-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Rzu2KFBDQRhBiBqbt1m0btnWOLx+ha6vQtDLwqdjkBYyGRN8j5iq6dxLPEVqOeTk vZVjD3Vinqj7nLf44zrlng== 0000024238-96-000007.txt : 19960812 0000024238-96-000007.hdr.sgml : 19960812 ACCESSION NUMBER: 0000024238-96-000007 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY CONTRAFUND CENTRAL INDEX KEY: 0000024238 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046056833 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-01400 FILM NUMBER: 96606779 BUSINESS ADDRESS: STREET 1: FIDELITY INVESTMENTS COMPANY STREET 2: 82 DEVONSHIRE STREET MAIL ZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: (617)439-1220 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAIL ZONE ZH1 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY CONTRAFUND INC DATE OF NAME CHANGE: 19850618 FORMER COMPANY: FORMER CONFORMED NAME: CONTRAFUND INC DATE OF NAME CHANGE: 19810203 N-30D 1 FIDELITY (registered trademark) CONTRAFUND SEMIANNUAL REPORT JUNE 30, 1996 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 10 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 34 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 38 Notes to the financial statements. To reduce expenses and demonstrate respect for our environment, we have begun mailing only one copy of most financial reports and prospectuses to most households, even if they have more than one account in the fund. If you need additional copies of financial reports, prospectuses, or historical account information, please call 1-800-544-6666. THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Although stocks have managed to post solid returns through the first six months of 1996, signs of strength in the economy have led to inflation fears, causing some uncertainty in bond markets so far this year. In 1995, both stock and bond markets posted strong results, while the year before, stocks posted below-average returns and bonds had one of the worst years in history. These market ups and downs are a normal part of investing, and there are some basic principles that are helpful for investors to remember in different types of markets. If you can leave your money invested over the long term, you can avoid the results of the volatility that generally accompanies the stock market in the short term. You also can help to manage some of the risks of investing through diversification. A stock fund is already diversified because it invests in many issues. You can diversify even further by placing some of your money in several different types of stock funds or in other investment categories, such as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, there is no assurance that a money market fund will achieve its goal, and it is important to remember that money market funds are not insured or guaranteed by any agency of the U.S. government. Finally, no matter what your investment horizon or portfolio diversity, it makes good sense to follow a regular investment plan - investing a certain amount of money at the same time each month or quarter - and to review your portfolio periodically. A periodic investment plan will not, of course, assure a profit or protect against a loss. If you have any questions, please call us at 1-800-544-8888. We stand ready to provide the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. A fund's total return includes changes in share price, plus reinvestment of any dividends (or income) and capital gains (the profits the fund earns when it sells securities that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 6 PAST 1 PAST 5 PAST 10 MONTHS YEAR YEARS YEARS Contrafund 9.10% 23.14% 154.02% 453.28% Contrafund (incl. 3% sales charge) 5.82% 19.44% 146.40% 436.69% S&P 500(registered trademark) 10.10% 26.00% 107.63% 264.95% Growth Funds Average 10.08% 22.20% 99.86% 216.52% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, six months, one year, five years, or 10 years. For example, if you invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500 Index - a widely recognized, unmanaged index of common stock prices. The index figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the growth funds average, which reflects the performance of 668 mutual funds with similar objectives tracked by Lipper Analytical Services, Inc. over the past six months. Both benchmarks include reinvested dividends and capital gains, if any, and exclude the effects of sales charges. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Contrafund 23.14% 20.50% 18.66% Contrafund (incl. 3% sales charge) 19.44% 19.76% 18.30% S&P 500 26.00% 15.73% 13.79% Growth Funds Average 22.20% 14.55% 11.79% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. $10,000 OVER 10 YEARS IMAHDR PRASUN SHR__CHT 19960630 19960712 105514 S00000000000001 Contrafund SP Standard & Poor 500 00022 SP001 1986/06/30 9700.00 10000.00 1986/07/31 8985.66 9441.00 1986/08/31 9572.17 10141.52 1986/09/30 9000.70 9302.82 1986/10/31 9602.25 9839.59 1986/11/30 9602.25 10078.69 1986/12/31 9479.98 9821.69 1987/01/31 10848.66 11144.67 1987/02/28 11511.96 11584.88 1987/03/31 11702.81 11919.68 1987/04/30 11728.84 11813.60 1987/05/31 11832.94 11916.38 1987/06/30 12266.70 12518.16 1987/07/31 12865.28 13152.83 1987/08/31 13333.74 13643.43 1987/09/30 13064.81 13344.63 1987/10/31 9291.11 10470.20 1987/11/30 8779.28 9607.46 1987/12/31 9299.79 10338.58 1988/01/31 9898.37 10773.84 1988/02/29 10349.48 11275.90 1988/03/31 10366.83 10927.47 1988/04/30 10575.04 11048.77 1988/05/31 10427.56 11144.89 1988/06/30 10930.72 11656.44 1988/07/31 11008.80 11612.15 1988/08/31 10765.89 11217.34 1988/09/30 11208.33 11695.19 1988/10/31 11503.28 12020.32 1988/11/30 11416.53 11848.43 1988/12/31 11254.81 12055.78 1989/01/31 12002.16 12938.26 1989/02/28 11930.99 12616.10 1989/03/31 12562.68 12910.05 1989/04/30 13372.31 13580.08 1989/05/31 14066.29 14130.08 1989/06/30 13977.32 14049.54 1989/07/31 15258.50 15318.21 1989/08/31 15694.45 15618.45 1989/09/30 15996.95 15554.41 1989/10/31 15516.51 15193.55 1989/11/30 15872.39 15503.50 1989/12/31 16111.47 15875.58 1990/01/31 15256.93 14810.33 1990/02/28 15573.78 15001.38 1990/03/31 15909.83 15398.92 1990/04/30 15746.61 15013.95 1990/05/31 17234.85 16477.81 1990/06/30 17455.69 16365.76 1990/07/31 17129.24 16313.39 1990/08/31 15794.62 14838.66 1990/09/30 15132.11 14116.01 1990/10/31 15208.92 14055.32 1990/11/30 16111.47 14963.29 1990/12/31 16745.62 15380.76 1991/01/31 18376.75 16051.37 1991/02/28 19766.59 17199.04 1991/03/31 20924.79 17615.25 1991/04/30 21040.61 17657.53 1991/05/31 22382.19 18420.34 1991/06/30 21127.48 17576.69 1991/07/31 22623.48 18395.76 1991/08/31 23762.38 18831.74 1991/09/30 23829.94 18517.25 1991/10/31 24515.21 18765.38 1991/11/30 23221.89 18009.13 1991/12/31 25942.07 20069.38 1992/01/31 26681.82 19696.09 1992/02/29 27547.68 19952.14 1992/03/31 26800.06 19563.07 1992/04/30 27090.80 20138.23 1992/05/31 27381.54 20236.90 1992/06/30 26716.99 19935.37 1992/07/31 27391.93 20750.73 1992/08/31 26883.13 20325.34 1992/09/30 27340.01 20565.18 1992/10/31 27952.64 20637.16 1992/11/30 29302.51 21340.88 1992/12/31 30065.28 21603.38 1993/01/31 31017.48 21784.85 1993/02/28 31222.10 22081.12 1993/03/31 32714.13 22547.03 1993/04/30 32935.17 22001.39 1993/05/31 34239.32 22591.03 1993/06/30 34250.37 22656.54 1993/07/31 34626.14 22565.92 1993/08/31 36306.05 23421.17 1993/09/30 36383.42 23240.82 1993/10/31 36703.93 23721.91 1993/11/30 35322.42 23496.55 1993/12/31 36507.13 23780.86 1994/01/31 37655.37 24589.41 1994/02/28 37385.20 23923.03 1994/03/31 35906.96 22879.99 1994/04/30 36348.05 23172.85 1994/05/31 36145.39 23552.89 1994/06/30 34750.59 22975.84 1994/07/31 35453.95 23729.45 1994/08/31 36932.19 24702.36 1994/09/30 36443.42 24097.15 1994/10/31 37480.57 24639.34 1994/11/30 35775.83 23741.97 1994/12/31 36097.70 24094.07 1995/01/31 35513.56 24718.82 1995/02/28 36944.11 25682.12 1995/03/31 38291.22 26440.00 1995/04/30 40019.81 27218.65 1995/05/31 40985.43 28306.58 1995/06/30 43584.28 28964.15 1995/07/31 46922.24 29924.60 1995/08/31 47542.15 29999.71 1995/09/30 48412.41 31265.70 1995/10/31 47530.23 31154.08 1995/11/30 48781.97 32521.74 1995/12/31 49193.98 33148.11 1996/01/31 50306.73 34276.47 1996/02/29 50613.42 34594.21 1996/03/31 52018.21 34927.36 1996/04/30 53627.59 35442.19 1996/05/31 54077.67 36356.24 1996/06/28 53668.50 36494.76 IMATRL PRASUN SHR__CHT 19960630 19960712 105519 R00000000000123 $10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested in Fidelity Contrafund on June 30, 1986, and a 3% sales charge was paid. As the chart shows, by June 30, 1996, the value