-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, AX45WM/2TYWU0dTBPyDTC9mb7/CBx61FWDF/ETUqi7VgZWZdqykS1RMSdgn6WkKc eYQrIpq6sleoLYXipuzkQQ== 0000028540-94-000017.txt : 19940715 0000028540-94-000017.hdr.sgml : 19940715 ACCESSION NUMBER: 0000028540-94-000017 CONFORMED SUBMISSION TYPE: N-30B-2 PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940531 FILED AS OF DATE: 19940712 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY MT VERNON STREET TRUST CENTRAL INDEX KEY: 0000707823 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 042778701 STATE OF INCORPORATION: MA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30B-2 SEC ACT: 1940 Act SEC FILE NUMBER: 811-03583 FILM NUMBER: 94538563 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174391706 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAILZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY GROWTH COMPANY FUND DATE OF NAME CHANGE: 19910110 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY MERCURY FUND DATE OF NAME CHANGE: 19861216 N-30B-2 1 FIDELITY (registered trademark) NEW MILLENNIUM(trademark) FUND SEMIANNUAL REPORT MAY 31, 1994 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on stock market strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 10 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 23 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 27 Notes to the financial statements. THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: The first few months of 1994 were an unsettling time for many investors. After three years of a nearly perfect environment for stock market investing, stock prices fell in March and April. Investors disagree about whether this decline represents only a short-term correction or signals the beginning of a longer bear market. One can collect statistics to support either opinion, but of course, nobody knows for sure what will happen to stock prices in the months ahead. We do know, however, that market declines are a normal part of stock market investing. We have historically seen corrections of 10% or more every two years. That's why I thought this might be a good time to review three basic investment principles that have proven helpful to successful stock market investors in every market cycle. First, take a long-term approach when investing in stocks and stock funds. If you can afford to leave your money invested through the market's inevitable ups and downs, you will greatly reduce your vulnerability to any single decline. Over time, stock prices have gone up - and have significantly outperformed other types of investments and stayed ahead of inflation. Second, you can further manage risk by diversifying your investments. A stock mutual fund is already diversified, because it invests in many different companies. You can increase your diversification by investing in a number of different stock funds, or in different investment categories, such as bonds. You should also keep money you'll need in the near future in a more stable investment. Finally, it makes good sense to follow a regular investment plan, investing a set amount of money at the same time each month or quarter. That way, you can avoid getting caught up in the excitement of a rapidly-rising market - and won't end up buying all your shares at market highs. This strategy won't assure a profit or protect you from a loss in a declining market, but it should help you lower the average cost of your purchases. For this to be effective, you must continue to buy shares in both up and down markets. If you have questions, please call us at 1-800-544-8888. We would be happy to send you a Fidelity FundMatch kit, which can help you determine the mix of investments that is right for you. You might also find it convenient to set up a regular investment plan using the Fidelity Automatic Account Builder. We look forward to hearing from 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. Each performance figure includes changes in a fund's share price, plus reinvestment of any dividends (or income) and capital gains (the profits the fund earns when it sells stocks that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED MAY 31, 1994 PAST 6 PAST 1 LIFE OF MONTHS YEAR FUND New Millennium -0.67% 5.32% 18.90% New Millennium (incl. 3% sales charge) -3.65% 2.16% 15.34% S&P 500(Registered trademark) 0.24% 4.26% 8.05% Average Capital Appreciation Fund -0.91% 5.52% n/a CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, six months, one year, or since the fund began on December 28, 1992. For example, if you invested $1,000 in a fund that had a 5% return over the past year, you would end up with $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500 Composite Stock Price Index - a common proxy for the U.S. stock market. You can compare these figures to the average capital appreciation fund, which reflects the performance of 152 capital appreciation funds tracked by Lipper Analytical Services. Both benchmarks include reinvested dividends and capital gains, if any, and exclude the effects of sales charges. