-----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, CBGMiH5+qD9FjeZsjkiDsNxfIun6+fhAJQiJ57rA2Kpo/fhoNuazfS8/foDWmX5w eYxu6sFlKAcg+Ogn/sMx9Q== 0000028540-95-000063.txt : 19951101 0000028540-95-000063.hdr.sgml : 19951101 ACCESSION NUMBER: 0000028540-95-000063 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19951031 EFFECTIVENESS DATE: 19951101 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAILY MONEY FUND/MA/ CENTRAL INDEX KEY: 0000028540 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 042778694 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 002-77909 FILM NUMBER: 95586134 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-03480 FILM NUMBER: 95586135 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 2142816351 MAIL ADDRESS: STREET 1: P.O. BOX 650471 STREET 2: MAILZONE DW4B CITY: DALLAS STATE: TX ZIP: 75265-0471 FORMER COMPANY: FORMER CONFORMED NAME: DEVONSHIRE STREET FUND INC DATE OF NAME CHANGE: 19821213 485BPOS 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT (No. 2-77909) UNDER THE SECURITIES ACT OF 1933 [X] Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 33 [X] and REGISTRATION STATEMENT (No. 811-3480) UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ] Amendment No. 33 [ X] Daily Money Fund (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 Siobhan Perkins Morris, Nichols, Arsht & Tunnell 1201 N. Market Street, P.O. Box 1347 Wilmington, DE 19899-1347 (Name and Address of Agent for Service) It is proposed that this filing will become effective ( ) immediately upon filing pursuant to paragraph (b) ( X ) on November 1, 1995 pursuant to paragraph (b) ( ) 60 days after filing pursuant to paragraph (a)(i) ( ) on ( ) pursuant to paragraph (a)(i) ( ) 75 days after filing pursuant to paragraph (a)(ii) ( ) on ( ) pursuant to paragraph (a)(ii) 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. Registrant has filed a declaration pursuant to Rule 24f-2 under the Investment Company Act of 1940 and filed the Notice required by such Rule on May 23, 1995. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS I CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1 .............................. Cover Page 2 .............................. Expenses 3 a .............................. Financial Highlights b .............................. * c .............................. Performance d .............................. Cover Page 4 a i............................. Charter ii........................... Investment Principles and Risks; Securities and Investment Practices; Fundamental Investment Policies and Restrictions b .............................. Securities and Investment Practices c .............................. Who May Want to Invest; Investment Principles and Risks; Securities and Investment Practices 5 a .............................. Charter b i............................. FMR and Its Affiliates ii........................... FMR and Its Affiliates; Charter; Breakdown of Expenses iii.......................... Expenses; Breakdown of Expenses; Management Fee c .............................. FMR and Its Affiliates d .............................. Charter; Breakdown of Expenses; Cover Page; FMR and Its Affiliates e .............................. FMR and its Affiliates; Breakdown of Expenses; Other Expenses f .............................. Expenses g .............................. Expenses; FMR and Its Affiliates 5A .............................. * 6 a i............................. Charter ii........................... How to Buy Shares; How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions iii.......................... * b ............................. FMR and Its Affiliates c .............................. Charter d .............................. Cover Page; Charter e .............................. Cover Page; How to Buy Shares; How to Sell Shares; Investor Services; Exchange Restrictions f, g .............................. Dividends, Capital Gains, and Taxes 7 a .............................. Charter; Cover Page b .............................. How to Buy Shares; Transaction Details c .............................. * d .............................. How to Buy Shares e .............................. Transaction Details; Breakdown of Expenses f .............................. Breakdown of Expenses; Other Expenses 8 .............................. How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions 9 .............................. *
* Not Applicable FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS I Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how each fund invests and the services available to shareholders. To learn more about each fund and its investments, you can obtain a copy of the applicable fund's most recent financial report and portfolio listing or a copy of the Statement of Additional Information (SAI) dated November 1, 1995. The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, contact your financial institution, or call Fidelity Client Services at 1-800-843-3001. INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A STABLE $1.00 SHARE PRICE. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IMMI-pro-1195 FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP): Treasury (formerly Treasury II) Government Domestic Money Market DAILY MONEY FUND (DMF): Treasury Only FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP): Tax-Exempt FIDELITY MONEY MARKET TRUST (FMMT): Rated Money Market (formerly Domestic Money Market Portfolio) PROSPECTUS NOVEMBER 1, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS
KEY FACTS WHO MAY WANT TO INVEST EXPENSES Class I's yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of each fund's financial data. PERFORMANCE THE FUNDS IN DETAIL CHARTER How each fund is organized. INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS
KEY FACTS WHO MAY WANT TO INVEST Each fund offers institutional and corporate investors a convenient and economical way to invest in a professionally managed portfolio of money market instruments. Each fund is designed for investors who would like to earn current income while preserving the value of their investment. The rate of income will vary from day to day, generally reflecting short-term interest rates. Each fund is managed to keep its share price stable at $1.00. Each of Treasury Only, Treasury, and Government offers an added measure of safety with its focus on U.S. Government securities. None of the funds constitutes a balanced investment plan. However, because they emphasize stability, they could be well-suited for a portion of your investment. Each fund is composed of multiple classes of shares. Each class of a fund has a common investment objective and investment portfolio. Class I shares do not have a sales charge and do not pay a distribution fee. Class II shares do not have a sales charge, but do pay a 0.15% distribution fee. Class III shares do not have a sales charge, but do pay a 0.25% distribution fee. Because Class I shares have no sales charge and do not pay a distribution fee, Class I shares are expected to have a higher total return than Class II and Class III shares. You may obtain more information about Class II and Class III shares, which are not offered through this prospectus, from your financial institution, or by calling Fidelity Client Services at 1-800-843-3001. Contact your financial institution to discuss which class is appropriate for you. EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell Class I shares of a fund. Maximum sales charge on purchases and None reinvested distributions Maximum deferred sales None charge Redemption fee None Exchange fee None ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a management fee to Fidelity Management & Research Company (FMR). FMR is responsible for the payment of all other expenses of Treasury Only and Rated Money Market with certain limited exceptions. Each fund, other than Treasury Only and Rated Money Market, also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. Class I's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see "Breakdown of Expenses" on page ). The following are projections based on estimated or historical expenses of Class I of each fund and are calculated as a percentage of average net assets of Class I of each fund. Class I Operating Expenses TREASURY Management fee 0.15% A 12b-1 fee (Distribution fee) None Other expenses 0.05 % Total operating expenses 0.20% A GOVERNMENT Management fee 0.16% A 12b-1 fee (Distribution fee) None Other expenses 0.04 % Total operating expenses 0.20% A A AFTER EXPENSE REDUCTIONS. Class I Operating Expenses DOMESTIC Management fee 0.13% A 12b-1 fee (Distribution fee) None Other expenses 0.07 % Total operating expenses 0.20% A MONEY MARKET Management fee 0.14% A 12b-1 fee (Distribution fee) None Other expenses 0.04 % Total operating expenses 0.18% A TREASURY ONLY Management fee 0.20% A 12b-1 fee (Distribution fee) None Other expenses 0.00 % Total operating expenses 0.20% A TAX-EXEMPT Management fee 0.14% A 12b-1 fee (Distribution fee) None Other expenses 0.06 % Total operating expenses 0.20% A RATED MONEY MARKET Management fee 0.20% A 12b-1 fee (Distribution fee) None Other expenses 0.00 % Total operating expenses 0.20% A A AFTER EXPENSE REDUCTIONS. EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000 investment in Class I shares, assuming a 5% annual return and full redemption at the end of each time period: 1 3 5 10 Year Years Years Years Treasury $ 2 $ 6 $ 11 $ 26 Government $ 2 $ 6 $ 11 $ 26 Domestic $ 2 $ 6 $ 11 $ 26 Money Market $ 2 $ 6 $ 10 $ 23 Treasury Only $ 2 $ 6 $ 11 $ 26 Tax-Exempt $ 2 $ 6 $ 11 $ 26 Rated Money Market $ 2 $ 6 $ 11 $ 26 THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY. FMR has voluntarily agreed to reimburse Class I of each fund to the extent that total operating expenses (excluding interest, taxes, brokerage commissions, and extraordinary expenses) are in excess of 0.20% (0.18% for Money Market) of its average net assets. If these agreements were not in effect, the management fees and total operating expenses for Class I of each fund would have been the following amounts, as a percentage of average net assets: 0.20% and 0.25% for Treasury; 0.20% and 0.24% for Government; 0.20% and 0.24% for Money Market; 0.20% and 0.27% for Domestic; 0.42% and 0.42% for Treasury Only; 0.20% and 0.26% for Tax-Exempt; and 0.42% and 0.42% for Rated Money Market. FINANCIAL HIGHLIGHTS The financial highlights tables that follow and each fund's financial statements are included in each fund's Annual Report and have been audited by independent accountants. Price Waterhouse LLP serves as independent accountants for each of the FICP funds, while Coopers & Lybrand L.L.P. serves as independent accountants for Tax-Exempt, Treasury Only, and Rated Money Market. Their reports, as applicable, on the financial statements and financial highlights are included in each Annual Report. The financial statements, the financial highlights, and the reports are incorporated by reference into the funds' SAI, which may be obtained free of charge from Fidelity Client Services at the phone number listed on page . Class II of each fund will comemnce operations on or about November 1, 1995. Class III of Treasury Only, Tax-Exempt, and Rated Money Market will commence operations on or about November 1, 1995. FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
1.Selected Per-Share Data 2.Years ended March 31 1987A 1988 1989 1990 1991 1992 1993 1994 1995 3.Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 period 4.Income from Investment Operations 5. Net interest income .009 .064 .078 .088 .076 .053 .034 .030 .047 6.Less Distributions 7. From net interest income (.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047) 8.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 9.Total return B .93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78 % % % % % % % % 10.RATIOS AND SUPPLEMENTAL DATA 11.Net assets, end of period (000 $ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1 omitted) 1 8 24 86 52 63 18 98 12.Ratio of expenses to average net .20% .20 .20 .19 .18 .18 .18 .18 .18 assets C % % % % % % % % 13.Ratio of expenses to average net .99% .32 .26 .27 .25 .25 .23 .24 .25 assets before C % % % % % % % % expense reductions 14.Ratio of net interest income to 6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71 average net assets C % % % % % % % %
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
15.Selected Per-Share Data 16.Years ended March 31 1994A 1995 17.Net asset value, beginning of period $ 1.000 $ 1.000 18.Income from Investment Operations 19. Net interest income .012 .044 20.Less Distributions 21. From net interest income (.012) (.044) 22.Net asset value, end of period $ 1.000 $ 1.000 23.Total return B 1.21% 4.45 % 24.RATIOS AND SUPPLEMENTAL DATA 25.Net assets, end of period (000 omitted) $ 5,175 $ 585,57 1 26.Ratio of expenses to average net assets .50% .50 C % 27.Ratio of expenses to average net assets before expense reductions .56% .81 C % 28.Ratio of net interest income to average net assets 2.69% 4.91 C %
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS I
29.Selected Per-Share Data 30.Years ended March 31 1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995 31.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 32.Income from Investment Operations 33. Net interest income .053 .063 .068 .079 .088 .077 .054 .035 .031 .048 34.Less Distributions 35. From net interest (.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048) income 36.Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $1.000 period 37.Total return B 5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86 % % % % % % % % % 38.RATIOS AND SUPPLEMENTAL DATA 39.Net assets, end of $ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0 period (000 omitted) 59 86 42 22 38 81 66 44 66 40.Ratio of expenses to .20% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 41.Ratio of expenses to .30% .25 .23 .24 .25 .25 .25 .24 .24 .24 average net assets before C % % % % % % % % % expense reductions 42.Ratio of net interest 7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77 income C % % % % % % % % % to average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS III
43.Selected Per-Share Data 44.Year ended March 31 1995 A 45.Net asset value, beginning of period $ 1.000 46.Income from Investment Operations 47. Net interest income .045 48.Less Distributions 49. From net interest income (.045) 50.Net asset value, end of period $ 1.000 51.Total return B 4.57% 52.RATIOS AND SUPPLEMENTAL DATA 53.Net assets, end of period (000 omitted) $ 40,516 54.Ratio of expenses to average net assets .43% C 55.Ratio of expenses to average net assets before expense reductions .66% C 56.Ratio of net interest income to average net assets 5.13% C
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS I
57.Selected Per-Share Data 58.Years ended March 31 1990A 1991 1992 1993 1994 1995 59.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 60.Income from Investment Operations 61. Net interest income .035 .078 .054 .034 .031 .049 62.Less Distributions 63. From net interest income (.035) (.078) (.054) (.034) (.031) (.049) 64.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 65.Total return B 3.52% 8.11 5.50 3.50 3.14 4.97 % % % % % 66.RATIOS AND SUPPLEMENTAL DATA 67.Net assets, end of period (000 omitted) $ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93 9 7 4 6 7 68.Ratio of expenses to average net assets .06% .18 .18 .18 .18 .18 C % % % % % 69.Ratio of expenses to average net assets before expense .43% .30 .29 .26 .26 .27 reductions C % % % % % 70.Ratio of net interest income to average net assets 8.44% 7.79 5.24 3.43 3.09 4.94 C % % % % %
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS III
71.Selected Per-Share Data 72.Year ended March 31 1995A 73.Net asset value, beginning of period $ 1.000 74.Income from Investment Operations 75. Net interest income .035 76.Less Distributions 77. From net interest income (.035) 78.Net asset value, end of period $ 1.000 79.Total return B 3.51% 80.RATIOS AND SUPPLEMENTAL DATA 81.Net assets, end of period (000 omitted) $ 26,545 82.Ratio of expenses to average net assets .50% C 83.Ratio of expenses to average net assets before expense reductions .79% C 84.Ratio of net interest income to average net assets 5.14% C
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS I
85.Selected Per-Share Data 86.Years ended March 31 1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995 87.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 88.Income from Investment Operations 89. Net interest income .059 .064 .069 .080 .089 .078 .055 .035 .032 .049 90.Less Distributions 91. From net interest (.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049) income 92.Net asset value, end of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 period 93.Total return B 6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99 % % % % % % % % % 94.RATIOS AND SUPPLEMENTAL DATA 95.Net assets, end of $ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1 period (000 omitted) 99 67 50 79 36 95 95 77 23 96.Ratio of expenses to .19% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 97.Ratio of expenses to .28% .23 .23 .24 .24 .25 .24 .23 .23 .24 average net assets before C % % % % % % % % % expense reductions 98.Ratio of net interest 7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00 income to average net C % % % % % % % % % assets
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS III
99.Selected Per-Share Data 100.Years ended March 31 1994A 1995 101.Net asset value, beginning of period $ 1.000 $ 1.000 102.Income from Investment Operations 103. Net interest income .011 .046 104.Less Distributions 105. From net interest income (.011) (.046) 106.Net asset value, end of period $ 1.000 $ 1.000 107.Total return B 1.07% 4.66% 108.RATIOS AND SUPPLEMENTAL DATA 109.Net assets, end of period (000 omitted) $ 89,463 $ 457,286 110.Ratio of expenses to average net assets .50% .50% C 111.Ratio of expenses to average net assets before expense reductions .55% .59% C 112.Ratio of net interest income to average net assets 2.83% 4.94% C
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED TREASURY ONLY - CLASS I
113.Selected Per-Share Data 114.Years ended March 31 1991A 1992E 1993E 1994E 1995D 115.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 116.Income from Investment Operations .055 .045 .031 .032 .033 Net interest income 117.Less Distributions (.055) (.045) (.031) (.032) (.033) From net interest income 118.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 119.Total returnB 5.63% 4.64% 3.10% 3.27% 3.38% 120.RATIOS AND SUPPLEMENTAL DATA 121.Net assets, end of period (000 omitted) $ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285 122.Ratio of expenses to average net assets .03% .20% .20% .20% .20% C C 123.Ratio of expenses to average net assets before expense .42% .42% .42% .42% .42% reductions C C 124.Ratio of net interest income to average net assets 6.34% 4.43% 3.05% 3.22% 5.02% C C
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D AUGUST 1, 1994 TO MARCH 31, 1995 E YEAR ENDED JULY 31 TAX-EXEMPT - CLASS I
125.Selected Per-Share Data 126.Years ended 1986A 1987E 1988E 1989E 1990E 1991E 1992E 1993E 1994E 1995D March 31 127.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 128.Income from .044 .042 .046 .058 .058 .053 .040 .026 .024 .027 Investment Operations Net interest income 129.Less Distributions (.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027) From net interest income 130.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period 131.Total returnB 4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74% % % % % % % % % 132.RATIOS AND SUPPLEMENTAL DATA 133.Net assets, end of $ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815 period 39 53 46 67 36 41 95 31 63 (000 omitted) 134.Ratio of expenses .19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C to average C % % % % % % % % net assets 135.Ratio of expenses .25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C to average net assets C % % % % % % % % before expense reductions 136.Ratio of net 5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C interest income to C % % % % % % % % average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D JUNE 1, 1994 TO MARCH 31, 1995 E YEAR ENDED MAY 31. RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
137.Fiscal years ended 1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995 August 31 138.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 139.Income from .069 .062 .070 .089 .080 .063 .034 .029 .033 .054 Investment Operations Net interest income 140.Less Distributions (.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054) From net interest income 141.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 142.Total return D 7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53 % % % % % % % % % 143.RATIOS AND SUPPLEMENTAL DATA 144.Net assets, end of $ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86 period (000 omitted) 32 68 56 45 2 2 3 3 145.Ratio of expenses to .42 .42 .42 .42 .42 .42 .42% .42 .42 .42 average net assets % % % % % % c % % % 146.Ratio of net interest 6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33 income to average net % % % % % % c % % % assets
A NOVEMBER 1, 1991 TO AUGUST 31, 1992 B YEAR ENDED OCTOBER 31. C ANNUALIZED D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. PERFORMANCE Money market fund performance can be measured as TOTAL RETURN or YIELD. EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in a fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. YIELD refers to the income generated by an investment in a fund over a given period of time, expressed as an annual percentage rate. When a yield assumes that income earned is reinvested, it is called an EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have to earn before taxes to equal a tax-free yield. SEVEN-DAY YIELD illustrates the income earned by an investment in a money market fund over a recent seven-day period. Since money market funds maintain a stable $1.00 share price, current seven-day yields are the most common illustration of money market fund performance. The funds' recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance call Fidelity Client Services at 1-800-843-3001. THE FUNDS IN DETAIL CHARTER EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. Treasury, Government, Domestic, and Money Market are diversified funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. Treasury Only is a diversified fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Tax-Exempt is a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Rated Money Market is a diversified fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. There is a remote possibility that one fund might become liable for a misstatement in the prospectus about another fund. EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the funds' activities, review contractual arrangements with companies that provide services to the funds, and review the funds' performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. The transfer agent will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. For shareholders of all funds (other than Rated Money Market) , you are entitled to one vote for each share you own. For shareholders of Rated Money Market, the number of votes you are entitled to is based upon the dollar value of your investment. Separate votes are taken by each class of shares, fund, or trust, if a matter affects just that class of shares, fund, or trust, respectively. FMR AND ITS AFFILIATES Fidelity Investments is one of the largest investment management organizations in the United States and has its principal business address at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number of different subsidiaries and divisions which provide a variety of financial services and products. The funds employ various Fidelity companies to perform activities required for their operation. The funds are managed by FMR, which handles their business affairs. FMR Texas, Inc. (FMR Texas), located in Irving, Texas, has primary responsibility for providing investment management services. As of August 31 , 19 95 , FMR advised funds having approximately 22 million shareholder accounts with a total value of more than $ 328 billion. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Investments Institutional Operations Company (FIIOC) performs transfer agent servicing functions for Class I shares of each fund. FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (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, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs FIIOC to perform these functions for Class I of Tax-Exempt. UMB is located at 1010 Grand Avenue, Kansas City, Missouri. To carry out the funds' transactions, FMR may use its broker-dealer affiliates and other firms that sell fund shares, provided that a fund receives services and commission rates comparable to those of other broker-dealers . INVESTMENT PRINCIPLES AND RISKS TREASURY ONLY seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant net asset value per share (NAV) of $1.00. The fund invests only in U.S. Treasury securities, including bills, notes, bonds and other direct obligations of the U.S. Treasury that are guaranteed as to payment of principal and interest by the full faith and credit of the U.S. Government. The fund will invest in those securities whose interest is specifically exempt from state and local income taxes under federal law; such interest is not exempt from federal income tax. TREASURY seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Under normal conditions, the fund invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. GOVERNMENT seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. Government obligations issued or guaranteed as to principal and interest by the U.S. Government, including bills, notes, bonds and other U.S. Treasury debt securities, and instruments issued or guaranteed by U.S. Government instrumentalities or agencies, and repurchase agreements backed by those obligations. The fund currently intends to invest exclusively in these instruments. DOMESTIC seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. dollar-denominated money market instruments of domestic issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. RATED MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in obligations of the U.S. Government, its agencies and instrumentalities, repurchase agreements backed by those obligations, and other high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. TAX-EXEMPT seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund invests primarily in high-quality, short-term municipal securities, but also may invest in high-quality, long-term fixed, variable, or floating rate instruments (including tender option bonds) whose features give them interest rates, maturities, and prices similar to short-term instruments. Securities in which the fund invests must be rated in the highest rating category for short-term securities by at least one nationally recognized rating service and rated in one of the two highest categories for short-term securities by another nationally recognized rating service if rated by more than one nationally recognized rating service; or, if unrated, judged by FMR to be equivalent quality to those securities rated in the highest short-term rating category, pursuant to procedures adopted by the Board of Trustees. The fund's policy regarding limiting investments to the highest rating category may be changed upon 90 days' prior notice to shareholders. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. The fund does not currently intend to purchase municipal obligations that are subject to the federal alternative minimum tax. FMR normally invests the fund's assets according to its investment strategy and does not expect to invest in federally taxable obligations. The fund also reserves the right to hold a substantial amount of uninvested cash or to invest more than normally permitted in federally taxable obligations for temporary, defensive purposes. COMMON POLICIES When you sell your shares of the funds, they should be worth the same amount as when you bought them. Of course, there is no guarantee that the funds will maintain a stable $1.00 share price. The funds follow industry-standard guidelines on the quality and maturity of their investments, which are designed to help maintain a stable $1.00 share price. The funds will purchase only high-quality securities that FMR believes present minimal credit risks and will observe maturity restrictions on securities they buy. In general, securities with longer maturities are more vulnerable to price changes, although they may provide higher yields. It is possible that a major change in interest rates or a default on the funds' investments could cause their share prices (and the value of your investment) to change. The funds earn income at current money market rates. Each fund stresses preservation of capital, liquidity, and income (tax-free income in the case of Tax-Exempt) and does not seek the higher yields or capital appreciation that more aggressive investments may provide. Each fund's yield will vary from day to day, and generally reflect s current short-term interest rates and other market conditions. It is important to note that neither the funds nor their yields are guaranteed by the U.S. G overnment. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which a fund may invest, strategies FMR may employ in pursuit of a fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of each fund's limitations and more detailed information about each fund's investments are contained in the funds' SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with a fund's investment objective and policies and that doing so will help a fund achieve its goal. Current holdings and recent investment strategies are described in each fund's financial reports, which are sent to shareholders twice a year. For a free SAI or financial report, call Fidelity Client Services at 1-800-843-3001. MONEY MARKET SECURITIES are high-quality, short-term obligations issued by the U.S. Government, corporations, financial institutions, municipalities, local and state governments, and other entities. These obligations may carry fixed, variable, or floating interest rates. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets so that they are eligible investments for money market funds. A security's credit may be enhanced by a bank, insurance company, or other entity. If the structure does not perform as intended, adverse tax or investment consequences may result. U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S. Government. Not all U.S. Government securities are backed by the full faith and credit of the United States. For example, securities issued by the Federal Farm Credit Bank or by the Federal National Mortgage Association are supported by the instrumentality's right to borrow money from the U.S. Treasury under certain circumstances. However, securities issued by the Financing Corporation are supported only by the credit of the entity that issued them. MUNICIPAL SECURITIES are issued to raise money for a variety of public or private purposes, including general financing for state and local governments, or financing for specific projects or public facilities. They may be issued in anticipation of future revenues, and may be backed by the full taxing power of a municipality, the revenues from a specific project, or the credit of a private organization. The value of some or all municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders. A fund may own a municipal security directly or through a participation interest. FOREIGN SECURITIES may involve different risks than domestic securities, including risks relating to the political and economic conditions of the foreign country involved, which could affect the payment of principal or interest. Issuers of foreign securities include foreign governments, corporations, and banks. RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt may not invest in foreign securities. Money Market and Rated Money Market may not invest in foreign securities unless they are denominated in U.S. dollars. ASSET-BACKED SECURITIES include interests in pools of mortgages, loans, receivables, or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities. VARIABLE AND FLOATING RATE SECURITIES have interest rates that are periodically adjusted either at specific intervals or whenever a benchmark rate changes. These interest rate adjustments are designed to help stabilize the security's price. STRIPPED SECURITIES are the separate income or principal components of a debt security. Their risks are similar to those of other money market securities, although they may be more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund temporarily transfers possession of a portfolio instrument to another party in return for cash. This could increase the risk of fluctuation in the fund's yield or in the market value of its assets. RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not intend to engage in reverse repurchase agreements. OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of deposit, bankers' acceptances, and time deposits. MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land, equipment, or facilities. If the municipality stops making payments or transfers its obligations to a private entity, the obligation could lose value or become taxable. OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and possessions such as Guam, the Virgin Islands, and Puerto Rico, and their political subdivisions and public corporations. PUT FEATURES entitle the holder to put (sell back) a security to the issuer or a financial intermediary. In exchange for this benefit, a fund may pay periodic fees or accept a lower interest rate. The credit quality of the investment may be affected by the creditworthiness of the put provider. Demand features, standby commitments, and tender options are types of put features. PRIVATE ENTITIES may be involved in some municipal securities. For example, industrial revenue bonds are backed by private entities, and resource recovery bonds often involve private corporations. The viability of a project or tax incentives could affect the value and credit quality of these securities. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities, and some other securities, may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to a fund. RESTRICTION : A fund may not purchase a security if, as a result, more than 10% of its net assets would be invested in illiquid securities. WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in which payment and delivery for the securities take place at a future date. The market value of a security could change during this period, which could affect the market value of a fund's assets. FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry are subject to various risks related to that industry, such as government regulation, changes in interest rates, and exposure on loans, including loans to foreign borrowers. If a fund invests substantially in this industry, its performance may be affected by conditions affecting the industry. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry or type of project. Economic, business, or political changes can affect all securities of a similar type. RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt) may not invest more than 5% of its total assets in any one issuer, except that, each fund (other than Treasury, Treasury Only and Tax-Exempt) may invest up to 10% of its total assets in the highest quality securities of a single issuer for up to three business days. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. These limitations do not apply to U.S. Government securities. Tax-Exempt may invest more than 25% of its total assets in tax-free securities that finance similar types of projects. BORROWING. Each fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements, and may make additional investments while borrowings are outstanding. RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. LENDING . A fund may lend money to other funds advised by FMR. RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraphs restate all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraphs, can be changed without shareholder approval. Treasury Only seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant NAV of $1.00. Each of Treasury, Government, Domestic, Money Market, and Rated Money Market seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Tax-Exempt seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. E ach of Domestic, Money Market, and Rated Money Market will invest more than 25% of its total assets in obligations of companies in the financial services industry. Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the funds pay fees related to their daily operations. Expenses paid out of each class's assets are reflected in that class's share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to an affiliate who provides assistance with these services. Each fund also pays OTHER EXPENSES, which are explained below. MANAGEMENT FEE FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary responsibility for providing investment management for each fund, while FMR retains responsibility for providing the fund s with other management services. FMR pays FMR Texas 50% of its management fee (before expense reimbursements) for these services. In the fiscal year ended March 31 , 1995 (August 31, 1995 for Rated Money Market), FMR paid FMR Texas the following percentages of each fund's average net assets. Fund Name Percentage of Average Net Assets Treasury 0.10% Government 0.10% Domestic 0.10% Money Market 0.10% Tax-Exempt 0.10% Treasury Only 0.21% Rated Money Market 0.21% OTHER EXPENSES While the management fee is a significant component of each fund's annual operating costs, the funds have other expenses as well. FIIOC performs transfer agency, dividend disbursing and shareholder servicing functions for Class I shares of each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for Class I of each Taxable Fund, and maintains the general accounting records for Class I of each Taxable Fund. These expenses are paid by FMR on behalf of Rated Money Market and Treasury Only pursuant to its management contract. In the fiscal year ended March 31, 1995, the following fees were paid to FIIOC and FSC: Fund Name Percentage of Percentage of Class I's the Fund's Average Net Average Net Assets Assets Paid to Paid to FIIOC FSC Treasury 0.03% 0.01% Government 0.01% 0.01% Domestic 0.03% 0.01% Money Market 0.01% 0.01% UMB has entered into sub-arrangements pursuant to which FIIOC performs transfer agency, dividend disbursing and shareholder services for Class I of Tax-Exempt. UMB has entered into sub-arrangements pursuant to which FSC calculates the NAV and dividends for Class I of Tax-Exempt and maintains Tax-Exempt's general accounting records. All of the fees are paid to FIIOC and FSC by UMB, which is reimbursed by Class I or the fund, as appropriate, for such payments. In the fiscal year ended March 31, 1995, fees paid by UMB to FIIOC on behalf of Class I of Tax-Exempt amounted to 0.02% of Class I's average net assets, and fees paid by UMB to FSC on behalf of Tax-Exempt amounted to 0.01% of its average net assets. Class I of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Each plan recognizes that FMR may use its resources, including management fees, to pay expenses associated with the sale of Class I shares. This may include reimbursing FDC for payments to third parties, such as banks or broker-dealers, that provide shareholder support services or engage in the sale of the funds' Class I shares. The Board of Trustees of each fund has not authorized such payments. Each fund, other than Rated Money Market and Treasury Only, also pays other expenses, such as legal, audit, and custodian fees; in some instances, proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. Rated Money Market and Treasury Only also pay other expenses such as brokerage fees and commissions, interest on borrowings (only Treasury Only), taxes, and the compensation of trustees who are not affiliated with Fidelity. YOUR ACCOUNT HOW TO BUY SHARES If you are investing through a securities dealer, financial or other institution (Financial Institution), contact that Financial Institution directly. Certain features of a fund may be modified when it is made available through a program of services offered by a Financial Institution, and administrative charges (in addition to payments the Financial Institution may receive pursuant to the Distribution and Service Plan) may be imposed for the services rendered. In particular, a broker may charge transaction fees with respect to the purchase and sale of fund shares. It is the responsibility of your Financial Institution to submit purchases and redemptions in order for you to receive the next determined NAV. EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The funds are managed to keep share prices stable at $1.00. Class I shares are sold without a sales charge. Shares are purchased at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. Share certificates are not available for the funds. IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or accompanied by a completed, signed application, which should be forwarded to: Fidelity Client Services c/o Fidelity Institutional Money Market Funds FIIOC P.O. Box 1182 Boston, MA 02103-1182 IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (small solid bullet) Place a purchase order and wire money into your account, or (small solid bullet) Open an account by exchanging from the same class of any fund that is offered through this prospectus. INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE SYSTEM. Checks will not be accepted as a means of investment. BY WIRE . For wiring information and instructions, you should call the Financial Institution through which you trade or if you trade directly through Fidelity, call Fidelity Client Services. There is no fee imposed by the funds for wire purchases. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire purchases. Fidelity Client Services: Nationwide 1-800-843-3001 In order to receive same-day acceptance of your investment, you must call Fidelity Client Services and place your order between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only ; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic and Money Market; 8:30 a.m. and 4:00 p.m. Eastern time for Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the funds are open for business. If Fidelity Client Services is not advised of your purchase prior to the stated cutoff time, your purchase will not be accepted by the transfer agent. All wires must be received by the transfer agent in good order at the applicable fund's designated wire bank before the close of the Federal Reserve Wire System on that day . In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late-trading arrangements. In order to receive same-day acceptance of your purchase order for Treasury after 3:00 p.m. Eastern time, you must call Fidelity Client Services as early in the day as possible. Wired money for purchase orders for Treasury placed after 3:00 p.m. Eastern time that is not properly identified with a wire reference number will be returned to the bank from which it was wired and will not be credited to your account. You are advised to wire funds as early in the day as possible, and to provide advance notice to Fidelity Client Services for purchases over $10 million ($5 million for Treasury Only). You will earn dividends on the day of your investment, provided (i) you telephone Fidelity Client Services and place your trade between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the fund s are open for business, and (ii) the fund's designated wire bank receives the wire before the close of the Federal Reserve Wire System on the day your purchase order is accepted by the transfer agent. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $1,000,000* MINIMUM BALANCE $1,000,000 * THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE INFORMATION REGARDING THIS WAIVER. HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. BY TELEPHONE. Redemption requests may be made by calling Fidelity Client Services at the phone number listed on page . You must designate on your account application the U.S. commercial bank account(s) into which you wish the redemption proceeds to be deposited. Fidelity Client Services will then notify you that this feature has been activated and that you may request wire redemptions. You may change the bank account(s) designated to receive redemption proceeds at any time prior to making a redemption request. You should send a letter of instruction, including a signature guarantee, to Fidelity Client Services at the address shown on page . You should be able to obtain a signature guarantee from a bank, broker, dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. There is no fee imposed by the funds for wiring of redemption proceeds. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire redemptions. Redemption proceeds will be wired via the Federal Reserve Wire System to your bank account of record. If your redemption request is received by telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time fo r Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, redemption proceeds will normally be wired on the same day your redemption request is received by the transfer agent. A fund reserves the right to take up to seven days to pay you if making immediate payment would adversely affect the fund. In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late trading arrangements. You are advised to place your trades as early in the day as possible. INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES STATEMENTS AND REPORTS that the transfer agent sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except a reinvestment, that affects your account balance or your account registration) (small solid bullet) Account statements (monthly) (small solid bullet) Financial reports (every six months) To reduce expenses, only one copy of most financial reports will be mailed, even if you have more than one account in a fund. Call Fidelity Client Services at 1-800-843-3001 if you need additional copies of financial reports or historical account information. SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged with FIIOC for institutions that wish to open multiple accounts (a master account and sub-accounts). You may be required to enter into a separate agreement with FIIOC. Charges for these services, if any, will be determined based on the level of services to be rendered. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES Each fund distributes substantially all of its net investment income and capital gains, if any, to shareholders each year. Income dividends are declared daily and paid monthly. Income dividends declared are accrued daily throughout the month and are normally distributed on the first business day of the following month. Based on prior approval of each fund, dividends relating to Class I shares redeemed during the month can be distributed on the day of redemption. Each fund reserves the right to limit this service. DISTRIBUTION OPTIONS When you open an account, specify on your account application how you want to receive your distributions. The funds offer two options: 1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if any, will be automatically reinvested in additional shares of the same class of the fund. If you do not indicate a choice on your application, you will be assigned this option. 2. CASH OPTION. You will be sent a wire for your dividend and capital gain distributions, if any. Dividends will be reinvested at each fund's Class I NAV on the last day of the month. Capital gain distributions, if any, will be reinvested at the NAV as of the record date of the distribution. TAXES As with any investment, you should consider how an investment in the funds could affect you. Below are some of the funds' tax implications. TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is distributed to shareholders as income dividends. Interest that is federally tax-free remains tax-free when it is distributed. Distributions from the Taxable Funds, however, are subject to federal income tax and may also be subject to state or local taxes. If you live outside the United States, your distributions from these funds could also be taxed by the country in which you reside. For federal tax purposes, the income and short-term capital gain distributions from each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds results in taxable distributions. Short-term capital gains and a portion of the gain on bonds purchased at a discount are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. Mutual fund dividends from U.S. Government securities are generally free from state and local income taxes. However, particular states may limit this benefit, and some types of securities, such as repurchase agreements and some agency-backed securities, may not qualify for the benefit. Ginnie mae securities and other mortgage-backed securities are notable exceptions in most states. In addition, some states may impose intangible property taxes. You should consult your own tax adviser for details and up-to-date information on the tax laws in your state. During the fiscal year ended March 31, 1995, 27% of Treasury's, 20% of Government's, 100% of Treasury Only's, 2% of Domestic's, and 1% of Money Market's income distributions were derived from interest on U.S. Government securities which is generally exempt from state income tax. During the fiscal year ended August 31, 1995, 4% of Rated Money Market's income distributions w as derived from interest on U.S. Government s ecurities which is generally exempt from state income tax. Distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. Every January, the transfer agent will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. A portion of Tax-Exempt's dividends may be free from state or local taxes. Income from investments in your state are often tax-free to you. Each year, the transfer agent will send you a breakdown of Tax-Exempt's income from each state to help you calculate your taxes. During the fiscal year ended March 31, 1995, 100% of Tax-Exempt's income dividends was free from federal income tax. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, a fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day that both the Federal Reserve Bank of New York (New York Fed) (for all Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed) (for Tax-Exempt) and the New York Stock Exchange (NYSE) are open. The following holiday closings have been scheduled for 1996: New Year's Day, Martin Luther King 's Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedule to be observed in the future, the Kansas City Fed, the New York Fed, or the NYSE may modify its holiday schedule at any time. On any day that the Kansas City Fed, the New York Fed, or the NYSE closes early, the principal government securities markets close early (such as on days in advance of holidays generally observed by participants in such markets), or as permitted by the SEC, the right is reserved to advance the time on that day by which purchase and redemption orders must be received. To the extent that portfolio securities are traded in other markets on days when the Kansas City Fed, the New York Fed, or the NYSE is closed, each fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. Certain Fidelity funds may follow different holiday closing schedules. A CLASS'S NAV is the value of a single share. The NAV of Class I of each fund is computed by adding Class I's pro rata share of the value of the fund's investments, cash, and other assets, subtracting Class I's pro rata share of the value of the fund's liabilities, subtracting the liabilities allocated to Class I, and dividing the result by the number of Class I shares of that fund that are outstanding. Each fund values its portfolio securities on the basis of amortized cost. This method minimizes the effect of changes in a security's market value and helps each fund maintain a stable $1.00 share price. THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to sell one share) of Class I are its NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your social security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require a fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer agent may only be liable for losses resulting from unauthorized transactions if they do not follow reasonable procedures designed to verify the identity of the caller. Fidelity and the transfer agent will request personalized security codes or other information, and may also record calls. You should verify the accuracy of the confirmation statements immediately after receipt. If you do not want the ability to redeem and exchange by telephone, call the transfer agent for instructions. Additional documentation may be required from corporations, associations and certain fiduciaries. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. Each fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of a fund. TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to initiate all trades as early in the day as possible and to notify Fidelity Client Services in advance of transactions in excess of $10 million ( $5 million for Treasury Only. ) WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) All of your purchases must be made by federal funds wire; checks will not be accepted for purchases. (small solid bullet) If your wire is not received by the close of the Federal Reserve Wire System, you could be liable for any losses or fees a fund or the transfer agent has incurred or for interest and penalties. Net interest income for dividend purposes is determined by FSC on a daily basis and shall be payable to shareholders of record at the time of its declaration (including, for this purpose, holders of Class I shares purchased, but excluding holders of shares redeemed, on that day). The income declared for Treasury is based on estimates of net interest income for the fund. Actual income may differ from estimates, and differences, if any, will be included in the calculation of subsequent dividends. Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market ; and 5:00 p.m. Eastern time for Treasury, will be entitled to dividends declared that day. Shares of Rated Money Market purchased between 3:00 p.m. and 4:00 p.m. Eastern time begin to earn income dividends on the following business day. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) Shares of Rated Money Market redeemed before 3:00 p.m. Eastern time do not receive the dividend declared on the day of redemption ; s hares of Rated Money Market redeemed between 3:00 p.m. and 4:00 p.m. Eastern time do receive the dividends declared on the day of redemption. (small solid bullet) Shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Tax-Exempt do not receive the dividend declared on the day of redemption. (small solid bullet) A fund may withhold redemption proceeds until it is reasonably assured that investments credited to your account have been received and collected. When the NYSE, the Kansas City Fed, or the New York Fed is closed (or when trading is restricted) for any reason other than its customary weekend or holiday closings, or under any emergency circumstances as determined by the SEC to merit such action, a fund may suspend redemption or postpone payment dates. In cases of suspension of the right of redemption, the request for redemption may either be withdrawn or payment may be made based on the NAV next determined after the termination of the suspension. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the account may be closed and the proceeds may be wired to your bank account of record. You will be given 30 days' notice that your account will be closed unless it is increased to the minimum. THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. EXCHANGE RESTRICTIONS As a shareholder you have the privilege of exchanging Class I shares of any fund offered through this prospectus at no charge for Class I shares of any other fund offered through this prospectus. An exchange involves the redemption of all or a portion of the shares of one fund and the purchase of shares of another fund. BY TELEPHONE. Exchanges may be requested on any day a fund is open for business by calling Fidelity Client Services at the number listed on page between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury. BY MAIL. You may exchange shares on any business day by submitting written instructions with an authorized signature which is on file for that account. Written requests for exchanges should contain the fund name, account number, the number of shares to be redeemed, and the name of the fund to be purchased. Written requests for exchange should be mailed to Fidelity Client Services at the address on page . WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class I shares will be redeemed at the next determined NAV after your order is received and accepted by the transfer agent. Shares of the fund to be acquired will be purchased at its next determined NAV after redemption proceeds are made available. You should note that, under certain circumstances, a fund may take up to seven days to make redemption proceeds available for the exchange purchase of shares of another fund. In addition, please note the following: (small solid bullet) Exchanges will not be permitted until a completed and signed account application is on file. (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) You will earn dividends in the acquired fund in accordance with the fund's customary policy, normally on the day the exchange request is received. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Each fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if a fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to a fund. Although the funds will attempt to give you prior notice whenever they are reasonably able to do so, they may impose these restrictions at any time. The funds reserve the right to terminate or modify the exchange privilege in the future. 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 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 s or FDC. This Prospectus and the related SAI do not constitute an offer by the fund s or by FDC to sell or to buy shares of the fund s to any person to whom it is unlawful to make such offer. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS I CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, 11 ............................ Cover Page; Table of Contents 12 ............................ * 13 a - c ............................ Investment Policies and Limitations d ............................ Portfolio Transactions 14 a - c ............................ Trustees and Officers 15 a ............................ * b ............................ Description of the Trusts c ............................ Trustees and Officers 16 a i ............................ FMR ii ............................ Trustees and Officers iii ............................ Management Contracts b,c,d ............................ Management Contracts e ............................ * f ............................ Distribution and Service Plans g ............................ * h ............................ Description of the Trusts i ............................ Management Contracts 17 a ............................ Portfolio Transactions b ............................ Portfolio Transactions c ............................ Portfolio Transactions d, e ............................ * 18 a ............................ Description of the Trusts b ............................ * 19 a ............................ Additional Purchase, Exchange and Redemption Information b ............................ Additional Purchase, Exchange and Redemption Information; Valuation c ............................ * 20 Distributions and Taxes 21 a, b ............................ Distribution and Service Plans; Management Contracts c ............................ * 22 ............................ Performance 23 ............................ Financial Statements
