-----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, Ugz5lGWzgd20RYkpkkanpp8HMWBbdSqtPu0rNDxS6DZ5u5QfgbkzZ9WlOYeYQHuK Xqwa4c86IYnwFF/cbU8SCA== 0000035348-96-000007.txt : 19960812 0000035348-96-000007.hdr.sgml : 19960812 ACCESSION NUMBER: 0000035348-96-000007 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960809 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY 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: 96607510 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 FUND ANNUAL REPORT JUNE 30, 1996 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 10 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 22 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 26 Notes to the financial statements. REPORT OF INDEPENDENT 30 The auditors' opinion. ACCOUNTANTS DISTRIBUTIONS 31 To reduce expenses and demonstrate respect for our environment, we have initiated a project through which we will begin eliminating duplicate copies of most financial reports and prospectuses to most households, even if they have more than one account in the fund. If additional copies of financial reports, prospectuses or historical account information are needed, please call 1-800-544-6666. THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Although stocks have managed to post solid returns through the first six months of 1996, signs of strength in the economy have led to inflation fears, causing some uncertainty in bond markets so far this year. In 1995, both stock and bond markets posted strong results, while the year before, stocks posted below-average returns and bonds had one of the worst years in history. These market ups and downs are a normal part of investing, and there are some basic principles that are helpful for investors to remember in different types of markets. If you can leave your money invested over the long term, you can avoid the results of the volatility that generally accompanies the stock market in the short term. You also can help to manage some of the risks of investing through diversification. A stock fund is already diversified because it invests in many issues. You can diversify even further by placing some of your money in several different types of stock funds or in other investment categories, such as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, there is no assurance that a money market fund will achieve its goal, and it is important to remember that money market funds are not insured or guaranteed by any agency of the U.S. government. Finally, no matter what your investment horizon or portfolio diversity, it makes good sense to follow a regular investment plan - investing a certain amount of money at the same time each month or quarter - and to review your portfolio periodically. A periodic investment plan will not, of course, assure a profit or protect against a loss. If you have any questions, please call us at 1-800-544-8888. We stand ready to provide the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. 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). CUMULATIVE TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Fund 27.00% 107.13% 238.38% S&P 500(registered trademark) 26.00% 107.63% 264.95% Growth & Income Funds Average 22.13% 95.61% 205.50% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, 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 500 Index - a widely recognized, unmanaged index of common stock prices. The index figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the growth & income funds average, which reflects the performance of 484 mutual funds with similar objectives tracked by Lipper Analytical Services, Inc. over the past year. Both benchmarks include reinvested dividends and capital gains, if any. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Fidelity Fund 27.00% 15.68% 12.96% S&P 500 26.00% 15.73% 13.79% Growth & Income Funds Average 22.13% 14.25% 11.70% AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return and show you what would have happened if the fund had performed at a constant rate each year. $10,000 OVER 10 YEARS IMAHDR PRASUN SHR__CHT 19960630 19960710 155521 S00000000000001 Fidelity SP Standard & Poor 500 00003 SP001 1986/06/30 10000.00 10000.00 1986/07/31 9437.85 9441.00 1986/08/31 9979.37 10141.52 1986/09/30 9305.43 9302.82 1986/10/31 9726.28 9839.59 1986/11/30 9793.82 10078.69 1986/12/31 9526.36 9821.69 1987/01/31 10630.35 11144.67 1987/02/28 11263.04 11584.88 1987/03/31 11571.65 11919.68 1987/04/30 11500.62 11813.60 1987/05/31 11539.36 11916.38 1987/06/30 11895.72 12518.16 1987/07/31 12610.77 13152.83 1987/08/31 12818.78 13643.43 1987/09/30 12722.41 13344.63 1987/10/31 9582.69 10470.20 1987/11/30 9098.65 9607.46 1987/12/31 9838.70 10338.58 1988/01/31 10085.03 10773.84 1988/02/29 10737.08 11275.90 1988/03/31 10539.99 10927.47 1988/04/30 10700.68 11048.77 1988/05/31 10751.81 11144.89 1988/06/30 11361.61 11656.44 1988/07/31 11251.16 11612.15 1988/08/31 10941.90 11217.34 1988/09/30 11319.44 11695.19 1988/10/31 11556.96 12020.32 1988/11/30 11408.51 11848.43 1988/12/31 11594.75 12055.78 1989/01/31 12233.90 12938.26 1989/02/28 11993.28 12616.10 1989/03/31 12287.20 12910.05 1989/04/30 12938.68 13580.08 1989/05/31 13575.01 14130.08 1989/06/30 13528.40 14049.54 1989/07/31 14580.77 15318.21 1989/08/31 14939.19 15618.45 1989/09/30 14917.41 15554.41 1989/10/31 14418.63 15193.55 1989/11/30 14625.81 15503.50 1989/12/31 14934.19 15875.58 1990/01/31 14134.59 14810.33 1990/02/28 14426.11 15001.38 1990/03/31 14709.99 15398.92 1990/04/30 14332.59 15013.95 1990/05/31 15397.68 16477.81 1990/06/30 15304.72 16365.76 1990/07/31 15161.21 16313.39 1990/08/31 14072.23 14838.66 1990/09/30 13442.38 14116.01 1990/10/31 13297.84 14055.32 1990/11/30 13884.51 14963.29 1990/12/31 14173.00 15380.76 1991/01/31 15086.55 16051.37 1991/02/28 16078.40 17199.04 1991/03/31 16445.39 17615.25 1991/04/30 16462.91 17657.53 1991/05/31 17294.81 18420.34 1991/06/30 16336.80 17576.69 1991/07/31 17068.17 18395.76 1991/08/31 17350.14 18831.74 1991/09/30 17200.40 18517.25 1991/10/31 17368.86 18765.38 1991/11/30 16322.65 18009.13 1991/12/31 17595.22 20069.38 1992/01/31 17871.63 19696.09 1992/02/29 18376.80 19952.14 1992/03/31 17820.63 19563.07 1992/04/30 17945.31 20138.23 1992/05/31 18108.37 20236.90 1992/06/30 17859.70 19935.37 1992/07/31 18245.23 20750.73 1992/08/31 17869.34 20325.34 1992/09/30 18051.82 20565.18 1992/10/31 18274.56 20637.16 1992/11/30 18681.31 21340.88 1992/12/31 19083.85 21603.38 1993/01/31 19587.65 21784.85 1993/02/28 19757.91 22081.12 1993/03/31 20344.76 22547.03 1993/04/30 20344.76 22001.39 1993/05/31 20842.96 22591.03 1993/06/30 20874.91 22656.54 1993/07/31 20895.35 22565.92 1993/08/31 21867.87 23421.17 1993/09/30 22067.80 23240.82 1993/10/31 22432.65 23721.91 1993/11/30 21835.63 23496.55 1993/12/31 22587.96 23780.86 1994/01/31 23549.15 24589.41 1994/02/28 23080.28 23923.03 1994/03/31 22030.63 22879.99 1994/04/30 22548.72 23172.85 1994/05/31 22525.17 23552.89 1994/06/30 22004.57 22975.84 1994/07/31 22725.83 23729.45 1994/08/31 23714.37 24702.36 1994/09/30 23216.16 24097.15 1994/10/31 23714.90 24639.34 1994/11/30 22879.51 23741.97 1994/12/31 23170.90 24094.07 1995/01/31 23133.29 24718.82 1995/02/28 23923.21 25682.12 1995/03/31 24790.43 26440.00 1995/04/30 25395.38 27218.65 1995/05/31 25823.89 28306.58 1995/06/30 26644.98 28964.15 1995/07/31 27860.72 29924.60 1995/08/31 28315.61 29999.71 1995/09/30 29147.23 31265.70 1995/10/31 28807.55 31154.08 1995/11/30 30022.56 32521.74 1995/12/31 30782.09 33148.11 1996/01/31 31530.88 34276.47 1996/02/29 31925.69 34594.21 1996/03/31 32525.65 34927.36 1996/04/30 33045.18 35442.19 1996/05/31 33687.77 36356.24 1996/06/28 33837.99 36494.76 IMATRL PRASUN SHR__CHT 19960630 19960710 155526 R00000000000123 $10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested in Fidelity Fund on June 30, 1986. As the chart shows, by June 30, 1996, the value of the investment would have grown to $33,838 - a 238.38% increase on the initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends and capital gains, if any, reinvested, the same investment would have grown to $36,495 - a 264.95% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW MARKET RECAP In spite of growing fears of lower corporate earnings and higher interest rates at the end of the period, the U.S. stock market posted strong gains over the 12 months ended June 30, 1996. Although several corporate earnings disappointments made for a volatile stock market in May and June, the Standard & Poor's 500 Index finished the 12 months with a return of 26% - well above its long-term historical annual average of about 12%. The stock market spent much of the past year breaking price and trading volume records as strong corporate earnings reports, large cash inflows into mutual funds and widespread optimism propelled equity share prices higher. In addition, the period was peppered with several high-profile merger announcements, especially in the media, telecommunications and technology sectors. Smaller-company stocks posted strong gains during the first