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED MAY 31, 1994 PAST 1 LIFE OF YEAR FUND New Millennium 5.32% 12.92% New Millennium (incl. 3% sales charge) 2.16% 10.53% S&P 500(Registered trademark) 4.26% 5.58% Average Capital Appreciation Fund 5.52% 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 New Millennium (300) S&P 500 12/28/92 9700.00 10000.00 12/31/92 9777.60 9910.45 01/31/93 10291.70 9993.70 02/28/93 10029.80 10129.62 03/31/93 10437.20 10343.35 04/30/93 10340.20 10093.04 05/31/93 10951.30 10363.53 06/30/93 11038.60 10393.59 07/31/93 11242.30 10352.01 08/31/93 11620.60 10744.36 09/30/93 11892.20 10661.62 10/31/93 12105.60 10882.32 11/30/93 11610.90 10778.94 12/31/93 12189.94 10909.36 01/31/94 12418.53 11280.28 02/28/94 12448.36 10974.59 03/31/94 11682.77 10496.09 04/30/94 11613.17 10630.44 05/31/94 11533.62 10804.78 $10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity New Millennium Fund on December 28, 1992, and paid a 3% sales charge. As the chart shows, by May 31, 1994, the value of your investment would have grown to $11,534 - a 15.34% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends reinvested, the same $10,000 investment would have grown to $10,805 - a 8.05% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) FUND TALK: THE MANAGER'S OVERVIEW An interview with Neal Miller, Portfolio Manager of Fidelity New Millennium Fund Q. HOW DID THE FUND PERFORM, NEAL? A. Not as well as I would have liked. For the six months and one year ended May 31, 1994, the fund had total returns of -0.67% and 5.32%, respectively. This compares with the average capital appreciation fund, which returned - - -0.91% over the six months and 5.52% over the year, according to Lipper Analytical Services. Q. WHAT HURT THE FUND? A. The negative interest rate environment - where interest rates were increasing dramatically - discriminated against my type of investing. I try to discover stocks that are out of favor but have something currently in the works that will make them overachievers, or top-performing investments, going forward. However, when interest rates go up, investors would rather own stock in a company that's turning in good results now, instead of one that has strong growth prospects. Q. YOU MENTIONED YOUR TYPE OF INVESTING. CAN YOU EXPLAIN THIS MORE? A. Yes. The fund tends to choose stocks based on social and economic trends that indicate the direction the market might take in the future. I like to say it tries to show people tomorrow's newspaper today. I look for counter trends or anomalies that indicate the beginning of a trend, then invest in stocks that are well placed to benefit from this favorable market backdrop. My goal is to find companies at bargain prices that have growth-oriented management, and companies whose products are already well received in the marketplace. Here's an example of how I pick stocks: I read in RAILWAY AGE, a trade periodical, that legislation to make railroad crossings safer was pending. The publication highlighted Harmon Industries as the leader in railroad crossing equipment. In response - after our research department saw that the company had a strong earnings forcast - I bought Harmon stock. Q. SO, OVER THE PAST SIX MONTHS, WHAT TRENDS HAVE EMERGED? A. There were many trends, but several of them stand out. The first is what I call "pleasure revenge." After two back-to-back recessions, layoffs in the workplace, and a fashion environment that favored the color black, it started to look like things were finally turning around. As the economy was recovering, people were coming out of their cocoons and were increasingly interested in pleasure items, such as travel. A second trend was the increased interest in technology in an office environment, especially networking and distributed data processing companies. I've tried to benefit from this trend through the database company Oracle Systems Corp. and the data storage company EMC Corp., both of which are in the fund's top 10 stocks. Q. HOW HAS THE "PLEASURE REVENGE" YOU MENTIONED AFFECTED THE STOCKS THAT YOU'VE BEEN BUYING? A. The fund owned mid- to upper-scale hotel companies, such as Hilton Hotels, which benefited from this trend. I also liked gaming stocks; clothing companies, such as Warnaco, which makes the highly publicized "Miracle Bra;" and companies that produce sporting goods products. Boating and outboard motor companies, like Brunswick Corp., also looked good. Q. WERE THERE OTHER NOTABLE TRENDS? A. Yes, as I indicated earlier, there was some interesting activity with railroads. First, keep in mind that in 1980 there were 71 Class 1 rails, or large railroad companies, in the United States. Now there are 13. The survivors of the railroad downsizing are more in charge of their destiny. They're cooperating with each other and operating their plant equipment more efficiently. In addition, trains can now be powered by alternating current, which makes them more fuel efficient. Because of these changes, I'm investing in large railroads, like Illinois Central, over the long run. I'm also focusing on related companies, such as Trinity Industries, which makes railroad