UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-02628
Fidelity Municipal Trust
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | December 31 |
Date of reporting period: | June 30, 2006 |
Item 1. Reports to Stockholders
Fidelity® Michigan Municipal Income Fund and Fidelity Michigan Municipal Money Market Fund |
Semiannual Report June 30, 2006 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix1x2.jpg)
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Fidelity Michigan Municipal Income Fund | ||||
Investment Changes | 6 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 7 | A complete list of the fund’s investments with | ||
their market values. | ||||
Financial Statements | 18 | Statements of assets and liabilities, operations, | ||
and changes in net assets, | ||||
as well as financial highlights. | ||||
Fidelity Michigan Municipal Money Market Fund | ||||
Investment Changes | 22 | A summary of major shifts in the fund’s investments | ||
over the past six months and one year. | ||||
Investments | 23 | A complete list of the fund’s investments. | ||
Financial Statements | 32 | Statements of assets and liabilities, operations, | ||
and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 36 | Notes to the Financial Statements | ||
Proxy Voting Results | 42 | |||
Board Approval of | 44 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the funds nor Fidelity Distributors Corporation is a bank. |
Semiannual Report 2
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) on going costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Semiannual Report |
4 |
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Fidelity Michigan Municipal | ||||||||||||
Income Fund | ||||||||||||
Actual | $ 1,000.00 | $ 999.90 | $ 2.48 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.32 | $ 2.51 | |||||||||
Fidelity Michigan Municipal | ||||||||||||
Money Market Fund | ||||||||||||
Actual | $ 1,000.00 | $ 1,014.10 | $ 2.75 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.07 | $ 2.76 | |||||||||
A 5% return per year before expenses |
* Expenses are equal to each Fund’s annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Fidelity Michigan Municipal Income Fund | 50% | |
Fidelity Michigan Municipal Money Market Fund | 55% |
5 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||
Investment Changes | ||||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 41.2 | 45.5 | ||
Escrowed/Pre Refunded | 25.5 | 19.2 | ||
Water & Sewer | 13.9 | 12.8 | ||
Health Care | 6.3 | 7.3 | ||
Special Tax | 5.0 | 5.5 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 10.2 | 11.1 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 6.0 | 6.1 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix6x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
Semiannual Report 6
Fidelity Michigan Municipal Income Fund | ||||
Investments June 30, 2006 (Unaudited) | ||||
Showing Percentage of Net Assets | ||||
Municipal Bonds 99.8% | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Guam 0.1% | ||||
Guam Wtrwks. Auth. Wtr. and Wastewtr. Sys. Rev. | ||||
5.875% 7/1/35 | $ 615,000 | $ 640,713 | ||
Michigan – 98.8% | ||||
Anchor Bay School District 2000 School Bldg. & Site | ||||
Series III, 5.25% 5/1/31 (Pre-Refunded to 5/1/12 @ | ||||
100) (d) | 9,300,000 | 9,907,662 | ||
Ann Arbor Bldg. Auth. Series 2005 A: | ||||
5% 3/1/17 (MBIA Insured) | 1,405,000 | 1,459,907 | ||
5% 3/1/18 (MBIA Insured) | 1,440,000 | 1,496,275 | ||
Ann Arbor Econ. Dev. Corp. Ltd. Oblig. Rev. (Glacier | ||||
Hills, Inc. Proj.) 8.375% 1/15/19 (Escrowed to | ||||
Maturity) (d) | 2,916,000 | 3,608,492 | ||
Bay City Gen. Oblig. 0% 6/1/15 (AMBAC Insured) | 1,725,000 | 1,156,682 | ||
Birmingham County School District Series II, 5.25% | ||||
11/1/19 (Pre-Refunded to 11/1/10 @ 100) (d) | 1,200,000 | 1,263,276 | ||
Brighton Area School District Livingston County Series II, | ||||
0% 5/1/15 (AMBAC Insured) | 10,000,000 | 6,730,600 | ||
Byron Ctr. Pub. Schools 5.5% 5/1/16 | 1,055,000 | 1,113,531 | ||
Caledonia Cmnty. Schools Counties of Kent, Allegan and | ||||
Barry: | ||||
5.25% 5/1/17 | 1,370,000 | 1,449,460 | ||
5.25% 5/1/18 | 1,100,000 | 1,161,798 | ||
Carman-Ainsworth Cmnty. School District: | ||||
5% 5/1/14 (FSA Insured) | 1,765,000 | 1,861,793 | ||
5% 5/1/16 (FSA Insured) | 1,000,000 | 1,047,130 | ||
5% 5/1/17 (FSA Insured) | 2,065,000 | 2,154,642 | ||
5.5% 5/1/14 (Pre-Refunded to 5/1/12 @ 100) (d) | 1,755,000 | 1,892,259 | ||
5.5% 5/1/15 (Pre-Refunded to 5/1/12 @ 100) (d) | 1,850,000 | 1,994,689 | ||
5.5% 5/1/17 (Pre-Refunded to 5/1/12 @ 100) (d) | 2,060,000 | 2,221,113 | ||
Carrier Creek Drainage District #326 5% 6/1/16 | ||||
(AMBAC Insured) | 1,620,000 | 1,696,982 | ||
Charles Stewart Mott Cmnty. College 5% 5/1/17 (MBIA | ||||
Insured) | 1,675,000 | 1,747,712 | ||
Chippewa Valley Schools: | ||||
Series I, 5.375% 5/1/17 (Pre-Refunded to 5/1/11 @ | ||||
100) (d) | 1,000,000 | 1,061,920 | ||
5.5% 5/1/17 (Pre-Refunded to 5/1/12 @ 100) (d) | 1,125,000 | 1,212,986 | ||
Clarkston Cmnty. Schools: | ||||
5.25% 5/1/29 (Pre-Refunded to 5/1/13 @ 100) (d) . | 5,000,000 | 5,351,050 | ||
5.375% 5/1/21 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,950,000 | 2,101,301 | ||
5.375% 5/1/22 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,150,000 | 1,239,229 | ||
Comstock Park Pub. Schools 5% 5/1/16 (FSA Insured) . | 1,000,000 | 1,046,380 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||||||
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value | |||||||||
Amount | (Note 1) | |||||||||
Michigan – continued | ||||||||||
Constantine Pub. Schools: | ||||||||||
5% 5/1/25 | $ 1,130,000 | $ 1,159,459 | ||||||||
5% 5/1/25 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,120,000 | 1,181,298 | ||||||||
5.5% 5/1/18 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,220,000 | 1,320,516 | ||||||||
5.5% 5/1/19 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,245,000 | 1,347,576 | ||||||||
5.5% 5/1/20 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,245,000 | 1,347,576 | ||||||||
5.5% 5/1/21 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,250,000 | 1,352,988 | ||||||||
Crawford AuSable School District (School Bldg. & Site | ||||||||||
Proj.) Series 2001, 5.625% 5/1/18 (Pre-Refunded to | ||||||||||
5/1/11 @ 100) (d) | 1,100,000 | 1,177,583 | ||||||||
Detroit City School District: | ||||||||||
Series 2005 A, 5.25% 5/1/30 (FSA Insured) | 5,000,000 | 5,383,750 | ||||||||
Series A: | ||||||||||
5.5% 5/1/11 (FSA Insured) | 2,000,000 | 2,133,800 | ||||||||
5.5% 5/1/16 (Pre-Refunded to 5/1/12 @ 100) (d) | 1,500,000 | 1,613,280 | ||||||||
5.5% 5/1/18 (Pre-Refunded to 5/1/12 @ 100) (d) | 1,000,000 | 1,075,520 | ||||||||
5.5% 5/1/18 (Pre-Refunded to 5/1/13 @ 100) (d) | 2,000,000 | 2,169,940 | ||||||||
5.5% 5/1/20 (Pre-Refunded to 5/1/12 @ 100) (d) | 3,050,000 | 3,280,336 | ||||||||
Series B, 5.25% 5/1/15 (FGIC Insured) | 3,085,000 | 3,267,663 | ||||||||
Detroit Convention Facilities Rev. (Cobo Hall Expansion | ||||||||||
Proj.): | ||||||||||
5% 9/30/11 (MBIA Insured) | 3,000,000 | 3,145,980 | ||||||||
5% 9/30/12 (MBIA Insured) | 4,765,000 | 5,019,928 | ||||||||
Detroit Gen. Oblig.: | ||||||||||
(Distributable State Aid Proj.) 5.25% 5/1/09 (AMBAC | ||||||||||
Insured) | 4,525,000 | 4,677,809 | ||||||||
Series 2003 A, 5% 4/1/11 (XL Cap. Assurance, Inc. | ||||||||||
Insured) | 1,430,000 | 1,481,065 | ||||||||
Series 2005 B, 5% 4/1/13 (FSA Insured) | 1,830,000 | 1,910,630 | ||||||||
Series 2005 C, 5% 4/1/13 (FSA Insured) | 1,985,000 | 2,072,459 | ||||||||
Series B1, 5% 4/1/13 (AMBAC Insured) | 2,000,000 | 2,088,120 | ||||||||
5.5% 4/1/17 (Pre-Refunded to 4/1/11 @ 100) (d) | 2,615,000 | 2,788,348 | ||||||||
5.5% 4/1/19 (Pre-Refunded to 4/1/11 @ 100) (d) | 1,500,000 | 1,599,435 | ||||||||
5.5% 4/1/20 (Pre-Refunded to 4/1/11 @ 100) (d) | 1,250,000 | 1,332,863 | ||||||||
Detroit Swr. Disp. Rev.: | ||||||||||
Series 2001 D1, 5.5%, tender 7/1/08 (MBIA | ||||||||||
Insured) (b) | 10,000,000 | 10,279,700 | ||||||||
Series A: | ||||||||||
0% 7/1/14 (FGIC Insured) | 6,730,000 | 4,720,759 | ||||||||
5.125% 7/1/31 (FGIC Insured) | 8,020,000 | 8,202,054 | ||||||||
Detroit Wtr. Supply Sys. Rev.: | ||||||||||
Series 2001 A, 5.25% 7/1/33 (FGIC Insured) | 6,390,000 | 6,604,768 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||||||
Principal | Value | |||||||||
Amount | (Note 1) | |||||||||
Michigan – continued | ||||||||||
Detroit Wtr. Supply Sys. Rev.: – continued | ||||||||||
Series A: | ||||||||||
5.5% 7/1/15 (Pre-Refunded to 1/1/10 @ 101) (d) | $ 3,675,000 | $ 3,889,620 | ||||||||
5.75% 7/1/11 (MBIA Insured) | 3,050,000 | 3,294,824 | ||||||||
Series B: | ||||||||||
5.25% 7/1/17 (MBIA Insured) | 2,760,000 | 2,909,951 | ||||||||
5.5% 7/1/33 (FGIC Insured) | 10,000,000 | 10,637,400 | ||||||||
6.5% 7/1/15 (FGIC Insured) | 6,025,000 | 6,989,723 | ||||||||
Dexter Cmnty. Schools 5% 5/1/18 (Liquidity Facility | ||||||||||
Sumitomo Bank Lease Fin., Inc. (SBLF)) | 1,955,000 | 2,026,846 | ||||||||
Dundee Cmnty. School District: | ||||||||||
Series 2000, 5.375% 5/1/27 (Pre-Refunded to | ||||||||||
5/1/10 @ 100) (d) | 1,195,000 | 1,256,483 | ||||||||
5.375% 5/1/19 (Pre-Refunded to 5/1/10 @ 100) (d) | 1,000,000 | 1,051,450 | ||||||||
Durand Area Schools Gen. Oblig.: | ||||||||||
5% 5/1/27 (FSA Insured) | 1,225,000 | 1,255,503 | ||||||||
5% 5/1/28 (FSA Insured) | 1,250,000 | 1,278,150 | ||||||||
5% 5/1/29 (FSA Insured) | 1,275,000 | 1,297,695 | ||||||||
East China School District 5.5% 5/1/17 (Pre-Refunded | ||||||||||
to 11/1/11 @ 100) (d) | 1,775,000 | 1,905,729 | ||||||||
East Grand Rapids Pub. School District: | ||||||||||
5% 5/1/16 (FSA Insured) | 1,425,000 | 1,484,793 | ||||||||
5% 5/1/17 (FSA Insured) | 1,985,000 | 2,062,951 | ||||||||
5.5% 5/1/17 | 1,690,000 | 1,772,827 | ||||||||
East Lansing School District Gen. Oblig. Series B, 5% | ||||||||||
5/1/30 (MBIA Insured) | 3,530,000 | 3,608,084 | ||||||||
Eastern Michigan Univ. Revs. Series 2000 B, 5.625% | ||||||||||
6/1/30 (Pre-Refunded to 6/1/10 @ 100) (d) | 1,250,000 | 1,326,850 | ||||||||
Farmington Pub. School District 5% 5/1/18 (FSA | ||||||||||
Insured) | 4,500,000 | 4,671,990 | ||||||||
Fenton Area Pub. Schools 5% 5/1/14 (FGIC Insured) | 1,775,000 | 1,866,288 | ||||||||
Ferris State Univ. Rev.: | ||||||||||
5% 10/1/16 (MBIA Insured) | 1,255,000 | 1,306,468 | ||||||||
5% 10/1/17 (MBIA Insured) | 1,320,000 | 1,369,513 | ||||||||
Flushing Cmnty. Schools: | ||||||||||
5.25% 5/1/17 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,000,000 | 1,070,210 | ||||||||
5.25% 5/1/18 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,030,000 | 1,102,316 | ||||||||
Fraser Pub. School District: | ||||||||||
5% 5/1/16 (FSA Insured) | 1,055,000 | 1,101,578 | ||||||||
5% 5/1/17 (FSA Insured) | 1,615,000 | 1,685,107 | ||||||||
Garden City School District: | ||||||||||
5% 5/1/14 (FSA Insured) | 1,210,000 | 1,272,230 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||||||
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value | |||||||||
Amount | (Note 1) | |||||||||
Michigan – continued | ||||||||||
Garden City School District: – continued | ||||||||||
5% 5/1/17 (FSA Insured) | $ 1,390,000 | $ 1,445,183 | ||||||||
Genesee County Gen. Oblig. Series A: | ||||||||||
5% 5/1/17 (MBIA Insured) | 1,355,000 | 1,403,780 | ||||||||
5% 5/1/18 (MBIA Insured) | 1,505,000 | 1,553,657 | ||||||||
Gibraltar School District: | ||||||||||
5% 5/1/16 (FSA Insured) | 1,230,000 | 1,278,831 | ||||||||
5% 5/1/17 (FSA Insured) | 1,230,000 | 1,274,280 | ||||||||
5.5% 5/1/18 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,200,000 | 1,298,868 | ||||||||
5.5% 5/1/21 (Pre-Refunded to 11/1/12 @ 100) (d) | 1,200,000 | 1,298,868 | ||||||||
Grand Blanc Cmnty. Schools 5.5% 5/1/13 (FGIC | ||||||||||
Insured) | 1,000,000 | 1,063,780 | ||||||||
Grand Rapids Downtown Dev. Auth. Tax Increment Rev. | ||||||||||
0% 6/1/11 (MBIA Insured) | 3,160,000 | 2,571,229 | ||||||||
Grand Rapids San. Swr. Sys. Rev. 5% 1/1/34 (MBIA | ||||||||||
Insured) | 3,000,000 | 3,056,520 | ||||||||
Grand Rapids Wtr. Supply Sys.: | ||||||||||
5% 1/1/35 (FGIC Insured) | 5,000,000 | 5,098,350 | ||||||||
5.75% 1/1/11 (FGIC Insured) | 2,020,000 | 2,168,127 | ||||||||
Grosse Ile Township School District Unltd. Tax Gen. | ||||||||||
Oblig.: | ||||||||||
5% 5/1/29 (MBIA Insured) | 1,950,000 | 1,992,374 | ||||||||
5% 5/1/32 (MBIA Insured) | 1,950,000 | 1,984,710 | ||||||||
Hamilton Cmnty. Schools District 5% 5/1/24 (FGIC | ||||||||||
Insured) | 1,500,000 | 1,515,735 | ||||||||
Haslett Pub. Schools 5% 5/1/16 (MBIA Insured) | 1,100,000 | 1,143,670 | ||||||||
Howell Pub. Schools 0% 5/1/10 (AMBAC Insured) | 1,130,000 | 964,116 | ||||||||
Hudsonville Pub. Schools 5% 5/1/16 (FSA Insured) | 1,000,000 | 1,039,700 | ||||||||
Huron School District 5.625% 5/1/16 (Pre-Refunded to | ||||||||||
5/1/11 @ 100) (d) | 1,050,000 | 1,126,430 | ||||||||
Huron Valley School District: | ||||||||||
0% 5/1/10 (FGIC Insured) | 2,500,000 | 2,133,000 | ||||||||
0% 5/1/11 (FGIC Insured) | 5,830,000 | 4,760,428 | ||||||||
0% 5/1/12 (FGIC Insured) | 1,420,000 | 1,107,316 | ||||||||
5.25% 5/1/16 | 2,450,000 | 2,601,018 | ||||||||
Kent Hosp. Fin. Auth. Hosp. Facilities Rev.: | ||||||||||
(Butterworth Hosp. Proj.) Series A, 7.25% 1/15/13 | 3,685,000 | 4,053,242 | ||||||||
(Spectrum Health Proj.) Series A: | ||||||||||
5.375% 1/15/11 | 2,420,000 | 2,494,488 | ||||||||
5.375% 1/15/12 | 2,505,000 | 2,584,083 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Michigan – continued | ||||||||
L’Anse Creuse Pub. Schools: | ||||||||
5.375% 5/1/18 (Pre-Refunded to 11/1/12 @ | ||||||||
100) (d) | $ 1,000,000 | $ 1,070,860 | ||||||
5.375% 5/1/20 (Pre-Refunded to 11/1/12 @ | ||||||||
100) (d) | 1,000,000 | 1,072,590 | ||||||
Lake Orion Cmnty. School District 5.25% 5/1/27 (Pre- | ||||||||
Refunded to 5/1/12 @ 100) (d) | 1,150,000 | 1,222,071 | ||||||
Lansing Bldg. Auth. Rev. 0% 6/1/12 (AMBAC Insured) . | 3,000,000 | 2,331,060 | ||||||
Lawton Cmnty. Schools 5.5% 5/1/19 (Pre-Refunded to | ||||||||
11/1/11 @ 100) (d) | 1,050,000 | 1,124,729 | ||||||
Livonia Muni. Bldg. Auth. 5% 5/1/17 (FGIC Insured) | 1,100,000 | 1,122,902 | ||||||
Livonia Pub. School District Series II, 0% 5/1/21 (FGIC | ||||||||
Insured) (Pre-Refunded to 5/1/07 @ 39.31) (d) | 8,480,000 | 3,229,099 | ||||||
Michigan Bldg. Auth. Rev. (Facilities Prog.): | ||||||||
Series II, 5% 10/15/33 (AMBAC Insured) | 3,000,000 | 3,060,030 | ||||||
Series III, 5% 10/15/10 (MBIA Insured) | 1,000,000 | 1,042,070 | ||||||
Michigan Comprehensive Trans. Rev. Series B: | ||||||||
5.25% 5/15/11 (FSA Insured) | 1,475,000 | 1,558,264 | ||||||
5.25% 5/15/16 (Pre-Refunded to 5/15/12 @ | ||||||||
100) (d) | 3,850,000 | 4,092,743 | ||||||
Michigan Ctfs. of Prtn. 5.75% 6/1/17 (Pre-Refunded to | ||||||||
6/1/10 @ 100) (d) | 3,000,000 | 3,197,880 | ||||||
Michigan Gen. Oblig. (Envir. Protection Prog.) 6.25% | ||||||||
11/1/12 | 2,665,000 | 2,895,443 | ||||||
Michigan Higher Ed. Student Ln. Auth. Rev. Series XII W, | ||||||||
4.875% 9/1/10 (AMBAC Insured) (c) | 3,000,000 | 3,037,470 | ||||||
Michigan Hosp. Fin. Auth. Hosp. Rev.: | ||||||||
(Ascension Health Cr. Group Proj.) Series A: | ||||||||
5%, tender 4/1/11 (b) | 2,035,000 | 2,105,024 | ||||||
6% 11/15/19 (Pre-Refunded to 11/15/09 @ | ||||||||
101) (d) | 10,645,000 | 11,403,868 | ||||||
(Crittenton Hosp. Proj.) Series A: | ||||||||
5.5% 3/1/13 | 455,000 | 478,742 | ||||||
5.5% 3/1/14 | 1,300,000 | 1,368,601 | ||||||
5.5% 3/1/15 | 1,985,000 | 2,087,426 | ||||||
(Genesys Reg’l. Med. Hosp. Proj.) Series A, 5.3% | ||||||||
10/1/11 (Escrowed to Maturity) (d) | 1,000,000 | 1,040,560 | ||||||
(Henry Ford Health Sys. Proj.): | ||||||||
Series 2003 A, 5.5% 3/1/14 (Pre-Refunded to | ||||||||
3/1/13 @ 100) (d) | 2,000,000 | 2,154,240 | ||||||
Series A: | ||||||||
5% 11/15/09 | 650,000 | 667,531 | ||||||
5% 11/15/12 | 1,485,000 | 1,542,217 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Michigan – continued | ||||||||
Michigan Hosp. Fin. Auth. Hosp. Rev.: – continued | ||||||||
(Henry Ford Health Sys. Proj.): | ||||||||
Series A: | ||||||||
5% 11/15/14 | $ 1,000,000 | $ 1,038,690 | ||||||
6% 11/15/19 (Pre-Refunded to 11/15/09 @ | ||||||||
101) (d) | 1,945,000 | 2,083,659 | ||||||
6% 9/1/12 (Escrowed to Maturity) (d) | 1,500,000 | 1,647,525 | ||||||
(Mercy Health Svcs. Proj.): | ||||||||
Series 1996 R, 5.375% 8/15/26 (Escrowed to | ||||||||
Maturity) (d) | 2,500,000 | 2,527,425 | ||||||
Series Q: | ||||||||
5.25% 8/15/10 (Escrowed to Maturity) (d) | 2,195,000 | 2,219,935 | ||||||
5.375% 8/15/26 (Escrowed to Maturity) (d) | 2,450,000 | 2,476,877 | ||||||
6% 8/15/08 (Escrowed to Maturity) (d) | 1,130,000 | 1,144,283 | ||||||
6% 8/15/10 (Escrowed to Maturity) (d) | 1,265,000 | 1,281,319 | ||||||
Series R, 5.375% 8/15/16 (Escrowed to | ||||||||
Maturity) (d) | 2,500,000 | 2,527,700 | ||||||
(MidMichigan Health Obligated Group Prog.) Series | ||||||||
2002 A, 5.5% 4/15/18 (AMBAC Insured) | 2,000,000 | 2,119,340 | ||||||
(Oakwood Obligated Group Proj.) 5.5% 11/1/11 | 3,000,000 | 3,175,200 | ||||||
(Saint John Hosp. & Med. Ctr. Proj.) Series A, 6% | ||||||||
5/15/09 (Escrowed to Maturity) (d) | 1,710,000 | 1,797,159 | ||||||
(Sisters of Mercy Health Corp. Proj.) Series P, 5.375% | ||||||||
8/15/14 (Escrowed to Maturity) (d) | 570,000 | 599,007 | ||||||
(Sparrow Hosp. Obligated Group Proj.): | ||||||||
5.5% 11/15/21 | 1,435,000 | 1,503,808 | ||||||
5.625% 11/15/31 | 4,500,000 | 4,671,135 | ||||||
(Trinity Health Sys. Proj.) Series 2000 A, 6% 12/1/27 | 1,535,000 | 1,651,952 | ||||||
Michigan Muni. Bond Auth. Rev.: | ||||||||
(Detroit School District Proj.) Series B, 5% 6/1/12 | ||||||||
(FSA Insured) | 7,300,000 | 7,633,318 | ||||||
(Local Govt. Ln. Prog.): | ||||||||
Series A: | ||||||||
0% 12/1/07 (FGIC Insured) | 5,340,000 | 5,057,674 | ||||||
4.75% 12/1/09 (FGIC Insured) | 6,000,000 | 6,003,180 | ||||||
Series CA, 0% 6/15/13 (FSA Insured) | 3,850,000 | 2,844,188 | ||||||
Series G, 0% 5/1/19 (AMBAC Insured) | 1,865,000 | 1,017,861 | ||||||
7.5% 11/1/09 (AMBAC Insured) | 15,000 | 15,032 | ||||||
Series C, 5% 5/1/11 | 2,085,000 | 2,180,097 | ||||||
5% 10/1/23 | 5,000,000 | 5,159,850 | ||||||
5.375% 10/1/19 | 2,005,000 | 2,145,430 | ||||||
Michigan Strategic Fund Exempt Facilities Rev. (Waste | ||||||||
Mgmt., Inc. Proj.) 3.75%, tender 8/1/07 (b)(c) | 3,000,000 | 2,980,080 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Michigan – continued | ||||||||
Michigan Strategic Fund Ltd. Oblig. Rev. (Detroit Edison | ||||||||
Co. Proj.): | ||||||||
Series A, 5.55% 9/1/29 (MBIA Insured) (c) | $ 1,000,000 | $ 1,041,680 | ||||||
Series BB: | ||||||||
7% 7/15/08 (MBIA Insured) | 2,200,000 | 2,330,658 | ||||||
7% 5/1/21 (AMBAC Insured) | 8,520,000 | 10,667,210 | ||||||
Michigan Trunk Line: | ||||||||
Series A: | ||||||||
0% 10/1/11 (AMBAC Insured) | 3,630,000 | 2,911,042 | ||||||
5.5% 11/1/16 | 3,000,000 | 3,297,300 | ||||||
5.25% 11/1/15 (FGIC Insured) (a) | 5,000,000 | 5,381,150 | ||||||
5.25% 10/1/16 (FSA Insured) | 3,000,000 | 3,177,810 | ||||||
Mona Shores School District 6.75% 5/1/10 (FGIC | ||||||||
Insured) | 2,220,000 | 2,433,275 | ||||||
Montague Pub. School District: | ||||||||
5.5% 5/1/16 | 1,005,000 | 1,060,265 | ||||||
5.5% 5/1/17 | 1,005,000 | 1,058,808 | ||||||
5.5% 5/1/19 | 1,090,000 | 1,145,187 | ||||||
Morenci Area Schools 5.25% 5/1/21 (Pre-Refunded to | ||||||||
5/1/12 @ 100) (d) | 1,410,000 | 1,502,129 | ||||||
Mount Clemens Cmnty. School District: | ||||||||
0% 5/1/17 | 5,000,000 | 2,448,550 | ||||||
5.5% 5/1/16 (Pre-Refunded to 11/1/11 @ 100) (d) . | 1,000,000 | 1,073,650 | ||||||
Muskegon Heights Wtr. Sys. Rev. Series 2000 A: | ||||||||
5.625% 11/1/20 (Pre-Refunded to 11/1/10 @ | ||||||||
100) (d) | 2,075,000 | 2,215,042 | ||||||
5.625% 11/1/30 (Pre-Refunded to 11/1/10 @ | ||||||||
100) (d) | 1,570,000 | 1,675,959 | ||||||
New Haven Cmnty. Schools 5.25% 5/1/18 (Pre-Re- | ||||||||
funded to 11/1/12 @ 100) (d) | 1,175,000 | 1,255,558 | ||||||
New Lothrop Area Pub. Schools Gen. Oblig. 5% | ||||||||
5/1/35 (FSA Insured) | 1,000,000 | 1,015,570 | ||||||
Northville Pub. Schools: | ||||||||
Series II: | ||||||||
5% 5/1/15 (FSA Insured) | 1,525,000 | 1,610,598 | ||||||
5% 5/1/16 (FSA Insured) | 1,475,000 | 1,533,558 | ||||||
5% 5/1/17 (FSA Insured) | 3,675,000 | 3,826,998 | ||||||
Northwestern Michigan Cmnty. College Impt.: | ||||||||
5.5% 4/1/14 (FGIC Insured) | 285,000 | 297,574 | ||||||
5.5% 4/1/15 (FGIC Insured) | 170,000 | 177,500 | ||||||
Northwestern Michigan College Gen. Oblig. 5% 4/1/14 | ||||||||
(AMBAC Insured) | 2,000,000 | 2,101,920 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Michigan – continued | ||||||||
Oakland Univ. Rev. 5% 5/15/12 (AMBAC Insured) | $ 1,020,000 | $ 1,068,950 | ||||||
Okemos Pub. School District: | ||||||||
0% 5/1/12 (MBIA Insured) | 2,500,000 | 1,949,500 | ||||||
0% 5/1/13 (MBIA Insured) | 1,700,000 | 1,262,573 | ||||||
Ovid-Elsie Area Schools Counties of Clinton, Shawassee, | ||||||||
Saginaw and Gratiot 5% 5/1/18 (Pre-Refunded to | ||||||||
11/1/12 @ 100) (d) | 1,515,000 | 1,597,916 | ||||||
Petoskey Pub. School District: | ||||||||
5% 5/1/14 (MBIA Insured) | 1,430,000 | 1,498,697 | ||||||
5% 5/1/16 (MBIA Insured) | 1,945,000 | 2,036,668 | ||||||
Plainwell Cmnty. School District: | ||||||||
5% 5/1/15 (FSA Insured) | 1,030,000 | 1,083,941 | ||||||
5% 5/1/16 (FSA Insured) | 1,025,000 | 1,077,142 | ||||||
5.5% 5/1/14 | 1,000,000 | 1,077,760 | ||||||
5.5% 5/1/16 (Pre-Refunded to 11/1/12 @ 100) (d) . | 1,000,000 | 1,079,490 | ||||||
Port Huron Area School District County of Saint Clair: | ||||||||
0% 5/1/08 (Liquidity Facility Michigan School Bond | ||||||||
Ln. Fund) | 1,975,000 | 1,838,666 | ||||||
5.25% 5/1/16 | 1,175,000 | 1,249,483 | ||||||
5.25% 5/1/17 | 2,125,000 | 2,252,436 | ||||||
5.25% 5/1/18 | 2,175,000 | 2,295,539 | ||||||
Riverview Cmnty. School District: | ||||||||
5% 5/1/14 | 905,000 | 953,399 | ||||||
5% 5/1/15 | 955,000 | 1,002,817 | ||||||
5% 5/1/17 | 1,000,000 | 1,041,960 | ||||||
5% 5/1/18 | 1,000,000 | 1,039,270 | ||||||
Rochester Cmnty. School District: | ||||||||
Series II, 5.5% 5/1/16 (Pre-Refunded to 11/1/11 @ | ||||||||
100) (d) | 1,125,000 | 1,207,856 | ||||||
5% 5/1/19 (MBIA Insured) | 1,000,000 | 1,055,230 | ||||||
Royal Oak Hosp. Fin. Auth. Hosp. Rev. (William | ||||||||
Beaumont Hosp. Proj.) Series M, 5.25% 11/15/31 | ||||||||
(MBIA Insured) | 2,000,000 | 2,047,640 | ||||||
Saint Clair County Gen. Oblig.: | ||||||||
5% 4/1/17 (AMBAC Insured) | 1,380,000 | 1,433,710 | ||||||
5% 4/1/19 (AMBAC Insured) | 1,475,000 | 1,528,484 | ||||||
Saint Joseph School District 5.5% 5/1/18 (Pre-Refunded | ||||||||
to 11/1/11 @ 100) (d) | 1,065,000 | 1,143,437 | ||||||
South Haven Pub. Schools: | ||||||||
5% 5/1/21 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,450,000 | 1,530,403 | ||||||
5% 5/1/22 (Pre-Refunded to 5/1/13 @ 100) (d) | 1,350,000 | 1,424,858 | ||||||
South Lyon Cmnty. Schools (School Bldg. and Site Prog.) | ||||||||
5.25% 5/1/15 (FGIC Insured) | 1,000,000 | 1,060,540 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||||
Principal | Value | |||||||||
Amount | (Note 1) | |||||||||
Michigan – continued | ||||||||||
South Redford School District 5% 5/1/16 (MBIA Insured) | $ 1,125,000 | $ 1,173,836 | ||||||||
Southfield Library Bldg. Auth. 5.5% 5/1/21 (Pre- | ||||||||||
Refunded to 5/1/10 @ 100) (d) | 1,425,000 | 1,504,586 | ||||||||
Southfield Pub. Schools: | ||||||||||
Series A: | ||||||||||
5.25% 5/1/17 (Liquidity Facility Sumitomo Bank | ||||||||||
Lease Fin., Inc. (SBLF)) | 1,025,000 | 1,084,450 | ||||||||
5.25% 5/1/18 (Liquidity Facility Sumitomo Bank | ||||||||||
Lease Fin., Inc. (SBLF)) | 1,025,000 | 1,082,585 | ||||||||
5.25% 5/1/19 (Liquidity Facility Sumitomo Bank | ||||||||||
Lease Fin., Inc. (SBLF)) | 1,025,000 | 1,082,585 | ||||||||
5.25% 5/1/20 (Liquidity Facility Sumitomo Bank | ||||||||||
Lease Fin., Inc. (SBLF)) | 1,025,000 | 1,081,959 | ||||||||
Series B: | ||||||||||
5.125% 5/1/16 (FSA Insured) | 2,780,000 | 2,928,869 | ||||||||
5.25% 5/1/25 (FSA Insured) | 6,500,000 | 6,817,915 | ||||||||
Taylor City Bldg. Auth. County of Wayne Bldg. Auth. | ||||||||||
Pub. Facilities 5% 10/1/21 (MBIA Insured) | 1,735,000 | 1,787,952 | ||||||||
Tecumseh Pub. Schools 5.5% 5/1/30 (Pre-Refunded to | ||||||||||
5/1/10 @ 100) (d) | 1,250,000 | 1,319,813 | ||||||||
Troy School District: | ||||||||||
5% 5/1/13 (MBIA Insured) | 1,000,000 | 1,053,620 | ||||||||
5% 5/1/15 | 2,135,000 | 2,241,899 | ||||||||
5% 5/1/15 (MBIA Insured) | 1,000,000 | 1,056,130 | ||||||||
5% 5/1/16 (MBIA Insured) | 1,000,000 | 1,056,350 | ||||||||
Utica Cmnty. Schools: | ||||||||||
5% 5/1/17 | 3,000,000 | 3,126,660 | ||||||||
5.25% 5/1/15 | 725,000 | 773,234 | ||||||||
5.375% 5/1/16 | 2,250,000 | 2,419,020 | ||||||||
5.5% 5/1/17 | 1,000,000 | 1,081,870 | ||||||||
Warren Consolidated School District 5.375% 5/1/16 | ||||||||||
(FSA Insured) | 2,350,000 | 2,490,601 | ||||||||
Waverly Cmnty. School District: | ||||||||||
5% 5/1/11 (FSA Insured) | 1,000,000 | 1,045,170 | ||||||||
5% 5/1/17 (FSA Insured) | 3,090,000 | 3,237,949 | ||||||||
5.75% 5/1/14 (Pre-Refunded to 5/1/10 @ 100) (d) | . | 1,000,000 | 1,064,630 | |||||||
5.75% 5/1/16 (Pre-Refunded to 5/1/10 @ 100) (d) | . | 1,000,000 | 1,064,630 | |||||||
Wayne Charter County Gen. Oblig. Series 2001 A, | ||||||||||
5.5% 12/1/17 (MBIA Insured) | 1,000,000 | 1,049,940 | ||||||||
West Ottawa Pub. School District 5.25% 5/1/10 (FGIC | ||||||||||
Insured) | 850,000 | 859,733 | ||||||||
Whitehall District Schools 5.5% 5/1/15 (Pre-Refunded | ||||||||||
to 11/1/11 @ 100) (d) | 1,000,000 | 1,073,650 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Bonds continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Williamston Cmnty. Schools Gen. Oblig. 5% 5/1/18 | ||||||
(FGIC Insured) | $ 1,000,000 | $ 1,039,700 | ||||
Willow Run Cmnty. Schools County of Washtenaw: | ||||||
5% 5/1/17 (FSA Insured) | 1,875,000 | 1,949,438 | ||||
5.5% 5/1/16 (Pre-Refunded to 5/1/11 @ 100) (d) | 1,630,000 | 1,739,797 | ||||
Woodhaven-Brownstown School District County of | ||||||
Wayne: | ||||||
5.375% 5/1/16 | 1,710,000 | 1,832,727 | ||||
5.375% 5/1/18 (FSA Insured) | 1,875,000 | 2,009,569 | ||||
Wyandotte City School District 5.375% 5/1/20 (Pre-Re- | ||||||
funded to 5/1/12 @ 100) (d) | 1,050,000 | 1,125,359 | ||||
Wyandotte Elec. Rev.: | ||||||
5.375% 10/1/14 (MBIA Insured) | 3,485,000 | 3,625,027 | ||||
5.375% 10/1/15 (MBIA Insured) | 1,670,000 | 1,737,101 | ||||
Wyoming Sewage Disp. Sys. Rev. 5% 6/1/30 (MBIA | ||||||
Insured) | 4,000,000 | 4,089,240 | ||||
Zeeland Pub. Schools: | ||||||
5% 5/1/16 (FGIC Insured) | 2,035,000 | 2,129,383 | ||||
5% 5/1/17 (FGIC Insured) | 1,500,000 | 1,565,115 | ||||
5.25% 5/1/16 (MBIA Insured) | 1,050,000 | 1,114,869 | ||||
538,219,895 | ||||||
Puerto Rico 0.9% | ||||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. | ||||||
Rev. Series 1996 Y, 5% 7/1/36 (MBIA Insured) | 2,500,000 | 2,549,225 | ||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Trans. | ||||||
Rev. Series L, 5.25% 7/1/38 (AMBAC Insured) | $ 1,000,000 | $ 1,080,070 | ||||
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Series QQ, 5.5% | ||||||
7/1/18 (XL Cap. Assurance, Inc. Insured) | 1,000,000 | 1,100,630 | ||||
4,729,925 | ||||||
TOTAL INVESTMENT PORTFOLIO 99.8% | ||||||
(Cost $537,269,015) | 543,590,533 | |||||
NET OTHER ASSETS – 0.2% | 845,864 | |||||
NET ASSETS 100% | $ 544,436,397 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
16 |
Legend (a) Security or a portion of the security purchased on a delayed delivery or when-issued basis. (b) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (c) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (d) Security collateralized by an amount sufficient to pay interest and principal. |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 41.2% | |
Escrowed/Pre Refunded | 25.5% | |
Water & Sewer | 13.9% | |
Health Care | 6.3% | |
Special Tax | 5.0% | |
Others* (individually less than 5%) | 8.1% | |
100.0% |
*Includes net other assets
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $537,269,015) | $ 543,590,533 | |||||
Cash | 1,012,731 | |||||
Receivable for fund shares sold | 546,031 | |||||
Interest receivable | 5,813,396 | |||||
Prepaid expenses | 1,146 | |||||
Other receivables | 74,790 | |||||
Total assets | 551,038,627 | |||||
Liabilities | ||||||
Payable for investments purchased on a delayed delivery | ||||||
basis | $ 5,373,150 | |||||
Payable for fund shares redeemed | 324,485 | |||||
Distributions payable | 606,971 | |||||
Accrued management fee | 168,323 | |||||
Other affiliated payables | 96,242 | |||||
Other payables and accrued expenses | 33,059 | |||||
Total liabilities | 6,602,230 | |||||
Net Assets | $ 544,436,397 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 537,591,380 | |||||
Undistributed net investment income | 204,116 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 319,383 | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | 6,321,518 | |||||
Net Assets, for 46,919,343 shares outstanding | $ 544,436,397 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($544,436,397 ÷ 46,919,343 shares) | $ 11.60 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
18 |
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 12,229,596 | |||||
Expenses | ||||||
Management fee | $ 1,031,550 | |||||
Transfer agent fees | 220,164 | |||||
Accounting fees and expenses | 66,796 | |||||
Independent trustees’ compensation | 1,082 | |||||
Custodian fees and expenses | 4,345 | |||||
Registration fees | 19,256 | |||||
Audit | 24,990 | |||||
Legal | 3,155 | |||||
Miscellaneous | 3,065 | |||||
Total expenses before reductions | 1,374,403 | |||||
Expense reductions | (202,603) | 1,171,800 | ||||
Net investment income | 11,057,796 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 380,991 | |||||
Futures contracts | 179,150 | |||||
Total net realized gain (loss) | 560,141 | |||||
Change in net unrealized appreciation (depreciation) on: | ||||||
Investment securities | (11,523,285) | |||||
Futures contracts | 67,273 | |||||
Total change in net unrealized appreciation | ||||||
(depreciation) | (11,456,012) | |||||
Net gain (loss) | (10,895,871) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 161,925 |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Fidelity Michigan Municipal Income Fund | ||||||||
Financial Statements continued | ||||||||
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
(Unaudited) | 2005 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 11,057,796 | $ 22,485,171 | ||||||
Net realized gain (loss) | 560,141 | 4,556,306 | ||||||
Change in net unrealized appreciation (depreciation) . | (11,456,012) | (11,968,775) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 161,925 | 15,072,702 | ||||||
Distributions to shareholders from net investment income . | (11,111,421) | (22,452,478) | ||||||
Distributions to shareholders from net realized gain | (239,486) | (5,430,741) | ||||||
Total distributions | (11,350,907) | (27,883,219) | ||||||
Share transactions | ||||||||
Proceeds from sales of shares | 33,931,926 | 91,467,289 | ||||||
Reinvestment of distributions | 7,548,200 | 18,797,338 | ||||||
Cost of shares redeemed | (51,339,866) | (91,856,609) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
share transactions | (9,859,740) | 18,408,018 | ||||||
Redemption fees | 1,003 | 3,250 | ||||||
Total increase (decrease) in net assets | (21,047,719) | 5,600,751 | ||||||
Net Assets | ||||||||
Beginning of period | 565,484,116 | 559,883,365 | ||||||
End of period (including undistributed net investment | ||||||||
income of $204,116 and undistributed net invest- | ||||||||
ment income of $260,167, respectively) | $ 544,436,397 | $ 565,484,116 | ||||||
Other Information | ||||||||
Shares | ||||||||
Sold | 2,885,300 | 7,616,556 | ||||||
Issued in reinvestment of distributions | 643,386 | 1,570,055 | ||||||
Redeemed | (4,370,114) | (7,675,047) | ||||||
Net increase (decrease) | (841,428) | 1,511,564 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
20 |
Financial Highlights | ||||||||||||
Six months ended | ||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Selected Per Share Data | ||||||||||||
Net asset value, | ||||||||||||
beginning of period | $ 11.84 | $ 12.11 | $ 12.22 | $ 12.04 | $ 11.47 | $ 11.48 | ||||||
Income from Investment | ||||||||||||
Operations | ||||||||||||
Net investment | ||||||||||||
incomeD | .233 | .472 | .491 | .513 | .532 | .552 | ||||||
Net realized and | ||||||||||||
unrealized gain | ||||||||||||
(loss) | (.234) | (.155) | (.026) | .180 | .568 | (.010) | ||||||
Total from investment | ||||||||||||
operations | (.001) | .317 | .465 | .693 | 1.100 | .542 | ||||||
Distributions from net | ||||||||||||
investment income . | (.234) | (.472) | (.490) | (.513) | (.530) | (.552) | ||||||
Distributions from net | ||||||||||||
realized gain | (.005) | (.115) | (.085) | — | — | — | ||||||
Total distributions | (.239) | (.587) | (.575) | (.513) | (.530) | (.552) | ||||||
Redemption fees | ||||||||||||
added to paid in | ||||||||||||
capitalD,F | — | — | — | — | — | — | ||||||
Net asset value, | ||||||||||||
end of period | $ 11.60 | $ 11.84 | $ 12.11 | $ 12.22 | $ 12.04 | $ 11.47 | ||||||
Total ReturnB,C | (.01)% | 2.67% | 3.90% | 5.87% | 9.78% | 4.77% | ||||||
Ratios to Average Net AssetsE | ||||||||||||
Expenses before | ||||||||||||
reductions | .50%A | .49% | .50% | .50% | .50% | .50% | ||||||
Expenses net of | ||||||||||||
fee waivers, | ||||||||||||
if any | .50%A | .49% | .50% | .50% | .50% | .50% | ||||||
Expenses net of all | ||||||||||||
reductions | .42%A | .45% | .48% | .49% | .48% | .44% | ||||||
Net investment | ||||||||||||
income | 4.00%A | 3.94% | 4.05% | 4.22% | 4.51% | 4.76% | ||||||
Supplemental Data | ||||||||||||
Net assets, | ||||||||||||
end of period | ||||||||||||
(000 omitted) | $544,436 | $565,484 | $559,883 | $561,394 | $572,242 | $505,534 | ||||||
Portfolio turnover | ||||||||||||
rate | 10%A | 23% | 12% | 23% | 17% | 19% |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrange ments. Expenses net of all reductions represent the net expenses paid by the fund. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||||
Investment Changes | ||||||
Maturity Diversification | ||||||
Days | % of fund’s | % of fund’s | % of fund’s | |||
investments | investments | investments | ||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
0 – 30 | 89.1 | 92.8 | 90.7 | |||
31 – 90 | 1.7 | 0.0 | 2.2 | |||
91 – 180 | 7.2 | 3.3 | 3.6 | |||
181 – 397 | 2.0 | 3.9 | 3.5 | |||
Weighted Average Maturity | ||||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
Fidelity Michigan Municipal Money | ||||||
Market Fund | 21 Days | 19 Days | 21 Days | |||
All Tax Free Money Market Funds | ||||||
Average* | 21 Days | 29 Days | 24 Days |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix22x1.jpg)
*Source: iMoneyNet, Inc.
Semiannual Report 22
Fidelity Michigan Municipal Money Market Fund | ||||
Investments June 30, 2006 (Unaudited) | ||||
Showing Percentage of Net Assets | ||||
Municipal Securities 97.3% | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Michigan – 95.3% | ||||
Allen Park Pub. School District Participating VRDN Series ROC | ||||
II R4007, 4.01% (Liquidity Facility Citigroup Global Markets | ||||
Hldgs., Inc.) (a)(d) | $ 5,110,000 | $ 5,110,000 | ||
Charlotte Hosp. Fin. Auth. Ltd. Oblig. Rev. (Hayes Green | ||||
Beach Proj.) 4.02%, LOC Fifth Third Bank, Cincinnati, | ||||
VRDN (a) | 13,675,000 | 13,675,000 | ||
Clarkston Cmnty. Schools Participating VRDN Series ROC II | ||||
R4519, 4.01% (Liquidity Facility Citigroup Global Markets | ||||
Hldgs., Inc.) (a)(d) | 6,085,000 | 6,085,000 | ||
Clinton Econ. Dev. Corp. Rev. (Clinton Area Care Ctr. Proj.) | ||||
4.02%, LOC Northern Trust Co., Chicago, VRDN (a) | 4,720,000 | 4,720,000 | ||
Comstock Park Pub. Schools Participating VRDN Series ROC II | ||||
R 2178, 4.01% (Liquidity Facility Citigroup Global Markets | ||||
Hldgs., Inc.) (a)(d) | 1,325,000 | 1,325,000 | ||
Delta County Econ. Dev. Corp. Envir. Impt. Rev. Participating | ||||
VRDN Series PT 2371, 4.04% (Liquidity Facility Merrill Lynch | ||||
& Co., Inc.) (a)(d) | 3,100,000 | 3,100,000 | ||
Detroit City School District: | ||||
Bonds Series A, 5% 5/1/07 (FGIC Insured) | 5,000,000 | 5,053,446 | ||
Participating VRDN: | ||||
ROC II R1033, 4.01% (Liquidity Facility Citigroup Global | ||||
Markets Hldgs., Inc.) (a)(d) | 2,310,000 | 2,310,000 | ||
Series AAB 04 39, 4.01% (Liquidity Facility ABN AMRO | ||||
Bank NV) (a)(d) | 5,800,000 | 5,800,000 | ||
Series Macon 05 R, 4.01% (Liquidity Facility Bank of | ||||
America NA) (a)(d) | 8,495,000 | 8,495,000 | ||
Series Macon 06 J, 3.99% (Liquidity Facility Bank of | ||||
America NA) (a)(d) | 3,575,000 | 3,575,000 | ||
Series PA 997, 4% (Liquidity Facility Merrill Lynch & Co., | ||||
Inc.) (a)(d) | 8,840,000 | 8,840,000 | ||
Series PT 2158, 4% (Liquidity Facility Merrill Lynch & Co., | ||||
Inc.) (a)(d) | 7,935,000 | 7,935,000 | ||
Series PT 3364, 4% (Liquidity Facility Bayerische Hypo-und | ||||
Vereinsbank AG) (a)(d) | 6,985,000 | 6,985,000 | ||
Series Putters 1311, 4.01% (Liquidity Facility JPMorgan | ||||
Chase Bank) (a)(d) | 3,125,000 | 3,125,000 | ||
Series ROC II R4004, 4.01% (Liquidity Facility Citigroup | ||||
Global Markets Hldgs., Inc.) (a)(d) | 5,735,000 | 5,735,000 | ||
Detroit Econ. Dev. Corp. Resource Recovery Rev. Participating | ||||
VRDN Series Merlots 01 A90, 4.06% (Liquidity Facility | ||||
Wachovia Bank NA) (a)(b)(d) | 2,500,000 | 2,500,000 | ||
Detroit Gen. Oblig.: | ||||
Bonds Series 2004 B, 5% 4/1/07 (FSA Insured) | 1,285,000 | 1,296,598 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Detroit Gen. Oblig.: – continued | ||||||
TAN 4.5% 3/1/07, LOC Bank of Nova Scotia, New York | ||||||
Agcy. | $ 2,400,000 | $ 2,411,995 | ||||
Detroit Swr. Disp. Rev. Participating VRDN: | ||||||
Series AAB 05 3, 4.01% (Liquidity Facility ABN-AMRO Bank | ||||||
NV) (a)(d) | 6,500,000 | 6,500,000 | ||||
Series Macon 02 G, 4.05% (Liquidity Facility Bank of | ||||||
America NA) (a)(d) | 8,520,000 | 8,520,000 | ||||
Series Merlots 00 I, 4.01% (Liquidity Facility Wachovia Bank | ||||||
NA) (a)(d) | 9,300,000 | 9,300,000 | ||||
Series Merlots 01 A103, 4.01% (Liquidity Facility Bank of | ||||||
New York, New York) (a)(d) | 9,985,000 | 9,985,000 | ||||
Series Merlots 06 B1, 4.01% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(d) | 5,495,000 | 5,495,000 | ||||
Series PA 1183, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(d) | 5,000,000 | 5,000,000 | ||||
Series ROC II R4014, 4.01% (Liquidity Facility Citigroup | ||||||
Global Markets Hldgs., Inc.) (a)(d) | 2,065,000 | 2,065,000 | ||||
Series SGB 47, 4.01% (Liquidity Facility Societe | ||||||
Generale) (a)(d) | 5,800,000 | 5,800,000 | ||||
Detroit Wtr. Supply Sys. Rev.: | ||||||
Bonds: | ||||||
Series B, 5.1% 7/1/07 (MBIA Insured) | 1,000,000 | 1,014,469 | ||||
Series PT 2587, 3.68%, tender 9/1/06 (Liquidity Facility | ||||||
Dexia Cr. Local de France) (a)(d)(e) | 3,260,000 | 3,260,000 | ||||
Participating VRDN Series Merlots 00 D, 4.01% (Liquidity | ||||||
Facility Wachovia Bank NA) (a)(d) | 4,500,000 | 4,500,000 | ||||
Detroit Wtr. Sys. Rev. Participating VRDN Series EGL 99 2202, | ||||||
4.02% (Liquidity Facility Citibank NA, New York) (a)(d) | 8,200,000 | 8,200,000 | ||||
East Lansing School District Gen. Oblig. Participating VRDN | ||||||
Series SGA 114, 4.03% (Liquidity Facility Societe | ||||||
Generale) (a)(d) | 6,000,000 | 6,000,000 | ||||
Ecorse Pub. School District Participating VRDN Series ROC II | ||||||
R7520, 4.01% (Liquidity Facility Citibank NA) (a)(d) | 5,635,000 | 5,635,000 | ||||
Fitzgerald Pub. School District Participating VRDN Series | ||||||
Putters 561, 4.01% (Liquidity Facility JPMorgan Chase | ||||||
Bank) (a)(d) | 4,990,000 | 4,990,000 | ||||
Grand Rapids Econ. Dev. Corp. (Cornerstone Univ. Proj.) | ||||||
3.99%, LOC Nat’l. City Bank, VRDN (a) | 1,800,000 | 1,800,000 | ||||
Grand Rapids San. Swr. Sys. Rev. Impt. Participating VRDN | ||||||
Series EGL 98 2201, 4.02% (Liquidity Facility Citibank | ||||||
NA) (a)(d) | 7,940,000 | 7,940,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Holland Charter Township Econ. Dev. Corp. Rev. (Chicago | ||||||
Mission Proj.) 4.08%, LOC Comerica Bank, Detroit, | ||||||
VRDN (a)(b) | $ 2,335,000 | $ 2,335,000 | ||||
Jonesville Cmnty. Schools Participating VRDN Series ROC II R | ||||||
7512, 4.01% (Liquidity Facility Citibank NA) (a)(d) | 5,805,000 | 5,805,000 | ||||
Kalamazoo Gen. Oblig. TAN 4.25% 12/1/06 | 6,000,000 | 6,023,244 | ||||
Lakeview School District Calhoun County Participating VRDN | ||||||
Series PT 1624, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(d) | 7,170,000 | 7,170,000 | ||||
Michigan Bldg. Auth. Rev.: | ||||||
Bonds (Facilities Prog.) Series I, 5.25% 10/15/06 (Escrowed | ||||||
to Maturity) (c) | 5,820,000 | 5,843,611 | ||||
Participating VRDN: | ||||||
Series AAB 03 35, 4.01% (Liquidity Facility ABN AMRO | ||||||
Bank NV) (a)(d) | 3,000,000 | 3,000,000 | ||||
Series AAB 05 33, 4.01% (Liquidity Facility ABN AMRO | ||||||
Bank NV) (a)(d) | 5,995,000 | 5,995,000 | ||||
Series EGL 01 2202, 4.02% (Liquidity Facility Citibank | ||||||
NA, New York) (a)(d) | 3,000,000 | 3,000,000 | ||||
Series MS 00 481X, 4.01% (Liquidity Facility Morgan | ||||||
Stanley) (a)(d) | 2,670,000 | 2,670,000 | ||||
Series ROC II R2064, 4.01% (Liquidity Facility Citigroup | ||||||
Global Markets Hldgs., Inc.) (a)(d) | 2,735,000 | 2,735,000 | ||||
Series ROC II R4057, 4.01% (Liquidity Facility Citigroup | ||||||
Global Markets Hldgs., Inc.) (a)(d) | 2,200,000 | 2,200,000 | ||||
Series ROC II R4551, 4.01% (Liquidity Facility Citigroup | ||||||
Global Markets Hldgs., Inc.) (a)(d) | 2,965,000 | 2,965,000 | ||||
Series ROC II R550, 4.01% (Liquidity Facility Citibank | ||||||
NA) (a)(d) | 2,000,000 | 2,000,000 | ||||
(Facilities Prog.) Series 2005 IIA, 3.98%, LOC DEPFA BANK | ||||||
PLC, VRDN (a) | 22,300,000 | 22,300,000 | ||||
Michigan Gen. Oblig.: | ||||||
Bonds Series 2005 C: | ||||||
3.65% tender 10/16/06 (Liquidity Facility DEPFA BANK | ||||||
PLC), CP mode | 7,100,000 | 7,100,000 | ||||
3.65% tender 10/16/06 (Liquidity Facility DEPFA BANK | ||||||
PLC), CP mode | 13,500,000 | 13,500,000 | ||||
Participating VRDN Series PT 2021, 4% (Liquidity Facility | ||||||
Merrill Lynch & Co., Inc.) (a)(d) | 4,415,000 | 4,415,000 | ||||
Michigan Higher Ed. Student Ln. Auth. Rev.: | ||||||
Participating VRDN: | ||||||
Series LB 05 L20, 4.06% (Liquidity Facility Lehman | ||||||
Brothers Hldgs., Inc.) (a)(b)(d) 6,475,000 6,475,000 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Securities continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Michigan – continued | ||||||||
Michigan Higher Ed. Student Ln. Auth. Rev.: – continued | ||||||||
Participating VRDN: | ||||||||
Series MS 1280, 4.04% (Liquidity Facility Morgan | ||||||||
Stanley) (a)(b)(d) | $ 2,400,000 | $ 2,400,000 | ||||||
Series PA 1064, 4.04% (Liquidity Facility Merrill Lynch & | ||||||||
Co., Inc.) (a)(b)(d) | 7,420,000 | 7,420,000 | ||||||
Series XII B, 4.03% (AMBAC Insured), VRDN (a)(b) | 7,000,000 | 7,000,000 | ||||||
Michigan Hosp. Fin. Auth. Hosp. Rev.: | ||||||||
Bonds (Ascension Health Cr. Group Proj.) Series B, 5.3%, | ||||||||
tender 11/15/06 (a) | 10,000,000 | 10,058,754 | ||||||
Participating VRDN Series ROC II R 588 CE, 4.02% | ||||||||
(Liquidity Facility Citibank NA) (a)(d) | 6,405,000 | 6,405,000 | ||||||
(Health Care Equip. Ln. Prog.): | ||||||||
Series B, 4%, LOC Lasalle Bank Midwest NA, VRDN (a) | 1,600,000 | 1,600,000 | ||||||
Series C, 4%, LOC Fifth Third Bank, Cincinnati, VRDN (a) . | 7,500,000 | 7,500,000 | ||||||
Michigan Hosp. Fin. Auth. Rev. Series B, 4%, LOC Lasalle Bank | ||||||||
Midwest NA, VRDN (a) | 3,600,000 | 3,600,000 | ||||||
Michigan Hsg. Dev. Auth. Multi-family Hsg. Rev. (Hunt Club | ||||||||
Apts. Proj.) 4.02%, LOC Fannie Mae, VRDN (a)(b) | 5,595,000 | 5,595,000 | ||||||
Michigan Hsg. Dev. Auth. Rental Hsg. Rev.: | ||||||||
Series 2000 A, 4.02% (MBIA Insured), VRDN (a)(b) | 3,190,000 | 3,190,000 | ||||||
Series 2002 A, 4.04% (MBIA Insured), VRDN (a)(b) | 9,800,000 | 9,800,000 | ||||||
Series 2004 A, 4.02% (FGIC Insured), VRDN (a)(b) | 5,000,000 | 5,000,000 | ||||||
Michigan Hsg. Dev. Auth. Single Family Mtg. Rev.: | ||||||||
Series 1999 B2, 4.03% (MBIA Insured), VRDN (a)(b) | 3,400,000 | 3,400,000 | ||||||
Series 2002 A, 4.03% (MBIA Insured), VRDN (a)(b) | 5,085,000 | 5,085,000 | ||||||
Series B, 4.06% (Liquidity Facility DEPFA BANK PLC), | ||||||||
VRDN (a)(b) | 7,200,000 | 7,200,000 | ||||||
Michigan Muni. Bond Auth. Rev.: | ||||||||
Participating VRDN: | ||||||||
Series EGL 00 2201, 4.02% (Liquidity Facility Citibank | ||||||||
NA, New York) (a)(d) | 3,500,000 | 3,500,000 | ||||||
Series MS 718, 4.01% (Liquidity Facility Morgan | ||||||||
Stanley) (a)(d) | 26,144,500 | 26,144,500 | ||||||
Series MSTC 02 204, 4.03% (Liquidity Facility Bear | ||||||||
Stearns Companies, Inc.) (a)(d) | 10,395,000 | 10,395,000 | ||||||
Series ROC II R 339, 4.01% (Liquidity Facility Citibank | ||||||||
NA) (a)(d) | 12,985,000 | 12,985,000 | ||||||
RAN Series C, 4.25% 8/18/06, LOC JPMorgan Chase Bank | 9,400,000 | 9,405,323 | ||||||
Michigan Strategic Fund Indl. Dev. Rev. (Althaus Family | ||||||||
Investors II Proj.) Series 1997, 4.27%, LOC Huntington Nat’l. | ||||||||
Bank, Columbus, VRDN (a) | 1,720,000 | 1,720,000 | ||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||
Semiannual Report | 26 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Michigan Strategic Fund Ltd. Oblig. Rev.: | ||||||
Bonds (Dow Chemical Co. Proj.) 3.45% tender 7/3/06, CP | ||||||
mode (b) | $ 5,900,000 | $ 5,900,000 | ||||
Participating VRDN Series Putters 858Z, 4.04% (Liquidity | ||||||
Facility JPMorgan Chase Bank) (a)(b)(d) | 12,170,000 | 12,170,000 | ||||
(BC&C Proj.) 4.12%, LOC Comerica Bank, Detroit, | ||||||
VRDN (a)(b) | 1,405,000 | 1,405,000 | ||||
(Biewer of Lansing LLC Proj.) Series 1999, 4.11%, LOC | ||||||
Lasalle Bank Midwest NA, VRDN (a)(b) | 965,000 | 965,000 | ||||
(Bosal Ind. Proj.) Series 1998, 4.1%, LOC Bank of New | ||||||
York, New York, VRDN (a)(b) | 7,500,000 | 7,500,000 | ||||
(CJS Properties LLC Proj.) 4.25%, LOC JPMorgan Chase | ||||||
Bank, VRDN (a)(b) | 1,700,000 | 1,700,000 | ||||
(Conti Properties LLC Proj.) Series 1997, 4.12%, LOC | ||||||
Comerica Bank, Detroit, VRDN (a)(b) | 2,380,000 | 2,380,000 | ||||
(Creative Foam Corp. Proj.) 4.25%, LOC JPMorgan Chase | ||||||
Bank, VRDN (a)(b) | 600,000 | 600,000 | ||||
(Doss Ind. Dev. Co. Proj.) 4.25%, LOC JPMorgan Chase | ||||||
Bank, VRDN (a)(b) | 1,400,000 | 1,400,000 | ||||
(Fintex LLC Proj.) Series 2000, 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 1,705,000 | 1,705,000 | ||||
(Future Fence Co. Proj.) 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 2,330,000 | 2,330,000 | ||||
(Holland Home Oblig. Group Proj.) 4.02%, LOC Huntington | ||||||
Nat’l. Bank, Columbus, VRDN (a) | 1,000,000 | 1,000,000 | ||||
(Holland Plastics Corp. Proj.) 4.08%, LOC Lasalle Bank NA, | ||||||
VRDN (a)(b) | 4,000,000 | 4,000,000 | ||||
(John H. Dekker & Sons Proj.) Series 1998, 4.11%, LOC | ||||||
Lasalle Bank Midwest NA, VRDN (a)(b) | 915,000 | 915,000 | ||||
(K&M Engineering, Inc. Proj.) 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 1,440,000 | 1,440,000 | ||||
(LPB LLC Proj.) 4.25%, LOC Comerica Bank, Detroit, | ||||||
VRDN (a)(b) | 2,300,000 | 2,300,000 | ||||
(Majestic Ind., Inc. Proj.) 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 1,895,000 | 1,895,000 | ||||
(Mans Proj.) Series 1998, 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 1,380,000 | 1,380,000 | ||||
(Mid-American Products, Inc. Proj.) Series 1998 4.08%, LOC | ||||||
Comerica Bank, Detroit, VRDN (a)(b) | 1,230,000 | 1,230,000 | ||||
(Orchestra Place Renewal Proj.) Series 2000, 3.98%, LOC | ||||||
ABN AMRO Bank NV, VRDN (a) | 2,000,000 | 2,000,000 | ||||
(PBL Enterprises, Inc. Proj.) Series 1997, 4.12%, LOC | ||||||
Comerica Bank, Detroit, VRDN (a)(b) | 1,745,000 | 1,745,000 |
See accompanying notes which are an integral part of the financial statements.
