0000719451-13-000056.txt : 20131028 0000719451-13-000056.hdr.sgml : 20131028 20131028120307 ACCESSION NUMBER: 0000719451-13-000056 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 82 CONFORMED PERIOD OF REPORT: 20130831 FILED AS OF DATE: 20131028 DATE AS OF CHANGE: 20131028 EFFECTIVENESS DATE: 20131028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY INCOME FUND /MA/ CENTRAL INDEX KEY: 0000751199 IRS NUMBER: 000000000 STATE OF INCORPORATION: MA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-04085 FILM NUMBER: 131172435 BUSINESS ADDRESS: STREET 1: 245 SUMMER STREET CITY: BOSTON STATE: MA ZIP: 02210 BUSINESS PHONE: 617-563-7000 MAIL ADDRESS: STREET 1: 245 SUMMER STREET CITY: BOSTON STATE: MA ZIP: 02210 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY MORTGAGE SECURITIES FUND DATE OF NAME CHANGE: 19851103

0000751199 S000007066 Fidelity Total Bond Fund

C000019272 Fidelity Total Bond Fund FTBFX

C000019273 Fidelity Advisor Total Bond Fund: Class A FEPAX

C000019274 Fidelity Advisor Total Bond Fund: Class B FBEPX

C000019275 Fidelity Advisor Total Bond Fund: Class C FCEPX

C000019276 Fidelity Advisor Total Bond Fund: Class T FEPTX

C000019277 Fidelity Advisor Total Bond Fund: Institutional Class FEPIX

0000751199 S000007069 Fidelity Government Income Fund

C000019283 Fidelity Government Income Fund FGOVX

C000038098 Fidelity Advisor Government Income Fund: Class A FVIAX

C000038099 Fidelity Advisor Government Income Fund: Class B FVIBX

C000038100 Fidelity Advisor Government Income Fund: Class C FVICX

C000038101 Fidelity Advisor Government Income Fund: Class T FVITX

C000038102 Fidelity Advisor Government Income Fund: Institutional Class FVIIX

0000751199 S000007070 Fidelity Intermediate Government Income Fund

C000019284 Fidelity Intermediate Government Income Fund FSTGX

N-CSR 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:	August 31, 2013

Item 1. Reports to Stockholders

Fidelity®

Government Income

Fund

Annual Report

August 31, 2013

(Fidelity Cover Art)

Performance	(Click Here)	How the fund has done over time.
Management's Discussion of Fund Performance	(Click Here)	The Portfolio Managers' review of fund performance and strategy.
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.
Report of Independent Registered Public Accounting Firm	(Click Here)
Trustees and Officers	(Click Here)
Distributions	(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 1-800-544-8544 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.

Annual Report

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.

Annual Report

Performance: The Bottom Line

Average annual total return reflects the change in the value of an investment, assuming reinvestment of the class' distributions from dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.

Average Annual Total Returns

Periods ended August 31, 2013	Past 1 year	Past 5 years	Past 10 years
Fidelity® Government Income Fund	-2.99%	4.16%	4.45%

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity® Government Income Fund, a class of the fund, on August 31, 2003. The chart shows how the value of your investment would have changed, and also shows how the Barclays® U.S. Government Bond Index performed over the same period.

gov716758

Annual Report

Management's Discussion of Fund Performance

Market Recap: A steep late-period sell-off amid the prospect of tighter monetary policy pushed U.S. taxable investment-grade bonds into the red for the 12 months ending August 31, 2013. The Barclays® U.S. Aggregate Bond Index returned -2.47% for the period, hitting its lowest point since December 2009. Most of the damage came in May through August, as interest rates began spiking higher in response to signals from the Federal Reserve that it could taper its stimulative bond-buying programs prior to year-end. The bond market suffered significant investor outflows, causing the sell-off to feed upon itself. Prior to that, "quantitative easing" had provided a positive tone for the market. Shifting expectations for global economic growth also was influential, with surprisingly strong data in the second quarter tempering investor demand for bonds. Among sectors that comprise the index, U.S. Treasuries and mortgage-backed securities - widely viewed as most vulnerable to a cessation of government-bond-buying programs - fared worst, returning -3.07% and -2.37%, respectively, while government-agency securities returned -1.75%. Investment-grade credit also lost ground, returning -2.12%, due to rising interest rates and investors' aversion to riskier assets at the end of the period. Thanks largely to their higher yields and solid first-half appreciation, commercial mortgage-backed securities fared best, rising 1.27%.

Comments from William Irving and Franco Castagliuolo, Lead Portfolio Manager and Co-Portfolio Manager, respectively, of Fidelity® Government Income Fund: The fund's Retail Class shares performed roughly in line with the benchmark net of expenses, returning -2.99%, while the Barclays®75% U.S. Government/25% U.S. MBS Blended Index returned -2.78%. Our comments reflect the fund's holdings in aggregate, including the underlying Fidelity®Mortgage Backed Securities Central Fund, which we also manage. We kept the fund's risk profile similar to that of the benchmark by maintaining interest-rate sensitivity in line with the Barclays index, occasionally using interest-rate swaps and Treasury futures. We also looked for ways to add incremental return through security and sector selection. Keeping the fund's duration in line with the benchmark helped the fund keep pace. The fund's overweighting in mortgage-backed securities (MBS) that offered comparatively high yields and that were somewhat insulated from mortgage prepayment was advantageous, because these investments generally outperformed the benchmark. It was helpful to significantly underweight Treasury securities, which materially lagged the benchmark. Detracting from performance was our exposure to high-coupon mortgage securities issued by Ginnie Mae.

The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.

Annual 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 (March 1, 2013 to August 31, 2013).

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.

Annual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio^B	Beginning Account Value March 1, 2013	Ending Account Value August 31, 2013	Expenses Paid During Period* March 1, 2013 to August 31, 2013
Class A	.77%
Actual		$ 1,000.00	$ 970.50	$ 3.82
Hypothetical^A		$ 1,000.00	$ 1,021.32	$ 3.92
Class T	.75%
Actual		$ 1,000.00	$ 970.60	$ 3.73
Hypothetical^A		$ 1,000.00	$ 1,021.42	$ 3.82
Class B	1.49%
Actual		$ 1,000.00	$ 967.00	$ 7.39
Hypothetical^A		$ 1,000.00	$ 1,017.69	$ 7.58
Class C	1.51%
Actual		$ 1,000.00	$ 966.90	$ 7.49
Hypothetical^A		$ 1,000.00	$ 1,017.59	$ 7.68
Government Income	.45%
Actual		$ 1,000.00	$ 972.00	$ 2.24
Hypothetical^A		$ 1,000.00	$ 1,022.94	$ 2.29
Institutional Class	.50%
Actual		$ 1,000.00	$ 971.80	$ 2.49
Hypothetical^A		$ 1,000.00	$ 1,022.68	$ 2.55

^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 184/365 (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 the Fund's annualized expense ratio.

Annual Report

Investment Changes (Unaudited)

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

Coupon Distribution as of August 31, 2013
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.0	0.5
0.01 - 0.99%	21.2	20.5
1 - 1.99%	9.4	9.9
2 - 2.99%	8.3	9.2
3 - 3.99%	20.8	15.2
4 - 4.99%	18.9	17.8
5 - 5.99%	13.6	14.3
6 - 6.99%	4.3	6.0
7% and over	0.3	0.2

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

Weighted Average Maturity as of August 31, 2013
		6 months ago
Years	5.9	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 August 31, 2013
		6 months ago
Years	4.9	4.4

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.

Asset Allocation (% of fund's net assets)
As of August 31, 2013*		As of February 28, 2013**
	Mortgage Securities 34.8%		Mortgage Securities 38.0%
	CMOs and Other Mortgage Related Securities 17.3%		CMOs and Other Mortgage Related Securities 17.4%
	U.S. Treasury Obligations 40.5%		U.S. Treasury Obligations 40.7%
	U.S. Government Agency Obligations ^† 2.9%		U.S. Government Agency Obligations ^† 3.8%
	Foreign Government & Government Agency Obligations 1.9%		Foreign Government & Government Agency Obligations 1.8%
	Short-Term Investments and Net Other Assets (Liabilities) 2.6%		Short-Term Investments and Net Other Assets (Liabilities) *** (1.7)%

gov716779

* Futures and Swaps	3.4%	** Futures and Swaps	(2.2)%
^† Includes NCUA Guaranteed Notes.
*** Short-Term Investments and Net Other Assets (Liabilities) are not included in the pie chart.

