N-CSRS 1 main.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-4085

Fidelity Income Fund
(Exact name of registrant as specified in charter)

245 Summer St., Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)

Scott C. Goebel, Secretary

245 Summer St.

Boston, Massachusetts 02210
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:	August 31

Date of reporting period:	February 28, 2014

Item 1. Reports to Stockholders

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®

Government Income

Fund - Class A, Class T, Class B
and Class C

Semiannual Report

February 28, 2014

(Fidelity Cover Art)

Class A, Class T, Class B, and Class C are classes of Fidelity® Government Income Fund

Shareholder Expense Example	(Click Here)	An example of shareholder expenses.
Investment Changes	(Click Here)	A summary of major shifts in the fund's investments over the past six months.
Investments	(Click Here)	A complete list of the fund's investments with their market values.
Financial Statements	(Click Here)	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	(Click Here)	Notes to the financial statements.
Board Approval of Investment Advisory Contracts and Management Fees	(Click Here)

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third-party marks appearing herein are the property of their respective owners.

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.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com, http://www.advisor.fidelity.com, or http://www.401k.com, as applicable.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2013 to February 28, 2014).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro-rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio ^B	Beginning Account Value September 1, 2013	Ending Account Value February 28, 2014	Expenses Paid During Period* September 1, 2013 to February 28, 2014
Class A	.78%
Actual		$ 1,000.00	$ 1,020.20	$ 3.91
Hypothetical^A		$ 1,000.00	$ 1,020.93	$ 3.91
Class T	.76%
Actual		$ 1,000.00	$ 1,020.30	$ 3.81
Hypothetical^A		$ 1,000.00	$ 1,021.03	$ 3.81
Class B	1.51%
Actual		$ 1,000.00	$ 1,016.50	$ 7.55
Hypothetical^A		$ 1,000.00	$ 1,017.31	$ 7.55
Class C	1.55%
Actual		$ 1,000.00	$ 1,016.30	$ 7.75
Hypothetical^A		$ 1,000.00	$ 1,017.11	$ 7.75
Government Income	.45%
Actual		$ 1,000.00	$ 1,022.90	$ 2.26
Hypothetical^A		$ 1,000.00	$ 1,022.56	$ 2.26
Institutional Class	.51%
Actual		$ 1,000.00	$ 1,021.50	$ 2.56
Hypothetical^A		$ 1,000.00	$ 1,022.27	$ 2.56

^A 5% return per year before expenses

^B Annualized expense ratio reflects expenses net of applicable fee waivers.

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in each Class' annualized expense ratio.

In addition to the expenses noted above, the Fund also indirectly bears its proportional share of the expenses of the underlying Fidelity Central Funds. Annualized expenses of the underlying non-money market Fidelity Central Funds as of their most recent fiscal half year were less than .01%.

Semiannual Report

Investment Changes (Unaudited)

The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds.

Coupon Distribution as of February 28, 2014
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.0^†	0.0^†
0.01 - 0.99%	17.6	21.2
1 - 1.99%	12.3	9.4
2 - 2.99%	10.2	8.3
3 - 3.99%	20.8	20.8
4 - 4.99%	18.0	18.9
5 - 5.99%	14.6	13.6
6 - 6.99%	1.8	4.3
7% and above	0.3	0.3

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Weighted Average Maturity as of February 28, 2014
		6 months ago
Years	6.1	5.9

This is a weighted average of all the maturities of the securities held in a fund. Weighted Average Maturity (WAM) can be used as a measure of sensitivity to interest rate changes and market changes. Generally, the longer the maturity, the greater the sensitivity to such changes. WAM is based on the dollar-weighted average length of time until principal payments must be paid. Depending on the types of securities held in a fund, certain maturity shortening devices (e.g., demand features, interest rate resets, and call options) may be taken into account when calculating the WAM.

Duration as of February 28, 2014
		6 months ago
Years	4.8	4.9

Duration is a measure of a security's price sensitivity to changes in interest rates. Duration differs from maturity in that it considers a security's interest payments in addition to the amount of time until the security reaches maturity, and also takes into account certain maturity shortening features (e.g., demand features, interest rate resets, and call options) when applicable. Securities with longer durations generally tend to be more sensitive to interest rate changes than securities with shorter durations. A fund with a longer average duration generally can be expected to be more sensitive to interest rate changes than a fund with a shorter average duration.

^† Amount represents less than 0.1%
Asset Allocation (% of fund's net assets)
As of February 28, 2014*			As of August 31, 2013**
	Mortgage Securities 29.3%			Mortgage Securities 34.8%
	CMOs and Other Mortgage Related Securities 21.4%			CMOs and Other Mortgage Related Securities 17.3%
	U.S. Treasury Obligations 40.2%			U.S. Treasury Obligations 40.5%
	U.S. Government Agency Obligations^† 4.0%			U.S. Government Agency Obligations^† 2.9%
	Foreign Government & Government Agency Obligations 3.1%			Foreign Government & Government Agency Obligations 1.9%
	Short-Term Investments and Net Other Assets (Liabilities) 2.0%			Short-Term Investments and Net Other Assets (Liabilities) 2.6%
* Foreign Investments		3.1%	** Foreign Investments		1.9%
* Futures and Swaps		1.7%	** Futures and Swaps		3.4%

inc428

^† Includes NCUA Guaranteed Notes.

Percentages in the above tables are adjusted for the effect of TBA Sale Commitments.

Semiannual Report

Investments February 28, 2014 (Unaudited)

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 44.2%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 1.8%
Fannie Mae:
0.875% 2/8/18	$ 266		$ 262
1.625% 11/27/18	913		915
1.875% 9/18/18	203		206
1.875% 2/19/19	1,112		1,123
Federal Home Loan Bank 1% 6/21/17	14,860		14,874
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	2,229		2,369
Series 2002-20K Class 1, 5.08% 11/1/22	3,571		3,887
Series 2004-20H Class 1, 5.17% 8/1/24	1,220		1,329
Tennessee Valley Authority:
1.75% 10/15/18	23,006		23,179
3.5% 12/15/42	7,070		5,951
5.25% 9/15/39	5,209		5,855
5.375% 4/1/56	8,429		9,300
5.88% 4/1/36	3,438		4,201
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			73,451
U.S. Treasury Obligations - 40.2%
U.S. Treasury Bonds:
3.625% 8/15/43	112,941		113,717
3.625% 2/15/44	3,000		3,019
3.75% 11/15/43	6,000		6,180
4.375% 2/15/38	30,154		34,682
5% 5/15/37 (d)	43,170		54,124
9.875% 11/15/15 (e)	10,285		11,960
U.S. Treasury Notes:
0.25% 2/15/15	70,000		70,068
0.25% 7/15/15	3		3
0.25% 9/30/15	15,000		15,008
0.25% 2/29/16	14,933		14,911
0.25% 4/15/16	61,378		61,225
0.25% 5/15/16	17,502		17,446
0.375% 1/15/16	133,453		133,656
0.375% 3/15/16	20,000		20,014
0.625% 7/15/16	67,927		68,198
0.625% 8/15/16	44,206		44,354
0.625% 11/15/16	4,315		4,320
0.625% 4/30/18	37,435		36,543
0.75% 1/15/17	10,000		10,030
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
0.75% 6/30/17	$ 58,736		$ 58,516
0.875% 9/15/16	10,000		10,091
0.875% 11/30/16	8,663		8,727
0.875% 1/31/17	704		708
0.875% 1/31/18	4,683		4,641
0.875% 7/31/19	6,174		5,915
1% 10/31/16	39,991		40,441
1% 5/31/18	22,215		21,986
1.25% 11/30/18	35,000		34,702
1.375% 11/30/15	470		479
1.375% 7/31/18	39,780		39,886
1.375% 9/30/18	17,526		17,525
1.375% 2/28/19	83,770		83,181
1.5% 12/31/18	10,768		10,786
1.5% 1/31/19 (b)	43,197		43,217
1.75% 7/31/15	4		4
1.75% 10/31/20	18,000		17,663
1.875% 8/31/17	47,000		48,513
1.875% 9/30/17	67,400		69,527
2% 2/28/21	23,772		23,568
2.125% 1/31/21	13,296		13,308
2.375% 6/30/18	26,608		27,841
2.5% 6/30/17	10,000		10,537
2.5% 8/15/23	27,413		27,203
2.75% 11/30/16	18,530		19,607
2.75% 11/15/23	137,815		139,273
2.75% 2/15/24	4,000		4,033
3.125% 1/31/17	39,773		42,582
3.5% 2/15/18	49,165		53,663
4.5% 5/15/17	24,685		27,568
4.75% 8/15/17	12,983		14,672
TOTAL U.S. TREASURY OBLIGATIONS			1,639,821
Other Government Related - 2.2%
National Credit Union Administration Guaranteed Notes:
Series 2010-A1 Class A, 0.5075% 12/7/20 (NCUA Guaranteed) (f)	6,584		6,591
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
Other Government Related - continued
National Credit Union Administration Guaranteed Notes: - continued
Series 2011-R4 Class 1A, 0.5425% 3/6/20 (NCUA Guaranteed) (f)	$ 5,651		$ 5,662
National Credit Union Administration Guaranteed Notes Master Trust 3.45% 6/12/21 (NCUA Guaranteed)	74,000		78,057
TOTAL OTHER GOVERNMENT RELATED			90,310
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,776,170)		1,803,582
U.S. Government Agency - Mortgage Securities - 9.9%

Fannie Mae - 2.6%
1.85% 10/1/33 (f)	261		271
1.885% 2/1/33 (f)	203		211
1.91% 12/1/34 (f)	233		243
1.91% 3/1/35 (f)	184		191
1.929% 10/1/33 (f)	107		111
1.94% 7/1/35 (f)	81		84
2.04% 11/1/33 (f)	613		643
2.05% 3/1/35 (f)	35		36
2.23% 7/1/34 (f)	125		132
2.303% 6/1/36 (f)	191		201
2.332% 3/1/35 (f)	125		133
2.389% 3/1/36 (f)	743		798
2.421% 10/1/33 (f)	166		176
2.486% 11/1/36 (f)	152		162
2.516% 7/1/35 (f)	343		365
2.536% 6/1/42 (f)	562		580
2.549% 2/1/36 (f)	278		292
2.588% 5/1/36 (f)	254		271
2.949% 11/1/40 (f)	346		364
2.959% 9/1/41 (f)	400		420
3% 3/1/44 (c)	40,000		38,848
3.093% 10/1/41 (f)	210		221
3.165% 3/1/42 (f)	15,664		16,411
3.224% 7/1/41 (f)	624		657
3.345% 10/1/41 (f)	355		376
3.49% 3/1/40 (f)	3,586		3,763
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
3.55% 7/1/41 (f)	$ 662		$ 703
4% 2/1/42	523		549
4% 3/1/44 (c)	6,400		6,707
5% 9/1/22 to 12/1/22	15,669		16,885
5.5% 1/1/29	3,386		3,750
6.19% 3/1/37 (f)	115		122
6.5% 2/1/17 to 8/1/36	10,687		12,070
9.5% 10/1/20	33		38
11.5% 6/15/19 to 1/15/21	16		17
			106,801
Freddie Mac - 0.7%
1.82% 3/1/35 (f)	581		598
2.121% 5/1/37 (f)	324		338
2.49% 6/1/35 (f)	611		649
2.492% 4/1/35 (f)	42		45
2.534% 2/1/36 (f)	31		32
2.673% 7/1/35 (f)	1,389		1,477
2.795% 7/1/36 (f)	591		629
2.877% 3/1/33 (f)	24		26
3% 11/1/42 to 2/1/43	5,160		5,018
3.064% 10/1/35 (f)	256		272
3.082% 9/1/41 (f)	3,397		3,568
3.23% 4/1/41 (f)	392		414
3.249% 9/1/41 (f)	370		390
3.281% 6/1/41 (f)	492		520
3.464% 5/1/41 (f)	417		443
3.622% 6/1/41 (f)	654		696
3.695% 5/1/41 (f)	604		642
4.5% 5/1/39 to 10/1/41	5,532		5,955
5.5% 7/1/29 to 7/1/35	3,821		4,241
6% 1/1/24	2,752		3,042
9.5% 6/1/18 to 8/1/21	46		51
9.75% 8/1/14	16		17
12% 3/1/15	0		0*
13% 6/1/14	0		0*
			29,063
Ginnie Mae - 6.6%
4.3% 8/20/61 (j)	5,069		5,478
4.5% 3/15/25 to 6/15/25	10,119		10,907
4.515% 3/20/62 (j)	18,921		20,762
4.53% 10/20/62 (j)	5,232		5,770
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Ginnie Mae - continued
4.55% 5/20/62 (j)	$ 38,719		$ 42,566
4.556% 12/20/61 (j)	20,987		23,019
4.604% 3/20/62 (j)	11,152		12,277
4.626% 3/20/62 (j)	8,186		9,002
4.649% 2/20/62 (j)	3,475		3,826
4.65% 3/20/62 (j)	7,437		8,192
4.682% 2/20/62 (j)	4,582		5,042
4.684% 1/20/62 (j)	26,043		28,645
4.804% 3/20/61 (j)	13,768		15,032
4.834% 3/20/61 (j)	24,723		27,029
5% 4/20/41 to 6/20/41	97		107
5.47% 8/20/59 (j)	2,894		3,085
5.492% 4/20/60 (j)	23,575		26,214
5.5% 11/15/35	3,612		4,062
5.612% 4/20/58 (j)	5,914		6,165
6% 6/15/36	8,438		9,682
			266,862
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $395,679)		402,726
Collateralized Mortgage Obligations - 12.0%