cars. However, this year railroad stocks, which are cyclical stocks - those that tend to do well when the economy is doing well or poorly when the economy is weak - did not turn in a strong performance. This is because a number of investors did not believe that the industry would have an opportunity to raise prices or that industry equipment backlogs were real. Q. ANY OTHER INDUSTRIES THAT WERE STANDOUTS? A. Yes. The newsprint industry was worth noting because the real price of newsprint is at a 20-year low and the domestic demand for it is very peppy. However, what's especially encouraging is that the industry is doing well despite new environmental emissions legislation that will cost it money. Another thing that makes this industry look good is that the same machinery used to produce newsprint can be used to make telephone books. Demand for telephone books is growing in many developing countries, such as Malaysia and Indonesia. Q. IN HINDSIGHT, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS? A. My buying discipline is to buy low and sell high. I went against this approach when I bought stocks in Southeast Asia after they'd already had a significant run and were priced high. These investments helped the fund's performance during 1993 when the region was turning in phenomenal results, but weakened its performance when these markets fell in 1994. So, it was pretty much a wash. Still, it could have turned out differently. Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT OVER THE NEXT YEAR? A. I'm fairly positive about the fund. It seems like the interest rate environment is beginning to stabilize. That could be good news for the fund since it means more investors may be willing to invest in stocks that look good for the long term. I believe that in this environment the overachieving companies that the fund favors may turn in solid performances. FUND FACTS GOAL: to increase the value of the fund's shares over the long term by focusing on stocks with growth potential due to social and economic changes START DATE: December 28, 1992 SIZE: as of May 31, 1994, more than $311 million in assets (with current limit of $500 million in assets) MANAGER: Neal Miller, since December 1992; manager, Fidelity Equity Portfolios, since November 1988; Fidelity Aggressive Equity Discipline, since June 1990; Fidelity Special Equity Discipline, 1988-1990; joined Fidelity in 1988 (checkmark) NEAL MILLER ON NEW MILLENNIUM'S TOP TEN STOCKS: "My largest holding is Herman Miller, one of the country's largest producers of office furniture. This company is benefiting from an excessive amount of commercial real estate and increased competition among landlords for business tenants. As a result of this situation, businesses are moving between locations more, and they're buying more furniture from companies like Herman Miller. Another company that has impressed me is the hotel chain La Quinta Motor Inns, whose management has taken a number of steps to freshen its image. "I was disappointed with IBM, which I had high hopes for six months ago. In general, from the fund's perspective as a growth investor, IBM no longer meets the fund's selection criteria." (bullet) Over the past six months, the fund switched some of its foreign holdings away from Southeast Asia and into Canadian companies. Canadian energy company Chieftain International, which has the majority of its energy production capacity in the United States, is the fund's largest Canadian holding. INVESTMENT CHANGES TOP TEN STOCKS AS OF MAY 31, 1994 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO Herman Miller, Inc. 3.7 3.8 La Quinta Motor Inns, Inc. 2.3 1.6 Diebold, Inc. 2.2 1.6 Trinity Industries, Inc. 1.8 2.0 Oracle Systems Corp. 1.6 - Bowater, Inc. 1.5 - Dell Computer Corporation 1.5 - Compaq Computer Corp. 1.3 0.6 EMC Corp. 1.3 - Hilton Hotels Corp. 1.2 - TOP FIVE INDUSTRIES AS OF MAY 31, 1994 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE INDUSTRIES 6 MONTHS AGO Technology 19.9 14.7 Media & Leisure 9.8 8.3 Durables 9.3 5.3 Transportation 8.0 10.4 Health 5.9 3.5 ASSET ALLOCATION AS OF MAY 31, 1994 * AS OF NOVEMBER 30, 1993 ** Row: 1, Col: 1, Value: 6.6 Row: 1, Col: 2, Value: 50.0 Row: 1, Col: 3, Value: 43.4 Row: 1, Col: 1, Value: 11.4 Row: 1, Col: 2, Value: 40.0 Row: 1, Col: 3, Value: 48.6 Stocks 93.4% Short-term Investments 6.6% FOREIGN INVESTMENTS 12.2% Stocks 88.6% Short-term Investments 11.4% FOREIGN INVESTMENTS 12.9% * ** INVESTMENTS MAY 31, 1994 (UNAUDITED) Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 93.3% SHARES VALUE (NOTE 1) BASIC INDUSTRIES - 5.8% CHEMICALS & PLASTICS - 0.4% Furon Co. 21,300 $ 330,150 Guardsman Products, Inc. 31,600 351,550 Quaker Chemical Corp. 7,600 136,800 Wellman, Inc. 21,300 543,150 1,361,650 IRON & STEEL - 0.6% Birmingham Steel Corp. 23,700 740,625 Laclede Steel Co. (a) 51,800 738,150 Nucor Corp. 7,200 483,300 1,962,075 METALS & MINING - 0.7% Brush Wellman, Inc. 2,400 42,900 Castle AM & Co. 84,300 1,728,150 Korea Tungsten Mining Co. (a) 8,888 348,506 2,119,556 PACKAGING & CONTAINERS - 0.3% Shorewood Packaging Corp. (a) 56,100 925,650 