-----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, N0WfoNA8yZqetpdQ/hH7vN9aa3yi+oZ8pO6BCQu4Cn3khRtOrn0pimbdSN4cNkhz myfl4Z9NFH3KVRbARexVNA== 0000035348-96-000001.txt : 19960410 0000035348-96-000001.hdr.sgml : 19960410 ACCESSION NUMBER: 0000035348-96-000001 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960209 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY HASTINGS STREET TRUST CENTRAL INDEX KEY: 0000035348 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046026953 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-00215 FILM NUMBER: 96514245 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6173300814 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAIL ZONE ZH-1 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY FUND DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY FUND INC DATE OF NAME CHANGE: 19851205 N-30D 1 (2_FIDELITY_LOGOS) FIDELITY FIFTY SEMIANNUAL REPORT DECEMBER 31, 1995 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 10 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 16 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 20 Notes to the financial statements. THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Although the markets were fairly positive in 1995, no one can predict what lies ahead for investors. The previous year, stocks posted below-average returns and bonds had one of the worst years in history. This downturn followed a period in which the investing environment was generally very positive. These market ups and downs are a normal part of investing, and there are some basic principles that are helpful for investors to remember in different types of markets. If you can leave your money invested over the long term, you can avoid the results of the volatility that generally accompanies the stock market in the short term, as we witnessed last year. You also can help to manage some of the risks of investing through diversification. A stock fund is already diversified because it invests in many issues. You can diversify even further by placing some of your money in several different types of stock funds or in other investment categories, such as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, there is no assurance that a money market fund will achieve its goal, and it is important to remember that money market funds are not insured or guaranteed by any agency of the U.S. government. Finally, no matter what your investment horizon or portfolio diversity, it makes good sense to follow a regular investment plan - investing a certain amount of money at the same time each month or quarter - and to review your portfolio periodically. A periodic investment plan will not, of course, assure a profit or protect against a loss. If you have any questions, please call us at 1-800-544-8888. We stand ready to provide the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. A fund's total return includes changes in a fund's share price, plus reinvestment of any dividends (or income) and capital gains (the profits the fund earns when it sells securities that have grown in value). Fidelity Fifty has a 3% sales charge, which was waived beginning January 1, 1995 through December 31, 1996. CUMULATIVE TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1995 PAST 6 PAST 1 LIFE OF MONTHS YEAR FUND Fidelity Fifty 9.74% 32.13% 45.52% Fidelity Fifty (incl. 3% sales charge) 6.45% 28.17% 41.15% S&P 500(registered trademark) 14.45% 37.58% 42.63% Average Capital Appreciation Fund 11.87% 30.34% n/a CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, six months, one year, or since the fund started on September 17, 1993. For example, if you invested $1,000 in a fund that had a 5% return, over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's Composite Index of 500 Stocks - a common proxy for the U.S. stock market. To measure how the fund's performance stacked up against its peers, you can compare it to the average capital appreciation fund, which reflects the performance of 171 capital appreciation funds with similar objectives tracked by Lipper Analytical Services over the past six months. Both benchmarks include reinvested dividends and capital gains, if any, and exclude the effects of sales charges. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1995 PAST 1 LIFE OF YEAR FUND Fidelity Fifty 32.13% 17.80% Fidelity Fifty (incl. 3% sales charge) 28.17% 16.24% S&P 500(registered trademark) 37.58% 16.77% Average Capital Appreciation Fund 30.34% n/a AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. $10,000 OVER LIFE OF FUND Fidelity Fifty SP Standard & Poor 500 09/17/93 9700.00 10000.00 09/30/93 9971.60 9999.89 10/31/93 10369.30 10206.89 11/30/93 10204.40 10109.92 12/31/93 10272.24 10232.25 01/31/94 10660.60 10580.15 02/28/94 10505.25 10293.43 03/31/94 9990.67 9844.63 04/30/94 10116.89 9970.64 05/31/94 10126.60 10134.16 06/30/94 9874.16 9885.88 07/31/94 10262.53 10210.13 08/31/94 10796.53 10628.75 09/30/94 10767.40 10368.34 10/31/94 10990.71 10601.63 11/30/94 10495.55 10215.52 12/31/94 10682.65 10367.02 01/31/95 10623.74 10635.83 02/28/95 11065.57 11050.31 03/31/95 11536.87 11376.41 04/30/95 11860.88 11711.44 05/31/95 12302.72 12179.55 06/30/95 12862.38 12462.48 07/31/95 13520.22 12875.73 08/31/95 13547.85 12908.05 09/30/95 13994.60 13452.77 10/31/95 13610.19 13404.75 11/30/95 14181.61 13993.21 12/29/95 14115.33 14262.72 $10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity Fifty on September 17, 1993, when the fund started, and paid a 3% sales charge. As the chart shows, by December 31, 1995, the value of your investment would have grown to $14,115 - a 41.15% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends reinvested, the same $10,000 investment would have grown to $14,263 - a 42.63% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW An interview with Scott Stewart, Portfolio Manager of Fidelity Fifty Q. SCOTT, HOW HAS THE FUND PERFORMED? A. For the six months ended December 31, 1995, the fund had a total return of 9.74%. That trailed both the 11.87% six-month return for the average capital appreciation fund tracked by Lipper Analytical Services and the 14.45% return for the Standard & Poor's Composite Index of 500 Stocks for the same period. For the 12 months ended December 31, 1995, the fund had a total return of 32.13%, while the average capital appreciation fund posted a 30.34% return and the S&P 500 returned 37.58%. Q. WHAT CONTRIBUTED TO THE FUND'S PERFORMANCE RELATIVE TO THE INDEX? A. While I use certain techniques to manage the fund's risk, Fidelity Fifty still has a more aggressive style than a portfolio made up strictly of stocks in the S&P 500. Fidelity Fifty is composed of more smaller-sized companies whose earnings are variable and whose stocks yield less dividends than those found in the index. These types of stocks, in general, did not perform as well as the large-capitalization S&P stocks, as demonstrated by the lower return -12.26% for the six months ended December 31 - of the Russell 2000 Index, a measure of smaller-capitalization stocks. In addition, while stock selection - what I would call the "engine" of Fidelity Fifty's active performance - was strong since the fund's inception and in the first six months of 1995, it kept the fund from performing better through the last six months of 1995. Q. AND WHY DID THE FUND UNDERPERFORM THE AVERAGE CAPITAL APPRECIATION FUND OVER THE PAST SIX MONTHS, BUT OUTPERFORM IT OVER THE PAST 12 MONTHS? A. I believe that stock selection was a major detractor in the second half of 1995. In addition, the fund probably held fewer companies with stable earnings than funds in the Lipper category, and more underperforming stocks in the automobile industry. Looking at the fund's 12-month performance, it appears stock selection was the main reason it did better than the Lipper average. It's important for shareholders to remember, though, that Fidelity Fifty was designed to add long-term value over its peers and the S&P 500, rather than focus on any particular year or six-month period. So far, the fund has been successful at adding value, outperforming both the Lipper average and the S&P 500 since inception. Q. WHAT HAS THE STOCK MARKET ENVIRONMENT BEEN LIKE OVER THE PAST SIX MONTHS? A. There have been a number of trends. First, the peak of the strong performance by stocks in the technology sector occurred in September. Subsequently, they've tended to deteriorate. Second, with the drop in technology stocks and the economy continuing its slowdown in the second half of the year, there was a move by investors to defensive groups, including energy, pharmaceuticals and consumer non-cyclicals. These groups comprise companies whose earnings tend to remain steady regardless of the economic backdrop. Third, financial stocks continued to do well, largely on the heels of merger and acquisition activity, in spite of slowing loan growth and signs of deteriorating