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

Annual Report

Investments August 31, 2013

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 43.4%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 2.6%
Fannie Mae:
0.5% 7/2/15	$ 60,173		$ 60,238
0.5% 3/30/16	8,534		8,490
0.625% 8/26/16	4,655		4,617
0.875% 2/8/18	2,333		2,257
0.875% 5/21/18	408		391
1.875% 9/18/18	203		203
Federal Home Loan Bank 1% 6/21/17	14,860		14,690
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	2,579		2,739
Series 2002-20K Class 1, 5.08% 11/1/22	4,203		4,563
Series 2004-20H Class 1, 5.17% 8/1/24	1,420		1,535
Tennessee Valley Authority:
5.25% 9/15/39	2,042		2,213
5.375% 4/1/56	8,429		9,132
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			111,068
U.S. Treasury Obligations - 40.5%
U.S. Treasury Bonds:
3.125% 2/15/43	68,291		60,982
3.625% 8/15/43 (c)	129,974		128,014
4.375% 2/15/38	24,154		27,215
5% 5/15/37 (d)	15,846		19,486
9.875% 11/15/15	10,285		12,398
U.S. Treasury Notes:
0.125% 4/30/15	4,228		4,214
0.25% 3/31/15	17,106		17,091
0.25% 5/31/15	9,600		9,583
0.25% 7/15/15	47,923		47,801
0.25% 7/31/15	6,000		5,984
0.25% 10/15/15	69,134		68,837
0.25% 4/15/16	61,378		60,764
0.25% 5/15/16	17,502		17,305
0.375% 1/15/16	133,453		132,921
0.375% 3/15/16	20,000		19,886
0.5% 6/15/16	70,000		69,606
0.625% 8/15/16 (c)	138,600		137,992
0.625% 4/30/18	37,435		35,920
0.75% 6/30/17	58,736		57,745
0.875% 11/30/16	29,402		29,356
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
0.875% 1/31/18	$ 4,683		$ 4,570
0.875% 7/31/19	6,174		5,804
1% 10/31/16	39,991		40,135
1% 5/31/18	31,053		30,269
1.375% 11/30/15	470		479
1.375% 7/31/18 (b)(c)	39,780		39,337
1.5% 8/31/18	72,009		71,559
1.75% 7/31/15	35,654		36,568
1.875% 8/31/17	47,000		48,131
1.875% 9/30/17	67,400		68,953
2% 7/31/20 (c) (j)	6,510		6,413
2.125% 5/31/15	4,176		4,304
2.125% 8/31/20 (c)	187,609		186,143
2.375% 6/30/18	26,608		27,597
2.5% 6/30/17	10,000		10,495
2.5% 8/15/23 (c)(j)	11,192		10,915
2.75% 11/30/16	18,530		19,609
3.125% 1/31/17	60,773		65,108
3.5% 2/15/18	58,585		63,816
4.5% 5/15/17	24,685		27,699
4.75% 8/15/17	12,983		14,752
TOTAL U.S. TREASURY OBLIGATIONS			1,745,756
Other Government Related - 0.3%
National Credit Union Administration Guaranteed Notes:
Series 2010-A1 Class A, 0.535% 12/7/20 (NCUA Guaranteed) (e)	7,606		7,615
Series 2011-R4 Class 1A, 0.5649% 3/6/20 (NCUA Guaranteed) (e)	6,666		6,682
TOTAL OTHER GOVERNMENT RELATED			14,297
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,866,922)		1,871,121
U.S. Government Agency - Mortgage Securities - 13.3%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 2.6%
1.975% 10/1/33 (e)	$ 268		$ 278
1.983% 2/1/33 (e)	209		217
2.023% 7/1/35 (e)	82		85
2.031% 12/1/34 (e)	238		247
2.035% 3/1/35 (e)	203		211
2.053% 10/1/33 (e)	122		127
2.175% 3/1/35 (e)	35		36
2.303% 6/1/36 (e)	214		228
2.332% 3/1/35 (e)	128		134
2.362% 2/1/36 (e)	477		505
2.378% 7/1/34 (e)	140		147
2.411% 3/1/36 (e)	1,074		1,142
2.415% 11/1/33 (e)	803		846
2.528% 10/1/33 (e)	191		203
2.574% 5/1/36 (e)	282		301
2.593% 11/1/36 (e)	163		173
2.639% 7/1/35 (e)	370		390
3% 12/1/42 to 2/1/43	7,456		7,138
3% 9/1/43 (c)	4,200		4,015
3% 9/1/43 (c)	4,200		4,015
3% 9/1/43 (c)	2,800		2,677
3% 9/1/43 (c)	2,800		2,677
3% 9/1/43 (c)	11,000		10,516
3% 9/1/43 (c)	6,600		6,310
3% 9/1/43 (c)	5,600		5,354
3.18% 3/1/42 (e)	17,700		18,455
3.485% 3/1/40 (e)	4,344		4,573
3.5% 12/1/42	2,465		2,427
4% 2/1/42	529		546
4.5% 3/1/41	4,132		4,383
5% 9/1/22 to 12/1/25	19,060		20,287
6.129% 3/1/37 (e)	210		221
6.5% 2/1/17 to 8/1/36	12,388		13,826
9% 5/1/14	15		15
9.5% 10/1/20	36		41
11.5% 6/15/19 to 1/15/21	21		22
			112,768
Freddie Mac - 1.6%
1.895% 3/1/35 (e)	701		726
2.137% 5/1/37 (e)	439		461
2.492% 4/1/35 (e)	171		182
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
2.546% 2/1/36 (e)	$ 37		$ 39
2.592% 6/1/35 (e)	759		808
2.673% 7/1/35 (e)	1,488		1,578
2.831% 7/1/36 (e)	599		641
3% 8/1/42 to 2/1/43	8,462		8,077
3.023% 3/1/33 (e)	25		26
3.087% 9/1/41 (e)	3,704		3,833
3.126% 10/1/35 (e)	279		298
3.5% 6/1/42 to 5/1/43	18,845		18,466
4% 9/1/43 (c)	17,500		18,006
4.5% 5/1/39 to 10/1/41	5,987		6,332
5.5% 7/1/29 to 7/1/35	4,557		4,948
6% 1/1/24	3,190		3,524
9.5% 6/1/18 to 8/1/21	56		62
9.75% 8/1/14	29		30
12% 3/1/15	0 *		0 *
12.5% 2/1/14 to 6/1/15	0 *		0 *
13% 6/1/14	0 *		0 *
			68,037
Ginnie Mae - 9.1%
4% 6/15/24 to 3/15/26	11,907		12,588
4.3% 8/20/61 (i)	5,181		5,575
4.5% 3/15/25 to 6/15/25	11,484		12,211
4.515% 3/20/62 (i)	19,545		21,227
4.53% 10/20/62 (i)	5,338		5,811
4.55% 5/20/62 (i)	39,487		42,955
4.556% 12/20/61 (i)	21,047		22,871
4.604% 3/20/62 (i)	11,655		12,696
4.626% 3/20/62 (i)	8,136		8,864
4.649% 2/20/62 (i)	3,421		3,730
4.65% 3/20/62 (i)	7,343		8,011
4.682% 2/20/62 (i)	4,550		4,964
4.684% 1/20/62 (i)	26,171		28,548
4.804% 3/20/61 (i)	13,900		15,154
4.834% 3/20/61 (i)	24,845		27,112
5% 4/20/41 to 6/20/41	109		118
5.47% 8/20/59 (i)	3,173		3,405
5.492% 4/20/60 (i)	23,603		26,355
5.5% 11/15/35	4,150		4,557
5.612% 4/20/58 (i)	7,337		7,699
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Ginnie Mae - continued
6% 6/15/36 to 9/15/40	$ 50,395		$ 55,557
6.5% 8/20/38 to 9/20/38	54,320		60,920
			390,928
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $574,735)		571,733
Collateralized Mortgage Obligations - 11.3%

U.S. Government Agency - 11.3%
Fannie Mae:
floater:
Series 2001-38 Class QF, 1.1641% 8/25/31 (e)	195		199
Series 2002-49 Class FB, 0.7841% 11/18/31 (e)	196		198
Series 2002-60 Class FV, 1.1841% 4/25/32 (e)	86		88
Series 2002-75 Class FA, 1.1841% 11/25/32 (e)	176		180
Series 2010-15 Class FJ, 1.1141% 6/25/36 (e)	14,065		14,424
pass-thru certificates Series 2012-127 Class DH, 4% 11/25/27	6,690		7,154
planned amortization class:
Series 1993-240 Class PD, 6.25% 12/25/13	25		25
Series 2003-113 Class PE, 4% 11/25/18	6,055		6,455
Series 2005-19 Class PA, 5.5% 7/25/34	5,181		5,623
Series 2005-27 Class NE, 5.5% 5/25/34	5,550		5,909
Series 2005-64 Class PX, 5.5% 6/25/35	4,976		5,460
Series 2006-45 Class OP, 6/25/36 (h)	2,139		1,853
Series 2010-118 Class PB, 4.5% 10/25/40	7,053		7,377
Series 2011-126 Class KB, 4% 12/25/41	6,260		6,242
sequential payer:
Series 2003-117 Class MD, 5% 12/25/23	2,331		2,519
Series 2004-91 Class Z, 5% 12/25/34	10,213		11,134
Series 2005-117 Class JN, 4.5% 1/25/36	645		688
Series 2005-14 Class ZB, 5% 3/25/35	3,622		3,959
Series 2005-47 Class HK, 4.5% 6/25/20	7,798		8,206
Series 2006-72 Class CY, 6% 8/25/26	9,655		10,726
Series 2009-14 Class EB, 4.5% 3/25/24	7,840		8,252
Series 2009-59 Class HB, 5% 8/25/39	4,590		4,933
Series 2010-97 Class CX, 4.5% 9/25/25	10,813		11,627
Series 2009-85 Class IB, 4.5% 8/25/24 (g)	1,297		122
Series 2009-93 Class IC, 4.5% 9/25/24 (g)	1,929		170
Series 2010-139 Class NI, 4.5% 2/25/40 (g)	8,651		1,422
Series 2010-39 Class FG, 1.1041% 3/25/36 (e)	8,545		8,759
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
Series 2010-97 Class CI, 4.5% 8/25/25 (g)	$ 3,998		$ 360
Series 2013-40 Class PV, 2% 1/25/26	7,652		7,723
Freddie Mac:
floater:
Series 2530 Class FE, 0.7841% 2/15/32 (e)	121		122
Series 2630 Class FL, 0.6841% 6/15/18 (e)	160		161
Series 2682 Class FB, 1.0841% 10/15/33 (e)	7,901		8,072
Series 2711 Class FC, 1.0841% 2/15/33 (e)	5,175		5,273
planned amortization class:
Series 1141 Class G, 9% 9/15/21	124		143
Series 2006-3245 Class ME, 5.5% 6/15/35	5,260		5,448
Series 2115 Class PE, 6% 1/15/14	12		12
Series 2356 Class GD, 6% 9/15/16	81		85
Series 2376 Class JE, 5.5% 11/15/16	511		536
Series 2381 Class OG, 5.5% 11/15/16	299		312
Series 2672 Class MG, 5% 9/15/23	7,120		7,815
Series 2682 Class LD, 4.5% 10/15/33	777		819
Series 2810 Class PD, 6% 6/15/33	167		170
Series 3415 Class PC, 5% 12/15/37	1,648		1,763
Series 3763 Class QA, 4% 4/15/34	4,387		4,615
planned amortization class sequential payer Series 2005-2963 Class VB, 5% 11/15/34	5,040		5,435
sequential payer:
Series 2587 Class AD, 4.71% 3/15/33	5,785		6,318
Series 2773 Class HC, 4.5% 4/15/19	704		753
Series 2877 Class ZD, 5% 10/15/34	13,255		14,341
Series 3007 Class EW, 5.5% 7/15/25	8,875		9,858
Series 3277 Class B, 4% 2/15/22	5,900		6,212
Series 3578 Class B, 4.5% 9/15/24	7,927		8,424
Series 3871 Class KB, 5.5% 6/15/41	13,870		15,662
Series 4176 Class BA, 3% 2/15/33	3,955		4,052
Series 4181 Class LA, 3% 3/15/37	5,447		5,518
Series 4182 Class BA, 3% 6/15/37	22,165		22,670
Ginnie Mae guaranteed REMIC pass-thru certificates:
floater:
Series 2008-2 Class FD, 0.6641% 1/20/38 (e)	663		667
Series 2008-73 Class FA, 1.0441% 8/20/38 (e)	4,444		4,520
Series 2008-83 Class FB, 1.0841% 9/20/38 (e)	4,552		4,634
Series 2009-108 Class CF, 0.7919% 11/16/39 (e)	3,240		3,268
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Ginnie Mae guaranteed REMIC pass-thru certificates: - continued
floater:
Series 2011-H21 Class FA, 0.7953% 10/20/61 (e)(i)	$ 9,150		$ 9,150
Series 2012-H01 Class FA, 0.8953% 11/20/61 (e)(i)	7,494		7,527
Series 2012-H03 Class FA, 0.8953% 1/20/62 (e)(i)	4,512		4,532
Series 2012-H06 Class FA, 0.8253% 1/20/62 (e)(i)	7,123		7,133
Series 2012-H07 Class FA, 0.8253% 3/20/62 (e)(i)	4,143		4,147
floater sequential payer Series 2011-150 Class D, 3% 4/20/37	1,829		1,862
planned amortization class:
Series 2010-112 Class PM, 3.25% 9/20/33	1,388		1,407
Series 2010-99 Class PT, 3.5% 8/20/33	1,763		1,790
sequential payer Series 2011-69 Class GX, 4.5% 5/16/40	10,205		10,647
Series 2010-H13 Class JA, 5.46% 10/20/59 (i)	15,682		16,833
Series 2010-H15 Class TP, 5.15% 8/20/60 (i)	20,317		22,452
Series 2010-H17 Class XP, 5.3018% 7/20/60 (e)(i)	28,493		31,486
Series 2010-H18 Class PL, 5.01% 9/20/60 (e)(i)	20,676		22,750
Series 2011-71:
Class ZB, 5.5% 8/20/34	22,529		25,059
Class ZC, 5.5% 7/16/34	23,674		26,069
Series 2012-64 Class KB, 3.479% 5/20/41 (e)	3,382		3,757
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $485,723)		486,066
Commercial Mortgage Securities - 4.0%

