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Fidelity
Portfolio
Annual Report
July 31, 2002
(2_fidelity_logos) (Registered_Trademark)
President's Message
Ned Johnson on investing strategies.
Performance
How the fund has done over time.
Fund Talk
The manager's review of fund performance, strategy and outlook.
Investment Changes
A summary of major shifts in the fund's investments over the past six months.
Investments
A complete list of the fund's investments with their market values.
Financial Statements
Statements of assets and liabilities, operations, and changes in net assets, Notes
Notes to the financial statements.
Report of Independent Accountants
The auditors' opinion.
Trustees and Officers
Distributions
Proxy Voting Results
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.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information
of the shareholders of the fund. This report is not authorized for distribution to prospective investors
in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed
by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board or any other agency, and are subject to
investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a
free prospectus. Read it carefully before you invest or send money.
Growth & Income
Contents
as well as financial highlights.
Semiannual Report
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
The Dow Jones Industrial AverageSM - often regarded as a barometer of overall U.S. stock market performance - recorded two of its three largest point gains ever in late July. Still, many equity benchmarks were lingering near four- to five-year lows through the first seven months of 2002, due in part to investors' lack of faith in corporate accounting standards. As a result, many investors turned to fixed-income securities for capital protection.
While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value).
Cumulative Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity® Growth & Income |
|
-17.56% |
10.32% |
192.83% |
S&P 500 ® |
|
-23.63% |
2.23% |
161.46% |
Growth & Income Funds Average |
|
-20.72% |
2.78% |
144.49% |
Cumulative total returns show the fund's performance in percentage terms over a set period - in this case, one year, five years or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500SM (S&P 500®) Index - a market capitalization-weighted index of common stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the growth & income funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 1,093 mutual funds. These benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Lipper has created additional comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page <Click Here> of this report.*
Average Annual Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity Growth & Income |
|
-17.56% |
1.98% |
11.34% |
S&P 500 |
|
-23.63% |
0.44% |
10.09% |
Growth & Income Funds Average |
|
-20.72% |
0.31% |
9.16% |
Average annual total returns take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year. (Note: Lipper calculates average annual total returns by annualizing each fund's total return, then taking an arithmetic average. This may produce a different figure than that obtained by averaging the cumulative total returns and annualizing the result.)
Annual Report
$10,000 Over 10 Years
$10,000 Over 10 Years: Let's say hypothetically that $10,000 was invested in Fidelity ® Growth & Income Portfolio on July 31, 1992. As the chart shows, by July 31, 2002, the value of the investment would have grown to $29,283 - a 192.83% increase on the initial investment. For comparison, look at how the Standard & Poor's 500 Index did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have grown to $26,146 - a 161.46% increase.
Understanding
Performance
How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain.
3The $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.
* The LipperSM large-cap core funds average reflects the performance (excluding sales charges) of mutual funds with similar portfolio characteristics and capitalization. The Lipper large-cap supergroup average reflects the performance (excluding sales charges) of mutual funds with similar capitalization. As of July 31, 2002, the one year, five year and 10 year cumulative total returns for the large-cap core funds average were -24.18%, -3.90%, and 128.69%, respectively. The one year, five year and 10 year average annual total returns were - -24.18%, -0.96%, and 8.42%, respectively. The one year, five year and 10 year cumulative total returns for the large-cap supergroup average were -25.22%, -5.38%, and 126.11%, respectively. The one year, five year and 10 year average annual total returns were -25.22%, -1.34%, and 8.25%, respectively.
Annual Report
Market Recap
Where's the bottom? Was it reached in late July 2002, when the Dow Jones Industrial AverageSM recorded two of its three best single day point gains ever? Or was it just a head fake, another tissue-thin false bottom before the next plunge? Only time will tell. But one thing for certain is that during the 12-month period ending July 31, 2002, equity investors endured one of the most challenging years in market history. Stocks recoiled from a series of tragic and troubling events that threatened investor confidence on a number of levels. When the period began, the U.S. economy was in recession, typically not a good time for stocks overall. Then came September 11, an unprecedented event that closed equity markets for nearly a week and sent them tumbling upon reopening. Shaken but not beaten, equity investors demonstrated their faith in the economic system, and stocks enjoyed a solid rebound in the fourth quarter of 2001. But then came the scandals: Enron, Arthur Andersen, WorldCom . . . and as the list went on, stock prices went down. When all was said and done, the blue-chip bellwether Dow Jones Industrial Average ended the 12-month period down 15.39%; the NASDAQ Composite® Index declined 34.26%; and the large-cap weighted Standard & Poor's 500SM Index suffered a loss of 23.63%.
(Portfolio Manager photograph)
An interview with Steve Kaye, Portfolio Manager of Fidelity Growth & Income Portfolio
Q. How did the fund perform, Steve?
A. The fund's return on an absolute basis was disappointing. However, relative to the broader market the fund performed well. For the 12 months ending July 31, 2002, the fund declined 17.56%, outperforming the Standard & Poor's 500 Index, which fell 23.63%, and the Lipper Inc. growth & income funds average, which lost 20.72%.
Q. How do you feel about the fund's performance in light of the difficult market environment of the past year?
A. Against a backdrop of economic recession, terrorism, corporate governance scandals and so forth, very few stocks had a positive return during the past 12 months. Obviously, I don't feel good about how that affected the fund's performance. If there's a bright spot, it's that the fund did what it should do in a down market, which is to outperform. So while the fund's decline hurt, it proved considerably better than the nearly 24% loss of the S&P 500.
Annual Report
Fund Talk: The Manager's Overview - continued
Q. How did you achieve the fund's relative outperformance?
A. Underweighting technology was the primary contributor. The sector continued to struggle with deteriorating fundamentals and rich valuations during the past year. At the end of the period, the fund's tech exposure was less than half that of the S&P 500 index. Overweighting consumer staples was another positive. Philip Morris had a good year, posting solid earnings and paying an attractive dividend. Procter & Gamble also was a great stock, one I wish I had owned more of. Its management has turned the company around very nicely. Gillette and Coca-Cola were two more turnaround stories that demonstrated strong growth during the past year. Another stock worth mentioning is SLM - formerly USA Education - the parent company of student loan lender Sallie Mae. For the past three years, this has been a terrific stock for the fund, and was my second largest position at the end of the period.
Q. In a troubled economy, investors often turn to the traditionally steady earnings in health care. Was that the case during the past year?
A. It depends on what segment of health care you're looking at. Pharmaceutical stocks had a terrible year. Company-specific problems - lost patents, poor product pipelines, stiff generic competition - hurt a number of drug stocks, and even tainted those that didn't deserve it, such as Pfizer, one of the fund's largest positions. Year to date through July, Pfizer's earnings were up in the mid-teens, but its stock price was down around 17%. However, a number of non-drug stocks did very well. Health maintenance organization UnitedHealth Group has beaten earnings estimates fairly consistently of late, and did so again during the past 12 months. Zimmer, a manufacturer of implants used in knee and hip replacements, was another winner, benefiting from favorable demographic trends. The hospital industry also performed well, including Tenet Healthcare. The stock had a reasonable valuation and was up about 18% year to date.
Q. What other stocks hurt performance?
A. Tyco International was the fund's worst performer on both an absolute and relative basis. Tyco's misfortunes have been well documented and has become a less meaningful position in the fund. General Electric, the fund's largest holding at period end, slipped for a number of reasons, including its lofty valuation and somewhat complex structure. Microsoft, which makes up the bulk of the fund's technology exposure, saw its share price decline along with the rest of the sector.
Q. What's your outlook, Steve?
A. The good news is that, relative to history, the stock market is reasonably priced today. Six months ago, the S&P 500 was trading at a multiple of about 23 times future earnings. Now, it's about 17 times, much closer to the historical norm. There's a stronger underpinning for stabilization of stock prices given that multiples are closer to historic norms relative to interest rates. One of the opportunities I've recently been looking at is in drug stocks. I feel they now have more attractive multiples than consumer staples, their fundamentals look to be improved going forward and the negative impact of patent expirations is easing. If this is true, earnings growth should accelerate and my guess is that the stocks should do better.
Annual Report
The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover 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.
Fund Facts
Goal: seeks a high total return through a combination of current income and capital appreciation
Fund number: 027
Trading symbol: FGRIX
Start date: December 30, 1985
Size: as of July 31, 2002, more than $27.8 billion
Manager: Steve Kaye, since
1993; manager, Fidelity Blue
Chip Growth Fund, 1990-
1992; Fidelity Select Energy
Services, Biotechnology and
Health Care Portfolios; 1986-
1990; joined Fidelity in 1985
Steve Kaye on market extremes:
"The stock market typically reacts to good news or bad news by going to an extreme. In the late 1990s, for instance, it went to an extreme on the upside, and this year, with the corporate governance scandals, it's headed to another extreme on the downside.
"The media likes to focus on the negatives, and unfortunately we've had some very big negatives lately with Enron and WorldCom, etc. But these things tend to repeat themselves. In the 1980s, we had the Drexel-related fallout with Michael Milken and Ivan Boesky. It's not much different than some of the things we're seeing today. But we also have to remember that the vast majority of corporate officers are honest, hard-working people.
"What we need to focus on now is that the market is much more fairly valued than it's been in some time, although that's hard to appreciate when you're suffering losses of 15% to 20%. The stock market follows earnings over time. It may not always cooperate in the short-term, but I still believe it will in the long term. I believe earnings will grow again and we'll see better markets before too long. Hopefully, we can get past all this noise and be able to focus once again on fundamentals."
Annual Report
Top Ten Stocks as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
General Electric Co. |
4.9 |
3.8 |
SLM Corp. |
4.0 |
3.5 |
Fannie Mae |
3.9 |
3.5 |
Microsoft Corp. |
3.7 |
4.3 |
Pfizer, Inc. |
3.5 |
3.7 |
Philip Morris Companies, Inc. |
3.3 |
3.0 |
Wal-Mart Stores, Inc. |
3.0 |
3.0 |
Exxon Mobil Corp. |
3.0 |
2.6 |
American International Group, Inc. |
2.3 |
1.8 |
Freddie Mac |
2.1 |
1.9 |
|
33.7 |
|
Top Five Market Sectors as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Financials |
21.9 |
20.0 |
Health Care |
18.5 |
17.1 |
Consumer Staples |
13.1 |
10.9 |
Industrials |
12.7 |
11.4 |
Consumer Discretionary |
9.3 |
10.4 |
Asset Allocation (% of fund's net assets) |
|||||||
As of July 31, 2002 * |
As of January 31, 2002 ** |
||||||
![]() |
Stocks 90.7% |
|
![]() |
Stocks and |
|
||
![]() |
Bonds 0.4% |
|
![]() |
Bonds 0.0% |
|
||
![]() |
Convertible |
|
![]() |
Convertible |
|
||
![]() |
Short-Term |
|
![]() |
Short-Term |
|
||
* Foreign investments |
1.3% |
|
** Foreign investments |
1.4% |
|
Annual Report
Showing Percentage of Net Assets
Common Stocks - 90.7% |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - 9.1% |
|||
Auto Components - 0.0% |
|||
TRW, Inc. |
163,700 |
$ 8,832 |
|
Automobiles - 0.0% |
|||
General Motors Corp. |
198,942 |
9,261 |
|
Hotels, Restaurants & Leisure - 1.3% |
|||
Harrah's Entertainment, Inc. (a) |
1,171,800 |
55,450 |
|
Marriott International, Inc. Class A |
1,994,400 |
66,812 |
|
McDonald's Corp. |
3,294,700 |
81,544 |
|
MGM Mirage, Inc. (a) |
2,049,930 |
71,748 |
|
Starbucks Corp. (a) |
2,442,560 |
47,947 |
|
Starwood Hotels & Resorts Worldwide, Inc. unit |
1,708,043 |
43,897 |
|
|
367,398 |
||
Household Durables - 0.2% |
|||
Leggett & Platt, Inc. |
1,000,000 |
22,490 |
|
Maytag Corp. |
628,450 |
20,821 |
|
|
43,311 |
||
Media - 3.1% |
|||
AOL Time Warner, Inc. (a) |
7,124,246 |
81,929 |
|
Clear Channel Communications, Inc. (a) |
1,450,000 |
37,773 |
|
Comcast Corp. Class A (special) (a) |
2,428,500 |
50,756 |
|
Gannett Co., Inc. |
1,450,000 |
104,270 |
|
General Motors Corp. Class H (a) |
2,063,827 |
20,432 |
|
Liberty Media Corp. Class A (a) |
2,008,726 |
15,789 |
|
Omnicom Group, Inc. |
1,316,300 |
70,172 |
|
Tribune Co. |
950,000 |
37,905 |
|
Univision Communications, Inc. Class A (a) |
1,675,000 |
47,888 |
|
Viacom, Inc. Class B (non-vtg.) (a) |
6,012,697 |
234,074 |
|
Walt Disney Co. |
9,096,500 |
161,281 |
|
|
862,269 |
||
Multiline Retail - 3.4% |
|||
Kohl's Corp. (a) |
1,547,100 |
102,109 |
|
Target Corp. |
320,800 |
10,699 |
|
Wal-Mart Stores, Inc. |
16,840,900 |
828,235 |
|
|
941,043 |
||
Specialty Retail - 1.1% |
|||
Best Buy Co., Inc. (a) |
1,500,000 |
49,350 |
|
Home Depot, Inc. |
7,799,750 |
240,856 |
|
|
290,206 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - continued |
|||
Textiles Apparel & Luxury Goods - 0.0% |
|||
Unifi, Inc. (a) |
1,466,800 |
$ 11,661 |
|
TOTAL CONSUMER DISCRETIONARY |
2,533,981 |
||
CONSUMER STAPLES - 13.1% |
|||
Beverages - 3.5% |
|||
Anheuser-Busch Companies, Inc. |
2,429,300 |
125,619 |
|
PepsiAmericas, Inc. |
2,636,400 |
37,964 |
|
PepsiCo, Inc. |
6,533,307 |
280,540 |
|
The Coca-Cola Co. |
10,649,000 |
531,811 |
|
|
975,934 |
||
Food & Drug Retailing - 1.7% |
|||
Safeway, Inc. (a) |
862,800 |
24,003 |
|
Sysco Corp. |
7,148,800 |
186,226 |
|
Walgreen Co. |
6,364,800 |
224,868 |
|
Whole Foods Market, Inc. (a) |
685,600 |
30,077 |
|
|
465,174 |
||
Food Products - 0.9% |
|||
Kraft Foods, Inc. Class A |
3,768,800 |
139,446 |
|
McCormick & Co., Inc. (non-vtg.) |
2,362,800 |
53,754 |
|
Sara Lee Corp. |
1,486,000 |
27,848 |
|
Unilever NV (NY Shares) |
752,400 |
42,398 |
|
|
263,446 |
||
Household Products - 2.1% |
|||
Colgate-Palmolive Co. |
2,396,100 |
123,040 |
|
Kimberly-Clark Corp. |
2,171,200 |
132,552 |
|
Procter & Gamble Co. |
3,543,900 |
315,372 |
|
|
570,964 |
||
Personal Products - 1.2% |
|||
Avon Products, Inc. |
863,800 |
39,959 |
|
Gillette Co. |
8,512,400 |
279,888 |
|
|
319,847 |
||
Tobacco - 3.7% |
|||
Loews Corp. - Carolina Group |
1,611,100 |
39,794 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
CONSUMER STAPLES - continued |
|||
Tobacco - continued |
|||
Philip Morris Companies, Inc. |
20,145,800 |
$ 927,714 |
|
UST, Inc. |
2,500,000 |
73,575 |
|
|
1,041,083 |
||
TOTAL CONSUMER STAPLES |
3,636,448 |
||
ENERGY - 4.9% |
|||
Energy Equipment & Services - 0.3% |
|||
Schlumberger Ltd. (NY Shares) |
1,766,600 |
75,822 |
|
Oil & Gas - 4.6% |
|||
ChevronTexaco Corp. |
3,808,410 |
285,631 |
|
Conoco, Inc. |
1,553,600 |
37,473 |
|
Exxon Mobil Corp. |
22,500,894 |
827,133 |
|
Royal Dutch Petroleum Co. (NY Shares) |
2,891,000 |
132,119 |
|
|
1,282,356 |
||
TOTAL ENERGY |
1,358,178 |
||
FINANCIALS - 21.5% |
|||
Banks - 3.3% |
|||
Bank of America Corp. |
3,364,506 |
223,740 |
|
Bank One Corp. |
3,688,800 |
143,531 |
|
FleetBoston Financial Corp. |
1,505,898 |
34,937 |
|
Golden West Financial Corp. |
525,000 |
34,519 |
|
Mellon Financial Corp. |
1,269,800 |
33,751 |
|
U.S. Bancorp, Delaware |
1,450,000 |
31,016 |
|
Wachovia Corp. |
3,829,313 |
137,089 |
|
Wells Fargo & Co. |
5,738,800 |
291,875 |
|
|
930,458 |
||
Diversified Financials - 13.3% |
|||
American Express Co. |
2,102,790 |
74,144 |
|
CIT Group, Inc. |
1,000,000 |
22,460 |
|
Citigroup, Inc. |
15,221,238 |
510,520 |
|
Fannie Mae |
14,495,700 |
1,085,583 |
|
Freddie Mac |
9,631,800 |
596,690 |
|
Household International, Inc. |
629,440 |
26,858 |
|
MBNA Corp. |
836,950 |
16,228 |
|
Merrill Lynch & Co., Inc. |
2,862,400 |
102,045 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
FINANCIALS - continued |
|||
Diversified Financials - continued |
|||
Morgan Stanley |
4,072,500 |
$ 164,325 |
|
SLM Corp. (d) |
12,229,810 |
1,112,913 |
|
|
3,711,766 |
||
Insurance - 3.4% |
|||
Allmerica Financial Corp. |
316,100 |
8,630 |
|
American International Group, Inc. |
9,890,500 |
632,201 |
|
Hartford Financial Services Group, Inc. |
407,300 |
20,609 |
|
MBIA, Inc. |
5,827,500 |
288,986 |
|
|
950,426 |
||
Real Estate - 1.5% |
|||
Equity Office Properties Trust |
4,075,190 |
107,504 |
|
Equity Residential Properties Trust (SBI) |
7,154,730 |
191,389 |
|
Manufactured Home Communities, Inc. |
921,400 |
31,143 |
|
Public Storage, Inc. |
1,028,600 |
38,830 |
|
Simon Property Group, Inc. |
984,900 |
35,447 |
|
|
404,313 |
||
TOTAL FINANCIALS |
5,996,963 |
||
HEALTH CARE - 18.5% |
|||
Biotechnology - 0.8% |
|||
Amgen, Inc. (a) |
5,060,900 |
230,979 |
|
Health Care Equipment & Supplies - 3.4% |
|||
Alcon, Inc. |
814,100 |
28,656 |
|
Baxter International, Inc. |
4,663,500 |
186,120 |
|
Becton, Dickinson & Co. |
4,619,100 |
134,231 |
|
Boston Scientific Corp. (a) |
1,344,500 |
40,322 |
|
C.R. Bard, Inc. |
1,660,500 |
89,783 |
|
Guidant Corp. (a) |
291,500 |
10,144 |
|
Medtronic, Inc. |
3,439,990 |
138,976 |
|
St. Jude Medical, Inc. (a) |
1,773,800 |
67,404 |
|
Stryker Corp. |
1,635,400 |
82,784 |
|
Zimmer Holdings, Inc. (a) |
4,206,593 |
156,611 |
|
|
935,031 |
||
Health Care Providers & Services - 3.7% |
|||
Cardinal Health, Inc. |
147,200 |
8,479 |
|
HCA, Inc. |
2,902,600 |
136,422 |
|
IMS Health, Inc. |
3,022,500 |
47,816 |
|
McKesson Corp. |
1,516,700 |
49,930 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
HEALTH CARE - continued |
|||
Health Care Providers & Services - continued |
|||
Tenet Healthcare Corp. (a) |
3,968,000 |
$ 189,075 |
|
UnitedHealth Group, Inc. |
5,513,900 |
483,348 |
|
Wellpoint Health Networks, Inc. (a) |
1,529,800 |
109,381 |
|
|
1,024,451 |
||
Pharmaceuticals - 10.6% |
|||
Abbott Laboratories |
1,720,200 |
71,233 |
|
Allergan, Inc. |
2,335,100 |
141,250 |
|
Bristol-Myers Squibb Co. |
6,762,000 |
158,434 |
|
Eli Lilly & Co. |
3,078,932 |
179,871 |
|
Forest Laboratories, Inc. (a) |
1,425,000 |
110,395 |
|
Johnson & Johnson |
4,643,200 |
246,090 |
|
Merck & Co., Inc. |
8,450,500 |
419,145 |
|
Pfizer, Inc. |
30,324,249 |
980,989 |
|
Pharmacia Corp. |
4,470,600 |
200,015 |
|
Schering-Plough Corp. |
4,247,700 |
108,316 |
|
Sepracor, Inc. (a) |
200,000 |
1,350 |
|
Teva Pharmaceutical Industries Ltd. sponsored ADR |
183,000 |
12,206 |
|
Wyeth |
8,050,300 |
321,207 |
|
|
2,950,501 |
||
TOTAL HEALTH CARE |
5,140,962 |
||
INDUSTRIALS - 11.9% |
|||
Aerospace & Defense - 2.5% |
|||
Boeing Co. |
3,765,000 |
156,323 |
|
General Dynamics Corp. |
658,240 |
53,265 |
|
Honeywell International, Inc. |
2,197,200 |
71,101 |
|
Lockheed Martin Corp. |
3,691,300 |
236,649 |
|
Northrop Grumman Corp. |
871,500 |
96,475 |
|
Raytheon Co. |
1,298,700 |
42,312 |
|
United Technologies Corp. |
612,100 |
42,541 |
|
|
698,666 |
||
Airlines - 0.4% |
|||
Southwest Airlines Co. |
7,828,343 |
108,109 |
|
Building Products - 0.1% |
|||
Masco Corp. |
1,463,400 |
35,414 |
|
Commercial Services & Supplies - 2.5% |
|||
Arbitron, Inc. (a) |
598,300 |
19,953 |
|
Automatic Data Processing, Inc. |
2,651,000 |
98,856 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INDUSTRIALS - continued |
|||
Commercial Services & Supplies - continued |
|||
Avery Dennison Corp. |
1,130,100 |
$ 70,304 |
|
Ceridian Corp. (a) |
1,825,000 |
31,591 |
|
ChoicePoint, Inc. (a) |
2,395,867 |
100,363 |
|
Cintas Corp. |
1,149,400 |
50,446 |
|
First Data Corp. |
3,780,200 |
132,118 |
|
Paychex, Inc. |
564,500 |
14,852 |
|
Pitney Bowes, Inc. |
2,173,920 |
84,783 |
|
Viad Corp. |
2,583,200 |
58,974 |
|
Waste Management, Inc. |
1,400,000 |
33,138 |
|
|
695,378 |
||
Electrical Equipment - 0.1% |
|||
Emerson Electric Co. |
814,600 |
41,504 |
|
Industrial Conglomerates - 5.6% |
|||
3M Co. |
817,000 |
102,803 |
|
General Electric Co. |
42,113,300 |
1,356,045 |
|
Tyco International Ltd. |
7,985,670 |
102,217 |
|
|
1,561,065 |
||
Machinery - 0.5% |
|||
Danaher Corp. |
241,200 |
14,966 |
|
Eaton Corp. |
477,100 |
33,311 |
|
Illinois Tool Works, Inc. |
993,500 |
65,561 |
|
Ingersoll-Rand Co. Ltd. Class A |
646,100 |
24,804 |
|
|
138,642 |
||
Road & Rail - 0.2% |
|||
Burlington Northern Santa Fe Corp. |
1,509,600 |
44,412 |
|
TOTAL INDUSTRIALS |
3,323,190 |
||
INFORMATION TECHNOLOGY - 5.6% |
|||
Communications Equipment - 0.2% |
|||
Cisco Systems, Inc. (a) |
3,574,900 |
47,153 |
|
Computers & Peripherals - 0.8% |
|||
Dell Computer Corp. (a) |
4,591,000 |
114,454 |
|
Hewlett-Packard Co. |
3,030,000 |
42,875 |
|
International Business Machines Corp. |
816,400 |
57,475 |
|
|
214,804 |
||
Internet Software & Services - 0.0% |
|||
Yahoo!, Inc. (a) |
1,295,200 |
17,058 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
IT Consulting & Services - 0.3% |
|||
Accenture Ltd. Class A |
1,375,000 |
$ 22,688 |
|
Electronic Data Systems Corp. |
1,114,500 |
40,980 |
|
SunGard Data Systems, Inc. (a) |
804,500 |
18,866 |
|
|
82,534 |
||
Office Electronics - 0.1% |
|||
Xerox Corp. (a) |
3,937,900 |
27,368 |
|
Semiconductor Equipment & Products - 0.3% |
|||
Analog Devices, Inc. (a) |
1,490,000 |
35,909 |
|
Intel Corp. |
2,322,400 |
43,638 |
|
Micron Technology, Inc. (a) |
605,152 |
11,794 |
|
|
91,341 |
||
Software - 3.9% |
|||
Adobe Systems, Inc. |
1,204,800 |
28,867 |
|
Microsoft Corp. (a) |
21,590,600 |
1,035,917 |
|
Oracle Corp. (a) |
2,740,900 |
27,434 |
|
|
1,092,218 |
||
TOTAL INFORMATION TECHNOLOGY |
1,572,476 |
||
MATERIALS - 1.0% |
|||
Chemicals - 0.7% |
|||
Dow Chemical Co. |
984,700 |
28,428 |
|
E.I. du Pont de Nemours & Co. |
1,209,700 |
50,699 |
|
Praxair, Inc. |
2,391,000 |
125,049 |
|
|
204,176 |
||
Metals & Mining - 0.1% |
|||
Alcoa, Inc. |
1,277,300 |
34,551 |
|
Paper & Forest Products - 0.2% |
|||
International Paper Co. |
950,000 |
37,829 |
|
TOTAL MATERIALS |
276,556 |
||
TELECOMMUNICATION SERVICES - 4.0% |
|||
Diversified Telecommunication Services - 4.0% |
|||
ALLTEL Corp. |
614,900 |
24,916 |
|
AT&T Corp. |
4,880,614 |
49,685 |
|
BellSouth Corp. |
11,844,800 |
318,033 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
TELECOMMUNICATION SERVICES - continued |
|||
Diversified Telecommunication Services - continued |
|||
SBC Communications, Inc. |
13,026,500 |
$ 360,313 |
|
Verizon Communications, Inc. |
10,527,040 |
347,392 |
|
|
1,100,339 |
||
UTILITIES - 1.1% |
|||
Electric Utilities - 1.1% |
|||
Dominion Resources, Inc. |
1,515,000 |
90,052 |
|
FirstEnergy Corp. |
965,000 |
29,674 |
|
Southern Co. |
2,902,000 |
83,520 |
|
TXU Corp. |
2,472,000 |
106,617 |
|
|
309,863 |
||
TOTAL COMMON STOCKS (Cost $18,063,156) |
25,248,956 |
||
Convertible Preferred Stocks - 2.7% |
|||
|
|
|
|
CONSUMER DISCRETIONARY - 0.1% |
|||
Automobiles - 0.1% |
|||
General Motors Corp. Series B, $1.313 |
741,000 |
17,977 |
|
FINANCIALS - 0.4% |
|||
Diversified Financials - 0.4% |
|||
Ford Motor Co. Capital Trust II $3.25 |
938,300 |
47,549 |
|
Union Pacific Capital Trust $3.125 TIDES (e) |
1,277,000 |
63,451 |
|
|
111,000 |
||
Insurance - 0.0% |
|||
Travelers Property Casualty Corp. $1.125 |
652,000 |
14,339 |
|
TOTAL FINANCIALS |
125,339 |
||
INDUSTRIALS - 0.6% |
|||
Aerospace & Defense - 0.6% |
|||
Northrop Grumman Corp. $7.25 |
416,000 |
48,776 |
|
Raytheon Co. $4.13 |
1,976,000 |
110,285 |
|
|
159,061 |
||
INFORMATION TECHNOLOGY - 0.6% |
|||
Communications Equipment - 0.4% |
|||
Motorola, Inc. $3.50 |
2,737,400 |
107,552 |
|
Convertible Preferred Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
IT Consulting & Services - 0.2% |
|||
Electronic Data Systems Corp. $3.81 PRIDES |
1,987,700 |
$ 72,909 |
|
TOTAL INFORMATION TECHNOLOGY |
180,461 |
||
UTILITIES - 1.0% |
|||
Electric Utilities - 0.9% |
|||
DTE Energy Co. $2.188 |
1,220,800 |
30,415 |
|
FPL Group, Inc.: |
|
|
|
$4.00 |
221,600 |
11,246 |
|
$4.25 |
2,242,600 |
119,710 |
|
TXU Corp. $4.063 PRIDES |
2,068,200 |
91,311 |
|
|
252,682 |
||
Gas Utilities - 0.1% |
|||
KeySpan Corp. $4.375 |
615,600 |
30,645 |
|
TOTAL UTILITIES |
283,327 |
||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $812,193) |
766,165 |
Corporate Bonds - 0.5% |
|||||
Ratings |
Principal |
|
|||
Convertible Bonds - 0.2% |
|||||
INFORMATION TECHNOLOGY - 0.2% |
|||||
Communications Equipment - 0.0% |
|||||
Corning, Inc. 3.5% 11/1/08 |
Ba2 |
|
$ 20,000 |
10,504 |
|
Electronic Equipment & Instruments - 0.2% |
|||||
Agilent Technologies, Inc. 3% 12/1/21 |
Baa2 |
|
46,760 |
42,150 |
|
TOTAL INFORMATION TECHNOLOGY |
52,654 |
||||
Nonconvertible Bonds - 0.3% |
|||||
CONSUMER DISCRETIONARY - 0.1% |
|||||
Media - 0.1% |
|||||
AOL Time Warner, Inc. 6.15% 5/1/07 |
Baa1 |
|
14,000 |
12,162 |
|
Time Warner, Inc. 8.11% 8/15/06 |
Baa1 |
|
6,466 |
5,725 |
|
|
17,887 |
||||
Corporate Bonds - continued |
|||||
Ratings |
Principal |
Value (Note 1) |
|||
Nonconvertible Bonds - continued |
|||||
INDUSTRIALS - 0.2% |
|||||
Industrial Conglomerates - 0.2% |
|||||
Tyco International Group SA yankee: |
|
|
|
|
|
5.875% 11/1/04 |
Ba2 |
|
$ 10,010 |
$ 8,258 |
|
6.375% 10/15/11 |
Ba2 |
|
63,000 |
46,935 |
|
|
55,193 |
||||
TOTAL NONCONVERTIBLE BONDS |
73,080 |
||||
TOTAL CORPORATE BONDS (Cost $146,457) |
125,734 |
||||
U.S. Treasury Obligations - 0.1% |
|||||
|
|||||
U.S. Treasury Bills, yield at date of purchase 1.67% 8/8/02 |
- |
|
6,000 |
5,998 |
|
U.S. Treasury Bonds 8.125% 8/15/19 |
Aaa |
|
10,000 |
13,142 |
|
TOTAL U.S. TREASURY OBLIGATIONS (Cost $16,216) |
19,140 |
Money Market Funds - 6.3% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.84% (c) |
1,757,881,939 |
1,757,882 |
|
Fidelity Securities Lending Cash Central Fund, 1.86% (c) |
2,421,000 |
2,421 |
|
TOTAL MONEY MARKET FUNDS (Cost $1,760,303) |
1,760,303 |
||
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $20,798,325) |
27,920,298 |
||
NET OTHER ASSETS - (0.3)% |
(71,496) |
||
NET ASSETS - 100% |
$ 27,848,802 |
Security Type Abbreviations |
||
PRIDES |
- |
Preferred Redeemable Increased Dividend Equity Securities |
TIDES |
- |
Term Income Deferred Equity Securities |
Legend |
(a) Non-income producing |
(b) For certain securities not individually rated by a nationally recognized rating agency, the ratings listed have been assigned by Fidelity. |
(c) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(d) Affiliated company |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $63,451,000 or 0.2% of net assets. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $11,125,039,000 and $10,761,275,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $826,000 for the period. |
Income Tax Information |
The fund hereby designates approximately $342,726,000 as a 20%-rate capital gain dividend for the purpose of the dividend paid deduction. |