* Not Applicable FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS I FIDELITY INSTITUTIONAL CASH PORTFOLIOS: Domestic, Government, Money Market, Treasury FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS: Tax-Exempt DAILY MONEY FUND: Treasury Only FIDELITY MONEY MARKET TRUST: Rated Money Market STATEMENT OF ADDITIONAL INFORMATION NOVEMBER 1, 1995 This Statement of Additional Information (SAI) is not a prospectus but should be read in conjunction with the funds' current Prospectus (dated November 1, 1995). Please retain this document for future reference. The funds' financial statements and financial highlights, included in the Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) , are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation Performance Additional Purchase, Exchange and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contracts Contracts with FMR Affiliates Distribution and Service Plans Description of the Trusts Financial Statements Appendix INVESTMENT ADVISER Fidelity Management & Research Company (FMR) SUB-ADVISER FMR Texas Inc. (FMR Texas) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT FOR TAXABLE FUNDS Fidelity Investments Institutional Operations Company (FIIOC) TRANSFER AGENT FOR TAX-EXEMPT UMB Bank, n.a. (UMB) I MM I -ptb-1195 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 shall be determined immediately after and as a result of a 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 each fund's investment policies and limitations. Each fund's fundamental investment policies and limitations may not be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940 (1940 Act)) of each fund. However, except for the fundamental investment limitations set forth below, the investment policies and limitations described in this SAI are not fundamental, and may be changed without shareholder approval. INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. 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 from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (v) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (vi) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (vii) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (viii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (ix) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (x) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. Treasury, under normal conditions, invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. These operating policies may be changed upon 90 days' notice to shareholders. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: GOVERNMENT THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuers together own more than 5% of such issuer's securities. (x i i) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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 Act in the disposition of restricted securities; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY MARKET THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under th e 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or fund for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TAX-EXEMPT THE FOLLOWING ARE TAX-EXEMPT'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) if, as a result thereof, (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 as permitted under the 1940 Act ; (3) make short sales of securities; (4) purchase any securities on margin, except for such short-term credits as are necessary for the clearance of transactions; (5) borrow money, except for temporary or emergency purposes (not for leveraging or investment) in an amount not to exceed 33 1/3% of the value of the fund's total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed 33 1/3% of the fund's assets by reason of a decline in net assets will be reduced within three days (exclusive of Sundays and Holidays) to the extent necessary to comply with the 33 1/3% limitation; (6) 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; (7) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government, or any of its agencies, instrumentalities, territories or possessions, or issued or guaranteed by a state government or political subdivision thereof) if as a result more than 25% of the value of its total assets would be invested in securities of companies having their principal business activities in the same industry; (8) purchase or sell real estate, but this shall not prevent the fund from investing in municipal bonds or other obligations secured by real estate or interest therein; (9) purchase or sell physical commodities; (10) 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 limit does not apply to purchases of debt securities or to repurchase agreements); or (11) invest in oil, gas or other mineral exploration or development programs. (12) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. For purposes of limitations (1) and (7), FMR identifies the issuer of a security depending on the terms and conditions of the security. In identifying the issuer, FMR will consider the entity or entities responsible for payment of interest and repayment of principal and the source of such payments; the way in which assets and revenues of an issuing political subdivision are separated from those of other political entities; and whether a governmental body is guaranteeing the security. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) 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. (iii) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (iv) The fund does not currently intend to engage in repurchase agreements or make loans, but this limitation does not apply to purchases of debt securities. (v) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (vi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TREASURY ONLY THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) issue senior securities, except as permitted under the 1940 Act ; (2) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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; 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. (8) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities. (iii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies, and limitations as the fund. Subject to revision upon 90 days' notice to shareholders, Treasury Only will not engage in reverse repurchase agreements. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF RATED MONEY MARKET THE FOLLOWING ARE RATED MONEY MARKET'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) 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 as permitted under the 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services 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; (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 limit does not apply to purchases of debt securities or to repurchase agreements. (9) invest in oil, gas or other mineral exploration or development programs. (10) write or purchase any put or call option. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options. (11) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iii) 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. (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 lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vi) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in securities of business enterprises that, including predecessors, have a record of less than three years continuous operation. (vii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (v ii i) 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. ( ix ) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. ( x ) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For purposes of limitation (vi), pass-through entities and other special purposes vehicles or pools of financial assets, such as issuers of asset-backed securities or investment companies, are not considered "business enterprises." For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . Each fund's investments must be consistent with its investment objective and policies. Accordingly, not all of the security types and investment techniques discussed below are eligible investments for each of the funds. 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 include 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. ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities and, in certain cases, supported by letters of credit, surety bonds, or other credit enhancements. The value of asset-backed securities may also be affected by the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities providing the credit support. DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a delayed-delivery or when-issued basis. These transactions involve a commitment by a fund to purchase or sell specific securities at a predetermined price or yield, with payment and delivery taking place after the customary settlement period for that type of security. Typically, no interest accrues to the purchaser until the security is delivered. When purchasing securities on a delayed-delivery basis, each fund assumes the rights and risks of ownership, including the risk of price and yield fluctuations. Because a fund is not required to pay for securities until the delivery date, these risks are in addition to the risks associated with the fund's other investments. If a fund remains substantially fully invested at a time when delayed-delivery purchases are outstanding, the delayed-delivery purchases may result in a form of leverage. When delayed-delivery purchases are outstanding, the fund will set aside appropriate liquid assets in a segregated custodial account to cover its purchase obligations. When a fund has sold a security on a delayed-delivery basis, the fund does not participate in further gains or losses with respect to the security. If the other party to a delayed-delivery transaction fails to deliver or pay for the securities, the fund could miss a favorable price or yield opportunity, or could suffer a loss. Each fund may renegotiate delayed-delivery transactions after they are entered into, and may sell underlying securities before they are delivered, which may result in capital gains or losses. DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S. dollar-denominated time deposits, certificates of deposit, and bankers' acceptances of U.S. banks and their branches located outside of the United States, U.S. branches and agencies of foreign banks, and foreign branches of foreign banks. A fund may also invest in U.S. dollar-denominated securities issued or guaranteed by other U.S. or foreign issuers, including U.S. and foreign corporations or other business organizations, foreign governments, foreign government agencies or instrumentalities, and U.S. and foreign financial institutions, including savings and loan institutions, insurance companies, mortgage bankers, and real estate investment trusts, as well as banks. The obligations of foreign branches of U.S. banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by governmental regulation. Payment of interest and principal on these obligations may also be affected by governmental action in the country of domicile of the branch (generally referred to as sovereign risk). In addition, evidence of ownership of portfolio securities may be held outside of the United States and a fund may be subject to the risks associated with the holding of such property overseas. Various provisions of federal law governing the establishment and operation of U.S. branches do not apply to foreign branches of U.S. banks. Obligations of U.S. branches and agencies of foreign banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by federal and state regulation, as well as by governmental action in the country in which the foreign bank has its head office. Obligations of foreign issuers involve certain additional risks. These risks may include future unfavorable political and economic developments, withholding taxes, seizures of foreign deposits, currency controls, interest limitations, or other governmental restrictions that might affect payment of principal or interest, or the ability to honor a credit commitment. Additionally, there may be less public information available about foreign entities. Foreign issuers may be subject to less governmental regulation and supervision than U.S. issuers. Foreign issuers also generally are not bound by uniform accounting, auditing, and financial reporting requirements comparable to those applicable to U.S. issuers. FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not intend to invest in securities whose interest is federally taxable. However, from time to time on a temporary basis, Tax-Exempt may invest a portion of its assets in fixed-income obligations whose interest is subject to federal income tax. Should Tax-Exempt invest in federally taxable obligations, it would purchase securities that, in FMR's judgment, are of high quality. These obligations would include those issued or guaranteed by the U.S. Government or its agencies or instrumentalities and repurchase agreements backed by such obligations. Proposals to restrict or eliminate the federal income tax exemption for interest on municipal obligations are introduced before Congress from time to time. Proposals also may be introduced before state legislatures that would affect the state tax treatment of Tax-Exempt's distributions. If such proposals were enacted, the availability of municipal obligations and the value of Tax-Exempt's holdings would be affected, and the Trustees would reevaluate Tax-Exempt's investment objectives and policies. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. 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 instruments. In determining the liquidity of a fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the funds to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days. Also, FMR may determine some restricted securities, municipal lease obligations, and time deposits to be illiquid. In the absence of market quotations, illiquid investments are valued for purposes of monitoring amortized cost valuation at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, a fund were in a position where more than 10% of its net assets were invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the SEC, each fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Tax-Exempt will participate in the interfund borrowing program only as a borrower. 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. Treasury, Treasury Only, Domestic, Money Market, Government, and Rated Money Market will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements). A fund will borrow through the program only when the costs are equal to or lower than the cost of bank loans. 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. Treasury, Government, and Treasury Only do not currently intend to participate in the program as lenders. MARKET DISRUPTION RISK. The value of municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders in the event of a bankruptcy. Municipal bankruptcies are relatively rare, and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear and remain untested. Further, the application of state law to municipal issuers could produce varying results among the states or among municipal securities issuers within a state. These legal uncertainties could affect the municipal securities market generally, certain specific segments of the market, or the relative credit quality of particular securities. Any of these effects could have a significant impact on the prices of some or all of the municipal securities held by a fund, making it more difficult for the fund to maintain a stable net asset value per share. MONEY MARKET SECURITIES are high-quality, short-term obligations. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets. For example, put features can be used to modify the maturity of a security, or interest rate adjustment features can be used to enhance price stability. If the structure does not perform as intended, adverse tax or investment consequences may result. Neither the Internal Revenue Service (IRS) nor any other regulatory authority has ruled definitively on certain legal issues presented by structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds. MUNICIPAL LEASES and participation interests therein may take the form of a lease, an installment purchase, or a conditional sale contract and are issued by state and local governments and authorities to acquire land or a wide variety of equipment and facilities. Generally, the funds will not hold such obligations directly as a lessor of the property, but will purchase a participation interest in a municipal obligation from a bank or other third party. A participation interest gives a fund a specified, undivided interest in the obligation in proportion to its purchased interest in the total amount of the obligation. Municipal leases frequently have risks distinct from those associated with general obligation or revenue bonds. State constitutions and statutes set forth requirements that states or municipalities must meet to incur debt. These may include voter referenda, interest rate limits, or public sale requirements. Leases, installment purchases, or conditional sale contracts (which normally provide for title to the leased asset to pass to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting their constitutional and statutory requirements for the issuance of debt. Many leases and contracts include "non-appropriation clauses" providing that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for such purposes by the appropriate legislative body on a yearly or other periodic basis. Non-appropriation clauses free the issuer from debt issuance limitations. MUNICIPAL SECTORS: ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been experiencing, and will continue to experience, increased competitive pressures. Federal legislation in the last two years will open transmission access to any electricity supplier, although it is not presently known to what extent competition will evolve. Other risks include: (a) the availability and cost of fuel, (b) the availability and cost of capital, (c) the effects of conservation on energy demand, (d) the effects of rapidly changing environmental, safety, and licensing requirements, and other federal, state, and local regulations, (e) timely and sufficient rate increases, and (f) opposition to nuclear power. HEALTH CARE INDUSTRY. The health care industry is subject to regulatory action by a number of private and governmental agencies, including federal, state, and local governmental agencies. A major source of revenues for the health care industry is payments from the Medicare and Medicaid programs. As a result, the industry is sensitive to legislative changes and reductions in governmental spending for such programs. Numerous other factors may affect the industry, such as general and local economic conditions; demand for services; expenses (including malpractice insurance premiums); and competition among health care providers. In the future, the following elements may adversely affect health care facility operations: adoption of legislation proposing a national health insurance program; other state or local health care reform measures; medical and technological advances which dramatically alter the need for health services or the way in which such services are delivered; changes in medical coverage which alter the traditional fee-for-service revenue stream; and efforts by employers, insurers, and governmental agencies to reduce the costs of health insurance and health care services. HOUSING. Housing revenue bonds are generally issued by a state, county, city, local housing authority, or other public agency. They generally are secured by the revenues derived from mortgages purchased with the proceeds of the bond issue. It is extremely difficult to predict the supply of available mortgages to be purchased with the proceeds of an issue or the future cash flow from the underlying mortgages. Consequently, there are risks that proceeds will exceed supply, resulting in early retirement of bonds, or that homeowner repayments will create an irregular cash flow. Many factors may affect the financing of multi-family housing projects, including acceptable completion of construction, proper management, occupancy and rent levels, economic conditions, and changes to current laws and regulations. EDUCATION. In general, there are two types of education-related bonds; those issued to finance projects for public and private colleges and universities, and those representing pooled interests in student loans. Bonds issued to supply educational institutions with funds are subject to the risk of unanticipated revenue decline, primarily the result of decreasing student enrollment or decreasing state and federal funding. Among the factors that may lead to declining or insufficient revenues are restrictions on students' ability to pay tuition, availability of state and federal funding, and general economic conditions. Student loan revenue bonds are generally offered by state (or substate) authorities or commissions and are backed by pools of student loans. Underlying student loans may be guaranteed by state guarantee agencies and may be subject to reimbursement by the United States Department of Education through its guaranteed student loan program. Others may be private, uninsured loans made to parents or students which are supported by reserves or other forms of credit enhancement. Recoveries of principal due to loan defaults may be applied to redemption of bonds or may be used to re-lend, depending on program latitude and demand for loans. Cash flows supporting student loan revenue bonds are impacted by numerous factors, including the rate of student loan defaults, seasoning of the loan portfolio, and student repayment deferral during periods of forbearance. Other risks associated with student loan revenue bonds include potential changes in federal legislation regarding student loan revenue bonds, state guarantee agency reimbursement and continued federal interest and other program subsidies currently in effect. WATER AND SEWER. Water and sewer revenue bonds are often considered to have relatively secure credit as a result of their issuer's importance, monopoly status, and generally unimpeded ability to raise rates. Despite this, lack of water supply due to insufficient rain, run-off, or snow pack is a concern that has led to past defaults. Further, public resistance to rate increases, costly environmental litigation, and federal environmental mandates are challenges faced by issuers of water and sewer bonds. TRANSPORTATION. Transportation debt may be issued to finance the construction of airports, toll roads, highways or other transit facilities. Airport bonds are dependent on the general stability of the airline industry and on the stability of a specific carrier who uses the airport as a hub. Air traffic generally follows broader economic trends and is also affected by the price and availability of fuel. Toll road bonds are also affected by the cost and availability of fuel as well as toll levels, the presence of competing roads, and the general economic health of the area. Fuel costs and availability also affect other transportation-related securities, as does the presence of alternate forms of transportation, such as public transportation. PUT FEATURES entitle the holder to sell a security back to the issuer or a third party at any time or at specified intervals. They are subject to the risk that the put provider is unable to honor the put feature (purchase the security). Put providers often support their ability to buy securities on demand by obtaining letters of credit or other guarantees from other entities. Demand features, standby commitments, and tender options are types of put features. 1.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of Trustees, the funds may purchase only high-quality securities that FMR believes present minimal credit risks. To be considered high-quality, a security must be rated in accordance with applicable rules in one of the two highest categories for short-term securities by at least two nationally recognized rating services (or by one, if only one rating service has rated the security); or, if unrated, judged to be of equivalent quality by FMR. High-quality securities are divided into "first tier" and "second tier" securities. First tier securities are those deemed to be in the highest rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier securities are those deemed to be in the second highest rating category (e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be determined to be either first or second tier based on applicable regulations. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may not invest more than 5% of its total assets in second tier securities. In addition, each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market fund may not invest more than 1% of its total assets or $1 million (whichever is greater) in the second tier securities of a single issuer. Each fund currently intends to limit its investments to securities with remaining maturities of 397 days or less, and to maintain a dollar-weighted average maturity of 90 days or less. When determining the maturity of a security, a fund may look to an interest rate reset or demand feature. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a security and simultaneously commits 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. To protect the fund from the risk that the original seller will not fulfill its obligation, the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to a fund in connection with bankruptcy proceedings), it is each fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. 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, a fund 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, a fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. However, in general, each fund anticipates holding restricted securities to maturity or selling them in an exempt transaction. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. A fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short. Short sales could be used to protect the net asset value per share of the fund in anticipation of increased interest rates, without sacrificing the current yield of 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. SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of the credit of a bank or another entity in determining whether to purchase a security supported by a letter of credit guarantee, insurance or other source of credit or liquidity. In evaluating the credit of a foreign bank or other foreign entities, FMR will consider whether adequate public information about the entity is available and whether the entity may be subject to unfavorable political or economic developments, currency controls, or other government restrictions that might affect its ability to honor its commitment. STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by separating the income and principal components of a debt instrument and selling them separately. U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities), are created when the coupon payments and the principal payment are stripped from an outstanding Treasury bond by the Federal Reserve Bank. Bonds issued by the government agencies also may be stripped in this fashion. Privately stripped government securities are created when a dealer deposits a Treasury security or federal agency security with a custodian for safekeeping and then sells the coupon payments and principal payment that will be generated by this security. Proprietary receipts, such as Certificates of Accrual on Treasury Securities (CATS), Treasury Investment Growth Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped U.S. Treasury securities that are separated into their component parts through trusts created by their broker sponsors. Bonds issued by the government agencies also may be stripped in this fashion. Because of the SEC's views on privately stripped government securities, a fund must evaluate them as it would non-government securities pursuant to regulatory guidelines applicable to all money market funds. A fund currently intends to purchase only those privately stripped government securities that have either received the highest rating from two nationally recognized rating services (or one, if only one has rated the security) or, if unrated, have been judged to be of equivalent quality by FMR pursuant to procedures adopted by the Board of Trustees. VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of the interest rate paid on the security. Variable rate securities provide for a specified periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate. Some variable or floating rate securities have put features. ZERO COUPON BONDS do not make regular interest payments. Instead, they are sold at a deep 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 very volatile when interest rates change. In calculating its daily dividend, a fund takes into account as income a portion of the difference between a zero coupon bond's purchase price and its face value. 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 has granted investment management authority to the sub-adviser (see the section entitled "Management Contracts"), and the 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 below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. Securities purchased and sold by a fund generally will be traded on a net basis (i.e., without commission). 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; and the reasonableness of any commissions. The funds may execute portfolio transactions with broker-dealers who provide research and execution services to the funds or other 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 accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). FMR maintains a listing of broker-dealers who provide such services on a regular basis. However, as many transactions on behalf of the funds are placed with broker-dealers (including broker-dealers on the list) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such broker-dealers solely because such services were provided. The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the funds may be useful to FMR in rendering investment management services to the funds 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 the funds. 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. Subject to applicable limitations of the federal securities laws, broker-dealers may receive 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 the funds 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 the funds and 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. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the funds or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with FBSI and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by nonaffiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. 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. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute fund transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. Each fund's Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the funds and review the commissions paid by each fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For fiscal years ended March 31, 1995, 1994, and 1993 (August 31, 1995, 1994, and 1993 for Rated Money Market), the funds paid no brokerage commissions. During fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) , the funds paid no fees to brokerage firms that provided research. 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, investment decisions for each fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and 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 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 Fidelity Service Company (FSC) normally determines a fund's net asset value per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The valuation of portfolio securities is determined as of these times for the purpose of computing each fund's NAV. Portfolio securities and other assets are valued on the basis of amortized cost. This technique involves initially valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. The amortized cost value of an instrument may be higher or lower than the price a fund would receive if it sold the instrument. During periods of declining interest rates, a fund's yield based on amortized cost valuation may be higher than would result if the fund used market valuations to determine its NAV. The converse would apply during periods of rising interest rates. Valuing each fund's instruments on the basis of amortized cost and use of the term "money market fund" are permitted pursuant to Rule 2a-7 under the 1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as summarized in the section entitled "Quality and Maturity" on page . The Board of Trustees oversees FMR's adherence to the provisions of Rule 2a-7 and has established procedures designed to stabilize each fund's NAV at $1.00. At such intervals as they deem appropriate, the Trustees consider the extent to which NAV calculated by using market valuations would deviate from $1.00 per share. If the Trustees believe that a deviation from a fund's amortized cost per share may result in material dilution or other unfair results to shareholders, the Trustees have agreed to take such corrective action, if any, as they deem appropriate to eliminate or reduce, to the extent reasonably practicable, the dilution or unfair results. Such corrective action could include selling portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; establishing NAV by using available market quotations; and such other measures as the Trustees may deem appropriate. PERFORMANCE The funds 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. Yield and total return fluctuate in response to market conditions and other factors. YIELD CALCULATIONS. To compute a class 's yield for a period, the net change in value of a hypothetical account containing one share reflects the value of additional shares purchased with dividends from the one original share and dividends declared on both the original share and any additional shares. The net change is then divided by the value of the account at the beginning of the period to obtain a base period return. This base period return is annualized to obtain a current annualized yield. An effective yield may also be calculated by compounding the base period return over a one-year period. In addition to the current yield, the funds may quote yields in advertising based on any historical seven-day period. Yields for each class of the funds are calculated on the same basis as other money market funds, as required by applicable regulations. Yield information may be useful in reviewing a class's performance and in providing a basis for comparison with other investment alternatives. However, each class's yield fluctuates, unlike investments that pay a fixed interest rate over a stated period of time. When comparing investment alternatives, investors should also note the quality and maturity of the portfolio securities of respective investment companies they have chosen to consider. Investors should recognize that in periods of declining interest rates a class's yield will tend to be somewhat higher than prevailing market rates, and in periods of rising interest rates a class's yield will tend to be somewhat lower. Also, when interest rates are falling, the inflow of net new money to a fund from the continuous sale of its shares will likely be invested in instruments producing lower yields than the balance of the fund's holdings, thereby reducing a class's current yield. In periods of rising interest rates, the opposite can be expected to occur. A class's tax-equivalent yield is the rate an investor would have to earn from a fully taxable investment before taxes to equal the class's tax-free yield. Tax-equivalent yields are calculated by dividing a class's yield by the result of one minus a stated federal or combined federal and state tax rate. If only a portion of a class's yield is tax-exempt, only that portion is adjusted in the calculation. The following table shows the effect of a shareholder's tax status on effective yield under federal income tax laws for 19 95 . It shows the approximate yield a taxable security must provide at various income brackets to produce after-tax yields equivalent to those of hypothetical tax-exempt obligations yielding from 2.00 % to 8.00 %. Of course, no assurance can be given that a class will achieve any specific tax-exempt yield. While Tax-Exempt invests principally in obligations whose interest is exempt from federal income tax, other income received by the fund may be taxable.
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
Taxable Income* Federal If individual tax-exempt yield is: Income
Tax 2.00 % 3.00 % 4.00 % 5.00 % 6.0 % 7.00 % 8.00 %
Single Return Joint Return Bracket** Then taxable equivalent yield is:
$ 23,351 - $ 36,001 - 28.0 % 2.78 % 4.17 % 5.56 % 6.94 % 8.33 % 9.72 % 11.11 % $ 56,500 $ 94,250 $ 56,501 - $ 94,251 - 31.0 % 2.90 % 4.35 % 5.80 % 7.25 % 8.70 % 10.14 % 11.59 % $ 117,950 $ 143,600 $ 117,951 - $ 143,601 - 36.0 % 3.13 % 4.69 % 6.25 % 7.81 % 9.38 % 10.94 % 12.50 % $ 256,500 $ 256,500 $ 256,501 - $ 256,501 - 39.6 % 3.31 % 4.97 % 6.62 % 8.28 % 9.93 % 11.59 % 13.25 %
* Net amount subject to federal income tax after deductions and exemptions. Assumes ordinary income only. ** Excludes the impact of the phaseout of personal exemptions, limitations on itemized deductions, and other credits, exclusions, and adjustments which may increase a taxpayer's marginal tax rate. An increase in a shareholder's marginal tax rate would increase that shareholder's tax-equivalent yield. Tax-Exempt may invest a portion of its assets in obligations that are subject to state or federal income taxes. When the fund invests in these obligations, its tax-equivalent yield will be lower. In the table above, the tax-equivalent yields are calculated assuming investments are 100% federally and state tax-free. TOTAL RETURN CALCULATIONS. Total 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 the class's NAV over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment 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 total return of 100% over ten years would produce an average annual total return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual total returns are a convenient means of comparing investment alternatives, investors should realize that performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of a class. In addition to average annual total returns, a class may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total 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. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. HISTORICAL RESULTS. The following table shows 7-day yields, tax-equivalent yields, and total returns for Class I of each fund for the period ended March 31 , 1995 (August 31, 1995 for Rated Money Market). Tax-Exempt's Class I tax-equivalent yield is based on a 36% federal income tax rate. Average Annual Total Returns Cumulative Total Returns
Seven-Day Tax One Five Life of One Five Life of Yield Equivalent Year Years Fund*/Te Year Years Fund*/Te Yield n Years n Years
Rated Money Market - 5.46% N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99% Class I Treasury - Class I 5.98% N/A 4.78% 4.90% 6.03% 4.78% 27.03% 61.24% Government - Class I 6.01% N/A 4.86% 4.99% 6.32% 4.86% 27.60% 81.07% Domestic - Class I 6.06% N/A 4.97% 5.03% 5.31% 4.97% 27.81% 32.32% Money Market - Class I 6.07% N/A 4.99% 5.09% 6.43% 4.99% 28.15% 83.60% Treasury Only - Class I 5.80% N/A 4.65% N/A 4.45% 4.65% N/A 21.65% Tax-Exempt - Class I 3.94% 6.16% 3.18% 3.65% 4.41% 3.18% 19.61% 51.86%
* Life of Fund figures are from commencement of operations of each fund, except Rated Money Market which reports a Ten Years figure. Commencement of operations for each fund, other than Rated Money Market, are as follows: Treasury - February 2, 1987; Government - July 25, 1985; Domestic - November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3, 1990; and Tax-Exempt - July 25, 1985. Note: If FMR had not reimbursed certain fund expenses during these periods, the total returns would have been lower and the yields for Class I of each fund would have been: Fund Yield Tax-Equivalent Yield Rated Money Market - Class I N/A N/A Treasury - Class I 5.91% N/A Government - Class I 5.95% N/A Domestic - Class I 5.97% N/A Money Market - Class I 6.01% N/A Treasury Only - Class I 5.58% N/A Tax-Exempt - Class I 3.86% 6.03 % The following tables show the income and capital elements of each fund's Class I cumulative total return. The tables compare each fund's Class I return to the record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for each fund. The S&P 500 and DJIA comparisons are provided to show how each class's total return compared to the record of a broad average of common stocks and a narrower set of stocks of major industrial companies, respectively, over the same period. Of course, since each fund invests in short-term fixed-income securities, common stocks represent a different type of investment from the fund. Common stocks generally offer greater growth potential than the funds, but generally experience greater price volatility, which means greater potential for loss. In addition, common stocks generally provide lower income than fixed-income investments, such as the funds. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the funds' returns, do not include the effect of paying brokerage commissions or other costs of investing. RATED MONEY MARKET HISTORICAL FUND RESULTS During the ten year period ended August 31, 1995, a hypothetical $10,000 investment in Class I of Rated Money Market would have grown to $ 18,099 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 8/31/86 10,000 742 0 10,742 13,914 14,773 10,157 8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593 8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019 8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537 8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185 8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648 8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046 8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407 8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796 8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
* The fiscal year end of the fund changed from October 31 to August 31 in July 1992 . Explanatory Notes: With an initial investment of $10,000 made on August 31, 1985 , the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,099 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,949 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY HISTORICAL FUND RESULTS During the period from February 2, 1987 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class I of Treasury would have grown to $ 16,124 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081 1988 10,000 759 0 10,759 9,804 9,560 10,477 1989 10,000 1,632 0 11,632 11,583 11,432 10,998 1990 10,000 2,693 0 12,693 13,816 14,014 11,574 1991 10,000 3,692 0 13,692 15,805 15,668 12,140 1992 10,000 4,433 0 14,433 17,552 17,950 12,527 1993 10,000 4,932 0 14,932 20,229 19,633 12,914 1994 10,000 5,389 0 15,389 20,528 21,366 13,237 1995 10,000 6,124 0 16,124 23,722 25,101 13,615
* From February 2, 1987 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on February 2, 1987, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 16,124 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,790 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. GOVERNMENT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) through March 31, 1995, a hypothetical investment of $10,000 in Class I of Government would have grown to $ 18,107 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093 1987 10,000 1,233 0 11,233 16,170 18,170 10,399 1988 10,000 2,017 0 12,017 14,824 16,188 10,807 1989 10,000 3,001 0 13,001 17,514 19,358 11,345 1990 10,000 4,191 0 14,191 20,890 23,729 11,939 1991 10,000 5,318 0 15,318 23,897 26,530 12,523 1992 10,000 6,167 0 16,167 26,540 30,395 12,922 1993 10,000 6,743 0 16,743 30,588 33,245 13,321 1994 10,000 7,267 0 17,267 31,039 36,179 13,655 1995 10,000 8,107 0 18,107 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations). ** From month end closest to initial investment date. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,107 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,954 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. DOMESTIC HISTORICAL FUND RESULTS During the period from November 3, 1989 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class I of Domestic would have grown to $ 13,232 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247 1991 10,000 1,192 0 11,192 11,655 11,685 10,748 1992 10,000 1,808 0 11,808 12,944 13,387 11,091 1993 10,000 2,222 0 12,222 14,919 14,642 11,433 1994 10,000 2,605 0 12,605 15,139 15,935 11,720 1995 10,000 3,232 0 13,232 17,494 18,720 12,054
* From November 3, 1989 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on November 3, 1989, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 13,232 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amoun t ed to $ 2,807 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. MONEY MARKET HISTORICAL FUND RESULTS During the period from July 5, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class I of Money Market would have grown to $ 18,360 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112 1987 10,000 1,297 0 11,297 16,217 18,525 10,418 1988 10,000 2,103 0 12,103 14,867 16,504 10,827 1989 10,000 3,113 0 13,113 17,564 19,736 11,366 1990 10,000 4,327 0 14,327 20,950 24,192 11,961 1991 10,000 5,492 0 15,492 23,965 27,048 12,546 1992 10,000 6,358 0 16,358 26,615 30,988 12,946 1993 10,000 6,945 0 16,945 30,675 33,894 13,346 1994 10,000 7,486 0 17,486 31,128 36,885 13,680 1995 10,000 8,360 0 18,360 35,971 43,332 14,071
* From July 5, 1985 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on July 5, 1985, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,360 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 6,093 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY ONLY HISTORICAL FUND RESULTS During the period from October 3, 1990 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class I of Treasury Only would have grown to $ 12,165 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3 /31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173 1992 10,000 913 0 10,913 13,454 13,573 10,497 1993 10,000 1,285 0 11,285 15,506 14,846 10,821 1994 10,000 1,624 0 11,624 15,735 16,157 11,093 1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
* From October 3, 1990 (commencement of operations). + The fiscal year end of the fund changed from July 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on October 3, 1990, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested) amounted to $ 12,165 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 1,963 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TAX-EXEMPT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class I of Tax-Exempt would have grown to $ 15,186 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class I of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3 /31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093 1987 10,000 814 0 10,814 16,170 18,170 10,399 1988 10,000 1,323 0 11,323 14,824 16,188 10,807 1989 10,000 1,958 0 11,958 17,514 19,358 11,345 1990 10,000 2,697 0 12,697 20,890 23,729 11,939 1991 10,000 3,411 0 13,411 23,897 26,530 12,523 1992 10,000 3,973 0 13,973 26,540 30,395 12,922 1993 10,000 4,369 0 14,369 30,588 33,245 13,321 1994 10,000 4,718 0 14,718 31,039 36,179 13,655 1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations) ** From month end closest to initial investment date. + The fiscal year end of the fund changed from May 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class I shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 15,186 . If distributions had not been reinvested, the amount of distributions earned from Class I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,186 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. A fund'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 Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. Lipper may also rank funds based on yield. In addition to the mutual fund rankings, a fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, 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 fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund 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 fund 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 your principal or your 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 indices. 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 total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. A fund may compare its performance or the performance of securities in which it may invest to averages published by IBC USA (Publications), Inc. of Ashland, Massachusetts. These averages assume reinvestment of distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Government, which is reported in the MONEY FUND REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND REPORT(trademark), covers over 387 money market funds. 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; charitable giving; and the Fidelity credit card. 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, a quarterly magazine provided free of charge to Fidelity fund shareholders. A fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. As of August 31 , 1995, FMR advised over $ 26.5 billion in tax-free fund assets, $ 79 billion in money market fund assets, $ 218 billion in equity fund assets, $ 56 billion in international fund assets, and $ 23 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. In addition to performance rankings, each class of a fund may compare its total expense ratio to the average total expense ratio of similar funds tracked by Lipper. A class 's total expense ratio is a significant factor in comparing bond and money market investments because of its effect on yield. ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing a class's NAV. Shareholders receiving 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. Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) a fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or a fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the prospectus, each fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, a fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DIVIDENDS. Because each fund's income is primarily derived from interest, dividends from the fund generally will not qualify for the dividends-received deduction available to corporate shareholders. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends received deduction. A portion of each fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. To the extent that each fund's income is designated as federally tax-exempt interest, the daily dividends declared by the fund are also federally tax-exempt. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends-received deduction. These gains will be taxed as ordinary income. Each fund will send each shareholder a notice in January describing the tax status of dividend and capital gain distributions (if any) for the prior year. Shareholders are required to report tax-exempt income on their federal tax returns. Shareholders who earn other income, such as social security benefits, may be subject to federal income tax on up to 85% of such benefits to the extent that their income, including tax-exempt income, exceeds certain base amounts. Tax-Exempt purchases municipal securities that are free from federal income tax based on opinions of counsel regarding their tax status. These opinions generally will be based on covenants by the issuers or other parties regarding continuing compliance with federal tax requirements. If at any time the covenants are not complied with, distribution to shareholders of interest on a security could become federally taxable retroactive to the date a security was issued. For certain types of structured securities, opinions of counsel may also be based on the effect of the structure on the federal tax treatment of the income. As a result of the Tax Reform Act of 1986, interest on certain "private activity" securities is subject to the federal alternative minimum tax (AMT), although the interest continues to be excludable from gross income for other tax purposes. Interest from private activity securities will be considered tax - exempt for purposes of Tax-Exempt's policy on investing so that at least 80% of its income is free from federal income tax. Interest from private activity securities is a tax preference item for the purposes of determining whether a taxpayer is subject to the AMT and the the amount of AMT to be paid, if any. Private activity securities issued after August 7, 1986 to benefit a private or industrial user or to finance a private facility are affected by this rule. A portion of the gain on bonds purchased with market discount after April 30, 1993 and short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. Dividend distributions resulting from a recharacterization of gain from the sale of bonds purchased with market discount after April 30, 1993 are not considered income for the purposes of Tax-Exempt's policy of investing so that at least 80% of its income is free from federal income tax. Tax - Exempt may distribute any net realized short-term capital gains and taxable market discounts once a year or more often, as necessary, to maintain its net asset value at $1.00 per share. It is the current position of the staff of the SEC that a fund that uses the term "tax-exempt" in its name may not derive more than 20% of its income from municipal obligations that pay interest that is a preference item for purposes of the AMT. According to this position, at least 80% of Tax-Exempt's income would have to be exempt from the AMT as well as from federal income taxes. Corporate investors should note that a tax preference item for the purposes of the corporate AMT is 75% of the amount by which adjusted current earnings (which includes tax-exempt interest) exceeds the alternative minimum taxable income of the corporation. If a shareholder receives an exempt-interest dividend and sells shares at a loss after holding them for a period of six months or less, the loss will be disallowed to the extent of the amount of the exempt-interest dividend. CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized short-term capital gains once a year or more often as necessary, to maintain its net asset value at $1.00 per share. Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market do not anticipate earning long-term capital gains on securities held by each fund. Tax-Exempt does not anticipate distributing long-term capital gains. As of fiscal year ended March 31, 1995, Treasury had capital loss carryforwards aggregating approximately $1,198,000. The loss carryforward for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and $534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Government had capital loss carryforwards aggregating approximately $1,104,600. The loss carryforward for Government, of which $19,400, $200, $53,000, $271,000, and $761,000 will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Domestic had capital loss carryforwards aggregating approximately $98,000. The loss carry forward for Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Money Market had capital loss carryforwards aggregating approximately $1,781,000. The loss carryforward for Money Market, of which $336,000, $898,000 and $547,000 will expire on March 31, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Treasury Only had capital loss carryforwards aggregating approximately $184,000. The loss carryforward for Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001 and 2002, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss carryforwards aggregating approximately $528,000. The loss carryforward for Tax-Exempt, which will expire on March 31, 1996, is available to offset future capital gains. As of fiscal year ended August 31, 1995, Rated Money Market had capital loss carryforwards aggregating approximately $74,000. The loss carryforward for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire on August 31, 1996, 1997, and 1998, respectively, is available to offset future capital gains. STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts, state law provides for a pass-through of the state and local income tax exemption afforded to direct owners of U.S. Government securities. Some states limit this to mutual funds that invest a certain amount in U.S. Government securities, and some types of securities, such as repurchase agreements and some agency backed securities, may not qualify for this benefit. The tax treatment of your dividend distributions from a fund will be the same as if you directly owned your proportionate share of the U.S. Government securities in the fund's portfolio. Because the income earned on most U.S. Government securities in which a fund invests is exempt from state and local income taxes, the portion of your dividends from the fund attributable to these securities will also be free from income taxes. The exemption from state and local income taxation does not preclude states from assessing other taxes on the ownership of U.S. Government securities. In a number of states, corporate franchise (income) tax laws do not exempt interest earned on U.S. Government securities whether such securities are held directly or through a fund. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid 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 are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. 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. Each fund is treated as a separate entity from the other funds of each Trust for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting each fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether a fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent company organized in 1972. 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 three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; FIIOC, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trusts are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers elected or appointed to the trusts prior to the funds' conversion from series of a Massachusetts business trust served in identical capacities. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. The business address of each Trustee 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 (64), Trustee and President, is Chairman, Chief Executive Officer 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 FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (62), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. 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 is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR (1992). 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 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). He is a Director of W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering and construction). 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 (1990). GERALD C. McDONOUGH (65), Trustee, is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (61), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). 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) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), 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 BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants, 1992). FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's money market (1994) and fixed-income (1995) funds and Senior Vice President of FMR Texas Inc. LELAND BARRON (36), Vice President (1989), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. BURNELL STEHMAN (63), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. JOHN TODD (46), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. SCOTT A. ORR (33), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995) THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice President of Fidelity's money market funds and Vice President and Associate General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an employee of FMR. JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current trustee of each fund for his or her services as trustee for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market). COMPENSATION TABLE Aggregate Compensation
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R. Davis Jones Malone Williams Rated Money $ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150 Market Treasury 0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084 Government 0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683 Money Market 0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360 Domestic 0 464 440 575 0 459 468 0 463 472 452 460 Tax-Exempt+ 0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118 Treasury Only + 0 543 504 679 0 533 544 0 535 533 524 523
Trustees Pension or Estimated Annual Total Retirement Benefits Upon Compensation Benefits Accrued Retirement from from the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead** $ 0 $ 0 $ 0 Ralph F. Cox 5,200 52,000 125,000 Phyllis Burke Davis 5,200 52,000 122,000 Richard J. Flynn 0 52,000 154,500 Edward C. Johnson 3d** 0 0 0 E. Bradley Jones 5,200 49,400 123,500 Donald J. Kirk 5,200 52,000 125,000 Peter S. Lynch** 0 0 0 Gerald C. McDonough 5,200 52,000 125,000 Edward H. Malone 5,200 44,200 128,000 Marvin L. Mann 5,200 52,000 125,000 Thomas R. Williams 5,200 52,000 126,500
* Information is as of December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. + The annualized amounts reported for Tax-Exempt and Treasury Only are for the periods June 1, 1994 through March 31, 1995 and August 1, 1994 through March 31, 1995, respectively. Each fund's fiscal year end changed to March 31 in February 1995. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. As of October 23 , 1995, the Trustees and officers of each fund owned, in the aggregate, less than 1 % of each fund's total outstanding shares. As of October 25, 1995, the following owned of record or beneficially 5% or more of outstanding shares of each class of the funds: TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America (11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank (6.39%). TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank (17.22%); and Chemical Bank (10.09%). GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%). GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co. of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank (12.58%); Indiana National Bank (11.37%); United National Bank (11.08%); and First Union National Bank (8.10%). DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of Boston Connecticut (5.21%). DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank (11.47%); and Exchange Bank (9.90%). MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and Shawmut Bank Of Boston, N.A. (5.58%). MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic National Bank of New York (12.38%); North American Trust Company (9.45%); and Boatmen's Trust Co. of St. Louis (5.59%). TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A. (7.49%); and Bingham, Dana & Gould (5.97%). TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank & Trust Company (9.21%); and Fleet National Bank (5.02%). RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America (7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and United States Trust Company of NY (5.39%). A shareholder owning of record or beneficially more than 25% of a fund's outstanding shares may be considered a controlling person. That shareholder's vote could have a more significant effect on matters presented at a shareholders' meeting than votes of other shareholders. MANAGEMENT CONTRACTS Each fund employs FMR to furnish investment advisory and other services. Under 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 each fund in accordance with its investment objective, policies, and limitations. FMR also provides each fund with all necessary office facilities and personnel for servicing each fund's investments, compensates all officers of each fund, all Trustees who are "interested persons" of the trusts or of FMR, and all personnel of each fund or FMR for 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 and state laws; developing management and shareholder services for each fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to UMB, FIIOC, and FSC , each fund or class thereof, as applicable, pays all of its expenses, without limitation, that are not assumed by those parties. Each fund (other than Treasury Only and Rated Money Market) 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. Although each fund's (other than Treasury Only's and Rated Money Market's) current management contract provides that each fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices and reports to shareholders, the trust, on behalf of each fund has entered into a revised transfer agent agreement with FIIOC and UMB, as applicable, pursuant to which FIIOC or UMB bears the costs of providing these services to existing shareholders of the applicable classes. Other expenses paid by each fund (other than Treasury Only and Rated Money Market) include interest, taxes, brokerage commissions, and each fund's proportionate share of insurance premiums and Investment Company Institute dues, and the costs of registering shares under federal and 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. FMR is responsible for the payment of all expenses of Treasury Only and Rated Money Market with certain exceptions. Specific expenses payable by FMR include, without limitation, expenses for the typesetting, printing, and mailing of proxy materials to shareholders; legal expenses, and the fees of the custodian, auditor, and interested Trustees; costs of typesetting, printing, and mailing prospectuses and statements of additional information, notices and reports to shareholders; and the fund's proportionate share of insurance premiums and Investment Company Institute dues. FMR also provides for transfer agent and dividend disbursing services through FIIOC and portfolio and general accounting record maintenance through FSC. FMR pays all other expenses of Treasury Only and Rated Money Market with the following exceptions: fees and expenses of all Trustees of the applicable trust who are not "interested persons" of the trust or FMR (the non-interested Trustees); interest on borrowings (only for Treasury Only); taxes; brokerage commissions (if any); and such nonrecurring expenses as may arise, including costs of any litigation to which a fund may be a party, and any obligation it may have to indemnify the officers and Trustees with respect to litigation. FMR is each fund's manager pursuant to management contracts dated May 30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30, 1993 for Treasury Only; and November 1, 1986 for Rated Money Market, which were approved by shareholders on November 18, 1992, November 13, 1991, March 24, 1993, and December 8, 1994, respectively. For the services of FMR under each contract, each fund (other than Treasury Only and Rated Money Market) pays FMR a monthly management fee at the annual rate of 0.20% of average net assets throughout the month. Treasury Only and Rated Money Market each pay FMR a monthly management fee at the annual rate of 0.42% of average net assets throughout the month. The management fees paid to FMR by Treasury Only and Rated Money Market are reduced by the fees and expenses paid by the respective funds to the non-interested Trustees. Fees received by FMR for the last three fiscal periods are shown in the table below. Fund Fiscal Year Ended Management Fees Paid to FMR Rated Money Market 8 /31/95 $ 1,352,919* 8/31/94 1,781,535* 8/31/93 2,893,862* Treasury 3/31/95 8,680,344 3/31/94 9,834,025 3/31/93 14,029,197 Government 3/31/95 6,680,088 3/31/94 9,660,519 3/31/93 12,610,880 Domestic 3/31/95 1,923,368 3/31/94 1,525,574 3/31/93 1,536,740 Money Market 3/31/95 10,436,518 3/31/94 10,551,990 3/31/93 10,066,276 Treasury Only 3/31/95** 3,279,429* 7/31/94 4,716,697* 7/31/93 4,892,175* 7/31/92 4,249,814* Tax-Exempt 3/31/95** 3,789,731 5/31/94 5,099,831 5/31/93 5,036,875 5/31/92 4,605,577 * After reduction of fees and expenses paid by the fund to the non-interested Trustees. ** The fiscal year end of Treasury Only changed from July 31 to March 31 in February 1995. The fiscal year end of Tax-Exempt changed from May 31 to March 31 in February 1995. FMR may, from time to time, voluntarily reimburse all or a portion of each fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). 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 each fund's total returns and yield and repayment of the reimbursement by each fund will lower its total returns and yield. During the fiscal periods reported, FMR voluntarily agreed subject to revision or termination, to reimburse Class I of certain funds if and to the extent that the fund's Class I total operating expenses (excluding interest, taxes, brokerage commissions, and extraordinary expenses) were in excess of an annual rate of its average net assets. The table below identifies the classes in reimbursement; the level at which reimbursement began; and the dollar amount reimbursed for each fiscal year ended March 31, 1995, 1994, and 1993 . Prior to August 31, 1995, Rated Money Market was not in reimbursement.