27 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Michigan Strategic Fund Ltd. Oblig. Rev.: – continued | ||||||
(Pioneer Laboratories, Inc. Proj.) 4.05%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a)(b) | $ 2,200,000 | $ 2,200,000 | ||||
(S&S LLC Proj.) Series 2000, 4.22%, LOC Lasalle Bank | ||||||
Midwest NA, VRDN (a)(b) | 2,325,000 | 2,325,000 | ||||
(SBC Ventures LLC Proj.) 4.12%, LOC Comerica Bank, | ||||||
Detroit, VRDN (a)(b) | 4,000,000 | 4,000,000 | ||||
(TEI Invts. LLC Proj.) Series 1997, 4.12%, LOC Comerica | ||||||
Bank, Detroit, VRDN (a)(b) | 600,000 | 600,000 | ||||
(Temperance Enterprise Proj.) Series 1996, 4.14%, LOC | ||||||
Nat’l. City Bank, VRDN (a)(b) | 1,680,000 | 1,680,000 | ||||
(The Spiratex Co. Proj.) Series 1994, 4.3%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a)(b) | 800,000 | 800,000 | ||||
(The Van Andel Research Institute Proj.) Series 1999, 4%, | ||||||
LOC Lasalle Bank Midwest NA, VRDN (a) | 5,000,000 | 5,000,000 | ||||
(Trilan LLC Proj.) 4.25%, LOC JPMorgan Chase Bank, | ||||||
VRDN (a)(b) | 3,600,000 | 3,600,000 | ||||
(W.H. Porter, Inc. Proj.) Series 2001, 4.12%, LOC Comerica | ||||||
Bank, Detroit, VRDN (a)(b) | 2,775,000 | 2,775,000 | ||||
(Windcrest Properties LLC Proj.) 4.13%, LOC Comerica | ||||||
Bank, Detroit, VRDN (a)(b) | 3,900,000 | 3,900,000 | ||||
(YMCA Metropolitan Detroit Proj.) Series 2001, 4.02%, LOC | ||||||
JPMorgan Chase Bank, VRDN (a) | 12,175,000 | 12,175,000 | ||||
Michigan Strategic Fund Rev. (Rest Haven Christian Services | ||||||
Proj.) Series A, 4%, LOC KBC Bank NV, VRDN (a) | 3,195,000 | 3,195,000 | ||||
Michigan Strategic Fund Solid Waste Disp. Rev.: | ||||||
Participating VRDN Series LB 05 F11, 4.11% (Lehman | ||||||
Brothers Hldgs., Inc. Guaranteed) (Liquidity Facility | ||||||
Lehman Brothers Hldgs., Inc.) (a)(b)(d) | 5,000,000 | 5,000,000 | ||||
(Grayling Gen. Station Proj.) Series 1990, 4.01%, LOC | ||||||
Barclays Bank PLC, VRDN (a)(b) | 8,197,000 | 8,197,000 | ||||
Michigan Technological Univ. Series A, 3.97% (AMBAC | ||||||
Insured), VRDN (a) | 7,100,000 | 7,100,000 | ||||
Michigan Trunk Line Fund Participating VRDN Series Clipper | ||||||
05 27, 4.01% (Liquidity Facility State Street Bank & Trust | ||||||
Co., Boston) (a)(d) | 6,500,000 | 6,500,000 | ||||
Oakland County Econ. Dev. Corp. Ltd. Oblig. Rev.: | ||||||
(Osmic, Inc. Proj.) Series 2001 A, 4.08%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a)(b) | 6,300,000 | 6,300,000 | ||||
(Progressive Metal Manufacturing Co. Proj.) 4.12%, LOC | ||||||
Comerica Bank, Detroit, VRDN (a)(b) | 4,000,000 | 4,000,000 | ||||
Saint Clair County Econ. Dev. Corp. Poll. Cont. Rev. | ||||||
Participating VRDN Series MS 00 282, 4.01% (Liquidity | ||||||
Facility Morgan Stanley) (a)(d) | 11,895,000 | 11,895,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Michigan – continued | ||||||
Sanilac County Econ. Dev. Corp. (Marlette Cmnty. Hosp. Proj.) | ||||||
Series 2001, 4.02%, LOC JPMorgan Chase Bank, VRDN (a) | $ 11,910,000 | $ 11,910,000 | ||||
Univ. of Michigan Univ. Revs. 3.55% 10/2/06, CP | 10,000,000 | 10,000,000 | ||||
Van Buren Township Local Dev. Fin. Auth. Participating VRDN | ||||||
Series ROC 4518, 4.01% (Liquidity Facility Citigroup Global | ||||||
Markets Hldgs., Inc.) (a)(d) | 7,650,000 | 7,650,000 | ||||
Waterford Econ. Dev. Corp. Ltd. Oblig. Rev. (Canterbury | ||||||
Health Care, Inc. Proj.) 4.02%, LOC KBC Bank NV, | ||||||
VRDN (a) | 6,600,000 | 6,600,000 | ||||
Wayne County Arpt. Auth. Rev. Participating VRDN: | ||||||
Series EGL 06 16 Class A, 4.06% (Liquidity Facility Citibank | ||||||
NA) (a)(b)(d) | 4,950,000 | 4,950,000 | ||||
Series EGL 720053029 Class A, 4.06% (Liquidity Facility | ||||||
Citibank NA) (a)(b)(d) | 6,600,000 | 6,600,000 | ||||
Series Floaters 06 32, 4.04% (Liquidity Facility Goldman | ||||||
Sachs Group, Inc.) (a)(b)(d) | 8,300,000 | 8,300,000 | ||||
Series Macon 05 T, 4.05% (Liquidity Facility Bank of | ||||||
America NA) (a)(b)(d) | 3,640,000 | 3,640,000 | ||||
Series MT 115, 4.05% (Liquidity Facility Svenska | ||||||
Handelsbanken AB) (a)(b)(d) | 6,100,000 | 6,100,000 | ||||
Series MT 203, 4.05% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(b)(d) | 6,500,000 | 6,500,000 | ||||
Series Putters 1081Z, 4.04% (Liquidity Facility JPMorgan | ||||||
Chase Bank) (a)(b)(d) | 2,750,000 | 2,750,000 | ||||
Series Putters 836, 4.04% (Liquidity Facility JPMorgan Chase | ||||||
& Co.) (a)(b)(d) | 6,075,000 | 6,075,000 | ||||
Series ROC II R 9009, 4.06% (Liquidity Facility Citigroup, | ||||||
Inc.) (a)(b)(d) | 4,560,000 | 4,560,000 | ||||
Series ROC II R442, 4.05% (Liquidity Facility Citibank | ||||||
NA) (a)(b)(d) | 6,795,000 | 6,795,000 | ||||
Wayne-Westland Cmnty. Schools Participating VRDN Series | ||||||
MS 98 56, 4.01% (Liquidity Facility Morgan Stanley) (a)(d) | . | 7,465,000 | 7,465,000 | |||
Whitmore Lake Pub. School District Participating VRDN Series | ||||||
ROC II R4515, 4.01% (Liquidity Facility Citigroup Global | ||||||
Markets Hldgs., Inc.) (a)(d) | 3,865,000 | 3,865,000 | ||||
Wyandotte City School District Participating VRDN Series PT | ||||||
1790, 4% (Liquidity Facility Merrill Lynch & Co., Inc.) (a)(d) | . | 2,880,000 | 2,880,000 | |||
Zeeland Hosp. Fin. Auth. Rev. (Zeeland Cmnty. Hosp. Proj.) | ||||||
4.12%, LOC Huntington Nat’l. Bank, Columbus, VRDN (a) | 15,410,000 | 15,410,000 | ||||
718,268,940 | ||||||
See accompanying notes which are an integral part of the financial statements. | ||||||
29 | Semiannual Report |
Fidelity Michigan Municipal Money Market Fund | ||||
Investments (Unaudited) continued | ||||
Municipal Securities continued | ||||
Principal | Value | |||
Amount | (Note 1) | |||
New York – 0.7% | ||||
Bank of New York Muni. Ctfs. trust various states Participating | ||||
VRDN Series BNY 02 3, 4.05% (Liquidity Facility Bank of | ||||
New York, New York) (a)(b)(d) | $ 5,500,000 | $ 5,500,000 | ||
Puerto Rico 1.3% | ||||
Puerto Rico Commonwealth Gen. Oblig. TRAN 4.5% | ||||
7/28/06, LOC Bank of Nova Scotia, New York Agcy., LOC | ||||
BNP Paribas SA | 4,600,000 | 4,604,256 | ||
Puerto Rico Ind. Med. & Envir. Poll. Cont. Facilities Fing. Auth. | ||||
Rev. Bonds (Abbot Labs Proj.) 3.55%, tender 3/1/07 (a) | 5,000,000 | 5,001,631 | ||
9,605,887 | ||||
TOTAL INVESTMENT PORTFOLIO 97.3% | ||||
(Cost $733,374,827) | 733,374,827 | |||
NET OTHER ASSETS – 2.7% | 20,199,367 | |||
NET ASSETS 100% | $ 753,574,194 |
Security Type Abbreviations | ||||
CP | — | COMMERCIAL PAPER | ||
RAN | — | REVENUE ANTICIPATION NOTE | ||
TAN | — | TAX ANTICIPATION NOTE | ||
TRAN | — | TAX AND REVENUE | ||
ANTICIPATION NOTE | ||||
VRDN | — | VARIABLE RATE DEMAND NOTE |
Legend (a) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (b) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (c) Security collateralized by an amount sufficient to pay interest and principal. |
(d) Provides evidence of ownership in one or more underlying municipal bonds. (e) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $3,260,000 or 0.4% of net assets. |
Additional information on each holding is as follows:
Acquisition | ||||
Security | Date | Cost | ||
Detroit Wtr. | ||||
Supply Sys. Rev. | ||||
Bonds Series PT | ||||
2587, 3.68%, | ||||
tender 9/1/06 | ||||
(Liquidity Facility | ||||
Dexia Cr. Local de | ||||
France) | 3/24/05 | $ 3,260,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 30
Affiliated Central Funds
Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:
Fund | Income earned | |||
Fidelity Municipal Cash Central Fund | $ 16,524 |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $733,374,827) | $ 733,374,827 | |||||
Cash | 10,433,010 | |||||
Receivable for investments sold | 5,926,143 | |||||
Receivable for fund shares sold | 9,888,283 | |||||
Interest receivable | 5,144,175 | |||||
Prepaid expenses | 1,281 | |||||
Receivable from investment adviser for expense | ||||||
reductions | 5,414 | |||||
Other receivables | 159,145 | |||||
Total assets | 764,932,278 | |||||
Liabilities | ||||||
Payable for investments purchased | $ 2,666,704 | |||||
Payable for fund shares redeemed | 8,190,297 | |||||
Distributions payable | 26,866 | |||||
Accrued management fee | 227,763 | |||||
Other affiliated payables | 201,543 | |||||
Other payables and accrued expenses | 44,911 | |||||
Total liabilities | 11,358,084 | |||||
Net Assets | $ 753,574,194 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 753,544,342 | |||||
Undistributed net investment income | 24,366 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 5,486 | |||||
Net Assets, for 753,019,985 shares outstanding | $ 753,574,194 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($753,574,194 ÷ 753,019,985 shares) | $ 1.00 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 11,439,179 | |||||
Income from affiliated Central Funds | 16,524 | |||||
Total income | 11,455,703 | |||||
Expenses | ||||||
Management fee | $ 1,314,631 | |||||
Transfer agent fees | 557,682 | |||||
Accounting fees and expenses | 45,393 | |||||
Independent trustees’ compensation | 1,338 | |||||
Custodian fees and expenses | 6,058 | |||||
Registration fees | 30,559 | |||||
Audit | 20,584 | |||||
Legal | 3,918 | |||||
Miscellaneous | 22,470 | |||||
Total expenses before reductions | 2,002,633 | |||||
Expense reductions | (506,495) | 1,496,138 | ||||
Net investment income | 9,959,565 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 15,922 | |||||
Net increase in net assets resulting from operations | $ 9,975,487 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Fidelity Michigan Municipal Money Market Fund | ||||
Financial Statements continued | ||||
Statement of Changes in Net Assets | ||||
Six months ended | Year ended | |||
June 30, 2006 | December 31, | |||
(Unaudited) | 2005 | |||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income | $ 9,959,565 | $ 12,456,066 | ||
Net realized gain (loss) | 15,922 | 75,234 | ||
Net increase in net assets resulting | ||||
from operations | 9,975,487 | 12,531,300 | ||
Distributions to shareholders from net investment income . | (9,960,513) | (12,429,383) | ||
Distributions to shareholders from net realized gain | — | (64,798) | ||
Total distributions | (9,960,513) | (12,494,181) | ||
Share transactions at net asset value of $1.00 per share | ||||
Proceeds from sales of shares | 1,192,943,837 | 1,770,447,671 | ||
Reinvestment of distributions | 9,750,218 | 12,318,803 | ||
Cost of shares redeemed | (1,144,185,720) | (1,695,873,909) | ||
Net increase (decrease) in net assets and shares | ||||
resulting from share transactions | 58,508,335 | 86,892,565 | ||
Total increase (decrease) in net assets | 58,523,309 | 86,929,684 | ||
Net Assets | ||||
Beginning of period | 695,050,885 | 608,121,201 | ||
End of period (including undistributed net investment | ||||
income of $24,366 and undistributed net investment | ||||
income of $25,314, respectively) | $ 753,574,194 | $ 695,050,885 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
34 |
Financial Highlights | ||||||||||||||||||||||||
Six months ended | ||||||||||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
Selected Per Share Data | ||||||||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | .014 | .020 | .007 | .006 | .010 | .023 | ||||||||||||||||||
Net realized and | ||||||||||||||||||||||||
unrealized gain | ||||||||||||||||||||||||
(loss)E | — | — | — | — | — | — | ||||||||||||||||||
Total from invest- | ||||||||||||||||||||||||
ment operations | .014 | .020 | .007 | .006 | .010 | .023 | ||||||||||||||||||
Distributions from net | ||||||||||||||||||||||||
investment income | (.014) | (.020) | (.007) | (.006) | (.010) | (.023) | ||||||||||||||||||
Distributions from net | ||||||||||||||||||||||||
realized gain | — | —E | — | —E | — | — | ||||||||||||||||||
Total distributions . | (.014) | (.020) | (.007) | (.006) | (.010) | (.023) | ||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
end of period | $1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Total ReturnB,C | 1.41% | 1.99% | .73% | .63% | 1.03% | 2.35% | ||||||||||||||||||
Ratios to Average Net AssetsD | ||||||||||||||||||||||||
Expenses before | ||||||||||||||||||||||||
reductions | 57%A | .56% | .57% | .56% | .56% | .56% | ||||||||||||||||||
Expenses net of | ||||||||||||||||||||||||
fee waivers, | ||||||||||||||||||||||||
if any | 55%A | .55% | .57% | .56% | .56% | .56% | ||||||||||||||||||
Expenses net of all | ||||||||||||||||||||||||
reductions | 42%A | .46% | .55% | .55% | .52% | .52% | ||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | 2.83%A | 1.97% | .72% | .61% | 1.02% | 2.32% | ||||||||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, | ||||||||||||||||||||||||
end of period | ||||||||||||||||||||||||
(000 omitted) | $753,574 | $695,051 | $608,121 | $588,292 | $568,762 | $542,017 |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrange ments. Expenses net of all reductions represent the net expenses paid by the fund. E Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
35 Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
1. Significant Accounting Policies.
Fidelity Michigan Municipal Income Fund (the Income Fund) is a fund of Fidelity Municipal Trust. Fidelity Michigan Municipal Money Market Fund (the Money Market Fund) is a fund of Fidelity Municipal Trust II. Each trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company. Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts) are organized as a Massachusetts business trust and a Delaware statutory trust, respectively. The Income Fund is a non diversified fund. Each Fund is authorized to issue an unlimited number of shares. Each Fund may be affected by economic and political developments in the state of Michigan. Certain funds may invest in affiliated money market central funds (Money Market Central Funds), which are open end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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 summa rizes the significant accounting policies of the Income Fund and the Money Market Fund:
Security Valuation. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, each Fund uses independent pricing services approved by the Board of Trustees to value their investments. For the Income Fund, debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
As permitted by compliance with certain conditions under Rule 2a 7 of the 1940 Act, securities owned by the Money Market Fund are valued at amortized cost which approximates value.
Semiannual Report |
36 |
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of each trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, each fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, 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, certain Funds claimed a portion of the payment made to redeeming shareholders as a distribu tion for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount, deferred trustees compensation, and losses deferred due to futures transactions.
The Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
Cost for Federal | Net Unrealized | |||||||
Income Tax | Unrealized | Unrealized | Appreciation/ | |||||
Purposes | Appreciation | Depreciation | (Depreciation) | |||||
Fidelity Michigan Municipal | ||||||||
Income Fund | $ 537,197,218 | $ 12,984,859 | $ (6,591,544) | $ 6,393,315 | ||||
Fidelity Michigan Municipal | ||||||||
Money Market Fund | 733,374,827 | — | — | — |
37 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
1. Significant Accounting Policies continued |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds’ net assets and results of operations.
Short Term Trading (Redemption) Fees. Shares held in the Income Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. Certain Funds may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in each applicable Fund’s Schedule of Investments. Certain Funds may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, each applicable Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Futures Contracts. The Income Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund’s exposure to the underlying instrument, while selling futures tends to decrease a fund’s exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount (“initial margin”)equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized
Semiannual Report |
38 |
2. Operating Policies continued
Futures Contracts continued
gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Income Funds’ Schedule of Investments. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract’s terms. 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. Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transac tions 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 at the end of each applicable Fund’s Schedule of Investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, for the Income Fund aggregated $26,013,862 and $25,837,512, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Funds with investment manage ment related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and a group fee rate. The individual fund fee rate is applied to each Fund’s average net assets. 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 manage ment decrease. For the period, each Fund’s annualized management fee rate expressed as a percentage of each Fund’s average net assets was as follows:
Individual | Group | |||||
Rate | Rate | Total | ||||
Fidelity Michigan Municipal Income Fund | .25% | .12% | .37% | |||
Fidelity Michigan Municipal Money Market Fund | .25% | .12% | .37% |
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent and shareholder servicing agent for the Funds. Citibank has entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the activities associated with the Funds’ transfer and shareholder servicing agent and accounting functions. The Funds pay account fees and asset based fees that vary according to account size and type of account. FSC pays for typesetting,
39 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
4. Fees and Other Transactions with Affiliates continued | ||
Transfer Agent and Accounting Fees continued |
printing and mailing of shareholder reports, except proxy statements. The accounting fee is based on the level of average net assets for the month. For the period, the transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Fidelity Michigan Municipal Income Fund | .08% | |
Fidelity Michigan Municipal Money Market Fund | .16% |
Affiliated Central Funds. Certain Funds may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
The Money Market Central Funds do not pay a management fee.
5. Committed Line of Credit.
The Income Fund participates with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit, which is reflected in Miscellaneous Expense on the Statement of Operations, and is as follows:
Fidelity Michigan Municipal Income Fund | $ 553 |
During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse funds to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
The following funds were in reimbursement during the period:
Expense | Reimbursement | |||
Limitations | from adviser | |||
Fidelity Michigan Municipal Money Market Fund | .55% | $ 65,243 |
Semiannual Report 40
6. Expense Reductions - continued
In addition, through arrangements with each applicable fund’s custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce each applicable fund’s expenses. All of the applicable expense reductions are noted in the table below.
Transfer | ||||||
Custody | Agent | |||||
expense | expense | |||||
reduction | reduction | |||||
Fidelity Michigan Municipal Income Fund | $ 4,345 | $ 198,258 | ||||
Fidelity Michigan Municipal Money Market Fund | 6,058 | 435,194 | ||||
7. Other. |
The Funds’ organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
41 Semiannual Report
Proxy Voting Results
A special meeting of Fidelity Michigan Municipal Money Market Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 667,201,902.33 | 95.261 | ||
Withheld | 33,193,298.35 | 4.739 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 667,477,031.41 | 95.300 | ||
Withheld | 32,918,169.27 | 4.700 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 666,308,716.35 | 95.133 | ||
Withheld | 34,086,484.33 | 4.867 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 664,652,778.09 | 94.897 | ||
Withheld | 35,742,422.59 | 5.103 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 664,170,496.79 | 94.828 | ||
Withheld | 36,224,703.89 | 5.172 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 663,788,907.22 | 94.773 | ||
Withheld | 36,606,293.46 | 5.227 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 667,006,752.59 | 95.233 | ||
Withheld | 33,388,448.09 | 4.767 | ||
TOTAL | 700,395,200.68 | 100.000 |
Marie L. Knowles | ||||
Affirmative | 666,373,338.05 | 95.142 | ||
Withheld | 34,021,862.63 | 4.858 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 666,334,938.56 | 95.137 | ||
Withheld | 34,060,262.12 | 4.863 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 665,764,692.27 | 95.056 | ||
Withheld | 34,630,508.41 | 4.944 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 667,335,421.55 | 95.280 | ||
Withheld | 33,059,779.13 | 4.720 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 667,579,724.56 | 95.315 | ||
Withheld | 32,815,476.12 | 4.685 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 665,215,267.33 | 94.977 | ||
Withheld | 35,179,933.35 | 5.023 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 666,060,714.08 | 95.098 | ||
Withheld | 34,334,486.60 | 4.902 | ||
TOTAL | 700,395,200.68 | 100.000 |
A Denotes trust-wide proposal and voting results.
Semiannual Report 42
A special meeting of Fidelity Michigan Municipal Income Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
43 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Michigan Municipal Income Fund / Fidelity Michigan Municipal Money Market Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, consid ered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s manage ment contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day management of the fund or the persons primarily responsible for such man agement; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not neces sitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services pro vided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the
Semiannual Report |
44 |
Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realiza tion of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for each fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of each fund’s Advisory Contracts, including the services and support provided to each fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such com mittee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for each fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to each fund and its sharehold ers (including the investment performance of each fund); (ii) the competitiveness of the management fee and total expenses of each fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with each fund; (iv) the extent to which economies of scale would be realized as each fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for each fund, the Board ultimately reached a determination, with the assistance of fund counsel and Indepen dent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contracts is consistent with Fidelity’s
45 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
fiduciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in each fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that each fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in that fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the backgrounds of the funds’ portfolio managers and the funds’ investment objectives and disciplines. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for each fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, each fund’s compliance policies and procedures.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of
Semiannual Report |
46 |
the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of a fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class avail able to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether each fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed each fund’s absolute investment performance, as well as each fund’s relative investment performance measured against (i) a broad based securities market index (bond fund only, as money market funds are typically not compared against a market index), and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. For each fund, the following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, the fund’s cumula tive total returns, the cumulative total returns of a broad based securities market index (“benchmark”) (bond fund only), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the fund.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Fidelity Michigan Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix48x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the second quartile for the one year period and the first quartile for the three and five year periods. The Board also stated that the relative investment performance of the fund was lower than its bench mark for all the periods shown.
Fidelity Michigan Municipal Money Market Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix48x2.jpg)
Semiannual Report 48
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the first quartile for the one year period and the second quartile for the three and five year periods.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative perfor mance, the Board concluded that the nature, extent, and quality of the services provided to each fund will benefit each fund’s shareholders, particularly in light of the Board’s view that each fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered each fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board’s management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the charts below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than a fund’s. For example, a TMG % of 25% would mean that 75% of the funds in the Total Mapped Group had higher management fees than a fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which a fund’s management fee ranked, is also included in the charts and considered by the Board.
49 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Fidelity Michigan Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix50x1.jpg)
The Board noted that each fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board concluded that each fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
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In its review of each fund’s total expenses, the Board considered the fund’s management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also consid ered current and historical total expenses of each fund compared to competitive fund median expenses. Each fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that each fund’s total expenses ranked below its competitive median for 2005.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that each fund’s total expenses were reason able in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing each fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for each fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitabil ity methodologies are reasonable in all material respects.
51 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the funds’ business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of each fund and determined that the amount of profit is a fair entrepreneurial profit for the management of each fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which each fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that each fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
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Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that each fund’s Advisory Contracts should be renewed.
53 Semiannual Report
Managing Your Investments
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix54x1.jpg)
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix54x2.jpg)
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix54x3.jpg)
* 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 guar anteed 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.
Semiannual Report 54
To Write Fidelity
We’ll give your correspondence immediate attention and send you written confirmation upon completion of your request.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix55x1.jpg)
(such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 |
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Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/michsemix55x3.jpg)
Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
55 Semiannual Report
To Visit Fidelity
For directions and hours, please call 1-800-544-9797. Arizona 7001 West Ray Road Chandler, AZ 15445 N. Scottsdale Road Scottsdale, AZ California 815 East Birch Street Brea, CA 1411 Chapin Avenue Burlingame, CA 851 East Hamilton Avenue Campbell, CA 19200 Von Karman Avenue Irvine, CA 601 Larkspur Landing Circle Larkspur, CA 10100 Santa Monica Blvd. Los Angeles, CA 27101 Puerta Real Mission Viejo, CA 73 575 El Paseo Palm Desert, CA 251 University Avenue Palo Alto, CA 123 South Lake Avenue Pasadena, CA 16995 Bernardo Ctr. Drive Rancho Bernardo, CA 1220 Roseville Parkway Roseville, CA 1740 Arden Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 11943 El Camino Real San Diego, CA 8 Montgomery Street San Francisco, CA 3793 State Street Santa Barbara, CA 1200 Wilshire Boulevard Santa Monica, CA 21701 Hawthorne Boulevard Torrance, CA |
2001 North Main Street Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA Colorado 1625 Broadway Denver, CO 9185 Westview Road Lone Tree, CO Connecticut 48 West Putnam Avenue Greenwich, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT Delaware 400 Delaware Avenue Wilmington, DE Florida 4400 N. Federal Highway Boca Raton, FL 121 Alhambra Plaza Coral Gables, FL 2948 N. Federal Highway Ft. Lauderdale, FL 4671 Town Center Parkway Jacksonville, FL 1907 West State Road 434 Longwood, FL 8880 Tamiami Trail, North Naples, FL 3501 PGA Boulevard Palm Beach Gardens, FL 3550 Tamiami Trail, South Sarasota, FL 1502 N. Westshore Blvd. Tampa, FL 2465 State Road 7 Wellington, FL |
Georgia 3445 Peachtree Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA Illinois One North LaSalle Street Chicago, IL 875 North Michigan Ave. Chicago, IL 1415 West 22nd Street Oak Brook, IL 1572 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 7315 Wisconsin Avenue Bethesda, MD One W. Pennsylvania Ave. Towson, MD Massachusetts 801 Boylston Street Boston, MA 155 Congress Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 238 Main Street Cambridge, MA 405 Cochituate Road Framingham, MA 416 Belmont Street Worcester, MA |
Semiannual Report 56
Michigan 500 E. Eisenhower Pkwy. Ann Arbor, MI 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 1524 South Lindbergh Blvd. St. Louis, MO Nevada 2225 Village Walk Drive Henderson, NV New Jersey 150 Essex Street Millburn, NJ 56 South Street Morristown, NJ 396 Route 17, North Paramus, NJ 3518 Route 1 North Princeton, NJ 530 Broad Street Shrewsbury, NJ New York 1055 Franklin Avenue Garden City, NY 37 West Jericho Turnpike Huntington Station, NY 1271 Avenue of the Americas New York, NY 980 Madison Avenue New York, NY 61 Broadway New York, NY 350 Park Avenue New York, NY 200 Fifth Avenue New York, NY 733 Third Avenue New York, NY 11 Penn Plaza New York, NY |
2070 Broadway New York, NY 1075 Northern Blvd. Roslyn, NY 799 Central Park Avenue Scarsdale, NY North Carolina 4611 Sharon Road Charlotte, NC 7011 Fayetteville Road Durham, NC Ohio 3805 Edwards Road Cincinnati, OH 1324 Polaris Parkway Columbus, OH 28699 Chagrin Boulevard Woodmere Village, OH Oregon 7493 SW Bridgeport Road 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 4001 Northwest Parkway Dallas, TX 12532 Memorial Drive Houston, TX 2701 Drexel Drive Houston, TX 6560 Fannin Street Houston, TX 6500 N. MacArthur Blvd. Irving, TX |
6005 West Park Boulevard Plano, TX 14100 San Pedro San Antonio, TX 1576 East Southlake Blvd. Southlake, TX 19740 IH 45 North Spring, TX Utah 279 West South Temple 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
57 Semiannual Report
57
Semiannual Report |
58 |
59 Semiannual Report
Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Advisers Fidelity Investments Money Management, Inc. Fidelity International Investment Advisors Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY and Fidelity Service Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24-Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
Telephone (FAST® ) (automated phone logo) | 1-800-544-5555 | |
(automated phone logo) Automated line for quickest service |
MIR-USAN-0806 1.787785.103 |
Fidelity® Minnesota Municipal Income Fund |
Semiannual Report June 30, 2006 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix1x2.jpg)
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders. | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Investment Changes | 5 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 6 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 13 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 17 | Notes to the financial statements. | ||
Proxy Voting Results | 21 | |||
Board Approval of | 22 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general in- formation of the shareholders of the fund. This report is not authorized for distribution to pro- spective investors in the fund unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the fund nor Fidelity Distributors Corporation is a bank. |
Semiannual Report |
2 |
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Actual | $ 1,000.00 | $ 1,001.60 | $ 2.53 | |||||||||
Hypothetical (5% return per year | ||||||||||||
before expenses) | $ 1,000.00 | $ 1,022.27 | $ 2.56 |
* Expenses are equal to the Fund’s annualized expense ratio of .51%; multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Semiannual Report |
4 |
Investment Changes | ||||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 33.5 | 38.7 | ||
Escrowed/Pre Refunded | 18.3 | 14.7 | ||
Health Care | 16.1 | 15.2 | ||
Electric Utilities | 14.1 | 14.9 | ||
Transportation | 8.5 | 7.0 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 12.3 | 12.4 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 5.8 | 5.7 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix5x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
5 Semiannual Report
Investments June 30, 2006 (Unaudited) | ||||
Showing Percentage of Net Assets | ||||
Municipal Bonds 98.2% | ||||
Principal | Value (Note 1) | |||
Amount | ||||
Guam 0.1% | ||||
Guam Wtrwks. Auth. Wtr. and Wastewtr. Sys. Rev. 5.875% | ||||
7/1/35 | $ 425,000 | $ 442,769 | ||
Minnesota – 93.9% | ||||
Anoka-Hennepin Independent School District #11: | ||||
Series 2004 B, 5% 2/1/20 | 1,880,000 | 1,949,222 | ||
Series A, 5.75% 2/1/20 (Pre-Refunded to 2/1/10 @ | ||||
100) (b) | 3,950,000 | 4,173,649 | ||
Brainerd Independent School District #181 Series A: | ||||
5.375% 2/1/16 (FGIC Insured) | 3,885,000 | 4,150,812 | ||
5.375% 2/1/17 (FGIC Insured) | 4,300,000 | 4,596,571 | ||
5.375% 2/1/19 (FGIC Insured) | 2,200,000 | 2,339,590 | ||
Brooklyn Ctr. Independent School District #286 5.1% 2/1/31 | ||||
(FGIC Insured) (Pre-Refunded to 2/1/12 @ 100) (b) | 6,000,000 | 6,279,240 | ||
Cambridge Independent School District #911 Gen. Oblig. | ||||
(Minnesota School District Prog.) Series C, 5% 4/1/14 | ||||
(MBIA Insured) | 1,200,000 | 1,266,024 | ||
Centennial Independent School District #12: | ||||
Series 1996 A, 5.625% 2/1/16 (Pre-Refunded to 2/1/08 @ | ||||
100) (b) | 1,000,000 | 1,025,830 | ||
Series A, 5% 2/1/19 (FSA Insured) | 480,000 | 495,749 | ||
Chaska Elec. Rev. (Generating Facilities Proj.) Series A: | ||||
5.25% 10/1/20 | 2,000,000 | 2,099,860 | ||
5.25% 10/1/25 | 1,215,000 | 1,268,217 | ||
Duluth Econ. Dev. Auth. Health Care Facilities Rev. (Benedictine | ||||
Health Sys. St. Mary’s) 5.25% 2/15/28 | 2,350,000 | 2,389,645 | ||
Elk River Independent School District #728 Series A, 5% | ||||
2/1/17 (FGIC Insured) | 2,000,000 | 2,097,320 | ||
Hopkins Independent School District #270: | ||||
5% 2/1/16 (FGIC Insured) | 1,350,000 | 1,400,382 | ||
5.125% 2/1/17 (FGIC Insured) | 1,015,000 | 1,062,187 | ||
Jackson County Central Independent School District #2895 5% | ||||
2/1/21 (Pre-Refunded to 2/1/12 @ 100) (b) | 1,220,000 | 1,270,154 | ||
Lake Superior Independent School District #381 Series A: | ||||
5% 4/1/15 (FSA Insured) | 1,970,000 | 2,061,507 | ||
5% 4/1/16 (FSA Insured) | 2,065,000 | 2,155,984 | ||
5% 4/1/17 (FSA Insured) | 2,165,000 | 2,255,237 | ||
5% 4/1/18 (FSA Insured) | 1,260,000 | 1,310,274 | ||
Lakeville Independent School District #194 Series A, 5% | ||||
2/1/22 (FGIC Insured) | 1,000,000 | 1,032,730 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 6
Municipal Bonds continued | ||||||
Principal | Value (Note 1) | |||||
Amount | ||||||
Minnesota – continued | ||||||
Mankato Independent School District #77 Series A, 5% | ||||||
2/1/12 (FSA Insured) | $ 1,000,000 | $ 1,027,850 | ||||
Maple Grove Gen. Oblig. Impt. Series A, 5.2% 2/1/17 (Pre- | ||||||
Refunded to 2/1/07 @ 100) (b) | 1,120,000 | 1,129,218 | ||||
Minneapolis & Saint Paul Hsg. & Redev. Auth. Health Care | ||||||
Sys. Rev.: | ||||||
(Health Partners Oblig. Group Proj.): | ||||||
5.875% 12/1/29 | 800,000 | 833,784 | ||||
6% 12/1/19 | 2,915,000 | 3,143,798 | ||||
(Healthspan Corp. Proj.) Series A, 4.75% 11/15/18 | ||||||
(AMBAC Insured) | 4,500,000 | 4,517,100 | ||||
Minneapolis & Saint Paul Metropolitan Arpts. Commission | ||||||
Series 13, 5.25% 1/1/11 (a) | 2,840,000 | 2,934,629 | ||||
Minneapolis & Saint Paul Metropolitan Arpts. Commission | ||||||
Arpt. Rev.: | ||||||
Series 1999 A, 5.125% 1/1/31 (FGIC Insured) | 3,375,000 | 3,456,675 | ||||
Series 2001 C: | ||||||
5.25% 1/1/32 (FGIC Insured) | 2,020,000 | 2,086,700 | ||||
5.5% 1/1/16 (FGIC Insured) | 2,500,000 | 2,651,550 | ||||
Series 2005 C, 5% 1/1/31 (FGIC Insured) | 2,090,000 | 2,137,861 | ||||
Series A: | ||||||
5% 1/1/19 (AMBAC Insured) | 3,500,000 | 3,589,635 | ||||
5% 1/1/35 (AMBAC Insured) | 8,500,000 | 8,670,765 | ||||
Series B: | ||||||
5.25% 1/1/11 (AMBAC Insured) (a) | 3,475,000 | 3,564,238 | ||||
5.4% 1/1/09 (FGIC Insured) (a) | 1,375,000 | 1,419,784 | ||||
5.625% 1/1/13 (FGIC Insured) (a) | 1,000,000 | 1,044,970 | ||||
Minneapolis Art Ctr. Facilities Rev. (Walker Art Ctr. Proj.) | ||||||
5.125% 7/1/21 | 1,250,000 | 1,286,788 | ||||
Minneapolis Cmnty. Dev. Agcy. Tax Increment Rev.: | ||||||
0% 9/1/07 (MBIA Insured) | 2,860,000 | 2,737,621 | ||||
0% 9/1/08 (MBIA Insured) | 4,600,000 | 4,210,702 | ||||
Minneapolis Gen. Oblig. (Sports Arena Proj.) 5.125% | ||||||
10/1/20 | 2,565,000 | 2,621,430 | ||||
Minneapolis Health Care Sys. Rev.: | ||||||
(Allina Health Sys. Proj.) Series 2002 A, 6% 11/15/18 | 2,655,000 | 2,877,489 | ||||
(Health Care Sys. Proj.): | ||||||
Series B, 5% 5/15/09 (MBIA Insured) | 3,180,000 | 3,272,729 | ||||
Series D, 5% 11/15/34 (AMBAC Insured) | 1,500,000 | 1,530,255 | ||||
Minneapolis Spl. School District #1: | ||||||
Series A, 5% 2/1/17 (FSA Insured) | 2,000,000 | 2,092,200 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Investments (Unaudited) continued | ||||||
Municipal Bonds continued | ||||||
Principal | Value (Note 1) | |||||
Amount | ||||||
Minnesota – continued | ||||||
Minneapolis Spl. School District #1: – continued | ||||||
5% 2/1/15 (MBIA Insured) | $ 1,020,000 | $ 1,063,717 | ||||
Minneapolis Spl. School District #1 Ctfs. of Prtn.: | ||||||
Series B, 5% 2/1/13 (Pre-Refunded to 2/1/07 @ 100) (b) . | 2,575,000 | 2,593,334 | ||||
5.5% 2/1/21 (MBIA Insured) (Pre-Refunded to 2/1/09 @ | ||||||
100) (b) | 1,305,000 | 1,353,924 | ||||
Minnesota Agric. & Econ. Dev. Board Rev. (Health Care Sys. | ||||||
Proj.) Series A: | ||||||
6.375% 11/15/29 | 90,000 | 98,393 | ||||
6.375% 11/15/29 (Pre-Refunded to 11/15/10 @ 101) (b) | 2,985,000 | 3,295,947 | ||||
Minnesota Gen. Oblig.: | ||||||
(Duluth Arpt. Proj.) Series B, 6.25% 8/1/14 (a) | 900,000 | 901,314 | ||||
5% 8/1/16 | 3,500,000 | 3,659,985 | ||||
5% 8/1/18 | 10,775,000 | 11,283,791 | ||||
5.2% 5/1/07 | 1,340,000 | 1,346,459 | ||||
5.25% 8/1/13 | 755,000 | 784,415 | ||||
5.5% 6/1/17 | 2,150,000 | 2,257,457 | ||||
Minnesota Higher Ed. Facilities Auth. Rev.: | ||||||
(Hamline Univ. Proj.) Series 5B, 5.95% 10/1/19 | 600,000 | 624,966 | ||||
(Saint John’s Univ. Proj.) 5% 10/1/08 | 1,000,000 | 1,023,490 | ||||
(Saint Thomas Univ. Proj.) Series 4M, 5.35% 4/1/17 | ||||||
(Pre-Refunded to 4/1/07 @ 100) (b) | 1,500,000 | 1,517,070 | ||||
(Trustees of the Hamline Univ. of Minnesota Proj.) Series 41, | ||||||
6% 10/1/12 | 440,000 | 442,138 | ||||
(Univ. of St. Thomas Proj.) Series 6I, 5% 4/1/23 | 1,000,000 | 1,025,510 | ||||
Minnesota Muni. Pwr. Agcy. Elec. Rev. 5.25% 10/1/21 | 5,450,000 | 5,709,529 | ||||
Minnesota Pub. Facilities Auth. Wtr. Poll. Cont. Rev. 5% | ||||||
3/1/16 | 295,000 | 297,151 | ||||
Minnesota Retirement Sys. Bldg. Rev.: | ||||||
5.55% 6/1/14 | 590,000 | 623,370 | ||||
5.6% 6/1/15 | 615,000 | 649,975 | ||||
5.65% 6/1/16 | 625,000 | 662,825 | ||||
5.7% 6/1/17 | 900,000 | 954,072 | ||||
5.75% 6/1/18 | 975,000 | 1,035,323 | ||||
5.75% 6/1/19 | 1,050,000 | 1,114,575 | ||||
5.8% 6/1/20 | 1,000,000 | 1,063,290 | ||||
5.875% 6/1/22 | 2,425,000 | 2,584,080 | ||||
Minnesota State Colleges & Univs. Board of Trustees Rev. | ||||||
Series A, 5% 10/1/18 (MBIA Insured) | 1,465,000 | 1,532,156 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||
Principal | Value (Note 1) | |||||
Amount | ||||||
Minnesota – continued | ||||||
Mounds View Independent School District #621 Series 2000 | ||||||
A, 5.375% 2/1/24 (Pre-Refunded to 2/1/11 @ 100) (b) | $ 3,000,000 | $ 3,155,340 | ||||
Northeast Metropolitan Intermediate School District #916 Ctfs. | ||||||
of Prtn. 5% 1/1/13 | 1,000,000 | 1,039,820 | ||||
Northern Muni. Pwr. Agcy. Elec. Sys. Rev.: | ||||||
5.25% 1/1/13 (FSA Insured) | 1,000,000 | 1,047,660 | ||||
5.375% 1/1/14 (FSA Insured) | 8,400,000 | 8,818,824 | ||||
Osseo Independent School District #279: | ||||||
(School Bldg. Proj.): | ||||||
Series 2000 A, 5.25% 2/1/21 (Pre-Refunded to 8/1/10 | ||||||
@ 100) (b) | 2,625,000 | 2,741,734 | ||||
Series A: | ||||||
5.75% 2/1/11 (Pre-Refunded to 8/1/10 @ 100) (b) | 2,420,000 | 2,572,629 | ||||
5.75% 2/1/12 (Pre-Refunded to 8/1/10 @ 100) (b) | 3,100,000 | 3,290,712 | ||||
Series A, 5.25% 2/1/14 (FSA Insured) | 2,705,000 | 2,863,946 | ||||
Series B, 5% 2/1/13 | 2,000,000 | 2,066,520 | ||||
Owatonna Pub. Utils. Commission Pub. Utils. Rev.: | ||||||
5% 1/1/11 (AMBAC Insured) | 720,000 | 750,499 | ||||
5% 1/1/13 (AMBAC Insured) | 800,000 | 841,104 | ||||
5% 1/1/15 (AMBAC Insured) | 715,000 | 746,767 | ||||
Prior Lake Ind. School District #719 Series 2000, 5.5% | ||||||
2/1/15 (FSA Insured) | 900,000 | 943,245 | ||||
Ramsey County Gen. Oblig. Series A, 5% 2/1/18 | 1,530,000 | 1,603,165 | ||||
Robbinsdale Independent School District #281: | ||||||
5% 2/1/16 (FSA Insured) | 2,410,000 | 2,503,580 | ||||
5% 2/1/16 (Pre-Refunded to 2/1/12 @ 100) (b) | 1,015,000 | 1,056,727 | ||||
5% 2/1/17 (FSA Insured) | 2,535,000 | 2,630,874 | ||||
5% 2/1/18 (FSA Insured) | 2,520,000 | 2,612,786 | ||||
Rochester Health Care Facilities Rev.: | ||||||
(Mayo Foundation Proj.): | ||||||
Series A, 5.5% 11/15/27 | 4,755,000 | 4,933,265 | ||||
5% 11/15/36 | 2,000,000 | 2,042,040 | ||||
(Mayo Foundation/Mayo Med. Ctr. Proj.) Series I: | ||||||
5.875% 11/15/08 | 1,000,000 | 1,045,180 | ||||
5.9% 11/15/09 | 1,000,000 | 1,060,390 | ||||
Roseville Independent School District #623 (School District Cr. | ||||||
Enhancement Prog.) Series A, 5% 2/1/15 (FSA Insured) | 400,000 | 415,188 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Investments (Unaudited) continued | ||||||
Municipal Bonds continued | ||||||
Principal | Value (Note 1) | |||||
Amount | ||||||
Minnesota – continued | ||||||
Saint Cloud Health Care Rev. (Saint Cloud Hosp. Group Oblig. | ||||||
Proj.) Series A:�� | ||||||
5.75% 5/1/26 (FSA Insured) | $ 7,020,000 | $ 7,459,733 | ||||
5.875% 5/1/30 (FSA Insured) | 4,000,000 | 4,269,480 | ||||
6.25% 5/1/20 (FSA Insured) | 2,760,000 | 2,989,218 | ||||
Saint Cloud Hosp. Facilities Rev. (Saint Cloud Hosp. Proj.) | ||||||
Series B, 5% 7/1/20 (AMBAC Insured) | 1,000,000 | 1,011,090 | ||||
Saint Louis Park Health Care Facilities Rev. (Park Nicollet | ||||||
Health Services Proj.) Series B, 5.5% 7/1/25 | 2,000,000 | 2,087,900 | ||||
Saint Louis Park Independent School District #283: | ||||||
5.65% 2/1/16 (Pre-Refunded to 2/1/09 @ 100) (b) | 2,630,000 | 2,738,146 | ||||
5.75% 2/1/20 (Pre-Refunded to 2/1/09 @ 100) (b) | 3,765,000 | 3,928,928 | ||||
Saint Michael Independent School District #885 5% 2/1/27 | ||||||
(FSA Insured) | 7,000,000 | 7,163,590 | ||||
Saint Paul Hsg. & Redev. Auth. Health Care Facilities Rev. | ||||||
(Regions Hosp. Proj.) 5.3% 5/15/28 | 1,250,000 | 1,259,463 | ||||
Saint Paul Hsg. & Redev. Auth. Hosp. Rev. (Healtheast Proj.) | ||||||
6% 11/15/30 | 2,000,000 | 2,135,480 | ||||
Saint Paul Independent School District #625: | ||||||
Series 2000 A, 5.5% 2/1/21 (Pre-Refunded to 2/1/10 @ | ||||||
100) (b) | 1,060,000 | 1,111,293 | ||||
Series A, 5% 2/1/17 (FSA Insured) | 220,000 | 228,980 | ||||
Series B: | ||||||
5% 2/1/16 (FSA Insured) | 1,025,000 | 1,076,691 | ||||
5% 2/1/17 (FSA Insured) | 1,300,000 | 1,361,763 | ||||
5% 2/1/18 (FSA Insured) | 395,000 | 409,978 | ||||
Series C, 5% 2/1/21 | 1,000,000 | 1,036,820 | ||||
Saint Paul Port Auth. Energy Park Tax Increment Rev. 5% | ||||||
2/1/08 (Escrowed to Maturity) (b) | 2,500,000 | 2,547,525 | ||||
Saint Paul Port Auth. Lease Rev.: | ||||||
(HealthEast Midway Campus Proj.) Series 2003 A, 5.75% | ||||||
5/1/25 | 2,000,000 | 2,032,900 | ||||
Series 2003 11, 5.25% 12/1/20 | 3,000,000 | 3,144,060 | ||||
Series 2003 12: | ||||||
5.125% 12/1/27 | 5,000,000 | 5,143,950 | ||||
5.25% 12/1/18 | 3,685,000 | 3,878,536 | ||||
Shakopee Health Care Facilities Rev. (Saint Francis Reg’l. Med. | ||||||
Ctr. Proj.) 5.25% 9/1/34 | 2,520,000 | 2,558,203 | ||||
South Washington County Independent School District #833 | ||||||
Series A: | ||||||
5.4% 2/1/15 (Pre-Refunded to 2/1/10 @ 100) (b) | 3,925,000 | 4,101,978 | ||||
5.5% 2/1/19 (Pre-Refunded to 2/1/10 @ 100) (b) | 1,000,000 | 1,048,390 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||
Principal | Value (Note 1) | |||
Amount | ||||
Minnesota – continued | ||||
Southern Minnesota Muni. Pwr. Agcy. Pwr. Supply Sys. Rev.: | ||||
Series 1994 A, 0% 1/1/21 (MBIA Insured) | $14,670,000 | $ 7,306,687 | ||
Series 2002 A: | ||||
5% 1/1/10 (AMBAC Insured) | 1,620,000 | 1,678,628 | ||
5% 1/1/12 (AMBAC Insured) | 2,660,000 | 2,788,505 | ||
Series A: | ||||
0% 1/1/19 (MBIA Insured) | 5,210,000 | 2,881,547 | ||
5.25% 1/1/15 (AMBAC Insured) | 1,000,000 | 1,074,300 | ||
5.25% 1/1/16 (AMBAC Insured) | 4,360,000 | 4,686,869 | ||
Spring Lake Park Ind. School District #16 Series B: | ||||
5% 2/1/15 (MBIA Insured) | 2,085,000 | 2,179,826 | ||
5% 2/1/16 (MBIA Insured) | 2,230,000 | 2,326,225 | ||
5% 2/1/17 (MBIA Insured) | 2,400,000 | 2,497,968 | ||
Suburban Hennepin Reg’l. Park District 5% 2/1/12 | 1,000,000 | 1,025,880 | ||
Virginia Hsg. & Redev. Auth. Health Care Facility Lease Rev. | ||||
5.25% 10/1/25 | 440,000 | 441,241 | ||
Washington County Gen. Oblig. 5.5% 2/1/21 (Pre-Refunded | ||||
to 2/1/10 @ 100) (b) | 1,450,000 | 1,520,166 | ||
Watertown Independent School District #111 Series A, 5% | ||||
2/1/22 (FSA Insured) | 1,495,000 | 1,547,863 | ||
Wayzata Ind. School District #284 Series B, 5% 2/1/16 (FSA | ||||
Insured) | 1,005,000 | 1,055,682 | ||
Western Minnesota Muni. Pwr. Agcy. Pwr. Supply Rev. | ||||
Series A: | ||||
5% 1/1/30 (MBIA Insured) | 3,000,000 | 3,059,880 | ||
6.375% 1/1/16 (Escrowed to Maturity) (b) | 1,320,000 | 1,444,978 | ||
312,038,546 | ||||
Puerto Rico 4.2% | ||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. Rev. | ||||
Series Y, 5.5% 7/1/36 (FSA Insured) | 2,680,000 | 2,893,650 | ||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Trans. Rev. | ||||
Series D, 5.25% 7/1/38 (Pre-Refunded to 7/1/12 @ | ||||
100) (b) | 2,500,000 | 2,674,500 | ||
Puerto Rico Commonwealth Infrastructure Fing. Auth. Series | ||||
2000 A: | ||||
5.5% 10/1/32 (Escrowed to Maturity) (b) | 2,795,000 | 2,957,753 | ||
5.5% 10/1/40 (Escrowed to Maturity) (b) | 865,000 | 913,302 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount | ||||||||
Puerto Rico continued | ||||||||
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Series HH, 5.25% | ||||||||
7/1/29 (FSA Insured) | $ 3,700,000 | $ 3,890,661 | ||||||
Puerto Rico Govt. Dev. Bank Series B, 5% 12/1/12 | 500,000 | 516,845 | ||||||
13,846,711 | ||||||||
TOTAL INVESTMENT PORTFOLIO 98.2% | ||||||||
(Cost $321,304,541) | 326,328,026 | |||||||
NET OTHER ASSETS – 1.8% | 5,868,897 | |||||||
NET ASSETS 100% | $ 332,196,923 |
Legend (a) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (b) Security collateralized by an amount sufficient to pay interest and principal. |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 33.5% | |
Escrowed/Pre Refunded | 18.3% | |
Health Care | 16.1% | |
Electric Utilities | 14.1% | |
Transportation | 8.5% | |
Others* (individually less than 5%) | 9.5% | |
100.0% |
*Includes net other assets
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 12
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $321,304,541) | $ 326,328,026 | |||||
Cash | 1,151,516 | |||||
Receivable for fund shares sold | 84,294 | |||||
Interest receivable | 5,359,086 | |||||
Prepaid expenses | 700 | |||||
Other receivables | 13,006 | |||||
Total assets | 332,936,628 | |||||
Liabilities | ||||||
Payable for fund shares redeemed | $ 225,684 | |||||
Distributions payable | 321,538 | |||||
Accrued management fee | 102,663 | |||||
Transfer agent fee payable | 44,819 | |||||
Other affiliated payables | 14,872 | |||||
Other payables and accrued expenses | 30,129 | |||||
Total liabilities | 739,705 | |||||
Net Assets | $ 332,196,923 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 326,464,039 | |||||
Undistributed net investment income | 91,351 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 618,048 | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | 5,023,485 | |||||
Net Assets, for 29,631,262 shares outstanding | $ 332,196,923 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($332,196,923 ÷ 29,631,262 shares) | $ 11.21 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Financial Statements continued | ||||||
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 7,659,507 | |||||
Expenses | ||||||
Management fee | $ 627,191 | |||||
Transfer agent fees | 135,917 | |||||
Accounting fees and expenses | 42,353 | |||||
Independent trustees’ compensation | 658 | |||||
Custodian fees and expenses | 2,855 | |||||
Registration fees | 19,975 | |||||
Audit | 24,404 | |||||
Legal | 5,631 | |||||
Miscellaneous | 1,780 | |||||
Total expenses before reductions | 860,764 | |||||
Expense reductions | (48,283) | 812,481 | ||||
Net investment income | 6,847,026 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 800,806 | |||||
Futures contracts | 1,082 | |||||
Total net realized gain (loss) | 801,888 | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (6,939,950) | |||||
Net gain (loss) | (6,138,062) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 708,964 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
(Unaudited) | 2005 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 6,847,026 | $ 14,107,143 | ||||||
Net realized gain (loss) | 801,888 | 1,314,751 | ||||||
Change in net unrealized appreciation (depreciation) . | (6,939,950) | (6,375,155) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
operations | 708,964 | 9,046,739 | ||||||
Distributions to shareholders from net investment income . | (6,834,514) | (14,107,348) | ||||||
Distributions to shareholders from net realized gain | — | (1,151,446) | ||||||
Total distributions | (6,834,514) | (15,258,794) | ||||||
Share transactions | ||||||||
Proceeds from sales of shares | 18,107,352 | 47,316,112 | ||||||
Reinvestment of distributions | 4,852,449 | 10,864,679 | ||||||
Cost of shares redeemed | (27,653,977) | (64,418,207) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
share transactions | (4,694,176) | (6,237,416) | ||||||
Redemption fees | 403 | 4,497 | ||||||
Total increase (decrease) in net assets | (10,819,323) | (12,444,974) | ||||||
Net Assets | ||||||||
Beginning of period | 343,016,246 | 355,461,220 | ||||||
End of period (including undistributed net investment | ||||||||
income of $91,351 and undistributed net investment | ||||||||
income of $81,719, respectively) | $ 332,196,923 | $ 343,016,246 | ||||||
Other Information | ||||||||
Shares | ||||||||
Sold | 1,595,025 | 4,095,080 | ||||||
Issued in reinvestment of distributions | 428,701 | 942,835 | ||||||
Redeemed | (2,439,065) | (5,592,973) | ||||||
Net increase (decrease) | (415,339) | (555,058) |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Financial Highlights | ||||||||||||
Six months ended | ||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Selected Per Share Data | ||||||||||||
Net asset value, | ||||||||||||
beginning of period | $ 11.42 | $ 11.62 | $ 11.69 | $ 11.62 | $ 11.19 | $ 11.20 | ||||||
Income from Investment | ||||||||||||
Operations | ||||||||||||
Net investment | ||||||||||||
incomeD | .229 | .460 | .458 | .467 | .509 | .529 | ||||||
Net realized and | ||||||||||||
unrealized gain | ||||||||||||
(loss) | (.210) | (.162) | (.012) | .133 | .431 | (.016) | ||||||
Total from invest- | ||||||||||||
ment operations | .019 | .298 | .446 | .600 | .940 | .513 | ||||||
Distributions from net | ||||||||||||
investment income . | (.229) | (.460) | (.459) | (.464) | (.510) | (.523) | ||||||
Distributions from net | ||||||||||||
realized gain | (.038) | (.057) | (.066) | — | — | |||||||
Total distributions | (.229) | (.498) | (.516) | (.530) | (.510) | (.523) | ||||||
Redemption fees | ||||||||||||
added to paid in | ||||||||||||
capitalD,F | — | — | — | — | — | — | ||||||
Net asset value, end of | ||||||||||||
period | $ 11.21 | $ 11.42 | $ 11.62 | $ 11.69 | $ 11.62 | $ 11.19 | ||||||
Total ReturnB,C | .16% | 2.61% | 3.92% | 5.27% | 8.57% | 4.64% | ||||||
Ratios to Average Net AssetsE | ||||||||||||
Expenses before | ||||||||||||
reductions | .51%A | .51% | .51% | .51% | .51% | .51% | ||||||
Expenses net of fee | ||||||||||||
waivers, if any | .51%A | .51% | .51% | .51% | .51% | .51% | ||||||
Expenses net of all | ||||||||||||
reductions | .48%A | .48% | .49% | .49% | .49% | .46% | ||||||
Net investment | ||||||||||||
income | 4.07%A | 3.99% | 3.95% | 4.00% | 4.45% | 4.69% | ||||||
Supplemental Data | ||||||||||||
Net assets, | ||||||||||||
end of period | ||||||||||||
(000 omitted) | $332,197 | $343,016 | $355,461 | $343,880 | $344,435 | $316,371 | ||||||
Portfolio turnover rate | 11%A | 15% | 12% | 15% | 25% | 7% |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Ex penses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrange ments. Expenses net of all reductions represent the net expenses paid by the fund. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
16 |
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
1. Significant Accounting Policies.
Fidelity Minnesota Municipal Income Fund (the Fund) is a non diversified fund of Fidelity Municipal Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company organized as a Massa chusetts business trust. The Fund may be affected by economic and political developments in the state of Minnesota. 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.Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from pub lished prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturi ties of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
17 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
1. Significant Accounting Policies continued |
Income Tax Information and Distributions to Shareholders continued |
Dividends are declared daily and paid monthly from net investment income. Distribu tions from realized gains, if any, 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 claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount, deferred trustees compensa tion, and losses deferred due to futures transactions.