At July 31, 2002, the fund had a capital loss carryforward of approximately $266,818,000 all of which will expire on July 31, 2010. |
The fund intends to elect to defer to its fiscal year ending July 31, 2003 approximately $531,014,000 of losses recognized during the period November 1, 2001 to July 31, 2002. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) |
July 31, 2002 |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $2,361) (cost $20,798,325) - See accompanying schedule |
|
$ 27,920,298 |
Cash |
|
328 |
Receivable for investments sold |
|
64,932 |
Receivable for fund shares sold |
|
27,009 |
Dividends receivable |
|
25,873 |
Interest receivable |
|
5,166 |
Other receivables |
|
121 |
Total assets |
|
28,043,727 |
Liabilities |
|
|
Payable for investments purchased |
$ 85,353 |
|
Payable for fund shares redeemed |
90,618 |
|
Accrued management fee |
11,074 |
|
Other payables and accrued expenses |
5,459 |
|
Collateral on securities loaned, at value |
2,421 |
|
Total liabilities |
|
194,925 |
Net Assets |
|
$ 27,848,802 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 21,560,153 |
Undistributed net investment income |
|
30,785 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(864,131) |
Net unrealized appreciation (depreciation) on investments |
|
7,121,995 |
Net Assets, for 881,023 shares outstanding |
|
$ 27,848,802 |
Net Asset Value, offering price and redemption price per share ($27,848,802 ÷ 881,023 shares) |
|
$ 31.61 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands |
Year ended July 31, 2002 |
|
Investment Income |
|
|
Dividends (including $10,702 received from affiliated issuers) |
|
$ 451,963 |
Interest |
|
79,846 |
Security lending |
|
16 |
Total income |
|
531,825 |
Expenses |
|
|
Management fee |
$ 158,049 |
|
Transfer agent fees |
67,613 |
|
Accounting and security lending fees |
1,605 |
|
Non-interested trustees' compensation |
103 |
|
Custodian fees and expenses |
344 |
|
Registration fees |
146 |
|
Audit |
220 |
|
Legal |
193 |
|
Miscellaneous |
469 |
|
Total expenses before reductions |
228,742 |
|
Expense reductions |
(5,026) |
223,716 |
Net investment income (loss) |
|
308,109 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities (including realized |
(733,047) |
|
Foreign currency transactions |
(11) |
|
Futures contracts |
(93,664) |
|
Total net realized gain (loss) |
|
(826,722) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(5,725,400) |
|
Assets and liabilities in foreign currencies |
99 |
|
Futures contracts |
61,343 |
|
Total change in net unrealized appreciation (depreciation) |
|
(5,663,958) |
Net gain (loss) |
|
(6,490,680) |
Net increase (decrease) in net assets resulting from operations |
|
$ (6,182,571) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands |
Year ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 308,109 |
$ 364,246 |
Net realized gain (loss) |
(826,722) |
1,164,784 |
Change in net unrealized appreciation (depreciation) |
(5,663,958) |
(4,870,918) |
Net increase (decrease) in net assets resulting |
(6,182,571) |
(3,341,888) |
Distributions to shareholders from net investment income |
(301,174) |
(350,062) |
Distributions to shareholders from net realized gain |
(349,292) |
(3,483,630) |
Total distributions |
(650,466) |
(3,833,692) |
Share transactions |
4,007,898 |
4,514,900 |
Reinvestment of distributions |
630,005 |
3,724,551 |
Cost of shares redeemed |
(6,054,662) |
(6,405,224) |
Net increase (decrease) in net assets resulting from share transactions |
(1,416,759) |
1,834,227 |
Total increase (decrease) in net assets |
(8,249,796) |
(5,341,353) |
Net Assets |
|
|
Beginning of period |
36,098,598 |
41,439,951 |
End of period (including undistributed net investment income of $30,785 and undistributed net investment income of $37,885, respectively) |
$ 27,848,802 |
$ 36,098,598 |
Other Information Shares |
|
|
Sold |
111,402 |
108,594 |
Issued in reinvestment of distributions |
17,431 |
84,232 |
Redeemed |
(171,139) |
(154,399) |
Net increase (decrease) |
(42,306) |
38,427 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, |
2002 |
2001 |
2000 |
1999 |
1998 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period |
$ 39.10 |
$ 46.83 |
$ 47.27 |
$ 43.73 |
$ 38.50 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss)B |
.34 |
.39 |
.38 |
.39 |
.41 |
Net realized and unrealized gain (loss) |
(7.12) |
(3.83) |
2.47 |
5.69 |
6.59 |
Total from investment |
(6.78) |
(3.44) |
2.85 |
6.08 |
7.00 |
Distributions from net investment income |
(.33) |
(.38) |
(.39) |
(.38) |
(.41) |
Distributions from net realized gain |
(.38) |
(3.91) |
(2.90) |
(2.16) |
(1.36) |
Total distributions |
(.71) |
(4.29) |
(3.29) |
(2.54) |
(1.77) |
Net asset value, end of period |
$ 31.61 |
$ 39.10 |
$ 46.83 |
$ 47.27 |
$ 43.73 |
Total Return A |
(17.56) % |
(8.25)% |
6.34% |
15.20% |
19.06% |
Ratios to Average Net AssetsC |
|
|
|
|
|
Expenses before |
.69% |
.68% |
.67% |
.68% |
.69% |
Expenses net of voluntary waivers, if any |
.69% |
.68% |
.67% |
.68% |
.69% |
Expenses net of all |
.68% |
.66% |
.66% |
.66% |
.68% |
Net investment income (loss) |
.94% |
.94% |
.82% |
.88% |
1.02% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (in millions) |
$ 27,849 |
$ 36,099 |
$ 41,440 |
$ 48,595 |
$ 44,361 |
Portfolio turnover rate |
36% |
46% |
41% |
35% |
32% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from directed brokerage or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflects expenses after reimbursement by the investment adviser but prior to reductions from directed brokerage or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.
See accompanying notes which are an integral part of the financial statements.
Annual Report
For the period ended July 31, 2002
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Growth & Income Portfolio (the fund) is a fund of Fidelity Securities 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 financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds. Deferred amounts remain in the fund until distributed in accordance with the Plan.
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. As a result, no provision for income taxes is required. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, foreign currency transactions, non-taxable dividends, prior period premium and discount on debt securities, capital loss carryforwards, and losses deferred due to wash sales and excise tax regulations.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-basis components of distributable earnings and the federal tax cost as of period end was as follows:
Unrealized appreciation |
$ 8,781,264 |
Unrealized depreciation |
(1,715,221) |
Net unrealized appreciation (depreciation) |
7,066,043 |
Undistributed ordinary income |
20,438 |
Capital loss carryforward |
(266,818) |
Total Distributable earnings |
$ 6,819,663 |
Cost for federal income tax purposes |
$ 20,854,255 |
The tax character of distributions paid during the year was as follows:
Ordinary Income |
$ 307,740 |
Long-term Capital Gains |
342,726 |
Total |
$ 650,466 |
2. Operating Policies.
Joint Trading Account. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations.
Repurchase Agreements. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a custodian bank. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above.
Futures Contracts. The fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments or if the counter-parties do not perform under the contracts' terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
2. Operating Policies - continued
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. 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 of .20% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by 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 .48% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .21% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $69,322 for the period.
Annual Report
4. Fees and Other Transactions with Affiliates - continued
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 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. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. 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, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is 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.
7. Expense Reductions.
Certain security trades were directed to brokers who paid $4,371 of the fund's expenses. In addition, through arrangements with the fund's custodian and transfer agent, 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 and transfer agent expenses by $7 and $648, respectively.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate |
Purchase |
|
Sales |
|
Dividend |
|
Value |
C.R. Bard, Inc. |
$ - |
|
$ 74,908 |
|
$ 715 |
|
$ - |
SLM Corp. |
60,396 |
|
109,228 |
|
9,987 |
|
1,112,913 |
TOTALS |
$ 60,396 |
|
$ 184,136 |
|
$ 10,702 |
|
$ 1,112,913 |
Annual Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Growth & Income Portfolio:
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 Growth & Income Portfolio (a fund of Fidelity Securities Fund) at July 31, 2002, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, 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 Growth & Income Portfolio'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 auditing standards generally accepted in the United States of America which 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 July 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 6, 2002
Annual Report
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, and review the fund's performance. Except for William O. McCoy and William S. Stavropoulos, each of the Trustees oversees 263 funds advised by FMR or an affiliate. Mr. McCoy oversees 265 funds advised by FMR or an affiliate, and Mr. Stavropoulos oversees 209 funds advised by FMR or an affiliate.
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. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. 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.
The fund's Statement of Additional Information (SAI) includes 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" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Edward C. Johnson 3d (72)** |
|
|
Year of Election or Appointment: 1984 President of Growth & Income. Mr. Johnson also serves as President of other Fidelity funds. He is Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; a Director of Fidelity Management & Research (U.K.) Inc.; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. |
Abigail P. Johnson (40)** |
|
|
Year of Election or Appointment: 2001 Senior Vice President of Growth & Income (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. |
Peter S. Lynch (59) |
|
|
Year of Election or Appointment: 1990 Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. |
* 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.
** Edward C. Johnson 3d, Trustee and President of the funds, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested 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, Age; Principal Occupation |
|
J. Michael Cook (59) |
|
|
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of AT&T (2001), International Flavors & Fragrances, Inc. (2000), Rockwell Automation International (2000), The Dow Chemical Company (2000), and HCA - The Healthcare Company (1999). He is a Member of the Advisory Board of the Securities Regulation Institute and of the Directorship Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Panel to the Comptroller General of the United States. He also serves as a member of the Board of Overseers of the Columbia Business School and a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. |
Ralph F. Cox (70) |
|
|
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. |
Phyllis Burke Davis (70) |
|
|
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Toshiba International Advisory Group of Toshiba Corporation (2001) and a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. |
Robert M. Gates (58) |
|
|
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of Charles Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and manufacturing), TRW Inc. (automotive, space, defense, and information technology), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines) and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. |
Donald J. Kirk (69) |
|
|
Year of Election or Appointment: 1987 Mr. Kirk is a Public Governor of the National Association of Securities Dealers, Inc., and of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Stabilization Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). |
Marie L. Knowles (55) |
|
|
Year of Election or Appointment: 2001 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. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. |
Ned C. Lautenbach (58) |
|
|
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and Chief Executive Officer (1999) and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman and C.E.O. of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial, 1997), Axcelis Technologies (semiconductors, 2000), and the Philharmonic Center for the Arts in Naples, Florida (1999). He also serves on the Board of Trustees of Fairfield University and is a member of the Council on Foreign Relations. |
Marvin L. Mann (69) |
|
|
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage, 1997) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. |
William O. McCoy (68) |
|
|
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm, 1997) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). |
William S. Stavropoulos (63) |
|
|
Year of Election or Appointment: 2002 Mr. Stavropoulos also serves as a Trustee (2001) or Member of the Advisory Board (2000) of other investment companies advised by
FMR. He is Chairman of the Board and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company.
Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including
President (1993- |
Executive Officers:
Correspondence intended for each executive officer may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Bart A. Grenier (43) |
|
|
Year of Election or Appointment: 2001 Vice President of Growth & Income. Mr. Grenier also serves as Vice President of certain Equity Funds (2001), a position he previously
held from 1999 to 2000 and Vice President of certain High Income Funds (2002). He is Senior Vice President of FMR (1999) and FMR
Co., Inc. (2001), and Group Leader of Fidelity's Asset Allocation Group (2000), Fidelity's Growth and Income Group (2001), and
Fidelity's Value Group (2001). Previously, Mr. Grenier served as President of Fidelity Ventures (2000), Vice President of certain High
Income Bond Funds (1997- |
Steven Kaye (43) |
|
|
Year of Election or Appointment: 1993 Vice President of Growth & Income. |
Eric D. Roiter (53) |
|
|
Year of Election or Appointment: 1998 Secretary of Growth & Income. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at Columbia University Law School (1996-1997). |
Maria F. Dwyer (43) |
|
|
Year of Election or Appointment: 2002 Treasurer of Growth & Income. She also serves as Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. |
John H. Costello (55) |
|
|
Year of Election or Appointment: 1986 Assistant Treasurer of Growth & Income. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. |
Frank V. Knox, Jr. (55) |
|
|
Year of Election or Appointment: 2002 Assistant Treasurer of Growth & Income. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), Compliance Officer of FMR Corp., and Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002) and Fidelity Management & Research (Far East) Inc. (1991-2002). |
Thomas J. Simpson (44) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of Growth & Income. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
A total of 2.28% 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 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2003 of amounts for use in preparing 2002 income tax returns.
Annual Report
A special meeting of the fund's shareholders was held on August 15, 2002. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
||
To continue the effectiveness of Article VIII, Section 4 of the Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
34,152,718,540.11 |
89.928 |
Against |
1,595,684,478.44 |
4.202 |
Abstain |
2,229,268,880.72 |
5.870 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 2 |
||
To authorize the Trustees to adopt an amended and restated Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
33,359,879,895.48 |
87.841 |
Against |
2,506,585,409.20 |
6.600 |
Abstain |
2,111,206,594.59 |
5.559 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 3 |
||
To elect the thirteen nominees specified below as Trustees.* |
||
|
# of |
% of |
J. Michael Cook |
||
Affirmative |
36,227,611,366.72 |
95.392 |
Withheld |
1,750,060,532.55 |
4.608 |
TOTAL |
37,977,671,899.27 |
100.000 |
Ralph F. Cox |
||
Affirmative |
36,182,850,121.37 |
95.274 |
Withheld |
1,794,821,777.90 |
4.726 |
TOTAL |
37,977,671,899.27 |
100.000 |
|
# of |
% of |
Phyllis Burke Davis |
||
Affirmative |
36,151,180,469.12 |
95.191 |
Withheld |
1,826,491,430.15 |
4.809 |
TOTAL |
37,977,671,899.27 |
100.000 |
Robert M. Gates |
||
Affirmative |
36,207,443,324.51 |
95.339 |
Withheld |
1,770,228,574.76 |
4.661 |
TOTAL |
37,977,671,899.27 |
100.000 |
Abigail P. Johnson |
||
Affirmative |
36,153,684,587.30 |
95.197 |
Withheld |
1,823,987,311.97 |
4.803 |
TOTAL |
37,977,671,899.27 |
100.000 |
Edward C. Johnson 3d |
||
Affirmative |
36,146,668,992.04 |
95.179 |
Withheld |
1,831,002,907.23 |
4.821 |
TOTAL |
37,977,671,899.27 |
100.000 |
Donald J. Kirk |
||
Affirmative |
36,212,215,628.07 |
95.351 |
Withheld |
1,765,456,271.20 |
4.649 |
TOTAL |
37,977,671,899.27 |
100.000 |
Marie L. Knowles |
||
Affirmative |
36,228,946,938.21 |
95.395 |
Withheld |
1,748,724,961.06 |
4.605 |
TOTAL |
37,977,671,899.27 |
100.000 |
Ned C. Lautenbach |
||
Affirmative |
36,247,557,672.80 |
95.444 |
Withheld |
1,730,114,226.47 |
4.556 |
TOTAL |
37,977,671,899.27 |
100.000 |
Peter S. Lynch |
||
Affirmative |
36,238,626,074.48 |
95.421 |
Withheld |
1,739,045,824.79 |
4.579 |
TOTAL |
37,977,671,899.27 |
100.000 |
*Denotes trust-wide proposals and voting results. |
||
|
# of |
% of |
Marvin L. Mann |
||
Affirmative |
36,208,314,198.20 |
95.341 |
Withheld |
1,769,357,701.07 |
4.659 |
TOTAL |
37,977,671,899.27 |
100.000 |
William O. McCoy |
||
Affirmative |
36,216,504,381.47 |
95.371 |
Withheld |
1,758,167,517.80 |
4.629 |
TOTAL |
37,977,671,899.27 |
100.000 |
William S. Stavropoulos |
||
Affirmative |
36,124,608,895.89 |
95.121 |
Withheld |
1,853,063,003.38 |
4.879 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 5 |
||
To amend the fund's fundamental investment limitation concerning underwriting. |
||
|
# of |
% of |
Affirmative |
13,621,560,115.41 |
84.173 |
Against |
1,088,893,222.48 |
6.729 |
Abstain |
1,000,267,728.98 |
6.181 |
Broker Non-Votes |
472,007,570.20 |
2.917 |
TOTAL |
16,182,728,637.07 |
100.000 |
PROPOSAL 6 |
||
To amend the fund's fundamental investment limitation concerning lending. |
||
|
# of |
% of |
Affirmative |
13,474,564,047.27 |
83.265 |
Against |
1,224,236,423.59 |
7.565 |
Abstain |
1,011,920,596.01 |
6.253 |
Broker Non-Votes |
472,007,570.20 |
2.917 |
TOTAL |
16,182,728,637.07 |
100.000 |
Annual Report
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Annual Report
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Annual Report
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Fidelity®
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Annual Report
July 31, 2002
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President's Message |
Ned Johnson on investing strategies. |
|
Performance |
How the fund has done over time. |
|
Fund Talk |
The manager's review of fund performance, strategy and outlook. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, |
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Notes |
Notes to the financial statements. |
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Independent Auditors' Report |
The auditors' opinion. |
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Trustees and Officers |
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Distributions |
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Proxy Voting Results |
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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.
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investment risks, including possible loss of principal amount invested.
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For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Semiannual Report
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
The Dow Jones Industrial AverageSM - often regarded as a barometer of overall U.S. stock market performance - recorded two of its three largest point gains ever in late July. Still, many equity benchmarks were lingering near four- to five-year lows through the first seven months of 2002, due in part to investors' lack of faith in corporate accounting standards. As a result, many investors turned to fixed-income securities for capital protection.
While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value).
Cumulative Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity ® Blue Chip Growth |
|
-26.16% |
-2.50% |
167.13% |
S&P 500® |
|
-23.63% |
2.23% |
161.46% |
Russell 1000® Growth |
|
-28.75% |
-14.40% |
112.25% |
Growth Funds Average |
|
-25.71% |
-3.27% |
132.37% |
Cumulative total returns show the fund's performance in percentage terms over a set period - in this case, one year, five years or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500SM Index - a market capitalization-weighted index of common stocks - and the performance of the Russell 1000 ® Growth Index - a market capitalization-weighted index of growth-oriented stocks of the largest U.S. domiciled corporations. To measure how the fund's performance stacked up against its peers, you can compare it to the growth funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 1,995 mutual funds. These benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Lipper has created additional comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page <Click Here> of this report.*
Average Annual Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity Blue Chip Growth |
|
-26.16% |
-0.50% |
10.32% |
S&P 500 |
|
-23.63% |
0.44% |
10.09% |
Russell 1000 Growth |
|
-28.75% |
-3.06% |
7.83% |
Growth Funds Average |
|
-25.71% |
-1.11% |
8.21% |
Average annual total returns take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year. (Note: Lipper calculates average annual total returns by annualizing each fund's total return, then taking an arithmetic average. This may produce a different figure than that obtained by averaging the cumulative total returns and annualizing the result.)
Annual Report
$10,000 Over 10 Years
$10,000 Over 10 Years: Let's say hypothetically that $10,000 was invested in Fidelity® Blue Chip Growth Fund on July 31, 1992. As the chart shows, by July 31, 2002, the value of the investment would have grown to $26,713 - a 167.13% increase on the initial investment. For comparison, look at how the S&P 500 ® did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have grown to $26,146 - a 161.46% increase.
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.
Understanding
Performance
How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain.
3* The LipperSM large-cap growth funds average reflects the performance (excluding sales charges) of mutual funds with similar portfolio characteristics and capitalization. The Lipper large-cap supergroup average reflects the performance (excluding sales charges) of mutual funds with similar capitalization. As of July 31, 2002, the one year, five year and 10 year cumulative total returns for the large-cap growth funds average were -28.89%, -10.42%, and 106.73%, respectively. The one year, five year and 10 year average annual total returns were -28.89%, -2.52%, and 7.20%, respectively. The one year, five year and 10 year cumulative total returns for the large-cap supergroup average were -25.22%, -5.38%, and 126.11%, respectively. The one year, five year and 10 year average annual total returns were -25.22%, -1.34%, and 8.25%, respectively.
Annual Report
Market Recap
Where's the bottom? Was it reached in late July 2002, when the Dow Jones Industrial AverageSM recorded two of its three best single day point gains ever? Or was it just a head fake, another tissue-thin false bottom before the next plunge? Only time will tell. But one thing for certain is that during the 12-month period ending July 31, 2002, equity investors endured one of the most challenging years in market history. Stocks recoiled from a series of tragic and troubling events that threatened investor confidence on a number of levels. When the period began, the U.S. economy was in recession, typically not a good time for stocks overall. Then came September 11, an unprecedented event that closed equity markets for nearly a week and sent them tumbling upon reopening. Shaken but not beaten, equity investors demonstrated their faith in the economic system, and stocks enjoyed a solid rebound in the fourth quarter of 2001. But then came the scandals: Enron, Arthur Andersen, WorldCom . . . and as the list went on, stock prices went down. When all was said and done, the blue-chip bellwether Dow Jones Industrial Average ended the 12-month period down 15.39%; the NASDAQ Composite® Index declined 34.26%; and the large-cap weighted Standard & Poor's 500SM Index suffered a loss of 23.63%.
(Portfolio Manager photograph)
An interview with John McDowell, Portfolio Manager of Fidelity Blue Chip Growth Fund
Q. How did the fund perform, John?
A. For the one-year period ending July 31, 2002, the fund returned -26.16%, trailing the Standard & Poor's 500 Index, which declined 23.63%. The fund outperformed its growth benchmark, the Russell 1000 Growth Index, which dropped 28.75%. The growth funds average tracked by Lipper Inc. fell 25.71% during the same period.
Q. What drove fund results during the past year?
A. Shying away from the weak technology and telecommunications sectors and overweighting strong-performing consumer staples and financial services stocks largely drove the fund's outperformance of the Russell index. Last year's economic downturn eroded tech and telecom earnings, resulting in two of the market's worst sector performances. The fund's results were less favorable, however, compared with the S&P 500 and Lipper average. The growth sectors of the market, where this fund primarily invests, were the hardest hit by the recession. Our peer group is more highly correlated with the S&P and also tends to have more exposure than we do to small- and mid-sized companies, which continued to dominate their large-cap counterparts.
Annual Report
Fund Talk: The Manager's Overview - continued
Q. How did the market environment influence performance?
A. The period can be divided into three distinct market environments: recession; anticipation of economic recovery driven by a surge in liquidity; and a market sell-off caused by concerns about accounting, excess debt and conflicts of interest on Wall Street. Against this volatile backdrop, the fund's conservative positioning relative to its Russell benchmark enabled it to outperform during the past year. Early in the period, the fund benefited from underweighting lagging tech and telecom stocks - including EMC, Sun Microsystems and AT&T Wireless - which suffered from overcapacity and excess inventory, and in the latter case, too much competition. Following September 11, the stock market hit a low and started to rebound. Despite little fundamental improvement, technology and cyclical stocks rose sharply as investors began to anticipate resumption in corporate earnings growth. While the fund lost ground during the tech rally, it was helped somewhat by the advances of such cyclical names as Danaher, Illinois Tool Works and Lockheed Martin. While the economy showed signs of stabilizing during the first half of 2002, corporate earnings and stock prices remained under pressure, due largely to accounting issues. Weakened balance sheets and higher borrowing costs exposed problems at many large companies that had relied on heavy borrowing and creative accounting methods to boost earnings growth. Modest positions in Computer Associates, Kmart, and Elan - all of which I sold during the period - and Tyco International detracted from performance.