Freddie Mac:
pass thru-certificates floater Series KF01 Class A, 0.54% 4/25/19 (e)	11,984		11,880
pass-thru certificates sequential payer:
Series K011 Class A2, 4.084% 11/25/20	3,740		3,985
Series K014 Class A2, 3.871% 4/25/21	9,230		9,705
Series K015 Class A2, 3.23% 7/25/21	16,425		16,523
sequential payer:
Series K006 Class A2, 4.251% 1/25/20	24,840		26,898
Series K009 Class A2, 3.808% 8/25/20	32,528		34,075
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac: - continued
sequential payer:
Series K017 Class A2, 2.873% 12/25/21	$ 28,660		$ 27,984
Series K031 Class A2, 3.3% 4/25/23	34,500		33,975
Series K501 Class A2, 1.655% 11/25/16	9,650		9,725
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $180,872)		174,750
Foreign Government and Government Agency Obligations - 1.9%

Israeli State (guaranteed by U.S. Government through Agency for International Development) 5.5% 9/18/23 (Cost $74,189)	70,567		82,826

Fixed-Income Funds - 24.7%
	Shares
Fidelity Mortgage Backed Securities Central Fund (f) (Cost $1,044,497)	10,118,826		1,064,096
Cash Equivalents - 2.0%
	Maturity Amount (000s)
Investments in repurchase agreements in a joint trading account at:
0.04%, dated 8/30/13 due 9/3/13 (Collateralized by U.S. Government Obligations) #	$ 77,035		77,035
0.05%, dated 8/30/13 due 9/3/13 (Collateralized by U.S. Government Obligations) # (a)	11,135		11,135
TOTAL CASH EQUIVALENTS (Cost $88,170)		88,170
TOTAL INVESTMENT PORTFOLIO - 100.6% (Cost $4,315,108)		4,338,762
NET OTHER ASSETS (LIABILITIES) - (0.6)%		(25,986)
NET ASSETS - 100%		$ 4,312,776
TBA Sale Commitments
	Principal Amount (000s)		Value (000s)
Fannie Mae
3% 9/1/43	$ (25,000)		$ (23,900)
3% 9/1/43	(4,400)		(4,206)
3% 9/1/43	(6,600)		(6,310)
3% 9/1/43	(5,600)		(5,354)
4.5% 9/1/43	(4,100)		(4,326)
TOTAL FANNIE MAE			(44,096)
Freddie Mac
3% 9/1/43	(3,000)		(2,859)
4% 9/1/43	(17,500)		(18,006)
TOTAL FREDDIE MAC			(20,865)
TOTAL TBA SALE COMMITMENTS (Proceeds $65,566)		$ (64,961)

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Purchased
Treasury Contracts
747 CBOT 2 Year U.S. Treasury Note Contracts	Dec. 2013	$ 164,153	$ 80
129 CBOT Ultra Long Term U.S. Treasury Bond Contracts	Dec. 2013	17,016	162
		$ 181,169	$ 242
Futures Contracts - continued
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
116 CBOT 10 Year U.S. Treasury Note Contracts	Dec. 2013	$ 14,417	$ (39)
TOTAL TREASURY CONTRACTS		$ 195,586	$ 203

The face value of futures purchased as a percentage of net assets is 4.2%

The face value of futures sold as a percentage of net assets is 0.3%

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 $437,000.

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

(f) 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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's website or upon request.

(g) 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.

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

(i) 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.

(j) Security or a portion of the security sold on a delayed delivery basis.

* 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)
$77,035,000 due 9/03/13 at 0.04%
Barclays Capital, Inc.	$ 22,608
Citibank NA	3,573
Citigroup Global Markets, Inc.	4,466
Commerz Markets LLC	6,197
HSBC Securities (USA), Inc.	17,863
Mizuho Securities USA, Inc.	22,328
	$ 77,035
$11,135,000 due 9/03/13 at 0.05%
Commerz Markets LLC	$ 11,135

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	$ 23,503

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	$ 1,395,601	$ 23,503	$ 306,003	$ 1,064,096	7.7%

Other Information

The following is a summary of the inputs used, as of August 31, 2013, 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	$ 1,871,121	$ -	$ 1,871,121	$ -
U.S. Government Agency - Mortgage Securities	571,733	-	571,733	-
Collateralized Mortgage Obligations	486,066	-	486,066	-
Commercial Mortgage Securities	174,750	-	174,750	-
Foreign Government and Government Agency Obligations	82,826	-	82,826	-
Fixed-Income Funds	1,064,096	1,064,096	-	-
Cash Equivalents	88,170	-	88,170	-
Total Investments in Securities:	$ 4,338,762	$ 1,064,096	$ 3,274,666	$ -
Derivative Instruments:
Assets
Futures Contracts	$ 242	$ 242	$ -	$ -
Liabilities
Futures Contracts	$ (39)	$ (39)	$ -	$ -
Total Derivative Instruments:	$ 203	$ 203	$ -	$ -
Other Financial Instruments:
TBA Sale Commitments	$ (64,961)	$ -	$ (64,961)	$ -

Value of Derivative Instruments

The following table is a summary of the Fund's value of derivative instruments by primary risk exposure as of August 31, 2013. 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	Value
(Amounts in thousands)
	Asset	Liability
Interest Rate Risk
Futures Contracts (a)	$ 242	$ (39)
Total Value of Derivatives	$ 242	$ (39)

(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.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	August 31, 2013

Assets
Investment in securities, at value (including securities loaned of $10,880 and repurchase agreements of $88,170) - See accompanying schedule: Unaffiliated issuers (cost $3,270,611)	$ 3,274,666
Fidelity Central Funds (cost $1,044,497)	1,064,096
Total Investments (cost $4,315,108)		$ 4,338,762
Cash		2
Receivable for investments sold Regular delivery		471,644
Delayed delivery		71,179
Receivable for TBA sale commitments		65,566
Receivable for fund shares sold		2,118
Interest receivable		10,228
Receivable for daily variation margin for derivative instruments		97
Receivable from investment adviser for expense reductions		1
Other receivables		771
Total assets		4,960,368

Liabilities
Payable for investments purchased Regular delivery	$ 380,430
Delayed delivery	181,834
TBA sale commitments, at value	64,961
Payable for fund shares redeemed	6,406
Distributions payable	187
Accrued management fee	1,138
Distribution and service plan fees payable	181
Other affiliated payables	550
Other payables and accrued expenses	770
Collateral on securities loaned, at value	11,135
Total liabilities		647,592

Net Assets		$ 4,312,776
Net Assets consist of:
Paid in capital		$ 4,348,508
Distributions in excess of net investment income		(880)
Accumulated undistributed net realized gain (loss) on investments		(59,314)
Net unrealized appreciation (depreciation) on investments		24,462
Net Assets		$ 4,312,776

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

Annual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	August 31, 2013

Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($291,321 ÷ 28,560 shares)		$ 10.20

Maximum offering price per share (100/96.00 of $10.20)		$ 10.63
Class T: Net Asset Value and redemption price per share ($227,899 ÷ 22,346 shares)		$ 10.20

Maximum offering price per share (100/96.00 of $10.20)		$ 10.63
Class B: Net Asset Value and offering price per share ($12,898 ÷ 1,265 shares)^A		$ 10.20

Class C: Net Asset Value and offering price per share ($72,925 ÷ 7,151 shares)^A		$ 10.20

Government Income: Net Asset Value, offering price and redemption price per share ($3,411,546 ÷ 334,985 shares)		$ 10.18

Institutional Class: Net Asset Value, offering price and redemption price per share ($296,187 ÷ 29,040 shares)		$ 10.20

^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.

Annual Report

Statement of Operations

Amounts in thousands	Year ended August 31, 2013

Investment Income
Interest		$ 64,268
Income from Fidelity Central Funds		23,503
Total income		87,771

Expenses
Management fee	$ 15,626
Transfer agent fees	5,625
Distribution and service plan fees	2,589
Fund wide operations fee	1,773
Independent trustees' compensation	20
Miscellaneous	17
Total expenses before reductions	25,650
Expense reductions	(16)	25,634
Net investment income (loss)		62,137
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	(30,374)
Fidelity Central Funds	11,403
Futures contracts	(978)
Swaps	17,606
Total net realized gain (loss)		(2,343)
Change in net unrealized appreciation (depreciation) on: Investment securities	(204,535)
Futures contracts	(1,411)
Swaps	(15)
Delayed delivery commitments	1,698
Total change in net unrealized appreciation (depreciation)		(204,263)
Net gain (loss)		(206,606)
Net increase (decrease) in net assets resulting from operations		$ (144,469)

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

Annual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands	Year ended August 31, 2013	Year ended August 31, 2012
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 62,137	$ 84,003
Net realized gain (loss)	(2,343)	136,006
Change in net unrealized appreciation (depreciation)	(204,263)	23,049
Net increase (decrease) in net assets resulting from operations	(144,469)	243,058
Distributions to shareholders from net investment income	(59,594)	(81,217)
Distributions to shareholders from net realized gain	(159,024)	(130,853)
Total distributions	(218,618)	(212,070)
Share transactions - net increase (decrease)	(779,262)	58,002
Total increase (decrease) in net assets	(1,142,349)	88,990

Net Assets
Beginning of period	5,455,125	5,366,135
End of period (including distributions in excess of net investment income of $880 and distributions in excess of net investment income of $2,970, respectively)	$ 4,312,776	$ 5,455,125

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

Annual Report

Financial Highlights - Class A

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

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011.

^I 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.