of the investment would have grown to $53,669 - a 436.69% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 investment would have grown to $36,495 - a 264.95% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW An interview with Will Danoff, Portfolio Manager of Fidelity Contrafund Q. HOW DID THE FUND PERFORM, WILL? A. For the six months ended June 30, 1996, the fund returned 9.10%. For the past year, the fund returned 23.14%. For the same periods, the growth funds average, as tracked by Lipper Analytical Services, was 10.08% and 22.20%, respectively. Additionally, the S&P 500 Index returned 10.10% and 26.00%, respectively. Q. WHAT'S YOUR EVALUATION OF THE FUND'S PERFORMANCE? A. The fund performed in line with its peers despite taking, in my opinion, much less risk than the average growth fund. While it is difficult to quantify risk in a fund, one measure is the fund's price-to-earnings (P/E) ratio - or the price the fund is paying for one dollar of earnings. Contrafund's average P/E ratio was about 21 at the end of the period, lower than the average growth fund's approximately 27 P/E ratio. Additionally, the fund carried a higher-than-average percentage of short-term investments - - or cash - during the period. Contrafund had between 13% and 15% of total investments in cash for the entire period, much more than the cash position for the average growth fund, which was about 8%. Thus, with the market up 10% for the period, the fund's cash position hurt its performance by approximately one percentage point. Q. WHY DID THE FUND HOLD A LARGE CASH POSITION? A. While in the short term it would have been better for the fund to have stayed fully invested in stocks, the fund held its relatively high cash position because I believed that the market was paying incredibly high prices for most growth companies - particularly small and rapidly growing companies. While small growth companies produced some of the best returns in the market during the period, many of these companies were trading at P/E ratios of more than 60 - which is almost three times as much as the average stock in Contrafund. I was simply unwilling to buy these expensive stocks in order to produce potentially better-than-average returns for a single six-month period. If interest rates increase, or this year's historically huge cash flows into mutual funds slow or earnings growth diminishes, these very expensive stocks could fall precipitously. Q. WHICH SECTORS HELPED THE FUND DURING THE PERIOD? WHICH ONES HURT IT? A. The energy and energy-services sector contributed nicely to the fund's performance during the first half of the year despite suffering what I consider a mild - and healthy - correction in the second quarter. The sector rose about 15% in the first six months of the year, handily beating all of the market averages and generating the best returns of all sectors with the exception of the volatile precious metals group. One dampening influence on the fund during the period, other than the high cash position, was its underweighting in the consumer nondurables sector. While the fund was adequately represented in the retailing sector - which rebounded sharply after a disastrous 1995 - it missed the strong performance of the consumer nondurables, which include tobacco, soft drink and personal care multinationals. Although I underestimated the excellent overseas unit growth of these companies, their stocks traded at very high P/E multiples relative to their expected - and admittedly very predictable - earnings growth rates and, in my opinion, were not the best investments for the fund. Q. WHAT HAPPENED WITH THE FUND'S TECHNOLOGY HOLDINGS? A. It's hard to generalize about the performance of technology stocks over the past six months. While several groups within technology - such as semiconductors - performed as poorly as I expected, other groups performed extremely well. For example, networking companies - which sell equipment to enable different computers to communicate with one another - experienced superb demand from corporations and from the surging popularity of the Internet. Companies producing personal computers and related components performed in line with the market, but intense competition, generally high inventories throughout the industry and questionable final demand created uncertainty for the group's profitability. The fund remained underweighted in technology because of this uncertain profit outlook as well as unequivocally high stock valuations. Q. DID YOU FEEL AS OPTIMISTIC ABOUT THE ENERGY SECTOR AS YOU DID AT THE BEGINNING OF THE YEAR? A. Yes, I still believed that the energy sector was one of the most attractive segments of the stock market. As I outlined in a letter to shareholders last year, new technological breakthroughs such as three-dimensional seismic analysis and horizontal drilling techniques now enable exploration companies to find and extract oil and natural gas much more economically than in the past. Thus, these energy companies can become more profitable and can grow faster even if the prices of oil and natural gas stay at current levels. Additionally, the entire energy industry was operating very close to effective capacity. In the past decade, the weaker energy companies have closed part of their operations, gone out of business entirely or sold themselves to the stronger players. My research showed that the industry's capacity utilization was approaching 95% - a level not seen since the last oil crisis in 1979. This tightness suggested that global oil and gas prices should remain firm, and rates charged by firms in the energy services sector should begin to increase for the first time in 15 years. These higher prices were extremely positive for the profit growth of the surviving companies and, consequently, their performance in the stock market. Based on this optimistic view, the fund held large positions in Schlumberger, Royal Dutch Petroleum, Halliburton, British Petroleum and Tidewater - all leading companies in this sector during the period. Q. GIVEN THE RECORD HIGHS IN THE STOCK MARKET, HOW DO YOU PLAN TO MANAGE THE FUND GOING FORWARD? A. Looking forward, the fund will most likely remain in what I believe is a defensive posture. For example, it may hold a substantial cash position, own less economically sensitive stocks and hold fewer high P/E stocks. Nevertheless, I will continue to look for companies with the potential for good earnings growth over time. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND FACTS GOAL: to increase the value of the fund's shares over the long term by investing in companies that are undervalued or out of favor START DATE: May 17, 1967 SIZE: as of June 30, 1996, more than $19 billion MANAGER: Will Danoff, since 1990; also manager, Fidelity Select Retailing Portfolio, 1986- 1989; joined Fidelity in 1986 (checkmark) WILL DANOFF ON "CONTRARIAN" INVESTING: "Typically, contrarian funds focus on companies that are doing poorly and whose share price is at or near its historical low. My strategy is a variation on that theme. I attempt to invest in companies that are experiencing improving business prospects and that I feel are doing better than generally perceived by the market. Although this is a different approach than many other contrarian funds, the strategy has been successful in the past in uncovering undervalued companies. I try very hard - with the help of Fidelity's extensive research department - to find companies that have been staggering but are beginning to increase their earnings faster than they have in the past because of some kind of catalyst. Examples of corporate catalysts include a new, more aggressive management team, a meaningful cost cutting initiative, a sale of a loss-creating division, a new product launch, a merger or acquisition, a significant improvement in the company's balance sheet or a tightening of an industry's capacity utilization. "On the sell side, I generally hold a stock as long as the company's business prospects are still improving and I think the company can earn more than is generally perceived, even if the company's share price has recovered from historically low levels. As a fellow shareholder in the fund, I find this approach has worked well since I started managing it six years ago, and believe it should continue to work in the future." INVESTMENT CHANGES TOP TEN STOCKS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Schlumberger Ltd. 1.9 1.3 Royal Dutch Petroleum Co. ADR 1.3 0.0 General Motors Corp. 1.1 1.5 Chrysler Corp. 1.1 1.6 