few months of 1996, and high-tech firms involved in the networking and software fields benefited from strong earnings. In early March, though, better-than-expected employment figures spooked the bond market, pushing long-term interest rates over 7%. Because smaller companies tend to be more adversely affected by the higher borrowing costs brought on by higher rates, their stock prices trended downward in the spring. While larger, multinational firms recorded positive gains, their returns were hurt somewhat by the strengthening dollar. An interview with Beth Terrana, Portfolio Manager of Fidelity Fund Q. HOW HAS THE FUND DONE OVER THE PAST YEAR, BETH? A. It's had a very good year. For the 12 months ended June 30, 1996, the fund posted a total return of 27.00%. That beat the growth & income funds average tracked by Lipper Analytical Services, which returned 22.13% over the same period. Q. WHAT WERE THE MAIN DRIVERS OF THE FUND'S STRONG PERFORMANCE? A. It came down to owning the right stocks, with most of the fund's top 20 positions providing good performance. While some of the fund's sector weightings changed over the past year, I really didn't pursue any industry-related themes over the past six months and focused almost all my attention on individual stock picking. That strategy helped, because over the past 12 months the market has rotated quickly from sector to sector, momentarily favoring areas that were expected to show either short-term earnings acceleration, or those that proved to be defensive in a rising interest-rate environment. At the same time, many stocks of companies that posted earnings disappointments were punished severely. It's been virtually impossible to time these sector rotations, so I focused instead on choosing stocks of companies that I felt would prosper regardless of the economic environment. That helped, as did the fact that I managed to avoid investing significantly in stocks that saw sharp drops in share price. Q. YOU'VE CONCENTRATED A GREATER PERCENTAGE OF THE FUND ON ITS LARGER HOLDINGS. WHY IS THAT? A. The market has been extraordinarily sensitive to economic news and has gone through the sector rotations I just discussed in response to the latest economic statistics. To help insulate the fund from this volatility, I increased the fund's larger positions because I had confidence that they would be able to perform well under most conditions, allowing, of course, for periods when they may underperform because the market temporarily disfavors them. My main goal has been to find what I would call "revaluation" stories, or companies that are changing in such a way that their earnings growth over the long term can be viewed as better than it has been in the past. Once that happens, investors usually are willing to pay a higher price-to-earnings multiple for the company's shares. The price-to-earnings multiple - or P/E - is the price of a stock divided by earnings per share, which is used to give investors an idea of how much they are paying for a company's earnings power. Q. LET'S TAKE A LOOK AT SOME OF THE FUND'S CURRENT TOP HOLDINGS AND WHY THEY WERE ATTRACTIVE TO YOU. A. Sure. General Electric, the fund's largest holding, was a prime example of the revaluation scenario. I felt that the company had better growth prospects than it had in the past, and that the market would revaluate the stock upward. In fact, that's what happened, as in late June the stock's price-to-earnings multiple was close to its historical high relative to the market. There was also a price-to-earnings multiple revaluation with Monsanto, which, while not part of the top 10, was still one of the fund's larger holdings. Here, my view was that Monsanto was no longer simply an economically sensitive chemical company, but one whose earnings growth rate would be increasingly driven by its agricultural biotechnology business. Again, it appears that the market came to share this view, as the stock price went up during the period. Finally, the market also revalued Allied-Signal, because it sold a large portion of its cyclical auto business. Q. SIX MONTHS AGO THE FUND HAD LARGE STAKES IN REGIONAL BELL OPERATING COMPANIES, OR RBOCS. YOU'VE SINCE SOLD THEM OFF. WHY? A. The fund benefited from the fine performance of these stocks earlier in the year, and sold them off before their recent declines. I sold the fund's RBOC positions because I found valuations to be high and because the specter of fierce competition appeared to be on the horizon. In addition, these stocks have been poor performers of late because they tend to move up and down with bonds, and the bond market has struggled over the past six months. Q. WHAT DO YOU SEE HAPPENING OVER THE NEXT SIX MONTHS? A. I think that the rapid sector rotation we've seen over the past six months will continue. I also expect that the focus on economic news and its impact on the stock market will be sustained. We may also continue to see very sharp drops in the share prices of companies that post any type of earnings disappointments. In this type of atmosphere, I will continue to look for companies that I believe can post good earnings growth and have the potential for upward multiple revaluation. 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 June 30, 1996, more than $3.9 billion MANAGER: Beth Terrana, since 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: "I'd liken the factors that have supported the stock market's strong rally over the past 18 months to the three legs on a stool. One leg was declining interest rates. A second was powerful earnings growth that was better than expected. The third was substantial cash flows into the markets. At the end of the period, though, the stool looked pretty rickety to me. "First of all, the economy has been stronger than expected, and the possibility of inflation has led to increases in interest rates. In addition, the potential for positive earnings surprises has diminished because Corporate America has already effectively downsized and cut costs over the past five to 10 years. Most companies are lean and mean, so any slowdown in revenue growth can impact earnings dramatically. In addition, many companies are now focusing on growing instead of shrinking, which in itself puts pressure on costs and potentially on short-term earnings. Finally, a slowdown in cash inflows has started to threaten the one remaining leg, making the stool very wobbly. "In this type of environment, careful stock picking is crucial. As a result, I'm making sure that I'm very comfortable with the earnings prospects of the companies I choose for the fund, looking for those that can prosper regardless of the economic backdrop." 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. INVESTMENT CHANGES TOP TEN STOCKS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO General Electric Co. 3.4 2.3 Philip Morris Companies, Inc. 3.1 3.4 Royal Dutch Petroleum Co. ADR 1.9 0.0 Allied-Signal, Inc. 1.9 0.8 British Petroleum PLC ADR 1.7 1.2 Praxair, Inc. 1.6 0.8 Consolidated Stores Corp. 1.6 0.6 Tyco International Ltd. 1.5 1.5 Federal National Mortgage 1.5 1.6 Association BankAmerica Corp. 1.5 0.0 TOP FIVE MARKET SECTORS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE MARKET SECTORS 6 MONTHS AGO Finance 11.3 14.2 Health 9.8 11.8 Media & Leisure 9.3 5.2 Retail & Wholesale 9.3 4.9 Basic Industries 8.5 7.0 ASSET ALLOCATION AS OF JUNE 30, 1996 * AS OF DECEMBER 31, 1995 ** Row: 1, Col: 1, Value: 4.8 Row: 1, Col: 2, Value: 1.7 Row: 1, Col: 3, Value: 48.5 Row: 1, Col: 4, Value: 45.0 Row: 1, Col: 1, Value: 7.4 Row: 1, Col: 2, Value: 4.8 Row: 1, Col: 3, Value: 43.0 Row: 1, Col: 4, Value: 44.8 Stocks 93.5% Bonds 1.7% Short-term investments 4.8% FOREIGN INVESTMENTS 7.6% Stocks 87.8% Bonds 4.8% Short-term investments 7.4% FOREIGN INVESTMENTS 3.8% * ** INVESTMENTS JUNE 30, 1996 Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 92.5% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 2.6% AEROSPACE & DEFENSE - 2.0% Alliant Techsystems, Inc. (a) 388,500 $ 18,308 Boeing Co. 342,400 29,832 Lockheed Martin Corp. 226,800 19,051 McDonnell Douglas Corp. 244,800 11,873 79,064 SHIP BUILDING & REPAIR - 0.6% General Dynamics Corp. 400,200 24,812 TOTAL AEROSPACE & DEFENSE 103,876 BASIC INDUSTRIES - 8.5% CHEMICALS & PLASTICS - 7.4% Air Products & Chemicals, Inc. 315,600 18,226 du Pont (E.I.) de Nemours & Co. 414,100 32,766 Grace (W.R.) & Co. 161,600 11,454 Hercules, Inc. 483,100 26,691 IMC Fertilizer Group, Inc. 578,000 21,747 Monsanto Co. 1,762,000 57,265 Olin Corp. 197,000 17,582 Praxair, Inc. 1,511,760 63,872 Raychem Corp. 413,400 29,713 Sealed Air Corp. (a) 382,700 12,868 292,184 PACKAGING & CONTAINERS - 0.7% Corning, Inc. 210,800 8,089 Tupperware Corp. (a) 477,100 20,158 28,247 PAPER & FOREST PRODUCTS - 0.4% Boise Cascade Corp. 70,400 2,578 Champion International Corp. 292,600 12,216 14,794 TOTAL BASIC INDUSTRIES 335,225 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONGLOMERATES - 4.5% Allied-Signal, Inc. 1,288,400 $ 73,600 American Standard Companies, Inc. (a) 455,600 