^J The portfolio turnover rate does not include the assets acquired in the merger.

^K For the period ended July 31.

^L Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class T

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

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H 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 The portfolio turnover rate does not include the assets acquired in the merger.

^K For the period ended July 31.

^L Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class B

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

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H 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 The portfolio turnover rate does not include the assets acquired in the merger.

^K For the period ended July 31.

^L Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class C

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

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H 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 The portfolio turnover rate does not include the assets acquired in the merger.

^K For the period ended July 31.

^L Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Government Income

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

^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^G For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011.

^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 period ended July 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Institutional Class

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

^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^G For the one month period ended August 31. The Fund changed its fiscal year from July 31 to August 31, effective August 31, 2011.

^I The portfolio turnover rate does not include the assets acquired in the merger.

^J For the period ended July 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Notes to Financial Statements

For the period ended August 31, 2013

(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 Fidelity Management & Research Company (FMR) 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.

Based on its investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each non-money market Fidelity Central Fund.

Fidelity Central Fund

Investment Manager

Investment Objective

Investment Practices

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

Options

Repurchase Agreements

Swaps

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

2. Investments in Fidelity Central Funds - continued

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, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, 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 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.

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)

Annual Report

3. Significant Accounting Policies - continued

Investment Valuation - continued

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. For foreign government and government agency obligations and U.S. government and government agency obligations, pricing vendors utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. For collateralized mortgage obligations, commercial mortgage securities and U.S. government agency mortgage securities, pricing vendors utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and type as well as broker-supplied prices. When independent prices are unavailable or unreliable, debt securities may be valued utilizing pricing methodologies which consider similar factors that would be used by third party pricing vendors. Debt securities 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. 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 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 August 31, 2013, is included at the end of the Fund's Schedule of Investments.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Investment Transactions and Income - continued

the principal amount. The adjustments to principal due to inflation are reflected as increases or decreases to Interest in the accompanying Statement of Operations.

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 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. 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.

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. As of August 31, 2013, the Fund did not have any unrecognized tax benefits in the financial statements; nor is the Fund aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months. 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.

Annual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

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. Temporary book-tax differences 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	$ 34,970
Gross unrealized depreciation	(52,090)
Net unrealized appreciation (depreciation) on securities and other investments	$ (17,120)

Tax Cost	$ 4,355,882

The tax-based components of distributable earnings as of period end were as follows:

Undistributed ordinary income	$ 1,996
Undistributed long-term capital gain	$ 17,722
Net unrealized appreciation (depreciation)	$ (16,514)

The tax character of distributions paid was as follows:

	August 31, 2013	August 31, 2012
Ordinary Income	$ 134,183	$ 142,768
Long-term Capital Gains	84,435	69,302
Total	$ 218,618	$ 212,070

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

3. Significant Accounting Policies - continued

Repurchase Agreements - continued

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.

Purchases and sales of TBA securities involve risks similar to those discussed above for delayed delivery and when-issued securities. Also, if the counterparty in a mortgage

Annual Report

3. Significant Accounting Policies - continued

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

dollar roll or a reverse mortgage dollar roll transaction files for bankruptcy or becomes 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.

New Accounting Pronouncement. The Financial Accounting Standards Board issued in December 2011, Accounting Standard Update No. 2011-11, Disclosures about Offsetting Assets and Liabilities, and in January 2013, Accounting Standards Update No. 2013-1 Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. These updates create new disclosure requirements requiring entities to disclose both gross and net information for derivatives and other financial instruments that are either offset in the Statement of Assets and Liabilities or subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. Management expects that the impact of the updates' adoption will be limited to additional financial statement disclosures as applicable.

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

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

4. Derivative Instruments - continued

Risk Exposures and the Use of Derivative Instruments - continued

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.

The Fund is also exposed to additional risks from investing in derivatives, such as liquidity risk and counterparty credit risk. Liquidity risk is the risk that the Fund will be unable to close out the derivative in the open market in a timely manner. Counterparty credit risk is the risk that the counterparty will not be able to fulfill its obligation to the Fund. Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain OTC derivatives such as options and bi-lateral swaps, 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. 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

Annual Report

4. Derivative Instruments - continued

Risk Exposures and the Use of Derivative Instruments - continued

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.

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	$ (978)	$ (1,411)
Purchased Options	1,857	-
Swaps	17,606	(15)
Totals (a)	$ 18,485	$ (1,426)

(a) A summary of the value of derivatives by primary risk exposure as of period end, if any, is included at the end of the Schedule of Investments and
isrepresentative of activity for the period.

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.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

4. Derivative Instruments - continued

Futures Contracts - continued

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. 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 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.

Writing puts and buying calls tend to increase exposure to the underlying instrument while buying puts and writing calls tend to decrease exposure to the underlying instrument. For purchased options, risk of loss is limited to the premium paid, and for written options, risk of loss is the change in value in excess of the premium received.

Annual Report

4. Derivative Instruments - continued

Swaps. A swap is a contract between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. A bi-lateral OTC swap is a transaction between a fund and a dealer counterparty where cash flows are exchanged between the two parties for the life of the swap. 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.

Bi-lateral OTC swaps are marked-to-market daily and changes in value are reflected in the Statement of Assets and Liabilities in the bi-lateral OTC swaps at value line items. Any upfront premiums paid or received upon entering a bi-lateral OTC swap to compensate for differences between stated terms of the swap and prevailing market conditions (e.g. credit spreads, interest rates or other factors) are recorded in net unrealized appreciation (depreciation) in the Statement of Assets and Liabilities and amortized to realized gain or (loss) ratably over the term of the swap. Any unamortized upfront premiums are presented in the Schedule of Investments.

Centrally cleared OTC swaps require a fund to deposit either cash or securities (initial margin) with the FCM, at the instruction of and for the benefit of the clearinghouse. Securities deposited to meet initial margin requirements are identified in the Schedule of Investments. Cash deposited to meet initial margin requirements is presented in segregated cash with brokers for derivative instruments in the Statement of Assets and Liabilities. Centrally cleared OTC swaps are marked-to-market daily and subsequent payments (variation margin) are made or received depending on the daily fluctuations in the value of the swaps and are recorded as unrealized appreciation or (depreciation). These daily payments, if any, are included in receivable or payable for daily variation 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.

For both bi-lateral and centrally cleared OTC swaps, payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gain or (loss). Realized gain or (loss) is also recorded in the event of an early termination of a swap. 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."

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

4. Derivative Instruments - continued

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 $23,503 and $310,839, respectively.

6. Fees and Other Transactions with Affiliates.

Management Fee. FMR 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 FMR, including any mutual funds previously advised by FMR that are currently advised by Fidelity SelectCo, LLC, an affiliate of FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .31% of the Fund's average net assets.

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 FMR, 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%	$ 865	$ 23
Class T	-%	.25%	682	5
Class B	.65%	.25%	156	115
Class C	.75%	.25%	886	149
			$ 2,589	$ 292

Annual Report

6. Fees and Other Transactions with Affiliates - continued

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	$ 27
Class T	5
Class B*	42
Class C*	20
	$ 94

* 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 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.

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

	Amount	% of Average Net Assets
Class A	$ 591	.17
Class T	414	.15
Class B	43	.25
Class C	153	.17
Government Income	3,943	.10
Institutional Class	481	.16
	$ 5,625

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

6. Fees and Other Transactions with Affiliates - continued

Fund Wide Operations Fee - continued

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 annual rate of .04% of average net assets.

7. Committed Line of Credit.

The Fund participates with other funds managed by FMR 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 $12 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.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is 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 $187.

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 $7.

Annual Report

9. Expense Reductions - continued

In addition, FMR reimbursed a portion of the Fund's operating expenses during the period in the amount of $9.

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Years ended August 31,	2013	2012
From net investment income
Class A	$ 3,252	$ 4,604
Class T	2,613	3,815
Class B	37	124
Class C	168	506
Government Income	49,780	66,943
Institutional Class	3,744	5,225
Total	$ 59,594	$ 81,217
From net realized gain
Class A	$ 11,175	$ 8,696
Class T	8,673	7,112
Class B	596	622
Class C	2,876	2,398
Government Income	125,918	103,541
Institutional Class	9,786	8,484
Total	$ 159,024	$ 130,853

11. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
Years ended August 31,	2013	2012	2013	2012
Class A
Shares sold	8,104	13,943	$ 85,854	$ 151,136
Reinvestment of distributions	1,265	1,130	13,433	12,251
Shares redeemed	(15,428)	(12,130)	(162,383)	(131,272)
Net increase (decrease)	(6,059)	2,943	$ (63,096)	$ 32,115
Class T
Shares sold	7,402	12,173	$ 78,470	$ 131,899
Reinvestment of distributions	1,047	991	11,108	10,739
Shares redeemed	(14,316)	(11,186)	(151,179)	(121,048)
Net increase (decrease)	(5,867)	1,978	$ (61,601)	$ 21,590
Class B
Shares sold	94	232	$ 1,008	$ 2,518
Reinvestment of distributions	46	54	489	581
Shares redeemed	(744)	(815)	(7,820)	(8,810)
Net increase (decrease)	(604)	(529)	$ (6,323)	$ (5,711)

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except percentages)

11. Share Transactions - continued

	Shares		Dollars
Years ended August 31,	2013	2012	2013	2012
Class C
Shares sold	1,670	3,034	$ 17,648	$ 32,891
Reinvestment of distributions	217	198	2,305	2,142
Shares redeemed	(3,719)	(2,929)	(39,071)	(31,631)
Net increase (decrease)	(1,832)	303	$ (19,118)	$ 3,402
Government Income
Shares sold	64,692	97,110	$ 682,510	$ 1,050,755
Reinvestment of distributions	16,002	15,159	169,563	164,066
Shares redeemed	(139,613)	(110,717)	(1,466,267)	(1,196,028)
Net increase (decrease)	(58,919)	1,552	$ (614,194)	$ 18,793
Institutional Class
Shares sold	10,037	14,768	$ 106,129	$ 159,980
Reinvestment of distributions	1,202	1,190	12,746	12,896
Shares redeemed	(12,650)	(17,084)	(133,805)	(185,063)
Net increase (decrease)	(1,411)	(1,126)	$ (14,930)	$ (12,187)

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.

Annual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Income Fund and the Shareholders of Fidelity Government Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Government Income Fund (a fund of Fidelity Income Fund) at August 31, 2013, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Government Income Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2013 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

Boston, Massachusetts

October 17, 2013

Annual Report

Trustees and Officers

The Trustees and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, oversee management of the risks associated with such activities and contractual arrangements, and review the fund's performance. Except for Elizabeth S. Acton and James C. Curvey, each of the Trustees oversees 221 funds. Ms. Acton oversees 203 funds. Mr. Curvey oversees 387 funds.

The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person of the trust and the fund (as defined in the 1940 Act) (Independent Trustee), shall retire not later than the last day of the month in which his or her 75th birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. The executive officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.