Halliburton Co. 1.0 0.5 WorldCom, Inc. 0.9 0.7 du Pont (E.I.) de Nemours & Co. 0.9 0.3 Home Depot, Inc., (The) 0.9 0.5 British Petroleum PLC ADR 0.8 0.8 Tidewater, Inc. 0.8 0.5 TOP FIVE MARKET SECTORS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE MARKET SECTORS 6 MONTHS AGO Energy 21.1 10.2 Retail & Wholesale 8.1 3.3 Finance 7.8 17.3 Durables 7.0 5.9 Media & Leisure 6.1 2.9 ASSET ALLOCATION AS OF JUNE 30, 1996 * AS OF DECEMBER 31, 1995 ** Row: 1, Col: 1, Value: 15.1 Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 3, Value: 2.3 Row: 1, Col: 4, Value: 42.6 Row: 1, Col: 5, Value: 40.0 Row: 1, Col: 1, Value: 4.9 Row: 1, Col: 2, Value: 1.3 Row: 1, Col: 3, Value: 11.8 Row: 1, Col: 4, Value: 42.0 Row: 1, Col: 5, Value: 40.0 Stocks 82.6% Bonds 2.3% Other 0.0% Short-term investments 15.1% FOREIGN INVESTMENTS 15.2% Stocks 83.0% Bonds 11.8% Other 0.3% Short-term investments 4.9% FOREIGN INVESTMENTS 20.4% * ** INVESTMENTS JUNE 30, 1996 (UNAUDITED) Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 82.3% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 1.4% AEROSPACE & DEFENSE - 0.9% Boeing Co. 389,700 $ 33,953 C A E Industries Ltd. 4,678,100 38,940 General Motors Corp. Class H 789,200 47,451 Harsco Corp. 225,100 15,138 Northrop Grumman Corp. 237,800 16,200 Orbital Sciences Corp. (a) 41,700 678 Sundstrand Corp. 798,800 29,256 181,616 DEFENSE ELECTRONICS - 0.2% Raytheon Co. 690,600 35,652 Tech-Sym Corp. (a) 119,100 3,543 39,195 SHIP BUILDING & REPAIR - 0.3% Avondale Industries, Inc. (a) 581,000 10,458 General Dynamics Corp. 631,400 39,146 49,604 TOTAL AEROSPACE & DEFENSE 270,415 BASIC INDUSTRIES - 5.7% CHEMICALS & PLASTICS - 3.3% Air Products & Chemicals, Inc. 330,600 19,092 Asahi Chemical Industry Co. Ltd. 3,227,000 23,003 Cambrex Corp. 374,100 19,126 Crompton & Knowles Corp. 2,317,900 38,825 Dow Chemical Co. 286,700 21,789 du Pont (E.I.) de Nemours & Co. 2,283,900 180,714 Furon Co. 128,100 3,170 Grace (W.R.) & Co. 556,200 39,421 Hercules, Inc. 769,400 42,509 ICI (Imperial Chemical Industries) PLC Ord. 714,200 8,736 International Specialty Products, Inc. (a) 922,300 10,145 Monsanto Co. 253,500 8,239 Praxair, Inc. 1,537,000 64,938 Raychem Corp. 476,800 34,270 Rohm & Haas Co. 128,500 8,063 Sealed Air Corp. (a) 1,294,000 43,511 Union Carbide Corp. 1,636,200 65,039 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED CHEMICALS & PLASTICS - CONTINUED Uniroyal Chemical Corp. (a)(c) 1,280,900 $ 19,053 Witco Corp. 325,200 11,179 660,822 IRON & STEEL - 0.2% Kobe Steel Ltd. (a) 11,093,000 31,852 Mueller Industries, Inc. (a) 148,100 6,146 37,998 METALS & MINING - 1.1% Aluminum Co. of America 347,600 19,944 Belden, Inc. 25,000 750 Falconbridge Ltd. 620,200 13,509 Falconbridge Ltd. 1st Installment Receipt (d) 1,076,300 8,683 Freeport-McMoRan Copper & Gold, Inc. Class B 2,207,500 70,364 Inco Ltd. 1,842,900 59,400 QNI Ltd. 8,680,400 19,415 SGL Carbon AG 120,900 14,116 Titanium Metals Corp. (a) 213,500 5,524 Tongkah Holdings BHD (c) 9,587,000 15,985 227,690 PACKAGING & CONTAINERS - 0.4% Bemis Co., Inc. 179,500 6,283 Corning, Inc. 650,900 24,978 Owens-Illinois, Inc. (a) 2,959,700 47,355 78,616 PAPER & FOREST PRODUCTS - 0.7% Arab Malaysian Corp. BHD 7,961,000 31,270 Boise Cascade Corp. 95,400 3,494 Champion International Corp. 438,900 18,324 Fort Howard Corp. (a) 319,300 6,346 Georgia-Pacific Corp. 312,500 22,188 International Paper Co. 56,800 2,095 Malakoff BHD 8,544,000 37,326 Pentair, Inc. 260,000 7,800 128,843 TOTAL BASIC INDUSTRIES 1,133,969 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONGLOMERATES - 1.1% Alexander & Baldwin, Inc. 66,300 $ 1,599 Allied-Signal, Inc. 1,156,500 66,065 American Standard Companies, Inc. (a) 269,400 8,890 Berkshire Hathaway, Inc. (a) 270 8,289 Brascan Ltd. Class A 670,200 12,484 Crane Co. 334,700 13,723 Suncor, Inc. 44,100 1,394 Tyco International Ltd. 2,638,100 107,503 United Technologies Corp. 40,800 4,692 224,639 CONSTRUCTION & REAL ESTATE - 2.0% BUILDING MATERIALS - 0.3% Dexter Corp. 73,500 2,187 Elcor Corp. 247,700 4,521 Hume Industries BHD 6,798,000 33,241 Masco Corp. 302,000 9,136 Schuller Corp. 809,300 8,396 Southdown, Inc. 212,900 5,003 York International Corp. 36,100 1,868 64,352 CONSTRUCTION - 0.6% Centex Corp. 74,200 2,309 Daiwa House Industry Co. Ltd. 2,126,000 32,945 Lennar Corp. 831,572 20,789 Oakwood Homes Corp. 1,165,500 24,038 Skyline Corp. 5,600 140 YTL Corp. BHD 7,076,250 36,870 117,091 ENGINEERING - 0.4% EG & G, Inc. 708,700 15,148 Fluor Corp. 845,500 55,275 Foster Wheeler Corp. 294,000 13,193 MasTec, Inc. (a) 187,400 4,732 88,348 REAL ESTATE - 0.3% Bandar Raya Development BHD 4,483,000 7,546 Catellus Development Corp. 114,300 1,043 Rouse Co. (The) 1,549,900 40,104 48,693 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONSTRUCTION & REAL ESTATE - CONTINUED REAL ESTATE INVESTMENT TRUSTS - 0.4% Crescent Real Estate Equities, Inc. 489,200 $ 17,977 Felcor Suite Hotels, Inc. 215,600 6,576 General Growth Properties, Inc. 126,200 3,045 Speiker Properties, Inc. 1,056,800 28,798 Starwood Lodging Trust combined certificate 446,900 16,256 Weingarten Realty Investors (SBI) 6,000 233 72,885 TOTAL CONSTRUCTION & REAL ESTATE 391,369 DURABLES - 7.0% AUTOS, TIRES, & ACCESSORIES - 5.1% Autozone, Inc. (a) 525,600 18,265 Chrysler Corp. 3,439,700 213,261 Dana Corp. 1,473,400 45,675 Danaher Corp. 1,063,900 46,280 Ford Motor Co. 4,688,900 151,803 General Motors Corp. 4,307,600 225,611 Goodyear Tire & Rubber Co. 463,000 22,340 Honda Motor Co. Ltd. 2,010,000 52,034 Intermet Corp. (a) 1,108,900 15,455 Lear Corp. (a) 2,543,300 89,650 Magna International, Inc. Class A 315,000 14,554 PACCAR, Inc. 160,300 7,855 SPX Corp. 699,900 17,147 Scania AB: Class A 287,300 7,952 Class B 287,300 7,974 Standard Products Co. 162,800 3,785 TRW, Inc. 283,500 25,480 Toyota Motor Corp. 1,266,000 31,620 996,741 CONSUMER DURABLES - 0.0% Syratech Corp. (a) 173,500 3,904 CONSUMER ELECTRONICS - 0.6% Harman International Industries, Inc. 403,900 19,892 Maytag Co. 1,650,400 34,452 Oyl Industries BHD 3,150,000 32,826 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) DURABLES - CONTINUED CONSUMER ELECTRONICS - CONTINUED Oyl Industries BHD (rights) (a) 315,000 $ 1,389 Sony Corp. 532,800 35,016 123,575 HOME FURNISHINGS - 0.1% Furniture Brands International, Inc. (a) 1,867,700 20,544 Miller (Herman), Inc. 101,700 3,115 23,659 TEXTILES & APPAREL - 1.2% Adidas AG 277,500 23,281 Designer Holdings Ltd. (a)(c) 533,900 14,215 Fila Holding Spa sponsored ADR 40,100 3,459 Fruit of the Loom, Inc. Class A (a) 233,400 5,952 Gucci Group NV 187,000 12,062 Intimate Brands, Inc. Class A 868,000 19,856 Jones Apparel Group, Inc. (a) 565,800 27,795 Liz Claiborne, Inc. 963,500 33,361 NIKE, Inc. Class B 543,500 55,844 Stride Rite Corp. 387,400 3,196 Unifi, Inc. 253,700 7,135 Warnaco Group, Inc. Class A 1,051,100 27,066 233,222 TOTAL DURABLES 1,381,101 ENERGY - 20.8% ENERGY SERVICES - 9.1% BJ Services Co. (a) 850,547 29,875 Baker Hughes, Inc. 2,571,100 84,525 Carbo Ceramics, Inc. (a) 275,100 6,052 Diamond Offshore Drilling, Inc. (a) 1,514,148 86,685 Dresser Industries, Inc. 4,388,300 129,455 ENSCO International, Inc. (a)(c) 3,791,325 123,218 Energy Ventures, Inc. (a) 679,500 22,084 Falcon Drilling, Inc. (a) 524,300 14,222 Global Marine, Inc. (a) 2,803,300 38,896 Halliburton Co. 3,526,900 195,743 Helmerich & Payne, Inc. 1,087,900 39,844 Nabors Industries, Inc. (a)(c) 5,574,500 90,586 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - CONTINUED ENERGY SERVICES - CONTINUED Newpark Resources, Inc. 239,000 $ 8,783 Noble Drilling Corp. 2,149,900 29,830 Powell Industries, Inc. (a) 41,600 484 Reading & Bates Corp. (a) 1,758,100 38,898 Rowan Companies, Inc. (a) 494,500 7,294 Schlumberger Ltd. 4,531,500 381,779 Smedvig AS (c) 1,749,100 40,461 Smith International, Inc. (a)(c) 3,993,100 120,292 Sonat Offshore Drilling, Inc. (c) 1,483,200 74,902 Tidewater, Inc. (c) 3,465,533 152,050 Transocean Drilling AS (a) 236,000 6,112 Varco International, Inc. (a) 609,000 11,038 Weatherford Enterra, Inc. (a) 2,490,180 74,705 1,807,813 INDEPENDENT POWER - 0.1% Thermo Electron Corp. (a) 764,700 31,831 OIL & GAS - 11.6% Amerada Hess Corp. 406,500 21,798 Amoco Corp. 73,400 5,312 Anadarko Petroleum Corp. 1,204,600 69,867 Atlantic Richfield Co. 901,200 106,792 Barrett Resources Corp. (a) 901,200 26,811 Benton Oil & Gas Co. (a) 702,900 15,464 British Petroleum PLC ADR 1,456,896 155,706 Burlington Resources, Inc. 1,363,600 58,635 Camco International, Inc. (c) 2,103,100 71,243 Canada Occidental Petroleum Ltd. 1,966,400 33,096 Canadian Natural Resources Ltd. (a) 445,900 