Level at Which Fund Reimbursement Began Dollar Amount Reimbursed
1995 1994 1993 1992 Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A Treasury - Class III 0.20% 409,770 570 N/A N/A Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A Government - Class III 0.20% 42,272 N/A N/A N/A Domestic - Class I 0.20% 818,759 638,552 645,507 N/A Domestic - Class III 0.20% 48,097 N/A N/A N/A Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A Money Market - Class III 0.18% 230,324 7,565 N/A N/A Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 $ 2,260,410 Tax-Exempt - Class I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31, 1995. During the fiscal year ended July 31, 1992, the level at which reimbursement began ranged from 0.15% to 0.20%. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995. During the fiscal year ended May 31, 1992, the level at which reimbursement began was 0.18%. To comply with the California Code of Regulations, FMR will reimburse each fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating each fund's expenses for purposes of this regulation, each fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its custodian fees attributable to investment in foreign securities. SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas pursuant to which FMR Texas has primary responsibility for providing portfolio investment management services to each fund. Under each sub-advisory agreements dated May 30, 1993, January 29, 1992, September 30, 1973, and November 1, 1989 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively, FMR pays FMR Texas fees equal to 50% of the management fees payable by FMR under its management contract with each fund. Each sub-advisory agreement was approved by each fund's shareholders on November 18, 1994, November 13, 1991, March 24, 1993, and November 16, 1994 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively. The fees paid to FMR Texas are not reduced by any voluntary or mandatory expense reimbursements that may be in effect from time to time. The table below shows fees paid by FMR to FMR Texas on behalf of each fund for the fiscal years ended March 31 (August 31 for Rated Money Market), 1995, 1994, and 1993. 1995 1994 1993 1992
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A Treasury 4,340,172 4,917,013 7,014,599 N/A Government 3,340,044 4,830,260 6,305,440 N/A Domestic 961,684 762,787 768,370 N/A Money Market 5,218,259 5,275,995 5,033,138 N/A Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907 Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31, 1995. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993 and 1994, and the fiscal period June 1, 1994 to March 31, 1995. CONTRACTS WITH FMR AFFILIATES FIIOC is transfer, dividend disbursing, and shareholder servicing agent for Class I shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent and shareholder servicing agent for Class I shares of Tax-Exempt. UMB has entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs transfer, dividend disbursing, and shareholder services for Class I shares of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee based on account size. The costs of FIIOC's services for Class I of Treasury Only and Rated Money Market are borne by FMR pursuant to its management contract. For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such fees. In addition, FIIOC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. Also, FIIOC pays out-of-pocket expenses associated with providing transfer agent services. FSC calculates NAV and dividends for Class I of each Taxable Fund, and maintains each Taxable Fund's accounting records. UMB has sub-arrangements with FSC pursuant to which FSC performs the calculations necessary to determine NAV and dividends for Class I of Tax-Exempt, and maintains the accounting records for Tax-Exempt. The annual fee rates for these pricing and bookkeeping services are based on each fund's average net assets, specifically .0175% for the first $500 million of average net assets and .0075% for average net assets in excess of $500 million. The fee is limited to a minimum of $20,000 and a maximum of $750,000 per year. The costs of FSC's services for Rated Money Market and Treasury Only are borne by FMR pursuant to its management contract. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC by the funds (except Rated Money Market and Treasury Only) for the past three fiscal years ended March 31, 1995, 1994, and 1993 were as follows: Pricing and Bookkeeping Fees
1995 1994 1993 1992 Treasury $ 375,762 $ 419,147 $ 576,072 N/A Government 331,070 412,411 523,696 N/A Domestic 122,139 107,464 108,548 N/A Money Market 441,370 445,362 429,428 N/A Tax-Exempt* 309,306 304,324 325,195 $ 332,264
* Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and fiscal period June 1, 1994 to March 31, 1995, annualized. The transfer agent fees and charges for Class I of Tax-Exempt, and pricing and bookkeeping fees for Tax-Exempt described above are paid to FIIOC and FSC, respectively, by UMB, which is entitled to reimbursement from Class I or the fund, as applicable, for these expenses. Each fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls 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 net asset value. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FMR. DISTRIBUTION AND SERVICE PLANS The Trustees have approved a Distribution and Service Plan on behalf of Class I 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 a fund except pursuant to a plan approved on behalf of the fund under the Rule. The Plans, as approved by the Trustees, allow Class I of the funds and FMR to incur certain expenses that might be considered to constitute indirect payment by the funds of distribution expenses. Under each Plan, if the payment of management fees by the funds to FMR is deemed to be indirect financing by the funds of the distribution of their shares, such payment is authorized by the Plans. Each Plan specifically recognizes that FMR may use its management fee revenue , as well as its past profits, or its other resources from any other source to reimburse FDC for expenses incurred in connection with the distribution of Class I shares, including payments made to third parties that assist in selling Class I shares of each fund, or to third parties, including banks, that render shareholder support services. The Trustees have not authorized such payments to date. Prior to approving each Plan, the Trustees carefully considered all pertinent factors relating to the implementation of each Plan, and have determined that there is a reasonable likelihood that the Plan will benefit the applicable class of each fund and its shareholders. In particular, the Trustees noted that each Plan does not authorize payments by Class I of each 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 of each fund, additional sales of fund shares may result. Furthermore, certain shareholder support services may be provided more effectively under the Plans by local entities with whom shareholders have other relationships. The Plans were approved by shareholders of Class I of each FICP fund on November 18, 1992, Class I of Tax-Exempt on November 31, 1991, Class I of Treasury Only on March 24, 1993, and Class I of Rated Money Market on December 8, 1994. Each Plan was approved by shareholders, in connection with the corresponding reorganization transactions which took place on May 30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 29, 1993 for Treasury Only; and December 29, 1994 for Rated Money Market, pursuant to Agreements and Plans of Conversion. The Glass-Steagall Act generally prohibits federally and state chartered or supervised banks from engaging in the business of underwriting, selling, or distributing securities. Although the scope of this prohibition under the Glass-Steagall Act has not been clearly defined by the courts or appropriate regulatory agencies, 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 and their affiliates or subsidiaries, 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. DESCRIPTION OF THE TRUSTS TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S. Government Portfolio, Domestic Money Market Portfolio, and Money Market Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May 30, 1993. Currently, there are four funds of Fidelity Institutional Cash Portfolios: Treasury, Government, Domestic, and Money Market. The Trust Instrument permits the Trustees to create additional funds. Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Tax-Exempt acquired all of the assets of Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity Institutional Tax-Exempt Cash Portfolios on January 29, 1992. Currently, Tax - Exempt is the only fund of Fidelity Institutional Tax-Exempt Cash Portfolios. The Trust Instrument permits the Trustees to create additional funds. Treasury Only is a fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury Income Portfolio of Daily Money Fund on September 29, 1993. Currently, there are six funds of Daily Money Fund: Treasury Only, Money Market Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves: Municipal Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. Rated Money Market is a fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. Rated Money Market acquired all of the assets of Domestic Money Market Portfolio of Fidelity Money Market Trust on December 29, 199 4. Currently, there are three funds of Fidelity Money Market Trust: Rated Money Market, Retirement Money Market Portfolio, and Retirement Government Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. There is a remote possibility that one fund might become liable for any misstatement in its prospectus or statement of additional information about another fund. The assets of the trusts received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trusts are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trusts, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of a trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is a business trust organized under Delaware law. Delaware law provides that shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. The courts of some states, however, may decline to apply Delaware law on this point. The Trust Instruments contain an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses of the trusts and require that a disclaimer be given in each contract entered into or executed by the trust or the Trustees. The Trust Instruments provide for indemnification out of each fund's property of any shareholder or former shareholder held personally liable for the obligations of the fund. The Trust Instruments also provide 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 Delaware law does not apply, no contractual limitation of liability was in effect, and the fund is unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is extremely remote. The Trust Instruments further provide that the Trustees, if they have exercised reasonable care, shall not be personally liable to any person other than the trust or its shareholders; moreover, the Trustees shall not be liable for any conduct whatsoever, provided that Trustees are not protected against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. 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. As a shareholder of Rated Money Market, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and non-assessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of a trust, fund or class may, as set forth in each of the Trust Instruments, call meetings of the trust, fund, or class, for any purpose related to the trust, fund, or class, as the case may be, including, in the case of a meeting of the entire trust, the purpose of voting on removal of one or more Trustees. Any trust or fund may be terminated upon the sale of its assets to, or merger with, another open-end management investment company or series thereof, or upon liquidation and distribution of its assets. Generally such terminations must be approved by vote of the holders of a majority of the outstanding shares of the trust or fund (or, for Rated Money Market, as determined by the current value of each shareholder's investment in the fund or trust); however, the Trustees may, without prior shareholder approval, change the form of organization of the trust or fund by merger, consolidation, or incorporation. If not so terminated, the trust and its funds will continue indefinitely. Under the Trust Instruments, the Trustees may, without shareholder vote, cause a trust to merge or consolidate into one or more trusts, partnerships, or corporations, or cause the trust to be incorporated under Delaware law, so long as the surviving entity is an open-end management investment company that will succeed to or assume the trust's registration statement. Each fund may invest all of its assets in another investment company. CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, NY 10260 is custodian of the assets of each fund, except Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New York is custodian of the assets of Treasury. The custodian for Tax-Exempt is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is responsible for the safekeeping of a fund's assets and the appointment of subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Chemical Bank, headquartered in New York, may also serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the funds' Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. 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. AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan Street, Suite 3000, Dallas, TX 75201 serves as the independent accountant for Tax-Exempt, Treasury Only, and Rated Money Market. Price Waterhouse LLP, 2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the independent accountant for the FICP funds. The auditors examine financial statements for the funds and provide other audit, tax, and related services. FINANCIAL STATEMENTS Each fund's financial statements and financial highlights for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) are included in the funds' Annual Report, which is a separate report supplied with this SAI. Each fund's financial statements and financial highlights are incorporated herein by reference. APPENDIX The descriptions that follow are examples of eligible ratings for the funds. A fund may, however, consider the ratings for other types of investments and the ratings assigned by other rating organizations when determining the eligibility of a particular investment. DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS: Issuers rated PRIME-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: Leading market positions in well established industries. High rates of return on funds employed. Conservative capitalization structures with moderate reliance on debt and ample asset protection. Broad margins in earning coverage of fixed financial charges and with high internal cash generation. Well-established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated PRIME-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earning trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternative liquidity is maintained. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS: A - Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. I ssues in this category are delineated with the numbers 1 and 2 to indicate the relative degree of safety. A-1 - This designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics will be denoted with a plus (+) sign designation. A-2 - Capacity for timely payment on issues with this designation is strong. However, the relative degree of safety is not as high as for issues designated A-1. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS II CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1 .............................. Cover Page 2 .............................. Expenses 3 a .............................. Financial Highlights b .............................. * c .............................. Performance d .............................. Cover Page 4 a i............................. Charter ii........................... Investment Principles and Risks; Securities and Investment Practices; Fundamental Investment Policies and Restrictions b .............................. Securities and Investment Practices c .............................. Who May Want to Invest; Investment Principles and Risks; Securities and Investment Practices 5 a .............................. Charter b i............................. FMR and Its Affiliates ii........................... FMR and Its Affiliates; Charter; Breakdown of Expenses iii.......................... Expenses; Breakdown of Expenses; Management Fee c .............................. FMR and Its Affiliates d .............................. Charter; Breakdown of Expenses; Cover Page; FMR and Its Affiliates e .............................. FMR and its Affiliates; Breakdown of Expenses; Other Expenses f .............................. Expenses g .............................. Expenses; FMR and Its Affiliates 5A .............................. * 6 a i............................. Charter ii........................... How to Buy Shares; How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions iii.......................... * b ............................. FMR and Its Affiliates c .............................. Charter d .............................. Cover Page; Charter e .............................. Cover Page; How to Buy Shares; How to Sell Shares; Investor Services; Exchange Restrictions f, g .............................. Dividends, Capital Gains, and Taxes 7 a .............................. Charter; Cover Page b .............................. How to Buy Shares; Transaction Details c .............................. * d .............................. How to Buy Shares e .............................. Transaction Details; Breakdown of Expenses f .............................. Breakdown of Expenses; Other Expenses 8 .............................. How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions 9 .............................. *
* Not Applicable FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS II Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how each fund invests and the services available to shareholders. To learn more about each fund and its investments, you can obtain a copy of the applicable fund's most recent financial report and portfolio listing or a copy of the Statement of Additional Information (SAI) dated November 1, 1995. The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, contact your financial institution, or call Fidelity Client Services at 1-800-843-3001. INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A STABLE $1.00 SHARE PRICE. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IMM II-pro-1195 FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP): Treasury (formerly Treasury II) Government Domestic Money Market DAILY MONEY FUND (DMF): Treasury Only FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP): Tax-Exempt FIDELITY MONEY MARKET TRUST (FMMT): Rated Money Market (formerly Domestic Money Market Portfolio) PROSPECTUS NOVEMBER 1, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS
KEY FACTS WHO MAY WANT TO INVEST EXPENSES Class II's yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of each fund's financial data. PERFORMANCE THE FUNDS IN DETAIL CHARTER How each fund is organized. INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS
KEY FACTS WHO MAY WANT TO INVEST Each fund offers institutional and corporate investors a convenient and economical way to invest in a professionally managed portfolio of money market instruments. Each fund is designed for investors who would like to earn current income while preserving the value of their investment. The rate of income will vary from day to day, generally reflecting short-term interest rates. Each fund is managed to keep its share price stable at $1.00. Each of Treasury Only, Treasury, and Government offers an added measure of safety with its focus on U.S. Government securities. None of the funds constitutes a balanced investment plan. However, because they emphasize stability, they could be well-suited for a portion of your investment. Each fund is composed of multiple classes of shares. Each class of a fund has a common investment objective and investment portfolio. Class I shares do not have a sales charge and do not pay a distribution fee. Class II shares do not have a sales charge, but do pay a 0.15% distribution fee. Class III shares do not have a sales charge, but do pay a 0.25% distribution fee. Because Class I shares have no sales charge and do not pay a distribution fee, Class I shares are expected to have a higher total return than Class II and Class III shares. You may obtain more information about Class I and Class III shares, which are not offered through this prospectus, from your financial institution, or by calling Fidelity Client Services at 1-800-843-3001. Contact your financial institution to discuss which class is appropriate for you. EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell Class II shares of a fund. Maximum sales charge on purchases and None reinvested distributions Maximum deferred sales charge None Redemption fee None Exchange fee None ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a management fee to Fidelity Management & Research Company (FMR). FMR is responsible for the payment of all other expenses of Treasury Only and Rated Money Market with certain limited exceptions. Each fund, other than Treasury Only and Rated Money Market, also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. 12b-1 fees are paid by Class II of each fund to the distributor for services and expenses in connection with the distribution of Class II shares of each fund. Long-term shareholders may pay more than the economic equivalent of the maximum sales charges permitted by the National Association of Securities, Inc., due to 12b-1 fees. Class II's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see "Breakdown of Expenses" on page ). The following are projections based on estimated expenses of Class II of each fund and are calculated as a percentage of average net assets of Class II of each fund. Class II Operating Expenses TREASURY Management fee 0.15% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.05% A Total operating expenses 0.35% A GOVERNMENT Management fee 0.16% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.04% A Total operating expenses 0.35% A A AFTER EXPENSE REDUCTIONS. Class II Operating Expenses DOMESTIC Management fee 0.13% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.07% A Total operating expenses 0.35% A MONEY MARKET Management fee 0.14% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.04% A Total operating expenses 0.33% A TREASURY ONLY Management fee 0.20% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.00 % Total operating expenses 0.35% A TAX-EXEMPT Management fee 0.14% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.06 % Total operating expenses 0.35% A RATED MONEY MARKET Management fee 0.20% A 12b-1 fee (Distribution fee) 0.15 % Other expenses 0.00 % Total operating expenses 0.35% A A AFTER EXPENSE REDUCTIONS. EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000 investment in Class II shares, assuming a 5% annual return and full redemption at the end of each time period: 1 3 5 10 Year Years Years Years Treasury $ 4 $ 11 $ 20 $ 44 Government $ 4 $ 11 $ 20 $ 44 Domestic $ 4 $ 11 $ 20 $ 44 Money Market $ 3 $ 11 $ 19 $ 42 Treasury Only $ 4 $ 11 $ 20 $ 44 Tax-Exempt $ 4 $ 11 $ 20 $ 44 Rated Money Market $ 4 $ 11 $ 20 $ 44 THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY. FMR has voluntarily agreed to reimburse Class II of each fund to the extent that total operating expenses (excluding interest, taxes, brokerage commissions, extraordinary expenses, and 12b-1 fees) are in excess of 0 .20% ( 0 .18% for Money Market) of its average net assets. If these agreement s were not in effect, the managemen t fees , other expenses, and total operating expenses for Class II of each fund would have been expected to be the following amounts, as a percentage of average net assets: 0.20 % , 0.29%, and 0.64 % for Treasury; 0.20% , 0.21%, and 0.56 % for Government; 0.20% , 0.27%, and 0.62% for Domestic; 0.20 % , 0.07%, and 0.42% for Money Market; 0.42% , 0.00%, and 0.57% for Treasury Only; 0.20 % , 0.06%, and 0.41% for Tax-Exempt; and 0.42% , 0.00%, and 0.57 % for Rated Money Market. FINANCIAL HIGHLIGHTS The financial highlights tables that follow and each fund's financial statements are included in each fund's Annual Report and have been audited by independent accountants. Price Waterhouse LLP serves as independent accountants for each of the FICP funds, while Coopers & Lybrand L.L.P. serves as independent accountants for Tax-Exempt, Treasury Only, and Rated Money Market. Their reports, as applicable, on the financial statements and financial highlights are included in each Annual Report. The financial statements, the financial highlights, and the reports are incorporated by reference into the funds' SAI, which may be obtained free of charge from Fidelity Client Services at the phone number listed on page . Class II of each fund will commence operations on or about November 1, 1995. Class III of Treasury Only, Tax Exempt, and Rated Money Market will commence operations on or about November 1, 1995. FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
148.Selected Per-Share Data 149.Years ended March 31 1987A 1988 1989 1990 1991 1992 1993 1994 1995 150.Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 period 151.Income from Investment Operations 152. Net interest income .009 .064 .078 .088 .076 .053 .034 .030 .047 153.Less Distributions 154. From net interest income (.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047) 155.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 156.Total return B .93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78 % % % % % % % % 157.RATIOS AND SUPPLEMENTAL DATA 158.Net assets, end of period (000 $ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1 omitted) 1 8 24 86 52 63 18 98 159.Ratio of expenses to average .20% .20 .20 .19 .18 .18 .18 .18 .18 net assets C % % % % % % % % 160.Ratio of expenses to average .99% .32 .26 .27 .25 .25 .23 .24 .25 net assets before C % % % % % % % % expense reductions 161.Ratio of net interest income to 6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71 average net assets C % % % % % % % %
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
162.Selected Per-Share Data 163.Years ended March 31 1994A 1995 164.Net asset value, beginning of period $ 1.000 $ 1.000 165.Income from Investment Operations 166. Net interest income .012 .044 167.Less Distributions 168. From net interest income (.012) (.044) 169.Net asset value, end of period $ 1.000 $ 1.000 170.Total return B 1.21% 4.45 % 171.RATIOS AND SUPPLEMENTAL DATA 172.Net assets, end of period (000 omitted) $ 5,175 $ 585,57 1 173.Ratio of expenses to average net assets .50% .50 C % 174.Ratio of expenses to average net assets before expense reductions .56% .81 C % 175.Ratio of net interest income to average net assets 2.69% 4.91 C %
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS I
176.Selected Per-Share Data 177.Years ended March 31 1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995 178.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 179.Income from Investment Operations 180. Net interest income .053 .063 .068 .079 .088 .077 .054 .035 .031 .048 181.Less Distributions 182. From net interest (.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048) income 183.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 184.Total return B 5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86 % % % % % % % % % 185.RATIOS AND SUPPLEMENTAL DATA 186.Net assets, end of $ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0 period (000 omitted) 59 86 42 22 38 81 66 44 66 187.Ratio of expenses to .20% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 188.Ratio of expenses to .30% .25 .23 .24 .25 .25 .25 .24 .24 .24 average net assets before C % % % % % % % % % expense reductions 189.Ratio of net interest 7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77 income C % % % % % % % % % to average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS III
190.Selected Per-Share Data 191.Year ended March 31 1995 A 192.Net asset value, beginning of period $ 1.000 193.Income from Investment Operations 194. Net interest income .045 195.Less Distributions 196. From net interest income (.045) 197.Net asset value, end of period $ 1.000 198.Total return B 4.57% 199.RATIOS AND SUPPLEMENTAL DATA 200.Net assets, end of period (000 omitted) $ 40,516 201.Ratio of expenses to average net assets .43% C 202.Ratio of expenses to average net assets before expense reductions .66% C 203.Ratio of net interest income to average net assets 5.13% C
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS I
204.Selected Per-Share Data 205.Years ended March 31 1990A 1991 1992 1993 1994 1995 206.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 207.Income from Investment Operations 208. Net interest income .035 .078 .054 .034 .031 .049 209.Less Distributions 210. From net interest income (.035) (.078) (.054) (.034) (.031) (.049) 211.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 212.Total return B 3.52% 8.11 5.50 3.50 3.14 4.97 % % % % % 213.RATIOS AND SUPPLEMENTAL DATA 214.Net assets, end of period (000 omitted) $ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93 9 7 4 6 7 215.Ratio of expenses to average net assets .06% .18 .18 .18 .18 .18 C % % % % % 216.Ratio of expenses to average net assets before expense .43% .30 .29 .26 .26 .27 reductions C % % % % % 217.Ratio of net interest income to average net assets 8.44% 7.79 5.24 3.43 3.09 4.94 C % % % % %
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS III
218.Selected Per-Share Data 219.Year ended March 31 1995A 220.Net asset value, beginning of period $ 1.000 221.Income from Investment Operations 222. Net interest income .035 223.Less Distributions 224. From net interest income (.035) 225.Net asset value, end of period $ 1.000 226.Total return B 3.51% 227.RATIOS AND SUPPLEMENTAL DATA 228.Net assets, end of period (000 omitted) $ 26,545 229.Ratio of expenses to average net assets .50% C 230.Ratio of expenses to average net assets before expense reductions .79% C 231.Ratio of net interest income to average net assets 5.14% C
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS I
232.Selected Per-Share Data 233.Years ended March 1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995 31 234.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 235.Income from Investment Operations 236. Net interest income .059 .064 .069 .080 .089 .078 .055 .035 .032 .049 237.Less Distributions 238. From net interest (.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049) income 239.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 240.Total return B 6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99 % % % % % % % % % 241.RATIOS AND SUPPLEMENTAL DATA 242.Net assets, end of $ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1 period (000 omitted) 99 67 50 79 36 95 95 77 23 243.Ratio of expenses to .19% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 244.Ratio of expenses to .28% .23 .23 .24 .24 .25 .24 .23 .23 .24 average net assets before C % % % % % % % % % expense reductions 245.Ratio of net interest 7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00 income to average net C % % % % % % % % % assets
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS III
246.Selected Per-Share Data 247.Years ended March 31 1994A 1995 248.Net asset value, beginning of period $ 1.000 $ 1.000 249.Income from Investment Operations 250. Net interest income .011 .046 251.Less Distributions 252. From net interest income (.011) (.046) 253.Net asset value, end of period $ 1.000 $ 1.000 254.Total return B 1.07% 4.66% 255.RATIOS AND SUPPLEMENTAL DATA 256.Net assets, end of period (000 omitted) $ 89,463 $ 457,286 257.Ratio of expenses to average net assets .50% .50% C 258.Ratio of expenses to average net assets before expense reductions .55% .59% C 259.Ratio of net interest income to average net assets 2.83% 4.94% C
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED TREASURY ONLY - CLASS IE
260.Selected Per-Share Data 261.Years ended March 31 1991A 1992E 1993E 1994E 1995D 262.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 263.Income from Investment Operations .055 .045 .031 .032 .033 Net interest income 264.Less Distributions (.055) (.045) (.031) (.032) (.033) From net interest income 265.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 266.Total returnB 5.63% 4.64% 3.10% 3.27% 3.38% 267.RATIOS AND SUPPLEMENTAL DATA 268.Net assets, end of period (000 omitted) $ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285 269.Ratio of expenses to average net assets .03% .20% .20% .20% .20% C C 270.Ratio of expenses to average net assets before expense .42% .42% .42% .42% .42% reductions C C 271.Ratio of net interest income to average net assets 6.34% 4.43% 3.05% 3.22% 5.02% C C
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D AUGUST 1, 1994 TO MARCH 31, 1995 E YEAR ENDED JULY 31 TAX-EXEMPT - CLASS I
272.Selected Per-Share Data 273.Years ended 1986A 1987E 1988E 1989E 1990E 1991E 1992E 1993E 1994E 1995D March 31 274.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 275.Income from .044 .042 .046 .058 .058 .053 .040 .026 .024 .027 Investment Operations Net interest income 276.Less Distributions (.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027) From net interest income 277.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period 278.Total returnB 4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74% % % % % % % % % 279.RATIOS AND SUPPLEMENTAL DATA 280.Net assets, end of $ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815 period 39 53 46 67 36 41 95 31 63 (000 omitted) 281.Ratio of expenses .19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C to average C % % % % % % % % net assets 282.Ratio of expenses .25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C to average net assets C % % % % % % % % before expense reductions 283.Ratio of net 5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C interest income to C % % % % % % % % average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D JUNE 1, 1994 TO MARCH 31, 1995 E YEAR ENDED MAY 31 RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
284.Years ended August 1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995 31 285.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 286.Income from .069 .062 .070 .089 .080 .063 .034 .029 .033 .054 Investment Operations Net interest income 287.Less Distributions (.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054) From net interest income 288.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 289.Total return D 7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53 % % % % % % % % % 290.RATIOS AND SUPPLEMENTAL DATA 291.Net assets, end of $ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86 period (000 omitted) 32 68 56 45 2 2 3 3 292.Ratio of expenses to .42 .42 .42 .42 .42 .42 .42% .42 .42 .42 average net assets % % % % % % c % % % 293.Ratio of net interest 6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33 income to average net % % % % % % c % % % assets
A NOVEMBER 1, 1991 TO AUGUST 31, 1992 B YEAR ENDED OCTOBER 31. C ANNUALIZED D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. PERFORMANCE Money market fund performance can be measured as TOTAL RETURN or YIELD. EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in a fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. Average annual total returns covering periods of less than one year assume that performance will remain constant for the rest of the year. YIELD refers to the income generated by an investment in a fund over a given period of time, expressed as an annual percentage rate. When a yield assumes that income earned is reinvested, it is called an EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have to earn before taxes to equal a tax-free yield. SEVEN-DAY YIELD illustrates the income earned by an investment in a money market fund over a recent seven-day period. Since money market funds maintain a stable $1.00 share price, current seven-day yields are the most common illustration of money market fund performance. The funds' recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance call Fidelity Client Services at 1-800-843-3001. THE FUNDS IN DETAIL CHARTER EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. Treasury, Government, Domestic, and Money Market are diversified funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. Treasury Only is a diversified fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Tax-Exempt is a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Rated Money Market is a diversified fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. There is a remote possibility that one fund might become liable for a misstatement in the prospectus about another fund. EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the funds' activities, review contractual arrangements with companies that provide services to the funds, and review the funds' performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. The transfer agent will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. For shareholders of all funds (other than Rated Money Market) , you are entitled to one vote for each share you own. For shareholders of Rated Money Market, the number of votes you are entitled to is based upon the dollar value of your investment. Separate votes are taken by each class of shares, fund, or trust, if a matter affects just that class of shares, fund, or trust, respectively. FMR AND ITS AFFILIATES Fidelity Investments is one of the largest investment management organizations in the United States and has its principal business address at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number of different subsidiaries and divisions which provide a variety of financial services and products. The funds employ various Fidelity companies to perform activities required for their operation. The funds are managed by FMR, which handles their business affairs. FMR Texas, Inc. (FMR Texas) , located in Irving, Texas, has primary responsibility for providing investment management services. As of August 31, 1 995 , FMR advised funds having approximately 22 million shareholder accounts with a total value of more than $ 328 billion. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Investments Institutional Operations Company (FIIOC) performs transfer agent servicing functions for Class II shares of each fund. FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (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, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs FIIOC to perform these functions for Class II of Tax-Exempt. UMB is located at 1010 Grand Avenue, Kansas City, Missouri. To carry out the funds' transactions, FMR may use its broker-dealer affiliates and other firms that sell fund shares, provided that a fund receives services and commission rates comparable to those of other broker-dealers . INVESTMENT PRINCIPLES AND RISKS TREASURY ONLY seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant net asset value per share (NAV) of $1.00. The fund invests only in U.S. Treasury securities, including bills, notes, bonds and other direct obligations of the U.S. Treasury that are guaranteed as to payment of principal and interest by the full faith and credit of the U.S. Government. The fund will invest in those securities whose interest is specifically exempt from state and local income taxes under federal law; such interest is not exempt from federal income tax. TREASURY seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Under normal conditions, the fund invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. GOVERNMENT seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. Government obligations issued or guaranteed as to principal and interest by the U.S. Government, including bills, notes, bonds and other U.S. Treasury debt securities, and instruments issued or guaranteed by U.S. Government instrumentalities or agencies, and repurchase agreements backed by those obligations. The fund currently intends to invest exclusively in these instruments. DOMESTIC seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. dollar-denominated money market instruments of domestic issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. RATED MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in obligations of the U.S. Government, its agencies and instrumentalities, repurchase agreements backed by those obligations, and other high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. TAX-EXEMPT seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund invests primarily in high-quality, short-term municipal securities, but also may invest in high-quality, long-term fixed, variable, or floating rate instruments (including tender option bonds) whose features give them interest rates, maturities, and prices similar to short-term instruments. Securities in which the fund invests must be rated in the highest rating category for short-term securities by at least one nationally recognized rating service and rated in one of the two highest categories for short-term securities by another nationally recognized rating service if rated by more than one nationally recognized rating service; or, if unrated, judged by FMR to be equivalent quality to those securities rated in the highest short-term rating category, pursuant to procedures adopted by the Board of Trustees. The fund's policy regarding limiting investments to the highest rating category may be changed upon 90 days' prior notice to shareholders. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. The fund does not currently intend to purchase municipal obligations that are subject to the federal alternative minimum tax. FMR normally invests the fund's assets according to its investment strategy and does not expect to invest in federally taxable obligations. The fund also reserves the right to hold a substantial amount of uninvested cash or to invest more than normally permitted in federally taxable obligations for temporary, defensive purposes. COMMON POLICIES When you sell your shares of the funds, they should be worth the same amount as when you bought them. Of course, there is no guarantee that the funds will maintain a stable $1.00 share price. The funds follow industry-standard guidelines on the quality and maturity of their investments, which are designed to help maintain a stable $1.00 share price. The funds will purchase only high-quality securities that FMR believes present minimal credit risks and will observe maturity restrictions on securities they buy. In general, securities with longer maturities are more vulnerable to price changes, although they may provide higher yields. It is possible that a major change in interest rates or a default on the funds' investments could cause their share prices (and the value of your investment) to change. The funds earn income at current money market rates. Each fund stresses preservation of capital, liquidity, and income (tax-free income in the case of Tax-Exempt) and does not seek the higher yields or capital appreciation that more aggressive investments may provide. Each fund's yield will vary from day to day, and generally reflect s current short-term interest rates and other market conditions. It is important to note that neither the funds nor their yields are guaranteed by the U.S. G overnment. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which a fund may invest, strategies FMR may employ in pursuit of a fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of each fund's limitations and more detailed information about each fund's investments are contained in the funds ' SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with a fund's investment objective and policies and that doing so will help a fund achieve its goal. Current holdings and recent investment strategies are described in each fund's financial reports, which are sent to shareholders twice a year. For a free SAI or financial report, call Fidelity Client Services at 1-800-843-3001. MONEY MARKET SECURITIES are high-quality, short-term obligations issued by the U.S. Government, corporations, financial institutions, municipalities, local and state governments, and other entities. These obligations may carry fixed, variable, or floating interest rates. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets so that they are eligible investments for money market funds. A security's credit may be enhanced by a bank, insurance company, or other entity. If the structure does not perform as intended, adverse tax or investment consequences may result. U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S. Government. Not all U.S. Government securities are backed by the full faith and credit of the United States. For example, securities issued by the Federal Farm Credit Bank or by the Federal National Mortgage Association are supported by the instrumentality's right to borrow money from the U.S. Treasury under certain circumstances. However, securities issued by the Financing Corporation are supported only by the credit of the entity that issued them. MUNICIPAL SECURITIES are issued to raise money for a variety of public or private purposes, including general financing for state and local governments, or financing for specific projects or public facilities. They may be issued in anticipation of future revenues, and may be backed by the full taxing power of a municipality, the revenues from a specific project, or the credit of a private organization. The value of some or all municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders. A fund may own a municipal security directly or through a participation interest. FOREIGN SECURITIES may involve different risks than domestic securities, including risks relating to the political and economic conditions of the foreign country involved, which could affect the payment of principal or interest. Issuers of foreign securities include foreign governments, corporations, and banks. RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt may not invest in foreign securities. Money Market and Rated Money Market may not invest in foreign securities unless they are denominated in U.S. dollars. ASSET-BACKED SECURITIES include interests in pools of mortgages, loans, receivables, or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities. VARIABLE AND FLOATING RATE SECURITIES have interest rates that are periodically adjusted either at specific intervals or whenever a benchmark rate changes. These interest rate adjustments are designed to help stabilize the security's price. STRIPPED SECURITIES are the separate income or principal components of a debt security. Their risks are similar to those of other money market securities, although they may be more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund temporarily transfers possession of a portfolio instrument to another party in return for cash. This could increase the risk of fluctuation in the fund's yield or in the market value of its assets. RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not intend to engage in reverse repurchase agreements. OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of deposit, bankers' acceptances, and time deposits. MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land, equipment, or facilities. If the municipality stops making payments or transfers its obligations to a private entity, the obligation could lose value or become taxable. OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and possessions such as Guam, the Virgin Islands, and Puerto Rico, and their political subdivisions and public corporations. PUT FEATURES entitle the holder to put (sell back) a security to the issuer or a financial intermediary. In exchange for this benefit, a fund may pay periodic fees or accept a lower interest rate. The credit quality of the investment may be affected by the creditworthiness of the put provider. Demand features, standby commitments, and tender options are types of put features. PRIVATE ENTITIES may be involved in some municipal securities. For example, industrial revenue bonds are backed by private entities, and resource recovery bonds often involve private corporations. The viability of a project or tax incentives could affect the value and credit quality of these securities. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities, and some other securities, may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to a fund. RESTRICTIO N: A fund may not purchase a security if, as a result, more than 10% of its net assets would be invested in illiquid securities. WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in which payment and delivery for the securities take place at a future date. The market value of a security could change during this period, which could affect the market value of a fund's assets. FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry are subject to various risks related to that industry, such as government regulation, changes in interest rates, and exposure on loans, including loans to foreign borrowers. If a fund invests substantially in this industry, its performance may be affected by conditions affecting the industry. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry or type of project. Economic, business, or political changes can affect all securities of a similar type. RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt) may not invest more than 5% of its total assets in any one issuer, except that, each fund (other than Treasury, Treasury Only and Tax-Exempt) may invest up to 10% of its total assets in the highest quality securities of a single issuer for up to three business days. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. These limitations do not apply to U.S. Government securities. Tax-Exempt may invest more than 25% of its total assets in tax-free securities that finance similar types of projects. BORROWING. Each fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements, and may make additional investments while borrowings are outstanding. RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. LENDING . A fund may lend money to other funds advised by FMR. RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraphs restate all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraphs, can be changed without shareholder approval. Treasury Only seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant NAV of $1.00. Each of Treasury, Government, Domestic, Money Market, and Rated Money Market seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Tax-Exempt seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. E ach of Domestic, Money Market, and Rated Money Market will invest more than 25% of its total assets in obligations of companies in the financial services industry. Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the funds pay fees related to their daily operations. Expenses paid out of each class's assets are reflected in that class's share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to an affiliate who provides assistance with these services. Each fund also pays OTHER EXPENSES, which are explained below. MANAGEMENT FEE FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary responsibility for providing investment management for each fund, while FMR retains responsibility for providing the fund s with other management services. FMR pays FMR Texas 50% of its management fee (before expense reimbursements) for these services. In the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market), FMR paid FMR Texas the following percentages of each fund's average net assets. Fund Name Percentage of Average Net Assets Treasury 0.10% Government 0.10% Domestic 0.10% Money Market 0.10% Tax-Exempt 0.10% Treasury Only 0.21% Rated Money Market 0.21% OTHER EXPENSES While the management fee is a significant component of each fund's annual operating costs, the funds have other expenses as well. FIIOC performs transfer agency, dividend disbursing and shareholder servicing functions for Class II shares of each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for Class II of each Taxable Fund, and maintains the general accounting records for Class II of each Taxable Fund . These expenses are paid by FMR on behalf of Rated Money Market and Treasury Only pursuant to its management contract. In the fiscal year ended March 31, 1995, the following fees were paid to FIIOC and FSC: Fund Name Percentage of Percentage of Class II's the Fund's Average Net Average Net Assets Assets Paid to Paid to FIIOC FSC Treasury * 0.01% Government * 0.01% Domestic * 0.01% Money Market * 0.01% * CLASS II WILL COMMENCE OPERATIONS ON OR ABOUT NOVEMBER 1, 1995. UMB has entered into sub-arrangements pursuant to which FIIOC performs transfer agency, dividend disbursing and shareholder services for Class II of Tax-Exempt. UMB has entered into sub-arrangements pursuant to which FSC calculates the NAV and dividends for Class II of Tax-Exempt and maintains Tax-Exempt's general accounting records. All of the fees are paid to FIIOC and FSC by UMB, which is reimbursed by Class II or the fund, as appropriate, for such payments. In the fiscal year ended March 31, 1995, fees paid by UMB to FSC on behalf of Tax-Exempt amounted to 0.01 % of its average net assets. Class II of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under the Plans, Class II of each fund is authorized to pay FDC a monthly distribution fee as compensation for its services and expenses in connection with the distribution of Class II shares of each fund and providing personal service to and/or maintenance of shareholder accounts. Class II of each fund currently pays FDC monthly at an annual rate of 0.15% of its average net assets determined at the close of business on each day throughout the month. The Plans specifically recognize that FMR may make payments from its management fee revenue, past profits or other resources to reimburse FDC for expenses incurred in connection with the distribution of Class II shares including payments made by FDC to financial institutions for their services to Class II shareholders. The Board of Trustees of each fund has not authorized such payments. Each fund, other than Rated Money Market and Treasury Only, also pays other expenses, such as legal, audit, and custodian fees; in some instances, proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. Rated Money Market and Treasury Only also pay other expenses such as brokerage fees and commissions, interest on borrowings (only Treasury Only), taxes, and the compensation of trustees who are not affiliated with Fidelity. YOUR ACCOUNT HOW TO BUY SHARES If you are investing through a securities dealer, financial or other institution (Financial Institution), contact that Financial Institution directly. Certain features of a fund may be modified when it is made available through a program of services offered by a Financial Institution, and administrative charges (in addition to payments the Financial Institution may receive pursuant to the Distribution and Service Plan) may be imposed for the services rendered. In particular, a broker may charge transaction fees with respect to the purchase and sale of fund shares. It is the responsibility of your Financial Institution to submit purchases and redemptions in order for you to receive the next determined NAV. EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The funds are managed to keep share prices stable at $1.00. Class II shares are sold without a sales charge. Shares are purchased at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. Share certificates are not available for the funds. IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or accompanied by a completed, signed application, which should be forwarded to: Fidelity Client Services c/o Fidelity Institutional Money Market Funds FIIOC P.O. Box 1182 Boston, MA 02103-1182 IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND , you can: (small solid bullet) Place a purchase order and wire money into your account, or (small solid bullet) Open an account by exchanging from the same class of any fund that is offered through this prospectus. INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE SYSTEM. Checks will not be accepted as a means of investment. BY WIRE. For wiring information and instructions, you should call the Financial Institution through which you trade or if you trade directly through Fidelity, call Fidelity Client Services. There is no fee imposed by the funds for wire purchases. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire purchases. Fidelity Client Services: Nationwide 1-800-843-3001 In order to receive same-day acceptance of your investment, you must call Fidelity Client Services and place your order between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic and Money Market; 8:30 a.m. and 4:00 p.m. Eastern time for Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the funds are open for business. If Fidelity Client Services is not advised of your purchase prior to the stated cutoff time, your purchase will not be accepted by the transfer agent. All wires must be received by the transfer agent in good order at the applicable fund's designated wire bank before the close of the Federal Reserve Wire System on that day. In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late-trading arrangements. In order to receive same-day acceptance of your purchase order for Treasury after 3:00 p.m. Eastern time, you must call Fidelity Client Services as early in the day as possible. Wired money for purchase orders for Treasury placed after 3:00 p.m. Eastern time that is not properly identified with a wire reference number will be returned to the bank from which it was wired and will not be credited to your account. You are advised to wire funds as early in the day as possible, and to provide advance notice to Fidelity Client Services for purchases over $10 million ($5 million for Treasury Only). You will earn dividends on the day of your investment, provided (i) you telephone Fidelity Client Services and place your trade between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the fund s are open for business, and (ii) the fund's designated wire bank receives the wire before the close of the Federal Reserve Wire System on the day your purchase order is accepted by the transfer agent. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $1,000,000 * MINIMUM BALANCE $1,000,000 * THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE INFORMATION REGARDING THIS WAIVER. HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. BY TELEPHONE. Redemption requests may be made by calling Fidelity Client Services at the phone number listed on page . You must designate on your account application the U.S. commercial bank account(s) into which you wish the redemption proceeds to be deposited. Fidelity Client Services will then notify you that this feature has been activated and that you may request wire redemptions. You may change the bank account(s) designated to receive redemption proceeds at any time prior to making a redemption request. You should send a letter of instruction, including a signature guarantee, to Fidelity Client Services at the address shown on page . You should be able to obtain a signature guarantee from a bank, broker, dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. There is no fee imposed by the funds for wiring of redemption proceeds. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire redemptions. Redemption proceeds will be wired via the Federal Reserve Wire System to your bank account of record. If your redemption request is received by telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, redemption proceeds will normally be wired on the same day your redemption request is received by the transfer agent. A fund reserves the right to take up to seven days to pay you if making immediate payment would adversely affect the fund. In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late trading arrangements. You are advised to place your trades as early in the day as possible. INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES STATEMENTS AND REPORTS that the transfer agent sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except a reinvestment, that affects your account balance or your account registration) (small solid bullet) Account statements (monthly) (small solid bullet) Financial reports (every six months) To reduce expenses, only one copy of most financial reports will be mailed, even if you have more than one account in a fund. Call Fidelity Client Services at 1-800-843-3001 if you need additional copies of financial reports or historical account information. SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged with FIIOC for institutions that wish to open multiple accounts (a master account and sub-accounts). You may be required to enter into a separate agreement with FIIOC. Charges for these services, if any, will be determined based on the level of services to be rendered. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES Each fund distributes substantially all of its net investment income and capital gains, if any, to shareholders each year. Income dividends are declared daily and paid monthly. Income dividends declared are accrued daily throughout the month and are normally distributed on the first business day of the following month. Based on prior approval of each fund, dividends relating to Class II shares redeemed during the month can be distributed on the day of redemption. Each fund reserves the right to limit this service. DISTRIBUTION OPTIONS When you open an account, specify on your account application how you want to receive your distributions. The funds offer two options: 1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if any, will be automatically reinvested in additional shares of the same class of the fund. If you do not indicate a choice on your application, you will be assigned this option. 2. CASH OPTION. You will be sent a wire for your dividend and capital gain distributions, if any. Dividends will be reinvested at each fund's Class II NAV on the last day of the month. Capital gain distributions, if any, will be reinvested at the NAV as of the record date of the distribution. TAXES As with any investment, you should consider how an investment in the funds could affect you. Below are some of the funds' tax implications. TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is distributed to shareholders as income dividends. Interest that is federally tax-free remains tax-free when it is distributed. Distributions from the Taxable Funds, however, are subject to federal income tax and may also be subject to state or local taxes. If you live outside the United States, your distributions from these funds could also be taxed by the country in which you reside. For federal tax purposes, the income and short-term capital gain distributions from each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds results in taxable distributions. Short-term capital gains and a portion of the gain on bonds purchased at a discount are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. Mutual fund dividends from U.S. Government securities are generally free from state and local income taxes. However, particular states may limit this benefit, and some types of securities, such as repurchase agreements and some agency-backed securities, may not qualify for the benefit. Ginnie mae securities and other mortgage-backed securities are notable exceptions in most states. In addition, some states may impose intangible property taxes. You should consult your own tax adviser for details and up-to-date information on the tax laws in your state. During the fiscal year ended March 31, 1995, 27 % of Treasury's, 20 % of Government's, 100 % of Treasury Only's, 2% of Domestic's, and 1 % of Money Market's income distributions were derived from interest on U.S. Government securities which is generally exempt from state income tax. During the fiscal year ended August 31, 1995, 4% of Rated Money Market's income distributions was derived from interest on U.S. Government securities which is generally exempt from state income tax. Distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. Every January, the transfer agent will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. A portion of Tax-Exempt's dividends may be free from state or local taxes. Income from investments in your state are often tax-free to you. Each year, the transfer agent will send you a breakdown of Tax-Exempt's income from each state to help you calculate your taxes. During the fiscal year ended March 31, 1995, 100 % of Ta x- Exempt's income dividends was free from federal income tax. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, a fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day that both the Federal Reserve Bank of New York (New York Fed) (for all Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed) (for Tax-Exempt) and the New York Stock Exchange (NYSE) are open. The following holiday closings have been scheduled for 1996: New Year's Day, Martin Luther King 's Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedule to be observed in the future, the Kansas City Fed, the New York Fed, or the NYSE may modify its holiday schedule at any time. On any day that the Kansas City Fed, the New York Fed, or the NYSE closes early, the principal government securities markets close early (such as on days in advance of holidays generally observed by participants in such markets), or as permitted by the SEC, the right is reserved to advance the time on that day by which purchase and redemption orders must be received. To the extent that portfolio securities are traded in other markets on days when the Kansas City Fed, the New York Fed, or the NYSE is closed, each fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. Certain Fidelity funds may follow different holiday closing schedules. A CLASS'S NAV is the value of a single share. The NAV of Class II of each fund is computed by adding Class II's pro rata share of the value of the fund's investments, cash, and other assets, subtracting Class II's pro rata share of the value of the fund's liabilities, subtracting the liabilities allocated to Class II, and dividing the result by the number of Class II shares of that fund that are outstanding. Each fund values its portfolio securities on the basis of amortized cost. This method minimizes the effect of changes in a security's market value and helps each fund maintain a stable $1.00 share price. THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to sell one share) of Class II are its NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your social security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require a fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer agent may only be liable for losses resulting from unauthorized transactions if they do not follow reasonable procedures designed to verify the identity of the caller. Fidelity and the transfer agent will request personalized security codes or other information, and may also record calls. You should verify the accuracy of the confirmation statements immediately after receipt. If you do not want the ability to redeem and exchange by telephone, call the transfer agent for instructions. Additional documentation may be required from corporations, associations and certain fiduciaries. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. Each fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of a fund. TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to initiate all trades as early in the day as possible and to notify Fidelity Client Services in advance of transactions in excess of $10 million ( $5 million for Treasury Only ) . WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) All of your purchases must be made by federal fund s wire; checks will not be accepted for purchases. (small solid bullet) If your wire is not received by the close of the Federal Reserve Wire System, you could be liable for any losses or fees a fund or the transfer agent has incurred or for interest and penalties. Net interest income for dividend purposes is determined by FSC on a daily basis and shall be payable to shareholders of record at the time of its declaration (including, for this purpose, holders of Class II shares purchased, but excluding holders of shares redeemed, on that day). The income declared for Treasury is based on estimates of net interest income for the fund. Actual income may differ from estimates , and differences, if any, will be included in the calculation of subsequent dividends. Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 5:00 p.m. Eastern time for Treasury, will be entitled to dividends declared that day. Shares of Rated Money Market purchased between 3:00 p.m. and 4:00 p.m. Eastern time begin to earn income dividends on the following business day. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) Shares of Rated Money Market redeemed before 3:00 p.m. Eastern time do not receive the dividend declared on the day of redemption ; s hares of Rated Money Market redeemed between 3:00 p.m. and 4:00 p.m. Eastern time do receive the dividends declared on the day of redemption. (small solid bullet) Shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Tax-Exempt do not receive the dividend declared on the day of redemption. (small solid bullet) A fund may withhold redemption proceeds until it is reasonably assured that investments credited to your account have been received and collected. When the NYSE, the Kansas City Fed, or the New York Fed is closed (or when trading is restricted) for any reason other than its customary weekend or holiday closings, or under any emergency circumstances as determined by the SEC to merit such action, a fund may suspend redemption or postpone payment dates. In cases of suspension of the right of redemption, the request for redemption may either be withdrawn or payment may be made based on the NAV next determined after the termination of the suspension. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the account may be closed and the proceeds may be wired to your bank account of record. You will be given 30 days' notice that your account will be closed unless it is increased to the minimum. THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. EXCHANGE RESTRICTIONS As a shareholder you have the privilege of exchanging Class II shares of any fund offered through this prospectus at no charge for Class II shares of any other fund offered through this prospectus. An exchange involves the redemption of all or a portion of the shares of one fund and the purchase of shares of another fund. BY TELEPHONE. Exchanges may be requested on any day a fund is open for business by calling Fidelity Client Services at the number listed on page between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury O nly ; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market ; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury. BY MAIL. You may exchange shares on any business day by submitting written instructions with an authorized signature which is on file for that account. Written requests for exchanges should contain the fund name, account number, the number of shares to be redeemed, and the name of the fund to be purchased. Written requests for exchange should be mailed to Fidelity Client Services at the address on page . WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class II shares will be redeemed at the next determined NAV after your order is received and accepted by the transfer agent. Shares of the fund to be acquired will be purchased at its next determined NAV after redemption proceeds are made available. You should note that, under certain circumstances, a fund may take up to seven days to make redemption proceeds available for the exchange purchase of shares of another fund. In addition, please note the following: (small solid bullet) Exchanges will not be permitted until a completed and signed account application is on file. (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) You will earn dividends in the acquired fund in accordance with the fund's customary policy, normally on the day the exchange request is received. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Each fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if a fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to a fund. Although the funds will attempt to give you prior notice whenever they are reasonably able to do so, they may impose these restrictions at any time. The funds reserve the right to terminate or modify the exchange privilege in the future. 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 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 s or FDC. This Prospectus and the related SAI do not constitute an offer by the fund s or by FDC to sell or to buy shares of the fund s to any person to whom it is unlawful to make such offer. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS II CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, 11 ............................ Cover Page; Table of Contents 12 ............................ * 13 a - c ............................ Investment Policies and Limitations d ............................ Portfolio Transactions 14 a - c ............................ Trustees and Officers 15 a ............................ * b ............................ Description of the Trusts c ............................ Trustees and Officers 16 a i ............................ FMR ii ............................ Trustees and Officers iii ............................ Management Contracts b,c,d ............................ Management Contracts e ............................ * f ............................ Distribution and Service Plans g ............................ * h ............................ Description of the Trusts i ............................ Management Contracts 17 a ............................ Portfolio Transactions b ............................ Portfolio Transactions c ............................ Portfolio Transactions d, e ............................ * 18 a ............................ Description of the Trusts b ............................ * 19 a ............................ Additional Purchase, Exchange and Redemption Information b ............................ Additional Purchase, Exchange and Redemption Information; Valuation c ............................ * 20 Distributions and Taxes 21 a, b ............................ Distribution and Service Plans; Management Contracts c ............................ * 22 ............................ Performance 23 ............................ Financial Statements