The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 8,058,678 | |||
Unrealized depreciation | $ (2,871,530) | |||
Net unrealized appreciation (depreciation) | $ 5,187,148 | |||
Cost for federal income tax purposes | $ 321,140,878 |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an inter pretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund’s net assets and results of operations.
Short Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the Fund and accounted for as an addition to paid in capital.
Semiannual Report |
18 |
2. Operating Policies. |
Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund’s exposure to the underlying instrument, while selling futures tends to decrease a fund’s exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount (“initial margin”) equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract’s terms. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, aggregated $18,600,043 and $24,498,921, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment manage ment related services for which the Fund pays a monthly management fee. The manage ment fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent and shareholder servicing agent for the Fund. Citibank has entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the activities associated with the Fund’s transfer and shareholder servicing agent and accounting functions. The Fund pays account fees and asset based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. The accounting fee is based on the level of average net assets for the month. For the period, the transfer agent fees were equivalent to an annualized rate of .08% of average net assets.
19 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
5. Committed Line of Credit. |
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the “line of credit”) to be utilized for temporary or emergency purposes to fund share holder redemptions or for other short term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $337 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions. |
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 $2,855 and $45,428, respectively.
7. Other. |
The Fund’s organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Semiannual Report |
20 |
Proxy Voting Results
A special meeting of the fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
21 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Minnesota Municipal Income Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, considered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s management contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day manage ment of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also consid ered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s man agement contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment performance, com petitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Semiannual Report |
22 |
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund’s Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such com mittee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for the fund, the Board ulti mately reached a determination, with the assistance of fund counsel and Independent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity’s fidu ciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice
23 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
among mutual funds offered by competitors to Fidelity, and that the fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the background of the fund’s portfolio manager and the fund’s investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for the fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund’s compliance policies and procedures.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Semiannual Report |
24 |
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class avail able to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed the fund’s absolute investment performance, as well as the fund’s relative investment performance measured against (i) a broad based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, the fund’s cumulative total returns, the cumulative total returns of a broad based securities market index (“bench mark”), and a range of cumulative total returns of a peer group of mutual funds identi fied by Lipper Inc. as having an investment objective similar to that of the fund. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percen tile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the fund.
25 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Fidelity Minnesota Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix26x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the third quartile for the one and three year periods and the second quartile for the five year period. The Board also stated that the relative investment performance of the fund was lower than its bench mark for all the periods shown. The Board discussed with FMR actions to be taken by FMR to improve the fund’s more recent disappointing performance.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative perfor mance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund’s shareholders, particularly in light of the Board’s view that the fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee charac teristics. Combining Lipper investment objective categories aids the Board’s manage ment fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the chart below. The group of Lipper funds used by the Board for
Semiannual Report |
26 |
management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund’s. For example, a TMG % of 8% means that 92% of the funds in the Total Mapped Group had higher management fees than the fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund’s management fee ranked, is also included in the chart and considered by the Board.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix27x1.jpg)
The Board noted that the fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board concluded that the fund’s management fee was fair and reasonable in light of the ser vices that the fund receives and the other factors considered.
In its review of the fund’s total expenses, the Board considered the fund’s management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers
27 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
and reimbursements on fees and expenses. As part of its review, the Board also consid ered current and historical total expenses of the fund compared to competitive fund median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund’s total expenses ranked below its competitive median for 2005.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund’s total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the fund’s business.
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28 |
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund’s Advisory Contracts should be renewed.
29 Semiannual Report
Managing Your Investments
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix30x1.jpg)
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix30x2.jpg)
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix30x3.jpg)
* 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 guar anteed 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.
Semiannual Report 30
To Write Fidelity
We’ll give your correspondence immediate attention and send you written confirmation upon completion of your request.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix31x1.jpg)
(such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix31x2.jpg)
Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/minnsemix31x3.jpg)
Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
31 Semiannual Report
Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Adviser Fidelity Investments Money Management Inc. Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Service Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24-Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
Telephone (FAST®) (automated phone logo) | 1-800-544-5555 | |
(automated phone logo) Automated line for quickest service |
MNF USAN-0806 1.787786.103 |
Fidelity® Municipal Income Fund |
Semiannual Report June 30, 2006 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix1x2.jpg)
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders. | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Investment Changes | 6 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 7 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 47 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 51 | Notes to the financial statements. | ||
Proxy Voting Results | 56 | |||
Board Approval of | 57 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the fund nor Fidelity Distributors Corporation is a bank. |
Semiannual Report |
2 |
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report |
4 |
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Actual | $ 1,000.00 | $ 1,001.80 | $ 2.33 | |||||||||
Hypothetical (5% return per year | ||||||||||||
before expenses) | $ 1,000.00 | $ 1,022.46 | $ 2.36 |
* Expenses are equal to the Fund’s annualized expense ratio of .47%; multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
5 Semiannual Report
Investment Changes | ||||
Top Five States as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
Texas | 13.1 | 13.7 | ||
California | 12.6 | 10.5 | ||
Illinois | 12.4 | 13.2 | ||
New York | 11.4 | 10.0 | ||
Massachusetts | 7.0 | 7.8 | ||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 36.0 | 33.0 | ||
Electric Utilities | 11.4 | 12.5 | ||
Escrowed/Pre Refunded | 9.4 | 11.1 | ||
Transportation | 9.9 | 9.9 | ||
Health Care | 8.8 | 8.9 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 15.2 | 15.4 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 6.8 | 6.6 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix6x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
Semiannual Report 6
Investments June 30, 2006 (Unaudited) | ||||||||
Showing Percentage of Net Assets | ||||||||
Municipal Bonds 99.3% | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Alabama – 0.2% | ||||||||
Alabama Pub. School & College Auth. Rev. Series 1999 | ||||||||
C, 5.75% 7/1/18 | $ 2,000 | $ 2,128 | ||||||
Birmingham Baptist Med. Ctrs. Spl. Care Facilities Fing. | ||||||||
Auth. Rev. (Baptist Health Sys., Inc. Proj.) Series A, 5% | ||||||||
11/15/09 | 2,700 | 2,745 | ||||||
Birmingham Wtrwks. & Swr. Board Wtr. & Swr. Rev. | ||||||||
Series B, 5% 1/1/43 (MBIA Insured) | 2,500 | 2,519 | ||||||
Jefferson County Ltd. Oblig. School Warrants Series A, | ||||||||
5.5% 1/1/22 | 2,900 | 3,052 | ||||||
10,444 | ||||||||
Arizona – 0.7% | ||||||||
Arizona School Facilities Board Ctfs. of Prtn. Series C: | ||||||||
5% 9/1/14 (FSA Insured) | 2,000 | 2,119 | ||||||
5% 9/1/15 (FSA Insured) | 1,815 | 1,909 | ||||||
Arizona Student Ln. Acquisition Auth. Student Ln. Rev. | ||||||||
Sr. Series A1, 5.9% 5/1/24 (g) | 2,000 | 2,091 | ||||||
Chandler Indl. Dev. Auth. Indl. Dev. Rev. (Intel Corp. | ||||||||
Proj.) 4.375%, tender 12/1/10 (d)(g) | 5,500 | 5,521 | ||||||
Maricopa County Indl. Dev. Auth. Hosp. Facilities Rev. | ||||||||
(Samaritan Health Svcs. Proj.) Series A, 7% 12/1/16 | ||||||||
(Escrowed to Maturity) (h) | 2,000 | 2,390 | ||||||
Phoenix Civic Impt. Corp. Wtr. Sys. Rev.: | ||||||||
5% 7/1/20 (MBIA Insured) | 5,000 | 5,213 | ||||||
5% 7/1/29 (MBIA Insured) | 2,000 | 2,054 | ||||||
Scottsdale Indl. Dev. Auth. Hosp. Rev. (Scottsdale Health | ||||||||
Care Proj.) 5.8% 12/1/31 (Pre-Refunded to 12/1/11 | ||||||||
@ 101) (h) | 3,250 | 3,558 | ||||||
Tucson Gen. Oblig. Series 2002, 5% 7/1/10 | 2,645 | 2,748 | ||||||
Univ. of Arizona Univ. Revs. Series 2005 A: | ||||||||
5% 6/1/18 (AMBAC Insured) | 1,225 | 1,284 | ||||||
5% 6/1/31 (AMBAC Insured) | 2,000 | 2,055 | ||||||
30,942 | ||||||||
Arkansas – 0.2% | ||||||||
Little Rock School District Series 2001 C, 5.25% 2/1/33 | ||||||||
(FSA Insured) | 6,500 | 6,683 | ||||||
North Little Rock Elec. Rev. Series A, 6.5% 7/1/10 | ||||||||
(MBIA Insured) | 3,840 | 4,023 | ||||||
10,706 | ||||||||
California – 12.6% | ||||||||
ABC Unified School District 0% 8/1/28 (FGIC Insured) . | 3,925 | 1,308 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
Cabrillo Unified School District Series A, 0% 8/1/20 | ||||||||
(AMBAC Insured) | $ 4,275 | $ 2,175 | ||||||
California Dept. of Wtr. Resources Pwr. Supply Rev. | ||||||||
Series A: | ||||||||
5.5% 5/1/15 (AMBAC Insured) | 8,800 | 9,477 | ||||||
6% 5/1/14 (MBIA Insured) | 3,500 | 3,865 | ||||||
California Econ. Recovery: | ||||||||
Series 2004 A: | ||||||||
5% 7/1/12 (MBIA Insured) | 1,750 | 1,846 | ||||||
5.25% 7/1/12 | 3,000 | 3,196 | ||||||
5.25% 7/1/13 | 6,000 | 6,419 | ||||||
Series A: | ||||||||
5% 7/1/15 (MBIA Insured) | 11,700 | 12,329 | ||||||
5.25% 1/1/11 | 3,700 | 3,893 | ||||||
5.25% 7/1/13 (MBIA Insured) | 13,800 | 14,808 | ||||||
5.25% 7/1/14 (FGIC Insured) | 5,100 | 5,489 | ||||||
California Edl. Facilities Auth. Rev. (Loyola Marymount | ||||||||
Univ. Proj.): | ||||||||
0% 10/1/16 (MBIA Insured) | 2,140 | 1,353 | ||||||
0% 10/1/17 (MBIA Insured) | 2,050 | 1,230 | ||||||
0% 10/1/18 (MBIA Insured) | 1,675 | 951 | ||||||
0% 10/1/22 (MBIA Insured) | 5,000 | 2,307 | ||||||
California Gen. Oblig.: | ||||||||
Series 1999, 5.75% 12/1/12 (FGIC Insured) | 5,000�� | 5,351 | ||||||
Series 2005, 5.75% 12/1/24 | 1,360 | 1,441 | ||||||
5% 2/1/11 | 2,000 | 2,081 | ||||||
5% 3/1/15 | 7,000 | 7,351 | ||||||
5.125% 9/1/12 | 2,000 | 2,086 | ||||||
5.25% 2/1/11 | 1,000 | 1,051 | ||||||
5.25% 3/1/12 | 2,300 | 2,437 | ||||||
5.25% 3/1/13 | 3,530 | 3,756 | ||||||
5.25% 2/1/14 | 7,600 | 8,098 | ||||||
5.25% 2/1/15 | 10,000 | 10,605 | ||||||
5.25% 2/1/15 | 8,300 | 8,802 | ||||||
5.25% 2/1/16 | 4,300 | 4,555 | ||||||
5.25% 2/1/19 | 5,620 | 5,897 | ||||||
5.25% 2/1/20 | 2,000 | 2,094 | ||||||
5.25% 2/1/24 | 4,000 | 4,163 | ||||||
5.25% 2/1/28 | 8,500 | 8,788 | ||||||
5.25% 11/1/28 | 4,485 | 4,642 | ||||||
5.25% 2/1/33 | 16,300 | 16,745 | ||||||
5.25% 12/1/33 | 15,900 | 16,407 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
California – continued | ||||||||||
California Gen. Oblig.: – continued | ||||||||||
5.25% 4/1/34 | $ 15,600 | $ 16,078 | ||||||||
5.5% 2/1/12 | 8,000 | 8,569 | ||||||||
5.5% 3/1/12 | 2,000 | 2,130 | ||||||||
5.5% 4/1/28 | 12,470 | 13,293 | ||||||||
5.5% 4/1/30 | 14,880 | 15,822 | ||||||||
5.5% 11/1/33 | 39,600 | 42,145 | ||||||||
5.625% 5/1/20 | 1,175 | 1,245 | ||||||||
California Health Facilities Fing. Auth. Rev. (Cedars-Sinai | ||||||||||
Med. Ctr. Proj.): | ||||||||||
5% 11/15/09 | 2,000 | 2,060 | ||||||||
5% 11/15/13 | 1,000 | 1,036 | ||||||||
California Hsg. Fin. Agcy. Home Mtg. Rev. Series 1983 | ||||||||||
A, 0% 2/1/15 (MBIA Insured) | 187 | 95 | ||||||||
California Poll. Cont. Fing. Auth. Solid Waste Disp. Rev. | ||||||||||
(Waste Mgmt., Inc. Proj.) Series A1, 4.7%, tender | ||||||||||
4/1/12 (d)(g) | 1,000 | 999 | ||||||||
California Pub. Works Board Lease Rev.: | ||||||||||
(Various California State Univ. Projs.) Series A, 5.25% | ||||||||||
12/1/13 | 5,000 | 5,004 | ||||||||
Series 2005 A, 5.25% 6/1/30 | 14,000 | 14,431 | ||||||||
Series 2005 H: | ||||||||||
5% 6/1/16 | 6,000 | 6,231 | ||||||||
5% 6/1/17 | 5,000 | 5,170 | ||||||||
5% 6/1/18 | 10,300 | 10,613 | ||||||||
Series 2005 J, 5% 1/1/17 | 6,000 | 6,215 | ||||||||
Series B: | ||||||||||
5.25% 11/1/24 (XL Cap. Assurance, Inc. Insured) | 1,575 | 1,668 | ||||||||
5.25% 11/1/26 (XL Cap. Assurance, Inc. Insured) | 2,860 | 3,013 | ||||||||
California Statewide Cmntys. Dev. Auth. Poll. Cont. Rev. | ||||||||||
(Southern California Edison Co.) 4.1%, tender 4/1/13 | ||||||||||
(XL Cap. Assurance, Inc. Insured) (d) | 5,000 | 4,974 | ||||||||
California Statewide Cmntys. Dev. Auth. Rev.: | ||||||||||
(Kaiser Fund Hosp./Health Place, Inc. Proj.) Series | ||||||||||
2002 C, 3.85%, tender 6/1/12 (d) | 3,500 | 3,399 | ||||||||
(Kaiser Permanente Health Sys. Proj.) Series 2004 G, | ||||||||||
2.3%, tender 5/1/07 (d) | 4,000 | 3,950 | ||||||||
Compton Cmnty. Redev. Agcy. (Tax Allocation-Compton | ||||||||||
Redev. Proj.) Series A, 6.5% 8/1/13 (FSA Insured) | 4,000 | 4,048 | ||||||||
Encinitas Union School District 0% 8/1/20 (MBIA | ||||||||||
Insured) | 3,500 | 1,781 | ||||||||
Foothill/Eastern Trans. Corridor Agcy. Toll Road Rev.: | ||||||||||
Series A, 5% 1/1/35 (MBIA Insured) | 5,070 | 5,097 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
Foothill/Eastern Trans. Corridor Agcy. Toll Road Rev.: - | ||||||||
continued | ||||||||
0% 1/15/27 (a) | $ 2,500 | $ 2,177 | ||||||
5% 1/15/16 (MBIA Insured) | 2,800 | 2,914 | ||||||
5.75% 1/15/40 | 6,300 | 6,494 | ||||||
Golden State Tobacco Securitization Corp.: | ||||||||
Series 2003 A1: | ||||||||
5% 6/1/21 | 2,295 | 2,306 | ||||||
6.75% 6/1/39 | 10,340 | 11,564 | ||||||
Series 2003 B, 5% 6/1/12 (Escrowed to Maturity) (h) | 2,255 | 2,375 | ||||||
Series A, 5% 6/1/45 | 35,695 | 35,588 | ||||||
Los Angeles Cmnty. Redev. Agcy. Lease Rev. (Vermont | ||||||||
Manchester Social Services Proj.): | ||||||||
5% 9/1/18 (AMBAC Insured) | 1,000 | 1,042 | ||||||
5% 9/1/19 (AMBAC Insured) | 2,545 | 2,643 | ||||||
Los Angeles Dept. of Wtr. & Pwr. Wtrwks. Rev.: | ||||||||
Series 2001 A, 5.125% 7/1/41 | 5,000 | 5,043 | ||||||
Series A, 5.125% 7/1/41 (MBIA Insured) | 9,985 | 10,136 | ||||||
Los Angeles Unified School District: | ||||||||
Series A: | ||||||||
5.375% 7/1/17 (MBIA Insured) | 4,375 | 4,689 | ||||||
5.5% 7/1/15 (MBIA Insured) | 6,140 | 6,677 | ||||||
Series F, 5% 7/1/18 (FSA Insured) | 10,000 | 10,400 | ||||||
Modesto Irrigation District Elec. Rev. Series A, 9.625% | ||||||||
1/1/11 (Escrowed to Maturity) (h) | 2,685 | 3,048 | ||||||
Monrovia Unified School District Series B, 0% 8/1/29 | ||||||||
(FGIC Insured) | 4,525 | 1,432 | ||||||
North City West School Facilities Fing. Auth. Spl. Tax | ||||||||
Subseries C, 5% 9/1/19 (AMBAC Insured) | 3,015 | 3,185 | ||||||
Placer County Wtr. Agcy. Rev. (Middle Fork Proj.) | ||||||||
Series A, 3.75% 7/1/12 | 3,640 | 3,640 | ||||||
San Diego Unified School District (Election of 1998 Proj.) | ||||||||
Series E2: | ||||||||
5.5% 7/1/25 (FSA Insured) | 10,000 | 11,240 | ||||||
5.5% 7/1/26 (FSA Insured) | 6,700 | 7,539 | ||||||
San Francisco City & County Arpt. Commission Int’l. | ||||||||
Arpt. Rev. Second Series 27A, 5.5% 5/1/09 | ||||||||
(MBIA Insured) (g) | 4,330 | 4,487 | ||||||
San Joaquin Hills Trans. Corridor Agcy. Toll Road Rev. | ||||||||
Series A: | ||||||||
0% 1/15/12 (MBIA Insured) | 9,900 | 7,864 | ||||||
0% 1/15/34 (MBIA Insured) | 10,000 | 2,494 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
San Mateo County Cmnty. College District Series A, 0% | ||||||||
9/1/26 (FGIC Insured) | $ 5,430 | $ 2,011 | ||||||
Torrance Ctfs. of Prtn. (Refing. & Pub. Impt. Proj.) | ||||||||
Series B, 5.25% 6/1/34 (AMBAC Insured) | 4,475 | 4,660 | ||||||
Univ. of California Revs. (UCLA Med. Ctr. Proj.): | ||||||||
Series A: | ||||||||
5.5% 5/15/15 (AMBAC Insured) | 2,990 | 3,238 | ||||||
5.5% 5/15/16 (AMBAC Insured) | 3,155 | 3,404 | ||||||
5.5% 5/15/17 (AMBAC Insured) | 3,325 | 3,586 | ||||||
5.5% 5/15/19 (AMBAC Insured) | 3,700 | 3,970 | ||||||
5.5% 5/15/22 (AMBAC Insured) | 1,000 | 1,068 | ||||||
5.5% 5/15/23 (AMBAC Insured) | 1,025 | 1,093 | ||||||
Series B: | ||||||||
5.5% 5/15/15 (AMBAC Insured) | 5,105 | 5,599 | ||||||
5.5% 5/15/16 (AMBAC Insured) | 6,500 | 7,097 | ||||||
5.5% 5/15/17 (AMBAC Insured) | 6,860 | 7,485 | ||||||
Val Verde Unified School District Ctfs. of Prtn. Series B, | ||||||||
5% 1/1/30 (FGIC Insured) | 2,200 | 2,227 | ||||||
560,477 | ||||||||
Colorado – 2.1% | ||||||||
Colorado Ctfs. of Prtn. (UCDHSC Fitzsimons Academic | ||||||||
Proj.) Series B, 5% 11/1/17 (MBIA Insured) | 2,475 | 2,595 | ||||||
Colorado Health Facilities Auth. Retirement Hsg. Rev. | ||||||||
(Liberty Heights Proj.) 0% 7/15/22 (Escrowed to | ||||||||
Maturity) (h) | 9,500 | 4,321 | ||||||
Colorado Health Facilities Auth. Rev. Series 2001: | ||||||||
6.5% 11/15/31 (Pre-Refunded to 11/15/11 @ | ||||||||
101) (h) | 5,040 | 5,683 | ||||||
6.625% 11/15/26 (Pre-Refunded to 11/15/11 @ | ||||||||
101) (h) | 2,700 | 3,060 | ||||||
Colorado Springs Arpt. Rev. Series C: | ||||||||
0% 1/1/09 (MBIA Insured) | 1,655 | 1,489 | ||||||
0% 1/1/10 (MBIA Insured) | 1,500 | 1,291 | ||||||
Colorado Wtr. Resources and Pwr. Dev. Auth. Wtr. | ||||||||
Resources Rev. (Parker Wtr. and Sanitation District | ||||||||
Proj.) Series D, 5.25% 9/1/43 (MBIA Insured) | 33,385 | 34,660 | ||||||
Dawson Ridge Metropolitan District #1: | ||||||||
Series 1992 A, 0% 10/1/22 (Escrowed to | ||||||||
Maturity) (h) | 32,490 | 14,624 | ||||||
Series 1992 B, 0% 10/1/17 (Escrowed to | ||||||||
Maturity) (h) | 7,900 | 4,626 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Colorado – continued | ||||||||
Denver Health & Hosp. Auth. Health Care Rev. Series A, | ||||||||
6.25% 12/1/33 | $ 2,000 | $ 2,147 | ||||||
Douglas and Elbert Counties School District #RE1: | ||||||||
5.75% 12/15/20 (FGIC Insured) | 1,500 | 1,665 | ||||||
5.75% 12/15/22 (FGIC Insured) | 1,000 | 1,108 | ||||||
E 470 Pub. Hwy. Auth. Rev.: | ||||||||
Series 2000 A, 5.75% 9/1/29 (MBIA Insured) | 10,000 | 10,768 | ||||||
Series B, 0% 9/1/15 (MBIA Insured) | 3,600 | 2,372 | ||||||
Northwest Pkwy Pub. Hwy. Auth. Sr. Series A: | ||||||||
5.5% 6/15/15 (AMBAC Insured) | 1,000 | 1,078 | ||||||
5.5% 6/15/19 (AMBAC Insured) | 1,000 | 1,074 | ||||||
92,561 | ||||||||
District Of Columbia – 1.1% | ||||||||
District of Columbia Gen. Oblig.: | ||||||||
Series 2005 A, 5.25% 6/1/27 (MBIA Insured) | 13,200 | 13,636 | ||||||
Series B, 0% 6/1/12 (MBIA Insured) | 8,800 | 6,775 | ||||||
District of Columbia Rev.: | ||||||||
(George Washington Univ. Proj.) Series A, 5.75% | ||||||||
9/15/20 (MBIA Insured) | 12,600 | 13,341 | ||||||
(Georgetown Univ. Proj.) Series A: | ||||||||
5.95% 4/1/14 (MBIA Insured) | 2,000 | 2,103 | ||||||
6% 4/1/18 (MBIA Insured) | 13,835 | 14,561 | ||||||
50,416 | ||||||||
Florida – 2.2% | ||||||||
Boynton Beach Util. Sys. Rev. 5.5% 11/1/19 (FGIC | ||||||||
Insured) | 3,300 | 3,663 | ||||||
Florida Board of Ed. Cap. Outlay Series B, 5.5% | ||||||||
6/1/15 (FGIC Insured) | 3,655 | 3,926 | ||||||
Highlands County Health Facilities Auth. Rev. (Adventist | ||||||||
Health Sys./Sunbelt Obligated Group Proj.): | ||||||||
Series A, 5% 11/15/17 | 1,200 | 1,223 | ||||||
3.95%, tender 9/1/12 (d) | 9,300 | 9,115 | ||||||
5%, tender 11/16/09 (d) | 12,500 | 12,806 | ||||||
5.25% 11/15/12 | 3,935 | 4,045 | ||||||
5.25% 11/15/13 | 3,140 | 3,221 | ||||||
Jacksonville Elec. Auth. Rev.: | ||||||||
(Saint Johns River Proj.) Series 13 Issue 2, 5.375% | ||||||||
10/1/16 (MBIA Insured) | 4,535 | 4,575 | ||||||
(Third Installment Proj.) Series 73, 6.8% 7/1/12 | ||||||||
(Escrowed to Maturity) (h) | 2,425 | 2,610 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Florida – continued | ||||||||
Jacksonville Port Auth. Rev. 5.75% 11/1/09 | ||||||||
(MBIA Insured) (g) | $ 1,000 | $ 1,025 | ||||||
JEA Elec. Sys. Rev. Series 3A, 5% 10/1/41 | ||||||||
(FSA Insured) | 10,800 | 10,952 | ||||||
Miami-Dade County Aviation Rev. (Miami Int’l. Arpt. | ||||||||
Proj.) Series A, 5% 10/1/37 (XL Cap. Assurance, Inc. | ||||||||
Insured) (g) | 5,750 | 5,775 | ||||||
Miami-Dade County Edl. Facilities Auth. Rev. 5.75% | ||||||||
4/1/29 (AMBAC Insured) | 5,000 | 5,317 | ||||||
Miami-Dade County School Board Ctfs. of Prtn. 5%, | ||||||||
tender 5/1/11 (MBIA Insured) (d) | 3,600 | 3,734 | ||||||
Orange County Health Facilities Auth. Rev. (Adventist | ||||||||
Health Sys./Sunbelt Obligated Group Proj.) 5.625% | ||||||||
11/15/32 | 2,000 | 2,100 | ||||||
Pasco County Solid Waste Disp. & Resource Recovery | ||||||||
Sys. Rev.: | ||||||||
6% 4/1/08 (AMBAC Insured) (g) | 5,000 | 5,135 | ||||||
6% 4/1/09 (AMBAC Insured) (g) | 8,090 | 8,415 | ||||||
Seminole County School Board Ctfs. of Prtn. Series A: | ||||||||
5% 7/1/16 (MBIA Insured) | 1,645 | 1,726 | ||||||
5% 7/1/20 (MBIA Insured) | 1,745 | 1,808 | ||||||
South Broward Hosp. District Rev. 5.625% 5/1/32 | ||||||||
(MBIA Insured) | 2,630 | 2,834 | ||||||
Tampa Wtr. & Swr. Rev. 6% 10/1/17 (FSA Insured) | 1,000 | 1,147 | ||||||
Univ. of Central Florida Athletics Assoc., Inc. Ctfs. of | ||||||||
Prtn. Series A, 5% 10/1/35 (FGIC Insured) | 1,000 | 1,011 | ||||||
96,163 | ||||||||
Georgia – 3.0% | ||||||||
Atlanta Wtr. & Wastewtr. Rev.: | ||||||||
5% 11/1/37 (FSA Insured) | 38,395 | 39,072 | ||||||
5% 11/1/43 (FSA Insured) | 57,750 | 58,570 | ||||||
Augusta Wtr. & Swr. Rev. 5.25% 10/1/39 (FSA Insured) | 12,100 | 12,625 | ||||||
College Park Bus. & Indl. Dev. Auth. Civic Ctr. Proj. Rev. | ||||||||
Series 2000, 5.75% 9/1/20 (Pre-Refunded to 9/1/10 | ||||||||
@ 102) (h) | 5,800 | 6,304 | ||||||
Colquitt County Dev. Auth. Rev. Series C, 0% 12/1/21 | ||||||||
(Escrowed to Maturity) (h) | 4,595 | 2,164 | ||||||
Fulton County Wtr. & Swr. Rev. 6.375% 1/1/14 (FGIC | ||||||||
Insured) | 140 | 155 | ||||||
Gainesville & Hall County Hosp. Auth. Rev. Anticipation | ||||||||
Ctfs. (Northeast Georgia Health Sys., Inc. Proj.) 5.5% | ||||||||
5/15/31 | 4,500 | 4,607 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Georgia – continued | ||||||||
Richmond County Dev. Auth. Rev.: | ||||||||
(Southern Care Corp. Facility Proj.) Series A, 0% | ||||||||
12/1/21 (Escrowed to Maturity) (h) | $ 5,615 | $ 2,645 | ||||||
Series C, 0% 12/1/21 (Escrowed to Maturity) (h) | 2,200 | 1,036 | ||||||
Savannah Econ. Dev. Auth. Rev. (Southern Care Corp. | ||||||||
Proj.) Series C, 0% 12/1/21 (Escrowed to | ||||||||
Maturity) (h) | 17,000 | 8,008 | ||||||
135,186 | ||||||||
Hawaii – 0.6% | ||||||||
Hawaii Arpt. Sys. Rev.: | ||||||||
Series 2000 A, 5.75% 7/1/21 (FGIC Insured) | 2,640 | 2,810 | ||||||
Series 2000 B, 8% 7/1/11 (FGIC Insured) (g) | 9,250 | 10,767 | ||||||
Hawaii Gen. Oblig. Series CU, 5.75% 10/1/12 | ||||||||
(MBIA Insured) | 2,130 | 2,270 | ||||||
Honolulu City & County Board of Wtr. Supply Wtr. Sys. | ||||||||
Rev. Series B: | ||||||||
5% 7/1/12 (MBIA Insured) (c)(g) | 1,690 | 1,753 | ||||||
5% 7/1/13 (MBIA Insured) (c)(g) | 1,000 | 1,038 | ||||||
5% 7/1/14 (MBIA Insured) (c)(g) | 1,140 | 1,184 | ||||||
5% 7/1/15 (MBIA Insured) (c)(g) | 1,430 | 1,484 | ||||||
5.25% 7/1/18 (MBIA Insured) (c)(g) | 3,205 | 3,362 | ||||||
Honolulu City and County Wastewtr. Sys. Sr. Series 2001 | ||||||||
5.5% 7/1/18 (AMBAC Insured) | 1,090 | 1,149 | ||||||
25,817 | ||||||||
Illinois – 12.4% | ||||||||
Chicago Board of Ed.: | ||||||||
(Westinghouse High School Proj.) Series C: | ||||||||
5.25% 12/1/19 (MBIA Insured) | 1,000 | 1,056 | ||||||
5.25% 12/1/20 (MBIA Insured) | 4,500 | 4,739 | ||||||
5.5% 12/1/23 (MBIA Insured) | 1,000 | 1,080 | ||||||
Series A: | ||||||||
0% 12/1/16 (FGIC Insured) | 3,200 | 1,974 | ||||||
5.5% 12/1/27 (AMBAC Insured) | 4,000 | 4,475 | ||||||
Chicago Gen. Oblig.: | ||||||||
(City Colleges Proj.): | ||||||||
0% 1/1/14 (FGIC Insured) | 17,000 | 12,174 | ||||||
0% 1/1/15 (FGIC Insured) | 20,000 | 13,585 | ||||||
0% 1/1/26 (FGIC Insured) | 16,000 | 6,194 | ||||||
0% 1/1/30 (FGIC Insured) | 18,670 | 5,867 | ||||||
(Neighborhoods Alive 21 Prog.): | ||||||||
5% 1/1/28 (AMBAC Insured) | 2,000 | 2,027 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Chicago Gen. Oblig.: – continued | ||||||||
(Neighborhoods Alive 21 Prog.): | ||||||||
5% 1/1/43 (AMBAC Insured) | $ 4,535 | $ 4,566 | ||||||
Series 2000 D, 5.5% 1/1/35 (FGIC Insured) | 15,000 | 15,691 | ||||||
Series 2004 A, 5.25% 1/1/29 (FSA Insured) | 2,500 | 2,604 | ||||||
Series A: | ||||||||
5% 1/1/41 (Pre-Refunded to 1/1/15 @ 100) (h) | 1,300 | 1,353 | ||||||
5% 1/1/42 (AMBAC Insured) | 18,955 | 19,150 | ||||||
5.25% 1/1/22 (MBIA Insured) | 2,085 | 2,183 | ||||||
5.25% 1/1/33 (MBIA Insured) | 8,115 | 8,352 | ||||||
5.25% 1/1/33 (Pre-Refunded to 1/1/11 @ 101) (h) | 185 | 196 | ||||||
5.5% 1/1/38 (MBIA Insured) | 5,620 | 5,888 | ||||||
5.5% 1/1/38 (Pre-Refunded to 1/1/11 @ 101) (h) . | 210 | 225 | ||||||
Series C, 5.7% 1/1/30 (FGIC Insured) | 5,760 | 6,134 | ||||||
5.5% 1/1/40 (FGIC Insured) | 5,515 | 5,759 | ||||||
Chicago Midway Arpt. Rev. Series B: | ||||||||
5.25% 1/1/13 (MBIA Insured) (g) | 2,910 | 2,954 | ||||||
5.25% 1/1/14 (MBIA Insured) (g) | 3,060 | 3,106 | ||||||
6% 1/1/08 (MBIA Insured) (g) | 2,170 | 2,212 | ||||||
6% 1/1/10 (MBIA Insured) (g) | 2,435 | 2,480 | ||||||
6.125% 1/1/11 (MBIA Insured) (g) | 2,580 | 2,629 | ||||||
Chicago Motor Fuel Tax Rev. Series A, 5.25% 1/1/19 | ||||||||
(AMBAC Insured) | 1,780 | 1,875 | ||||||
Chicago O’Hare Int’l. Arpt. Rev.: | ||||||||
Series 1999, 5.5% 1/1/11 (AMBAC Insured) (g) | 10,000 | 10,507 | ||||||
Series A: | ||||||||
5.5% 1/1/16 (AMBAC Insured) (g) | 10,770 | 11,058 | ||||||
5.6% 1/1/10 (AMBAC Insured) | 4,500 | 4,586 | ||||||
6.25% 1/1/09 (AMBAC Insured) (g) | 6,040 | 6,226 | ||||||
Series B: | ||||||||
5.25% 1/1/14 (FGIC Insured) | 2,000 | 2,132 | ||||||
5.75% 1/1/30 (AMBAC Insured) | 13,420 | 14,300 | ||||||
Chicago Park District Series A: | ||||||||
5.25% 1/1/18 (FGIC Insured) | 4,690 | 4,951 | ||||||
5.25% 1/1/19 (FGIC Insured) | 3,000 | 3,159 | ||||||
5.25% 1/1/20 (FGIC Insured) | 2,195 | 2,306 | ||||||
5.5% 1/1/19 (FGIC Insured) | 475 | 500 | ||||||
5.5% 1/1/20 (FGIC Insured) | 490 | 515 | ||||||
Chicago Pub. Bldg. Commission Bldg. Rev. (Chicago | ||||||||
Transit Auth. Proj.) 5.25% 3/1/16 (AMBAC Insured) . | 3,600 | 3,811 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Chicago Spl. Trans. Rev. Series 2001: | ||||||||
5.25% 1/1/31 (Pre-Refunded to 1/1/27 @ 100) (h) . | $ 11,670 | $ 12,157 | ||||||
5.5% 1/1/17 (Escrowed to Maturity) (h) | 1,135 | 1,200 | ||||||
Chicago Wtr. Rev. 0% 11/1/16 (AMBAC Insured) | 7,555 | 4,687 | ||||||
Cicero Gen. Oblig. 5.25% 12/1/26 (MBIA Insured) | 3,010 | 3,149 | ||||||
Cook County Gen. Oblig. Series C, 5% 11/15/25 | ||||||||
(AMBAC Insured) | 8,400 | 8,574 | ||||||
DuPage County Forest Preserve District Rev. 0% | ||||||||
11/1/17 | 6,665 | 3,926 | ||||||
Evanston Gen. Oblig. Series C: | ||||||||
5.25% 1/1/16 | 1,000 | 1,054 | ||||||
5.25% 1/1/22 | 2,000 | 2,101 | ||||||
Franklin Park Village Cook County Gen. Oblig. Series B: | ||||||||
5% 7/1/17 (AMBAC Insured) | 1,380 | 1,437 | ||||||
5% 7/1/18 (AMBAC Insured) | 1,450 | 1,505 | ||||||
Granite City Solid Waste Disp. Rev. (Waste Mgmt., Inc. | ||||||||
Proj.) 3.85%, tender 5/1/08 (d)(g) | 5,600 | 5,538 | ||||||
Hodgkins Tax Increment Rev. 5% 1/1/11 | 2,075 | 2,135 | ||||||
Illinois Dedicated Tax Rev. Series B, 0% 12/15/18 | ||||||||
(AMBAC Insured) | 4,500 | 2,506 | ||||||
Illinois Dev. Fin. Auth. Retirement 0% 7/15/23 | ||||||||
(Escrowed to Maturity) (h) | 24,975 | 10,778 | ||||||
Illinois Dev. Fin. Auth. Rev.: | ||||||||
(DePaul Univ. Proj.) Series 2004 C, 5.625% 10/1/17 | 2,800 | 3,003 | ||||||
(Revolving Fund-Master Trust Prog.): | ||||||||
5.5% 9/1/18 | 5,365 | 5,751 | ||||||
5.5% 9/1/19 | 4,405 | 4,725 | ||||||
Illinois Edl. Facilities Auth. Revs. (Univ. of Chicago Proj.): | ||||||||
Series 2004 B1, 3.45%, tender 7/1/08 (d) | 3,350 | 3,316 | ||||||
Series 2005 A: | ||||||||
5.25% 7/1/41 | 755 | 780 | ||||||
5.25% 7/1/41 (Pre-Refunded to 7/1/11 @ 101) (h) | 305 | 325 | ||||||
Series A, 5.125% 7/1/38 | 1,585 | 1,609 | ||||||
Illinois Fin. Auth. Gas Supply Rev. (Peoples Gas Lt. and | ||||||||
Coke Co. Proj.) Series A, 4.3%, tender 6/1/16 | ||||||||
(AMBAC Insured) (d) | 3,860 | 3,762 | ||||||
Illinois Gen. Oblig.: | ||||||||
First Series: | ||||||||
5.25% 12/1/17 (FSA Insured) | 2,260 | 2,396 | ||||||
5.25% 12/1/20 (FSA Insured) | 2,000 | 2,110 | ||||||
5.375% 12/1/14 (FSA Insured) | 5,000 | 5,344 | ||||||
5.375% 7/1/15 (MBIA Insured) | 3,700 | 3,942 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
16 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Illinois Gen. Oblig.: – continued | ||||||||
First Series: | ||||||||
5.5% 4/1/16 (FSA Insured) | $ 1,300 | $ 1,395 | ||||||
5.5% 8/1/16 (MBIA Insured) | 13,000 | 13,961 | ||||||
5.5% 8/1/17 (MBIA Insured) | 7,500 | 8,046 | ||||||
5.5% 2/1/18 (FGIC Insured) | 1,000 | 1,066 | ||||||
5.5% 8/1/18 (MBIA Insured) | 5,000 | 5,362 | ||||||
5.75% 12/1/18 (MBIA Insured) | 1,200 | 1,278 | ||||||
Series 2006, 5.5% 1/1/31 | 3,000 | 3,380 | ||||||
5.5% 4/1/17 (MBIA Insured) | 7,065 | 7,409 | ||||||
5.6% 4/1/21 (MBIA Insured) | 7,500 | 7,872 | ||||||
5.7% 4/1/16 (MBIA Insured) | 7,350 | 7,774 | ||||||
Illinois Health Facilities Auth. Rev.: | ||||||||
(Condell Med. Ctr. Proj.): | ||||||||
6.5% 5/15/30 | 9,000 | 9,464 | ||||||
7% 5/15/22 | 5,000 | 5,410 | ||||||
(Lake Forest Hosp. Proj.): | ||||||||
Series A, 6.25% 7/1/22 | 4,200 | 4,541 | ||||||
6% 7/1/33 | 3,775 | 3,966 | ||||||
(Lutheran Gen. Health Care Sys. Proj.) Series C: | ||||||||
6% 4/1/18 | 3,000 | 3,282 | ||||||
7% 4/1/14 | 1,500 | 1,720 | ||||||
(Riverside Health Sys. Proj.) 6.85% 11/15/29 | ||||||||
(Pre-Refunded to 11/15/10 @ 101) (h) | 5,025 | 5,643 | ||||||
(Swedish American Hosp. Proj.) 6.875% 11/15/30 | ||||||||
(Pre-Refunded to 5/15/10 @ 101) (h) | 6,970 | 7,668 | ||||||
6.75% 2/15/15 (Escrowed to Maturity) (h) | 1,000 | 1,092 | ||||||
Illinois Reg’l. Trans. Auth. Series A, 8% 6/1/17 | ||||||||
(AMBAC Insured) | 4,500 | 5,837 | ||||||
Illinois Sales Tax Rev. 6% 6/15/20 | 4,600 | 4,918 | ||||||
Illinois Toll Hwy. Auth. Toll Hwy. Rev. Series 2006 A2, 5% | ||||||||
1/1/31 (FSA Insured) | 17,300 | 17,654 | ||||||
Kane & DeKalb Counties Cmnty. Unit School District | ||||||||
#302 5.8% 2/1/22 (FGIC Insured) | 3,795 | 4,147 | ||||||
Lake County Cmnty. High School District #117, Antioch | ||||||||
Series B, 0% 12/1/18 (FGIC Insured) | 7,240 | 4,040 | ||||||
Lake County Warren Township High School District | ||||||||
#121, Gurnee Series C: | ||||||||
5.5% 3/1/24 (AMBAC Insured) | 2,945 | 3,182 | ||||||
5.625% 3/1/21 (AMBAC Insured) | 2,505 | 2,741 | ||||||
5.75% 3/1/19 (AMBAC Insured) | 2,240 | 2,488 |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Metropolitan Pier & Exposition Auth. Dedicated State Tax | ||||||||
Rev.: | ||||||||
(McCormick Place Expansion Proj.): | ||||||||
Series 2002 A, 5.75% 6/15/41 (MBIA Insured) | $ 26,420 | $ 28,485 | ||||||
Series 2002 B, 0% 6/15/20 (MBIA Insured) (a) | 2,000 | 1,575 | ||||||
Series A: | ||||||||
0% 6/15/11 (Escrowed to Maturity) (h) | 6,000 | 4,874 | ||||||
0% 6/15/15 (FGIC Insured) | 15,000 | 9,997 | ||||||
0% 6/15/19 (FGIC Insured) | 3,225 | 1,750 | ||||||
0% 6/15/19 (MBIA Insured) | 2,870 | 1,557 | ||||||
0% 6/15/20 (FGIC Insured) | 3,470 | 1,791 | ||||||
5.25% 12/15/10 (AMBAC Insured) | 12,950 | 13,225 | ||||||
6.65% 6/15/12 (FGIC Insured) | 250 | 250 | ||||||
Series 2002: | ||||||||
0% 6/15/10 (Escrowed to Maturity) (h) | 16,640 | 14,147 | ||||||
0% 6/15/13 (Escrowed to Maturity) (h) | 4,155 | 3,070 | ||||||
0% 6/15/13 (FGIC Insured) | 5,575 | 4,110 | ||||||
Moline Gen. Oblig. Series A, 5.5% 2/1/17 (FGIC Insured) | 1,000 | 1,068 | ||||||
Univ. of Illinois Auxiliary Facilities Sys. Rev.: | ||||||||
Series A, 0% 4/1/21 (MBIA Insured) | 4,965 | 2,450 | ||||||
0% 4/1/17 (MBIA Insured) | 16,270 | 9,891 | ||||||
0% 4/1/20 (MBIA Insured) | 8,000 | 4,159 | ||||||
Will County Cmnty. Unit School District #365, Valley | ||||||||
View 0% 11/1/17 (FSA Insured) | 3,200 | 1,889 | ||||||
552,013 | ||||||||
Indiana – 2.5% | ||||||||
Avon 2000 Cmnty. School Bldg. Corp. 5% 7/15/17 | ||||||||
(FSA Insured) | 2,835 | 2,971 | ||||||
Clark-Pleasant 2004 School Bldg. Corp.: | ||||||||
5.25% 7/15/23 (FSA Insured) | 1,545 | 1,613 | ||||||
5.25% 7/15/25 (FSA Insured) | 1,720 | 1,789 | ||||||
Crown Point Multi-School Bldg. Corp. 0% 1/15/21 | ||||||||
(MBIA Insured) | 7,480 | 3,703 | ||||||
Franklin Township Independent School Bldg. Corp., | ||||||||
Marion County: | ||||||||
5% 7/15/24 (MBIA Insured) | 1,365 | 1,400 | ||||||
5.25% 7/15/17 (MBIA Insured) | 1,885 | 2,008 | ||||||
GCS School Bldg. Corp. One 5% 7/15/22 | ||||||||
(FSA Insured) | 1,545 | 1,590 | ||||||
Hamilton Southeastern Cumberland Campus School | ||||||||
Bldg. Corp. 5.125% 1/15/23 (AMBAC Insured) | 1,250 | 1,292 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
18 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Indiana – continued | ||||||||
Hammond School Bldg. Corp. 5% 7/15/16 | ||||||||
(MBIA Insured) | $ 1,845 | $ 1,936 | ||||||
Hobart Bldg. Corp. 6.5% 1/15/29 (FGIC Insured) | 17,800 | 21,217 | ||||||
Indiana Bond Bank Series B: | ||||||||
5% 2/1/19 (MBIA Insured) | 1,940 | 2,011 | ||||||
5% 2/1/20 (MBIA Insured) | 1,635 | 1,690 | ||||||
Indiana Dev. Fin. Auth. Rev. 5.95% 8/1/30 (g) | 7,350 | 7,519 | ||||||
Indiana Dev. Fin. Auth. Solid Waste Disp. Rev. (Waste | ||||||||
Mgmt., Inc. Proj.) 4.7%, tender 10/1/15 (d)(g) | 3,000 | 2,967 | ||||||
Indiana Health Facilities Fing. Auth. Hosp. Rev.: | ||||||||
(Columbus Reg’l. Hosp. Proj.) 7% 8/15/15 | ||||||||
(FSA Insured) | 2,500 | 2,855 | ||||||
5.5% 2/15/30 (Pre-Refunded to 8/15/10 @ | ||||||||
101.5) (h) | 5,295 | 5,679 | ||||||
Indiana Trans. Fin. Auth. Hwy.: | ||||||||
Series 1993 A, 0% 6/1/18 (AMBAC Insured) | 1,700 | 976 | ||||||
Series A, 0% 6/1/16 (AMBAC Insured) | 6,470 | 4,112 | ||||||
Indianapolis Arpt. Auth. Rev. Series A, 5.6% 7/1/15 | ||||||||
(FGIC Insured) | 1,000 | 1,022 | ||||||
Indianapolis Local Pub. Impt. Bond Bank (Indianapolis | ||||||||
Arpt. Auth. Proj.) Series 2006 F: | ||||||||
5% 1/1/16 (AMBAC Insured) (g) | 1,500 | 1,548 | ||||||
5% 1/1/17 (AMBAC Insured) (g) | 1,700 | 1,754 | ||||||
5.25% 1/1/14 (AMBAC Insured) (g) | 2,675 | 2,817 | ||||||
Petersburg Poll. Cont. Rev.: | ||||||||
(Indianapolis Pwr. & Lt. Co. Proj.) 5.9% 12/1/24 (g) . | 10,000 | 10,534 | ||||||
5.95% 12/1/29 (g) | 2,000 | 2,107 | ||||||
Portage Township Multi-School Bldg. Corp.: | ||||||||
5.25% 7/15/17 (MBIA Insured) | 1,375 | 1,459 | ||||||
5.25% 7/15/22 (MBIA Insured) | 1,785 | 1,887 | ||||||
5.25% 7/15/24 (MBIA Insured) | 1,975 | 2,081 | ||||||
5.25% 7/15/25 (MBIA Insured) | 2,085 | 2,187 | ||||||
5.25% 1/15/29 (MBIA Insured) | 1,265 | 1,319 | ||||||
Rockport Poll. Cont. Rev. (AEP Generating Co. Proj.) | ||||||||
Series 1995 A, 4.15%, tender 7/15/11 | ||||||||
(AMBAC Insured) (c)(d) | 4,400 | 4,422 | ||||||
South Harrison School Bldg. Corp. Series A: | ||||||||
5.25% 7/15/22 (FSA Insured) | 2,820 | 2,985 | ||||||
5.5% 7/15/21 (FSA Insured) | 2,675 | 2,894 | ||||||
Southmont School Bldg. Corp. 5% 7/15/15 | ||||||||
(FGIC Insured) | 2,000 | 2,086 |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Indiana – continued | ||||||||||
Westfield Washington Multi-School Bldg. Corp. Series A: | ||||||||||
5% 7/15/15 (FSA Insured) | $ 1,360 | $ 1,433 | ||||||||
5% 7/15/18 (FSA Insured) | 1,500 | 1,558 | ||||||||
111,421 | ||||||||||
Iowa 0.8% | ||||||||||
Iowa Fin. Auth. Hosp. Facilities Rev.: | ||||||||||
5.875% 2/15/30 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 15,000 | 16,113 | ||||||||
6.625% 2/15/12 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 2,000 | 2,195 | ||||||||
6.75% 2/15/13 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 1,000 | 1,102 | ||||||||
6.75% 2/15/14 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 1,280 | 1,410 | ||||||||
6.75% 2/15/15 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 1,000 | 1,102 | ||||||||
6.75% 2/15/17 (Pre-Refunded to 2/15/10 @ | ||||||||||
101) (h) | 1,000 | 1,102 | ||||||||
Tobacco Settlement Auth. Tobacco Settlement Rev. 5.3% | ||||||||||
6/1/25 (Pre-Refunded to 6/1/11 @ 101) (h) | 10,000 | 10,513 | ||||||||
33,537 | ||||||||||
Kansas 0.4% | ||||||||||
Burlington Envir. Impt. Rev. (Kansas City Pwr. & Lt. Co. | ||||||||||
Proj.) Series A, 4.75%, tender 10/1/07 (d) | 7,800 | 7,864 | ||||||||
Kansas Dev. Fin. Auth. Health Facilities Rev. (Sisters of | ||||||||||
Charity of Leavenworth Health Svcs. Corp. Proj.) | ||||||||||
Series J, 6.25% 12/1/28 | 4,500 | 4,860 | ||||||||
Topeka Combined Util. Impt. Rev. Series 2005 A: | ||||||||||
6% 8/1/20 (XL Cap. Assurance, Inc. Insured) | 1,200 | 1,368 | ||||||||
6% 8/1/25 (XL Cap. Assurance, Inc. Insured) | 1,100 | 1,240 | ||||||||
6% 8/1/27 (XL Cap. Assurance, Inc. Insured) | 1,235 | 1,388 | ||||||||
16,720 | ||||||||||
Kentucky 0.7% | ||||||||||
Jefferson County Cap. Projs. Corp. Rev. (Lease Prog.) | ||||||||||
Series A, 0% 8/15/11 | 5,250 | 4,170 | ||||||||
Louisville & Jefferson County Metropolitan Swr. District | ||||||||||
Swr. & Drain Sys. Rev. Series A, 5.25% 5/15/37 | ||||||||||
(FGIC Insured) | 15,750 | 16,560 | ||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 20 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Kentucky – continued | ||||||||
Louisville & Jefferson County Reg’l. Arpt. Auth. Arpt. Sys. | ||||||||
Rev. Series 2001 A: | ||||||||
5.25% 7/1/09 (FSA Insured) (g) | $ 1,545 | $ 1,594 | ||||||
5.5% 7/1/10 (FSA Insured) (g) | 3,800 | 3,984 | ||||||
Owensboro Elec. Lt. & Pwr. Rev. Series B, 0% 1/1/10 | ||||||||
(AMBAC Insured) | 7,440 | 6,428 | ||||||
32,736 | ||||||||
Louisiana – 0.7% | ||||||||
Louisiana Gas & Fuel Tax Rev. Series A, 5.375% 6/1/20 | ||||||||
(AMBAC Insured) | 3,000 | 3,128 | ||||||
Monroe-West Monroe Pub. Trust Fing. Auth. Mtg. Rev. | ||||||||
Series C, 0% 8/20/14 | 8,625 | 5,784 | ||||||
New Orleans Gen. Oblig.: | ||||||||
0% 9/1/09 (AMBAC Insured) | 16,500 | 14,456 | ||||||
0% 9/1/11 (AMBAC Insured) | 3,080 | 2,448 | ||||||
0% 9/1/13 (AMBAC Insured) | 3,350 | 2,415 | ||||||
0% 9/1/14 (AMBAC Insured) | 3,165 | 2,159 | ||||||
30,390 | ||||||||
Maine – 0.1% | ||||||||
Maine Tpk. Auth. Tpk. Rev. 5.25% 7/1/30 (FSA Insured) | 3,000 | 3,129 | ||||||
Maryland 0.3% | ||||||||
Baltimore Convention Ctr. Hotel Rev. Series A, 5.25% | ||||||||
9/1/39 (XL Cap. Assurance, Inc. Insured) | 6,000 | 6,254 | ||||||
Maryland Econ. Dev. Corp. (Univ. of Maryland, | ||||||||
Baltimore County Student Hsg. Proj.): | ||||||||
5% 6/1/14 (CIFG North America Insured) | 1,020 | 1,073 | ||||||
5% 6/1/16 (CIFG North America Insured) | 1,000 | 1,053 | ||||||
5% 6/1/19 (CIFG North America Insured) | 1,500 | 1,561 | ||||||
Maryland Health & Higher Edl. Facilities Auth. Rev. | ||||||||
(Good Samaritan Hosp. Proj.): | ||||||||
5.75% 7/1/13 (Escrowed to Maturity) (h) | 1,605 | 1,729 | ||||||
5.75% 7/1/13 (Escrowed to Maturity) (h) | 995 | 1,072 | ||||||
12,742 | ||||||||
Massachusetts 7.0% | ||||||||
Massachusetts Bay Trans. Auth.: | ||||||||
Series 2000 A, 5.25% 7/1/30 | 1,465 | 1,516 | ||||||
Series A, 5% 7/1/31 | 11,000 | 11,240 | ||||||
Series B, 6.2% 3/1/16 | 3,800 | 4,274 | ||||||
Massachusetts Ed. Ln. Auth. Ed. Ln. Rev.: | ||||||||
Series A Issue E, 4.9% 7/1/13 (AMBAC Insured) (g) | 2,985 | 2,995 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Massachusetts continued | ||||||||
Massachusetts Ed. Ln. Auth. Ed. Ln. Rev.: – continued | ||||||||
Series B Issue E: | ||||||||
5.85% 7/1/06 (AMBAC Insured) (g) | $ 615 | $ 615 | ||||||
5.95% 7/1/07 (AMBAC Insured) (g) | 660 | 664 | ||||||
6.05% 7/1/08 (AMBAC Insured) (g) | 675 | 679 | ||||||
6.15% 7/1/10 (AMBAC Insured) (g) | 270 | 272 | ||||||
6.25% 7/1/11 (AMBAC Insured) (g) | 170 | 171 | ||||||
6.3% 7/1/12 (AMBAC Insured) (g) | 160 | 161 | ||||||
Massachusetts Fed. Hwy. Series 2000 A: | ||||||||
5.75% 6/15/11 | 10,000 | 10,676 | ||||||
5.75% 6/15/12 | 5,000 | 5,319 | ||||||
5.75% 6/15/13 | 5,000 | 5,321 | ||||||
Massachusetts Gen. Oblig.: | ||||||||
Series 2005 A: | ||||||||
5% 3/1/21 (FSA Insured) | 20,000 | 20,782 | ||||||
5% 3/1/22 | 6,500 | 6,702 | ||||||
Series 2005 C, 5.25% 9/1/23 | 19,745 | 20,906 | ||||||
Series D: | ||||||||
5.25% 10/1/20 (Pre-Refunded to 10/1/13 @ | ||||||||
100) (h) | 14,000 | 14,908 | ||||||
5.25% 10/1/21 (Pre-Refunded to 10/1/13 @ | ||||||||
100) (h) | 9,000 | 9,584 | ||||||
Massachusetts Health & Edl. Facilities Auth. Rev.: | ||||||||
(Blood Research Institute Proj.) Series A, 6.5% | ||||||||
2/1/22 (i) | 3,855 | 3,861 | ||||||
(Massachusetts Gen. Hosp. Proj.) Series F, 6.25% | ||||||||
7/1/12 (AMBAC Insured) | 2,000 | 2,117 | ||||||
(New England Med. Ctr. Hosp. Proj.) Series G, | ||||||||
5.375% 7/1/24 (MBIA Insured) | 3,800 | 3,803 | ||||||
(South Shore Hosp. Proj.) Series F, 5.75% 7/1/29 | 11,930 | 12,467 | ||||||
(Tufts Univ. Proj.) Series I, 5.5% 2/15/36 | 10,000 | 10,424 | ||||||
(Wellesley College Proj.) Series F, 5.125% 7/1/39 | 5,705 | 5,832 | ||||||
Massachusetts Indl. Fin. Agcy. Resource Recovery Rev. | ||||||||
(Ogden Haverhill Proj.) Series 1992 A, 4.95% | ||||||||
12/1/06 | 2,000 | 2,008 | ||||||
Massachusetts Indl. Fin. Agcy. Rev. (Massachusetts | ||||||||
Biomedical Research Corp. Proj.) Series A2: | ||||||||
0% 8/1/08 | 5,000 | 4,585 | ||||||
0% 8/1/09 | 21,800 | 19,085 | ||||||
0% 8/1/10 | 2,000 | 1,669 | ||||||
Massachusetts Muni. Wholesale Elec. Co. Pwr. Supply Sys. | ||||||||
Rev. Series A, 5% 7/1/10 (Escrowed to Maturity) (h) | 3,010 | 3,011 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
22 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Massachusetts continued | ||||||||
Massachusetts Port Auth. Spl. Facilities Rev. (Delta Air | ||||||||
Lines, Inc. Proj.) Series A: | ||||||||
5.5% 1/1/12 (AMBAC Insured) (g) | $ 2,000 | $ 2,085 | ||||||
5.5% 1/1/14 (AMBAC Insured) (g) | 2,540 | 2,643 | ||||||
Massachusetts School Bldg. Auth. Dedicated Sales Tax | ||||||||
Rev. Series A: | ||||||||
5% 8/15/23 (FSA Insured) | 29,965 | 30,960 | ||||||
5% 8/15/26 (FSA Insured) | 10,000 | 10,279 | ||||||
5% 8/15/30 (FSA Insured) | 30,000 | 30,637 | ||||||
Massachusetts Tpk. Auth. Metropolitan Hwy. Sys. Rev.: | ||||||||
Series 1999 A, 5.25% 1/1/29 (AMBAC Insured) | 14,400 | 14,867 | ||||||
Sr. Series A, 5.125% 1/1/23 (MBIA Insured) | 7,950 | 8,147 | ||||||
Massachusetts Tpk. Auth. Western Tpk. Rev. Series A, | ||||||||
5.55% 1/1/17 (MBIA Insured) | 12,230 | 12,563 | ||||||
Massachusetts Wtr. Poll. Abatement Trust Wtr. Poll. | ||||||||
Abatement Rev. (MWRA Ln. Prog.) Series A, 5.25% | ||||||||
8/1/13 | 90 | 93 | ||||||
Route 3 North Trans. Impt. Assoc. Lease Rev. 5.75% | ||||||||
6/15/16 (MBIA Insured) | 4,850 | 5,149 | ||||||
Springfield Gen. Oblig. 5% 8/1/19 (MBIA Insured) | 7,015 | 7,279 | ||||||
310,349 | ||||||||
Michigan – 1.1% | ||||||||
Carman-Ainsworth Cmnty. School District 5% 5/1/18 | ||||||||
(FSA Insured) | 2,175 | 2,261 | ||||||
Clarkston Cmnty. Schools 5.375% 5/1/20 (Pre-Re- | ||||||||
funded to 5/1/13 @ 100) (h) | 1,775 | 1,913 | ||||||
Detroit Wtr. Supply Sys. Rev. Series 2001 A, 5.25% | ||||||||
7/1/33 (FGIC Insured) | 4,520 | 4,672 | ||||||
Ferris State Univ. Rev. 5% 10/1/20 (MBIA Insured) | 3,165 | 3,255 | ||||||
Fowlerville Cmnty. School District 5.25% 5/1/17 | ||||||||
(FGIC Insured) | 1,425 | 1,509 | ||||||
Michigan Ctfs. of Prtn. 5.75% 6/1/17 (Pre-Refunded to | ||||||||
6/1/10 @ 100) (h) | 1,460 | 1,556 | ||||||
Michigan Hosp. Fin. Auth. Hosp. Rev.: | ||||||||
(Mercy Health Svcs. Proj.): | ||||||||
Series Q, 5.375% 8/15/26 (Escrowed to | ||||||||
Maturity) (h) | 4,750 | 4,802 | ||||||
Series W, 5.25% 8/15/27 (Escrowed to | ||||||||
Maturity) (h) | 4,000 | 4,047 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Michigan – continued | ||||||||||
Michigan Hosp. Fin. Auth. Hosp. Rev.: – continued | ||||||||||
(Mercy Health Svcs. Proj.): | ||||||||||
Series X: | ||||||||||
6% 8/15/34 (Pre Refunded to 8/15/09 @ 101) (h) | $ 7,145 | $ 7,624 | ||||||||
6% 8/15/34 (Pre Refunded to 8/15/09 @ 101) (h) | 3,530 | 3,767 | ||||||||
(Sisters of Mercy Health Corp. Proj.) Series P, 5.375% | ||||||||||
8/15/14 (Escrowed to Maturity) (h) | 420 | 441 | ||||||||
(Trinity Health Sys. Proj.) Series 2000 A, 6% 12/1/27 | 2,000 | 2,152 | ||||||||
Royal Oak Hosp. Fin. Auth. Hosp. Rev. (William | ||||||||||
Beaumont Hosp. Proj.): | ||||||||||
Series M, 5.25% 11/15/31 (MBIA Insured) | 7,000 | 7,167 | ||||||||
6.25% 1/1/09 | 400 | 420 | ||||||||
Troy School District 5% 5/1/17 (MBIA Insured) | 2,000 | 2,096 | ||||||||
47,682 | ||||||||||
Minnesota 1.2% | ||||||||||
Minneapolis & Saint Paul Hsg. & Redev. Auth. Health | ||||||||||
Care Sys. Rev.: | ||||||||||
(Health Partners Oblig. Group Proj.) 6% 12/1/18 | 1,000 | 1,079 | ||||||||
(Healthspan Corp. Proj.) Series A, 4.75% 11/15/18 | ||||||||||
(AMBAC Insured) | 9,700 | 9,737 | ||||||||
Minneapolis & Saint Paul Metropolitan Arpts. Commission | ||||||||||
Arpt. Rev. Series A, 5% 1/1/35 (AMBAC Insured) | 4,000 | 4,080 | ||||||||
Minneapolis Health Care Sys. Rev. (Allina Health Sys. | ||||||||||
Proj.) Series 2002 A, 6% 11/15/23 | 6,000 | 6,472 | ||||||||
Minnesota Agric. & Econ. Dev. Board Rev. (Health Care | ||||||||||
Sys. Proj.) Series A: | ||||||||||
6.375% 11/15/29 | 375 | 410 | ||||||||
6.375% 11/15/29 (Pre-Refunded to 11/15/10 @ | ||||||||||
101) (h) | 11,625 | 12,836 | ||||||||
Saint Cloud Health Care Rev. (Saint Cloud Hosp. Group | ||||||||||
Oblig. Proj.) Series A, 5.875% 5/1/30 (FSA Insured) . | 8,500 | 9,073 | ||||||||
Saint Paul Hsg. & Redev. Auth. Hosp. Rev. (Healtheast | ||||||||||
Proj.) 6% 11/15/30 | 2,000 | 2,135 | ||||||||
Saint Paul Port Auth. Lease Rev. Series 2003 11: | ||||||||||
5.25% 12/1/18 | 1,710 | 1,800 | ||||||||
5.25% 12/1/19 | 2,850 | 2,994 | ||||||||
Waconia Independent School District #110 Series A, 5% | ||||||||||
2/1/15 (FSA Insured) | 555 | 576 | ||||||||
51,192 | ||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 24 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Mississippi – 0.1% | ||||||||
Hinds County Rev. (Mississippi Methodist Hosp. & | ||||||||
Rehabilitation Proj.) 5.6% 5/1/12 (AMBAC Insured) . | $ 3,515 | $ 3,641 | ||||||
Missouri – 0.2% | ||||||||
Missouri Dev. Fin. Board Infrastructure Facilities Rev. | ||||||||
(City of Branson Branson Landing Proj.) Series 2005 A, | ||||||||
6% 6/1/20 | 2,125 | 2,359 | ||||||
Missouri Envir. Impt. & Energy Resources Auth. Wtr. Poll. | ||||||||
Cont. & Drinking Wtr. Rev. (State Revolving Fund Prog.): | ||||||||
Series 2002 B, 5.5% 7/1/17 | 1,780 | 1,919 | ||||||
Series 2003 A: | ||||||||
5.125% 1/1/19 | 5,000 | 5,243 | ||||||
5.25% 1/1/18 | 1,280 | 1,354 | ||||||
Missouri Hsg. Dev. Commission Single Family Mtg. Rev. | ||||||||
Series C, 5.5% 3/1/16 (g) | 110 | 110 | ||||||
10,985 | ||||||||
Montana 0.5% | ||||||||
Forsyth Poll. Cont. Rev. (Portland Gen. Elec. Co. Proj.) | ||||||||
Series A, 5.2%, tender 5/1/09 (d) | 10,755 | 10,998 | ||||||
Montana Board of Invt. (Payroll Tax Workers | ||||||||
Compensation Prog.): | ||||||||
Series 1996: | ||||||||
6.875% 6/1/20 (Escrowed to Maturity) (h) | 1,255 | 1,323 | ||||||
6.875% 6/1/20 (Escrowed to Maturity) (h) | 3,870 | 4,081 | ||||||
6.875% 6/1/20 (Escrowed to Maturity) (h) | 2,005 | 2,114 | ||||||
Montana Board of Regents Higher Ed. Rev. (Montana | ||||||||
State Univ. Proj.) 5% 11/15/34 (AMBAC Insured) | 2,000 | 2,037 | ||||||
20,553 | ||||||||
Nevada 0.6% | ||||||||
Clark County Arpt. Rev. Series C: | ||||||||
5.375% 7/1/17 (AMBAC Insured) (g) | 4,310 | 4,500 | ||||||
5.375% 7/1/19 (AMBAC Insured) (g) | 1,100 | 1,144 | ||||||
5.375% 7/1/21 (AMBAC Insured) (g) | 1,600 | 1,661 | ||||||
Clark County Gen. Oblig. 5.5% 7/1/21 (Pre-Refunded | ||||||||
to 7/1/10 @ 100) (h) | 1,100 | 1,163 | ||||||
Henderson Health Care Facility Rev. (Catholic Healthcare | ||||||||
West Proj.) Series 2005 B, 5% 7/1/08 | 2,700 | 2,751 | ||||||
Las Vegas Valley Wtr. District Series B, 5.25% 6/1/17 | ||||||||
(MBIA Insured) | 6,285 | 6,619 | ||||||
Washoe County Gen. Oblig. (Reno Sparks Proj.) Series B: | ||||||||
0% 7/1/12 (FSA Insured) | 4,605 | 3,545 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Nevada – continued | ||||||||
Washoe County Gen. Oblig. (Reno Sparks Proj.) Series B: | ||||||||
– continued | ||||||||
0% 7/1/13 (FSA Insured) | $ 4,590 | $ 3,366 | ||||||
0% 7/1/14 (FSA Insured) | 3,000 | 2,093 | ||||||
26,842 | ||||||||
New Hampshire – 0.2% | ||||||||
Nashua Gen. Oblig. 5.25% 9/15/18 | 1,000 | 1,059 | ||||||
New Hampshire Bus. Fin. Auth. Poll. Cont. Rev. (United | ||||||||
Illumination Co.) Series A, 3.65%, tender 2/1/10 | ||||||||
(AMBAC Insured) (d)(g) | 6,100 | 5,942 | ||||||
New Hampshire Tpk. Sys. Rev. 5% 5/1/09 | ||||||||
(AMBAC Insured) (c) | 2,000 | 2,052 | ||||||
9,053 | ||||||||
New Jersey – 3.3% | ||||||||
New Jersey Econ. Dev. Auth. Rev.: | ||||||||
Series 2005 K, 5.5% 12/15/19 (AMBAC Insured) | 9,500 | 10,480 | ||||||
Series 2005 O: | ||||||||
5.125% 3/1/30 | 5,000 | 5,142 | ||||||
5.25% 3/1/23 | 4,500 | 4,726 | ||||||
5.25% 3/1/26 | 11,305 | 11,824 | ||||||
Series O: | ||||||||
5.25% 3/1/21 (MBIA Insured) | 2,800 | 2,959 | ||||||
5.25% 3/1/25 | 9,900 | 10,362 | ||||||
New Jersey Health Care Facilities Fing. Auth. Rev. (Christ | ||||||||
Hosp. Group Issue Proj.) 7% 7/1/06 (Escrowed to | ||||||||
Maturity) (h) | 845 | 845 | ||||||
New Jersey Tpk. Auth. Tpk. Rev. Series A, 5% 1/1/25 | ||||||||
(FSA Insured) | 6,200 | 6,395 | ||||||
New Jersey Trans. Trust Fund Auth.: | ||||||||
Series 2006 C, 0% 12/15/34 (FSA Insured) | 4,900 | 1,183 | ||||||
Series B, 5.5% 12/15/21 (MBIA Insured) | 5,000 | 5,540 | ||||||
Series C, 5.25% 6/15/16 (Pre-Refunded to 6/15/15 | ||||||||
@ 100) (h) | 2,000 | 2,158 | ||||||
North Hudson Swr. Auth. Swr. Rev. Series A: | ||||||||
5.25% 8/1/18 (FGIC Insured) | 3,235 | 3,437 | ||||||
5.25% 8/1/19 (FGIC Insured) | 2,735 | 2,886 | ||||||
Ocean County Utils. Auth. Wastewtr. Rev. 5.25% | ||||||||
1/1/07 | 650 | 654 | ||||||
Tobacco Settlement Fing. Corp.: | ||||||||
4.375% 6/1/19 | 13,995 | 13,972 | ||||||
5.75% 6/1/32 | 8,710 | 9,065 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
26 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New Jersey – continued | ||||||||
Tobacco Settlement Fing. Corp.: – continued | ||||||||
6.125% 6/1/24 | $ 24,850 | $ 26,582 | ||||||
6.125% 6/1/42 | 4,500 | 4,760 | ||||||
6.375% 6/1/32 | 6,300 | 6,823 | ||||||
6.75% 6/1/39 | 8,700 | 9,665 | ||||||
Union County Impt. Auth. (Juvenile Detention Ctr. Facility | ||||||||
Proj.) 5.5% 5/1/28 (FGIC Insured) | 5,560 | 5,977 | ||||||
145,435 | ||||||||
New Mexico – 0.5% | ||||||||
Albuquerque Arpt. Rev.: | ||||||||
6.5% 7/1/08 (AMBAC Insured) (g) | 1,500 | 1,565 | ||||||
6.7% 7/1/18 (AMBAC Insured) (g) | 2,500 | 2,607 | ||||||
6.75% 7/1/09 (AMBAC Insured) (g) | 1,150 | 1,229 | ||||||
6.75% 7/1/10 (AMBAC Insured) (g) | 1,700 | 1,843 | ||||||
6.75% 7/1/12 (AMBAC Insured) (g) | 1,935 | 2,155 | ||||||
New Mexico Edl. Assistance Foundation Sr. Series A3, | ||||||||
4.95% 3/1/09 (g) | 5,000 | 5,088 | ||||||
Univ. of New Mexico Univ. Revs. Series A, 6% 6/1/21 . | 5,340 | 6,024 | ||||||
20,511 | ||||||||
New York – 11.4% | ||||||||
Erie County Indl. Dev. Agcy. School Facility Rev. (Buffalo | ||||||||
City School District Proj.): | ||||||||
Series 2003: | ||||||||
5.75% 5/1/21 (FSA Insured) | 1,575 | 1,691 | ||||||
5.75% 5/1/23 (FSA Insured) | 1,750 | 1,874 | ||||||
Series 2004: | ||||||||
5.75% 5/1/21 (FSA Insured) | 3,845 | 4,238 | ||||||
5.75% 5/1/24 (FSA Insured) | 3,000 | 3,299 | ||||||
5.75% 5/1/25 (FSA Insured) | 3,400 | 3,731 | ||||||
5.75% 5/1/26 (FSA Insured) | 5,200 | 5,696 | ||||||
5.75% 5/1/14 (FSA Insured) | 3,500 | 3,821 | ||||||
5.75% 5/1/15 (FSA Insured) | 7,870 | 8,577 | ||||||
5.75% 5/1/16 (FSA Insured) | 7,120 | 7,879 | ||||||
5.75% 5/1/18 (FSA Insured) | 3,460 | 3,732 | ||||||
5.75% 5/1/18 (FSA Insured) | 9,220 | 10,196 | ||||||
5.75% 5/1/20 (FSA Insured) | 8,000 | 8,830 | ||||||
5.75% 5/1/22 (FSA Insured) | 1,000 | 1,102 | ||||||
Long Island Pwr. Auth. Elec. Sys. Rev.: | ||||||||
5% 12/1/25 (FGIC Insured) | 5,000 | 5,149 | ||||||
5% 12/1/26 (XL Cap. Assurance, Inc. Insured) | 2,600 | 2,669 |
See accompanying notes which are an integral part of the financial statements.