Q. What were some of your key strategies?
A. In the context of this rapidly changing environment, I chose to make only minor sector allocation changes. I modestly reduced the fund's technology weighting and sold some cyclical, energy and health care services stocks to take profits. In turn, I raised the fund's stake in attractively priced consumer staples stocks. That move paid off, as the steep market decline prompted a flight to quality in companies with more stable and predictable earnings growth, reasonable valuations and improving free cash flow. Gillette, Philip Morris and Coca-Cola were notable contributors here. I also added to various health positions, particularly in the pharmaceuticals industry, as valuations declined. I favored companies with strong product momentum, such as Johnson & Johnson. Companies in this industry typically have strong cash flows. I believed the earnings squeeze experienced by many big drug companies, due to a large number of drugs whose patents were expiring, was only temporary. Although this strategy didn't work during the period, I felt it could provide long-term benefits.
Q. What's your outlook?
A. While there's some evidence that the economic recovery is advancing - albeit unevenly - I remain skeptical. My biggest concern continues to be excessive debt levels in the economy, because they typically are much lower at the beginning of sustained economic and stock market advances. Furthermore, given the certain new conservatism in accounting, future earnings growth as reported may generally be less robust and less consistent, putting pressure on still-high earnings multiples. My goal is to identify and own those companies that can grow in this environment.
Annual Report
The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover 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.
>
Fund Facts
Goal: growth of capital over the long term
Fund number: 312
Trading symbol: FBGRX
Start date: December 31, 1987
Size: as of July 31, 2002, more than $17.0 billion
Manager: John McDowell, since 1996; head, Fidelity domestic equities, since 2002; manager, Fidelity Large Cap Stock Fund, 1995-1996; joined Fidelity in 1985
3John McDowell retraces the bear market's trail:
"During the late 1990s, there was significant multiple expansion in the market - meaning stock prices rose much faster than earnings. Over the past two years, we have seen this reverse as price-to-earnings multiples, particularly among large-capitalization stocks, have generally contracted. As valuations expanded, I resisted buying some of the most expensive stocks. While doing so limited relative performance on the upside, it has helped performance during the subsequent correction.
"Following a year of stock market weakness, the effects of the decline in equities began to show in the economy. The characteristics of last year's slowdown differed from others in the recent past. Despite a rise in the unemployment rate, the recession was related more to corporate overinvestment and the resulting weakness in corporate earnings, and less to a falloff in consumer spending. Throughout 2001, consumers got a boost from lower energy prices and tax cuts, as well as pre-emptive rate cuts, which lowered borrowing costs for home and car buyers and spurred refinancing activity. However, unlike past recessions, the cash raised from home refinancing was largely taken out of the house and not used to lower homeowner monthly payments. Consequently, consumer debt is near historically high levels as a percentage of disposable income."
Annual Report
Top Ten Stocks as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Microsoft Corp. |
5.0 |
5.0 |
General Electric Co. |
4.9 |
4.5 |
Pfizer, Inc. |
4.5 |
4.4 |
Intel Corp. |
2.6 |
4.0 |
Wal-Mart Stores, Inc. |
2.5 |
2.9 |
American International Group, Inc. |
2.5 |
2.1 |
The Coca-Cola Co. |
2.4 |
1.4 |
Johnson & Johnson |
2.3 |
1.7 |
Philip Morris Companies, Inc. |
2.1 |
1.7 |
Citigroup, Inc. |
1.8 |
2.0 |
|
30.6 |
|
Top Five Market Sectors as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Health Care |
21.6 |
19.5 |
Information Technology |
18.8 |
25.7 |
Financials |
14.1 |
11.1 |
Consumer Discretionary |
12.6 |
13.8 |
Industrials |
12.1 |
10.9 |
Asset Allocation (% of fund's net assets) |
|||||||
As of July 31, 2002 * |
As of January 31, 2002 ** |
||||||
![]() |
Stocks 97.6% |
|
![]() |
Stocks 97.3% |
|
||
![]() |
Short-Term |
|
![]() |
Short-Term |
|
||
* Foreign investments |
1.6% |
|
** Foreign investments |
1.9% |
|
Annual Report
Showing Percentage of Net Assets
Common Stocks - 97.6% |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - 12.6% |
|||
Hotels, Restaurants & Leisure - 1.1% |
|||
Brinker International, Inc. (a) |
2,053,300 |
$ 66,938 |
|
McDonald's Corp. |
4,758,600 |
117,775 |
|
|
184,713 |
||
Household Durables - 0.6% |
|||
Leggett & Platt, Inc. |
1,834,000 |
41,247 |
|
Sony Corp. sponsored ADR |
1,318,100 |
59,749 |
|
|
100,996 |
||
Media - 3.7% |
|||
AOL Time Warner, Inc. (a) |
8,124,632 |
93,433 |
|
Clear Channel Communications, Inc. (a) |
2,116,400 |
55,132 |
|
Comcast Corp. Class A (special) (a) |
3,017,800 |
63,072 |
|
Cox Communications, Inc. Class A (a) |
1,988,900 |
54,993 |
|
EchoStar Communications Corp. Class A (a) |
1,013,600 |
16,532 |
|
McGraw-Hill Companies, Inc. |
1,500,200 |
93,838 |
|
Omnicom Group, Inc. |
385,000 |
20,524 |
|
The New York Times Co. Class A |
1,541,600 |
69,757 |
|
Viacom, Inc. Class B (non-vtg.) (a) |
3,123,596 |
121,602 |
|
Walt Disney Co. |
2,299,200 |
40,765 |
|
|
629,648 |
||
Multiline Retail - 3.6% |
|||
Family Dollar Stores, Inc. |
1,970,500 |
59,686 |
|
Kohl's Corp. (a) |
1,442,700 |
95,218 |
|
Target Corp. |
799,100 |
26,650 |
|
Wal-Mart Stores, Inc. |
8,690,755 |
427,411 |
|
|
608,965 |
||
Specialty Retail - 3.2% |
|||
AutoZone, Inc. (a) |
420,400 |
31,005 |
|
Bed Bath & Beyond, Inc. (a) |
972,900 |
30,160 |
|
Best Buy Co., Inc. (a) |
2,236,350 |
73,576 |
|
CDW Computer Centers, Inc. (a) |
675,300 |
32,279 |
|
Gap, Inc. |
3,644,100 |
44,276 |
|
Home Depot, Inc. |
5,156,500 |
159,233 |
|
Lowe's Companies, Inc. |
3,991,600 |
151,082 |
|
Office Depot, Inc. (a) |
2,313,500 |
30,029 |
|
|
551,640 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - continued |
|||
Textiles Apparel & Luxury Goods - 0.4% |
|||
Liz Claiborne, Inc. |
1,593,100 |
$ 45,961 |
|
NIKE, Inc. Class B |
548,300 |
27,026 |
|
|
72,987 |
||
TOTAL CONSUMER DISCRETIONARY |
2,148,949 |
||
CONSUMER STAPLES - 11.8% |
|||
Beverages - 4.2% |
|||
Anheuser-Busch Companies, Inc. |
999,900 |
51,705 |
|
PepsiCo, Inc. |
5,723,962 |
245,787 |
|
The Coca-Cola Co. |
8,328,400 |
415,920 |
|
|
713,412 |
||
Food & Drug Retailing - 1.0% |
|||
Albertson's, Inc. |
731,610 |
20,617 |
|
CVS Corp. |
1,522,500 |
43,544 |
|
Rite Aid Corp. |
2,254,000 |
4,869 |
|
Walgreen Co. |
2,289,200 |
80,877 |
|
Whole Foods Market, Inc. (a) |
544,700 |
23,896 |
|
|
173,803 |
||
Food Products - 0.4% |
|||
Kraft Foods, Inc. Class A |
826,200 |
30,569 |
|
Wm. Wrigley Jr. Co. |
850,600 |
43,508 |
|
|
74,077 |
||
Household Products - 1.9% |
|||
Colgate-Palmolive Co. |
1,709,200 |
87,767 |
|
Procter & Gamble Co. |
2,585,290 |
230,065 |
|
|
317,832 |
||
Personal Products - 2.2% |
|||
Avon Products, Inc. |
2,569,300 |
118,856 |
|
Gillette Co. |
7,830,500 |
257,467 |
|
|
376,323 |
||
Tobacco - 2.1% |
|||
Philip Morris Companies, Inc. |
7,782,500 |
358,384 |
|
TOTAL CONSUMER STAPLES |
2,013,831 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
ENERGY - 4.7% |
|||
Energy Equipment & Services - 1.8% |
|||
Baker Hughes, Inc. |
3,304,000 |
$ 88,547 |
|
BJ Services Co. (a) |
1,053,900 |
33,609 |
|
Nabors Industries Ltd. (a) |
1,139,500 |
34,778 |
|
Schlumberger Ltd. (NY Shares) |
1,494,700 |
64,153 |
|
Transocean, Inc. |
1,697,100 |
43,276 |
|
Weatherford International Ltd. (a) |
1,180,000 |
47,861 |
|
|
312,224 |
||
Oil & Gas - 2.9% |
|||
ChevronTexaco Corp. |
1,828,700 |
137,153 |
|
Exxon Mobil Corp. |
4,991,700 |
183,495 |
|
Phillips Petroleum Co. |
1,192,300 |
61,702 |
|
TotalFinaElf SA Series B |
668,500 |
96,999 |
|
Valero Energy Corp. |
337,900 |
11,509 |
|
|
490,858 |
||
TOTAL ENERGY |
803,082 |
||
FINANCIALS - 14.1% |
|||
Banks - 2.5% |
|||
Bank One Corp. |
3,657,100 |
142,298 |
|
Fifth Third Bancorp |
1,898,300 |
125,421 |
|
Golden West Financial Corp. |
716,800 |
47,130 |
|
Mellon Financial Corp. |
1,146,700 |
30,479 |
|
Northern Trust Corp. |
458,300 |
18,254 |
|
Wachovia Corp. |
1,599,700 |
57,269 |
|
|
420,851 |
||
Diversified Financials - 7.8% |
|||
American Express Co. |
4,091,729 |
144,274 |
|
Charles Schwab Corp. |
2,640,100 |
23,629 |
|
Citigroup, Inc. |
9,374,054 |
314,406 |
|
Fannie Mae |
2,709,300 |
202,899 |
|
Freddie Mac |
3,115,400 |
192,999 |
|
Goldman Sachs Group, Inc. |
465,800 |
34,073 |
|
Household International, Inc. |
1,316,900 |
56,192 |
|
J.P. Morgan Chase & Co. |
2,488,100 |
62,103 |
|
MBNA Corp. |
3,935,800 |
76,315 |
|
Merrill Lynch & Co., Inc. |
2,557,700 |
91,182 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
FINANCIALS - continued |
|||
Diversified Financials - continued |
|||
Morgan Stanley |
2,291,000 |
$ 92,442 |
|
State Street Corp. |
1,127,400 |
47,915 |
|
|
1,338,429 |
||
Insurance - 3.8% |
|||
AFLAC, Inc. |
2,258,100 |
70,927 |
|
Allstate Corp. |
2,467,100 |
93,774 |
|
American International Group, Inc. |
6,685,155 |
427,315 |
|
MBIA, Inc. |
1,074,150 |
53,267 |
|
|
645,283 |
||
TOTAL FINANCIALS |
2,404,563 |
||
HEALTH CARE - 21.6% |
|||
Biotechnology - 0.6% |
|||
Amgen, Inc. (a) |
1,523,200 |
69,519 |
|
Human Genome Sciences, Inc. (a) |
1,123,100 |
19,452 |
|
Protein Design Labs, Inc. (a) |
1,142,300 |
15,524 |
|
|
104,495 |
||
Health Care Equipment & Supplies - 2.8% |
|||
Baxter International, Inc. |
2,535,700 |
101,200 |
|
Boston Scientific Corp. (a) |
1,299,100 |
38,960 |
|
Guidant Corp. (a) |
299,400 |
10,419 |
|
Medtronic, Inc. |
4,447,700 |
179,687 |
|
St. Jude Medical, Inc. (a) |
1,387,800 |
52,736 |
|
Zimmer Holdings, Inc. (a) |
2,368,380 |
88,175 |
|
|
471,177 |
||
Health Care Providers & Services - 3.9% |
|||
Cardinal Health, Inc. |
1,665,675 |
95,943 |
|
Health Management Associates, Inc. Class A (a) |
2,606,600 |
52,732 |
|
McKesson Corp. |
3,031,400 |
99,794 |
|
Tenet Healthcare Corp. (a) |
2,726,100 |
129,899 |
|
Trigon Healthcare, Inc. (a) |
674,000 |
68,553 |
|
UnitedHealth Group, Inc. |
1,893,500 |
165,984 |
|
Wellpoint Health Networks, Inc. (a) |
675,000 |
48,263 |
|
|
661,168 |
||
Pharmaceuticals - 14.3% |
|||
Abbott Laboratories |
4,878,100 |
202,002 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
HEALTH CARE - continued |
|||
Pharmaceuticals - continued |
|||
Allergan, Inc. |
1,752,800 |
$ 106,027 |
|
Bristol-Myers Squibb Co. |
4,633,800 |
108,570 |
|
Eli Lilly & Co. |
555,200 |
32,435 |
|
Forest Laboratories, Inc. (a) |
1,103,800 |
85,511 |
|
Johnson & Johnson |
7,335,104 |
388,761 |
|
King Pharmaceuticals, Inc. (a) |
1,090,633 |
23,132 |
|
Merck & Co., Inc. |
6,257,000 |
310,347 |
|
Mylan Laboratories, Inc. |
585,100 |
18,981 |
|
Pfizer, Inc. |
23,496,400 |
760,109 |
|
Pharmacia Corp. |
2,124,500 |
95,050 |
|
Schering-Plough Corp. |
3,836,900 |
97,841 |
|
Wyeth |
5,103,200 |
203,618 |
|
|
2,432,384 |
||
TOTAL HEALTH CARE |
3,669,224 |
||
INDUSTRIALS - 12.1% |
|||
Aerospace & Defense - 1.5% |
|||
Boeing Co. |
2,043,600 |
84,850 |
|
Lockheed Martin Corp. |
1,767,000 |
113,282 |
|
Northrop Grumman Corp. |
548,100 |
60,675 |
|
|
258,807 |
||
Air Freight & Logistics - 0.4% |
|||
United Parcel Service, Inc. Class B |
926,000 |
60,505 |
|
Airlines - 0.3% |
|||
Southwest Airlines Co. |
3,035,800 |
41,924 |
|
Building Products - 0.3% |
|||
Masco Corp. |
2,306,200 |
55,810 |
|
Commercial Services & Supplies - 2.7% |
|||
Automatic Data Processing, Inc. |
2,414,680 |
90,043 |
|
Avery Dennison Corp. |
927,200 |
57,681 |
|
Cendant Corp. (a) |
2,905,500 |
40,154 |
|
Cintas Corp. |
1,180,900 |
51,829 |
|
First Data Corp. |
5,315,700 |
185,784 |
|
Paychex, Inc. |
1,434,420 |
37,740 |
|
|
463,231 |
||
Industrial Conglomerates - 5.5% |
|||
3M Co. |
505,100 |
63,557 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INDUSTRIALS - continued |
|||
Industrial Conglomerates - continued |
|||
General Electric Co. |
25,916,700 |
$ 834,518 |
|
Tyco International Ltd. |
2,946,300 |
37,713 |
|
|
935,788 |
||
Machinery - 1.3% |
|||
Danaher Corp. |
1,213,900 |
75,322 |
|
Illinois Tool Works, Inc. |
886,100 |
58,474 |
|
Ingersoll-Rand Co. Ltd. Class A |
573,950 |
22,034 |
|
Parker Hannifin Corp. |
1,539,700 |
61,988 |
|
|
217,818 |
||
Road & Rail - 0.1% |
|||
Union Pacific Corp. |
269,500 |
15,812 |
|
TOTAL INDUSTRIALS |
2,049,695 |
||
INFORMATION TECHNOLOGY - 18.8% |
|||
Communications Equipment - 2.1% |
|||
Brocade Communications System, Inc. (a) |
1,453,600 |
27,255 |
|
Cisco Systems, Inc. (a) |
18,515,000 |
244,213 |
|
Motorola, Inc. |
4,525,100 |
52,491 |
|
QUALCOMM, Inc. (a) |
1,314,700 |
36,128 |
|
|
360,087 |
||
Computers & Peripherals - 2.8% |
|||
Dell Computer Corp. (a) |
8,836,900 |
220,304 |
|
EMC Corp. (a) |
3,885,700 |
29,143 |
|
International Business Machines Corp. |
2,644,100 |
186,145 |
|
Network Appliance, Inc. (a) |
1,896,200 |
16,042 |
|
Sun Microsystems, Inc. (a) |
5,668,900 |
22,222 |
|
|
473,856 |
||
Electronic Equipment & Instruments - 0.9% |
|||
Agilent Technologies, Inc. (a) |
2,648,274 |
49,999 |
|
Millipore Corp. |
964,300 |
31,918 |
|
Tektronix, Inc. (a) |
1,687,300 |
31,451 |
|
Waters Corp. (a) |
1,477,000 |
33,543 |
|
|
146,911 |
||
Internet Software & Services - 0.2% |
|||
Yahoo!, Inc. (a) |
2,326,613 |
30,641 |
|
IT Consulting & Services - 0.5% |
|||
Computer Sciences Corp. (a) |
2,239,500 |
82,862 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductor Equipment & Products - 6.0% |
|||
Altera Corp. (a) |
710,200 |
$ 8,402 |
|
Analog Devices, Inc. (a) |
2,542,000 |
61,262 |
|
Applied Materials, Inc. (a) |
3,709,100 |
55,154 |
|
Integrated Device Technology, Inc. (a) |
1,763,500 |
22,573 |
|
Intel Corp. |
23,644,340 |
444,277 |
|
International Rectifier Corp. (a) |
948,200 |
21,865 |
|
Intersil Corp. Class A (a) |
1,390,900 |
30,308 |
|
KLA-Tencor Corp. (a) |
1,406,200 |
55,390 |
|
LAM Research Corp. (a) |
1,182,000 |
14,539 |
|
Linear Technology Corp. |
1,793,360 |
48,564 |
|
LSI Logic Corp. (a) |
2,974,800 |
23,203 |
|
Micron Technology, Inc. (a) |
3,295,900 |
64,237 |
|
Teradyne, Inc. (a) |
2,122,800 |
31,842 |
|
Texas Instruments, Inc. |
5,582,000 |
129,223 |
|
Xilinx, Inc. (a) |
934,400 |
17,931 |
|
|
1,028,770 |
||
Software - 6.3% |
|||
Adobe Systems, Inc. |
579,968 |
13,896 |
|
BEA Systems, Inc. (a) |
2,507,000 |
13,914 |
|
Microsoft Corp. (a) |
17,688,900 |
848,711 |
|
Network Associates, Inc. (a) |
1,685,300 |
20,476 |
|
Oracle Corp. (a) |
8,124,800 |
81,321 |
|
PeopleSoft, Inc. (a) |
1,267,100 |
22,782 |
|
Symantec Corp. (a) |
716,700 |
24,038 |
|
Synopsys, Inc. (a) |
623,253 |
26,657 |
|
VERITAS Software Corp. (a) |
1,818,328 |
30,602 |
|
|
1,082,397 |
||
TOTAL INFORMATION TECHNOLOGY |
3,205,524 |
||
MATERIALS - 0.7% |
|||
Chemicals - 0.3% |
|||
Praxair, Inc. |
1,072,000 |
56,066 |
|
Containers & Packaging - 0.1% |
|||
Sealed Air Corp. |
520,000 |
7,545 |
|
Metals & Mining - 0.3% |
|||
Alcoa, Inc. |
1,665,100 |
45,041 |
|
TOTAL MATERIALS |
108,652 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
TELECOMMUNICATION SERVICES - 1.2% |
|||
Diversified Telecommunication Services - 1.0% |
|||
AT&T Corp. |
7,960,624 |
$ 81,039 |
|
KT Corp. sponsored ADR |
1,950,500 |
39,829 |
|
Qwest Communications International, Inc. (a) |
5,592,600 |
7,159 |
|
SBC Communications, Inc. |
1,761,600 |
48,726 |
|
|
176,753 |
||
Wireless Telecommunication Services - 0.2% |
|||
AT&T Wireless Services, Inc. (a) |
6,963,200 |
32,657 |
|
TOTAL TELECOMMUNICATION SERVICES |
209,410 |
||
TOTAL COMMON STOCKS (Cost $16,223,109) |
16,612,930 |
||
Convertible Preferred Stocks - 0.0% |
|||
|
|
|
|
INFORMATION TECHNOLOGY - 0.0% |
|||
Communications Equipment - 0.0% |
|||
Chorum Technologies Series E (c) |
132,000 |
132 |
|
Money Market Funds - 2.5% |
|||
|
|
|
|
Fidelity Cash Central Fund, 1.84% (b) |
399,871,557 |
399,872 |
|
Fidelity Securities Lending Cash Central Fund, 1.86% (b) |
24,223,200 |
24,223 |
|
TOTAL MONEY MARKET FUNDS (Cost $424,095) |
424,095 |
||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $16,649,480) |
17,037,157 |
||
NET OTHER ASSETS - (0.1)% |
(16,349) |
||
NET ASSETS - 100% |
$ 17,020,808 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933. |
Additional information on each holding is as follows: |
Security |
Acquisition Date |
Acquisition Cost (000s) |
Chorum Technologies Series E |
9/19/00 |
$ 2,276 |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $6,830,528,000 and $6,539,921,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $532,000 for the period. |
The fund invested in securities that are not registered under the Securities Act of 1933. At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $132,000 or 0.0% of net assets. |
Income Tax Information |
At July 31, 2002, the fund had a capital loss carryforward of approximately $1,572,081,000 all of which will expire on July 31, 2010. |
The fund intends to elect to defer to its fiscal year ending July 31, 2003 approximately $1,304,994,000 of losses recognized during the period November 1, 2001 to July 31, 2002. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) |
July 31, 2002 |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $23,534) (cost $16,649,480) - See accompanying schedule |
|
$ 17,037,157 |
Receivable for investments sold |
|
61,911 |
Receivable for fund shares sold |
|
50,913 |
Dividends receivable |
|
9,683 |
Interest receivable |
|
501 |
Other receivables |
|
55 |
Total assets |
|
17,160,220 |
Liabilities |
|
|
Payable for investments purchased |
$ 86,102 |
|
Payable for fund shares redeemed |
18,677 |
|
Accrued management fee |
6,810 |
|
Other payables and accrued expenses |
3,600 |
|
Collateral on securities loaned, at value |
24,223 |
|
Total liabilities |
|
139,412 |
Net Assets |
|
$ 17,020,808 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 19,506,386 |
Undistributed net investment income |
|
21,321 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(2,894,586) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
387,687 |
Net Assets, for 512,013 shares outstanding |
|
$ 17,020,808 |
Net Asset Value, offering price and redemption price per share ($17,020,808 ÷ 512,013 shares) |
|
$ 33.24 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands |
Year ended July 31, 2002 |
|
Investment Income |
|
|
Dividends |
|
$ 192,289 |
Interest |
|
11,716 |
Security lending |
|
183 |
Total income |
|
204,188 |
Expenses |
|
|
Management fee |
$ 119,892 |
|
Performance adjustment |
(18,343) |
|
Transfer agent fees |
53,216 |
|
Accounting and security lending fees |
1,340 |
|
Non-interested trustees' compensation |
64 |
|
Custodian fees and expenses |
329 |
|
Registration fees |
190 |
|
Audit |
116 |
|
Legal |
113 |
|
Miscellaneous |
321 |
|
Total expenses before reductions |
157,238 |
|
Expense reductions |
(3,823) |
153,415 |
Net investment income (loss) |
|
50,773 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities |
(1,774,174) |
|
Foreign currency transactions |
(29) |
|
Total net realized gain (loss) |
|
(1,774,203) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(4,362,251) |
|
Assets and liabilities in foreign currencies |
(4) |
|
Total change in net unrealized appreciation (depreciation) |
|
(4,362,255) |
Net gain (loss) |
|
(6,136,458) |
Net increase (decrease) in net assets resulting from operations |
|
$ (6,085,685) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands |
Year ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 50,773 |
$ 2,904 |
Net realized gain (loss) |
(1,774,203) |
(483,991) |
Change in net unrealized appreciation (depreciation) |
(4,362,255) |
(6,081,376) |
Net increase (decrease) in net assets resulting |
(6,085,685) |
(6,562,463) |
Distributions to shareholders from net investment income |
(30,589) |
- |
Distributions to shareholders from net realized gain |
- |
(1,244,515) |
Total distributions |
(30,589) |
(1,244,515) |
Share transactions |
5,075,169 |
6,149,616 |
Reinvestment of distributions |
29,819 |
1,219,279 |
Cost of shares redeemed |
(5,000,331) |
(5,683,556) |
Net increase (decrease) in net assets resulting from share transactions |
104,657 |
1,685,339 |
Total increase (decrease) in net assets |
(6,011,617) |
(6,121,639) |
Net Assets |
|
|
Beginning of period |
23,032,425 |
29,154,064 |
End of period (including undistributed net investment income of $21,321 and undistributed net investment income of $2,779, respectively) |
$ 17,020,808 |
$ 23,032,425 |
Other Information Shares |
|
|
Sold |
127,561 |
118,810 |
Issued in reinvestment of distributions |
701 |
20,917 |
Redeemed |
(127,201) |
(112,646) |
Net increase (decrease) |
1,061 |
27,081 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, |
2002 |
2001 |
2000 |
1999 |
1998 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, |
$ 45.08 |
$ 60.25 |
$ 53.20 |
$ 47.06 |
$ 41.21 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C |
.10 |
.01 |
(.01) |
.16 |
.22 |
Net realized and unrealized gain (loss) |
(11.88) |
(12.66) |
9.27 |
8.14 |
7.64 |
Total from investment |
(11.78) |
(12.65) |
9.26 |
8.30 |
7.86 |
Distributions from net investment income |
(.06) |
- |
(.14) |
(.10) |
(.26) |
Distributions from net |
- |
(2.52) |
(2.07) |
(2.06) |
(1.75) |
Total distributions |
(.06) |
(2.52) |
(2.21) |
(2.16) |
(2.01) |
Net asset value, end of period |
$ 33.24 |
$ 45.08 |
$ 60.25 |
$ 53.20 |
$ 47.06 |
Total Return A, B |
(26.16)% |
(21.92)% |
17.97% |
19.30% |
20.17% |
Ratios to Average Net Assets D |
|
|
|
|
|
Expenses before expense reductions |
.76% |
.89% |
.88% |
.71% |
.72% |
Expenses net of voluntary waivers, if any |
.76% |
.89% |
.88% |
.71% |
.72% |
Expenses net of all |
.74% |
.87% |
.86% |
.70% |
.70% |
Net investment income (loss) |
.25% |
.01% |
(.02)% |
.32% |
.52% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period |
$ 17,021 |
$ 23,032 |
$ 29,154 |
$ 23,684 |
$ 17,006 |
Portfolio turnover rate |
33% |
46% |
40% |
38% |
49% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Total returns do not include the effect of the former one time sales charge.
C Calculated based on average shares outstanding during the period.
D Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from directed brokerage or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflects expenses after reimbursement by the investment adviser but prior to reductions from directed brokerage or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.
See accompanying notes which are an integral part of the financial statements.