* Not Applicable FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS II FIDELITY INSTITUTIONAL CASH PORTFOLIOS: Domestic, Government, Money Market, Treasury FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS: Tax-Exempt DAILY MONEY FUND: Treasury Only FIDELITY MONEY MARKET TRUST: Rated Money Market STATEMENT OF ADDITIONAL INFORMATION NOVEMBER 1, 1995 This Statement of Additional Information (SAI) is not a prospectus but should be read in conjunction with the funds' current Prospectus (dated November 1, 1995). Please retain this document for future reference. The funds' financial statements and financial highlights, included in the Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) , are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation Performance Additional Purchase, Exchange and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contracts Contracts with FMR Affiliates Distribution and Service Plans Description of the Trusts Financial Statements Appendix INVESTMENT ADVISER Fidelity Management & Research Company (FMR) SUB-ADVISER FMR Texas Inc. (FMR Texas) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT FOR TAXABLE FUNDS Fidelity Investments Institutional Operations Company (FIIOC) TRANSFER AGENT FOR TAX-EXEMPT UMB Bank, n.a. (UMB) IMMII-ptb -1195 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 shall be determined immediately after and as a result of a 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 each fund's investment policies and limitations. Each fund's fundamental investment policies and limitations may not be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940 (1940 Act)) of each fund. However, except for the fundamental investment limitations set forth below, the investment policies and limitations described in this SAI are not fundamental, and may be changed without shareholder approval. INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. 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 from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (v) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (vi) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (vii) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (viii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (ix) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (x) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. Treasury, under normal conditions, invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. These operating policies may be changed upon 90 days' notice to shareholders. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: GOVERNMENT THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi i ) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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 Act in the disposition of restricted securities; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY MARKET THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or fund for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TAX-EXEMPT THE FOLLOWING ARE TAX-EXEMPT'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) if, as a result thereof, (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 as permitted under the 1940 Act ; (3) make short sales of securities; (4) purchase any securities on margin, except for such short-term credits as are necessary for the clearance of transactions; (5) borrow money, except for temporary or emergency purposes (not for leveraging or investment) in an amount not to exceed 33 1/3% of the value of the fund's total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed 33 1/3% of the fund's assets by reason of a decline in net assets will be reduced within three days (exclusive of Sundays and Holidays) to the extent necessary to comply with the 33 1/3% limitation; (6) 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; (7) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government, or any of its agencies, instrumentalities, territories or possessions, or issued or guaranteed by a state government or political subdivision thereof) if as a result more than 25% of the value of its total assets would be invested in securities of companies having their principal business activities in the same industry; (8) purchase or sell real estate, but this shall not prevent the fund from investing in municipal bonds or other obligations secured by real estate or interest therein; (9) purchase or sell physical commodities; (10) 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 limit does not apply to purchases of debt securities or to repurchase agreements); or (11) invest in oil, gas or other mineral exploration or development programs. (12) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. For purposes of limitations (1) and (7), FMR identifies the issuer of a security depending on the terms and conditions of the security. In identifying the issuer, FMR will consider the entity or entities responsible for payment of interest and repayment of principal and the source of such payments; the way in which assets and revenues of an issuing political subdivision are separated from those of other political entities; and whether a governmental body is guaranteeing the security. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) 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. (iii) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (iv) The fund does not currently intend to engage in repurchase agreements or make loans, but this limitation does not apply to purchases of debt securities. (v) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (vi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TREASURY ONLY THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) issue senior securities, except as permitted under the 1940 Act ; (2) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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; 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. (8) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities. (iii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies, and limitations as the fund. Subject to revision upon 90 days' notice to shareholders, Treasury Only will not engage in reverse repurchase agreements. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF RATED MONEY MARKET THE FOLLOWING ARE RATED MONEY MARKET'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) 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 as permitted under the 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services 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; (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 limit does not apply to purchases of debt securities or to repurchase agreements. (9) invest in oil, gas or other mineral exploration or development programs. (10) write or purchase any put or call option. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options. (11) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iii) 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. (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 lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vi) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in securities of business enterprises that, including predecessors, have a record of less than three years continuous operation. (vii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (vi 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. ( ix ) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (x) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For purposes of limitation (vi), pass-through entities and other special purposes vehicles or pools of financial assets, such as issuers of asset-backed securities or investment companies, are not considered "business enterprises." For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . Each fund's investments must be consistent with its investment objective and policies. Accordingly, not all of the security types and investment techniques discussed below are eligible investments for each of the funds. 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 include 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. ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities and, in certain cases, supported by letters of credit, surety bonds, or other credit enhancements. The value of asset-backed securities may also be affected by the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities providing the credit support. DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a delayed-delivery or when-issued basis. These transactions involve a commitment by a fund to purchase or sell specific securities at a predetermined price or yield, with payment and delivery taking place after the customary settlement period for that type of security. Typically, no interest accrues to the purchaser until the security is delivered. When purchasing securities on a delayed-delivery basis, each fund assumes the rights and risks of ownership, including the risk of price and yield fluctuations. Because a fund is not required to pay for securities until the delivery date, these risks are in addition to the risks associated with the fund's other investments. If a fund remains substantially fully invested at a time when delayed-delivery purchases are outstanding, the delayed-delivery purchases may result in a form of leverage. When delayed-delivery purchases are outstanding, the fund will set aside appropriate liquid assets in a segregated custodial account to cover its purchase obligations. When a fund has sold a security on a delayed-delivery basis, the fund does not participate in further gains or losses with respect to the security. If the other party to a delayed-delivery transaction fails to deliver or pay for the securities, the fund could miss a favorable price or yield opportunity, or could suffer a loss. Each fund may renegotiate delayed-delivery transactions after they are entered into, and may sell underlying securities before they are delivered, which may result in capital gains or losses. DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S. dollar-denominated time deposits, certificates of deposit, and bankers' acceptances of U.S. banks and their branches located outside of the United States, U.S. branches and agencies of foreign banks, and foreign branches of foreign banks. A fund may also invest in U.S. dollar-denominated securities issued or guaranteed by other U.S. or foreign issuers, including U.S. and foreign corporations or other business organizations, foreign governments, foreign government agencies or instrumentalities, and U.S. and foreign financial institutions, including savings and loan institutions, insurance companies, mortgage bankers, and real estate investment trusts, as well as banks. The obligations of foreign branches of U.S. banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by governmental regulation. Payment of interest and principal on these obligations may also be affected by governmental action in the country of domicile of the branch (generally referred to as sovereign risk). In addition, evidence of ownership of portfolio securities may be held outside of the United States and a fund may be subject to the risks associated with the holding of such property overseas. Various provisions of federal law governing the establishment and operation of U.S. branches do not apply to foreign branches of U.S. banks. Obligations of U.S. branches and agencies of foreign banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by federal and state regulation, as well as by governmental action in the country in which the foreign bank has its head office. Obligations of foreign issuers involve certain additional risks. These risks may include future unfavorable political and economic developments, withholding taxes, seizures of foreign deposits, currency controls, interest limitations, or other governmental restrictions that might affect payment of principal or interest, or the ability to honor a credit commitment. Additionally, there may be less public information available about foreign entities. Foreign issuers may be subject to less governmental regulation and supervision than U.S. issuers. Foreign issuers also generally are not bound by uniform accounting, auditing, and financial reporting requirements comparable to those applicable to U.S. issuers. FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not intend to invest in securities whose interest is federally taxable. However, from time to time on a temporary basis, Tax-Exempt may invest a portion of its assets in fixed-income obligations whose interest is subject to federal income tax. Should Tax-Exempt invest in federally taxable obligations, it would purchase securities that, in FMR's judgment, are of high quality. These obligations would include those issued or guaranteed by the U.S. Government or its agencies or instrumentalities and repurchase agreements backed by such obligations. Proposals to restrict or eliminate the federal income tax exemption for interest on municipal obligations are introduced before Congress from time to time. Proposals also may be introduced before state legislatures that would affect the state tax treatment of Tax-Exempt's distributions. If such proposals were enacted, the availability of municipal obligations and the value of Tax-Exempt's holdings would be affected, and the Trustees would reevaluate Tax-Exempt's investment objectives and policies. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. 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 instruments. In determining the liquidity of a fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the funds to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days. Also, FMR may determine some restricted securities, municipal lease obligations, and time deposits to be illiquid. In the absence of market quotations, illiquid investments are valued for purposes of monitoring amortized cost valuation at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, a fund were in a position where more than 10% of its net assets were invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the SEC, each fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Tax-Exempt will participate in the interfund borrowing program only as a borrower. 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. Treasury, Treasury Only, Domestic, Money Market, Government, and Rated Money Market will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements). A fund will borrow through the program only when the costs are equal to or lower than the cost of bank loans. 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. Treasury, Government, and Treasury Only do not currently intend to participate in the program as lenders. MARKET DISRUPTION RISK. The value of municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders in the event of a bankruptcy. Municipal bankruptcies are relatively rare, and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear and remain untested. Further, the application of state law to municipal issuers could produce varying results among the states or among municipal securities issuers within a state. These legal uncertainties could affect the municipal securities market generally, certain specific segments of the market, or the relative credit quality of particular securities. Any of these effects could have a significant impact on the prices of some or all of the municipal securities held by a fund, making it more difficult for the fund to maintain a stable net asset value per share. MONEY MARKET SECURITIES are high-quality, short-term obligations. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets. For example, put features can be used to modify the maturity of a security, or interest rate adjustment features can be used to enhance price stability. If the structure does not perform as intended, adverse tax or investment consequences may result. Neither the Internal Revenue Service (IRS) nor any other regulatory authority has ruled definitively on certain legal issues presented by structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds. MUNICIPAL LEASES and participation interests therein may take the form of a lease, an installment purchase, or a conditional sale contract and are issued by state and local governments and authorities to acquire land or a wide variety of equipment and facilities. Generally, the funds will not hold such obligations directly as a lessor of the property, but will purchase a participation interest in a municipal obligation from a bank or other third party. A participation interest gives a fund a specified, undivided interest in the obligation in proportion to its purchased interest in the total amount of the obligation. Municipal leases frequently have risks distinct from those associated with general obligation or revenue bonds. State constitutions and statutes set forth requirements that states or municipalities must meet to incur debt. These may include voter referenda, interest rate limits, or public sale requirements. Leases, installment purchases, or conditional sale contracts (which normally provide for title to the leased asset to pass to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting their constitutional and statutory requirements for the issuance of debt. Many leases and contracts include "non-appropriation clauses" providing that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for such purposes by the appropriate legislative body on a yearly or other periodic basis. Non-appropriation clauses free the issuer from debt issuance limitations. MUNICIPAL SECTORS : ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been experiencing, and will continue to experience, increased competitive pressures. Federal legislation in the last two years will open transmission access to any electricity supplier, although it is not presently known to what extent competition will evolve. Other risks include: (a) the availability and cost of fuel, (b) the availability and cost of capital, (c) the effects of conservation on energy demand, (d) the effects of rapidly changing environmental, safety, and licensing requirements, and other federal, state, and local regulations, (e) timely and sufficient rate increases, and (f) opposition to nuclear power. HEALTH CARE INDUSTRY. The health care industry is subject to regulatory action by a number of private and governmental agencies, including federal, state, and local governmental agencies. A major source of revenues for the health care industry is payments from the Medicare and Medicaid programs. As a result, the industry is sensitive to legislative changes and reductions in governmental spending for such programs. Numerous other factors may affect the industry, such as general and local economic conditions; demand for services; expenses (including malpractice insurance premiums); and competition among health care providers. In the future, the following elements may adversely affect health care facility operations: adoption of legislation proposing a national health insurance program; other state or local health care reform measures; medical and technological advances which dramatically alter the need for health services or the way in which such services are delivered; changes in medical coverage which alter the traditional fee-for-service revenue stream; and efforts by employers, insurers, and governmental agencies to reduce the costs of health insurance and health care services. HOUSING. Housing revenue bonds are generally issued by a state, county, city, local housing authority, or other public agency. They generally are secured by the revenues derived from mortgages purchased with the proceeds of the bond issue. It is extremely difficult to predict the supply of available mortgages to be purchased with the proceeds of an issue or the future cash flow from the underlying mortgages. Consequently, there are risks that proceeds will exceed supply, resulting in early retirement of bonds, or that homeowner repayments will create an irregular cash flow. Many factors may affect the financing of multi-family housing projects, including acceptable completion of construction, proper management, occupancy and rent levels, economic conditions, and changes to current laws and regulations. EDUCATION. In general, there are two types of education-related bonds; those issued to finance projects for public and private colleges and universities, and those representing pooled interests in student loans. Bonds issued to supply educational institutions with funds are subject to the risk of unanticipated revenue decline, primarily the result of decreasing student enrollment or decreasing state and federal funding. Among the factors that may lead to declining or insufficient revenues are restrictions on students' ability to pay tuition, availability of state and federal funding, and general economic conditions. Student loan revenue bonds are generally offered by state (or substate) authorities or commissions and are backed by pools of student loans. Underlying student loans may be guaranteed by state guarantee agencies and may be subject to reimbursement by the United States Department of Education through its guaranteed student loan program. Others may be private, uninsured loans made to parents or students which are supported by reserves or other forms of credit enhancement. Recoveries of principal due to loan defaults may be applied to redemption of bonds or may be used to re-lend, depending on program latitude and demand for loans. Cash flows supporting student loan revenue bonds are impacted by numerous factors, including the rate of student loan defaults, seasoning of the loan portfolio, and student repayment deferral during periods of forbearance. Other risks associated with student loan revenue bonds include potential changes in federal legislation regarding student loan revenue bonds, state guarantee agency reimbursement and continued federal interest and other program subsidies currently in effect. WATER AND SEWER. Water and sewer revenue bonds are often considered to have relatively secure credit as a result of their issuer's importance, monopoly status, and generally unimpeded ability to raise rates. Despite this, lack of water supply due to insufficient rain, run-off, or snow pack is a concern that has led to past defaults. Further, public resistance to rate increases, costly environmental litigation, and federal environmental mandates are challenges faced by issuers of water and sewer bonds. TRANSPORTATION. Transportation debt may be issued to finance the construction of airports, toll roads, highways or other transit facilities. Airport bonds are dependent on the general stability of the airline industry and on the stability of a specific carrier who uses the airport as a hub. Air traffic generally follows broader economic trends and is also affected by the price and availability of fuel. Toll road bonds are also affected by the cost and availability of fuel as well as toll levels, the presence of competing roads, and the general economic health of the area. Fuel costs and availability also affect other transportation-related securities, as does the presence of alternate forms of transportation, such as public transportation. PUT FEATURES entitle the holder to sell a security back to the issuer or a third party at any time or at specified intervals. They are subject to the risk that the put provider is unable to honor the put feature (purchase the security). Put providers often support their ability to buy securities on demand by obtaining letters of credit or other guarantees from other entities. Demand features, standby commitments, and tender options are types of put features. 2.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of Trustees, the funds may purchase only high-quality securities that FMR believes present minimal credit risks. To be considered high-quality, a security must be rated in accordance with applicable rules in one of the two highest categories for short-term securities by at least two nationally recognized rating services (or by one, if only one rating service has rated the security); or, if unrated, judged to be of equivalent quality by FMR. High-quality securities are divided into "first tier" and "second tier" securities. First tier securities are those deemed to be in the highest rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier securities are those deemed to be in the second highest rating category (e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be determined to be either first or second tier based on applicable regulations. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may not invest more than 5% of its total assets in second tier securities. In addition, each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market fund may not invest more than 1% of its total assets or $1 million (whichever is greater) in the second tier securities of a single issuer. Each fund currently intends to limit its investments to securities with remaining maturities of 397 days or less, and to maintain a dollar-weighted average maturity of 90 days or less. When determining the maturity of a security, a fund may look to an interest rate reset or demand feature. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a security and simultaneously commits 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. To protect the fund from the risk that the original seller will not fulfill its obligation, the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to a fund in connection with bankruptcy proceedings), it is each fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. 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, a fund 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, a fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. However, in general, each fund anticipates holding restricted securities to maturity or selling them in an exempt transaction. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. A fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short. Short sales could be used to protect the net asset value per share of the fund in anticipation of increased interest rates, without sacrificing the current yield of 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. SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of the credit of a bank or another entity in determining whether to purchase a security supported by a letter of credit guarantee, insurance or other source of credit or liquidity. In evaluating the credit of a foreign bank or other foreign entities, FMR will consider whether adequate public information about the entity is available and whether the entity may be subject to unfavorable political or economic developments, currency controls, or other government restrictions that might affect its ability to honor its commitment. STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by separating the income and principal components of a debt instrument and selling them separately. U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities), are created when the coupon payments and the principal payment are stripped from an outstanding Treasury bond by the Federal Reserve Bank. Bonds issued by the government agencies also may be stripped in this fashion. Privately stripped government securities are created when a dealer deposits a Treasury security or federal agency security with a custodian for safekeeping and then sells the coupon payments and principal payment that will be generated by this security. Proprietary receipts, such as Certificates of Accrual on Treasury Securities (CATS), Treasury Investment Growth Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped U.S. Treasury securities that are separated into their component parts through trusts created by their broker sponsors. Bonds issued by the government agencies also may be stripped in this fashion. Because of the SEC's views on privately stripped government securities, a fund must evaluate them as it would non-government securities pursuant to regulatory guidelines applicable to all money market funds. A fund currently intends to purchase only those privately stripped government securities that have either received the highest rating from two nationally recognized rating services (or one, if only one has rated the security) or, if unrated, have been judged to be of equivalent quality by FMR pursuant to procedures adopted by the Board of Trustees. VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of the interest rate paid on the security. Variable rate securities provide for a specified periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate. Some variable or floating rate securities have put features. ZERO COUPON BONDS do not make regular interest payments. Instead, they are sold at a deep 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 very volatile when interest rates change. In calculating its daily dividend, a fund takes into account as income a portion of the difference between a zero coupon bond's purchase price and its face value. 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 has granted investment management authority to the sub-adviser (see the section entitled "Management Contracts"), and the 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 below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. Securities purchased and sold by a fund generally will be traded on a net basis (i.e., without commission). 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; and the reasonableness of any commissions. The funds may execute portfolio transactions with broker-dealers who provide research and execution services to the funds or other 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 accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). FMR maintains a listing of broker-dealers who provide such services on a regular basis. However, as many transactions on behalf of the funds are placed with broker-dealers (including broker-dealers on the list) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such broker-dealers solely because such services were provided. The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the funds may be useful to FMR in rendering investment management services to the funds 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 the funds. 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. Subject to applicable limitations of the federal securities laws, broker-dealers may receive 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 the funds 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 the funds and 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. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the funds or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with FBSI and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by nonaffiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. 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. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute fund transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. Each fund's Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the funds and review the commissions paid by each fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For fiscal years ended March 31, 1995, 1994, and 1993 (August 31, 1995, 1994, and 1993 for Rated Money Market), the funds paid no brokerage commissions. During fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market), the funds paid no fees to brokerage firms that provided research. 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, investment decisions for each fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and 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 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 Fidelity Service Company (FSC) normally determines a fund's net asset value per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only ; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The valuation of portfolio securities is determined as of these times for the purpose of computing each fund's NAV. Portfolio securities and other assets are valued on the basis of amortized cost. This technique involves initially valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. The amortized cost value of an instrument may be higher or lower than the price a fund would receive if it sold the instrument. During periods of declining interest rates, a fund's yield based on amortized cost valuation may be higher than would result if the fund used market valuations to determine its NAV. The converse would apply during periods of rising interest rates. Valuing each fund's instruments on the basis of amortized cost and use of the term "money market fund" are permitted pursuant to Rule 2a-7 under the 1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as summarized in the section entitled "Quality and Maturity" on page . The Board of Trustees oversees FMR's adherence to the provisions of Rule 2a-7 and has established procedures designed to stabilize each fund's NAV at $1.00. At such intervals as they deem appropriate, the Trustees consider the extent to which NAV calculated by using market valuations would deviate from $1.00 per share. If the Trustees believe that a deviation from a fund's amortized cost per share may result in material dilution or other unfair results to shareholders, the Trustees have agreed to take such corrective action, if any, as they deem appropriate to eliminate or reduce, to the extent reasonably practicable, the dilution or unfair results. Such corrective action could include selling portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; establishing NAV by using available market quotations; and such other measures as the Trustees may deem appropriate. PERFORMANCE The funds 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. Yield and total return fluctuate in response to market conditions and other factors. YIELD CALCULATIONS. To compute a class's yield for a period, the net change in value of a hypothetical account containing one share reflects the value of additional shares purchased with dividends from the one original share and dividends declared on both the original share and any additional shares. The net change is then divided by the value of the account at the beginning of the period to obtain a base period return. This base period return is annualized to obtain a current annualized yield. An effective yield may also be calculated by compounding the base period return over a one-year period. In addition to the current yield, the funds may quote yields in advertising based on any historical seven-day period. Yields for each class of the funds are calculated on the same basis as other money market funds, as required by applicable regulations. Yield information may be useful in reviewing a class's performance and in providing a basis for comparison with other investment alternatives. However, each class's yield fluctuates, unlike investments that pay a fixed interest rate over a stated period of time. When comparing investment alternatives, investors should also note the quality and maturity of the portfolio securities of respective investment companies they have chosen to consider. Investors should recognize that in periods of declining interest rates a class's yield will tend to be somewhat higher than prevailing market rates, and in periods of rising interest rates a class's yield will tend to be somewhat lower. Also, when interest rates are falling, the inflow of net new money to a fund from the continuous sale of its shares will likely be invested in instruments producing lower yields than the balance of the fund's holdings, thereby reducing a class's current yield. In periods of rising interest rates, the opposite can be expected to occur. A class's tax-equivalent yield is the rate an investor would have to earn from a fully taxable investment before taxes to equal the class's tax-free yield. Tax-equivalent yields are calculated by dividing a class's yield by the result of one minus a stated federal or combined federal and state tax rate. If only a portion of a class's yield is tax-exempt, only that portion is adjusted in the calculation. The following table shows the effect of a shareholder's tax status on effective yield under federal income tax laws for 19 95 . It shows the approximate yield a taxable security must provide at various income brackets to produce after-tax yields equivalent to those of hypothetical tax-exempt obligations yielding from 2.00 % to 8.00 %. Of course, no assurance can be given that a class will achieve any specific tax-exempt yield. While Tax-Exempt invests principally in obligations whose interest is exempt from federal income tax, other income received by the fund may be taxable.
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
Taxable Income* Federal If individual tax-exempt yield is: Income
Tax 2.00 % 3.00 % 4.00 % 5.00 % 6.0 % 7.00 % 8.00 %
Single Return Joint Return Bracket** Then taxable equivalent yield is:
$ 23,351- $ 36,001 - 28.0 % 2.78 % 4.17 % 5.56 % 6.94 % 8.33 % 9.72 % 11.11 % $ 56,500 $ 94,250 $ 56,501 - $ 94,251 - 31.0 % 2.90 % 4.35 % 5.80 % 7.25 % 8.70 % 10.14 % 11.59 % $ 117,950 $ 143,600 $ 117,951 - $ 143,601 - 36.0 % 3.13 % 4.69% 6.25 % 7.81 % 9.38 % 10.94 % 12.50 % $ 256,500 $ 256,500 $ 256,501 - $ 256,501 - 39.6 % 3.31 % 4.97 % 6.62 % 8.28 % 9.93 % 11.59 % 13.25 %
* Net amount subject to federal income tax after deductions and exemptions. Assumes ordinary income only. ** Excludes the impact of the phaseout of personal exemptions, limitations on itemized deductions, and other credits, exclusions, and adjustments which may increase a taxpayer's marginal tax rate. An increase in a shareholder's marginal tax rate would increase that shareholder's tax-equivalent yield. Tax-Exempt may invest a portion of its assets in obligations that are subject to state or federal income taxes. When the fund invests in these obligations, its tax-equivalent yield will be lower. In the table above, the tax-equivalent yields are calculated assuming investments are 100% federally and state tax-free. TOTAL RETURN CALCULATIONS. Total 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 the class's NAV over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment 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 total return of 100% over ten years would produce an average annual total 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 total returns covering periods of less than one year are calculated by determining a class's total 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 total returns are a convenient means of comparing investment alternatives, investors should realize that performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of a class. In addition to average annual total returns, a class may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total 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. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. HISTORICAL RESULTS. The following table shows 7-day yields, tax-equivalent yields, and total returns for Class II of each fund for the period ended March 31 , 1995 (August 31, 1995 for Rated Money Market). Initial offering of the Class II shares of each of the funds took place on November 1, 1995. Class II shares have a 0.15% 12b-1 fee which is not reflected in figures prior to this date. Prior date figures are those of Class I, the original class of the funds, which does not have a 12b-1 fee. Class II figures would have been lower had 12b-1 fees been reflected. Tax-Exempt's Class II tax-equivalent yield is based on a 36% federal income tax rate. Average Annual Total Returns Cumulative Total Returns
Seven-Day Tax One Five Life of One Five Life of Yield Equivalent Year Years Fund*/Te Year Years Fund*/Te Yield n Years n Years
Rated Money Market - 5.46% N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99% Class II Treasury - Class II 5.98% N/A 4.78% 4.90% 6.03% 4.78% 27.03% 61.24% Government - Class II 6.01% N/A 4.86% 4.99% 6.32% 4.86% 27.60% 81.07% Domestic - Class II 6.06% N/A 4.97% 5.03% 5.31% 4.97% 27.81% 32.32% Money Market - Class II 6.07% N/A 4.99% 5.09% 6.43% 4.99% 28.15% 83.60% Treasury Only - Class II 5.80% N/A 4.65% N/A 4.45% 4.65% N/A 21.65% Tax-Exempt - Class II 3.94% 6.16% 3.18% 3.65% 4.41% 3.18% 19.61% 51.86%
* Life of Fund figures are from commencement of operations of each fund, except Rated Money Market which reports a Ten Years figure. Commencement of operations for each fund, other than Rated Money Market, are as follows: Treasury - February 2, 1987; Government - July 25, 1985; Domestic - November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3, 1990; and Tax-Exempt - July 25, 1985. Note: If FMR had not reimbursed certain fund expenses during these periods, the total returns would have been lower and the yields for Class II of each fund would have been: Fund Yield Tax-Equivalent Yield Rated Money Market - Class II N/A N/A Treasury - Class II 5.91% N/A Government - Class II 5.95% N/A Domestic - Class II 5.97% N/A Money Market - Class II 6.01% N/A Treasury Only - Class II 5.58% N/A Tax-Exempt - Class II 3.86% 6.03 % The following tables show the income and capital elements of each fund's Class II cumulative total return. The tables compare each fund's Class II return to the record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for each fund. The S&P 500 and DJIA comparisons are provided to show how each class's total return compared to the record of a broad average of common stocks and a narrower set of stocks of major industrial companies, respectively, over the same period. Of course, since each fund invests in short-term fixed-income securities, common stocks represent a different type of investment from the fund. Common stocks generally offer greater growth potential than the funds, but generally experience greater price volatility, which means greater potential for loss. In addition, common stocks generally provide lower income than fixed-income investments, such as the funds. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the funds' returns, do not include the effect of paying brokerage commissions or other costs of investing. CLASS II CHARTS. The figures for Class II shares of the funds reflect the performance for Class I shares from each fund's commencement of operations. Class I shares are sold without 12b-1 fees. The figures would have been lower if Class II's 12b-1 fee had been included. RATED MONEY MARKET HISTORICAL FUND RESULTS During the ten year period ended August 31, 1995, a hypothetical $10,000 investment in Class II of Rated Money Market would have grown to $ 18,099 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 8/31/86 10,000 742 0 10,742 13,914 14,773 10,157 8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593 8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019 8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537 8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185 8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648 8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046 8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407 8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796 8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
* The fiscal year end of the fund changed from October 31 to August 31 in July 1992. Explanatory Notes: With an initial investment of $10,000 made on August 31, 1985 , the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,099 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,949 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY HISTORICAL FUND RESULTS During the period from February 2, 1987 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class II of Treasury would have grown to $ 16,124 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081 1988 10,000 759 0 10,759 9,804 9,560 10,477 1989 10,000 1,632 0 11,632 11,583 11,432 10,998 1990 10,000 2,693 0 12,693 13,816 14,014 11,574 1991 10,000 3,692 0 13,692 15,805 15,668 12,140 1992 10,000 4,433 0 14,433 17,552 17,950 12,527 1993 10,000 4,932 0 14,932 20,229 19,633 12,914 1994 10,000 5,389 0 15,389 20,528 21,366 13,237 1995 10,000 6,124 0 16,124 23,722 25,101 13,615
* From February 2, 1987 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on February 2, 1987, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 16,124 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,790 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. GOVERNMENT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) through March 31, 1995, a hypothetical investment of $10,000 in Class II of Government would have grown to $ 18,107 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093 1987 10,000 1,233 0 11,233 16,170 18,170 10,399 1988 10,000 2,017 0 12,017 14,824 16,188 10,807 1989 10,000 3,001 0 13,001 17,514 19,358 11,345 1990 10,000 4,191 0 14,191 20,890 23,729 11,939 1991 10,000 5,318 0 15,318 23,897 26,530 12,523 1992 10,000 6,167 0 16,167 26,540 30,395 12,922 1993 10,000 6,743 0 16,743 30,588 33,245 13,321 1994 10,000 7,267 0 17,267 31,039 36,179 13,655 1995 10,000 8,107 0 18,107 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations). ** From month end closest to initial investment date. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,107 . If distributions had not been reinvested, the amount of distributions earned from Class I I shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,954 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. DOMESTIC HISTORICAL FUND RESULTS During the period from November 3, 1989 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class II of Domestic would have grown to $ 13,232 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247 1991 10,000 1,192 0 11,192 11,655 11,685 10,748 1992 10,000 1,808 0 11,808 12,944 13,387 11,091 1993 10,000 2,222 0 12,222 14,919 14,642 11,433 1994 10,000 2,605 0 12,605 15,139 15,935 11,720 1995 10,000 3,232 0 13,232 17,494 18,720 12,054
* From November 3, 1989 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on November 3, 1989, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 13,232 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amoun t ed to $ 2,807 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. MONEY MARKET HISTORICAL FUND RESULTS During the period from July 5, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class II of Money Market would have grown to $ 18,360 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112 1987 10,000 1,297 0 11,297 16,217 18,525 10,418 1988 10,000 2,103 0 12,103 14,867 16,504 10,827 1989 10,000 3,113 0 13,113 17,564 19,736 11,366 1990 10,000 4,327 0 14,327 20,950 24,192 11,961 1991 10,000 5,492 0 15,492 23,965 27,048 12,546 1992 10,000 6,358 0 16,358 26,615 30,988 12,946 1993 10,000 6,945 0 16,945 30,675 33,894 13,346 1994 10,000 7,486 0 17,486 31,128 36,885 13,680 1995 10,000 8,360 0 18,360 35,971 43,332 14,071
* From July 5, 1985 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on July 5, 1985, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,360 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 6,093 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY ONLY HISTORICAL FUND RESULTS During the period from October 3, 1990 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class II of Treasury Only would have grown to $ 12,165 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3 /31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173 1992 10,000 913 0 10,913 13,454 13,573 10,497 1993 10,000 1,285 0 11,285 15,506 14,846 10,821 1994 10,000 1,624 0 11,624 15,735 16,157 11,093 1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
* From October 3, 1990 (commencement of operations). + The fiscal year end of the fund changed from July 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on October 3, 1990, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested) amounted to $ 12,165 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 1,963 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TAX-EXEMPT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class II of Tax-Exempt would have grown to $ 15,186 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class II of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3 /31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093 1987 10,000 814 0 10,814 16,170 18,170 10,399 1988 10,000 1,323 0 11,323 14,824 16,188 10,807 1989 10,000 1,958 0 11,958 17,514 19,358 11,345 1990 10,000 2,697 0 12,697 20,890 23,729 11,939 1991 10,000 3,411 0 13,411 23,897 26,530 12,523 1992 10,000 3,973 0 13,973 26,540 30,395 12,922 1993 10,000 4,369 0 14,369 30,588 33,245 13,321 1994 10,000 4,718 0 14,718 31,039 36,179 13,655 1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations) ** From month end closest to initial investment date. + The fiscal year end of the fund changed from May 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class II shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 15,186 . If distributions had not been reinvested, the amount of distributions earned from Class II shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,186 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. A fund'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 Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. Lipper may also rank funds based on yield. In addition to the mutual fund rankings, a fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, 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 fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund 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 fund 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 your principal or your 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 indices. 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 total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. A fund may compare its performance or the performance of securities in which it may invest to averages published by IBC USA (Publications), Inc. of Ashland, Massachusetts. These averages assume reinvestment of distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Government, which is reported in the MONEY FUND REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND REPORT(trademark), covers over 387 money market funds. 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; charitable giving; and the Fidelity credit card. 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, a quarterly magazine provided free of charge to Fidelity fund shareholders. A fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. As of August 31, 1995, FMR advised over $26.5 billion in tax-free fund assets, $79 billion in money market fund assets, $218 billion in equity fund assets, $56 billion in international fund assets, and $23 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. In addition to performance rankings, each class of a fund may compare its total expense ratio to the average total expense ratio of similar funds tracked by Lipper. A class's total expense ratio is a significant factor in comparing bond and money market investments because of its effect on yield. ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing a class's NAV. Shareholders receiving 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. Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) a fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or a fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the prospectus, each fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, a fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DIVIDENDS. Because each fund's income is primarily derived from interest, dividends from the fund generally will not qualify for the dividends-received deduction available to corporate shareholders. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends received deduction. A portion of each fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. To the extent that each fund's income is designated as federally tax-exempt interest, the daily dividends declared by the fund are also federally tax-exempt. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends-received deduction. These gains will be taxed as ordinary income. Each fund will send each shareholder a notice in January describing the tax status of dividend and capital gain distributions (if any) for the prior year. Shareholders are required to report tax-exempt income on their federal tax returns. Shareholders who earn other income, such as social security benefits, may be subject to federal income tax on up to 85% of such benefits to the extent that their income, including tax-exempt income, exceeds certain base amounts. Tax-Exempt purchases municipal securities that are free from federal income tax based on opinions of counsel regarding their tax status. These opinions generally will be based on covenants by the issuers or other parties regarding continuing compliance with federal tax requirements. If at any time the covenants are not complied with, distribution to shareholders of interest on a security could become federally taxable retroactive to the date a security was issued. For certain types of structured securities, opinions of counsel may also be based on the effect of the structure on the federal tax treatment of the income. As a result of the Tax Reform Act of 1986, interest on certain "private activity" securities is subject to the federal alternative minimum tax (AMT), although the interest continues to be excludable from gross income for other tax purposes. Interest from private activity securities will be considered tax-exempt for purposes of Tax-Exempt's policy on investing so that at least 80% of its income is free from federal income tax. Interest from private activity securities is a tax preference item for the purposes of determining whether a taxpayer is subject to the AMT and the the amount of AMT to be paid, if any. Private activity securities issued after August 7, 1986 to benefit a private or industrial user or to finance a private facility are affected by this rule. A portion of the gain on bonds purchased with market discount after April 30, 1993 and short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. Dividend distributions resulting from a recharacterization of gain from the sale of bonds purchased with market discount after April 30, 1993 are not considered income for the purposes of Tax-Exempt's policy of investing so that at least 80% of its income is free from federal income tax. Tax-Exempt may distribute any net realized short-term capital gains and taxable market discounts once a year or more often, as necessary, to maintain its net asset value at $1.00 per share. It is the current position of the staff of the SEC that a fund that uses the term "tax-exempt" in its name may not derive more than 20% of its income from municipal obligations that pay interest that is a preference item for purposes of the AMT. According to this position, at least 80% of Tax-Exempt's income would have to be exempt from the AMT as well as from federal income taxes. Corporate investors should note that a tax preference item for the purposes of the corporate AMT is 75% of the amount by which adjusted current earnings (which includes tax-exempt interest) exceeds the alternative minimum taxable income of the corporation. If a shareholder receives an exempt-interest dividend and sells shares at a loss after holding them for a period of six months or less, the loss will be disallowed to the extent of the amount of the exempt-interest dividend. CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized short-term capital gains once a year or more often as necessary, to maintain its net asset value at $1.00 per share. Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market do not anticipate earning long-term capital gains on securities held by each fund. Tax-Exempt does not anticipate distributing long-term capital gains. As of fiscal year ended March 31, 1995, Treasury had capital loss carryforwards aggregating approximately $1,198,000. The loss carryforward for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and $534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Government had capital loss carryforwards aggregating approximately $1,104,600. The loss carryforward for Government, of which $19,400, $200, $53,000, $271,000, and $761,000 will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Domestic had capital loss carryforwards aggregating approximately $98,000. The loss carry forward for Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Money Market had capital loss carryforwards aggregating approximately $1,781,000. The loss carryforward for Money Market, of which $336,000, $898,000 and $547,000 will expire on March 31, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Treasury Only had capital loss carryforwards aggregating approximately $184,000. The loss carryforward for Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001 and 2002, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss carryforwards aggregating approximately $528,000. The loss carryforward for Tax-Exempt, which will expire on March 31, 1996, is available to offset future capital gains. As of fiscal year ended August 31, 1995, Rated Money Market had capital loss carryforwards aggregating approximately $74,000. The loss carryforward for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire on August 31, 1996, 1997, and 1998, respectively, is available to offset future capital gains. STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts, state law provides for a pass-through of the state and local income tax exemption afforded to direct owners of U.S. Government securities. Some states limit this to mutual funds that invest a certain amount in U.S. Government securities, and some types of securities, such as repurchase agreements and some agency backed securities, may not qualify for this benefit. The tax treatment of your dividend distributions from a fund will be the same as if you directly owned your proportionate share of the U.S. Government securities in the fund's portfolio. Because the income earned on most U.S. Government securities in which a fund invests is exempt from state and local income taxes, the portion of your dividends from the fund attributable to these securities will also be free from income taxes. The exemption from state and local income taxation does not preclude states from assessing other taxes on the ownership of U.S. Government securities. In a number of states, corporate franchise (income) tax laws do not exempt interest earned on U.S. Government securities whether such securities are held directly or through a fund. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid 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 are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. 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. Each fund is treated as a separate entity from the other funds of each Trust for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting each fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether a fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent company organized in 1972. 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 three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; FIIOC, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trusts are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers elected or appointed to the trusts prior to the funds' conversion from series of a Massachusetts business trust served in identical capacities. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. The business address of each Trustee 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 (64), Trustee and President, is Chairman, Chief Executive Officer 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 FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (62), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. 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 is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR (1992). 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 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). He is a Director of W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering and construction). 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 (1990). GERALD C. McDONOUGH (65), Trustee, is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (61), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). 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) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), 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 BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants, 1992). FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's money market (1994) and fixed-income (1995) funds and Senior Vice President of FMR Texas Inc. LELAND BARRON (36), Vice President (1989), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. BURNELL STEHMAN (63), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. JOHN TODD (46), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. SCOTT A. ORR (33), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995) THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice President of Fidelity's money market funds and Vice President and Associate General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an employee of FMR. JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current trustee of each fund for his or her services as trustee for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market). COMPENSATION TABLE Aggregate Compensation
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R. Davis Jones Malone Williams Rated Money $ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150 Market Treasury 0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084 Government 0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683 Money Market 0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360 Domestic 0 464 440 575 0 459 468 0 463 472 452 460 Tax-Exempt+ 0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118 Treasury Only+ 0 543 504 679 0 533 544 0 535 533 524 523
Trustees Pension or Estimated Annual Total Retirement Benefits Upon Compensation Benefits Accrued Retirement from from the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead** $ 0 $ 0 $ 0 Ralph F. Cox 5,200 52,000 125,000 Phyllis Burke Davis 5,200 52,000 122,000 Richard J. Flynn 0 52,000 154,500 Edward C. Johnson 3d** 0 0 0 E. Bradley Jones 5,200 49,400 123,500 Donald J. Kirk 5,200 52,000 125,000 Peter S. Lynch** 0 0 0 Gerald C. McDonough 5,200 52,000 125,000 Edward H. Malone 5,200 44,200 128,000 Marvin L. Mann 5,200 52,000 125,000 Thomas R. Williams 5,200 52,000 126,500
* Information is as December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. + The annualized amounts reported for Tax-Exempt and Treasury Only are for the periods June 1, 1994 through March 31, 1995 and August 1, 1994 through March 31, 1995, respectively. Each fund's fiscal year end changed to March 31 in February 1995. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. As of October 23, 1995, the Trustees and officers of each fund owned, in the aggregate, less than 1% of each fund's total outstanding shares. As of October 25, 1995, the following owned of record or beneficially 5% or more of outstanding shares of each class of the funds: TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America (11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank (6.39%). TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank (17.22%); and Chemical Bank (10.09%). GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%). GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co. of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank (12.58%); Indiana National Bank (11.37%); United National Bank (11.08%); and First Union National Bank (8.10%). DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of Boston Connecticut (5.21%). DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank (11.47%); and Exchange Bank (9.90%). MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and Shawmut Bank Of Boston, N.A. (5.58%). MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic National Bank of New York (12.38%); North American Trust Company (9.45%); and Boatmen's Trust Co. of St. Louis (5.59%). TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A. (7.49%); and Bingham, Dana & Gould (5.97%). TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank & Trust Company (9.21%); and Fleet National Bank (5.02%). RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America (7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and United States Trust Company of NY (5.39%). A shareholder owning of record or beneficially more than 25% of a fund's outstanding shares may be considered a controlling person. That shareholder's vote could have a more significant effect on matters presented at a shareholders' meeting than votes of other shareholders. MANAGEMENT CONTRACTS Each fund employs FMR to furnish investment advisory and other services. Under 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 each fund in accordance with its investment objective, policies, and limitations. FMR also provides each fund with all necessary office facilities and personnel for servicing each fund's investments, compensates all officers of each fund, all Trustees who are "interested persons" of the trusts or of FMR, and all personnel of each fund or FMR for 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 and state laws; developing management and shareholder services for each fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to UMB, FIIOC, and FSC , each fund or class thereof, as applicable, pays all of its expenses, without limitation, that are not assumed by those parties. Each fund (other than Treasury Only and Rated Money Market) 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. Although each fund's (other than Treasury Only's and Rated Money Market's) current management contract provides that each fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices and reports to shareholders, the trust, on behalf of each fund has entered into a revised transfer agent agreement with FIIOC and UMB, as applicable, pursuant to which FIIOC or UMB bears the costs of providing these services to existing shareholders of the applicable classes. Other expenses paid by each fund (other than Treasury Only and Rated Money Market) include interest, taxes, brokerage commissions, and each fund's proportionate share of insurance premiums and Investment Company Institute dues, and the costs of registering shares under federal and 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. FMR is responsible for the payment of all expenses of Treasury Only and Rated Money Market with certain exceptions. Specific expenses payable by FMR include, without limitation, expenses for the typesetting, printing, and mailing of proxy materials to shareholders; legal expenses, and the fees of the custodian, auditor, and interested Trustees; costs of typesetting, printing, and mailing prospectuses and statements of additional information, notices and reports to shareholders; and the fund's proportionate share of insurance premiums and Investment Company Institute dues. FMR also provides for transfer agent and dividend disbursing services through FIIOC and portfolio and general accounting record maintenance through FSC. FMR pays all other expenses of Treasury Only and Rated Money Market with the following exceptions: fees and expenses of all Trustees of the applicable trust who are not "interested persons" of the trust or FMR (the non-interested Trustees); interest on borrowings (only for Treasury Only); taxes; brokerage commissions (if any); and such nonrecurring expenses as may arise, including costs of any litigation to which a fund may be a party, and any obligation it may have to indemnify the officers and Trustees with respect to litigation. FMR is each fund's manager pursuant to management contracts dated May 30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30, 1993 for Treasury Only; and November 1, 1986 for Rated Money Market, which were approved by shareholders on November 18, 1992, November 13, 1991, March 24, 1993, and December 8, 1994, respectively. For the services of FMR under each contract, each fund (other than Treasury Only and Rated Money Market) pays FMR a monthly management fee at the annual rate of 0 .20% of average net assets throughout the month. Treasury Only and Rated Money Market each pay FMR a monthly management fee at the annual rate of 0.42% of average net assets throughout the month. The management fees paid to FMR by Treasury Only and Rated Money Market are reduced by the fees and expenses paid by the respective funds to the non-interested Trustees. Fees received by FMR for the last three fiscal periods are shown in the table below. Fund Fiscal Year Ended Management Fees Paid to FMR Rated Money Market 8 /31/95 $ 1,352,919* 8/31/94 1,781,535* 8/31/93 2,893,862* Treasury 3/31/95 8,680,344 3/31/94 9,834,025 3/31/93 14,029,197 Government 3/31/95 6,680,088 3/31/94 9,660,519 3/31/93 12,610,880 Domestic 3/31/95 1,923,368 3/31/94 1,525,574 3/31/93 1,536,740 Money Market 3/31/95 10,436,518 3/31/94 10,551,990 3/31/93 10,066,276 Treasury Only 3/31/95** 3,279,429* 7/31/94 4,716,697* 7/31/93 4,892,175* 7/31/92 4,249,814* Tax-Exempt 3/31/95** 3,789,731 5/31/94 5,099,831 5/31/93 5,036,875 5/31/92 4,605,577 * After reduction of fees and expenses paid by the fund to the non-interested Trustees. ** The fiscal year end of Treasury Only changed from July 31 to March 31 in February 1995. The fiscal year end of Tax-Exempt changed from May 31 to March 31 in February 1995. FMR may, from time to time, voluntarily reimburse all or a portion of each fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). 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 each fund's total returns and yield and repayment of the reimbursement by each fund will lower its total returns and yield. During the fiscal periods reported, FMR voluntarily agreed subject to revision or termination, to reimburse Class II of certain funds if and to the extent that the fund's Class II total operating expenses (excluding interest, taxes, brokerage commissions, extraordinary expenses, and 12b-1 fees) were in excess of an annual rate of its average net assets. The table below identifies the classes in reimbursement; the level at which reimbursement began; and the dollar amount reimbursed for each fiscal year ended March 31, 1995, 1994, and 1993. Prior to August 31, 1995, Rated Money Market was not in reimbursement .