PAPER & FOREST PRODUCTS - 3.8% Abitibi-Price, Inc. (a) 246,500 3,009,361 Aokam Perdana BHD (a) 185,800 1,382,965 Bowater, Inc. 198,300 4,808,775 Domtar, Inc. (a) 13,800 68,638 Fletcher Challenge Canada Ltd. Class A 28,900 394,637 Kimberly Clark de Mexico Class A 42,800 898,001 Longview Fibre Co. 26,200 517,450 Stone Consolidated Corp. (a) 93,700 1,093,082 12,172,909 TOTAL BASIC INDUSTRIES 18,541,840 CONGLOMERATES - 0.8% Alexander & Baldwin, Inc. 74,900 1,853,775 Harris Corp. 14,600 691,675 2,545,450 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) CONSTRUCTION & REAL ESTATE - 4.0% BUILDING MATERIALS - 1.5% Associated Kaolin Industries BHD 99,000 $ 291,685 Central Sprinkler Corp. (a) 20,000 235,000 Golden Pharos BHD (a) 100,000 317,891 Lilly Industrial Coatings, Inc. Class A 71,700 1,613,250 National Gypsum Co. (a) 32,800 1,148,000 Republic Gypsum Co. 26,200 294,750 Southdown, Inc. (a) 2,400 51,300 USG Corp. (a) 29,900 687,700 4,639,576 CONSTRUCTION - 1.8% Butler Manufacturing Co. (Del.) (a) 109,300 2,377,275 NCI Building Systems, Inc. (a) 137,500 2,303,125 Renong BHD 358,000 441,342 Standard Pacific Corp. 69,100 613,263 5,735,005 ENGINEERING - 0.6% Apogee Enterprises, Inc. 19,800 232,650 Foster Wheeler Corp. 3,000 112,875 Glenayre Technologies, Inc. 37,800 1,625,400 Stone & Webster, Inc. 1,000 33,250 2,004,175 REAL ESTATE - 0.1% Grubb & Ellis Co. (a) 77,800 204,225 TOTAL CONSTRUCTION & REAL ESTATE 12,582,981 DURABLES - 9.3% AUTOS, TIRES, & ACCESSORIES - 3.3% CLARCOR, Inc. 44,100 793,800 Cooper Tire & Rubber Co. 6,100 161,650 Echlin, Inc. 103,000 2,793,875 Genuine Parts Company 85,400 2,978,325 Honda Motor Co. Ltd. 34,000 606,817 Raymond Corp. (The) (a) 109,465 1,970,370 Smith (A.O.) Corp. Class B 16,800 459,900 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) DURABLES - CONTINUED AUTOS, TIRES, & ACCESSORIES - CONTINUED Suzuki Motor Corp. 46,000 $ 610,086 Wabash National Corp. 1,900 90,250 10,465,073 CONSUMER ELECTRONICS - 1.2% Harman International Industries, Inc. (a) 8,500 231,625 Matsushita Electric Industrial Co. Ltd. 115,000 2,002,513 Newell Co. 34,600 1,569,975 3,804,113 HOME FURNISHINGS - 3.9% HON Industries, Inc. 25,600 734,400 Herman Miller, Inc. 478,000 11,711,000 12,445,400 TEXTILES & APPAREL - 0.9% NIKE, Inc. Class B 19,700 1,162,300 Warnaco Group, Inc. Class A (a) 53,700 1,758,675 2,920,975 TOTAL DURABLES 29,635,561 ENERGY - 5.0% COAL - 0.5% MAPCO, Inc. 23,700 1,481,250 ENERGY SERVICES - 2.8% Atwood Oceanics, Inc. (a) 4,500 57,938 BJ Services Co. (a) 57,800 1,083,750 Dreco Energy Services Ltd. Class A (a) 28,600 286,000 Dual Drilling Co. (a) 33,900 372,900 Global Marine, Inc. (a) 97,000 388,000 Marine Drilling Cos., Inc. (a) 120,000 570,000 Maverick Tube Corp. (a) 38,200 334,250 Nabors Industries, Inc. (a) 193,900 1,308,825 Petroleum Helicopters, Inc. (a) 4,100 39,975 Petroleum Helicopters, Inc. (non-vtg.) (a) 9,600 93,600 Pride Petroleum Services, Inc. (a) 30,000 151,875 Schlumberger Ltd. 34,300 1,963,675 Smith International, Inc. (a) 28,200 426,525 Weatherford International, Inc. (a) 169,200 1,797,750 8,875,063 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) ENERGY - CONTINUED OIL & GAS - 1.7% Apache Corp. 26,600 $ 721,525 Chieftain International, Inc. (a) 216,300 3,736,055 KCS Group, Inc. 12,800 268,800 Parker & Parsley Petroleum Co. 32,400 793,800 5,520,180 TOTAL ENERGY 15,876,493 FINANCE - 4.3% BANKS - 0.9% Bancorp Hawaii, Inc. 20,300 664,825 Development & Commercial Bank 313,000 649,178 First Hawaiian, Inc. 11,400 313,500 Michigan National Corp. 10,100 765,075 State Street Boston Corp. 8,500 344,781 2,737,359 CREDIT & OTHER FINANCE - 0.9% Brierley Investments Ltd. 967,087 734,677 First USA, Inc. 4,900 217,438 Granite Industries BHD 131,000 233,611 Idris Hydraulic Malaysia BHD (a) 808,000 1,353,190 Tong Yang Securities Co. Ltd. (a) 11,628 249,615 2,788,531 INSURANCE - 0.2% American Travellers Corp. (a) 30,500 392,688 Berkley (W.R.) Corp. 10,500 406,875 799,563 SAVINGS & LOANS - 0.1% Washington Mutual Savings Bank 17,700 366,169 SECURITIES INDUSTRY - 2.2% Daiwa Securities 70,000 1,200,333 Korea First Securities Co. (a) 47,940 1,017,216 Nikko Securities 125,000 1,645,914 Nomura Securities Co. Ltd. 97,000 2,239,778 Seoul Securities Co. (a) 25,584 479,363 Sunkyong Securities Co. (a) 20,000 419,407 7,002,011 TOTAL FINANCE 13,693,633 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) HEALTH - 5.9% DRUGS & PHARMACEUTICALS - 1.9% American Cyanamid Co. 18,300 $ 953,888 Circa Pharmaceuticals, Inc. (a) 110,400 1,090,200 Hauser Chemical Research, Inc. (a) 204,000 1,453,500 Idexx Corp. (a) 15,200 486,400 Pfizer, Inc. 15,200 969,000 Upjohn Co. 19,000 610,375 Warner-Lambert Co. 6,300 443,363 6,006,726 MEDICAL EQUIPMENT & SUPPLIES - 3.3% Becton, Dickinson & Co. 77,400 2,950,875 Boston Scientific Corp. (a) 80,200 1,182,950 Datascope Corp. 2,500 41,719 Kendall International, Inc. (a) 9,100 439,075 Medtronic, Inc. 37,100 3,051,475 Millipore Corp. 13,900 733,225 Owens and Minor, Inc. 96,900 2,216,588 10,615,907 MEDICAL FACILITIES MANAGEMENT - 0.7% Manor Care, Inc. 59,700 1,544,738 U.S. Healthcare, Inc. 14,250 