U.S. Government Agency - 12.0%
Fannie Mae:
floater:
Series 2001-38 Class QF, 1.1355% 8/25/31 (f)	165		168
Series 2002-49 Class FB, 0.7545% 11/18/31 (f)	166		168
Series 2002-60 Class FV, 1.1555% 4/25/32 (f)	73		74
Series 2002-75 Class FA, 1.1555% 11/25/32 (f)	149		152
Series 2010-15 Class FJ, 1.0855% 6/25/36 (f)	11,921		12,123
pass-thru certificates Series 2012-127 Class DH, 4% 11/25/27	5,640		6,025
planned amortization class:
Series 2003-113 Class PE, 4% 11/25/18	4,976		5,230
Series 2005-19 Class PA, 5.5% 7/25/34	4,529		4,939
Series 2005-27 Class NE, 5.5% 5/25/34	4,455		4,697
Series 2005-64 Class PX, 5.5% 6/25/35	4,354		4,787
Series 2006-45 Class OP, 0% 6/25/36 (i)	1,771		1,548
Series 2010-118 Class PB, 4.5% 10/25/40	7,053		7,455
Series 2011-126 Class KB, 4% 12/25/41	6,260		6,327
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
sequential payer:
Series 2003-117 Class MD, 5% 12/25/23	$ 2,002		$ 2,180
Series 2004-91 Class Z, 5% 12/25/34	10,471		11,497
Series 2005-117 Class JN, 4.5% 1/25/36	645		695
Series 2005-14 Class ZB, 5% 3/25/35	3,568		3,915
Series 2005-47 Class HK, 4.5% 6/25/20	7,309		7,707
Series 2006-72 Class CY, 6% 8/25/26	8,150		9,080
Series 2009-14 Class EB, 4.5% 3/25/24	6,918		7,329
Series 2009-59 Class HB, 5% 8/25/39	4,590		4,919
Series 2010-97 Class CX, 4.5% 9/25/25	10,813		11,774
Series 2009-85 Class IB, 4.5% 8/25/24 (h)	1,038		88
Series 2009-93 Class IC, 4.5% 9/25/24 (h)	1,533		129
Series 2010-139 Class NI, 4.5% 2/25/40 (h)	7,910		1,342
Series 2010-39 Class FG, 1.0755% 3/25/36 (f)	7,369		7,547
Series 2010-97 Class CI, 4.5% 8/25/25 (h)	3,241		320
Series 2013-40 Class PV, 2% 1/25/26	7,424		7,551
Freddie Mac:
floater:
Series 2530 Class FE, 0.7545% 2/15/32 (f)	103		105
Series 2630 Class FL, 0.6545% 6/15/18 (f)	129		129
Series 2682 Class FB, 1.0545% 10/15/33 (f)	6,472		6,601
Series 2711 Class FC, 1.0545% 2/15/33 (f)	4,360		4,428
planned amortization class:
Series 1141 Class G, 9% 9/15/21	99		115
Series 2006-3245 Class ME, 5.5% 6/15/35	2,907		2,984
Series 2356 Class GD, 6% 9/15/16	59		62
Series 2376 Class JE, 5.5% 11/15/16	391		409
Series 2381 Class OG, 5.5% 11/15/16	215		224
Series 2672 Class MG, 5% 9/15/23	7,120		7,853
Series 2682 Class LD, 4.5% 10/15/33	777		829
Series 2810 Class PD, 6% 6/15/33	99		100
Series 3415 Class PC, 5% 12/15/37	1,291		1,390
Series 3763 Class QA, 4% 4/15/34	3,886		4,082
planned amortization class sequential payer Series 2005-2963 Class VB, 5% 11/15/34	5,040		5,436
sequential payer:
Series 2004-2802 Class ZG, 5.5% 5/15/34	10,645		12,021
Series 2587 Class AD, 4.71% 3/15/33	5,785		6,337
Series 2773 Class HC, 4.5% 4/15/19	704		755
Series 2877 Class ZD, 5% 10/15/34	13,507		14,762
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac: - continued
sequential payer: - continued
Series 3007 Class EW, 5.5% 7/15/25	$ 8,875		$ 9,929
Series 3277 Class B, 4% 2/15/22	5,900		6,252
Series 3578 Class B, 4.5% 9/15/24	7,927		8,369
Series 3871 Class KB, 5.5% 6/15/41	13,870		15,769
Series 4181 Class LA, 3% 3/15/37	5,266		5,403
Ginnie Mae guaranteed REMIC pass-thru certificates:
floater:
Series 2008-2 Class FD, 0.637% 1/20/38 (f)	555		558
Series 2008-73 Class FA, 1.017% 8/20/38 (f)	3,740		3,804
Series 2008-83 Class FB, 1.057% 9/20/38 (f)	3,839		3,908
Series 2009-108 Class CF, 0.7545% 11/16/39 (f)	2,582		2,604
Series 2011-H21 Class FA, 0.7683% 10/20/61 (f)(j)	8,626		8,627
Series 2012-H01 Class FA, 0.8683% 11/20/61 (f)(j)	7,194		7,225
Series 2012-H03 Class FA, 0.8683% 1/20/62 (f)(j)	4,344		4,363
Series 2012-H06 Class FA, 0.7983% 1/20/62 (f)(j)	6,690		6,699
Series 2012-H07 Class FA, 0.7983% 3/20/62 (f)(j)	3,960		3,964
Series 2014-H02 Class FB, 0.804% 12/20/63 (f)(j)	42,789		42,791
floater sequential payer Series 2011-150 Class D, 3% 4/20/37	1,274		1,293
planned amortization class:
Series 2010-112 Class PM, 3.25% 9/20/33	889		897
Series 2010-99 Class PT, 3.5% 8/20/33	1,148		1,159
sequential payer Series 2011-69 Class GX, 4.5% 5/16/40	10,205		10,913
Series 2010-H13 Class JA, 5.46% 10/20/59 (j)	14,741		15,698
Series 2010-H15 Class TP, 5.15% 8/20/60 (j)	20,414		22,542
Series 2010-H17 Class XP, 5.302% 7/20/60 (f)(j)	27,910		30,758
Series 2010-H18 Class PL, 5.01% 9/20/60 (f)(j)	20,263		22,293
Series 2011-71:
Class ZB, 5.5% 8/20/34	23,156		26,475
Class ZC, 5.5% 7/16/34	22,567		25,318
Series 2012-64 Class KB, 3.8135% 5/20/41 (f)	2,924		3,264
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $484,616)		489,263
Commercial Mortgage Securities - 6.7%
	Principal Amount (000s)		Value (000s)
Freddie Mac:
pass thru-certificates floater Series KF01 Class A, 0.5183% 4/25/19 (f)	$ 8,024		$ 8,009
pass-thru certificates sequential payer:
Series K011 Class A2, 4.084% 11/25/20	3,740		4,073
Series K014 Class A2, 3.871% 4/25/21	9,230		9,912
Series K015 Class A2, 3.23% 7/25/21	16,425		16,931
sequential payer:
Series K006 Class A2, 4.251% 1/25/20	24,840		27,412
Series K009 Class A2, 3.808% 8/25/20	32,528		34,961
Series K017 Class A2, 2.873% 12/25/21	28,660		28,753
Series K034:
Class A1, 2.669% 2/25/23	15,424		15,719
Class A2, 3.531% 7/25/23	50,700		52,383
Series K031 Class A2, 3.3% 4/25/23	34,500		35,120
Series K032 Class A1, 3.016% 2/25/23	28,191		29,398
Series K501 Class A2, 1.655% 11/25/16	9,650		9,809
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $272,431)		272,480
Foreign Government and Government Agency Obligations - 3.1%

Israeli State (guaranteed by U.S. Government through Agency for International Development):
5.5% 9/18/23	72,266		86,064
5.5% 12/4/23	48		57
Jordanian Kingdom 2.503% 10/30/20	41,050		41,282
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $117,142)		127,403

Fixed-Income Funds - 23.2%
	Shares
Fidelity Mortgage Backed Securities Central Fund (g) (Cost $911,203)	8,825,644		945,491
Cash Equivalents - 4.2%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.05%, dated 2/28/14 due 3/3/14:
(Collateralized by U.S. Government Obligations) # (a)	$ 42,877		$ 42,877
(Collateralized by U.S. Government Obligations) #	127,980		127,979
TOTAL CASH EQUIVALENTS (Cost $170,856)		170,856

Purchased Swaptions - 0.0%
	Expiration Date	Notional Amount (000s)
Put Options - 0.0%
Option on an interest rate swap with JPMorgan to pay a fixed rate of 3.3825% and receive a floating rate based on 3-month LIBOR	1/13/15	$ 42,345	780
Call Options - 0.0%
Option on an interest rate swap with JPMorgan to receive a fixed rate of 3.3825% and pay a floating rate based on 3-month LIBOR	1/13/15	42,345	1,697
TOTAL PURCHASED SWAPTIONS (Cost $2,532)			2,477

TOTAL INVESTMENT PORTFOLIO - 103.3% (Cost $4,130,629)			4,214,278
NET OTHER ASSETS (LIABILITIES) - (3.3)%			(135,292)
NET ASSETS - 100%		$ 4,078,986
TBA Sale Commitments
	Principal Amount (000s)
Fannie Mae
3% 3/1/44 (Proceeds $50,278)	$ (51,900)		(50,405)

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Purchased
Treasury Contracts
42 CBOT 10 Year U.S. Treasury Note Contracts	June 2014	$ 5,230	$ 24
727 CBOT 2 Year U.S. Treasury Note Contracts	June 2014	159,849	56
81 CBOT 5 Year U.S. Treasury Note Contracts	June 2014	9,709	30
128 CBOT Long Term U.S. Treasury Bond Contracts	June 2014	17,032	224
327 CBOT Ultra Long Term U.S. Treasury Bond Contracts	June 2014	46,955	592
TOTAL TREASURY CONTRACTS		$ 238,775	$ 926

The face value of futures purchased as a percentage of net assets is 5.8%

Swaps
Interest Rate Swaps Clearinghouse/Counterparty (1)	Expiration Date	Notional Amount (000s)		Payment Received	Payment Paid	Value (000s)	Upfront Premium Received/ (Paid) (2) (000s)	Unrealized Appreciation/(Depreciation) (000s)

CME	Jun. 2016		$ 11,314	3-month LIBOR	0.75%	$ (8)	$ 0	$ (8)
CME	Jun. 2019		6,718	3-month LIBOR	2%	(30)	0	(30)
CME	Jun. 2024		136,978	3-month LIBOR	3%	(1,481)	0	(1,481)
CME	Jun. 2044		1,035	3.75%	3-month LIBOR	27	0	27
TOTAL INTEREST RATE SWAPS						$ (1,492)	$ 0	$ (1,492)

(1) Swaps with CME Group (CME) are centrally cleared over-the-counter (OTC) swaps.

(2) Any premiums for centrally cleared OTC swaps are recorded periodically throughout the term of the swap to variation margin and included in unrealized appreciation (depreciation).

Legend

(a) Includes investment made with cash collateral received from securities on loan.

(b) Security or a portion of the security is on loan at period end.