Level at Which Fund Reimbursement Began Dollar Amount Reimbursed
1995 1994 1993 1992 Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A Treasury - Class III 0.20% 409,770 570 N/A N/A Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A Government - Class III 0.20% 42,272 N/A N/A N/A Domestic - Class I 0.20% 818,759 638,552 645,507 N/A Domestic - Class III 0.20% 48,097 N/A N/A N/A Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A Money Market - Class III 0.18% 230,324 7,565 N/A N/A Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 $ 2,260,410 Tax-Exempt - Class I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31, 1995. During the fiscal year ended July 31, 1992, the level at which reimbursement began ranged from 0.15% to 0.20%. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995. During the fiscal year ended May 31, 1992, the level at which reimbursement began was 0.18%. To comply with the California Code of Regulations, FMR will reimburse each fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating each fund's expenses for purposes of this regulation, each fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its distribution plan expenses and custodian fees attributable to investment in foreign securities. SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas pursuant to which FMR Texas has primary responsibility for providing portfolio investment management services to each fund. Under each sub-advisory agreement s dated May 30, 1993, January 29, 1992, September 30, 1973, and November 1, 1989 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively, FMR pays FMR Texas fees equal to 50% of the management fees payable by FMR under its m anagement c ontract with each fund. Each sub-advisory agreement was approved by each fund's shareholders on November 18, 1994, November 13, 1991, March 24, 1993, and November 16, 1994 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively. The fees paid to FMR Texas are not reduced by any voluntary or mandatory expense reimbursements that may be in effect from time to time. The table below shows fees paid to FMR Texas for the fiscal years ended March 31 (August 31 for Rated Money Market), 1995, 1994, and 1993. 1995 1994 1993 1992
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A Treasury 4,340,172 4,917,013 7,014,599 N/A Government 3,340,044 4,830,260 6,305,440 N/A Domestic 961,684 762,787 768,370 N/A Money Market 5,218,259 5,275,995 5,033,138 N/A Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907 Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31, 1995. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993 and 1994, and the fiscal period June 1, 1994 to March 31, 1995. CONTRACTS WITH FMR AFFILIATES FIIOC is transfer, dividend disbursing, and shareholder servicing agent for Class II shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent and shareholder servicing agent for Class II shares of Tax-Exempt. UMB has entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs transfer, dividend disbursing, and shareholder services for Class II shares of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee based on account size. The costs of FIIOC's services for Class II of Treasury Only and Rated Money Market are borne by FMR pursuant to its management contract. For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such fees. In addition, FIIOC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. Also, FIIOC pays out-of-pocket expenses associated with providing transfer agent services. FSC calculates NAV and dividends for Class II of each Taxable Fund, and maintains each Taxable Fund's accounting records. UMB has sub-arrangements with FSC pursuant to which FSC performs the calculations necessary to determine NAV and dividends for Class II of Tax-Exempt, and maintains the accounting records for Tax-Exempt. The annual fee rates for these pricing and bookkeeping services are based on each fund's average net assets, specifically .0175% for the first $500 million of average net assets and .0075% for average net assets in excess of $500 million. The fee is limited to a minimum of $20,000 and a maximum of $750,000 per year. The costs of FSC's services for Rated Money Market and Treasury Only are borne by FMR pursuant to its management contract. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC by the funds (except Rated Money Market and Treasury Only) for the past three fiscal years ended March 31, 1995, 1994, and 1993 were as follows: Pricing and Bookkeeping Fees
1995 1994 1993 1992 Treasury $ 375,762 $ 419,147 $ 576,072 N/A Government 331,070 412,411 523,696 N/A Domestic 122,139 107,464 108,548 N/A Money Market 441,370 445,362 429,428 N/A Tax-Exempt * 309,306 304,324 325,195 $ 332,264
* Figure s for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and fiscal period June 1, 1994 to March 31, 1995 , a nnualized . The transfer agent fees and charges for Class II of Tax-Exempt, and pricing and bookkeeping fees for Tax-Exempt described above are paid to FIIOC and FSC, respectively, by UMB, which is entitled to reimbursement from Class II or the fund, as applicable, for these expenses. Each fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls 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 net asset value. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FMR. DISTRIBUTION AND SERVICE PLANS The Trustees have approved a Distribution and Service Plan on behalf of Class II 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 a fund except pursuant to a plan approved on behalf of the fund under the Rule. The Plans, as approved by the Trustees, allow Class II of the funds 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 Plans, FDC is paid a distribution fee as a percentage of each fund ' s Class II's average net assets at an annual rate of 0.15% for each of the funds . Under each Plan, if the payment of management fees by the funds to FMR is deemed to be indirect financing by the funds of the distribution of their shares, such payment is authorized by the Plans. Each Plan specifically recognizes that FMR may use its management fee revenue as well as its past profits, or its other resources from any other source to reimburse FDC for expenses incurred in connection with the distribution of Class II shares, including payments made to third parties that assist in selling Class II shares of each fund, or to third parties, including banks, that render shareholder support services. The Trustees have not authorized such payments to date. Prior to approving each Plan, the Trustees carefully considered all pertinent factors relating to the implementation of each Plan, and have determined that there is a reasonable likelihood that the Plan will benefit the applicable class of each fund and its shareholders. To the extent that each Plan gives FMR and FDC greater flexibility in connection with the distribution of shares of the applicable class of each fund, additional sales of fund shares may result. Furthermore, certain shareholder support services may be provided more effectively under the Plans by local entities with whom shareholders have other relationships. None of the Plans provide for specific payments by Class II of any of the expenses of FDC or obligates 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. After payments by FDC for advertising, marketing and distribution, and payments to third parties, the amounts remaining, if any, may be used as FDC may elect. The Plans were approved by FMR as the then sole shareholder of each Class II fund on October 31, 1995. The Glass-Steagall Act generally prohibits federally and state chartered or supervised banks from engaging in the business of underwriting, selling, or distributing securities. Although the scope of this prohibition under the Glass-Steagall Act has not been clearly defined by the courts or appropriate regulatory agencies, 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 and their affiliates or subsidiaries, 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. DESCRIPTION OF THE TRUSTS TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S. Government Portfolio, Domestic Money Market Portfolio, and Money Market Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May 30, 1993. Currently, there are four funds of Fidelity Institutional Cash Portfolios: Treasury, Government, Domestic, and Money Market. The Trust Instrument permits the Trustees to create additional funds. Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Tax-Exempt acquired all of the assets of Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity Institutional Tax-Exempt Cash Portfolios on January 29, 1992. Currently, Tax-Exempt is the only fund of Fidelity Institutional Tax-Exempt Cash Portfolios. The Trust Instrument permits the Trustees to create additional funds. Treasury Only is a fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury Income Portfolio of Daily Money Fund on September 29, 1993. Currently, there are six funds of Daily Money Fund: Treasury Only, Money Market Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves: Municipal Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. Rated Money Market is a fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. Rated Money Market acquired all of the assets of Domestic Money Market Portfolio of Fidelity Money Market Trust on December 29, 199 4 . Currently, there are three funds of Fidelity Money Market Trust: Rated Money Market, Retirement Money Market Portfolio, and Retirement Government Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. There is a remote possibility that one fund might become liable for any misstatement in its prospectus or statement of additional information about another fund. The assets of the trusts received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trusts are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trusts, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of a trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is a business trust organized under Delaware law. Delaware law provides that shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. The courts of some states, however, may decline to apply Delaware law on this point. The Trust Instruments contain an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses of the trusts and require that a disclaimer be given in each contract entered into or executed by the trust or the Trustees. The Trust Instruments provide for indemnification out of each fund's property of any shareholder or former shareholder held personally liable for the obligations of the fund. The Trust Instruments also provide 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 Delaware law does not apply, no contractual limitation of liability was in effect, and the fund is unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is extremely remote. The Trust Instruments further provide that the Trustees, if they have exercised reasonable care, shall not be personally liable to any person other than the trust or its shareholders; moreover, the Trustees shall not be liable for any conduct whatsoever, provided that Trustees are not protected against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. 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. As a shareholder of Rated Money Market, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and non-assessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of a trust, fund or class may, as set forth in each of the Trust Instruments, call meetings of the t rust, fund, or class, for any purpose related to the t rust, fund, or class, as the case may be, including, in the case of a meeting of the entire t rust, the purpose of voting on removal of one or more Trustees. Any trust or fund may be terminated upon the sale of its assets to, or merger with, another open-end management investment company or series thereof, or upon liquidation and distribution of its assets. Generally such terminations must be approved by vote of the holders of a majority of the outstanding shares of the trust or fund (or, for Rated Money Market, as determined by the current value of each shareholder's investment in the fund or trust); however, the Trustees may, without prior shareholder approval, change the form o f organization of the trust or fund by merger, consolidation, or incorporation. If not so terminated, the trust and its funds will continue indefinitely. Under the Trust Instruments, the Trustees may, without shareholder vote, cause a trust to merge or consolidate into one or more trusts, partnerships, or corporations, or cause the trust to be incorporated under Delaware law, so long as the surviving entity is an open-end management investment company that will succeed to or assume the trust's registration statement. Each fund may invest all of its assets in another investment company. CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, NY 10260 is custodian of the assets of each fund, except Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New York is custodian of the assets of Treasury. The custodian for Tax-Exempt is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is responsible for the safekeeping of a fund's assets and the appointment of subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Chemical Bank, headquartered in New York, may also serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the funds' Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. 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. AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan Street, Suite 3000, Dallas, TX 75201 serves as the independent accountant for Tax-Exempt, Treasury Only, and Rated Money Market. Price Waterhouse LLP, 2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the independent accountant for the FICP funds. The auditors examine financial statements for the funds and provide other audit, tax, and related services. FINANCIAL STATEMENTS Each fund's financial statements and financial highlights for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) are included in the funds' Annual Report, which is a separate report supplied with this SAI. Each fund's financial statements and financial highlights are incorporated herein by reference. APPENDIX The descriptions that follow are examples of eligible ratings for the funds. A fund may, however, consider the ratings for other types of investments and the ratings assigned by other rating organizations when determining the eligibility of a particular investment. DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS: Issuers rated PRIME-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: Leading market positions in well established industries. High rates of return on funds employed. Conservative capitalization structures with moderate reliance on debt and ample asset protection. Broad margins in earning coverage of fixed financial charges and with high internal cash generation. Well-established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated PRIME-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earning trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternative liquidity is maintained. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS: A - Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. I ssues in this category are delineated with the numbers 1 and 2 to indicate the relative degree of safety. A-1 - This designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics will be denoted with a plus (+) sign designation. A-2 - Capacity for timely payment on issues with this designation is strong. However, the relative degree of safety is not as high as for issues designated A-1. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS CLASS III CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1 .............................. Cover Page 2 .............................. Expenses 3 a .............................. Financial Highlights b .............................. * c .............................. Performance d .............................. Cover Page 4 a i............................. Charter ii........................... Investment Principles and Risks; Securities and Investment Practices; Fundamental Investment Policies and Restrictions b .............................. Securities and Investment Practices c .............................. Who May Want to Invest; Investment Principles and Risks; Securities and Investment Practices 5 a .............................. Charter b i............................. FMR and Its Affiliates ii........................... FMR and Its Affiliates; Charter; Breakdown of Expenses iii.......................... Expenses; Breakdown of Expenses; Management Fee c .............................. FMR and Its Affiliates d .............................. Charter; Breakdown of Expenses; Cover Page; FMR and Its Affiliates e .............................. FMR and its Affiliates; Breakdown of Expenses; Other Expenses f .............................. Expenses g .............................. Expenses; FMR and Its Affiliates 5A .............................. * 6 a i............................. Charter ii........................... How to Buy Shares; How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions iii.......................... * b ............................. FMR and Its Affiliates c .............................. Charter d .............................. Cover Page; Charter e .............................. Cover Page; How to Buy Shares; How to Sell Shares; Investor Services; Exchange Restrictions f, g .............................. Dividends, Capital Gains, and Taxes 7 a .............................. Charter; Cover Page b .............................. How to Buy Shares; Transaction Details c .............................. * d .............................. How to Buy Shares e .............................. Transaction Details; Breakdown of Expenses f .............................. Breakdown of Expenses; Other Expenses 8 .............................. How to Sell Shares; Investor Services; Transaction Details; Exchange Restrictions 9 .............................. *
* Not Applicable ** To Be Filed By Amendment FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS III Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how each fund invests and the services available to shareholders. To learn more about each fund and its investments, you can obtain a copy of the applicable fund's most recent financial report and portfolio listing or a copy of the Statement of Additional Information (SAI) dated November 1, 1995. The SAI has been filed with the Securities and Exchange Commission (SEC) and is incorporated herein by reference (legally forms a part of the prospectus). For a free copy of either document, contact your financial institution, or call Fidelity Client Services at 1-800-843-3001. INVESTMENTS IN THE FUNDS ARE NEITHER INSURED NOR GUARANTEED BY THE U.S. GOVERNMENT, AND THERE CAN BE NO ASSURANCE THAT A FUND WILL MAINTAIN A STABLE $1.00 SHARE PRICE. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. IMMIII-pro-1195 FIDELITY INSTITUTIONAL CASH PORTFOLIOS (FICP): Treasury (formerly Treasury II) Government Domestic Money Market DAILY MONEY FUND (DMF): Treasury Only FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS (FITECP): Tax-Exempt FIDELITY MONEY MARKET TRUST (FMMT): Rated Money Market (formerly Domestic Money Market Portfolio) PROSPECTUS NOVEMBER 1, 1995 (FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 CONTENTS
KEY FACTS WHO MAY WANT TO INVEST EXPENSES Class III's yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of each fund's financial data. PERFORMANCE THE FUNDS IN DETAIL CHARTER How each fund is organized. INVESTMENT PRINCIPLES AND RISKS Each fund's overall approach to investing. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. YOUR ACCOUNT HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES TRANSACTION DETAILS Share price calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS
KEY FACTS WHO MAY WANT TO INVEST Each fund offers institutional and corporate investors a convenient and economical way to invest in a professionally managed portfolio of money market instruments. Each fund is designed for investors who would like to earn current income while preserving the value of their investment. The rate of income will vary from day to day, generally reflecting short-term interest rates. Each fund is managed to keep its share price stable at $1.00. Each of Treasury Only, Treasury, and Government offers an added measure of safety with its focus on U.S. Government securities. None of the funds constitutes a balanced investment plan. However, because they emphasize stability, they could be well-suited for a portion of your investment. Each fund is composed of multiple classes of shares. Each class of a fund has a common investment objective and investment portfolio. Class I shares do not have a sales charge and do not pay a distribution fee. Class II shares do not have a sales charge, but do pay a 0.15% distribution fee. Class III shares do not have a sales charge, but do pay a 0.25% distribution fee. Because Class I shares have no sales charge and do not pay a distribution fee, Class I shares are expected to have a higher total return than Class II and Class III shares. You may obtain more information about Class I and Class II shares, which are not offered through this prospectus, from your financial institution, or by calling Fidelity Client Services at 1-800-843-3001. Contact your financial institution to discuss which class is appropriate for you. EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell Class III shares of a fund. Maximum sales charge on purchases and reinvested distributions None Maximum deferred sales charge None Redemption fee None Exchange fee None ANNUAL OPERATING EXPENSES are paid out of each fund's assets. Each fund pays a management fee to Fidelity Management & Research Company (FMR). FMR is responsible for the payment of all other expenses of Treasury Only and Rated Money Market with certain limited exceptions. Each fund, other than Treasury Only and Rated Money Market, also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and financial reports. 12b-1 fees are paid by Class III of each fund to the distributor for services and expenses in connection with the distribution of Class III shares of each fund. Long-term shareholders may pay more than the economic equivalent of the maximum sales charges permitted by the National Association of Securities Dealers, Inc., due to 12b-1 fees. Class III's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see "Breakdown of Expenses" on page ). The following are projections based on estimated or historical expenses of Class III of each fund and are calculated as a percentage of average net assets of Class III of each fund. Class III Operating Expenses TREASURY Management fee 0.15% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.05% A Total operating expenses 0.45% A GOVERNMENT Management fee 0.16% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.04% A Total operating expenses 0.45% A A AFTER EXPENSE REDUCTIONS. Class III Operating Expenses DOMESTIC Management fee 0.13% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.07% A Total operating expenses 0.45% A MONEY MARKET Management fee 0.14% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.04% A Total operating expenses 0.43% A TREASURY ONLY Management fee 0.20% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.00 % Total operating expenses 0.45% A TAX-EXEMPT Management fee 0.14% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.06 % Total operating expenses 0.45% A RATED MONEY MARKET Management fee 0.20% A 12b-1 fee (Distribution fee) 0.25 % Other expenses 0.00 % Total operating expenses 0.45% A A AFTER EXPENSE REDUCTIONS. EXPENSE TABLE EXAMPLE: You would pay the following expenses on a $1,000 investment in Class III shares, assuming a 5% annual return and full redemption at the end of each time period: 1 3 5 10 Year Years Years Years Treasury $ 5 $ 14 $ 25 $ 57 Government $ 5 $ 14 $ 25 $ 57 Domestic $ 5 $ 14 $ 25 $ 57 Money Market $ 4 $ 14 $ 2 4 $ 54 Treasury Only $ 5 $ 14 $ 25 $ 57 Tax-Exempt $ 5 $ 14 $ 25 $ 57 Rated Money Market $ 5 $ 14 $ 25 $ 57 THESE EXAMPLES ILLUSTRATE THE EFFECT OF EXPENSES, BUT ARE NOT MEANT TO SUGGEST ACTUAL OR EXPECTED COSTS OR RETURNS, ALL OF WHICH MAY VARY. FMR has voluntarily agreed to reimburse Class III of each fund to the extent that total operating expenses (excluding interest, taxes, brokerage commissions, extraordinary expenses, and 12b-1 fees) are in excess of 0 .20% ( 0 .18% for Money Market) of its average net assets. If th ese agreement s were not in effect, the management fees , other expenses, and total operating expenses for Class III of each fund would have been the following amounts, as a percentage of average net assets: 0.20 % , 0.29%, and 0.74 % for Treasury; 0.20 % , 0.21%, and 0.66 % for Government; 0.20 % , 0.27%, and 0.72 % for Domestic; and 0.20 % , 0.07%, and 0.52 % for Money Market ; and would have been expected to be 0.42 % , 0.00%, and 0.67 % for Treasury Only; 0.20 % , 0.06% and 0.51 % for Tax-Exempt; and 0.42 % , 0.00%, and 0.67 % for Rated Money Market. FINANCIAL HIGHLIGHTS The financial highlights tables that follow and each fund's financial statements are included in each fund's Annual Report and have been audited by independent accountants. Price Waterhouse LLP serves as independent accountants for each of the FICP funds, while Coopers & Lybrand L.L.P. serves as independent accountants for Tax-Exempt, Treasury Only, and Rated Money Market. Their reports, as applicable, on the financial statements and financial highlights are included in each Annual Report. The financial statements, the financial highlights, and the reports are incorporated by reference into the funds' SAI, which may be obtained free of charge from Fidelity Client Services at the phone number listed on page . Class II of each fund will commence operations on or about November 1, 1995. Class III of Treasury Only, Tax-Exempt, and Rated Money Market will commence operations on or about November 1, 1995. FICP: TREASURY (FORMERLY TREASURY II) - CLASS I
295.Selected Per-Share Data 296.Years ended March 31 1987A 1988 1989 1990 1991 1992 1993 1994 1995 297.Net asset value, beginning of $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 period 298.Income from Investment Operations 299. Net interest income .009 .064 .078 .088 .076 .053 .034 .030 .047 300.Less Distributions 301. From net interest income (.009) (.064) (.078) (.088) (.076) (.053) (.034) (.030) (.047) 302.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 303.Total return B .93% 6.60 8.11 9.13 7.87 5.41 3.46 3.06 4.78 % % % % % % % % 304.RATIOS AND SUPPLEMENTAL DATA 305.Net assets, end of period (000 $ 26,314 $ 379,50 $ 658,06 $ 1,481,3 $ 3,281,6 $ 5,476,8 $ 5,589,6 $ 4,551,9 $ 4,688,1 omitted) 1 8 24 86 52 63 18 98 306.Ratio of expenses to average .20% .20 .20 .19 .18 .18 .18 .18 .18 net assets C % % % % % % % % 307.Ratio of expenses to average .99% .32 .26 .27 .25 .25 .23 .24 .25 net assets before C % % % % % % % % expense reductions 308.Ratio of net interest income to 6.11% 6.46 7.92 8.63 7.50 5.12 3.38 3.01 4.71 average net assets C % % % % % % % %
A FEBRUARY 2, 1987 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1987 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: TREASURY (FORMERLY TREASURY II) - CLASS III
309.Selected Per-Share Data 310.Years ended March 31 1994A 1995 311.Net asset value, beginning of period $ 1.000 $ 1.000 312.Income from Investment Operations 313. Net interest income .012 .044 314.Less Distributions 315. From net interest income (.012) (.044) 316.Net asset value, end of period $ 1.000 $ 1.000 317.Total return B 1.21% 4.45 % 318.RATIOS AND SUPPLEMENTAL DATA 319.Net assets, end of period (000 omitted) $ 5,175 $ 585,57 1 320.Ratio of expenses to average net assets .50% .50 C % 321.Ratio of expenses to average net assets before expense reductions .56% .81 C % 322.Ratio of net interest income to average net assets 2.69% 4.91 C %
A OCTOBER 22, 1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS I
323.Selected Per-Share Data 324.Years ended March 31 1986 A 1987 1988 1989 1990 1991 1992 1993 1994 1995 325.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 326.Income from Investment Operations 327. Net interest income .053 .063 .068 .079 .088 .077 .054 .035 .031 .048 328.Less Distributions 329. From net interest (.053) (.063) (.068) (.079) (.088) (.077) (.054) (.035) (.031) (.048) income 330.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 331.Total return B 5.47% 6.51 6.98 8.19 9.15 7.94 5.55 3.56 3.13 4.86 % % % % % % % % % 332.RATIOS AND SUPPLEMENTAL DATA 333.Net assets, end of $ 511,720 $ 1,358,6 $ 1,878,7 $ 1,918,3 $ 2,815,6 $ 3,613,8 $ 4,603,7 $ 5,686,1 $ 3,764,5 $ 3,321,0 period (000 omitted) 59 86 42 22 38 81 66 44 66 334.Ratio of expenses to .20% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 335.Ratio of expenses to .30% .25 .23 .24 .25 .25 .25 .24 .24 .24 average net assets before C % % % % % % % % % expense reductions 336.Ratio of net interest 7.81% 6.28 6.78 7.90 8.74 7.62 5.33 3.50 3.07 4.77 income C % % % % % % % % % to average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: GOVERNMENT - CLASS III
337.Selected Per-Share Data 338.Year ended March 31 1995 A 339.Net asset value, beginning of period $ 1.000 340.Income from Investment Operations 341. Net interest income .045 342.Less Distributions 343. From net interest income (.045) 344.Net asset value, end of period $ 1.000 345.Total return B 4.57% 346.RATIOS AND SUPPLEMENTAL DATA 347.Net assets, end of period (000 omitted) $ 40,516 348.Ratio of expenses to average net assets .43% C 349.Ratio of expenses to average net assets before expense reductions .66% C 350.Ratio of net interest income to average net assets 5.13% C
A APRIL 4, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS I
351.Selected Per-Share Data 352.Years ended March 31 1990A 1991 1992 1993 1994 1995 353.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 354.Income from Investment Operations 355. Net interest income .035 .078 .054 .034 .031 .049 356.Less Distributions 357. From net interest income (.035) (.078) (.054) (.034) (.031) (.049) 358.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 359.Total return B 3.52% 8.11 5.50 3.50 3.14 4.97 % % % % % 360.RATIOS AND SUPPLEMENTAL DATA 361.Net assets, end of period (000 omitted) $ 330,974 $ 355,36 $ 558,72 $ 804,35 $ 656,97 $ 771,93 9 7 4 6 7 362.Ratio of expenses to average net assets .06% .18 .18 .18 .18 .18 C % % % % % 363.Ratio of expenses to average net assets before expense .43% .30 .29 .26 .26 .27 reductions C % % % % % 364.Ratio of net interest income to average net assets 8.44% 7.79 5.24 3.43 3.09 4.94 C % % % % %
A NOVEMBER 3, 1989 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1990 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: DOMESTIC - CLASS III
365.Selected Per-Share Data 366.Year ended March 31 1995A 367.Net asset value, beginning of period $ 1.000 368.Income from Investment Operations 369. Net interest income .035 370.Less Distributions 371. From net interest income (.035) 372.Net asset value, end of period $ 1.000 373.Total return B 3.51% 374.RATIOS AND SUPPLEMENTAL DATA 375.Net assets, end of period (000 omitted) $ 26,545 376.Ratio of expenses to average net assets .50% C 377.Ratio of expenses to average net assets before expense reductions .79% C 378.Ratio of net interest income to average net assets 5.14% C
A JULY 19, 1994 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1995 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS I
379.Selected Per-Share Data 380.Years ended March 1986A 1987 1988 1989 1990 1991 1992 1993 1994 1995 31 381.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 382.Income from Investment Operations 383. Net interest income .059 .064 .069 .080 .089 .078 .055 .035 .032 .049 384.Less Distributions 385. From net interest (.059) (.064) (.069) (.080) (.089) (.078) (.055) (.035) (.032) (.049) income 386.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 387.Total return B 6.01% 6.57 7.14 8.35 9.25 8.13 5.59 3.58 3.20 4.99 % % % % % % % % % 388.RATIOS AND SUPPLEMENTAL DATA 389.Net assets, end of $ 960,784 $ 1,569,1 $ 2,524,7 $ 2,627,4 $ 4,127,8 $ 4,706,9 $ 3,990,3 $ 4,332,9 $ 3,200,2 $ 5,130,1 period (000 omitted) 99 67 50 79 36 95 95 77 23 390.Ratio of expenses to .19% .20 .20 .20 .20 .18 .18 .18 .18 .18 average net assets C % % % % % % % % % 391.Ratio of expenses to .28% .23 .23 .24 .24 .25 .24 .23 .23 .24 average net assets before C % % % % % % % % % expense reductions 392.Ratio of net interest 7.97% 6.33 6.95 8.11 8.82 7.80 5.42 3.50 3.15 5.00 income to average net C % % % % % % % % % assets
A JULY 5, 1985 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED FICP: MONEY MARKET - CLASS III
393.Selected Per-Share Data 394.Years ended March 31 1994A 1995 395.Net asset value, beginning of period $ 1.000 $ 1.000 396.Income from Investment Operations 397. Net interest income .011 .046 398.Less Distributions 399. From net interest income (.011) (.046) 400.Net asset value, end of period $ 1.000 $ 1.000 401.Total return B 1.07% 4.66% 402.RATIOS AND SUPPLEMENTAL DATA 403.Net assets, end of period (000 omitted) $ 89,463 $ 457,286 404.Ratio of expenses to average net assets .50% .50% C 405.Ratio of expenses to average net assets before expense reductions .55% .59% C 406.Ratio of net interest income to average net assets 2.83% 4.94% C
A NOVEMBER 17,1993 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1994 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED TREASURY ONLY - CLASS I
407.Selected Per-Share Data 408.Years ended March 31 1991A 1992E 1993E 1994E 1995D 409.Net asset value, beginning of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 410.Income from Investment Operations .055 .045 .031 .032 .033 Net interest income 411.Less Distributions (.055) (.045) (.031) (.032) (.033) From net interest income 412.Net asset value, end of period $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 413.Total returnB 5.63% 4.64% 3.10% 3.27% 3.38% 414.RATIOS AND SUPPLEMENTAL DATA 415.Net assets, end of period (000 omitted) $ 705,543 $ 1,197,559 $ 1,047,791 $ 1,049,170 $ 1,266,285 416.Ratio of expenses to average net assets .03% .20% .20% .20% .20% C C 417.Ratio of expenses to average net assets before expense .42% .42% .42% .42% .42% reductions C C 418.Ratio of net interest income to average net assets 6.34% 4.43% 3.05% 3.22% 5.02% C C
A OCTOBER 3, 1990 (COMMENCEMENT OF OPERATIONS) TO JULY 31, 1991 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D AUGUST 1, 1994 TO MARCH 31, 1995 E YEAR ENDED JULY 31. TAX-EXEMPT - CLASS I
419.Selected Per-Share Data 420.Years ended 1986A 1987 E 1988 E 1989 E 1990 E 1991 E 1992 E 1993 E 1994 E 1995D March 31 421.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 422.Income from .044 .042 .046 .058 .058 .053 .040 .026 .024 .027 Investment Operations Net interest income 423.Less Distributions (.044) (.042) (.046) (.058) (.058) (.053) (.040) (.026) (.024) (.027) From net interest income 424.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 end of period 425.Total returnB 4.51% 4.28 4.72 5.97 6.00 5.40 4.02 2.66 2.44 2.74% % % % % % % % % 426.RATIOS AND SUPPLEMENTAL DATA 427.Net assets, end of $ 1,162,9 $ 1,850,0 $ 2,080,8 $ 2,006,8 $ 1,984,6 $ 2,116,8 $ 2,556,9 $ 2,239,0 $ 2,390,6 $ 1,876,815 period 39 53 46 67 36 41 95 31 63 (000 omitted) 428.Ratio of expenses .19% .20 .20 .20 .20 .18 .18 .18 .18 .18%C to average C % % % % % % % % net assets 429.Ratio of expenses .25% .23 .22 .24 .23 .23 .25 .24 .24 .26%C to average net assets C % % % % % % % % before expense reductions 430.Ratio of net 5.18% 4.20 4.65 5.80 5.82 5.28 3.90 2.62 2.41 3.20%C interest income to C % % % % % % % % average net assets
A JULY 25, 1985 (COMMENCEMENT OF OPERATIONS) TO MAY 31, 1986 B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. C ANNUALIZED D JUNE 1, 1994 TO MARCH 31, 1995 E YEAR ENDED MAY 31. RATED MONEY MARKET (FORMERLY DOMESTIC MONEY MARKET PORTFOLIO) - CLASS I
431.Years ended August 1986B 1987B 1988B 1989B 1990B 1991B 1992A 1993 1994 1995 31 432.Net asset value, $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 beginning of period 433.Income from .069 .062 .070 .089 .080 .063 .034 .029 .033 .054 Investment Operations Net interest income 434.Less Distributions (.069) (.062) (.070) (.089) (.080) (.063) (.034) (.029) (.033) (.054) From net interest income 435.Net asset value, end $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000 of period 436.Total return D 7.07 6.42 7.27 9.26 8.27 6.44 3.44% 2.93 3.34 5.53 % % % % % % % % % 437.RATIOS AND SUPPLEMENTAL DATA 438.Net assets, end of $ 1,300,8 $ 1,231,7 $ 1,035,7 $ 1,273,7 $ 944,78 $ 851,87 $ 765,721 $ 611,410 $ 399,33 $ 300,86 period (000 omitted) 32 68 56 45 2 2 3 3 439.Ratio of expenses to .42 .42 .42 .42 .42 .42 .42% .42 .42 .42 average net assets % % % % % % c % % % 440.Ratio of net interest 6.87 6.22 7.00 8.91 8.01 6.38 4.04% 2.89 3.24 5.33 income to average net % % % % % % c % % % assets
A NOVEMBER 1, 1991 TO AUGUST 31, 1992 B YEAR ENDED OCTOBER 31. C ANNUALIZED D TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. PERFORMANCE Money market fund performance can be measured as TOTAL RETURN or YIELD. EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in a fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. Average annual total returns covering periods of less than one year assume that performance will remain constant for the rest of the year. YIELD refers to the income generated by an investment in a fund over a given period of time, expressed as an annual percentage rate. When a yield assumes that income earned is reinvested, it is called an EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have to earn before taxes to equal a tax-free yield. SEVEN-DAY YIELD illustrates the income earned by an investment in a money market fund over a recent seven-day period. Since money market funds maintain a stable $1.00 share price, current seven-day yields are the most common illustration of money market fund performance. The funds' recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance call Fidelity Client Services at 1-800-843-3001. THE FUNDS IN DETAIL CHARTER EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. Treasury, Government, Domestic, and Money Market are diversified funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. Treasury Only is a diversified fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Tax-Exempt is a diversified fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Rated Money Market is a diversified fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. There is a remote possibility that one fund might become liable for a misstatement in the prospectus about another fund. EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the funds' activities, review contractual arrangements with companies that provide services to the funds, and review the funds' performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. The transfer agent will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. For shareholders of all funds (other than Rated Money Market) , you are entitled to one vote for each share you own. For shareholders of Rated Money Market, the number of votes you are entitled to is based upon the dollar value of your investment. Separate votes are taken by each class of shares, fund, or trust, if a matter affects just that class of shares, fund, or trust, respectively. FMR AND ITS AFFILIATES Fidelity Investments is one of the largest investment management organizations in the United States and has its principal business address at 82 Devonshire Street, Boston, Massachusetts 02109. It includes a number of different subsidiaries and divisions which provide a variety of financial services and products. The funds employ various Fidelity companies to perform activities required for their operation. The funds are managed by FMR, which handles their business affairs. FMR Texas, Inc. (FMR Texas) , located in Irving, Texas, has primary responsibility for providing investment management services. As of August 31, 1995, FMR advised funds having approximately 22 million shareholder accounts with a total value of more than $328 billion. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that establishes procedures for personal investing and restricts certain transactions. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's funds and services. Fidelity Investments Institutional Operations Company (FIIOC) performs transfer agent servicing functions for Class III shares of each fund. FMR Corp. is the ultimate parent company of FMR and FMR Texas. Members of the Edward C. Johnson 3d family are the predominant owners of a class of shares of common stock representing approximately 49% of the voting power of FMR Corp. Under the Investment Company Act of 1940 (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, the Johnson family may be deemed under the 1940 Act to form a controlling group with respect to FMR Corp. UMB Bank, n.a. (UMB) is Tax-Exempt's transfer agent, although it employs FIIOC to perform these functions for Class II I of Tax-Exempt. UMB is located at 1010 Grand Avenue, Kansas City, Missouri. To carry out the funds' transactions, FMR may use its broker-dealer affiliates and other firms that sell fund shares, provided that a fund receives services and commission rates comparable to those of other broker-dealers. INVESTMENT PRINCIPLES AND RISKS TREASURY ONLY seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant net asset value per share (NAV) of $1.00. The fund invests only in U.S. Treasury securities, including bills, notes, bonds and other direct obligations of the U.S. Treasury that are guaranteed as to payment of principal and interest by the full faith and credit of the U.S. Government. The fund will invest in those securities whose interest is specifically exempt from state and local income taxes under federal law; such interest is not exempt from federal income tax. TREASURY seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Under normal conditions, the fund invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. GOVERNMENT seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. Government obligations issued or guaranteed as to principal and interest by the U.S. Government, including bills, notes, bonds and other U.S. Treasury debt securities, and instruments issued or guaranteed by U.S. Government instrumentalities or agencies, and repurchase agreements backed by those obligations. The fund currently intends to invest exclusively in these instruments. DOMESTIC seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in U.S. dollar-denominated money market instruments of domestic issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. RATED MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in obligations of the U.S. Government, its agencies and instrumentalities, repurchase agreements backed by those obligations, and other high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. MONEY MARKET seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. The fund invests in high-quality, U.S. dollar-denominated money market instruments of domestic and foreign issuers rated in the highest rating category by at least two nationally recognized rating services, or by one if only one rating service has rated an obligation. The fund may purchase unrated obligations determined to be of equivalent quality pursuant to procedures adopted by the Board of Trustees. Under normal conditions, the fund will invest more than 25% of its total assets in obligations of companies in the financial services industry. TAX-EXEMPT seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund invests primarily in high-quality, short-term municipal securities, but also may invest in high-quality, long-term fixed, variable, or floating rate instruments (including tender option bonds) whose features give them interest rates, maturities, and prices similar to short-term instruments. Securities in which the fund invests must be rated in the highest rating category for short-term securities by at least one nationally recognized rating service and rated in one of the two highest categories for short-term securities by another nationally recognized rating service if rated by more than one nationally recognized rating service; or, if unrated, judged by FMR to be equivalent quality to those securities rated in the highest short-term rating category, pursuant to procedures adopted by the Board of Trustees. The fund's policy regarding limiting investments to the highest rating category may be changed upon 90 days' prior notice to shareholders. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. The fund does not currently intend to purchase municipal obligations that are subject to the federal alternative minimum tax. FMR normally invests the fund's assets according to its investment strategy and does not expect to invest in federally taxable obligations. The fund also reserves the right to hold a substantial amount of uninvested cash or to invest more than normally permitted in federally taxable obligations for temporary, defensive purposes. COMMON POLICIES When you sell your shares of the funds, they should be worth the same amount as when you bought them. Of course, there is no guarantee that the funds will maintain a stable $1.00 share price. The funds follow industry-standard guidelines on the quality and maturity of their investments, which are designed to help maintain a stable $1.00 share price. The funds will purchase only high-quality securities that FMR believes present minimal credit risks and will observe maturity restrictions on securities they buy. In general, securities with longer maturities are more vulnerable to price changes, although they may provide higher yields. It is possible that a major change in interest rates or a default on the funds' investments could cause their share prices (and the value of your investment) to change. The funds earn income at current money market rates. Each fund stresses preservation of capital, liquidity, and income (tax-free income in the case of Tax-Exempt) and does not seek the higher yields or capital appreciation that more aggressive investments may provide. Each fund's yield will vary from day to day, and generally reflects current short-term interest rates and other market conditions. It is important to note that neither the funds nor their yields are guaranteed by the U.S. Government. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which a fund may invest, strategies FMR may employ in pursuit of a fund's investment objective, and a summary of related risks. Any restrictions listed supplement those discussed earlier in this section. A complete listing of each fund's limitations and more detailed information about each fund's investments are contained in the funds' SAI. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques unless it believes that they are consistent with a fund's investment objective and policies and that doing so will help a fund achieve its goal. Current holdings and recent investment strategies are described in each fund's financial reports, which are sent to shareholders twice a year. For a free SAI or financial report, call Fidelity Client Services at 1-800-843-3001. MONEY MARKET SECURITIES are high-quality, short-term obligations issued by the U.S. Government, corporations, financial institutions, municipalities, local and state governments, and other entities. These obligations may carry fixed, variable, or floating interest rates. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets so that they are eligible investments for money market funds. A security's credit may be enhanced by a bank, insurance company, or other entity. If the structure does not perform as intended, adverse tax or investment consequences may result. U.S. GOVERNMENT MONEY MARKET SECURITIES are short-term debt obligations issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S. Government. Not all U.S. Government securities are backed by the full faith and credit of the United States. For example, securities issued by the Federal Farm Credit Bank or by the Federal National Mortgage Association are supported by the instrumentality's right to borrow money from the U.S. Treasury under certain circumstances. However, securities issued by the Financing Corporation are supported only by the credit of the entity that issued them. MUNICIPAL SECURITIES are issued to raise money for a variety of public or private purposes, including general financing for state and local governments, or financing for specific projects or public facilities. They may be issued in anticipation of future revenues, and may be backed by the full taxing power of a municipality, the revenues from a specific project, or the credit of a private organization. The value of some or all municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders. A fund may own a municipal security directly or through a participation interest. FOREIGN SECURITIES may involve different risks than domestic securities, including risks relating to the political and economic conditions of the foreign country involved, which could affect the payment of principal or interest. Issuers of foreign securities include foreign governments, corporations, and banks. RESTRICTIONS: Treasury, Government, Domestic, Treasury Only, and Tax-Exempt may not invest in foreign securities. Money Market and Rated Money Market may not invest in foreign securities unless they are denominated in U.S. dollars. ASSET-BACKED SECURITIES include interests in pools of mortgages, loans, receivables, or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities. VARIABLE AND FLOATING RATE SECURITIES have interest rates that are periodically adjusted either at specific intervals or whenever a benchmark rate changes. These interest rate adjustments are designed to help stabilize the security's price. STRIPPED SECURITIES are the separate income or principal components of a debt security. Their risks are similar to those of other money market securities, although they may be more volatile. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund temporarily transfers possession of a portfolio instrument to another party in return for cash. This could increase the risk of fluctuation in the fund's yield or in the market value of its assets. RESTRICTION: Treasury Only, Treasury, and Tax-Exempt do not intend to engage in reverse repurchase agreements. OTHER MONEY MARKET SECURITIES may include commercial paper, certificates of deposit, bankers' acceptances, and time deposits. MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land, equipment, or facilities. If the municipality stops making payments or transfers its obligations to a private entity, the obligation could lose value or become taxable. OTHER MUNICIPAL SECURITIES may include obligations of U.S. territories and possessions such as Guam, the Virgin Islands, and Puerto Rico, and their political subdivisions and public corporations. PUT FEATURES entitle the holder to put (sell back) a security to the issuer or a financial intermediary. In exchange for this benefit, a fund may pay periodic fees or accept a lower interest rate. The credit quality of the investment may be affected by the creditworthiness of the put provider. Demand features, standby commitments, and tender options are types of put features. PRIVATE ENTITIES may be involved in some municipal securities. For example, industrial revenue bonds are backed by private entities, and resource recovery bonds often involve private corporations. The viability of a project or tax incentives could affect the value and credit quality of these securities. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of some illiquid securities, and some other securities, may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to a fund. RESTRICTION : A fund may not purchase a security if, as a result, more than 10% of its net assets would be invested in illiquid securities. WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in which payment and delivery for the securities take place at a future date. The market value of a security could change during this period, which could affect the market value of a fund's assets. FINANCIAL SERVICES INDUSTRY. Companies in the financial services industry are subject to various risks related to that industry, such as government regulation, changes in interest rates, and exposure on loans, including loans to foreign borrowers. If a fund invests substantially in this industry, its performance may be affected by conditions affecting the industry. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry or type of project. Economic, business, or political changes can affect all securities of a similar type. RESTRICTIONS: Each fund (other than Treasury, Treasury Only and Tax-Exempt) may not invest more than 5% of its total assets in any one issuer, except that, each fund (other than Treasury, Treasury Only and Tax-Exempt) may invest up to 10% of its total assets in the highest quality securities of a single issuer for up to three business days. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. These limitations do not apply to U.S. Government securities. Tax-Exempt may invest more than 25% of its total assets in tax-free securities that finance similar types of projects. BORROWING. Each fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements, and may make additional investments while borrowings are outstanding. RESTRICTIONS: Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. LENDING. A fund may lend money to other funds advised by FMR. RESTRICTION: Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraphs restate all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraphs, can be changed without shareholder approval. Treasury Only seeks as high a level of current income as is consistent with the security of principal and liquidity, and to maintain a constant NAV of $1.00. Each of Treasury, Government, Domestic, Money Market, and Rated Money Market seeks to obtain as high a level of current income as is consistent with the preservation of principal and liquidity within the limitations prescribed for the fund. Tax-Exempt seeks as high a level of interest income exempt from federal income tax as is consistent with a portfolio of high-quality, short-term municipal obligations selected on the basis of liquidity and stability of principal. The fund, under normal conditions, will invest so that at least 80% of its income distributions is exempt from federal income tax. With respect to 75% of its total assets, Tax-Exempt may not purchase a security if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may borrow only for temporary or emergency purposes, or engage in reverse repurchase agreements, but not in an amount exceeding 331/3% of its total assets. Tax-Exempt may borrow only for temporary or emergency purposes, but not in an amount exceeding 331/3% of its total assets. E ach of Domestic, Money Market, and Rated Money Market will invest more than 25% of its total assets in obligations of companies in the financial services industry. Loans, in the aggregate, may not exceed 331/3% of a fund's total assets. BREAKDOWN OF EXPENSES Like all mutual funds, the funds pay fees related to their daily operations. Expenses paid out of each class's assets are reflected in that class's share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. Each fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to an affiliate who provides assistance with these services. Each fund also pays OTHER EXPENSES, which are explained below. MANAGEMENT FEE FMR HAS SUB-ADVISORY AGREEMENTS with FMR Texas, which has primary responsibility for providing investment management for each fund, while FMR retains responsibility for providing the funds with other management services. FMR pays FMR Texas 50% of its management fee (before expense reimbursements) for these services. In the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market), FMR paid FMR Texas the following percentages of each fund's average net assets. Fund Name Percentage of Average Net Assets Treasury 0.10% Government 0.10% Domestic 0.10% Money Market 0.10% Tax-Exempt 0.10% Treasury Only 0.21% Rated Money Market 0.21 % OTHER EXPENSES While the management fee is a significant component of each fund's annual operating costs, the funds have other expenses as well. FIIOC performs transfer agency, dividend disbursing and shareholder servicing functions for Class III shares of each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). Fidelity Service Co. (FSC) calculates the NAV and dividends for Class III of each Taxable Fund, and maintains the general accounting records for Class III of each Taxable Fund. These expenses are paid by FMR on behalf of Rated Money Market and Treasury Only pursuant to its management contract. In the fiscal year ended March 31, 1995, the following fees were paid to FIIOC and FSC: Fund Name Percentage of Percentage of Class III's the Fund's Average Net Average Net Assets Assets Paid to Paid to FIIOC FSC Treasury 0.02 % 0.01% Government 0.05% 0.01 % Domestic 0.08 % 0.01 % Money Market 0.03 % 0.01 % UMB has entered into sub-arrangements pursuant to which FI I OC performs transfer agency, dividend disbursing and shareholder services for Class III of Tax-Exempt. UMB has entered into sub-arrangements pursuant to which FSC calculates the NAV and dividends for Class III of Tax-Exempt and maintains Tax-Exempt's general accounting records. All of the fees are paid to FIIOC and FSC by UMB, which is reimbursed by Class III or the fund, as appropriate, for such payments. In the fiscal year ended March 31, 1995, fees paid by UMB to FSC on behalf of Tax-Exempt amounted to 0.01% of its average net assets. Class III of each fund has adopted a DISTRIBUTION AND SERVICE PLAN. Under the Plans, Class III of each fund is authorized to pay FDC a monthly distribution fee as compensation for its services and expenses in connection with the distribution of Class III shares of each fund and providing personal service to and/or maintenance of shareholder accounts. Class III of each fund currently pays FDC monthly at an annual rate of 0.25% of its average net assets determined at the close of business on each day throughout the month. The Plans specifically recognize that FMR may make payments from its management fee revenue, past profits or other resources to reimburse FDC for expenses incurred in connection with the distribution of Class III shares including payments made by FDC to financial institutions for their services to Class II I shareholders. The Board of Trustees of each fund has not authorized such payments. Each fund, other than Rated Money Market and Treasury Only, also pays other expenses, such as legal, audit, and custodian fees; in some instances, proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. Rated Money Market and Treasury Only also pay other expenses such as brokerage fees and commissions, interest on borrowings (only Treasury Only), taxes, and the compensation of trustees who are not affiliated with Fidelity. YOUR ACCOUNT HOW TO BUY SHARES If you are investing through a securities dealer, financial or other institution (Financial Institution), contact that Financial Institution directly. Certain features of a fund may be modified when it is made available through a program of services offered by a Financial Institution, and administrative charges (in addition to payments the Financial Institution may receive pursuant to the Distribution and Service Plan) may be imposed for the services rendered. In particular, a broker may charge transaction fees with respect to the purchase and sale of fund shares. It is the responsibility of your Financial Institution to submit purchases and redemptions in order for you to receive the next determined NAV. EACH CLASS'S SHARE PRICE, called NAV, is calculated every business day. The funds are managed to keep share prices stable at $1.00. Class III shares are sold without a sales charge. Shares are purchased at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. Share certificates are not available for the funds. IF YOU ARE NEW TO FIDELITY, an initial investment must be preceded or accompanied by a completed, signed application, which should be forwarded to: Fidelity Client Services c/o Fidelity Institutional Money Market Funds FIIOC P.O. Box 1182 Boston, MA 02103-1182 IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND , you can: (small solid bullet) Place a purchase order and wire money into your account, or (small solid bullet) Open an account by exchanging from the same class of any fund that is offered through this prospectus. INVESTMENTS IN THE FUNDS MUST BE MADE USING THE FEDERAL RESERVE WIRE SYSTEM. Checks will not be accepted as a means of investment. BY WIRE . For wiring information and instructions, you should call the Financial Institution through which you trade or if you trade directly through Fidelity, call Fidelity Client Services. There is no fee imposed by the funds for wire purchases. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire purchases. Fidelity Client Services: Nationwide 1-800-843-3001 In order to receive same-day acceptance of your investment, you must call Fidelity Client Services and place your order between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only ; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic and Money Market; 8:30 a.m. and 4:00 p.m. Eastern time for Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the funds are open for business. If Fidelity Client Services is not advised of your purchase prior to the stated cutoff time, your purchase will not be accepted by the transfer agent. All wires must be received by the transfer agent in good order at the applicable fund's designated wire bank before the close of the Federal Reserve Wire System on that day . In order to purchase shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late-trading arrangements. In order to receive same-day acceptance of your purchase order for Treasury after 3:00 p.m. Eastern time, you must call Fidelity Client Services as early in the day as possible. Wired money for purchase orders for Treasury placed after 3:00 p.m. Eastern time that is not properly identified with a wire reference number will be returned to the bank from which it was wired and will not be credited to your account. You are advised to wire funds as early in the day as possible, and to provide advance notice to Fidelity Client Services for purchases over $10 million ($5 million for Treasury Only). You will earn dividends on the day of your investment, provided (i) you telephone Fidelity Client Services and place your trade between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, on days the fund s are open for business, and (ii) the fund's designated wire bank receives the wire before the close of the Federal Reserve Wire System on the day your purchase order is accepted by the transfer agent. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $1,000,000 * MINIMUM BALANCE $1,000,000 * THE MINIMUM INITIAL INVESTMENT OF $1 MILLION MAY BE WAIVED IF YOUR AGGREGATE BALANCE IN THE FIDELITY INSTITUTIONAL MONEY MARKET FUNDS IS GREATER THAN $10 MILLION. PLEASE CONTACT FIDELITY CLIENT SERVICES FOR MORE INFORMATION REGARDING THIS WAIVER. HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. NAV is normally calculated at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. BY TELEPHONE. Redemption requests may be made by calling Fidelity Client Services at the phone number listed on page . You must designate on your account application the U.S. commercial bank account(s) into which you wish the redemption proceeds to be deposited. Fidelity Client Services will then notify you that this feature has been activated and that you may request wire redemptions. You may change the bank account(s) designated to receive redemption proceeds at any time prior to making a redemption request. You should send a letter of instruction, including a signature guarantee, to Fidelity Client Services at the address shown on page . You should be able to obtain a signature guarantee from a bank, broker, dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. There is no fee imposed by the funds for wiring of redemption proceeds. However, if you buy shares through a Financial Institution, the Financial Institution may impose a fee for wire redemptions. Redemption proceeds will be wired via the Federal Reserve Wire System to your bank account of record. If your redemption request is received by telephone between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market ; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury, redemption proceeds will normally be wired on the same day your redemption request is received by the transfer agent. A fund reserves the right to take up to seven days to pay you if making immediate payment would adversely affect the fund. In order to redeem shares of Treasury after 3:00 p.m. Eastern time, you must contact Fidelity Client Services one week in advance to make late trading arrangements. You are advised to place your trades as early in the day as possible. INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES STATEMENTS AND REPORTS that the transfer agent sends to you include the following: (small solid bullet) Confirmation statements (after every transaction, except a reinvestment, that affects your account balance or your account registration) (small solid bullet) Account statements (monthly) (small solid bullet) Financial reports (every six months) To reduce expenses, only one copy of most financial reports will be mailed, even if you have more than one account in a fund. Call Fidelity Client Services at 1-800-843-3001 if you need additional copies of financial reports or historical account information. SUB-ACCOUNTING AND SPECIAL SERVICES. Special processing has been arranged with FIIOC for institutions that wish to open multiple accounts (a master account and sub-accounts). You may be required to enter into a separate agreement with FIIOC. Charges for these services, if any, will be determined based on the level of services to be rendered. SHAREHOLDER AND ACCOUNT POLICIES DIVIDENDS, CAPITAL GAINS, AND TAXES Each fund distributes substantially all of its net investment income and capital gains, if any, to shareholders each year. Income dividends are declared daily and paid monthly. Income dividends declared are accrued daily throughout the month and are normally distributed on the first business day of the following month. Based on prior approval of each fund, dividends relating to Class III shares redeemed during the month can be distributed on the day of redemption. Each fund reserves the right to limit this service. DISTRIBUTION OPTIONS When you open an account, specify on your account application how you want to receive your distributions. The funds offer two options: 1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if any, will be automatically reinvested in additional shares of the same class of the fund. If you do not indicate a choice on your application, you will be assigned this option. 2. CASH OPTION. You will be sent a wire for your dividend and capital gain distributions, if any. Dividends will be reinvested at each fund's Class III NAV on the last day of the month. Capital gain distributions, if any, will be reinvested at the NAV as of the record date of the distribution. TAXES As with any investment, you should consider how an investment in the funds could affect you. Below are some of the funds' tax implications. TAXES ON DISTRIBUTIONS. Interest income that Tax-Exempt earns is distributed to shareholders as income dividends. Interest that is federally tax-free remains tax-free when it is distributed. Distributions from the Taxable Funds, however, are subject to federal income tax and may also be subject to state or local taxes. If you live outside the United States, your distributions from these funds could also be taxed by the country in which you reside. For federal tax purposes, the income and short-term capital gain distributions from each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. However, for shareholders of Tax-Exempt, gain on the sale of tax-free bonds results in taxable distributions. Short-term capital gains and a portion of the gain on bonds purchased at a discount are taxed as dividends; long-term capital gain distributions, if any, are taxed as long-term capital gains. Mutual fund dividends from U.S. Government securities are generally free from state and local income taxes. However, particular states may limit this benefit, and some types of securities, such as repurchase agreements and some agency-backed securities, may not qualify for the benefit. Ginnie mae securities and other mortgage-backed securities are notable exceptions in most states. In addition, some states may impose intangible property taxes. You should consult your own tax adviser for details and up-to-date information on the tax laws in your state. During the fiscal year ended March 31, 1995, 27 % of Treasury's, 20 % of Government's, 100 % of Treasury Only's, 2% of Domestic's, and 1% of Money Market's income distributions were derived from interest on U.S. Government securities which is generally exempt from state income tax. During the fiscal year ended August 31, 1995, 4% of Rated Money Market's income distributions was derived from interest on U.S. Government securities which is generally exempt from state income tax. Distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. Every January, the transfer agent will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. A portion of Tax-Exempt's dividends may be free from state or local taxes. Income from investments in your state are often tax-free to you. Each year, the transfer agent will send you a breakdown of Tax-Exempt's income from each state to help you calculate your taxes. During the fiscal year ended March 31, 1995, 100 % of Tax-Exempt's income dividends was free from federal income tax. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, a fund may have to limit its investment activity in some types of instruments. TRANSACTION DETAILS EACH FUND IS OPEN FOR BUSINESS and its NAV is normally calculated each day that both the Federal Reserve Bank of New York (New York Fed) (for all Taxable Funds) or the Federal Reserve Bank of Kansas City (Kansas City Fed) (for Tax-Exempt) and the New York Stock Exchange (NYSE) are open. The following holiday closings have been scheduled for 1996: New Year's Day, Martin Luther King 's Birthday, Washington's Birthday, Good Friday, Memorial Day, Independence Day, Labor Day, Columbus Day, Thanksgiving Day, and Christmas Day. Although FMR expects the same holiday schedule to be observed in the future, the Kansas City Fed, the New York Fed, or the NYSE may modify its holiday schedule at any time. On any day that the Kansas City Fed, the New York Fed, or the NYSE closes early, the principal government securities markets close early (such as on days in advance of holidays generally observed by participants in such markets), or as permitted by the SEC, the right is reserved to advance the time on that day by which purchase and redemption orders must be received. To the extent that portfolio securities are traded in other markets on days when the Kansas City Fed, the New York Fed, or the NYSE is closed, each fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. Certain Fidelity funds may follow different holiday closing schedules. A CLASS'S NAV is the value of a single share. The NAV of Class III of each fund is computed by adding Class III's pro rata share of the value of the fund's investments, cash, and other assets, subtracting Class III's pro rata share of the value of the fund's liabilities, subtracting the liabilities allocated to Class III, and dividing the result by the number of Class III shares of that fund that are outstanding. Each fund values its portfolio securities on the basis of amortized cost. This method minimizes the effect of changes in a security's market value and helps each fund maintain a stable $1.00 share price. THE OFFERING PRICE (price to buy one share) and REDEMPTION PRICE (price to sell one share) of Class III are its NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your social security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require a fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Fidelity and the transfer agent may only be liable for losses resulting from unauthorized transactions if they do not follow reasonable procedures designed to verify the identity of the caller. Fidelity and the transfer agent will request personalized security codes or other information, and may also record calls. You should verify the accuracy of the confirmation statements immediately after receipt. If you do not want the ability to redeem and exchange by telephone, call the transfer agent for instructions. Additional documentation may be required from corporations, associations and certain fiduciaries. EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. Each fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they would disrupt management of a fund. TO ALLOW FMR TO MANAGE THE FUNDS MOST EFFECTIVELY, you are urged to initiate all trades as early in the day as possible and to notify Fidelity Client Services in advance of transactions in excess of $10 million ( $5 million for Treasury Only ) . WHEN YOU PLACE AN ORDER TO BUY SHARES, your shares will be purchased at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) All of your purchases must be made by federal funds wire; checks will not be accepted for purchases. (small solid bullet) If your wire is not received by the close of the Federal Reserve Wire System, you could be liable for any losses or fees a fund or the transfer agent has incurred or for interest and penalties. Net interest income for dividend purposes is determined by FSC on a daily basis and shall be payable to shareholders of record at the time of its declaration (including, for this purpose, holders of Class III shares purchased, but excluding holders of shares redeemed, on that day). The income declared for Treasury is based on estimates of net interest income for the fund. Actual income may differ from estimates, and differences, if any, will be included in the calculation of subsequent dividends. Shareholders of record as of 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 5:00 p.m. Eastern time for Treasury, will be entitled to dividends declared that day. Shares of Rated Money Market purchased between 3:00 p.m. and 4:00 p.m. Eastern time begin to earn income dividends on the following business day. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your order is received and accepted by the transfer agent. Note the following: (small solid bullet) Shares of Rated Money Market redeemed before 3:00 p.m. Eastern time do not receive the dividend declared on the day of redemption ; s hares of Rated Money Market redeemed between 3:00 p.m. and 4:00 p.m. Eastern time do receive the dividends declared on the day of redemption. (small solid bullet) Shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Tax-Exempt do not receive the dividend declared on the day of redemption. (small solid bullet) A fund may withhold redemption proceeds until it is reasonably assured that investments credited to your account have been received and collected. When the NYSE, the Kansas City Fed, or the New York Fed is closed (or when trading is restricted) for any reason other than its customary weekend or holiday closings, or under any emergency circumstances as determined by the SEC to merit such action, a fund may suspend redemption or postpone payment dates. In cases of suspension of the right of redemption, the request for redemption may either be withdrawn or payment may be made based on the NAV next determined after the termination of the suspension. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000,000 due to redemption, the account may be closed and the proceeds may be wired to your bank account of record. You will be given 30 days' notice that your account will be closed unless it is increased to the minimum. THE TRANSFER AGENT MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. EXCHANGE RESTRICTIONS As a shareholder you have the privilege of exchanging Class III shares of any fund offered through this prospectus at no charge for Class III shares of any other fund offered through this prospectus. An exchange involves the redemption of all or a portion of the shares of one fund and the purchase of shares of another fund. BY TELEPHONE. Exchanges may be requested on any day a fund is open for business by calling Fidelity Client Services at the number listed on page between 8:30 a.m. and 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 8:30 a.m. and 3:00 p.m. Eastern time for Government, Domestic, Money Market, and Rated Money Market; and 8:30 a.m. and 5:00 p.m. Eastern time for Treasury. BY MAIL. You may exchange shares on any business day by submitting written instructions with an authorized signature which is on file for that account. Written requests for exchanges should contain the fund name, account number, the number of shares to be redeemed, and the name of the fund to be purchased. Written requests for exchange should be mailed to Fidelity Client Services at the address on page . WHEN YOU PLACE AN ORDER TO EXCHANGE SHARES, Class III shares will be redeemed at the next determined NAV after your order is received and accepted by the transfer agent. Shares of the fund to be acquired will be purchased at its next determined NAV after redemption proceeds are made available. You should note that, under certain circumstances, a fund may take up to seven days to make redemption proceeds available for the exchange purchase of shares of another fund. In addition, please note the following: (small solid bullet) Exchanges will not be permitted until a completed and signed account application is on file. (small solid bullet) The fund you are exchanging into must be registered for sale in your state. (small solid bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (small solid bullet) Before exchanging into a fund, read its prospectus. (small solid bullet) You will earn dividends in the acquired fund in accordance with the fund's customary policy, normally on the day the exchange request is received. (small solid bullet) Exchanges may have tax consequences for you. (small solid bullet) Each fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (small solid bullet) Your exchanges may be restricted or refused if a fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincides with a "market timing" strategy may be disruptive to a fund. Although the funds will attempt to give you prior notice whenever they are reasonably able to do so, they may impose these restrictions at any time. The funds reserve the right to terminate or modify the exchange privilege in the future. 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 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 s or FDC. This Prospectus and the related SAI do not constitute an offer by the fund s or by FDC to sell or to buy shares of the fund s to any person to whom it is unlawful to make such offer. FIDELITY INSTITUTIONAL MONEY MARKET FUNDS - CLASS III CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, 11 ............................ Cover Page; Table of Contents 12 ............................ * 13 a - c ............................ Investment Policies and Limitations d ............................ Portfolio Transactions 14 a - c ............................ Trustees and Officers 15 a ............................ * b ............................ Description of the Trusts c ............................ Trustees and Officers 16 a i ............................ FMR ii ............................ Trustees and Officers iii ............................ Management Contracts b,c,d ............................ Management Contracts e ............................ * f ............................ Distribution and Service Plans g ............................ * h ............................ Description of the Trusts i ............................ Management Contracts 17 a ............................ Portfolio Transactions b ............................ Portfolio Transactions c ............................ Portfolio Transactions d, e ............................ * 18 a ............................ Description of the Trusts b ............................ * 19 a ............................ Additional Purchase, Exchange and Redemption Information b ............................ Additional Purchase, Exchange and Redemption Information; Valuation c ............................ * 20 Distributions and Taxes 21 a, b ............................ Distribution and Service Plans; Management Contracts c ............................ * 22 ............................ Performance 23 ............................ Financial Statements
* Not Applicable FIDELITY INSTITUTIONAL MONEY MARKET FUNDS: CLASS III FIDELITY INSTITUTIONAL CASH PORTFOLIOS: Domestic, Government, Money Market, Treasury FIDELITY INSTITUTIONAL TAX-EXEMPT CASH PORTFOLIOS: Tax-Exempt DAILY MONEY FUND: Treasury Only FIDELITY MONEY MARKET TRUST: Rated Money Market STATEMENT OF ADDITIONAL INFORMATION NOVEMBER 1, 1995 This Statement of Additional Information (SAI) is not a prospectus but should be read in conjunction with the funds' current Prospectus (dated November 1, 1995). Please retain this document for future reference. The funds' financial statements and financial highlights, included in the Annual Report, for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) , are incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation Performance Additional Purchase, Exchange and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contracts Contracts with FMR Affiliates Distribution and Service Plans Description of the Trusts Financial Statements Appendix INVESTMENT ADVISER Fidelity Management & Research Company (FMR) SUB-ADVISER FMR Texas Inc. (FMR Texas) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT FOR TAXABLE FUNDS Fidelity Investments Institutional Operations Company (FIIOC) TRANSFER AGENT FOR TAX-EXEMPT UMB Bank, n.a. (UMB) IMM III -ptb-1195 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 shall be determined immediately after and as a result of a 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 each fund's investment policies and limitations. Each fund's fundamental investment policies and limitations may not be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940 (1940 Act)) of each fund. However, except for the fundamental investment limitations set forth below, the investment policies and limitations described in this SAI are not fundamental, and may be changed without shareholder approval. INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: TREASURY THE FOLLOWING ARE TREASURY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. 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 from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (v) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (vi) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (vii) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (viii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (ix) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (x) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. Treasury, under normal conditions, invests 100% of its total assets in U.S. Treasury bills, notes and bonds and other direct obligations of the U.S. Treasury. The fund may also engage in repurchase agreements backed by those obligations. These operating policies may be changed upon 90 days' notice to shareholders. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: GOVERNMENT THE FOLLOWING ARE GOVERNMENT'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (viii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities or to repurchase agreements. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xi) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi i ) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: DOMESTIC THE FOLLOWING ARE DOMESTIC'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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 Act in the disposition of restricted securities; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF FIDELITY INSTITUTIONAL CASH PORTFOLIOS: MONEY MARKET THE FOLLOWING ARE MONEY MARKET'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) purchase the securities of any issuer (other than obligations issued or guaranteed as to principal and interest by the government of the United States, its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of such issuer, provided, however, that with respect to 25% of its total assets, 10% of its assets may be invested in the securities of an issuer; (2) issue senior securities, except as permitted under the 1940 Act ; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the value of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services industry; (6) buy or sell real estate; (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; (8) invest in oil, gas, or other mineral exploration or development programs; or (9) invest in companies for the purpose of exercising control or management. (10) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. (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 fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (v) 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. (vi) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (vii) The fund does not currently intend to lend assets other than securities to other parties, except by lending money (up to 10% of the fund's net assets) to a registered investment company or fund for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (viii) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (ix) The fund does not currently intend to invest in interests in real estate investment trusts that are not readily marketable, or to invest in interests in real estate limited partnerships that are not listed on the NYSE or the AMEX or traded on the NASDAQ National Market System. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (xi) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (xii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company managed by FMR or an affiliate or successor with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TAX-EXEMPT THE FOLLOWING ARE TAX-EXEMPT'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) if, as a result thereof, (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 as permitted under the 1940 Act; (3) make short sales of securities; (4) purchase any securities on margin, except for such short-term credits as are necessary for the clearance of transactions; (5) borrow money, except for temporary or emergency purposes (not for leveraging or investment) in an amount not to exceed 33 1/3% of the value of the fund's total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed 33 1/3% of the fund's assets by reason of a decline in net assets will be reduced within three days (exclusive of Sundays and Holidays) to the extent necessary to comply with the 33 1/3% limitation; (6) 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; (7) purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. Government, or any of its agencies, instrumentalities, territories or possessions, or issued or guaranteed by a state government or political subdivision thereof) if as a result more than 25% of the value of its total assets would be invested in securities of companies having their principal business activities in the same industry; (8) purchase or sell real estate, but this shall not prevent the fund from investing in municipal bonds or other obligations secured by real estate or interest therein; (9) purchase or sell physical commodities; (10) 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 limit does not apply to purchases of debt securities or to repurchase agreements); or (11) invest in oil, gas or other mineral exploration or development programs. (12) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. For purposes of limitations (1) and (7), FMR identifies the issuer of a security depending on the terms and conditions of the security. In identifying the issuer, FMR will consider the entity or entities responsible for payment of interest and repayment of principal and the source of such payments; the way in which assets and revenues of an issuing political subdivision are separated from those of other political entities; and whether a governmental body is guaranteeing the security. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL, AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) 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. (iii) The fund does not currently intend to purchase or sell futures contracts or call options. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options or futures contracts. (iv) The fund does not currently intend to engage in repurchase agreements or make loans, but this limitation does not apply to purchases of debt securities. (v) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (vi) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF TREASURY ONLY THE FOLLOWING ARE TREASURY ONLY'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) issue senior securities, except as permitted under the 1940 Act; (2) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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; 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. (8) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund may borrow money only (a) from a bank or from a registered investment company or fund for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party. The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (ii) The fund does not currently intend to make loans, but this limitation does not apply to purchases of debt securities. (iii) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objectives, policies, and limitations as the fund. Subject to revision upon 90 days' notice to shareholders, Treasury Only will not engage in reverse repurchase agreements. For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . INVESTMENT LIMITATIONS OF RATED MONEY MARKET THE FOLLOWING ARE RATED MONEY MARKET'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) 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 as permitted under the 1940 Act; (3) borrow money, except that the fund may (i) borrow money for temporary or emergency purposes (not for leveraging or investment) and (ii) engage in reverse repurchase agreements for any purpose; provided that (i) and (ii) in combination do not exceed 33 1/3% of the fund's 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; (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) 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, except that the fund will invest more than 25% of its total assets in the financial services 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; (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 limit does not apply to purchases of debt securities or to repurchase agreements. (9) invest in oil, gas or other mineral exploration or development programs. (10) write or purchase any put or call option. This limitation does not apply to options attached to, or acquired or traded together with, their underlying securities, and does not apply to securities that incorporate features similar to options. (11) The fund may, notwithstanding any other fundamental investment policy or limitation, invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies and limitations as the fund. THE FOLLOWING LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL: (i) The fund does not currently intend to purchase a security (other than a security issued or guaranteed by the U.S. Government or any of its agencies or instrumentalities) if, as a result, more than 5% of its total assets would be invested in the securities of a single issuer; provided that the fund may invest up to 10% of its total assets in the first tier securities of a single issuer for up to three business days. (ii) 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. The fund will not purchase any security while borrowings (excluding reverse repurchase agreements) representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iii) 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. (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 lending money (up to 10% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vi) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in securities of business enterprises that, including predecessors, have a record of less than three years continuous operation. (vii) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the Trust and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. (vii i ) 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. ( ix ) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. ( x ) The fund does not currently intend to invest all of its assets in the securities of a single open-end management investment company with substantially the same fundamental investment objective, policies, and limitations as the fund. For purposes of limitation (vi), pass-through entities and other special purposes vehicles or pools of financial assets, such as issuers of asset-backed securities or investment companies, are not considered "business enterprises." For the fund's policies on quality and maturity, see the section entitled "Quality and Maturity" on page . Each fund's investments must be consistent with its investment objective and policies. Accordingly, not all of the security types and investment techniques discussed below are eligible investments for each of the funds. 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 include 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. ASSET-BACKED SECURITIES include pools of mortgages, loans, receivables or other assets. Payment of principal and interest may be largely dependent upon the cash flows generated by the assets backing the securities and, in certain cases, supported by letters of credit, surety bonds, or other credit enhancements. The value of asset-backed securities may also be affected by the creditworthiness of the servicing agent for the pool, the originator of the loans or receivables, or the entities providing the credit support. DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a delayed-delivery or when-issued basis. These transactions involve a commitment by a fund to purchase or sell specific securities at a predetermined price or yield, with payment and delivery taking place after the customary settlement period for that type of security. Typically, no interest accrues to the purchaser until the security is delivered. When purchasing securities on a delayed-delivery basis, each fund assumes the rights and risks of ownership, including the risk of price and yield fluctuations. Because a fund is not required to pay for securities until the delivery date, these risks are in addition to the risks associated with the fund's other investments. If a fund remains substantially fully invested at a time when delayed-delivery purchases are outstanding, the delayed-delivery purchases may result in a form of leverage. When delayed-delivery purchases are outstanding, the fund will set aside appropriate liquid assets in a segregated custodial account to cover its purchase obligations. When a fund has sold a security on a delayed-delivery basis, the fund does not participate in further gains or losses with respect to the security. If the other party to a delayed-delivery transaction fails to deliver or pay for the securities, the fund could miss a favorable price or yield opportunity, or could suffer a loss. Each fund may renegotiate delayed-delivery transactions after they are entered into, and may sell underlying securities before they are delivered, which may result in capital gains or losses. DOMESTIC AND FOREIGN ISSUERS. Investments may be made in U.S. dollar-denominated time deposits, certificates of deposit, and bankers' acceptances of U.S. banks and their branches located outside of the United States, U.S. branches and agencies of foreign banks, and foreign branches of foreign banks. A fund may also invest in U.S. dollar-denominated securities issued or guaranteed by other U.S. or foreign issuers, including U.S. and foreign corporations or other business organizations, foreign governments, foreign government agencies or instrumentalities, and U.S. and foreign financial institutions, including savings and loan institutions, insurance companies, mortgage bankers, and real estate investment trusts, as well as banks. The obligations of foreign branches of U.S. banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by governmental regulation. Payment of interest and principal on these obligations may also be affected by governmental action in the country of domicile of the branch (generally referred to as sovereign risk). In addition, evidence of ownership of portfolio securities may be held outside of the United States and a fund may be subject to the risks associated with the holding of such property overseas. Various provisions of federal law governing the establishment and operation of U.S. branches do not apply to foreign branches of U.S. banks. Obligations of U.S. branches and agencies of foreign banks may be general obligations of the parent bank in addition to the issuing branch, or may be limited by the terms of a specific obligation and by federal and state regulation, as well as by governmental action in the country in which the foreign bank has its head office. Obligations of foreign issuers involve certain additional risks. These risks may include future unfavorable political and economic developments, withholding taxes, seizures of foreign deposits, currency controls, interest limitations, or other governmental restrictions that might affect payment of principal or interest, or the ability to honor a credit commitment. Additionally, there may be less public information available about foreign entities. Foreign issuers may be subject to less governmental regulation and supervision than U.S. issuers. Foreign issuers also generally are not bound by uniform accounting, auditing, and financial reporting requirements comparable to those applicable to U.S. issuers. FEDERALLY TAXABLE OBLIGATIONS. Under normal conditions, Tax-Exempt does not intend to invest in securities whose interest is federally taxable. However, from time to time on a temporary basis, Tax-Exempt may invest a portion of its assets in fixed-income obligations whose interest is subject to federal income tax. Should Tax-Exempt invest in federally taxable obligations, it would purchase securities that, in FMR's judgment, are of high quality. These obligations would include those issued or guaranteed by the U.S. Government or its agencies or instrumentalities and repurchase agreements backed by such obligations. Proposals to restrict or eliminate the federal income tax exemption for interest on municipal obligations are introduced before Congress from time to time. Proposals also may be introduced before state legislatures that would affect the state tax treatment of Tax-Exempt's distributions. If such proposals were enacted, the availability of municipal obligations and the value of Tax-Exempt's holdings would be affected, and the Trustees would reevaluate Tax-Exempt's investment objectives and policies. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. 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 instruments. In determining the liquidity of a fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features), and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the funds to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days. Also, FMR may determine some restricted securities, municipal lease obligations, and time deposits to be illiquid. In the absence of market quotations, illiquid investments are valued for purposes of monitoring amortized cost valuation at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, a fund were in a position where more than 10% of its net assets were invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. INTERFUND BORROWING PROGRAM. Pursuant to an exemptive order issued by the SEC, each fund has received permission to lend money to, and borrow money from, other funds advised by FMR or its affiliates. Tax-Exempt will participate in the interfund borrowing program only as a borrower. 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. Treasury, Treasury Only, Domestic, Money Market, Government, and Rated Money Market will lend through the program only when the returns are higher than those available from other short-term instruments (such as repurchase agreements). A fund will borrow through the program only when the costs are equal to or lower than the cost of bank loans. 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. Treasury, Government, and Treasury Only do not currently intend to participate in the program as lenders. MARKET DISRUPTION RISK. The value of municipal securities may be affected by uncertainties in the municipal market related to legislation or litigation involving the taxation of municipal securities or the rights of municipal securities holders in the event of a bankruptcy. Municipal bankruptcies are relatively rare, and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear and remain untested. Further, the application of state law to municipal issuers could produce varying results among the states or among municipal securities issuers within a state. These legal uncertainties could affect the municipal securities market generally, certain specific segments of the market, or the relative credit quality of particular securities. Any of these effects could have a significant impact on the prices of some or all of the municipal securities held by a fund, making it more difficult for the fund to maintain a stable net asset value per share. MONEY MARKET SECURITIES are high-quality, short-term obligations. Some money market securities employ a trust or other similar structure to modify the maturity, price characteristics, or quality of financial assets. For example, put features can be used to modify the maturity of a security, or interest rate adjustment features can be used to enhance price stability. If the structure does not perform as intended, adverse tax or investment consequences may result. Neither the Internal Revenue Service (IRS) nor any other regulatory authority has ruled definitively on certain legal issues presented by structured securities. Future tax or other regulatory determinations could adversely affect the value, liquidity, or tax treatment of the income received from these securities or the nature and timing of distributions made by the funds. MUNICIPAL LEASES and participation interests therein may take the form of a lease, an installment purchase, or a conditional sale contract and are issued by state and local governments and authorities to acquire land or a wide variety of equipment and facilities. Generally, the funds will not hold such obligations directly as a lessor of the property, but will purchase a participation interest in a municipal obligation from a bank or other third party. A participation interest gives a fund a specified, undivided interest in the obligation in proportion to its purchased interest in the total amount of the obligation. Municipal leases frequently have risks distinct from those associated with general obligation or revenue bonds. State constitutions and statutes set forth requirements that states or municipalities must meet to incur debt. These may include voter referenda, interest rate limits, or public sale requirements. Leases, installment purchases, or conditional sale contracts (which normally provide for title to the leased asset to pass to the governmental issuer) have evolved as a means for governmental issuers to acquire property and equipment without meeting their constitutional and statutory requirements for the issuance of debt. Many leases and contracts include "non-appropriation clauses" providing that the governmental issuer has no obligation to make future payments under the lease or contract unless money is appropriated for such purposes by the appropriate legislative body on a yearly or other periodic basis. Non-appropriation clauses free the issuer from debt issuance limitations. MUNICIPAL SECTORS: ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been experiencing, and will continue to experience, increased competitive pressures. Federal legislation in the last two years will open transmission access to any electricity supplier, although it is not presently known to what extent competition will evolve. Other risks include: (a) the availability and cost of fuel, (b) the availability and cost of capital, (c) the effects of conservation on energy demand, (d) the effects of rapidly changing environmental, safety, and licensing requirements, and other federal, state, and local regulations, (e) timely and sufficient rate increases, and (f) opposition to nuclear power. HEALTH CARE INDUSTRY. The health care industry is subject to regulatory action by a number of private and governmental agencies, including federal, state, and local governmental agencies. A major source of revenues for the health care industry is payments from the Medicare and Medicaid programs. As a result, the industry is sensitive to legislative changes and reductions in governmental spending for such programs. Numerous other factors may affect the industry, such as general and local economic conditions; demand for services; expenses (including malpractice insurance premiums); and competition among health care providers. In the future, the following elements may adversely affect health care facility operations: adoption of legislation proposing a national health insurance program; other state or local health care reform measures; medical and technological advances which dramatically alter the need for health services or the way in which such services are delivered; changes in medical coverage which alter the traditional fee-for-service revenue stream; and efforts by employers, insurers, and governmental agencies to reduce the costs of health insurance and health care services. HOUSING. Housing revenue bonds are generally issued by a state, county, city, local housing authority, or other public agency. They generally are secured by the revenues derived from mortgages purchased with the proceeds of the bond issue. It is extremely difficult to predict the supply of available mortgages to be purchased with the proceeds of an issue or the future cash flow from the underlying mortgages. Consequently, there are risks that proceeds will exceed supply, resulting in early retirement of bonds, or that homeowner repayments will create an irregular cash flow. Many factors may affect the financing of multi-family housing projects, including acceptable completion of construction, proper management, occupancy and rent levels, economic conditions, and changes to current laws and regulations. EDUCATION. In general, there are two types of education-related bonds; those issued to finance projects for public and private colleges and universities, and those representing pooled interests in student loans. Bonds issued to supply educational institutions with funds are subject to the risk of unanticipated revenue decline, primarily the result of decreasing student enrollment or decreasing state and federal funding. Among the factors that may lead to declining or insufficient revenues are restrictions on students' ability to pay tuition, availability of state and federal funding, and general economic conditions. Student loan revenue bonds are generally offered by state (or substate) authorities or commissions and are backed by pools of student loans. Underlying student loans may be guaranteed by state guarantee agencies and may be subject to reimbursement by the United States Department of Education through its guaranteed student loan program. Others may be private, uninsured loans made to parents or students which are supported by reserves or other forms of credit enhancement. Recoveries of principal due to loan defaults may be applied to redemption of bonds or may be used to re-lend, depending on program latitude and demand for loans. Cash flows supporting student loan revenue bonds are impacted by numerous factors, including the rate of student loan defaults, seasoning of the loan portfolio, and student repayment deferral during periods of forbearance. Other risks associated with student loan revenue bonds include potential changes in federal legislation regarding student loan revenue bonds, state guarantee agency reimbursement and continued federal interest and other program subsidies currently in effect. WATER AND SEWER. Water and sewer revenue bonds are often considered to have relatively secure credit as a result of their issuer's importance, monopoly status, and generally unimpeded ability to raise rates. Despite this, lack of water supply due to insufficient rain, run-off, or snow pack is a concern that has led to past defaults. Further, public resistance to rate increases, costly environmental litigation, and federal environmental mandates are challenges faced by issuers of water and sewer bonds. TRANSPORTATION. Transportation debt may be issued to finance the construction of airports, toll roads, highways or other transit facilities. Airport bonds are dependent on the general stability of the airline industry and on the stability of a specific carrier who uses the airport as a hub. Air traffic generally follows broader economic trends and is also affected by the price and availability of fuel. Toll road bonds are also affected by the cost and availability of fuel as well as toll levels, the presence of competing roads, and the general economic health of the area. Fuel costs and availability also affect other transportation-related securities, as does the presence of alternate forms of transportation, such as public transportation. PUT FEATURES entitle the holder to sell a security back to the issuer or a third party at any time or at specified intervals. They are subject to the risk that the put provider is unable to honor the put feature (purchase the security). Put providers often support their ability to buy securities on demand by obtaining letters of credit or other guarantees from other entities. Demand features, standby commitments, and tender options are types of put features. 3.QUALITY AND MATURITY. Pursuant to procedures adopted by the Board of Trustees, the funds may purchase only high-quality securities that FMR believes present minimal credit risks. To be considered high-quality, a security must be rated in accordance with applicable rules in one of the two highest categories for short-term securities by at least two nationally recognized rating services (or by one, if only one rating service has rated the security); or, if unrated, judged to be of equivalent quality by FMR. High-quality securities are divided into "first tier" and "second tier" securities. First tier securities are those deemed to be in the highest rating category (e.g., Standard & Poor's A-1 or SP-1), and second tier securities are those deemed to be in the second highest rating category (e.g., Standard & Poor's A-2 or SP-2). Split-rated securities may be determined to be either first or second tier based on applicable regulations. Each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market may not invest more than 5% of its total assets in second tier securities. In addition, each of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market fund may not invest more than 1% of its total assets or $1 million (whichever is greater) in the second tier securities of a single issuer. Each fund currently intends to limit its investments to securities with remaining maturities of 397 days or less, and to maintain a dollar-weighted average maturity of 90 days or less. When determining the maturity of a security, a fund may look to an interest rate reset or demand feature. REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a security and simultaneously commits 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. To protect the fund from the risk that the original seller will not fulfill its obligation, the securities are held in an account of the fund at a bank, marked-to-market daily, and maintained at a value at least equal to the sale price plus the accrued incremental amount. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility that the value of the underlying security will be less than the resale price, as well as delays and costs to a fund in connection with bankruptcy proceedings), it is each fund's current policy to engage in repurchase agreement transactions with parties whose creditworthiness has been reviewed and found satisfactory by FMR. 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, a fund 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, a fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. However, in general, each fund anticipates holding restricted securities to maturity or selling them in an exempt transaction. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. A fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. SHORT SALES "AGAINST THE BOX." A fund may sell securities short when it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short. Short sales could be used to protect the net asset value per share of the fund in anticipation of increased interest rates, without sacrificing the current yield of 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. SOURCES OF CREDIT OR LIQUIDITY SUPPORT. FMR may rely on its evaluation of the credit of a bank or another entity in determining whether to purchase a security supported by a letter of credit guarantee, insurance or other source of credit or liquidity. In evaluating the credit of a foreign bank or other foreign entities, FMR will consider whether adequate public information about the entity is available and whether the entity may be subject to unfavorable political or economic developments, currency controls, or other government restrictions that might affect its ability to honor its commitment. STRIPPED GOVERNMENT SECURITIES. Stripped securities are created by separating the income and principal components of a debt instrument and selling them separately. U.S. Treasury STRIPS (Separate Trading of Registered Interest and Principal of Securities), are created when the coupon payments and the principal payment are stripped from an outstanding Treasury bond by the Federal Reserve Bank. Bonds issued by the government agencies also may be stripped in this fashion. Privately stripped government securities are created when a dealer deposits a Treasury security or federal agency security with a custodian for safekeeping and then sells the coupon payments and principal payment that will be generated by this security. Proprietary receipts, such as Certificates of Accrual on Treasury Securities (CATS), Treasury Investment Growth Receipts (TIGRS), and generic Treasury Receipts (TRs), are stripped U.S. Treasury securities that are separated into their component parts through trusts created by their broker sponsors. Bonds issued by the government agencies also may be stripped in this fashion. Because of the SEC's views on privately stripped government securities, a fund must evaluate them as it would non-government securities pursuant to regulatory guidelines applicable to all money market funds. A fund currently intends to purchase only those privately stripped government securities that have either received the highest rating from two nationally recognized rating services (or one, if only one has rated the security) or, if unrated, have been judged to be of equivalent quality by FMR pursuant to procedures adopted by the Board of Trustees. VARIABLE AND FLOATING RATE SECURITIES provide for periodic adjustments of the interest rate paid on the security. Variable rate securities provide for a specified periodic adjustment in the interest rate, while floating rate securities have interest rates that change whenever there is a change in a designated benchmark rate. Some variable or floating rate securities have put features. ZERO COUPON BONDS do not make regular interest payments. Instead, they are sold at a deep 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 very volatile when interest rates change. In calculating its daily dividend, a fund takes into account as income a portion of the difference between a zero coupon bond's purchase price and its face value. 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 has granted investment management authority to the sub-adviser (see the section entitled "Management Contracts"), and the 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 below. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. Securities purchased and sold by a fund generally will be traded on a net basis (i.e., without commission). 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; and the reasonableness of any commissions. The funds may execute portfolio transactions with broker-dealers who provide research and execution services to the funds or other 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 accounts; effect securities transactions, and perform functions incidental thereto (such as clearance and settlement). FMR maintains a listing of broker-dealers who provide such services on a regular basis. However, as many transactions on behalf of the funds are placed with broker-dealers (including broker-dealers on the list) without regard to the furnishing of such services, it is not possible to estimate the proportion of such transactions directed to such broker-dealers solely because such services were provided. The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the funds may be useful to FMR in rendering investment management services to the funds 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 the funds. 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. Subject to applicable limitations of the federal securities laws, broker-dealers may receive 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 the funds 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 the funds and 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. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the funds or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with FBSI and Fidelity Brokerage Services (FBS), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by nonaffiliated, qualified brokerage firms for similar services. From September 1992 through December 1994, FBS operated under the name Fidelity Brokerage Services Limited, Inc. (FBSL). As of January 1995, FBSL was converted to an unlimited liability company and assumed the name FBS. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. 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. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, unless certain requirements are satisfied. Pursuant to such requirements, the Board of Trustees has authorized FBSI to execute fund transactions on national securities exchanges in accordance with approved procedures and applicable SEC rules. Each fund's Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the funds and review the commissions paid by each fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For fiscal years ended March 31, 1995, 1994, and 1993 (August 31, 1995, 1994, and 1993 for Rated Money Market) , the funds paid no brokerage commissions. During fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) , the funds paid no fees to brokerage firms that provided research. 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, investment decisions for each fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds and 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 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 Fidelity Service Company (FSC) normally determines a fund's net asset value per share (NAV) at 12:00 p.m. Eastern time for Tax-Exempt and Treasury Only; 3:00 p.m. Eastern time for Government, Domestic, and Money Market; 3:00 p.m. and 4:00 p.m. Eastern time for Rated Money Market; and 3:00 p.m. and 5:00 p.m. Eastern time for Treasury. The valuation of portfolio securities is determined as of these times for the purpose of computing each fund's NAV. Portfolio securities and other assets are valued on the basis of amortized cost. This technique involves initially valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. The amortized cost value of an instrument may be higher or lower than the price a fund would receive if it sold the instrument. During periods of declining interest rates, a fund's yield based on amortized cost valuation may be higher than would result if the fund used market valuations to determine its NAV. The converse would apply during periods of rising interest rates. Valuing each fund's instruments on the basis of amortized cost and use of the term "money market fund" are permitted pursuant to Rule 2a-7 under the 1940 Act. Each fund must adhere to certain conditions under Rule 2a-7, as summarized in the section entitled "Quality and Maturity" on page . The Board of Trustees oversees FMR's adherence to the provisions of Rule 2a-7 and has established procedures designed to stabilize each fund's NAV at $1.00. At such intervals as they deem appropriate, the Trustees consider the extent to which NAV calculated by using market valuations would deviate from $1.00 per share. If the Trustees believe that a deviation from a fund's amortized cost per share may result in material dilution or other unfair results to shareholders, the Trustees have agreed to take such corrective action, if any, as they deem appropriate to eliminate or reduce, to the extent reasonably practicable, the dilution or unfair results. Such corrective action could include selling portfolio instruments prior to maturity to realize capital gains or losses or to shorten average portfolio maturity; withholding dividends; redeeming shares in kind; establishing NAV by using available market quotations; and such other measures as the Trustees may deem appropriate. PERFORMANCE The funds 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. Yield and total return fluctuate in response to market conditions and other factors. YIELD CALCULATIONS. To compute a class 's yield for a period, the net change in value of a hypothetical account containing one share reflects the value of additional shares purchased with dividends from the one original share and dividends declared on both the original share and any additional shares. The net change is then divided by the value of the account at the beginning of the period to obtain a base period return. This base period return is annualized to obtain a current annualized yield. An effective yield may also be calculated by compounding the base period return over a one-year period. In addition to the current yield, the funds may quote yields in advertising based on any historical seven-day period. Yields for each class of the funds are calculated on the same basis as other money market funds, as required by applicable regulations. Yield information may be useful in reviewing a class's performance and in providing a basis for comparison with other investment alternatives. However, each class's yield fluctuates, unlike investments that pay a fixed interest rate over a stated period of time. When comparing investment alternatives, investors should also note the quality and maturity of the portfolio securities of respective investment companies they have chosen to consider. Investors should recognize that in periods of declining interest rates a class's yield will tend to be somewhat higher than prevailing market rates, and in periods of rising interest rates a class's yield will tend to be somewhat lower. Also, when interest rates are falling, the inflow of net new money to a fund from the continuous sale of its shares will likely be invested in instruments producing lower yields than the balance of the fund's holdings, thereby reducing a class's current yield. In periods of rising interest rates, the opposite can be expected to occur. A class's tax-equivalent yield is the rate an investor would have to earn from a fully taxable investment before taxes to equal the class's tax-free yield. Tax-equivalent yields are calculated by dividing a class's yield by the result of one minus a stated federal or combined federal and state tax rate. If only a portion of a class's yield is tax-exempt, only that portion is adjusted in the calculation. The following table shows the effect of a shareholder's tax status on effective yield under federal income tax laws for 19 95 . It shows the approximate yield a taxable security must provide at various income brackets to produce after-tax yields equivalent to those of hypothetical tax-exempt obligations yielding from 2.00 % to 8.00 %. Of course, no assurance can be given that a class will achieve any specific tax-exempt yield. While Tax-Exempt invests principally in obligations whose interest is exempt from federal income tax, other income received by the fund may be taxable.