15,035 Tyco International Ltd. 1,493,816 60,873 United Technologies Corp. 237,400 27,301 176,809 CONSTRUCTION & REAL ESTATE - 2.1% BUILDING MATERIALS - 0.4% Masco Corp. 461,600 13,963 REAL ESTATE - 0.3% Rouse Co. (The) 440,700 11,403 REAL ESTATE INVESTMENT TRUSTS - 1.4% Beacon Properties Corp. 384,400 9,850 Duke Realty Investors, Inc. 268,500 8,122 Equity Residential Properties Trust (SBI) 405,100 13,318 Home Properties of NY, Inc. 74,900 1,517 Public Storage, Inc. 385,000 7,941 RFS Hotel Investors, Inc. 504,100 7,814 Storage USA, Inc. 273,500 8,820 57,382 TOTAL CONSTRUCTION & REAL ESTATE 82,748 DURABLES - 3.4% AUTOS, TIRES, & ACCESSORIES - 1.1% Cummins Engine Co., Inc. 338,700 13,675 Magna International, Inc. Class A 488,700 22,579 Scania AB: Class A 64,800 1,794 Class B 229,900 6,381 44,429 CONSUMER ELECTRONICS - 1.4% Black & Decker Corp. 821,300 31,723 Harman International Industries, Inc. 299,200 14,736 Newell Co. 304,900 9,337 55,796 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) DURABLES - CONTINUED TEXTILES & APPAREL - 0.9% NIKE, Inc. Class B 99,800 $ 10,254 Nine West Group, Inc. 105,600 5,399 Warnaco Group, Inc. Class A 765,400 19,709 35,362 TOTAL DURABLES 135,587 ENERGY - 7.1% ENERGY SERVICES - 0.5% Halliburton Co. 84,000 4,662 Transocean Drilling AS (a) 222,900 5,773 Weatherford Enterra, Inc. (a) 298,200 8,946 19,381 OIL & GAS - 6.6% Amerada Hess Corp. 414,197 22,211 British Petroleum PLC ADR 638,650 68,256 Burlington Resources, Inc. 151,800 6,528 Exxon Corp. 361,200 31,379 Mobil Corp. 230,300 25,822 Occidental Petroleum Corp. 722,800 17,889 Royal Dutch Petroleum Co. ADR 483,400 74,323 Texaco, Inc. 187,900 15,760 262,168 TOTAL ENERGY 281,549 FINANCE - 11.2% BANKS - 5.4% Bank of Boston Corp. 507,000 25,096 Bank of New York Co., Inc. 361,800 18,542 BankAmerica Corp. 778,600 58,979 Canadian Imperial Bank of Commerce 539,500 17,429 Chase Manhattan Corp. 385,500 27,226 Citicorp 466,200 38,520 First Bank System, Inc. 22,200 1,288 KeyCorp. 459,000 17,786 U.S. Bancorp. 248,100 8,963 213,829 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED CREDIT & OTHER FINANCE - 1.5% American Express Co. 582,364 $ 25,988 Associates First Capital Corp. (a) 40,000 1,505 First USA, Inc. 203,000 11,165 Household International, Inc. 291,511 22,155 60,813 FEDERAL SPONSORED CREDIT - 2.2% Federal Home Loan Mortgage Corporation 312,200 26,693 Federal National Mortgage Association 1,812,400 60,715 87,408 INSURANCE - 2.1% Aetna Life & Casualty Co. 319,100 22,816 Allstate Corp. 722,300 32,955 First Colony Corp. 153,000 4,743 Travelers Group, Inc. (The) 503,850 22,988 83,502 TOTAL FINANCE 445,552 HEALTH - 9.7% DRUGS & PHARMACEUTICALS - 5.1% American Home Products Corp. 604,300 36,333 Copley Pharmaceutical, Inc. (a) 80,300 1,064 Glaxo PLC sponsored ADR 742,500 19,862 Lilly (Eli) & Co. 141,200 9,178 Merck & Co., Inc. 167,500 10,825 Neopath, Inc. (a) 175,000 4,419 Pharmacia & Upjohn, Inc. 627,400 27,841 Pfizer, Inc. 43,000 3,069 Rhone Poulenc Rorer, Inc. 294,200 19,748 SmithKline Beecham PLC ADR 875,100 47,584 Warner-Lambert Co. 441,600 24,288 204,211 MEDICAL EQUIPMENT & SUPPLIES - 3.6% Bard (C.R.), Inc. 188,900 6,423 Boston Scientific Corp. (a) 258,700 11,641 Datascope Corp. (a) 49,700 882 Hillenbrand Industries, Inc. 138,500 5,159 Johnson & Johnson 757,400 37,491 Medtronic, Inc. 96,800 5,421 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - CONTINUED MEDICAL EQUIPMENT & SUPPLIES - CONTINUED Millipore Corp. 428,100 $ 17,927 Nellcor, Inc. (a) 516,900 12,809 Pall Corp. 556,200 13,418 St. Jude Medical, Inc. (a) 922,300 30,897 142,068 MEDICAL FACILITIES MANAGEMENT - 1.0% Columbia/HCA Healthcare Corp. 624,375 33,326 United HealthCare Corp. 92,800 4,686 38,012 TOTAL HEALTH 384,291 HOLDING COMPANIES - 0.2% U.S. Industries, Inc. (a) 322,600 7,783 INDUSTRIAL MACHINERY & EQUIPMENT - 6.6% ELECTRICAL EQUIPMENT - 4.4% Emerson Electric Co. 260,400 23,533 General Electric Co. 1,578,600 136,549 Sensormatic Electronics Corp. 249,700 4,089 Westinghouse Electric Corp. 460,900 8,642 172,813 INDUSTRIAL MACHINERY & EQUIPMENT - 2.2% Deere & Co. 333,000 13,320 Dover Corp. 382,600 17,648 Duriron Co., Inc. 159,600 3,830 Greenfield Industries, Inc. 428,700 14,147 Illinois Tool Works, Inc. 262,700 17,765 Stanley Works 551,600 16,410 Tenneco, Inc. 115,200 5,890 89,010 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 261,823 MEDIA & LEISURE - 8.2% BROADCASTING - 0.9% Home Shopping Network, Inc. (a) 437,800 5,254 Infinity Broadcasting Corp. Class A 503,400 15,102 Viacom, Inc. Class B (non-vtg.) (a) 352,400 13,699 34,055 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED ENTERTAINMENT - 1.0% Disney (Walt) Co. 259,500 $ 16,316 MGM Grand, Inc. 460,900 18,378 Regal Cinemas, Inc. (a) 88,850 4,065 38,759 LEISURE DURABLES & TOYS - 0.6% Brunswick Corp. 85,100 1,702 Callaway Golf Co. 99,600 3,312 Harley Davidson, Inc. 138,200 5,683 Hasbro, Inc. 397,300 14,204 24,901 LODGING & GAMING - 3.5% Circus Circus Enterprises, Inc. (a) 877,200 35,965 Host Marriott Corp. (a) 1,313,359 17,238 ITT Corp. 528,200 34,993 La Quinta Motor Inns, Inc. 466,213 15,618 Millennium & Copthorne Hotels PLC sponsored ADR (a)(b) 124,000 2,511 Mirage Resorts, Inc. (a) 517,000 27,789 Red Lion Inns LP 169,200 3,976 Wyndham Hotel Corp. (a) 2,500 52 138,142 PUBLISHING - 2.0% Dun & Bradstreet Corp. 27,600 1,725 Harcourt General, Inc. 246,100 12,305 Knight-Ridder, Inc. 83,800 6,076 Meredith Corp. 463,000 19,330 Times Mirror Co. Class A 618,800 26,918 World Color Press, Inc. (a) 527,700 13,390 79,744 RESTAURANTS - 0.2% Darden Restaurants, Inc. 393,300 4,228 Host Marriott Services Corp. (a) 654,091 4,742 8,970 TOTAL MEDIA & LEISURE 324,571 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) NONDURABLES - 7.8% AGRICULTURE - 0.4% Pioneer Hi-Bred International, Inc. 349,900 $ 18,501 BEVERAGES - 1.4% Anheuser-Busch Companies, Inc. 400,300 30,023 PepsiCo, Inc. 740,200 26,184 56,207 FOODS - 0.3% Kellogg Co. 10,000 733 Tyson Foods, Inc. 344,600 9,433 10,166 HOUSEHOLD PRODUCTS - 2.6% Avon Products, Inc. 465,400 21,001 First Brands Corp. 800,600 21,616 Gillette Co. 163,400 10,192 Premark International, Inc. 403,900 7,472 Procter & Gamble Co. 484,400 43,899 104,180 TOBACCO - 3.1% Philip Morris Companies, Inc. 1,170,500 121,732 TOTAL NONDURABLES 310,786 PRECIOUS METALS - 0.3% Getchell Gold Corp. 382,887 12,635 RETAIL & WHOLESALE - 9.2% APPAREL STORES - 1.3% Gymboree Corp. (a) 303,900 9,269 Limited, Inc. (The) 587,300 12,627 Melville Corp. 523,000 21,182 Payless Shoesource, Inc. (a) 241,900 7,680 Saks Holdings, Inc. (a) 4,600 157 50,915 DRUG STORES - 0.3% General Nutrition Companies, Inc. (a) 752,700 13,172 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED GENERAL MERCHANDISE STORES - 4.7% Consolidated Stores Corp. (a) 1,718,400 $ 63,151 Dayton Hudson Corp. 210,400 21,698 K mart Corp. 142,300 1,761 Penney (J.C.) Co., Inc. 130,400 6,846 Price/Costco, Inc. (a) 682,400 14,757 Sears, Roebuck & Co. 497,900 24,210 Wal-Mart Stores, Inc. 1,133,500 28,762 Woolworth Corp. (a) 1,119,200 25,182 186,367 RETAIL & WHOLESALE, MISCELLANEOUS - 2.9% Barnes & Noble, Inc. (a) 18,200 653 Garden Botanika, Inc. (a) 1,200 26 Home Depot, Inc., (The) 442,800 23,911 Lowe's Companies, Inc. 632,600 22,853 Tandy Corp. 786,600 37,265 Toys "R" Us, Inc. 1,075,600 30,655 115,363 TOTAL RETAIL & WHOLESALE 365,817 SERVICES - 3.2% ADVERTISING - 0.8% Omnicom Group, Inc. 667,500 31,039 PRINTING - 0.5% Deluxe Corp. 587,500 20,856 SERVICES - 1.9% ADT Ltd. (a) 689,400 13,012 Block (H&R), Inc. 533,900 17,418 Manpower, Inc. 638,400 25,057 Personnel Group of America, Inc. (a) 15,900 392 Regis Corp. 111,600 3,488 Service Corp. International 269,800 15,514 74,881 TOTAL SERVICES 126,776 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - 5.7% COMMUNICATIONS EQUIPMENT - 0.6% Cisco Systems, Inc. (a) 400,800 $ 22,695 COMPUTER SERVICES & SOFTWARE - 1.6% America Online, Inc. 38,000 1,663 Ceridian Corp. (a) 481,700 24,326 Computer Sciences Corp. (a) 86,900 6,496 Continuum Co., Inc. (a) 110,124 6,387 Electronic Data Systems Corp. 190,600 10,245 Equifax, Inc. 9,100 239 Metromail Corp. (a) 79,800 1,786 Microsoft Corp. (a) 58,400 7,015 Oracle Corp. (a) 137,200 5,411 63,568 COMPUTERS & OFFICE EQUIPMENT - 3.5% Amdahl Corp. (a) 482,900 5,191 Bell & Howell Co. (a) 493,400 16,097 Comdisco, Inc. 292,600 7,790 Diebold, Inc. 582,200 28,091 MICROS Systems, Inc. (a) 155,000 4,321 Pitney Bowes, Inc. 531,200 25,365 Quantum Corp. (a) 117,200 1,714 Radius, Inc. (a) 6,005 17 Silicon Graphics, Inc. (a) 428,600 10,286 Xerox Corp. 729,600 39,034 137,906 TOTAL TECHNOLOGY 224,169 TRANSPORTATION - 1.9% RAILROADS - 1.6% Burlington Northern Santa Fe Corp. 471,013 38,093 CSX Corp. 556,200 26,837 64,930 TRUCKING & FREIGHT - 0.3% Hunt (J.B.) Transport Services, Inc. 539,000 11,252 TOTAL TRANSPORTATION 76,182 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - 0.3% TELEPHONE SERVICES - 0.3% Frontier Corp. 341,200 $ 10,449 TOTAL COMMON STOCKS (Cost $3,120,966) 3,666,628 CONVERTIBLE PREFERRED STOCKS - 1.0% CONSTRUCTION & REAL ESTATE - 0.1% REAL ESTATE - 0.1% Rouse Co., Series