(d) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At period end, the value of securities pledged amounted to $2,064,000.

(e) Security or a portion of the security was pledged to cover margin requirements for centrally cleared OTC swaps. At period end, the value of securities pledged amounted to $4,023,000.

(f) Coupon rates for floating and adjustable rate securities reflect the rates in effect at period end.

(g) Affiliated fund that is generally available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's website at www.sec.gov. An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. In addition, each Fidelity Central Fund's financial statements are available on the SEC's website or upon request.

(h) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool as of the end of the period.

(i) Principal Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans.

(j) Represents an investment in an underlying pool of reverse mortgages which typically do not require regular principal and interest payments as repayment is deferred until a maturity event.

* Amount represents less than $1,000.

# Additional information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$127,979,000 due 3/03/14 at 0.05%
BNP Paribas Securities Corp.	$ 4,332
Citibank NA	24,999
Credit Agricole CIB New York Branch	42,104
ING Financial Markets LLC	5,263
Mizuho Securities USA, Inc.	31,280
Morgan Stanley & Co., Inc.	3,686
Wells Fargo Securities LLC	16,315
	$ 127,979
$42,877,000 due 3/03/14 at 0.05%
Commerz Markets LLC	$ 42,501
Mizuho Securities USA, Inc.	376
	$ 42,877

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned (Amounts in thousands)
Fidelity Mortgage Backed Securities Central Fund	$ 12,504

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund (Amounts in thousands)	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity Mortgage Backed Securities Central Fund	$ 1,064,096	$ 12,504	$ 150,134	$ 945,491	9.3%

Other Information

The following is a summary of the inputs used, as of February 28, 2014, involving the Fund's assets and liabilities carried at fair value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the table below, please refer to the Investment Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities:
U.S. Government and Government Agency Obligations	$ 1,803,582	$ -	$ 1,803,582	$ -
U.S. Government Agency - Mortgage Securities	402,726	-	402,726	-
Collateralized Mortgage Obligations	489,263	-	489,263	-
Commercial Mortgage Securities	272,480	-	272,480	-
Foreign Government and Government Agency Obligations	127,403	-	127,403	-
Fixed-Income Funds	945,491	945,491	-	-
Cash Equivalents	170,856	-	170,856	-
Purchased Swaptions	2,477	-	2,477	-
Total Investments in Securities:	$ 4,214,278	$ 945,491	$ 3,268,787	$ -
Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Other Derivative Instruments:
Assets
Futures Contracts	$ 926	$ 926	$ -	$ -
Swaps	27	-	27	-
Total Assets	$ 953	$ 926	$ 27	$ -
Liabilities
Swaps	$ (1,519)	$ -	$ (1,519)	$ -
Total Other Derivative Instruments:	$ (566)	$ 926	$ (1,492)	$ -
Other Financial Instruments:
TBA Sale Commitments	$ (50,405)	$ -	$ (50,405)	$ -

Value of Derivative Instruments

The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of February 28, 2014. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.

Primary Risk Exposure / Derivative Type (Amounts in thousands)	Value
	Asset	Liability
Interest Rate Risk
Futures Contracts (a)	$ 926	$ -
Purchased Swaptions (b)	2,477	-
Swaps (c)	27	(1,519)
Total Value of Derivatives	$ 3,430	$ (1,519)

(a) Reflects gross cumulative appreciation (depreciation) on futures contracts as presented in the Schedule of Investments. Only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities.

(b) Gross value is included in the Statement of Assets and Liabilities in the investments, at value line-item.

(c) For centrally cleared OTC swaps, reflects gross cumulative appreciation (depreciation) as presented in the Schedule of Investments. For centrally cleared OTC swaps, only the period end receivable or payable for daily variation margin and net unrealized appreciation (depreciation) are presented in the Statement of Assets and Liabilities.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	February 28, 2014 (Unaudited)

Assets
Investment in securities, at value (including securities loaned of $42,020 and repurchase agreements of $170,856) - See accompanying schedule: Unaffiliated issuers (cost $3,219,426)	$ 3,268,787
Fidelity Central Funds (cost $911,203)	945,491
Total Investments (cost $4,130,629)		$ 4,214,278
Cash		2
Receivable for investments sold, regular delivery		20,021
Receivable for TBA sale commitments		50,278
Receivable for fund shares sold		2,851
Interest receivable		11,793
Receivable for daily variation margin for derivative instruments		176
Other receivables		773
Total assets		4,300,172

Liabilities
Payable for investments purchased Regular delivery	$ 74,728
Delayed delivery	45,294
TBA sale commitments, at value	50,405
Payable for fund shares redeemed	5,169
Distributions payable	203
Accrued management fee	1,060
Distribution and service plan fees payable	159
Other affiliated payables	519
Other payables and accrued expenses	771
Collateral on securities loaned, at value	42,878
Total liabilities		221,186

Net Assets		$ 4,078,986
Net Assets consist of:
Paid in capital		$ 4,060,697
Distributions in excess of net investment income		(1,783)
Accumulated undistributed net realized gain (loss) on investments		(62,884)
Net unrealized appreciation (depreciation) on investments		82,956
Net Assets		$ 4,078,986

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	February 28, 2014 (Unaudited)

Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($255,021 ÷ 24,678 shares)		$ 10.33

Maximum offering price per share (100/96.00 of $10.33)		$ 10.76
Class T: Net Asset Value and redemption price per share ($207,155 ÷ 20,049 shares)		$ 10.33

Maximum offering price per share (100/96.00 of $10.33)		$ 10.76
Class B: Net Asset Value and offering price per share ($10,195 ÷ 987 shares)^A		$ 10.33

Class C: Net Asset Value and offering price per share ($64,770 ÷ 6,269 shares)^A		$ 10.33

Government Income: Net Asset Value, offering price and redemption price per share ($3,228,063 ÷ 312,871 shares)		$ 10.32

Institutional Class: Net Asset Value, offering price and redemption price per share ($313,782 ÷ 30,367 shares)		$ 10.33

^A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands Six months ended February 28, 2014 (Unaudited)

Investment Income
Interest		$ 30,780
Income from Fidelity Central Funds		12,504
Total income		43,284

Expenses
Management fee	$ 6,552
Transfer agent fees	2,385
Distribution and service plan fees	1,002
Fund wide operations fee	790
Independent trustees' compensation	8
Miscellaneous	6
Total expenses before reductions	10,743
Expense reductions	(22)	10,721
Net investment income (loss)		32,563
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	(6,536)
Fidelity Central Funds	4,335
Futures contracts	3,804
Swaps	(2,313)
Total net realized gain (loss)		(710)
Change in net unrealized appreciation (depreciation) on: Investment securities	59,995
Futures contracts	723
Swaps	(1,492)
Delayed delivery commitments	(732)
Total change in net unrealized appreciation (depreciation)		58,494
Net gain (loss)		57,784
Net increase (decrease) in net assets resulting from operations		$ 90,347

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands	Six months ended February 28, 2014 (Unaudited)	Year ended August 31, 2013
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 32,563	$ 62,137
Net realized gain (loss)	(710)	(2,343)
Change in net unrealized appreciation (depreciation)	58,494	(204,263)
Net increase (decrease) in net assets resulting from operations	90,347	(144,469)
Distributions to shareholders from net investment income	(33,466)	(59,594)
Distributions to shareholders from net realized gain	(2,860)	(159,024)
Total distributions	(36,326)	(218,618)
Share transactions - net increase (decrease)	(287,811)	(779,262)
Total increase (decrease) in net assets	(233,790)	(1,142,349)

Net Assets
Beginning of period	4,312,776	5,455,125
End of period (including distributions in excess of net investment income of $1,783 and distributions in excess of net investment income of $880, respectively)	$ 4,078,986	$ 4,312,776

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^J	2011 ^K	2010 ^K	2009 ^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.20	$ 10.97	$ 10.90	$ 10.70	$ 10.84	$ 10.77	$ 10.40
Income from Investment Operations
Net investment income (loss) ^E	.066	.105	.141	.015	.199	.242	.356
Net realized and unrealized gain (loss)	.139	(.454)	.327	.199	.108	.424	.466
Total from investment operations	.205	(.349)	.468	.214	.307	.666	.822
Distributions from net investment income	(.068)	(.099)	(.135)	(.014)	(.191)	(.231)	(.352)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.075)	(.421)	(.398)	(.014)	(.447)	(.596)	(.452)
Net asset value, end of period	$ 10.33	$ 10.20	$ 10.97	$ 10.90	$ 10.70	$ 10.84	$ 10.77
Total Return^B,C,D	2.02%	(3.29)%	4.39%	2.00%	2.94%	6.44%	8.03%
Ratios to Average Net Assets^F,H
Expenses before reductions	.78% ^A	.77%	.77%	.76% ^A	.77%	.77%	.77%
Expenses net of fee waivers, if any	.78% ^A	.77%	.77%	.76% ^A	.77%	.77%	.77%
Expenses net of all reductions	.78% ^A	.77%	.77%	.76% ^A	.77%	.77%	.77%
Net investment income (loss)	1.30% ^A	.99%	1.30%	1.61% ^A	1.88%	2.28%	3.33%
Supplemental Data
Net assets, end of period (in millions)	$ 255	$ 291	$ 380	$ 345	$ 329	$ 431	$ 437
Portfolio turnover rate ^G	162% ^A	192%	222%	466% ^A,L	430%	355%	380% ^I

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ^D Total returns do not include the effect of the sales charges. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I The portfolio turnover rate does not include the assets acquired in the merger. ^J For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011. ^K For the period ended July 31. ^L Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class T

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^J	2011 ^K	2010 ^K	2009 ^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77	$ 10.40
Income from Investment Operations
Net investment income (loss) ^E	.067	.107	.143	.015	.201	.243	.357
Net realized and unrealized gain (loss)	.139	(.454)	.327	.209	.098	.425	.466
Total from investment operations	.206	(.347)	.470	.224	.299	.668	.823
Distributions from net investment income	(.069)	(.101)	(.137)	(.014)	(.193)	(.233)	(.353)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.076)	(.423)	(.400)	(.014)	(.449)	(.598)	(.453)
Net asset value, end of period	$ 10.33	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77
Total Return^B,C,D	2.03%	(3.27)%	4.41%	2.10%	2.86%	6.45%	8.04%
Ratios to Average Net Assets^F,H
Expenses before reductions	.76% ^A	.75%	.75%	.75% ^A	.76%	.76%	.76%
Expenses net of fee waivers, if any	.76% ^A	.75%	.75%	.75% ^A	.76%	.76%	.76%
Expenses net of all reductions	.76% ^A	.75%	.75%	.75% ^A	.76%	.76%	.76%
Net investment income (loss)	1.32% ^A	1.01%	1.32%	1.62% ^A	1.89%	2.29%	3.33%
Supplemental Data
Net assets, end of period (in millions)	$ 207	$ 228	$ 309	$ 286	$ 272	$ 335	$ 324
Portfolio turnover rate ^G	162% ^A	192%	222%	466% ^A,L	430%	355%	380% ^I

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class B

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^J	2011 ^K	2010 ^K	2009 ^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77	$ 10.40
Income from Investment Operations
Net investment income (loss) ^E	.029	.028	.062	.008	.122	.164	.278
Net realized and unrealized gain (loss)	.139	(.454)	.328	.210	.098	.425	.467
Total from investment operations	.168	(.426)	.390	.218	.220	.589	.745
Distributions from net investment income	(.031)	(.022)	(.057)	(.008)	(.114)	(.154)	(.275)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.038)	(.344)	(.320)	(.008)	(.370)	(.519)	(.375)
Net asset value, end of period	$ 10.33	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77
Total Return^B,C,D	1.65%	(3.99)%	3.64%	2.04%	2.10%	5.67%	7.25%
Ratios to Average Net Assets^F,H
Expenses before reductions	1.51% ^A	1.50%	1.49%	1.49% ^A	1.50%	1.50%	1.50%
Expenses net of fee waivers, if any	1.51% ^A	1.50%	1.49%	1.49% ^A	1.50%	1.50%	1.50%
Expenses net of all reductions	1.51% ^A	1.50%	1.49%	1.49% ^A	1.50%	1.50%	1.50%
Net investment income (loss)	.57% ^A	.26%	.58%	.90% ^A	1.15%	1.55%	2.60%
Supplemental Data
Net assets, end of period (in millions)	$ 10	$ 13	$ 20	$ 26	$ 25	$ 38	$ 48
Portfolio turnover rate ^G	162% ^A	192%	222%	466% ^A,L	430%	355%	380% ^I