19 95 TAX RATES AND TAX-EQUIVALENT YIELDS
Taxable Income* Federal If individual tax-exempt yield is: Income
Tax 2.00% 3.00% 4.00% 5.00% 6.0% 7.00% 8.00%
Single Return Joint Return Bracket** Then taxable equivalent yield is:
$23,351 - $36,001 - 28.0% 2.78% 4.17% 5.56% 6.94% 8.33% 9.72% 11.11% $56,500 $94,250 $56,501 - $94,251 - 31.0% 2.90% 4.35% 5.80% 7.25% 8.70% 10.14% 11.59% $117,950 $143,600 $117,951 - $143,601 - 36.0% 3.13% 4.69% 6.25% 7.81% 9.38% 10.94% 12.50% $256,500 $256,500 $256,501 - $256,501 - 39.6% 3.31% 4.97% 6.62% 8.28% 9.93% 11.59% 13.25%
* Net amount subject to federal income tax after deductions and exemptions. Assumes ordinary income only. ** Excludes the impact of the phaseout of personal exemptions, limitations on itemized deductions, and other credits, exclusions, and adjustments which may increase a taxpayer's marginal tax rate. An increase in a shareholder's marginal tax rate would increase that shareholder's tax-equivalent yield. Tax-Exempt may invest a portion of its assets in obligations that are subject to state or federal income taxes. When the fund invests in these obligations, its tax-equivalent yield will be lower. In the table above, the tax-equivalent yields are calculated assuming investments are 100% federally and state tax-free. TOTAL RETURN CALCULATIONS. Total 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 the class's NAV over a stated period. Average annual total returns are calculated by determining the growth or decline in value of a hypothetical historical investment 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 total return of 100% over ten years would produce an average annual total 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 total returns covering periods of less than one year are calculated by determining a class's total 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 total returns are a convenient means of comparing investment alternatives, investors should realize that performance is not constant over time, but changes from year to year, and that average annual total returns represent averaged figures as opposed to the actual year-to-year performance of a class. In addition to average annual total returns, a class may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total 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. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. Total returns may be quoted on a before-tax or after-tax basis. Total returns, yields, and other performance information may be quoted numerically or in a table, graph, or similar illustration. HISTORICAL RESULTS. The following table shows 7-day yields, tax-equivalent yields, and total returns for Class III of each fund for the period ended March 31, 1995 (August 31, 1995 for Rated Money Market). Initial offering of Class III shares took place on the following dates: Treasury (10/22/93), Government (4/4/94), Domestic (7/19/94), Money Market (11/17/93), Rated Money Market (11/1/95), Treasury Only (11/1/95), and Tax-Exempt (11/1/95). Class III shares of Treasury, Domestic, and Money Market had a 0.32% 12b-1 fee (Government had a 0.25% 12b-1 fee), which is not reflected in figures prior to these dates. Prior date figures are those of Class I, the original class of the funds, which does not have a 12b-1 fee. Class III figures would have been lower had 12b-1 fees been reflected in all periods. Effective July 1, 1995, Class III shares of Treasury, Government, Domestic, and Money Market have a 0.25% 12b-1 fee. Effective November 1, 1995, Class III shares of Rated Money Market, Treasury Only, and Tax-Exempt have a 0.25% 12b-1 fee. Tax-Exempt's Class III tax-equivalent yield is based on a 36% federal income tax rate. Average Annual Total Returns Cumulative Total Returns
Seven-Day Tax One Five Life of One Five Life of Yield Equivalent Year Years Fund*/Ten Year Years Fund*/Ten Yield Years Years Rated Money Market - 5.46 % N/A 5.53% 4.60% 6.11% 5.53% 25.20% 80.99% Class III Treasury - Class III 5.66% N/A 4.45% 4.81% 5.97% 4.45% 26.45% 60.50% Government - Class III 5.76% N/A 4.60% 4.94% 6.29% 4.60% 27.28% 80.62% Domestic - Class III 5.74% N/A 4.71% 4.98% 5.26% 4.71% 27.49% 31.99% Money Market - Class III 5.76% N/A 4.66% 4.99% 6.39% 4.66% 27.59% 82.80% Treasury Only - Class III 5.80 % N/A 4.65 % N/A 4.45 % 4.65 % N/A 21.65 % Tax-Exempt - Class III 3.94 % 6.16 % 3.18 % 3.65 % 4.41 % 3.18 % 19.61 % 51.86 %
* Life of Fund figures are from commencement of operations of each fund, except Rated Money Market which reports a Ten Years figure. Commencement of operations for each fund, other than Rated Money Market, are as follows: Treasury - February 2, 1987; Government - July 25, 1985; Domestic - November 3, 1989; Money Market - July 5, 1985; Treasury Only - October 3, 1990; and Tax-Exempt - July 25, 1985. Note: If FMR had not reimbursed certain fund expenses during these periods, the total returns would have been lower and the yields for Class III of each fund would have been: Fund Yield Tax-Equivalent Yield Rated Money Market - Class III N/A N/A Treasury - Class III 5.29% N/A Government - Class III 5.50% N/A Domestic - Class III 5.37% N/A Money Market - Class III 5.67% N/A Treasury Only - Class III 5.58% N/A Tax-Exempt - Class III 3.86% 6.03% The following tables show the income and capital elements of each fund's Class III cumulative total return. The tables compare each fund's Class III return to the record of the Standard & Poor's Composite Index of 500 Stocks (S&P 500), the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The CPI information is as of the month end closest to the initial investment date for each fund. The S&P 500 and DJIA comparisons are provided to show how each class's total return compared to the record of a broad average of common stocks and a narrower set of stocks of major industrial companies, respectively, over the same period. Of course, since each fund invests in short-term fixed-income securities, common stocks represent a different type of investment from the fund. Common stocks generally offer greater growth potential than the funds, but generally experience greater price volatility, which means greater potential for loss. In addition, common stocks generally provide lower income than fixed-income investments, such as the funds. Figures for the S&P 500 and DJIA are based on the prices of unmanaged groups of stocks and, unlike the funds' returns, do not include the effect of paying brokerage commissions or other costs of investing. CLASS III CHARTS. The following table shows 7-day yields, tax-equivalent yields, and total returns for Class III of each fund for the period ended March 31, 1995 (August 31, 1995 for Rated Money Market). Initial offering of Class III shares took place on the following dates: Treasury (10/22/93), Government (4/4/94), Domestic (7/19/94), Money Market (11/17/93), Rated Money Market (11/1/95), Treasury Only (11/1/95), and Tax-Exempt (11/1/95). Class III shares of Treasury, Domestic, and Money Market had a 0.32% 12b-1 fee (Government had a 0.25% 12b-1 fee), which is not reflected in figures prior to these dates. Prior date figures are those of Class I, the original class of the funds, which does not have a 12b-1 fee. Class III figures would have been lower had 12b-1 fees been reflected in all periods. Effective July 1, 1995, Class III shares of Treasury, Government, Domestic, and Money Market have a 0.25% 12b-1 fee. Effective November 1, 1995, Class III shares of Rated Money Market, Treasury Only, and Tax-Exempt have a 0.25% 12b-1 fee. RATED MONEY MARKET HISTORICAL FUND RESULTS During the ten year period ended August 31, 1995, a hypothetical $10,000 investment in Class III of Rated Money Market would have grown to $ 18,099 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 8/31/86 10,000 742 0 10,742 13,914 14,773 10,157 8/31/87 10,000 1,408 0 11,408 18,718 21,377 10,593 8/31/88 10,000 2,217 0 12,217 15,389 16,894 11,019 8/31/89 10,000 3,335 0 13,335 21,428 23,615 11,537 8/31/90 10,000 4,456 0 14,456 20,358 23,431 12,185 8/31/91 10,000 5,450 0 15,450 25,836 28,277 12,648 8/31/92* 10,000 6,123 0 16,123 27,885 31,172 13,046 8/31/93 10,000 6,596 0 16,596 32,132 35,985 13,407 8/31/94 10,000 7,151 0 17,151 33,890 39,634 13,796 8/31/95 10,000 8,099 0 18,099 41,158 47,913 14,157
* The fiscal year end of the fund changed from October 31 to August 31 in July 1992 . Explanatory Notes: With an initial investment of $10,000 made on August 31, 1985 , the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,099 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,949 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY HISTORICAL FUND RESULTS During the period from February 2, 1987 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class III of Treasury would have grown to $ 16,050 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinveste d Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1987* $ 10,000 $ 93 $ 0 $ 10,093 $ 10,694 $ 10,731 $ 10,081 1988 10,000 759 0 10,759 9,804 9,560 10,477 1989 10,000 1,632 0 11,632 11,583 11,432 10,998 1990 10,000 2,693 0 12,693 13,816 14,014 11,574 1991 10,000 3,692 0 13,692 15,805 15,668 12,140 1992 10,000 4,433 0 14,433 17,552 17,950 12,527 1993 10,000 4,932 0 14,932 20,229 19,633 12,914 1994 10,000 5,367 0 15,367 20,528 21,366 13,237 1995 10,000 6,050 0 16,050 23,722 25,101 13,615
* From February 2, 1987 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on February 2, 1987, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 16,050 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,744 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. GOVERNMENT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) through March 31, 1995, a hypothetical investment of $10,000 in Class III of Government would have grown to $ 18,062 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 547 $ 0 $ 10,547 $ 12,812 $ 13,855 $ 10,093 1987 10,000 1,233 0 11,233 16,170 18,170 10,399 1988 10,000 2,017 0 12,017 14,824 16,188 10,807 1989 10,000 3,001 0 13,001 17,514 19,358 11,345 1990 10,000 4,191 0 14,191 20,890 23,729 11,939 1991 10,000 5,318 0 15,318 23,897 26,530 12,523 1992 10,000 6,167 0 16,167 26,450 30,395 12,922 1993 10,000 6,743 0 16,743 30,588 33,245 13,321 1994 10,000 7,267 0 17,267 31,039 36,179 13,655 1995 10,000 8,062 0 18,062 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations). ** From month end closest to initial investment date. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,062 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 5,929 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. DOMESTIC HISTORICAL FUND RESULTS During the period from November 3, 1989 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class III of Domestic would have grown to $ 13,199 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1990* $ 10,000 $ 352 $ 0 $ 10,352 $ 10,189 $ 10,451 $ 10,247 1991 10,000 1,192 0 11,192 11,655 11,685 10,748 1992 10,000 1,808 0 11,808 12,944 13,387 11,091 1993 10,000 2,222 0 12,222 14,919 14,642 11,433 1994 10,000 2,605 0 12,605 15,139 15,935 11,720 1995 10,000 3,199 0 13,199 17,494 18,720 12,054
* From November 3, 1989 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on November 3, 1989, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 13,199 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amoun t ed to $ 2,782 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. MONEY MARKET HISTORICAL FUND RESULTS During the period from July 5, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class III of Money Market would have grown to $ 18,280 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 601 $ 0 $ 10,601 $ 12,848 $ 14,126 $ 10,112 1987 10,000 1,297 0 11,297 16,217 18,525 10,418 1988 10,000 2,103 0 12,103 14,867 16,504 10,827 1989 10,000 3,113 0 13,113 17,564 19,736 11,366 1990 10,000 4,327 0 14,327 20,950 24,192 11,961 1991 10,000 5,492 0 15,492 23,965 27,048 12,546 1992 10,000 6,358 0 16,358 26,615 30,988 12,946 1993 10,000 6,945 0 16,945 30,675 33,894 13,346 1994 10,000 7,466 0 17,466 31,128 36,885 13,680 1995 10,000 8,280 0 18,280 35,971 43,332 14,071
* From July 5, 1985 (commencement of operations). Explanatory Notes: With an initial investment of $10,000 made on July 5, 1985, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 18,280 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 6,049 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TREASURY ONLY HISTORICAL FUND RESULTS During the period from October 3, 1990 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class III of Treasury Only would have grown to $ 12,165 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living $10,000 Dividend Capital Gain Investment Distributions Distributions 1991* $ 10,000 $ 353 $ 0 $ 10,353 $ 12,114 $ 11,848 $ 10,173 1992 10,000 913 0 10,913 13,454 13,573 10,497 1993 10,000 1,285 0 11,285 15,506 14,846 10,821 1994 10,000 1,624 0 11,624 15,735 16,157 11,093 1995+ 10,000 2,165 0 12,165 18,183 18,980 11,409
* From October 3, 1990 (commencement of operations). + The fiscal year end of the fund changed from July 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on October 3, 1990, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested) amounted to $ 12,165 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 1,963 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. TAX-EXEMPT HISTORICAL FUND RESULTS During the period from July 25, 1985 (commencement of operations) to March 31, 1995, a hypothetical $10,000 investment in Class III of Tax-Exempt would have grown to $ 15,186 , assuming all distributions were reinvested. This was a period of fluctuating interest rates and the figures below should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in Class III of the fund today.
INDICES Period Ended Value of Value of Value of Total S&P 500 DJIA Cost of 3/31 Initial Reinvested Reinvested Value Living** $10,000 Dividend Capital Gain Investment Distributions Distributions 1986* $ 10,000 $ 368 $ 0 $ 10,368 $ 12,812 $ 13,855 $ 10,093 1987 10,000 814 0 10,814 16,170 18,170 10,399 1988 10,000 1,323 0 11,323 14,824 16,188 10,807 1989 10,000 1,958 0 11,958 17,514 19,358 11,345 1990 10,000 2,697 0 12,697 20,890 23,729 11,939 1991 10,000 3,411 0 13,411 23,897 26,530 12,523 1992 10,000 3,973 0 13,973 26,540 30,395 12,922 1993 10,000 4,369 0 14,369 30,588 33,245 13,321 1994 10,000 4,718 0 14,718 31,039 36,179 13,655 1995+ 10,000 5,186 0 15,186 35,869 42,502 14,045
* From July 25, 1985 (commencement of operations) ** From month end closest to initial investment date. + The fiscal year end of the fund changed from May 31 to March 31 in February 1995. Explanatory Notes: With an initial investment of $10,000 made on July 25, 1985, the net amount invested in Class III shares of the fund was $10,000. The cost of the initial investment ($10,000) together with the aggregate cost of reinvested dividends for the period covered (their cash value at the time they were reinvested), amounted to $ 15,186 . If distributions had not been reinvested, the amount of distributions earned from Class III shares of the fund over time would have been smaller, and cash payments (dividends) for the period would have amounted to $ 4,186 . The fund did not distribute any capital gains during the period. Tax consequences of different investments have not been factored into the above figures. PERFORMANCE COMPARISONS. A fund'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 Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. Lipper may also rank funds based on yield. In addition to the mutual fund rankings, a fund's performance may be compared to stock, bond, and money market mutual fund performance indices prepared by Lipper or other organizations. When comparing these indices, 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 fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund 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 fund 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 your principal or your 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 indices. 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 total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. A fund may compare its performance or the performance of securities in which it may invest to averages published by IBC USA (Publications), Inc. of Ashland, Massachusetts. These averages assume reinvestment of distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/Government, which is reported in the MONEY FUND REPORT(trademark), covers over 229 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Taxable, which is reported in the MONEY FUND REPORT(trademark), covers over 749 money market funds; IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All Tax-Free, which is reported in the MONEY FUND REPORT(trademark), covers over 387 money market funds. 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; charitable giving; and the Fidelity credit card. 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, a quarterly magazine provided free of charge to Fidelity fund shareholders. A fund may present its fund number, Quotron(trademark) number, and CUSIP number, and discuss or quote its current portfolio manager. As of August 31 , 1995, FMR advised over $ 26.5 billion in tax-free fund assets, $ 79 billion in money market fund assets, $ 218 billion in equity fund assets, $ 56 billion in international fund assets, and $ 23 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. In addition to performance rankings, each class of a fund may compare its total expense ratio to the average total expense ratio of similar funds tracked by Lipper. A class 's total expense ratio is a significant factor in comparing bond and money market investments because of its effect on yield. ADDITIONAL PURCHASE, EXCHANGE AND REDEMPTION INFORMATION If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing a class's NAV. Shareholders receiving 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. Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) a fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or a fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the prospectus, each fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, a fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DIVIDENDS. Because each fund's income is primarily derived from interest, dividends from the fund generally will not qualify for the dividends-received deduction available to corporate shareholders. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends received deduction. A portion of each fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. To the extent that each fund's income is designated as federally tax-exempt interest, the daily dividends declared by the fund are also federally tax-exempt. Short-term capital gains are distributed as dividend income, but do not qualify for the dividends-received deduction. These gains will be taxed as ordinary income. Each fund will send each shareholder a notice in January describing the tax status of dividend and capital gain distributions (if any) for the prior year. Shareholders are required to report tax-exempt income on their federal tax returns. Shareholders who earn other income, such as social security benefits, may be subject to federal income tax on up to 85% of such benefits to the extent that their income, including tax-exempt income, exceeds certain base amounts. Tax-Exempt purchases municipal securities that are free from federal income tax based on opinions of counsel regarding their tax status. These opinions generally will be based on covenants by the issuers or other parties regarding continuing compliance with federal tax requirements. If at any time the covenants are not complied with, distribution to shareholders of interest on a security could become federally taxable retroactive to the date a security was issued. For certain types of structured securities, opinions of counsel may also be based on the effect of the structure on the federal tax treatment of the income. As a result of the Tax Reform Act of 1986, interest on certain "private activity" securities is subject to the federal alternative minimum tax (AMT), although the interest continues to be excludable from gross income for other tax purposes. Interest from private activity securities will be considered tax-exempt for purposes of Tax-Exempt's policy on investing so that at least 80% of its income is free from federal income tax. Interest from private activity securities is a tax preference item for the purposes of determining whether a taxpayer is subject to the AMT and the the amount of AMT to be paid, if any. Private activity securities issued after August 7, 1986 to benefit a private or industrial user or to finance a private facility are affected by this rule. A portion of the gain on bonds purchased with market discount after April 30, 1993 and short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. Dividend distributions resulting from a recharacterization of gain from the sale of bonds purchased with market discount after April 30, 1993 are not considered income for the purposes of Tax-Exempt's policy of investing so that at least 80% of its income is free from federal income tax. Tax-Exempt may distribute any net realized short-term capital gains and taxable market discounts once a year or more often, as necessary, to maintain its net asset value at $1.00 per share. It is the current position of the staff of the SEC that a fund that uses the term "tax-exempt" in its name may not derive more than 20% of its income from municipal obligations that pay interest that is a preference item for purposes of the AMT. According to this position, at least 80% of Tax-Exempt's income would have to be exempt from the AMT as well as from federal income taxes. Corporate investors should note that a tax preference item for the purposes of the corporate AMT is 75% of the amount by which adjusted current earnings (which includes tax-exempt interest) exceeds the alternative minimum taxable income of the corporation. If a shareholder receives an exempt-interest dividend and sells shares at a loss after holding them for a period of six months or less, the loss will be disallowed to the extent of the amount of the exempt-interest dividend. CAPITAL GAIN DISTRIBUTIONS. Each fund may distribute any net realized short-term capital gains once a year or more often as necessary, to maintain its net asset value at $1.00 per share. Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market do not anticipate earning long-term capital gains on securities held by each fund. Tax-Exempt does not anticipate distributing long-term capital gains. As of fiscal year ended March 31, 1995, Treasury had capital loss carryforwards aggregating approximately $1,198,000. The loss carryforward for Treasury, of which $82,000, $109,000, $142,000, $1,000, $330,000, and $534,000 will expire on March 31, 1996, 1997, 1999, 2001, 2002 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Government had capital loss carryforwards aggregating approximately $1,104,600. The loss carryforward for Government, of which $19,400, $200, $53,000, $271,000, and $761,000 will expire on March 31, 1996, 1997, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Domestic had capital loss carryforwards aggregating approximately $98,000. The loss carry forward for Domestic, of which $49,000 and $49,000 will expire on March 31, 2001 and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Money Market had capital loss carryforwards aggregating approximately $1,781,000. The loss carryforward for Money Market, of which $336,000, $898,000 and $547,000 will expire on March 31, 2001, 2002, and 2003, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Treasury Only had capital loss carryforwards aggregating approximately $184,000. The loss carryforward for Treasury Only, of which $22,000 and $162,000 will expire on March 31, 2001 and 2002, respectively, is available to offset future capital gains. As of fiscal year ended March 31, 1995, Tax-Exempt, had capital loss carryforwards aggregating approximately $528,000. The loss carryforward for Tax-Exempt, which will expire on March 31, 1996, is available to offset future capital gains. As of fiscal year ended August 31, 1995, Rated Money Market had capital loss carryforwards aggregating approximately $74,000. The loss carryforward for Rated Money Market, of which $40,000, $32,000, and $2,000 will expire on August 31, 1996, 1997, and 1998, respectively, is available to offset future capital gains. STATE AND LOCAL TAX ISSUES. For mutual funds organized as business trusts, state law provides for a pass-through of the state and local income tax exemption afforded to direct owners of U.S. Government securities. Some states limit this to mutual funds that invest a certain amount in U.S. Government securities, and some types of securities, such as repurchase agreements and some agency backed securities, may not qualify for this benefit. The tax treatment of your dividend distributions from a fund will be the same as if you directly owned your proportionate share of the U.S. Government securities in the fund's portfolio. Because the income earned on most U.S. Government securities in which a fund invests is exempt from state and local income taxes, the portion of your dividends from the fund attributable to these securities will also be free from income taxes. The exemption from state and local income taxation does not preclude states from assessing other taxes on the ownership of U.S. Government securities. In a number of states, corporate franchise (income) tax laws do not exempt interest earned on U.S. Government securities whether such securities are held directly or through a fund. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid 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 are invested in securities of foreign issuers, the fund may elect to pass through foreign taxes paid and thereby allow shareholders to take a credit or deduction on their individual tax returns. TAX STATUS OF THE FUNDS. Each fund intends to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. 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. Each fund is treated as a separate entity from the other funds of each Trust for tax purposes. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting each fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on fund distributions, and shares may be subject to state and local personal property taxes. Investors should consult their tax advisers to determine whether a fund is suitable to their particular tax situation. FMR All of the stock of FMR is owned by FMR Corp., its parent company organized in 1972. 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 three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; FIIOC, which performs shareholder servicing functions for institutional customers and funds sold through intermediaries; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Fidelity investment personnel may invest in securities for their own account pursuant to a code of ethics that sets forth all employees' fiduciary responsibilities regarding the funds, establishes procedures for personal investing and restricts certain transactions. For example, all personal trades in most securities require pre-clearance, and participation in initial public offerings is prohibited. In addition, restrictions on the timing of personal investing in relation to trades by Fidelity funds and on short-term trading have been adopted. TRUSTEES AND OFFICERS The Trustees and executive officers of the trusts are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. Trustees and officers elected or appointed to the trusts prior to the funds' conversion from series of a Massachusetts business trust served in identical capacities. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. The business address of each Trustee 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 (64), Trustee and President, is Chairman, Chief Executive Officer 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 FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD (53), Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. RALPH F. COX (62), Trustee (1991), is a consultant to Western Mining Corporation (1994). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Sanifill Corporation (non-hazardous waste, 1993) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS (63), Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she is a member of the President's Advisory Council of The University of Vermont School of Business Administration. RICHARD J. FLYNN (71), Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc., and he previously served as a Director of Mechanics Bank (1971-1995). E. BRADLEY JONES (67), Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc (mining), Consolidated Rail Corporation, Birmingham Steel Corporation, and RPM, Inc. (manufacturer of chemical products, 1990), and he previously served as a Director of NACCO Industries, Inc. (mining and marketing, 1985-1995) and Hyster-Yale Materials Handling, Inc. (1985-1995). In addition, he serves as a Trustee of First Union Real Estate Investments, a Trustee and member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK (62), Trustee, is Executive-in-Residence (1995) at Columbia University Graduate School of Business and a financial consultant. 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 is a Director of General Re Corporation (reinsurance), and he previously served as a Director of Valuation Research Corp. (appraisals and valuations, 1993-1995). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund, Vice Chairman of the Board of Trustees of the Greenwich Hospital Association, and as a Member of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995). *PETER S. LYNCH (52), Trustee (1990) is Vice Chairman and Director of FMR (1992). 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 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). He is a Director of W.R. Grace & Co. (chemicals) and Morrison Knudsen Corporation (engineering and construction). 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 (1990). GERALD C. McDONOUGH (65), Trustee, is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration), Commercial Intertech Corp. (water treatment equipment, 1992), and Associated Estates Realty Corporation (a real estate investment trust, 1993). EDWARD H. MALONE (70), Trustee. Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In addition, he serves as a Trustee of Corporate Property Investors, the EPS Foundation at Trinity College, the Naples Philharmonic Center for the Arts, and Rensselaer Polytechnic Institute, and he is a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN (61), Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). 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) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS (66), 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 BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc., and AppleSouth, Inc. (restaurants, 1992). FRED L. HENNING, JR. (55), Vice President, is Vice President of Fidelity's money market (1994) and fixed-income (1995) funds and Senior Vice President of FMR Texas Inc. LELAND BARRON (36), Vice President (1989), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. BURNELL STEHMAN (63), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. JOHN TODD (46), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. SCOTT A. ORR (33), Vice President (1992), is also Vice President of other funds advised by FMR and an employee of FMR Texas, Inc. ARTHUR S. LORING (47), Secretary, is Senior Vice President (1993) and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. KENNETH A. RATHGEBER (47), Treasurer (1995), is Treasurer of the Fidelity funds and is an employee of FMR (1995). Before joining FMR, Mr. Rathgeber was a Vice President of Goldman Sachs & Co. (1978-1995), where he served in various positions, including Vice President of Proprietary Accounting (1988-1992), Global Co-Controller (1992-1994), and Chief Operations Officer of Goldman Sachs (Asia) LLC (1994-1995) THOMAS D. MAHER (50), Assistant Vice President (1990), is Assistant Vice President of Fidelity's money market funds and Vice President and Associate General Counsel of FMR Texas Inc. (1990). Prior to 1990, Mr. Maher was an employee of FMR. JOHN H. COSTELLO (48), Assistant Treasurer, is an employee of FMR. LEONARD M. RUSH (48), Assistant Treasurer (1994), is an employee of FMR (1994). Prior to becoming Assistant Treasurer of the Fidelity funds, Mr. Rush was Chief Compliance of Officer of FMR Corp. (1993-1994); Chief Financial Officer of Fidelity Brokerage Services, Inc. (1990-1993); and Vice President, Assistant Controller, and Director of the Accounting Department - First Boston Corp. (1986-1990). The following table sets forth information describing the compensation of each current trustee of each fund for his or her services as trustee for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) . COMPENSATION TABLE Aggregate Compensation
J. Gary Ralph F. Phyllis Richard Edward C. E. Donald Peter S. Gerald C. Edward Marvin L. Thomas Burkhead** Cox Burke J. Flynn Johnson 3d** Bradley J. Kirk Lynch** McDonough H. Mann R. Davis Jones Malone Williams Rated Money $ 0 $ 151 $ 145 $ 189 $ 0 $ 151 $ 153 $ 0 $ 151 $ 151 $ 151 $ 150 Market Treasury 0 2,082 1,985 2,568 0 2,059 2,111 0 2,112 2,134 2,032 2,084 Government 0 1,672 1,600 2,059 0 1,654 1,706 0 1,708 1,723 1,632 1,683 Money Market 0 2,371 2,246 2,942 0 2,345 2,395 0 2,395 2,416 2,312 2,360 Domestic 0 464 440 575 0 459 468 0 463 472 452 460 Tax-Exempt+ 0 1,128 1,066 1,393 0 1,111 1,129 0 1,130 1,149 1,099 1,118 Treasury Only+ 0 543 504 679 0 533 544 0 535 533 524 523
Trustees Pension or Estimated Annual Total Retirement Benefits Upon Compensation Benefits Accrued Retirement from from the Fund as Part of Fund the Fund Complex* Expenses from the Complex* Fund Complex* J. Gary Burkhead** $ 0 $ 0 $ 0 Ralph F. Cox 5,200 52,000 125,000 Phyllis Burke Davis 5,200 52,000 122,000 Richard J. Flynn 0 52,000 154,500 Edward C. Johnson 3d** 0 0 0 E. Bradley Jones 5,200 49,400 123,500 Donald J. Kirk 5,200 52,000 125,000 Peter S. Lynch** 0 0 0 Gerald C. McDonough 5,200 52,000 125,000 Edward H. Malone 5,200 44,200 128,000 Marvin L. Mann 5,200 52,000 125,000 Thomas R. Williams 5,200 52,000 126,500
* Information is as of December 31, 1994 for 206 funds in the complex. ** Interested trustees of the fund are compensated by FMR. + The annualized amounts reported for Tax-Exempt and Treasury Only are for the periods June 1, 1994 through March 31, 1995 and August 1, 1994 through March 31, 1995, respectively. Each fund's fiscal year end changed to March 31 in February 1995. Under a retirement program adopted in July 1988, the non-interested Trustees, upon reaching age 72, become eligible to participate in a retirement program under which they receive payments during their lifetime from a fund based on their basic trustee fees and length of service. The obligation of a fund to make such payments is not secured or funded. Trustees become eligible if, at the time of retirement, they have served on the Board for at least five years. Currently, Messrs. Ralph S. Saul, William R. Spaulding, Bertram H. Witham, and David L. Yunich, all former non-interested Trustees, receive retirement benefits under the program. As of October 23, 1995, the Trustees and officers of each fund owned, in the aggregate, less than 1% of each fund's total outstanding shares. As of October 25, 1995, the following owned of record or beneficially 5% or more of outstanding shares of each class of the funds: TREASURY - CLASS I: First Union National Bank (13.32%); Bank of America (11.69%); Texas Commerce Bank, N.A. (9.93%); and First Interstate Bank (6.39%). TREASURY - CLASS III: Bank Of New York (51.76%); First Union National Bank (17.22%); and Chemical Bank (10.09%). GOVERNMENT - CLASS I: First Tennessee Bank, Memphis (11.28%); Shawmut Bank Of Boston, N.A. (7.47%); and Texas Commerce Bank, N.A. (7.35%). GOVERNMENT - CLASS III: Whitney National Bank (22.53%); Boatmen's Trust Co. of St. Louis (16.08%); First Interstate Bank (13.45%); Nationsbank (12.58%); Indiana National Bank (11.37%); United National Bank (11.08%); and First Union National Bank (8.10%). DOMESTIC - CLASS I: First Union National Bank (15.68%); Texas Commerce Bank, N.A. (11.21%); United States National Bank (10.48%); and Bank of Boston Connecticut (5.21%). DOMESTIC - CLASS III: Boatmen's Trust Co. of St. Louis (38.71%); First Union National Bank (25.39%); Reliance Trust Company (21.96%); NationsBank (11.47%); and Exchange Bank (9.90%). MONEY MARKET - CLASS I: FMR Corp. (8.52%); Citibank, N.A. (8.35%); and Shawmut Bank Of Boston, N.A. (5.58%). MONEY MARKET - CLASS III: First Union National Bank (62.10%); Republic National Bank of New York (12.38%); North American Trust Company (9.45%); and Boatmen's Trust Co. of St. Louis (5.59%). TREASURY ONLY - CLASS I: First Union National Bank (34.40%); First American Trust Company (8.80%); Ropes & Gray (7.49%); Shawmut Bank Of Boston, N.A. (7.49%); and Bingham, Dana & Gould (5.97%). TAX-EXEMPT - CLASS I: Shawmut Bank Of Boston, N.A. (12.81%); Wachovia Bank & Trust Company (9.21%); and Fleet National Bank (5.02%). RATED MONEY MARKET - CLASS I: Promus Companies (15.21%); Bank of America (7.94%); Metric Partners (7.66%); Eastern Utilities Associates (7.17%); and United States Trust Company of NY (5.39%). A shareholder owning of record or beneficially more than 25% of a fund's outstanding shares may be considered a controlling person. That shareholder's vote could have a more significant effect on matters presented at a shareholders' meeting than votes of other shareholders. MANAGEMENT CONTRACTS Each fund employs FMR to furnish investment advisory and other services. Under 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 each fund in accordance with its investment objective, policies, and limitations. FMR also provides each fund with all necessary office facilities and personnel for servicing each fund's investments, compensates all officers of each fund, all Trustees who are "interested persons" of the trusts or of FMR, and all personnel of each fund or FMR for 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 and state laws; developing management and shareholder services for each fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Trustees. In addition to the management fee payable to FMR and the fees payable to UMB, FIIOC, and FSC , each fund or class thereof, as applicable, pays all of its expenses, without limitation, that are not assumed by those parties. Each fund (other than Treasury Only and Rated Money Market) 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. Although each fund's (other than Treasury Only's and Rated Money Market's) current management contract provides that each fund will pay for typesetting, printing, and mailing prospectuses, statements of additional information, notices and reports to shareholders, the trust, on behalf of each fund has entered into a revised transfer agent agreement with FIIOC and UMB, as applicable, pursuant to which FIIOC or UMB bears the costs of providing these services to existing shareholders of the applicable classes. Other expenses paid by each fund (other than Treasury Only and Rated Money Market) include interest, taxes, brokerage commissions, and each fund's proportionate share of insurance premiums and Investment Company Institute dues, and the costs of registering shares under federal and 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. FMR is responsible for the payment of all expenses of Treasury Only and Rated Money Market with certain exceptions. Specific expenses payable by FMR include, without limitation, expenses for the typesetting, printing, and mailing of proxy materials to shareholders; legal expenses, and the fees of the custodian, auditor, and interested Trustees; costs of typesetting, printing, and mailing prospectuses and statements of additional information, notices and reports to shareholders; and the fund's proportionate share of insurance premiums and Investment Company Institute dues. FMR also provides for transfer agent and dividend disbursing services through FIIOC and portfolio and general accounting record maintenance through FSC. FMR pays all other expenses of Treasury Only and Rated Money Market with the following exceptions: fees and expenses of all Trustees of the applicable trust who are not "interested persons" of the trust or FMR (the non-interested Trustees); interest on borrowings (only for Treasury Only); taxes; brokerage commissions (if any); and such nonrecurring expenses as may arise, including costs of any litigation to which a fund may be a party, and any obligation it may have to indemnify the officers and Trustees with respect to litigation. FMR is each fund's manager pursuant to management contracts dated May 30, 1993 for the FICP funds; January 29, 1992 for Tax-Exempt; September 30, 1993 for Treasury Only ; and November 1, 1986 for Rated Money Market, which were approved by shareholders on November 18, 1992, November 13, 1991, March 24, 1993, and December 8, 1994, respectively. For the services of FMR under each contract, each fund (other than Treasury Only and Rated Money Market) pays FMR a monthly management fee at the annual rate of 0.20% of average net assets throughout the month. Treasury Only and Rated Money Market each pay FMR a monthly management fee at the annual rate of 0.42% of average net assets throughout the month. The management fees paid to FMR by Treasury Only and Rated Money Market are reduced by the fees and expenses paid by the respective funds to the non-interested Trustees. Fees received by FMR for the last three fiscal periods are shown in the table below. Fund Fiscal Year Ended Management Fees Paid to FMR Rated Money Market 8/31/95 $ 1,352,919* 8/31/94 1,781,535* 8/31/93 2,893,862* Treasury 3/31/95 8,680,344 3/31/94 9,834,025 3/31/93 14,029,197 Government 3/31/95 6,680,088 3/31/94 9,660,519 3/31/93 12,610,880 Domestic 3/31/95 1,923,368 3/31/94 1,525,574 3/31/93 1,536,740 Money Market 3/31/95 10,436,518 3/31/94 10,551,990 3/31/93 10,066,276 Treasury Only 3/31/95** 3,279,429* 7/31/94 4,716,697* 7/31/93 4,892,175* 7/31/92 4,249,814* Tax-Exempt 3/31/95** 3,789,731 5/31/94 5,099,831 5/31/93 5,036,875 5/31/92 4,605,577 * After reduction of fees and expenses paid by the fund to the non-interested Trustees. ** The fiscal year end of Treasury Only changed from July 31 to March 31 in February 1995. The fiscal year end of Tax-Exempt changed from May 31 to March 31 in February 1995. FMR may, from time to time, voluntarily reimburse all or a portion of each fund's operating expenses (exclusive of interest, taxes, brokerage commissions, and extraordinary expenses). 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 each fund's total returns and yield and repayment of the reimbursement by each fund will lower its total returns and yield. During the fiscal periods reported, FMR voluntarily agreed subject to revision or termination, to reimburse Class I II of certain funds if and to the extent that the fund's Class I II total operating expenses (excluding interest, taxes, brokerage commissions, extraordinary expenses, and 12b-1 fees) were in excess of an annual rate of its average net assets. The table below identifies the classes in reimbursement; the level at which reimbursement began; and the dollar amount reimbursed for each fiscal year ended March 31, 1995, 1994, and 1993 . Prior to August 31, 1995, Rated Money Market was not in reimbursement.