Experience, Skills, Attributes, and Qualifications of the Fund's Trustees. The Governance and Nominating Committee has adopted a statement of policy that describes the experience, qualifications, attributes, and skills that are necessary and desirable for potential Independent Trustee candidates (Statement of Policy). The Board believes that each Trustee satisfied at the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards contemplated by the Statement of Policy. The Governance and Nominating Committee also engages professional search firms to help identify potential Independent Trustee candidates who have the experience, qualifications, attributes, and skills consistent with the Statement of Policy. From time to time, additional criteria based on the composition and skills of the current Independent Trustees, as well as experience or skills that may be appropriate in light of future changes to board composition, business conditions, and regulatory or other developments, have also been considered by the professional search firms and the Governance and Nominating Committee. In addition, the Board takes into account the Trustees' commitment and participation in Board and committee meetings, as well as their leadership of standing and ad hoc committees throughout their tenure.

In determining that a particular Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the Trustees have balanced and diverse experience, qualifications, attributes, and skills, which allow the Board to operate effectively in governing the fund and protecting the interests of shareholders. Information about the specific experience, skills, attributes, and qualifications of each Trustee, which in each case led to the Board's conclusion that the Trustee should serve (or continue to serve) as a trustee of the fund, is provided below.

Annual Report

Trustees and Officers - continued

Board Structure and Oversight Function. Abigail P. Johnson is an interested person (as defined in the 1940 Act) and currently serves as Chairman. The Trustees have determined that an interested Chairman is appropriate and benefits shareholders because an interested Chairman has a personal and professional stake in the quality and continuity of services provided to the fund. Independent Trustees exercise their informed business judgment to appoint an individual of their choosing to serve as Chairman, regardless of whether the Trustee happens to be independent or a member of management. The Independent Trustees have determined that they can act independently and effectively without having an Independent Trustee serve as Chairman and that a key structural component for assuring that they are in a position to do so is for the Independent Trustees to constitute a substantial majority for the Board. The Independent Trustees also regularly meet in executive session. Albert R. Gamper, Jr. serves as Chairman of the Independent Trustees and as such (i) acts as a liaison between the Independent Trustees and management with respect to matters important to the Independent Trustees and (ii) with management prepares agendas for Board meetings.

Fidelity funds are overseen by different Boards of Trustees. The fund's Board oversees Fidelity's investment-grade bond, money market, and asset allocation funds and another Board oversees Fidelity's equity and high income funds. The asset allocation funds may invest in Fidelity funds that are overseen by such other Board. The use of separate Boards, each with its own committee structure, allows the Trustees of each group of Fidelity funds to focus on the unique issues of the funds they oversee, including common research, investment, and operational issues. On occasion, the separate Boards establish joint committees to address issues of overlapping consequences for the Fidelity funds overseen by each Board.

The Trustees operate using a system of committees to facilitate the timely and efficient consideration of all matters of importance to the Trustees, the fund, and fund shareholders and to facilitate compliance with legal and regulatory requirements and oversight of the fund's activities and associated risks. The Board, acting through its committees, has charged FMR and its affiliates with (i) identifying events or circumstances the occurrence of which could have demonstrably adverse effects on the fund's business and/or reputation; (ii) implementing processes and controls to lessen the possibility that such events or circumstances occur or to mitigate the effects of such events or circumstances if they do occur; and (iii) creating and maintaining a system designed to evaluate continuously business and market conditions in order to facilitate the identification and implementation processes described in (i) and (ii) above. Because the day-to-day operations and activities of the fund are carried out by or through FMR, its affiliates, and other service providers, the fund's exposure to risks is mitigated but not eliminated by the processes overseen by the Trustees. While each of the Board's committees has responsibility for overseeing different aspects of the fund's activities, oversight is exercised primarily through the Operations and Audit Committees. In addition, an ad hoc Board committee of Independent Trustees has worked with FMR to enhance the Board's oversight of investment and financial risks, legal and regulatory risks, technology risks, and operational risks, including the development of additional risk reporting to the Board. Appropriate personnel, including but not limited to the fund's Chief Compliance Officer (CCO), FMR's internal auditor, the independent accountants, the fund's Treasurer and portfolio management personnel, make periodic reports to the Board's committees, as appropriate, including an annual review of FMR's risk management program for the Fidelity funds. The responsibilities of each standing committee, including their oversight responsibilities, are described further under "Standing Committees of the Fund's Trustees."

Annual Report

The fund's Statement of Additional Information (SAI) include more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.

Interested Trustees*:

Correspondence intended for each Trustee who is an interested person may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.

Name, Year of Birth; Principal Occupations and Other Relevant Experience⁺
Abigail P. Johnson (1961)
	Year of Election or Appointment: 2009 Ms. Johnson is Trustee and Chairman of the Board of Trustees of certain Trusts. Ms. Johnson serves as President of Fidelity Financial Services (2012-present) and President of Personal, Workplace and Institutional Services (2005-present). Ms. Johnson is Chairman and Director of FMR Co., Inc. (2011-present), Chairman and Director of FMR (2011-present), and the Vice Chairman and Director (2007-present) of FMR LLC. Previously, Ms. Johnson served as President and a Director of FMR (2001-2005), a Trustee of other investment companies advised by FMR, Fidelity Investments Money Management, Inc., and FMR Co., Inc. (2001-2005), Senior Vice President of the Fidelity funds (2001-2005), and managed a number of Fidelity funds. Ms. Abigail P. Johnson and Mr. Arthur E. Johnson are not related.
James C. Curvey (1935)
	Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of Fidelity Investments Money Management, Inc. (2009-present), Director of Fidelity Research & Analysis Co. (2009-present) and Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2007-present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University. Previously, Mr. Curvey was the Vice Chairman (2006-2007) and Director (2000-2007) of FMR Corp.

* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.

⁺ The information above includes each Trustee's principal occupation during the last five years and other information relating to the experience, attributes, and skills relevant to each Trustee's qualifications to serve as a Trustee, which led to the conclusion that each Trustee should serve as a Trustee for the fund.

Independent Trustees:

Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.

Name, Year of Birth; Principal Occupations and Other Relevant Experience⁺
Elizabeth S. Acton (1951)
	Year of Election or Appointment: 2013 Ms. Acton is Trustee of certain Trusts. Prior to her retirement in April 2012, Ms. Acton was Executive Vice President, Finance (November 2011-April 2012), Executive Vice President, Chief Financial Officer (April 2002-November 2011), and Treasurer (May 2004-May 2005) of Comerica Incorporated (financial services). Prior to joining Comerica, Ms. Acton held a variety of positions at Ford Motor Company (1983-2002), including Vice President and Treasurer (2000-2002) and Executive Vice President and Chief Financial Officer of Ford Motor Credit Company (1998-2000). Ms. Acton currently serves as a member of the Board of Directors and Audit and Finance Committees of Beazer Homes USA, Inc. (homebuilding, 2012-present).
Albert R. Gamper, Jr. (1942)
	Year of Election or Appointment: 2006 Mr. Gamper is Chairman of the Independent Trustees of the Fixed Income and Asset Allocation Funds (2012-present). Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President (2002-2003). Mr. Gamper currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities, 2000-present), a member of the Board of Trustees, Rutgers University (2004-present), and Chairman of the Board of Barnabas Health Care System. Previously, Mr. Gamper served as Vice Chairman of the Independent Trustees of the Fixed Income and Asset Allocation Funds (2011-2012) and as Chairman of the Board of Governors, Rutgers University (2004-2007).
Robert F. Gartland (1951)
	Year of Election or Appointment: 2010 Mr. Gartland is Chairman and an investor in Gartland and Mellina Group Corp. (consulting, 2009-present). Previously, Mr. Gartland served as a partner and investor of Vietnam Partners LLC (investments and consulting, 2008-2011). Prior to his retirement, Mr. Gartland held a variety of positions at Morgan Stanley (financial services, 1979-2007) including Managing Director (1987-2007).
Arthur E. Johnson (1947)
	Year of Election or Appointment: 2008 Mr. Johnson serves as a member of the Board of Directors of Eaton Corporation (diversified power management, 2009-present), AGL Resources, Inc. (holding company, 2002-present) and Booz Allen Hamilton (management consulting, 2011-present). Prior to his retirement, Mr. Johnson served as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor, 1999-2009). He previously served on the Board of Directors of IKON Office Solutions, Inc. (1999-2008) and Delta Airlines (2005-2007). Mr. Arthur E. Johnson is not related to Ms. Abigail P. Johnson.
Michael E. Kenneally (1954)
	Year of Election or Appointment: 2009 Mr. Kenneally served as a Member of the Advisory Board for certain Fidelity Fixed Income and Asset Allocation Funds before joining the Board of Trustees (2008-2009). Prior to his retirement, Mr. Kenneally served as Chairman and Global Chief Executive Officer of Credit Suisse Asset Management. Before joining Credit Suisse, he was an Executive Vice President and Chief Investment Officer for Bank of America Corporation. Earlier roles at Bank of America included Director of Research, Senior Portfolio Manager and Research Analyst, and Mr. Kenneally was awarded the Chartered Financial Analyst (CFA) designation in 1991.
James H. Keyes (1940)
	Year of Election or Appointment: 2007 Mr. Keyes serves as a member of the Board and Non-Executive Chairman of Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines, since 2002). Previously, Mr. Keyes served as a member of the Board of Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions, 1998-2013). Prior to his retirement, Mr. Keyes served as Chairman and Chief Executive Officer of Johnson Controls (automotive, building, and energy, 1998-2002) and as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008).
Marie L. Knowles (1946)
	Year of Election or Appointment: 2001 Ms. Knowles is Vice Chairman of the Independent Trustees of the Fixed Income and Asset Allocation Funds (2012-present). Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. Ms. Knowles currently serves as a Director and Chairman of the Audit Committee of McKesson Corporation (healthcare service, since 2002). Ms. Knowles is a member of the Board of the Catalina Island Conservancy and of the Santa Catalina Island Company (2009-present). She also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007), URS Corporation (engineering and construction, 2000-2003) and America West (airline, 1999-2002).
Kenneth L. Wolfe (1939)
	Year of Election or Appointment: 2005 Prior to his retirement, Mr. Wolfe served as Chairman and a Director (2007-2009) and Chairman and Chief Executive Officer (1994-2001) of Hershey Foods Corporation. He also served as a member of the Boards of Adelphia Communications Corporation (telecommunications, 2003-2006), Bausch & Lomb, Inc. (medical/pharmaceutical, 1993-2007), and Revlon, Inc. (personal care products, 2004-2009). Mr. Wolfe previously served as Chairman of the Independent Trustees of the Fixed Income and Asset Allocation Funds (2008-2012).

Executive Officers:

Correspondence intended for each executive officer may be sent to Fidelity Investments, 245 Summer Street, Boston, Massachusetts 02210.