8,323 Chesapeake Energy Corp. (a) 567,900 34,027 Coastal Corp. (The) 1,387,600 57,932 Cooper Cameron Corp. (a)(c) 1,794,800 78,523 Devon Energy Corp. 30,200 740 Diamond Shamrock R&M, Inc. (c) 1,681,200 48,544 Elan Energy, Inc. (a) 161,900 1,484 Enron Oil & Gas Co. 2,536,300 70,699 Enterprise Oil PLC 1,866,400 13,328 Exxon Corp. 710,100 61,690 Forcenergy Gas Exploration, Inc. (a) 328,500 6,200 Imperial Oil Ltd. 260,300 10,996 Kerr-McGee Corp. 443,700 27,010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - CONTINUED OIL & GAS - CONTINUED Louisiana Land & Exploration Co. 138,700 $ 7,993 NGC Corp. 424,100 6,362 Newfield Exploration Co. (a)(c) 1,028,200 39,971 Noble Affiliates, Inc. (a) 1,007,000 38,014 Norcen Energy Resources Ltd. 109,600 1,925 Northstar Energy Corp. (a) 1,499,300 14,569 Occidental Petroleum Corp. 4,641,800 114,884 Petro-Canada 1,221,600 15,185 Petro-Canada 1st installment receipt (e) 1,547,100 9,644 Phillips Petroleum Co. 3,320,400 139,041 Pogo Producing Co. 1,626,200 61,999 Renaissance Energy Ltd. (a) 2,710,288 71,556 Rio Alto Exploration Ltd. (a)(b) 549,700 3,024 Royal Dutch Petroleum Co.: Ord. 253,200 39,038 ADR 1,660,800 255,348 Rutherford-Moran Oil Corp. 23,100 563 Santa Fe Energy Resources, Inc. (a) 2,152,100 25,556 Swift Energy Co. (a) 221,000 3,978 Texaco, Inc. 1,306,200 109,558 Tosco Corp. 612,200 30,763 USX-Marathon Group 2,520,300 50,721 Union Pacific Resources Group, Inc. 1,926,300 51,529 United Meridian Corp. (a) 802,800 28,901 Unocal Corp. 4,106,602 138,598 Valero Energy Corp. 450,100 11,253 Vastar Resources, Inc. 375,900 14,049 Vintage Petroleum, Inc. 1,014,000 25,857 2,294,099 TOTAL ENERGY 4,133,743 FINANCE - 7.8% BANKS - 3.5% Bangkok Bank PCL (For. Reg.) 3,122,200 42,290 Bank International Indonesia PT (For. Reg.) 1,718,000 8,492 Bank of New York Co., Inc. 389,200 19,947 BankAmerica Corp. 1,519,500 115,102 Chase Manhattan Corp. 452,200 31,937 Citicorp 885,900 73,197 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED BANKS - CONTINUED Cullen Frost Bankers, Inc. 238,000 $ 6,605 First Bank System, Inc. 1,413,400 81,977 First Commerce Corp. 354,400 12,537 Firstar Corp. 104,300 4,811 HSBC Holdings PLC 3,660,000 56,021 HUBCO, Inc. 173,800 3,672 Hang Seng Bank Ltd. 897,000 9,038 Hong Leong Bank BHD 2,289,000 6,422 Krung Thai Bank Ltd. (For. Reg.) 5,968,200 27,965 Mitsui Trust and Banking Co. Ltd. 2,040,000 23,802 NationsBank Corp. 423,100 34,959 Regions Financial Corp. 46,400 2,169 Sakura Bank Ltd. 1,153,000 12,822 Siam City Bank PCL (For. Reg.) 8,987,400 9,643 Texas Regional Bancshares, Inc. Class A (vtg) 95,500 2,388 Thai Farmers Bank PCL 1,629,200 17,834 Thai Military Bank Ltd. (For. Reg.) 3,047,640 12,000 U.S. Bancorp. 1,688,800 61,008 Westpac Banking Corp. 3,633,000 16,108 Zions Bancorp. 93,400 6,795 699,541 CLOSED END INVESTMENT COMPANY - 0.4% Alliance Global Environment Fund 163,000 2,139 Asia Pacific Fund, Inc. 324,400 4,217 Asia Tigers Fund, Inc. 338,400 3,934 Emerging Markets Infrastructure Fund, Inc. 332,600 3,783 GT Global Developing Markets Fund 642,000 7,142 Malaysia Fund, Inc. 86,000 1,613 Mexico Fund, Inc. (The) 249,200 3,800 Morgan Stanley Asia-Pacific Fund, Inc. 1,608,500 19,302 Morgan Stanley Emerging Markets Fund, Inc. 391,900 6,613 Schroder Asian Growth Fund, Inc. (a) 485,500 6,372 TCW/DW Emerging Markets Opportunities Trust (SBI) 233,600 2,570 Templeton Dragon Fund, Inc. 742,500 9,838 Templeton Emerging Markets Fund, Inc. 166,900 3,171 74,494 CREDIT & OTHER FINANCE - 1.7% Aames Financial Corp. 2,800 100 Acom Co. Ltd. 331,900 12,979 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED CREDIT & OTHER FINANCE - CONTINUED American Express Co. 1,581,600 $ 70,579 Associates First Capital Corp. (a) 490,900 18,470 Cityscape Financial Corp. 225,200 11,542 Greenpoint Financial Corp. 1,112,600 31,431 Hong Leong Credit BHD 2,931,000 13,862 Hong Leong Finance Ltd. (For. Reg.) 1,199,000 4,196 Household International, Inc. 1,904,688 144,756 Industrial Finance Corp. (For. Reg.) 3,101,200 13,920 PHH Corp. 231,200 13,178 TA Enterprise BHD 7,017,000 10,968 345,981 FEDERAL SPONSORED CREDIT - 0.5% Federal Home Loan Mortgage Corporation 117,500 10,046 Federal National Mortgage Association 2,680,400 89,793 99,839 INSURANCE - 1.1% ACE Ltd. 21,100 992 Allmerica Financial Corp. 536,800 15,970 Allstate Corp. 1,771,300 80,816 Conseco, Inc. 1,174,600 46,984 Everest Reinsurance Holdings, Inc. 50,000 1,294 Gainsco, Inc. 599,000 5,915 ITT Hartford Group, Inc. 12,500 666 SunAmerica, Inc. 506,200 28,600 Tokio Marine & Fire Insurance Co. Ltd. (The) 417,000 5,550 Travelers/Aetna Property Casualty Corp. Class A (a) 439,200 12,462 Travelers Group, Inc., (The) 654,450 29,859 229,108 SAVINGS & LOANS - 0.3% Glendale Federal Bank Federal Savings Bank (a) 1,442,000 26,136 Golden West Financial Corp. 568,600 31,842 57,978 SECURITIES INDUSTRY - 0.3% Nikko Securities Co. Ltd. 2,115,000 23,713 Nomura Securities Co. Ltd. 617,000 12,036 Peregrine Investments Holdings Ltd. 10,398,000 14,977 50,726 TOTAL FINANCE 1,557,667 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - 2.5% DRUGS & PHARMACEUTICALS - 0.3% Alliance Pharmaceutical Corp. (a) 598,400 $ 9,874 Andrx Corp. (a) 78,700 1,190 CIBA-GEIGY AG (Reg.) 2,600 3,163 Sandoz AG (Reg.) 1,800 2,054 Sepracor, Inc. (c) 1,319,400 19,791 Takeda Chemical Industries Ltd. 1,169,000 20,672 56,744 MEDICAL EQUIPMENT & SUPPLIES - 0.6% Acuson Corp. (a) 122,400 1,958 Bard (C.R.), Inc. 54,500 1,853 Becton, Dickinson & Co. 86,700 6,958 Biomet, Inc. (a) 681,900 9,802 Cardinal Health, Inc. 40,100 2,892 Guidant Corp. 312,600 15,396 Hoya Corp. 1,242,000 40,077 InControl, Inc. (a) 562,000 6,604 Pall Corp. 82,400 1,988 Sofamor/Danek Group, Inc. 169,900 4,715 U.S. Surgical Corp. 1,048,200 32,494 124,737 MEDICAL FACILITIES MANAGEMENT - 1.6% Columbia/HCA Healthcare Corp. 1,217,500 64,985 HEALTHSOUTH Rehabilitation Corp. (a) 3,769,000 135,685 Health Management Associates, Inc. Class A (a) 1,600,750 32,415 Multicare Companies, Inc. (a) 231,900 4,406 National Surgery Centers, Inc. (a) 220,450 5,842 OrNda Healthcorp (a) 313,000 7,512 Physicians Resource Group, Inc. (a) 187,100 6,244 Quorum Health Group, Inc. (a) 190,500 5,024 Tenet Healthcare Corp. (a) 1,491,900 31,889 Total Renal Care Holdings, Inc. (a) 194,300 8,209 Vencor, Inc. (a) 456,600 13,926 316,137 TOTAL HEALTH 497,618 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HOLDING COMPANIES - 0.3% Astra International PT (For. Reg.) 5,041,000 $ 7,313 First Pacific Co. Ltd. 8,142,000 12,516 Citic Pacific Ltd. Ord. 2,336,000 9,445 Lonrho Ltd. Ord. 3,949,900 11,344 Malaysian Plantations BHD (c) 14,164,000 19,075 59,693 INDUSTRIAL MACHINERY & EQUIPMENT - 4.9% ELECTRICAL EQUIPMENT - 1.2% Alcatel Alsthom Cie Generale d'Electricite SA 419,200 36,512 AMETEK, Inc. 312,800 6,803 Avid Technology, Inc. (a) 496,300 9,182 Charter Power Systems, Inc. 42,100 1,463 Computer Products, Inc. (a) 478,100 8,187 Emerson Electric Co. 303,800 27,456 Hutchison Whampoa Ltd. Ord. 294,000 1,850 Loral Space & Communications Ltd. (a) 3,245,700 44,223 Omron Corp. 1,345,000 28,566 Roper Industries, Inc. 43,100 2,101 Sensormatic Electronics Corp. (a) 118,500 1,940 United Engineers BHD 2,356,000 16,336 Westinghouse Electric Corp. 2,392,400 44,859 229,478 INDUSTRIAL MACHINERY & EQUIPMENT - 2.6% BW/IP Holdings, Inc. Class A 561,600 10,670 Case Corp. 1,416,300 67,982 Caterpillar, Inc. 1,778,400 120,487 Cooper Industries, Inc. 689,100 28,598 Deere & Co. 846,400 33,856 Detroit Diesel Corp. (a) 150,300 2,912 Dover Corp. 611,500 28,205 Global Industrial Technologies, Inc. (a) 46,600 746 Graham-Field Health Products, Inc. (a) 42,300 365 Harnischfeger Industries, Inc. 544,400 18,101 Ingersoll-Rand Co. 1,392,700 60,931 Kaydon Corp. 726,500 31,240 Parker-Hannifin Corp. 193,300 8,191 Stanley Works 1,092,000 32,486 Thermo Fibertek, Inc. (a) 265,650 4,483 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED UCAR International, Inc. (a) 1,200,000 $ 49,950 Van Der Horst Ltd. 2,573,000 12,031 511,234 POLLUTION CONTROL - 1.1% Allied Waste Industries, Inc. (a) 1,101,600 9,777 Republic Industries, Inc. 132,000 3,845 Sanifill, Inc. (a) 792,100 39,011 Sevenson Environmental Services, Inc. (c) 401,200 6,971 Thermo Instrument Systems, Inc. (a) 109,100 3,518 USA Waste Services, Inc. (a) 1,178,400 34,910 United Waste Systems, Inc. (a) 1,377,600 44,428 WMX Technologies, Inc. 2,475,600 81,075 223,535 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 964,247 MEDIA & LEISURE - 6.1% BROADCASTING - 1.0% American Radio Systems Corp. Class A (a)(c) 705,800 30,349 Asia Satellite Telecommunications