Annual Report
For the period ended July 31, 2002
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Blue Chip Growth Fund (the fund) is a fund of Fidelity Securities 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 financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds. Deferred amounts remain in the fund until distributed in accordance with the Plan.
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. As a result, no provision for income taxes is required. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, capital loss carryforwards, losses deferred due to wash sales and excise tax regulations.
The tax-basis components of distributable earnings and the federal tax cost as of period end was as follows:
Unrealized appreciation |
$ 3,221,137 |
Unrealized depreciation |
(2,850,961) |
Net unrealized appreciation (depreciation) |
370,176 |
Undistributed ordinary income |
21,321 |
Capital loss carryforward |
(1,572,081) |
Total Distributable earnings |
$ (1,180,584) |
Cost for federal income tax purposes |
$ 16,666,981 |
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax character of distributions paid during the year was as follows:
Ordinary Income |
$30,589 |
2. Operating Policies.
Joint Trading Account. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations.
Repurchase Agreements. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a custodian bank. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. 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 of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the fund's average net assets over a 36 month performance period). The upward, or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .49% of the fund's average net assets.
Sales Load. Fidelity Distributors Corporation (FDC), an affiliate of FMR, is the general distributor of the fund. Shares purchased before October 12, 1990 are subject to a 1% deferred sales charge upon redemption. For the period, FDC received deferred sales charges of $29 on redemption of shares of the fund.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .26% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $11,714 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
Annual Report
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 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. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. 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, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is 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.
7. Expense Reductions.
Certain security trades were directed to brokers who paid $3,242 of the fund's expenses. In addition, through arrangements with the fund's transfer agent, 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 transfer agent expenses by $581.
Annual Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity Blue Chip Growth Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Blue Chip Growth Fund (the Fund), a fund of Fidelity Securities Fund, including the portfolio of investments, as of July 31, 2002, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2002, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Blue Chip Growth Fund as of July 31, 2002, and 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 its 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.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 6, 2002
Annual Report
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, and review the fund's performance. Except for William O. McCoy and William S. Stavropoulos, each of the Trustees oversees 263 funds advised by FMR or an affiliate. Mr. McCoy oversees 265 funds advised by FMR or an affiliate, and Mr. Stavropoulos oversees 209 funds advised by FMR or an affiliate.
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. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. 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.
The fund's Statement of Additional Information (SAI) includes 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" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Edward C. Johnson 3d (72)** |
|
|
Year of Election or Appointment: 1984 President of Blue Chip Growth. Mr. Johnson also serves as President of other Fidelity funds. He is Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; a Director of Fidelity Management & Research (U.K.) Inc.; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. |
Abigail P. Johnson (40)** |
|
|
Year of Election or Appointment: 2001 Senior Vice President of Blue Chip Growth (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. |
Peter S. Lynch (59) |
|
|
Year of Election or Appointment: 1990 Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity Magellan Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. |
* 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.
** Edward C. Johnson 3d, Trustee and President of the funds, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested 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, Age; Principal Occupation |
|
J. Michael Cook (59) |
|
|
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of AT&T (2001), International Flavors & Fragrances, Inc. (2000), Rockwell Automation International (2000), The Dow Chemical Company (2000), and HCA - The Healthcare Company (1999). He is a Member of the Advisory Board of the Securities Regulation Institute and of the Directorship Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Panel to the Comptroller General of the United States. He also serves as a member of the Board of Overseers of the Columbia Business School and a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. |
Ralph F. Cox (70) |
|
|
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. |
Phyllis Burke Davis (70) |
|
|
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Toshiba International Advisory Group of Toshiba Corporation (2001) and a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. |
Robert M. Gates (58) |
|
|
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of Charles Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and manufacturing), TRW Inc. (automotive, space, defense, and information technology), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines) and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. |
Donald J. Kirk (69) |
|
|
Year of Election or Appointment: 1987 Mr. Kirk is a Public Governor of the National Association of Securities Dealers, Inc., and of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Stabilization Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). |
Marie L. Knowles (55) |
|
|
Year of Election or Appointment: 2001 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. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (health care service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. |
Ned C. Lautenbach (58) |
|
|
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and Chief Executive Officer (1999) and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman and C.E.O. of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial, 1997), Axcelis Technologies (semiconductors, 2000), and the Philharmonic Center for the Arts in Naples, Florida (1999). He also serves on the Board of Trustees of Fairfield University and is a member of the Council on Foreign Relations. |
Marvin L. Mann (69) |
|
|
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage, 1997) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. |
William O. McCoy (68) |
|
|
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm, 1997) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). |
William S. Stavropoulos (63) |
|
|
Year of Election or Appointment: 2002 Mr. Stavropoulos also serves as a Trustee (2001) or Member of the Advisory Board (2000) of other investment companies advised by FMR. He is Chairman of the Board and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions, 1997), BellSouth Corporation (telecommunications, 1997), and the Chemical Financial Corporation. He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research and Fordham University. In addition, Mr. Stavropoulos is a member of the American Chemical Society, The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Executive Officers:
Name, Age; Principal Occupation |
|
John B. McDowell (43) |
|
|
Year of Election or Appointment: 2002 Vice President of Blue Chip Growth. Mr. McDowell also serves as Vice President of certain Equity Funds (2002). He is Senior Vice President of FMR (1999), FMR Co., Inc. (2001), and Fidelity Management Trust Company (FMTC). Since joining Fidelity Investments in 1985, Mr. McDowell has worked as a research analyst and manager. |
Eric D. Roiter (53) |
|
|
Year of Election or Appointment: 1998 Secretary of Blue Chip Growth. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at Columbia University Law School (1996-1997). |
Maria F. Dwyer (43) |
|
|
Year of Election or Appointment: 2002 Treasurer of Blue Chip Growth. She also serves as Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. |
John H. Costello (55) |
|
|
Year of Election or Appointment: 1986 Assistant Treasurer of Blue Chip Growth. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. |
Francis V. Knox, Jr. (55) |
|
|
Year of Election or Appointment: 2002 Assistant Treasurer of Blue Chip Growth. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), Compliance Officer of FMR Corp., and Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002) and Fidelity Management & Research (Far East) Inc. (1991-2002). |
Thomas J. Simpson (44) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of Blue Chip Growth. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
The fund designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2003 of amounts for use in preparing 2002 income tax returns.
Annual Report
A special meeting of the fund's shareholders was held on August 15, 2002. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
||
To continue the effectiveness of Article VIII, Section 4 of the Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
34,152,718,540.11 |
89.928 |
Against |
1,595,684,478.44 |
4.202 |
Abstain |
2,229,268,880.72 |
5.870 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 2 |
||
To authorize the Trustees to adopt an amended and restated Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
33,359,879,895.48 |
87.841 |
Against |
2,506,585,409.20 |
6.600 |
Abstain |
2,111,206,594.59 |
5.559 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 3 |
||
To elect the thirteen nominees specified below as Trustees.* |
||
|
# of |
% of |
J. Michael Cook |
||
Affirmative |
36,227,611,366.72 |
95.392 |
Withheld |
1,750,060,532.55 |
4.608 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ralph F. Cox |
||
Affirmative |
36,182,850,121.37 |
95.274 |
Withheld |
1,794,821,777.90 |
4.726 |
TOTAL |
37,977,671,899.27 |
100.00 |
|
# of |
% of |
Phyllis Burke Davis |
||
Affirmative |
36,151,180,469.12 |
95.191 |
Withheld |
1,826,491,430.15 |
4.809 |
TOTAL |
37,977,671,899.27 |
100.00 |
Robert M. Gates |
||
Affirmative |
36,207,443,324.51 |
95.339 |
Withheld |
1,770,228,574.76 |
4.661 |
TOTAL |
37,977,671,899.27 |
100.00 |
Abigail P. Johnson |
||
Affirmative |
36,153,684,587.30 |
95.197 |
Withheld |
1,823,987,311.97 |
4.803 |
TOTAL |
37,977,671,899.27 |
100.00 |
Edward C. Johnson 3d |
||
Affirmative |
36,146,668,992.04 |
95.179 |
Withheld |
1,831,002,907.23 |
4.821 |
TOTAL |
37,977,671,899.27 |
100.00 |
Donald J. Kirk |
||
Affirmative |
36,212,215,628.07 |
95.351 |
Withheld |
1,765,456,271.20 |
4.649 |
TOTAL |
37,977,671,899.27 |
100.00 |
Marie L. Knowles |
||
Affirmative |
36,228,946,938.21 |
95.395 |
Withheld |
1,748,724,961.06 |
4.605 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ned C. Lautenbach |
||
Affirmative |
36,247,557,672.80 |
95.444 |
Withheld |
1,730,114,226.47 |
4.556 |
TOTAL |
37,977,671,899.27 |
100.00 |
Peter S. Lynch |
||
Affirmative |
36,238,626,074.48 |
95.421 |
Withheld |
1,739,045,824.79 |
4.579 |
TOTAL |
37,977,671,899.27 |
100.00 |
*Denotes trust-wide proposals and voting results. |
||
|
# of |
% of |
Marvin L. Mann |
||
Affirmative |
36,208,314,198.20 |
95.341 |
Withheld |
1,769,357,701.07 |
4.659 |
TOTAL |
37,977,671,899.27 |
100.00 |
William O. McCoy |
||
Affirmative |
36,216,504,381.47 |
95.371 |
Withheld |
1,758,167,517.80 |
4.629 |
TOTAL |
37,977,671,899.27 |
100.00 |
William S. Stavropoulos |
||
Affirmative |
36,124,608,895.89 |
95.121 |
Withheld |
1,853,063,003.38 |
4.879 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 4 |
||
To eliminate a fundamental investment policy of the fund. |
||
|
# of |
% of |
Affirmative |
8,372,469,066.92 |
82.084 |
Against |
934,996,173.45 |
9.167 |
Abstain |
701,603,524.73 |
6.879 |
Broker |
190,751,493.80 |
1.870 |
TOTAL |
10,199,820,258.90 |
100.00 |
PROPOSAL 5 |
||
To amend the fund's fundamental investment limitation concerning underwriting. |
||
|
# of |
% of |
Affirmative |
8,479,257,994.98 |
83.131 |
Against |
827,005,820.66 |
8.108 |
Abstain |
702,804,949.46 |
6.891 |
Broker |
190,751,493.80 |
1.870 |
TOTAL |
10,199,820,258.90 |
100.00 |
PROPOSAL 6 |
||
To amend the fund's fundamental investment limitation concerning lending. |
||
|
# of |
% of |
Affirmative |
8,404,212,024.08 |
82.396 |
Against |
897,888,253.90 |
8.803 |
Abstain |
706,968,487.12 |
6.931 |
Broker |
190,751,493.80 |
1.870 |
TOTAL |
10,199,820,258.90 |
100.00 |
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
Fidelity's Growth Funds
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
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Disciplined Equity Fund
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Export and Multinational Fund
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Focused Stock Fund
Growth Company Fund
Independence Fund
Large Cap Stock Fund
Leveraged Company Stock Fund
Low-Priced Stock Fund
Magellan® Fund
Mid-Cap Stock Fund
New Millennium Fund®
OTC Portfolio
Small Cap Independence Fund
Small Cap Stock Fund
Stock Selector
Structured Large Cap Growth Fund
Structured Large Cap Value Fund
Structured Mid Cap Growth Fund
Structured Mid Cap Value Fund
Tax Managed Stock Fund
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Value Fund
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®) (automated graphic)   1-800-544-5555
(automated graphic)   Automated line for quickest service
BCF-ANN-0902 158011
1.536058.105
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
Fidelity®
Fund
Annual Report
July 31, 2002
(2_fidelity_logos) (Registered_Trademark)
President's Message |
Ned Johnson on investing strategies. |
|
Performance |
How the fund has done over time. |
|
Fund Talk |
The manager's review of fund performance, strategy and outlook. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, |
|
Notes |
Notes to the financial statements. |
|
Report of Independent Accountants |
The auditors' opinion. |
|
Trustees and Officers |
|
|
Distributions |
|
|
Proxy Voting Results |
|
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.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Semiannual Report
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
The Dow Jones Industrial AverageSM - often regarded as a barometer of overall U.S. stock market performance - recorded two of its three largest point gains ever in late July. Still, many equity benchmarks were lingering near four- to five-year lows through the first seven months of 2002, due in part to investors' lack of faith in corporate accounting standards. As a result, many investors turned to fixed-income securities for capital protection.
While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value).
Cumulative Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Life of |
Fidelity® Dividend Growth |
|
-24.04% |
28.28% |
263.63% |
S&P 500 ® |
|
-23.63% |
2.23% |
147.85% |
Growth Funds Average |
|
-25.71% |
-3.27% |
n/a* |
Cumulative total returns show the fund's performance in percentage terms over a set period - in this case, one year, five years or since the fund started on April 27, 1993. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500SM Index - a market capitalization-weighted index of common stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the growth funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 1,995 mutual funds. These benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Lipper has created additional comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page <Click Here> of this report.(dagger)
Average Annual Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Life of |
Fidelity Dividend Growth |
|
-24.04% |
5.11% |
14.95% |
S&P 500 |
|
-23.63% |
0.44% |
10.29% |
Growth Funds Average |
|
-25.71% |
-1.11% |
n/a* |
Average annual total returns take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year. (Note: Lipper calculates average annual total returns by annualizing each fund's total return, then taking an arithmetic average. This may produce a different figure than that obtained by averaging the cumulative total returns and annualizing the result.)
* Not available
Annual Report
$10,000 Over Life of Fund
$10,000 Over Life of Fund: Let's say hypothetically that $10,000 was invested in Fidelity ® Dividend Growth Fund on April 27, 1993, when the fund started. As the chart shows, by July 31, 2002, the value of the investment would have grown to $36,363 - a 263.63% increase on the initial investment. For comparison, look at how the Standard & Poor's 500 Index did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have grown to $24,785 - a 147.85% increase.
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.
Understanding
Performance
How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain.
3(dagger) The LipperSM large-cap core funds average reflects the performance (excluding sales charges) of mutual funds with similar portfolio characteristics and capitalization. The Lipper large-cap supergroup average reflects the performance (excluding sales charges) of mutual funds with similar capitalization. As of July 31, 2002, the one year and five year cumulative total returns for the large-cap core funds average were -24.18% and -3.90%, respectively. The one year and five year average annual total returns were -24.18% and -0.96%, respectively. The one year and five year cumulative total returns for the large-cap supergroup average were -25.22% and -5.38%, respectively. The one year and five year average annual total returns were -25.22% and -1.34%, respectively.
Annual Report
Market Recap
Where's the bottom? Was it reached in late July 2002, when the Dow Jones Industrial AverageSM recorded two of its three best single day point gains ever? Or was it just a head fake, another tissue-thin false bottom before the next plunge? Only time will tell. But one thing for certain is that during the 12-month period ending July 31, 2002, equity investors endured one of the most challenging years in market history. Stocks recoiled from a series of tragic and troubling events that threatened investor confidence on a number of levels. When the period began, the U.S. economy was in recession, typically not a good time for stocks overall. Then came September 11, an unprecedented event that closed equity markets for nearly a week and sent them tumbling upon reopening. Shaken but not beaten, equity investors demonstrated their faith in the economic system, and stocks enjoyed a solid rebound in the fourth quarter of 2001. But then came the scandals: Enron, Arthur Andersen, WorldCom . . . and as the list went on, stock prices went down. When all was said and done, the blue-chip bellwether Dow Jones Industrial Average ended the 12-month period down 15.39%; the NASDAQ Composite® Index declined 34.26%; and the large-cap weighted Standard & Poor's 500SM Index suffered a loss of 23.63%.
(Portfolio Manager photograph)
An interview with Charles Mangum, Portfolio Manager of Fidelity Dividend Growth Fund
Q. How did the fund perform, Charles?
A. The fund's performance for the 12 months ended July 31, 2002, reflected the difficult environment we were operating in. The fund returned -24.04% during that time, while the Standard & Poor's 500 Index returned -23.63%, and the growth funds average, as tracked by Lipper Inc., returned -25.71%.
Q. The fund historically has gained more ground in tough markets. What happened this time?
A. First and foremost, the fund's performance was hindered by several bad stock picks on my part, most notably diversified media company Clear Channel Communications and drug stock Bristol-Myers Squibb. Both of these holdings fell in value for different reasons. For Bristol-Myers, anything that could have gone wrong basically did - including patent renewal rejections and a poor success rate for late-stage clinical products. Clear Channel, on the other hand, declined due to negative sentiment regarding several of the company's acquisitions during the period. These stocks were far and away the fund's biggest disappointments, but I still held a favorable view on their long-term prospects.
Annual Report
Fund Talk: The Manager's Overview - continued
Q. What other factors held the fund back?
A. In hindsight, my biggest mistake was shifting from a conservative mentality to an aggressive mindset prematurely. Within finance, for example, I added to the fund's stakes in more of the brokerage-type names such as Citigroup and Merrill Lynch, and I de-emphasized conservative areas such as regional banks. My thinking was that brokerage stocks were trading at significant discounts and their fundamentals were weak, giving them - I felt - more growth upside than regional banks, where fundamentals were stronger. Unfortunately, the market didn't share my viewpoint as investors continued to reward conservative names and seemed to punish everything else. Consumer staple stock Procter & Gamble was another example. I sold out of the fund's position in P&G during the first half of the period because I felt its valuation had gotten too rich. Then I watched from the sidelines as the company's stock price continued to climb. I'm sticking with the aggressive approach for now, because I firmly believe it will pay dividends down the road. I just made the jump a bit too early.
Q. Let's talk about some positives. What factors helped the fund's performance during the period?
A. Surprisingly, the sector that contributed most positively during the period was technology. The fund benefited relative to the S&P 500 by having slightly underweighted positions in industry leaders such as Microsoft and Oracle, and its investment in Dell Computer resulted in positive gains. I also was able to avoid many of the landmines within the tech sector during the period. Several of the fund's consumer-related holdings also worked out nicely as investors retreated to well-known, everyday-use brand names. Coca-Cola was the fund's second-best performer during the period, while Alberto-Culver - which makes a variety of health and beauty products - also performed well.
Q. Which other stocks performed well during the period? Which ones were disappointments?
A. Philip Morris was a good stock for a couple of reasons. First, the company came through on its earnings targets in a very unstable climate, and second, the cloud of tobacco litigation began to clear slightly. Another good performer was ChoicePoint, a company that provides risk management-related data to clients ranging from insurance companies to the U.S. government. In terms of disappointments, the fund's investments in Computer Associates and Tyco International underperformed, and the fund was held back further by not owning certain stocks, including health care company Johnson & Johnson and retailer Wal-Mart. AOL Time Warner continued to struggle as well, as the company experienced more growing pains from its landmark merger. Looking down the road, I feel that the company's impressive collection of media assets could eventually serve its shareholders well.
Q. What's your outlook, Charles?
A. I'm increasingly bullish on the market, mainly because I'm starting to see more attractive valuations out there. Good valuations are half the battle. We're also seeing some much-welcomed firmness in the economy, and interest rate levels, for now at least, remain attractive. Add it all up, and these factors could contribute to a restoration of investor confidence and a better earnings environment.
Annual Report
The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover 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.
Fund Facts
Goal: to increase the value of the fund's shares by investing mainly in common stocks of companies that have the potential to increase their current dividend or begin paying a dividend
Fund number: 330
Trading symbol: FDGFX
Start date: April 27, 1993
Size: as of July 31, 2002, more than $12.6 billion
Manager: Charles Mangum, since 1997; various Fidelity funds, 1992-1997; joined Fidelity in 1990
3Charles Mangum on the beleaguered drug stocks - and why he's sticking with them:
"It's been painful to watch the struggles of the pharmaceutical industry during the past 12 months. But while the poor performance of the drug group has hampered the fund's performance, it's very much worth noting that the drug industry has been down this difficult road before - and has at least battled back from adversity, or the perception of adversity - - on many occasions.
"The group fell under scrutiny, for instance, as far back as the 1960s, when lawmakers conducted hearings on the industry's pricing methods - and as recently as the mid-1990s, when there was talk of a nationalized health care plan. But the drug stocks have always bounced back.
"This most recent confluence of negative events has hit particularly hard, but I'm confident that the group can rebound again. First, these companies have a good track record of generating strong cash flows, and most are generally well run. Also, the U.S. drug business continued to grow at a healthy 10% annual clip during the period, and the aging demographics of the country are favorable. I think it's only a matter of time until the industry's strong fundamentals resurface, and investors reacquaint themselves with these stocks."