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I The portfolio turnover rate does not include the assets acquired in the merger. ^J For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011. ^K For the period ended July 31. ^L Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Class C

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^J	2011 ^K	2010 ^K	2009 ^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.20	$ 10.96	$ 10.90	$ 10.69	$ 10.84	$ 10.77	$ 10.40
Income from Investment Operations
Net investment income (loss) ^E	.027	.025	.060	.008	.121	.163	.275
Net realized and unrealized gain (loss)	.139	(.443)	.318	.210	.098	.425	.468
Total from investment operations	.166	(.418)	.378	.218	.219	.588	.743
Distributions from net investment income	(.029)	(.020)	(.055)	(.008)	(.113)	(.153)	(.273)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.036)	(.342)	(.318)	(.008)	(.369)	(.518)	(.373)
Net asset value, end of period	$ 10.33	$ 10.20	$ 10.96	$ 10.90	$ 10.69	$ 10.84	$ 10.77
Total Return^B,C,D	1.63%	(3.93)%	3.53%	2.04%	2.09%	5.66%	7.23%
Ratios to Average Net Assets^F,H
Expenses before reductions	1.55% ^A	1.52%	1.51%	1.50% ^A	1.51%	1.51%	1.52%
Expenses net of fee waivers, if any	1.55% ^A	1.52%	1.51%	1.50% ^A	1.51%	1.51%	1.52%
Expenses net of all reductions	1.55% ^A	1.52%	1.51%	1.50% ^A	1.51%	1.51%	1.51%
Net investment income (loss)	.53% ^A	.24%	.56%	.88% ^A	1.14%	1.54%	2.58%
Supplemental Data
Net assets, end of period (in millions)	$ 65	$ 73	$ 98	$ 95	$ 89	$ 118	$ 131
Portfolio turnover rate ^G	162% ^A	192%	222%	466% ^A,L	430%	355%	380% ^I

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ^D Total returns do not include the effect of the contingent deferred sales charge. ^E Calculated based on average shares outstanding during the period. ^F Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%. ^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^H Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^I The portfolio turnover rate does not include the assets acquired in the merger. ^J For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011. ^K For the period ended July 31. ^L Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Government Income

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^I	2011 ^J	2010 ^J	2009 ^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.18	$ 10.95	$ 10.88	$ 10.68	$ 10.82	$ 10.76	$ 10.38
Income from Investment Operations
Net investment income (loss) ^D	.083	.138	.175	.018	.233	.275	.390
Net realized and unrealized gain (loss)	.149	(.453)	.328	.199	.108	.415	.476
Total from investment operations	.232	(.315)	.503	.217	.341	.690	.866
Distributions from net investment income	(.085)	(.133)	(.170)	(.017)	(.225)	(.265)	(.386)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.092)	(.455)	(.433)	(.017)	(.481)	(.630)	(.486)
Net asset value, end of period	$ 10.32	$ 10.18	$ 10.95	$ 10.88	$ 10.68	$ 10.82	$ 10.76
Total Return^B,C	2.29%	(2.99)%	4.73%	2.03%	3.27%	6.69%	8.49%
Ratios to Average Net Assets^E,G
Expenses before reductions	.45% ^A	.45%	.45%	.45% ^A	.45%	.45%	.45%
Expenses net of fee waivers, if any	.45% ^A	.45%	.45%	.45% ^A	.45%	.45%	.45%
Expenses net of all reductions	.45% ^A	.45%	.45%	.45% ^A	.45%	.45%	.45%
Net investment income (loss)	1.62% ^A	1.31%	1.62%	1.91% ^A	2.20%	2.60%	3.65%
Supplemental Data
Net assets, end of period (in millions)	$ 3,228 ^A	$ 3,412	$ 4,313	$ 4,270	$ 4,167	$ 4,809	$ 4,638
Portfolio turnover rate ^F	162%	192%	222%	466% ^A,K	430%	355%	380% ^H

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ^D Calculated based on average shares outstanding during the period. ^E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%. ^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^H The portfolio turnover rate does not include the assets acquired in the merger. ^I For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011. ^J For the period ended July 31. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Financial Highlights - Institutional Class

	Six months ended February 28, 2014	Years ended August 31,
	(Unaudited)	2013	2012	2011 ^I	2011 ^J	2010 ^J	2009 ^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77	$ 10.40
Income from Investment Operations
Net investment income (loss) ^D	.080	.133	.169	.017	.225	.267	.385
Net realized and unrealized gain (loss)	.139	(.454)	.327	.210	.099	.425	.466
Total from investment operations	.219	(.321)	.496	.227	.324	.692	.851
Distributions from net investment income	(.082)	(.127)	(.163)	(.017)	(.218)	(.257)	(.381)
Distributions from net realized gain	(.007)	(.322)	(.263)	-	(.256)	(.365)	(.100)
Total distributions	(.089)	(.449)	(.426)	(.017)	(.474)	(.622)	(.481)
Net asset value, end of period	$ 10.33	$ 10.20	$ 10.97	$ 10.90	$ 10.69	$ 10.84	$ 10.77
Total Return^B,C	2.15%	(3.03)%	4.66%	2.12%	3.10%	6.70%	8.32%
Ratios to Average Net Assets^E,G
Expenses before reductions	.51% ^A	.51%	.51%	.52% ^A	.52%	.53%	.51%
Expenses net of fee waivers, if any	.51% ^A	.51%	.51%	.52% ^A	.52%	.53%	.51%
Expenses net of all reductions	.51% ^A	.51%	.51%	.52% ^A	.52%	.53%	.51%
Net investment income (loss)	1.57% ^A	1.26%	1.56%	1.84% ^A	2.13%	2.52%	3.59%
Supplemental Data
Net assets, end of period (in millions)	$ 314	$ 296	$ 334	$ 344	$ 344	$ 284	$ 200
Portfolio turnover rate ^F	162% ^A	192%	222%	466% ^A,K	430%	355%	380% ^H

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns would have been lower if certain expenses had not been reduced during the applicable periods shown. ^D Calculated based on average shares outstanding during the period. ^E Fees and expenses of any underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds. Based on their most recent shareholder report date, the expenses of any underlying non-money market Fidelity Central Funds were less than .01%. ^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds. ^G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or reductions from other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. ^H The portfolio turnover rate does not include the assets acquired in the merger. ^I For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011. ^J For the period ended July 31. ^K Portfolio turnover rate excludes securities received or delivered in-kind.

Semiannual Report

See accompanying notes which are an integral part of the financial statements.

Notes to Financial Statements

For the period ended February 28, 2014 (Unaudited)

(Amounts in thousands except percentages)

1. Organization.

Fidelity® Government Income Fund (the Fund) is a fund of Fidelity Income Fund (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 Fund offers Class A, Class T, Class C, Government Income and Institutional Class shares, each of which, along with Class B shares, has equal rights as to assets and voting privileges. Class B shares are closed to new accounts and additional purchases, except for exchanges and reinvestments. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase.

2. Investments in Fidelity Central Funds.

The Fund invests in Fidelity Central Funds, which are open-end investment companies generally available only to other investment companies and accounts managed by the investment adviser and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds held as of period end, if any, as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Fidelity Central Fund

Investment Manager

Investment
Objective

Investment
Practices

Expense
Ratio*

Fidelity Mortgage Backed Securities Central Fund

Fidelity Investment Money Management, Inc. (FIMM)

Seeks a high level of income by normally
investing in investment-grade mortgage-related securities and repurchase agreements for those securities.

Delayed Delivery & When Issued Securities

Futures

Repurchase Agreements

Swaps

Less than .01%

* Expenses expressed as a percentage of average net assets and are as of each underlying Central Fund's most recent annual or semi-annual shareholder report.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

2. Investments in Fidelity Central Funds - continued

An unaudited holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at fidelity.com and/or advisor.fidelity.com, as applicable. A complete unaudited list of holdings for each Fidelity Central Fund is available upon request or at the Securities and Exchange Commission (the SEC) website at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds which contain the significant accounting policies (including investment valuation policies) of those funds are available on the SEC website or upon request.

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Subsequent events, if any, through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:

Investment Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. In accordance with valuation policies and procedures approved by the Board of Trustees (the Board), the Fund attempts to obtain prices from one or more third party pricing vendors or brokers to value its investments. When current market prices, quotations or currency exchange rates are not readily available or reliable, investments will be fair valued in good faith by the Fidelity Management & Research Company (FMR) Fair Value Committee (the Committee), in accordance with procedures adopted by the Board. Factors used in determining fair value vary by investment type and may include market or investment specific events, changes in interest rates and credit quality. The frequency with which these procedures are used cannot be predicted and they may be utilized to a significant extent. The Committee oversees the Fund's valuation policies and procedures and is responsible for approving and reporting to the Board all fair value determinations.

Semiannual Report

3. Significant Accounting Policies - continued

Investment Valuation - continued

The Fund categorizes the inputs to valuation techniques used to value its investments into a disclosure hierarchy consisting of three levels as shown below:

Level 1 - quoted prices in active markets for identical investments

Level 2 - other significant observable inputs (including quoted prices for similar investments, interest rates, prepayment speeds, etc.)

Level 3 - unobservable inputs (including the Fund's own assumptions based on the best information available)

Valuation techniques used to value the Fund's investments by major category are as follows:

Debt securities, including restricted securities, are valued based on evaluated prices received from third party pricing vendors or from brokers who make markets in such securities. Foreign government and government agency obligations and U.S. government and government agency obligations, are valued by pricing vendors who utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Collateralized mortgage obligations, commercial mortgage securities and U.S. government agency mortgage securities, are valued by pricing vendors who utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type or by broker-supplied prices. Swaps are marked-to-market daily based on valuations from third party pricing vendors, registered derivatives clearing organizations (clearinghouses) or broker-supplied valuations. These pricing sources may utilize inputs such as interest rate curves, credit spread curves, default possibilities and recovery rates. When independent prices are unavailable or unreliable, debt securities and swaps may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. For foreign debt securities, when significant market or security specific events arise, valuations may be determined in good faith in accordance with procedures adopted by the Board. Debt securities and swaps are generally categorized as Level 2 in the hierarchy but may be Level 3 depending on the circumstances.

Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded and are categorized as Level 1 in the hierarchy. Options traded over-the-counter are valued using broker-supplied valuations and are categorized as Level 2 in the hierarchy. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value (NAV) each business day and are categorized as Level 1 in the hierarchy. Short-term securities

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Investment Valuation - continued

with remaining maturities of sixty days or less may be valued at amortized cost, which approximates fair value, and are categorized as Level 2 in the hierarchy.

Changes in valuation techniques may result in transfers in or out of an assigned level within the disclosure hierarchy. The aggregate value of investments by input level, as of February 28, 2014, is included at the end of the Fund's Schedule of Investments.

Class Allocations and Expenses. Investment income, realized and unrealized capital gains and losses, common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated daily on a pro-rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions may also differ by class. For the reporting period, the allocated portion of income and expenses to each class as a percent of its average net assets may vary due to the timing of recording these transactions in relation to fluctuating net assets of the classes. Expenses directly attributable to a fund are charged to that fund. Expenses attributable to more than one fund are allocated among the respective funds on the basis of relative net assets or other appropriate methods. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees may elect to defer receipt of a portion of their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Semiannual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company under Subchapter M of the Internal Revenue Code, including distributing substantially all of its taxable income and realized gains. As a result, no provision for U.S. Federal income taxes is required. The Fund files a U.S. federal tax return, in addition to state and local tax returns as required. The Fund's federal income tax returns are subject to examination by the Internal Revenue Service (IRS) for a period of three fiscal years after they are filed. State and local tax returns may be subject to examination for an additional fiscal year depending on the jurisdiction.

Dividends are declared and recorded daily and paid monthly from net investment income. Distributions from realized gains, if any, are declared and recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from GAAP.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Capital accounts are not adjusted for temporary book-tax differences which will reverse in a subsequent period.