27 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Long Island Pwr. Auth. Elec. Sys. Rev.: – continued | ||||||||
5% 12/1/35 | $ 2,000 | $ 2,026 | ||||||
Metropolitan Trans. Auth. Dedicated Tax Fund Series A, | ||||||||
5.5% 11/15/26 (FSA Insured) | 2,200 | 2,357 | ||||||
Metropolitan Trans. Auth. Rev. Series F, 5.25% | ||||||||
11/15/27 (MBIA Insured) | 3,400 | 3,580 | ||||||
Metropolitan Trans. Auth. Svc. Contract Rev.: | ||||||||
Series 2002 A, 5.75% 7/1/31 (AMBAC Insured) | 3,800 | 4,094 | ||||||
Series A, 5.5% 1/1/20 (MBIA Insured) | 4,200 | 4,491 | ||||||
Series B, 5.5% 7/1/19 (MBIA Insured) | 2,000 | 2,140 | ||||||
Nassau County Gen. Oblig. Series Z, 5% 9/1/11 | ||||||||
(FGIC Insured) | 2,300 | 2,397 | ||||||
New York City Gen. Oblig.: | ||||||||
Series 2000 A, 6.5% 5/15/11 | 5,120 | 5,592 | ||||||
Series 2002 C, 5.5% 8/1/13 | 5,000 | 5,355 | ||||||
Series 2003 A, 5.5% 8/1/20 (MBIA Insured) | 8,000 | 8,585 | ||||||
Series 2003 I, 5.75% 3/1/16 | 5,500 | 5,957 | ||||||
Series 2005 G: | ||||||||
5% 8/1/14 | 2,400 | 2,510 | ||||||
5% 8/1/15 | 1,500 | 1,568 | ||||||
5.25% 8/1/16 | 3,525 | 3,752 | ||||||
Series A, 5.25% 11/1/14 (MBIA Insured) | 1,850 | 1,959 | ||||||
Series B, 5.75% 8/1/14 | 2,000 | 2,168 | ||||||
Series C, 5.75% 3/15/27 (FSA Insured) | 1,035 | 1,111 | ||||||
Series G, 5.25% 8/1/14 (AMBAC Insured) | 2,500 | 2,632 | ||||||
Subseries 2005 F1: | ||||||||
5% 9/1/15 | 4,000 | 4,182 | ||||||
5.25% 9/1/14 | 5,060 | 5,380 | ||||||
New York City Indl. Dev. Agcy. Indl. Dev. Rev. (Japan | ||||||||
Airlines Co. Ltd. Proj.) Series 1991, 6% 11/1/15 | ||||||||
(FSA Insured) (g) | 1,385 | 1,409 | ||||||
New York City Indl. Dev. Agcy. Spl. Facilities Rev. | ||||||||
(Terminal One Group Assoc. Proj.) 5% 1/1/09 (g) | 3,100 | 3,152 | ||||||
New York City Muni. Wtr. Fin. Auth. Wtr. & Swr. Sys. | ||||||||
Rev.: | ||||||||
Series 2002 A, 5.125% 6/15/34 (FSA Insured) | 3,300 | 3,391 | ||||||
Series A, 5.125% 6/15/34 (MBIA Insured) | 13,800 | 14,180 | ||||||
Series B, 5.125% 6/15/31 | 10,545 | 10,838 | ||||||
Series G, 5.125% 6/15/32 | 2,000 | 2,050 | ||||||
New York City Trust Cultural Resources Rev. (Museum of | ||||||||
Modern Art Proj.) Series 2001 D, 5.125% 7/1/31 | ||||||||
(AMBAC Insured) | 6,000 | 6,198 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
28 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
New York Local Govt. Assistance Corp. Series C, 5.5% | ||||||||
4/1/17 | $ 22,015 | $ 23,851 | ||||||
New York State Dorm. Auth. Revs.: | ||||||||
(City Univ. Sys. Consolidation Proj.): | ||||||||
Series A: | ||||||||
5.75% 7/1/09 | 4,370 | 4,548 | ||||||
5.75% 7/1/13 | 8,750 | 9,366 | ||||||
Series C, 7.5% 7/1/10 (FGIC Insured) | 21,250 | 22,715 | ||||||
(Long Island Jewish Med. Ctr. Proj.) 5.25% 7/1/11 | ||||||||
(MBIA Insured) | 3,770 | 3,914 | ||||||
(State Univ. Edl. Facilities Proj.) Series A, 5.875% | ||||||||
5/15/17 (FGIC Insured) | 6,865 | 7,795 | ||||||
(Suffolk County Judicial Facilities Proj.) Series A, 9.5% | ||||||||
4/15/14 (Escrowed to Maturity) (h) | 690 | 861 | ||||||
Series 2002 A, 5.75% 10/1/17 (MBIA Insured) | 3,000 | 3,263 | ||||||
New York State Envir. Facilities Corp. Clean Wtr. & | ||||||||
Drinking Wtr. Rev. Series F: | ||||||||
4.875% 6/15/18 | 4,205 | 4,296 | ||||||
4.875% 6/15/20 | 8,500 | 8,670 | ||||||
5% 6/15/15 | 3,015 | 3,107 | ||||||
New York State Med. Care Facilities Fin. Agcy. Rev. | ||||||||
(Homeowner Mtg. Prog.) Series E, 6.2% 2/15/15 | 1,265 | 1,281 | ||||||
New York State Thruway Auth. Gen. Rev. Series 2005 G, | ||||||||
5.25% 1/1/27 (FSA Insured) | 12,500 | 13,206 | ||||||
New York State Thruway Auth. Svc. Contract Rev. 5.5% | ||||||||
4/1/16 | 2,350 | 2,505 | ||||||
New York State Urban Dev. Corp. Rev. Series 2004 A2, | ||||||||
5.5% 3/15/21 (MBIA Insured) | 14,360 | 15,972 | ||||||
New York Transitional Fin. Auth. Rev.: | ||||||||
Series 2003 D, 5% 2/1/31 | 3,500 | 3,571 | ||||||
Series 2004 C, 5% 2/1/33 (FGIC Insured) | 5,000 | 5,114 | ||||||
Series A, 5.75% 2/15/16 | 130 | 139 | ||||||
Series B: | ||||||||
5.25% 8/1/19 | 2,000 | 2,108 | ||||||
5.25% 2/1/29 (b) | 13,000 | 13,622 | ||||||
Niagara Falls City Niagara County Pub. Impt. (Pub. | ||||||||
Impt. Proj.) 7.5% 3/1/18 (MBIA Insured) | 500 | 641 | ||||||
Sales Tax Asset Receivables Corp. Series A, 5.25% | ||||||||
10/15/27 (AMBAC Insured) | 10,500 | 11,090 | ||||||
Tobacco Settlement Fing. Corp.: | ||||||||
Series 2003 C1, 5.5% 6/1/19 | 9,500 | 10,127 | ||||||
Series A1: | ||||||||
5.25% 6/1/21 (AMBAC Insured) | 5,645 | 5,924 |
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Tobacco Settlement Fing. Corp.: – continued | ||||||||
Series A1: | ||||||||
5.25% 6/1/22 (AMBAC Insured) | $ 3,850 | $ 4,036 | ||||||
5.5% 6/1/14 | 7,500 | 7,793 | ||||||
5.5% 6/1/15 | 33,500 | 35,137 | ||||||
5.5% 6/1/18 (MBIA Insured) | 2,000 | 2,132 | ||||||
Series C1: | ||||||||
5.5% 6/1/14 | 9,900 | 10,286 | ||||||
5.5% 6/1/15 | 9,900 | 10,384 | ||||||
5.5% 6/1/16 | 3,820 | 4,040 | ||||||
5.5% 6/1/17 | 9,200 | 9,712 | ||||||
5.5% 6/1/18 | 12,000 | 12,750 | ||||||
5.5% 6/1/20 | 2,700 | 2,872 | ||||||
5.5% 6/1/22 | 8,255 | 8,750 | ||||||
Triborough Bridge & Tunnel Auth. (Convention Ctr. Proj.) | ||||||||
Series E, 7.25% 1/1/10 (XL Cap. Assurance, Inc. | ||||||||
Insured) | 6,095 | 6,458 | ||||||
Triborough Bridge & Tunnel Auth. Revs.: | ||||||||
Series 2005 A, 5.125% 1/1/22 | 4,000 | 4,150 | ||||||
Series A, 5% 1/1/32 (MBIA Insured) | 470 | 479 | ||||||
Series B: | ||||||||
5.2% 1/1/27 (Pre-Refunded to 1/1/22 @ 100) (h) . | 2,000 | 2,181 | ||||||
5.5% 1/1/30 (Pre-Refunded to 1/1/22 @ 100) (h) . | 4,000 | 4,432 | ||||||
Series SR, 5.5% 1/1/12 (Escrowed to Maturity) (h) | 9,685 | 10,068 | ||||||
TSASC, Inc. Rev. Series 1, 5.5% 7/15/24 (Pre-Refunded | ||||||||
to 7/15/12 @ 100) (h) | 7,800 | 8,284 | ||||||
507,168 | ||||||||
New York & New Jersey – 0.3% | ||||||||
Port Auth. of New York & New Jersey 124th Series, 5% | ||||||||
8/1/13 (FGIC Insured) (g) | 3,400 | 3,476 | ||||||
Port Auth. of New York & New Jersey Spl. Oblig. Rev. | ||||||||
(JFK Int’l. Air Term. Spl. Proj.) Series 6, 6.25% | ||||||||
12/1/13 (MBIA Insured) (g) | 10,275 | 11,437 | ||||||
14,913 | ||||||||
North Carolina – 3.7% | ||||||||
Catawba County Ctfs. of Prtn. (Pub. School and Cmnty. | ||||||||
College Proj.) 5.25% 6/1/20 (MBIA Insured) | 1,800 | 1,897 | ||||||
Dare County Ctfs. of Prtn.: | ||||||||
5.25% 6/1/17 (AMBAC Insured) | 1,620 | 1,711 | ||||||
5.25% 6/1/18 (AMBAC Insured) | 1,620 | 1,704 | ||||||
5.25% 6/1/19 (AMBAC Insured) | 1,540 | 1,621 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
30 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
North Carolina – continued | ||||||||
Dare County Ctfs. of Prtn.: – continued | ||||||||
5.25% 6/1/22 (AMBAC Insured) | $ 1,620 | $ 1,701 | ||||||
5.25% 6/1/23 (AMBAC Insured) | 1,620 | 1,690 | ||||||
North Carolina Cap. Facilities Fin. Agcy. Rev. (Duke | ||||||||
Univ. Proj.) Series A: | ||||||||
5.125% 10/1/41 | 6,380 | 6,498 | ||||||
5.125% 7/1/42 | 34,200 | 34,938 | ||||||
5.25% 7/1/42 | 9,805 | 10,109 | ||||||
North Carolina Ctfs. of Prtn. (Repair and Renovation | ||||||||
Proj.) Series B, 5.25% 6/1/17 | 3,600 | 3,822 | ||||||
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.: | ||||||||
Series A: | ||||||||
5.5% 1/1/11 | 8,700 | 9,125 | ||||||
5.75% 1/1/26 | 4,000 | 4,206 | ||||||
Series B, 7% 1/1/08 | 10,060 | 10,476 | ||||||
Series C, 5.25% 1/1/09 | 2,500 | 2,564 | ||||||
Series D: | ||||||||
5.375% 1/1/10 | 4,525 | 4,690 | ||||||
6.7% 1/1/19 | 5,000 | 5,418 | ||||||
6.75% 1/1/26 | 7,000 | 7,596 | ||||||
North Carolina Infrastructure Fin. Corp. Ctfs. of Prtn. | ||||||||
(North Carolina Correctional Facilities Proj.) Series A: | ||||||||
5% 2/1/19 | 2,945 | 3,037 | ||||||
5% 2/1/20 | 1,500 | 1,543 | ||||||
North Carolina Muni. Pwr. Agcy. #1 Catawba Elec. Rev.: | ||||||||
Series 1999 B, 6.375% 1/1/08 | 7,000 | 7,236 | ||||||
Series A: | ||||||||
5.125% 1/1/15 (MBIA Insured) | 6,860 | 7,035 | ||||||
5.125% 1/1/17 (MBIA Insured) | 15,350 | 15,737 | ||||||
5.125% 1/1/17 (MBIA Insured) | 16,000 | 16,547 | ||||||
Univ. of North Carolina at Chapel Hill Rev. Series A, | ||||||||
4.75% 12/1/34 | 5,000 | 4,961 | ||||||
165,862 | ||||||||
North Dakota 0.7% | ||||||||
Mercer County Poll. Cont. Rev. (Antelope Valley | ||||||||
Station/Basin Elec. Pwr. Coop. Proj.) 7.2% 6/30/13 | ||||||||
(AMBAC Insured) | 26,000 | 29,355 | ||||||
Ohio – 0.9% | ||||||||
Franklin County Hosp. Rev. 5.5% 5/1/28 (Pre-Refunded | ||||||||
to 5/1/11 @ 101) (h) | 4,265 | 4,588 | ||||||
Lakewood Hosp. Impt. Rev. (Lakewood Hosp. Assoc. | ||||||||
Proj.) 5.5% 2/15/08 | 1,225 | 1,254 |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Ohio – continued | ||||||||
Montgomery County Rev. (Catholic Health Initiatives | ||||||||
Proj.) Series A: | ||||||||
6% 12/1/19 | $ 4,905 | $ 5,283 | ||||||
6% 12/1/19 (Escrowed to Maturity) (h) | 5,095 | 5,494 | ||||||
6% 12/1/26 (Escrowed to Maturity) (h) | 10,000 | 10,730 | ||||||
Ohio Solid Waste Rev. (Waste Mgmt., Inc. Proj.) 4.85%, | ||||||||
tender 11/1/07 (d)(g) | 5,000 | 5,025 | ||||||
Richland County Hosp. Facilities (MedCentral Health Sys. | ||||||||
Proj.) Series B, 6.375% 11/15/30 | 3,000 | 3,209 | ||||||
Univ. of Cincinnati Ctfs. of Prtn. 5.125% 6/1/28 (MBIA | ||||||||
Insured) | 3,750 | 3,822 | ||||||
39,405 | ||||||||
Oklahoma – 1.2% | ||||||||
Cherokee County Econ. Dev. Auth. Series A, 0% | ||||||||
11/1/11 (Escrowed to Maturity) (h) | 2,080 | 1,650 | ||||||
Oklahoma City Pub. Property Auth. Hotel Tax Rev.: | ||||||||
5.25% 10/1/29 (FGIC Insured) | 4,000 | 4,197 | ||||||
5.5% 10/1/22 (FGIC Insured) | 2,845 | 3,060 | ||||||
5.5% 10/1/23 (FGIC Insured) | 3,005 | 3,220 | ||||||
5.5% 10/1/24 (FGIC Insured) | 3,175 | 3,395 | ||||||
Oklahoma Dev. Fin. Auth. Rev. (Saint John Health Sys. | ||||||||
Proj.) 6% 2/15/29 | 15,000 | 15,936 | ||||||
Oklahoma Industries Auth. Rev. (Health Sys. Oblig. | ||||||||
Group Proj.) Series A: | ||||||||
5.75% 8/15/29 (MBIA Insured) | 11,420 | 11,986 | ||||||
5.75% 8/15/29 (Pre-Refunded to 8/15/09 @ | ||||||||
101) (h) | 8,330 | 8,828 | ||||||
52,272 | ||||||||
Oregon – 0.3% | ||||||||
Clackamas County School District #62C, Oregon City | ||||||||
Series 2004, 5% 6/15/19 (FSA Insured) | 3,395 | 3,523 | ||||||
Clackamus County School District #7J: | ||||||||
5.25% 6/1/23 (FSA Insured) | 2,000 | 2,174 | ||||||
5.25% 6/1/24 (FSA Insured) | 2,605 | 2,830 | ||||||
Port Morrow Poll. Cont. Rev. (Pacific Northwest Proj.) | ||||||||
Series A: | ||||||||
8% 7/15/06 | 385 | 385 | ||||||
8% 7/15/07 | 430 | 441 | ||||||
8% 7/15/08 | 480 | 492 | ||||||
8% 7/15/09 | 540 | 554 | ||||||
8% 7/15/10 | 605 | 620 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Oregon – continued | ||||||||
Port Morrow Poll. Cont. Rev. (Pacific Northwest Proj.) | ||||||||
Series A: – continued | ||||||||
8% 7/15/11 | $ 385 | $ 395 | ||||||
Washington County School District #15: | ||||||||
5.5% 6/15/20 (FSA Insured) | 1,770 | 1,948 | ||||||
5.5% 6/15/21 (FSA Insured) | 1,060 | 1,165 | ||||||
Yamhill County School District #029J Newberg 5.5% | ||||||||
6/15/20 (FGIC Insured) | 1,000 | 1,106 | ||||||
15,633 | ||||||||
Pennsylvania – 1.6% | ||||||||
Annville-Cleona School District: | ||||||||
5.5% 3/1/24 (FSA Insured) | 1,350 | 1,455 | ||||||
5.5% 3/1/25 (FSA Insured) | 1,400 | 1,506 | ||||||
Canon McMillan School District Series 2001 B, 5.75% | ||||||||
12/1/33 (FGIC Insured) | 3,000 | 3,192 | ||||||
Central Dauphin School District Gen. Oblig. 7% 2/1/27 | ||||||||
(MBIA Insured) | 1,000 | 1,207 | ||||||
Chester County Health & Ed. Facilities Auth. Health Sys. | ||||||||
Rev. (Jefferson Health Sys. Proj.) Series B, 5.25% | ||||||||
5/15/22 (AMBAC Insured) | 4,400 | 4,517 | ||||||
Montgomery County Higher Ed. & Health Auth. Hosp. | ||||||||
Rev. (Abington Memorial Hosp. Proj.) Series A: | ||||||||
6% 6/1/22 (AMBAC Insured) | 2,000 | 2,303 | ||||||
6.1% 6/1/12 (AMBAC Insured) | 3,000 | 3,300 | ||||||
6.125% 6/1/14 (AMBAC Insured) | 5,230 | 5,856 | ||||||
Northumberland County Auth. Commonwealth Lease | ||||||||
Rev. (State Correctional Facilities Proj.) 0% 10/15/13 | ||||||||
(Escrowed to Maturity) (h) | 11,455 | 8,316 | ||||||
Pennsylvania Convention Ctr. Auth. Rev. Series A, 6.7% | ||||||||
9/1/16 (Escrowed to Maturity) (h) | 2,000 | 2,278 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities | ||||||||
Rev.: | ||||||||
(Amtrak Proj.) Series 2001 A, 6.375% 11/1/41 (g) | 8,700 | 9,313 | ||||||
(Shippingport Proj.) Series A, 4.35%, tender | ||||||||
6/1/10 (d)(g) | 5,600 | 5,552 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Solid Waste Disp. | ||||||||
Rev. (Waste Mgmt., Inc. Proj.) Series 2004 A, 3.95%, | ||||||||
tender 11/1/09 (d)(g) | 5,000 | 4,917 | ||||||
Pennsylvania Higher Edl. Facilities Auth. Rev. (Univ. of | ||||||||
Pennsylvania Health Systems Proj.) Series A, 5% | ||||||||
8/15/16 (AMBAC Insured) | 3,600 | 3,777 | ||||||
Pennsylvania Hsg. Fin. Agcy.: | ||||||||
Series 54A, 5.375% 10/1/28 (g) | 290 | 292 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Hsg. Fin. Agcy.: – continued | ||||||||
Series C, 8.1% 7/1/13 | $ 555 | $ 557 | ||||||
Philadelphia Arpt. Rev. Series 1998, 5.375% 6/15/10 | ||||||||
(FGIC Insured) (g) | 4,425 | 4,607 | ||||||
Philadelphia Gen. Oblig. Series 2003 A: | ||||||||
5% 2/15/10 (XL Cap. Assurance, Inc. Insured) | 2,000 | 2,067 | ||||||
5% 2/15/12 (XL Cap. Assurance, Inc. Insured) | 1,000 | 1,047 | ||||||
Philadelphia Redev. Auth. Rev. (Philadelphia | ||||||||
Neighborhood Transformation Initiative Proj.) | ||||||||
Series 2005 C, 5% 4/15/31 (FGIC Insured) | 3,000 | 3,062 | ||||||
69,121 | ||||||||
Puerto Rico 0.6% | ||||||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Trans. | ||||||||
Rev.: | ||||||||
Series 1998, 5.75% 7/1/22 (CIFG North America | ||||||||
Insured) | 2,300 | 2,486 | ||||||
5.75% 7/1/19 (FGIC Insured) | 3,240 | 3,521 | ||||||
Puerto Rico Commonwealth Infrastructure Fing. Auth.: | ||||||||
Series 2000 A: | ||||||||
5.5% 10/1/32 (Escrowed to Maturity) (h) | 5,315 | 5,624 | ||||||
5.5% 10/1/40 (Escrowed to Maturity) (h) | 765 | 808 | ||||||
Series C, 5.5% 7/1/21 (FGIC Insured) | 3,000 | 3,328 | ||||||
Puerto Rico Govt. Dev. Bank: | ||||||||
Series B, 5% 12/1/12 | 5,000 | 5,168 | ||||||
Series C, 5.25% 1/1/15 (g) | 5,000 | 5,166 | ||||||
26,101 | ||||||||
Rhode Island – 0.3% | ||||||||
Rhode Island Health & Edl. Bldg. Corp. Rev.: | ||||||||
(Lifespan Corp. Proj.) Series A: | ||||||||
5% 5/15/11 | 1,680 | 1,723 | ||||||
5% 5/15/13 (FSA Insured) | 4,000 | 4,179 | ||||||
(Univ. of Rhode Island Univ. Revs. Proj.) Series A: | ||||||||
5.25% 9/15/15 (AMBAC Insured) | 1,725 | 1,831 | ||||||
5.25% 9/15/16 (AMBAC Insured) | 1,815 | 1,932 | ||||||
5.25% 9/15/18 (AMBAC Insured) | 1,005 | 1,060 | ||||||
5.5% 9/15/24 (AMBAC Insured) | 2,000 | 2,140 | ||||||
12,865 | ||||||||
South Carolina – 0.8% | ||||||||
Greenville County School District Installment Purp. Rev. | ||||||||
5% 12/1/11 | 3,750 | 3,897 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
34 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
South Carolina – continued | ||||||||
Lexington County Health Svcs. District, Inc. Hosp. Rev. | ||||||||
6% 11/1/18 | $ 3,500 | $ 3,801 | ||||||
Lexington One School Facilities Corp. Rev. (Lexington | ||||||||
County School District No. 1 Proj.) 5.25% 12/1/18 | 1,540 | 1,618 | ||||||
Richland County Hosp. Facilities Rev. (Cmnty. Provider | ||||||||
Pooled Ln. Prog.) Series A, 7.125% 7/1/17 (Escrowed | ||||||||
to Maturity) (h) | 1,500 | 1,705 | ||||||
Rock Hill Util. Sys. Rev. Series 2003 A: | ||||||||
5.375% 1/1/17 (FSA Insured) | 2,100 | 2,233 | ||||||
5.375% 1/1/23 (FSA Insured) | 1,025 | 1,083 | ||||||
South Carolina Jobs Econ. Dev. Auth. Hosp. Facilities | ||||||||
Rev. (Palmetto Health Alliance Proj.) Series A, 7.375% | ||||||||
12/15/21 (Pre-Refunded to 12/15/10 @ 102) (h) | 4,000 | 4,592 | ||||||
South Carolina Ports Auth. Ports Rev. 5.5% 7/1/08 | ||||||||
(FSA Insured) (g) | 3,515 | 3,613 | ||||||
South Carolina Pub. Svc. Auth. Rev.: | ||||||||
(Santee Cooper Proj.) Series 2005 B, 5% 1/1/18 | ||||||||
(MBIA Insured) | 2,200 | 2,310 | ||||||
Series 2005 B, 5% 1/1/19 (MBIA Insured) | 2,500 | 2,609 | ||||||
Series A, 5.5% 1/1/15 (FGIC Insured) | 5,000 | 5,456 | ||||||
York County Wtr. & Swr. Rev. 5.25% 12/1/30 | ||||||||
(MBIA Insured) | 1,120 | 1,165 | ||||||
34,082 | ||||||||
South Dakota 0.0% | ||||||||
South Dakota Lease Rev. Series A, 6.625% 9/1/12 | ||||||||
(FSA Insured) | 1,000 | 1,132 | ||||||
Tennessee – 1.0% | ||||||||
Clarksville Natural Gas Acquisition Corp. Gas Rev.: | ||||||||
5% 12/15/12 | 4,500 | 4,678 | ||||||
5% 12/15/13 | 5,000 | 5,201 | ||||||
5% 12/15/14 | 3,870 | 4,024 | ||||||
Knox County Health Edl. & Hsg. Facilities Board Hosp. | ||||||||
Facilities Rev. (Fort Sanders Alliance Proj.) Series C: | ||||||||
5.25% 1/1/15 (MBIA Insured) | 3,300 | 3,506 | ||||||
5.75% 1/1/14 (MBIA Insured) | 2,000 | 2,191 | ||||||
7.25% 1/1/10 (MBIA Insured) | 2,660 | 2,930 | ||||||
Memphis-Shelby County Arpt. Auth. Arpt. Rev.: | ||||||||
Series A: | ||||||||
6.25% 2/15/09 (MBIA Insured) (g) | 1,500 | 1,579 | ||||||
6.25% 2/15/10 (MBIA Insured) (g) | 1,000 | 1,069 | ||||||
6.25% 2/15/11 (MBIA Insured) (g) | 1,415 | 1,532 | ||||||
Series B, 6.5% 2/15/09 (MBIA Insured) (g) | 500 | 529 |
See accompanying notes which are an integral part of the financial statements.
35 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Tennessee – continued | ||||||||
Metropolitan Govt. Nashville & Davidson County Wtr. & | ||||||||
Swr. Sys. Rev. 7.7% 1/1/12 (FGIC Insured) | $ 5,600 | $ 6,329 | ||||||
Shelby County Health Edl. & Hsg. Facility Board Hosp. | ||||||||
Rev. (Methodist Hosp. Proj.) 6.5% 9/1/26 | ||||||||
(Pre-Refunded to 9/1/12 @ 100) (h) | 8,410 | 9,517 | ||||||
43,085 | ||||||||
Texas 13.1% | ||||||||
Abilene Independent School District: | ||||||||
5% 2/15/16 | 2,035 | 2,131 | ||||||
5% 2/15/18 | 2,000 | 2,078 | ||||||
5% 2/15/23 | 3,205 | 3,295 | ||||||
Aledo Independent School District Series A, 5.125% | ||||||||
2/15/33 | 2,775 | 2,850 | ||||||
Argyle Independent School District 5.25% 8/15/40 | ||||||||
(FSA Insured) | 1,745 | 1,819 | ||||||
Arlington Gen. Oblig. 5% 8/15/18 (FGIC Insured) | 1,215 | 1,255 | ||||||
Austin Cmnty. College District 5.5% 8/1/34 | 4,600 | 4,924 | ||||||
Austin Independent School District 5.25% 8/1/15 | 2,000 | 2,146 | ||||||
Austin Util. Sys. Rev.: | ||||||||
0% 5/15/10 (MBIA Insured) | 7,970 | 6,794 | ||||||
0% 5/15/17 (FGIC Insured) | 9,200 | 5,567 | ||||||
0% 5/15/18 (FGIC Insured) | 5,000 | 2,866 | ||||||
Austin Wtr. & Wastewtr. Sys. Rev.: | ||||||||
5% 11/15/12 (MBIA Insured) (c) | 2,375 | 2,478 | ||||||
5% 11/15/15 (MBIA Insured) (c) | 1,250 | 1,306 | ||||||
Bexar Metropolitan Wtr. District Wtrwks. Sys. Rev. | ||||||||
5.375% 5/1/20 (FSA Insured) | 1,660 | 1,752 | ||||||
Birdville Independent School District: | ||||||||
0% 2/15/11 | 8,665 | 7,129 | ||||||
0% 2/15/13 | 13,690 | 10,242 | ||||||
Boerne Independent School District 5.25% 2/1/35 | 11,000 | 11,407 | ||||||
Canyon Independent School District Series A, 5.5% | ||||||||
2/15/21 | 1,855 | 1,980 | ||||||
Cedar Hill Independent School District 0% 8/15/09 | 1,575 | 1,381 | ||||||
Clint Independent School District: | ||||||||
5.5% 8/15/19 | 1,055 | 1,128 | ||||||
5.5% 8/15/20 | 1,110 | 1,185 | ||||||
5.5% 8/15/21 | 1,175 | 1,255 | ||||||
Conroe Independent School District: | ||||||||
Series B, 0% 2/15/10 | 2,805 | 2,413 | ||||||
0% 2/15/11 | 1,500 | 1,234 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 36
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Corpus Christi Util. Sys. Rev.: | ||||||||
5.25% 7/15/18 (FSA Insured) | $ 3,305 | $ 3,522 | ||||||
5.25% 7/15/19 (FSA Insured) | 4,000 | 4,248 | ||||||
Corsicana Independent School District 5.125% 2/15/34 | 3,275 | 3,361 | ||||||
Cypress-Fairbanks Independent School District: | ||||||||
Series A: | ||||||||
0% 2/15/12 | 20,900 | 16,427 | ||||||
0% 2/15/13 | 6,425 | 4,807 | ||||||
0% 2/15/14 | 11,475 | 8,167 | ||||||
0% 2/15/16 | 9,700 | 6,231 | ||||||
5.75% 2/15/19 (Pre-Refunded to 2/15/12 @ | ||||||||
100) (h) | 4,400 | 4,788 | ||||||
5.75% 2/15/21 (Pre-Refunded to 2/15/12 @ | ||||||||
100) (h) | 1,000 | 1,088 | ||||||
Dallas Fort Worth Int’l. Arpt. Rev. Series A, 5.25% | ||||||||
11/1/10 (MBIA Insured) (g) | 2,150 | 2,236 | ||||||
Denton County Lewisville Independent School District | ||||||||
Series 2004, 5% 8/15/16 | 3,465 | 3,577 | ||||||
Duncanville Independent School District 5.65% 2/15/28 | 30 | 32 | ||||||
El Paso Independent School District 5.25% 8/15/31 | 2,245 | 2,336 | ||||||
Fort Worth Wtr. & Swr. Rev. 5% 2/15/16 (FSA Insured) | 6,000 | 6,254 | ||||||
Frisco Independent School District: | ||||||||
Series C: | ||||||||
5% 8/15/22 | 2,000 | 2,060 | ||||||
5% 8/15/26 | 3,765 | 3,856 | ||||||
5.375% 8/15/17 | 2,715 | 2,887 | ||||||
Gainesville Independent School District 5.25% 2/15/36 | 1,900 | 1,990 | ||||||
Garland Wtr. & Swr. Rev. 5.25% 3/1/23 (AMBAC | ||||||||
Insured) | 1,315 | 1,367 | ||||||
Grand Prairie Independent School District 0% 2/15/16 . | 3,775 | 2,429 | ||||||
Guadalupe-Blanco River Auth. Contract Rev. (Western | ||||||||
Canyon Reg’l. Wtr. Supply Proj.): | ||||||||
5.25% 4/15/15 (MBIA Insured) | 1,570 | 1,663 | ||||||
5.25% 4/15/16 (MBIA Insured) | 1,680 | 1,774 | ||||||
5.25% 4/15/17 (MBIA Insured) | 2,295 | 2,416 | ||||||
5.25% 4/15/18 (MBIA Insured) | 1,915 | 2,010 | ||||||
5.25% 4/15/19 (MBIA Insured) | 1,000 | 1,050 | ||||||
5.25% 4/15/20 (MBIA Insured) | 1,565 | 1,640 | ||||||
Harlandale Independent School District: | ||||||||
Series 2005, 5.7% 8/15/30 | 100 | 106 | ||||||
5.5% 8/15/35 | 45 | 47 | ||||||
6% 8/15/16 | 35 | 38 |
See accompanying notes which are an integral part of the financial statements.
37 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Harris County Gen. Oblig.: | ||||||||
Series A, 5.25% 8/15/35 (FSA Insured) | $ 11,400 | $ 11,803 | ||||||
0% 10/1/13 (MBIA Insured) | 5,550 | 4,042 | ||||||
0% 10/1/14 (MBIA Insured) | 11,000 | 7,618 | ||||||
0% 8/15/25 (MBIA Insured) | 3,000 | 1,159 | ||||||
0% 8/15/28 (MBIA Insured) | 5,000 | 1,635 | ||||||
Harris County Health Facilities Dev. Corp. Rev. (Saint | ||||||||
Luke’s Episcopal Hosp. Proj.) Series 2001 A: | ||||||||
5.375% 2/15/26 (Pre-Refunded to 8/15/11 @ | ||||||||
100) (h) | 3,000 | 3,189 | ||||||
5.625% 2/15/13 (Pre-Refunded to 8/15/11 @ | ||||||||
100) (h) | 4,625 | 4,969 | ||||||
Harris County Hosp. District Mtg. Rev.: | ||||||||
7.4% 2/15/10 (AMBAC Insured) | 1,120 | 1,193 | ||||||
7.4% 2/15/10 (Escrowed to Maturity) (h) | 425 | 448 | ||||||
Houston Area Wtr. Corp. Contract Rev. (Northeast Wtr. | ||||||||
Purification Proj.) 5.5% 3/1/15 (FGIC Insured) | 1,985 | 2,121 | ||||||
Houston Arpt. Sys. Rev.: | ||||||||
Series A: | ||||||||
5.625% 7/1/20 (FSA Insured) (g) | 2,000 | 2,105 | ||||||
5.625% 7/1/21 (FSA Insured) (g) | 3,350 | 3,523 | ||||||
6% 7/1/08 (FGIC Insured) (g) | 1,000 | 1,037 | ||||||
Series B, 5.5% 7/1/30 (FSA Insured) | 10,645 | 11,144 | ||||||
Houston Independent School District: | ||||||||
Series A, 0% 8/15/11 | 6,400 | 5,150 | ||||||
0% 8/15/13 | 9,835 | 7,183 | ||||||
Humble Independent School District: | ||||||||
Series 2005 B, 5.25% 2/15/22 (FGIC Insured) | 1,995 | 2,101 | ||||||
0% 2/15/16 | 3,000 | 1,936 | ||||||
0% 2/15/17 | 3,480 | 2,133 | ||||||
Hurst Euless Bedford Independent School District: | ||||||||
0% 8/15/11 | 3,620 | 2,913 | ||||||
0% 8/15/12 | 5,105 | 3,920 | ||||||
0% 8/15/13 | 3,610 | 2,637 | ||||||
Katy Independent School District: | ||||||||
Series A, 5% 2/15/16 | 2,500 | 2,594 | ||||||
0% 8/15/11 | 4,170 | 3,355 | ||||||
Keller Independent School District Series 1996 A, 0% | ||||||||
8/15/17 | 2,000 | 1,189 | ||||||
Kennedale Independent School District 5.5% 2/15/29 | 3,335 | 3,568 | ||||||
Killeen Independent School District: | ||||||||
5.25% 2/15/17 | 2,105 | 2,215 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
38 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Killeen Independent School District: – continued | ||||||||
5.25% 2/15/18 | $ 1,325 | $ 1,390 | ||||||
La Joya Independent School District 5.25% 2/15/23 | 2,940 | 3,086 | ||||||
Little Elm Independent School District 5.5% 8/15/21 | 2,540 | 2,676 | ||||||
Lower Colorado River Auth. Rev.: | ||||||||
5.25% 1/1/15 (Escrowed to Maturity) (h) | 6,260 | 6,734 | ||||||
5.25% 5/15/18 (AMBAC Insured) | 2,020 | 2,122 | ||||||
Lower Colorado River Auth. Transmission Contract Rev. | ||||||||
(LCRA Transmission Services Corp. Proj.) Series C: | ||||||||
5.25% 5/15/18 (AMBAC Insured) | 1,000 | 1,055 | ||||||
5.25% 5/15/19 (AMBAC Insured) | 1,000 | 1,054 | ||||||
5.25% 5/15/20 (AMBAC Insured) | 2,000 | 2,106 | ||||||
Lubbock Gen. Oblig. (Wtrwks. Sys. Surplus Proj.) 5% | ||||||||
2/15/17 (FSA Insured) | 2,270 | 2,362 | ||||||
Mansfield Independent School District 5.5% 2/15/18 | 3,855 | 4,113 | ||||||
Mesquite Independent School District: | ||||||||
3.65%, tender 12/1/08 (Liquidity Facility JPMorgan | ||||||||
Chase Bank) (d) | 6,400 | 6,400 | ||||||
5.375% 8/15/11 | 395 | 407 | ||||||
Midlothian Independent School District 0% 2/15/10 | 1,525 | 1,312 | ||||||
Midway Independent School District 0% 8/15/19 | 3,600 | 1,918 | ||||||
Montgomery County Gen. Oblig. Series A, 5.625% | ||||||||
3/1/20 (FSA Insured) | 495 | 530 | ||||||
Navasota Independent School District: | ||||||||
5.25% 8/15/34 (FGIC Insured) | 2,275 | 2,377 | ||||||
5.5% 8/15/25 (FGIC Insured) | 1,675 | 1,803 | ||||||
North Central Health Facilities Dev. Corp. Rev. Series | ||||||||
1997 B, 5.75% 2/15/14 (MBIA Insured) | 5,215 | 5,701 | ||||||
North Forest Independent School District: | ||||||||
Series A, 5% 8/15/17 | 2,020 | 2,120 | ||||||
Series B, 5% 8/15/18 (FSA Insured) | 1,470 | 1,535 | ||||||
Pflugerville Gen. Oblig. 5.5% 8/1/22 (AMBAC Insured) | 1,000 | 1,069 | ||||||
Prosper Independent School District 5.75% 8/15/29 | 1,250 | 1,346 | ||||||
Robstown Independent School District 5.25% 2/15/29 . | 3,165 | 3,304 | ||||||
Rockwall Independent School District: | ||||||||
5.375% 2/15/19 | 1,450 | 1,531 | ||||||
5.375% 2/15/20 | 1,230 | 1,299 | ||||||
5.375% 2/15/21 | 1,560 | 1,645 | ||||||
5.625% 2/15/13 | 1,190 | 1,272 | ||||||
5.625% 2/15/14 | 1,160 | 1,237 | ||||||
Round Rock Independent School District 0% 8/15/11 | ||||||||
(MBIA Insured) | 4,300 | 3,469 |
See accompanying notes which are an integral part of the financial statements.
39 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Sabine River Auth. Poll. Cont. Rev. (Texas Utils. Elec. Co. | ||||||||
Proj.) Series B, 5.75%, tender 11/1/11 (d)(g) | $ 16,000 | $ 16,803 | ||||||
San Antonio Elec. & Gas Sys. Rev.: | ||||||||
Series B: | ||||||||
0% 2/1/10 (Escrowed to Maturity) (h) | 19,000 | 16,403 | ||||||
0% 2/1/12 (Escrowed to Maturity) (h) | 7,000 | 5,529 | ||||||
3.55%, tender 12/1/07 (d) | 7,500 | 7,462 | ||||||
5.375% 2/1/18 (Pre-Refunded to 2/1/12 @ 100) (h) | 5,000 | 5,320 | ||||||
San Antonio Gen. Oblig.: | ||||||||
5.5% 2/1/15 | 1,975 | 2,108 | ||||||
5.5% 2/1/15 (Pre-Refunded to 2/1/12 @ 100) (h) | 25 | 27 | ||||||
San Antonio Wtr. Sys. Rev. 6.5% 5/15/10 (Escrowed to | ||||||||
Maturity) (h) | 440 | 480 | ||||||
San Marcos Consolidated Independent School District: | ||||||||
5% 8/1/15 | 1,200 | 1,259 | ||||||
5% 8/1/17 | 1,175 | 1,223 | ||||||
5% 8/1/19 | 1,450 | 1,499 | ||||||
5% 8/1/22 | 1,680 | 1,726 | ||||||
5% 8/1/23 | 1,760 | 1,807 | ||||||
5.125% 8/1/29 | 13,400 | 13,797 | ||||||
5.625% 8/1/26 | 2,210 | 2,408 | ||||||
Snyder Independent School District: | ||||||||
5.25% 2/15/21 (AMBAC Insured) | 1,035 | 1,096 | ||||||
5.25% 2/15/22 (AMBAC Insured) | 1,090 | 1,152 | ||||||
5.25% 2/15/30 (AMBAC Insured) | 1,750 | 1,826 | ||||||
Socorro Independent School District 5.375% 8/15/18 | 1,090 | 1,151 | ||||||
South San Antonio Independent School District 5% | ||||||||
8/15/17 | 1,025 | 1,061 | ||||||
Southlake Gen. Oblig. Series 2000 D, 5.75% 2/15/21 | ||||||||
(AMBAC Insured) | 2,345 | 2,452 | ||||||
Southwest Higher Ed. Auth. Rev. (Southern Methodist | ||||||||
Univ. Proj.) 5.5% 10/1/17 (AMBAC Insured) | 3,825 | 4,097 | ||||||
Spring Branch Independent School District: | ||||||||
Series 2001, 5.375% 2/1/13 | 3,130 | 3,312 | ||||||
5.375% 2/1/18 | 3,600 | 3,789 | ||||||
Tarrant County Health Facilities Dev. Corp. Hosp. Rev. | ||||||||
5.375% 11/15/20 | 5,750 | 5,875 | ||||||
Texas Gen. Oblig.: | ||||||||
(College Student Ln. Prog.) 5% 8/1/12 (g) | 6,655 | 6,782 | ||||||
5.75% 8/1/26 | 5,000 | 5,332 | ||||||
Texas Muni. Pwr. Agcy. Rev. 0% 9/1/16 (MBIA Insured) | 5,365 | 3,354 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
40 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Texas Pub. Fin. Auth. Bldg. Rev.: | ||||||||
Series 1990: | ||||||||
0% 2/1/12 (MBIA Insured) | $ 4,400 | $ 3,474 | ||||||
0% 2/1/14 (MBIA Insured) | 6,900 | 4,938 | ||||||
0% 2/1/09 (MBIA Insured) | 2,000 | 1,801 | ||||||
Texas Tpk. Auth. Central Tpk. Sys. Rev.: | ||||||||
5.5% 8/15/39 (AMBAC Insured) | 37,550 | 39,493 | ||||||
5.75% 8/15/38 (AMBAC Insured) | 27,550 | 29,583 | ||||||
Texas Tpk. Auth. Dallas North Tollway Rev. 0% 1/1/10 | ||||||||
(Escrowed to Maturity) (h) | 3,000 | 2,599 | ||||||
Texas Wtr. Dev. Board Rev. Series B: | ||||||||
5.375% 7/15/16 | 5,000 | 5,229 | ||||||
5.625% 7/15/21 | 5,900 | 6,189 | ||||||
Trinity River Auth. Rev. (Tarrant County Wtr. Proj.) 5% | ||||||||
2/1/17 (MBIA Insured) | 4,930 | 5,153 | ||||||
Tyler Health Facilities Dev. Corp. Hosp. Rev. (Mother | ||||||||
Frances Hosp. Reg’l. Health Care Ctr. Proj.): | ||||||||
5.75% 7/1/27 | 1,000 | 1,018 | ||||||
6% 7/1/31 | 6,225 | 6,527 | ||||||
Weatherford Independent School District: | ||||||||
Series 2000, 0% 2/15/25 (Pre-Refunded to 2/15/10 | ||||||||
@ 36.782) (h) | 6,155 | 1,951 | ||||||
0% 2/15/22 (Pre-Refunded to 2/15/10 @ | ||||||||
45.084) (h) | 2,980 | 1,158 | ||||||
0% 2/15/26 (Pre-Refunded to 2/15/10 @ 34.41) (h) | 2,985 | 885 | ||||||
0% 2/15/33 | 6,985 | 1,773 | ||||||
White Settlement Independent School District: | ||||||||
5.75% 8/15/30 | 2,890 | 3,110 | ||||||
5.75% 8/15/34 | 3,000 | 3,221 | ||||||
Wichita Falls Wtr. & Swr. Rev. Series 2001, 5.375% | ||||||||
8/1/24 (AMBAC Insured) | 3,000 | 3,133 | ||||||
Williamson County Gen. Oblig.: | ||||||||
5.5% 2/15/18 (FSA Insured) | 60 | 63 | ||||||
5.5% 2/15/20 (FSA Insured) | 65 | 69 | ||||||
5.5% 2/15/20 (Pre-Refunded to 2/15/11 @ 100) (h) | 4,455 | 4,743 | ||||||
582,115 | ||||||||
Utah 1.1% | ||||||||
Intermountain Pwr. Agcy. Pwr. Supply Rev.: | ||||||||
Series A: | ||||||||
6% 7/1/16 (AMBAC Insured) | 5,640 | 5,867 | ||||||
6% 7/1/16 (Escrowed to Maturity) (h) | 9,205 | 9,508 |
See accompanying notes which are an integral part of the financial statements.