A 80,500 4,669 FINANCE - 0.1% CREDIT & OTHER FINANCE - 0.1% SCI Finance, Series A, $3.125 41,300 3,991 RETAIL & WHOLESALE - 0.1% GENERAL MERCHANDISE STORES - 0.1% K mart Financing I $3.875 43,700 2,371 TECHNOLOGY - 0.7% COMPUTER SERVICES & SOFTWARE - 0.7% Ceridian Corp. $2.75 270,600 30,273 TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $30,851) 41,304 CORPORATE BONDS - 1.7% MOODY'S RATINGS PRINCIPAL (UNAUDITED) AMOUNT (000S) CONVERTIBLE BONDS - 1.4% DURABLES - 0.2% TEXTILES & APPAREL - 0.2% Nine West Group, Inc. 5 1/2%, 7/15/03 (b) - $ 9,360 9,407 CORPORATE BONDS - CONTINUED MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1) (UNAUDITED) AMOUNT (000S) (000S) CONVERTIBLE BONDS - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - 0.1% POLLUTION CONTROL - 0.1% Laidlaw, Inc. 6%, 1/31/99 Baa2 $ 3,000 $ 3,750 MEDIA & LEISURE - 1.0% LODGING & GAMING - 1.0% HFS, Inc. 4 1/2%, 10/1/99 Baa3 7,540 29,264 Prime Hospitality 7%, 4/15/02 B2 6,170 9,317 38,581 PUBLISHING - 0.0% Scholastic Corp. 5%, 8/15/05 (b) Baa3 940 982 TOTAL MEDIA & LEISURE 39,563 SERVICES - 0.1% First Financial Management Corp. 5%, 12/15/99 A2 890 1,667 TOTAL CONVERTIBLE BONDS 54,387 NONCONVERTIBLE BONDS - 0.3% AEROSPACE & DEFENSE - 0.1% DEFENSE ELECTRONICS - 0.1% Tracor, Inc. 10 7/8%, 8/15/01 B2 1,500 1,582 HEALTH - 0.1% MEDICAL FACILITIES MANAGEMENT - 0.1% Tenet Healthcare Corp. 8 5/8%, 12/1/03 Ba1 5,440 5,494 MEDIA & LEISURE - 0.1% RESTAURANTS - 0.1% Foodmaker, Inc. 9 3/4%, 6/1/02 B3 4,900 4,680 TOTAL NONCONVERTIBLE BONDS 11,756 TOTAL CORPORATE BONDS (Cost $60,699) 66,143 REPURCHASE AGREEMENTS - 4.8% MATURITY VALUE (NOTE 1) AMOUNT (000S) (000S) Investments in repurchase agreements (U.S. Treasury obligations), in a joint trading account at 5.46%, dated 6/28/96 due 7/1/96 $ 192,308 $ 192,221 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $3,404,737) $ 3,966,296 LEGEND 1. Non-income producing 2. Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $12,900,000 or 0.3% of net assets. INCOME TAX INFORMATION At June 30, 1996, the aggregate cost of invest- ment securities for income tax purposes was $3,410,943,000. Net unrealized appreci- ation aggregated $555,353,000, of which $594,595,000 related to appreciated investment securities and $39,242,000 related to depreciated investment securities. The fund hereby designates approximately $35,427,000 as a capital gain dividend for the purpose of the dividend paid deduction. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNT) JUNE 30, 1996 ASSETS Investment in securities, at value (including repurchase $ 3,966,296 agreements of $192,221) (cost $3,404,737) - See accompanying schedule Cash 1 Receivable for investments sold 30,188 Receivable for fund shares sold 12,533 Dividends receivable 4,621 Interest receivable 419 Other receivables 778 TOTAL ASSETS 4,014,836 LIABILITIES Payable for investments purchased $ 34,579 Payable for fund shares redeemed 6,969 Accrued management fee 1,307 Other payables and accrued expenses 1,240 Collateral on securities loaned, at value 23,395 TOTAL LIABILITIES 67,490 NET ASSETS $ 3,947,346 Net Assets consist of: Paid in capital $ 3,108,306 Undistributed net investment income 1,218 Accumulated undistributed net realized gain (loss) on 276,268 investments and foreign currency transactions Net unrealized appreciation (depreciation) on 561,554 investments and assets and liabilities in foreign currencies NET ASSETS, for 160,108 shares outstanding $ 3,947,346 NET ASSET VALUE, offering price and redemption price $24.65 per share ($3,947,346 (divided by) 160,108 shares)
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED JUNE 30, 1996 INVESTMENT INCOME $ 56,365 Dividends Interest (including income on securities loaned of $158) 18,919 TOTAL INCOME 75,284 EXPENSES Management fee $ 12,985 Transfer agent fees 6,152 Accounting and security lending fees 797 Non-interested trustees' compensation 11 Custodian fees and expenses 90 Registration fees 371 Audit 47 Legal 23 Miscellaneous 18 Total expenses before reductions 20,494 Expense reductions (853) 19,641 NET INVESTMENT INCOME 55,643 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities 395,342 Foreign currency transactions 1 395,343 Change in net unrealized appreciation (depreciation) on: Investment securities 296,071 Assets and liabilities in foreign currencies (9) 296,062 NET GAIN (LOSS) 691,405 NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 747,048 FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEAR ENDED YEAR ENDED JUNE 30, JUNE 30, 1996 1995 INCREASE (DECREASE) IN NET ASSETS Operations $ 55,643 $ 42,354 Net investment income Net realized gain (loss) 395,343 70,757 Change in net unrealized appreciation (depreciation) 296,062 273,028 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 747,048 386,139 FROM OPERATIONS Distributions to shareholders (58,669) (37,407) From net investment income From net realized gain (182,544) (80,847) TOTAL DISTRIBUTIONS (241,213) (118,254) Share transactions 1,833,400 997,742 Net proceeds from sales of shares Reinvestment of distributions 217,154 101,857 Cost of shares redeemed (1,013,515) (555,067) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,037,039 544,532 FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 1,542,874 812,417 NET ASSETS Beginning of period 2,404,472 1,592,055 End of period (including undistributed net investment $ 3,947,346 $ 2,404,472 income of $1,218 and $3,624, respectively) OTHER INFORMATION Shares Sold 79,709 52,253 Issued in reinvestment of distributions 9,745 5,464 Redeemed (43,626) (28,996) Net increase (decrease) 45,828 28,721
FINANCIAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS YEARS ENDED JUNE 30, SIX MONTHS YEARS ENDED ENDED DECEMBER 31, JUNE 30,
1996 1995 1994 F 1993 1992 D 1991
SELECTED PER-SHARE DATA $ 21.04 $ 18.61 $ 20.42 $ 18.94 $ 18.46 $ 16.29 Net asset value, beginning of period Income from Investment Operations Net investment income .39 .38 .27 .29E .45 .53 Net realized and 5.04 3.35 .79 1.48 1.09 3.29 unrealized gain (loss) Total from investment 5.43 3.73 1.06 1.77 1.54 3.82 operations Less Distributions (.41) H (.36) (.31) (.22) (.48) (.50) From net investment income From net realized gain (1.41) H (.94) (2.56) (.07) (.58) (1.15) Total distributions (1.82) (1.30) (2.87) (.29) (1.06) (1.65) Net asset value, end $ 24.65 $ 21.04 $ 18.61 $ 20.42 $ 18.94 $ 18.46 of period TOTAL RETURN B,C 27.00% 21.09% 5.41% 9.39% 8.46 24.15 % % RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 3,947 $ 2,404 $ 1,592 $ 1,439 $ 1,354 $ 1,320 (in millions) Ratio of expenses to .63% .66% .68% .66% A .67 .68 average net assets % % Ratio of expenses to .60% .64% .65% .66% A .67 .68 average net assets after G G G % % expense reductions Ratio of net investment 1.71% 2.18% 1.85% 2.94% A, 2.37 2.84 income to average E % % net assets Portfolio turnover rate 150% 157% 207% 261% A 151 267 % %
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 OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 6 OF NOTES TO FINANCIAL STATEMENTS). H THE AMOUNTS SHOWN REFLECT CERTAIN RECLASSIFICATIONS RELATED TO BOOK TO TAX DIFFERENCES (SEE NOTE 1 OF NOTES TO FINANCIAL STATEMENTS). NOTES TO FINANCIAL STATEMENTS For the period ended June 30, 1996 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 financial statements have been prepared in conformity with generally accepted accounting principles which permit management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities (including restricted securities) for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange) are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days of their purchase date are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts, and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of the transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of forward currency contracts, 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 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED INVESTMENT INCOME - CONTINUED accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. 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 litigation proceeds, 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). Undistributed net investment income and accumulated undistributed net realized gain (loss) on investments and foreign currency transactions may include temporary book and tax basis differences that will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may use foreign currency contracts to facilitate transactions in foreign securities and to manage the fund's currency exposure. Contracts to buy generally are used to acquire exposure to foreign currencies, while contracts to sell are used to hedge the fund's investments against currency fluctuations. Also, a contract to buy or sell can offset a previous contract. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and any realized gain (loss) is recognized on the date of offset; otherwise, gain (loss) is recognized on settlement date. 2. OPERATING POLICIES - CONTINUED 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 mature in 60 days or less from the date of purchase for U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency Securities are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $5,329,631,000 and $4,559,912,000, respectively, of which U.S. government and government agency obligations aggregated $205,191,000 and $231,953,000, 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 .2500% to .5200% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is .09%. For the period, the management fee was equivalent to an annual rate of .40% of average net assets. 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, the transfer agent fees were equivalent to an annual 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 $1,971,000 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 $22,519,000 and $23,395,000, respectively. 6. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $744,000 under this arrangement. In addition, the fund has entered into arrangements with its custodian and transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of the fund's expenses. During the period, the fund's custodian and transfer agent fees were reduced by $6,000 and $103,000, respectively, under these arrangements. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of Fidelity Hastings Street Trust and the Shareholders of Fidelity Fund: We have audited the accompanying statement of assets and liabilities of Fidelity Hastings Street Trust: Fidelity Fund, including the schedule of portfolio investments, as of June 30, 1996, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the three years then ended, the six month period ended June 30, 1993 and for each of the two years in the period ended December 31, 1992. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 1996 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Hastings Street Trust: Fidelity Fund as of June 30, 1996, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the three years then ended, the six month period ended June 30, 1993 and for each of the two years in the period ended December 31, 1992, in conformity with generally accepted accounting principles. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Boston, Massachusetts August 2, 1996 DISTRIBUTIONS The Board of Trustees of Fidelity Fund voted to pay on August 5, 1996, to shareholders of record at the opening of business on August 2, 1996, a distribution of $1.56 per share derived from capital gains realized from sales of portfolio securities. A total of 1.4% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax. A total of 19% of the dividends distributed during the fiscal year qualifies for the dividends-received deduction for corporate shareholders. The fund will notify shareholders in January 1997 of these percentages for use in preparing 1996 income tax returns. 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 * ADVISORY BOARD William O. McCoy 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 AND INCOME FUNDS Balanced Fund Convertible Securities Fund Equity-Income Fund Equity-Income II Fund Fidelity Fund Global Balanced Fund Growth & Income Portfolio Market Index Fund Puritan Fund Real Estate Investment Portfolio Utilities 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 (2_FIDELITY_LOGOS) FIDELITY FIFTY ANNUAL REPORT JUNE 30, 1996 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 10 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 11 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 17 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 21 Notes to the financial statements. REPORT OF INDEPENDENT 25 The auditors' opinion. ACCOUNTANTS DISTRIBUTIONS 26 THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT INVESTED. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK. FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Although stocks have managed to post solid returns through the first six months of 1996, signs of strength in the economy have led to inflation fears, causing some uncertainty in bond markets so far this year. In 1995, both stock and bond markets posted strong results, while the year before, stocks posted below-average returns and bonds had one of the worst years in history. These market ups and downs are a normal part of investing, and there are some basic principles that are helpful for investors to remember in different types of markets. If you can leave your money invested over the long term, you can avoid the results of the volatility that generally accompanies the stock market in the short term. You also can help to manage some of the risks of investing through diversification. A stock fund is already diversified because it invests in many issues. You can diversify even further by placing some of your money in several different types of stock funds or in other investment categories, such as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, there is no assurance that a money market fund will achieve its goal, and it is important to remember that money market funds are not insured or guaranteed by any agency of the U.S. government. Finally, no matter what your investment horizon or portfolio diversity, it makes good sense to follow a regular investment plan - investing a certain amount of money at the same time each month or quarter - and to review your portfolio periodically. A periodic investment plan will not, of course, assure a profit or protect against a loss. If you have any questions, please call us at 1-800-544-8888. We stand ready to provide the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change, or the growth of a hypothetical $10,000 investment. A fund's total return includes changes in 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, and is effective through December 31, 1996. CUMULATIVE TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 1 LIFE OF YEAR FUND Fidelity Fifty 18.46% 57.08% Fidelity Fifty (incl. 3% sales charge) 14.90% 52.36% S&P 500(registered trademark) 26.00% 57.03% Capital Appreciation Funds Average 23.97% n/a CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, 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 500 Index - a widely recognized, unmanaged index of common stock prices. The index figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the capital appreciation funds average, which reflects the performance of 169 mutual funds with similar objectives tracked by Lipper Analytical Services, Inc. over the past 12 months. Both benchmarks include reinvested dividends and capital gains, if any, and exclude the effects of sales charges. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED JUNE 30, 1996 PAST 1 LIFE OF YEAR FUND Fidelity Fifty 18.46% 17.57% Fidelity Fifty (incl. 3% sales charge) 14.90% 16.30% S&P 500 26.00% 17.56% Capital Appreciation Funds Average 23.97% 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 IMAHDR PRASUN SHR__CHT 19960630 19960711 095146 S00000000000001 Fidelity Fifty SP Standard & Poor 500 00500 SP001 1993/09/17 9700.00 10000.00 1993/09/30 9971.60 9999.89 1993/10/31 10369.30 10206.89 1993/11/30 10204.40 10109.92 1993/12/31 10272.24 10232.25 1994/01/31 10660.60 10580.15 1994/02/28 10505.25 10293.43 1994/03/31 9990.67 9844.63 1994/04/30 10116.89 9970.64 1994/05/31 10126.60 10134.16 1994/06/30 9874.16 9885.88 1994/07/31 10262.53 10210.13 1994/08/31 10796.53 10628.75 1994/09/30 10767.40 10368.34 1994/10/31 10990.71 10601.63 1994/11/30 10495.55 10215.52 1994/12/31 10682.65 10367.02 1995/01/31 10623.74 10635.83 1995/02/28 11065.57 11050.31 1995/03/31 11536.87 11376.41 1995/04/30 11860.88 11711.44 1995/05/31 12302.72 12179.55 1995/06/30 12862.38 12462.48 1995/07/31 13520.22 12875.73 1995/08/31 13547.85 12908.05 1995/09/30 13994.60 13452.77 1995/10/31 13610.19 13404.75 1995/11/30 14181.61 13993.21 1995/12/31 14115.33 14262.72 1996/01/31 14474.47 14748.23 1996/02/29 14866.26 14884.94 1996/03/31 14909.79 15028.29 1996/04/30 15225.40 15249.80 1996/05/31 15508.36 15643.09 1996/06/28 15236.28 15702.69 IMATRL PRASUN SHR__CHT 19960630 19960711 095148 R00000000000037 $10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was invested in Fidelity Fifty on September 17, 1993, when the fund started, and a 3% sales charge was paid. As the chart shows, by June 30, 1996, the value of the investment would have grown to $15,236 - a 52.36% increase on the 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 $15,703 - a 57.03% 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 MARKET RECAP In spite of growing fears of lower corporate earnings and higher interest rates at the end of the period, the U.S. stock market posted strong gains over the 12 months ended June 30, 1996. Although several corporate earnings disappointments made for a volatile stock market in May and June, the Standard & Poor's 500 Index finished the 12 months with a return of 26% - well above its long-term historical annual average of about 12%. The stock market spent much of the past year breaking price and trading volume records as strong corporate earnings reports, large cash inflows into mutual funds and