credit quality. While the fund had investments in the areas that performed well, its results were affected by stocks in the areas that didn't. Q. WHICH STOCKS HELPED THE FUND'S PERFORMANCE? A. General Electric, Philip Morris, PepsiCo and Merck - all examples of quality stocks - helped. In addition, America Online did well because of strong new subscriptions. Pioneer Hi-Bred, one of the leaders in high-performance corn seed production, benefited from a mediocre corn crop this year. Pioneer had virtually no debt and was buying back shares. I sold this stock once it reached my target price. New product development - including an innovative Internet search technology - as well as solid performance from its Alpha semiconductor chip spurred Digital Equipment's stock. And Case Corporation, a company that manufactures agricultural and construction equipment, was helped by cost cutting and strong European sales. Q. AND WHICH STOCKS DIDN'T DO AS WELL AS YOU WOULD HAVE LIKED? A. One was DSC Communications, a cellular equipment company. Weaker-than-expected cellular telephone sales - especially from the company's main client, Motorola - hurt the stock. Another was Apria Health Care, a supplier of oxygen for home use. The company suffered from discussions in Congress that indicated Medicaid reimbursements might be cut by as much as 40%, a move that would cut into the company's earnings. Finally, Novell dropped due to revenue and sales problems in its word processing group and slower-than-expected growth in its networking business. The fund no longer owns any of these stocks. Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS? A. In terms of the market environment, the two most important criteria are earnings and interest rates, and we've come to a point where interest rates are relatively low and the expectation is that they will remain stable or decline. The earnings outlook is not as strong as it has been, and it looks like some companies could face earnings disappointments. As always, I'll continue to try to pick the best stocks that offer solid potential, selling at attractive valuations. I will continue to apply a systematic process for stock selection, and work to enhance that process in order to produce the best possible returns. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND FACTS GOAL: to increase the value of the fund's shares by investing mainly in equity securities, normally 50 - 60 stocks START DATE: September 17, 1993 SIZE: as of December 31, 1995, more than $156 million MANAGER: Scott Stewart, since September 1993; founder and head of Fidelity's Structured Equity Group since 1987, when he joined Fidelity (checkmark) SCOTT STEWART ON THE FUND'S STOCK SELECTION STRATEGY: "I use both quantitative techniques - a computer-based management system - and fundamental research - analysis of individual companies' business prospects - to structure the portfolio. I begin by analyzing the fundamental results produced by Fidelity's extensive research of more than 3,000 stocks. Then, I focus on approximately 100 stocks whose prospects have just recently improved and are now strong, and whose price is attractive relative to those prospects. These can include turnaround stories or a company whose earnings growth has been continually strong, but appears to be on the cusp of some acceleration in that growth. Then, I try to select the best 50 to 60 stocks for the portfolio, based on both qualitative and quantitative techniques. The computer-based system then helps me to adjust stock weightings in order to improve diversification and to moderate risk. I decide to sell a stock when its prospects are no longer improving or if the stock price has reached a point where it appears the company's prospects can't support growth in the stock's market value. By following this approach, I seek to create an aggressive stock portfolio that holds approximately 50 to 60 stocks- much like a personal portfolio selected for an individual." INVESTMENT CHANGES TOP TEN STOCKS AS OF DECEMBER 31, 1995 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Merck & Co., Inc. 3.3 2.2 General Electric Co. 3.1 0.0 Philip Morris Companies, Inc. 2.8 2.1 Compaq Computer Corp. 2.7 2.3 Atlantic Richfield Co. 2.5 1.9 Ingersoll-Rand Co. 2.4 1.5 Kellogg Co. 2.3 2.1 PepsiCo, Inc. 2.2 1.5 Pharmacia & Upjohn, Inc. 2.2 0.0 Masco Corp. 2.1 2.0 TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1995 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE SECTORS 6 MONTHS AGO Technology 14.5 24.0 Industrial Machinery & Equipment 10.4 2.6 Health 8.7 6.8 Basic Industries 7.4 3.6 Energy 7.4 4.0 ASSET ALLOCATION AS OF DECEMBER 31, 1995* AS OF JUNE 30, 1995** Row: 1, Col: 1, Value: 11.8 Row: 1, Col: 2, Value: 44.0 Row: 1, Col: 3, Value: 44.2 Row: 1, Col: 1, Value: 5.8 Row: 1, Col: 2, Value: 44.2 Row: 1, Col: 3, Value: 50.0 Stocks and equity futures 88.2% Short-term investments 11.8% FOREIGN INVESTMENTS 1.4% Stocks and equity futures 94.2% Short-term investments 5.8% FOREIGN INVESTMENTS 7.0% * ** INVESTMENTS DECEMBER 31, 1995 (UNAUDITED) Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 81.0% SHARES VALUE (NOTE 1) BASIC INDUSTRIES - 7.4% CHEMICALS & PLASTICS - 4.3% Agrium, Inc. 45,400 $ 682,156 du Pont (E.I.) de Nemours & Co. 48,000 3,354,000 Hanna (M.A.) Co. 44,400 1,243,200 Praxair, Inc. 58,500 1,967,063 7,246,419 METALS & MINING - 3.1% Alumax, Inc. 67,100 2,054,938 Inco Ltd. 42,400 1,402,353 Kaiser Aluminum Corp. (a) 140,200 1,822,600 5,279,891 TOTAL BASIC INDUSTRIES 12,526,310 CONSTRUCTION & REAL ESTATE - 2.1% BUILDING MATERIALS - 2.1% Masco Corp. 113,000 3,545,375 DURABLES - 2.2% AUTOS, TIRES, & ACCESSORIES - 0.9% Echlin, Inc. 43,500 1,587,750 HOME FURNISHINGS - 1.3% Heilig-Meyers Co. 119,700 2,199,488 TOTAL DURABLES 3,787,238 ENERGY - 7.4% ENERGY SERVICES - 3.2% BJ Services Co. (a) 75,076 2,177,204 BJ Services Co. (warrants) (a) 6,960 53,070 Dresser Industries, Inc. 76,000 1,852,500 McDermott International, Inc. 60,700 1,335,400 5,418,174 OIL & GAS - 4.2% Amerada Hess Corp. 52,500 2,782,500 Atlantic Richfield Co. 37,600 4,164,200 Chesapeake Energy Corp. 4,200 139,650 7,086,350 TOTAL ENERGY 12,504,524 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) FINANCE - 5.6% BANKS - 4.0% Banc One Corp. 87,900 $ 3,318,225 Fleet Financial Group, Inc. 49,700 2,025,275 Wells Fargo & Co. 7,000 1,512,000 6,855,500 INSURANCE - 1.6% Aetna Life & Casualty Co. 38,500 2,666,125 TOTAL FINANCE 9,521,625 HEALTH - 8.7% DRUGS & PHARMACEUTICALS - 5.5% Merck & Co., Inc. 84,600 5,562,450 Pharmacia & Upjohn, Inc. 97,100 3,762,625 9,325,075 MEDICAL EQUIPMENT & SUPPLIES - 1.8% Baxter International, Inc. 73,800 3,090,375 MEDICAL FACILITIES MANAGEMENT - 1.4% Ornda Healthcorp (a) 44,000 1,023,000 Vencor, Inc. (a) 41,000 1,332,500 2,355,500 TOTAL HEALTH 14,770,950 INDUSTRIAL MACHINERY & EQUIPMENT - 10.4% ELECTRICAL EQUIPMENT - 4.7% General Electric Co. 73,000 5,256,000 Glenayre Technologies, Inc. 64,500 2,676,750 7,932,750 INDUSTRIAL MACHINERY & EQUIPMENT - 5.7% Case Corp. 38,900 1,779,675 Harnischfeger Industries, Inc. 41,300 1,373,225 Ingersoll-Rand Co. 113,700 3,993,713 Stewart & Stevenson Services, Inc. 99,800 2,519,950 9,666,563 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 17,599,313 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) MEDIA & LEISURE - 2.6% BROADCASTING - 1.8% Comcast Corp. Class A (special) 70,000 $ 1,273,125 Viacom, Inc. Class A (a) 38,500 1,766,188 3,039,313 LODGING & GAMING - 0.8% Hilton Hotels Corp. 22,000 1,353,000 TOTAL MEDIA & LEISURE 4,392,313 NONDURABLES - 7.3% BEVERAGES - 2.2% PepsiCo, Inc. 67,800 3,788,325 FOODS - 2.3% Kellogg Co. 49,800 3,847,050 TOBACCO - 2.8% Philip Morris Companies, Inc. 53,000 4,796,500 TOTAL NONDURABLES 12,431,875 PRECIOUS METALS - 1.3% Newmont Gold Co. 50,300 2,200,625 RETAIL & WHOLESALE - 3.2% APPAREL STORES - 0.3% Gymboree Corp. 22,400 462,000 GENERAL MERCHANDISE STORES - 1.0% Federated Department Stores, Inc. (a) 59,600 1,639,000 RETAIL & WHOLESALE, MISCELLANEOUS - 1.9% Home Depot, Inc. (The) 48,700 2,331,513 Tandy Corp. 22,900 950,350 3,281,863 TOTAL RETAIL & WHOLESALE 5,382,863 SERVICES - 0.6% LEASING & RENTAL - 0.6% Movie Gallery, Inc. (a) 31,000 945,500 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) TECHNOLOGY - 14.5% COMPUTER SERVICES & SOFTWARE - 4.4% America Online, Inc. (a) 75,600 $ 2,835,000 Automatic Data Processing, Inc. 48,000 1,782,000 Cerner Corp. (a) 29,000 594,500 Symantec Corp. (a) 97,100 2,257,575 7,469,075 COMPUTERS & OFFICE EQUIPMENT - 5.3% Compaq Computer Corp. (a) 97,000 4,656,000 Digital Equipment Corp. (a) 30,400 1,949,400 Seagate Technology 50,700 2,408,250 9,013,650 ELECTRONICS - 4.8% Analog Devices, Inc. (a) 37,000 1,308,875 Avnet, Inc. 3,300 147,675 Maxim Integrated Products, Inc. 71,600 2,756,600 Vishay Intertechnology, Inc. 58,400 1,839,600 Xilinx, Inc. 68,200 2,080,100 8,132,850 TOTAL TECHNOLOGY 24,615,575 TRANSPORTATION - 4.7% AIR TRANSPORTATION - 