573,563 Vitalink Pharmacy Services, Inc. (a) 15,600 156,000 2,274,301 TOTAL HEALTH 18,896,934 INDUSTRIAL MACHINERY & EQUIPMENT - 5.9% ELECTRICAL EQUIPMENT - 1.2% Asea AB sponsored ADR 1,300 102,050 C COR Electronics, Inc. (a) 17,200 356,900 Grainger (W.W.), Inc. 33,400 2,175,175 Mitsubishi Electric Co. Ord. 47,000 304,071 Scientific-Atlanta, Inc. 22,700 848,413 Star Paging International Holdings Ltd. 78,000 32,307 3,818,916 INDUSTRIAL MACHINERY & EQUIPMENT - 4.7% Brenco, Inc. 207,500 2,308,438 CMI Corp. Class A 15,600 111,150 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED Cascade Corp. 82,500 $ 1,650,000 Cooper Industries, Inc. 22,100 801,125 Duriron Company, Inc. 74,800 1,084,600 Greenfield Industries, Inc. 8,300 154,588 JLG Industries, Inc. 40,400 1,252,400 Manitowoc Co., Inc. 103,200 2,644,500 Regal-Beloit Corp. 94,900 2,562,300 Stewart & Stevenson Services, Inc. 35,500 1,553,125 Twin Disc, Inc. 35,700 687,225 14,809,451 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 18,628,367 MEDIA & LEISURE - 9.8% BROADCASTING - 1.1% Associated Communications Corp. Class B (a) 56,500 1,320,688 Capital Cities/ABC, Inc. 3,000 2,219,250 United Television, Inc. 700 31,675 3,571,613 ENTERTAINMENT - 0.2% Royal Carribean Cruises Ltd. 19,900 579,588 LEISURE DURABLES & TOYS - 2.3% Brunswick Corp. 104,800 2,593,800 Coleman, Inc. (a) 1,200 33,150 Fleetwood Enterprises, Inc. 55,500 1,165,500 Sports and Recreation, Inc. (a) 43,800 1,730,100 West Marine, Inc. 88,000 1,826,000 7,348,550 LODGING & GAMING - 5.6% Accor Asia Pacific Ltd. 346,300 280,919 Caesars World, Inc. (a) 8,800 344,300 Circus Circus Enterprises, Inc. (a) 8,100 187,313 Hilton Hotels Corp. 69,100 3,843,688 Hospitality Franchise Systems, Inc. (a) 51,600 1,399,650 La Quinta Motor Inns, Inc. 249,525 7,329,797 Mirage Resorts, Inc. (a) 81,500 1,599,438 Penn National Gaming, Inc. 12,600 130,725 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) MEDIA & LEISURE - CONTINUED LODGING & GAMING - CONTINUED President Riverboat Casinos, Inc. (a) 41,000 $ 389,500 Promus Companies, Inc. (a) 27,000 1,029,375 Sahara Gaming Corp. (a) 75,667 586,419 Supertel Hospitality, Inc. 16,500 189,750 WMS Industries, Inc. (a) 22,800 510,150 17,821,024 PUBLISHING - 0.3% American City Business Journals, Inc. (a) 13,200 188,100 Commerce Clearing House, Inc. Class A 26,900 484,200 Score Board, Inc. (a) 6,700 54,438 Wiley (John) & Sons, Inc. Class A 4,100 339,275 1,066,013 RESTAURANTS - 0.3% Sizzler International, Inc. 28,000 192,500 Taco Cabana, Inc. Class A (a) 26,400 409,200 Uno Restaurant Corp. (a) 30,400 319,200 920,900 TOTAL MEDIA & LEISURE 31,307,688 NONDURABLES - 2.4% AGRICULTURE - 0.1% Chai-Na-Ta Ginseng Products (a) 19,500 81,118 Delta & Pine Land Co. (a) 15,200 288,800 369,918 BEVERAGES - 0.5% Big Rock Brewery Ltd. 6,800 82,450 Canadaigua Wine Co. Class A (a) 61,800 1,421,400 1,503,850 FOODS - 0.5% Dean Foods Co. 40,100 1,092,725 Lance, Inc. 27,600 501,975 Savanna Foods & Industries, Inc. 3,600 37,800 1,632,500 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) NONDURABLES - CONTINUED HOUSEHOLD PRODUCTS - 1.0% Luxottica Group SPA sponsored ADR 7,200 $ 223,200 Neutrogena Corp. 146,700 2,787,300 3,010,500 TOBACCO - 0.3% Philip Morris Companies, Inc. 22,100 1,088,425 TOTAL NONDURABLES 7,605,193 PRECIOUS METALS - 0.1% Homestake Mining Co. 9,300 181,350 RETAIL & WHOLESALE - 4.8% APPAREL STORES - 0.4% AnnTaylor Stores Corp. (a) 35,300 1,182,550 BON-TON Stores, Inc. (a) 2,500 20,938 Harolds Stores, Inc. (a) 100 1,238 Sportmart, Inc. (a) 10,600 149,725 1,354,451 GENERAL MERCHANDISE STORES - 0.2% Dayton Hudson Corp. 5,000 393,125 Nordstrom, Inc. 6,300 277,988 Proffitts, Inc. (a) 5,000 97,500 768,613 GROCERY STORES - 1.0% Harry's Farmers' Market, Inc. Class A (a) 12,300 144,525 Starbucks Corp. (a) 35,400 1,008,900 Whole Foods Market, Inc. (a) 123,900 1,858,500 3,011,925 RETAIL & WHOLESALE, MISCELLANEOUS - 3.2% Best Buy Co., Inc. (a) 109,000 3,147,375 CDW Computer Centers, Inc. (a) 3,800 71,250 Circuit City Stores, Inc. 7,100 137,563 Cole National Corp. Class A 100 1,288 Friedmans, Inc. Class A (a) 2,500 34,375 Lowe's Companies, Inc. 14,700 461,213 Micro Warehouse, Inc. (a) 20,700 522,675 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) RETAIL & WHOLESALE - CONTINUED RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED North West Company, Inc. 47,000 $ 501,537 Office Depot, Inc. (a) 67,200 2,511,600 Sodak Gaming, Inc. (a) 15,200 277,400 Sotheby's Holdings, Inc. Class A 136,300 1,754,863 Staples, Inc. 6,200 179,800 Tiffany & Company, Inc. 4,100 142,475 Viking Office Products, Inc. (a) 5,600 280,350 10,023,764 TOTAL RETAIL & WHOLESALE 15,158,753 SERVICES - 4.5% LEASING & RENTAL - 0.2% Blockbuster Entertainment Corp. 23,100 652,575 PRINTING - 2.9% Cryk, Inc. (a) 26,300 670,650 Donnelley (R.R.) & Sons Co. 15,400 423,500 Graphic Industries, Inc. 11,400 99,750 New England Business Service, Inc. 101,600 1,968,500 Reynolds & Reynolds Co. Class A 155,800 3,544,450 Wallace Computer Services, Inc. 79,400 2,640,050 9,346,900 SERVICES - 1.4% Devry, Inc. (a) 70,800 1,893,900 Manpower, Inc. (a) 37,100 