widespread optimism propelled equity share prices higher. In addition, the period was peppered with several high-profile merger announcements, especially in the media, telecommunications and technology sectors. Smaller-company stocks posted strong gains during the first few months of 1996, and high-tech firms involved in the networking and software fields benefited from strong earnings. In early March, though, better-than-expected employment figures spooked the bond market, pushing long-term interest rates over 7%. Because smaller companies tend to be more adversely affected by the higher borrowing costs brought on by higher rates, their stock prices trended downward in the spring. While larger, multinational firms recorded positive gains, their returns were hurt somewhat by the strengthening dollar. An interview with Scott Stewart, Portfolio Manager of Fidelity Fifty Q. SCOTT, HOW HAS THE FUND PERFORMED OVER THE PAST YEAR? A. For the 12 months ended June 30, 1996, the fund posted a return of 18.46%. This trailed both the 23.97% 12-month return for the capital appreciation funds average tracked by Lipper Analytical Services and the 26.00% return of the Standard & Poor's 500 Index for the same period. While this isn't as good as I would have liked, it's worth noting that since around the time of its inception in late 1993, the fund's performance has equalled that of the S&P 500 and exceeded that of its peer group. Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S UNDERPERFORMANCE? A. There were a couple of factors. While diversified among 50 to 60 stocks, the fund was weighted more in mid-sized companies with higher earnings variability than the S&P 500. Unfortunately, mid-cap stocks didn't perform as well as either their smaller or larger counterparts. To illustrate this, the Russell 2000, which reflects the performance of the small-cap stock market, had a one-year return of about 24%, and the S&P 500, which tracks larger-capitalization stocks, had a 26% return for the same period. The S&P MidCap 400 Index, which tracks the performance of medium-capitalization stocks, turned in a return of about 22% over the 12-month period. Q. WERE THERE ANY OTHER REASONS? A. I'd point to individual stock selection also. This fund is unique in that I choose stocks based on both fundamental research and intensive quantitative analysis. The fund's strategy is to select stocks that offer opportunities for growth in earnings and are selling at attractive valuations. Industry and "style" factors are controlled to some degree. As a result, whether the fund performs well or trails its competitors, stock selection tends to be a major driver. Stock selection over the past 12 months turned out to be a detriment in terms of performance. Over the past six months, with the continuing bull market, we've observed that prices of stocks with high valuations have continued to rise. This has contrasted with most market trends and resulted in a more speculative atmosphere, which I believe impacted stock selection as well. Q. WHICH INDIVIDUAL STOCKS CONTRIBUTED POSITIVELY TO THE FUND'S PERFORMANCE? WHICH WERE DISAPPOINTMENTS? A. The fund's positions in Gymboree (children's apparel), Alaska Air (transportation) and Case (farming and construction equipment) all performed well due to improved earnings prospects and price appreciation. On the other hand, the fund's investments in Symantec Corp. (computer software), Heilig-Meyers Co. (home furniture) and W.R. Grace (chemical and medical products) had a negative impact on performance. Q. DID YOU DETECT ANY MARKET TRENDS DURING THE PERIOD? A. The market has exhibited rapid sector rotation over the past year. The leading industry group seems to vary from month to month. Changing opinions on the health of the economy and interest rates contributed to this environment. For example, once technology stocks peaked in performance in September 1995, investors moved into more defensive-oriented industries, including health care and consumer non-cyclicals, such as companies selling food and other staples. Following a weak January, consumer cyclicals - including the retail sector and industrials - performed well. For the entire period, health care, financial services, industrials and consumer staples were the strong performers. Bringing up the rear were technology, consumer-service and utility stocks. Q. WHAT FACTORS DO YOU CONSIDER WHEN ADDRESSING THE FUND'S RISK EXPOSURE? A. The structure of this fund - investing in 50-60 stocks - makes it look more like the portfolio of an individual investor. As a result, the performance of any one stock will have a much greater impact on this fund than it would on a fund which holds hundreds of securities. In trying to control the fund's risk exposure, there are certain rules I follow. First, aside from companies which represent a large portion of the S&P 500, I aim to keep the fund's position in any one stock to no more than 5% of the total portfolio. Stocks determined to have risky characteristics are further restricted. Second, I try not to have more than an approximate 10% active weighting in any one industry group. I also consider liquidity. If I'm not comfortable with a stock's trading frequency, I'll hold a smaller weighting. Increased liquidity is vital with a fund like this because it helps ensure that I can sell a stock quickly if I need to. Finally, in trying to manage the "style" of the portfolio, I consider a stock's relative volatility, price-to-earnings ratio and market capitalization. Q. WHAT'S YOUR OUTLOOK? A. The key things to monitor will be earnings prospects and any interest rate movements by the Fed. Interest rates rebounded from their lows late last year and valuations of the stock market were neutral to high as of the end of June. It's important to remember that market perceptions can change in a heartbeat, and it's difficult to anticipate overall market movements. For Fidelity Fifty, I seek to add long-term value for the fund by selecting individual stocks, managing the portfolio's diversification and generally avoiding attempts to time the market. While this active approach may not offer value versus the S&P 500 or my peers in every 12-month period, I believe it will tend to add value over the long-term. 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 June 30, 1996, over $180 million MANAGER: Scott Stewart, since September 1993; founder and head of Fidelity's Structured Equity Group since 1987; joined Fidelity in 1987 (checkmark) SCOTT STEWART ON HIS SECTOR ALLOCATION STRATEGIES: "I don't pick a stock based solely on its sector. Rather, sector allocation for the fund is a residual of my stock-picking process. It doesn't make sense for me to be overweighted in a particular sector because if that sector doesn't do well, it obviously won't bode well for the fund. This is especially true considering the sector rotation that we've seen during the period, where it seems the market favors a different industry group on a monthly basis. During the last six months, the fund's larger positions were in consumer cyclicals and industrials, both highly influenced by the state of the economy. Since I don't try to time the market or predict the economy, I've been careful not to be overweighted in these areas. In terms of the fund's technology stake, the fund's weighting went from approximately 14% at the beginning of the period to around 8% at the end of June. I've reduced technology positions because of the poor earnings prospects and high valuations I saw for stocks within that universe." INVESTMENT CHANGES TOP TEN STOCKS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Royal Dutch Petroleum Co. ADR 3.3 0.0 Pharmacia & Upjohn, Inc. 3.0 2.2 Ingersoll-Rand Co. 2.8 2.4 Philip Morris Companies, Inc. 2.7 2.8 General Electric Co. 2.6 3.1 WorldCom, Inc. 2.4 0.3 du Pont (E.I.) de Nemours & Co. 2.3 2.0 Enron Corp. 2.2 0.0 Kellogg Co. 2.2 2.3 General Motors Corp. 2.2 0.0 TOP FIVE MARKET SECTORS AS OF JUNE 30, 1996 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE SECTORS 6 MONTHS AGO Energy 10.7 7.4 Utilities 10.5 3.0 Industrial Machinery & Equipment 10.0 10.4 Technology 8.2 14.5 Nondurables 7.0 7.3 ASSET ALLOCATION AS OF JUNE 30, 1996 * AS OF DECEMBER 31, 1995 ** Row: 1, Col: 1, Value: 3.0 Row: 1, Col: 2, Value: 47.0 Row: 1, Col: 3, Value: 50.0 Row: 1, Col: 1, Value: 11.8 Row: 1, Col: 2, Value: 38.2 Row: 1, Col: 3, Value: 50.0 Stocks and equity futures 97.8% Short-term investments 2.2% FOREIGN INVESTMENTS 5.5% Stocks and equity futures 88.2% Short-term investments 11.8% FOREIGN INVESTMENTS 1.4% * ** INVESTMENTS JUNE 30, 1996 Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 91.4% SHARES VALUE (NOTE 1) AEROSPACE & DEFENSE - 1.9% Lockheed Martin Corp. 39,600 $ 3,326,400 BASIC INDUSTRIES - 5.9% CHEMICALS & PLASTICS - 5.0% du Pont (E.I.) de Nemours & Co. 51,000 4,035,375 Hanna (M.A.) Co. 105,850 2,209,619 Praxair, Inc. 63,400 2,678,650 8,923,644 METALS & MINING - 0.9% Inco Ltd. 52,300 1,685,736 TOTAL BASIC INDUSTRIES 10,609,380 CONSTRUCTION & REAL ESTATE - 