Book-tax differences are primarily due to futures contracts, swap agreements, options, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, certain losses related to deflation adjustments on U.S. Treasury inflation-indexed securities and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:

Gross unrealized appreciation	$ 95,750
Gross unrealized depreciation	(12,745)
Net unrealized appreciation (depreciation) on securities and other investments	$ 83,005

Tax cost	$ 4,131,273

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Repurchase Agreements - continued

Repurchase agreements may be collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. During the period, the Fund transacted in securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

To-Be-Announced (TBA) Securities and Mortgage Dollar Rolls. During the period, the Fund transacted in TBA securities that involved buying or selling mortgage-backed securities (MBS) on a forward commitment basis. A TBA transaction typically does not designate the actual security to be delivered and only includes an approximate principal amount; however delivered securities must meet specified terms defined by industry guidelines, including issuer, rate and current principal amount outstanding on underlying mortgage pools. The Fund may enter into a TBA transaction with the intent to take possession of or deliver the underlying MBS, or the Fund may elect to extend the settlement by entering into either a mortgage or reverse mortgage dollar roll. Mortgage dollar rolls are transactions where a fund sells TBA securities and simultaneously agrees to repurchase MBS on a later date at a lower price and with the same counterparty. Reverse mortgage dollar rolls involve the purchase and simultaneous agreement to sell TBA securities on a later date at a lower price. Transactions in mortgage dollar rolls and reverse mortgage dollar rolls are accounted for as purchases and sales and may result in an increase to the Fund's portfolio turnover rate.

Semiannual Report

3. Significant Accounting Policies - continued

To-Be-Announced (TBA) Securities and Mortgage Dollar Rolls - continued

insolvent, the Fund's right to repurchase or sell securities may be limited. Additionally, when a fund sells TBA securities without already owning or having the right to obtain the deliverable securities (an uncovered forward commitment to sell), it incurs a risk of loss because it could have to purchase the securities at a price that is higher than the price at which it sold them. A fund may be unable to purchase the deliverable securities if the corresponding market is illiquid.

TBA securities subject to a forward commitment to sell at period end are included at the end of the Fund's Schedule of Investments under the caption "TBA Sale Commitments." The proceeds and value of these commitments are reflected in the Fund's Statement of Assets and Liabilities as Receivable for TBA sale commitments and TBA sale commitments, at value, respectively.

4. Derivative Instruments.

Risk Exposures and the Use of Derivative Instruments. The Fund's investment objective allows the Fund to enter into various types of derivative contracts, including futures contracts, options and swaps. Derivatives are investments whose value is primarily derived from underlying assets, indices or reference rates and may be transacted on an exchange or over-the-counter (OTC). Derivatives may involve a future commitment to buy or sell a specified asset based on specified terms, to exchange future cash flows at periodic intervals based on a notional principal amount, or for one party to make one or more payments upon the occurrence of specified events in exchange for periodic payments from the other party.

The Fund used derivatives to increase returns, to gain exposure to certain types of assets and to manage exposure to certain risks as defined below. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.

The Fund's use of derivatives increased or decreased its exposure to the following risk:

Interest Rate Risk

Interest rate risk relates to the fluctuations in the value of interest-bearing securities due to changes in the prevailing levels of market interest rates.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

4. Derivative Instruments - continued

Risk Exposures and the Use of Derivative Instruments - continued

creditworthiness of all potential counterparties. On certain OTC derivatives such as options, the Fund attempts to reduce its exposure to counterparty credit risk by entering into an International Swaps and Derivatives Association, Inc. (ISDA) Master Agreement with each of its counterparties. The ISDA Master Agreement gives the Fund the right to terminate all transactions traded under such agreement upon the deterioration in the credit quality of the counterparty beyond specified levels. The ISDA Master Agreement gives each party the right, upon an event of default by the other party or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net payable by one party to the other. To mitigate counterparty credit risk on bi-lateral OTC derivatives, the Fund receives collateral in the form of cash or securities once the Fund's net unrealized appreciation on outstanding derivative contracts under an ISDA Master Agreement exceeds certain applicable thresholds, subject to certain minimum transfer provisions. The collateral received is held in segregated accounts with the Fund's custodian bank in accordance with the collateral agreements entered into between the Fund, the counterparty and the Fund's custodian bank. The Fund could experience delays and costs in gaining access to the collateral even though it is held by the Fund's custodian bank. The Fund's maximum risk of loss from counterparty credit risk related to bi-lateral OTC derivatives is generally the aggregate unrealized appreciation and unpaid counterparty payments in excess of any collateral pledged by the counterparty to the Fund. The Fund may be required to pledge collateral for the benefit of the counterparties on bi-lateral OTC derivatives in an amount not less than each counterparty's unrealized appreciation on outstanding derivative contracts, subject to certain minimum transfer provisions, and any such pledged collateral is identified in the Schedule of Investments. Exchange-traded futures contracts are not covered by the ISDA Master Agreement; however counterparty credit risk related to exchange-traded futures contracts may be mitigated by the protection provided by the exchange on which they trade. Counterparty credit risk related to centrally cleared OTC swaps may be mitigated by the protection provided by the clearinghouse.

Investing in derivatives may involve greater risks than investing in the underlying assets directly and, to varying degrees, may involve risk of loss in excess of any initial investment and collateral received and amounts recognized in the Statement of Assets and Liabilities. In addition, there may be the risk that the change in value of the derivative contract does not correspond to the change in value of the underlying instrument.

Semiannual Report

4. Derivative Instruments - continued

Net Realized Gain (Loss) and Change in Net Unrealized Appreciation (Depreciation) on Derivatives. The table below, which reflects the impacts of derivatives on the financial performance of the Fund, summarizes the net realized gain (loss) and change in net unrealized appreciation (depreciation) for derivatives during the period as presented in the Statement of Operations.

Primary Risk Exposure / Derivative Type	Net Realized Gain (Loss)	Change in Net Unrealized Appreciation (Depreciation)
Interest Rate Risk
Futures Contracts	$ 3,804	$ 723
Purchased Options	-	(55)
Swaps	(2,313)	(1,492)
Totals (a)	$ 1,491	$ (824)

(a) A summary of the value of derivatives by primary risk exposure as of period end is included at the end of the Schedule of Investments.

Futures Contracts. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. The Fund used futures contracts to manage its exposure to the bond market and to fluctuations in interest rates.

Upon entering into a futures contract, a fund is required to deposit either cash or securities (initial margin) with a clearing broker in an amount equal to a certain percentage of the face value of the contract. Futures contracts are marked-to-market daily and subsequent daily payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contracts and are recorded as unrealized appreciation or (depreciation). This receivable and/or payable, if any, is included in daily variation margin for derivative instruments in the Statement of Assets and Liabilities. Realized gain or (loss) is recorded upon the expiration or closing of a futures contract. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on futures contracts during the period is included in the Statement of Operations.

Any open futures contracts at period end are presented in the Schedule of Investments under the caption "Futures Contracts." The underlying face amount at value reflects each contract's exposure to the underlying instrument or index at period end and is representative of volume of activity during the period. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments.

Options. Options give the purchaser the right, but not the obligation, to buy (call) or sell (put) an underlying security or financial instrument at an agreed exercise or strike price between or on certain dates. Options obligate the seller (writer) to buy (put) or sell (call) an underlying instrument at the exercise or strike price or cash settle an underlying derivative instrument if the holder exercises the option on or before the

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

4. Derivative Instruments - continued

Options - continued

expiration date. The Fund used OTC options, such as swaptions, which are options where the underlying instrument is a swap, to manage its exposure to fluctuations in interest rates.

Upon entering into an options contract, a fund will pay or receive a premium. Premiums paid on purchased options are reflected as cost of investments and premiums received on written options are reflected as a liability on the Statement of Assets and Liabilities. Certain options may be purchased or written with premiums to be paid or received on a future date. Options are valued daily and any unrealized appreciation (depreciation) is reflected on the Statement of Assets and Liabilities. When an option is exercised, the cost or proceeds of the underlying instrument purchased or sold is adjusted by the amount of the premium. When an option is closed the Fund will realize a gain or loss depending on whether the proceeds or amount paid for the closing sale transaction is greater or less than the premium received or paid. When an option expires, gains and losses are realized to the extent of premiums received and paid, respectively. The net realized and unrealized gains (losses) on purchased options are included on the Statement of Operations in net realized gain (loss) and change in net unrealized appreciation (depreciation) on investment securities. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on written options are reflected separately on the Statement of Operations.

Any open options at period end are presented in the Schedule of Investments under the captions "Purchased Options," "Purchased Swaptions," "Written Options" and "Written Swaptions," as applicable, and are representative of volume of activity during the period.

Swaps. A swap is a contract between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. A centrally cleared OTC swap is a transaction executed between a fund and a dealer counterparty, then cleared by a futures commission merchant (FCM) through a clearinghouse. Once cleared, the clearinghouse serves as a central counterparty, with whom a fund exchanges cash flows for the life of the transaction, similar to transactions in futures contracts.

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4. Derivative Instruments - continued

Swaps - continued

margin for derivative instruments in the Statement of Assets and Liabilities. Any premiums for centrally cleared OTC swaps are recorded periodically throughout the term of the swap to variation margin and included in unrealized appreciation (depreciation) in the Statement of Assets and Liabilities. Any premiums are recognized as realized gain (loss) upon termination or maturity of the swap.

Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gain or (loss). Some swaps may be terminated prior to the effective date and realize a gain or loss upon termination. The net realized gain (loss) and change in net unrealized appreciation (depreciation) on swaps during the period is included in the Statement of Operations.

Any open swaps at period end are included in the Schedule of Investments under the caption "Swaps" and are representative of volume of activity during the period.

Interest Rate Swaps. Interest rate swaps are agreements between counterparties to exchange cash flows, one based on a fixed rate, and the other on a floating rate. The Fund entered into interest rate swaps to manage its exposure to interest rate changes. Changes in interest rates can have an effect on both the value of bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $56,030 and $152,563, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. Fidelity Management & Research Company (the investment adviser) and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and an annualized group fee rate that averaged .11% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by the investment adviser, including any mutual funds previously advised by the investment adviser that are currently advised by Fidelity SelectCo, LLC, an affiliate of the investment adviser. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the reporting period, the total annualized management fee rate was .31% of the Fund's average net assets.

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Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan Fees. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of the investment adviser, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates, total fees and amounts retained by FDC were as follows:

	Distribution Fee	Service Fee	Total Fees	Retained by FDC
Class A	-%	.25%	$ 340	$ 9
Class T	-%	.25%	271	3
Class B	.65%	.25%	51	38
Class C	.75%	.25%	340	36
			$ 1,002	$ 86

Sales Load. FDC may receive a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. Depending on the holding period, FDC may receive contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. The deferred sales charges range from 5.00% to 1.00% for Class B shares, 1.00% for Class C shares, .75% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 4
Class T	2
Class B*	17
Class C*	9
	$ 32

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc., (FIIOC), an affiliate of the investment adviser FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.

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6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

For the period, transfer agent fees for each class were as follows:

	Amount	% of Average Net Assets*
Class A	$ 237	.18
Class T	165	.15
Class B	14	.25
Class C	63	.19
Government Income	1,662	.10
Institutional Class	244	.16
	$ 2,385

* Annualized

Fund Wide Operations Fee. Pursuant to the Fund Wide Operations and Expense Agreement (FWOE), the investment adviser has agreed to provide for fund level expenses (which do not include transfer agent, Rule 12b-1 fees, compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fee was equivalent to an annualized rate of .04% of average net assets.

7. Committed Line of Credit.

The Fund participates with other funds managed by the investment adviser or an affiliate in a $4.25 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $4 and is reflected in Miscellaneous expenses on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

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Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

8. Security Lending - continued

determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, the Fund may apply collateral received from the borrower against the obligation. The Fund may experience delays and costs in recovering the securities loaned. Any cash collateral received is maintained at the Fund's custodian and/or invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less rebates paid to borrowers, plus any premium payments received for lending certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Total security lending income during the period amounted to $88.

9. Expense Reductions.

Through arrangements with the Fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $2.