718,813 Pittston Company Services Group 16,400 422,300 Regis Corporation (a) 18,400 239,200 Robert Half International, Inc. (a) 1,300 44,200 Service Corp. International 46,200 1,131,900 4,450,313 TOTAL SERVICES 14,449,788 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) TECHNOLOGY - 19.9% COMMUNICATIONS EQUIPMENT - 1.4% Cabletron Systems, Inc. (a) 5,200 $ 514,800 Ericsson (L.M.) Telephone Co. Class B ADR 6,300 316,575 Harmon Industries, Inc. (a) 63,100 1,293,550 Newbridge Networks Corp. (a) 17,000 784,125 Syntellect, Inc. (a) 35,100 109,688 Union Switch and Signal, Inc. (a) 3,700 66,600 3Com Corp. (a) 33,100 1,555,700 4,641,038 COMPUTER SERVICES & SOFTWARE - 6.8% Adobe Systems, Inc. 25,600 736,000 Broderbund Software, Inc. (a) 3,600 158,400 CACI International, Inc. Class A 23,300 221,350 Cheyenne Software, Inc. (a) 9,550 191,000 Computer Task Group, Inc. 8,900 76,763 Compuware Corp. (a) 44,100 1,868,738 General Motors Corp. Class E 43,700 1,534,963 Henry (Jack) & Associates, Inc. 134,333 1,192,205 Intuit (a) 20,700 719,325 Investment Technology Group, Inc. 24,000 366,000 Keane, Inc. (a) 18,450 684,956 Lotus Development Corp. (a) 3,500 210,000 Microsoft Corp. (a) 29,100 1,564,125 Novell, Inc. (a) 101,300 1,798,075 Oracle Systems Corp. (a) 149,000 5,103,250 Parametric Technology Corp. (a) 52,000 1,540,500 Peoplesoft, Inc. (a) 45,700 1,513,813 Platinum Technology, Inc. (a) 64,300 868,050 SunGard Data Systems, Inc. (a) 14,600 521,038 Sybase, Inc. (a) 13,700 739,800 21,608,351 COMPUTERS & OFFICE EQUIPMENT - 9.3% ADAPTEC, Inc. (a) 26,600 468,825 Canon, Inc. 120,000 1,992,817 Compaq Computer Corp. (a) 34,100 4,032,325 Conner Peripherals, Inc. (a) 183,400 2,796,850 Danka Business Systems PLC sponsored ADR 18,800 796,650 Dell Computer Corporation (a) 165,200 4,728,850 Diebold, Inc. 159,750 6,869,250 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - CONTINUED EMC Corp. (a) 238,900 $ 4,031,438 Intergraph Corp. (a) 18,200 168,350 Komag, Inc. (a) 13,800 310,500 Microtouch Systems, Inc. 31,400 620,150 Silicon Graphics, Inc. (a) 106,300 2,405,038 Tech Data Corp. (a) 27,800 437,850 29,658,893 ELECTRONIC INSTRUMENTS - 0.4% Applied Materials, Inc. (a) 19,000 828,875 Hung Chang Products Co. 11,000 294,826 1,123,701 ELECTRONICS - 2.0% Advanced Micro Devices, Inc. (a) 11,300 305,100 Atmel Corp. (a) 1,400 36,050 Cirrus Logic, Inc. (a) 9,500 323,594 Hitachi Ltd. 200,000 2,053,759 Intel Corp. 30,500 1,906,250 Linear Technology Corp. 21,600 972,000 Maxim Integrated Products, Inc. (a) 10,800 567,000 National Semiconductor Corp. (a) 7,700 149,188 6,312,941 TOTAL TECHNOLOGY 63,344,924 TRANSPORTATION - 8.0% AIR TRANSPORTATION - 0.8% Korean Air (a) 45,000 1,440,625 Mesa Airlines, Inc. (a) 62,400 748,800 SkyWest, Inc. 12,100 390,225 2,579,650 RAILROADS - 5.8% ABC Rail Products Corp. (a) 30,600 577,575 CSX Corp. 32,300 2,470,950 Illinois Central Corp., Series A 89,500 3,110,125 Johnstown America Industries, Inc. (a) 40,800 867,000 Portec, Inc. (a) 13,200 188,100 Santa Fe Pacific Corp. 53,400 1,214,850 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) TRANSPORTATION - CONTINUED RAILROADS - CONTINUED Southern Pacific Rail Corp. (a) 86,200 $ 1,896,400 Trinity Industries, Inc. 157,500 5,827,500 Wisconsin Central Transportation Corp. (a) 33,700 2,337,938 18,490,438 SHIPPING - 0.1% OMI Corp. (a) 23,600 153,400 TRUCKING & FREIGHT - 1.3% Carolina Freight Corp. 17,200 187,050 Consolidated Freightways, Inc. (a) 41,000 1,055,750 Detroit & Canada Tunnel Corp. 1,000 26,750 Expeditors International of Washington, Inc. 31,500 551,250 Roadway Services, Inc. 32,500 2,315,625 4,136,425 TOTAL TRANSPORTATION 25,359,913 UTILITIES - 2.8% CELLULAR - 1.3% Airtouch Communications 18,500 450,938 Dial Page, Inc. (a) 75,100 2,515,850 Onecomm Corp. 52,700 1,146,225 4,113,013 ELECTRIC UTILITY - 0.4% Korea Electric Power Corp. 35,010 1,194,658 GAS - 0.1% Tejas Gas Corp. (Del.) (a) 9,500 464,313 TELEPHONE SERVICES - 1.0% ALC Communications Corp. (a) 21,600 685,800 C-TEC Corp. (a) 12,100 308,550 LDDS Communications, Inc. (a) 45,954 844,405 Rochester Telephone Corp. 57,800 1,293,254 Transaction Network Services, Inc. 16,300 173,188 3,305,197 TOTAL UTILITIES 9,077,181 TOTAL COMMON STOCKS (Cost $288,315,289) 296,886,049 NONCONVERTIBLE PREFERRED STOCKS - 0.1% SHARES VALUE (NOTE 1) FINANCE - 0.1% CREDIT & OTHER FINANCE - 0.1% Tong Yang Securities (a) (Cost $432,279) 20,600 $ 385,978 REPURCHASE AGREEMENTS - 6.6% MATURITY AMOUNT Investments in repurchase agreements, (U.S. Treasury obligations), in a joint trading account at 4.26% dated 5/31/94 due 6/1/94 $ 21,029,488 21,027,000 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $309,774,568) $ 318,299,027 LEGEND (a) Non-income producing OTHER INFORMATION Distribution of investments by country of issue, as a percentage of total value of investment in securities, is as follows: United States 87.8% Japan 4.0 Canada 3.2 Korea 1.8 Malaysia 1.5 Others (individually less than 1%) 1.7 TOTAL 100.0% INCOME TAX INFORMATION At April 30, 1994, the aggregate cost of investment securities for income tax purposes was $309,858,601. Net unrealized appreciation aggregated $8,440,426, of which $24,222,786 related to appreciated investment securities and $15,782,360 related to depreciated investment securities. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