2.1% BUILDING MATERIALS - 2.1% Masco Corp. 123,000 3,720,750 DURABLES - 5.5% AUTOS, TIRES, & ACCESSORIES - 4.3% Echlin, Inc. 55,900 2,117,213 General Motors Corp. 75,000 3,928,125 Pep Boys-Manny, Moe & Jack 50,300 1,710,200 7,755,538 TEXTILES & APPAREL - 1.2% Liz Claiborne, Inc. 63,000 2,181,375 TOTAL DURABLES 9,936,913 ENERGY - 10.7% ENERGY SERVICES - 4.2% BJ Services Co. (a) 75,576 2,654,607 Dresser Industries, Inc. 117,700 3,472,150 McDermott International, Inc. 66,800 1,394,450 7,521,207 OIL & GAS - 6.5% Amerada Hess Corp. 48,200 2,584,725 Coastal Corp. (The) 78,000 3,256,500 Royal Dutch Petroleum Co. ADR 38,000 5,842,500 11,683,725 TOTAL ENERGY 19,204,932 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) FINANCE - 6.7% BANKS - 3.4% BankAmerica Corp. 51,000 $ 3,863,250 Fleet Financial Group, Inc. 52,000 2,262,000 6,125,250 INSURANCE - 3.3% Aetna Life & Casualty Co. 49,500 3,539,250 MBIA, Inc. 30,000 2,336,250 5,875,500 TOTAL FINANCE 12,000,750 HEALTH - 6.4% DRUGS & PHARMACEUTICALS - 3.0% Pharmacia & Upjohn, Inc. 122,100 5,418,188 MEDICAL EQUIPMENT & SUPPLIES - 0.9% Pall Corp. 63,500 1,531,938 MEDICAL FACILITIES MANAGEMENT - 2.5% Tenet Healthcare Corp. (a) 128,100 2,738,138 Vencor, Inc. (a) 57,000 1,738,500 4,476,638 TOTAL HEALTH 11,426,764 INDUSTRIAL MACHINERY & EQUIPMENT - 10.0% ELECTRICAL EQUIPMENT - 2.6% General Electric Co. 54,000 4,671,000 INDUSTRIAL MACHINERY & EQUIPMENT - 6.5% Case Corp. 36,900 1,771,200 Harnischfeger Industries, Inc. 61,300 2,038,225 Ingersoll-Rand Co. 114,000 4,987,500 Stewart & Stevenson Services, Inc. 130,800 2,975,700 11,772,625 POLLUTION CONTROL - 0.9% Thermo Instrument Systems, Inc. (a) 48,000 1,548,000 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 17,991,625 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) MEDIA & LEISURE - 5.9% LODGING & GAMING - 3.8% HFS, Inc. 47,600 $ 3,332,000 Mirage Resorts, Inc. (a) 64,100 3,445,375 6,777,375 PUBLISHING - 2.1% Times Mirror Co. Class A 86,800 3,775,800 TOTAL MEDIA & LEISURE 10,553,175 NONDURABLES - 7.0% BEVERAGES - 2.1% PepsiCo, Inc. 107,200 3,792,200 FOODS - 2.2% Kellogg Co. 53,800 3,940,850 TOBACCO - 2.7% Philip Morris Companies, Inc. 45,900 4,773,600 TOTAL NONDURABLES 12,506,650 PRECIOUS METALS - 1.3% Newmont Gold Co. 45,300 2,281,988 RETAIL & WHOLESALE - 3.8% APPAREL STORES - 0.7% Gymboree Corp. (a) 42,900 1,308,450 GENERAL MERCHANDISE STORES - 1.9% Federated Department Stores, Inc. (a) 96,600 3,296,475 RETAIL & WHOLESALE, MISCELLANEOUS - 1.2% Tandy Corp. 45,400 2,150,825 TOTAL RETAIL & WHOLESALE 6,755,750 SERVICES - 1.7% LEASING & RENTAL - 0.5% Movie Gallery, Inc. (a) 44,800 940,800 SERVICES - 1.2% Block (H&R), Inc. 66,600 2,172,825 TOTAL SERVICES 3,113,625 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) TECHNOLOGY - 8.2% COMMUNICATIONS EQUIPMENT - 2.1% Cisco Systems, Inc. (a) 66,000 $ 3,737,250 COMPUTER SERVICES & SOFTWARE - 4.4% America Online, Inc. (a) 76,500 3,346,875 American Management Systems, Inc. (a) 69,000 2,018,250 Automatic Data Processing, Inc. 63,000 2,433,375 7,798,500 COMPUTERS & OFFICE EQUIPMENT - 0.8% Adaptec, Inc. (a) 5,400 255,825 Digital Equipment Corp. (a) 27,400 1,233,000 1,488,825 ELECTRONICS - 0.9% ESS Technology, Inc. (a) 59,900 1,108,150 S-3, Inc. (a) 46,800 576,225 1,684,375 TOTAL TECHNOLOGY 14,708,950 TRANSPORTATION - 3.8% AIR TRANSPORTATION - 2.9% Alaska Air Group, Inc. (a) 90,500 2,477,438 Continental Airlines, Inc. (a) 43,600 2,692,300 5,169,738 RAILROADS - 0.9% Burlington Northern Santa Fe Corp. 20,160 1,630,440 TOTAL TRANSPORTATION 6,800,178 UTILITIES - 10.5% CELLULAR - 1.4% 360 Degrees Communications Co. (a) 101,600 2,438,400 ELECTRIC UTILITY - 1.1% American Electric Power Co., Inc. 45,600 1,943,700 GAS - 2.2% Enron Corp. 97,000 3,964,875 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) UTILITIES - CONTINUED TELEPHONE SERVICES - 5.8% AT&T Corp. 62,200 $ 3,856,400 BCE, Inc. 58,000 2,286,311 WorldCom, Inc. (a) 78,300 4,335,863 10,478,574 TOTAL UTILITIES 18,825,549 TOTAL COMMON STOCKS (Cost $147,621,006) 163,763,379 U.S. TREASURY OBLIGATIONS - 0.5% U.S. Treasury Bill, yield at date of purchase 5.22%, 10/31/96 (b) (Cost $982,611) 1,000,000 982,676 REPURCHASE AGREEMENTS - 8.1% MATURITY AMOUNT Investments in repurchase agreements (U.S. Treasury obligations), in a joint trading account at 5.46%, dated 6/28/96 due 7/1/96 $ 14,522,605 14,516,000 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $163,119,617) $ 179,262,055 FUTURES CONTRACTS EXPIRATION UNDERLYING FACE UNREALIZED DATE AMOUNT AT VALUE GAIN/(LOSS) PURCHASED 97 Midcap 400 Stock Index Futures Contracts Sept. 1996 $ 11,489,650 $ (88,028) THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 6.4% 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 $982,676. INCOME TAX INFORMATION At June 30, 1996, the aggregate cost of investment securities for income tax purposes was $163,314,981. Net unrealized appreci- ation aggregated $15,947,074, of which $18,443,152 related to appreciated invest- ment securities and $2,496,078 related to depreciated investment securities. The fund hereby designates approximately $3,780,000 as a capital gain dividend for the purpose of the dividend paid deduction. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996 ASSETS Investment in securities, at value (including repurchase $ 179,262,055 agreements of $14,516,000) (cost $163,119,617) - See accompanying schedule Cash 122 Receivable for investments sold 2,237,415 Receivable for fund shares sold 735,121 Dividends receivable 204,617 Receivable for daily variation on futures contracts 126,100 TOTAL ASSETS 182,565,430 LIABILITIES Payable for investments purchased $ 840,091 Payable for fund shares redeemed 562,528 Accrued management fee 84,399 Other payables and accrued expenses 95,658 TOTAL LIABILITIES 1,582,676 NET ASSETS $ 180,982,754 Net Assets consist of: Paid in capital $ 153,583,247 Undistributed net investment income 1,141,826 Accumulated undistributed net realized gain (loss) on 10,203,239 investments and foreign currency transactions Net unrealized appreciation (depreciation) on 16,054,442 investments and assets and liabilities in foreign currencies NET ASSETS, for 12,923,767 shares outstanding $ 180,982,754 NET ASSET VALUE, offering price and redemption price per $14.00 share ($180,982,754 (divided by) 12,923,767 shares)
STATEMENT OF OPERATIONS
YEAR ENDED JUNE 30, 1996 INVESTMENT INCOME $ 2,243,852 Dividends Interest 1,293,929 TOTAL INCOME 3,537,781 EXPENSES Management fee $ 982,794 Basic fee Performance adjustment 23,625 Transfer agent fees 446,267 Accounting fees and expenses 98,089 Non-interested trustees' compensation 614 Custodian fees and expenses 29,082 Registration fees 55,851 Audit 30,872 Legal 874 Miscellaneous 1,316 Total expenses before reductions 1,669,384 Expense reductions (75,643) 1,593,741 NET INVESTMENT INCOME 1,944,040 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities 14,545,329 Foreign currency transactions 190 Futures contracts 2,204,680 16,750,199 Change in net unrealized appreciation (depreciation) on: Investment securities 6,851,243 Assets and liabilities in foreign currencies (10) Futures contracts (296,098) 6,555,135 NET GAIN (LOSS) 23,305,334 NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 25,249,374 FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED YEAR ENDED JUNE 30, JUNE 30, 1996 1995 INCREASE (DECREASE) IN NET ASSETS Operations $ 1,944,040 $ 776,811 Net investment income Net realized gain (loss) 16,750,199 8,550,756 Change in net unrealized appreciation (depreciation) 6,555,135 10,596,181 NET INCREASE (DECREASE) IN NET ASSETS RESULTING 25,249,374 19,923,748 FROM OPERATIONS Distributions to shareholders (1,413,153) (101,513) From net investment income From net realized gain (13,362,095) (507,564) TOTAL DISTRIBUTIONS (14,775,248) (609,077) Share transactions 172,795,915 134,344,421 Net proceeds from sales of shares Reinvestment of distributions 14,630,874 601,102 Cost of shares redeemed (145,489,851) (74,047,825) NET INCREASE (DECREASE) IN NET ASSETS RESULTING 41,936,938 60,897,698 FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) IN NET ASSETS 52,411,064 80,212,369 NET ASSETS Beginning of period 128,571,690 48,359,321 End of period (including undistributed net investment $ 180,982,754 $ 128,571,690 income of $1,141,826 and $675,298, respectively) OTHER INFORMATION Shares Sold 12,765,610 11,495,589 Issued in reinvestment of distributions 1,127,988 56,495 Redeemed (10,786,198) (6,489,573) Net increase (decrease) 3,107,400 5,062,511
FINANCIAL HIGHLIGHTS YEARS ENDED JUNE 30, SEPTEMBER 17, 1993 (COMMENCEMENT OF OPERATIONS) TO 1996 1995 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 .15 .08 .02 Net realized and unrealized gain (loss) 2.12 2.97 .16 Total from investment operations 2.27 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 $ 14.00 $ 13.10 $ 10.17 TOTAL RETURN B, C 18.46% 30.26% 1.80% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000 omitted) $ 180,983 $ 128,572 $ 48,359 Ratio of expenses to average net assets 1.03% 1.22% 1.58% A Ratio of expenses to average net assets .99% 1.19% 1.58% A after expense reductions D D Ratio of net investment income to average 1.20% 1.15% .23% A net assets Portfolio turnover rate 152% 180% 320% A A ANNUALIZED B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED. C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS). NOTES TO FINANCIAL STATEMENTS