In addition, the investment adviser reimbursed a portion if the Fund's operating expenses during the period in the amount of $20.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Six months ended February 28, 2014	Year ended August 31, 2013
From net investment income
Class A	$ 1,801	$ 3,252
Class T	1,461	2,613
Class B	34	37
Class C	193	168
Government Income	27,503	49,780
Institutional Class	2,474	3,744
Total	$ 33,466	$ 59,594
From net realized gain
Class A	$ 183	$ 11,175
Class T	147	8,673
Class B	8	596
Class C	46	2,876
Government Income	2,266	125,918
Institutional Class	210	9,786
Total	$ 2,860	$ 159,024

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11. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
	Six months ended February 28, 2014	Year ended August 31, 2013	Six months ended February 28, 2014	Year ended August 31, 2013
Class A
Shares sold	1,701	8,104	$ 17,459	$ 85,854
Reinvestment of distributions	180	1,265	1,848	13,433
Shares redeemed	(5,763)	(15,428)	(59,127)	(162,383)
Net increase (decrease)	(3,882)	(6,059)	$ (39,820)	$ (63,096)
Class T
Shares sold	2,048	7,402	$ 21,026	$ 78,470
Reinvestment of distributions	153	1,047	1,572	11,108
Shares redeemed	(4,498)	(14,316)	(46,151)	(151,179)
Net increase (decrease)	(2,297)	(5,867)	$ (23,553)	$ (61,601)
Class B
Shares sold	13	94	$ 129	$ 1,008
Reinvestment of distributions	3	46	32	489
Shares redeemed	(294)	(744)	(3,007)	(7,820)
Net increase (decrease)	(278)	(604)	$ (2,846)	$ (6,323)
Class C
Shares sold	424	1,670	$ 4,368	$ 17,648
Reinvestment of distributions	18	217	181	2,305
Shares redeemed	(1,324)	(3,719)	(13,587)	(39,071)
Net increase (decrease)	(882)	(1,832)	$ (9,038)	$ (19,118)
Government Income
Shares sold	32,923	64,692	$ 337,153	$ 682,510
Reinvestment of distributions	2,786	16,002	28,600	169,563
Shares redeemed	(57,823)	(139,613)	(591,896)	(1,466,267)
Net increase (decrease)	(22,114)	(58,919)	$ (226,143)	$ (614,194)
Institutional Class
Shares sold	5,030	10,037	$ 51,526	$ 106,129
Reinvestment of distributions	253	1,202	2,601	12,746
Shares redeemed	(3,956)	(12,650)	(40,538)	(133,805)
Net increase (decrease)	1,327	(1,411)	$ 13,589	$ (14,930)

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Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except percentages)

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

Semiannual Report

Board Approval of Investment Advisory Contracts and Management Fees

Fidelity Government Income Fund

Each year, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract with Fidelity Management & Research Company (FMR) and the sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information relevant to the renewal of the Advisory Contracts throughout the year.

The Board meets regularly and, at each of its meetings, covers an extensive agenda of topics and materials and considers factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established four standing committees, Operations, Audit, Fair Valuation, and Governance and Nominating, each composed of and chaired by Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Operations Committee, of which all of the Independent Trustees are members, meets regularly throughout the year and, among other matters, considers matters specifically related to the annual consideration of the renewal of the fund's Advisory Contracts. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts. Members of the Board may also meet with trustees of other Fidelity funds through ad hoc joint committees to discuss certain matters relevant to the Fidelity funds.

At its September 2013 meeting, the Board, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expense ratio relative to peer funds; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale exist and would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.

In considering whether to renew the Advisory Contracts for the fund, the Board reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts was in the best interests of the fund and its shareholders and that the compensation payable under the Advisory Contracts was fair and reasonable. The Board's decision to renew the Advisory Contracts was not based on any single factor, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, was aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by Fidelity's competitors, and that the fund's shareholders, who have the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, which is part of the Fidelity family of funds.

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Nature, Extent, and Quality of Services Provided. The Board considered Fidelity's staffing as it relates to the fund, including the backgrounds of investment personnel of FMR and the sub-advisers (together, the Investment Advisers), and also considered the fund's investment objective, strategies, and related investment philosophy. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives to act in the best interests of the fund.

Resources Dedicated to Investment Management and Support Services. The Board reviewed the general qualifications and capabilities of Fidelity's investment staff, including its size, education, experience, and resources, as well as Fidelity's approach to recruiting, managing, and compensating investment personnel. The Board noted that Fidelity has continued to increase the resources devoted to non-U.S. offices, including expansion of Fidelity's global investment organization. The Board also noted that Fidelity's analysts have extensive resources, tools and capabilities that allow them to conduct sophisticated quantitative and fundamental analysis, as well as credit analysis of issuers, counterparties and guarantors. Further, the Board believes that Fidelity's investment professionals have sufficient access to global information and data so as to provide competitive investment results over time, and that those professionals also have access to sophisticated tools that permit them to assess portfolio construction and risk and performance attribution characteristics continuously, as well as to transmit new information and research conclusions rapidly around the world. Additionally, in its deliberations, the Board considered Fidelity's trading and risk management capabilities and resources, which are an integral part of the investment management process.

Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures.

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Board Approval of Investment Advisory Contracts and
Management Fees - continued

The Board noted that the growth of fund assets over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through telephone representatives and over the Internet, investor education materials and asset allocation tools, and the expanded availability of Fidelity Investor Centers.

Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken, or had made recommendations that resulted in the Fidelity funds taking, a number of actions over the previous year that benefited particular funds, including (i) continuing to dedicate additional resources to investment research and to the support of the senior management team that oversees asset management; (ii) persisting in efforts to enhance Fidelity's global research capabilities; (iii) launching new funds and making other enhancements to meet client needs for global and income-oriented solutions; (iv) continuing to launch dedicated lower cost underlying funds to meet portfolio construction needs related to expanding underlying fund options for Fidelity funds of funds, specifically for the Freedom Fund product lines; (v) rationalizing product lines and gaining increased efficiencies through the combination of several funds with other funds; (vi) strengthening Fidelity's index fund offerings by reducing investment minimums and adopting or lowering existing expense caps for certain funds and classes; (vii) enhancing Global Asset Allocation product offerings by launching new funds and strategies, including "open architecture" target date funds that utilize affiliated and unaffiliated sub-advisers; (viii) modifying the eligibility criteria for Institutional Class shares of Advisor funds to increase their marketability to a portion of the defined contribution plan market; (ix) creating a new low-cost retirement share class for certain Advisor funds to appeal to large retirement plans; (x) transitioning the management of certain Fidelity commodity funds to Geode Capital Management LLC, a registered commodity pool operator, while retaining administrative responsibilities for the funds; and (xi) taking steps toward establishing a new Fidelity adviser to manage sector-based funds and products.

Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions and its performance history.

The Board took into account discussions with the Investment Advisers about fund investment performance that occur at Board meetings throughout the year. In this regard the Board noted that as part of regularly scheduled fund reviews and other reports to the Board on fund performance, the Board periodically considers annualized return information for the fund for different time periods, measured against a securities market index ("benchmark index") and a peer group of mutual funds with similar objectives ("peer group"). In its evaluation of fund investment performance at meetings throughout the year, the Board gave particular attention to information indicating underperformance of certain Fidelity funds for specific time periods and the Investment Advisers' explanations for such underperformance.

Semiannual Report

In addition to reviewing absolute and relative fund performance, the Independent Trustees periodically consider the appropriateness of fund performance metrics in evaluating the results achieved. In general, the Independent Trustees believe that fund performance should be evaluated based on gross performance (before fees and expenses but after transaction costs) compared to appropriate benchmark indices, over appropriate time periods that may include full market cycles, and on net performance (after fees and expenses) compared to peer groups, as applicable, over the same periods, taking into account relevant factors including the following: general market conditions; expectations for interest rate levels and credit conditions; issuer-specific information including credit quality; tactical opportunities for investment; the potential for incremental return versus the fund's benchmark index weighed against the risks involved in obtaining that incremental return, including the risk of diminished or negative total returns; and fund cash flows and other factors. Depending on the circumstances, the Independent Trustees may be satisfied with a fund's performance notwithstanding that it lags its benchmark index or peer group for certain periods.

The Independent Trustees recognize that shareholders evaluate performance on a net basis over their own holding periods, for which one-, three-, and five-year periods are often used as a proxy. For this reason, the performance information reviewed by the Board also included net cumulative calendar year total return information for the fund and an appropriate benchmark index and peer group for the most recent one-, three-, and five-year periods.

Based on its review, the Board concluded that the nature, extent, and quality of services provided to the fund under the Advisory Contracts should benefit the fund's shareholders.

Competitiveness of Management Fee and Total Expense Ratio. The Board considered the fund's management fee and total expense ratio compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable investment mandates. Combining Lipper investment objective categories aids the Board's management fee and total expense ratio comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.

Management Fee. The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group" and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund's standing in terms of gross management fees before expense reimbursements or caps relative to the total universe of funds with comparable investment mandates, regardless of whether their management fee structures also are comparable. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a hypothetical TMG % of 50% would mean that half of the funds in the Total Mapped Group had higher, and half had lower, management fees than the fund. The fund's actual TMG %s are in the chart below. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to a subset of non-Fidelity funds within the Total Mapped Group that are similar in size and management fee structure. For example, if a fund is in the first quartile of the ASPG, the fund's management fee ranks in the least expensive or lowest 25% of funds in the ASPG. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee structures, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee rate ranked, is also included in the chart and considered by the Board.

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Board Approval of Investment Advisory Contracts and
Management Fees - continued

Fidelity Government Income Fund

inc430

The Board noted that the fund's management fee rate ranked below the median of its Total Mapped Group and below the median of its ASPG for 2012.

Semiannual Report

Based on its review, the Board concluded that the fund's management fee is fair and reasonable in light of the services that the fund receives and the other factors considered.

Total Expense Ratio. In its review of each class's total expense ratio, the Board considered the fund's management fee as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered the current and historical total expense ratios of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.

The Board noted that the total expense ratio of each class ranked below its competitive median for 2012.

The Board considered that the current contractual arrangements for the fund have the effect of setting the total "fund-level" (but not "class-level") expenses (including, among certain other "fund-level" expenses, the management fee) for each class at 0.35%. The Board also considered that current contractual arrangements oblige FMR to pay all "class-level" expenses of the retail class of the fund to the extent necessary to limit total expenses, with certain exceptions, to 0.45%. These contractual arrangements may not be increased without the approval of the Board and the shareholders of the fund or class, as applicable.

The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR calculates the group fee rates based on a tiered asset "breakpoint" schedule that varies based on asset class. The Board noted, however, that because the current contractual arrangements set the total "fund-level" expenses for each class at 0.35%, increases or decreases in the management fee due to changes in the group fee rate will not impact the total expense ratio.

Amendment to Description of Group Fee Rate. At its September 2013 meeting, the Board voted to approve an amendment to the fund's management contract to modify the description of the "group fee rate." The Board noted that under the prior description in the contract, the group fee rate was based on the average net assets of all registered investment companies with which FMR has management contracts. Under the contract's tiered asset breakpoint schedule, the group fee rate is lower as total fund assets under FMR's management increase, and higher as total fund assets under FMR's management decrease. The Board considered that the prior description would have excluded the assets of 64 Fidelity sector funds from the group fee rate calculation once Fidelity SelectCo, LLC, an affiliate of FMR, assumed management responsibilities for those funds. The Board noted that modifying the description of the group fee rate to continue to include the assets of those 64 funds for purposes of determining group fee rate breakpoints would avoid an immediate adverse impact on the group fee rate for any fund.

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Board Approval of Investment Advisory Contracts and
Management Fees - continued

Fees Charged to Other Fidelity Clients. The Board also considered Fidelity fee structures and other information with respect to clients of Fidelity, such as other mutual funds advised or subadvised by Fidelity, pension plan clients, and other institutional clients. The Board noted the findings of the 2013 ad hoc joint committee (created with the board of other Fidelity funds), which reviewed and compared Fidelity's institutional investment advisory business with its business of providing services to the Fidelity funds, including the differences in services provided, fees charged, and costs incurred, as well as competition in their respective marketplaces.

Based on its review of total expense ratios and fees charged to other Fidelity clients, the Board concluded that the total expense ratio of each class of the fund was reasonable in light of the services that the fund and its shareholders receive and the other factors considered.

Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and servicing the fund's shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.

On an annual basis, Fidelity presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the books and records of Fidelity on which Fidelity's audited financial statements are based. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.

PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of the methodologies used by Fidelity in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board concluded that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.

Semiannual Report

The Board also reviewed Fidelity's non-fund businesses and fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.

The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and was satisfied that the profitability was not excessive in the circumstances.

Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions. The Board also noted that in 2009, it and the board of other Fidelity funds created an ad hoc committee (the Economies of Scale Committee) to analyze whether Fidelity attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.