4.0% Alaska Air Group, Inc. 91,400 1,485,250 Atlantic Southeast Airlines, Inc. 98,500 2,117,750 Delta Air Lines, Inc. 43,000 3,176,625 6,779,625 RAILROADS - 0.7% Burlington Northern Santa Fe Corp. 15,160 1,182,480 TOTAL TRANSPORTATION 7,962,105 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) UTILITIES - 3.0% CELLULAR - 0.7% Mobile Telecommunications Technologies, Inc. 56,600 $ 1,209,825 TELEPHONE SERVICES - 2.3% AT&T Corp. 52,000 3,367,000 WorldCom, Inc. (a) 14,200 500,550 3,867,550 TOTAL UTILITIES 5,077,375 TOTAL COMMON STOCKS (Cost $126,939,757) 137,263,566 U.S. TREASURY OBLIGATIONS - 0.6% PRINCIPAL AMOUNT U.S. Treasury Bills, yield at date of purchase 5.40%, 3/7/96 (b) (Cost $990,081) $ 1,000,000 991,187 REPURCHASE AGREEMENTS - 18.4% MATURITY AMOUNT Investments in repurchase agreements (U.S. Treasury obligations) in a joint trading account at 5.88% dated 12/29/95 due 1/2/96 $ 31,152,340 31,132,000 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $159,061,838) $ 169,386,753 FUTURES CONTRACTS EXPIRATION UNDERLYING FACE UNREALIZED DATE AMOUNT AT VALUE GAIN/(LOSS) PURCHASED 21 S&P 500 Stock Index Futures Mar. 1996 $ 6,493,725 $ (69,583) 53 Midcap 400 Stock Index Futures Mar. 1996 $ 5,778,325 (61,947) $ (131,530) THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 7.2% LEGEND (1.) Non-income producing (2.) Security pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $991,187. INCOME TAX INFORMATION At December 31, 1995, the aggregate cost of investment securities for income tax purposes was $159,062,974. Net unrealized appreciation aggregated $10,323,779, of which $12,894,425 related to appreciated investment securities and $2,570,646 related to depreciated investment securities. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 (UNAUDITED) ASSETS Investment in securities, at value (including repurchase $ 169,386,753 agreements of $31,132,000) (cost $159,061,838) - See accompanying schedule Cash 612 Receivable for investments sold 17,742,136 Receivable for fund shares sold 1,087,204 Dividends receivable 263,118 Receivable for daily variation on futures contracts 38,360 TOTAL ASSETS 188,518,183 LIABILITIES Payable for investments purchased $ 31,152,939 Payable for fund shares redeemed 584,480 Accrued management fee 76,462 Other payables and accrued expenses 61,078 TOTAL LIABILITIES 31,874,959 NET ASSETS $ 156,643,224 Net Assets consist of: Paid in capital $ 141,654,444 Undistributed net investment income 21,723 Accumulated undistributed net realized gain (loss) on 4,773,633 investments and foreign currency transactions Net unrealized appreciation (depreciation) on 10,193,424 investments and assets and liabilities in foreign currencies NET ASSETS, for 12,074,589 shares outstanding $ 156,643,224 NET ASSET VALUE, offering price and redemption price per $12.97 share ($156,643,224 (divided by) 12,074,589 shares)
STATEMENT OF OPERATIONS
SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED) INVESTMENT INCOME $ 913,648 Dividends Interest 664,974 TOTAL INCOME 1,578,622 EXPENSES Management fee $ 442,850 Basic fee Performance adjustment 31,403 Transfer agent fees 201,479 Accounting fees and expenses 44,513 Non-interested trustees' compensation 272 Custodian fees and expenses 11,211 Registration fees 38,279 Audit 15,032 Legal 559 Miscellaneous 457 Total expenses before reductions 786,055 Expense reductions (31,502) 754,553 NET INVESTMENT INCOME 824,069 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities 9,780,077 Foreign currency transactions 14 Futures contracts 1,540,310 11,320,401 Change in net unrealized appreciation (depreciation) on: Investment securities 1,033,720 Assets & liabilities in foreign currencies (3) Futures contracts (339,600) 694,117 NET GAIN (LOSS) 12,014,518 NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 12,838,587 FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS YEAR ENDED ENDED DECEMBER JUNE 30, 31, 1995 1995 (UNAUDITED) INCREASE (DECREASE) IN NET ASSETS Operations $ 824,069 $ 776,811 Net investment income Net realized gain (loss) 11,320,401 8,550,756 Change in net unrealized appreciation (depreciation) 694,117 10,596,181 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 12,838,587 19,923,748 FROM OPERATIONS Distributions to shareholders (1,413,094) (101,513) From net investment income From net realized gain (13,362,093) (507,564) TOTAL DISTRIBUTIONS (14,775,187) (609,077) Share transactions 81,216,692 134,344,421 Net proceeds from sales of shares Reinvestment of distributions 14,630,812 601,102 Cost of shares redeemed (65,839,370) (74,047,825) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 30,008,134 60,897,698 FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 28,071,534 80,212,369 NET ASSETS Beginning of period 128,571,690 48,359,321 End of period (including undistributed net investment $ 156,643,224 $ 128,571,690 income of $21,723 and $675,298, respectively) OTHER INFORMATION Shares Sold 6,095,054 11,495,589 Issued in reinvestment of distributions 1,127,983 56,495 Redeemed (4,964,815) (6,489,573) Net increase (decrease) 2,258,222 5,062,511
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 17, DECEMBER 31, 1995 JUNE 30, 1993 (UNAUDITED) 1995 (COMMENCEMENT OF OPERATIONS) TO JUNE 30, 1994 SELECTED PER-SHARE DATA Net asset value, beginning of period $ 13.10 $ 10.17 $ 10.00 Income from Investment Operations Net investment income .06 .08 .02 Net realized and unrealized 1.18 2.97 .16 gain (loss) Total from investment operations 1.24 3.05 .18 Less Distributions (.13) (.02) (.01) From net investment income From net realized gain (1.24) (.10) - Total distributions (1.37) (.12) (.01) Net asset value, end of period $ 12.97 $ 13.10 $ 10.17 TOTAL RETURN B, C 9.74% 30.26% 1.80% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 156,643 $ 128,572 $ 48,359 (000 omitted) Ratio of expenses to average 1.09% A 1.22% 1.58% A net assets Ratio of expenses to average net 1.04% A, 1.19% 1.58% A assets after expense reductions D D Ratio of net investment income to 1.14% A 1.15% .23% A average net assets Portfolio turnover rate 164% A 180% 320% A
A ANNUALIZED B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. D FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). NOTES TO FINANCIAL STATEMENTS For the period ended December 31, 1995 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Fifty (the fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange) are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days of their purchase date are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of the transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are included with the net realized and unrealized gain or loss on investment securities. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income, which includes accretion of original issue discount, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED EXPENSES. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned between the funds in the trust. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences, which may result in distribution reclassifications, are primarily due to differing treatments for futures and options transactions and losses deferred due to wash sales and excise tax regulations. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain (loss). Undistributed net investment income and accumulated undistributed net realized gain (loss) on investments and foreign currency transactions may include temporary book and tax basis differences which will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the fund's investments against currency fluctuations. Also, a contract to buy or sell can offset a previous contract. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and any realized gain (loss) is recognized on the date of offset; otherwise, gain (loss) is recognized on settlement date. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT - CONTINUED agreements that mature in 60 days or less from the date of purchase, and are collateralized by U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying U.S. Treasury or Federal Agency securities, the market value of which is required to be at least equal to the repurchase price. For term repurchase agreement transactions, the underlying securities are marked-to-market daily and maintained at a value at least equal to the repurchase price. FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options contracts to manage its exposure to the stock market and to fluctuations in interest rates. Buying futures, writing puts, and buying calls tend to increase the fund's exposure to the underlying instrument. Selling futures, buying puts, and writing calls tend to decrease the fund's exposure to the underlying instrument, or hedge other fund investments. Futures contracts involve, to varying degrees, risk of loss in excess of the futures variation margin reflected in the Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end, is shown in the schedule of investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end. Losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparties do not perform under the contracts' terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price. Options traded over-the-counter are valued using dealer-supplied valuations. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $127,163,456 and $101,648,317, respectively. The market value of futures contracts opened and closed during the period amounted to $58,328,833 and $67,321,843, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED MANAGEMENT FEE - CONTINUED FMR. The rates ranged from .2700% to .5200% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is .30%. The basic fee is subject to a performance adjustment (up to a maximum of (plus/minus) .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. The fund's performance adjustment took effect in September, 1994. For the period, the management fee was equivalent to an annualized rate of .65% of average net assets after the performance adjustment. The Board of Trustees has approved a new group fee rate schedule with rates ranging from .2500% to .5200%. Effective January 1, 1996, FMR voluntarily agreed to implement this new group fee rate schedule as it results in the same or a lower management fee. SALES LOAD. For the period January 1, 1995 through December 31, 1996, Fidelity Distributors Corporation, an affiliate of FMR and the general distributor of the fund, will voluntarily waive the sales charge (3% of the offering price) on the sales of shares. TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .28% of average net assets. ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $29,623 for the period. 5. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $31,502 under this arrangement. INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA INVESTMENT SUB-ADVISERS Fidelity Management & Research Company (U.K.) Inc., London, England Fidelity Management & Research (Far East) Inc., Tokyo, Japan OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President William J. Hayes, Vice President Scott Stewart, Vice President Arthur S. Loring, Secretary Kenneth A. Rathgeber, Treasurer Robert H. Morrison, Manager, Security Transactions John H. Costello, Assistant Treasurer Leonard M. Rush, Assistant Treasurer BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox* Phyllis Burke Davis* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Marvin L. Mann* Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN Brown Brothers Harriman & Co. Boston, MA FIDELITY'S GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Export Fund Fidelity Fifty Growth Company Fund Large Cap Stock Fund Low-Priced Stock Fund Magellan(registered trademark) Fund Mid-Cap Stock Fund New Millennium(trademark) Fund OTC Portfolio Retirement Growth Fund Small Cap Stock Fund Stock Selector Trend Fund Value Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) (registered trademark) (2_FIDELITY_LOGOS) FIDELITY FUND SEMIANNUAL REPORT DECEMBER 31, 1995 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 10 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 23 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 27 Notes to the financial statements. THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Although the markets were fairly positive in 1995, no one can predict what lies ahead for investors. The previous year, stocks posted below-average returns and bonds had one of the worst years in history. This downturn followed a period in which the investing environment was generally very positive. These market ups and downs are a normal part of investing, and there are some basic principles that are helpful for investors to remember in different types of markets. If you can leave your money invested over the long term, you can avoid the results of the volatility that generally accompanies the stock market in the short term, as we witnessed last year. You also can help to manage some of the risks of investing through diversification. A stock fund is already diversified because it invests in many issues. You can diversify even further by placing some of your money in several different types of stock funds or in other investment categories, such as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, there is no assurance that a money market fund will achieve its goal, and it is important to remember that money market funds are not insured or guaranteed by any agency of the U.S. government. Finally, no matter what your investment horizon or portfolio diversity, it makes good sense to follow a regular investment plan - investing a certain amount of money at the same time each month or quarter - and to review your portfolio periodically. A periodic investment plan will not, of course, assure a profit or protect against a loss. If you have any questions, please call us at 1-800-544-8888. We stand ready to provide the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. A fund's total return includes changes in a fund's share price, plus reinvestment of any dividends (or income) and capital gains (the profits the fund earns when it sells stocks that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1995 PAST 6 PAST 1 PAST 5 PAST 10 MONTHS YEAR YEARS YEARS Fidelity Fund 15.53% 32.85% 117.19% 274.06% S&P 500(registered trademark) 14.45% 37.58% 115.52% 300.54% Average Growth & Income Fund 11.96% 30.82% 105.29% 232.79% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, six months, one, five, or 10 years. For example, if you invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's Composite Index of 500 Stocks - a common proxy for the U.S. stock market. To measure how the fund's performance stacked up against its peers, you can compare it to the average growth & income fund, which reflects the performance of 484 growth & income funds with similar objectives tracked by Lipper Analytical Services over the past six months. Both benchmarks include reinvested dividends and capital gains, if any. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1995 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Fund 32.85% 16.78% 14.10% S&P 500(registered trademark) 37.58% 16.60% 14.89% Average Growth & Income Fund 30.82% 15.31% 12.64% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. $10,000 OVER 10 YEARS 05/31/86 11999.58 11882.56 06/30/86 12151.85 12083.37 07/31/86 11468.74 11407.91 08/31/86 12126.78 12254.38 09/30/86 11307.82 11240.94 10/31/86 11819.23 11889.55 11/30/86 11901.31 12178.46 12/31/86 11576.29 11867.91 01/31/87 12917.84 13466.52 02/28/87 13686.68 13998.45 03/31/87 14061.70 14403.00 04/30/87 13975.38 14274.81 05/31/87 14022.46 14399.01 06/30/87 14455.51 15126.15 07/31/87 15324.42 15893.05 08/31/87 15577.19 16485.86 09/30/87 15460.09 16124.82 10/31/87 11644.74 12651.53 11/30/87 11056.55 11609.05 12/31/87 11955.85 12492.50 01/31/88 12255.18 13018.43 02/29/88 13047.54 13625.09 03/31/88 12808.04 13204.07 04/30/88 13003.31 13350.64 05/31/88 13065.44 13466.79 06/30/88 13806.45 14084.92 07/31/88 13672.24 14031.39 08/31/88 13296.43 13554.33 09/30/88 13755.22 14131.74 10/31/88 14043.85 14524.60 11/30/88 13863.45 14316.90 12/31/88 14089.77 14567.45 01/31/89 14866.45 15633.78 02/28/89 14574.05 15244.50 03/31/89 14931.22 15599.70 04/30/89 15722.89 16409.32 05/31/89 16496.15 17073.90 06/30/89 16439.50 16976.58 07/31/89 17718.34 18509.57 08/31/89 18153.88 18872.35 09/30/89 18127.41 18794.98 10/31/89 17521.30 18358.93 11/30/89 17773.07 18733.46 12/31/89 18147.80 19183.06 01/31/90 17176.14 17895.87 02/28/90 17530.39 18126.73 03/31/90 17875.36 18607.09 04/30/90 17416.75 18141.91 05/31/90 18711.03 19910.75 06/30/90 18598.06 19775.36 07/31/90 18423.67 19712.07 08/31/90 17100.37 17930.10 09/30/90 16334.98 17056.91 10/31/90 16159.34 16983.56 11/30/90 16872.25 18080.70 12/31/90 17222.82 18585.15 01/31/91 18332.94 19395.46 02/28/91 19538.22 20782.24 03/31/91 19984.20 21285.17 04/30/91 20005.48 21336.26 05/31/91 21016.39 22257.98 06/30/91 19852.24 21238.57 07/31/91 20740.99 22228.28 08/31/91 21083.64 22755.09 09/30/91 20901.67 22375.08 10/31/91 21106.38 22674.91 11/30/91 19835.04 21761.11 12/31/91 21381.44 24250.58 01/31/92 21717.34 23799.52 02/29/92 22331.22 24108.91 03/31/92 21655.36 23638.79 04/30/92 21806.88 24333.77 05/31/92 22005.02 24453.01 06/30/92 21702.84 24088.66 07/31/92 22171.33 25073.88 08/31/92 21714.55 24559.87 09/30/92 21936.30 24849.67 10/31/92 22206.97 24936.65 11/30/92 22701.24 25786.99 12/31/92 23190.41 26104.17 01/31/93 23802.61 26323.44 02/28/93 24009.51 26681.44 03/31/93 24722.65 27244.42 04/30/93 24722.65 26585.11 05/31/93 25328.05 27297.59 06/30/93 25366.87 27376.75 07/31/93 25391.72 27267.24 08/31/93 26573.51 28300.67 09/30/93 26816.47 28082.76 10/31/93 27259.82 28664.07 11/30/93 26534.33 28391.76 12/31/93 27448.55 28735.30 01/31/94 28616.58 29712.30 02/28/94 28046.81 28907.10 03/31/94 26771.29 