41 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Utah – continued | ||||||||||
Intermountain Pwr. Agcy. Pwr. Supply Rev.: – continued | ||||||||||
Series B, 5.75% 7/1/16 (MBIA Insured) | $ 11,230 | $ 11,654 | ||||||||
Salt Lake City Hosp. Rev. (Intermountain Health Care | ||||||||||
Hosp., Inc. Proj.) Series A, 8.125% 5/15/15 | ||||||||||
(Escrowed to Maturity) (h) | 2,975 | 3,484 | ||||||||
Salt Lake County Hosp. Rev. (IHC Health Svcs., Inc. Proj.) | ||||||||||
5.5% 5/15/11 (AMBAC Insured) | 9,000 | 9,545 | ||||||||
Utah Associated Muni. Pwr. Sys. Rev. (Payson Pwr. Proj.) | ||||||||||
Series A: | ||||||||||
5.25% 4/1/16 (FSA Insured) | 3,590 | 3,787 | ||||||||
5.25% 4/1/17 (FSA Insured) | 4,335 | 4,563 | ||||||||
48,408 | ||||||||||
Vermont – 0.3% | ||||||||||
Vermont Edl. & Health Bldg. Fing. Agcy. Rev. (Fletcher | ||||||||||
Allen Health Care, Inc. Proj.): | ||||||||||
Series 2000 A, 6.125% 12/1/27 (AMBAC Insured) | 8,600 | 9,309 | ||||||||
Series A, 5.75% 12/1/18 (AMBAC Insured) | 3,100 | 3,317 | ||||||||
12,626 | ||||||||||
Virginia – 0.3% | ||||||||||
Amelia County Indl. Dev. Auth. Solid Waste Disp. Rev. | ||||||||||
(Waste Mgmt., Inc. Proj.) 4.05%, tender 4/1/08 (d)(g) | 3,900 | 3,871 | ||||||||
Peninsula Ports Auth. Hosp. Facilities Rev. (Whittaker | ||||||||||
Memorial Hosp. Proj.) 8.7% 8/1/23 | 1,450 | 1,665 | ||||||||
Virginia Beach Dev. Auth. Hosp. Facilities Rev. (Virginia | ||||||||||
Beach Gen. Hosp. Proj.): | ||||||||||
6% 2/15/12 (AMBAC Insured) | 2,150 | 2,353 | ||||||||
6% 2/15/13 (AMBAC Insured) | 1,460 | 1,614 | ||||||||
Virginia Hsg. Dev. Auth. Multi-family Hsg. Rev. Series I, | ||||||||||
5.95% 5/1/09 (g) | 1,890 | 1,923 | ||||||||
11,426 | ||||||||||
Washington 5.4% | ||||||||||
Chelan County Pub. Util. District #1 Columbia River-Rock | ||||||||||
Island Hydro-Elec. Sys. Rev. Series A: | ||||||||||
0% 6/1/17 (MBIA Insured) | 7,200 | 4,316 | ||||||||
0% 6/1/29 (MBIA Insured) | 14,995 | 4,721 | ||||||||
Chelan County Pub. Util. District #1 Rev. Series 2005 A, | ||||||||||
5.125%, tender 7/1/15 (FGIC Insured) (d)(g) | 2,430 | 2,500 | ||||||||
Chelan County School District #246, Wenatchee 5.5% | ||||||||||
12/1/19 (FSA Insured) | 3,535 | 3,765 | ||||||||
Clark County School District #37, Vancouver Series C, | ||||||||||
0% 12/1/19 (FGIC Insured) | 2,030 | 1,075 | ||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 42 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Washington – continued | ||||||||
Douglas County Pub. Util. District #1 Wells Hydroelectric | ||||||||
Rev. Series A, 8.75% 9/1/18 | $ 2,790 | $ 2,977 | ||||||
Energy Northwest Elec. Rev.: | ||||||||
(#1 Proj.) Series 2006 A, 5% 7/1/15 | 8,000 | 8,414 | ||||||
(#3 Proj.) Series B, 6% 7/1/16 (AMBAC Insured) | 28,000 | 30,721 | ||||||
Grant County Pub. Util. District #2 Wanapum Hydro | ||||||||
Elec. Rev. Series B: | ||||||||
5.25% 1/1/18 (FGIC Insured) (g) | 1,590 | 1,646 | ||||||
5.25% 1/1/20 (FGIC Insured) (g) | 1,760 | 1,806 | ||||||
5.25% 1/1/23 (FGIC Insured) (g) | 2,055 | 2,093 | ||||||
King County Swr. Rev. Series B, 5.125% 1/1/33 (FSA | ||||||||
Insured) | 22,390 | 22,970 | ||||||
Mead School District #354, Spokane County 5.375% | ||||||||
12/1/19 (FSA Insured) | 2,575 | 2,744 | ||||||
Pierce County School District #10 Tacoma Series A, 5% | ||||||||
12/1/18 (FSA Insured) | 4,000 | 4,170 | ||||||
Port of Seattle Rev.: | ||||||||
Series B: | ||||||||
5.5% 9/1/09 (FGIC Insured) (g) | 3,800 | 3,847 | ||||||
5.6% 9/1/10 (FGIC Insured) (g) | 4,005 | 4,055 | ||||||
Series D: | ||||||||
5.75% 11/1/13 (FGIC Insured) (g) | 1,500 | 1,620 | ||||||
5.75% 11/1/14 (FGIC Insured) (g) | 3,055 | 3,296 | ||||||
5.75% 11/1/16 (FGIC Insured) (g) | 2,250 | 2,409 | ||||||
Snohomish County Pub. Hosp. District #2 (Stevens Health | ||||||||
Care Proj.) 4.5% 12/1/11 (FGIC Insured) | 1,155 | 1,175 | ||||||
Snohomish County School District #2, Everett 5.5% | ||||||||
12/1/16 (FSA Insured) | 1,650 | 1,766 | ||||||
Snohomish County School District #4, Lake Stevens | ||||||||
5.125% 12/1/19 (FGIC Insured) | 1,875 | 1,964 | ||||||
Spokane Pub. Facilities District Hotel/Motel Tax & | ||||||||
Sales/Use Tax Rev. 5.75% 12/1/19 (MBIA Insured) | 2,000 | 2,211 | ||||||
Thurston & Pierce Counties Cmnty. Schools 5.25% | ||||||||
12/1/17 (FSA Insured) | 2,000 | 2,107 | ||||||
Washington Gen. Oblig.: | ||||||||
Series 2001 C, 5.25% 1/1/16 | 7,070 | 7,415 | ||||||
Series C, 5.25% 1/1/26 (FSA Insured) | 15,800 | 16,498 | ||||||
Series R 97A: | ||||||||
0% 7/1/17 | 7,045 | 4,215 | ||||||
0% 7/1/19 (MBIA Insured) | 9,100 | 4,915 | ||||||
Washington Health Care Facilities Auth. Rev. | ||||||||
(Providence Health Systems Proj.) Series A, 5.5% | ||||||||
10/1/12 (MBIA Insured) | 5,455 | 5,759 |
See accompanying notes which are an integral part of the financial statements.
43 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Washington – continued | ||||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #1 Rev.: | ||||||||
(Bonneville Pwr. Administration Proj.) Series B, 7% | ||||||||
7/1/08 | $ 1,000 | $ 1,057 | ||||||
Series A, 7% 7/1/08 | 310 | 328 | ||||||
Series B, 5.125% 7/1/13 | 14,600 | 15,057 | ||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #2 Rev.: | ||||||||
Series A, 0% 7/1/11 (Escrowed to Maturity) (h) | 1,350 | 1,095 | ||||||
5.4% 7/1/12 | 56,550 | 60,417 | ||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #3 Rev.: | ||||||||
Series A, 0% 7/1/12 (MBIA Insured) | 4,000 | 3,072 | ||||||
0% 7/1/10 (MBIA Insured) | 2,800 | 2,372 | ||||||
240,568 | ||||||||
West Virginia – 0.1% | ||||||||
West Virginia Wtr. Dev. Auth. Infrastructure Rev. | ||||||||
Series A, 5.625% 10/1/26 (Pre-Refunded to | ||||||||
10/1/10 @ 100) (h) | 5,000 | 5,331 | ||||||
Wisconsin – 0.8% | ||||||||
Badger Tobacco Asset Securitization Corp. 6.125% | ||||||||
6/1/27 | 5,660 | 5,998 | ||||||
Douglas County Gen. Oblig. 5.5% 2/1/19 (FGIC | ||||||||
Insured) | 1,035 | 1,096 | ||||||
Evansville Cmnty. School District 5% 4/1/15 (FSA | ||||||||
Insured) | 2,200 | 2,314 | ||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: | ||||||||
(Wheaton Franciscan Svcs., Inc. Proj.): | ||||||||
Series A: | ||||||||
5.5% 8/15/15 | 1,480 | 1,552 | ||||||
5.5% 8/15/16 | 1,545 | 1,616 | ||||||
5.75% 8/15/30 | 14,250 | 14,959 | ||||||
6.25% 8/15/22 | 4,300 | 4,656 | ||||||
Series A, 5.375% 2/15/34 | 3,250 | 3,290 | ||||||
35,481 | ||||||||
Wyoming – 0.1% | ||||||||
Gillette Spl. Purp. Wtr. & Swr. Utils. Sys. Rev. 7.7% | ||||||||
12/1/10 (Escrowed to Maturity) (h) | 4,960 | 5,583 | ||||||
TOTAL MUNICIPAL BONDS | ||||||||
(Cost $4,335,337) | 4,404,175 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
44 |
Money Market Funds 0.0% | ||||||||
Shares | Value (Note 1) | |||||||
(000s) | ||||||||
Fidelity Municipal Cash Central Fund, 3.77% (e)(f) | ||||||||
(Cost $139) | 138,900 | $ 139 | ||||||
TOTAL INVESTMENT PORTFOLIO 99.3% | ||||||||
(Cost $4,335,476) | 4,404,314 | |||||||
NET OTHER ASSETS – 0.7% | 31,397 | |||||||
NET ASSETS 100% | $ 4,435,711 |
Legend (a) Security 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. (b) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. (c) Security or a portion of the security purchased on a delayed delivery or when-issued basis. (d) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (e) Information in this report regarding holdings by state and security types does not reflect the holdings of the Fidelity Municipal Cash Central Fund. (f) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete unaudited listing of the fund’s holdings as of its most recent quarter end is available upon request. |
(g) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (h) Security collateralized by an amount sufficient to pay interest and principal. (i) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $3,861,000 or 0.1% of net assets. |
Additional information on each holding is as follows:
Acquisition | Acquisition | |||||
Security | Date | Cost (000s) | ||||
Massachusetts | ||||||
Health & Edl. | ||||||
Facilities Auth. | ||||||
Rev. (Blood | ||||||
Research Institute | ||||||
Proj.) Series A, | ||||||
6.5% 2/1/22 | 9/3/92 | $ 3,634 |
See accompanying notes which are an integral part of the financial statements.
45 Semiannual Report
Investments (Unaudited) continued
Affiliated Central Funds
Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:
Fund | Income earned | |||
(Amounts in thousands) | ||||
Fidelity Municipal Cash Central Fund | $ 2 |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 36.0% | |
Electric Utilities | 11.4% | |
Escrowed/Pre Refunded | 9.4% | |
Transportation | 9.9% | |
Health Care | 8.8% | |
Special Tax | 8.3% | |
Water & Sewer | 7.7% | |
Others* (individually less than 5%) | 8.5% | |
100.0% |
* Includes net other assets
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 46
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
Amounts in thousands (except per share amount) | June 30, 2006 (Unaudited) | |||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $4,335,337) | $ 4,404,175 | |||||
Affiliated Central Funds (cost $139) | 139 | |||||
Total Investments (cost $4,335,476) | $ 4,404,314 | |||||
Cash | 8,553 | |||||
Receivable for fund shares sold | 1,822 | |||||
Interest receivable | 59,166 | |||||
Prepaid expenses | 9 | |||||
Other receivables | 97 | |||||
Total assets | 4,473,961 | |||||
Liabilities | ||||||
Payable for investments purchased | ||||||
Regular delivery | $ 8,659 | |||||
Delayed delivery | 19,110 | |||||
Payable for fund shares redeemed | 3,313 | |||||
Distributions payable | 4,967 | |||||
Accrued management fee | 1,376 | |||||
Other affiliated payables | 711 | |||||
Other payables and accrued expenses | 114 | |||||
Total liabilities | 38,250 | |||||
Net Assets | $ 4,435,711 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 4,337,412 | |||||
Undistributed net investment income | 2,376 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 27,085 | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | 68,838 | |||||
Net Assets, for 353,175 shares outstanding | $ 4,435,711 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($4,435,711 ÷ 353,175 shares) | $ 12.56 |
See accompanying notes which are an integral part of the financial statements.
47 Semiannual Report
Financial Statements continued | ||||||
Statement of Operations | ||||||
Amounts in thousands | Six months ended June 30, 2006 (Unaudited) | |||||
Investment Income | ||||||
Interest | $ 106,670 | |||||
Income from affiliated Central Funds | 2 | |||||
Total income | 106,672 | |||||
Expenses | ||||||
Management fee | $ 8,562 | |||||
Transfer agent fees | 1,800 | |||||
Accounting fees and expenses | 310 | |||||
Independent trustees’ compensation | 9 | |||||
Custodian fees and expenses | 36 | |||||
Registration fees | 62 | |||||
Audit | 43 | |||||
Legal | 4 | |||||
Miscellaneous | 22 | |||||
Total expenses before reductions | 10,848 | |||||
Expense reductions | (473) | 10,375 | ||||
Net investment income | 96,297 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 28,619 | |||||
Futures contracts | 635 | |||||
Total net realized gain (loss) | 29,254 | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (118,644) | |||||
Net gain (loss) | (89,390) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 6,907 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
48 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
Amounts in thousands | (Unaudited) | 2005 | ||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 96,297 | $ 197,583 | ||||||
Net realized gain (loss) | 29,254 | 68,032 | ||||||
Change in net unrealized appreciation (depreciation) . | (118,644) | (95,214) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 6,907 | 170,401 | ||||||
Distributions to shareholders from net investment income . | (95,856) | (196,839) | ||||||
Distributions to shareholders from net realized gain | (7,341) | (69,217) | ||||||
Total distributions | (103,197) | (266,056) | ||||||
Share transactions | ||||||||
Proceeds from sales of shares | 333,303 | 594,138 | ||||||
Reinvestment of distributions | 68,906 | 179,128 | ||||||
Cost of shares redeemed | (546,424) | (631,498) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
share transactions | (144,215) | 141,768 | ||||||
Redemption fees | 11 | 29 | ||||||
Total increase (decrease) in net assets | (240,494) | 46,142 | ||||||
Net Assets | ||||||||
Beginning of period | 4,676,205 | 4,630,063 | ||||||
End of period (including undistributed net investment | ||||||||
income of $2,376 and undistributed net investment | ||||||||
income of $2,276, respectively) | $ 4,435,711 | $ 4,676,205 | ||||||
Other Information | ||||||||
Shares | ||||||||
Sold | 26,168 | 45,559 | ||||||
Issued in reinvestment of distributions | 5,423 | 13,796 | ||||||
Redeemed | (43,055) | (48,528) | ||||||
Net increase (decrease) | (11,464) | 10,827 |
See accompanying notes which are an integral part of the financial statements.
49 Semiannual Report
Financial Highlights | ||||||||||||
Six months ended | ||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Selected Per Share Data | ||||||||||||
Net asset value, | ||||||||||||
beginning of period . | $ 12.82 | $ 13.09 | $ 13.18 | $ 13.22 | $ 12.68 | $ 12.70 | ||||||
Income from Investment | ||||||||||||
Operations | ||||||||||||
Net investment | ||||||||||||
incomeD | .265 | .549 | .571 | .585 | .603 | .617 | ||||||
Net realized and | ||||||||||||
unrealized gain | ||||||||||||
(loss) | (.241) | (.080) | .035 | .162 | .697 | .011 | ||||||
Total from investment | ||||||||||||
operations | .024 | .469 | .606 | .747 | 1.300 | .628 | ||||||
Distributions from net | ||||||||||||
investment income | (.264) | (.547) | (.571) | (.585) | (.600) | (.613) | ||||||
Distributions from net | ||||||||||||
realized gain | (.020) | (.192) | (.125) | (.202) | (.160) | (.035) | ||||||
Total distributions | (.284) | (.739) | (.696) | (.787) | (.760) | (.648) | ||||||
Redemption fees added | ||||||||||||
to paid in capitalD,F | — | — | — | — | — | — | ||||||
Net asset value, | ||||||||||||
end of period | $ 12.56 | $ 12.82 | $ 13.09 | $ 13.18 | $ 13.22 | $ 12.68 | ||||||
Total ReturnB,C | .18% | 3.66% | 4.73% | 5.80% | 10.48% | 5.00% | ||||||
Ratios to Average Net AssetsE | ||||||||||||
Expenses before | ||||||||||||
reductions | .47%A | .47% | .47% | .48% | .48% | .47% | ||||||
Expenses net of fee | ||||||||||||
waivers, if any | .47%A | .47% | .47% | .48% | .48% | .47% | ||||||
Expenses net of all | ||||||||||||
reductions | .45%A | .45% | .47% | .47% | .46% | .43% | ||||||
Net investment income | 4.20%A | 4.22% | 4.36% | 4.42% | 4.62% | 4.80% | ||||||
Supplemental Data | ||||||||||||
Net assets, | ||||||||||||
end of period | ||||||||||||
(in millions) | $ 4,436 | $ 4,676 | $ 4,630 | $ 4,784 | $ 4,801 | $ 4,527 | ||||||
Portfolio turnover rate | 26%A | 25% | 20% | 23% | 23% | 27% |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
50 |
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Municipal Income Fund (the Fund) is a fund of Fidelity Municipal Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company organized as a Massachusetts business trust. The Fund may invest in affiliated money market central funds (Money Market Central Funds), which is an open end investment company available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require manage ment 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. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accor dance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Invest ments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quota tions are not readily available are valued at amortized cost, which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
51 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
(Amounts in thousands except ratios) |
1. Significant Accounting Policies continued |
Income Tax Information and Distributions to Shareholders continued |
Dividends are declared daily and paid monthly from net investment income. Distribu tions from realized gains, if any, 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 claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount and losses deferred due to futures transactions.
The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 113,526 | |||
Unrealized depreciation | (41,500) | |||
Net unrealized appreciation (depreciation) | $ 72,026 | |||
Cost for federal income tax purposes | $ 4,332,288 |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an inter pretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund’s net assets and results of operations.
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
Semiannual Report |
52 |
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in the Fund’s Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underly ing securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Futures Contracts. The Fund may use futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. Buying futures tends to increase a fund’s exposure to the underlying instrument, while selling futures tends to decrease a fund’s exposure to the underlying instrument or hedge other fund investments. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount (“initial margin”) equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses. Realized gains (losses) are recorded upon the expiration or closing of the futures contract. Securities deposited to meet margin requirements are identified in the Schedule of Investments. Losses may arise from changes in the value of the underlying instruments or if the counterparties do not perform under the contract’s terms. 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 transac tions 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 at the end of the Fund’s Schedule of Investments.
53 Semiannual Report
Notes to Financial Statements (Unaudited) continued
(Amounts in thousands except ratios)
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, aggregated $600,951 and $772,232, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment manage ment related services for which the Fund pays a monthly management fee. The manage ment fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent and shareholder servicing agent for the Fund. Citibank has entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the activities associated with the Fund’s transfer and shareholder servicing agent and accounting functions. The Fund pays account fees and asset based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. The accounting fee is based on the level of average net assets for the month. For the period, the transfer agent fees were equivalent to an annualized rate of .08% of average net assets.
Affiliated Central Funds. The Fund may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
The Money Market Central Funds do not pay a management fee.
5. Committed Line of Credit. |
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the “line of credit”) to be utilized for temporary or emergency purposes to fund share holder redemptions or for other short term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $5 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Semiannual Report |
54 |
6. Expense Reductions. |
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 $36 and $437, respectively.
7. Other. |
The Fund’s organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
55 Semiannual Report
Proxy Voting Results
A special meeting of the fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
Semiannual Report 56
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Municipal Income Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, consid ered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s management contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day manage ment of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also consid ered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s man agement contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately
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benefited from any such economies of scale, and whether there is potential for realiza tion of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund’s Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such com mittee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for the fund, the Board ulti mately reached a determination, with the assistance of fund counsel and Independent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity’s fidu ciary duty under applicable law. In addition to evaluating the specific factors noted
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above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the background of the fund’s portfolio manager and the fund’s investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for the fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund’s compliance policies and procedures.
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to
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account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class avail able to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed the fund’s absolute investment performance, as well as the fund’s relative investment performance measured against (i) a broad based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, the fund’s cumulative total returns, the cumulative total returns of a broad based securities market index (“bench mark”), and a range of cumulative total returns of a peer group of mutual funds identi fied by Lipper Inc. as having an investment objective similar to that of the fund. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percen tile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the fund.
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![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix61x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the first quartile for all the periods shown. The Board also stated that the relative investment performance of the fund compared favorably to its benchmark for all the periods shown.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative perfor mance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund’s shareholders, particularly in light of the Board’s view that the fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee charac teristics. Combining Lipper investment objective categories aids the Board’s manage ment fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for
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performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund’s. For example, a TMG % of 8% means that 92% of the funds in the Total Mapped Group had higher management fees than the fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund’s management fee ranked, is also included in the chart and considered by the Board.
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The Board noted that the fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board concluded that the fund’s management fee was fair and reasonable in light of the ser vices that the fund receives and the other factors considered.
In its review of the fund’s total expenses, the Board considered the fund’s management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also consid ered current and historical total expenses of the fund compared to competitive fund
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median expenses. The fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the fund’s total expenses ranked below its competitive median for 2005.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the fund’s total expenses were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the fund’s business.
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The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund’s Advisory Contracts should be renewed.
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Managing Your Investments
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix65x1.jpg)
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix65x2.jpg)
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/muniincsemix65x3.jpg)
* 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 guar anteed 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.
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To Visit Fidelity
For directions and hours, please call 1-800-544-9797. Arizona 7001 West Ray Road Chandler, AZ 15445 N. Scottsdale Road Scottsdale, AZ California 815 East Birch Street Brea, CA 1411 Chapin Avenue Burlingame, CA 851 East Hamilton Avenue Campbell, CA 19200 Von Karman Avenue Irvine, CA 601 Larkspur Landing Circle Larkspur, CA 10100 Santa Monica Blvd. Los Angeles, CA 27101 Puerta Real Mission Viejo, CA 73 575 El Paseo Palm Desert, CA 251 University Avenue Palo Alto, CA 123 South Lake Avenue Pasadena, CA 16995 Bernardo Ctr. Drive Rancho Bernardo, CA 1220 Roseville Parkway Roseville, CA 1740 Arden Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 11943 El Camino Real San Diego, CA 8 Montgomery Street San Francisco, CA 3793 State Street Santa Barbara, CA 1200 Wilshire Boulevard Santa Monica, CA 21701 Hawthorne Boulevard Torrance, CA |
2001 North Main Street Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA Colorado 1625 Broadway Denver, CO 9185 Westview Road Lone Tree, CO Connecticut 48 West Putnam Avenue Greenwich, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT Delaware 400 Delaware Avenue Wilmington, DE Florida 4400 N. Federal Highway Boca Raton, FL 121 Alhambra Plaza Coral Gables, FL 2948 N. Federal Highway Ft. Lauderdale, FL 4671 Town Center Parkway Jacksonville, FL 1907 West State Road 434 Longwood, FL 8880 Tamiami Trail, North Naples, FL 3501 PGA Boulevard Palm Beach Gardens, FL 3550 Tamiami Trail, South Sarasota, FL 1502 N. Westshore Blvd. Tampa, FL 2465 State Road 7 Wellington, FL |
Georgia 3445 Peachtree Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA Illinois One North LaSalle Street Chicago, IL 875 North Michigan Ave. Chicago, IL 1415 West 22nd Street Oak Brook, IL 1572 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 7315 Wisconsin Avenue Bethesda, MD One W. Pennsylvania Ave. Towson, MD Massachusetts 801 Boylston Street Boston, MA 155 Congress Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 238 Main Street Cambridge, MA 405 Cochituate Road Framingham, MA 416 Belmont Street Worcester, MA |
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Michigan 500 E. Eisenhower Pkwy. Ann Arbor, MI 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 1524 South Lindbergh Blvd. St. Louis, MO Nevada 2225 Village Walk Drive Henderson, NV New Jersey 150 Essex Street Millburn, NJ 56 South Street Morristown, NJ 396 Route 17, North Paramus, NJ 3518 Route 1 North Princeton, NJ 530 Broad Street Shrewsbury, NJ New York 1055 Franklin Avenue Garden City, NY 37 West Jericho Turnpike Huntington Station, NY 1271 Avenue of the Americas New York, NY 980 Madison Avenue New York, NY 61 Broadway New York, NY 350 Park Avenue New York, NY 200 Fifth Avenue New York, NY 733 Third Avenue New York, NY 11 Penn Plaza New York, NY |
2070 Broadway New York, NY 1075 Northern Blvd. Roslyn, NY 799 Central Park Avenue Scarsdale, NY North Carolina 4611 Sharon Road Charlotte, NC 7011 Fayetteville Road Durham, NC Ohio 3805 Edwards Road Cincinnati, OH 1324 Polaris Parkway Columbus, OH 28699 Chagrin Boulevard Woodmere Village, OH Oregon 7493 SW Bridgeport Road 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 4001 Northwest Parkway Dallas, TX 12532 Memorial Drive Houston, TX 2701 Drexel Drive Houston, TX 6560 Fannin Street Houston, TX 6500 N. MacArthur Blvd. Irving, TX |
6005 West Park Boulevard Plano, TX 14100 San Pedro San Antonio, TX 1576 East Southlake Blvd. Southlake, TX 19740 IH 45 North Spring, TX Utah 279 West South Temple 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
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To Write Fidelity
We’ll give your correspondence immediate attention and send you written confirmation upon completion of your request.
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(such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 |
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Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
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Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Adviser Fidelity Investments Money Management, Inc. Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank N.A. New York NY Fidelity Service Company, Inc. Boston, MA Custodian Citibank N.A. New York NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24-Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
Telephone(FAST® ) (automated phone logo) | 1-800-544-5555 | |
(automated phone logo) Automated line for quickest service |
HIY USAN-0806 1.787789.103 |
Fidelity® Ohio Municipal Income Fund and Fidelity Ohio Municipal Money Market Fund |
Semiannual Report June 30, 2006 |
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Contents | ||||
Chairman’s Message | 4 | Ned Johnson’s message to shareholders | ||
Shareholder Expense | 5 | An example of shareholder expenses. | ||
Example | ||||
Fidelity Ohio Municipal Income Fund | ||||
Investment Changes | 7 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 8 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 16 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Fidelity Ohio Municipal Money Market Fund | ||||
Investment Changes | 20 | A summary of major shifts in the fund’s | ||
investments over the past six months and | ||||
one year. | ||||
Investments | 21 | A complete list of the fund’s investments. | ||
Financial Statements | 31 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 35 | Notes to the Financial Statements | ||
Proxy Voting Results | 40 | |||
Board Approval of | 42 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
Semiannual Report 2
This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the funds nor Fidelity Distributors Corporation is a bank. |
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Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report 4
4
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
5 Semiannual Report
Shareholder Expense Example continued | ||||||||||
Expenses Paid | ||||||||||
Beginning | Ending | During Period* | ||||||||
Account Value | Account Value | January 1, 2006 | ||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||
Fidelity Ohio Municipal Income | ||||||||||
Fund | ||||||||||
Actual | $ 1,000.00 | $ 998.10 | $ 2.48 | |||||||
HypotheticalA | $ 1,000.00 | $ 1,022.32 | $ 2.51 | |||||||
Fidelity Ohio Municipal Money | ||||||||||
Market Fund | ||||||||||
Actual | $ 1,000.00 | $ 1,014.10 | $ 2.70 | |||||||
HypotheticalA | $ 1,000.00 | $ 1,022.12 | $ 2.71 | |||||||
A 5% return per year before expenses |
* Expenses are equal to each Fund’s annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Fidelity Ohio Municipal Income Fund | .50% | |
Fidelity Ohio Municipal Money Market Fund | .54% |
Semiannual Report |
6 |
Fidelity Ohio Municipal Income Fund | ||||
Investment Changes | ||||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 43.0 | 42.3 | ||
Water & Sewer | 14.5 | 13.0 | ||
Education | 12.8 | 11.8 | ||
Health Care | 6.9 | 7.4 | ||
Escrowed/Pre Refunded | 6.3 | 10.0 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 13.4 | 13.2 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 6.6 | 6.6 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/ohiomunix7x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
7 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||
Investments June 30, 2006 (Unaudited) | ||||
Showing Percentage of Net Assets | ||||
Municipal Bonds 98.2% | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Guam 0.1% | ||||
Guam Wtrwks. Auth. Wtr. and Wastewtr. Sys. Rev. | ||||
5.875% 7/1/35 | $ 470,000 | $ 489,651 | ||
Ohio – 95.8% | ||||
Adams County Valley Local School District (Adams & | ||||
Highland County Proj.) 5.25% 12/1/21 (MBIA | ||||
Insured) | 2,000,000 | 2,032,260 | ||
Akron City Non-tax Rev. Econ. Dev. Series 1997, 6% | ||||
12/1/12 (MBIA Insured) | 1,250,000 | 1,382,500 | ||
Akron Ctfs. of Prtn. 5% 12/1/15 | 1,475,000 | 1,547,305 | ||
Akron Wtrwks. Rev. 5.25% 12/1/19 (MBIA Insured) | 1,630,000 | 1,722,340 | ||
Avon Lake City School District 5% 12/1/14 (MBIA | ||||
Insured) | 1,205,000 | 1,272,613 | ||
Brookville Local School District 5.25% 12/1/20 | ||||
(FSA Insured) | 1,875,000 | 1,984,406 | ||
Buckeye Valley Local School District Delaware County | ||||
Series A, 6.85% 12/1/15 (MBIA Insured) | 2,500,000 | 2,827,100 | ||
Butler County Gen. Oblig. 5.25% 12/1/16 | ||||
(MBIA Insured) | 1,820,000 | 1,935,679 | ||
Butler County Sales Tax (Govt. Svcs. Ctr. Proj.) Series A, | ||||
5% 12/15/16 (AMBAC Insured) | 2,455,000 | 2,564,272 | ||
Canal Winchester Local School District 5% 12/1/18 | ||||
(MBIA Insured) | 2,035,000 | 2,129,709 | ||
Chagrin Falls Exempted Village School District 5.25% | ||||
12/1/19 (MBIA Insured) | 1,915,000 | 2,024,098 | ||
Cincinnati City School District: | ||||
5.25% 6/1/16 (FSA Insured) | 1,500,000 | 1,592,745 | ||
5.25% 12/1/17 (FSA Insured) | 2,000,000 | 2,127,120 | ||
Cincinnati Gen. Oblig. 5.375% 12/1/20 | 2,000,000 | 2,106,620 | ||
Cincinnati Student Ln. Fdg. Corp. Student Ln. Rev. | ||||
Series A, 7.25% 2/1/08 (c) | 4,000,000 | 4,007,640 | ||
Cincinnati Wtr. Sys. Rev. Series 2001, 5.5% 12/1/17 | 2,000,000 | 2,119,500 | ||
Cleveland Arpt. Sys. Rev. Series A, 5.5% 1/1/08 | ||||
(FSA Insured) (c) | 1,500,000 | 1,532,580 | ||
Cleveland Muni. School District: | ||||
5.25% 12/1/17 (FSA Insured) | 2,215,000 | 2,350,071 | ||
5.25% 12/1/19 (FSA Insured) | 1,045,000 | 1,109,435 | ||
Cleveland Pub. Pwr. Sys. Rev. (First Mtg. Prog.) Series A: | ||||
0% 11/15/10 (MBIA Insured) | 2,685,000 | 2,227,718 | ||
0% 11/15/11 (MBIA Insured) | 2,685,000 | 2,129,823 | ||
Cleveland State Univ. Gen. Receipts Series 2003 A, 5% | ||||
6/1/18 (FGIC Insured) | 2,490,000 | 2,572,021 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 8
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Ohio – continued | ||||||||
Cleveland Wtrwks. Rev.: | ||||||||
(First Mtg. Prog.): | ||||||||
Series G, 5.5% 1/1/13 (MBIA Insured) | $ 2,450,000 | $ 2,584,456 | ||||||
Series H, 5.75% 1/1/16 (MBIA Insured) | 45,000 | 45,893 | ||||||
Series I: | ||||||||
5% 1/1/28 (FSA Insured) | 25,000 | 25,396 | ||||||
5% 1/1/28 (Pre-Refunded to 1/1/08 @ 101) (d) | 25,000 | 25,673 | ||||||
Columbus City School District: | ||||||||
5% 12/1/31 (FGIC Insured) | 6,045,000 | 6,147,040 | ||||||
5.25% 12/1/25 (FSA Insured) | 3,780,000 | 3,965,598 | ||||||
Cuyahoga County Gen. Oblig.: | ||||||||
Series A: | ||||||||
0% 10/1/09 (MBIA Insured) | 4,200,000 | 3,672,564 | ||||||
0% 10/1/11 (MBIA Insured) | 2,400,000 | 1,924,656 | ||||||
0% 10/1/12 (MBIA Insured) | 1,405,000 | 1,074,966 | ||||||
5% 12/1/19 | 3,000,000 | 3,162,000 | ||||||
5.75% 12/1/12 (Pre-Refunded to 12/1/10 @ | ||||||||
100) (d) | 1,950,000 | 2,089,679 | ||||||
5.75% 12/1/14 (Pre-Refunded to 12/1/10 @ | ||||||||
100) (d) | 1,460,000 | 1,564,580 | ||||||
Erie County Gen. Oblig. 5.5% 12/1/18 (FSA Insured) | 1,265,000 | 1,362,228 | ||||||
Fairfield City School District 7.45% 12/1/14 (FGIC | ||||||||
Insured) | 1,000,000 | 1,183,130 | ||||||
Fairless Local School District 5% 12/1/32 (FSA Insured) | 3,300,000 | 3,363,327 | ||||||
Fairview Park City School District Gen. Oblig. 5% | ||||||||
12/1/33 (MBIA Insured) | 4,350,000 | 4,434,347 | ||||||
Fairview Park Gen. Oblig. 5% 12/1/30 (MBIA Insured) | 3,750,000 | 3,828,825 | ||||||
Franklin County Convention Facilities Auth. Tax & Lease | ||||||||
Rev. 5.25% 12/1/19 (AMBAC Insured) | 4,000,000 | 4,203,680 | ||||||
Franklin County Hosp. Rev. 5.5% 5/1/13 (Pre-Refunded | ||||||||
to 5/1/11 @ 101) (d) | 1,130,000 | 1,215,473 | ||||||
Franklin County Rev. (OCLC Online Computer Library | ||||||||
Ctr., Inc. Proj.) 5% 4/15/12 | 2,505,000 | 2,570,481 | ||||||
Gallia County Hosp. Facilities Rev. (Holzer Med. Ctr. | ||||||||
Proj.) 5.125% 10/1/13 (AMBAC Insured) | 3,000,000 | 3,101,400 | ||||||
Greene County Swr. Sys. Rev. 0% 12/1/09 (AMBAC | ||||||||
Insured) | 775,000 | 673,010 | ||||||
Hamilton County Convention Facilities Auth. Rev.: | ||||||||
5% 12/1/17 (FGIC Insured) | 1,985,000 | 2,071,784 | ||||||
5% 12/1/18 (FGIC Insured) | 1,075,000 | 1,118,344 | ||||||
5% 12/1/19 (FGIC Insured) | 2,190,000 | 2,275,344 | ||||||
5% 12/1/19 (FGIC Insured) | 1,130,000 | 1,174,036 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Ohio – continued | ||||||||
Hamilton County Econ. Dev. Rev. (King Highland Cmnty. | ||||||||
Urban Redev. Corp. Proj.) Series A, 5% 6/1/17 | ||||||||
(MBIA Insured) (a) | $ 1,070,000 | $ 1,120,258 | ||||||
Hamilton County Hosp. Facilities Rev. (Children’s Hosp. | ||||||||
Med. Ctr. Proj.) Series J: | ||||||||
5.25% 5/15/15 (FGIC Insured) | 1,835,000 | 1,945,082 | ||||||
5.25% 5/15/17 (FGIC Insured) | 2,585,000 | 2,724,228 | ||||||
5.25% 5/15/18 (FGIC Insured) | 2,720,000 | 2,855,456 | ||||||
Hamilton County Sales Tax Series B, 5.25% 12/1/32 | ||||||||
(AMBAC Insured) | 4,750,000 | 4,909,743 | ||||||
Hamilton Wtrwks. Rev. 5% 10/15/16 (MBIA Insured) | 1,000,000 | 1,043,900 | ||||||
Hilliard Gen. Oblig. 5% 12/1/18 (MBIA Insured) | 1,000,000 | 1,038,730 | ||||||
Hilliard School District 0% 12/1/11 (FGIC Insured) | 3,720,000 | 2,960,785 | ||||||
Huber Heights Wtr. Sys. Rev. 5% 12/1/30 (MBIA | ||||||||
Insured) | 2,285,000 | 2,338,263 | ||||||
Kent City School District Series 2004, 5% 12/1/20 | ||||||||
(FGIC Insured) | 1,400,000 | 1,449,462 | ||||||
Kings Local School District 5% 12/1/19 (MBIA Insured) . | 1,365,000 | 1,418,918 | ||||||
Lakewood City School District 5.25% 12/1/15 | ||||||||
(FSA Insured) | 1,000,000 | 1,070,730 | ||||||
Lakewood Hosp. Impt. Rev. (Lakewood Hosp. Assoc. | ||||||||
Proj.): | ||||||||
5.5% 2/15/10 | 1,000,000 | 1,035,270 | ||||||
5.5% 2/15/11 | 1,875,000 | 1,949,794 | ||||||
5.5% 2/15/12 | 1,000,000 | 1,047,010 | ||||||
Licking Heights Local School District: | ||||||||
(Facilities Construction & Impt. Proj.) Series A, 5% | ||||||||
12/1/32 (MBIA Insured) | 3,860,000 | 3,915,237 | ||||||
5.25% 12/1/23 (FGIC Insured) | 2,660,000 | 2,803,986 | ||||||
Lorain County 5.5% 12/1/22 (FGIC Insured) | 2,985,000 | 3,186,935 | ||||||
Lucas County Hosp. Rev. (Promedia Health Care Oblig. | ||||||||
Group Proj.): | ||||||||
5.375% 11/15/23 (AMBAC Insured) | 5,000,000 | 5,207,900 | ||||||
5.625% 11/15/12 (AMBAC Insured) | 2,000,000 | 2,113,420 | ||||||
5.625% 11/15/13 (AMBAC Insured) | 1,200,000 | 1,268,052 | ||||||
Marysville Exempted Village School District 5% 12/1/29 | ||||||||
(FSA Insured) | 4,000,000 | 4,105,480 | ||||||
Middletown City School District: | ||||||||
5% 12/1/17 (FGIC Insured) | 1,175,000 | 1,216,830 | ||||||
5% 12/1/19 (FGIC Insured) | 1,110,000 | 1,150,937 | ||||||
Milford Exempt Village School District 5.125% 12/1/30 | ||||||||
(FSA Insured) | 5,335,000 | 5,459,732 | ||||||
Montgomery County Gen. Oblig. 5.5% 12/1/25 | 2,235,000 | 2,360,898 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Ohio – continued | ||||||||
Montgomery County Rev. (Catholic Health Initiatives | ||||||||
Proj.) Series A: | ||||||||
6% 12/1/19 | $ 1,470,000 | $ 1,583,366 | ||||||
6% 12/1/19 (Escrowed to Maturity) (d) | 1,530,000 | 1,649,723 | ||||||
6% 12/1/26 (Escrowed to Maturity) (d) | 3,000,000 | 3,219,000 | ||||||
Montgomery County Wtr. Sys. Rev. Series 2002, 5.375% | ||||||||
11/15/16 (AMBAC Insured) | 2,200,000 | 2,344,078 | ||||||
North Olmsted Gen. Oblig. Series D, 5.25% 12/1/20 | ||||||||
(AMBAC Insured) | 2,075,000 | 2,208,381 | ||||||
Ohio Air Quality Dev. Auth. Rev.: | ||||||||
(Ohio Edison Co. Proj.) Series A, 3.25%, tender | ||||||||
2/1/08 (AMBAC Insured) (b) | 2,000,000 | 1,972,580 | ||||||
Series 2002 A, 4.25%, tender 7/1/06 (b) | 3,000,000 | 3,000,000 | ||||||
Ohio Bldg. Auth.: | ||||||||
(Administration Bldg. Fund Prog.) Series A: | ||||||||
4.75% 10/1/17 | 1,000,000 | 1,014,000 | ||||||
5% 4/1/11 (FSA Insured) | 1,425,000 | 1,488,341 | ||||||
(Adult Correctional Bldg. Fund Prog.) Series 2001 A, | ||||||||
5.5% 10/1/12 (FSA Insured) | 1,000,000 | 1,066,270 | ||||||
(Juvenile Correctional Bldg. Fund Prog.): | ||||||||
Series A, 5.5% 4/1/12 | 2,960,000 | 3,145,710 | ||||||
5% 4/1/17 (MBIA Insured) | 2,485,000 | 2,573,864 | ||||||
(Sports Facilities Bldg. Fund Prog.) Series 1999 A, | ||||||||
5.25% 10/1/12 | 2,940,000 | 3,073,799 | ||||||
Ohio Gen. Oblig.: | ||||||||
(College Savings Prog.): | ||||||||
0% 8/1/09 | 2,290,000 | 2,013,895 | ||||||
0% 8/1/10 | 2,000,000 | 1,680,040 | ||||||
0% 8/1/14 | 1,375,000 | 954,126 | ||||||
(Higher Ed. Cap. Facilities Proj.) Series A, 5.375% | ||||||||
8/1/16 | 5,980,000 | 6,365,232 | ||||||
(Mental Health Cap. Facilities Proj.): | ||||||||
Series IIA, 5.25% 6/1/17 | 2,670,000 | 2,810,843 | ||||||
Series IIB, 5.5% 6/1/15 | 2,265,000 | 2,390,051 | ||||||
Series 2001 IIA, 5.5% 12/1/13 | 2,020,000 | 2,142,796 | ||||||
Series 2002 B, 5.25% 11/1/20 | 2,520,000 | 2,673,997 | ||||||
Series A, 5.5% 9/15/16 | 11,060,000 | 11,878,874 | ||||||
Ohio Higher Edl. Facility Commission Rev.: | ||||||||
(Case Western Reserve Univ. 2002 Proj.): | ||||||||
Series B: | ||||||||
5.5% 10/1/21 | 2,000,000 | 2,129,920 | ||||||
6.5% 10/1/20 | 2,335,000 | 2,767,092 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Ohio – continued | ||||||||
Ohio Higher Edl. Facility Commission Rev.: – continued | ||||||||
(Case Western Reserve Univ. 2002 Proj.): | ||||||||
Series C, 5.125% 10/1/17 | $ 2,985,000 | $ 3,056,998 | ||||||
6.125% 10/1/15 | 2,000,000 | 2,270,760 | ||||||
6.25% 10/1/16 | 2,500,000 | 2,891,075 | ||||||
(Denison Univ. Proj.) 5.5% 11/1/14 | 1,000,000 | 1,065,410 | ||||||
(John Carroll Univ. Proj.) 5% 4/1/17 | 1,000,000 | 1,032,620 | ||||||
(Univ. of Dayton Proj.): | ||||||||
5% 12/1/17 (AMBAC Insured) | 2,170,000 | 2,269,863 | ||||||
5.5% 12/1/20 (AMBAC Insured) | 1,300,000 | 1,377,519 | ||||||
Ohio Hsg. Fin. Agcy. Mtg. Rev. (Residential Proj.): | ||||||||
Series B2, 5.375% 9/1/19 (c) | 55,000 | 55,083 | ||||||
Series C, 4.9% 9/1/26 (c) | 65,000 | 65,053 | ||||||
Ohio Muni. Elec. Gen. Agcy. (Belleville Hydroelectric | ||||||||
Proj.) 5% 2/15/17 (AMBAC Insured) | 1,215,000 | 1,266,431 | ||||||
Ohio Poll. Cont. Rev. (Standard Oil Co. Proj.) 6.75% | ||||||||
12/1/15 | 3,100,000 | 3,669,005 | ||||||
Ohio Pub. Facilities Commission Rev. (Mental Health | ||||||||
Cap. Facilities Proj.) Series 2000 IIA, 5.375% 6/1/14 | 2,200,000 | 2,310,660 | ||||||
Ohio Solid Waste Rev. (Waste Mgmt., Inc. Proj.) 4.85%, | ||||||||
tender 11/1/07 (b)(c) | 3,000,000 | 3,015,030 | ||||||
Ohio State Univ. Gen. Receipts: | ||||||||
Series 2002 A, 5.125% 12/1/31 | 5,000,000 | 5,177,600 | ||||||
Series B, 5.25% 6/1/16 | 5,000,000 | 5,283,950 | ||||||
Ohio Tpk. Commission Tpk. Rev. 5.5% 2/15/26 | 3,700,000 | 3,875,787 | ||||||
Ohio Univ. Gen. Receipts Athens: | ||||||||
Subseries B, 5% 12/1/31 (FSA Insured) | 1,490,000 | 1,525,149 | ||||||
5% 12/1/18 (MBIA Insured) | 1,980,000 | 2,053,141 | ||||||
Ohio Wtr. Dev. Auth. Rev.: | ||||||||
(Drinking Wtr. Fund Prog.) Series 2005: | ||||||||
5.25% 6/1/18 | 2,610,000 | 2,828,875 | ||||||
5.25% 12/1/18 | 2,610,000 | 2,835,843 | ||||||
(Fresh Wtr. Impt. Proj.): | ||||||||
Series B, 5.5% 6/1/16 (FSA Insured) | 1,560,000 | 1,710,930 | ||||||
5% 12/1/34 | 5,250,000 | 5,349,278 | ||||||
5.25% 12/1/15 | 2,200,000 | 2,357,212 | ||||||
5.5% 6/1/17 | 3,960,000 | 4,377,226 | ||||||
(Pure Wtr. Proj.): | ||||||||
Series I, 6% 12/1/16 (Escrowed to Maturity) (d) | 1,685,000 | 1,859,532 | ||||||
5.5% 12/1/18 (AMBAC Insured) | 240,000 | 240,202 | ||||||
5% 12/1/17 | 3,765,000 | 3,945,005 | ||||||
5.25% 6/1/13 (MBIA Insured) | 1,295,000 | 1,380,483 | ||||||
5.25% 12/1/13 (MBIA Insured) | 1,305,000 | 1,393,923 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||||
Principal | Value | |||||||||
Amount | (Note 1) | |||||||||
Ohio – continued | ||||||||||
Ohio Wtr. Dev. Auth. Rev.: continued | ||||||||||
5.25% 6/1/14 (MBIA Insured) | $ 1,250,000 | $ 1,335,713 | ||||||||
5.25% 12/1/14 (MBIA Insured) | 1,260,000 | 1,348,200 | ||||||||
5.25% 12/1/15 (MBIA Insured) | 1,180,000 | 1,265,904 | ||||||||
5.25% 6/1/17 (MBIA Insured) | 1,160,000 | 1,250,874 | ||||||||
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev. (North Star | ||||||||||
BHP Steel/Cargill Proj.) 6.3% 9/1/20 (c) | 6,350,000 | 6,437,948 | ||||||||
Ohio Wtr. Dev. Auth. Wtr. Poll. Cont. Rev.: | ||||||||||
5% 6/1/18 | 2,000,000 | 2,087,440 | ||||||||
5.25% 6/1/19 | 5,000,000 | 5,425,100 | ||||||||
5.25% 12/1/19 | 1,975,000 | 2,147,714 | ||||||||
Olentangy Local School District: | ||||||||||
(School Facilities Construction & Impt. Proj.) Series A: | ||||||||||
5.25% 12/1/17 (Pre Refunded to 12/1/12 @ 100) (d) | 1,335,000 | 1,427,609 | ||||||||
5.5% 12/1/15 (FGIC Insured) | 1,055,000 | 1,152,777 | ||||||||
5% 12/1/30 (FSA Insured) | 5,345,000 | 5,475,525 | ||||||||
Otsego Local School District Wood, Henry & Lucas | ||||||||||
Counties 5.375% 12/1/32 (FSA Insured) | 1,000,000 | 1,052,040 | ||||||||
Penta Career Ctr. Ctfs. of Prtn.: | ||||||||||
(Ohio School Facilities Proj.) 5.25% 4/1/17 | ||||||||||
(FGIC Insured) | 1,755,000 | 1,854,158 | ||||||||
(Wood, Lucas, Sandusky, Fulton, Ottawa, Henry and | ||||||||||
Hancock Counties, Ohio School Facilities Proj.) | ||||||||||
5.25% 4/1/19 (FGIC Insured) | 1,940,000 | 2,049,610 | ||||||||
Pickerington Local School District 5.25% 12/1/20 | ||||||||||
(Pre-Refunded to 12/1/11 @ 100) (d) | 5,000,000 | 5,313,250 | ||||||||
Plain Local School District 6% 12/1/25 (FGIC Insured) | 990,000 | 1,069,992 | ||||||||
Richland County Hosp. Facilities (MedCentral Health Sys. | ||||||||||
Proj.) Series B: | ||||||||||
6.375% 11/15/22 | 1,500,000 | 1,610,730 | ||||||||
6.375% 11/15/30 | 1,000,000 | 1,069,740 | ||||||||
RiverSouth Auth. Rev. Series 2005 A, 5.25% 12/1/15 | 1,000,000 | 1,066,420 | ||||||||
Rocky River Gen. Oblig. 5% 12/1/19 (AMBAC Insured) | 2,125,000 | 2,204,603 | ||||||||
Scioto County Marine Term. Facilities Rev. (Norfolk | ||||||||||
Southern Corp. Proj.) 5.3% 8/15/13 | 3,000,000 | 3,047,250 | ||||||||
Sharonville Gen. Oblig. 5.25% 6/1/16 (FGIC Insured) . | 1,410,000 | 1,492,668 | ||||||||
Springboro Cmnty. City School District 5.25% 12/1/21 | ||||||||||
(MBIA Insured) | 3,440,000 | 3,635,598 | ||||||||
Sugarcreek Local School District 5.25% 12/1/22 | ||||||||||
(MBIA Insured) | 1,800,000 | 1,892,214 | ||||||||
Summit County Gen. Oblig.: | ||||||||||
5.25% 12/1/20 | 1,645,000 | 1,749,556 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Bonds continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Summit County Gen. Oblig.: – continued | ||||||
5.25% 12/1/21 | $ 1,740,000 | $ 1,847,184 | ||||
Swanton Local School District 5.25% 12/1/21 | ||||||
(Pre-Refunded to 12/1/11 @ 101) (d) | 3,415,000 | 3,656,611 | ||||
Tallmadge School District Gen. Oblig. 5% 12/1/31 | ||||||
(FSA Insured) | 4,000,000 | 4,083,400 | ||||
Toledo Wtrwks. Rev.: | ||||||
5% 11/15/16 (AMBAC Insured) | 1,110,000 | 1,159,217 | ||||
5% 11/15/30 (MBIA Insured) | 3,500,000 | 3,567,935 | ||||
Univ. of Akron Gen. Receipts Series B, 5% 1/1/27 | ||||||
(FGIC Insured) | 1,405,000 | 1,438,453 | ||||
Univ. of Cincinnati Ctfs. of Prtn.: | ||||||
5.5% 6/1/11 (MBIA Insured) | 1,045,000 | 1,109,393 | ||||
5.5% 6/1/12 (MBIA Insured) | 1,315,000 | 1,393,847 | ||||
5.5% 6/1/15 (MBIA Insured) | 1,000,000 | 1,057,070 | ||||
Univ. of Cincinnati Gen. Receipts Series 2004 A: | ||||||
5% 6/1/18 (AMBAC Insured) | 1,445,000 | 1,503,262 | ||||
5% 6/1/19 (AMBAC Insured) | 1,520,000 | 1,577,182 | ||||
Warren County Gen. Oblig.: | ||||||
6.1% 12/1/12 | 500,000 | 530,720 | ||||
6.65% 12/1/11 | 330,000 | 352,150 | ||||
West Muskingum Local School District School Facilities | ||||||
Construction and Impt. 5% 12/1/30 (FGIC Insured) | 1,000,000 | 1,019,160 | ||||
Wright State Univ. Gen. Receipts: | ||||||
5% 5/1/17 (MBIA Insured) | 1,375,000 | 1,434,551 | ||||
5% 5/1/18 (MBIA Insured) | 1,440,000 | 1,497,514 | ||||
5% 5/1/19 (MBIA Insured) | 1,515,000 | 1,573,479 | ||||
389,801,883 | ||||||
Puerto Rico 2.2% | ||||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. | ||||||
Rev. Series Y, 5.5% 7/1/36 (FSA Insured) | 1,000,000 | 1,079,720 | ||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Trans. | ||||||
Rev. Series E, 5.5% 7/1/22 (FSA Insured) | 1,500,000 | 1,667,850 | ||||
Puerto Rico Commonwealth Infrastructure Fing. Auth. | ||||||
Series 2000 A, 5.5% 10/1/40 (Escrowed to | ||||||
Maturity) (d) | 3,615,000 | 3,816,862 | ||||
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.: | ||||||
Series HH, 5.25% 7/1/29 (FSA Insured) | 800,000 | 841,224 | ||||
Series QQ, 5.5% 7/1/17 (XL Cap. Assurance, Inc. | ||||||
Insured) | 1,300,000 | 1,425,892 | ||||
8,831,548 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Virgin Islands – 0.1% | ||||||||
Virgin Islands Pub. Fin. Auth. Rev. Series A, 5% | ||||||||
10/1/09 | $ 500,000 | $ 511,345 | ||||||
TOTAL INVESTMENT PORTFOLIO 98.2% | ||||||||
(Cost $396,715,485) | 399,634,427 | |||||||
NET OTHER ASSETS – 1.8% | 7,297,664 | |||||||
NET ASSETS 100% | $ 406,932,091 |
Legend (a) Security or a portion of the security purchased on a delayed delivery or when-issued basis. (b) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (c) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (d) Security collateralized by an amount sufficient to pay interest and principal. |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 43.0% | |
Water & Sewer | 14.5% | |
Education | 12.8% | |
Health Care | 6.9% | |
Escrowed/Pre Refunded | 6.3% | |
Others* (individually less than 5%) | 16.5% | |
100.0% |
*Includes net other assets
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $396,715,485) | $ 399,634,427 | |||||
Cash | 6,166,212 | |||||
Receivable for fund shares sold | 115,846 | |||||
Interest receivable | 2,913,391 | |||||
Prepaid expenses | 855 | |||||
Other receivables | 58,274 | |||||
Total assets | 408,889,005 | |||||
Liabilities | ||||||
Payable for investments purchased on a delayed delivery | ||||||
basis | $ 1,116,500 | |||||
Payable for fund shares redeemed | 248,004 | |||||
Distributions payable | 363,270 | |||||
Accrued management fee | 126,101 | |||||
Other affiliated payables | 72,025 | |||||
Other payables and accrued expenses | 31,014 | |||||
Total liabilities | 1,956,914 | |||||
Net Assets | $ 406,932,091 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 401,495,779 | |||||
Undistributed net investment income | 38,649 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 2,478,721 | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | 2,918,942 | |||||
Net Assets, for 35,689,947 shares outstanding | $ 406,932,091 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($406,932,091 ÷ 35,689,947 shares) | $ 11.40 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
16 |
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 9,254,739 | |||||
Expenses | ||||||
Management fee | $ 777,945 | |||||
Transfer agent fees | 162,632 | |||||
Accounting fees and expenses | 52,536 | |||||
Independent trustees’ compensation | 818 | |||||
Custodian fees and expenses | 3,412 | |||||
Registration fees | 17,160 | |||||
Audit | 24,624 | |||||
Legal | 495 | |||||
Miscellaneous | 2,326 | |||||
Total expenses before reductions | 1,041,948 | |||||
Expense reductions | (101,184) | 940,764 | ||||
Net investment income | 8,313,975 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 2,951,133 | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (11,901,245) | |||||
Net gain (loss) | (8,950,112) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ (636,137) |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Fidelity Ohio Municipal Income Fund | ||||||||
Financial Statements continued | ||||||||
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
(Unaudited) | 2005 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 8,313,975 | $ 17,127,666 | ||||||
Net realized gain (loss) | 2,951,133 | 6,703,232 | ||||||
Change in net unrealized appreciation (depreciation) . | (11,901,245) | (11,621,333) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | (636,137) | 12,209,565 | ||||||
Distributions to shareholders from net investment income . | (8,310,486) | (17,117,253) | ||||||
Distributions to shareholders from net realized gain | (366,073) | (6,682,810) | ||||||
Total distributions | (8,676,559) | (23,800,063) | ||||||
Share transactions | ||||||||
Proceeds from sales of shares | 20,104,929 | 51,253,642 | ||||||
Reinvestment of distributions | 6,237,382 | 17,268,216 | ||||||
Cost of shares redeemed | (34,947,500) | (55,685,453) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
share transactions | (8,605,189) | 12,836,405 | ||||||
Redemption fees | 823 | 5,873 | ||||||
Total increase (decrease) in net assets | (17,917,062) | 1,251,780 | ||||||
Net Assets | ||||||||
Beginning of period | 424,849,153 | 423,597,373 | ||||||
End of period (including undistributed net investment | ||||||||
income of $38,649 and undistributed net investment | ||||||||
income of $64,436, respectively) | $ 406,932,091 | $ 424,849,153 | ||||||
Other Information | ||||||||
Shares | ||||||||
Sold | 1,735,399 | 4,303,543 | ||||||
Issued in reinvestment of distributions | 540,234 | 1,460,402 | ||||||
Redeemed | (3,026,562) | (4,689,736) | ||||||
Net increase (decrease) | (750,929) | 1,074,209 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
18 |
Financial Highlights | ||||||||||||
Six months ended | ||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Selected Per Share Data | ||||||||||||
Net asset value, | ||||||||||||
beginning of period | $ 11.66 | $ 11.98 | $ 12.10 | $ 12.03 | $ 11.54 | $ 11.54 | ||||||
Income from | ||||||||||||
Investment | ||||||||||||
Operations | ||||||||||||
Net investment | ||||||||||||
incomeD | .229 | .476 | .496 | .507 | .527 | .542 | ||||||
Net realized and un | ||||||||||||
realized gain (loss) | (.250) | (.135) | .026 | .166 | .568 | (.002) | ||||||
Total from invest- | ||||||||||||
ment operations . | (.021) | .341 | .522 | .673 | 1.095 | .540 | ||||||
Distributions from net | ||||||||||||
investment income . | (.229) | (.476) | (.497) | (.508) | (.525) | (.540) | ||||||
Distributions from net | ||||||||||||
realized gain | (.010) | (.185) | (.145) | (.095) | (.080) | — | ||||||
Total distributions | (.239) | (.661) | (.642) | (.603) | (.605) | (.540) | ||||||
Redemption fees | ||||||||||||
added to paid in | ||||||||||||
capitalD,F | — | — | — | — | — | — | ||||||
Net asset value, | ||||||||||||
end of period | $ 11.40 | $ 11.66 | $ 11.98 | $ 12.10 | $ 12.03 | $ 11.54 | ||||||
Total ReturnB,C | (.19)% | 2.90% | 4.44% | 5.72% | 9.68% | 4.73% | ||||||
Ratios to Average Net AssetsE | ||||||||||||
Expenses before | ||||||||||||
reductions | .50%A | .50% | .50% | .51% | .51% | .51% | ||||||
Expenses net of fee | ||||||||||||
waivers, if any | .50%A | .50% | .50% | .51% | .51% | .51% | ||||||
Expenses net of all | ||||||||||||
reductions | .45%A | .47% | .49% | .50% | .49% | .46% | ||||||
Net investment | ||||||||||||
income | 3.99%A | 4.00% | 4.13% | 4.20% | 4.45% | 4.64% | ||||||
Supplemental Data | ||||||||||||
Net assets, | ||||||||||||
end of period | ||||||||||||
(000 omitted) | $406,932 | $424,849 | $423,597 | $431,039 | $435,057 | $399,353 | ||||||
Portfolio turnover | ||||||||||||
rate | 12%A | 23% | 26% | 22% | 19% | 17% |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Investment Changes | ||||||
Maturity Diversification | ||||||
Days | % of fund’s | % of fund’s | % of fund’s | |||
investments | investments | investments | ||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
0 – 30 | 87.4 | 80.6 | 77.7 | |||
31 – 90 | 5.8 | 6.8 | 7.7 | |||
91 – 180 | 3.7 | 6.4 | 5.6 | |||
181 – 397 | 3.1 | 6.2 | 9.0 | |||
Weighted Average Maturity | ||||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
Fidelity Ohio Municipal Money Market | ||||||
Fund | 24 Days | 37 Days | 44 Days | |||
Ohio Tax Free Money Market | ||||||
Funds Average* | 32 Days | 39 Days | 34 Days |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/ohiomunix20x1.jpg)
*Source: iMoneyNet, Inc.