Annual Report
Top Ten Stocks as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Cardinal Health, Inc. |
7.3 |
7.0 |
General Electric Co. |
6.0 |
4.1 |
American International Group, Inc. |
5.4 |
2.2 |
Fannie Mae |
3.9 |
3.7 |
Clear Channel Communications, Inc. |
3.8 |
4.5 |
Citigroup, Inc. |
3.4 |
2.6 |
Pfizer, Inc. |
3.1 |
2.3 |
Schering-Plough Corp. |
2.8 |
1.3 |
Conoco, Inc. |
2.7 |
2.6 |
Philip Morris Companies, Inc. |
2.6 |
2.4 |
|
41.0 |
|
Top Five Market Sectors as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Financials |
22.1 |
19.0 |
Health Care |
20.3 |
18.0 |
Information Technology |
9.8 |
13.3 |
Industrials |
9.5 |
10.1 |
Consumer Discretionary |
9.2 |
10.4 |
Asset Allocation (% of fund's net assets) |
|||||||
As of July 31, 2002 * |
As of January 31, 2002 ** |
||||||
![]() |
Stocks 91.6% |
|
![]() |
Stocks 93.0% |
|
||
![]() |
Convertible |
|
![]() |
Convertible |
|
||
![]() |
Short-Term |
|
![]() |
Short-Term |
|
||
* Foreign |
0.7% |
|
** Foreign |
1.3% |
|
Annual Report
Showing Percentage of Net Assets
Common Stocks - 91.6% |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - 8.8% |
|||
Auto Components - 0.2% |
|||
Dana Corp. |
1,235,100 |
$ 19,860 |
|
Hotels, Restaurants & Leisure - 0.5% |
|||
McDonald's Corp. |
2,546,500 |
63,026 |
|
Household Durables - 0.1% |
|||
Leggett & Platt, Inc. |
584,000 |
13,134 |
|
Leisure Equipment & Products - 0.1% |
|||
Brunswick Corp. |
741,000 |
16,954 |
|
Media - 5.2% |
|||
AOL Time Warner, Inc. (a) |
15,567,982 |
179,032 |
|
Clear Channel Communications, Inc. (a) |
18,373,940 |
478,641 |
|
|
657,673 |
||
Multiline Retail - 0.6% |
|||
Federated Department Stores, Inc. (a) |
365,500 |
13,746 |
|
Target Corp. |
1,719,600 |
57,349 |
|
|
71,095 |
||
Specialty Retail - 2.1% |
|||
Home Depot, Inc. |
4,594,600 |
141,881 |
|
Limited Brands, Inc. |
1,320,000 |
23,720 |
|
Lowe's Companies, Inc. |
2,733,300 |
103,455 |
|
|
269,056 |
||
TOTAL CONSUMER DISCRETIONARY |
1,110,798 |
||
CONSUMER STAPLES - 8.9% |
|||
Beverages - 1.9% |
|||
PepsiCo, Inc. |
3,170,290 |
136,132 |
|
The Coca-Cola Co. |
2,001,200 |
99,940 |
|
|
236,072 |
||
Food & Drug Retailing - 2.6% |
|||
Albertson's, Inc. |
2,710,800 |
76,390 |
|
CVS Corp. |
6,516,000 |
186,358 |
|
Safeway, Inc. (a) |
2,474,500 |
68,841 |
|
|
331,589 |
||
Food Products - 0.0% |
|||
McCormick & Co., Inc. (non-vtg.) |
266,200 |
6,056 |
|
Personal Products - 1.8% |
|||
Alberto-Culver Co.: |
|
|
|
Class A (c) |
3,987,300 |
179,389 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
CONSUMER STAPLES - continued |
|||
Personal Products - continued |
|||
Alberto-Culver Co.: - continued |
|
|
|
Class B |
5,000 |
$ 238 |
|
Gillette Co. |
1,294,010 |
42,547 |
|
|
222,174 |
||
Tobacco - 2.6% |
|||
Philip Morris Companies, Inc. |
7,263,500 |
334,484 |
|
TOTAL CONSUMER STAPLES |
1,130,375 |
||
ENERGY - 5.5% |
|||
Energy Equipment & Services - 0.4% |
|||
Cooper Cameron Corp. (a) |
365,000 |
15,691 |
|
GlobalSantaFe Corp. |
513,279 |
11,569 |
|
Halliburton Co. |
1,432,000 |
18,902 |
|
|
46,162 |
||
Oil & Gas - 5.1% |
|||
ChevronTexaco Corp. |
2,300,900 |
172,568 |
|
Conoco, Inc. |
14,080,852 |
339,630 |
|
Exxon Mobil Corp. |
3,811,900 |
140,125 |
|
|
652,323 |
||
TOTAL ENERGY |
698,485 |
||
FINANCIALS - 22.1% |
|||
Banks - 4.5% |
|||
Bank of America Corp. |
1,079,600 |
71,793 |
|
Bank One Corp. |
1,595,100 |
62,065 |
|
Comerica, Inc. |
1,202,745 |
69,952 |
|
FleetBoston Financial Corp. |
5,318,000 |
123,378 |
|
PNC Financial Services Group, Inc. |
1,696,310 |
71,499 |
|
Synovus Financial Corp. |
1,639,900 |
39,358 |
|
Wachovia Corp. |
3,723,062 |
133,286 |
|
|
571,331 |
||
Diversified Financials - 11.3% |
|||
Citigroup, Inc. |
12,881,639 |
432,050 |
|
Fannie Mae |
6,521,480 |
488,394 |
|
Goldman Sachs Group, Inc. |
749,900 |
54,855 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
FINANCIALS - continued |
|||
Diversified Financials - continued |
|||
Merrill Lynch & Co., Inc. |
6,692,100 |
$ 238,573 |
|
Morgan Stanley |
5,320,300 |
214,674 |
|
|
1,428,546 |
||
Insurance - 6.3% |
|||
Allmerica Financial Corp. |
1,437,000 |
39,230 |
|
American International Group, Inc. |
10,739,400 |
686,462 |
|
Hartford Financial Services Group, Inc. |
1,063,300 |
53,803 |
|
PartnerRe Ltd. |
344,000 |
16,615 |
|
|
796,110 |
||
TOTAL FINANCIALS |
2,795,987 |
||
HEALTH CARE - 20.3% |
|||
Health Care Equipment & Supplies - 1.0% |
|||
Baxter International, Inc. |
391,800 |
15,637 |
|
C.R. Bard, Inc. |
1,006,200 |
54,405 |
|
Guidant Corp. (a) |
1,763,600 |
61,373 |
|
|
131,415 |
||
Health Care Providers & Services - 7.3% |
|||
Cardinal Health, Inc. |
16,110,070 |
927,945 |
|
Pharmaceuticals - 12.0% |
|||
Bristol-Myers Squibb Co. |
11,759,916 |
275,535 |
|
Eli Lilly & Co. |
117,900 |
6,888 |
|
Merck & Co., Inc. |
5,419,600 |
268,812 |
|
Pfizer, Inc. |
12,306,700 |
398,122 |
|
Pharmacia Corp. |
821,700 |
36,763 |
|
Schering-Plough Corp. |
13,653,100 |
348,154 |
|
Wyeth |
4,427,600 |
176,661 |
|
|
1,510,935 |
||
TOTAL HEALTH CARE |
2,570,295 |
||
INDUSTRIALS - 9.5% |
|||
Airlines - 0.2% |
|||
AMR Corp. (a) |
710,500 |
7,943 |
|
Delta Air Lines, Inc. |
763,800 |
11,900 |
|
Northwest Airlines Corp. (a) |
745,700 |
6,920 |
|
|
26,763 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INDUSTRIALS - continued |
|||
Building Products - 0.3% |
|||
Masco Corp. |
1,453,300 |
$ 35,170 |
|
Commercial Services & Supplies - 1.1% |
|||
Automatic Data Processing, Inc. |
549,100 |
20,476 |
|
ChoicePoint, Inc. (a) |
1,423,200 |
59,618 |
|
First Data Corp. |
1,551,500 |
54,225 |
|
|
134,319 |
||
Industrial Conglomerates - 7.2% |
|||
General Electric Co. |
23,703,900 |
763,266 |
|
Tyco International Ltd. |
11,907,700 |
152,419 |
|
|
915,685 |
||
Machinery - 0.4% |
|||
Ingersoll-Rand Co. Ltd. Class A |
1,121,800 |
43,066 |
|
Parker Hannifin Corp. |
191,700 |
7,718 |
|
|
50,784 |
||
Road & Rail - 0.3% |
|||
Burlington Northern Santa Fe Corp. |
1,468,690 |
43,209 |
|
TOTAL INDUSTRIALS |
1,205,930 |
||
INFORMATION TECHNOLOGY - 7.9% |
|||
Communications Equipment - 0.8% |
|||
Cisco Systems, Inc. (a) |
5,672,200 |
74,816 |
|
Comverse Technology, Inc. (a) |
3,800,000 |
30,248 |
|
|
105,064 |
||
Computers & Peripherals - 1.8% |
|||
Dell Computer Corp. (a) |
6,908,700 |
172,234 |
|
EMC Corp. (a) |
3,810,300 |
28,577 |
|
Sun Microsystems, Inc. (a) |
5,347,000 |
20,960 |
|
|
221,771 |
||
Electronic Equipment & Instruments - 0.3% |
|||
Solectron Corp. (a) |
8,100,200 |
32,401 |
|
IT Consulting & Services - 0.2% |
|||
Computer Sciences Corp. (a) |
70,700 |
2,616 |
|
Electronic Data Systems Corp. |
711,100 |
26,147 |
|
|
28,763 |
||
Semiconductor Equipment & Products - 2.0% |
|||
Altera Corp. (a) |
1,302,400 |
15,407 |
|
Analog Devices, Inc. (a) |
800,000 |
19,280 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductor Equipment & Products - continued |
|||
Intel Corp. |
4,230,700 |
$ 79,495 |
|
Linear Technology Corp. |
579,000 |
15,679 |
|
Micron Technology, Inc. (a) |
2,495,100 |
48,629 |
|
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR |
2,627,680 |
23,964 |
|
Texas Instruments, Inc. |
200,000 |
4,630 |
|
United Microelectronics Corp. sponsored ADR |
4,735,600 |
28,129 |
|
Xilinx, Inc. (a) |
577,700 |
11,086 |
|
|
246,299 |
||
Software - 2.8% |
|||
Adobe Systems, Inc. |
831,170 |
19,915 |
|
Computer Associates International, Inc. |
4,697,200 |
43,872 |
|
Microsoft Corp. (a) |
5,593,700 |
268,386 |
|
Network Associates, Inc. (a) |
736,100 |
8,944 |
|
Oracle Corp. (a) |
1,043,400 |
10,443 |
|
VERITAS Software Corp. (a) |
377,000 |
6,345 |
|
|
357,905 |
||
TOTAL INFORMATION TECHNOLOGY |
992,203 |
||
MATERIALS - 0.4% |
|||
Chemicals - 0.2% |
|||
E.I. du Pont de Nemours & Co. |
227,100 |
9,518 |
|
Praxair, Inc. |
207,365 |
10,845 |
|
|
20,363 |
||
Metals & Mining - 0.2% |
|||
Alcoa, Inc. |
1,072,800 |
29,019 |
|
TOTAL MATERIALS |
49,382 |
||
TELECOMMUNICATION SERVICES - 6.2% |
|||
Diversified Telecommunication Services - 6.0% |
|||
AT&T Corp. |
5,107,681 |
51,996 |
|
BellSouth Corp. |
6,343,900 |
170,334 |
|
Qwest Communications International, Inc. (a) |
22,320,900 |
28,571 |
|
SBC Communications, Inc. |
8,755,091 |
242,166 |
|
Verizon Communications, Inc. |
8,000,250 |
264,008 |
|
|
757,075 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
TELECOMMUNICATION SERVICES - continued |
|||
Wireless Telecommunication Services - 0.2% |
|||
Nextel Communications, Inc. Class A (a) |
4,604,200 |
$ 26,382 |
|
TOTAL TELECOMMUNICATION SERVICES |
783,457 |
||
UTILITIES - 2.0% |
|||
Electric Utilities - 1.9% |
|||
FirstEnergy Corp. |
3,726,900 |
114,602 |
|
Southern Co. |
2,470,600 |
71,104 |
|
TXU Corp. |
1,296,300 |
55,909 |
|
|
241,615 |
||
Multi-Utilities & Unregulated Power - 0.1% |
|||
AES Corp. (a) |
1,728,300 |
3,543 |
|
TOTAL UTILITIES |
245,158 |
||
TOTAL COMMON STOCKS (Cost $13,560,055) |
11,582,070 |
||
Convertible Preferred Stocks - 0.0% |
|||
|
|
|
|
FINANCIALS - 0.0% |
|||
Diversified Financials - 0.0% |
|||
AES Trust VII $3.00 |
936,200 |
5,046 |
Corporate Bonds - 2.7% |
|||||
Ratings |
Principal |
|
|||
Convertible Bonds - 2.7% |
|||||
CONSUMER DISCRETIONARY - 0.4% |
|||||
Media - 0.3% |
|||||
EchoStar Communications Corp.: |
|
|
|
|
|
4.875% 1/1/07 |
Caa1 |
|
$ 28,560 |
19,706 |
|
5.75% 5/15/08 (d) |
Caa1 |
|
16,500 |
11,220 |
|
|
30,926 |
||||
Corporate Bonds - continued |
|||||
Ratings |
Principal |
Value (Note 1) |
|||
Convertible Bonds - continued |
|||||
CONSUMER DISCRETIONARY - continued |
|||||
Specialty Retail - 0.1% |
|||||
Gap, Inc. 5.75% 3/15/09 (d) |
Ba3 |
|
$ 15,590 |
$ 15,907 |
|
TOTAL CONSUMER DISCRETIONARY |
46,833 |
||||
FINANCIALS - 0.0% |
|||||
Diversified Financials - 0.0% |
|||||
Elan Finance Corp. Ltd. liquid yield option note 0% 12/14/18 |
Caa1 |
|
7,170 |
1,828 |
|
INFORMATION TECHNOLOGY - 1.9% |
|||||
Communications Equipment - 1.2% |
|||||
CIENA Corp. 3.75% 2/1/08 |
Ba3 |
|
23,425 |
13,938 |
|
Comverse Technology, Inc. 1.5% 12/1/05 |
BB |
|
7,530 |
5,837 |
|
Juniper Networks, Inc. 4.75% 3/15/07 |
B2 |
|
75,970 |
50,705 |
|
ONI Systems Corp. 5% 10/15/05 |
B- |
|
102,070 |
68,334 |
|
Redback Networks, Inc. 5% 4/1/07 |
- |
|
39,460 |
13,771 |
|
|
152,585 |
||||
Electronic Equipment & Instruments - 0.4% |
|||||
Sanmina-SCI Corp. 4.25% 5/1/04 |
Ba2 |
|
55,405 |
45,709 |
|
Semiconductor Equipment & Products - 0.3% |
|||||
Agere Systems, Inc. 6.5% 12/15/09 |
B2 |
|
9,674 |
7,810 |
|
Atmel Corp. 0% 5/23/21 |
CCC+ |
|
14,729 |
3,056 |
|
LSI Logic Corp. 4% 2/15/05 |
Ba3 |
|
2,240 |
1,772 |
|
Vitesse Semiconductor Corp. 4% 3/15/05 |
B3 |
|
44,910 |
31,044 |
|
|
43,682 |
||||
TOTAL INFORMATION TECHNOLOGY |
241,976 |
||||
TELECOMMUNICATION SERVICES - 0.4% |
|||||
Wireless Telecommunication Services - 0.4% |
|||||
Nextel Communications, Inc.: |
|
|
|
|
|
6% 6/1/11 (d) |
B3 |
|
20,000 |
11,400 |
|
6% 6/1/11 |
B3 |
|
63,450 |
36,167 |
|
|
47,567 |
||||
TOTAL CONVERTIBLE BONDS |
338,204 |
||||
Corporate Bonds - continued |
|||||
Ratings |
Principal |
Value (Note 1) |
|||
Nonconvertible Bonds - 0.0% |
|||||
UTILITIES - 0.0% |
|||||
Multi-Utilities & Unregulated Power - 0.0% |
|||||
AES Corp.: |
|
|
|
|
|
9.375% 9/15/10 |
Ba3 |
|
$ 13,425 |
$ 5,370 |
|
9.5% 6/1/09 |
Ba3 |
|
4,485 |
1,839 |
|
|
7,209 |
||||
TOTAL CORPORATE BONDS (Cost $430,709) |
345,413 |
Money Market Funds - 5.0% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.84% (b) |
610,650,714 |
610,651 |
|
Fidelity Securities Lending Cash Central Fund, 1.86% (b) |
18,962,600 |
18,963 |
|
TOTAL MONEY MARKET FUNDS (Cost $629,614) |
629,614 |
||
TOTAL INVESTMENT PORTFOLIO - 99.3% (Cost $14,633,538) |
12,562,143 |
||
NET OTHER ASSETS - 0.7% |
86,036 |
||
NET ASSETS - 100% |
$ 12,648,179 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Affiliated company |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $38,527,000 or 0.3% of net assets. |
(e) For certain securities not individually rated by a nationally recognized rating agency, the ratings listed have been assigned by Fidelity. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $13,522,755,000 and $11,429,096,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $841,000 for the period. |
Income Tax Information |
The fund hereby designates approximately $161,644,000 as a 20%-rate capital gain dividend for the purpose of the dividend paid deduction. |
At July 31, 2002, the fund had a capital loss carryforward of approximately $221,038,000 all of which will expire on July 31, 2010. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) |
July 31, 2002 |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $16,041) (cost $14,633,538) - See accompanying schedule |
|
$ 12,562,143 |
Cash |
|
205 |
Receivable for investments sold |
|
98,119 |
Receivable for fund shares sold |
|
101,691 |
Dividends receivable |
|
18,546 |
Interest receivable |
|
7,774 |
Other receivables |
|
15 |
Total assets |
|
12,788,493 |
Liabilities |
|
|
Payable for investments purchased |
$ 95,603 |
|
Payable for fund shares redeemed |
16,187 |
|
Accrued management fee |
8,286 |
|
Other payables and accrued expenses |
1,275 |
|
Collateral on securities loaned, at value |
18,963 |
|
Total liabilities |
|
140,314 |
Net Assets |
|
$ 12,648,179 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 15,008,239 |
Undistributed net investment income |
|
89,855 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(378,524) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(2,071,391) |
Net Assets, for 569,752 shares outstanding |
|
$ 12,648,179 |
Net Asset Value, offering price and redemption price per share ($12,648,179 ÷ 569,752 shares) |
|
$ 22.20 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands |
Year ended July 31, 2002 |
|
Investment Income |
|
|
Dividends (including $1,445 received from affiliated issuers) |
|
$ 195,489 |
Interest |
|
75,681 |
Security lending |
|
279 |
Total income |
|
271,449 |
Expenses |
|
|
Management fee |
$ 85,229 |
|
Performance adjustment |
25,071 |
|
Transfer agent fees |
31,954 |
|
Accounting and security lending fees |
1,085 |
|
Non-interested trustees' compensation |
46 |
|
Custodian fees and expenses |
246 |
|
Registration fees |
407 |
|
Audit |
105 |
|
Legal |
70 |
|
Miscellaneous |
216 |
|
Total expenses before reductions |
144,429 |
|
Expense reductions |
(4,622) |
139,807 |
Net investment income (loss) |
|
131,642 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities (including realized gain (loss) of $5,646 on sales of investments in affiliated issuers) |
(259,085) |
|
Foreign currency transactions |
12 |
|
Total net realized gain (loss) |
|
(259,073) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(3,908,762) |
|
Assets and liabilities in foreign currencies |
5 |
|
Total change in net unrealized appreciation (depreciation) |
|
(3,908,757) |
Net gain (loss) |
|
(4,167,830) |
Net increase (decrease) in net assets resulting from operations |
|
$ (4,036,188) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands |
Year ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 131,642 |
$ 66,189 |
Net realized gain (loss) |
(259,073) |
407,614 |
Change in net unrealized appreciation (depreciation) |
(3,908,757) |
9,069 |
Net increase (decrease) in net assets resulting |
(4,036,188) |
482,872 |
Distributions to shareholders from net investment income |
(76,000) |
(63,404) |
Distributions to shareholders from net realized gain |
(163,168) |
(849,513) |
Total distributions |
(239,168) |
(912,917) |
Share transactions |
6,234,565 |
6,231,162 |
Reinvestment of distributions |
230,633 |
883,411 |
Cost of shares redeemed |
(4,004,387) |
(2,653,375) |
Net increase (decrease) in net assets resulting from share transactions |
2,460,811 |
4,461,198 |
Total increase (decrease) in net assets |
(1,814,545) |
4,031,153 |
Net Assets |
|
|
Beginning of period |
14,462,724 |
10,431,571 |
End of period (including undistributed net investment income of $89,855 and undistributed net investment income of $45,363, respectively) |
$ 12,648,179 |
$ 14,462,724 |
Other Information Shares |
|
|
Sold |
229,387 |
209,167 |
Issued in reinvestment of distributions |
8,598 |
28,999 |
Redeemed |
(154,448) |
(89,565) |
Net increase (decrease) |
83,537 |
148,601 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, |
2002 |
2001 |
2000 |
1999 |
1998 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period |
$ 29.75 |
$ 30.90 |
$ 31.14 |
$ 28.11 |
$ 25.07 |
Income from Investment Operations |
|
|
|
|
|
Net investment |
.24 D |
.16 |
.15 |
.17 |
.17 |
Net realized and unrealized gain (loss) |
(7.31) D |
1.27 |
1.89 |
5.18 |
5.21 |
Total from investment |
(7.07) |
1.43 |
2.04 |
5.35 |
5.38 |
Distributions from net investment income |
(.15) |
(.18) |
(.14) |
(.13) |
(.15) |
Distributions from net realized gain |
(.33) |
(2.40) |
(2.14) |
(2.19) |
(2.19) |
Total distributions |
(.48) |
(2.58) |
(2.28) |
(2.32) |
(2.34) |
Net asset value, end of period |
$ 22.20 |
$ 29.75 |
$ 30.90 |
$ 31.14 |
$ 28.11 |
Total Return A |
(24.04)% |
4.58% |
7.00% |
21.90% |
23.81% |
Ratios to Average Net Assets C |
|
|
|
|
|
Expenses before expense reductions |
.98% |
.97% |
.77% |
.87% |
.89% |
Expenses net of voluntary waivers, if any |
.98% |
.97% |
.77% |
.87% |
.89% |
Expenses net of all |
.95% |
.94% |
.74% |
.84% |
.86% |
Net investment |
.90% D |
.54% |
.52% |
.58% |
.64% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (in millions) |
$ 12,648 |
$ 14,463 |
$ 10,432 |
$ 14,283 |
$ 7,371 |
Portfolio turnover rate |
81% |
88% |
86% |
104% |
109% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from directed brokerage or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflects expenses after reimbursement by the investment adviser but prior to reductions from directed brokerage or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.
D Effective August 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. The effect of this change during the period was to increase net investment income (loss) per share by $.06 and decrease net realized and unrealized gain (loss) per share by $.06. Without this change the ratio of net investment income (loss) to average net assets would have been .68%. Per share data, ratios and supplemental data for prior periods have not been restated to reflect this change.
See accompanying notes which are an integral part of the financial statements.
Annual Report
For the period ended July 31, 2002
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Dividend Growth Fund (the fund) is a fund of Fidelity Securities 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 financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
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. As a result, no provision for income taxes is required. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the fund will treat a portion of the proceeds from shares redeemed as a distribution from net investment income for income tax purposes. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, prior period premium and discount on debt securities, market discount, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-basis components of distributable earnings and the federal tax cost as of period end was as follows:
Unrealized appreciation |
$ 945,801 |
Unrealized depreciation |
(3,075,822) |
Net unrealized appreciation (depreciation) |
(2,130,021) |
Undistributed ordinary income |
71,130 |
Capital loss carryforward |
(221,038) |
Total Distributable earnings |
$ (2,279,929) |
Cost for federal income tax purposes |
$ 14,692,164 |
The tax character of distributions paid during the year was as follows:
Ordinary Income |
$ 77,524 |
Long-term Capital Gains |
161,644 |
Total |
$ 239,168 |
Change in Accounting Principle. Effective August 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. The cumulative effect of this accounting change had no impact on total net assets of the fund, but resulted in a $16,149 increase to the cost of securities held and a corresponding increase to accumulated net undistributed realized gain (loss), based on securities held by the fund on August 1, 2001.
The effect of this change during the period, was to increase net investment income (loss) by $32,330; decrease net unrealized appreciation/ depreciation by $17,409; and decrease net realized gain (loss) by $14,921. The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.
2. Operating Policies.
Joint Trading Account. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
2. Operating Policies - continued
Repurchase Agreements. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a custodian bank. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. 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 of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ±.20% of the fund's average net assets over a 36 month performance period). The upward, or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .75% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except
Annual Report
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees - continued
proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .22% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $11,376 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 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. During the period, there were no borrowings on this line of credit.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. 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, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is 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.
7. Expense Reductions.
Certain security trades were directed to brokers who paid $4,298 of the fund's expenses. In addition, through arrangements with the fund's custodian and transfer agent, 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 and transfer agent expenses by $12 and $312, respectively.
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate |
Purchase |
Sales |
Dividend |
Value |
Alberto-Culver Co. Class A |
$ - |
$ 6,324 |
$ 1,445 |
$ 179,389 |
Annual Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Dividend Growth 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 Dividend Growth Fund (a fund of Fidelity Securities Fund) at July 31, 2002, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, 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 Dividend Growth 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 auditing standards generally accepted in the United States of America which 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 July 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 6, 2002
Annual Report
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, and review the fund's performance. Except for William O. McCoy and William S. Stavropoulos, each of the Trustees oversees 262 funds advised by FMR or an affiliate. Mr. McCoy oversees 264 funds advised by FMR or an affiliate, and Mr. Stavropoulos oversees 208 funds advised by FMR or an affiliate.
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. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. 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.
The fund's Statement of Additional Information (SAI) includes 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" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Edward C. Johnson 3d (72)** |
|
|
Year of Election or Appointment: 1984 President of Dividend Growth. Mr. Johnson also serves as President of other Fidelity funds. He is Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; a Director of Fidelity Management & Research (U.K.) Inc.; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. |
Abigail P. Johnson (40)** |
|
|
Year of Election or Appointment: 2001 Senior Vice President of Dividend Growth (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. |
Peter S. Lynch (59) |
|
|
Year of Election or Appointment: 1990 Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity Magellan Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. |
* 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.
** Edward C. Johnson 3d, Trustee and President of the funds, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested 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, Age; Principal Occupation |
|
J. Michael Cook (59) |
|
|
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of AT&T (2001), International Flavors & Fragrances, Inc. (2000), Rockwell Automation International (2000), The Dow Chemical Company (2000), and HCA - The Healthcare Company (1999). He is a Member of the Advisory Board of the Securities Regulation Institute and of the Directorship Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Panel to the Comptroller General of the United States. He also serves as a member of the Board of Overseers of the Columbia Business School and a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. |
Ralph F. Cox (70) |
|
|
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. |
Phyllis Burke Davis (70) |
|
|
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Toshiba International Advisory Group of Toshiba Corporation (2001) and a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. |
Robert M. Gates (58) |
|
|
Year of Election or Appointment: 1997 Dr. Gates is a President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of Charles Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and manufacturing), TRW Inc. (automotive, space, defense, and information technology), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines) and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. |
Donald J. Kirk (69) |
|
|
Year of Election or Appointment: 1987 Mr. Kirk is a Public Governor of the National Association of Securities Dealers, Inc., and of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Art Stabilization Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). |
Marie L. Knowles (55) |
|
|
Year of Election or Appointment: 2001 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. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. |
Ned C. Lautenbach (58) |
|
|
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and Chief Executive Officer (1999) and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman and C.E.O. of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial, 1997), Axcelis Technologies (semiconductors, 2000), and the Philharmonic Center for the Arts in Naples, Florida (1999). He also serves on the Board of Trustees of Fairfield University and is a member of the Council on Foreign Relations. |
Marvin L. Mann (69) |
|
|
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage, 1997) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. |
William O. McCoy (68) |
|
|
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm, 1997) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). |
William S. Stavropoulos (63) |
|
|
Year of Election or Appointment: 2002 Mr. Stavropoulos also serves as a Trustee (2001) or Member of the Advisory Board (2000) of other investment companies advised by FMR. He is Chairman of the Board and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions, 1997), BellSouth Corporation (telecommunications, 1997), and the Chemical Financial Corporation. He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research and Fordham University. In addition, Mr. Stavropoulos is a member of the American Chemical Society, The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Executive Officers:
Correspondence intended for each executive officer may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
John McDowell (43) |
|
|
Year of Election or Appointment: 2002 Vice President of Dividend Growth. Mr. McDowell also serves as Vice President of certain Equity Funds (2002). He is Senior Vice President of FMR (1999), FMR Co., Inc. (2001), and Fidelity Management Trust Company (FMTC). Since joining Fidelity Investments in 1985, Mr. McDowell has worked as a research analyst and manager.
|
Charles A. Mangum (37) |
|
|
Year of Election or Appointment: 1997 Vice President of Dividend Growth. Mr. Mangum also serves as Vice President of other funds advised by FMR. Prior to assuming his current responsibilities, Mr. Mangum managed a variety of Fidelity funds.
|
Eric D. Roiter (53) |
|
|
Year of Election or Appointment: 1998 Secretary of Dividend Growth. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at Columbia University Law School (1996-1997). |
Maria F. Dwyer (43) |
|
|
Year of Election or Appointment: 2002 Treasurer of Dividend Growth. She also serves as Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. |
John H. Costello (55) |
|
|
Year of Election or Appointment: 1993 Assistant Treasurer of Dividend Growth. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. |
Francis V. Knox, Jr. (55) |
|
|
Year of Election or Appointment: 2002 Assistant Treasurer of Dividend Growth. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), Compliance Officer of FMR Corp., and Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002) and Fidelity Management & Research (Far East) Inc. (1991-2002). |
Thomas J. Simpson (44) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of Dividend Growth. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
The fund designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2003 of amounts for use in preparing 2002 income tax returns.
Annual Report
A special meeting of the fund's shareholders was held on August 15, 2002. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
||
To continue the effectiveness of Article VIII, Section 4 of the Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
34,152,718,540.11 |
89.928 |
Against |
1,595,684,478.44 |
4.202 |
Abstain |
2,229,268,880.72 |
5.870 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 2 |
||
To authorize the Trustees to adopt an amended and restated Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
33,359,879,895.48 |
87.841 |
Against |
2,506,585,409.20 |
6.600 |
Abstain |
2,111,206,594.59 |
5.559 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 3 |
||
To elect the thirteen nominees specified below as Trustees.* |
||
|
# of |
% of |
J. Michael Cook |
||
Affirmative |
36,227,611,366.72 |
95.392 |
Withheld |
1,750,060,532.55 |
4.608 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ralph F. Cox |
||
Affirmative |
36,182,850,121.37 |
95.274 |
Withheld |
1,794,821,777.90 |
4.726 |
TOTAL |
37,977,671,899.27 |
100.00 |
Phyllis Burke Davis |
||
Affirmative |
36,151,180,469.12 |
95.191 |
Withheld |
1,826,491,430.15 |
4.809 |
TOTAL |
37,977,671,899.27 |
100.00 |
|
# of |
% of |
Robert M. Gates |
||
Affirmative |
36,207,443,324.51 |
95.339 |
Withheld |
1,770,228,574.76 |
4.661 |
TOTAL |
37,977,671,899.27 |
100.00 |
Abigail P. Johnson |
||
Affirmative |
36,153,684,587.30 |
95.197 |
Withheld |
1,823,987,311.97 |
4.803 |
TOTAL |
37,977,671,899.27 |
100.00 |
Edward C. Johnson 3d |
||
Affirmative |
36,146,668,992.04 |
95.179 |
Withheld |
1,831,002,907.23 |
4.821 |
TOTAL |
37,977,671,899.27 |
100.00 |
Donald J. Kirk |
||
Affirmative |
36,212,215,628.07 |
95.351 |
Withheld |
1,765,456,271.20 |
4.649 |
TOTAL |
37,977,671,899.27 |
100.00 |
Marie L. Knowles |
||
Affirmative |
36,228,946,938.21 |
95.395 |
Withheld |
1,748,724,961.06 |
4.605 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ned C. Lautenbach |
||
Affirmative |
36,247,557,672.80 |
95.444 |
Withheld |
1,730,114,226.47 |
4.556 |
TOTAL |
37,977,671,899.27 |
100.00 |
Peter S. Lynch |
||
Affirmative |
36,238,626,074.48 |
95.421 |
Withheld |
1,739,045,824.79 |
4.579 |
TOTAL |
37,977,671,899.27 |
100.00 |
Marvin L. Mann |
||
Affirmative |
36,208,314,198.20 |
95.341 |
Withheld |
1,769,357,701.07 |
4.659 |
TOTAL |
37,977,671,899.27 |
100.00 |
*Denotes trust-wide proposals and voting results.
Annual Report
Proxy Voting Results - continued
|
# of |
% of |
William O. McCoy |
||
Affirmative |
36,216,504,381.47 |
95.371 |
Withheld |
1,758,167,517.80 |
4.629 |
TOTAL |
37,977,671,899.27 |
100.00 |
William S. Stavropoulos |
||
Affirmative |
36,124,608,895.89 |
95.121 |
Withheld |
1,853,063,003.38 |
4.879 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 5 |
||
To amend the fund's fundamental investment limitation concerning underwriting. |
||
|
# of |
% of |
Affirmative |
6,644,594,550.80 |
84.629 |
Against |
514,692,287.86 |
6.555 |
Abstain |
429,292,880.87 |
5.468 |
Broker |
262,902,861.30 |
3.348 |
TOTAL |
7,851,482,580.83 |
100.00 |
PROPOSAL 6 |
||
To amend the fund's fundamental investment limitation concerning lending. |
||
|
# of |
% of |
Affirmative |
6,574,065,386.51 |
83.730 |
Against |
575,981,896.06 |
7.337 |
Abstain |
438,532,436.96 |
5.585 |
Broker |
262,902,861.30 |
3.348 |
TOTAL |
7,851,482,580.83 |
100.00 |
Annual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
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Fidelity Automated
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2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
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If you are not currently on the Internet, call EarthLink Sprint at 1-800-EarthLink, and be sure to ask for registration number SMD004 to receive a special Fidelity package that includes 30 days of free Internet access. EarthLink is North America's #1 independent Internet access provider.
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Annual Report
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Annual Report
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Fidelity
Portfolio
Annual Report
July 31, 2002
(2_fidelity_logos) (Registered_Trademark)
President's Message |
Ned Johnson on investing strategies. |
|
Performance |
How the fund has done over time. |
|
Fund Talk |
The manager's review of fund performance, strategy and outlook. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the past six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, |
|
Notes |
Notes to the financial statements. |
|
Independent Auditors' Report |
The auditors' opinion. |
|
Trustees and Officers |
|
|
Proxy Voting Results |
|
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.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Semiannual Report
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
The Dow Jones Industrial AverageSM - often regarded as a barometer of overall U.S. stock market performance - recorded two of its three largest point gains ever in late July. Still, many equity benchmarks were lingering near four- to five-year lows through the first seven months of 2002, due in part to investors' lack of faith in corporate accounting standards. As a result, many investors turned to fixed-income securities for capital protection.