27646.75 04/30/94 27400.87 28000.63 05/31/94 27372.25 28459.84 06/30/94 26739.62 27762.57 07/31/94 27616.09 28673.18 08/31/94 28817.35 29848.78 09/30/94 28211.93 29117.49 10/31/94 28817.99 29772.63 11/30/94 27802.84 28688.31 12/31/94 28156.94 29113.76 01/31/95 28111.23 29868.68 02/28/95 29071.12 31032.66 03/31/95 30124.96 31948.44 04/30/95 30860.08 32889.32 05/31/95 31380.80 34203.90 06/30/95 32378.58 34998.46 07/31/95 33855.93 36159.01 08/31/95 34408.71 36249.77 09/30/95 35419.28 37779.51 10/31/95 35006.50 37644.64 11/30/95 36482.97 39297.24 12/29/95 37405.93 40054.10 $10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Fund on December 31, 1985. As the chart shows, by December 31, 1995, the value of your investment would have grown to $37,406 - a 274.06% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends reinvested, the same investment would have grown to $40,054 - a 300.54% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW An interview with Beth Terrana, Portfolio Manager of Fidelity Fund Q. BETH, HOW HAS THE FUND PERFORMED OVER THE PAST SIX MONTHS? A. It has done very well. For the six months ended December 31, 1995, the fund had a total return of 15.53%. That beat the average growth and income fund tracked by Lipper Analytical Services, which returned 11.96% during the same period. For the 12 months ended December 31, 1995, the fund posted a total return of 32.85%, while the average growth and income fund had a total return of 30.82%. Q. WHAT HELPED THE FUND BEAT THE LIPPER AVERAGE? A. A number of the fund's largest holdings exhibited particularly strong performance over this period. Tyco International, the Federal National Mortgage Association - Fannie Mae - and BellSouth all posted outstanding returns. In general, the regional Bell operating companies (RBOCs) were almost universally strong stocks. Q. WHAT HAS THE INVESTING ENVIRONMENT BEEN LIKE OVER THE PAST SIX MONTHS? A. Even though many of the most frequently quoted stock market averages - such as the Standard & Poor's 500 and the Dow Jones Industrial Average - posted strong returns, their performance belied some underlying difficulties within the market. Investor interest rotated quickly from sector to sector, with different sectors falling in and out of favor. We saw some dramatic swings as a result. For example, technology stocks - some of the best performers through September - generally saw significant price declines in the fourth quarter. It became increasingly clear in the second half of the year that the economy was maintaining a lackluster pace. In anticipation of potential earnings disappointments in 1996, the market for the most part shifted its focus to "safe" stocks - those whose earnings growth generally remains steady regardless of the economic backdrop - including those found in the nondurables and health care sectors. Q. HOW DID THIS BACKDROP AFFECT YOUR STRATEGY AND POSITIONING OF THE FUND? A. The moves I made during the period mirrored those of the broad market. Specifically, I added to the fund's health care investments, with most of the shift occurring late in the second quarter. I also increased nondurables investments. At the same time, I cut back on the fund's technology investments, believing that they would be affected by the economic slowdown. That turned out to be the case, even though many of the companies in the sector still have the potential for rapid future earnings growth. The fund's weighting in the financial sector remained relatively constant, but its focus shifted. I reduced investments in banks because statistics showing declining consumer confidence and increasing credit problems indicated the economic environment would not be a good one for this industry. Instead, I gravitated toward or maintained investments in insurance companies and diversified financial stocks. These included Fannie Mae and Freddie Mac - the Federal Home Loan Mortgage Corp. I chose these types of investments because it appeared they would enjoy stable earnings growth, and their stocks were selling at what I found to be cheap valuations relative to the rest of the market. I also purchased long-term government bonds, believing the economy was weaker than the consensus expected, and that the bonds would increase in value because of declining interest rates. Q. BETH, EARLIER YOU MENTIONED SOME STOCKS THAT HELPED THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS. LET'S TOUCH UPON SOME OTHERS. A. I can start off with three stocks that I would put into the category of safe stocks that I mentioned earlier: Philip Morris, Bristol-Myers Squibb and General Electric. Philip Morris - the fund's largest holding - was a great performer in 1995. It continued to grow profits through the strength of its Marlboro brand and international sales, and used its free cash flow to buy back stock. Bristol-Myers Squibb effectively cut costs and I found its share price to be one the cheapest in the health care sector. General Electric provided solid earnings growth. In addition, Tyco International - a company that manufactures, among other things, fire protection systems and electrical components - has an excellent management team, has seen solid earnings growth and has used its free cash flow to make beneficial acquisitions lately. Q. AT THE END OF THE PERIOD, THREE OF THE FUND'S TOP 10 INVESTMENTS - AMERITECH, BELLSOUTH AND SBC COMMUNICATIONS - WERE RBOCS. HOW HAVE THEY PERFORMED, AND WHAT'S THEIR ATTRACTION? A. These three stocks did very well during the period. I've invested in them for two reasons. First, in the current market environment where many companies have started to miss earnings estimates, these stocks appear to offer some safety because they generally provide significant yields. Second, although deregulation in this industry has threatened RBOCs' existing market share, it appears to be more than offset by their ability to enter new businesses. The industry has the potential to consolidate over the next couple of years as well, and seems to offer better growth prospects than most investors believe. Q. LOOKING BACK OVER THE PAST SIX MONTHS, WHICH STOCKS DIDN'T TURN OUT AS WELL AS YOU WOULD HAVE LIKED? A. Retail was one area that was particularly hard hit; the market has been unforgiving of any mistakes in this sector. Even though companies such as Wal-Mart and Home Depot had above-average rates of return and growth, their stock prices fell because those rates have been moving downward. The share price of Consolidated Stores - a close-out merchandise retailer that generally benefits from the kind of economic climate we're seeing currently - - has made little upward progress even though it appeared management was doing everything right. Beyond retail, Ceridian, an information services company, posted disappointing returns, probably because investors associated it with technology. Additionally, any technology exposure hurt. Although it appears long-term personal computer sales will grow substantially over time, computer stocks such as Compaq declined during the period. Q. WHAT'S YOUR OUTLOOK FOR THE NEXT SIX MONTHS? A. The market was extremely narrow and quite volatile in 1995. I would not be surprised if 1996 is a year of similar volatility. With a very uneasy global economic picture, we could see sectors come in and out favor as quickly as they did this year. The picture gets even more confusing when you factor in the U.S. political environment, which is anything but clear in terms of the budget process or the election. The big question for stock selection in 1996 is whether the economy picks up or not. If the economy does not reaccelerate, the kinds of stocks that did well last year probably should do well once again, namely the safe, stable, predictable growth companies. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND OTHER CONDITIONS. FUND FACTS GOAL: to increase the value of the fund's shares over the long term by investing mainly in equity securities with good prospects for growth and current income START DATE: April 30, 1930 SIZE: as of December 31, 1995, more than $3.2 billion MANAGER: Beth Terrana, since August 1993; manager, Fidelity Equity-Income Fund, Fidelity Advisor Equity Income Fund, VIP: Equity-Income Portfolio, 1990 - 1993; Fidelity Growth & Income Portfolio, 1985 - 1990; joined Fidelity in 1983 (checkmark) BETH TERRANA ON THE STOCK MARKET IN 1995: "The strength of the broad market indices in 1995 overstates how narrow the market was. Over 60% of the stocks in the S&P 500 actually lagged the index, and almost half of all U.S. stocks lagged the S&P 500 by more than 15%. To match or beat the market, one needed to be concentrated in large-capitalization, traditional, blue chip stocks. "Throughout the year, market participants became incredibly unforgiving of even the slightest earnings disappointments. For those that disappointed, stock price declines were rapid and dramatic. Conversely, those companies that beat expectations were likewise rewarded with rapid and dramatic stock price increases. This instantaneous revaluation of stocks highlighted how crucial in-depth fundamental research is." INVESTMENT CHANGES TOP TEN STOCKS AS OF DECEMBER 31, 1995 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Philip Morris Companies, Inc. 3.4 2.4 General Electric Co. 2.3 0.5 Federal National Mortgage 1.6 1.4 Association Tyco International Ltd. 1.5 1.3 Burlington Northern Santa Fe 1.3 1.1 Corp. Ameritech Corp. 1.2 1.0 British Petroleum PLC ADR 1.2 1.8 BellSouth Corp. 1.2 0.7 SBC Communications, Inc. 1.2 1.2 Bristol-Myers Squibb Co. 1.0 0.0 TOP FIVE MARKET SECTORS AS OF DECEMBER 31, 1995 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE MARKET SECTORS 6 MONTHS AGO Finance 14.2 14.0 Health 11.8 6.3 Nondurables 8.1 6.6 Basic Industries 7.0 8.1 Industrial Machinery & Equipment 6.0 6.0 ASSET ALLOCATION AS OF DECEMBER 31, 1995* AS OF JUNE 30, 1995** Row: 1, Col: 1, Value: 8.0 Row: 1, Col: 2, Value: 5.0 Row: 1, Col: 3, Value: 43.0 Row: 1, Col: 4, Value: 44.0 Row: 1, Col: 1, Value: 5.0 Row: 1, Col: 2, Value: 4.0 Row: 1, Col: 3, Value: 45.0 Row: 1, Col: 4, Value: 46.0 Stocks 87.8% Bonds 4.8% Short-term investments 7.4% FOREIGN INVESTMENTS 3.8% Stocks 91.6% Bonds 3.9% Short-term investments 4.5% FOREIGN INVESTMENTS 8.4% * ** INVESTMENTS DECEMBER 31, 1995 (UNAUDITED) Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 86.8% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 4.1% AEROSPACE & DEFENSE - 2.3% Alliant Techsystems, Inc. (a) 329,000 $ 16,656 Boeing Co. 194,300 15,228 McDonnell Douglas Corp. 187,400 17,241 Precision Castparts Corp. 108,400 4,309 Rockwell International Corp. 368,000 19,458 Thiokol Corp. 37,000 1,253 74,145 DEFENSE ELECTRONICS - 1.1% Loral Corp. 294,800 10,429 Raytheon Co. 542,800 25,647 36,076 SHIP BUILDING & REPAIR - 0.7% General Dynamics Corp. 356,100 21,054 TOTAL AEROSPACE & DEFENSE 131,275 BASIC INDUSTRIES - 6.8% CHEMICALS & PLASTICS - 5.8% Agrium, Inc. 609,600 9,160 Air Products & Chemicals, Inc. 41,100 2,168 CBI Industries, Inc. 159,300 5,237 du Pont (E.I.) de Nemours & Co. 388,700 27,160 Hercules, Inc. 466,800 26,316 Monsanto Co. 200,500 24,561 Morton International, Inc. 285,700 10,249 Potash Corp. of Saskatchewan 139,700 9,907 Praxair, Inc. 760,100 25,558 Raychem Corp. 334,700 19,036 Sealed Air Corp. (a) 339,000 9,534 Union Carbide Corp. 286,600 10,748 Vigoro Corp. 115,300 7,120 186,754 PACKAGING & CONTAINERS - 0.1% Crown Cork & Seal Co., Inc. 105,400 4,400 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED PAPER & FOREST PRODUCTS - 0.9% James River Corp. 123,100 $ 2,970 Kimberly-Clark Corp. 323,244 26,748 29,718 TOTAL BASIC INDUSTRIES 220,872 CONGLOMERATES - 3.0% Allied-Signal, Inc. 537,300 25,522 Crane Co. 173,200 6,387 Tyco International Ltd. 1,333,516 47,507 United Technologies Corp. 171,500 16,271 95,687 CONSTRUCTION & REAL ESTATE - 1.7% BUILDING MATERIALS - 0.3% Armstrong World Industries, Inc. 140,600 8,717 Masco Corp. 40,500 1,271 9,988 REAL ESTATE INVESTMENT TRUSTS - 1.4% Duke Realty Investors, Inc. 168,500 5,287 Equity Residential Properties Trust (SBI) 280,000 8,575 Home Properties of NY, Inc. 75,900 1,300 Kimco Realty Corp. 240,750 6,560 Public Storage, Inc. 183,100 3,479 RFS Hotel Investors, Inc. 404,100 6,213 Shurgard Storage Centers, Inc. 105,800 2,857 Storage USA, Inc. 224,900 7,337 Summit Property Trust 118,300 2,351 43,959 TOTAL CONSTRUCTION & REAL ESTATE 53,947 DURABLES - 2.6% AUTOS, TIRES, & ACCESSORIES - 1.4% Cummins Engine Co., Inc. 233,200 8,628 Dana Corp. 89,100 2,606 Echlin, Inc. 313,000 11,425 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) DURABLES - CONTINUED AUTOS, TIRES, & ACCESSORIES - CONTINUED Magna International, Inc. Class A 409,100 $ 17,616 Wabash National Corp. 271,400 6,039 46,314 CONSUMER ELECTRONICS - 0.1% Sunbeam-Oster, Inc. 162,200 2,474 TEXTILES & APPAREL - 1.1% NIKE, Inc. Class B 162,200 11,293 Warnaco Group, Inc. Class A 932,600 23,315 34,608 TOTAL DURABLES 83,396 ENERGY - 2.5% ENERGY SERVICES - 0.9% Schlumberger Ltd. 309,800 21,454 Sonat Offshore Drilling, Inc. 33,500 1,499 Transocean Drilling AS (a) 222,900 3,847 26,800 INDEPENDENT POWER - 0.0% Thermo Electron Corp. (a) 15,700 816 OIL & GAS - 1.6% Amerada Hess Corp. 230,500 12,217 British Petroleum PLC ADR 394,268 40,264 52,481 TOTAL ENERGY 80,097 FINANCE - 14.2% BANKS - 4.9% Bank of Boston Corp. 329,417 15,236 Bank of New York Co., Inc. 349,500 17,038 Bank South Corp. 194,800 5,917 Barnett Banks, Inc. 137,000 8,083 Boatmen's Bancshares, Inc. 43,400 1,774 Chemical Banking Corp. 394,400 23,170 Citicorp 297,200 19,987 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED BANKS - CONTINUED First Bank System, Inc. 82,500 $ 4,094 First Interstate Bancorp 213,700 29,170 First Tennessee National Corp. 156,000 9,438 Fleet Financial Group, Inc. 343,414 13,994 KeyCorp. 138,000 5,003 Wells Fargo & Co. 23,000 4,968 157,872 CREDIT & OTHER FINANCE - 1.4% American Express Co. 532,364 22,026 Beneficial Corp. 135,500 6,318 Household International, Inc. 270,000 15,964 44,308 FEDERAL SPONSORED CREDIT - 1.8% Federal Home Loan Mortgage Corp. 115,400 9,636 Federal National Mortgage Association 403,100 50,035 59,671 INSURANCE - 5.0% Aetna Life & Casualty Co. 308,700 21,377 Allmerica Financial Corp. 6,800 184 Allstate Corp. 589,500 24,243 American International Group, Inc. 301,400 27,880 American Reinsurance Corp. 366,300 14,973 CIGNA Corp. 210,600 21,744 General Re Corp. 125,600 19,468 ITT Hartford Group, Inc. 60,800 2,941 MGIC Investment Corp. 91,800 4,980 Prudential Reinsurance Holdings, Inc. 141,900 3,317 St. Paul Companies, Inc. (The) 38,000 2,114 Travelers, Inc. (The) 270,600 17,014 160,235 SAVINGS & LOANS - 0.7% Ahmanson (H.F.) & Co. 263,500 6,983 Charter One Financial Corp. 318,600 9,757 Great Western Financial Corp. 260,800 6,650 23,390 SECURITIES INDUSTRY - 0.4% Merrill Lynch & Co., Inc. 246,000 12,546 TOTAL FINANCE 458,022 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - 11.6% DRUGS & PHARMACEUTICALS - 5.1% American Home Products Corp. 130,400 $ 12,649 Amgen, Inc. (a) 248,300 14,743 Bristol-Myers Squibb Co. 365,300 31,370 Lilly (Eli) & Co. 254,200 14,299 Merck & Co., Inc. 474,900 31,225 Neopath, Inc. (a) 25,000 581 Pharmacia & Upjohn, Inc. 659,400 25,552 Schering-Plough Corp. 173,000 9,472 SmithKline Beecham PLC ADR 475,200 26,374 166,265 MEDICAL EQUIPMENT & SUPPLIES - 4.8% Baxter International, Inc. 696,900 29,183 Guidant Corp. 302,700 12,789 Hillenbrand Industries, Inc. 66,600 2,256 Johnson & Johnson 268,300 22,973 McKesson Corp. 97,200 4,921 Medtronic, Inc. 114,000 6,370 Millipore Corp. 459,100 18,880 Nellcor, Inc. (a) 279,232 16,195 Pall Corp. 518,700 13,940 St. Jude Medical, Inc. (a) 679,400 29,214 156,721 MEDICAL FACILITIES MANAGEMENT - 1.7% Columbia/HCA Healthcare Corp. 421,275 21,380 Community Health Systems, Inc.(a) 310,500 11,062 Tenet Healthcare Corp. (a) 1,012,000 20,998 53,440 TOTAL HEALTH 376,426 HOLDING COMPANIES - 0.2% U.S. Industries, Inc. (a) 322,600 5,928 INDUSTRIAL MACHINERY & EQUIPMENT - 5.9% ELECTRICAL EQUIPMENT - 3.2% Charter Power Systems, Inc. 263,200 7,567 Emerson Electric Co. 271,800 22,220 General Electric Co. 1,040,000 74,880 104,667 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - 2.4% Caterpillar, Inc. 295,800 $ 17,378 Deere & Co. 796,000 28,058 Greenfield Industries, Inc. 292,500 9,141 Imo Industries, Inc. (a) 55,500 382 Keystone International, Inc. 90,200 1,804 Stanley Works 221,200 11,392 Tenneco, Inc. 163,100 8,094 76,249 POLLUTION CONTROL - 0.3% Browning-Ferris Industries, Inc. 290,100 8,558 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 189,474 MEDIA & LEISURE - 4.6% BROADCASTING - 0.7% Gaylord Entertainment Co. Class A 178,300 4,948 Sinclair Broadcast Group, Inc. Class A (a) 30,800 531 Time Warner, Inc. 162,694 6,162 Viacom, Inc. (a): Class B (warrants) 194,500 559 Class B (non-vtg.) 216,193 10,242 22,442 ENTERTAINMENT - 0.3% Cedar Fair LP (depositary units) 5,300 196 Regal Cinemas, Inc. (a) 339,650 10,105 10,301 LEISURE DURABLES & TOYS - 0.2% Hasbro, Inc. 203,100 6,296 LODGING & GAMING - 1.8% Circus Circus Enterprises, Inc.