Holdings Ltd. 2,180,300 6,464 Chancellor Corp. Class A 51,800 1,618 Clear Channel Communications, Inc. (a) 165,200 13,608 Emmis Broadcasting Corp. Class A (a) 95,000 4,750 EZ Communications, Inc. Class A (a) 9,200 219 Home Shopping Network, Inc. (a) 2,041,000 24,492 Infinity Broadcasting Corp. Class A 1,380,800 41,425 Jacor Communications, Inc. Class A (a) 309,500 9,556 PanAmSat Corp. (a) 283,600 8,224 Paxson Communications Corp. (a) 630,500 6,699 Renaissance Communications Corp. (a) 720,600 23,239 TCI Group Class A 494,600 8,965 U.S. Satellite Broadcasting Co., Inc. Class A 195,100 7,365 Viacom, Inc. Class A (a) 12,100 461 187,434 ENTERTAINMENT - 0.2% Ameristar Casinos, Inc. 95,300 1,239 Carmike Cinemas, Inc. Class A (a) 28,000 756 Disney (Walt) Co. 185,000 11,632 MGM Grand, Inc. (a) 29,000 1,156 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED ENTERTAINMENT - CONTINUED Multi-Purpose Holdings BHD 12,703,000 $ 20,468 Regal Cinemas, Inc. (a) 213,100 9,749 45,000 LEISURE DURABLES & TOYS - 1.2% Brunswick Corp. 14,200 284 Callaway Golf Co. 275,100 9,147 Champion Enterprises, Inc. (a) 1,355,100 28,288 Coleman, Inc. (a) 381,600 16,170 Harley Davidson, Inc. 755,700 31,078 Hasbro, Inc. 1,547,200 55,312 K2, Inc. (a) 81,100 2,200 Mattel, Inc. 1,634,225 46,780 Nintendo Co. Ltd. Ord. 521,400 38,782 Polaris Industries, Inc. 428,800 14,633 242,674 LODGING & GAMING - 2.3% Bally Entertainment Corp. 2,025,000 55,688 Circus Circus Enterprises, Inc. (a) 1,782,900 73,099 HFS, Inc. (a) 880,460 61,632 Hilton Hotels Corp. 847,500 95,344 Host Marriott Corp. (a) 3,077,900 40,397 ITT Corp. 768,000 50,880 International Game Technology Corp. 901,200 15,208 Interstate Hotels Co. 147,200 3,275 Mirage Resorts, Inc. (a) 367,750 19,767 Penske Motorsports, Inc. 84,200 2,231 Promus Hotel Corp. (a) 12,300 364 Renaissance Hotel Group NV 29,600 629 Showboat, Inc. 612,750 18,459 Sun International Hotels Ltd. Ord. (a) 177,300 8,599 445,572 PUBLISHING - 1.1% Belo (A.H.) Corp. Class A 27,700 1,032 Dow Jones & Co., Inc. 32,500 1,357 Harcourt General, Inc. 915,000 45,750 K-III Communications Corp. (a)(c) 981,800 12,273 Knight-Ridder, Inc. 629,700 45,653 New York Times Co., (The) Class A 1,361,500 44,419 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED PUBLISHING - CONTINUED Playboy Enterprises, Inc. Class B (a) 476,400 $ 7,027 Times Mirror Co. Class A 1,299,100 56,511 214,022 RESTAURANTS - 0.3% Daka International, Inc. (a) 18,600 437 Landry's Seafood Restaurants, Inc. (a)(c) 1,143,700 28,307 Outback Steakhouse, Inc. (a) 767,500 26,467 Papa John's International, Inc. (a) 130,200 6,347 Shoney's, Inc. (a) 472,400 5,137 66,695 TOTAL MEDIA & LEISURE 1,201,397 NONDURABLES - 1.0% BEVERAGES - 0.1% Coca-Cola Enterprises, Inc. 51,000 1,766 PepsiCo, Inc. 354,600 12,544 Seagram Co. Ltd. 377,800 12,676 26,986 FOODS - 0.0% Dole Food, Inc. 93,500 4,020 HOUSEHOLD PRODUCTS - 0.4% Gillette Co. 304,600 18,999 Inbrand Corp. (a) 196,200 5,494 Metro Pacific, Inc. Class B 130,851,000 38,971 Premark International, Inc. 373,500 6,910 Safeskin Corp. (a) 231,500 9,607 79,981 TOBACCO - 0.5% Grupo Carso SA de CV Class A-1 (a) 9,781,000 69,376 Gudang Garam PT (For. Reg.) 1,955,000 8,382 Sampoerna Hanjaya Mandala (For. Reg.) 1,307,500 14,893 92,651 TOTAL NONDURABLES 203,638 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) PRECIOUS METALS - 2.8% Agnico Eagle Mines Ltd. 270,700 $ 4,417 Barrick Gold Corp. 1,847,700 50,205 Bre-X Minerals Ltd. (a) 4,433,500 74,133 Bresea Resources Ltd. (a) 323,800 3,028 De Beers Consolidated Mines Ltd. ADR 179,200 6,048 Euro-Nevada Mining Ltd. 502,200 21,546 Euro-Nevada Mining Ltd. (b) 71,500 3,068 Franco Nevada Mining Corp. 709,800 45,028 Getchell Gold Corp. 676,056 22,310 Greenstone Resources Ltd. (a) 505,700 5,934 Indochina Goldfields Ltd. (b) 948,400 8,173 Kinross Gold Corp. (a) 4,196,900 31,703 Newmont Gold Co. 486,300 24,497 Newmont Mining Corp. 3,035,300 149,867 Placer Dome, Inc. 1,785,600 42,756 TVI Pacific, Inc. (a) 679,700 857 TVI Pacific, Inc. (a)(b) 1,769,700 2,232 Western Mining Holdings Ltd. 7,257,100 52,009 547,811 RETAIL & WHOLESALE - 7.9% APPAREL STORES - 2.4% AnnTaylor Stores Corp. (a) 497,000 10,064 Burton Group PLC Ord. 4,000,000 9,625 Cato Corp. Class A (c) 1,615,000 9,690 Charming Shoppes, Inc. (c) 7,457,100 52,666 Gap, Inc. 2,284,500 73,390 Goody's Family Clothing (c) 1,535,300 15,737 Limited, Inc. (The) 2,114,204 45,455 Loehmanns, Inc. (a)(c) 327,500 7,533 Melville Corp. 2,841,700 115,089 Payless Shoesource, Inc. (a) 1,071,332 34,015 Ross Stores, Inc. 488,500 16,975 Saks Holdings, Inc. (a) 378,500 12,916 TJX Companies, Inc. 1,912,900 64,560 467,715 GENERAL MERCHANDISE STORES - 1.8% Consolidated Stores Corp. (a) 191,900 7,052 Dayton Hudson Corp. 668,400 68,929 Dillard Department Stores, Inc. Class A 1,095,300 39,978 Federated Department Stores, Inc. (a) 360,200 12,292 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED GENERAL MERCHANDISE STORES - CONTINUED K mart Corp. 2,126,200 $ 26,312 Kohls Corp. (a) 135,300 4,955 May Department Stores Co. (The) 180,800 7,910 Mercantile Stores Co., Inc. 163,200 9,568 Meyer (Fred), Inc. (a) 164,600 4,835 Michaels Stores, Inc. (a) 1,107,400 18,826 Price/Costco, Inc. (a) 1,265,400 27,364 Stein Mart, Inc. (a) 797,100 14,547 Value City Department Stores, Inc. (a) 541,800 5,960 Woolworth Corp. (a) 5,044,000 113,490 362,018 GROCERY STORES - 1.9% Albertson's, Inc. 436,300 18,052 American Stores Co. 606,600 25,022 Central Garden & Pet Co. (a)(c) 465,800 8,384 Food Lion, Inc.: Class A 5,559,900 44,132 Class B 429,800 3,331 Giant Food, Inc. Class A 106,500 3,821 Great Atlantic & Pacific Tea Co., Inc. 1,130,200 37,155 Loblaw Companies Ltd. 1,620,000 13,128 Performance Food Group Co. (a) 371,600 9,662 Provigo, Inc. (a) 4,196,200 22,465 Quality Food Centers, Inc. (a) 115,900 2,984 Richfood Holdings, Inc. Class A (c) 2,325,700 75,585 Safeway, Inc. (a) 2,841,300 93,763 Vons Companies, Inc. (a) 154,100 5,759 Weis Markets, Inc. 63,300 2,065 Whole Foods Market, Inc. (a) 286,000 7,579 372,887 RETAIL & WHOLESALE, MISCELLANEOUS - 1.8% Circuit City Stores, Inc. 822,900 29,727 Daisytek International Corp. 12,900 542 Duty Free International, Inc. 338,000 5,155 Home Depot, Inc., (The) 3,302,000 178,308 Lowe's Companies, Inc. 892,400 32,238 Orchard Supply Hardware Corp. (a) 196,600 5,923 Petco Animal Supplies, Inc. (a) 83,700 2,406 PETsMART, Inc. (a) 65,300 3,118 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED Tiffany & Co., Inc. 124,500 $ 9,089 Toys "R" Us, Inc. 3,138,300 89,442 355,948 TOTAL RETAIL & WHOLESALE 1,558,568 SERVICES - 0.7% ADVERTISING - 0.1% Interpublic Group of Companies, Inc. 82,500 3,868 WPP Group PLC 2,434,300 8,200 12,068 LEASING & RENTAL - 0.0% Team Rental Group, Inc. Class A (a) 4,600 64 PRINTING - 0.1% Deluxe Corp. 309,000 10,970 Harland (John H.) Co. 119,400 2,940 13,910 SERVICES - 0.5% APAC Teleservices, Inc. (a) 431,000 15,516 Block (H&R), Inc. 69,100 2,254 Coach USA, Inc. (a) 120,200 2,674 HCIA, Inc. (a) 255,400 16,090 Manpower, Inc. 359,800 14,122 National Service Industries, Inc. 848,800 33,209 Norrell Corp. GA 25,000 1,228 Robert Half International, Inc. (a) 56,600 1,578 Service Corp. International 265,100 15,244 Sitel Corp. (a) 58,600 2,425 104,340 TOTAL SERVICES 130,382 TECHNOLOGY - 5.2% COMMUNICATIONS EQUIPMENT - 0.5% Cisco Systems, Inc. (a) 670,500 37,967 Dynatech Corp. (a)(c) 983,300 31,957 Echostar Communications Corp. Class A (a) 274,300 7,749 Northern Telecom Ltd. 555,700 30,260 107,933 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTER SERVICES & SOFTWARE - 1.7% Acxiom Corp. (a) 44,600 $ 1,522 Ascend Communications, Inc. (a) 63,200 3,555 BBN Corp. 115,900 2,521 BMC Software, Inc. (a) 164,900 9,853 Broadway & Seymour, Inc. (a) 12,700 152 CACI International, Inc. Class A (a) 411,400 6,480 CUC International, Inc. (a) 470,500 16,703 Ceridian Corp. (a) 1,963,800 99,172 Computer Sciences Corp. (a) 233,100 17,424 Compuware Corp. (a) 37,100 1,465 Documentum, Inc. (a) 392,500 11,971 ECI Telecom Ltd. 1,164,500 27,075 Electronic Arts, Inc. 198,500 5,310 Equifax Inc. 649,900 17,060 Fair Issac & Company, Inc. 20,400 903 First Data Corp. 356,100 28,354 Fiserv, Inc. 52,700 1,581 GT Interactive Software, Inc. (a) 225,800 3,782 ICT Group, Inc. (a) 73,000 1,405 Keane, Inc. (a) 412,700 15,218 Metromail Corp. (a) 362,900 8,120 Micrografx, Inc. (a) 295,600 4,323 National Data Corp. 81,600 2,795 Oracle Corp. (a) 608,000 23,978 Policy Management Systems Corp. (a) 90,700 4,535 SunGard Data Systems, Inc. (a) 184,600 7,407 Vanstar Corp. (a)(c) 916,600 15,353 338,017 