While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value).
Cumulative Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity® OTC |
|
-28.82% |
-5.29% |
131.97% |
NASDAQ® |
|
-34.26% |
-15.36% |
143.43% |
Mid-Cap Funds Average |
|
-22.96% |
10.39% |
157.45% |
Cumulative total returns show the fund's performance in percentage terms over a set period - in this case, one year, five years or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the NASDAQ Composite ® Index - a market capitalization-weighted index that is designed to represent the performance of the National Market System which includes over 5,000 stocks traded only over-the-counter and not on an exchange. To measure how the fund's performance stacked up against its peers, you can compare it to the mid-cap funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 654 mutual funds. These benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Lipper has created additional comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page <Click Here> of this report.*
Average Annual Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Past 5 |
Past 10 |
Fidelity OTC |
|
-28.82% |
-1.08% |
8.78% |
NASDAQ |
|
-34.26% |
-3.28% |
9.30% |
Mid-Cap Funds Average |
|
-22.96% |
1.45% |
9.56% |
Average annual total returns take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year. (Note: Lipper calculates average annual total returns by annualizing each fund's total return, then taking an arithmetic average. This may produce a different figure than that obtained by averaging the cumulative total returns and annualizing the result.)
Annual Report
$10,000 Over 10 Years
$10,000 Over 10 Years: Let's say hypothetically that $10,000 was invested in Fidelity ® OTC Portfolio on July 31, 1992. As the chart shows, by July 31, 2002, the value of the investment would have grown to $23,197 - a 131.97% increase on the initial investment. For comparison, look at how the NASDAQ Composite Index did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have grown to $24,343 - a 143.43% increase.
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.
Understanding
Performance
How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain.
3* The Lipper multi-cap growth funds average reflects the performance (excluding sales charges) of mutual funds with similar portfolio characteristics and capitalization. The Lipper multi-cap supergroup average reflects the performance (excluding sales charges) of mutual funds with similar capitalization. As of July 31, 2002, the one year, five year and 10 year cumulative total returns for the multi-cap growth funds average were -31.69%, -4.74%, and 120.44%, respectively. The one year, five year and 10 year average annual total returns were - -31.69%, -1.41%, and 7.74%. The one year, five year and 10 year cumulative total returns for the multi-cap supergroup average were -23.89%, 5.20%, and 156.17%, respectively. The one year, five year and 10 year average annual total returns were -23.89%, 0.62%, and 9.51%.
Annual Report
Market Recap
Where's the bottom? Was it reached in late July 2002, when the Dow Jones Industrial AverageSM recorded two of its three best single day point gains ever? Or was it just a head fake, another tissue-thin false bottom before the next plunge? Only time will tell. But one thing for certain is that during the 12-month period ending July 31, 2002, equity investors endured one of the most challenging years in market history. Stocks recoiled from a series of tragic and troubling events that threatened investor confidence on a number of levels. When the period began, the U.S. economy was in recession, typically not a good time for stocks overall. Then came September 11, an unprecedented event that closed equity markets for nearly a week and sent them tumbling upon reopening. Shaken but not beaten, equity investors demonstrated their faith in the economic system, and stocks enjoyed a solid rebound in the fourth quarter of 2001. But then came the scandals: Enron, Arthur Andersen, WorldCom . . . and as the list went on, stock prices went down. When all was said and done, the blue-chip bellwether Dow Jones Industrial Average ended the 12-month period down 15.39%; the NASDAQ Composite® Index declined 34.26%; and the large-cap weighted Standard & Poor's 500SM Index suffered a loss of 23.63%.
(Portfolio Manager photograph)
An interview with Jason Weiner, Portfolio Manager of Fidelity OTC Portfolio
Q. How did the fund perform, Jason?
A. For the 12 months ending July 31, 2002, the fund returned -28.82%, outperforming the 34.26% decline of the NASDAQ Composite Index, but trailing the Lipper Inc. mid-cap funds average, which lost 22.96%.
Q. What were the principal factors affecting performance?
A. It was one of the worst periods ever for the NASDAQ, as fundamentals in the technology-heavy OTC market - and much of the broader market - worsened due to the lifeless economy. Despite widespread weakness in absolute terms, timely sector allocations made the difference relative to the index. The fund benefited early in the period by maintaining a fairly aggressive posture in tech following September 11, emphasizing semiconductor-related stocks - including Taiwan Semiconductor and Marvell Technology - - that snapped back sharply in anticipation of a strong, liquidity-driven economic recovery. I reduced the semiconductor bet heading into 2002 to take profits. That was a good decision, as these stocks deflated when inventory rebuilding stopped in the absence of a recovery in end-user demand. Market conditions steadily deteriorated later in the period due to concerns about the slowed pace of economic recovery, high valuations, downward earnings revisions and the incessant hum of corporate scandals. Becoming more conservatively positioned as the period wore on allowed us to sidestep the full brunt of the market decline. However, the fund's charter to emphasize OTC names hurt performance relative to its mid-cap peers, which were generally more diversified and, thus, less exposed to the tech slump.
Annual Report
Fund Talk: The Manager's Overview - continued
Q. Could you expand on your conservative strategy?
A. In the third year of a downturn where there was little shelter to be found in the NASDAQ - and with nearly every sector incurring double-digit declines - I tried to keep a growth focus, but with a higher degree of safety than the index. I reduced the number of fund holdings to concentrate more intently on those select companies that would likely grow their earnings and have the least amount of risk to miss estimates. A good example would be the fund's sizable position in Microsoft - the largest component of the index - which hurt on an absolute basis, but helped relative performance as it declined less than the index. The software giant benefited as one of the few large-cap tech companies whose earnings didn't collapse. Generally speaking, we gained ground by sticking with high-quality names, avoiding excessively high valuations and limiting our exposure to weak telecommunications equipment, enterprise software and Internet stocks. Finally, holding a modest 5% cash position on average also helped. As a sign of how increasingly difficult it became to find good names in the index, though, the fund ended the period with a higher-than-average cash weighting.
Q. What other moves made a difference?
A. We benefited from underweighting or avoiding entirely some of the bigger technology hardware names that really hurt the index, such as Intel, Sun Microsystems and Oracle, as well as WorldCom, which collapsed due to accounting issues. The stocks we emphasized that aided performance were largely special situations that presented compelling growth stories. Investors rallied around such fund holdings as discount retailer Dollar Tree Stores, video game software maker Electronic Arts, adult education provider Strayer Education, specialty retailer Michaels Stores and DENTSPLY, which supplies dental products. Conversely, we had our share of disappointments, including Comverse Technology, Altera, Brocade and Vignette, all of which suffered from weak corporate technology spending. Underweighting some of the less prominent sectors in the index, such as financials, also hurt, as banks in particular performed well due to lower interest rates. Some stocks I've mentioned were no longer held at period end.
Q. What's your outlook?
A. It all boils down to the economy, as there's a heavy degree of cyclicality in the NASDAQ. If conditions improve, we may finally see a bottom in the market, a revival in business investment and an eventual pickup in corporate earnings. However, if the economy gets worse, we could face further declines as companies continue to cut their numbers. There's no magic number as to how long a downturn must last. Unfortunately, the tech sector continues to suffer the most from excessive spending during the boom, which still could take several years to unwind, particularly in the absence of any major product cycles.
Annual Report
The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover 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.
Fund Facts
Goal: capital appreciation by normally investing in securities principally traded on the over-the-counter market
Fund number: 093
Trading symbol: FOCPX
Start date: December 31, 1984
Size: as of July 31, 2002, more than $5.9 billion
Manager: Jason Weiner, since
2000; manager, Fidelity
Contrafund II, 1998-2000;
Fidelity Export and Multinational
Fund, 1997-1998; several
Fidelity Select Portfolios, 1994-
1997; joined Fidelity in 1991
Jason Weiner on lessons from the past:
"It's not clear that the star stocks of the past are going to be the ones to own going forward. If you look at past bubbles, most stocks that drove the market never come close to their old highs following a major correction. For the handful of names that are able to do so, the slow climb could take decades to achieve as they work out the excesses accumulated in their businesses - in terms of their expenses and staffing - and in their stock prices. A whole resizing may have to take place before these stocks can work again.
"Often what comes out of corrections is a change in leadership from one group of companies to another. As a result, I've tried to focus on identifying those companies that will emerge as the leaders within their industries for the next market cycle, the ones that will provide new innovations, new breakthroughs and new earnings growth. While these relatively young companies tend to carry more volatility and risk, their more concentrated product offerings can generate astounding growth rates.
"Booms are always driven by a new innovation, and there's no reason to believe that one can't come to market during a recession. That said, I´m keeping my eyes open with the hope of catching tomorrow's stars before they shine."
Annual Report
Top Ten Stocks as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Microsoft Corp. |
17.3 |
16.5 |
Dollar Tree Stores, Inc. |
3.1 |
2.0 |
Fifth Third Bancorp |
2.9 |
1.3 |
Dell Computer Corp. |
2.8 |
1.7 |
Electronic Arts, Inc. |
2.2 |
1.1 |
Comverse Technology, Inc. |
1.7 |
0.9 |
Biomet, Inc. |
1.5 |
0.8 |
Invitrogen Corp. |
1.4 |
0.2 |
ASML Holding NV (NY Shares) |
1.4 |
2.9 |
DENTSPLY International, Inc. |
1.4 |
0.4 |
|
35.7 |
|
Top Five Market Sectors as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Information Technology |
39.1 |
67.3 |
Health Care |
17.8 |
11.7 |
Consumer Discretionary |
13.7 |
8.2 |
Industrials |
9.1 |
6.3 |
Financials |
5.6 |
4.1 |
Asset Allocation (% of fund's net assets) |
|||||||
As of July 31, 2002 * |
As of January 31, 2002 ** |
||||||
![]() |
Stocks 88.0% |
|
![]() |
Stocks 99.6% |
|
||
![]() |
Short-Term |
|
![]() |
Short-Term |
|
||
* Foreign |
3.5% |
|
** Foreign |
11.2% |
|
Annual Report
Showing Percentage of Net Assets
Common Stocks - 88.0% |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - 13.7% |
|||
Auto Components - 0.2% |
|||
Keystone Automotive Industries, Inc. (a) |
603,300 |
$ 9,128 |
|
Hotels, Restaurants & Leisure - 0.9% |
|||
Applebee's International, Inc. |
950,000 |
21,575 |
|
Panera Bread Co. Class A (a) |
900,000 |
28,935 |
|
Starbucks Corp. (a) |
250,000 |
4,908 |
|
|
55,418 |
||
Household Durables - 0.1% |
|||
Lancaster Colony Corp. |
100,000 |
3,737 |
|
Internet & Catalog Retail - 0.9% |
|||
USA Interactive (a) |
2,500,000 |
55,123 |
|
Media - 2.3% |
|||
AOL Time Warner, Inc. (a) |
2,000,000 |
23,000 |
|
Clear Channel Communications, Inc. (a) |
1,000,000 |
26,050 |
|
Comcast Corp. Class A (special) (a) |
1,750,000 |
36,575 |
|
Getty Images, Inc. (a) |
125,000 |
2,059 |
|
Lamar Advertising Co. Class A (a) |
1,500,000 |
47,370 |
|
|
135,054 |
||
Multiline Retail - 3.6% |
|||
Costco Wholesale Corp. (a) |
800,000 |
27,896 |
|
Dollar Tree Stores, Inc. (a)(c) |
6,000,000 |
187,179 |
|
|
215,075 |
||
Specialty Retail - 5.5% |
|||
AC Moore Arts & Crafts, Inc. (a) |
285,400 |
9,906 |
|
Bed Bath & Beyond, Inc. (a) |
100,000 |
3,100 |
|
CDW Computer Centers, Inc. (a) |
1,025,000 |
48,995 |
|
Christopher & Banks Corp. (a) |
1,000,000 |
34,010 |
|
GameStop Corp. Class A |
900,000 |
15,750 |
|
Gap, Inc. |
4,662,500 |
56,649 |
|
Hollywood Entertainment Corp. (a) |
2,840,300 |
45,786 |
|
Hot Topic, Inc. (a) |
750,000 |
11,663 |
|
Michaels Stores, Inc. (a) |
548,000 |
20,292 |
|
Movie Gallery, Inc. (a) |
1,257,950 |
20,819 |
|
PETsMART, Inc. (a) |
1,682,300 |
24,292 |
|
Regis Corp. |
1,261,500 |
32,017 |
|
|
323,279 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - continued |
|||
Textiles Apparel & Luxury Goods - 0.2% |
|||
Oshkosh B'Gosh, Inc. Class A |
420,200 |
$ 12,648 |
|
TOTAL CONSUMER DISCRETIONARY |
809,462 |
||
CONSUMER STAPLES - 0.5% |
|||
Food & Drug Retailing - 0.5% |
|||
Whole Foods Market, Inc. (a) |
700,000 |
30,709 |
|
Wild Oats Markets, Inc. (a) |
100,000 |
1,118 |
|
|
31,827 |
||
ENERGY - 0.5% |
|||
Energy Equipment & Services - 0.5% |
|||
Patterson-UTI Energy, Inc. (a) |
1,150,000 |
27,497 |
|
Oil & Gas - 0.0% |
|||
Tsakos Energy Navigation Ltd. |
149,300 |
1,759 |
|
TOTAL ENERGY |
29,256 |
||
FINANCIALS - 5.6% |
|||
Banks - 5.3% |
|||
Banknorth Group, Inc. |
1,480,000 |
37,651 |
|
Boston Private Financial Holdings, Inc. |
220,000 |
5,031 |
|
Fifth Third Bancorp |
2,600,000 |
171,782 |
|
Greater Bay Bancorp |
450,000 |
10,917 |
|
SouthTrust Corp. |
2,050,000 |
51,742 |
|
Zions Bancorp |
650,072 |
32,835 |
|
|
309,958 |
||
Insurance - 0.3% |
|||
Cincinnati Financial Corp. |
450,000 |
18,041 |
|
TOTAL FINANCIALS |
327,999 |
||
HEALTH CARE - 17.8% |
|||
Biotechnology - 5.1% |
|||
Biogen, Inc. (a) |
2,250,000 |
80,933 |
|
Gilead Sciences, Inc. (a) |
1,700,000 |
51,799 |
|
Invitrogen Corp. (a) |
2,420,000 |
84,337 |
|
QLT, Inc. (a) |
1,750,000 |
16,155 |
|
Techne Corp. (a)(c) |
2,383,200 |
65,895 |
|
|
299,119 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
HEALTH CARE - continued |
|||
Health Care Equipment & Supplies - 4.9% |
|||
Advanced Neuromodulation Systems, Inc. (a) |
350,000 |
$ 11,141 |
|
Biomet, Inc. |
3,524,238 |
91,383 |
|
Biosite, Inc. (a) |
260,000 |
5,252 |
|
Cooper Companies, Inc. |
742,200 |
32,583 |
|
DENTSPLY International, Inc. |
2,049,750 |
81,252 |
|
Interpore International, Inc. (a) |
150,000 |
1,020 |
|
Kensey Nash Corp. (a) |
27,700 |
396 |
|
Respironics, Inc. (a)(c) |
1,740,700 |
55,737 |
|
Wright Medical Group, Inc. |
482,660 |
8,683 |
|
|
287,447 |
||
Health Care Providers & Services - 6.0% |
|||
Accredo Health, Inc. (a) |
1,225,000 |
58,434 |
|
AMN Healthcare Services, Inc. |
964,800 |
27,449 |
|
Community Health Systems, Inc. (a) |
250,000 |
6,188 |
|
Cross Country, Inc. |
1,010,400 |
28,928 |
|
First Health Group Corp. (a) |
1,458,200 |
36,659 |
|
LifePoint Hospitals, Inc. (a) |
1,510,000 |
51,416 |
|
Patterson Dental Co. (a) |
1,100,000 |
50,908 |
|
Province Healthcare Co. (a)(c) |
2,618,750 |
50,280 |
|
Tenet Healthcare Corp. (a) |
375,000 |
17,869 |
|
UnitedHealth Group, Inc. |
300,000 |
26,298 |
|
|
354,429 |
||
Pharmaceuticals - 1.8% |
|||
Atrix Laboratories, Inc. (a) |
810,000 |
12,936 |
|
Perrigo Co. (a)(c) |
3,668,500 |
42,408 |
|
Salix Pharmaceuticals Ltd. (a) |
300,000 |
2,010 |
|
Teva Pharmaceutical Industries Ltd. sponsored ADR |
785,000 |
52,360 |
|
|
109,714 |
||
TOTAL HEALTH CARE |
1,050,709 |
||
INDUSTRIALS - 9.1% |
|||
Aerospace & Defense - 0.1% |
|||
MTC Technologies, Inc. |
447,500 |
8,042 |
|
Air Freight & Logistics - 0.5% |
|||
C.H. Robinson Worldwide, Inc. |
529,708 |
15,891 |
|
Expeditors International of Washington, Inc. |
449,720 |
13,267 |
|
|
29,158 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INDUSTRIALS - continued |
|||
Airlines - 0.8% |
|||
Atlantic Coast Airlines Holdings, Inc. (a) |
350,000 |
$ 5,478 |
|
JetBlue Airways Corp. |
237,782 |
11,071 |
|
Northwest Airlines Corp. (a) |
2,678,751 |
24,859 |
|
Ryanair Holdings PLC: |
|
|
|
warrants (UBS Warrant Programme) 2/25/04 (a) |
500,000 |
2,981 |
|
sponsored ADR (a) |
205,000 |
6,593 |
|
|
50,982 |
||
Commercial Services & Supplies - 6.8% |
|||
Apollo Group, Inc. Class A (a) |
900,000 |
35,325 |
|
Career Education Corp. (a) |
762,000 |
33,635 |
|
Cintas Corp. |
1,350,000 |
59,250 |
|
Corporate Executive Board Co. (a) |
200,000 |
6,042 |
|
Herman Miller, Inc. |
1,700,000 |
28,815 |
|
InterCept, Inc. (a)(c) |
1,775,270 |
35,417 |
|
NDCHealth Corp. |
538,000 |
11,615 |
|
On Assignment, Inc. (a)(c) |
2,098,800 |
16,769 |
|
Paychex, Inc. |
1,550,000 |
40,781 |
|
Stericycle, Inc. (a) |
200,000 |
6,602 |
|
Strayer Education, Inc. (c) |
1,385,600 |
76,901 |
|
The BISYS Group, Inc. (a) |
760,000 |
17,556 |
|
Viad Corp. |
1,100,000 |
25,113 |
|
Waste Connections, Inc. (a) |
250,000 |
8,073 |
|
|
401,894 |
||
Machinery - 0.4% |
|||
Oshkosh Truck Co. |
400,000 |
21,980 |
|
Trading Companies & Distributors - 0.5% |
|||
Fastenal Co. |
750,000 |
28,553 |
|
TOTAL INDUSTRIALS |
540,609 |
||
INFORMATION TECHNOLOGY - 39.1% |
|||
Communications Equipment - 3.6% |
|||
Adaptec, Inc. (a) |
2,100,000 |
12,390 |
|
Advanced Fibre Communication, Inc. (a) |
350,000 |
6,031 |
|
Cisco Systems, Inc. (a) |
4,173,090 |
55,043 |
|
Comverse Technology, Inc. (a)(c) |
12,232,100 |
97,368 |
|
FalconStor Software, Inc. (a) |
1,050,100 |
4,704 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
Communications Equipment - continued |
|||
Polycom, Inc. (a) |
2,605,600 |
$ 29,834 |
|
QUALCOMM, Inc. (a) |
225,000 |
6,183 |
|
|
211,553 |
||
Computers & Peripherals - 3.4% |
|||
Dell Computer Corp. (a) |
6,550,000 |
163,292 |
|
Gateway, Inc. (a) |
5,600,000 |
19,040 |
|
Intergraph Corp. (a) |
850,000 |
13,515 |
|
Western Digital Corp. (a) |
1,125,000 |
4,995 |
|
|
200,842 |
||
Electronic Equipment & Instruments - 0.4% |
|||
Itron, Inc. (a) |
55,700 |
880 |
|
Tech Data Corp. (a) |
720,150 |
24,161 |
|
|
25,041 |
||
Internet Software & Services - 0.5% |
|||
Retek, Inc. (a) |
350,000 |
2,265 |
|
Yahoo!, Inc. (a) |
2,000,000 |
26,340 |
|
|
28,605 |
||
IT Consulting & Services - 2.0% |
|||
Acxiom Corp. (a) |
1,292,900 |
20,505 |
|
Anteon International Corp. |
1,271,570 |
25,075 |
|
CACI International, Inc. Class A (a) |
1,300,000 |
44,564 |
|
Cognizant Technology Solutions Corp. Class A (a)(c) |
507,200 |
29,683 |
|
|
119,827 |
||
Semiconductor Equipment & Products - 5.8% |
|||
Agere Systems, Inc. Class A (a) |
1,100,000 |
2,090 |
|
Applied Materials, Inc. (a) |
1,770,000 |
26,320 |
|
ASML Holding NV (NY Shares) (a) |
6,868,300 |
81,389 |
|
ATMI, Inc. (a) |
1,456,611 |
26,321 |
|
Broadcom Corp. Class A (a) |
400,000 |
7,504 |
|
California Micro Devices Corp. (a) |
3,269 |
17 |
|
Cree, Inc. (a) |
175,000 |
2,646 |
|
Cymer, Inc. (a)(c) |
2,155,900 |
60,344 |
|
Intel Corp. |
2,250,000 |
42,278 |
|
KLA-Tencor Corp. (a) |
565,700 |
22,283 |
|
Linear Technology Corp. |
1,194,300 |
32,342 |
|
LTX Corp. (a) |
1,099,690 |
10,799 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - continued |
|||
Semiconductor Equipment & Products - continued |
|||
Maxim Integrated Products, Inc. (a) |
450,000 |
$ 15,831 |
|
Micrel, Inc. (a) |
1,197,100 |
13,731 |
|
|
343,895 |
||
Software - 23.4% |
|||
Activision, Inc. (a) |
2,296,250 |
65,948 |
|
Barra, Inc. (a) |
450,000 |
15,156 |
|
Electronic Arts, Inc. (a) |
2,121,300 |
127,660 |
|
EPIQ Systems, Inc. (a)(c) |
1,073,300 |
17,141 |
|
Legato Systems, Inc. (a) |
4,710,000 |
12,717 |
|
Mercury Interactive Corp. (a) |
300,000 |
7,686 |
|
Microsoft Corp. (a) |
21,281,200 |
1,021,063 |
|
National Instruments Corp. (a) |
109,500 |
2,971 |
|
Peregrine Systems, Inc. (a) |
3,476,600 |
834 |
|
Precise Software Solutions Ltd. (a)(c) |
1,741,500 |
21,873 |
|
Red Hat, Inc. (a) |
2,000,000 |
9,220 |
|
Synopsys, Inc. (a) |
350,000 |
14,970 |
|
THQ, Inc. (a) |
1,150,000 |
28,612 |
|
VERITAS Software Corp. (a) |
2,000,000 |
33,660 |
|
|
1,379,511 |
||
TOTAL INFORMATION TECHNOLOGY |
2,309,274 |
||
MATERIALS - 0.4% |
|||
Metals & Mining - 0.4% |
|||
Anglo American PLC |
1,834,955 |
22,982 |
|
TELECOMMUNICATION SERVICES - 1.3% |
|||
Diversified Telecommunication Services - 1.2% |
|||
AT&T Corp. |
5,000,000 |
50,900 |
|
Level 3 Communications, Inc. (a) |
196,800 |
1,389 |
|
Qwest Communications International, Inc. (a) |
13,000,000 |
16,640 |
|
TeraBeam Networks (d) |
44,800 |
11 |
|
|
68,940 |
||
Wireless Telecommunication Services - 0.1% |
|||
Sprint Corp. - PCS Group Series 1 (a) |
1,700,000 |
6,970 |
|
TOTAL TELECOMMUNICATION SERVICES |
75,910 |
||
TOTAL COMMON STOCKS (Cost $5,778,294) |
5,198,028 |
||
Money Market Funds - 13.0% |
|||
Shares |
Value (Note 1) |
||
Fidelity Cash Central Fund, 1.84% (b) |
709,460,565 |
$ 709,461 |
|
Fidelity Securities Lending Cash Central Fund, 1.86% (b) |
60,484,600 |
60,485 |
|
TOTAL MONEY MARKET FUNDS (Cost $769,946) |
769,946 |
||
TOTAL INVESTMENT PORTFOLIO - 101.0% (Cost $6,548,240) |
5,967,974 |
||
NET OTHER ASSETS - (1.0)% |
(56,744) |
||
NET ASSETS - 100% |
$ 5,911,230 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Affiliated company |
(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933. |
Additional information on each holding is as follows: |
Security |
Acquisition |
Acquisition |
TeraBeam Networks |
4/7/00 |
$ 168 |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $8,525,465,000 and $9,133,109,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $745,000 for the period. |
The fund invested in securities that are not registered under the Securities Act of 1933. At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $11,000 or 0.0% of net assets. |
The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $22,614,000. The weighted average interest rate was 1.8%. At period end there were no interfund loans outstanding. |
Income Tax Information |
At July 31, 2002, the fund had a capital loss carryforward of approximately $5,343,183,000 all of which will expire on July 31, 2010. |
The fund intends to elect to defer to its fiscal year ending July 31, 2003 approximately $829,784,000 of losses recognized during the period November 1, 2001 to July 31, 2002. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities
Amounts in thousands (except per-share amounts) |
July 31, 2002 |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $59,708) (cost $6,548,240) - See accompanying schedule |
|
$ 5,967,974 |
Cash |
|
35 |
Receivable for investments sold |
|
53,931 |
Receivable for fund shares sold |
|
10,033 |
Dividends receivable |
|
455 |
Interest receivable |
|
992 |
Other receivables |
|
552 |
Total assets |
|
6,033,972 |
Liabilities |
|
|
Payable for investments purchased |
$ 46,330 |
|
Payable for fund shares redeemed |
10,845 |
|
Accrued management fee |
4,882 |
|
Other payables and accrued expenses |
200 |
|
Collateral on securities loaned, at value |
60,485 |
|
Total liabilities |
|
122,742 |
Net Assets |
|
$ 5,911,230 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 12,729,646 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(6,238,142) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(580,274) |
Net Assets, for 251,933 shares outstanding |
|
$ 5,911,230 |
Net Asset Value, offering price and redemption price per share ($5,911,230 ÷ 251,933 shares) |
|
$ 23.46 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands |
Year ended July 31, 2002 |
|
Investment Income |
|
|
Dividends (including $456 received from affiliated issuers) |
|
$ 11,550 |
Interest |
|
8,121 |
Security lending |
|
1,171 |
Total income |
|
20,842 |
Expenses |
|
|
Management fee |
$ 47,622 |
|
Performance adjustment |
17,349 |
|
Transfer agent fees |
19,523 |
|
Accounting and security lending fees |
802 |
|
Non-interested trustees' compensation |
30 |
|
Custodian fees and expenses |
210 |
|
Registration fees |
109 |
|
Audit |
71 |
|
Legal |
61 |
|
Interest |
5 |
|
Miscellaneous |
128 |
|
Total expenses before reductions |
85,910 |
|
Expense reductions |
(3,560) |
82,350 |
Net investment income (loss) |
|
(61,508) |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities (including realized gain (loss) of ($75,371) on sales of investments in affiliated issuers) |
(1,655,492) |
|
Foreign currency transactions |
(27) |
|
Total net realized gain (loss) |
|
(1,655,519) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(772,558) |
|
Assets and liabilities in foreign currencies |
(10) |
|
Total change in net unrealized appreciation (depreciation) |
|
(772,568) |
Net gain (loss) |
|
(2,428,087) |
Net increase (decrease) in net assets resulting from operations |
|
$ (2,489,595) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands |
Year ended |
Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ (61,508) |
$ (45,171) |
Net realized gain (loss) |
(1,655,519) |
(4,239,312) |
Change in net unrealized appreciation (depreciation) |
(772,568) |
(2,270,986) |
Net increase (decrease) in net assets resulting |
(2,489,595) |
(6,555,469) |
Distributions to shareholders from net realized gain |
- |
(2,700,580) |
Share transactions |
3,639,638 |
7,203,455 |
Reinvestment of distributions |
- |
2,651,876 |
Cost of shares redeemed |
(4,040,535) |
(6,345,370) |
Net increase (decrease) in net assets resulting from share transactions |
(400,897) |
3,509,961 |
Total increase (decrease) in net assets |
(2,890,492) |
(5,746,088) |
Net Assets |
|
|
Beginning of period |
8,801,722 |
14,547,810 |
End of period |
$ 5,911,230 |
$ 8,801,722 |
Other Information Shares |
|
|
Sold |
125,205 |
161,780 |
Issued in reinvestment of distributions |
- |
43,957 |
Redeemed |
(140,340) |
(147,027) |
Net increase (decrease) |
(15,135) |
58,710 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, |
2002 |
2001 |
2000 |
1999 |
1998 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period |
$ 32.96 |
$ 69.82 |
$ 51.53 |
$ 40.03 |
$ 38.46 |
Income from Investment Operations |
|
|
|
|
|
Net investment income (loss) C |
(.24) |
(.18) |
(.27) |
(.07) |
(.12) |
Net realized and unrealized gain (loss) |
(9.26) |
(24.02) |
24.07 |
13.95 |
4.21 |
Total from investment operations |
(9.50) |
(24.20) |
23.80 |
13.88 |
4.09 |
Distributions from net realized gain |
- |
(12.66) |
(5.51) |
(2.38) |
(2.52) |
Net asset value, end of period |
$ 23.46 |
$ 32.96 |
$ 69.82 |
$ 51.53 |
$ 40.03 |
Total Return A, B |
(28.82)% |
(42.79)% |
50.05% |
38.54% |
11.87% |
Ratios to Average Net Assets D |
|
|
|
|
|
Expenses before expense reductions |
1.14% |
.97% |
.76% |
.75% |
.76% |
Expenses net of voluntary waivers, if any |
1.14% |
.97% |
.76% |
.75% |
.76% |
Expenses net of all reductions |
1.09% |
.94% |
.75% |
.74% |
.75% |
Net investment income (loss) |
(.81)% |
(.40)% |
(.43)% |
(.16)% |
(.32)% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (in millions) |
$ 5,911 |
$ 8,802 |
$ 14,548 |
$ 7,298 |
$ 4,493 |
Portfolio turnover rate |
120% |
219% |
196% |
117% |
125% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Total returns do not include the effect of the former one time sales charge.