(a) 450,800 12,566 Host Marriott Corp. (a) 790,459 10,474 ITT Corp. 205,600 10,897 La Quinta Motor Inns, Inc. 286,213 7,835 Marriott International, Inc. 92,900 3,553 Mirage Resorts, Inc. (a) 171,100 5,903 Red Lion Inns LP 169,200 3,828 Showboat, Inc. 93,800 2,474 57,530 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED PUBLISHING - 1.4% Knight-Ridder, Inc. 119,500 $ 7,469 Meredith Corp. 511,900 21,435 Nelson Thomas, Inc. 85,900 1,117 Times Mirror Co. Class A 494,200 16,741 46,762 RESTAURANTS - 0.2% Host Marriott Services Corp. 100,000 675 Darden Restaurants, Inc. 493,300 5,858 6,533 TOTAL MEDIA & LEISURE 149,864 NONDURABLES - 8.1% AGRICULTURE - 0.5% DEKALB Genetics Corp. Class B 99,000 4,467 Pioneer Hi-Bred International, Inc. 235,200 13,083 17,550 BEVERAGES - 1.2% Anheuser-Busch Companies, Inc. 225,000 15,047 PepsiCo, Inc. 406,500 22,713 37,760 FOODS - 1.0% ConAgra, Inc. 374,100 15,432 Nabisco Holdings Class A 127,200 4,150 RalCorp Holdings, Inc. (a) 225,300 5,464 Sara Lee Corp. 81,400 2,595 Tyson Foods, Inc. 252,600 6,599 34,240 HOUSEHOLD PRODUCTS - 1.7% Avon Products, Inc. 358,200 26,999 Colgate-Palmolive Co. 175,200 12,308 Estee Lauder Companies, Inc. (a) 8,000 279 First Brands Corp. 295,000 14,049 53,635 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) NONDURABLES - CONTINUED TOBACCO - 3.7% Philip Morris Companies, Inc. 1,225,200 $ 110,880 RJR Nabisco Holdings Corp. 235,200 7,262 118,142 TOTAL NONDURABLES 261,327 PRECIOUS METALS - 0.3% Firstmiss Gold, Inc. (a) 382,887 8,519 RETAIL & WHOLESALE - 4.9% APPAREL STORES - 0.2% Gymboree Corp. (a) 297,400 6,134 DRUG STORES - 0.8% Revco (D.S.), Inc. (a) 625,200 17,662 Rite Aid Corp. 231,500 7,929 Walgreen Co. 62,800 1,876 27,467 GENERAL MERCHANDISE STORES - 1.3% Consolidated Stores Corp. (a) 888,900 19,334 Lechters, Inc. (a) 409,500 2,636 Sears, Roebuck & Co. 516,600 20,147 42,117 RETAIL & WHOLESALE, MISCELLANEOUS - 2.6% Circuit City Stores, Inc. 332,900 9,196 Home Depot, Inc. (The) 482,600 23,104 Lowe's Companies, Inc. 742,000 24,858 Officemax, Inc. (a) 248,600 5,562 Office Depot, Inc. 35,400 699 Petsmart, Inc. (a) 145,500 4,511 Staples, Inc. (a) 227,500 5,545 Tandy Corp. 252,000 10,458 83,933 TOTAL RETAIL & WHOLESALE 159,651 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) SERVICES - 2.1% ADVERTISING - 0.7% Omnicom Group, Inc. 633,200 $ 23,587 PRINTING - 0.2% Deluxe Corp. 231,700 6,719 SERVICES - 1.2% ADT Ltd. (a) 597,500 8,963 Manpower, Inc. 206,600 5,811 Regis Corp. 69,400 1,666 Service Corp. International 407,600 17,933 Supercuts, Inc. (a) 278,700 2,230 36,603 TOTAL SERVICES 66,909 TECHNOLOGY - 5.7% COMMUNICATIONS EQUIPMENT - 0.3% Cisco Systems, Inc. (a) 88,100 6,575 Newbridge Networks Corp. (a) 65,800 2,722 9,297 COMPUTER SERVICES & SOFTWARE - 1.9% Automatic Data Processing, Inc. 521,800 19,372 Ceridian Corp. (a) 181,400 7,483 Cerner Corp. (a) 227,000 4,654 Computer Sciences Corp. (a) 53,400 3,751 DST Systems, Inc. (a) 15,000 428 First Data Corp. 49,800 3,330 HBO & Co. 13,800 1,057 Hogan Systems, Inc. (a) 105,100 1,432 Landmark Graphics Corp. (a) 120,800 2,809 Microsoft Corp. (a) 172,300 15,119 Policy Management Systems Corp. (a) 64,700 3,081 62,516 COMPUTERS & OFFICE EQUIPMENT - 3.0% Bell & Howell Holdings Co. (a) 227,500 6,370 Compaq Computer Corp. (a) 223,300 10,718 Diebold, Inc. 252,600 13,988 Hewlett-Packard Co. 49,600 4,154 International Business Machines Corp. 137,500 12,616 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - CONTINUED MICROS Systems, Inc. (a) 197,600 $ 9,732 Pitney Bowes, Inc. 460,200 21,629 Xerox Corp. 131,600 18,029 97,236 PHOTOGRAPHIC EQUIPMENT - 0.5% Eastman Kodak Co. 163,200 10,935 Polaroid Corp. 82,100 3,889 14,824 TOTAL TECHNOLOGY 183,873 TRANSPORTATION - 3.6% AIR TRANSPORTATION - 0.2% Delta Air Lines, Inc. 82,100 6,065 RAILROADS - 3.1% Burlington Northern Santa Fe Corp. 543,113 42,363 CSX Corp. 535,100 24,414 Conrail, Inc. 114,100 7,987 Illinois Central Corp., Series A 275,100 10,557 Southern Pacific Rail Corp. (a) 61,300 1,471 Union Pacific Corp. 196,700 12,982 99,774 TRUCKING & FREIGHT - 0.3% Hunt (J.B.) Transport Services, Inc. 327,700 5,489 Roadway Services, Inc. 85,100 4,159 TNT Freightways Corp. 71,900 1,447 11,095 TOTAL TRANSPORTATION 116,934 UTILITIES - 4.9% TELEPHONE SERVICES - 4.9% Ameritech Corp. 682,700 40,279 BellSouth Corp. 908,800 39,534 NYNEX Corp. 368,800 19,915 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - CONTINUED TELEPHONE SERVICES - CONTINUED Pacific Telesis Group 564,500 $ 18,981 SBC Communications, Inc. 671,900 38,634 157,343 TOTAL COMMON STOCKS (Cost $2,343,391) 2,799,544 CONVERTIBLE PREFERRED STOCKS - 1.0% BASIC INDUSTRIES - 0.2% PAPER & FOREST PRODUCTS - 0.2% James River Corp. cumulative, Series P 337,700 7,894 TECHNOLOGY - 0.8% COMPUTER SERVICES & SOFTWARE - 0.8% Ceridian Corp. 3 1/2% 270,600 25,030 TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $31,830) 32,924 CORPORATE BONDS - 1.3% MOODY'S PRINCIPAL RATINGS (B) AMOUNT (000S) CONVERTIBLE BONDS - 0.8% INDUSTRIAL MACHINERY & EQUIPMENT - 0.1% POLLUTION CONTROL - 0.1% Laidlaw, Inc. 6%, 1/31/99 Baa2 $ 3,000 3,585 MEDIA & LEISURE - 0.3% LODGING & GAMING - 0.3% HFS, Inc. 4 1/2%, 10/1/99 Baa3 1,220 2,827 Prime Hospitality 7%, 4/15/02 B2 5,570 5,765 8,592 CORPORATE BONDS - CONTINUED PRINCIPAL AMOUNT MOODY'S PRINCIPAL vALUE (NOTE1) RATINGS (B) AMOUNT (000S) 000S) CONVERTIBLE BONDS - CONTINUED RETAIL & WHOLESALE - 0.0% GENERAL MERCHANDISE STORES - 0.0% Lechters, Inc. 5%, 9/27/01 - $ 1,640 $ 1,000 SERVICES - 0.4% First Financial Management Corp. 5%, 12/15/99 A2 6,910 11,177 TOTAL CONVERTIBLE BONDS 24,354 NONCONVERTIBLE BONDS - 0.5% AEROSPACE & DEFENSE - 0.0% DEFENSE ELECTRONICS - 0.0% Tracor, Inc. 10 7/8%, 8/15/01 B2 1,500 1,560 HEALTH - 0.2% MEDICAL FACILITIES MANAGEMENT - 0.2% Tenet Healthcare Corp. 8 5/8%, 12/1/03 Ba2 5,440 5,685 MEDIA & LEISURE - 0.3% LODGING & GAMING - 0.1% Red Roof Inns, Inc. 9 5/8%, 12/15/03 B3 4,000 3,930 RESTAURANTS - 0.2% Foodmaker, Inc. 9 3/4%, 6/1/02 B3 4,900 4,533 TOTAL MEDIA & LEISURE 8,463 TOTAL NONCONVERTIBLE BONDS 15,708 TOTAL CORPORATE BONDS (Cost $37,996) 40,062 U.S. TREASURY OBLIGATIONS - 3.5% 11 3/4%, 2/15/10 Aaa 2,890 4,121 12 3/4%, 11/15/10 Aaa 90 137 Stripped Principal 0%, 2/15/19 Aaa 343,200 82,073 U.S. TREASURY OBLIGATIONS - CONTINUED MOODY'S PRINCIPAL VALUE (NOTE 1) RATINGS (B) AMOUNT (000S) (000S) 7 1/4%, 2/ 15/23 Aaa $ 3,355 $ 3,836 6 1/4%, 8/15/23 Aaa 2,420 2,490 7 1/2%, 11/15/24 Aaa 4,580 5,505 7 5/8%, 2/15/25 Aaa 8,070 9,868 6 7/8%, 8/15/25 Aaa 4,240 4,782 TOTAL U.S. TREASURY OBLIGATIONS (Cost $105,138) 112,812 REPURCHASE AGREEMENTS - 7.4% MATURITY AMOUNT (000S) Investments in repurchase agreements (U.S. Treasury obligations) in a joint trading account at 5.88% dated 12/29/95 due 1/2/96 $ 240,289 240,132 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $2,758,487) $ 3,225,474 LEGEND (1.) Non-income producing (2.) Standard & Poor's Corporation credit ratings are used in the absence of a rating by Moody's Investors Service, Inc. INCOME TAX INFORMATION At December 31, 1995, the aggregate cost of investment securities for income tax purposes was $2,760,619,000. Net unrealized appreciation aggregated $464,855,000, of which $495,964,000 related to appreciated investment securities and $31,109,000 related to depreciated investment securities. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) DECEMBER 31, 1995 (UNAUDITED) ASSETS Investment in securities, at value (including repurchase $ 3,225,474 agreements of $240,132) (cost $2,758,487) - See accompanying schedule Receivable for investments sold 20,932 Receivable for fund shares sold 14,266 Dividends receivable 6,651 Interest receivable 1,025 Other receivables 657 TOTAL ASSETS 3,269,005 LIABILITIES Payable for investments purchased $ 39,777 Payable for fund shares redeemed 5,340 Accrued management fee 1,049 Other payables and accrued expenses 769 Collateral on securities loaned, at value 801 TOTAL LIABILITIES 47,736 NET ASSETS $ 3,221,269 Net Assets consist of: Paid in capital $ 2,694,383 Distributions in excess of net investment income (572) Accumulated undistributed net realized gain (loss) on 60,470 investments and foreign currency transactions Net unrealized appreciation (depreciation) on 466,988 investments and assets and liabilities in foreign currencies NET ASSETS, for 142,497 shares outstanding $ 3,221,269 NET ASSET VALUE, offering price and redemption price per $22.61 share ($3,221,269 (divided by) 142,497 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED) INVESTMENT INCOME $ 24,937 Dividends Interest (including income on securities loaned of $128) 8,764 TOTAL INCOME 33,701 EXPENSES Management fee $ 5,720 Transfer agent fees 2,672 Accounting and security lending fees 391 Non-interested trustees' compensation 5 Custodian fees and expenses 25 Registration fees 175 Audit 14 Legal 12 Miscellaneous 2 Total expenses before reductions 9,016 Expense reductions (269) 8,747 NET INVESTMENT INCOME 24,954 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities 177,085 Foreign currency transactions 4 177,089 Change in net unrealized appreciation (depreciation) on: Investment securities 201,499 Assets and liabilities in foreign currencies (3) 201,496 NET GAIN (LOSS) 378,585 NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 403,539 FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS SIX MONTHS YEAR ENDED ENDED DECEMBER JUNE 30, 31, 1995 1995 (UNAUDITED) INCREASE (DECREASE) IN NET ASSETS Operations $ 24,954 $ 42,354 Net investment income Net realized gain (loss) 177,089 70,757 Change in net unrealized appreciation (depreciation) 201,496 273,028 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 403,539 386,139 FROM OPERATIONS Distributions to shareholders (29,150) (37,407) From net investment income From net realized gain (180,707) (80,847) TOTAL DISTRIBUTIONS (209,857) (118,254) Share transactions 805,462 997,742 Net proceeds from sales of shares Reinvestment of distributions 189,547 101,857 Cost of shares redeemed (371,894) (555,067) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 623,115 544,532 FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 816,797 812,417 NET ASSETS Beginning of period 2,404,472 1,592,055 End of period (including under (over) distribution of net $ 3,221,269 $ 2,404,472 investment income of $(572) and $3,624, respectively) OTHER INFORMATION Shares Sold 36,343 52,253 Issued in reinvestment of distributions 8,602 5,464 Redeemed (16,728) (28,996) Net increase (decrease) 28,217 28,721
