard Assistant Secretary of FIIA.

(7) FIDELITY INTERNATIONAL INVESTMENT ADVISORS (U.K.) LIMITED
(FIIA(U.K.)L)
26 Lovat Lane, London, EC3R 8LL, England

The directors and officers of FIIA(U.K.)L have held, during the past
two fiscal years, the following positions of a substantial nature.

Anthony J. Bolton Director of FIIA(U.K.)L,
Fidelity International
Investment Advisors (FIIA),
Fidelity Investment
Management Limited (FIML
(U.K.)), Fidelity Investment
Services Limited (FISL
(U.K.)), and Fidelity
Investments International
(FII).

Pamela Edwards Director of FIIA(U.K.)L, FISL
(U.K.), and FII; Previously,
Director of Legal Services
for Europe.

Simon Haslam Director and Secretary of
FIIA(U.K.)L; Director and
Chief Financial Officer of
FIIA, FISL (U.K.), and FII;
Previously, Chief Financial
Officer of FIL, Company
Secretary of Fidelity
Investments Group of
Companies (U.K.); Director
of FIJ.

Sally Walden Director of FIIA(U.K.)L and
FISL (U.K.).

Sally Hinchliffe Assistant Secretary of
FIIA(U.K.)L.

(8) FIDELITY INVESTMENTS JAPAN LIMITED (FIJ)
1-8-8 Shinkawa, Chuo-ku, Tokyo 104-0033, Japan

The directors and officers of FIJ have held, during the past two
fiscal years, the following positions of a substantial nature.

Edward C. Johnson 3d Chairman and Representative
Director of FIJ; Chairman of
the Board and Director of
FMR Far East, FMR, FMR
Corp., FMR U.K., and FIMM;
Director of FMRC; Chairman
of the Executive Committee
of FMR; President and Chief
Executive Officer of FMR
Corp.; President and Trustee
of funds advised by FMR.

Simon Haslam Director of FIJ; Director and
Chief Financial Officer of
FIIA, FISL (U.K.), and FII;
Director and Secretary of
FIIA(U.K.)L; Previously,
Chief Financial Officer of
FIL; Company Secretary of
Fidelity Investments Group
of Companies (U.K.).

Noboru Kawai Director and General Manager
of Administration of FIJ.

Yasuo Kuramoto Vice Chairman and
Representative Director of
FIJ.

Tetsuzo Nishimura Director and Vice President
of Wholesales/ Broker
Distribution of FIJ.

Takeshi Okazaki Director and Head of
Institutional Sales of FIJ.

Billy Wilder President and Representative
Director of FIJ; Vice
President of FMR Far East.

Hiroshi Yamashita Senior Managing Director of
FIJ.

Item 27. Principal Underwriters

(a) Fidelity Distributors Corporation (FDC) acts as distributor for
all funds advised by FMR or an affiliate.

(b)

Name and Principal Positions and Offices Positions and Offices

Business Address* with Underwriter with Fund

Edward L. McCartney Director and President None

J. Gary Burkhead Director None

Paul J. Gallagher Director None

Kevin J. Kelly Director None

Daniel T. Geraci Executive Vice President None

Eric D. Roiter Vice President and Clerk Secretary

Jane Greene Treasurer and Controller None

Gary Greenstein Assistant Treasurer None

Jay Freedman Assistant Clerk None

Linda Capps Holland Compliance Officer None

* 82 Devonshire Street, Boston, MA

Item 28. Location of Accounts and Records

All accounts, books, and other documents required to be maintained by
Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company, Fidelity Service
Company, Inc. or Fidelity Investments Institutional Operations
Company, Inc., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodians, The Chase Manhattan Bank, 1 Chase Manhattan
Plaza, New York, NY, Brown Brothers Harriman & Co., 40 Water Street,
Boston, MA, and State Street Bank & Trust Company, 1776 Heritage
Drive, Quincy, MA.

Item 29. Management Services

Not applicable.

Item 30. Undertakings

The Registrant undertakes for Variable Insurance Products Fund III:
Mid Cap Portfolio: (1) to call a meeting of shareholders for the
purpose of voting upon the questions of removal of a trustee or
trustees, when requested to do so by record holders of not less than
10% of its outstanding shares; and (2) to assist in communications
with other shareholders pursuant to Section 16(c)(1) and (2), whenever
shareholders meeting the qualifications set forth in Section 16(c)
seek the opportunity to communicate with other shareholders with a
view toward requesting a meeting.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 18 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Boston, and Commonwealth of Massachusetts, on the 27th day
of June 2000.