C Calculated based on average shares outstanding during the period.
D Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from directed brokerage or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflects expenses after reimbursement by the investment adviser but prior to reductions from directed brokerage or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
For the period ended July 31, 2002
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity OTC Portfolio (the fund) is a fund of Fidelity Securities 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 financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds. Deferred amounts remain in the fund until distributed in accordance with the Plan.
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. As a result, no provision for income taxes is required. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
The tax-basis components of distributable earnings and the federal tax cost as of period end was as follows:
Unrealized appreciation |
$ 467,307 |
Unrealized depreciation |
(1,112,756) |
Net unrealized appreciation (depreciation) |
(645,449) |
Capital loss carryforward |
(5,343,183) |
Total distributable earnings |
$ (5,988,632) |
Cost for federal income tax purposes |
$ 6,613,423 |
Annual Report
2. Operating Policies.
Joint Trading Account. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations.
Repurchase Agreements. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a custodian bank. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. 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 of .35% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ±.20% of the fund's average net assets over a 36 month performance period). The upward, or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .86% of the fund's average net assets.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .26% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $7,981 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 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. During the period, there were no borrowings on this line of credit.
Annual Report
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. 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, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is 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.
7. Expense Reductions.
Certain security trades were directed to brokers who paid $3,546 of the fund's expenses. In addition, through arrangements with the fund's transfer agent, 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 transfer agent expenses by $14.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate |
Purchase |
Sales |
Dividend |
Value |
AC Moore Arts & Crafts Inc. |
$ 2,104 |
$ 7,119 |
$ - |
$ - |
Advanced Energy Industries, Inc. |
8,613 |
35,588 |
- |
- |
AdvancePCS Class A |
54,800 |
63,406 |
- |
- |
ATMI, Inc. |
15,446 |
21,100 |
- |
- |
Atrix Laboritories, Inc. |
6,292 |
6,517 |
- |
- |
CIMA Labs, Inc. |
- |
14,082 |
- |
- |
Cognex Corp. |
10,804 |
13,741 |
- |
- |
Cognizant Technology Solutions Corp. Class A |
4,237 |
- |
- |
29,683 |
Comverse Technology, Inc. |
38,195 |
5,423 |
- |
97,368 |
Cymer, Inc. |
13,293 |
- |
- |
60,344 |
Dianon Systems, Inc. |
15,807 |
16,056 |
- |
- |
Digital Insight Corp. |
- |
4,494 |
- |
- |
Dollar Tree Stores, Inc. |
7,638 |
- |
- |
187,179 |
DuPont Photomasks, Inc. |
- |
6,956 |
- |
- |
EPIQ Systems, Inc. |
6,075 |
- |
- |
17,141 |
Helix Technology, Inc. |
51 |
10,665 |
96 |
- |
InterCept, Inc. |
21,244 |
- |
- |
35,417 |
Kensey Nash Corp.. |
- |
95 |
- |
- |
Legato Systems, Inc. |
1,954 |
31,100 |
- |
- |
LTX Corp. |
33,011 |
36,811 |
- |
- |
Oak Technology, Inc. |
6,219 |
5,934 |
- |
- |
On Assignment, Inc. |
11,639 |
- |
- |
16,769 |
Perrigo Co. |
2,778 |
6,499 |
- |
42,408 |
Precise Software Solutions Ltd. |
15,822 |
33,483 |
- |
21,873 |
Province Healthcare Co. |
4,795 |
2,456 |
- |
50,280 |
Respironics, Inc. |
2,695 |
- |
- |
55,737 |
Strayer Education, Inc. |
3,270 |
- |
360 |
76,901 |
Techne Corp. |
6,222 |
- |
- |
65,895 |
Vignette Corp. |
- |
10,274 |
- |
- |
TOTALS |
$ 293,004 |
$ 331,799 |
$ 456 |
$ 756,995 |
Annual Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity OTC Portfolio:
We have audited the accompanying statement of assets and liabilities of Fidelity OTC Portfolio (the Fund), a fund of Fidelity Securities Fund, including the portfolio of investments, as of July 31, 2002, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2002, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity OTC Portfolio as of July 31, 2002, and 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 its 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.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 6, 2002
Annual Report
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, and review the fund's performance. Except for William O. McCoy and William S. Stavropoulos, each of the Trustees oversees 263 funds advised by FMR or an affiliate. Mr. McCoy oversees 265 funds advised by FMR or an affiliate, and Mr. Stavropoulos oversees 209 funds advised by FMR or an affiliate.
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. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers 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.
The fund's Statement of Additional Information (SAI) includes 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" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Edward C. Johnson 3d (72)** |
|
|
Year of Election or Appointment: 1984 President of OTC. Mr. Johnson also serves as President of other Fidelity funds. He is Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; a Director of Fidelity Management & Research (U.K.) Inc.; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. |
Abigail P. Johnson (40)** |
|
|
Year of Election or Appointment: 2001 Senior Vice President of OTC (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. |
Peter S. Lynch (59) |
|
|
Year of Election or Appointment: 1990 Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity Magellan Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. |
* 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.
** Edward C. Johnson 3d, Trustee and President of the funds, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested 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, Age; Principal Occupation |
|
J. Michael Cook (59) |
|
|
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of AT&T (2001), International Flavors & Fragrances, Inc. (2000), Rockwell Automation International (2000), The Dow Chemical Company (2000), and HCA - The Healthcare Company (1999). He is a Member of the Advisory Board of the Securities Regulation Institute and of the Directorship Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Panel to the Comptroller General of the United States. He also serves as a member of the Board of Overseers of the Columbia Business School and a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. |
Ralph F. Cox (70) |
|
|
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. |
Phyllis Burke Davis (70) |
|
|
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Toshiba International Advisory Group of Toshiba Corporation (2001) and a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. |
Robert M. Gates (58) |
|
|
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of Charles Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and manufacturing), TRW Inc. (automotive, space, defense, and information technology), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines) and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. |
Donald J. Kirk (69) |
|
|
Year of Election or Appointment: 1987 Mr. Kirk is a Public Governor of the National Association of Securities Dealers, Inc., and of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, and a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Stabilization Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). |
Marie L. Knowles (55) |
|
|
Year of Election or Appointment: 2001 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. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. |
Ned C. Lautenbach (58) |
|
|
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and Chief Executive Officer (1999) and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman and C.E.O. of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial, 1997), Axcelis Technologies (semiconductors, 2000), and the Philharmonic Center for the Arts in Naples, Florida (1999). He also serves on the Board of Trustees of Fairfield University and is a member of the Council on Foreign Relations. |
Marvin L. Mann (69) |
|
|
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage, 1997) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. |
William O. McCoy (68) |
|
|
Year of Election or Appointment: 1997 Mr. McCoy also serves as a non-interested Trustee overseeing 264 other investment companies advised by FMR, (1997). Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm, 1997) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). |
William S. Stavropoulos (63) |
|
|
Year of Election or Appointment: 2002 Mr. Stavropoulos also serves as a Trustee (2001) or Member of the Advisory Board (2000) of other investment companies advised by FMR. He is Chairman of the Board and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions, 1997), BellSouth Corporation (telecommunications, 1997), and the Chemical Financial Corporation. He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research and Fordham University. In addition, Mr. Stavropoulos is a member of the American Chemical Society, The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Executive Officers:
Correspondence intended for each executive officer may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Jason Weiner (32) |
|
|
Year of Election or Appointment: 2000 Vice President of OTC. Since joining Fidelity Investments in 1991, Mr. Weiner has worked as a research analyst and manager. |
Eric D. Roiter (53) |
|
|
Year of Election or Appointment: 1998 Secretary of OTC. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at Columbia University Law School (1996-1997). |
Maria F. Dwyer (43) |
|
|
Year of Election or Appointment: 2002 Treasurer of OTC. She also serves as Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. |
John H. Costello (55) |
|
|
Year of Election or Appointment: 1986 Assistant Treasurer of OTC. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. |
Francis V. Knox, Jr. (55) |
|
|
Year of Election or Appointment: 2002 Assistant Treasurer of OTC. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), Compliance Officer of FMR Corp., and Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002) and Fidelity Management & Research (Far East) Inc. (1991-2002). |
Thomas J. Simpson (44) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of OTC. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
A special meeting of the fund's shareholders was held on August 15, 2002. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
||
To continue the effectiveness of Article VIII, Section 4 of the Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
34,152,718,540.11 |
89.928 |
Against |
1,595,684,478.44 |
4.202 |
Abstain |
2,229,268,880.72 |
5.870 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 2 |
||
To authorize the Trustees to adopt an amended and restated Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
33,359,879,895.48 |
87.841 |
Against |
2,506,585,409.20 |
6.600 |
Abstain |
2,111,206,594.59 |
5.559 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 3 |
||
To elect the thirteen nominees specified below as Trustees.* |
||
|
# of |
% of |
J. Michael Cook |
||
Affirmative |
36,227,611,366.72 |
95.392 |
Withheld |
1,750,060,532.55 |
4.608 |
TOTAL |
37,977,671,899.27 |
100.000 |
Ralph F. Cox |
||
Affirmative |
36,182,850,121.37 |
95.274 |
Withheld |
1,794,821,777.90 |
4.726 |
TOTAL |
37,977,671,899.27 |
100.000 |
|
# of |
% of |
Phyllis Burke Davis |
||
Affirmative |
36,151,180,469.12 |
95.191 |
Withheld |
1,826,491,430.15 |
4.809 |
TOTAL |
37,977,671,899.27 |
100.000 |
Robert M. Gates |
||
Affirmative |
36,207,443,324.51 |
95.339 |
Withheld |
1,770,228,574.76 |
4.661 |
TOTAL |
37,977,671,899.27 |
100.000 |
Abigail P. Johnson |
||
Affirmative |
36,153,684,587.30 |
95.197 |
Withheld |
1,823,987,311.97 |
4.803 |
TOTAL |
37,977,671,899.27 |
100.000 |
Edward C. Johnson 3d |
||
Affirmative |
36,146,668,992.04 |
95.179 |
Withheld |
1,831,002,907.23 |
4.821 |
TOTAL |
37,977,671,899.27 |
100.000 |
Donald J. Kirk |
||
Affirmative |
36,212,215,628.07 |
95.351 |
Withheld |
1,765,456,271.20 |
4.649 |
TOTAL |
37,977,671,899.27 |
100.000 |
Marie L. Knowles |
||
Affirmative |
36,228,946,938.21 |
95.395 |
Withheld |
1,748,724,961.06 |
4.605 |
TOTAL |
37,977,671,899.27 |
100.000 |
Ned C. Lautenbach |
||
Affirmative |
36,247,557,672.80 |
95.444 |
Withheld |
1,730,114,226.47 |
4.556 |
TOTAL |
37,977,671,899.27 |
100.000 |
Peter S. Lynch |
||
Affirmative |
36,238,626,074.48 |
95.421 |
Withheld |
1,739,045,824.79 |
4.579 |
TOTAL |
37,977,671,899.27 |
100.000 |
*Denotes trust-wide proposals and voting results. |
||
|
# of |
% of |
Marvin L. Mann |
||
Affirmative |
36,208,314,198.20 |
95.341 |
Withheld |
1,769,357,701.07 |
4.659 |
TOTAL |
37,977,671,899.27 |
100.000 |
William O. McCoy |
||
Affirmative |
36,216,504,381.47 |
95.371 |
Withheld |
1,758,167,517.80 |
4.629 |
TOTAL |
37,977,671,899.27 |
100.000 |
William S. Stavropoulos |
||
Affirmative |
36,124,608,895.89 |
95.121 |
Withheld |
1,853,063,003.38 |
4.879 |
TOTAL |
37,977,671,899.27 |
100.000 |
PROPOSAL 5 |
||
To amend the fund's fundamental investment limitation concerning underwriting. |
||
|
# of |
% of |
Affirmative |
3,024,573,720.32 |
81.761 |
Against |
224,378,744.23 |
6.066 |
Abstain |
390,697,839.35 |
10.561 |
Broker |
59,634,322.88 |
1.612 |
TOTAL |
3,699,284,626.78 |
100.000 |
PROPOSAL 6 |
||
To amend the fund's fundamental investment limitation concerning lending. |
||
|
# of |
% of |
Affirmative |
2,998,399,848.87 |
81.054 |
Against |
248,671,610.71 |
6.722 |
Abstain |
392,578,844.32 |
10.612 |
Broker |
59,634,322.88 |
1.612 |
TOTAL |
3,699,284,626.78 |
100.000 |
Annual Report
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
If you are not currently on the Internet, call EarthLink Sprint at 1-800-EarthLink, and be sure to ask for registration number SMD004 to receive a special Fidelity package that includes 30 days of free Internet access. EarthLink is North America's #1 independent Internet access provider.
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Annual Report
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Annual Report
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Fidelity®
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Annual Report
July 31, 2002
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President's Message |
Ned Johnson on investing strategies. |
|
Performance |
How the fund has done over time. |
|
Fund Talk |
The manager's review of fund performance, strategy and outlook. |
|
Investment Changes |
A summary of major shifts in the fund's investments over the last six months. |
|
Investments |
A complete list of the fund's investments with their market values. |
|
Financial Statements |
Statements of assets and liabilities, operations, and changes in net assets, |
|
Notes |
Notes to the financial statements. |
|
Report of Independent Accountants |
The auditors' opinion. |
|
Trustees and Officers |
|
|
Distributions |
|
|
Proxy Voting Results |
|
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.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Semiannual Report
(Photograph of Edward C. Johnson 3d.)
Dear Shareholder:
The Dow Jones Industrial AverageSM - often regarded as a barometer of overall U.S. stock market performance - recorded two of its three largest point gains ever in late July. Still, many equity benchmarks were lingering near four- to five-year lows through the first seven months of 2002, due in part to investors' lack of faith in corporate accounting standards. As a result, many investors turned to fixed-income securities for capital protection.
While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs.
First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation.
Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds.
Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy.
If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value).
Cumulative Total Returns
Periods ended July 31, 2002 |
|
|
Past 1 |
Life of |
Fidelity ® Leveraged Company Stock |
|
|
-29.40% |
-24.74% |
S&P 500 ® |
|
|
-23.63% |
-28.63% |
CSFB Leveraged Equity |
|
|
-33.90% |
n/a* |
Capital Appreciation Funds Average |
|
|
-20.20% |
n/a* |
Cumulative total returns show the fund's performance in percentage terms over a set period - in this case, one year or since the fund started on December 19, 2000. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500SM Index - a market capitalization-weighted index of common stocks and the performance of the Credit Suisse First Boston Leveraged Equity Index - a market-value weighted index designed to represent securities of the investable universe of the U.S. dollar denominated public equity of issuers in the high yield debt market. To measure how the fund's performance stacked up against its peers, you can compare it to the capital appreciation funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 380 mutual funds. These benchmarks include reinvested dividends and capital gains, if any and excludes the effect of sales charges. Lipper has created additional comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page 5 of this report. (dagger)
Average Annual Total Returns
Periods ended July 31, 2002 |
|
Past 1 |
Life of |
Fidelity Leveraged Company Stock |
|
-29.40% |
-16.15% |
S&P 500 |
|
-23.63% |
-18.86% |
CSFB Leveraged Equity |
|
-33.90% |
n/a* |
Capital Appreciation Funds Average |
|
-20.20% |
n/a* |
Average annual total returns take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year.
* Not available
Annual Report
Performance - continued
$10,000 Over Life of Fund
$10,000 Over Life of Fund: Let's say hypothetically that $10,000 was invested in Fidelity ® Leveraged Company Stock Fund on December 19, 2000. As the chart shows, by July 31, 2002, the value of the investment would have been $7,526 - a 24.74% decrease on the initial investment. For comparison, look at how the Standard & Poor's 500 Index did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have been $7,137 - a 28.63% decrease.
Understanding
Performance
How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain.
3The $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.
(dagger) The Lipper mid-cap value funds average reflects the performance (excluding sales charges) of mutual funds with similar portfolio characteristics and capitalization. The Lipper mid-cap supergroup average reflects the performance (excluding sales charges) of mutual funds with similar capitalization. As of July 31, 2002, the one year cumulative total returns for the mid-cap value funds average was -9.86%; and the one year average annual total return was -9.86%. The one year cumulative total returns for the mid-cap supergroup was -22.30%; and the one year average annual total return was -22.30%.
Annual Report
Market Recap
Where's the bottom? Was it reached in late July 2002, when the Dow Jones Industrial AverageSM recorded two of its three best single day point gains ever? Or was it just a head fake, another tissue-thin false bottom before the next plunge? Only time will tell. But one thing for certain is that during the 12-month period ending July 31, 2002, equity investors endured one of the most challenging years in market history. Stocks recoiled from a series of tragic and troubling events that threatened investor confidence on a number of levels. When the period began, the U.S. economy was in recession, typically not a good time for stocks overall. Then came September 11, an unprecedented event that closed equity markets for nearly a week and sent them tumbling upon reopening. Shaken but not beaten, equity investors demonstrated their faith in the economic system, and stocks enjoyed a solid rebound in the fourth quarter of 2001. But then came the scandals: Enron, Arthur Andersen, WorldCom . . . and as the list went on, stock prices went down. When all was said and done, the blue-chip bellwether Dow Jones Industrial Average ended the 12-month period down 15.39%; the NASDAQ Composite® Index declined 34.26%; and the large-cap weighted Standard & Poor's 500SM Index suffered a loss of 23.63%.
(Portfolio Manager photograph)
An interview with David Glancy, Portfolio Manager of Fidelity Leveraged Company Stock Fund
Q. How did the fund perform, David?
A. For the 12 months that ended July 31, 2002, the fund returned -29.40%. To compare, the Standard & Poor's 500 Index and the Credit Suisse First Boston (CSFB) Leveraged Equity Index returned -23.63% and -33.90%, respectively, while the capital appreciation funds average tracked by Lipper Inc. returned -20.20%.
Q. What factors influenced the fund's performance during the period?
A. Leveraged company stocks tend to be more sensitive to upward or downward trends in the market. During this period, the stock market declined, and leveraged company stocks fell even further. The fund's performance relative to the S&P 500 was also held back by weak stock selection and an overweighted position in media stocks, and by poor stock picking in the telecommunication services and capital goods industries. The fund lagged the Lipper average because many of its peers in the capital appreciation group carry characteristics similar to the S&P 500. The fund outperformed the CSFB index due to a relative underweighting in information technology stocks; an overweighting in forest products, container and metals and mineral stocks; and stock selection in the financial and gaming/leisure sectors.
Annual Report
Fund Talk: The Manager's Overview - continued
Q. Which stocks contributed positively to the performance of the fund? Which disappointed?
A. Packaging product manufacturer Owens-Illinois benefited from investor interest in companies that stand to benefit from an improving economy. The corporation also demonstrated strong earnings growth and improved its balance sheet by refinancing some of its debt. Hollywood Casino also offered solid performance, due to its acquisition by another firm. We sold out of the stock to take profits before the merger in March 2002. Finally, AMC Entertainment, which owns and operates movie theaters, continued to post positive earnings, pay down debt and cement its position as a leader within its industry. On the down side, satellite TV provider EchoStar Communications, the fund's largest holding, declined in spite of the firm's solid execution of its business plan. One factor that hurt the stock was uncertainty about the company's pending merger with GM Hughes. However, the most damaging news for EchoStar's stock came in the form of the collapse of cable media firm Adelphia Communications amid an accounting scandal that sent a ripple throughout the entire media industry. This also hurt satellite provider Pegasus Communications, as did lingering questions about the potential effects of the EchoStar/GM Hughes merger on its business. Believing that these concerns were overdone, I took advantage of Pegasus' steep decline to add shares in the company. Wireless services provider Nextel Communications also fell due to the after-effects of ongoing investigations of some of its competitors. In addition, there were concerns about whether or not Nextel could sustain its current debt load and finance an eventual upgrade of its communications systems.
Q. EchoStar remained the fund's largest holding, comprising more than 18% of the fund's net assets. Why did you concentrate such a large portion of the fund on that one stock?
A. In spite of its recent tribulations, I remained confident about EchoStar's future prospects, even if the Federal Trade Commission decides to withhold final approval of the GM Hughes merger. I continued to maintain a large position in the company because I found the capital efficiency of the firm's business model to be attractive relative to its cable competitors. EchoStar also offered strong growth in terms of subscribers, cash flow and earnings. I was reassured further by the company's conservative accounting approach amid the uncertain backdrop created by the Adelphia accounting scandal.
Q. What's your outlook, David?
A. I'm cautiously optimistic at this time. It appears that the economy should continue to improve through the remainder of 2002. To that end, I reduced the fund's cash and short-term investment position during the period to take advantage of opportunities to add stocks of companies that could be aided by any improvement in the economy. I've looked to structure the portfolio to benefit from such a scenario.
Annual Report
The views expressed in this report reflect those of the portfolio manager only through the end of the period of the report as stated on the cover 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.
Fund Facts
Goal: seeks capital appreciation by normally investing in common stocks of leveraged companies and potentially investing in lower-quality debt securities
Fund number: 122
Trading symbol: FLVCX
Start date: December 19, 2000
Size: as of July 31, 2002, more than $36 million
Manager: David Glancy, since
inception; manager, Fidelity
Advisor Leveraged Company
Stock Fund, since 2000; Fidelity
Capital & Income Fund, since
1996; Fidelity Advisor High
Income Fund, 1999-2001;
Spartan High Income Fund,
1993-
1996; joined Fidelity in 1990
David Glancy on how a recovering economy could influence the fund:
"A recovering economy could help the performance of leveraged company stocks if higher growth in gross domestic product (GDP) translates into improved corporate earnings. Currently, it is not clear if that scenario will come to pass. If it does, leveraged companies should stand to benefit more than the overall market. That's because shares of companies with leveraged capital structures - the kinds of companies that issue high-yield, or junk, bonds - - typically rise more rapidly within a positive market environment.
"My focus is to invest in companies that are using leverage wisely to enhance returns. I look to choose companies with solid business prospects and avoid those that are using leverage as a crutch or to fund an ill-conceived business plan. Because leverage can magnify the impact of economic developments, an improving U.S. economy should provide a generally positive backdrop for leveraged company stocks."