Name, Year of Birth; Principal Occupation
Stephanie J. Dorsey (1969)
	Year of Election or Appointment: 2013 President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Dorsey also serves as Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2013-present), Assistant Treasurer of other Fidelity funds (2010-present), and is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-2013), Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Charles S. Morrison (1960)
	Year of Election or Appointment: 2012 Vice President of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Morrison also serves as President, Fixed Income and is an employee of Fidelity Investments. Previously, Mr. Morrison served as Vice President of Fidelity's Money Market Funds (2005-2009), President, Money Market Group Leader of FMR (2009), and Senior Vice President, Money Market Group of FMR (2004-2009). Mr. Morrison also served as Vice President of Fidelity's Bond Funds (2002-2005), certain Balanced Funds (2002-2005), and certain Asset Allocation Funds (2002-2007), and as Senior Vice President (2002-2005) of Fidelity's Fixed Income Division.
Robert P. Brown (1963)
	Year of Election or Appointment: 2012 Vice President of Fidelity's Bond Funds. Mr. Brown also serves as Executive Vice President of Fidelity Investments Money Management, Inc. (2010-present), President, Bond Group of FMR (2011-present), Director and Managing Director, Research of Fidelity Management & Research (U.K.) Inc. (2008-present) and is an employee of Fidelity Investments. Previously, Mr. Brown served as President, Money Market Group of FMR (2010-2011) and Vice President of Fidelity's Money Market Funds (2010-2012).
Scott C. Goebel (1968)
	Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of certain Fidelity funds. Mr. Goebel also serves as Secretary of Fidelity Investments Money Management, Inc. (FIMM) (2010-present) and Fidelity Research and Analysis Company (FRAC) (2010-present); Secretary and CLO of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); employed by FMR LLC or an affiliate (2001-present); Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), and Fidelity Management & Research (U.K.) Inc. (2008-present). Previously, Mr. Goebel served as Secretary and CLO of other Fidelity funds (2008-2013), as Assistant Secretary of FIMM (2008-2010), FRAC (2008-2010), and the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Marc Bryant (1966)
	Year of Election or Appointment: 2013 Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Bryant also serves as Secretary and Chief Legal Officer (2010-present) and Secretary (2013-present) of other Fidelity funds and Senior Vice President and Deputy General Counsel of Fidelity Investments. Prior to joining Fidelity Investments, Mr. Bryant served as a Senior Vice President and the Head of Global Retail Legal for AllianceBernstein L.P. (2006-2010), and as the General Counsel for ProFund Advisors LLC (2001-2006).
Elizabeth Paige Baumann (1968)
	Year of Election or Appointment: 2012 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Baumann also serves as AML Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2012-present), Chief AML Officer of FMR LLC (2012-present), and is an employee of Fidelity Investments. Previously, Ms. Baumann served as Vice President and Deputy Anti-Money Laundering Officer (2007-2012).
Christine Reynolds (1958)
	Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007).
Michael H. Whitaker (1967)
	Year of Election or Appointment: 2008 Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Whitaker also serves as Chief Compliance Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2008-present). Mr. Whitaker is an employee of Fidelity Investments (2007-present). Prior to joining Fidelity Investments, Mr. Whitaker worked at MFS Investment Management where he served as Senior Vice President and Chief Compliance Officer (2004-2006), and Assistant General Counsel.
Joseph F. Zambello (1957)
	Year of Election or Appointment: 2011 Deputy Treasurer of the Fidelity funds. Mr. Zambello is an employee of Fidelity Investments. Previously, Mr. Zambello served as Vice President of FMR's Program Management Group (2009-2011) and Vice President of the Transfer Agent Oversight Group (2005-2009).
Stephen Sadoski (1971)
	Year of Election or Appointment: 2013 Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Sadoski also serves as Deputy Treasurer of other Fidelity funds (2012-present) and is an employee of Fidelity Investments (2012-present). Previously, Mr. Sadoski served as Deputy Treasurer (2012-2013) and Assistant Treasurer (2012-2013) of other Fidelity funds, an assistant chief accountant in the Division of Investment Management of the Securities and Exchange Commission (SEC) (2009-2012) and as a senior manager at Deloitte & Touche LLP (1997-2009).
Renee Stagnone (1975)
	Year of Election or Appointment: 2013 Deputy Treasurer of the Fidelity funds. Ms. Stagnone is an employee of Fidelity Investments.
Adrien E. Deberghes (1967)
	Year of Election or Appointment: 2010 Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Deberghes also serves as President and Treasurer (2013-present), Vice President and Assistant Treasurer (2011-present), and Deputy Treasurer (2008-present) of other Fidelity funds, and is an employee of Fidelity Investments (2008-present). Previously, Mr. Deberghes served as Deputy Treasurer of other Fidelity funds (2008-2013), Senior Vice President of Mutual Fund Administration at State Street Corporation (2007-2008), Senior Director of Mutual Fund Administration at Investors Bank & Trust (2005-2007), and Director of Finance for Dunkin' Brands (2000-2005).
Chris Maher (1972)
	Year of Election or Appointment: 2013 Assistant Treasurer of the Fidelity funds. Mr. Maher is Vice President of Valuation Oversight and is an employee of Fidelity Investments. Previously, Mr. Maher served as Vice President of Asset Management Compliance (2013), Vice President of FMR's Program Management Group (2010-2013), and Vice President of Valuation Oversight (2008-2010).
Kenneth B. Robins (1969)
	Year of Election or Appointment: 2009 Assistant Treasurer of the Fidelity Fixed Income and Asset Allocation Funds. Mr. Robins also serves as President and Treasurer (2008-present) and Deputy Treasurer (2013-present) of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Mr. Robins serves as Executive Vice President of Fidelity Investments Money Management, Inc. (FIMM) (2013-present). Previously, Mr. Robins served as President and Treasurer (2008-2013) and Deputy Treasurer (2005-2008) of certain Fidelity funds, and Treasurer and Chief Financial Officer of The North Carolina Capital Management Trust: Cash and Term Portfolios (2006-2008).
Gary W. Ryan (1958)
	Year of Election or Appointment: 2005 Assistant Treasurer of certain Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Assistant Treasurer of other Fidelity funds (2005-2013) and Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005).
Stacie M. Smith (1974)
	Year of Election or Appointment: 2013 Assistant Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Smith also serves as Deputy Treasurer (2013-present) and Assistant Treasurer (2013-present) of other Fidelity funds and is an employee of Fidelity Investments (2009-present). Previously, Ms. Smith served as Deputy Treasurer of certain Fidelity funds (2013) and Senior Audit Manager of Ernst & Young LLP (1996-2009).
Jonathan Davis (1968)
	Year of Election or Appointment: 2010 Assistant Treasurer of the Fidelity funds. Mr. Davis is also Assistant Treasurer of Fidelity Rutland Square Trust II and Fidelity Commonwealth Trust II. Mr. Davis is an employee of Fidelity Investments. Previously, Mr. Davis served as Vice President and Associate General Counsel of FMR LLC (2003-2010).

Annual Report

Distributions (Unaudited)

The fund hereby designates as a capital gain dividend with respect to the taxable year ended August, 2013, $32,028,831, or, if subsequently determined to be different, the net capital gain of such year.

A total of 31.07% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.

The fund designates $38,113,707 of distributions paid during the period January 1, 2013 to August 31, 2013 as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.

The fund will notify shareholders in January 2014 of amounts for use in preparing 2013 income tax returns.

Annual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

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

Fidelity Investments
Money Management, 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

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)

TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)

Fidelity Automated Service
Telephone (FAST®) gov716781
1-800-544-5555

Automated line for quickest service

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
245 Summer St., Boston, MA 02210
www.fidelity.com

GOV-UANN-1013
1.789246.110

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

Government Income

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

Annual Report

August 31, 2013

(Fidelity Cover Art)

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

Performance	(Click Here)	How the fund has done over time.
Management's Discussion of Fund Performance	(Click Here)	The Portfolio Managers' review of fund performance and strategy.
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.
Report of Independent Registered Public Accounting Firm	(Click Here)
Trustees and Officers	(Click Here)
Distributions	(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.

NOT FDIC INSURED • MAY LOSE VALUE • NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Performance: The Bottom Line

Average Annual Total Returns

Periods ended August 31, 2013	Past 1 year	Past 5 years	Past 10 years
Class A (incl. 4.00% sales charge) ^A	-7.16%	2.99%	3.81%
Class T (incl. 4.00% sales charge) ^B	-7.14%	3.01%	3.82%
Class B (incl. contingent deferred sales charge)^C	-8.64%	2.74%	3.72%
Class C (incl. contingent deferred sales charge)^D	-4.86%	3.07%	3.71%

^A As of April 1, 2007, Class A shares bear a 0.25% 12b-1 fee. The initial offering of Class A shares took place on October 24, 2006. Returns between October 24, 2006, and March 31, 2007, reflect a 0.15% 12b-1 fee. Returns prior to October 24, 2006, are those of Fidelity® Government Income Fund, the original class of the fund, which does not bear a 12b-1 fee. Had Class A shares' current 12b-1 fee been reflected, returns prior to April 1, 2007, would have been lower.

^B Class T shares bear a 0.25% 12b-1 fee. The initial offering of Class T shares took place on October 24, 2006. Returns prior to October 24, 2006, are those of Fidelity® Government Income Fund, the original class of the fund, which does not bear a 12b-1 fee. Had Class T shares' 12b-1 fee been reflected, returns prior to October 24, 2006, would have been lower.

^C Class B shares bear a 0.90% 12b-1 fee. The initial offering of Class B shares took place on October 24, 2006. Returns prior to October 24, 2006, are those of Fidelity Government Income Fund, the original class of the fund, which does not bear a 12b-1 fee. Had Class B shares' 12b-1 fee been reflected, returns prior to October 24, 2006, would have been lower. Class B shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 5%, 2%, and 0%, respectively.

^D Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on October 24, 2006. Returns prior to October 24, 2006, are those of Fidelity Government Income Fund, the original class of the fund, which does not bear a 12b-1 fee. Had Class C shares' 12b-1 fee been reflected, returns prior to October 24, 2006, would have been lower. Class C shares' contingent deferred sales charges included in the past one year, past five years, and past ten years total return figures are 1%, 0%, and 0%, respectively.