FINANCIAL HIGHLIGHTS SIX MONTHS ENDED YEARS ENDED SIX MONTHS YEARS ENDED DECEMBER 31, DECEMBER 31, 1995 JUNE 30, ENDED JUNE 30, SELECTED PER-SHARE DATA (UNAUDITED) 1995 1994 F 1993 1992 D 1991 1990
Net asset value, beginning of period $ 21.04 $ 18.61 $ 20.42 $ 18.94 $ 18.46 $ 16.29 $ 17.93 Income from Investment Operations .18 .38 .27 .29 E .45 .53 .70 E Net investment income Net realized and unrealized gain (loss) 3.01 3.35 .79 1.48 1.09 3.29 (1.60) Total from investment operations 3.19 3.73 1.06 1.77 1.54 3.82 (.90) Less Distributions (.22) (.36) (.31) (.22) (.48) (.50) (.74) From net investment income From net realized gain (1.40) (.94) (2.56) (.07) (.58) (1.15) - Total distributions (1.62) (1.30) (2.87) (.29) (1.06) (1.65) (.74) Net asset value, end of period $ 22.61 $ 21.04 $ 18.61 $ 20.42 $ 18.94 $ 18.46 $ 16.29 TOTAL RETURN B, C 15.53% 21.09% 5.41% 9.39% 8.46 24.15 (5.10)% % % RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (in millions) $ 3,221 $ 2,404 $ 1,592 $ 1,439 $ 1,354 $ 1,320 $ 1,064 Ratio of expenses to average net assets .63% A .66% .68% .66% A .67 .68 .66% % % Ratio of expenses to average net assets after .61% A, .64% .65% .66% A .67 .68 .66% expense reductions G G G % % Ratio of net investment income to average net assets 1.75% A 2.18% 1.85% 2.94% A, 2.37% 2.84% 4.04% E E Portfolio turnover rate 158% A 157% 207% 261% A 151 267 259% % %
A ANNUALIZED B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). D AS OF JANUARY 1, 1992, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING. E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO $.06 PER SHARE. F EFFECTIVE JULY 1, 1993, THE FUND ADOPTED STATEMENT OF POSITION 93-2, "DETERMINATION, DISCLOSURE, AND FINANCIAL STATEMENT PRESENTATION OF INCOME, CAPITAL GAIN, AND RETURN OF CAPITAL DISTRIBUTIONS BY INVESTMENT COMPANIES." AS A RESULT, NET INVESTMENT INCOME PER SHARE MAY REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES. G FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). NOTES TO FINANCIAL STATEMENTS For the period ended December 31, 1995 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Fund (the fund) is a fund of Fidelity Hastings Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange) are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days of their purchase date are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of the transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of forward currency contracts, disposition of foreign currencies, currency gains and losses realized between the trade and settlement dates on securities transactions, and the difference between the amount of net investment income accrued and the U.S. dollar amount actually received. The effects of changes in foreign currency exchange rates on investments in securities are included with the net realized and unrealized gain or loss on investment securities. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income, which includes accretion of original issue discount, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED EXPENSES. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned between the funds in the trust. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences, which may result in distribution reclassifications, are primarily due to differing treatments for foreign currency transactions, market discount, partnerships, non-taxable dividends and losses deferred due to wash sales. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital and may affect the per-share allocation between net investment income and realized and unrealized gain (loss). Distributions in excess of net investment income and accumulated undistributed net realized gain (loss) on investments and foreign currency transactions may include temporary book and tax basis differences which will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the fund's investments against currency fluctuations. Also, a contract to buy or sell can offset a previous contract. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and any realized gain (loss) is recognized on the date of offset; otherwise, gain (loss) is recognized on settlement date. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements that 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT - CONTINUED mature in 60 days or less from the date of purchase, and are collateralized by U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying U.S. Treasury or Federal Agency securities, the market value of which is required to be at least equal to the repurchase price. For term repurchase agreement transactions, the underlying securities are marked-to-market daily and maintained at a value at least equal to the repurchase price. FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $2,411,782,000 and $2,117,257,000, respectively, of which U.S. government and government agency obligations aggregated $191,238,000 and $117,163,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .2700% to .5200% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is .09%. For the period, the management fee was equivalent to an annualized rate of .40% of average net assets. The Board of Trustees has approved a new group fee rate schedule with rates ranging from .2500% to .5200%. Effective January 1, 1996, FMR voluntarily agreed to implement this new group fee rate schedule as it results in the same or a lower management fee. DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or the fund's distributor, Fidelity Distributors Corporation (FDC), an affiliate of FMR, may use their resources to pay administrative and promotional expenses related to the sale of the fund's shares. Subject to the approval of the Board of Trustees, the Plan also authorizes payments to third parties that assist in the sale of the fund's shares or render shareholder support services. FMR or FDC has informed the fund that payments made to third parties under the Plan amounted to $9,000 for the period. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED TRANSFER AGENT FEES. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, transfer agent fees were equivalent to an annualized rate of .19% of average net assets. ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $998,000 for the period. 5. SECURITY LENDING. The fund loaned securities to certain brokers who paid the fund negotiated lenders' fees. These fees are included in interest income. The fund receives U.S. Treasury obligations and/or cash as collateral against the loaned securities, in an amount at least equal to 102% of the market value of the loaned securities at the inception of each loan. This collateral must be maintained at not less than 100% of the market value of the loaned securities during the period of the loan. At period end, the value of the securities loaned and the value of collateral amounted to $744,000 and $801,000, respectively. 6. EXPENSE REDUCTIONS. FMR directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $269,000 under this arrangement. INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc., London, England Fidelity Management & Research (Far East) Inc., Tokyo, Japan OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President William J. Hayes, Vice President Beth Terrana, Vice President Arthur S. Loring, Secretary Kenneth A. Rathgeber, Treasurer Robert H. Morrison, Manager, Security Transactions John H. Costello, Assistant Treasurer Leonard M. Rush, Assistant Treasurer BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox* Phyllis Burke Davis* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Marvin L. Mann* Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN The Chase Manhattan Bank, N.A. New York, NY FIDELITY'S GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Export Fund Fidelity Fifty Growth Company Fund Large Cap Stock Fund Low-Priced Stock Fund Magellan(registered trademark) Fund Mid-Cap Stock Fund New Millennium(trademark) Fund OTC Portfolio Retirement Growth Fund Small Cap Stock Fund Stock Selector Trend Fund Value Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) (registered trademark) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----