MAY 31, 1994 (UNAUDITED) ASSETS Investment in securities, at value (including repurchase $ 318,299,027 agreements of $21,027,000) (cost $309,774,568) (Notes 1 and 2) - See accompanying schedule Cash 357 Receivable for investments sold 21,561,175 Receivable for fund shares sold 724,220 Dividends receivable 373,742 TOTAL ASSETS 340,958,521 LIABILITIES Payable for investments purchased $ 27,986,682 Payable for fund shares redeemed 776,443 Accrued management fee 212,057 Other payables and accrued expenses 188,123 TOTAL LIABILITIES 29,163,305 NET ASSETS $ 311,795,216 Net Assets consist of (Note 1): Paid in capital $ 298,066,353 Accumulated net investment (loss) (112,664) Accumulated undistributed net realized gain (loss) on 5,317,068 investments Net unrealized appreciation (depreciation) on investment 8,524,459 securities NET ASSETS, for 26,879,084 shares outstanding $ 311,795,216 NET ASSET VALUE and redemption price per share $11.60 ($311,795,216 (divided by) 26,879,084 shares) Maximum offering price per share (100/97 of $11.60) $11.96
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1994 (UNAUDITED) INVESTMENT INCOME $ 1,545,137 Dividends Interest 461,870 TOTAL INCOME 2,007,007 EXPENSES Management fee (Note 4) $ 1,037,398 Basic fee Performance adjustment 216,169 Transfer agent fees (Note 4) 573,498 Accounting fees and expenses (Note 4) 93,113 Non-interested trustees' compensation 934 Custodian fees and expenses 77,978 Registration fees 30,126 Audit 15,443 Legal 1,444 Miscellaneous 921 Total expenses before reductions 2,047,024 Expense reductions (Note 5) (43,700) 2,003,324 NET INVESTMENT INCOME 3,683 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 5,892,893 (NOTES 1 AND 3) Net realized gain (loss) on investment securities Change in net unrealized appreciation (depreciation) on (11,093,932) investment securities NET GAIN (LOSS) (5,201,039) NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ (5,197,356) OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS DECEMBER 28, ENDED MAY 31, 1992 1994 (COMMENCEMENT (UNAUDITED) OF OPERATIONS) TO NOVEMBER 30, 1993 INCREASE (DECREASE) IN NET ASSETS Operations $ 3,683 $ (177,405) Net investment income (loss) Net realized gain (loss) on investments 5,892,893 6,532,870 Change in net unrealized appreciation (depreciation) (11,093,932) 19,618,391 on investments NET INCREASE (DECREASE) IN NET ASSETS RESULTING (5,197,356) 25,973,856 FROM OPERATIONS Distributions to shareholders From net realized gain (6,389,367) - Share transactions 216,946,540 413,120,185 Net proceeds from sales of shares Reinvestment of distributions 6,209,934 - Cost of shares redeemed (153,883,456) (184,985,120) Net increase (decrease) in net assets resulting from 69,273,018 228,135,065 share transactions TOTAL INCREASE (DECREASE) IN NET ASSETS 57,686,295 254,108,921 NET ASSETS Beginning of period 254,108,921 - End of period (including accumulated net investment $ 311,795,216 $ 254,108,921 loss of $112,664 and $177,405, respectively) OTHER INFORMATION Shares Sold 17,743,655 37,507,976 Issued in reinvestment of distributions 516,510 - Redeemed (12,612,696) (16,276,361) Net increase (decrease) 5,647,469 21,231,615
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED DECEMBER 28, 1992 MAY 31, 1994 (COMMENCEMENT OF OPERATIONS) TO NOVEMBER 30, (UNAUDITED) 1993 SELECTED PER-SHARE DATA Net asset value, beginning of period $ 11.97 $ 10.00 Income from Investment Operations Net investment income - (.01) Net realized and unrealized gain (loss) on (.07) 1.98 investments Total from investment operations (.07) 1.97 Less Distributions From net realized gain (.30) - Net asset value, end of period $ 11.60 $ 11.97 TOTAL RETURN (dagger)(double dagger) (.67)% 19.70% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period (000 omitted) $ 311,795 $ 254,109 Ratio of expenses to average net assets (diamond) 1.32%* 1.32%* Ratio of expenses to average net assets before 1.34%* 1.34%* expense reductions (diamond) Ratio of net investment income to average net assets - (.10)%* Portfolio turnover rate 185%* 204%*
* ANNUALIZED (dagger) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. (double dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. (diamond) SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS For the period ended May 31, 1994 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity New Millennium Fund (the fund) is a fund of Fidelity Mt. Vernon Street Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange), are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days 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 current exchange rate. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions. It is not practicable to identify the portion of each amount shown in the fund's Statement of Operations under the caption "Realized and Unrealized Gain (Loss) on Investments" that arises from changes in foreign currency exchange rates. Investment income includes net realized and unrealized currency gains and losses recognized between accrual and payment dates. 