COMPUTERS & OFFICE EQUIPMENT - 1.3% Bell & Howell Co. (a)(c) 975,700 31,832 Canon, Inc. 3,965,000 82,406 Compaq Computer Corp. (a) 302,200 14,883 Data General Corp. (a) 234,100 3,043 Dell Computer Corp. (a) 155,400 7,906 Diebold, Inc. 389,600 18,798 FileNet Corp. (a)(c) 809,100 29,532 Hewlett-Packard Co. 75,700 7,542 Kronos, Inc. (a)(c) 761,500 27,033 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - CONTINUED Stratus Computer, Inc. (a) 809,600 $ 23,478 Sun Microsystems, Inc. (a) 74,900 4,410 VeriFone, Inc. (a) 241,300 10,195 261,058 ELECTRONIC INSTRUMENTS - 0.4% ADE Corp. 113,000 1,610 Perkin-Elmer Corp. 1,438,300 69,398 Waters Corp. (a) 385,600 12,725 83,733 ELECTRONICS - 0.7% ESS Technology, Inc. (a) 412,000 7,622 Griffon Corp. (a) 692,600 5,627 Intel Corp. 606,200 44,519 OnTrak Systems, Inc. (a) 42,700 694 Storage Technology Corp. (a) 1,702,100 65,105 Zero Corp. 482,400 10,311 133,878 PHOTOGRAPHIC EQUIPMENT - 0.6% Eastman Kodak Co. 281,200 21,863 Fuji Photo Film Co. Ltd. 2,003,000 63,173 Polaroid Corp. 519,500 23,702 108,738 TOTAL TECHNOLOGY 1,033,357 TRANSPORTATION - 2.5% AIR TRANSPORTATION - 0.6% AMR Corp. 112,800 10,265 Atlantic Southeast Airlines, Inc. 540,800 15,278 Comair Holdings, Inc. 247,800 6,691 Delta Air Lines, Inc. 713,900 59,253 Mesa Airlines, Inc. 50,000 594 Northwest Airlines Corp. Class A (a) 50,000 1,975 UAL Corp. (a) 429,700 23,095 USAir Group, Inc. 199,100 3,584 120,735 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TRANSPORTATION - CONTINUED RAILROADS - 1.9% Bombardier, Inc. Class B 2,407,500 $ 36,107 Burlington Northern Santa Fe Corp. 1,719,200 139,040 CSX Corp. 1,932,800 93,258 Canadian Pacific Ltd. Ord. 2,424,200 53,158 Tranz Rail Holdings Ltd. sponsored ADR (a) 276,900 3,842 Wisconsin Central Transportation Corp. (a) 1,549,200 50,349 375,754 SHIPPING - 0.0% Trico Marine Services, Inc. (a) 103,600 2,305 TRUCKING & FREIGHT - 0.0% Expeditors International of Washington, Inc. 1,900 59 USFreightways Corp. 320,500 6,250 Yellow Corp. (a) 101,000 1,338 7,647 TOTAL TRANSPORTATION 506,441 UTILITIES - 2.6% CELLULAR - 0.1% Advanced Information Services PCL (For. Reg.) 60,100 942 Commnet Cellular, Inc. (a) 23,200 696 Palmer Wireless, Inc. (a) 666,900 13,338 360 Degrees Communications Co. (a) 422,100 10,130 25,106 ELECTRIC UTILITY - 0.2% Iberdrola SA 900,000 9,232 Korea Electric Power Corp. 696,400 28,124 Korea Electric Power Corp. ADR 119,400 2,895 40,251 GAS - 0.4% Consolidated Natural Gas Co. 9,200 481 Enron Corp. 709,100 28,984 Nova Corp. 3,364,700 30,475 Sonat, Inc. 516,200 23,229 Williams Companies, Inc. 17,000 842 84,011 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - CONTINUED TELEPHONE SERVICES - 1.9% BCE, Inc. 1,660,500 $ 65,456 Cincinnati Bell, Inc. 185,500 9,669 Comsat Corp., Series 1 431,400 11,216 DDI Corp. Ord. 209 1,821 LCI International, Inc. (a) 865,500 27,155 Lucent Technologies, Inc. 630,000 23,861 Sprint Corp. 1,260,800 52,954 WorldCom, Inc. (a) 3,328,800 184,333 376,465 TOTAL UTILITIES 525,833 TOTAL COMMON STOCKS (Cost $14,220,629) 16,321,888 CONVERTIBLE PREFERRED STOCKS - 0.3% CONSTRUCTION & REAL ESTATE - 0.0% REAL ESTATE - 0.0% Rouse Co., Series A 150,400 8,723 ENERGY - 0.1% OIL & GAS - 0.1% Diamond Shamrock, Inc. $2.50 (b) 160,800 9,728 Valero Energy Corp. $3.125 100,000 5,250 14,978 MEDIA & LEISURE - 0.0% BROADCASTING - 0.0% American Radio System Corp. $3.50 depository shares representing 1/20 (b) 72,400 4,272 RETAIL & WHOLESALE - 0.2% APPAREL STORES - 0.1% TJX Companies, Inc., Series E, $7.00 73,500 13,818 CONVERTIBLE PREFERRED STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED GENERAL MERCHANDISE STORES - 0.1% K Mart Financing I $3.875 212,200 $ 11,512 TOTAL RETAIL & WHOLESALE 25,330 TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $50,944) 53,303 CORPORATE BONDS - 0.3% MOODY'S PRINCIPAL RATINGS (F) AMOUNT (000S) ENERGY - 0.2% ENERGY SERVICES - 0.1% Nabors Industries, Inc. 5%, 5/1/06 Ba2 $ 9,476,000 10,518 OIL & GAS - 0.1% Pogo Producing Co. 5 1/2%, 6/15/06 (b) B2 13,900,000 14,943 TOTAL ENERGY 25,461 HEALTH - 0.1% MEDICAL FACILITIES MANAGEMENT - 0.1% NovaCare, Inc. 5 1/2%, 1/15/00 B1 19,870,000 17,486 MEDIA & LEISURE - 0.0% BROADCASTING - 0.0% Home Shopping Network, Inc. 5 7/8%, 3/1/06 (b) B- 4,152,000 4,775 Jacor Communications, Inc. liquid yield option notes 0%, 6/12/11 B 3,870,000 1,828 6,603 TECHNOLOGY - 0.0% ELECTRONICS - 0.0% National Semiconductor Corp. 6 1/2%, 10/1/02 (b) Ba2 2,780,000 2,405 TOTAL CORPORATE BONDS (Cost $49,141) 51,955 U.S. TREASURY OBLIGATIONS - 5.3% MOODY'S PRINCIPAL VALUE (NOTE 1) RATINGS (F) AMOUNT (000S) (000S) U.S. Treasury Bills, yields at date of purchase 4.93% to 5.03%, 7/18/96 to 7/25/96 $ 656,000 $ 654,464 7 1/8%, 2/15/23 Aaa 33,100 33,457 6 1/4%, 8/15/23 Aaa 175,500 159,101 7 1/2%, 11/15/24 Aaa 90,400 95,824 7 5/8%, 2/15/25 Aaa 23,110 24,901 6%, 2/15/26 Aaa 100,000 88,672 TOTAL U.S. TREASURY OBLIGATIONS (Cost $1,069,594) 1,056,419 REPURCHASE AGREEMENTS - 11.8% MATURITY AMOUNT (000S) Investments in repurchase agreements (U.S. Treasury obligations), in a joint trading account at 5.46%, dated 6/28/96 due 7/1/96 $ 2,347,233 2,346,165 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $17,736,473) $ 19,829,730 CURRENCY TYPE ABBREVIATIONS CAD - Canadian dollars LEGEND 1. Non-income producing 2. Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $52,620,000 or 0.3% of net assets. 3. Affiliated company (see Note 7 of Notes to Financial Statements). 4. Purchased on an installment basis. Market value reflects only those payments made through June 30, 1996. The remaining installments aggregating CAD 10,225,000 are due July 31, 1996 and January 31, 1997. 5. Purchased on an installment basis. Market value reflects only those payments made through June 30, 1996. The remaining installments aggregating CAD 6,575,000 are due September 23, 1996 and March 24, 1997. 6. Standard & Poor's credit ratings are used in the absence of a rating by Moody's Investors Service, Inc. OTHER INFORMATION Distribution of investments by country of issue, as a percentage of total value of investment in securities, is as follows: United States 84.8% Canada 4.4 Japan 2.9 Netherlands 1.5 Malaysia 1.4 United Kingdom 1.1 Others (individually less than 1%) 3.9 TOTAL 100.0% INCOME TAX INFORMATION At June 30, 1996, the aggregate cost of investment securities for income tax purposes was $17,748,959,000. Net unrealized appreciation aggregated $2,080,771,000, of which $2,341,841,000 related to appreciated investment securities and $261,070,000 related to depreciated investment securities. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) JUNE 30, 1996 (UNAUDITED) ASSETS Investment in securities, at value (including repurchase $ 19,829,730 agreements of $2,346,165) (cost $17,736,473) - See accompanying schedule Cash 957 Receivable for investments sold 267,947 Receivable for fund shares sold 43,206 Dividends receivable 19,521 Interest receivable 9,429 Other receivables 606 TOTAL ASSETS 20,171,396 LIABILITIES Payable for investments purchased $ 353,906 Payable for fund shares redeemed 27,739 Accrued management fee 9,152 Other payables and accrued expenses 6,657 Collateral on securities loaned, at value 115,337 TOTAL LIABILITIES 512,791 NET ASSETS $ 19,658,605 Net Assets consist of: Paid in capital $ 16,541,627 Undistributed net investment income 118,083 Accumulated undistributed net realized gain (loss) on 905,752 investments and foreign currency transactions Net unrealized appreciation (depreciation) on 2,093,143 investments and assets and liabilities in foreign currencies NET ASSETS, for 499,625 shares outstanding $ 19,658,605 NET ASSET VALUE and redemption price per share $39.35 ($19,658,605 (divided by) 499,625 shares) Maximum offering price per share (100/97.00 of $39.35) $40.57