The Board concluded, taking into account the analysis of the Economies of Scale Committee, that economies of scale, if any, are being appropriately shared between fund shareholders and Fidelity.

Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including: (i) Fidelity's fund profitability methodology, profitability trends for certain funds, and the impact of certain factors on fund profitability results; (ii) portfolio manager changes that have occurred during the past year and the amount of the investment that each portfolio manager has made in the Fidelity fund(s) that he or she manages; (iii) Fidelity's compensation structure for portfolio managers, research analysts, and other key personnel, including its effects on fund profitability, the rationale for the compensation structure, and the extent to which current market conditions have affected retention and recruitment; (iv) the arrangements with and compensation paid to certain fund sub-advisers on behalf of the Fidelity funds; (v) Fidelity's fee structures, including the group fee structure and definition of group assets, and the rationale for recommending different fees among different categories of funds and classes; (vi) Fidelity's voluntary waiver of its fees to maintain minimum yields for certain money market funds and classes as well as contractual waivers in place for certain funds; (vii) the methodology with respect to competitive fund data and peer group classifications; (viii) Fidelity's transfer agent fee, expense, and service structures for different funds and classes, and the impact of the increased use of omnibus accounts; and (ix) explanations regarding the relative total expense ratios of certain funds and classes, total expense competitive trends and methodologies for total expense competitive comparisons, and actions that might be taken by Fidelity to reduce total expense ratios for certain funds and classes or to achieve further economies of scale.

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Board Approval of Investment Advisory Contracts and
Management Fees - continued

Based on its evaluation of all of the conclusions noted above, and after considering all factors it believed relevant, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Investments Money
Management, Inc.

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Smithfield, RI

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

(Fidelity Investment logo)(registered trademark)

AGVT-USAN-0414
1.864213.106

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor®

Government Income

Fund - Institutional Class

Semiannual Report

February 28, 2014

(Fidelity Cover Art)

Institutional Class is a class of
Fidelity® Government Income Fund

Shareholder Expense Example	(Click Here)	An example of shareholder expenses.
Investment Changes	(Click Here)	A summary of major shifts in the fund's investments over the past six months.
Investments	(Click Here)	A complete list of the fund's investments with their market values.
Financial Statements	(Click Here)	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	(Click Here)	Notes to the financial statements.
Board Approval of Investment Advisory Contracts and Management Fees	(Click Here)

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third-party marks appearing herein are the property of their respective owners.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Shareholder Expense Example

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 1, 2013 to February 28, 2014).

Actual Expenses

Hypothetical Example for Comparison Purposes

Semiannual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio ^B	Beginning Account Value September 1, 2013	Ending Account Value February 28, 2014	Expenses Paid During Period* September 1, 2013 to February 28, 2014
Class A	.78%
Actual		$ 1,000.00	$ 1,020.20	$ 3.91
Hypothetical^A		$ 1,000.00	$ 1,020.93	$ 3.91
Class T	.76%
Actual		$ 1,000.00	$ 1,020.30	$ 3.81
Hypothetical^A		$ 1,000.00	$ 1,021.03	$ 3.81
Class B	1.51%
Actual		$ 1,000.00	$ 1,016.50	$ 7.55
Hypothetical^A		$ 1,000.00	$ 1,017.31	$ 7.55
Class C	1.55%
Actual		$ 1,000.00	$ 1,016.30	$ 7.75
Hypothetical^A		$ 1,000.00	$ 1,017.11	$ 7.75
Government Income	.45%
Actual		$ 1,000.00	$ 1,022.90	$ 2.26
Hypothetical^A		$ 1,000.00	$ 1,022.56	$ 2.26
Institutional Class	.51%
Actual		$ 1,000.00	$ 1,021.50	$ 2.56
Hypothetical^A		$ 1,000.00	$ 1,022.27	$ 2.56

^A 5% return per year before expenses

^B Annualized expense ratio reflects expenses net of applicable fee waivers.

Semiannual Report

Investment Changes (Unaudited)

The information in the following tables is based on the combined investments of the Fund and its pro-rata share of the investments of Fidelity's fixed-income central funds.

Coupon Distribution as of February 28, 2014
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.0^†	0.0^†
0.01 - 0.99%	17.6	21.2
1 - 1.99%	12.3	9.4
2 - 2.99%	10.2	8.3
3 - 3.99%	20.8	20.8
4 - 4.99%	18.0	18.9
5 - 5.99%	14.6	13.6
6 - 6.99%	1.8	4.3
7% and above	0.3	0.3

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Weighted Average Maturity as of February 28, 2014
		6 months ago
Years	6.1	5.9

Duration as of February 28, 2014
		6 months ago
Years	4.8	4.9

^† Amount represents less than 0.1%
Asset Allocation (% of fund's net assets)
As of February 28, 2014*			As of August 31, 2013**
	Mortgage Securities 29.3%			Mortgage Securities 34.8%
	CMOs and Other Mortgage Related Securities 21.4%			CMOs and Other Mortgage Related Securities 17.3%
	U.S. Treasury Obligations 40.2%			U.S. Treasury Obligations 40.5%
	U.S. Government Agency Obligations^† 4.0%			U.S. Government Agency Obligations^† 2.9%
	Foreign Government & Government Agency Obligations 3.1%			Foreign Government & Government Agency Obligations 1.9%
	Short-Term Investments and Net Other Assets (Liabilities) 2.0%			Short-Term Investments and Net Other Assets (Liabilities) 2.6%
* Foreign Investments		3.1%	** Foreign Investments		1.9%
* Futures and Swaps		1.7%	** Futures and Swaps		3.4%

inc450

^† Includes NCUA Guaranteed Notes.

Percentages in the above tables are adjusted for the effect of TBA Sale Commitments.

Semiannual Report

Investments February 28, 2014 (Unaudited)

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 44.2%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 1.8%
Fannie Mae:
0.875% 2/8/18	$ 266		$ 262
1.625% 11/27/18	913		915
1.875% 9/18/18	203		206
1.875% 2/19/19	1,112		1,123
Federal Home Loan Bank 1% 6/21/17	14,860		14,874
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	2,229		2,369
Series 2002-20K Class 1, 5.08% 11/1/22	3,571		3,887
Series 2004-20H Class 1, 5.17% 8/1/24	1,220		1,329
Tennessee Valley Authority:
1.75% 10/15/18	23,006		23,179
3.5% 12/15/42	7,070		5,951
5.25% 9/15/39	5,209		5,855
5.375% 4/1/56	8,429		9,300
5.88% 4/1/36	3,438		4,201
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			73,451
U.S. Treasury Obligations - 40.2%
U.S. Treasury Bonds:
3.625% 8/15/43	112,941		113,717
3.625% 2/15/44	3,000		3,019
3.75% 11/15/43	6,000		6,180
4.375% 2/15/38	30,154		34,682
5% 5/15/37 (d)	43,170		54,124
9.875% 11/15/15 (e)	10,285		11,960
U.S. Treasury Notes:
0.25% 2/15/15	70,000		70,068
0.25% 7/15/15	3		3
0.25% 9/30/15	15,000		15,008
0.25% 2/29/16	14,933		14,911
0.25% 4/15/16	61,378		61,225
0.25% 5/15/16	17,502		17,446
0.375% 1/15/16	133,453		133,656
0.375% 3/15/16	20,000		20,014
0.625% 7/15/16	67,927		68,198
0.625% 8/15/16	44,206		44,354
0.625% 11/15/16	4,315		4,320
0.625% 4/30/18	37,435		36,543
0.75% 1/15/17	10,000		10,030
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
0.75% 6/30/17	$ 58,736		$ 58,516
0.875% 9/15/16	10,000		10,091
0.875% 11/30/16	8,663		8,727
0.875% 1/31/17	704		708
0.875% 1/31/18	4,683		4,641
0.875% 7/31/19	6,174		5,915
1% 10/31/16	39,991		40,441
1% 5/31/18	22,215		21,986
1.25% 11/30/18	35,000		34,702
1.375% 11/30/15	470		479
1.375% 7/31/18	39,780		39,886
1.375% 9/30/18	17,526		17,525
1.375% 2/28/19	83,770		83,181
1.5% 12/31/18	10,768		10,786
1.5% 1/31/19 (b)	43,197		43,217
1.75% 7/31/15	4		4
1.75% 10/31/20	18,000		17,663
1.875% 8/31/17	47,000		48,513
1.875% 9/30/17	67,400		69,527
2% 2/28/21	23,772		23,568
2.125% 1/31/21	13,296		13,308
2.375% 6/30/18	26,608		27,841
2.5% 6/30/17	10,000		10,537
2.5% 8/15/23	27,413		27,203
2.75% 11/30/16	18,530		19,607
2.75% 11/15/23	137,815		139,273
2.75% 2/15/24	4,000		4,033
3.125% 1/31/17	39,773		42,582
3.5% 2/15/18	49,165		53,663
4.5% 5/15/17	24,685		27,568
4.75% 8/15/17	12,983		14,672
TOTAL U.S. TREASURY OBLIGATIONS			1,639,821
Other Government Related - 2.2%
National Credit Union Administration Guaranteed Notes:
Series 2010-A1 Class A, 0.5075% 12/7/20 (NCUA Guaranteed) (f)	6,584		6,591
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
Other Government Related - continued
National Credit Union Administration Guaranteed Notes: - continued
Series 2011-R4 Class 1A, 0.5425% 3/6/20 (NCUA Guaranteed) (f)	$ 5,651		$ 5,662
National Credit Union Administration Guaranteed Notes Master Trust 3.45% 6/12/21 (NCUA Guaranteed)	74,000		78,057
TOTAL OTHER GOVERNMENT RELATED			90,310
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,776,170)		1,803,582
U.S. Government Agency - Mortgage Securities - 9.9%

Fannie Mae - 2.6%
1.85% 10/1/33 (f)	261		271
1.885% 2/1/33 (f)	203		211
1.91% 12/1/34 (f)	233		243
1.91% 3/1/35 (f)	184		191
1.929% 10/1/33 (f)	107		111
1.94% 7/1/35 (f)	81		84
2.04% 11/1/33 (f)	613		643
2.05% 3/1/35 (f)	35		36
2.23% 7/1/34 (f)	125		132
2.303% 6/1/36 (f)	191		201
2.332% 3/1/35 (f)	125		133
2.389% 3/1/36 (f)	743		798
2.421% 10/1/33 (f)	166		176
2.486% 11/1/36 (f)	152		162
2.516% 7/1/35 (f)	343		365
2.536% 6/1/42 (f)	562		580
2.549% 2/1/36 (f)	278		292
2.588% 5/1/36 (f)	254		271
2.949% 11/1/40 (f)	346		364
2.959% 9/1/41 (f)	400		420
3% 3/1/44 (c)	40,000		38,848
3.093% 10/1/41 (f)	210		221
3.165% 3/1/42 (f)	15,664		16,411
3.224% 7/1/41 (f)	624		657
3.345% 10/1/41 (f)	355		376
3.49% 3/1/40 (f)	3,586		3,763
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
3.55% 7/1/41 (f)	$ 662		$ 703
4% 2/1/42	523		549
4% 3/1/44 (c)	6,400		6,707
5% 9/1/22 to 12/1/22	15,669		16,885
5.5% 1/1/29	3,386		3,750
6.19% 3/1/37 (f)	115		122
6.5% 2/1/17 to 8/1/36	10,687		12,070
9.5% 10/1/20	33		38
11.5% 6/15/19 to 1/15/21	16		17
			106,801
Freddie Mac - 0.7%
1.82% 3/1/35 (f)	581		598
2.121% 5/1/37 (f)	324		338
2.49% 6/1/35 (f)	611		649
2.492% 4/1/35 (f)	42		45
2.534% 2/1/36 (f)	31		32
2.673% 7/1/35 (f)	1,389		1,477
2.795% 7/1/36 (f)	591		629
2.877% 3/1/33 (f)	24		26
3% 11/1/42 to 2/1/43	5,160		5,018
3.064% 10/1/35 (f)	256		272
3.082% 9/1/41 (f)	3,397		3,568
3.23% 4/1/41 (f)	392		414
3.249% 9/1/41 (f)	370		390
3.281% 6/1/41 (f)	492		520
3.464% 5/1/41 (f)	417		443
3.622% 6/1/41 (f)	654		696
3.695% 5/1/41 (f)	604		642
4.5% 5/1/39 to 10/1/41	5,532		5,955
5.5% 7/1/29 to 7/1/35	3,821		4,241
6% 1/1/24	2,752		3,042
9.5% 6/1/18 to 8/1/21	46		51
9.75% 8/1/14	16		17
12% 3/1/15	0		0*
13% 6/1/14	0		0*
			29,063
Ginnie Mae - 6.6%
4.3% 8/20/61 (j)	5,069		5,478
4.5% 3/15/25 to 6/15/25	10,119		10,907
4.515% 3/20/62 (j)	18,921		20,762
4.53% 10/20/62 (j)	5,232		5,770
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Ginnie Mae - continued
4.55% 5/20/62 (j)	$ 38,719		$ 42,566
4.556% 12/20/61 (j)	20,987		23,019
4.604% 3/20/62 (j)	11,152		12,277
4.626% 3/20/62 (j)	8,186		9,002
4.649% 2/20/62 (j)	3,475		3,826
4.65% 3/20/62 (j)	7,437		8,192
4.682% 2/20/62 (j)	4,582		5,042
4.684% 1/20/62 (j)	26,043		28,645
4.804% 3/20/61 (j)	13,768		15,032
4.834% 3/20/61 (j)	24,723		27,029
5% 4/20/41 to 6/20/41	97		107
5.47% 8/20/59 (j)	2,894		3,085
5.492% 4/20/60 (j)	23,575		26,214
5.5% 11/15/35	3,612		4,062
5.612% 4/20/58 (j)	5,914		6,165
6% 6/15/36	8,438		9,682
			266,862
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $395,679)		402,726
Collateralized Mortgage Obligations - 12.0%