Semiannual Report 20
Fidelity Ohio Municipal Money Market Fund | ||||
Investments June 30, 2006 (Unaudited) | ||||
Showing Percentage of Net Assets | ||||
Municipal Securities 98.7% | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Ohio – 95.3% | ||||
Akron Income Tax Rev. Participating VRDN Series ROC II | ||||
R2137, 4.01% (Liquidity Facility Citigroup Global Markets | ||||
Hldgs., Inc.) (a)(c) | $ 3,170,000 | $ 3,170,000 | ||
American Muni. Pwr. Bonds (Omega Joint Venture 6 Proj.) | ||||
3.43%, tender 8/15/06 (a) | 8,676,000 | 8,676,000 | ||
Ashtabula County Indl. Dev. Rev. (Plasticolors, Inc. Proj.) Series | ||||
1996 A, 4.11%, LOC Key Bank NA, VRDN (a)(b) | 1,650,000 | 1,650,000 | ||
Bellefontaine Hosp. Facilities Rev. (Mary Rutan Hosp. Proj.) | ||||
4.02%, LOC Nat’l. City Bank, VRDN (a) | 7,700,000 | 7,700,000 | ||
Butler County Gen. Oblig. BAN 4.5% 9/21/06 | 4,745,000 | 4,753,893 | ||
Butler County Wtrwks. Rev. Bonds Series ROC II R2207, | ||||
3.45%, tender 8/10/06 (Liquidity Facility Citigroup Global | ||||
Markets Hldgs., Inc.) (a)(c)(d) | 2,540,000 | 2,540,000 | ||
Cambridge Hosp. Facilities Rev. (Southeastern Reg’l. Med. Ctr. | ||||
Proj.) 3.55%, LOC Nat’l. City Bank, VRDN (a) | 3,950,000 | 3,950,000 | ||
Cincinnati City School District Participating VRDN Series EGL | ||||
04 34 Class A, 4.02% (Liquidity Facility Citibank NA) (a)(c) . | 1,295,000 | 1,295,000 | ||
Cincinnati Student Ln. Fdg. Corp. Student Ln. Rev.: | ||||
Series 1998 A1, 4.05% (Liquidity Facility Sallie Mae), | ||||
VRDN (a)(b) | 7,700,000 | 7,700,000 | ||
Series 1998 A2, 4.05% (Liquidity Facility Sallie Mae), | ||||
VRDN (a)(b) | 19,800,000 | 19,800,000 | ||
Cincinnati Technical & Cmnty. College Gen. Receipts | ||||
Participating VRDN: | ||||
Series PT 02 1587, 4% (Liquidity Facility Merrill Lynch & Co., | ||||
Inc.) (a)(c) | 6,445,000 | 6,445,000 | ||
Series PT 1615, 4% (Liquidity Facility Merrill Lynch & Co., | ||||
Inc.) (a)(c) | 5,670,000 | 5,670,000 | ||
Cincinnati Wtr. Sys. Rev. Bonds Series ROC II R7528, 3.45%, | ||||
tender 8/10/06 (Liquidity Facility Citibank NA) (a)(c)(d) | 2,625,000 | 2,625,000 | ||
Clark County Health Care Facilities Rev. (The Ohio Masonic | ||||
Home Proj.) 4% (AMBAC Insured), VRDN (a) | 11,900,000 | 11,900,000 | ||
Clermont County Indl. Dev. Rev. (American Micro Products | ||||
Proj.) 4.11%, LOC Key Bank NA, VRDN (a)(b) | 1,510,000 | 1,510,000 | ||
Cleveland Arpt. Sys. Rev. Participating VRDN: | ||||
Series PT 799, 4.05% (Liquidity Facility Merrill Lynch & Co., | ||||
Inc.) (a)(b)(c) | 1,500,000 | 1,500,000 | ||
Series Stars 06 149, 4.04% (Liquidity Facility BNP Paribas | ||||
SA) (a)(b)(c) | 7,935,000 | 7,935,000 | ||
Cleveland Gen. Oblig. Participating VRDN Series PT 2032, 4% | ||||
(Liquidity Facility Merrill Lynch & Co., Inc.) (a)(c) | 3,030,000 | 3,030,000 | ||
Cleveland Muni. School District BAN 3.75% 7/27/06 | 7,900,000 | 7,902,546 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Cleveland-Cuyahoga County Port Auth. Rev. (Carnegie/96th | ||||||
Research Bldg., LLC Proj.) Series 2003, 4%, LOC Fifth Third | ||||||
Bank, Cincinnati, VRDN (a) | $10,000,000 | $ 10,000,000 | ||||
Columbus City School District Participating VRDN Series PT | ||||||
2278, 4% (Liquidity Facility Merrill Lynch & Co., Inc.) (a)(c) . | 2,720,000 | 2,720,000 | ||||
Cuyahoga County Arpt. Facilities Rev. (Corporate | ||||||
Wings-Cleveland LLC Proj.) 4.09%, LOC Nat’l. City Bank, | ||||||
VRDN (a)(b) | 3,620,000 | 3,620,000 | ||||
Cuyahoga County Civic Facilities Rev. (Fairfax Dev. Corp. | ||||||
Proj.) 4.04%, LOC Key Bank NA, VRDN (a) | 4,325,000 | 4,325,000 | ||||
Cuyahoga County Health Care Facilities Rev. (Altenheim Proj.) | ||||||
4.02%, LOC U.S. Bank NA, Minnesota, VRDN (a) | 6,230,000 | 6,230,000 | ||||
Cuyahoga County Indl. Dev. Rev.: | ||||||
(Progressive Plastics, Inc. Proj.) 4.25%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a)(b) | 1,140,000 | 1,140,000 | ||||
(Pubco Corp. Proj.) Series 2001, 4.09%, LOC Nat’l. City | ||||||
Bank, VRDN (a)(b) | 2,480,000 | 2,480,000 | ||||
(The Great Lakes Brewing Co. Proj.) Series 1997, 4.27%, | ||||||
LOC Huntington Nat’l. Bank, Columbus, VRDN (a)(b) | 3,430,000 | 3,430,000 | ||||
Cuyahoga County Rev. (Cleveland Clinic Health Sys. Obligated | ||||||
Group Prog.) Subseries B3, 4.08%, VRDN (a) | 2,600,000 | 2,600,000 | ||||
Darke County Health Care Facilities Rev. (Brethren Retirement | ||||||
Cmnty. Proj.) 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | 7,015,000 | 7,015,000 | ||||
Delaware County Health Care Facilities (Willow Brook | ||||||
Christian Cmnty. Proj.) Series 1999, 4.1%, LOC Huntington | ||||||
Nat’l. Bank, Columbus, VRDN (a) | 3,580,000 | 3,580,000 | ||||
Delaware Gen. Oblig. BAN 4.5% 12/14/06 | 7,800,000 | 7,837,709 | ||||
Elyria Gen. Oblig. BAN 4% 10/18/06 | 2,550,000 | 2,556,275 | ||||
Erie County Gen. Oblig. BAN: | ||||||
4.25% 4/11/07 | 7,500,000 | 7,536,589 | ||||
4.25% 4/11/07 | 5,000,000 | 5,024,393 | ||||
Erie County Hosp. Facilities Rev. Participating VRDN Series MT | ||||||
253, 4.04% (Liquidity Facility Merrill Lynch & Co., Inc.) (a)(c) | 7,490,000 | 7,490,000 | ||||
Erie County Multi-family Hsg. Rev. (Providence Residential | ||||||
Cmnty. Corp. Proj.) Series 1999 A, 4.02%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a) | 8,800,000 | 8,800,000 | ||||
Franklin County Multi-family Rev.: | ||||||
(Golf Pointe Apts. Proj.) Series 2000 A, 4.03%, LOC Lasalle | ||||||
Bank NA, VRDN (a)(b) | 6,690,000 | 6,690,000 | ||||
(Hanover Ridge Apts. Proj. 4.06%, LOC Fannie Mae, | ||||||
VRDN (a)(b) | 4,350,000 | 4,350,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
22 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Geauga County Health Care Facilities Rev. (Montefiore Hsg. | ||||||
Corp. Proj.) Series 2001, 4.04%, LOC Key Bank NA, | ||||||
VRDN (a) | $ 5,440,000 | $ 5,440,000 | ||||
Hamilton County Health Care Facilities Rev. 4.02%, LOC Fifth | ||||||
Third Bank, Cincinnati, VRDN (a) | 4,040,000 | 4,040,000 | ||||
Hamilton Gen. Oblig. BAN: | ||||||
Series A, 4.5% 9/15/06 | 3,000,000 | 3,004,577 | ||||
4.25% 9/15/06 | 8,820,000 | 8,833,406 | ||||
Jackson Local School District Stark & Summit Counties | ||||||
Participating VRDN Series PT 2334, 4% (Liquidity Facility | ||||||
Merrill Lynch & Co., Inc.) (a)(c) | 3,965,000 | 3,965,000 | ||||
Kettering Indl. Dev. Rev. (Millat Industries Corp. Proj.) 4.09%, | ||||||
LOC Nat’l. City Bank, VRDN (a)(b) | 3,000,000 | 3,000,000 | ||||
Lake County Indl. Dev. Rev.: | ||||||
(American Bus. Co. Proj.) 4.27%, LOC Huntington Nat’l. | ||||||
Bank, Columbus, VRDN (a)(b) | 765,000 | 765,000 | ||||
(Norshar Co. Proj.) 4.25%, LOC JPMorgan Chase Bank, | ||||||
VRDN (a)(b) | 2,825,000 | 2,825,000 | ||||
Lakewood Gen. Oblig. BAN 4.5% 10/12/06 | 2,050,000 | 2,055,296 | ||||
Lima Hosp. Rev. (Lima Memorial Hosp. Proj.) 4.05%, LOC | ||||||
JPMorgan Chase Bank, VRDN (a) | 2,300,000 | 2,300,000 | ||||
Lucas County Multi-family Rev. (Lakewoods Proj.) 4.11%, LOC | ||||||
Key Bank NA, VRDN (a)(b) | 4,000,000 | 4,000,000 | ||||
Marysville Wastewtr. Treatment Sys. Rev. BAN 4.5% | ||||||
12/21/06 | 8,000,000 | 8,041,064 | ||||
Medina County Indl. Dev. Rev.: | ||||||
(Firedex, Inc. Proj.) Series 1997, 4.11%, LOC Key Bank NA, | ||||||
VRDN (a)(b) | 815,000 | 815,000 | ||||
(Rembond Proj.) Series 1996, 4.25%, LOC JPMorgan Chase | ||||||
Bank, VRDN (a)(b) | 1,650,000 | 1,650,000 | ||||
Mentor Gen. Oblig. BAN 4% 10/1/06 | 2,500,000 | 2,504,131 | ||||
Middletown Hosp. Facilities Rev. Participating VRDN Series MT | ||||||
239, 4.06% (Liquidity Facility Merrill Lynch & Co., Inc.) (a)(c) | 8,000,000 | 8,000,000 | ||||
Montgomery County Health Care Facilities Rev.: | ||||||
(Eastway Corp. & Property Resource Proj.) Series 1997, | ||||||
4.27%, LOC Huntington Nat’l. Bank, Columbus, | ||||||
VRDN (a)(b) | 2,495,000 | 2,495,000 | ||||
(Kettering Affiliated Proj.) 4.05%, LOC JPMorgan Chase | ||||||
Bank, VRDN (a) | 2,300,000 | 2,300,000 | ||||
Montgomery County Multi-family Hsg. Dev. Rev. (Pedcor | ||||||
Invts.-Lyons Gate Proj.) 4.02%, LOC Fed. Home Ln. Bank, | ||||||
Cincinnati, VRDN (a)(b) | 4,306,000 | 4,306,000 | ||||
North Ridgeville Gen. Oblig. BAN 4% 9/21/06 | 3,000,000 | 3,003,936 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Ohio Air Quality Dev. Auth. Rev.: | ||||||
Participating VRDN: | ||||||
Series MS 1223, 4.01% (Liquidity Facility Morgan | ||||||
Stanley) (a)(c) | $ 8,300,000 | $ 8,300,000 | ||||
Series PA 769R, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(c) | 8,880,000 | 8,880,000 | ||||
(AK Steel Corp. Proj.) Series A, 4.06%, LOC ABN AMRO | ||||||
Bank NV, VRDN (a)(b) | 14,500,000 | 14,500,000 | ||||
(Cincinnati Gas & Elec. Co. Proj.) Series A: | ||||||
4.13%, LOC Cr. Lyonnais SA, VRDN (a)(b) | 12,100,000 | 12,100,000 | ||||
4.15%, VRDN (a) | 7,600,000 | 7,600,000 | ||||
(First Energy Corp. Poll. Cont. Proj.) Series B, 3.98%, LOC | ||||||
Barclays Bank PLC, VRDN (a) | 2,800,000 | 2,800,000 | ||||
(Ohio Edison Co. Proj.) Series 2000 C, 3.95%, LOC | ||||||
Wachovia Bank NA, VRDN (a) | 1,730,000 | 1,730,000 | ||||
Ohio Bldg. Auth. Participating VRDN: | ||||||
Series PT 3440, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(c) | 6,000,000 | 5,998,560 | ||||
Series Putters 790, 4.01% (Liquidity Facility JPMorgan Chase | ||||||
Bank) (a)(c) | 1,285,000 | 1,285,000 | ||||
Series Putters 793, 4.01% (Liquidity Facility JPMorgan Chase | ||||||
& Co.) (a)(c) | 2,070,000 | 2,070,000 | ||||
Ohio Gen. Oblig. Participating VRDN: | ||||||
Series PT 2139, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(c) | 4,260,000 | 4,260,000 | ||||
Series Putters 1295, 4.01% (Liquidity Facility JPMorgan | ||||||
Chase Bank) (a)(c) | 3,000,000 | 3,000,000 | ||||
Series ROC II R7508, 4.01% (Liquidity Facility Citibank | ||||||
NA) (a)(c) | 11,185,000 | 11,185,000 | ||||
Ohio Higher Edl. Facility Commission Rev.: | ||||||
Participating VRDN: | ||||||
Series EGL 7053020 Class A, 4.02% (Liquidity Facility | ||||||
Citibank NA) (a)(c) | 7,900,000 | 7,900,000 | ||||
Series MS 98 116, 4.01% (Liquidity Facility Morgan | ||||||
Stanley) (a)(c) | 10,120,000 | 10,120,000 | ||||
(Ashland Univ. Proj.) 4.02%, LOC Key Bank NA, VRDN (a) . | 12,480,000 | 12,480,000 | ||||
(Cleveland Institute of Music Proj.) 3.99%, LOC Nat’l. City | ||||||
Bank, VRDN (a) | 7,000,000 | 7,000,000 | ||||
(Pooled Fing. Prog.): | ||||||
Series 1996, 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | 2,790,000 | 2,790,000 | ||||
Series 1997, 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | 4,500,000 | 4,500,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Ohio Higher Edl. Facility Commission Rev.: – continued | ||||||
(Pooled Fing. Prog.): | ||||||
Series 1998, 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | $ 9,340,000 | $ 9,340,000 | ||||
Series 1999, 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | 8,200,000 | 8,200,000 | ||||
(Univ. of Northwestern Ohio Proj.) 4.1%, LOC Huntington | ||||||
Nat’l. Bank, Columbus, VRDN (a) | 5,000,000 | 5,000,000 | ||||
Ohio Hsg. Fin. Agcy. Mtg. Rev.: | ||||||
Bonds Series Merlots 00 A1, 3.32%, tender 11/7/06 | ||||||
(Liquidity Facility Wachovia Bank NA) (a)(b)(c)(d) | 3,015,000 | 3,015,000 | ||||
Participating VRDN: | ||||||
Series BA 01 I, 4.09% (Liquidity Facility Bank of America | ||||||
NA) (a)(b)(c) | 3,050,000 | 3,050,000 | ||||
Series BA 98 B, 4.12% (Liquidity Facility Bank of America | ||||||
NA) (a)(b)(c) | 14,695,000 | 14,695,000 | ||||
Series BA 98 Q, 4.12% (Liquidity Facility Bank of America | ||||||
NA) (a)(b)(c) | 4,600,000 | 4,600,000 | ||||
Series LB 03 L46J, 4.06% (Liquidity Facility Lehman | ||||||
Brothers Hldgs., Inc.) (a)(b)(c) | 5,610,000 | 5,610,000 | ||||
Series Merlots 01 A78, 4.06% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(b)(c) | 1,510,000 | 1,510,000 | ||||
Series Merlots 02 A34, 4.06% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(b)(c) | 1,310,000 | 1,310,000 | ||||
Series Merlots 05 A16, 4.06% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(b)(c) | 4,810,000 | 4,810,000 | ||||
Series Merlots 06 A2, 4.06% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(b)(c) | 4,000,000 | 4,000,000 | ||||
Series PT 1334, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 4,360,000 | 4,360,000 | ||||
Series PT 228, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 3,145,000 | 3,145,000 | ||||
Series PT 241, 4.04% (Liquidity Facility Bayerische | ||||||
Hypo-und Vereinsbank AG) (a)(b)(c) | 310,000 | 310,000 | ||||
Series PT 567, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 1,560,000 | 1,560,000 | ||||
Series PT 582, 4.04% (Liquidity Facility Svenska | ||||||
Handelsbanken AB) (a)(b)(c) | 2,095,000 | 2,095,000 | ||||
Series Putters 1334, 4.04% (Liquidity Facility JPMorgan | ||||||
Chase & Co.) (a)(b)(c) | 9,890,000 | 9,890,000 | ||||
(Mortgage-Backed Securities Prog.): | ||||||
Series 2005 B1, 4.03% (Liquidity Facility Fed. Home Ln. | ||||||
Bank, Cincinnati), VRDN (a)(b) | 8,000,000 | 8,000,000 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Ohio Hsg. Fin. Agcy. Mtg. Rev.: – continued | ||||||
(Mortgage-Backed Securities Prog.): | ||||||
Series 2006 F, 4.02% (Liquidity Facility Citibank NA), | ||||||
VRDN (a)(b) | $ 8,200,000 | $ 8,198,032 | ||||
Series B, 4.04% (Liquidity Facility Citibank NA), | ||||||
VRDN (a)(b) | 14,500,000 | 14,500,000 | ||||
Series 2004 D, 4.02% (Liquidity Facility Fed. Home Ln. Bank, | ||||||
Cincinnati), VRDN (a)(b) | 7,900,000 | 7,900,000 | ||||
Series B, 4.03% (Liquidity Facility Fed. Home Ln. Bank, | ||||||
Cincinnati), VRDN (a)(b) | 11,990,000 | 11,990,000 | ||||
Series F, 4.04% (Liquidity Facility Fed. Home Ln. Bank, | ||||||
Cincinnati), VRDN (a)(b) | 6,400,000 | 6,400,000 | ||||
Ohio Hsg. Fin. Agcy. Multi-family Hsg. Rev.: | ||||||
(Club at Spring Valley Apts. Proj.) Series 1996 A, 4.04%, | ||||||
LOC Key Bank NA, VRDN (a)(b) | 5,700,000 | 5,700,000 | ||||
(Pedcor Invts. Willow Lake Apts. Proj.): | ||||||
Series A, 4.05%, LOC Fed. Home Ln. Bank, Indianapolis, | ||||||
VRDN (a)(b) | 2,835,000 | 2,835,000 | ||||
Series B, 4.15%, LOC Fed. Home Ln. Bank, Indianapolis, | ||||||
VRDN (a)(b) | 470,000 | 470,000 | ||||
Series C, 4.15%, LOC Fed. Home Ln. Bank, Indianapolis, | ||||||
VRDN (a)(b) | 460,000 | 460,000 | ||||
Series D, 4.15%, LOC Fed. Home Ln. Bank, Indianapolis, | ||||||
VRDN (a)(b) | 460,000 | 460,000 | ||||
(Pine Crossing Apts. Proj.) 4.03%, LOC Lasalle Bank NA, | ||||||
VRDN (a)(b) | 5,670,000 | 5,670,000 | ||||
(Shannon Glenn Apts. Proj.) 4.02%, LOC Fannie Mae, | ||||||
VRDN (a)(b) | 11,800,000 | 11,800,000 | ||||
(Wingate at Belle Meadows Proj.) 4.02%, LOC Fed. Home | ||||||
Ln. Bank, Cincinnati, VRDN (a)(b) | 8,750,000 | 8,750,000 | ||||
Ohio Indl. Dev. Rev.: | ||||||
(K&S Realty Proj.) Series 1989 I, 4.04%, LOC Nat’l. City | ||||||
Bank, VRDN (a)(b) | 60,000 | 60,000 | ||||
(K&S Realty/Starr Fabricating, Inc. Proj.) Series 1989 III, | ||||||
4.04%, LOC Nat’l. City Bank, VRDN (a)(b) | 110,000 | 110,000 | ||||
Ohio Solid Waste Rev.: | ||||||
(BP Amoco Chemical Co. Proj.) 4.03% (BP PLC Guaranteed), | ||||||
VRDN (a)(b) | 6,300,000 | 6,300,000 | ||||
(BP Exploration & Oil, Inc. Proj.) Series 2000, 4.03% | ||||||
(BP PLC Guaranteed), VRDN (a)(b) | 6,600,000 | 6,600,000 | ||||
(BP Products NA, Inc. Proj.) Series B, 4.03% | ||||||
(BP PLC Guaranteed), VRDN (a)(b) | 2,115,000 | 2,115,000 | ||||
(Republic Svcs., Inc. Proj.) 4.25%, VRDN (a)(b) | 7,700,000 | 7,700,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
26 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Ohio State Univ. Gen. Receipts Rev. Bonds Series 2003 C: | ||||||
3.62% tender 9/15/06, CP mode | $ 2,000,000 | $ 2,000,000 | ||||
3.65% tender 9/11/06, CP mode | 8,000,000 | 8,000,000 | ||||
Ohio Wtr. Dev. Auth. (Waste Mgmt., Inc. Proj.) Series B, | ||||||
4.06%, LOC Bank of America NA, VRDN (a)(b) | 4,700,000 | 4,700,000 | ||||
Ohio Wtr. Dev. Auth. Poll. Cont. Facilities Rev.: | ||||||
Participating VRDN Series Putters 558, 4.01% (Liquidity | ||||||
Facility JPMorgan Chase & Co.) (a)(c) | 4,550,000 | 4,550,000 | ||||
(First Energy Corp. Proj.) Series A, 4.02%, LOC Barclays | ||||||
Bank PLC, VRDN (a)(b) | 8,000,000 | 8,000,000 | ||||
Series A, 4.04%, LOC Barclays Bank PLC, VRDN (a)(b) | 10,000,000 | 10,000,000 | ||||
Ohio Wtr. Dev. Auth. Solid Waste Disp. Rev. (Timken Co. Proj.) | ||||||
Series 1997, 4.05%, LOC Wachovia Bank NA, VRDN (a)(b) | 24,000,000 | 24,000,001 | ||||
Ohio Wtr. Dev. Auth. Wtr. Poll. Cont. Rev. (Ohio Edison Co. | ||||||
Proj.) Series 1999 A, 4.1%, VRDN (a) | 8,100,000 | 8,100,000 | ||||
Pepper Pike Gen. Oblig. BAN 4% 5/31/07 | 4,613,000 | 4,623,159 | ||||
Perrysburg Gen. Oblig. BAN: | ||||||
3.65% 11/9/06 | 1,500,000 | 1,502,084 | ||||
3.65% 11/9/06 | 2,600,000 | 2,603,612 | ||||
3.75% 8/10/06 | 4,465,000 | 4,469,038 | ||||
Port of Greater Cincinnati Dev. Auth. Rev. (Nat’l. Underground | ||||||
Railroad Freedom Ctr., Inc. Proj.) Series 2003 A, 4%, LOC | ||||||
JPMorgan Chase Bank, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a) | 14,600,000 | 14,600,000 | ||||
Portage County Indl. Dev. Rev. (Mantaline Corp. Proj.) 4.14%, | ||||||
LOC Nat’l. City Bank, VRDN (a)(b) | 1,940,000 | 1,940,000 | ||||
Richland County Health Care Facilities Rev.: | ||||||
(Mansfield Memorial Homes Proj.) Series 2002, 4.07%, LOC | ||||||
Key Bank NA, VRDN (a) | 4,700,000 | 4,700,000 | ||||
(Wesleyan Sr. Living Proj.) Series 2004 A, 4%, LOC | ||||||
JPMorgan Chase Bank, VRDN (a) | 8,000,000 | 8,000,000 | ||||
Richland County Indl. Dev. Rev. (Sabin Robbins Paper Co. | ||||||
Proj.) Series 1997, 4.13%, LOC Lasalle Bank Midwest NA, | ||||||
VRDN (a)(b) | 1,500,000 | 1,500,000 | ||||
Rickenbacker Port Auth. Indl. Dev. (Micro Industries Corp. | ||||||
Proj.) Series 2000, 4.25%, LOC JPMorgan Chase Bank, | ||||||
VRDN (a)(b) | 2,425,000 | 2,425,000 | ||||
Stark County Indl. Dev. Rev. (H-P Products, Inc. Proj.) 4.11%, | ||||||
LOC Key Bank NA, VRDN (a)(b) | 2,085,000 | 2,085,000 | ||||
Summit County Civic Facilities Rev. (YMCA of Akron Proj.) | ||||||
4.04%, LOC Key Bank NA, VRDN (a) | 4,760,000 | 4,760,000 | ||||
Summit County Indl. Dev. Rev.: | ||||||
(Commercial Alloys Corp. Proj.): | ||||||
4.14%, LOC Nat’l. City Bank, VRDN (a)(b) | 1,400,000 | 1,400,000 |
See accompanying notes which are an integral part of the financial statements.
27 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Ohio – continued | ||||||
Summit County Indl. Dev. Rev.: – continued | ||||||
(Commercial Alloys Corp. Proj.): | ||||||
4.25%, LOC Nat’l. City Bank, VRDN (a)(b) | $ 2,155,000 | $ 2,155,000 | ||||
(Kaiser Dev. Proj.) 4.3%, LOC Nat’l. City Bank, VRDN (a)(b) | 580,000 | 580,000 | ||||
(Keltec, Inc. Proj.) Series 1987, 4.3%, LOC Nat’l. City Bank, | ||||||
VRDN (a)(b) | 80,000 | 80,000 | ||||
(Mannix Co. Proj.) Series 1987, 4.3%, LOC JPMorgan | ||||||
Chase Bank, VRDN (a)(b) | 425,000 | 425,000 | ||||
(Sigma Properties Proj.) Series 2000 B, 4.14%, LOC Nat’l. | ||||||
City Bank, VRDN (a)(b) | 1,655,000 | 1,655,000 | ||||
(Triumph Hldgs. Proj.) 4.14%, LOC Nat’l. City Bank, | ||||||
VRDN (a)(b) | 1,210,000 | 1,210,000 | ||||
Toledo City School District Participating VRDN Series Putters | ||||||
655, 4.01% (Liquidity Facility JPMorgan Chase Bank) (a)(c) . | 1,695,000 | 1,695,000 | ||||
Toledo-Lucas County Port Auth. Rev. (P&G Industries Proj.) | ||||||
4.14%, LOC Nat’l. City Bank, VRDN (a)(b) | 1,555,000 | 1,555,000 | ||||
Trumbull County Health Care Facilities Rev. (Shepard of the | ||||||
Valley Retire Howland Proj.) 3.99% (Radian Asset | ||||||
Assurance, Inc. Insured), VRDN (a) | 9,400,000 | 9,400,000 | ||||
Tuscarawas County Hosp. Facilities Rev. Participating VRDN | ||||||
Series MT 103, 4.04% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(c) | 2,945,000 | 2,945,000 | ||||
Univ. of Cincinnati Gen. Receipts BAN Series C, 4.5% | ||||||
3/28/07 | 8,000,000 | 8,054,858 | ||||
Village of Indian Hill Econ. Dev. Rev. (Cincinnati Country Day | ||||||
School Proj.) Series 1999, 4.04%, LOC Nat’l. City Bank, | ||||||
VRDN (a) | 4,545,000 | 4,545,000 | ||||
Warren County Health Care Facilities Rev. (Otterbein Homes | ||||||
Proj.) Series 1998 B, 4.01%, LOC Fifth Third Bank, | ||||||
Cincinnati, VRDN (a) | 11,704,000 | 11,704,000 | ||||
Wood County Indl. Dev. Rev.: | ||||||
(CMC Group Proj.) Series 2001, 4.14%, LOC Nat’l. City | ||||||
Bank, VRDN (a)(b) | 1,995,000 | 1,995,000 | ||||
(Dowa THT America, Inc. Proj.) Series 1999, 4.1%, LOC | ||||||
Comerica Bank, Detroit, VRDN (a)(b) | 3,585,000 | 3,585,000 | ||||
Zanesville-Muskingum Port Auth. Indl. Dev. Rev. (Almana II LLC | ||||||
Proj.) Series 2000, 4.15%, LOC JPMorgan Chase Bank, | ||||||
VRDN (a)(b) | 5,300,000 | 5,300,000 | ||||
792,379,159 | ||||||
Puerto Rico 3.4% | ||||||
Puerto Rico Commonwealth Gen. Oblig. TRAN 4.5% | ||||||
7/28/06, LOC Bank of Nova Scotia, New York Agcy., LOC | ||||||
BNP Paribas SA | 5,500,000 | 5,505,088 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
Municipal Securities continued | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Puerto Rico continued | ||||
Puerto Rico Commonwealth Infrastructure Fing. Auth. | ||||
Participating VRDN Series TOC 05 Z6, 4.04% (Liquidity | ||||
Facility Goldman Sachs Group, Inc.) (a)(c) | $ 3,185,000 | $ 3,185,000 | ||
Puerto Rico Elec. Pwr. Auth. Pwr. Rev. Participating VRDN: | ||||
Series PA 1044, 3.96% (Liquidity Facility Merrill Lynch & | ||||
Co., Inc.) (a)(c) | 8,745,000 | 8,742,902 | ||
Series PA 1364, 3.96% (Liquidity Facility Merrill Lynch & | ||||
Co., Inc.) (a)(c) | 10,635,000 | 10,632,448 | ||
28,065,438 | ||||
TOTAL INVESTMENT PORTFOLIO 98.7% | ||||
(Cost $820,444,597) | 820,444,597 | |||
NET OTHER ASSETS – 1.3% | 10,642,803 | |||
NET ASSETS 100% | $ 831,087,400 |
Security Type Abbreviations | ||||
BAN | — | BOND ANTICIPATION NOTE | ||
CP | — | COMMERCIAL PAPER | ||
TRAN | — | TAX AND REVENUE | ||
ANTICIPATION NOTE | ||||
VRDN | — | VARIABLE RATE DEMAND NOTE |
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Fidelity Ohio Municipal Money Market Fund Investments (Unaudited) continued |
Legend (a) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (b) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (c) Provides evidence of ownership in one or more underlying municipal bonds. |
(d) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $8,180,000 or 1.0% of net assets. |
Additional information on each holding is as follows:
Acquisition | ||||
Security | Date | Cost | ||
Butler County | ||||
Wtrwks. Rev. | ||||
Bonds Series ROC | ||||
II R2207, 3.45%, | ||||
tender 8/10/06 | ||||
(Liquidity Facility | ||||
Citigroup Global | ||||
Markets Hldgs., | ||||
Inc.) | 6/8/05 | $ 2,540,000 | ||
Cincinnati Wtr. | ||||
Sys. Rev. Bonds | ||||
Series ROC II | ||||
R7528, 3.45%, | ||||
tender 8/10/06 | ||||
(Liquidity Facility | ||||
Citibank NA) | 5/18/05 | $ 2,625,000 | ||
Ohio Hsg. Fin. | ||||
Agcy. Mtg. Rev. | ||||
Bonds Series | ||||
Merlots 00 A1, | ||||
3.32%, tender | ||||
11/7/06 | ||||
(Liquidity Facility | ||||
Wachovia Bank | ||||
NA) | 11/12/03 | $ 3,015,000 |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:
Fund | Income earned | |||
Fidelity Municipal Cash Central Fund | $ 9,235 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 30
Fidelity Ohio Municipal Money Market Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $820,444,597) | $ 820,444,597 | |||||
Cash | 3,376,772 | |||||
Receivable for fund shares sold | 10,088,260 | |||||
Interest receivable | 5,619,856 | |||||
Prepaid expenses | 1,485 | |||||
Other receivables | 196,638 | |||||
Total assets | 839,727,608 | |||||
Liabilities | ||||||
Payable for investments purchased | $ 3,685,778 | |||||
Payable for fund shares redeemed | 4,434,829 | |||||
Distributions payable | 24,962 | |||||
Accrued management fee | 252,877 | |||||
Other affiliated payables | 202,641 | |||||
Other payables and accrued expenses | 39,121 | |||||
Total liabilities | 8,640,208 | |||||
Net Assets | $ 831,087,400 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 831,002,755 | |||||
Undistributed net investment income | 74,628 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 10,017 | |||||
Net Assets, for 831,001,626 shares outstanding | $ 831,087,400 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($831,087,400 ÷ 831,001,626 shares) | $ 1.00 |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Fidelity Ohio Municipal Money Market Fund | ||||||
Financial Statements continued | ||||||
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 12,888,577 | |||||
Income from affiliated Central Funds | 9,235 | |||||
Total income | 12,897,812 | |||||
Expenses | ||||||
Management fee | $ 1,495,548 | |||||
Transfer agent fees | 556,983 | |||||
Accounting fees and expenses | 49,049 | |||||
Independent trustees’ compensation | 1,542 | |||||
Custodian fees and expenses | 6,786 | |||||
Registration fees | 28,962 | |||||
Audit | 20,853 | |||||
Legal | 709 | |||||
Miscellaneous | 20,459 | |||||
Total expenses before reductions | 2,180,891 | |||||
Expense reductions | (587,726) | 1,593,165 | ||||
Net investment income | 11,304,647 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 4,137 | |||||
Net increase in net assets resulting from operations | $ 11,308,784 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Statement of Changes in Net Assets | ||||
Six months ended | Year ended | |||
June 30, 2006 | December 31, | |||
(Unaudited) | 2005 | |||
Increase (Decrease) in Net Assets | ||||
Operations | ||||
Net investment income | $ 11,304,647 | $ 14,994,846 | ||
Net realized gain (loss) | 4,137 | 51,221 | ||
Net increase in net assets resulting | ||||
from operations | 11,308,784 | 15,046,067 | ||
Distributions to shareholders from net investment income . | (11,305,182) | (14,990,504) | ||
Share transactions at net asset value of $1.00 per share | ||||
Proceeds from sales of shares | 1,135,985,428 | 1,997,767,736 | ||
Reinvestment of distributions | 11,168,238 | 14,776,226 | ||
Cost of shares redeemed | (1,117,974,645) | (1,980,752,974) | ||
Net increase (decrease) in net assets and shares | ||||
resulting from share transactions | 29,179,021 | 31,790,988 | ||
Total increase (decrease) in net assets | 29,182,623 | 31,846,551 | ||
Net Assets | ||||
Beginning of period | 801,904,777 | 770,058,226 | ||
End of period (including undistributed net investment | ||||
income of $74,628 and undistributed net investment | ||||
income of $75,163, respectively) | $ 831,087,400 | $ 801,904,777 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Financial Highlights | ||||||||||||||||||||||||
Six months ended | ||||||||||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
Selected Per Share Data | ||||||||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Income from | ||||||||||||||||||||||||
Investment | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | .014 | .020 | .008 | .006 | .011 | .025 | ||||||||||||||||||
Distributions from net | ||||||||||||||||||||||||
investment income | (.014) | (.020) | (.008) | (.006) | (.011) | (.025) | ||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Total ReturnB,C | 1.41% | 1.99% | .76% | .64% | 1.13% | 2.52% | ||||||||||||||||||
Ratios to Average Net AssetsD | ||||||||||||||||||||||||
Expenses before | ||||||||||||||||||||||||
reductions | .54%A | .54% | .54% | .54% | .54% | .55% | ||||||||||||||||||
Expenses net of fee | ||||||||||||||||||||||||
waivers, if any | .54%A | .54% | .54% | .54% | .54% | .55% | ||||||||||||||||||
Expenses net of all | ||||||||||||||||||||||||
reductions | .40%A | .43% | .53% | .53% | .51% | .51% | ||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | 2.82%A | 1.98% | .77% | .64% | 1.12% | 2.47% | ||||||||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, | ||||||||||||||||||||||||
end of period | ||||||||||||||||||||||||
(000 omitted) | $831,087 | $801,905 | $770,058 | $687,760 | $652,072 | $622,602 |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Ex penses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrange ments. 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 |
34 |
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
1. Significant Accounting Policies.
Fidelity Ohio Municipal Income Fund (the Income Fund) is a fund of Fidelity Municipal Trust. Fidelity Ohio Municipal Money Market Fund (the Money Market Fund) is a fund of Fidelity Municipal Trust II. Each trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company. Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts) are organized as a Massachusetts business trust and a Delaware statutory trust, respectively. The Income Fund is a non diversified fund. Each Fund is authorized to issue an unlimited number of shares. Each Fund may be affected by economic and political developments in the state of Ohio. Certain Funds may invest in affiliated money market central funds (Money Market Central Funds), which are open end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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 Income Fund and the Money Market Fund:
Security Valuation. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, each Fund uses independent pricing services approved by the Board of Trustees to value their investments. For the Income Fund, debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securi ties. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
As permitted by compliance with certain conditions under Rule 2a 7 of the 1940 Act, securities owned by the Money Market Fund are valued at amortized cost which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
35 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
1. Significant Accounting Policies continued |
Expenses. Most expenses of each trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, each Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, 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, certain Funds claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to futures transactions, market discount, deferred trust ees compensation, capital loss carryforwards, and losses deferred due to futures transactions.
The Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
Cost for Federal | Net | Unrealized | ||||||||||
Income Tax | Unrealized | Unrealized | Appreciation/ | |||||||||
Purposes | Appreciation | Depreciation | (Depreciation) | |||||||||
Fidelity Ohio Municipal | ||||||||||||
Income Fund | $ 396,693,656 | $ 7,912,295 | $ (4,971,524) | $ 2,940,771 | ||||||||
Fidelity Ohio Municipal | ||||||||||||
Money Market Fund | 820,444,597 | — | — | — |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds’ net assets and results of operations.
Semiannual Report |
36 |
1. Significant Accounting Policies continued
Short Term Trading (Redemption) Fees. Shares held in the Income Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. Certain Funds may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in each applicable Fund’s Schedule of Investments. Certain Funds may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, each applicable Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. Certain Funds 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 at the end of each applicable Fund’s Schedule of Investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, for the Income Fund aggregated $24,743,943 and $37,935,038, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and a group fee rate. The individual fund fee rate is applied to each Fund’s average net assets. The group fee rate is based
37 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
4. Fees and Other Transactions with Affiliates continued | ||
Management Fee continued |
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, each Fund’s annualized management fee rate expressed as a percentage of each Fund’s average net assets was as follows:
Individual | Group | |||||
Rate | Rate | Total | ||||
Fidelity Ohio Municipal Income Fund | .25% | .12% | .37% | |||
Fidelity Ohio Municipal Money Market Fund | .25% | .12% | .37% |
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent and shareholder servicing agent for the Funds. Citibank has entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the activities associated with the Funds’ transfer and shareholder servicing agent and accounting functions. The Funds pay account fees and asset based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. The accounting fee is based on the level of average net assets for the month. For the period, the transfer agent fees were equivalent to the following annualized rates expressed as a percentage of average net assets:
Fidelity Ohio Municipal Income Fund | .08% | |
Fidelity Ohio Municipal Money Market Fund | .14% |
Affiliated Central Funds. Certain Funds may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
The Money Market Central Funds do not pay a management fee.
5. Committed Line of Credit.
The Income Fund participates with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit, which is reflected in Miscellaneous Expense on the Statement of Operations, and is as follows:
Fidelity Ohio Municipal Income Fund | $ 417 |
During the period, there were no borrowings on this line of credit.
Semiannual Report 38
6. Expense Reductions. |
Through arrangements with each applicable Fund’s custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce each applicable Fund’s expenses. All of the applicable expense reductions are noted in the table below.
Transfer | ||||||||||||
Custody | Agent | Accounting | ||||||||||
expense | expense | expense | ||||||||||
reduction | reduction | reduction | ||||||||||
Fidelity Ohio Municipal Income Fund | $ 3,412 | $ 97,772 | $ — | |||||||||
Fidelity Ohio Municipal Money Market Fund | 6,786 | 556,983 | 23,957 | |||||||||
7. Other. |
The Funds’ organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
39 Semiannual Report
Proxy Voting Results
A special meeting of Fidelity Ohio Municipal Money Market Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 667,201,902.33 | 95.261 | ||
Withheld | 33,193,298.35 | 4.739 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 667,477,031.41 | 95.300 | ||
Withheld | 32,918,169.27 | 4.700 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 666,308,716.35 | 95.133 | ||
Withheld | 34,086,484.33 | 4.867 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 664,652,778.09 | 94.897 | ||
Withheld | 35,742,422.59 | 5.103 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 664,170,496.79 | 94.828 | ||
Withheld | 36,224,703.89 | 5.172 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 663,788,907.22 | 94.773 | ||
Withheld | 36,606,293.46 | 5.227 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 667,006,752.59 | 95.233 | ||
Withheld | 33,388,448.09 | 4.767 | ||
TOTAL | 700,395,200.68 | 100.000 |
Marie L. Knowles | ||||
Affirmative | 666,373,338.05 | 95.142 | ||
Withheld | 34,021,862.63 | 4.858 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 666,334,938.56 | 95.137 | ||
Withheld | 34,060,262.12 | 4.863 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 665,764,692.27 | 95.056 | ||
Withheld | 34,630,508.41 | 4.944 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 667,335,421.55 | 95.280 | ||
Withheld | 33,059,779.13 | 4.720 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 667,579,724.56 | 95.315 | ||
Withheld | 32,815,476.12 | 4.685 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 665,215,267.33 | 94.977 | ||
Withheld | 35,179,933.35 | 5.023 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 666,060,714.08 | 95.098 | ||
Withheld | 34,334,486.60 | 4.902 | ||
TOTAL | 700,395,200.68 | 100.000 |
A Denotes trust-wide proposal and voting results.
Semiannual Report 40
A special meeting of Fidelity Ohio Municipal Income Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
41 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Ohio Municipal Income Fund / Fidelity Ohio Municipal Money Market Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (togeth er, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for each fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for each fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to each fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, considered a broad range of information and determined that it would be beneficial for each fund to access the research and investment advisory support services supplied by FRAC at no additional expense to each fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under each fund’s manage ment contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of each fund’s assets; (iii) the nature or level of services provided under each fund’s management contract or sub advisory agreements; (iv) the day to day management of each fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of each Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of each fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which each fund will not bear any additional management fees or expenses and under which each fund’s portfolio manager would not change, it did not consider each fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of each fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to each fund, including shareholder and administrative services and investment perfor mance; (ii) the competitiveness of each fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distrib uting, managing, administering, and servicing each fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the
Semiannual Report |
42 |
Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that each fund’s Agreement is fair and reasonable, and that each fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for each fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of each fund’s Advisory Contracts, including the services and support provided to each fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such com mittee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for each fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to each fund and its sharehold ers (including the investment performance of each fund); (ii) the competitiveness of the management fee and total expenses of each fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with each fund; (iv) the extent to which economies of scale would be realized as each fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
43 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
In determining whether to renew the Advisory Contracts for each fund, the Board ultimately reached a determination, with the assistance of fund counsel and Indepen dent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contracts is consistent with Fidelity’s fiduciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in each fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that each fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in that fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the backgrounds of the funds’ portfolio managers and the funds’ investment objectives and disciplines. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for each fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, each fund’s compliance policies and procedures.
Semiannual Report |
44 |
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of a fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class avail able to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether each fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed each fund’s absolute investment performance, as well as each fund’s relative investment performance measured against (i) a broad based securities market index (bond fund only, as money market funds are typically not compared against a market index), and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. For each fund, the following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, the fund’s cumula tive total returns, the cumulative total returns of a broad based securities market index (“benchmark”) (bond fund only), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the fund.
45 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Fidelity Ohio Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/ohiomunix46x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the second quartile for the one year period and the first quartile for the three and five year periods. The Board also stated that the relative investment performance of the fund was lower than its bench mark for all the periods shown.
Fidelity Ohio Municipal Money Market Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/ohiomunix46x2.jpg)
Semiannual Report 46
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the second quartile for all the periods shown.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative perfor mance, the Board concluded that the nature, extent, and quality of the services provided to each fund will benefit each fund’s shareholders, particularly in light of the Board’s view that each fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered each fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board’s management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the charts below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than a fund’s. For example, a TMG % of 25% would mean that 75% of the funds in the Total Mapped Group had higher management fees than a fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which a fund’s management fee ranked, is also included in the charts and considered by the Board.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Fidelity Ohio Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/ohiomunix48x1.jpg)
The Board noted that each fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board concluded that each fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
Semiannual Report |
48 |
In its review of each fund’s total expenses, the Board considered the fund’s management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also consid ered current and historical total expenses of each fund compared to competitive fund median expenses. Each fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that each fund’s total expenses ranked below its competitive median for 2005.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that each fund’s total expenses were reason able in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing each fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for each fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitabil ity methodologies are reasonable in all material respects.
49 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the funds’ business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of each fund and determined that the amount of profit is a fair entrepreneurial profit for the management of each fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which each fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that each fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Semiannual Report |
50 |
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that each fund’s Advisory Contracts should be renewed.