Annual Report

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity Advisor® Government Income Fund - Class A on August 31, 2003, and the current 4.00% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the Barclays® U.S. Government Bond Index performed over the same period. The initial offering of Class A took place on October 24, 2006. See footnote A on the previous page for additional information regarding the performance of Class A.

atb918519

Annual Report

Management's Discussion of Fund Performance

Comments from William Irving and Franco Castagliuolo, Lead Portfolio Manager and Co-Portfolio Manager, respectively, of Fidelity Advisor® Government Income Fund: The fund's Class A, Class T, Class B and Class C shares returned -3.29%, -3.27%, -3.99% and -3.93%, respectively (excluding sales charges). Meanwhile, the Barclays®75% U.S. Government/25% U.S. MBS Blended Index returned -2.78%. Our comments reflect the fund's holdings in aggregate, including the underlying Fidelity®Mortgage Backed Securities Central Fund, which we also manage. We kept the fund's risk profile similar to that of the benchmark by maintaining interest-rate sensitivity in line with the Barclays index, occasionally using interest-rate swaps and Treasury futures. We also looked for ways to add incremental return through security and sector selection. Keeping the fund's duration in line with the benchmark helped the fund keep pace. The fund's overweighting in mortgage-backed securities (MBS) that offered comparatively high yields and that were somewhat insulated from mortgage prepayment was advantageous, because these investments generally outperformed the benchmark. It was helpful to significantly underweight Treasury securities, which materially lagged the benchmark. Detracting from performance was our exposure to high-coupon mortgage securities issued by Ginnie Mae.

Annual 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 (March 1, 2013 to August 31, 2013).

Actual Expenses

Hypothetical Example for Comparison Purposes

Annual Report

	Annualized Expense Ratio^B	Beginning Account Value March 1, 2013	Ending Account Value August 31, 2013	Expenses Paid During Period* March 1, 2013 to August 31, 2013
Class A	.77%
Actual		$ 1,000.00	$ 970.50	$ 3.82
Hypothetical^A		$ 1,000.00	$ 1,021.32	$ 3.92
Class T	.75%
Actual		$ 1,000.00	$ 970.60	$ 3.73
Hypothetical^A		$ 1,000.00	$ 1,021.42	$ 3.82
Class B	1.49%
Actual		$ 1,000.00	$ 967.00	$ 7.39
Hypothetical^A		$ 1,000.00	$ 1,017.69	$ 7.58
Class C	1.51%
Actual		$ 1,000.00	$ 966.90	$ 7.49
Hypothetical^A		$ 1,000.00	$ 1,017.59	$ 7.68
Government Income	.45%
Actual		$ 1,000.00	$ 972.00	$ 2.24
Hypothetical^A		$ 1,000.00	$ 1,022.94	$ 2.29
Institutional Class	.50%
Actual		$ 1,000.00	$ 971.80	$ 2.49
Hypothetical^A		$ 1,000.00	$ 1,022.68	$ 2.55

^A 5% return per year before expenses

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

Annual Report

Investment Changes (Unaudited)

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

Coupon Distribution as of August 31, 2013
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	0.0	0.5
0.01 - 0.99%	21.2	20.5
1 - 1.99%	9.4	9.9
2 - 2.99%	8.3	9.2
3 - 3.99%	20.8	15.2
4 - 4.99%	18.9	17.8
5 - 5.99%	13.6	14.3
6 - 6.99%	4.3	6.0
7% and over	0.3	0.2

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

Weighted Average Maturity as of August 31, 2013
		6 months ago
Years	5.9	5.9

Duration as of August 31, 2013
		6 months ago
Years	4.9	4.4

Asset Allocation (% of fund's net assets)
As of August 31, 2013*		As of February 28, 2013**
	Mortgage Securities 34.8%		Mortgage Securities 38.0%
	CMOs and Other Mortgage Related Securities 17.3%		CMOs and Other Mortgage Related Securities 17.4%
	U.S. Treasury Obligations 40.5%		U.S. Treasury Obligations 40.7%
	U.S. Government Agency Obligations ^† 2.9%		U.S. Government Agency Obligations ^† 3.8%
	Foreign Government & Government Agency Obligations 1.9%		Foreign Government & Government Agency Obligations 1.8%
	Short-Term Investments and Net Other Assets (Liabilities) 2.6%		Short-Term Investments and Net Other Assets (Liabilities) *** (1.7)%

atb918540

* Futures and Swaps	3.4%	** Futures and Swaps	(2.2)%
^† Includes NCUA Guaranteed Notes.
*** Short-Term Investments and Net Other Assets (Liabilities) are not included in the pie chart.

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

Annual Report

Investments August 31, 2013

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 43.4%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 2.6%
Fannie Mae:
0.5% 7/2/15	$ 60,173		$ 60,238
0.5% 3/30/16	8,534		8,490
0.625% 8/26/16	4,655		4,617
0.875% 2/8/18	2,333		2,257
0.875% 5/21/18	408		391
1.875% 9/18/18	203		203
Federal Home Loan Bank 1% 6/21/17	14,860		14,690
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	2,579		2,739
Series 2002-20K Class 1, 5.08% 11/1/22	4,203		4,563
Series 2004-20H Class 1, 5.17% 8/1/24	1,420		1,535
Tennessee Valley Authority:
5.25% 9/15/39	2,042		2,213
5.375% 4/1/56	8,429		9,132
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			111,068
U.S. Treasury Obligations - 40.5%
U.S. Treasury Bonds:
3.125% 2/15/43	68,291		60,982
3.625% 8/15/43 (c)	129,974		128,014
4.375% 2/15/38	24,154		27,215
5% 5/15/37 (d)	15,846		19,486
9.875% 11/15/15	10,285		12,398
U.S. Treasury Notes:
0.125% 4/30/15	4,228		4,214
0.25% 3/31/15	17,106		17,091
0.25% 5/31/15	9,600		9,583
0.25% 7/15/15	47,923		47,801
0.25% 7/31/15	6,000		5,984
0.25% 10/15/15	69,134		68,837
0.25% 4/15/16	61,378		60,764
0.25% 5/15/16	17,502		17,305
0.375% 1/15/16	133,453		132,921
0.375% 3/15/16	20,000		19,886
0.5% 6/15/16	70,000		69,606
0.625% 8/15/16 (c)	138,600		137,992
0.625% 4/30/18	37,435		35,920
0.75% 6/30/17	58,736		57,745
0.875% 11/30/16	29,402		29,356
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
0.875% 1/31/18	$ 4,683		$ 4,570
0.875% 7/31/19	6,174		5,804
1% 10/31/16	39,991		40,135
1% 5/31/18	31,053		30,269
1.375% 11/30/15	470		479
1.375% 7/31/18 (b)(c)	39,780		39,337
1.5% 8/31/18	72,009		71,559
1.75% 7/31/15	35,654		36,568
1.875% 8/31/17	47,000		48,131
1.875% 9/30/17	67,400		68,953
2% 7/31/20 (c) (j)	6,510		6,413
2.125% 5/31/15	4,176		4,304
2.125% 8/31/20 (c)	187,609		186,143
2.375% 6/30/18	26,608		27,597
2.5% 6/30/17	10,000		10,495
2.5% 8/15/23 (c)(j)	11,192		10,915
2.75% 11/30/16	18,530		19,609
3.125% 1/31/17	60,773		65,108
3.5% 2/15/18	58,585		63,816
4.5% 5/15/17	24,685		27,699
4.75% 8/15/17	12,983		14,752
TOTAL U.S. TREASURY OBLIGATIONS			1,745,756
Other Government Related - 0.3%
National Credit Union Administration Guaranteed Notes:
Series 2010-A1 Class A, 0.535% 12/7/20 (NCUA Guaranteed) (e)	7,606		7,615
Series 2011-R4 Class 1A, 0.5649% 3/6/20 (NCUA Guaranteed) (e)	6,666		6,682
TOTAL OTHER GOVERNMENT RELATED			14,297
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,866,922)		1,871,121
U.S. Government Agency - Mortgage Securities - 13.3%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 2.6%
1.975% 10/1/33 (e)	$ 268		$ 278
1.983% 2/1/33 (e)	209		217
2.023% 7/1/35 (e)	82		85
2.031% 12/1/34 (e)	238		247
2.035% 3/1/35 (e)	203		211
2.053% 10/1/33 (e)	122		127
2.175% 3/1/35 (e)	35		36
2.303% 6/1/36 (e)	214		228
2.332% 3/1/35 (e)	128		134
2.362% 2/1/36 (e)	477		505
2.378% 7/1/34 (e)	140		147
2.411% 3/1/36 (e)	1,074		1,142
2.415% 11/1/33 (e)	803		846
2.528% 10/1/33 (e)	191		203
2.574% 5/1/36 (e)	282		301
2.593% 11/1/36 (e)	163		173
2.639% 7/1/35 (e)	370		390
3% 12/1/42 to 2/1/43	7,456		7,138
3% 9/1/43 (c)	4,200		4,015
3% 9/1/43 (c)	4,200		4,015
3% 9/1/43 (c)	2,800		2,677
3% 9/1/43 (c)	2,800		2,677
3% 9/1/43 (c)	11,000		10,516
3% 9/1/43 (c)	6,600		6,310
3% 9/1/43 (c)	5,600		5,354
3.18% 3/1/42 (e)	17,700		18,455
3.485% 3/1/40 (e)	4,344		4,573
3.5% 12/1/42	2,465		2,427
4% 2/1/42	529		546
4.5% 3/1/41	4,132		4,383
5% 9/1/22 to 12/1/25	19,060		20,287
6.129% 3/1/37 (e)	210		221
6.5% 2/1/17 to 8/1/36	12,388		13,826
9% 5/1/14	15		15
9.5% 10/1/20	36		41
11.5% 6/15/19 to 1/15/21	21		22
			112,768
Freddie Mac - 1.6%
1.895% 3/1/35 (e)	701		726
2.137% 5/1/37 (e)	439		461
2.492% 4/1/35 (e)	171		182
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
2.546% 2/1/36 (e)	$ 37		$ 39
2.592% 6/1/35 (e)	759		808
2.673% 7/1/35 (e)	1,488		1,578
2.831% 7/1/36 (e)	599		641
3% 8/1/42 to 2/1/43	8,462		8,077
3.023% 3/1/33 (e)	25		26
3.087% 9/1/41 (e)	3,704		3,833
3.126% 10/1/35 (e)	279		298
3.5% 6/1/42 to 5/1/43	18,845		18,466
4% 9/1/43 (c)	17,500		18,006
4.5% 5/1/39 to 10/1/41	5,987		6,332
5.5% 7/1/29 to 7/1/35	4,557		4,948
6% 1/1/24	3,190		3,524
9.5% 6/1/18 to 8/1/21	56		62
9.75% 8/1/14	29		30
12% 3/1/15	0 *		0 *
12.5% 2/1/14 to 6/1/15	0 *		0 *
13% 6/1/14	0 *		0 *
			68,037
Ginnie Mae - 9.1%
4% 6/15/24 to 3/15/26	11,907		12,588
4.3% 8/20/61 (i)	5,181		5,575
4.5% 3/15/25 to 6/15/25	11,484		12,211
4.515% 3/20/62 (i)	19,545		21,227
4.53% 10/20/62 (i)	5,338		5,811
4.55% 5/20/62 (i)	39,487		42,955
4.556% 12/20/61 (i)	21,047		22,871
4.604% 3/20/62 (i)	11,655		12,696
4.626% 3/20/62 (i)	8,136		8,864
4.649% 2/20/62 (i)	3,421		3,730
4.65% 3/20/62 (i)	7,343		8,011
4.682% 2/20/62 (i)	4,550		4,964
4.684% 1/20/62 (i)	26,171		28,548
4.804% 3/20/61 (i)	13,900		15,154
4.834% 3/20/61 (i)	24,845		27,112
5% 4/20/41 to 6/20/41	109		118
5.47% 8/20/59 (i)	3,173		3,405
5.492% 4/20/60 (i)	23,603		26,355
5.5% 11/15/35	4,150		4,557
5.612% 4/20/58 (i)	7,337		7,699
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Ginnie Mae - continued
6% 6/15/36 to 9/15/40	$ 50,395		$ 55,557
6.5% 8/20/38 to 9/20/38	54,320		60,920
			390,928
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $574,735)		571,733
Collateralized Mortgage Obligations - 11.3%