For the period ended June 30, 1996 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 financial statements have been prepared in conformity with generally accepted accounting principles which permit management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities 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. 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 agreements that 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT - CONTINUED mature in 60 days or less from the date of purchase for U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency Securities are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. FUTURES CONTRACTS AND OPTIONS. The fund may use futures and options contracts to manage its exposure to the stock market. 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 $253,097,112 and $211,665,777, respectively. The market value of futures contracts opened and closed during the period amounted to $121,868,882 and $130,147,485, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .2500% to .5200% for the period. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED MANAGEMENT FEE - CONTINUED rates, as they resulted in the same or a lower management fee. The annual individual fund fee rate is .30%. The basic fee is subject to a performance adjustment (up to a maximum of (plus/minus) .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. For the period, the management fee was equivalent to an annual rate of .62% of average net assets after the performance adjustment. 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 annual 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 $72,507 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 $70,303 under this arrangement. In addition, the fund has entered into arrangements with its custodian and transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of the fund's expenses. During the period, the fund's custodian and transfer agent fees were reduced by $46 and $5,294, respectively, under these arrangements. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees of Fidelity Hastings Street Trust and the Shareholders of Fidelity Fifty: We have audited the accompanying statement of assets and liabilities of Fidelity Hastings Street Trust: Fidelity Fifty, including the schedule of portfolio investments, as of June 30, 1996, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the two years in the period then ended and for the period September 17, 1993 (commencement of operations) to June 30, 1994. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of June 30, 1996 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Hastings Street Trust: Fidelity Fifty as of June 30, 1996, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the two years in the period then ended and for the period September 17, 1993 (commencement of operations) to June 30, 1994, in conformity with generally accepted accounting principles. /s/COOPERS & LYBRAND L.L.P. COOPERS & LYBRAND L.L.P. Boston, Massachusetts August 2, 1996 DISTRIBUTIONS The Board of Trustees of Fidelity Fifty voted to pay on August 5, 1996, to shareholders of record at the opening of business on August 2, 1996, a distribution of $.54 per share derived from capital gains realized from sales of portfolio securities and a dividend of $.06 per share from net investment income. A total of .42% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax. A total of 10% of the dividends distributed during the fiscal year qualifies for the dividends-received deduction for corporate shareholders. The fund will notify shareholders in January 1997 of the applicable percentages for use in preparing 1996 income tax returns. TO CALL FIDELITY FOR FUND INFORMATION AND QUOTES The Fidelity Telephone Connection offers you special automated telephone services for quotes and balances. The services are easy to use, confidential and quick. All you need is a Touch Tone telephone. YOUR PERSONAL IDENTIFICATION NUMBER (PIN) The first time you call one of our automated telephone services, we'll ask you to set up your Personal Identification Number (PIN). The PIN assures that only you have automated telephone access to your account information. Please have your Customer Number (T-account #) handy when you call - you'll need it to establish your PIN. If you would ever like to change your PIN, just choose the "Change your Personal Identification Number" option when you call. If you forget your PIN, please call a Fidelity representative at 1-800- 544-6666 for assistance. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES* 1-800-544-8544 Just make a selection from this record-ed menu: PRESS For quotes on funds you own. 1. For an individual fund quote. 2. For the ten most frequently requested Fidelity fund quotes. 3. For quotes on Fidelity Select Portfolios(registered trademark). 4. To change your Personal Identification Number (PIN). 5. To speak with a Fidelity representative. 6. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT BALANCES 1-800-544-7544 Just make a selection from this record- ed menu: PRESS For balances on funds you own. 1. For your most recent fund activity (purchases, redemptions, and dividends). 2. To change your Personal Identification Number (PIN). 3. To speak with a Fidelity representative. 4. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 East Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19100 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 811 Wilshire Boulevard Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 455 Market Street San Francisco, CA 950 Northgate Drive San Rafael, CA 1400 Civic Drive Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 90 Alhambra Plaza Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 4001 Tamiami Trail, North Naples, FL 1907 West State Road 434 Orlando, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 2000 66th Street, North St. Petersburg, FL GEORGIA 3525 Piedmont Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA HAWAII 700 Bishop Street Honolulu, HI ILLINOIS 215 East Erie Street Chicago, IL One North Franklin Chicago, IL 540 Lake Cook Road Deerfield, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL LOUISIANA 201 St. Charles Avenue New Orleans, LA MAINE 3 Canal Plaza Portland, ME MARYLAND 7401 Wisconsin Avenue Bethesda, MD 1 West Pennsylvania Ave. Towson, MD MASSACHUSETTS 470 Boylston Street Boston, MA 21 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 29155 Northwestern Hwy. Southfield, MI MINNESOTA 7600 France Avenue South Edina, MN MISSOURI 700 West 47th Street Kansas City, MO 8885 Ladue Road Ladue, MO 200 North Broadway St. Louis, MO NEW JERSEY 56 South Street Morristown, NJ 501 Route 17, South Paramus, NJ 505 Millburn Avenue Short Hills, NJ NEW YORK 1050 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 1271 Avenue of the Americas New York, NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 4611 Sharon Road Charlotte, NC 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 28699 Chagrin Boulevard Woodmere Village, OH 1903 East Ninth Street Cleveland, OH OREGON 121 S.W. Morrison Street Portland, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 5100 Poplar Avenue Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 7001 Preston Road Dallas, TX 1155 Dairy Ashford Houston, TX 2701 Drexel Drive Houston, TX 1010 Lamar Street Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 215 South State Street Salt Lake City, UT VERMONT 199 Main Street Burlington, VT VIRGINIA 8180 Greensboro Drive McLean, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 511 Pine Street Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 595 North Barker Road Brookfield, WI TO WRITE FIDELITY If more than one address is listed, please locate the address that is closest to you. We'll give your correspondence immediate attention and send you written confirmation upon completion of your request. (LETTER_GRAPHIC)MAKING CHANGES TO YOUR ACCOUNT (such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 (LETTER_GRAPHIC)FOR NON-RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 OVERNIGHT EXPRESS Fidelity Investments 100 Crosby Parkway - KP2C Covington, KY 41015-4399 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6I 400 East Las Colinas Blvd. Irving, TX 75309-5517 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 193 Boston, MA 02210-0193 (LETTER_GRAPHIC)FOR RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6R 400 East Las Colinas Blvd. Irving, TX 75309-5517 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 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 * ADVISORY BOARD William O. McCoy 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) -----END PRIVACY-ENHANCED MESSAGE-----