Variable Insurance Products Fund III

By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons
in the capacities and on the dates indicated.

(Signature) (Title) (Date)

/s/Edward C. Johnson 3d President and Trustee June 27, 2000
(dagger)

Edward C. Johnson 3d (Principal Executive Officer)

/s/Robert A. Dwight Treasurer June 27, 2000

Robert A. Dwight

/s/Robert C. Pozen Trustee June 27, 2000

Robert C. Pozen

/s/Ralph F. Cox Trustee June 27, 2000
*

Ralph F. Cox

/s/Phyllis Burke Davis Trustee June 27, 2000
*

Phyllis Burke Davis

/s/Robert M. Gates Trustee June 27, 2000
*

Robert M. Gates

/s/Donald J. Kirk Trustee June 27, 2000
*

Donald J. Kirk

/s/Ned C. Lautenbach Trustee June 27, 2000
*

Ned C. Lautenbach

/s/Peter S. Lynch Trustee June 27, 2000
*

Peter S. Lynch

/s/Marvin L. Mann Trustee June 27, 2000
*

Marvin L. Mann

/s/William O. McCoy Trustee June 27, 2000
*

William O. McCoy

/s/Gerald C. McDonough Trustee June 27, 2000
*

Gerald C. McDonough

/s/Thomas R. Williams Trustee June 27, 2000
*

Thomas R. Williams

(dagger) Signatures affixed by Robert C. Pozen pursuant to a power of
attorney dated July 17, 1997 and filed herewith.

* Signature affixed by Robert C. Hacker pursuant to a power of
attorney dated December 16, 1999 and filed herewith.

POWER OF ATTORNEY

I, the undersigned President and Director, Trustee, or General
Partner, as the case may be, of the following investment companies:

Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional Cash
Fidelity Advisor Series III Portfolios
Fidelity Advisor Series IV Fidelity Institutional
Fidelity Advisor Series V Tax-Exempt Cash Portfolios
Fidelity Advisor Series VI Fidelity Investment Trust
Fidelity Advisor Series VII Fidelity Magellan Fund
Fidelity Advisor Series VIII Fidelity Massachusetts
Fidelity Beacon Street Trust Municipal Trust
Fidelity Boston Street Trust Fidelity Money Market Trust
Fidelity California Municipal Fidelity Mt. Vernon Street
Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust II Fidelity Municipal Trust II
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust
Fidelity Commonwealth Trust Fidelity New York Municipal
Fidelity Concord Street Trust Trust II
Fidelity Congress Street Fund Fidelity Phillips Street Trust
Fidelity Contrafund Fidelity Puritan Trust
Fidelity Corporate Trust Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Daily Money Fund Fidelity Sterling Performance
Fidelity Destiny Portfolios Portfolio, L.P.
Fidelity Deutsche Mark Fidelity Summer Street Trust
Performance Fidelity Trend Fund
Portfolio, L.P. Fidelity U.S.
Fidelity Devonshire Trust Investments-Bond Fund, L.P.
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Government
Fidelity Fixed-Income Trust Securities
Fidelity Government Fund, L.P.
Securities Fund Fidelity Union Street Trust
Fidelity Hastings Street Trust Fidelity Union Street Trust II
Fidelity Yen Performance
Portfolio, L.P.
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II
Variable Insurance Products
Fund III

in addition to any other investment company for which Fidelity
Management & Research Company or an affiliate acts as investment
adviser and for which the undersigned individual serves as President
and Director, Trustee, or General Partner (collectively, the "Funds"),
hereby constitute and appoint Robert C. Pozen my true and lawful
attorney-in-fact, with full power of substitution, and with full power
to him to sign for me and in my name in the appropriate capacity, all
Registration Statements of the Funds on Form N-1A, Form N-8A, or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A, Form N-8A, or any successor thereto, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such
things in my name and on my behalf in connection therewith as said
attorney-in-fact deems necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and the Investment Company
Act of 1940, and all related requirements of the Securities and
Exchange Commission. I hereby ratify and confirm all that said
attorney-in-fact or his substitutes may do or cause to be done by
virtue hereof. This power of attorney is effective for all documents
filed on or after August 1, 1997.

WITNESS my hand on the date set forth below.