U.S. Government Agency - 12.0%
Fannie Mae:
floater:
Series 2001-38 Class QF, 1.1355% 8/25/31 (f)	165		168
Series 2002-49 Class FB, 0.7545% 11/18/31 (f)	166		168
Series 2002-60 Class FV, 1.1555% 4/25/32 (f)	73		74
Series 2002-75 Class FA, 1.1555% 11/25/32 (f)	149		152
Series 2010-15 Class FJ, 1.0855% 6/25/36 (f)	11,921		12,123
pass-thru certificates Series 2012-127 Class DH, 4% 11/25/27	5,640		6,025
planned amortization class:
Series 2003-113 Class PE, 4% 11/25/18	4,976		5,230
Series 2005-19 Class PA, 5.5% 7/25/34	4,529		4,939
Series 2005-27 Class NE, 5.5% 5/25/34	4,455		4,697
Series 2005-64 Class PX, 5.5% 6/25/35	4,354		4,787
Series 2006-45 Class OP, 0% 6/25/36 (i)	1,771		1,548
Series 2010-118 Class PB, 4.5% 10/25/40	7,053		7,455
Series 2011-126 Class KB, 4% 12/25/41	6,260		6,327
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
sequential payer:
Series 2003-117 Class MD, 5% 12/25/23	$ 2,002		$ 2,180
Series 2004-91 Class Z, 5% 12/25/34	10,471		11,497
Series 2005-117 Class JN, 4.5% 1/25/36	645		695
Series 2005-14 Class ZB, 5% 3/25/35	3,568		3,915
Series 2005-47 Class HK, 4.5% 6/25/20	7,309		7,707
Series 2006-72 Class CY, 6% 8/25/26	8,150		9,080
Series 2009-14 Class EB, 4.5% 3/25/24	6,918		7,329
Series 2009-59 Class HB, 5% 8/25/39	4,590		4,919
Series 2010-97 Class CX, 4.5% 9/25/25	10,813		11,774
Series 2009-85 Class IB, 4.5% 8/25/24 (h)	1,038		88
Series 2009-93 Class IC, 4.5% 9/25/24 (h)	1,533		129
Series 2010-139 Class NI, 4.5% 2/25/40 (h)	7,910		1,342
Series 2010-39 Class FG, 1.0755% 3/25/36 (f)	7,369		7,547
Series 2010-97 Class CI, 4.5% 8/25/25 (h)	3,241		320
Series 2013-40 Class PV, 2% 1/25/26	7,424		7,551
Freddie Mac:
floater:
Series 2530 Class FE, 0.7545% 2/15/32 (f)	103		105
Series 2630 Class FL, 0.6545% 6/15/18 (f)	129		129
Series 2682 Class FB, 1.0545% 10/15/33 (f)	6,472		6,601
Series 2711 Class FC, 1.0545% 2/15/33 (f)	4,360		4,428
planned amortization class:
Series 1141 Class G, 9% 9/15/21	99		115
Series 2006-3245 Class ME, 5.5% 6/15/35	2,907		2,984
Series 2356 Class GD, 6% 9/15/16	59		62
Series 2376 Class JE, 5.5% 11/15/16	391		409
Series 2381 Class OG, 5.5% 11/15/16	215		224
Series 2672 Class MG, 5% 9/15/23	7,120		7,853
Series 2682 Class LD, 4.5% 10/15/33	777		829
Series 2810 Class PD, 6% 6/15/33	99		100
Series 3415 Class PC, 5% 12/15/37	1,291		1,390
Series 3763 Class QA, 4% 4/15/34	3,886		4,082
planned amortization class sequential payer Series 2005-2963 Class VB, 5% 11/15/34	5,040		5,436
sequential payer:
Series 2004-2802 Class ZG, 5.5% 5/15/34	10,645		12,021
Series 2587 Class AD, 4.71% 3/15/33	5,785		6,337
Series 2773 Class HC, 4.5% 4/15/19	704		755
Series 2877 Class ZD, 5% 10/15/34	13,507		14,762
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac: - continued
sequential payer: - continued
Series 3007 Class EW, 5.5% 7/15/25	$ 8,875		$ 9,929
Series 3277 Class B, 4% 2/15/22	5,900		6,252
Series 3578 Class B, 4.5% 9/15/24	7,927		8,369
Series 3871 Class KB, 5.5% 6/15/41	13,870		15,769
Series 4181 Class LA, 3% 3/15/37	5,266		5,403
Ginnie Mae guaranteed REMIC pass-thru certificates:
floater:
Series 2008-2 Class FD, 0.637% 1/20/38 (f)	555		558
Series 2008-73 Class FA, 1.017% 8/20/38 (f)	3,740		3,804
Series 2008-83 Class FB, 1.057% 9/20/38 (f)	3,839		3,908
Series 2009-108 Class CF, 0.7545% 11/16/39 (f)	2,582		2,604
Series 2011-H21 Class FA, 0.7683% 10/20/61 (f)(j)	8,626		8,627
Series 2012-H01 Class FA, 0.8683% 11/20/61 (f)(j)	7,194		7,225
Series 2012-H03 Class FA, 0.8683% 1/20/62 (f)(j)	4,344		4,363
Series 2012-H06 Class FA, 0.7983% 1/20/62 (f)(j)	6,690		6,699
Series 2012-H07 Class FA, 0.7983% 3/20/62 (f)(j)	3,960		3,964
Series 2014-H02 Class FB, 0.804% 12/20/63 (f)(j)	42,789		42,791
floater sequential payer Series 2011-150 Class D, 3% 4/20/37	1,274		1,293
planned amortization class:
Series 2010-112 Class PM, 3.25% 9/20/33	889		897
Series 2010-99 Class PT, 3.5% 8/20/33	1,148		1,159
sequential payer Series 2011-69 Class GX, 4.5% 5/16/40	10,205		10,913
Series 2010-H13 Class JA, 5.46% 10/20/59 (j)	14,741		15,698
Series 2010-H15 Class TP, 5.15% 8/20/60 (j)	20,414		22,542
Series 2010-H17 Class XP, 5.302% 7/20/60 (f)(j)	27,910		30,758
Series 2010-H18 Class PL, 5.01% 9/20/60 (f)(j)	20,263		22,293
Series 2011-71:
Class ZB, 5.5% 8/20/34	23,156		26,475
Class ZC, 5.5% 7/16/34	22,567		25,318
Series 2012-64 Class KB, 3.8135% 5/20/41 (f)	2,924		3,264
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $484,616)		489,263
Commercial Mortgage Securities - 6.7%
	Principal Amount (000s)		Value (000s)
Freddie Mac:
pass thru-certificates floater Series KF01 Class A, 0.5183% 4/25/19 (f)	$ 8,024		$ 8,009
pass-thru certificates sequential payer:
Series K011 Class A2, 4.084% 11/25/20	3,740		4,073
Series K014 Class A2, 3.871% 4/25/21	9,230		9,912
Series K015 Class A2, 3.23% 7/25/21	16,425		16,931
sequential payer:
Series K006 Class A2, 4.251% 1/25/20	24,840		27,412
Series K009 Class A2, 3.808% 8/25/20	32,528		34,961
Series K017 Class A2, 2.873% 12/25/21	28,660		28,753
Series K034:
Class A1, 2.669% 2/25/23	15,424		15,719
Class A2, 3.531% 7/25/23	50,700		52,383
Series K031 Class A2, 3.3% 4/25/23	34,500		35,120
Series K032 Class A1, 3.016% 2/25/23	28,191		29,398
Series K501 Class A2, 1.655% 11/25/16	9,650		9,809
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $272,431)		272,480
Foreign Government and Government Agency Obligations - 3.1%

Israeli State (guaranteed by U.S. Government through Agency for International Development):
5.5% 9/18/23	72,266		86,064
5.5% 12/4/23	48		57
Jordanian Kingdom 2.503% 10/30/20	41,050		41,282
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $117,142)		127,403

Fixed-Income Funds - 23.2%
	Shares
Fidelity Mortgage Backed Securities Central Fund (g) (Cost $911,203)	8,825,644		945,491
Cash Equivalents - 4.2%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.05%, dated 2/28/14 due 3/3/14:
(Collateralized by U.S. Government Obligations) # (a)	$ 42,877		$ 42,877
(Collateralized by U.S. Government Obligations) #	127,980		127,979
TOTAL CASH EQUIVALENTS (Cost $170,856)		170,856

Purchased Swaptions - 0.0%
	Expiration Date	Notional Amount (000s)
Put Options - 0.0%
Option on an interest rate swap with JPMorgan to pay a fixed rate of 3.3825% and receive a floating rate based on 3-month LIBOR	1/13/15	$ 42,345	780
Call Options - 0.0%
Option on an interest rate swap with JPMorgan to receive a fixed rate of 3.3825% and pay a floating rate based on 3-month LIBOR	1/13/15	42,345	1,697
TOTAL PURCHASED SWAPTIONS (Cost $2,532)			2,477

TOTAL INVESTMENT PORTFOLIO - 103.3% (Cost $4,130,629)			4,214,278
NET OTHER ASSETS (LIABILITIES) - (3.3)%			(135,292)
NET ASSETS - 100%		$ 4,078,986
TBA Sale Commitments
	Principal Amount (000s)
Fannie Mae
3% 3/1/44 (Proceeds $50,278)	$ (51,900)		(50,405)

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Purchased
Treasury Contracts
42 CBOT 10 Year U.S. Treasury Note Contracts	June 2014	$ 5,230	$ 24
727 CBOT 2 Year U.S. Treasury Note Contracts	June 2014	159,849	56
81 CBOT 5 Year U.S. Treasury Note Contracts	June 2014	9,709	30
128 CBOT Long Term U.S. Treasury Bond Contracts	June 2014	17,032	224
327 CBOT Ultra Long Term U.S. Treasury Bond Contracts	June 2014	46,955	592
TOTAL TREASURY CONTRACTS		$ 238,775	$ 926

The face value of futures purchased as a percentage of net assets is 5.8%

Swaps
Interest Rate Swaps Clearinghouse/Counterparty (1)	Expiration Date	Notional Amount (000s)		Payment Received	Payment Paid	Value (000s)	Upfront Premium Received/ (Paid) (2) (000s)	Unrealized Appreciation/(Depreciation) (000s)

CME	Jun. 2016		$ 11,314	3-month LIBOR	0.75%	$ (8)	$ 0	$ (8)
CME	Jun. 2019		6,718	3-month LIBOR	2%	(30)	0	(30)
CME	Jun. 2024		136,978	3-month LIBOR	3%	(1,481)	0	(1,481)
CME	Jun. 2044		1,035	3.75%	3-month LIBOR	27	0	27
TOTAL INTEREST RATE SWAPS						$ (1,492)	$ 0	$ (1,492)