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED JUNE 30, 1996 (UNAUDITED) INVESTMENT INCOME $ 102,443 Dividends (including $2,059 received from affiliated issuers) Special dividend from Schuller Corp. 14,957 Interest (including income on securities loaned of $992) 77,598 TOTAL INCOME 194,998 EXPENSES Management fee $ 52,907 Basic fee Performance adjustment 1,442 Transfer agent fees 19,680 Accounting and security lending fees 447 Non-interested trustees' compensation 29 Custodian fees and expenses 1,223 Registration fees 1,959 Audit 71 Legal 39 Miscellaneous 84 Total expenses before reductions 77,881 Expense reductions (3,850) 74,031 NET INVESTMENT INCOME 120,967 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities (including realized gain of 950,647 $22,645 on sales of investments in affiliated issuers) Foreign currency transactions 9,363 960,010 Change in net unrealized appreciation (depreciation) on: Investment securities 393,586 Assets and liabilities in foreign currencies (5,900) 387,686 NET GAIN (LOSS) 1,347,696 NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,468,663 FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED ENDED DECEMBER 31, JUNE 30, 1996 1995 (UNAUDITED) INCREASE (DECREASE) IN NET ASSETS Operations $ 120,967 $ 50,900 Net investment income Net realized gain (loss) 960,010 2,153,716 Change in net unrealized appreciation (depreciation) 387,686 1,261,176 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,468,663 3,465,792 FROM OPERATIONS Distributions to shareholders - (32,239) From net investment income From net realized gain (813,982) (1,121,208) TOTAL DISTRIBUTIONS (813,982) (1,153,447) Share transactions 5,068,004 5,506,303 Net proceeds from sales of shares Reinvestment of distributions 802,684 1,134,123 Cost of shares redeemed (1,724,626) (2,789,091) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 4,146,062 3,851,335 FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 4,800,743 6,163,680 NET ASSETS Beginning of period 14,857,862 8,694,182 End of period (including undistributed net investment $ 19,658,605 $ 14,857,862 income (loss) of $118,083 and $(2,312), respectively) OTHER INFORMATION Shares Sold 132,076 150,801 Issued in reinvestment of distributions 21,705 30,067 Redeemed (44,914) (77,218) Net increase (decrease) 108,867 103,650
FINANCIAL HIGHLIGHTS SIX MONTHS YEARS ENDED DECEMBER 31, ENDED JUNE 30, 1996 (UNAUDITED) 1995 1994 1993 F 1992 D 1991
SELECTED PER-SHARE DATA Net asset value, $ 38.02 $ 30.28 $ 30.84 $ 27.47 $ 25.60 $ 17.35 beginning of period Income from Investment Operations Net investment .24 I .03 .06 .14 .32 E .22 income Net realized and 3.09 10.93 (.40) 5.66 3.67 9.20 unrealized gain (loss) Total from investment 3.33 10.96 (.34) 5.80 3.99 9.42 operations Less Distributions - (.09) - (.11) (.20) (.11) From net investment income In excess of net - - - (.07) - - investment income From net realized (2.00) (3.13) (.22) (2.25) (1.92) (1.06) gain Total distributions (2.00) (3.22) (.22) (2.43) (2.12) (1.17) Net asset value, end $ 39.35 $ 38.02 $ 30.28 $ 30.84 $ 27.47 $ 25.60 of period TOTAL RETURN B, C 9.10% 36.28% (1.12) 21.43% 15.89 54.92 % % % RATIOS AND SUPPLEMENTAL DATA Net assets, end of $ 19,659 $ 14,858 $ 8,694 $ 6,208 $ 1,986 $ 1,000 period (in millions) Ratio of expenses to .90% A .98% 1.03% 1.08% .87 .89 average net assets % % Ratio of expenses to .86% A .96% 1.00% 1.06% .87 .89 average net assets , G G G G % % after expense reductions Ratio of net investment 1.40% A .44% .59% .46% 1.19 1.01 income to average % % net assets Portfolio turnover rate 199% A 223% 235% 255% 297 217 % %
Average commission rate H $ .0350 A ANNUALIZED B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). D AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING. E NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. F EFFECTIVE JANUARY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES. G FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). H FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION RATE STRUCTURES MAY DIFFER. I INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND FROM SCHULLER CORP. WHICH AMOUNTED TO $.03 PER SHARE. NOTES TO FINANCIAL STATEMENTS For the period ended June 30, 1996 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Contrafund (the fund) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust and is authorized to issue an unlimited number of shares. The financial statements have been prepared in conformity with generally accepted accounting principles which permit management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities (including restricted securities) for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange) are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days of their purchase date are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of the transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of forward currency contracts and foreign currency options, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are included with the net realized and unrealized gain or loss on investment securities. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income is accrued as earned. Investment income is recorded 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED INVESTMENT INCOME - CONTINUED net of foreign taxes withheld where recovery of such taxes is uncertain. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences, which may result in distribution reclassifications, are primarily due to differing treatments for litigation proceeds, futures and options transactions, foreign currency transactions, passive foreign investment companies (PFIC), market discount, partnerships, non-taxable dividends, and losses deferred due to wash sales. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain (loss). Undistributed net investment income and accumulated undistributed net realized gain (loss) on investments and foreign currency transactions may include temporary book and tax basis differences that will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the fund's investments against currency fluctuations. Also, a contract to buy or sell can offset a previous contract. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and any realized gain (loss) is recognized on the date of offset; otherwise, gain (loss) is recognized on settlement date. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT - CONTINUED agreements that mature in 60 days or less from the date of purchase, and are collateralized by U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency Securities are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options contracts to manage its exposure to the stock market and to fluctuations in currency values. Buying futures, writing puts, and buying calls tend to increase the fund's exposure to the underlying instrument. Selling futures, buying puts, and writing calls tend to decrease the fund's exposure to the underlying instrument, or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparties do not perform under the contracts' terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price. Options traded over-the-counter are valued using dealer-supplied valuations. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $17,023,412,000 and $14,841,102,000, respectively, of which U.S. government and government agency obligations aggregated $278,937,000 and $717,345,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .2500% to .5200% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is .30%. The basic fee is subject to a performance adjustment (up to a maximum of (plus/minus) .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. For 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED MANAGEMENT FEE - CONTINUED the period, the management fee was equivalent to an annualized rate of .63% of average net assets after the performance adjustment. SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an affiliate of FMR and the general distributor of the fund, received sales charges of $10,544,000 on sales of shares of the fund. TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .23% of average net assets. ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $6,300,000 for the period. 5. SECURITY LENDING. The fund loaned securities to certain brokers who paid the fund negotiated lenders' fees. These fees are included in interest income. The fund receives U.S. Treasury obligations and/or cash as collateral against the loaned securities, in an amount at least equal to 102% of the market value of the loaned securities at the inception of each loan. This collateral must be maintained at not less than 100% of the market value of the loaned securities during the period of the loan. At period end, the value of the securities loaned and the value of collateral amounted to $112,451,000 and $115,337,000, respectively. 6. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $3,346,000 under this arrangement. In addition, FMR has entered into arrangements on behalf of the fund with the fund's custodian and transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of the fund's expenses. During the period, the fund's expenses were reduced by $10,000 and $494,000 under these arrangements. 