Annual Report
Top Ten Stocks as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
EchoStar Communications Corp. Class A |
18.7 |
20.4 |
Nextel Communications, Inc. Class A |
6.5 |
4.4 |
Markel Corp. |
4.4 |
1.4 |
Qwest Communications International, Inc. |
4.3 |
0.0 |
American Financial Group, Inc., Ohio |
4.2 |
4.0 |
Western Gas Resources, Inc. |
3.3 |
1.0 |
Level 3 Communications, Inc. |
2.7 |
0.0 |
LNR Property Corp. |
2.7 |
1.7 |
American Standard Companies, Inc. |
2.7 |
0.0 |
Kansas City Southern |
2.4 |
0.0 |
|
51.9 |
|
Top Five Market Sectors as of July 31, 2002 |
||
|
% of fund's |
% of fund's net assets |
Consumer Discretionary |
26.1 |
34.4 |
Telecommunication Services |
15.8 |
9.0 |
Financials |
14.3 |
9.4 |
Energy |
9.6 |
1.8 |
Industrials |
9.5 |
0.9 |
Asset Allocation (% of fund's net assets) |
|||||||
As of July 31, 2002 * |
As of January 31, 2002 ** |
||||||
![]() |
Stocks 90.2% |
|
![]() |
Stocks 78.3% |
|
||
![]() |
Bonds 1.6% |
|
![]() |
Bonds 3.2% |
|
||
![]() |
Short-Term |
|
![]() |
Short-Term |
|
||
* Foreign |
2.1% |
|
** Foreign |
1.1% |
|
Annual Report
Showing Percentage of Net Assets
Common Stocks - 89.9% |
|||
Shares |
Value (Note 1) |
||
CONSUMER DISCRETIONARY - 25.1% |
|||
Household Durables - 0.1% |
|||
Champion Enterprises, Inc. (a) |
12,000 |
$ 48,240 |
|
Leisure Equipment & Products - 2.1% |
|||
M&F Worldwide Corp. (a) |
134,400 |
739,200 |
|
Media - 22.7% |
|||
AMC Entertainment, Inc. (a) |
28,340 |
268,663 |
|
Cablevision Systems Corp. - NY Group Class A (a) |
40,000 |
325,200 |
|
EchoStar Communications Corp. Class A (a) |
416,180 |
6,787,895 |
|
Granite Broadcasting Corp. (non vtg.) (a) |
109,000 |
210,370 |
|
Pegasus Communications Corp. Class A (a) |
568,060 |
443,087 |
|
UnitedGlobalCom, Inc. Class A (a) |
102,000 |
204,000 |
|
|
8,239,215 |
||
Textiles Apparel & Luxury Goods - 0.2% |
|||
Tropical Sportswear International Corp. (a) |
4,100 |
80,729 |
|
TOTAL CONSUMER DISCRETIONARY |
9,107,384 |
||
CONSUMER STAPLES - 5.9% |
|||
Food & Drug Retailing - 4.1% |
|||
7-Eleven, Inc. (a) |
78,600 |
610,722 |
|
Pathmark Stores, Inc. (a) |
53,247 |
875,381 |
|
|
1,486,103 |
||
Personal Products - 1.8% |
|||
Revlon, Inc. Class A (a) |
135,200 |
676,000 |
|
TOTAL CONSUMER STAPLES |
2,162,103 |
||
ENERGY - 9.6% |
|||
Energy Equipment & Services - 3.8% |
|||
Grant Prideco, Inc. (a) |
16,900 |
168,831 |
|
Grey Wolf, Inc. (a) |
89,200 |
267,600 |
|
Helmerich & Payne, Inc. |
6,100 |
202,337 |
|
Key Energy Services, Inc. (a) |
45,100 |
362,604 |
|
Nabors Industries Ltd. (a) |
9,700 |
296,044 |
|
Rowan Companies, Inc. |
5,100 |
99,807 |
|
|
1,397,223 |
||
Oil & Gas - 5.8% |
|||
Chesapeake Energy Corp. (a) |
56,300 |
301,205 |
|
Equitable Resources, Inc. |
4,400 |
150,436 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
ENERGY - continued |
|||
Oil & Gas - continued |
|||
Teekay Shipping Corp. |
13,100 |
$ 449,068 |
|
Western Gas Resources, Inc. |
38,100 |
1,191,387 |
|
|
2,092,096 |
||
TOTAL ENERGY |
3,489,319 |
||
FINANCIALS - 14.3% |
|||
Banks - 1.0% |
|||
Wachovia Corp. |
10,700 |
383,060 |
|
Insurance - 10.6% |
|||
American Financial Group, Inc., Ohio |
69,500 |
1,539,425 |
|
Markel Corp. (a) |
7,800 |
1,579,500 |
|
Penn Treaty American Corp. (a) |
164,200 |
730,690 |
|
|
3,849,615 |
||
Real Estate - 2.7% |
|||
LNR Property Corp. |
30,000 |
982,500 |
|
TOTAL FINANCIALS |
5,215,175 |
||
HEALTH CARE - 0.5% |
|||
Health Care Providers & Services - 0.5% |
|||
Hanger Orthopedic Group, Inc. (a) |
15,300 |
182,070 |
|
INDUSTRIALS - 9.5% |
|||
Aerospace & Defense - 0.6% |
|||
Lockheed Martin Corp. |
3,300 |
211,563 |
|
Airlines - 0.3% |
|||
Frontier Airlines, Inc. (a) |
19,400 |
113,102 |
|
Building Products - 2.7% |
|||
American Standard Companies, Inc. (a) |
13,600 |
972,536 |
|
Commercial Services & Supplies - 0.9% |
|||
Allied Waste Industries, Inc. (a) |
48,700 |
321,420 |
|
Industrial Conglomerates - 2.4% |
|||
Tyco International Ltd. |
68,200 |
872,960 |
|
Machinery - 0.2% |
|||
Terex Corp. (a) |
4,500 |
87,885 |
|
Road & Rail - 2.4% |
|||
Kansas City Southern (a) |
54,600 |
887,796 |
|
TOTAL INDUSTRIALS |
3,467,262 |
||
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
INFORMATION TECHNOLOGY - 0.8% |
|||
Semiconductor Equipment & Products - 0.8% |
|||
Micron Technology, Inc. (a) |
14,400 |
$ 280,656 |
|
MATERIALS - 3.8% |
|||
Containers & Packaging - 1.0% |
|||
Owens-Illinois, Inc. (a) |
29,700 |
371,250 |
|
Metals & Mining - 2.8% |
|||
Falconbridge Ltd. |
16,000 |
174,397 |
|
Freeport-McMoRan Copper & Gold, Inc. Class B (a) |
53,700 |
819,999 |
|
|
994,396 |
||
TOTAL MATERIALS |
1,365,646 |
||
TELECOMMUNICATION SERVICES - 15.4% |
|||
Diversified Telecommunication Services - 8.6% |
|||
AT&T Corp. |
51,300 |
522,234 |
|
Focal Communications Corp. (a) |
57,770 |
76,256 |
|
Focal Communications Corp. warrants 12/14/07 (a) |
235,989 |
24 |
|
Level 3 Communications, Inc. (a) |
139,500 |
984,870 |
|
Qwest Communications International, Inc. (a) |
1,206,600 |
1,544,448 |
|
|
3,127,832 |
||
Wireless Telecommunication Services - 6.8% |
|||
American Tower Corp. Class A (a) |
47,800 |
107,072 |
|
Nextel Communications, Inc. Class A (a) |
410,700 |
2,353,311 |
|
|
2,460,383 |
||
TOTAL TELECOMMUNICATION SERVICES |
5,588,215 |
||
UTILITIES - 5.0% |
|||
Electric Utilities - 1.0% |
|||
CMS Energy Corp. |
31,700 |
257,404 |
|
PG&E Corp. (a) |
7,400 |
102,860 |
|
|
360,264 |
||
Gas Utilities - 0.6% |
|||
Kinder Morgan, Inc. |
3,100 |
128,991 |
|
National Fuel Gas Co. |
3,800 |
73,454 |
|
|
202,445 |
||
Multi-Utilities & Unregulated Power - 3.4% |
|||
AES Corp. (a) |
356,600 |
731,030 |
|
Common Stocks - continued |
|||
Shares |
Value (Note 1) |
||
UTILITIES - continued |
|||
Multi-Utilities & Unregulated Power - continued |
|||
Westar Energy, Inc. |
7,600 |
$ 89,072 |
|
Williams Companies, Inc. |
143,100 |
422,145 |
|
|
1,242,247 |
||
TOTAL UTILITIES |
1,804,956 |
||
TOTAL COMMON STOCKS (Cost $46,658,771) |
32,662,786 |
||
Nonconvertible Preferred Stocks - 0.3% |
|||
|
|
|
|
CONSUMER DISCRETIONARY - 0.3% |
|||
Media - 0.3% |
|||
Granite Broadcasting Corp. $127.50 pay-in-kind |
175 |
108,500 |
Nonconvertible Bonds - 1.6% |
|||||
Ratings |
Principal |
|
|||
CONSUMER DISCRETIONARY - 0.7% |
|||||
Media - 0.7% |
|||||
International Cabletel, Inc. 11.5% 2/1/06 (c) |
Ca |
|
$ 910,000 |
136,500 |
|
Satelites Mexicanos SA de CV 6.31% 6/30/04 (d)(e) |
B1 |
|
123,000 |
104,550 |
|
|
241,050 |
||||
CONSUMER STAPLES - 0.5% |
|||||
Personal Products - 0.5% |
|||||
Revlon Consumer Products Corp. 8.625% 2/1/08 |
Ca |
|
395,000 |
189,600 |
|
TELECOMMUNICATION SERVICES - 0.4% |
|||||
Diversified Telecommunication Services - 0.4% |
|||||
NEXTLINK Communications, Inc.: |
|
|
|
|
|
0% 6/1/09 (c)(g) |
Ca |
|
4,230,000 |
42,300 |
|
Nonconvertible Bonds - continued |
|||||
Ratings |
Principal |
Value |
|||
TELECOMMUNICATION SERVICES - continued |
|||||
Diversified Telecommunication Services - continued |
|||||
NEXTLINK Communications, Inc.: - continued |
|
|
|
|
|
0% 12/1/09 (c)(g) |
Ca |
|
$ 7,845,000 |
$ 78,450 |
|
NTL, Inc. 0% 4/1/08 (c)(g) |
Ca |
|
90,000 |
11,700 |
|
|
132,450 |
||||
TOTAL NONCONVERTIBLE BONDS (Cost $2,920,336) |
563,100 |
Money Market Funds - 8.6% |
|||
Shares |
|
||
Fidelity Cash Central Fund, 1.84% (b) |
2,871,828 |
2,871,828 |
|
Fidelity Securities Lending Cash Central Fund, 1.86% (b) |
262,700 |
262,700 |
|
TOTAL MONEY MARKET FUNDS (Cost $3,134,528) |
3,134,528 |
||
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $52,812,510) |
36,468,914 |
||
NET OTHER ASSETS - (0.4)% |
(129,449) |
||
NET ASSETS - 100% |
$ 36,339,465 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments. |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $104,550 or 0.3% of net assets. |
(e) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(f) For certain securities not individually rated by a nationally recognized rating agency, the ratings listed have been assigned by Fidelity. |
(g) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $125,147,643 and $228,902,541, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $70,557 for the period. |
The fund participated in the security lending program during the period. At period end the fund also received as collateral U.S. Treasury obligations valued at $1,187,700. |
The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $4,023,667. The weighted average interest rate was 3.3%. At period end there were no interfund loans outstanding. |
Income Tax Information |
At July 31, 2002, the fund had a capital loss carryforward of approximately $20,468,000 all of which will expire on July 31, 2010. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Assets and Liabilities
|
July 31, 2002 |
|
Assets |
|
|
Investment in securities, at value (including securities loaned of $1,481,196) (cost $52,812,510) - See accompanying schedule |
|
$ 36,468,914 |
Receivable for investments sold |
|
336,956 |
Receivable for fund shares sold |
|
386,579 |
Dividends receivable |
|
3,770 |
Interest receivable |
|
24,422 |
Other receivables |
|
43,783 |
Total assets |
|
37,264,424 |
Liabilities |
|
|
Payable to custodian bank |
$ 6,164 |
|
Payable for investments purchased |
533,244 |
|
Payable for fund shares redeemed |
71,255 |
|
Accrued management fee |
19,871 |
|
Other payables and accrued expenses |
31,725 |
|
Collateral on securities loaned, at value |
262,700 |
|
Total liabilities |
|
924,959 |
Net Assets |
|
$ 36,339,465 |
Net Assets consist of: |
|
|
Paid in capital |
|
$ 74,983,755 |
Undistributed net investment income |
|
122,638 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions |
|
(22,423,327) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies |
|
(16,343,601) |
Net Assets, for 4,929,443 shares outstanding |
|
$ 36,339,465 |
Net Asset Value, offering price and redemption price per share ($36,339,465 ÷ 4,929,443 shares) |
|
$ 7.37 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
|
Year ended July 31, 2002 |
|
Investment Income |
|
|
Dividends |
|
$ 278,169 |
Interest |
|
989,813 |
Security lending |
|
121,341 |
Total income |
|
1,389,323 |
Expenses |
|
|
Management fee |
$ 418,199 |
|
Transfer agent fees |
176,907 |
|
Accounting and security lending fees |
61,687 |
|
Non-interested trustees' compensation |
271 |
|
Custodian fees and expenses |
12,554 |
|
Registration fees |
60,502 |
|
Audit |
25,296 |
|
Legal |
430 |
|
Interest |
1,111 |
|
Miscellaneous |
1,703 |
|
Total expenses before reductions |
758,660 |
|
Expense reductions |
(140,653) |
618,007 |
Net investment income (loss) |
|
771,316 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: |
|
|
Investment securities |
(8,911,358) |
|
Foreign currency transactions |
(120) |
|
Futures contracts |
(56,465) |
|
Total net realized gain (loss) |
|
(8,967,943) |
Change in net unrealized appreciation (depreciation) on: Investment securities |
(23,002,609) |
|
Assets and liabilities in foreign currencies |
(5) |
|
Total change in net unrealized appreciation (depreciation) |
|
(23,002,614) |
Net gain (loss) |
|
(31,970,557) |
Net increase (decrease) in net assets resulting from operations |
|
$ (31,199,241) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
|
Year ended |
December 19, 2000 (commencement |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income (loss) |
$ 771,316 |
$ 1,075,754 |
Net realized gain (loss) |
(8,967,943) |
(13,554,956) |
Change in net unrealized appreciation (depreciation) |
(23,002,614) |
6,737,216 |
Net increase (decrease) in net assets resulting |
(31,199,241) |
(5,741,986) |
Distributions to shareholders from net investment income |
(1,693,352) |
- |
Share transactions |
28,112,721 |
250,722,867 |
Reinvestment of distributions |
1,556,225 |
- |
Cost of shares redeemed |
(155,175,972) |
(50,615,501) |
Net increase (decrease) in net assets resulting from share transactions |
(125,507,026) |
200,107,366 |
Redemption fees |
154,770 |
218,934 |
Total increase (decrease) in net assets |
(158,244,849) |
194,584,314 |
Net Assets |
|
|
Beginning of period |
194,584,314 |
- |
End of period (including undistributed net investment income of $122,638 and undistributed net investment income of $1,171,601, respectively) |
$ 36,339,465 |
$ 194,584,314 |
Other Information Shares |
|
|
Sold |
2,875,744 |
23,105,586 |
Issued in reinvestment of distributions |
164,222 |
- |
Redeemed |
(16,365,761) |
(4,850,348) |
Net increase (decrease) |
(13,325,795) |
18,255,238 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, |
2002 |
2001 F |
Selected Per-Share Data |
|
|
Net asset value, beginning of period |
$ 10.66 |
$ 10.00 |
Income from Investment Operations |
|
|
Net investment income (loss) D |
.11 H |
.07 |
Net realized and unrealized gain (loss) |
(3.22) H |
.58 E |
Total from investment operations |
(3.11) |
.65 |
Distributions from net investment income |
(.20) |
- |
Redemption fees added to paid in capital D |
.02 |
.01 |
Net asset value, end of period |
$ 7.37 |
$ 10.66 |
Total Return B, C |
(29.40)% |
6.60% |
Ratios to Average Net Assets G |
|
|
Expenses before expense reductions |
1.14% |
.94% A |
Expenses net of voluntary waivers, if any |
1.14% |
.94% A |
Expenses net of all reductions |
.93% |
.83% A |
Net investment income (loss) |
1.16% H |
1.12% A |
Supplemental Data |
|
|
Net assets, end of period (000 omitted) |
$ 36,339 |
$ 194,584 |
Portfolio turnover rate |
203% |
230% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E The amount shown for a share outstanding does not correspond with the aggregate net gain (loss) on investments for the period due to the timing of sales and repurchases of shares in relation to fluctuating market values of the investments of the fund.
F For the period December 19, 2000 (commencement of operations) to July 31, 2001.
G Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from directed brokerage or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflects expenses after reimbursement by the investment adviser but prior to reductions from directed brokerage or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.
H Effective August 1, 2001, the Fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. The effect of this change during the period was to increase net investment income (loss) per share by $.02 and decrease net realized and unrealized gain (loss) per share by $.02. Without this change the ratio of net investment income (loss) to average net assets would have been .93%. Per share data, ratios and supplemental data for prior periods have not been restated to reflect this change.
See accompanying notes which are an integral part of the financial statements.
Annual Report
For the period ended July 31, 2002
1. Significant Accounting Policies.
Fidelity Leveraged Company Stock Fund (the fund) is a fund of Fidelity Securities 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 financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
Annual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures, under the general supervision of the Board of Trustees. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
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. As a result, no provision for income taxes is required. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, foreign currency transactions, prior period premium and discount on debt securities, defaulted bonds, market discount, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-basis components of distributable earnings and the federal tax cost as of period end was as follows:
Unrealized appreciation |
$ 2,287,370 |
Unrealized depreciation |
(20,463,738) |
Net unrealized appreciation (depreciation) |
(18,176,368) |
Capital loss carryforward |
(20,467,922) |
Total Distributable earnings |
$ (38,644,290) |
Cost for federal income tax purposes |
$ 54,645,282 |
The tax character of distributions paid during the year was as follows:
Ordinary Income |
$ 1,693,352 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a short-term trading fee equal to 1.50% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.
Change in Accounting Principle. Effective August 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. The cumulative effect of this accounting change had no impact on total net assets of the fund, but resulted in a $78,203 increase to the cost of securities held and a corresponding increase to accumulated net undistributed realized gain (loss), based on securities held by the fund on August 1, 2001.
The effect of this change during the period, was to increase net investment income (loss) by $153,179; decrease net unrealized appreciation/ depreciation by $55,169; and decrease net realized gain (loss) by $98,010. The Statement of Changes in Net Assets and Financial Highlights for prior periods have not been restated to reflect this change in presentation.
2. Operating Policies.
Joint Trading Account. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations.
Annual Report
Notes to Financial Statements - continued
2. Operating Policies - continued
Repurchase Agreements. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a custodian bank. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above.
Futures Contracts. The fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments or if the counter-parties do not perform under the contracts' terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. 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 of .35% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by 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 .63% of the fund's average net assets.
Annual Report
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .27% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $207,604 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 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. During the period, there were no borrowings on this line of credit.
Annual Report
Notes to Financial Statements - continued
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. 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, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is 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. Additional information regarding security lending is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
7. Expense Reductions.
Certain security trades were directed to brokers who paid $133,919 of the fund's expenses. In addition, 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 $6,734.
Annual Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Leveraged Company Stock 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 Leveraged Company Stock Fund (a fund of Fidelity Securities Fund) at July 31, 2002 and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, 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 Leveraged Company Stock 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 auditing standards generally accepted in the United States of America which 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 July 31, 2002 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 6, 2002
Annual Report
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, and review the fund's performance. Except for William O. McCoy and William S. Stavropoulos, each of the Trustees oversees 262 funds advised by FMR or an affiliate. Mr. McCoy oversees 264 funds advised by FMR or an affiliate, and Mr. Stavropoulos oversees 208 funds advised by FMR or an affiliate.
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. 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. The fund's Statement of Additional Information (SAI) includes 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" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Edward C. Johnson 3d (72)** |
|
|
Year of Election or Appointment: 1984 President of Leveraged Company Stock (2000). Mr. Johnson also serves as President of other Fidelity funds. He is Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; a Director of Fidelity Management & Research (U.K.) Inc.; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director (1997) of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. |
Abigail P. Johnson (40)** |
|
|
Year of Election or Appointment: 2001 |
Peter S. Lynch (59) |
|
|
Year of Election or Appointment: 1990 Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. |
* 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.
** Edward C. Johnson 3d, Trustee and President of the funds, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested 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, Age; Principal Occupation |
|
J. Michael Cook (59) |
|
|
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of AT&T (2001), International Flavors & Fragrances, Inc. (2000), Rockwell Automation International (2000), The Dow Chemical Company (2000), and HCA - The Healthcare Company (1999). He is a Member of the Advisory Board of the Securities Regulation Institute, and of the directorship group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Panel to the Comptroller General of the United States. He also serves as a member of the Board of Overseers of the Columbia Business School and a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. |
Ralph F. Cox (70) |
|
|
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. |
Phyllis Burke Davis (70) |
|
|
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Toshiba International Advisory Group of Toshiba Corporation (2001) and a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. |
Robert M. Gates (58) |
|
|
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of Charles Stark Draper Laboratory (non-profit), NACCO Industries, Inc. (mining and manufacturing), TRW Inc. (automotive, space, defense, and information technology), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines) and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. |
Donald J. Kirk (69) |
|
|
Year of Election or Appointment: 1987 Mr. Kirk is a Public Governor of the National Association of Securities Dealers, Inc., and of the American Stock Exchange (2001), a Trustee, and a Director Emeritus and former Chairman of the Board of Directors of National Arts Stabilization Inc., former Chairman of the Board of Trustees of the Greenwich Hospital Association, and a Director of the Yale-New Haven Health Services Corp. (1998). Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). |
Marie L. Knowles (55) |
|
|
Year of Election or Appointment: 2001 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. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. |
Ned C. Lautenbach (58) |
|
|
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and Chief Executive Officer (1999) and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman and C.E.O. of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial, 1997), Axcelis Technologies (semiconductors, 2000), and the Philharmonic Center for the Arts in Naples, Florida (1999). He also serves on the Board of Trustees of Fairfield University and is a member of the Council on Foreign Relations. |
Marvin L. Mann (69) |
|
|
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage, 1997) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. |
William O. McCoy (68) |
|
|
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm, 1997) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). |
William S. Stavropoulos (63) |
|
|
Year of Election or Appointment: 2002 Mr. Stavropoulos also serves as a Trustee (2001) or Member of the Advisory Board (2000) of other investment companies advised by FMR. He is Chairman of the Board and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions, 1997), BellSouth Corporation (telecommunications, 1997), and the Chemical Financial Corporation. He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research and Fordham University. In addition, Mr. Stavropoulos is a member of the American Chemical Society, The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Executive Officers:
Correspondence intended for each executive officer may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation |
|
Bart A. Grenier (43) |
|
|
Year of Election or Appointment: 2001 Vice President of Leveraged Company Stock. Mr. Grenier also serves as Vice President of certain Equity Funds (2001), a position he previously held from 1999 to 2000, and Vice President of High Income Funds (2002). He is Senior Vice President of FMR (1999) and FMR Co., Inc. (2001), and Group Leader of Fidelity's Asset Allocation Group (2000), Fidelity's Growth and Income Group (2001), and Fidelity's Value Group (2001). Previously, Mr. Grenier served as President of Fidelity Ventures (2000), Vice President of certain High Income Bond Funds (1997-2000), Group Leader of the Income-Growth and Asset Allocation-Income Groups (1996-2000), and Assistant Equity Division Head (1997-2000). |
David Glancy (41) |
|
|
Year of Election or Appointment: 2000 Vice President of Leveraged Company Stock. Mr Glancy is also Vice President of other funds advised by FMR. Prior to assuming his current responsibilities, Mr. Glancy managed a variety of Fidelity funds. |
Eric D. Roiter (53) |
|
|
Year of Election or Appointment: 2000 Secretary of Leveraged Company Stock. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter was an Adjunct Member, Faculty of Law, at Columbia University Law School (1996-1997). |
Maria F. Dwyer (43) |
|
|
Year of Election or Appointment: 2002 Treasurer of Leveraged Company Stock. She also serves as Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. |
John H. Costello (55) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of Leveraged Company Stock. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. |
Francis V. Knox, Jr. (55) |
|
|
Year of Election or Appointment: 2002 Assistant Treasurer of Leveraged Company Stock. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), Compliance Officer of FMR Corp., and Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002) and Fidelity Management & Research (Far East) Inc. (1991-2002). |
Thomas J. Simpson (44) |
|
|
Year of Election or Appointment: 2000 Assistant Treasurer of Leveraged Company Stock. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
The fund designates 36%, and 27% of the dividends distributed in September and December, respectively during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2003 of amounts for use in preparing 2002 income tax returns.
Annual Report
A special meeting of the fund's shareholders was held on August 15, 2002. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 |
||
To continue the effectiveness of Article VIII, Section 4 of the Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
34,152,718,540.11 |
89.928 |
Against |
1,595,684,478.44 |
4.202 |
Abstain |
2,229,268,880.72 |
5.870 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 2 |
||
To authorize the Trustees to adopt an amended and restated Declaration of Trust.* |
||
|
# of |
% of |
Affirmative |
33,359,879,895.48 |
87.841 |
Against |
2,506,585,409.20 |
6.600 |
Abstain |
2,111,206,594.59 |
5.559 |
TOTAL |
37,977,671,899.27 |
100.00 |
PROPOSAL 3 |
||
To elect the thirteen nominees specified below as Trustees.* |
||
|
# of |
% of |
J. Michael Cook |
||
Affirmative |
36,227,611,366.72 |
95.392 |
Withheld |
1,750,060,532.55 |
4.608 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ralph F. Cox |
||
Affirmative |
36,182,850,121.37 |
95.274 |
Withheld |
1,794,821,777.90 |
4.726 |
TOTAL |
37,977,671,899.27 |
100.00 |
|
# of |
% of |
Phyllis Burke Davis |
||
Affirmative |
36,151,180,469.12 |
95.191 |
Withheld |
1,826,491,430.15 |
4.809 |
TOTAL |
37,977,671,899.27 |
100.00 |
Robert M. Gates |
||
Affirmative |
36,207,443,324.51 |
95.339 |
Withheld |
1,770,228,574.76 |
4.661 |
TOTAL |
37,977,671,899.27 |
100.00 |
Abigail P. Johnson |
||
Affirmative |
36,153,684,587.30 |
95.197 |
Withheld |
1,823,987,311.97 |
4.803 |
TOTAL |
37,977,671,899.27 |
100.00 |
Edward C. Johnson 3d |
||
Affirmative |
36,146,668,992.04 |
95.179 |
Withheld |
1,831,002,907.23 |
4.821 |
TOTAL |
37,977,671,899.27 |
100.00 |
Donald J. Kirk |
||
Affirmative |
36,212,215,628.07 |
95.351 |
Withheld |
1,765,456,271.20 |
4.649 |
TOTAL |
37,977,671,899.27 |
100.00 |
Marie L. Knowles |
||
Affirmative |
36,228,946,938.21 |
95.395 |
Withheld |
1,748,724,961.06 |
4.605 |
TOTAL |
37,977,671,899.27 |
100.00 |
Ned C. Lautenbach |
||
Affirmative |
36,247,557,672.80 |
95.444 |
Withheld |
1,730,114,226.47 |
4.556 |
TOTAL |
37,977,671,899.27 |
100.00 |
Peter S. Lynch |
||
Affirmative |
36,238,626,074.48 |
95.421 |
Withheld |
1,739,045,824.79 |
4.579 |
TOTAL |
37,977,671,899.27 |
100.00 |
*Denotes trust-wide proposals and voting results. |
||
|
# of |
% of |
Marvin L. Mann |
||
Affirmative |
36,208,314,198.20 |
95.341 |
Withheld |
1,769,357,701.07 |
4.659 |
TOTAL |
37,977,671,899.27 |
100.00 |
William O. McCoy |
||
Affirmative |
36,216,504,381.47 |
95.371 |
Withheld |
1,758,167,517.80 |
4.629 |
TOTAL |
37,977,671,899.27 |
100.00 |
William S. Stavropoulos |
||
Affirmative |
36,124,608,895.89 |
95.121 |
Withheld |
1,853,063,003.38 |
4.879 |
TOTAL |
37,977,671,899.27 |
100.00 |
Annual Report
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
7373 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
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1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
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527 North Brand Boulevard
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Irvine, CA
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Larkspur, CA
10100 Santa Monica Blvd.
Los Angeles, CA
27101 Puerta Real
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73-575 El Paseo
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Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
Annual Report
Michigan
280 Old N. Woodward Ave.
Birmingham, MI
43420 Grand River Avenue
Novi, MI
29155 Northwestern Hwy.
Southfield, MI
Minnesota
7600 France Avenue South
Edina, MN
Missouri
8885 Ladue Road
Ladue, MO
New Jersey
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
New York
1055 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
North Carolina
4611 Sharon Road
Charlotte, NC
Ohio
3805 Edwards Road
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
16850 SW 72nd Avenue
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
47 Providence Place
Providence, RI
Tennessee
6150 Poplar Avenue
Memphis, TN
Texas
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
Utah
215 South State Street
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
411 108th Avenue, N.E.
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
595 North Barker Road
Brookfield, WI
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
Fidelity's Growth Funds
Aggressive Growth Fund
Blue Chip Growth Fund
Capital Appreciation Fund
Contrafund ®
Contrafund® II
Disciplined Equity Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity Fifty ®
Focused Stock Fund
Growth Company Fund
Independence Fund
Large Cap Stock Fund
Leveraged Company Stock Fund
Low-Priced Stock Fund
Magellan® Fund
Mid-Cap Stock Fund
New Millennium Fund®
OTC Portfolio
Small Cap Independence Fund
Small Cap Stock Fund
Stock Selector
Structured Large Cap Growth Fund
Structured Large Cap Value Fund
Structured Mid Cap Growth Fund
Structured Mid Cap Value Fund
Tax Managed Stock Fund
Trend Fund
Value Fund
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 ®) (automated graphic)   1-800-544-5555
(automated graphic)   Automated line for quickest service
LSF-ANN-0902 158006
1.762413.101
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
#:
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