/s/Edward C. Johnson 3d July 17, 1997

Edward C. Johnson 3d

POWER OF ATTORNEY

We, the undersigned Directors, Trustees, or General Partners, as the
case may be, of the following investment companies:

Colchester Street Trust Fidelity Hastings Street Trust
Fidelity Aberdeen Street Trust Fidelity Hereford Street Trust
Fidelity Advisor Series I Fidelity Income Fund
Fidelity Advisor Series II Fidelity Institutional
Fidelity Advisor Series III Tax-Exempt Cash Portfolios
Fidelity Advisor Series IV Fidelity Investment Trust
Fidelity Advisor Series V Fidelity Magellan Fund
Fidelity Advisor Series VI Fidelity Massachusetts
Fidelity Advisor Series VII Municipal Trust
Fidelity Advisor Series VIII Fidelity Money Market Trust
Fidelity Beacon Street Trust Fidelity Mt. Vernon Street
Fidelity Boston Street Trust Trust
Fidelity California Municipal Fidelity Municipal Trust
Trust Fidelity Municipal Trust II
Fidelity California Municipal Fidelity New York Municipal
Trust II Trust
Fidelity Capital Trust Fidelity New York Municipal
Fidelity Charles Street Trust Trust II
Fidelity Commonwealth Trust Fidelity Oxford Street Trust
Fidelity Concord Street Trust Fidelity Phillips Street Trust
Fidelity Congress Street Fund Fidelity Puritan Trust
Fidelity Contrafund Fidelity Revere Street Trust
Fidelity Court Street Trust Fidelity School Street Trust
Fidelity Court Street Trust II Fidelity Securities Fund
Fidelity Covington Trust Fidelity Select Portfolios
Fidelity Destiny Portfolios Fidelity Summer Street Trust
Fidelity Devonshire Trust Fidelity Trend Fund
Fidelity Exchange Fund Fidelity U.S.
Fidelity Financial Trust Investments-Bond Fund, L.P.
Fidelity Fixed-Income Trust Fidelity U.S.
Fidelity Government Investments-Government
Securities Fund Securities
Fund, L.P.
Fidelity Union Street Trust
Fidelity Union Street Trust II
Newbury Street Trust
Variable Insurance Products
Fund
Variable Insurance Products
Fund II

plus any other investment company for which Fidelity Management &
Research Company or an affiliate acts as investment adviser and for
which the undersigned individual serves as Directors, Trustees, or
General Partners (collectively, the "Funds"), hereby constitute and
appoint Arthur J. Brown, Arthur C. Delibert, Stephanie A. Djinis,
Robert C. Hacker, Thomas M. Leahey, Richard M. Phillips, and Dana L.
Platt, each of them singly, our true and lawful attorneys-in-fact,
with full power of substitution, and with full power to each of them,
to sign for us and in our names in the appropriate capacities, all
Registration Statements of the Funds on Form N-1A, Form N-8A or any
successor thereto, any and all subsequent Amendments, Pre-Effective
Amendments, or Post-Effective Amendments to said Registration
Statements on Form N-1A or any successor thereto, any Registration
Statements on Form N-14, and any supplements or other instruments in
connection therewith, and generally to do all such things in our names
and behalf in connection therewith as said attorneys-in-fact deems
necessary or appropriate, to comply with the provisions of the
Securities Act of 1933 and the Investment Company Act of 1940, and all
related requirements of the Securities and Exchange Commission. I
hereby ratify and confirm all that said attorneys-in-fact or their
substitutes may do or cause to be done by virtue hereof. This power
of attorney is effective for all documents filed on or after January
1, 2000.

WITNESS our hands on this sixteenth day of December, 1999.

/s/Edward C. Johnson 3d /s/Peter S. Lynch

Edward C. Johnson 3d Peter S. Lynch

/s/Ralph F. Cox /s/William O. McCoy

Ralph F. Cox William O. McCoy

/s/Phyllis Burke Davis /s/Gerald C. McDonough

Phyllis Burke Davis Gerald C. McDonough

/s/Ned C. Lautenbach /s/Marvin L. Mann

Ned C. Lautenbach Marvin L. Mann

/s/Donald J. Kirk /s/Thomas R. Williams

Donald J. Kirk Thomas R. Williams

/s/Robert C. Pozen /s/Robert M. Gates

Robert C. Pozen Robert M. Gates