51 Semiannual Report
Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Advisers Fidelity Investments Money Management, Inc. Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Service Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24-Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
Telephone (FAST® ) (automated phone logo) | 1-800-544-5555 | |
(automated phone logo) Automated lines for quickest service |
OFF USAN-0806 1.787787.103 |
Fidelity® Pennsylvania Municipal Income Fund and Fidelity Pennsylvania Municipal Money Market Fund |
Semiannual Report June 30, 2006 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix1x2.jpg)
Contents | ||||
Chairman’s Message | 4 | Ned Johnson’s message to shareholders | ||
Shareholder Expense | 5 | An example of shareholder expenses. | ||
Example | ||||
Fidelity Pennsylvania Municipal Income Fund | ||||
Investment Changes | 7 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 8 | A complete list of the fund’s investments with | ||
their market values. | ||||
Financial Statements | 15 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Fidelity Pennsylvania Municipal Money Market Fund | ||||
Investment Changes | 19 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 20 | A complete list of the fund’s investments. | ||
Financial Statements | 27 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 31 | Notes to the Financial Statements | ||
Proxy Voting Results | 36 | |||
Board Approval of | 39 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
Semiannual Report 2
This report and the financial statements contained herein are submitted for the general in- formation of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the funds nor Fidelity Distributors Corporation is a bank. |
3 Semiannual Report
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report 4
4
Shareholder Expense Example
As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Fidelity Pennsylvania Municipal | ||||||||||||
Income Fund | ||||||||||||
Actual | $ 1,000.00 | $ 1,001.30 | $ 2.53 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.27 | $ 2.56 | |||||||||
5 | Semiannual Report |
Shareholder Expense Example continued | ||||||||||
Expenses Paid | ||||||||||
Beginning | Ending | During Period* | ||||||||
Account Value | Account Value | January 1, 2006 | ||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||
Fidelity Pennsylvania Municipal | ||||||||||
Money Market Fund | ||||||||||
Actual | $ 1,000.00 | $ 1,014.30 | $ 2.50 | |||||||
HypotheticalA | $ 1,000.00 | $ 1,022.32 | $ 2.51 | |||||||
A 5% return per year before expenses |
* Expenses are equal to each Fund’s annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Fidelity Pennsylvania Municipal Income Fund | 51% | |
Fidelity Pennsylvania Municipal Money Market Fund | 50% |
Semiannual Report |
6 |
Fidelity Pennsylvania Municipal Income Fund | ||||
Investment Changes | ||||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 34.7 | 35.8 | ||
Escrowed/Pre Refunded | 15.1 | 12.8 | ||
Transportation | 11.7 | 10.9 | ||
Health Care | 9.9 | 8.6 | ||
Water & Sewer | 9.6 | 9.2 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 11.5 | 12.2 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 5.6 | 6.1 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix7x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
7 Semiannual Report
Fidelity Pennsylvania Municipal Income Fund | ||||||
Investments June 30, 2006 (Unaudited) | ||||||
Showing Percentage of Net Assets | ||||||
Municipal Bonds 98.5% | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Guam 0.1% | ||||||
Guam Wtrwks. Auth. Wtr. and Wastewtr. Sys. Rev. | ||||||
5.875% 7/1/35 | $ 325,000 | $ 338,588 | ||||
New Jersey/Pennsylvania – 1.3% | ||||||
Delaware River Joint Toll Bridge Commission Bridge Rev. | ||||||
5.25% 7/1/19 (Pre-Refunded to 7/1/13 @ 100) (c) | 1,000,000 | 1,068,610 | ||||
Delaware River Port Auth. Pennsylvania & New Jersey | ||||||
Rev.: | ||||||
(Port District Proj.) Series A, 5.5% 1/1/18 (FSA | ||||||
Insured) | 2,000,000 | 2,131,240 | ||||
Series 1999, 6% 1/1/18 (FSA Insured) | 700,000 | 746,774 | ||||
3,946,624 | ||||||
Pennsylvania – 95.0% | ||||||
Allegheny County Arpt. Rev. (Pittsburgh Int’l. Arpt. Proj.): | ||||||
Series A1: | ||||||
5.75% 1/1/07 (MBIA Insured) (b) | 1,500,000 | 1,513,005 | ||||
5.75% 1/1/08 (MBIA Insured) (b) | 1,000,000 | 1,024,420 | ||||
5.75% 1/1/09 (MBIA Insured) (b) | 3,000,000 | 3,107,940 | ||||
5.75% 1/1/11 (MBIA Insured) (b) | 2,000,000 | 2,112,160 | ||||
5.75% 1/1/12 (MBIA Insured) (b) | 3,000,000 | 3,193,980 | ||||
5.75% 1/1/14 (MBIA Insured) (b) | 3,000,000 | 3,224,250 | ||||
Allegheny County Gen. Oblig. Series C55, 5.375% | ||||||
11/1/15 (MBIA Insured) | 3,535,000 | 3,764,881 | ||||
Allegheny County Higher Ed. Bldg. Auth. Univ. Rev.: | ||||||
(Carnegie Mellon Univ. Proj.): | ||||||
5.125% 3/1/32 | 1,700,000 | 1,740,477 | ||||
5.25% 3/1/32 | 2,000,000 | 2,064,940 | ||||
(Duquesne Univ. Proj.) 6.5% 3/1/10 (AMBAC Insured) . | 400,000 | 433,788 | ||||
Allegheny County Hosp. Dev. Auth. Rev.: | ||||||
(Health Ctr.-UPMC Health Sys. Proj.) Series A: | ||||||
4.625% 8/1/12 (MBIA Insured) | 1,000,000 | 1,014,110 | ||||
4.625% 8/1/14 (MBIA Insured) | 3,560,000 | 3,594,888 | ||||
5.55% 4/1/12 (MBIA Insured) | 2,845,000 | 2,933,650 | ||||
(Jefferson Reg’l. Med. Ctr. Proj.) Series B: | ||||||
4% 5/1/07 | 685,000 | 683,383 | ||||
4.05% 5/1/08 | 1,425,000 | 1,421,224 | ||||
5% 5/1/09 | 1,475,000 | 1,502,052 | ||||
Allegheny County Indl. Dev. Auth. Rev. (Watson Institute | ||||||
Ed. Ctr. Proj.) 3.375%, tender 5/1/08, LOC PNC | ||||||
Bank NA, Pittsburgh (a) | 3,000,000 | 2,958,510 | ||||
Allegheny County San. Auth. Swr. Rev.: | ||||||
0% 12/1/12 (Escrowed to Maturity) (c) | 2,260,000 | 1,706,458 | ||||
5.5% 12/1/30 (MBIA Insured) | 305,000 | 321,296 | ||||
See accompanying notes which are an integral part of the financial statements. | ||||||
Semiannual Report | 8 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Pennsylvania – continued | ||||||||
Allegheny County San. Auth. Swr. Rev.: – continued | ||||||||
5.5% 12/1/30 (Pre-Refunded to 12/1/10 @ 101) (c) | $ 1,695,000 | $ 1,806,633 | ||||||
Annville-Cleona School District: | ||||||||
6% 3/1/28 (FSA Insured) | 1,500,000 | 1,680,225 | ||||||
6% 3/1/31 (FSA Insured) | 1,975,000 | 2,210,795 | ||||||
Bristol Borough School District: | ||||||||
5.25% 3/1/25 (FSA Insured) | 2,400,000 | 2,535,528 | ||||||
5.25% 3/1/31 (FSA Insured) | 5,495,000 | 5,738,154 | ||||||
Bucks County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||||
(Pennsylvania Suburban Wtr. Co. Proj.) Series 2002, | ||||||||
5.55% 9/1/32 (FGIC Insured) (b) | 1,870,000 | 1,944,220 | ||||||
Butler Area School District 0% 11/15/19 (Pre-Refunded | ||||||||
to 11/15/07 @ 50.177) (c) | 5,650,000 | 2,691,604 | ||||||
Canon McMillan School District: | ||||||||
Series 2001 B, 5.75% 12/1/33 (FGIC Insured) | 8,995,000 | 9,572,029 | ||||||
Series 2002 B, 5.75% 12/1/35 (FGIC Insured) | 2,500,000 | 2,680,675 | ||||||
Central Dauphin School District Gen. Oblig. 7.5% | ||||||||
2/1/30 (MBIA Insured) | 5,000,000 | 6,190,900 | ||||||
Central York School District 5.5% 6/1/16 (Pre-Refunded | ||||||||
to 6/1/12 @ 100) (c) | 2,000,000 | 2,158,440 | ||||||
Chester County Health & Ed. Facilities Auth. Health Sys. | ||||||||
Rev. (Jefferson Health Sys. Proj.) Series B: | ||||||||
5% 5/15/08 (AMBAC Insured) | 600,000 | 611,370 | ||||||
5.25% 5/15/22 (AMBAC Insured) | 1,450,000 | 1,488,454 | ||||||
Cumberland County Muni. Auth. College Rev. (Dickerson | ||||||||
College Proj.) Series A, 5.5% 11/1/30 (Pre-Refunded | ||||||||
to 11/1/10 @ 100) (c) | 4,200,000 | 4,462,794 | ||||||
Delaware County Auth. College Rev. (Haverford College | ||||||||
Proj.): | ||||||||
5.75% 11/15/29 | 5,000,000 | 5,334,800 | ||||||
6% 11/15/30 | 3,620,000 | 3,910,034 | ||||||
Delaware County Indl. Dev. Auth. Rev. (Philadelphia | ||||||||
Suburban Wtr. Co. Proj.) 6% 6/1/29 (FGIC | ||||||||
Insured) (b) | 2,500,000 | 2,650,150 | ||||||
Delaware County Reg’l. Wtr. Quality Cont. Auth. Swr. | ||||||||
Rev. Series 2001, 5.25% 5/1/12 (FGIC Insured) | 2,165,000 | 2,295,528 | ||||||
Erie County Gen. Oblig. Series 2005 A, 5.5% 9/1/21 | ||||||||
(FGIC Insured) | 1,770,000 | 1,966,948 | ||||||
Harrisburg Auth. Dauphin County School Rev. | ||||||||
(Harrisburg School District Rfdg. Proj.) 5.5% 4/1/14 | ||||||||
(FGIC Insured) | 1,655,000 | 1,769,642 | ||||||
Harrisburg Auth. Wtr. Rev. 5.75% 7/15/12 (FGIC | ||||||||
Insured) | 1,115,000 | 1,198,291 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Fidelity Pennsylvania Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Pennsylvania – continued | ||||||||
Kennett Consolidated School District Series A, 5.25% | ||||||||
2/15/15 (FGIC Insured) | $ 1,310,000 | $ 1,390,146 | ||||||
Luzerne County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||||
(Pennsylvania-American Wtr. Co. Proj.) 3.6%, tender | ||||||||
12/1/09 (AMBAC Insured) (a)(b) | 2,000,000 | 1,934,400 | ||||||
Montgomery County Higher Ed. & Health Auth. Hosp. | ||||||||
Rev. (Abington Memorial Hosp. Proj.) Series A: | ||||||||
6% 6/1/09 (AMBAC Insured) | 2,365,000 | 2,491,977 | ||||||
6% 6/1/16 (AMBAC Insured) | 1,000,000 | 1,123,850 | ||||||
Montgomery County Higher Ed. & Health Auth. Rev. | ||||||||
(Health Care-Holy Redeemer Health Proj.) Series A, | ||||||||
5.5% 10/1/08 (AMBAC Insured) | 1,000,000 | 1,028,590 | ||||||
Muhlenberg School District Series AA, 5.375% 9/1/15 | ||||||||
(FGIC Insured) | 1,055,000 | 1,128,027 | ||||||
Northumberland County Auth. Commonwealth Lease | ||||||||
Rev. (State Correctional Facilities Proj.) 0% 10/15/10 | ||||||||
(Escrowed to Maturity) (c) | 1,000,000 | 838,600 | ||||||
Owen J. Roberts School District 5.5% 8/15/19 (Pre-Re- | ||||||||
funded to 8/15/12 @ 100) (c) | 1,525,000 | 1,646,954 | ||||||
Pennsbury School District 5.5% 1/15/17 (FGIC Insured) | 2,160,000 | 2,310,444 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities | ||||||||
Rev.: | ||||||||
(Amtrak Proj.) Series 2001 A: | ||||||||
6.25% 11/1/31 (b) | 3,300,000 | 3,517,965 | ||||||
6.375% 11/1/41 (b) | 1,300,000 | 1,391,611 | ||||||
(Shippingport Proj.) Series A, 4.35%, tender | ||||||||
6/1/10 (a)(b) | 2,500,000 | 2,478,675 | ||||||
Pennsylvania Gen. Oblig.: | ||||||||
First Series: | ||||||||
5% 7/1/19 | 2,500,000 | 2,614,100 | ||||||
5.25% 2/1/14 | 125,000 | 132,216 | ||||||
5.25% 2/1/18 (Pre-Refunded to 2/1/12 @ 100) (c) | 1,250,000 | 1,328,563 | ||||||
Second Series: | ||||||||
0% 7/1/07 (AMBAC Insured) | 1,770,000 | 1,704,014 | ||||||
5.25% 6/1/15 (FSA Insured) | 3,350,000 | 3,588,989 | ||||||
5.75% 10/1/16 (Pre-Refunded to 10/1/09 @ | ||||||||
101) (c) | 475,000 | 505,785 | ||||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: | ||||||||
(Drexel Univ. Proj.): | ||||||||
Series A: | ||||||||
5% 5/1/16 (MBIA Insured) | 1,135,000 | 1,193,589 | ||||||
5% 5/1/18 (MBIA Insured) | 1,220,000 | 1,273,863 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: - | ||||||||
continued | ||||||||
(Drexel Univ. Proj.): | ||||||||
6% 5/1/24 (Pre-Refunded to 5/1/09 @ 100) (c) | $ 4,075,000 | $ 4,296,680 | ||||||
6% 5/1/29 (Pre-Refunded to 5/1/09 @ 100) (c) | 3,470,000 | 3,658,768 | ||||||
(Lafayette College Proj.) 6% 5/1/30 | 2,500,000 | 2,662,550 | ||||||
(Temple Univ. Proj.) 5.375% 7/15/19 (Pre-Refunded | ||||||||
to 7/15/11 @ 101) (c) | 1,990,000 | 2,134,434 | ||||||
(Univ. of Pennsylvania Health Systems Proj.) Series A, | ||||||||
5% 8/15/17 (AMBAC Insured) | 3,000,000 | 3,124,590 | ||||||
(UPMC Health Sys. Proj.): | ||||||||
Series 1999 A: | ||||||||
5.25% 8/1/10 (FSA Insured) | 1,000,000 | 1,040,180 | ||||||
5.25% 8/1/11 (FSA Insured) | 1,000,000 | 1,047,250 | ||||||
Series 2001 A: | ||||||||
6% 1/15/22 | 400,000 | 431,844 | ||||||
6% 1/15/31 | 1,000,000 | 1,076,610 | ||||||
Series 2000 S, 5.5% 6/15/15 (AMBAC Insured) | 500,000 | 525,970 | ||||||
Pennsylvania Hsg. Fin. Agcy. Series 54A, 5.375% | ||||||||
10/1/28 (b) | 290,000 | 292,300 | ||||||
Pennsylvania Indl. Dev. Auth. Rev.: | ||||||||
5.5% 7/1/16 (AMBAC Insured) | 1,080,000 | 1,165,622 | ||||||
7% 1/1/07 (AMBAC Insured) | 1,000,000 | 1,015,350 | ||||||
Pennsylvania Pub. School Bldg. Auth. School Rev.: | ||||||||
(Northwestern School District Proj.) Series E, 5.75% | ||||||||
1/15/19 (FGIC Insured) | 500,000 | 521,910 | ||||||
(Philadelphia School District Proj.) 5% 6/1/33 (FSA | ||||||||
Insured) | 3,085,000 | 3,124,365 | ||||||
Pennsylvania State Univ.: | ||||||||
5% 9/1/29 | 1,550,000 | 1,589,975 | ||||||
5% 9/1/35 | 4,485,000 | 4,577,167 | ||||||
Pennsylvania Tpk. Commission Registration Fee Rev. | ||||||||
Series 2001, 5.5% 7/15/33 (Pre-Refunded to | ||||||||
7/15/11 @ 101) (c) | 1,000,000 | 1,078,220 | ||||||
Pennsylvania Tpk. Commission Tpk. Rev.: | ||||||||
Series A, 5% 12/1/26 (AMBAC Insured) | 2,000,000 | 2,058,160 | ||||||
Series S, 5.625% 6/1/12 (FGIC Insured) | 2,000,000 | 2,161,640 | ||||||
Philadelphia Arpt. Rev.: | ||||||||
Series 1998, 5.375% 6/15/10 (FGIC Insured) (b) | 2,000,000 | 2,082,140 | ||||||
5.375% 6/15/11 (FGIC Insured) (b) | 3,770,000 | 3,921,931 | ||||||
6% 6/15/08 (FGIC Insured) (b) | 3,000,000 | 3,108,090 | ||||||
Philadelphia Gas Works Rev.: | ||||||||
(1975 Gen. Ordinance Proj.) 17th Series, 5% 7/1/08 | ||||||||
(FSA Insured) | 1,000,000 | 1,020,440 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Fidelity Pennsylvania Municipal Income Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Pennsylvania – continued | ||||||||
Philadelphia Gas Works Rev.: – continued | ||||||||
(1998 Gen. Ordinance Proj.) 4th Series, 5.25% | ||||||||
8/1/17 (FSA Insured) | $ 2,290,000 | $ 2,408,508 | ||||||
Series A1, 5.25% 9/1/18 (Assured Guaranty Ltd. | ||||||||
Insured) | 3,340,000 | 3,499,886 | ||||||
Philadelphia Gen. Oblig. 5.25% 9/15/12 (FSA Insured) | 2,455,000 | 2,576,375 | ||||||
Philadelphia Hosp. & Higher Ed. Facilities Auth. Health | ||||||||
Sys. Rev. (Jefferson Health Sys. Proj.) Series A: | ||||||||
5% 5/15/09 | 1,000,000 | 1,023,990 | ||||||
5.5% 5/15/08 | 1,000,000 | 1,027,460 | ||||||
Philadelphia Hosp. & Higher Ed. Facilities Auth. Hosp. Rev. | ||||||||
(Jeanes Hosp. Proj.) 5.875% 7/1/17 (Pre Refunded to | ||||||||
7/1/07 @ 102) (c) | 340,000 | 353,620 | ||||||
Philadelphia Muni. Auth. Rev.: | ||||||||
(Muni. Svcs. Bldg. Lease Prog.) 0% 3/15/11 (FSA | ||||||||
Insured) | 1,000,000 | 817,550 | ||||||
Series B, 5.25% 11/15/11 (FSA Insured) | 2,000,000 | 2,110,520 | ||||||
Philadelphia Redev. Auth. Rev. (Philadelphia | ||||||||
Neighborhood Transformation Initiative Proj.) Series | ||||||||
2005 C, 5% 4/15/31 (FGIC Insured) | 1,000,000 | 1,020,580 | ||||||
Philadelphia School District: | ||||||||
Series 2002 A, 5.5% 2/1/26 (Pre-Refunded to | ||||||||
2/1/12 @ 100) (c) | 3,565,000 | 3,833,195 | ||||||
Series 2004 D, 5.25% 6/1/34 (FGIC Insured) | 2,785,000 | 2,892,473 | ||||||
Series 2005 D: | ||||||||
5.5% 6/1/16 (FSA Insured) | 2,030,000 | 2,209,310 | ||||||
5.5% 6/1/17 (FSA Insured) | 2,125,000 | 2,317,908 | ||||||
Series A, 5.75% 2/1/16 (Pre-Refunded to 2/1/11 @ | ||||||||
100) (c) | 500,000 | 537,275 | ||||||
Series B, 5.625% 8/1/15 (Pre-Refunded to 8/1/12 @ | ||||||||
100) (c) | 1,510,000 | 1,640,177 | ||||||
Series D, 5.125% 6/1/34 (FGIC Insured) | 1,800,000 | 1,852,326 | ||||||
Philadelphia Wtr. & Wastewtr. Rev.: | ||||||||
Series 14, 0% 10/1/08 (MBIA Insured) | 5,300,000 | 4,833,812 | ||||||
Series A: | ||||||||
5% 11/1/31 (FGIC Insured) | 1,075,000 | 1,088,868 | ||||||
5.375% 11/1/19 (FGIC Insured) | 3,000,000 | 3,188,550 | ||||||
6.25% 8/1/10 (MBIA Insured) | 1,480,000 | 1,606,185 | ||||||
Pittsburgh Gen. Oblig.: | ||||||||
Series 2003 A, 5.75% 9/1/22 (Pre-Refunded to | ||||||||
9/1/09 @ 100) (c) | 800,000 | 843,704 | ||||||
Series 2003 D, 5% 9/1/06 (FGIC Insured) | 250,000 | 250,488 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Pennsylvania – continued | ||||||
Pittsburgh Gen. Oblig.: – continued | ||||||
Series A: | ||||||
5% 9/1/11 (MBIA Insured) | $ 5,020,000 | $ 5,237,165 | ||||
5.5% 9/1/16 (AMBAC Insured) | 2,565,000 | 2,725,774 | ||||
5.5% 9/1/16 (Pre-Refunded to 3/1/12 @ 100) (c) | 2,435,000 | 2,620,571 | ||||
Series B, 5.25% 9/1/15 (FSA Insured) | 2,000,000 | 2,137,720 | ||||
Pittsburgh School District: | ||||||
Series A, 5% 9/1/08 (MBIA Insured) | 3,080,000 | 3,135,132 | ||||
Series C: | ||||||
0% 8/1/07 (AMBAC Insured) | 2,610,000 | 2,504,373 | ||||
0% 8/1/08 (AMBAC Insured) | 2,000,000 | 1,837,020 | ||||
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys. Rev. Series | ||||||
A, 6.5% 9/1/13 (FGIC Insured) | 10,000,000 | 11,211,198 | ||||
Scranton-Lackawanna Health & Welfare Auth. Rev. | ||||||
(Cmnty. Med. Ctr. Proj.) 5.5% 7/1/12 (MBIA Insured) | 3,375,000 | 3,500,584 | ||||
Spring-Ford Area School District: | ||||||
5.375% 4/1/16 (FSA Insured) | 790,000 | 839,312 | ||||
5.375% 4/1/17 (FSA Insured) | 830,000 | 877,899 | ||||
5.375% 4/1/18 (FSA Insured) | 875,000 | 925,041 | ||||
Upper Saint Clair Township School District 5.375% | ||||||
7/15/16 (FSA Insured) | 1,855,000 | 1,976,039 | ||||
West Allegheny School District Series B, 5.25% 2/1/12 | ||||||
(FGIC Insured) | 1,850,000 | 1,964,386 | ||||
Westmoreland County Gen. Oblig.: | ||||||
0% 8/1/15 (Escrowed to Maturity) (c) | 4,290,000 | 2,847,616 | ||||
0% 8/1/16 (Escrowed to Maturity) (c) | 2,955,000 | 1,869,274 | ||||
Westmoreland County Indl. Dev. Auth. Rev. (Nat’l. Waste | ||||||
& Energy Corp./Valley Landfill Expansion Proj.) 5.1%, | ||||||
tender 5/1/09 (a)(b) | 2,700,000 | 2,742,984 | ||||
Westmoreland County Muni. Auth. Muni. Svc. Rev.: | ||||||
Series A: | ||||||
0% 8/15/19 (FGIC Insured) | 5,000,000 | 2,698,750 | ||||
0% 8/15/20 (FGIC Insured) | 2,500,000 | 1,278,525 | ||||
Series C, 0% 8/15/17 (Escrowed to Maturity) (c) | 2,500,000 | 1,505,200 | ||||
York City Swr. Auth. Swr. Rev. 0% 12/1/12 (MBIA | ||||||
Insured) | 3,235,000 | 2,452,809 | ||||
York County School of Technology Auth. Lease Rev.: | ||||||
5.375% 2/15/18 (FGIC Insured) | 1,000,000 | 1,062,400 | ||||
5.5% 2/15/23 (FGIC Insured) | 1,070,000 | 1,141,230 | ||||
285,574,932 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Fidelity Pennsylvania Municipal Income Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Bonds continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Puerto Rico 2.1% | ||||||
Puerto Rico Commonwealth Hwy. & Trans. Auth. Hwy. | ||||||
Rev. Series Y, 5.5% 7/1/36 (FSA Insured) | $ 400,000 | $ 431,888 | ||||
Puerto Rico Commonwealth Infrastructure Fing. Auth. | ||||||
Series C, 5.5% 7/1/25 (AMBAC Insured) | 2,500,000 | 2,789,600 | ||||
Puerto Rico Elec. Pwr. Auth. Pwr. Rev.: | ||||||
Series II, 5.375% 7/1/16 (MBIA Insured) | 1,000,000 | 1,068,870 | ||||
Series QQ, 5.25% 7/1/13 (XL Cap. Assurance, Inc. | ||||||
Insured) | 500,000 | 533,055 | ||||
Puerto Rico Govt. Dev. Bank 5% 12/1/10 | 1,500,000 | 1,540,440 | ||||
6,363,853 | ||||||
TOTAL INVESTMENT PORTFOLIO – 98.5% | ||||||
(Cost $291,587,323) | 296,223,997 | |||||
NET OTHER ASSETS – 1.5% | 4,545,955 | |||||
NET ASSETS 100% | $ 300,769,952 |
Legend (a) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (b) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (c) Security collateralized by an amount sufficient to pay interest and principal. |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 34.7% | |
Escrowed/Pre Refunded | 15.1% | |
Transportation | 11.7% | |
Health Care | 9.9% | |
Water & Sewer | 9.6% | |
Education | 9.4% | |
Others* (individually less than 5%) | 9.6% | |
100.0% |
*Includes net other assets
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 14
Fidelity Pennsylvania Municipal Income Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $291,587,323) | $ 296,223,997 | |||||
Cash | 1,748,612 | |||||
Receivable for fund shares sold | 39,307 | |||||
Interest receivable | 3,517,691 | |||||
Prepaid expenses | 617 | |||||
Other receivables | 52,477 | |||||
Total assets | 301,582,701 | |||||
Liabilities | ||||||
Payable for fund shares redeemed | $ 324,184 | |||||
Distributions payable | 315,047 | |||||
Accrued management fee | 93,075 | |||||
Other affiliated payables | 52,708 | |||||
Other payables and accrued expenses | 27,735 | |||||
Total liabilities | 812,749 | |||||
Net Assets | $ 300,769,952 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 296,544,180 | |||||
Undistributed net investment income | 8,706 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | (419,608) | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | 4,636,674 | |||||
Net Assets, for 28,384,904 shares outstanding | $ 300,769,952 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($300,769,952 ÷ 28,384,904 shares) | $ 10.60 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Fidelity Pennsylvania Municipal Income Fund | ||||||
Financial Statements continued | ||||||
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 6,728,216 | |||||
Expenses | ||||||
Management fee | $ 565,984 | |||||
Transfer agent fees | 118,453 | |||||
Accounting fees and expenses | 38,221 | |||||
Independent trustees’ compensation | 593 | |||||
Custodian fees and expenses | 2,482 | |||||
Registration fees | 18,250 | |||||
Audit | 24,313 | |||||
Legal | 1,693 | |||||
Miscellaneous | 1,594 | |||||
Total expenses before reductions | 771,583 | |||||
Expense reductions | (159,156) | 612,427 | ||||
Net investment income | 6,115,789 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 494,777 | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (6,250,159) | |||||
Net gain (loss) | (5,755,382) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 360,407 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
16 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
(Unaudited) | 2005 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 6,115,789 | $ 12,367,867 | ||||||
Net realized gain (loss) | 494,777 | 1,976,866 | ||||||
Change in net unrealized appreciation (depreciation) . | (6,250,159) | (6,355,623) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 360,407 | 7,989,110 | ||||||
Distributions to shareholders from net investment income . | (6,118,560) | (12,342,980) | ||||||
Distributions to shareholders from net realized gain | — | (2,072,399) | ||||||
Total distributions | (6,118,560) | (14,415,379) | ||||||
Share transactions | ||||||||
Proceeds from sales of shares | 22,034,400 | 54,588,207 | ||||||
Reinvestment of distributions | 4,204,503 | 10,204,264 | ||||||
Cost of shares redeemed | (26,442,922) | (49,266,553) | ||||||
Net increase (decrease) in net assets resulting from | ||||||||
share transactions | (204,019) | 15,525,918 | ||||||
Redemption fees | 142 | 10,940 | ||||||
Total increase (decrease) in net assets | (5,962,030) | 9,110,589 | ||||||
Net Assets | ||||||||
Beginning of period | 306,731,982 | 297,621,393 | ||||||
End of period (including undistributed net investment | ||||||||
income of $8,706 and undistributed net investment | ||||||||
income of $22,723, respectively) | $ 300,769,952 | $ 306,731,982 | ||||||
Other Information | ||||||||
Shares | ||||||||
Sold | 2,053,386 | 4,981,143 | ||||||
Issued in reinvestment of distributions | 392,642 | 934,909 | ||||||
Redeemed | (2,469,559) | (4,514,890) | ||||||
Net increase (decrease) | (23,531) | 1,401,162 |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Financial Highlights | ||||||||||||
Six months ended | ||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Selected Per Share Data | ||||||||||||
Net asset value, | ||||||||||||
beginning of period | $ 10.80 | $ 11.02 | $ 11.06 | $ 11.07 | $ 10.64 | $ 10.64 | ||||||
Income from Investment | ||||||||||||
Operations | ||||||||||||
Net investment | ||||||||||||
incomeD | .215 | .440 | .454 | .463 | .482 | .494 | ||||||
Net realized and un | ||||||||||||
realized gain (loss) | (.200) | (.148) | .006E | .091 | .471 | .030 | ||||||
Total from invest- | ||||||||||||
ment operations | .015 | .292 | .460 | .554 | .953 | .524 | ||||||
Distributions from net | ||||||||||||
investment income . | (.215) | (.439) | (.452) | (.462) | (.482) | (.493) | ||||||
Distributions from net | ||||||||||||
realized gain | (.073) | (.048) | (.102) | (.041) | (.031) | |||||||
Total distributions | (.215) | (.512) | (.500) | (.564) | (.523) | (.524) | ||||||
Redemption fees | ||||||||||||
added to paid in | ||||||||||||
capitalD,G | — | — | — | — | — | — | ||||||
Net asset value, | ||||||||||||
end of period | $ 10.60 | $ 10.80 | $ 11.02 | $ 11.06 | $ 11.07 | $ 10.64 | ||||||
Total ReturnB,C | .13% | 2.70% | 4.28% | 5.11% | 9.14% | 4.97% | ||||||
Ratios to Average Net AssetsF | ||||||||||||
Expenses before | ||||||||||||
reductions | .51%A | .50% | .50% | .51% | .51% | .51% | ||||||
Expenses net of fee | ||||||||||||
waivers, if any | .51%A | .50% | .50% | .51% | .51% | .51% | ||||||
Expenses net of all | ||||||||||||
reductions | .40%A | .45% | .49% | .50% | .49% | .45% | ||||||
Net investment | ||||||||||||
income | 4.03%A | 4.02% | 4.14% | 4.18% | 4.42% | 4.59% | ||||||
Supplemental Data | ||||||||||||
Net assets, | ||||||||||||
end of period | ||||||||||||
(000 omitted) | $300,770 | $306,732 | $297,621 | $292,019 | $300,026 | $269,262 | ||||||
Portfolio turnover | ||||||||||||
rate | 12%A | 26% | 14% | 18% | 9% | 22% |
A Annualized 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 Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund. G Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
18 |
Fidelity Pennsylvania Municipal Money Market Fund | ||||||
Investment Changes | ||||||
Maturity Diversification | ||||||
Days | % of fund’s | % of fund’s | % of fund’s | |||
investments | investments | investments | ||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
0 – 30 | 95.5 | 88.4 | 87.5 | |||
31 – 90 | 0.8 | 1.2 | 1.8 | |||
91 – 180 | 0.0 | 5.6 | 3.1 | |||
181 – 397 | 3.7 | 4.8 | 7.6 | |||
Weighted Average Maturity | ||||||
6/30/06 | 12/31/05 | 6/30/05 | ||||
Fidelity Pennsylvania Municipal Money | ||||||
Market Fund | 19 Days | 23 Days | 33 Days | |||
Pennsylvania Tax Free Money Market | ||||||
Funds Average* | 18 Days | 27 Days | 22 Days |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix19x1.jpg)
*Source: iMoneyNet, Inc.
19 Semiannual Report
Fidelity Pennsylvania Municipal Money Market Fund | ||||||
Investments June 30, 2006 (Unaudited) | ||||||
Showing Percentage of Net Assets | ||||||
Municipal Securities 95.5% | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
New Jersey/Pennsylvania – 1.6% | ||||||
Delaware River Port Auth. Pennsylvania & New Jersey Rev. | ||||||
Participating VRDN Series SGA 89, 4.02% (Liquidity Facility | ||||||
Societe Generale) (a)(c) | $ 7,500,000 | $ 7,500,000 | ||||
Pennsylvania – 92.4% | ||||||
Allegheny County Arpt. Rev. Participating VRDN Series PA | ||||||
567, 4.05% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(b)(c) | 2,000,000 | 2,000,000 | ||||
Allegheny County Hosp. Dev. Auth. Rev.: | ||||||
Bonds (South Hills Health Sys. Proj.) Series 2000 A, 3.68%, | ||||||
tender 6/1/07, LOC PNC Bank NA, Pittsburgh (a) | 5,000,000 | 5,000,000 | ||||
Participating VRDN Series PT 762, 4% (Liquidity Facility | ||||||
Landesbank Hessen-Thuringen) (a)(c) | 5,340,000 | 5,340,000 | ||||
Allegheny County Indl. Dev. Auth. Econ. Dev. Rev. (Glassport | ||||||
Realty Ltd. Proj.) 4.25%, LOC Huntington Nat’l. Bank, | ||||||
Columbus, VRDN (a)(b) | 1,560,000 | 1,560,000 | ||||
Allegheny County Indl. Dev. Auth. Rev.: | ||||||
Bonds (Animal Friends, Inc. Proj.) 4%, tender 7/1/06, LOC | ||||||
PNC Bank NA, Pittsburgh (a) | 4,155,000 | 4,155,060 | ||||
(Doren, Inc. Proj.) Series 1997 C, 4.14%, LOC Nat’l. City | ||||||
Bank, PA, VRDN (a)(b) | 1,300,000 | 1,300,000 | ||||
(R.I. Lampus Co. Proj.) Series 1997 A, 4.09%, LOC Nat’l. | ||||||
City Bank, PA, VRDN (a)(b) | 2,360,000 | 2,360,000 | ||||
(Union Elec. Steel Co. Proj.) Series 1996 A, 4.05%, LOC | ||||||
PNC Bank NA, Pittsburgh, VRDN (a)(b) | 3,120,000 | 3,120,000 | ||||
(UPMC Children’s Hosp. Proj.) Series 2004 A, 4.08%, | ||||||
VRDN (a) | 3,200,000 | 3,200,000 | ||||
Berks County Indl. Dev. Auth. Rev. (Fleetwood Industries Bus. | ||||||
Trust Proj.) 4.07%, LOC First Tennessee Bank NA, Memphis, | ||||||
VRDN (a)(b) | 2,360,000 | 2,360,000 | ||||
Blair County Indl. Dev. Auth. Rev. (Homewood at Martinsburg | ||||||
Proj.) 4.02%, LOC Manufacturers & Traders Trust Co., | ||||||
VRDN (a) | 3,200,000 | 3,200,000 | ||||
Bucks County Indl. Dev. Auth. Rev.: | ||||||
(Double H Plastics, Inc. Proj.) Series 1993, 4.03%, LOC | ||||||
Wachovia Bank NA, VRDN (a)(b) | 1,220,000 | 1,220,000 | ||||
(Snowball Real Estate LP Proj.) 4.13%, LOC Wachovia Bank | ||||||
NA, VRDN (a)(b) | 2,240,000 | 2,240,000 | ||||
Butler County Indl. Dev. Auth. Rev. (Armco, Inc. Proj.) Series | ||||||
1996 A, 4.05%, LOC Fifth Third Bank, Cincinnati, | ||||||
VRDN (a)(b) | 1,500,000 | 1,500,000 | ||||
Cambria County Ind. Dev. Auth. (Cambria Cogen Co. Proj.): | ||||||
Series 1998 A1, 4.25%, LOC Bayerische Hypo-und | ||||||
Vereinsbank AG, VRDN (a)(b) | 5,825,000 | 5,825,000 | ||||
See accompanying notes which are an integral part of the financial statements. | ||||||
Semiannual Report | 20 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Pennsylvania – continued | ||||||
Cambria County Ind. Dev. Auth. (Cambria Cogen Co. Proj.): - | ||||||
continued | ||||||
Series 1998 A2, 4.14%, LOC Bayerische Hypo-und | ||||||
Vereinsbank AG, VRDN (a)(b) | $ 3,300,000 | $ 3,300,000 | ||||
Central Bucks School District Series 2000 A, 4.02% (FGIC | ||||||
Insured), VRDN (a) | 3,930,000 | 3,930,000 | ||||
Chester County Inter Unit 4.07%, LOC PNC Bank NA, | ||||||
Pittsburgh, VRDN (a) | 1,650,000 | 1,650,000 | ||||
Delaware County Indl. Dev. Auth. Rev. Participating VRDN | ||||||
Series PA 1295, 4.02% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 10,650,000 | 10,650,000 | ||||
Erie County Gen. Oblig. Participating VRDN Series PT 1961, | ||||||
4% (Liquidity Facility Merrill Lynch & Co., Inc.) (a)(c) | 1,000,000 | 1,000,000 | ||||
Harrisburg Auth. Wtr. Rev.: | ||||||
Series 2002 B, 4.02% (FSA Insured), VRDN (a) | 3,000,000 | 3,000,000 | ||||
Series A, 4.02% (FGIC Insured), VRDN (a) | 4,785,000 | 4,785,000 | ||||
Hatfield Township Indl. Dev. Auth. Exempt Facilities Rev. | ||||||
(Hatfield Quality Meats Proj.) 4.05%, LOC Bank of America | ||||||
NA, VRDN (a)(b) | 1,500,000 | 1,500,000 | ||||
Indiana County Indl. Dev. Auth. Poll. Cont. Rev. (Exelon | ||||||
Generation Co. LLC Proj.) Series A, 4.07%, LOC BNP | ||||||
Paribas SA, VRDN (a)(b) | 2,255,000 | 2,255,000 | ||||
Lawrence County Indl. Dev. Auth. Indl. Dev. Rev. (Atlantic | ||||||
States Materials Proj.) Series 1999, 4.08%, LOC Wachovia | ||||||
Bank NA, VRDN (a)(b) | 1,200,000 | 1,200,000 | ||||
Luzerne County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||
Participating VRDN Series MS 1170X, 4.04% (Liquidity | ||||||
Facility Morgan Stanley) (a)(b)(c) | 2,000,000 | 2,000,000 | ||||
Lycoming County Indl. Dev. Auth. (FXD-Brodart Co. Proj.): | ||||||
Series A, 4.12%, LOC Manufacturers & Traders Trust Co., | ||||||
VRDN (a)(b) | 1,905,000 | 1,905,000 | ||||
Series C, 4.12%, LOC Manufacturers & Traders Trust Co., | ||||||
VRDN (a)(b) | 1,000,000 | 1,000,000 | ||||
Northampton County Indl. Dev. Auth. Rev.: | ||||||
Bonds (Citizens Utils. Co. Proj.) Series 1991, 3.65% tender | ||||||
8/4/06, CP mode (b) | 2,500,000 | 2,500,000 | ||||
(Binney & Smith, Inc. Proj.) Series 1997 A, 4.03%, LOC | ||||||
JPMorgan Chase Bank, VRDN (a)(b) | 2,350,000 | 2,350,000 | ||||
Northampton Indl. Dev. Auth. Rev. (Ultra-Poly Corp./Portland | ||||||
Ind. Park Proj.) 4.06%, LOC PNC Bank NA, Pittsburgh, | ||||||
VRDN (a)(b) | 2,400,000 | 2,400,000 | ||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities Rev.: | ||||||
(Amtrak Proj.) Series B, 4.06%, LOC JPMorgan Chase Bank, | ||||||
VRDN (a)(b) | 19,700,000 | 19,700,000 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Fidelity Pennsylvania Municipal Money Market Fund | ||||||||
Investments (Unaudited) continued | ||||||||
Municipal Securities continued | ||||||||
Principal | Value | |||||||
Amount | (Note 1) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities Rev.: - | ||||||||
continued | ||||||||
(Merck & Co. Proj.) Series 2000, 4.04%, VRDN (a)(b) | $11,000,000 | $ 11,000,000 | ||||||
(York Wtr. Co. Proj.) Series B, 4.05% (XL Cap. Assurance, | ||||||||
Inc. Insured), VRDN (a)(b) | 3,500,000 | 3,500,000 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Indl. Dev. Rev.: | ||||||||
Series 1999 C4, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 800,000 | 800,000 | ||||||
Series 2002 B6, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 800,000 | 800,000 | ||||||
Series 2004 D2, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 2,600,000 | 2,600,000 | ||||||
Series 2004 D6, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 2,700,000 | 2,700,000 | ||||||
Series B3, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 1,400,000 | 1,400,000 | ||||||
Series B5, 4.05%, LOC PNC Bank NA, Pittsburgh, | ||||||||
VRDN (a)(b) | 1,000,000 | 1,000,000 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Rev.: | ||||||||
(Westrum Hanover, LP Proj.) 4.03%, LOC Fed. Home Ln. | ||||||||
Bank Pittsburg, VRDN (a)(b) | 7,400,000 | 7,400,000 | ||||||
(Westrum Harleysville II, LP Proj.) 4.03%, LOC Fed. Home Ln. | ||||||||
Bank Pittsburg, VRDN (a)(b) | 4,335,000 | 4,335,000 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Solid Waste Disp. Rev.: | ||||||||
Participating VRDN Series MT 47, 4.04% (Liquidity Facility | ||||||||
Lloyds TSB Bank PLC) (a)(b)(c) | 4,500,000 | 4,500,000 | ||||||
(Waste Mgmt., Inc. Proj.) 4.29%, VRDN (a)(b) | 4,200,000 | 4,200,000 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Wastewtr. Treatment Rev. | ||||||||
(Sunoco, Inc. (R&M) Proj.): | ||||||||
Series A, 4.195%, VRDN (a)(b) | 1,600,000 | 1,600,000 | ||||||
Series B, 4.14% (Sunoco, Inc. Guaranteed), VRDN (a)(b) | 1,600,000 | 1,600,000 | ||||||
Pennsylvania Gen. Oblig.: | ||||||||
Bonds Second Series, 5% 9/15/06 | 1,000,000 | 1,002,564 | ||||||
Participating VRDN: | ||||||||
Series EGL 04 43 Class A, 4.02% (Liquidity Facility | ||||||||
Citibank NA) (a)(c) | 10,250,000 | 10,250,000 | ||||||
Series Merlots 04 B15, 4.01% (Liquidity Facility Wachovia | ||||||||
Bank NA) (a)(c) | 3,090,000 | 3,090,000 | ||||||
Series ROC II R506, 4.01% (Liquidity Facility Citibank | ||||||||
NA) (a)(c) | 4,260,000 | 4,260,000 | ||||||
Pennsylvania Higher Ed. Assistance Agcy. Student Ln. Rev.: | ||||||||
Series 1988 A, 4.01% (AMBAC Insured), VRDN (a)(b) | 7,300,000 | 7,300,000 | ||||||
Series 1988 B, 4.01% (AMBAC Insured), VRDN (a)(b) | 9,500,000 | 9,500,000 | ||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||
Semiannual Report | 22 |
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Pennsylvania – continued | ||||||
Pennsylvania Higher Ed. Assistance Agcy. Student Ln. Rev.: - | ||||||
continued | ||||||
Series 1988 C, 4.01%, LOC Sallie Mae, VRDN (a)(b) | $ 20,850,000 | $ 20,850,000 | ||||
Series 1988 E, 4.01%, LOC Sallie Mae, VRDN (a)(b) | 16,000,000 | 16,000,000 | ||||
Series 1997 A, 4.05% (AMBAC Insured), VRDN (a)(b) | 2,900,000 | 2,900,000 | ||||
Series 1999 A, 4.03% (AMBAC Insured), VRDN (a)(b) | 5,000,000 | 5,000,000 | ||||
Series 2000 A, 4.05% (AMBAC Insured), VRDN (a)(b) | 4,000,000 | 4,000,000 | ||||
Series 2001 B, 4.05% (FSA Insured), VRDN (a)(b) | 800,000 | 800,000 | ||||
Series 2002 B, 4.05% (FSA Insured), VRDN (a)(b) | 2,800,000 | 2,800,000 | ||||
Series A: | ||||||
4.05% (AMBAC Insured), VRDN (a)(b) | 2,500,000 | 2,500,000 | ||||
4.05% (FSA Insured), VRDN (a)(b) | 20,500,000 | 20,500,000 | ||||
Series A1, 4.05% (AMBAC Insured), VRDN (a)(b) | 5,600,000 | 5,600,000 | ||||
Pennsylvania Higher Edl. Facilities Auth. (Washington & | ||||||
Jefferson Dev. Corp. Proj.) Series A, 4%, LOC Unicredito | ||||||
Italiano Spa, VRDN (a) | 3,500,000 | 3,500,000 | ||||
Pennsylvania Higher Edl. Facilities Auth. Hosp. Rev. | ||||||
Participating VRDN Series MT 42, 4.03% (Liquidity Facility | ||||||
Lloyds TSB Bank PLC) (a)(c) | 7,590,000 | 7,590,000 | ||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: | ||||||
Participating VRDN: | ||||||
Series Merlots 05 D6, 4.01% (Liquidity Facility Wachovia | ||||||
Bank NA) (a)(c) | 4,370,000 | 4,370,000 | ||||
Series Putters 1378, 4.03% (Liquidity Facility JPMorgan | ||||||
Chase Bank) (a)(c) | 1,500,000 | 1,500,000 | ||||
(Mount Aloysius College Proj.) Series L3, 4%, LOC Allied | ||||||
Irish Banks PLC, VRDN (a) | 2,600,000 | 2,600,000 | ||||
Pennsylvania Hsg. Fin. Agcy.: | ||||||
Participating VRDN: | ||||||
Series LB 04 L80, 4.09% (Liquidity Facility Lehman | ||||||
Brothers Hldgs., Inc.) (a)(b)(c) | 2,705,000 | 2,705,000 | ||||
Series MT 163, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 2,300,000 | 2,300,000 | ||||
Series PA 1235, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 1,075,000 | 1,075,000 | ||||
Series PA 930, 4.02% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 4,995,000 | 4,995,000 | ||||
Series PT 2190, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 4,775,000 | 4,775,000 | ||||
Series PT 890, 4.04% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 835,000 | 835,000 | ||||
Series Putters 1213, 4.04% (Liquidity Facility JPMorgan | ||||||
Chase & Co.) (a)(b)(c) | 2,365,000 | 2,365,000 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Fidelity Pennsylvania Municipal Money Market Fund | ||||||
Investments (Unaudited) continued | ||||||
Municipal Securities continued | ||||||
Principal | Value | |||||
Amount | (Note 1) | |||||
Pennsylvania – continued | ||||||
Pennsylvania Hsg. Fin. Agcy.: – continued | ||||||
(Single Family Mortgage Proj.) Series 2006 92B, 4.03% | ||||||
(Liquidity Facility Landesbank Hessen-Thuringen), | ||||||
VRDN (a)(b) | $ 4,300,000 | $ 4,300,000 | ||||
Series 2004 84D, 4.02% (Liquidity Facility Dexia Cr. Local | ||||||
de France), VRDN (a)(b) | 15,035,000 | 15,035,000 | ||||
Pennsylvania Pub. School Bldg. Auth. School Rev. Participating | ||||||
VRDN: | ||||||
Series MS 958, 4.01% (Liquidity Facility Morgan | ||||||
Stanley) (a)(c) | 2,129,000 | 2,129,000 | ||||
Series ROC II R 566, 4.01% (Liquidity Facility Citibank | ||||||
NA) (a)(c) | 5,000,000 | 5,000,000 | ||||
Pennsylvania Tpk. Commission Tpk. Rev.: | ||||||
Bonds Series AAB 04-9, 4.01%, tender 7/7/06 (Liquidity | ||||||
Facility ABN AMRO Bank NV) (a)(c) | 3,100,000 | 3,100,000 | ||||
Series 2002 A3, 3.98% (Liquidity Facility Bayerische | ||||||
Landesbank Girozentrale), VRDN (a) | 5,200,000 | 5,200,000 | ||||
Philadelphia Arpt. Rev.: | ||||||
Participating VRDN: | ||||||
Series PT 3077, 4.05% (Liquidity Facility Merrill Lynch & | ||||||
Co., Inc.) (a)(b)(c) | 1,000,000 | 1,000,000 | ||||
Series SG 118, 4.05% (Liquidity Facility Societe | ||||||
Generale) (a)(b)(c) | 2,600,000 | 2,600,000 | ||||
Series 2005 C, 4.05% (MBIA Insured), VRDN (a)(b) | 4,900,000 | 4,900,000 | ||||
Philadelphia Auth. for Indl. Dev. Arpt. Rev. Participating | ||||||
VRDN: | ||||||
Series PA 882, 4.05% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(b)(c) | 2,200,000 | 2,200,000 | ||||
Series Putters 217, 4.04% (Liquidity Facility JPMorgan Chase | ||||||
Bank) (a)(b)(c) | 7,715,000 | 7,715,000 | ||||
Philadelphia Gas Works Rev.: | ||||||
Bonds (1975 Gen. Ordinance Proj.) 17th Series, 5% | ||||||
7/1/07 (FSA Insured) | 4,000,000 | 4,053,602 | ||||
Participating VRDN: | ||||||
Series PT 1144, 4% (Liquidity Facility Merrill Lynch & Co., | ||||||
Inc.) (a)(c) | 2,000,000 | 2,000,000 | ||||
Series Putters 384, 4.01% (Liquidity Facility JPMorgan | ||||||
Chase Bank) (a)(c) | 1,600,000 | 1,600,000 | ||||
Fifth Series A2, 4%, LOC Bank of Nova Scotia, New York | ||||||
Agcy., LOC JPMorgan Chase Bank, VRDN (a) | 1,000,000 | 1,000,000 | ||||
Philadelphia Redev. Auth. Rev. Participating VRDN: | ||||||
Series DB 134, 4.02% (Liquidity Facility Deutsche Bank | ||||||
AG) (a)(b)(c) | 3,500,000 | 3,500,000 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Securities continued | ||||
Principal | Value | |||
Amount | (Note 1) | |||
Pennsylvania – continued | ||||
Philadelphia Redev. Auth. Rev. Participating VRDN: - | ||||
continued | ||||
Series ROC II R 392, 4.01% (Liquidity Facility Citibank | ||||
NA) (a)(c) | $ 1,000,000 | $ 1,000,000 | ||
Philadelphia Wtr. & Wastewtr. Rev. Participating VRDN: | ||||
Series EGL 7050050 Class A, 4.02% (Liquidity Facility | ||||
Citibank NA) (a)(c) | 2,300,000 | 2,300,000 | ||
Series SG 158, 4% (Liquidity Facility Societe Generale) (a)(c) | 3,200,000 | 3,200,000 | ||
Pittsburgh Gen. Oblig. Bonds Series A, 6% 3/1/07 (MBIA | ||||
Insured) | 2,735,000 | 2,777,499 | ||
Pittsburgh Urban Redev. Auth. Single Family Mortgage Rev. | ||||
Participating VRDN Series PT 996, 4.04% (Liquidity Facility | ||||
Landesbank Hessen-Thuringen) (a)(b)(c) | 5,685,000 | 5,685,000 | ||
Reading School District Participating VRDN Series TOC 06 | ||||
Z18, 4.04% (Liquidity Facility Goldman Sachs Group, | ||||
Inc.) (a)(c) | 4,300,000 | 4,300,000 | ||
Schuylkill County Indl. Dev. Auth. Resource Recovery Rev. | ||||
(Northeastern Pwr. Co. Proj.) Series 1997 B, 4.06%, LOC | ||||
Dexia Cr. Local de France, VRDN (a)(b) | 10,100,000 | 10,100,000 | ||
Scranton-Lackawanna Health & Welfare Auth. Rev. | ||||
Participating VRDN Series Merlots 02 A18, 4.01% (Liquidity | ||||
Facility Wachovia Bank NA) (a)(c) | 2,240,000 | 2,240,000 | ||
Southcentral Pennsylvania Gen. Auth. Rev. (Hanover Lutheran | ||||
Village Proj.) 4.02%, LOC Manufacturers & Traders Trust | ||||
Co., VRDN (a) | 3,700,000 | 3,700,000 | ||
Southeastern Pennsylvania Transit Auth. Spl. Rev. Participating | ||||
VRDN Series BS 01 9016 Class A, 4.01% (Liquidity Facility | ||||
Bear Stearns Companies, Inc.) (a)(c) | 5,500,000 | 5,500,000 | ||
Temple Univ. of the Commonwealth Sys. of Higher Ed. RAN 5% | ||||
4/26/07 | 4,300,000 | 4,344,823 | ||
422,382,548 | ||||
Puerto Rico 1.5% | ||||
Puerto Rico Commonwealth Gen. Oblig. TRAN 4.5% | ||||
7/28/06, LOC Bank of Nova Scotia, New York Agcy., LOC | ||||
BNP Paribas SA | 6,900,000 | 6,906,518 | ||
TOTAL INVESTMENT PORTFOLIO – 95.5% | ||||
(Cost $436,789,066) | 436,789,066 | |||
NET OTHER ASSETS – 4.5% | 20,492,648 | |||
NET ASSETS 100% | $ 457,281,714 | |||
See accompanying notes which are an integral part of the financial statements. | ||||
25 | Semiannual Report |
Fidelity Pennsylvania Municipal Money Market Fund Investments (Unaudited) continued |
Security Type Abbreviations | ||||
CP | — | COMMERCIAL PAPER | ||
RAN | — | REVENUE ANTICIPATION NOTE | ||
TRAN | — | TAX AND REVENUE | ||
ANTICIPATION NOTE | ||||
VRDN | — | VARIABLE RATE DEMAND NOTE |
Legend (a) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (b) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (c) Provides evidence of ownership in one or more underlying municipal bonds. |
Affiliated Central Funds
Information regarding fiscal year to date income earned by the fund from the affiliated Central funds is as follows:
Fund | Income earned | |||
Fidelity Municipal Cash Central Fund | $ 32,806 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 26
Fidelity Pennsylvania Municipal Money Market Fund | ||||||
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
June 30, 2006 (Unaudited) | ||||||
Assets | ||||||
Investment in securities, at value See accompanying | ||||||
schedule: | ||||||
Unaffiliated issuers (cost $436,789,066) | $ 436,789,066 | |||||
Cash | 22,231,323 | |||||
Receivable for fund shares sold | 3,409,536 | |||||
Interest receivable | 3,144,529 | |||||
Other receivables | 94,690 | |||||
Total assets | 465,669,144 | |||||
Liabilities | ||||||
Payable for investments purchased | $ 4,500,000 | |||||
Payable for fund shares redeemed | 3,677,283 | |||||
Distributions payable | 20,706 | |||||
Accrued management fee | 188,682 | |||||
Other affiliated payables | 759 | |||||
Total liabilities | 8,387,430 | |||||
Net Assets | $ 457,281,714 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 457,198,427 | |||||
Undistributed net investment income | 78,843 | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | 4,444 | |||||
Net Assets, for 457,172,137 shares outstanding | $ 457,281,714 | |||||
Net Asset Value, offering price and redemption price per | ||||||
share ($457,281,714 ÷ 457,172,137 shares) | $ 1.00 |
See accompanying notes which are an integral part of the financial statements.
27 Semiannual Report
Fidelity Pennsylvania Municipal Money Market Fund | ||||||
Financial Statements continued | ||||||
Statement of Operations | ||||||
Six months ended June 30, 2006 (Unaudited) | ||||||
Investment Income | ||||||
Interest | $ 6,969,575 | |||||
Income from affiliated Central Funds | 32,806 | |||||
Total income | 7,002,381 | |||||
Expenses | ||||||
Management fee | $ 1,084,293 | |||||
Independent trustees’ compensation | 826 | |||||
Total expenses before reductions | 1,085,119 | |||||
Expense reductions | (265,872) | 819,247 | ||||
Net investment income | 6,183,134 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | 4,444 | |||||
Net increase in net assets resulting from operations | $ 6,187,578 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
(Unaudited) | 2005 | |||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 6,183,134 | $ 7,547,861 | ||||||
Net realized gain (loss) | 4,444 | 92,353 | ||||||
Net increase in net assets resulting | ||||||||
from operations | 6,187,578 | 7,640,214 | ||||||
Distributions to shareholders from net investment income . | (6,182,706) | (7,509,743) | ||||||
Share transactions at net asset value of $1.00 per share | ||||||||
Proceeds from sales of shares | 659,599,320 | 968,684,411 | ||||||
Reinvestment of distributions | 6,086,655 | 7,419,506 | ||||||
Cost of shares redeemed | (634,796,336) | (881,682,805) | ||||||
Net increase (decrease) in net assets and shares | ||||||||
resulting from share transactions | 30,889,639 | 94,421,112 | ||||||
Total increase (decrease) in net assets | 30,894,511 | 94,551,583 | ||||||
Net Assets | ||||||||
Beginning of period | 426,387,203 | 331,835,620 | ||||||
End of period (including undistributed net investment | ||||||||
income of $78,843 and undistributed net investment | ||||||||
income of $78,415, respectively) | $ 457,281,714 | $ 426,387,203 |
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Financial Highlights | ||||||||||||||||||||||||
Six months ended | ||||||||||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||||||||||||
Selected Per Share Data | ||||||||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
beginning of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Income from Investment | ||||||||||||||||||||||||
Operations | ||||||||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | .014 | .020 | .008 | .006 | .011 | .025 | ||||||||||||||||||
Distributions from net | ||||||||||||||||||||||||
investment income | (.014) | (.020) | (.008) | (.006) | (.011) | (.025) | ||||||||||||||||||
Net asset value, | ||||||||||||||||||||||||
end of period | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | $ 1.00 | ||||||||||||||||||
Total ReturnB,C,D | 1.43% | 2.02% | .81% | .65% | 1.09% | 2.50% | ||||||||||||||||||
Ratios to Average Net Assets E | ||||||||||||||||||||||||
Expenses before | ||||||||||||||||||||||||
reductions | .50% A | .50% | .50% | .50% | .50% | .50% | ||||||||||||||||||
Expenses net of | ||||||||||||||||||||||||
fee waivers, | ||||||||||||||||||||||||
if any | .50% A | .50% | .50% | .50% | .50% | .50% | ||||||||||||||||||
Expenses net of all | ||||||||||||||||||||||||
reductions | .38% A | .41% | .48% | .49% | .46% | .47% | ||||||||||||||||||
Net investment | ||||||||||||||||||||||||
income | 2.87% A | 2.02% | .80% | .66% | 1.09% | 2.45% | ||||||||||||||||||
Supplemental Data | ||||||||||||||||||||||||
Net assets, | ||||||||||||||||||||||||
end of period | ||||||||||||||||||||||||
(000 omitted) | $457,282 | $426,387 | $331,836 | $294,312 | $278,322 | $240,705 |
A Annualized 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 Total returns do not include the effect of the former account closeout fee. E Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrange ments. 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 |
30 |
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
1. Significant Accounting Policies.
Fidelity Pennsylvania Municipal Income Fund (the Income Fund) is a fund of Fidelity Municipal Trust. Fidelity Pennsylvania Municipal Money Market Fund (the Money Market Fund) is a fund of Fidelity Municipal Trust II. Each trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end manage ment investment company. Fidelity Municipal Trust and Fidelity Municipal Trust II (the trusts) are organized as a Massachusetts business trust and a Delaware statutory trust, respectively. The Income Fund is a non diversified fund. Each Fund is authorized to issue an unlimited number of shares. Each Fund may be affected by economic and political developments in the state of Pennsylvania. Certain Funds may invest in affili ated money market central funds (Money Market Central Funds), which are open end investment companies available to investment companies and other accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. 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 summa rizes the significant accounting policies of the Income Fund and the Money Market Fund:
Security Valuation. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, each Fund uses independent pricing services approved by the Board of Trustees to value their investments. For the Income Fund, debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securi ties. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
As permitted by compliance with certain conditions under Rule 2a 7 of the 1940 Act, securities owned by the Money Market Fund are valued at amortized cost which approximates value.
31 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Expenses. Most expenses of each trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, each Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distribu tions from realized gains, if any, 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, Certain Funds claimed a portion of the payment made to redeeming shareholders as a distribu tion for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to futures transactions, market discount, deferred trustees compensation and losses deferred due to futures transactions and excise tax regulations.
The Funds purchase municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each Fund:
Cost for Federal | Net Unrealized | |||||||
Income Tax | Unrealized | Unrealized | Appreciation/ | |||||
Purposes | Appreciation | Depreciation | (Depreciation) | |||||
Fidelity Pennsylvania Municipal | ||||||||
Income Fund | $ 291,513,207 | $ 7,553,642 | $ (2,842,852) | $ 4,710,790 | ||||
Fidelity Pennsylvania Municipal | ||||||||
Money Market Fund | 436,789,066 | — | — | — | ||||
Semiannual Report | 32 |
1. Significant Accounting Policies continued
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an inter pretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Funds’ net assets and results of operations.
Short Term Trading (Redemption) Fees. Shares held in the Income Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by FMR, are retained by the Fund and accounted for as an addition to paid in capital.
2. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, for the Income Fund aggregated $19,984,264 and $17,261,700, respectively.
3. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Income Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of.25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
FMR and its affiliates provide the Money Market Fund with investment management related services for which the Fund pays a monthly management fee that is based on an annual rate of .50% of the Fund’s average net assets. FMR pays all other expenses, except the compensa tion of the independent Trustees and certain exceptions such as interest expense, including commitment fees. The management fee paid to FMR by the Fund is reduced by an amount equal to the fees and expenses paid by the Fund to the independent Trustees.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent and shareholder servicing agent for the Funds. Citibank has entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, under which FSC performs the activities associated with the Funds’ transfer and shareholder servicing agent and accounting functions. Under the terms of the management fee
33 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
3. Fees and Other Transactions with Affiliates continued | ||
Transfer Agent and Accounting Fees continued |
contract, FMR pays transfer agent fees on behalf of the Money Market Fund. The Income Fund pays account fees and asset based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. The accounting fee is based on the level of average net assets for the month. For the period, the Income Fund’s transfer agent fees were equivalent to the following annualized rate expressed as a percentage of average net assets:
Fidelity Pennsylvania Municipal Income Fund | .08% |
Affiliated Central Funds. Certain Funds may invest in Money Market Central Funds which seek preservation of capital and current income and are managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR.
The Money Market Central Funds do not pay a management fee.
4. Committed Line of Credit.
The Income Fund participates with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit, which is reflected in Miscellaneous Expense on the Statement of Operations, and is as follows:
Fidelity Pennsylvania Municipal Income Fund | 302 |
During the period, there were no borrowings on this line of credit.
5. Expense Reductions.
Through arrangements with the Income Fund’s custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce Fund expenses. These expense reductions are noted in the table below.
Custody | Agent | Accounting | ||||||||||
expense | expense | expense | ||||||||||
reduction | reduction | reduction | ||||||||||
Fidelity Pennsylvania Municipal | ||||||||||||
Income Fund | $ 2,482 | $ 118,453 | $ 38,221 |
In addition, through an arrangement with the Money Market Fund’s custodian and transfer agent, $265,872 of credits realized as a result of uninvested cash balances were used to reduce the Fund’s management fee.
Semiannual Report 34
6. Other. |
The Funds’ organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.
35 Semiannual Report
Proxy Voting Results
A special meeting of Fidelity Pennsylvania Municipal Money Market Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 667,201,902.33 | 95.261 | ||
Withheld | 33,193,298.35 | 4.739 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 667,477,031.41 | 95.300 | ||
Withheld | 32,918,169.27 | 4.700 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 666,308,716.35 | 95.133 | ||
Withheld | 34,086,484.33 | 4.867 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 664,652,778.09 | 94.897 | ||
Withheld | 35,742,422.59 | 5.103 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 664,170,496.79 | 94.828 | ||
Withheld | 36,224,703.89 | 5.172 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 663,788,907.22 | 94.773 | ||
Withheld | 36,606,293.46 | 5.227 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 667,006,752.59 | 95.233 | ||
Withheld | 33,388,448.09 | 4.767 | ||
TOTAL | 700,395,200.68 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 666,373,338.05 | 95.142 | ||
Withheld | 34,021,862.63 | 4.858 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 666,334,938.56 | 95.137 | ||
Withheld | 34,060,262.12 | 4.863 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 665,764,692.27 | 95.056 | ||
Withheld | 34,630,508.41 | 4.944 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 667,335,421.55 | 95.280 | ||
Withheld | 33,059,779.13 | 4.720 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 667,579,724.56 | 95.315 | ||
Withheld | 32,815,476.12 | 4.685 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 665,215,267.33 | 94.977 | ||
Withheld | 35,179,933.35 | 5.023 | ||
TOTAL | 700,395,200.68 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 666,060,714.08 | 95.098 | ||
Withheld | 34,334,486.60 | 4.902 | ||
TOTAL | 700,395,200.68 | 100.000 |
A Denotes trust-wide proposal and voting results.
Semiannual Report 36
A special meeting of Fidelity Pennsylvania Municipal Income Fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the propos als 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
37 Semiannual Report
Proxy Voting Results - continued
PROPOSAL 2 |
To change Fidelity Pennsylvania Municipal Income Fund from a diversified to a non diversified fund.
# of | % of | |||
Votes | Votes | |||
Affirmative | 138,944,647.47 | 74.679 | ||
Against | 29,304,872.03 | 15.751 | ||
Abstain | 10,404,283.99 | 5.592 | ||
Broker | ||||
Non Votes . | 7,402,189.22 | 3.978 | ||
TOTAL | 186,055,992.71 | 100.000 |
Semiannual Report |
38 |
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Pennsylvania Municipal Income Fund / Fidelity Pennsylvania Municipal Money Market Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for each fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for each fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to each fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, considered a broad range of information and determined that it would be beneficial for each fund to access the research and investment advisory support services supplied by FRAC at no additional expense to each fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under each fund’s manage ment contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of each fund’s assets; (iii) the nature or level of services provided under each fund’s management contract or sub advisory agreements; (iv) the day to day management of each fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of each Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of each fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which each fund will not bear any additional management fees or expenses and under which each fund’s portfolio manager would not change, it did not consider each fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of each fund’s management contract and sub advi sory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to each fund, including shareholder and administrative services and invest ment performance; (ii) the competitiveness of each fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering, and servicing each fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of
39 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
the Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that each fund’s Agreement is fair and reasonable, and that each fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for each fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of each fund’s Advisory Contracts, including the services and support provided to each fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such com mittee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for each fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to each fund and its sharehold ers (including the investment performance of each fund); (ii) the competitiveness of the management fee and total expenses of each fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with each fund; (iv) the extent to which economies of scale would be realized as each fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
Semiannual Report |
40 |
In determining whether to renew the Advisory Contracts for each fund, the Board ultimately reached a determination, with the assistance of fund counsel and Indepen dent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contracts is consistent with Fidelity’s fiduciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in each fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that each fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in that fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the backgrounds of the funds’ portfolio managers and the funds’ investment objectives and disciplines. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for each fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, each fund’s compliance policies and procedures.