7. TRANSACTIONS WITH AFFILIATED COMPANIES. An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows: SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE AFFILIATE COST COST INCOME Adflex Solutions $ - $ 4,098 $ - $ - American Radio Systems Corp. Class A 16,389 6,912 - 30,349 BDM International, Inc. 2,089 3,799 - - Bell & Howell Co. 167 107 - 31,832 CACI International, Inc. Class A - 2,513 - - C A E Industries Ltd. 243 1,272 139 - Cambrex Corp. 1,203 5,442 27 - Camco International, Inc. 772 8,285 119 71,243 Cato Corp. Class A 1,721 4,873 136 9,690 Central Garden & Pet Co. 810 741 - 8,384 Charming Shoppes, Inc. 16,489 - - 52,666 Computer Products, Inc. 1,644 4,540 - - Cooper Cameron Corp. 21,460 - - 78,523 CyCare Systems, Inc. - 5,031 - - Designer Holdings Ltd. 1,626 1,564 - 14,215 Diamond Shamrock R&M, Inc. 6,171 - 37 48,544 Dynatech Corp. 2,801 6,147 - 31,957 EZ Communications, Inc. Class A - 3,962 - - Emmis Broadcasting Corp. Class A - 6,664 - - ENSCO International, Inc. - - - 123,218 Falcon Drilling, Inc. 8,106 2,580 - - FileNet Corp. 30,281 34,933 - 29,532 Gleason Corp. - 1,134 34 - Glendale Federal Bank Federal Savings Bank 1,508 5,132 - - Goody's Family Clothing - 346 - 15,737 K-III Communications Corp. 1,423 - - 12,273 Kronos, Inc. 3,901 1,407 - 27,033 Landry's Seafood Restaurants, Inc. 583 - - 28,307 Loehmanns, Inc. - 690 - 7,533 Malaysian Plantations BHD 158 - - 19,075 Metro Pacific, Inc. Class B 448 2,689 - - Nabors Industries, Inc. 16,530 2,731 - 90,586 Newfield Exploration Co. 5,692 66 - 39,971 Progress Software Corp. - 7,088 - - Richfood Holdings, Inc. Class A 17,825 956 54 75,585 Rohr Industries, Inc. - 620 - - Rykoff-Sexton, Inc. - 6,736 - - Sepracor, Inc. 1,649 7,895 - 19,791 Sevenson Environmental Services, Inc. - 657 47 6,971 SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED AMOUNTS IN THOUSANDS PURCHASE SALES DIVIDEND VALUE AFFILIATE COST COST INCOME Showboat, Inc. $ 12,116 $ 17,974 $ 52 $ - Sinclair Broadcasting Group, Inc. Class A - 1,439 - - Smedvig AS 13,585 10,306 558 40,461 Smith International, Inc. 7,073 2,883 - 120,292 Sonat Offshore Drilling, Inc. 17,417 18,367 96 74,902 Special Devices, Inc. - 1,984 - - Tech-Sym Corp. 1,101 5,946 - - Tel-Save Holdings, Inc. - 1,518 - - Tidewater, Inc. 20,118 6,154 760 152,050 Tongkah Holdings BHD - - - 15,985 Truevision, Inc. - 1,251 - - Uniroyal Chemical Corp. 742 - - 19,053 Vanstar Corp. 2,735 311 - 15,353 Zycon Corp. - 2,594 - - TOTALS $ 236,576 $ 212,337 $ 2,059 $ 1,311,111 TO CALL FIDELITY FOR FUND INFORMATION AND QUOTES The Fidelity Telephone Connection offers you special automated telephone services for quotes and balances. The services are easy to use, confidential and quick. All you need is a Touch Tone telephone. YOUR PERSONAL IDENTIFICATION NUMBER (PIN) The first time you call one of our automated telephone services, we'll ask you to set up your Personal Identification Number (PIN). The PIN assures that only you have automated telephone access to your account information. Please have your Customer Number (T-account #) handy when you call - you'll need it to establish your PIN. If you would ever like to change your PIN, just choose the "Change your Personal Identification Number" option when you call. If you forget your PIN, please call a Fidelity representative at 1-800- 544-6666 for assistance. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES* 1-800-544-8544 Just make a selection from this record-ed menu: PRESS For quotes on funds you own. 1. For an individual fund quote. 2. For the ten most frequently requested Fidelity fund quotes. 3. For quotes on Fidelity Select Portfolios(registered trademark). 4. To change your Personal Identification Number (PIN). 5. To speak with a Fidelity representative. 6. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT BALANCES 1-800-544-7544 Just make a selection from this record- ed menu: PRESS For balances on funds you own. 1. For your most recent fund activity (purchases, redemptions, and dividends). 2. To change your Personal Identification Number (PIN). 3. To speak with a Fidelity representative. 4. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. TO WRITE FIDELITY If more than one address is listed, please locate the address that is closest to you. We'll give your correspondence immediate attention and send you written confirmation upon completion of your request. (LETTER_GRAPHIC)MAKING CHANGES TO YOUR ACCOUNT (such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 (LETTER_GRAPHIC)FOR NON-RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 OVERNIGHT EXPRESS Fidelity Investments 100 Crosby Parkway - KP2C Covington, KY 41015-4399 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6I 400 East Las Colinas Blvd. Irving, TX 75309-5517 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 193 Boston, MA 02210-0193 (LETTER_GRAPHIC)FOR RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6R 400 East Las Colinas Blvd. Irving, TX 75309-5517 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 East Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19100 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 811 Wilshire Boulevard Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 455 Market Street San Francisco, CA 950 Northgate Drive San Rafael, CA 1400 Civic Drive Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 90 Alhambra Plaza Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 4001 Tamiami Trail, North Naples, FL 1907 West State Road 434 Orlando, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 2000 66th Street, North St. Petersburg, FL GEORGIA 3525 Piedmont Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA HAWAII 700 Bishop Street Honolulu, HI ILLINOIS 215 East Erie Street Chicago, IL One North Franklin Chicago, IL 540 Lake Cook Road Deerfield, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL LOUISIANA 201 St. Charles Avenue New Orleans, LA MAINE 3 Canal Plaza Portland, ME MARYLAND 7401 Wisconsin Avenue Bethesda, MD 1 West Pennsylvania Ave. Towson, MD MASSACHUSETTS 470 Boylston Street Boston, MA 21 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 29155 Northwestern Hwy. Southfield, MI MINNESOTA 7600 France Avenue South Edina, MN MISSOURI 700 West 47th Street Kansas City, MO 8885 Ladue Road Ladue, MO 200 North Broadway St. Louis, MO NEW JERSEY 56 South Street Morristown, NJ 501 Route 17, South Paramus, NJ 505 Millburn Avenue Short Hills, NJ NEW YORK 1050 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 1271 Avenue of the Americas New York, NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 4611 Sharon Road Charlotte, NC 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 28699 Chagrin Boulevard Woodmere Village, OH 1903 East Ninth Street Cleveland, OH OREGON 121 S.W. Morrison Street Portland, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 5100 Poplar Avenue Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 7001 Preston Road Dallas, TX 1155 Dairy Ashford Houston, TX 2701 Drexel Drive Houston, TX 1010 Lamar Street Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 215 South State Street Salt Lake City, UT VERMONT 199 Main Street Burlington, VT VIRGINIA 8180 Greensboro Drive McLean, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 511 Pine Street Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 595 North Barker Road Brookfield, WI INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc., London, England Fidelity Management & Research (Far East) Inc., Tokyo, Japan OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President William J. Hayes, Vice President Will Danoff, Vice President Arthur S. Loring, Secretary Kenneth A. Rathgeber, Treasurer Robert H. Morrison, Manager, Security Transactions John H. Costello, Assistant Treasurer Leonard M. Rush, Assistant Treasurer BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox * Phyllis Burke Davis * Richard J. Flynn * Edward C. Johnson 3d E. Bradley Jones * Donald J. Kirk * Peter S. Lynch Edward H. Malone * Marvin L. Mann * Gerald C. McDonough * Thomas R. Williams * ADVISORY BOARD William O. McCoy GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN Brown Brothers Harriman & Co. Boston, MA FIDELITY'S GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Export Fund Fidelity Fifty Growth Company Fund Large Cap Stock Fund Low-Priced Stock Fund Magellan(registered trademark) Fund Mid-Cap Stock Fund New Millennium(trademark) Fund OTC Portfolio Retirement Growth Fund Small Cap Stock Fund Stock Selector Trend Fund Value Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) (registered trademark) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----