Level at Which Fund Reimbursement Began Dollar Amount Reimbursed
1995 1994 1993 1992 Treasury - Class I 0.20% $ 3,129,549 $ 2,956,232 $ 3,246,298 N/A Treasury - Class III 0.20% 409,770 570 N/A N/A Government - Class I 0.20% 1,894,134 2,665,587 3,508,338 N/A Government - Class III 0.20% 42,272 N/A N/A N/A Domestic - Class I 0.20% 818,759 638,552 645,507 N/A Domestic - Class III 0.20% 48,097 N/A N/A N/A Money Market - Class I 0.18% 2,772,106 2,437,428 2,697,402 N/A Money Market - Class III 0.18% 230,324 7,565 N/A N/A Treasury Only - Class I* 0.20% 1,719,806 2,474,345 2,567,107 2,260,410 Tax-Exempt Class - I** 0.20% 1,429,650 1,643,561 1,591,107 1,590,017
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993, and 1994, and the fiscal period August 1, 1994 to March 31, 1995. During the fiscal year ended July 31, 1992, the level at which reimbursement began ranged from 0.15% to 0.20%. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and the fiscal period June 1, 1994 to March 31, 1995. During the fiscal year ended May 31, 1992, the level at which reimbursement began was 0.18%. To comply with the California Code of Regulations, FMR will reimburse each fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating each fund's expenses for purposes of this regulation, each fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its distribution plan expenses and custodian fees attributable to investment in foreign securities. SUB-ADVISER. FMR has entered into a sub-advisory agreement with FMR Texas pursuant to which FMR Texas has primary responsibility for providing portfolio investment management services to each fund. Under each sub-advisory agreements dated May 30, 1993, January 29, 1992, September 30, 1973, and November 1, 1989 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively, FMR pays FMR Texas fees equal to 50% of the management fees payable by FMR under its management contract with each fund. Each sub-advisory agreement was approved by each fund's shareholders on November 18, 1994, November 13, 1991, March 24, 1993, and November 16, 1994 for the FICP funds, Tax-Exempt, Treasury Only, and Rated Money Market, respectively. The fees paid to FMR Texas are not reduced by any voluntary or mandatory expense reimbursements that may be in effect from time to time. The table below shows fees paid by FMR to FMR Texas on behalf of each fund for the fiscal years ended March 31 (August 31 for Rated Money Market), 1995, 1994, and 1993. 1995 1994 1993 1992
Rated Money Market $ 676,460 $ 890,768 $ 1,446,931 N/A Treasury 4,340,172 4,917,013 7,014,599 N/A Government 3,340,044 4,830,260 6,305,440 N/A Domestic 961,684 762,787 768,370 N/A Money Market 5,218,259 5,275,995 5,033,138 N/A Treasury Only* 1,639,715 2,358,349 2,446,088 $ 2,124,907 Tax-Exempt** 1,894,866 2,549,916 2,518,438 2,302,789
* Figures for Treasury Only are for the fiscal years ended July 31, 1992, 1993 and 1994, and the fiscal period August 1, 1994 to March 31, 1995. ** Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993 and 1994, and the fiscal period June 1, 1994 to March 31, 1995. CONTRACTS WITH FMR AFFILIATES FIIOC is transfer, dividend disbursing, and shareholder servicing agent for Class III shares of Treasury, Government, Domestic, Money Market, Treasury Only, and Rated Money Market (the Taxable Funds). UMB is the transfer agent and shareholder servicing agent for Class III shares of Tax-Exempt. UMB has entered into a sub-arrangement with FIIOC pursuant to which FIIOC performs transfer, dividend disbursing, and shareholder services for Class III shares of Tax-Exempt. FIIOC receives an annual fee and an asset-based fee based on account size. The costs of FIIOC's services for Class III of Treasury Only and Rated Money Market are bo r ne by FMR pursuant to its management contrac t . For accounts that FIIOC maintains on behalf of UMB, FIIOC receives all such fees. In addition, FIIOC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. Also, FIIOC pays out-of-pocket expenses associated with providing transfer agent services. FSC calculates NAV and dividends for Class III of each Taxable Fund, and maintains each Taxable Fund's accounting records . UMB has sub-arrangements with FSC pursuant to which FSC performs the calculations necessary to determine NAV and dividends for Class III of Tax-Exempt, and maintains the accounting records for Tax-Exempt. The annual fee rates for these pricing and bookkeeping services are based on each fund's average net assets, specifically .0175% for the first $500 million of average net assets and .0075% for average net assets in excess of $500 million. The fee is limited to a minimum of $20,000 and a maximum of $750,000 per year. The costs of FSC's services for Rated Money Market and Treasury Only are borne by FMR pursuant to its management contract . Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC by the funds (except Rated Money Market and Treasury Only) for the past three fiscal years ended March 31, 1995, 1994, and 1993 were as follows: Pricing and Bookkeeping Fees
1995 1994 1993 1992 Treasury $ 375,762 $ 419,147 $ 576,072 N/A Government 331,070 412,411 523,696 N/A Domestic 122,139 107,464 108,548 N/A Money Market 441,370 445,362 429,428 N/A Tax-Exempt* 309,306 304,324 325,195 $ 332,264
* Figures for Tax-Exempt are for the fiscal years ended May 31, 1992, 1993, and 1994, and fiscal period June 1, 1994 to March 31, 1995, annualized. The transfer agent fees and charges for Class III of Tax-Exempt, and pricing and bookkeeping fees for Tax-Exempt described above are paid to FIIOC and FSC, respectively, by UMB, which is entitled to reimbursement from Class III or the fund, as applicable, for these expenses. Each fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls 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 net asset value. Promotional and administrative expenses in connection with the offer and sale of shares are paid by FMR. DISTRIBUTION AND SERVICE PLANS The Trustees have approved a Distribution and Service Plan on behalf of Class III 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 a fund except pursuant to a plan approved on behalf of the fund under the Rule. The Plans, as approved by the Trustees, allow Class III of the funds 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 Plans, FDC is paid a distribution fee as a percentage of each fund's Class III 's average net assets at an annual rate of 0.25% for each of the funds. For the fiscal years ended March 31, 1995 and 1994, Class III of each fund paid the following distribution fees: 1995 1994 Treasury $ 418,917 $ 2,065 Government 46,340 N/A Domestic 52,640 N/A Money Market 812,749 40,685 of which the following was retained by FDC: 1995 1994 Treasury $ 0 $ 0 Government 0 N/A Domestic 0 N/A Money Market 0 0 No distribution fees were paid by Class III of Treasury Only, Tax-Exempt, and Rated Money Market, which will commence operations on or about November 1, 1995. Under each Plan, if the payment of management fees by the funds to FMR is deemed to be indirect financing by the funds of the distribution of their shares, such payment is authorized by the Plans. Each Plan specifically recognizes that FMR may use its management fee revenue, as well as its past profits, or its other resources from any other source to reimburse FDC for expenses incurred in connection with the distribution of Class III shares, including payments made to third parties that assist in selling Class III shares of each fund, or to third parties, including banks, that render shareholder support services. The Trustees have not authorized such payments to date. Prior to approving each Plan, the Trustees carefully considered all pertinent factors relating to the implementation of each Plan, and have determined that there is a reasonable likelihood that the Plan will benefit the applicable class of each fund and its shareholders. To the extent that each Plan gives FMR and FDC greater flexibility in connection with the distribution of shares of the applicable class of each fund, additional sales of fund shares may result. Furthermore, certain shareholder support services may be provided more effectively under the Plans by local entities with whom shareholders have other relationships. None of the Plans provide for specific payments by Class III of any of the expenses of FDC or obligates 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. After payments by FDC for advertising, marketing and distribution, and payments to third parties, the amounts remaining, if any, may be used as FDC may elect. The Class III Plan for Treasury was approved by FMR as the then sole shareholder on October 22, 1993. The Class III Plan for Government was approved by FMR as the then sole shareholder on April 4, 1994. The Class III Plan for Domestic was approved by FMR as the then sole shareholder on July 19, 1994. The Class III Plan for Money Market was approved by FMR as the then sole shareholder on November 17, 1993. The Class III Plans for Treasury Only, Tax-Exempt, and Rated Money Market were approved by FMR as the then sole shareholder on October 31 , 1995. The Glass-Steagall Act generally prohibits federally and state chartered or supervised banks from engaging in the business of underwriting, selling, or distributing securities. Although the scope of this prohibition under the Glass-Steagall Act has not been clearly defined by the courts or appropriate regulatory agencies, 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 and their affiliates or subsidiaries, 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. DESCRIPTION OF THE TRUSTS TRUST ORGANIZATION. Treasury, Government, Domestic and Money Market are funds of Fidelity Institutional Cash Portfolios, an open-end management investment company organized as a Delaware business trust on May 30, 1993. The funds acquired all of the assets of U.S. Treasury Portfolio II, U.S. Government Portfolio, Domestic Money Market Portfolio, and Money Market Portfolio, respectively, of Fidelity Institutional Cash Portfolios on May 30, 1993. Currently, there are four funds of Fidelity Institutional Cash Portfolios: Treasury, Government, Domestic, and Money Market. The Trust Instrument permits the Trustees to create additional funds. Tax-Exempt is a fund of Fidelity Institutional Tax-Exempt Cash Portfolios, an open-end management investment company organized as a Delaware business trust on January 29, 1992. Tax-Exempt acquired all of the assets of Fidelity Institutional Tax-Exempt Cash Portfolios of Fidelity Institutional Tax-Exempt Cash Portfolios on January 29, 1992. Currently, Tax-Exempt is the only fund of Fidelity Institutional Tax-Exempt Cash Portfolios. The Trust Instrument permits the Trustees to create additional funds. Treasury Only is a fund of Daily Money Fund, an open-end management investment company organized as a Delaware business trust on September 29, 1993. Treasury Only acquired all of the assets of Fidelity U.S. Treasury Income Portfolio of Daily Money Fund on September 29, 1993. Currently, there are six funds of Daily Money Fund: Treasury Only, Money Market Portfolio, U.S. Treasury Portfolio, Capital Reserves: U.S. Government Portfolio, Capital Reserves: Money Market Portfolio, and Capital Reserves: Municipal Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. Rated Money Market is a fund of Fidelity Money Market Trust, an open-end management investment company organized as a Delaware business trust on December 29, 1994. Rated Money Market acquired all of the assets of Domestic Money Market Portfolio of Fidelity Money Market Trust on December 29, 199 4 . Currently, there are three funds of Fidelity Money Market Trust: Rated Money Market, Retirement Money Market Portfolio, and Retirement Government Money Market Portfolio. The Trust Instrument permits the Trustees to create additional funds. In the event that FMR ceases to be the investment adviser to a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. There is a remote possibility that one fund might become liable for any misstatement in its prospectus or statement of additional information about another fund. The assets of the trusts received for the issue or sale of shares of each fund and all income, earnings, profits, and proceeds thereof, subject only to the rights of creditors, are especially allocated to such fund, and constitute the underlying assets of such fund. The underlying assets of each fund are segregated on the books of account, and are to be charged with the liabilities with respect to such fund and with a share of the general expenses of the trust. Expenses with respect to the trusts are to be allocated in proportion to the asset value of the respective funds, except where allocations of direct expense can otherwise be fairly made. The officers of the trusts, subject to the general supervision of the Board of Trustees, have the power to determine which expenses are allocable to a given fund, or which are general or allocable to all of the funds. In the event of the dissolution or liquidation of a trust, shareholders of each fund are entitled to receive as a class the underlying assets of such fund available for distribution. SHAREHOLDER AND TRUSTEE LIABILITY. Each trust is a business trust organized under Delaware law. Delaware law provides that shareholders shall be entitled to the same limitations of personal liability extended to stockholders of private corporations for profit. The courts of some states, however, may decline to apply Delaware law on this point. The Trust Instruments contain an express disclaimer of shareholder liability for the debts, liabilities, obligations, and expenses of the trusts and require that a disclaimer be given in each contract entered into or executed by the trust or the Trustees. The Trust Instruments provide for indemnification out of each fund's property of any shareholder or former shareholder held personally liable for the obligations of the fund. The Trust Instruments also provide 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 Delaware law does not apply, no contractual limitation of liability was in effect, and the fund is unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is extremely remote. The Trust Instruments further provide that the Trustees, if they have exercised reasonable care, shall not be personally liable to any person other than the trust or its shareholders; moreover, the Trustees shall not be liable for any conduct whatsoever, provided that Trustees are not protected against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. 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. As a shareholder of Rated Money Market, you receive one vote for each dollar value of net asset value you own. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and non-assessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of a trust, fund or class may, as set forth in each of the Trust Instruments, call meetings of the t rust, fund, or class, for any purpose related to the t rust, fund, or class, as the case may be, including, in the case of a meeting of the entire t rust, the purpose of voting on removal of one or more Trustees. Any trust or fund may be terminated upon the sale of its assets to, or merger with, another open-end management investment company or series thereof, or upon liquidation and distribution of its assets. Generally such terminations must be approved by vote of the holders of a majority of the outstanding shares of the trust or fund (or, for Rated Money Market, as determined by the current value of each shareholder's investment in the fund or trust); however, the Trustees may, without prior shareholder approval, change the form o f organization of the trust or fund by merger, consolidation, or incorporation. If not so terminated, the trust and its funds will continue indefinitely. Under the Trust Instruments, the Trustees may, without shareholder vote, cause a trust to merge or consolidate into one or more trusts, partnerships, or corporations, or cause the trust to be incorporated under Delaware law, so long as the surviving entity is an open-end management investment company that will succeed to or assume the trust's registration statement. Each fund may invest all of its assets in another investment company. CUSTODIAN. Morgan Guaranty Trust Company of New York, 60 Wall Street, New York, NY 10260 is custodian of the assets of each fund, except Treasury and Tax-Exempt. Bank of New York, 48 Wall Street, New York, New York is custodian of the assets of Treasury. The custodian for Tax-Exempt is UMB, 1010 Grand Avenue, Kansas City Missouri. The custodian is responsible for the safekeeping of a fund's assets and the appointment of subcustodian banks and clearing agencies. The custodian takes no part in determining the investment policies of a fund or in deciding which securities are purchased or sold by a fund. However, a fund may invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. Chemical Bank, headquartered in New York, may also serve as a special purpose custodian of certain assets in connection with pooled repurchase agreement transactions. FMR, its officers and directors, its affiliated companies, and the funds' Trustees may, from time to time, conduct transactions with various banks, including banks serving as custodians for certain funds advised by FMR. 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. AUDITOR S . Coopers & Lybrand L.L.P., 1999 Bryan St reet, Suite 3000, Dallas, TX 75201 serves as the independent accountant for Tax-Exempt, Treasury Only, and Rated Money Market. Price Waterhouse LLP, 2001 Ross Avenue, Suite 1800, Dallas, TX 75201 serves as the independent accountant for the FICP funds. The auditors examine financial statements for the funds and provide other audit, tax, and related services. FINANCIAL STATEMENTS Each fund's financial statements and financial highlights for the fiscal year ended March 31, 1995 (August 31, 1995 for Rated Money Market) are included in the funds ' Annual Report, which is a separate report supplied with this SAI. Each fund's financial statements and financial highlights are incorporated herein by reference. APPENDIX The descriptions that follow are examples of eligible ratings for the funds. The funds may, however, consider the ratings for other types of investments and the ratings assigned by other rating organizations when determining the eligibility of a particular investment. DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S COMMERCIAL PAPER RATINGS: Issuers rated PRIME-1 (or related supporting institutions) have a superior capacity for repayment of short-term promissory obligations. Prime-1 repayment capacity will normally be evidenced by the following characteristics: Leading market positions in well established industries. High rates of return on funds employed. Conservative capitalization structures with moderate reliance on debt and ample asset protection. Broad margins in earning coverage of fixed financial charges and with high internal cash generation. Well-established access to a range of financial markets and assured sources of alternate liquidity. Issuers rated PRIME-2 (or related supporting institutions) have a strong capacity for repayment of short-term promissory obligations. This will normally be evidenced by many of the characteristics cited above but to a lesser degree. Earning trends and coverage ratios, while sound, will be more subject to variation. Capitalization characteristics, while still appropriate, may be more affected by external conditions. Ample alternative liquidity is maintained. DESCRIPTION OF STANDARD & POOR'S CORPORATION'S COMMERCIAL PAPER RATINGS: A - Issues assigned this highest rating are regarded as having the greatest capacity for timely payment. I ssues in this category are delineated with the numbers 1 and 2 to indicate the relative degree of safety. A-1 - This designation indicates that the degree of safety regarding timely payment is either overwhelming or very strong. Those issues determined to possess overwhelming safety characteristics will be denoted with a plus (+) sign designation. A-2 - Capacity for timely payment on issues with this designation is strong. However, the relative degree of safety is not as high as for issues designated A-1. PART C - OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) 1. Financial Statements and Financial Highlights, included in the Annual Report for Daily Money Fund: Treasury Only for the fiscal period August 1, 1994 through March 31, 1995 are included in the fund's prospectus, are incorporated by reference into the fund's Statement of Additional Information and were filed on May 22, 1995 for Daily Money Fund (File NO. 811-3480) pursuant to Rule 30d-1 under the Investment Company Act of 1940, and are incorporated herein by reference. (b) Exhibits: 1. (a) Trust Instrument dated June 20, 1991 was electronically filed and is incorporated herein by reference to Exhibit 1(a) to Post Effective Amendment No. 22. (b) Certificate of Trust of Daily Money Fund II, dated June 20, 1991 was electronically filed and is incorporated herein by reference to Exhibit 1(b) . (c) Certificate of Amendment of Daily Money Fund II to Daily Money Fund, dated July 14, 1991 was electronically filed and is incorporated herein by reference as Exhibit 1(c) to Post Effective Amendment No. 30. 2. (a) By-Laws of the Trust effective May 19, 1994 were electronically filed and are incorporated herein by reference to Exhibit 2(a) to Fidelity Union Street Trust II's Post-Effective Amendment No. 10. 3. Not applicable. 4. Not applicable. 5. (a) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of U.S. Treasury Income Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(a) to Post-Effective Amendment No. 25. (b) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of Money Market Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(b) to Post-Effective Amendment No. 25. (c) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of U.S. Treasury Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(c) to Post-Effective Amendment No. 25. (d) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: Municipal Money Market Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(d) to Post-Effective Amendment No. 25. (e) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: Money Market Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(e) to Post-Effective Amendment No. 25. (f) Management Contract dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: U.S. Government Portfolio, and Fidelity Management & Research Company was electronically filed and is incorporated herein by reference as Exhibit 5(f) to Post-Effective Amendment No. 25. (g) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of Money Market Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(g) to Post-Effective Amendment No. 25. (h) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of U.S. Treasury Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(h) to Post-Effective Amendment No. 25. (i) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of Capital Reserves: Money Market Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(i) to Post-Effective Amendment No. 25. (j) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of Capital Reserves: U.S. Government Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(j) to Post-Effective Amendment No. 25. (k) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of Capital Reserves: Municipal Money Market Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(k) to Post-Effective Amendment No. 25. (l) Sub-Advisory Agreement dated September 30, 1993 between FMR Texas Inc. and Fidelity Management & Research Company, on behalf of U.S. Treasury Income Portfolio, was electronically filed and is incorporated herein by reference as Exhibit 5(l) to Post-Effective Amendment No. 25. 6. (a) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of Money Market Portfolio, and Fidelity Distributors Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(a) to Post-Effective Amendment No. 25. (b) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of U.S. Treasury Portfolio, and Fidelity Distributors Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(b) to Post-Effective Amendment No. 25. (c) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of U.S. Treasury Income Portfolio, and Fidelity Distributors Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(c) to Post-Effective Amendment No. 25. (d) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: U.S. Government Portfolio, and National Financial Services Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(d) to Post-Effective Amendment No. 25. (e) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: Municipal Money Market Portfolio, and National Financial Services Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(e) to Post-Effective Amendment No. 25. (f) General Distribution Agreement dated September 30, 1993 between Daily Money Fund, on behalf of Capital Reserves: Money Market Portfolio, and National Financial Services Corporation was electronically filed and is incorporated herein by reference as Exhibit 6(f) to Post-Effective Amendment No. 25. 7. (a) Retirement Plan for Non-Interested Person Trustees, Directors or General Partners was electronically filed and is incorporated herein by reference to Exhibit 7 to Union Street Trust's Post-Effective Amendment No. 87. 8. (a) Custodian Agreement and Appendix C, dated December 1, 1994 between Morgan Guaranty Trust Co. of New York and Fidelity Daily Money Fund on behalf of Fidelity U.S. Treasury Income Portfolio; Money Market Portfolio; U.S. Treasury Portfolio; and, Capital Reserves: U.S. Government Portfolio and Money Market Portfolio was electronically filed and is incorporated herein by reference to Exhibit 8(c) to Fidelity Hereford Street Trust's Post-Effective Amendment No. 4 (File No. 33-52577). (b) Appendix A, dated June16, 1995, to the Custodian Agreement, dated December 1, 1994, between Morgan Guaranty Trust Co. of New York and Fidelity Daily Money Fund on behalf of Fidelity U.S. Treasury Income Portfolio; Money Market Portfolio; U.S. Treasury Portfolio; and, Capital Reserves: U.S. Government Portfolio and Money Market Portfolio was electronically filed and is incorporated herein by reference to Exhibit 8(b) to Fidelity Institutional Cash Portfolios' Post-Effective Amendment No. 28 (File No. 2-74808). (c) Appendix B, dated April 20, 1995, to the Custodian Agreement, dated December 1, 1994, between Morgan Guaranty Trust Company of New York and Fidelity Daily Money Fund on behalf of Fidelity U.S. Treasury Income Portfolio; Money Market Portfolio; U.S. Treasury Portfolio; and, Capital Reserves: U.S. Government Portfolio and Money Market Portfolio was electronically filed and is incorporated herein by reference to Exhibit 8(d) to Fidelity Hereford Street Trust's Post-Effective Amendment No. 5 (File No. 33-52577). (d) Custodian Agreement, Appendix A, Appendix B, and Appendix C, dated December 1, 1994, between UMB Bank, n.a. and Fidelity Daily Money Fund on behalf of Capital Reserves: Municipal Money Market Portfolio was electronically filed and is incorporated herein by reference to Exhibit 8 to Fidelity California Municipal Trust's Post-Effective Amendment No. 28 (File No. 2-83367). 9. Not applicable. 10. None. 11. Consent of Coopers & Lybrand L.L.P. is electronically filed herein as Exhibit 11. 12. None. 13. None. 14. (a) Retirement Plan for Fidelity Individual Retirement Accounts, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(a) to Union Street Trust's Post-Effective Amendment No. 87 (b) Retirement Plan for Portfolio Advisory Services Individual Retirement Account, as currently in effect, was electronically filed and is incorporated herein by reference as Exhibit 14(i) to Union Street Trust's Post-Effective Amendment No. 87. (c) Retirement Plan for NFSC Individual Retirement Account, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(h) to Union Street Trust's Post-Effective Amendment No. 87. (d) NFSC Defined Contribution Plan, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(k) to Union Street's Trust Post-Effective Amendment No. 87. (e) Fidelity Institutional Individual Retirement Account Custodian Agreement and Disclosure Statement, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(d) to Union Street Trust's Post-Effective Amendment No. 87. (f) Fidelity 403(b)(7) Individual Custodial Agreement, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(j) to Union Street Trust's Post-Effective Amendment No. 87. (g) Fidelity 403(b) Custodial Agreement, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(e) to Union Street Trust's Post-Effective Amendment No. 87. (h) The CORPORATEplan for Retirement Profit Sharing/401k Plan, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(l) to Union Street Trust's Post-Effective Amendment No. 87. (i) The CORPORATEplan for Retirement Money Purchase Pension Plan, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(m) to Union Street Trust's Post-Effective Amendment No. 87. (j) Fidelity Advisor Funds Individual Retirement Account Custodial Agreement Disclosure Statement in effect as of January 1, 1994 was filed electronically and is incorporated herein by reference to Exhibit 14(b) to Advisor Series I Post-Effective Amendment No. 22. (k) Plymouth Defined Contribution Plan, as currently in effect, was electronically filed and is incorporated herein by reference to Exhibit 14(o) to Commonwealth Trust's Post-Effective Amendment No. 57. 15. (a) Service Plan dated September 30, 1993 between Daily Money Fund, Fidelity Management & Research Company, and Fidelity Distributors Corporation was electronically filed and is incorporated herein by reference as Exhibit 15(a) to Post-Effective Amendment No. 25. (b) Distribution and Service Plan dated September 30, 1993 for Daily Money Fund: U.S. Treasury Income Portfolio was electronically filed and incorporated herein by reference as Exhibit 15(b) to Post-Effective Amendment No. 25. (c) Distribution and Service Plan dated September 30, 1993 for Daily Money Fund: Capital Reserves: Money Market Portfolio, U.S. Government Portfolio, and Municipal Money Market Portfolio was electronically filed and is incorporated herein by reference to Exhibit 15(c) to Post-Effective Amendment No. 30. (d) Distribution and Service Plan for Class B of Daily Money Fund: U.S. Treasury Portfolio was electronically filed and is incorporated herein by reference as Exhibit 15(d) to Post-Effective Amendment No. 30 . (e) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury Only Class II was electronically filed and is incorporated herein by reference as Exhibit 15(e) to Post-Effective Amendment 31. (f) Distribution and Service Plan pursuant to Rule 12b-1, for Treasury Only Class III was electronically filed and is incorporated herein by reference as Exhibit 15(f) to Post-Effective Amendment No. 31. 16. Schedules for computations of performance quotations for Daily Money Fund: Treasury Only were electronically filed and are incorporated herein by reference to Exhibit 16 to Post-Effective Amendment No. 30. 17. A Financial Data Schedule is electronically filed herein as Exhibit 17. 18. A Multiple Class of Shares Plan was electronically filed and is incorporated herein by reference as Exhibit 18 to Post-Effective Amendment 31. Item 25. Persons Controlled by or under Common Control with Registrant The Board of Trustees of Registrant is the same as the boards of other funds advised by FMR, each of which has Fidelity Management & Research Company as its investment adviser. In addition, the officers of these funds are substantially identical. Nonetheless, Registrant takes the position that it is not under common control with these other funds since the power residing in the respective boards and officers arises as the result of an official position with the respective funds. Item 26. Number of Holders of Securities As of September 1, 1995 Title of Class Number of Record Holders Money Market Portfolio - Initial Class 174,094 U.S. Treasury Portfolio - Initial Class 31, 562 U.S. Treasury Portfolio-Class B 208 Treasury Only - Class I 2,634 Treasury Only - Class II 0 Treasury Only - Class III 0 Capital Reserves: Money Market Portfolio 122,219 Capital Reserves: U.S. Government Portfolio 12, 147 Capital Reserves: Municipal Money Market Portfolio 7,398 Item 27. 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 Registrant 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 in connection with any claim, action, suit or proceeding in which he is involved by virtue of his service as a trustee, an officer, or both. Additionally, amounts paid or incurred in settlement of such matters are covered by this indemnification. Indemnification will not be provided in certain circumstances, however. These include instances of willful misfeasance, bad faith, gross negligence, and reckless disregard of the duties involved in the conduct of the particular office involved. Item 28. Business and Other Connections of Investment Adviser (1) FIDELITY MANAGEMENT & RESEARCH COMPANY 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 Executive Committee of FMR; President and Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc., Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc.; Senior Vice President and Trustee of funds advised by FMR. Peter S. Lynch Vice Chairman and Director of FMR. Robert Beckwitt Vice President of FMR and of funds advised by FMR. David Breazzano Vice President of FMR (1993) and of a fund advised by FMR. Stephan Campbell Vice President of FMR (1993). Dwight Churchill Vice President of FMR (1993). William Danoff Vice President of FMR (1993) and of a fund advised by FMR. Scott DeSano Vice President of FMR (1993). Penelope Dobkin Vice President of FMR and of a fund advised by FMR. Larry Domash Vice President of FMR (1993). George Domolky Vice President of FMR (1993) and of a fund advised by FMR. Robert K. Duby Vice President of FMR. Margaret L. Eagle Vice President of FMR and of a fund advised by FMR. Kathryn L. Eklund Vice President of FMR. Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised by FMR. Daniel R. Frank Vice President of FMR and of funds advised by FMR. Michael S. Gray Vice President of FMR and of funds advised by FMR. Lawrence Greenberg Vice President of FMR (1993). Barry A. Greenfield Vice President of FMR and of a fund advised by FMR. William J. Hayes Senior Vice President of FMR; Equity Division Leader. Robert Haber Vice President of FMR and of funds advised by FMR. Richard Haberman Senior Vice President of FMR (1993). Daniel Harmetz Vice President of FMR and of a fund advised by FMR. Ellen S. Heller Vice President of FMR. John Hickling Vice President of FMR (1993) and of funds advised by FMR.
Robert F. Hill Vice President of FMR; Director of Technical Research. Stephen P. Jonas Treasurer and Vice President of FMR (1993)); Treasurer of FMR Texas Inc. (1993), Fidelity Management & Research (U.K.) Inc. (1993), and Fidelity Management & Research (Far East) Inc. (1993). David B. Jones Vice President of FMR (1993). Steven Kaye Vice President of FMR (1993) and of a fund advised by FMR. Frank Knox Vice President of FMR (1993). Robert A. Lawrence Senior Vice President of FMR (1993); High Income Division Leader. Alan Leifer Vice President of FMR and of a fund advised by FMR. Harris Leviton Vice President of FMR (1993) and of a fund advised by FMR. Bradford E. Lewis Vice President of FMR and of funds advised by FMR. Malcolm W. MacNaught III Vice President of FMR (1993). Robert H. Morrison Vice President of FMR; Director of Equity Trading. David Murphy Vice President of FMR and of funds advised by FMR. Andrew Offit Vice President of FMR (1993). Judy Pagliuca Vice President of FMR (1993). Jacques Perold Vice President of FMR. Anne Punzak Vice President of FMR and of funds advised by FMR. Lee Sandwen Vice President of FMR (1993). Patricia A. Satterthwaite Vice President of FMR (1993) and of a fund advised by FMR. Thomas T. Soviero Vice President of FMR (1993). Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised by FMR. Gary L. Swayze Vice President of FMR and of funds advised by FMR; Tax-Free Fixed-Income Group Leader. Thomas Sweeney Vice President of FMR (1993). Donald Taylor Vice President of FMR (1993) and of funds advised by FMR. Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised by FMR. Joel Tillinghast Vice President of FMR (1993) and of a fund advised by FMR. Robert Tucket Vice President of FMR (1993). George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by FMR; Growth Group Leader. Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised by FMR. Guy E. Wickwire Vice President of FMR and of a fund advised by FMR. Arthur S. Loring Senior Vice President (1993), Clerk, and General Counsel of FMR; Vice President, Legal of FMR Corp.; Secretary of funds advised by FMR.
(2) FMR TEXAS INC. (FMR Texas) FMR Texas 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 and Director of FMR Texas; Chairman of the Executive Committee of FMR; President and Chief Exective Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research (U.K.) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President and Director of FMR Texas; President of FMR; Managing Director of FMR Corp.; President and a Director of Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research (U.K.) Inc.; Senior Vice President and Trustee of funds advised by FMR. Fred L. Henning, Jr. Senior Vice President of FMR Texas; Fixed-Income Division Leader (1995). Robert Auld Vice President of FMR Texas (1993). Leland Barron Vice President of FMR Texas and of funds advised by FMR. Robert Litterst Vice President of FMR Texas and of funds advised by FMR (1993). Thomas D. Maher Vice President of FMR Texas and Assistant Vice President of funds advised by FMR. Burnell R. Stehman Vice President of FMR Texas and of funds advised by FMR. John J. Todd Vice President of FMR Texas and of funds advised by FMR. Sarah H. Zenoble Vice President of FMR Texas; Money Market Division Leader (1995). Stephen P. Jonas Treasurer of FMR Texas Inc. (1993), Fidelity Management & Research (U.K.) Inc. (1993), and Fidelity Mangement & Research (Far East) Inc. (1993); Treasurer and Vice President of FMR (1993). David C. Weinstein Secretary of FMR Texas; Clerk of Fidelity Management & Research (U.K.) Inc.; Clerk of Fidelity Management & Research (Far East) Inc.
Item 29. Principal Underwriters (a) Fidelity Distributors Corporation (FDC) acts as distributor for most funds advised by FMR and the following other funds: ARK Funds (b)
Name and Principal Positions and Offices Positions and Offices Business Address* With Underwriter With Registrant Edward C. Johnson 3d Director Trustee and President Nita B. Kincaid Director None W. Humphrey Bogart Director None Kurt A. Lange President and Treasurer None William L. Adair Senior Vice President None Thomas W. Littauer Senior Vice President None Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA (c) Not applicable. Item 30. Location of Accounts and Records All accounts, books, and other documents required to be maintained by Section 31a of the 1940 Act and the Rules promulgated thereunder are maintained by Fidelity Management & Research Company or Fidelity Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds' respective custodians UMB Bank, n.a., 1010 Grand Avenue, Kansas City, MO. and Morgan Guaranty Trust Company of New York, 61 Wall Street, 37th Floor, New York, N.Y. Item 31. Management Services Not applicable. Item 32. Undertakings The Registrant, on behalf of Daily Money Fund: Capital Reserves: Money Market Portfolio, Capital Reserves: U.S. Government Portfolio, Capital Reserves: Municipal Money Market Portfolio, Money Market Portfolio:Initial Class, U.S. Treasury Portfolio: Initial Class, U.S. Treasury Portfolio; Class B, undertakes to deliver to each person who has received the prospectus or annual or semiannual financial report for a fund in an electronic format, upon his or her request and without charge, a paper copy of the prospectus or annual or semiannual report for the fund. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for the effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 33 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 30th day of October 1995. DAILY MONEY FUND 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(dagger) President and Trustee Edward C. Johnson 3d (Principal Executive Officer) October 30, 1995
/s/Kenneth A. Rathgeber Treasurer October 30, 1995 Kenneth A. Rathgeber /s/J. Gary Burkhead Trustee October 30, 1995 J. Gary Burkhead /s/Ralph F. Cox * Trustee October 30, 1995 Ralph F. Cox /s/Phyllis Burke Davis * Trustee October 30, 1995 Phyllis Burke Davis /s/Richard J. Flynn * Trustee October 30, 1995 Richard J. Flynn /s/E. Bradley Jones * Trustee October 30, 1995 E. Bradley Jones /s/Donald J. Kirk * Trustee October 30, 1995 Donald J. Kirk /s/Peter S. Lynch * Trustee October 30, 1995 Peter S. Lynch /s/Edward H. Malone * Trustee October 30, 1995 Edward H. Malone /s/Marvin L. Mann_____* Trustee October 30, 1995 Marvin L. Mann /s/Gerald C. McDonough* Trustee October 30, 1995 Gerald C. McDonough /s/Thomas R. Williams * Trustee October 30, 1995 Thomas R. Williams (dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of attorney dated December 15, 1994 and filed herewith. * Signature affixed by Robert C. Hacker pursuant to a power of attorney dated December 15, 1994 and filed herewith. POWER OF ATTORNEY We, the undersigned Directors, Trustees or General Partners, as the case may be, of the following investment companies:
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust Fidelity Beacon Street Trust Fidelity Money Market Trust II Fidelity California Municipal Trust II Fidelity Municipal Trust II Fidelity Court Street Trust II Fidelity New York Municipal Trust II Fidelity Hereford Street Trust Fidelity Phillips Street Trust Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
in addition to any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as a Director, Trustee or General Partner (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Djinis, each of them singly, my true and lawful attorney-in-fact, with full power of substitution, and with full power to each of them, to sign for me and my name in the appropriate capacities any Registration Statements of the Funds on Form N-1A or any successor thereto, any and all subsequent 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 my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS our hands on this fifteenth day of December, 1994. /s/Edward C. Johnson 3d /s/Donald J. Kirk Edward C. Johnson 3d Donald J. Kirk /s/J. Gary Burkhead /s/Peter S. Lynch J. Gary Burkhead Peter S. Lynch /s/Ralph F. Cox /s/Marvin L. Mann Ralph F. Cox Marvin L. Mann /s/Phyllis Burke Davis /s/Edward H. Malone Phyllis Burke Davis Edward H. Malone /s/Richard J. Flynn /s/Gerald C. McDonough Richard J. Flynn Gerald C. McDonough /s/E. Bradley Jones /s/Thomas R. Williams E. Bradley Jones Thomas R. Williams POWER OF ATTORNEY I, the undersigned President and Director, Trustee or General Partner, as the case may be, of the following investment companies:
Daily Money Fund Fidelity Institutional Tax-Exempt Cash Portfolios Daily Tax-Exempt Money Fund Fidelity Institutional Investors Trust Fidelity Beacon Street Trust Fidelity Money Market Trust II Fidelity California Municipal Trust II Fidelity Municipal Trust II Fidelity Court Street Trust II Fidelity New York Municipal Trust II Fidelity Hereford Street Trust Fidelity Phillips Street Trust Fidelity Institutional Cash Portfolios Fidelity Union Street Trust II
in addition to any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as President and Board Member (collectively, the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true and lawful attorney-in-fact, with full power of substitution, and with full power to sign for me and in my name in the appropriate capacity any Registration Statements of the Funds on Form N-1A, Form N-8A or any successor thereto, any and all subsequent 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 my name and behalf in connection therewith as said attorney-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and 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. WITNESS my hand on the date set forth below. /s/Edward C. Johnson 3d December 15, 1994 Edward C. Johnson 3d EX-99.B11 2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference, into the Prospectus and Statement of Additional Information constituting part of Post-Effective Amendment No. 33 to the Registration Statement on Form N-1A of Daily Money Fund: Treasury Only (formerly Daily Money Fund: Fidelity U.S. Treasury Income Portfolio), of our report dated April 26, 1995 on the financial statements and financial highlights included in the March 31, 1995 Annual Report to Shareholders of Daily Money Fund: Treasury Only (formerly Daily Money Fund: Fidelity U.S. Treasury Income Portfolio). We further consent to the references to our Firm under the headings "Financial Highlights" in the Prospectus and "Auditors" in the Statement of Additional Information. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Boston, Massachusetts October 30, 1995 EX-27 3
6 0000028540 Daily Money Fund 31 Fidelity U.S. Treasury Income Portfolio 1,000 8-MOS JUL-31-1995 MAR-31-1995 1,187,243 1,187,243 83,716 0 0 1,270,959 0 0 4,674 4,674 0 1,266,267 1,266,267 1,049,189 0 0 18 0 0 1,266,285 0 40,811 0 1,563 39,248 37 0 39,285 0 39,248 0 0 3,322,555 3,114,152 8,675 217,115 0 (20) 0 0 3,279 0 3,283 1,174,203 1.000 .033 0 .033 0 0 1.000 20 0 0 -----END PRIVACY-ENHANCED MESSAGE-----