U.S. Government Agency - 11.3%
Fannie Mae:
floater:
Series 2001-38 Class QF, 1.1641% 8/25/31 (e)	195		199
Series 2002-49 Class FB, 0.7841% 11/18/31 (e)	196		198
Series 2002-60 Class FV, 1.1841% 4/25/32 (e)	86		88
Series 2002-75 Class FA, 1.1841% 11/25/32 (e)	176		180
Series 2010-15 Class FJ, 1.1141% 6/25/36 (e)	14,065		14,424
pass-thru certificates Series 2012-127 Class DH, 4% 11/25/27	6,690		7,154
planned amortization class:
Series 1993-240 Class PD, 6.25% 12/25/13	25		25
Series 2003-113 Class PE, 4% 11/25/18	6,055		6,455
Series 2005-19 Class PA, 5.5% 7/25/34	5,181		5,623
Series 2005-27 Class NE, 5.5% 5/25/34	5,550		5,909
Series 2005-64 Class PX, 5.5% 6/25/35	4,976		5,460
Series 2006-45 Class OP, 6/25/36 (h)	2,139		1,853
Series 2010-118 Class PB, 4.5% 10/25/40	7,053		7,377
Series 2011-126 Class KB, 4% 12/25/41	6,260		6,242
sequential payer:
Series 2003-117 Class MD, 5% 12/25/23	2,331		2,519
Series 2004-91 Class Z, 5% 12/25/34	10,213		11,134
Series 2005-117 Class JN, 4.5% 1/25/36	645		688
Series 2005-14 Class ZB, 5% 3/25/35	3,622		3,959
Series 2005-47 Class HK, 4.5% 6/25/20	7,798		8,206
Series 2006-72 Class CY, 6% 8/25/26	9,655		10,726
Series 2009-14 Class EB, 4.5% 3/25/24	7,840		8,252
Series 2009-59 Class HB, 5% 8/25/39	4,590		4,933
Series 2010-97 Class CX, 4.5% 9/25/25	10,813		11,627
Series 2009-85 Class IB, 4.5% 8/25/24 (g)	1,297		122
Series 2009-93 Class IC, 4.5% 9/25/24 (g)	1,929		170
Series 2010-139 Class NI, 4.5% 2/25/40 (g)	8,651		1,422
Series 2010-39 Class FG, 1.1041% 3/25/36 (e)	8,545		8,759
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
Series 2010-97 Class CI, 4.5% 8/25/25 (g)	$ 3,998		$ 360
Series 2013-40 Class PV, 2% 1/25/26	7,652		7,723
Freddie Mac:
floater:
Series 2530 Class FE, 0.7841% 2/15/32 (e)	121		122
Series 2630 Class FL, 0.6841% 6/15/18 (e)	160		161
Series 2682 Class FB, 1.0841% 10/15/33 (e)	7,901		8,072
Series 2711 Class FC, 1.0841% 2/15/33 (e)	5,175		5,273
planned amortization class:
Series 1141 Class G, 9% 9/15/21	124		143
Series 2006-3245 Class ME, 5.5% 6/15/35	5,260		5,448
Series 2115 Class PE, 6% 1/15/14	12		12
Series 2356 Class GD, 6% 9/15/16	81		85
Series 2376 Class JE, 5.5% 11/15/16	511		536
Series 2381 Class OG, 5.5% 11/15/16	299		312
Series 2672 Class MG, 5% 9/15/23	7,120		7,815
Series 2682 Class LD, 4.5% 10/15/33	777		819
Series 2810 Class PD, 6% 6/15/33	167		170
Series 3415 Class PC, 5% 12/15/37	1,648		1,763
Series 3763 Class QA, 4% 4/15/34	4,387		4,615
planned amortization class sequential payer Series 2005-2963 Class VB, 5% 11/15/34	5,040		5,435
sequential payer:
Series 2587 Class AD, 4.71% 3/15/33	5,785		6,318
Series 2773 Class HC, 4.5% 4/15/19	704		753
Series 2877 Class ZD, 5% 10/15/34	13,255		14,341
Series 3007 Class EW, 5.5% 7/15/25	8,875		9,858
Series 3277 Class B, 4% 2/15/22	5,900		6,212
Series 3578 Class B, 4.5% 9/15/24	7,927		8,424
Series 3871 Class KB, 5.5% 6/15/41	13,870		15,662
Series 4176 Class BA, 3% 2/15/33	3,955		4,052
Series 4181 Class LA, 3% 3/15/37	5,447		5,518
Series 4182 Class BA, 3% 6/15/37	22,165		22,670
Ginnie Mae guaranteed REMIC pass-thru certificates:
floater:
Series 2008-2 Class FD, 0.6641% 1/20/38 (e)	663		667
Series 2008-73 Class FA, 1.0441% 8/20/38 (e)	4,444		4,520
Series 2008-83 Class FB, 1.0841% 9/20/38 (e)	4,552		4,634
Series 2009-108 Class CF, 0.7919% 11/16/39 (e)	3,240		3,268
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Ginnie Mae guaranteed REMIC pass-thru certificates: - continued
floater:
Series 2011-H21 Class FA, 0.7953% 10/20/61 (e)(i)	$ 9,150		$ 9,150
Series 2012-H01 Class FA, 0.8953% 11/20/61 (e)(i)	7,494		7,527
Series 2012-H03 Class FA, 0.8953% 1/20/62 (e)(i)	4,512		4,532
Series 2012-H06 Class FA, 0.8253% 1/20/62 (e)(i)	7,123		7,133
Series 2012-H07 Class FA, 0.8253% 3/20/62 (e)(i)	4,143		4,147
floater sequential payer Series 2011-150 Class D, 3% 4/20/37	1,829		1,862
planned amortization class:
Series 2010-112 Class PM, 3.25% 9/20/33	1,388		1,407
Series 2010-99 Class PT, 3.5% 8/20/33	1,763		1,790
sequential payer Series 2011-69 Class GX, 4.5% 5/16/40	10,205		10,647
Series 2010-H13 Class JA, 5.46% 10/20/59 (i)	15,682		16,833
Series 2010-H15 Class TP, 5.15% 8/20/60 (i)	20,317		22,452
Series 2010-H17 Class XP, 5.3018% 7/20/60 (e)(i)	28,493		31,486
Series 2010-H18 Class PL, 5.01% 9/20/60 (e)(i)	20,676		22,750
Series 2011-71:
Class ZB, 5.5% 8/20/34	22,529		25,059
Class ZC, 5.5% 7/16/34	23,674		26,069
Series 2012-64 Class KB, 3.479% 5/20/41 (e)	3,382		3,757
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $485,723)		486,066
Commercial Mortgage Securities - 4.0%

Freddie Mac:
pass thru-certificates floater Series KF01 Class A, 0.54% 4/25/19 (e)	11,984		11,880
pass-thru certificates sequential payer:
Series K011 Class A2, 4.084% 11/25/20	3,740		3,985
Series K014 Class A2, 3.871% 4/25/21	9,230		9,705
Series K015 Class A2, 3.23% 7/25/21	16,425		16,523
sequential payer:
Series K006 Class A2, 4.251% 1/25/20	24,840		26,898
Series K009 Class A2, 3.808% 8/25/20	32,528		34,075
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac: - continued
sequential payer:
Series K017 Class A2, 2.873% 12/25/21	$ 28,660		$ 27,984
Series K031 Class A2, 3.3% 4/25/23	34,500		33,975
Series K501 Class A2, 1.655% 11/25/16	9,650		9,725
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $180,872)		174,750
Foreign Government and Government Agency Obligations - 1.9%

Israeli State (guaranteed by U.S. Government through Agency for International Development) 5.5% 9/18/23 (Cost $74,189)	70,567		82,826

Fixed-Income Funds - 24.7%
	Shares
Fidelity Mortgage Backed Securities Central Fund (f) (Cost $1,044,497)	10,118,826		1,064,096
Cash Equivalents - 2.0%
	Maturity Amount (000s)
Investments in repurchase agreements in a joint trading account at:
0.04%, dated 8/30/13 due 9/3/13 (Collateralized by U.S. Government Obligations) #	$ 77,035		77,035
0.05%, dated 8/30/13 due 9/3/13 (Collateralized by U.S. Government Obligations) # (a)	11,135		11,135
TOTAL CASH EQUIVALENTS (Cost $88,170)		88,170
TOTAL INVESTMENT PORTFOLIO - 100.6% (Cost $4,315,108)		4,338,762
NET OTHER ASSETS (LIABILITIES) - (0.6)%		(25,986)
NET ASSETS - 100%		$ 4,312,776
TBA Sale Commitments
	Principal Amount (000s)		Value (000s)
Fannie Mae
3% 9/1/43	$ (25,000)		$ (23,900)
3% 9/1/43	(4,400)		(4,206)
3% 9/1/43	(6,600)		(6,310)
3% 9/1/43	(5,600)		(5,354)
4.5% 9/1/43	(4,100)		(4,326)
TOTAL FANNIE MAE			(44,096)
Freddie Mac
3% 9/1/43	(3,000)		(2,859)
4% 9/1/43	(17,500)		(18,006)
TOTAL FREDDIE MAC			(20,865)
TOTAL TBA SALE COMMITMENTS (Proceeds $65,566)		$ (64,961)

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Purchased
Treasury Contracts
747 CBOT 2 Year U.S. Treasury Note Contracts	Dec. 2013	$ 164,153	$ 80
129 CBOT Ultra Long Term U.S. Treasury Bond Contracts	Dec. 2013	17,016	162
		$ 181,169	$ 242
Futures Contracts - continued
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
116 CBOT 10 Year U.S. Treasury Note Contracts	Dec. 2013	$ 14,417	$ (39)
TOTAL TREASURY CONTRACTS		$ 195,586	$ 203