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 all of its taxable income for its fiscal year. The schedule of investments includes information re- garding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income is accrued as earned. Dividend and interest 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. 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for foreign currency 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 distri- butions will result in reclassifications to paid in capital. Undistributed net investment income 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. CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective December 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, the fund changed the classification of distributions to shareholders to better disclose the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, amounts as of November 30, 1993 have been reclassified to reflect an increase in paid in capital of $2, a decrease in undistributed net investment loss of $61,058 and a decrease in accumulated net realized gain on investments of $61,060. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign currency contracts. These contracts involve market risk in excess of the amount reflected in the fund's Statement of Assets and Liabilities. The face or contract amount in U.S. dollars reflects the total exposure the fund has in that particular currency contract. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Losses may arise due to changes in the value of the foreign currency or if the counterparty does not perform under the contract. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and presented net on the Statement of Assets and Liabilities. Gain (loss) on the purchase or sale of forward foreign currency contracts having the same settlement date and broker is recognized on the date of offset, otherwise gain (loss) is recognized on settlement date. 2. OPERATING POLICIES - CONTINUED REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying securities, whose market value is required to be at least 102% of the resale price at the time of purchase. The fund's investment adviser, Fidelity Management & Research Company (FMR), is responsible for determining that the value of these underlying securities remains at least equal to the resale price. JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission, the fund, along with other registered investment companies having management contracts with FMR, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Federal Agency obligations. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $328,400,702 and $258,040,860, 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 ranging from .30% to .52% and is based on the monthly average net assets of all the mutual funds advised by FMR. The annual individual fund fee rate is .35%. The basic fee is subject to a performance adjustment (up to a maximum of + or - .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. The fund's performance adjustment took effect on December 1, 1993. For the period, the management fee was equivalent to an annualized rate of .82% of average net assets after the performance adjustment. The Board of Trustees approved a new group fee rate schedule with rates rang- ing from .2850% to .5200%. Effective November 1, 1993, FMR has voluntarily agreed to implement this new group fee rate schedule as it results in the same or a lower management fee. SALES LOAD. For the period, Fidelity Distributors Corporation, an affiliate of FMR and the general distributor of the fund, received sales charges of $739,816 on sales of shares of the fund. TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives fees based on the type, size, number of accounts and the number of transactions made by shareholders. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. ACCOUNTING FEE. 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. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED 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 $39,357 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 $43,700 under this arrangement. 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. FOR MORE INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Gary L. French, Treasurer John H. Costello, Assistant Treasurer Arthur S. Loring, Secretary Robert H. Morrison, Manager, Security Transactions 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* Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN Chase Manhattan Bank, N.A. New York, NY FIDELITY GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Fidelity Fifty Growth Company Fund Low-Priced Stock Fund Magellan(Registered trademark) Fund Mid-Cap Stock Fund New Millennium(trademark) Fund OTC Portfolio Retirement Growth Fund Small Cap Growth 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) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE -----END PRIVACY-ENHANCED MESSAGE-----