41 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of a fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class avail able to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether each fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed each fund’s absolute investment performance, as well as each fund’s relative investment performance measured against (i) a broad based securities market index (bond fund only , as money market funds are typically not compared against a market index), and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. For each fund, the following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, the fund’s cumulative total returns, the cumulative total returns of a broad based securities market index (“benchmark”) (bond fund only), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objec tive similar to that of the fund. The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten number noted below each chart corresponds to the percentile box and represents the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the fund.
Semiannual Report |
42 |
Fidelity Pennsylvania Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix43x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the third quartile for the one year period, the second quartile for the three year period, and the first quartile for the five year period. The Board also stated that the relative investment performance of the fund was lower than its benchmark for all the periods shown.
Fidelity Pennsylvania Municipal Money Market Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix43x2.jpg)
43 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of the fund was in the second quartile for all the periods shown.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative perfor mance, the Board concluded that the nature, extent, and quality of the services provided to each fund will benefit each fund’s shareholders, particularly in light of the Board’s view that each fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered each fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board’s management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the charts below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than a fund’s. For example, a TMG % of 20% would mean that 80% of the funds in the Total Mapped Group had higher management fees than a fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which a fund’s management fee ranked, is also included in the charts and considered by the Board. For a more meaningful comparison of management fees, Fidelity Pennsylvania Municipal Money Market Fund is compared on the basis of a hypothetical “net management fee,” which is derived by subtracting payments made by FMR for non management expenses (including transfer agent fees, pricing and book keeping fees, and custody fees) from the fund’s all inclusive fee. In this regard, the Board realizes that net management fees can vary from year to year because of differences in non management expenses.
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44 |
Fidelity Pennsylvania Municipal Income Fund
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix45x1.jpg)
The Board noted that each fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board concluded that each fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
45 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
In its review of Fidelity Pennsylvania Municipal Income Fund’s total expenses, the Board considered the fund’s management fee as well as other fund expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses.
In its review of Fidelity Pennsylvania Municipal Money Market Fund’s total expenses, the Board considered the fund’s hypothetical net management fee as well as the fund’s all inclusive fee. The Board also considered other expenses, such as transfer agent fees, pricing and bookkeeping fees, and custodial, legal, and audit fees, paid by FMR under the all inclusive arrangement. The Board also noted the effects of any waivers and reim bursements on fees and expenses.
As part of its review, the Board also considered current and historical total expenses of each fund compared to competitive fund median expenses. Each fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that each fund’s total expenses ranked below its competitive median for 2005.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that each fund’s total expenses were reason able in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing each fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for each fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s
Semiannual Report |
46 |
engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the funds’ business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of each fund and determined that the amount of profit is a fair entrepreneurial profit for the management of each fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including each fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which each fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including (Fidelity Pennsylvania Municipal Income Fund only) reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that Fidelity Pennsylvania Municipal Income Fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s management increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have de clined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that each fund’s Advisory Contracts should be renewed.
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48 |
Managing Your Investments
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix49x1.jpg)
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix49x2.jpg)
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/pennsemix49x3.jpg)
* 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 guar anteed 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.
49 Semiannual Report
To Visit Fidelity
For directions and hours, please call 1-800-544-9797. Arizona 7001 West Ray Road Chandler, AZ 15445 N. Scottsdale Road Scottsdale, AZ California 815 East Birch Street Brea, CA 1411 Chapin Avenue Burlingame, CA 851 East Hamilton Avenue Campbell, CA 19200 Von Karman Avenue Irvine, CA 601 Larkspur Landing Circle Larkspur, CA 10100 Santa Monica Blvd. Los Angeles, CA 27101 Puerta Real Mission Viejo, CA 73 575 El Paseo Palm Desert, CA 251 University Avenue Palo Alto, CA 123 South Lake Avenue Pasadena, CA 16995 Bernardo Ctr. Drive Rancho Bernardo, CA 1220 Roseville Parkway Roseville, CA 1740 Arden Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 11943 El Camino Real San Diego, CA 8 Montgomery Street San Francisco, CA 3793 State Street Santa Barbara, CA 1200 Wilshire Boulevard Santa Monica, CA 21701 Hawthorne Boulevard Torrance, CA |
2001 North Main Street Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA Colorado 1625 Broadway Denver, CO 9185 Westview Road Lone Tree, CO Connecticut 48 West Putnam Avenue Greenwich, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT Delaware 400 Delaware Avenue Wilmington, DE Florida 4400 N. Federal Highway Boca Raton, FL 121 Alhambra Plaza Coral Gables, FL 2948 N. Federal Highway Ft. Lauderdale, FL 4671 Town Center Parkway Jacksonville, FL 1907 West State Road 434 Longwood, FL 8880 Tamiami Trail, North Naples, FL 3501 PGA Boulevard Palm Beach Gardens, FL 3550 Tamiami Trail, South Sarasota, FL 1502 N. Westshore Blvd. Tampa, FL 2465 State Road 7 Wellington, FL |
Georgia 3445 Peachtree Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA Illinois One North LaSalle Street Chicago, IL 875 North Michigan Ave. Chicago, IL 1415 West 22nd Street Oak Brook, IL 1572 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 7315 Wisconsin Avenue Bethesda, MD One W. Pennsylvania Ave. Towson, MD Massachusetts 801 Boylston Street Boston, MA 155 Congress Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 238 Main Street Cambridge, MA 405 Cochituate Road Framingham, MA 416 Belmont Street Worcester, MA |
Semiannual Report 50
Michigan 500 E. Eisenhower Pkwy. Ann Arbor, MI 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 1524 South Lindbergh Blvd. St. Louis, MO Nevada 2225 Village Walk Drive Henderson, NV New Jersey 150 Essex Street Millburn, NJ 56 South Street Morristown, NJ 396 Route 17, North Paramus, NJ 3518 Route 1 North Princeton, NJ 530 Broad Street Shrewsbury, NJ New York 1055 Franklin Avenue Garden City, NY 37 West Jericho Turnpike Huntington Station, NY 1271 Avenue of the Americas New York, NY 980 Madison Avenue New York, NY 61 Broadway New York, NY 350 Park Avenue New York, NY 200 Fifth Avenue New York, NY 733 Third Avenue New York, NY 11 Penn Plaza New York, NY |
2070 Broadway New York, NY 1075 Northern Blvd. Roslyn, NY 799 Central Park Avenue Scarsdale, NY North Carolina 4611 Sharon Road Charlotte, NC 7011 Fayetteville Road Durham, NC Ohio 3805 Edwards Road Cincinnati, OH 1324 Polaris Parkway Columbus, OH 28699 Chagrin Boulevard Woodmere Village, OH Oregon 7493 SW Bridgeport Road 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 4001 Northwest Parkway Dallas, TX 12532 Memorial Drive Houston, TX 2701 Drexel Drive Houston, TX 6560 Fannin Street Houston, TX 6500 N. MacArthur Blvd. Irving, TX |
6005 West Park Boulevard Plano, TX 14100 San Pedro San Antonio, TX 1576 East Southlake Blvd. Southlake, TX 19740 IH 45 North Spring, TX Utah 279 West South Temple 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
51 Semiannual Report
51
Investment Adviser Fidelity Management & Research Company Boston, MA Sub-Adviser Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity Investments Money Management, Inc. Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Service Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24-Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
Telephone (FAST® ) (automated phone logo) | 1-800-544-5555 | |
(automated phone logo) Automated line for quickest service |
PFR-USAN-0806 1.787788.103 |
Fidelity® Short-Intermediate Municipal Income Fund |
Semiannual Report June 30, 2006 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix1x2.jpg)
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders. | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Investment Changes | 6 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 7 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 30 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 40 | Notes to the financial statements. | ||
Proxy Voting Results | 47 | |||
Board Approval of | 48 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.fidelity.com/holdings. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the fund nor Fidelity Distributors Corporation is a bank. |
Semiannual Report |
2 2 |
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b 1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report |
4 |
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Class A | ||||||||||||
Actual | $ 1,000.00 | $ 1,003.20 | $ 3.23 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.57 | $ 3.26 | |||||||||
Class T | ||||||||||||
Actual | $ 1,000.00 | $ 1,002.70 | $ 3.72 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.08 | $ 3.76 | |||||||||
Class B | ||||||||||||
Actual | $ 1,000.00 | $ 999.40 | $ 7.04 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.75 | $ 7.10 | |||||||||
Class C | ||||||||||||
Actual | $ 1,000.00 | $ 998.90 | $ 7.58 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.21 | $ 7.65 | |||||||||
Short Intermediate Municipal | ||||||||||||
Income | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
Institutional Class | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
A 5% return per year before expenses |
* Expenses are equal to each Class’ annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Class A | .65% | |
Class T | .75% | |
Class B | 1.42% | |
Class C | 1.53% | |
Short Intermediate Municipal Income | .49% | |
Institutional Class | .49% |
5 Semiannual Report
Investment Changes | ||||
Top Five States as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
Texas | 14.0 | 14.7 | ||
New York | 13.0 | 11.8 | ||
Illinois | 11.0 | 9.4 | ||
New Jersey | 6.1 | 6.9 | ||
California | 5.4 | 7.6 | ||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 43.8 | 49.1 | ||
Escrowed/Pre Refunded | 12.2 | 8.2 | ||
Electric Utilities | 9.4 | 13.8 | ||
Transportation | 6.9 | 6.7 | ||
Health Care | 6.6 | 6.5 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 3.6 | 3.5 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 2.9 | 3.0 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix6x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
Semiannual Report 6
Investments June 30, 2006 (Unaudited) | ||||||||
Showing Percentage of Net Assets | ||||||||
Municipal Bonds 95.8% | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Alabama – 3.3% | ||||||||
Birmingham Baptist Med. Ctrs. Spl. Care Facilities Fing. | ||||||||
Auth. Rev. (Baptist Health Sys., Inc. Proj.) Series A, 5% | ||||||||
11/15/09 | $ 1,100 | $ 1,118 | ||||||
Daphne Spl. Care Facilities Fing. Auth. Rev. Series A, 0% | ||||||||
8/15/28 (Pre-Refunded to 8/15/08 @ 100) (e) | 10,000 | 9,203 | ||||||
Health Care Auth. for Baptist Health Series 2006 D: | ||||||||
5% 11/15/08 | 1,475 | 1,499 | ||||||
5% 11/15/11 | 1,000 | 1,026 | ||||||
Huntsville Solid Waste Disp. Auth. & Resource Recovery | ||||||||
Rev.: | ||||||||
5.25% 10/1/07 (MBIA Insured) (d) | 1,750 | 1,775 | ||||||
5.25% 10/1/08 (MBIA Insured) (d) | 2,900 | 2,960 | ||||||
5.75% 10/1/09 (MBIA Insured) (d) | 4,000 | 4,190 | ||||||
Jefferson County Ltd. Oblig. School Warrants Series A, | ||||||||
5% 1/1/07 | 2,210 | 2,220 | ||||||
Jefferson County Swr. Rev.: | ||||||||
Series 1999 A, 5.75% 2/1/38 (Pre-Refunded to | ||||||||
2/1/09 @ 101) (e) | 5,010 | 5,281 | ||||||
Series A: | ||||||||
5% 2/1/33 (Pre-Refunded to 2/1/09 @ 101) (e) | 13,520 | 13,972 | ||||||
5.5% 2/1/40 (Pre-Refunded to 2/1/11 @ 101) (e) . | 3,900 | 4,183 | ||||||
5% 2/1/41 (Pre-Refunded to 8/1/12 @ 100) (e) | 2,060 | 2,158 | ||||||
Mobile County Gen. Oblig. 5% 2/1/08 (MBIA Insured) . | 1,475 | 1,501 | ||||||
51,086 | ||||||||
Alaska – 0.6% | ||||||||
Alaska Student Ln. Corp. Student Ln. Rev. Series A, | ||||||||
5.85% 7/1/13 (AMBAC Insured) (d) | 3,285 | 3,465 | ||||||
Anchorage Gen. Oblig. Series B, 5.75% 12/1/11 | ||||||||
(Pre-Refunded to 12/1/10 @ 100) (e) | 2,500 | 2,684 | ||||||
North Slope Borough Gen. Oblig. Series B, 0% | ||||||||
6/30/08 (MBIA Insured) | 4,240 | 3,923 | ||||||
10,072 | ||||||||
Arizona – 1.6% | ||||||||
Arizona Ctfs. of Prtn. Series B, 5.5% 9/1/10 (FSA | ||||||||
Insured) | 9,025 | 9,513 | ||||||
Arizona School Facilities Board Ctfs. of Prtn. Series C, | ||||||||
5% 9/1/09 (FSA Insured) | 1,115 | 1,152 | ||||||
Maricopa County Unified School District #48 Scottsdale | ||||||||
7.4% 7/1/10 | 3,750 | 4,220 | ||||||
Pima County Unified School District #1 Tucson 7.5% | ||||||||
7/1/08 (FGIC Insured) | 7,060 | 7,543 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Arizona – continued | ||||||||
Pinal County Indl. Dev. Auth. Correctional Facilities | ||||||||
Contract Rev. (Florence West Prison Expansion, LLC | ||||||||
Proj.) Series A, 4.5% 10/1/08 (American Cap. | ||||||||
Access Corp. Insured) | $ 660 | $ 664 | ||||||
Tucson Wtr. Rev. Series A, 5% 7/1/11 (FGIC Insured) | 1,500 | 1,564 | ||||||
24,656 | ||||||||
Arkansas – 0.1% | ||||||||
Arkansas Dev. Fin. Auth. Exempt Facilities Rev. (Waste | ||||||||
Mgmt. Proj.) 3.65%, tender 8/1/06 (c)(d) | 1,000 | 1,000 | ||||||
California – 5.4% | ||||||||
California Dept. of Wtr. Resources Pwr. Supply Rev. | ||||||||
Series A, 5.25% 5/1/12 (MBIA Insured) | 6,000 | 6,370 | ||||||
California Econ. Recovery: | ||||||||
Series 2004 A, 5.25% 7/1/13 | 2,400 | 2,568 | ||||||
Series A: | ||||||||
5.25% 1/1/11 | 6,500 | 6,839 | ||||||
5.25% 7/1/13 (MBIA Insured) | 2,900 | 3,112 | ||||||
California Gen. Oblig.: | ||||||||
5% 2/1/09 | 1,640 | 1,683 | ||||||
5% 2/1/10 | 2,000 | 2,068 | ||||||
5% 2/1/11 | 2,525 | 2,627 | ||||||
5.125% 9/1/12 | 1,000 | 1,043 | ||||||
5.25% 2/1/11 | 5,775 | 6,069 | ||||||
5.5% 3/1/11 (FGIC Insured) | 3,210 | 3,419 | ||||||
5.5% 3/1/11 (XL Cap. Assurance, Inc. Insured) | 3,525 | 3,747 | ||||||
5.75% 10/1/08 | 1,085 | 1,128 | ||||||
6.4% 9/1/08 | 3,075 | 3,231 | ||||||
6.5% 9/1/10 | 1,760 | 1,925 | ||||||
8% 11/1/07 (FGIC Insured) | 4,670 | 4,828 | ||||||
California Health Facilities Fing. Auth. Rev. (Cedars-Sinai | ||||||||
Med. Ctr. Proj.) 5% 11/15/10 | 1,000 | 1,034 | ||||||
California Pub. Works Board Lease Rev.: | ||||||||
(California State Univ. Proj.) Series 1997 A, 5.5% | ||||||||
10/1/07 | 1,075 | 1,094 | ||||||
(Coalinga State Hosp. Proj.) Series 2004 A, 5% | ||||||||
6/1/08 | 6,000 | 6,113 | ||||||
California Statewide Cmntys. Dev. Auth. Rev.: | ||||||||
(Kaiser Fund Hosp./Health Place, Inc. Proj.) | ||||||||
Series 2002 C, 3.85%, tender 6/1/12 (c) | 1,400 | 1,360 | ||||||
(Kaiser Permanente Health Sys. Proj.): | ||||||||
Series 2001 A, 2.55%, tender 1/4/07 (c) | 1,400 | 1,391 | ||||||
Series 2004 G, 2.3%, tender 5/1/07 (c) | 8,000 | 7,899 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
North City West School Facilities Fing. Auth. Spl. Tax | ||||||||
Subseries C: | ||||||||
5% 9/1/07 (AMBAC Insured) | $ 1,975 | $ 2,004 | ||||||
5% 9/1/08 (AMBAC Insured) | 2,080 | 2,132 | ||||||
San Joaquin Hills Trans. Corridor Agcy. Toll Road Rev. | ||||||||
Series A, 0% 1/15/12 (MBIA Insured) | 3,600 | 2,860 | ||||||
Univ. of California Revs. (UCLA Med. Ctr. Proj.) 4.55% | ||||||||
12/1/09 (g) | 8,955 | 9,019 | ||||||
85,563 | ||||||||
Colorado – 0.5% | ||||||||
Denver City & County Arpt. Rev. Series E, 5% 11/15/08 | ||||||||
(XL Cap. Assurance, Inc. Insured) (d) | 5,000 | 5,101 | ||||||
E-470 Pub. Hwy. Auth. Rev. Series 2000 B, 0% 9/1/07 | ||||||||
(Escrowed to Maturity) (e) | 3,200 | 3,057 | ||||||
8,158 | ||||||||
Connecticut – 0.7% | ||||||||
Connecticut Gen. Oblig.: | ||||||||
Series 2001 D, 5.125% 11/15/18 (Pre-Refunded to | ||||||||
11/15/11 @ 100) (e) | 5,000 | 5,269 | ||||||
Series 2002 C, 5% 12/15/08 | 1,930 | 1,981 | ||||||
Connecticut Health & Edl. Facilities Auth. Rev. | ||||||||
(Connecticut Children’s Med. Ctr. Proj.) Series B: | ||||||||
4% 7/1/07 (MBIA Insured) | 1,275 | 1,277 | ||||||
4.5% 7/1/08 (MBIA Insured) | 1,045 | 1,057 | ||||||
5% 7/1/09 (MBIA Insured) | 1,000 | 1,028 | ||||||
10,612 | ||||||||
District Of Columbia – 0.8% | ||||||||
District of Columbia Ctfs. of Prtn. 5.25% 1/1/08 | ||||||||
(AMBAC Insured) | 935 | 953 | ||||||
District of Columbia Gen. Oblig.: | ||||||||
Series A, 5.25% 6/1/09 (FSA Insured) | 1,000 | 1,036 | ||||||
Series B, 0% 6/1/12 (MBIA Insured) | 3,600 | 2,772 | ||||||
Metropolitan Washington Arpt. Auth. Gen. Arpt. Rev. | ||||||||
Series B, 5.5% 10/1/08 (FGIC Insured) (d) | 6,460 | 6,648 | ||||||
Metropolitan Washington Arpt. Auth. Sys. Rev. Series D, | ||||||||
4% 10/1/07 (FSA Insured) (d) | 1,000 | 1,000 | ||||||
12,409 | ||||||||
Florida – 5.2% | ||||||||
Brevard County School Board Ctfs. of Prtn. Series A, | ||||||||
5.5% 7/1/09 (AMBAC Insured) | 2,775 | 2,893 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Florida – continued | ||||||||
Coral Gables Health Facilities Hosp. (Baptist Health | ||||||||
South Florida Obligated Group Proj.) 5% 8/15/06 | $ 1,000 | $ 1,001 | ||||||
Florida Gen. Oblig. (Dept. of Trans. Right of Way Proj.) | ||||||||
Series B, 6.375% 7/1/08 | 3,000 | 3,141 | ||||||
Highlands County Health Facilities Auth. Rev. (Adventist | ||||||||
Health Sys./Sunbelt Obligated Group Proj.): | ||||||||
Series A, 5% 11/15/10 | 1,000 | 1,030 | ||||||
Series B, 5% 11/15/08 | 800 | 816 | ||||||
3.95%, tender 9/1/12 (c) | 7,550 | 7,400 | ||||||
5%, tender 11/16/09 (c) | 4,700 | 4,815 | ||||||
Hillsborough County Indl. Dev. Auth. Poll. Cont. Rev. | ||||||||
(Tampa Elec. Co. Proj.): | ||||||||
4%, tender 8/1/07 (c) | 11,000 | 10,953 | ||||||
4.25%, tender 8/1/07 (c)(d) | 6,000 | 5,990 | ||||||
Lee County Solid Waste Sys. Rev. 5.25% 10/1/09 | ||||||||
(MBIA Insured) (d) | 1,000 | 1,032 | ||||||
Lee Memorial Health Sys. Board of Directors Hosp. Rev. | ||||||||
Series A, 5.75% 4/1/12 (FSA Insured) | 1,980 | 2,139 | ||||||
Miami-Dade County Cap. Asset Acquisition Fixed Rate | ||||||||
Spl. Oblig. Series 2002 A, 5% 4/1/08 (AMBAC | ||||||||
Insured) | 2,825 | 2,880 | ||||||
Miami-Dade County School Board Ctfs. of Prtn. 5%, | ||||||||
tender 5/1/11 (MBIA Insured) (c) | 1,500 | 1,556 | ||||||
Orange County School Board Ctfs. of Prtn. Series A, | ||||||||
5.375% 8/1/22 (Pre-Refunded to 8/1/07 @ 101) (e) | 3,815 | 3,914 | ||||||
Orlando Utils. Commission Util. Sys. Rev. 5.25% 7/1/09 | 6,000 | 6,231 | ||||||
Palm Beach County School Board Ctfs. of Prtn. Series A, | ||||||||
6% 8/1/22 (Pre-Refunded to 8/1/10 @ 101) (e) | 7,000 | 7,591 | ||||||
Polk County Cap. Impt. Rev.: | ||||||||
Series 2004, 5.5%, tender 12/1/10 (FSA Insured) (c) | 9,000 | 9,440 | ||||||
5.5% 12/1/11 (FGIC Insured) | 3,470 | 3,726 | ||||||
Seminole County School Board Ctfs. of Prtn. Series A, | ||||||||
4.5% 7/1/08 (MBIA Insured) | 1,250 | 1,264 | ||||||
Univ. Athletic Assoc., Inc. Athletic Prog. Rev. Series | ||||||||
2001: | ||||||||
2.8%, tender 10/1/08, LOC SunTrust Banks of | ||||||||
Florida, Inc. (c) | 2,000 | 1,945 | ||||||
3%, tender 10/1/09, LOC SunTrust Banks, Inc. (c) | 1,000 | 966 | ||||||
Volusia County School Board Ctfs. of Prtn. (School Board | ||||||||
of Volusia County Master Lease Prog.) 5% 8/1/08 | ||||||||
(FSA Insured) | 1,625 | 1,659 | ||||||
82,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Georgia – 0.6% | ||||||||
Columbia County Gen. Oblig. 5% 1/1/09 (FSA Insured) | $ 1,505 | $ 1,546 | ||||||
Fulton DeKalb Hosp. Auth. Hosp. Rev. 5% 1/1/08 | ||||||||
(FSA Insured) | 2,250 | 2,286 | ||||||
Georgia Muni. Elec. Auth. Pwr. Rev. Series 1992 B, | ||||||||
8.25% 1/1/11 (MBIA Insured) | 4,105 | 4,802 | ||||||
Henry County Wtr. & Swr. Auth. Rev. 5% 2/1/08 | ||||||||
(MBIA Insured) | 1,095 | 1,115 | ||||||
9,749 | ||||||||
Hawaii – 2.4% | ||||||||
Hawaii Arpt. Sys. Rev. Series 2000 B, 8% 7/1/10 | ||||||||
(FGIC Insured) (d) | 3,850 | 4,379 | ||||||
Hawaii Gen. Oblig. Series CU: | ||||||||
5.75% 10/1/11 (MBIA Insured) | 3,040 | 3,248 | ||||||
5.75% 10/1/11 (Pre-Refunded to 10/1/10 @ | ||||||||
100) (e) | 170 | 182 | ||||||
Honolulu City & County Gen. Oblig. Series B, 8% | ||||||||
10/1/09 | 26,940 | 30,172 | ||||||
37,981 | ||||||||
Illinois – 10.3% | ||||||||
Chicago Gen. Oblig. Series A, 5.25% 1/1/12 | ||||||||
(FSA Insured) | 1,000 | 1,059 | ||||||
Chicago Midway Arpt. Rev. Series B: | ||||||||
5% 1/1/10 (AMBAC Insured) | 1,225 | 1,264 | ||||||
5% 1/1/11 (AMBAC Insured) | 3,625 | 3,763 | ||||||
Chicago O’Hare Int’l. Arpt. Rev.: | ||||||||
Series A: | ||||||||
5% 1/1/12 (MBIA Insured) | 1,135 | 1,184 | ||||||
5.5% 1/1/08 (AMBAC Insured) | 5,000 | 5,093 | ||||||
5.5% 1/1/10 (AMBAC Insured) (d) | 5,000 | 5,214 | ||||||
Chicago Park District: | ||||||||
Series B, 5% 1/1/11 (AMBAC Insured) | 5,750 | 5,982 | ||||||
Series C, 5% 1/1/11 (AMBAC Insured) | 2,515 | 2,616 | ||||||
Chicago School Fin. Auth. Series B, 5% 6/1/09 | ||||||||
(FSA Insured) | 12,825 | 13,198 | ||||||
Chicago Tax Increment Rev. Series 2000 A, 0% | ||||||||
12/1/08 (AMBAC Insured) | 10,000 | 9,084 | ||||||
Chicago Transit Auth. Cap. Grant Receipts Rev. (Fed. | ||||||||
Transit Administration Section 5307 Formula Funds | ||||||||
Proj.) Series A, 5.25% 6/1/10 (AMBAC Insured) | 4,785 | 5,004 | ||||||
Chicago Wastewtr. Transmission Rev. 5.5% 1/1/09 | ||||||||
(FGIC Insured) | 2,975 | 3,085 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Cook County Cmnty. College District #508 Ctfs. of Prtn. | ||||||||
8.75% 1/1/07 (FGIC Insured) | $ 8,000 | $ 8,188 | ||||||
DuPage Wtr. Commission Wtr. Rev. 5% 5/1/08 | ||||||||
(AMBAC Insured) | 4,525 | 4,613 | ||||||
Granite City Solid Waste Disp. Rev. (Waste Mgmt., Inc. | ||||||||
Proj.) 3.85%, tender 5/1/08 (c)(d) | 2,200 | 2,176 | ||||||
Hodgkins Tax Increment Rev.: | ||||||||
5% 1/1/07 | 1,000 | 1,004 | ||||||
5% 1/1/09 | 1,805 | 1,843 | ||||||
Illinois Dev. Fin. Auth. Gas Supply Rev. (The Peoples Gas | ||||||||
Lt. & Coke Co. Proj.) Series 2003 B, 3.05%, tender | ||||||||
2/1/08 (AMBAC Insured) (c) | 6,100 | 5,957 | ||||||
Illinois Dev. Fin. Auth. Rev. (DePaul Univ. Proj.) Series | ||||||||
2004 C, 5.5% 10/1/10 | 1,900 | 1,998 | ||||||
Illinois Edl. Facilities Auth. Revs.: | ||||||||
(Art Institute of Chicago Proj.) Series 2003, 3.85%, | ||||||||
tender 3/1/11 (c) | 12,800 | 12,527 | ||||||
(Field Museum of Natural History Proj.) 4.05%, tender | ||||||||
11/1/11 (c) | 3,250 | 3,219 | ||||||
(Univ. of Chicago Proj.): | ||||||||
Series 2004 B1, 3.45%, tender 7/1/08 (c) | 6,100 | 6,039 | ||||||
Series A, 5.25% 7/1/41 (Pre-Refunded to 7/1/11 | ||||||||
@ 101) (e) | 2,640 | 2,809 | ||||||
Series B: | ||||||||
3.1%, tender 7/1/07 (c)(e) | 5 | 5 | ||||||
3.1%, tender 7/1/07 (c) | 3,895 | 3,845 | ||||||
Illinois Fin. Auth. Rev. (DePaul Univ. Proj.): | ||||||||
5% 10/1/06 | 1,115 | 1,117 | ||||||
5% 10/1/07 | 1,225 | 1,236 | ||||||
5% 10/1/08 | 1,000 | 1,020 | ||||||
Illinois Gen. Oblig.: | ||||||||
First Series 2001, 5.25% 5/1/11 (FSA Insured) | 1,475 | 1,557 | ||||||
First Series: | ||||||||
5.25% 4/1/08 (MBIA Insured) | 1,035 | 1,059 | ||||||
5.375% 7/1/11 (MBIA Insured) | 6,745 | 7,170 | ||||||
5.5% 8/1/10 | 1,415 | 1,495 | ||||||
6% 1/1/11 (Pre-Refunded to 1/1/10 @ 100) (e) | 7,075 | 7,552 | ||||||
Series A, 5% 10/1/09 | 2,600 | 2,683 | ||||||
5.75% 4/1/12 (Pre-Refunded to 4/1/10 @ 100) (e) . | 1,000 | 1,063 | ||||||
Illinois Health Facilities Auth. Rev. (Condell Med. Ctr. Proj.): | ||||||||
5% 5/15/07 | 500 | 502 | ||||||
5% 5/15/08 | 700 | 707 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Kane & DeKalb Counties Cmnty. Unit School District | ||||||||
#301 0% 12/1/10 (AMBAC Insured) | $ 2,000 | $ 1,658 | ||||||
Kane & DuPage Counties Cmnty. Unit School District | ||||||||
#303, Saint Charles Series A, 5.5% 1/1/12 (FSA | ||||||||
Insured) | 2,270 | 2,430 | ||||||
Kane County School District #129, Aurora West Side | ||||||||
Series A, 5.75% 2/1/14 (Pre-Refunded to 2/1/12 @ | ||||||||
100) (e) | 1,600 | 1,740 | ||||||
Kane, McHenry, Cook & DeKalb Counties Cmnty. Unit | ||||||||
School District #300, Carpentersville 5.5% 12/1/13 | ||||||||
(Pre-Refunded to 12/1/11 @ 100) (e) | 5,000 | 5,374 | ||||||
Lake County Cmnty. High School District #128, | ||||||||
Libertyville Series 2004, 5% 1/1/11 | 2,365 | 2,461 | ||||||
Rosemont Gen. Oblig.: | ||||||||
Series 3: | ||||||||
0% 12/1/07 (Escrowed to Maturity) (e) | 2,375 | 2,251 | ||||||
0% 12/1/07 (FGIC Insured) | 625 | 592 | ||||||
Series A, 0% 12/1/11 (FGIC Insured) | 3,695 | 2,949 | ||||||
Univ. of Illinois Auxiliary Facilities Sys. Rev. Series 2001 | ||||||||
A, 5% 4/1/08 (AMBAC Insured) | 2,035 | 2,072 | ||||||
Univ. of Illinois Ctfs. of Prtn. (Util. Infrastructure Proj.) 5% | ||||||||
8/15/11 (AMBAC Insured) | 1,360 | 1,418 | ||||||
Will County School District #122 Series B, 0% 11/1/08 | ||||||||
(FSA Insured) | 1,280 | 1,165 | ||||||
162,040 | ||||||||
Indiana – 3.7% | ||||||||
Carmel High School Bldg. Corp. 5% 1/10/11 (FSA | ||||||||
Insured) | 1,000 | 1,041 | ||||||
Ctr. Grove 2000 Bldg. Corp.: | ||||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,785 | 1,910 | ||||||
5.5% 7/15/18 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,885 | 2,017 | ||||||
Hamilton Southeastern Consolidated School Bldg. Corp.: | ||||||||
Series A: | ||||||||
5% 1/10/10 (FSA Insured) | 1,750 | 1,810 | ||||||
5.25% 7/10/11 (FSA Insured) | 2,295 | 2,425 | ||||||
5.25% 1/10/12 (FSA Insured) | 1,355 | 1,436 | ||||||
5% 1/15/10 (FSA Insured) | 1,835 | 1,898 | ||||||
5% 1/15/11 (FSA Insured) | 1,910 | 1,989 | ||||||
5% 1/15/12 (FSA Insured) | 1,990 | 2,085 | ||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,855 | 1,985 | ||||||
Indiana Health Facility Fing. Auth. Rev. (Ascension Health | ||||||||
Cr. Group Prog.) Series 2002 F, 5.5% 11/15/06 | 1,000 | 1,006 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Indiana – continued | ||||||||
Indiana Univ. Student Fee Revs. Series H, 0% 8/1/09 | ||||||||
(AMBAC Insured) | $ 3,875 | $ 3,420 | ||||||
Indianapolis Local Pub. Impt. Bond Bank | ||||||||
(Indianapolis Arpt. Auth. Proj.) Series I, 5% 1/1/08 | ||||||||
(MBIA Insured) (d) | 1,550 | 1,571 | ||||||
Indianapolis Resource Recovery Rev. (Ogden Martin | ||||||||
Sys., Inc. Proj.) 6.75% 12/1/07 (AMBAC Insured) | 3,000 | 3,084 | ||||||
Ivy Tech State College Series I, 5% 7/1/09 | ||||||||
(AMBAC Insured) | 1,405 | 1,448 | ||||||
Logansport High School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,000 | 1,047 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,020 | 1,073 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,045 | 1,102 | ||||||
5.25% 7/15/12 (MBIA Insured) | 1,075 | 1,139 | ||||||
Mount Vernon of Hancock County Multi-School Corp. | ||||||||
Series B: | ||||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,605 | 1,717 | ||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,695 | 1,814 | ||||||
Muncie School Bldg. Corp. 5.25% 7/10/12 | ||||||||
(MBIA Insured) | 1,585 | 1,687 | ||||||
New Albany Floyd County Independent School Bldg. | ||||||||
Corp. 5% 1/15/11 (FSA Insured) | 1,000 | 1,041 | ||||||
Rockport Poll. Cont. Rev.: | ||||||||
(AEP Generating Co. Proj.) Series 1995 A, 4.15%, | ||||||||
tender 7/15/11 (AMBAC Insured) (b)(c) | 1,600 | 1,608 | ||||||
4.9%, tender 6/1/07 (c) | 4,000 | 4,015 | ||||||
Saint Joseph County Ind. Edl. Facilities Rev. (Univ. of | ||||||||
Notre Dame Du Lac Proj.) 2.5%, tender 12/3/07 (c) . | 10,000 | 9,787 | ||||||
West Clark 2000 School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,065 | 1,118 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,125 | 1,186 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,150 | 1,216 | ||||||
58,675 | ||||||||
Kansas 0.2% | ||||||||
Burlington Envir. Impt. Rev. (Kansas City Pwr. & Lt. Co. | ||||||||
Proj.) Series A, 4.75%, tender 10/1/07 (c) | 2,400 | 2,420 | ||||||
Kansas Dev. Fin. Auth. Health Facilities Rev. (Hays Med. | ||||||||
Ctr. Proj.) Series 2005 L: | ||||||||
5.25% 11/15/10 | 545 | 567 | ||||||
5.25% 11/15/12 | 680 | 709 | ||||||
3,696 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Kentucky 0.2% | ||||||||
Kenton County Arpt. Board Arpt. Rev. Series B, 5% | ||||||||
3/1/09 (MBIA Insured) (d) | $ 1,185 | $ 1,211 | ||||||
Owensboro Elec. Lt. & Pwr. Rev. Series B, 0% 1/1/09 | ||||||||
(AMBAC Insured) | 2,000 | 1,805 | ||||||
3,016 | ||||||||
Louisiana – 0.2% | ||||||||
East Baton Rouge Parish Pub. Impt. Sales Tax Rev. | ||||||||
Series B, 5% 2/1/12 (AMBAC Insured) | 1,000 | 1,046 | ||||||
Louisiana Offshore Term. Auth. Deepwater Port Rev. | ||||||||
(LOOP LLC Proj.) Series 2003 D, 4%, tender | ||||||||
9/1/08 (c) | 2,700 | 2,695 | ||||||
3,741 | ||||||||
Maryland 0.1% | ||||||||
Prince Georges County Ctfs. of Prtn. (Equip. Acquisition | ||||||||
Prog.) 5.25% 5/15/10 (MBIA Insured) | 1,535 | 1,605 | ||||||
Massachusetts 3.7% | ||||||||
Massachusetts Bay Trans. Auth. Series A, 7% 3/1/09 | 6,880 | 7,403 | ||||||
Massachusetts Dev. Fin. Agcy. Rev. (Massachusetts | ||||||||
Biomedical Research Corp. Proj.) Series C: | ||||||||
5.75% 8/1/06 | 1,200 | 1,201 | ||||||
5.875% 8/1/08 | 1,630 | 1,675 | ||||||
Massachusetts Fed. Hwy.: | ||||||||
Series 2000 A, 5.75% 6/15/13 | 3,000 | 3,193 | ||||||
Series B, 5.125% 12/15/14 (Pre-Refunded to | ||||||||
12/15/08 @ 101) (e) | 2,775 | 2,875 | ||||||
Massachusetts Gen. Oblig.: | ||||||||
Series 1999 C, 5.625% 9/1/12 (Pre-Refunded to | ||||||||
9/1/09 @ 101) (e) | 2,570 | 2,716 | ||||||
Series 2000 A, 6% 2/1/10 | 2,500 | 2,671 | ||||||
Series 2001 A, 5.5% 1/1/11 | 5,000 | 5,307 | ||||||
Series 2003 A, 5.375% 8/1/08 | 5,165 | 5,317 | ||||||
Series 2003 C, 5.5% 10/1/10 (MBIA Insured) | 1,130 | 1,200 | ||||||
Series A, 4.5% 1/1/09 (Pre-Refunded to 1/1/08 @ | ||||||||
101) (e) | 2,055 | 2,094 | ||||||
Series C: | ||||||||
5.25% 11/1/30 (Pre-Refunded to 11/1/12 @ | ||||||||
100) (e) | 2,495 | 2,659 | ||||||
5.5% 11/1/10 (FSA Insured) | 10,000 | 10,626 | ||||||
Massachusetts Health & Edl. Facilities Auth. Rev. | ||||||||
(Berkshire Health Sys., Inc. Proj.) Series F, 5% | ||||||||
10/1/08 | 2,720 | 2,768 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Massachusetts continued | ||||||||||
Massachusetts Port Auth. Spl. Facilities Rev. | ||||||||||
(Delta Air Lines, Inc. Proj.) Series A, 5.5% 1/1/12 | ||||||||||
(AMBAC Insured) (d) | $ 1,000 | $ 1,043 | ||||||||
Massachusetts Wtr. Resources Auth. Series A, 5.75% | ||||||||||
8/1/39 (Pre-Refunded to 8/1/10 @ 101) (e) | 5,000 | 5,376 | ||||||||
58,124 | ||||||||||
Michigan – 3.1% | ||||||||||
Chippewa Valley Schools 5% 5/1/08 | 1,260 | 1,285 | ||||||||
Detroit City School District Series A, 5.5% 5/1/11 | ||||||||||
(FSA Insured) | 1,200 | 1,280 | ||||||||
Detroit Gen. Oblig.: | ||||||||||
Series 2004 A, 5% 4/1/08 (FSA Insured) | 7,275 | 7,414 | ||||||||
5% 4/1/08 (MBIA Insured) | 14,545 | 14,823 | ||||||||
5% 4/1/09 (MBIA Insured) | 10,620 | 10,900 | ||||||||
Detroit Swr. Disp. Rev. Series A, 5.75% 7/1/26 | ||||||||||
(Pre-Refunded to 1/1/10 @ 101) (e) | 2,000 | 2,126 | ||||||||
Greater Detroit Resource Recovery Auth. Rev. Series A, | ||||||||||
6.25% 12/13/07 (AMBAC Insured) | 4,000 | 4,132 | ||||||||
Hazel Park School District 5% 5/1/08 | 1,275 | 1,300 | ||||||||
Livonia Pub. School District Series II, 0% 5/1/21 | ||||||||||
(FGIC Insured) (Pre Refunded to 5/1/07 @ 39.31) (e) | 8,000 | 3,046 | ||||||||
Troy School District 5% 5/1/11 (MBIA Insured) | 1,000 | 1,045 | ||||||||
Wayne-Westland Cmnty. Schools 5% 5/1/10 | ||||||||||
(FSA Insured) | 1,225 | 1,272 | ||||||||
48,623 | ||||||||||
Minnesota 0.2% | ||||||||||
Minneapolis & Saint Paul Hsg. & Redev. Auth. Health | ||||||||||
Care Sys. Rev. (Health Partners Oblig. Group Proj.): | ||||||||||
5.25% 12/1/08 | 1,200 | 1,228 | ||||||||
5.25% 12/1/10 | 500 | 518 | ||||||||
Saint Paul Port Auth. Lease Rev. (HealthEast Midway | ||||||||||
Campus Proj.) Series 2003 A, 5% 5/1/10 | 625 | 622 | ||||||||
Waconia Independent School District #110 Series A, 5% | ||||||||||
2/1/11 (FSA Insured) | 940 | 981 | ||||||||
3,349 | ||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 16 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Mississippi – 0.2% | ||||||||
Mississippi Bus. Fin. Corp. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.4%, tender 3/1/11 (c)(d) | $ 1,100 | $ 1,087 | ||||||
Mississippi Higher Ed. Student Ln. Series 2000 B3, 5.3% | ||||||||
9/1/08 (d) | 1,190 | 1,215 | ||||||
2,302 | ||||||||
Missouri – 0.4% | ||||||||
Fenton Tax Increment Rev. (Gravois Bluffs Redev. Proj.) | ||||||||
5% 4/1/11 | 1,430 | 1,465 | ||||||
Kansas City School District Bldg. Corp. Rev.: | ||||||||
(School District Elementary School Proj.) Series B, 5% | ||||||||
2/1/11 (FGIC Insured) | 1,850 | 1,930 | ||||||
Series A, 5% 2/1/08 (FGIC Insured) | 2,000 | 2,037 | ||||||
Saint Louis Muni. Fin. Corp. Leasehold Rev. (Callahan | ||||||||
Courthouse Proj.) Series A, 5.75% 2/15/14 | ||||||||
(FGIC Insured) | 1,050 | 1,140 | ||||||
6,572 | ||||||||
Montana 0.3% | ||||||||
Forsyth Poll. Cont. Rev. (Portland Gen. Elec. Co. Proj.) | ||||||||
Series A, 5.2%, tender 5/1/09 (c) | 4,000 | 4,090 | ||||||
Nevada 2.4% | ||||||||
Clark County Arpt. Rev. Series C: | ||||||||
5% 7/1/06 (AMBAC Insured) (d) | 800 | 800 | ||||||
5% 7/1/08 (AMBAC Insured) (d) | 2,215 | 2,253 | ||||||
5% 7/1/09 (AMBAC Insured) (d) | 2,700 | 2,763 | ||||||
5% 7/1/10 (AMBAC Insured) (d) | 1,225 | 1,260 | ||||||
5% 7/1/11 (AMBAC Insured) (d) | 1,790 | 1,849 | ||||||
Clark County Hwy. Impt. Rev. (Motor Vehicle Fuel Tax) | ||||||||
5% 7/1/11 (AMBAC Insured) | 3,230 | 3,373 | ||||||
Clark County School District: | ||||||||
Series 2000 A, 5.75% 6/15/17 (Pre-Refunded to | ||||||||
6/15/10 @ 100) (e) | 1,600 | 1,705 | ||||||
Series C, 5% 6/15/10 (MBIA Insured) | 1,075 | 1,115 | ||||||
Series D, 5% 6/15/09 (MBIA Insured) | 13,890 | 14,303 | ||||||
Series F, 5.375% 6/15/11 (FSA Insured) | 4,090 | 4,338 | ||||||
Henderson Health Care Facility Rev. (Catholic Healthcare | ||||||||
West Proj.) Series 2005 B, 5% 7/1/08 | 1,100 | 1,121 | ||||||
Lyon Co. School District Gen. Oblig. 5% 6/1/09 | 695 | 715 | ||||||
Washoe County School District Gen. Oblig. Series D, 5% | ||||||||
6/1/10 (MBIA Insured) | 2,410 | 2,500 | ||||||
38,095 |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
New Hampshire – 0.3% | ||||||||||
New Hampshire Bus. Fin. Auth. Poll. Cont. Rev. (United | ||||||||||
Illumination Co.) Series A, 3.65%, tender 2/1/10 | ||||||||||
(AMBAC Insured) (c)(d) | $ 2,500 | $ 2,435 | ||||||||
New Hampshire Tpk. Sys. Rev. 5% 5/1/07 | ||||||||||
(AMBAC Insured) (b) | 1,500 | 1,512 | ||||||||
3,947 | ||||||||||
New Jersey – 6.1% | ||||||||||
Camden County Impt. Auth. Rev. (Cooper Health Sys. | ||||||||||
Obligated Group Proj.) Series B, 5.25% 2/15/09 | 1,250 | 1,273 | ||||||||
Casino Reinvestment Dev. Auth. Hotel Room Fee Rev.: | ||||||||||
5% 1/1/08 (AMBAC Insured) | 920 | 934 | ||||||||
5% 1/1/09 (AMBAC Insured) | 1,000 | 1,024 | ||||||||
Elizabeth Gen. Oblig. 5.25% 8/15/09 (MBIA Insured) | 1,225 | 1,275 | ||||||||
Garden State Preservation Trust Open Space & | ||||||||||
Farmland Preservation Series B: | ||||||||||
6.25% 11/1/09 (MBIA Insured) | 4,000 | 4,283 | ||||||||
6.375% 11/1/11 (MBIA Insured) | 7,470 | 8,308 | ||||||||
New Jersey Econ. Dev. Auth. Rev. 5% 6/15/07 | 7,500 | 7,570 | ||||||||
New Jersey Tpk. Auth. Tpk. Rev. Series A: | ||||||||||
5.75% 1/1/18 (Pre-Refunded to 1/1/10 @ 100) (e) | 3,215 | 3,406 | ||||||||
6% 1/1/11 (MBIA Insured) | 17,180 | 18,607 | ||||||||
New Jersey Trans. Trust Fund Auth.: | ||||||||||
Series B: | ||||||||||
5.25% 12/15/10 (FGIC Insured) | 4,550 | 4,779 | ||||||||
6.5% 6/15/11 (MBIA Insured) | 5,000 | 5,548 | ||||||||
Series C, 5.5% 12/15/10 (FSA Insured) | 25,000 | 26,512 | ||||||||
New Jersey Transit Corp. Series 2000 B, 5.5% 2/1/08 | ||||||||||
(AMBAC Insured) | 1,000 | 1,025 | ||||||||
New Jersey Transit Corp. Ctfs. of Prtn. Series A, 6% | ||||||||||
9/15/13 (Pre-Refunded to 9/15/09 @ 100) (e) | 7,000 | 7,417 | ||||||||
Tobacco Settlement Fing. Corp. 4.375% 6/1/19 | 4,065 | 4,058 | ||||||||
96,019 | ||||||||||
New Jersey/Pennsylvania – 0.3% | ||||||||||
Delaware River Joint Toll Bridge Commission Bridge Rev. | ||||||||||
5% 7/1/09 | 5,170 | 5,313 | ||||||||
New York – 13.0% | ||||||||||
Grand Central District Mgmt. Assoc., Inc.: | ||||||||||
5% 1/1/10 | 1,200 | 1,237 | ||||||||
5% 1/1/12 | 1,175 | 1,221 | ||||||||
Metropolitan Trans. Auth. Commuter Facilities Rev. | ||||||||||
Series A, 5.375% 7/1/09 (Escrowed to Maturity) (e) | 3,635 | 3,788 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 18
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Metropolitan Trans. Auth. Rev. Series 2005 C: | ||||||||
5% 11/15/10 | $ 2,000 | $ 2,078 | ||||||
5% 11/15/11 | 2,750 | 2,865 | ||||||
Nassau County Gen. Oblig. Series Z, 5% 9/1/11 (FGIC | ||||||||
Insured) | 800 | 834 | ||||||
New York City Gen. Oblig.: | ||||||||
Series 1996 B, 6.5% 8/15/09 | 3,425 | 3,667 | ||||||
Series 1997 H, 6% 8/1/12 (FGIC Insured) | 1,300 | 1,432 | ||||||
Series 2000 A, 6.5% 5/15/11 | 1,985 | 2,168 | ||||||
Series 2002 G, 5.5% 8/1/10 | 2,720 | 2,865 | ||||||
Series 2003 F, 5.5% 12/15/11 | 4,305 | 4,581 | ||||||
Series 2004 G, 5% 8/1/09 | 8,000 | 8,226 | ||||||
Series 2005 C, 5% 8/1/12 | 19,770 | 20,641 | ||||||
Series 2005 D, 5% 8/1/12 | 4,925 | 5,142 | ||||||
Series 2005 G, 5.625% 8/1/13 (MBIA Insured) | 5,075 | 5,478 | ||||||
Series 2005 K: | ||||||||
5% 8/1/11 | 7,120 | 7,404 | ||||||
5% 8/1/12 | 4,360 | 4,552 | ||||||
Series 2005 O, 5% 6/1/12 | 7,500 | 7,822 | ||||||
Series A, 5.25% 11/1/14 (MBIA Insured) | 600 | 635 | ||||||
Series B, 5.75% 8/1/14 | 1,000 | 1,084 | ||||||
Series G, 5.25% 8/1/14 (AMBAC Insured) | 1,000 | 1,053 | ||||||
Subseries 2005 F1, 5% 9/1/15 | 3,560 | 3,722 | ||||||
New York City Indl. Dev. Agcy. Spl. Facilities Rev. | ||||||||
(Terminal One Group Assoc. Proj.) 5% 1/1/07 (d) | 1,700 | 1,706 | ||||||
New York Counties Tobacco Trust I Series B, 6.5% | ||||||||
6/1/35 (Pre-Refunded to 6/1/10 @ 101) (e) | 5,900 | 6,492 | ||||||
New York State Dorm. Auth. Revs.: | ||||||||
(City Univ. Sys. Consolidation Proj.): | ||||||||
Series 2000 A, 6.125% 7/1/12 (AMBAC Insured) . | 5,540 | 6,043 | ||||||
Series A: | ||||||||
5.75% 7/1/13 | 3,500 | 3,747 | ||||||
5.75% 7/1/13 (AMBAC Insured) | 1,000 | 1,073 | ||||||
Series C, 7.5% 7/1/10 | 3,100 | 3,307 | ||||||
Series B, 5.25%, tender 5/15/12 (c) | 13,000 | 13,688 | ||||||
New York State Urban Dev. Corp. Rev. 5% 1/1/12 | 5,000 | 5,214 | ||||||
New York Transitional Fin. Auth. Rev.: | ||||||||
Series 2003 E: | ||||||||
4.5% 2/1/08 | 1,500 | 1,517 | ||||||
5% 2/1/09 | 2,035 | 2,093 | ||||||
Series B, 5.25% 2/1/29 (a) | 2,700 | 2,829 | ||||||
Series E, 4.5% 2/1/07 | 245 | 246 |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Tobacco Settlement Fing. Corp.: | ||||||||
Series 2004 B1, 5% 6/1/09 | $ 3,800 | $ 3,896 | ||||||
Series A1: | ||||||||
5% 6/1/10 | 1,875 | 1,934 | ||||||
5.25% 6/1/12 | 5,000 | 5,006 | ||||||
5.25% 6/1/13 | 17,500 | 17,932 | ||||||
5.5% 6/1/14 | 2,700 | 2,805 | ||||||
Series C1: | ||||||||
5.5% 6/1/15 | 700 | 734 | ||||||
5.5% 6/1/17 | 3,400 | 3,589 | ||||||
TSASC, Inc. Rev. Series 1: | ||||||||
5.5% 7/15/24 (Pre-Refunded to 7/15/12 @ 100) (e) | 7,015 | 7,450 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 1,200 | 1,281 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,490 | 2,658 | ||||||
6% 7/15/20 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,280 | 2,434 | ||||||
6% 7/15/21 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,310 | 2,466 | ||||||
6.25% 7/15/34 (Pre-Refunded to 7/15/09 @ | ||||||||
101) (e) | 11,270 | 12,112 | ||||||
204,747 | ||||||||
New York & New Jersey – 0.6% | ||||||||
Port Auth. of New York & New Jersey: | ||||||||
124th Series, 5% 8/1/13 (FGIC Insured) (d) | 1,200 | 1,227 | ||||||
127th Series, 5% 12/15/08 (AMBAC Insured) (d) | 3,510 | 3,587 | ||||||
Port Auth. of New York & New Jersey Spl. Oblig. Rev. | ||||||||
(JFK Int’l. Air Term. Spl. Proj.) Series 6, 6.25% | ||||||||
12/1/13 (MBIA Insured) (d) | 4,100 | 4,564 | ||||||
9,378 | ||||||||
North Carolina – 1.5% | ||||||||
Charlotte Ctfs. of Prtn. (FY 2004 Equip. Acquisition Proj.) | ||||||||
Series 2004 C, 4% 3/1/08 | 4,940 | 4,955 | ||||||
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.: | ||||||||
Series 1993 B, 7% 1/1/08 (MBIA Insured) | 600 | 628 | ||||||
Series A, 5.5% 1/1/10 | 3,000 | 3,121 | ||||||
Series B, 7.25% 1/1/07 | 9,375 | 9,517 | ||||||
Series C, 5% 1/1/08 | 1,190 | 1,205 | ||||||
Series D, 5.375% 1/1/10 | 3,715 | 3,850 | ||||||
23,276 | ||||||||
Ohio – 1.6% | ||||||||
Akron Ctfs. of Prtn. 5% 12/1/07 | 2,350 | 2,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
20 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Ohio – continued | ||||||||
Cleveland Pub. Pwr. Sys. Rev. (First Mtg. Prog.) | ||||||||
Series 1994 A, 0% 11/15/09 (MBIA Insured) | $ 2,250 | $ 1,954 | ||||||
Franklin County Rev. (OCLC Online Computer Library | ||||||||
Ctr., Inc. Proj.) 5% 4/15/07 | 1,960 | 1,971 | ||||||
Lakewood Hosp. Impt. Rev. (Lakewood Hosp. Assoc. | ||||||||
Proj.) 5.5% 2/15/07 | 1,420 | 1,431 | ||||||
Ohio Air Quality Dev. Auth. Rev. Series 2002 A, 4.25%, | ||||||||
tender 7/1/06 (c) | 1,000 | 1,000 | ||||||
Ohio Gen. Oblig.: | ||||||||
Series 2000 E, 5.5% 5/1/09 | 1,905 | 1,987 | ||||||
Series 2003 D, 2.45%, tender 9/14/07 (c) | 12,300 | 12,069 | ||||||
Univ. of Cincinnati Gen. Receipts Series A, 5.5% 6/1/09 | ||||||||
(FGIC Insured) | 2,000 | 2,089 | ||||||
24,883 | ||||||||
Oklahoma – 0.1% | ||||||||
Cherokee County Econ. Dev. Auth. Series A, 0% | ||||||||
11/1/11 (Escrowed to Maturity) (e) | 1,000 | 793 | ||||||
Oregon – 0.3% | ||||||||
Beaverton Wtr. Rev. Series B, 5% 6/1/10 (FSA Insured) . | 1,210 | 1,257 | ||||||
Oregon Dept. Administrative Svcs. Ctfs. of Prtn. Series B: | ||||||||
5% 5/1/09 (FSA Insured) | 1,000 | 1,027 | ||||||
5% 5/1/11 (FSA Insured) | 1,000 | 1,039 | ||||||
Oregon Gen. Oblig. 8.25% 1/1/07 | 1,000 | 1,021 | ||||||
4,344 | ||||||||
Pennsylvania – 3.9% | ||||||||
Allegheny County Arpt. Rev. (Pittsburgh Int’l. Arpt. Proj.) | ||||||||
Series A1, 5.75% 1/1/12 (MBIA Insured) (d) | 1,300 | 1,384 | ||||||
Allegheny County Hosp. Dev. Auth. Rev. (Univ. of | ||||||||
Pittsburgh Med. Ctr. Proj.) Series B, 5.5% 6/15/07 | 2,000 | 2,030 | ||||||
Allegheny County Indl. Dev. Auth. Rev. (Watson Institute | ||||||||
Ed. Ctr. Proj.) 3.375%, tender 5/1/08, LOC PNC | ||||||||
Bank NA, Pittsburgh (c) | 4,500 | 4,438 | ||||||
Allegheny County San. Auth. Swr. Rev. 6% 12/1/11 | ||||||||
(MBIA Insured) | 1,495 | 1,630 | ||||||
Luzerne County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||||
(Pennsylvania-American Wtr. Co. Proj.) 3.6%, tender | ||||||||
12/1/09 (AMBAC Insured) (c)(d) | 10,000 | 9,672 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities | ||||||||
Rev. (Shippingport Proj.) Series A, 4.35%, tender | ||||||||
6/1/10 (c)(d) | 2,100 | 2,082 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: | ||||||||
(Univ. of Pennsylvania Health Sys. Proj.) Series A: | ||||||||
4% 8/15/06 | $ 1,405 | $ 1,405 | ||||||
5% 8/15/07 | 1,735 | 1,757 | ||||||
5% 8/15/08 | 2,000 | 2,041 | ||||||
(UPMC Health Sys. Proj.) Series 2001 A, 5.75% | ||||||||
1/15/09 | 1,750 | 1,824 | ||||||
Series B, 5.25% 9/1/08 | 5,860 | 6,025 | ||||||
Pennsylvania Indl. Dev. Auth. Rev. 5.25% 7/1/10 | ||||||||
(AMBAC Insured) | 2,750 | 2,885 | ||||||
Philadelphia Gas Works Rev. (1975 Gen. Ordinance | ||||||||
Proj.) 17th Series, 5% 7/1/08 (FSA Insured) | 7,410 | 7,561 | ||||||
Philadelphia Muni. Auth. Rev.: | ||||||||
Series A, 5% 5/15/08 (FSA Insured) | 5,000 | 5,102 | ||||||
Series B, 5.25% 11/15/11 (FSA Insured) | 3,400 | 3,588 | ||||||
Philadelphia School District: | ||||||||
Series 2005 D, 5.25% 6/1/12 (FSA Insured) | 1,465 | 1,551 | ||||||
Series B, 5% 4/1/11 (AMBAC Insured) | 2,160 | 2,251 | ||||||
Pittsburgh School District Series A, 5% 9/1/09 | ||||||||
(MBIA Insured) | 1,600 | 1,641 | ||||||
Westmoreland County Muni. Auth. Muni. Svc. Rev. | ||||||||
Series K, 0% 7/1/12 (Escrowed to Maturity) (e) | 2,355 | 1,828 | ||||||
60,695 | ||||||||
Puerto Rico 0.7% | ||||||||
Puerto Rico Convention Ctr. District Auth. Hotel | ||||||||
Occupancy Tax Rev. Series 2006 A, 5% 7/1/10 | 2,000 | 2,056 | ||||||
Puerto Rico Govt. Dev. Bank 5% 12/1/10 | 8,000 | 8,216 | ||||||
Puerto Rico Pub. Bldg. Auth. Rev. Series K, 4%, tender | ||||||||
7/1/07 (MBIA Insured) (c) | 1,000 | 1,001 | ||||||
11,273 | ||||||||
Rhode Island – 0.3% | ||||||||
Providence Spl. Oblig. Series 2005 E: | ||||||||
4% 6/1/08 (Radian Asset Assurance Ltd. Insured) | 1,000 | 998 | ||||||
5% 6/1/09 (Radian Asset Assurance Ltd. Insured) | 1,315 | 1,344 | ||||||
5% 6/1/10 (Radian Asset Assurance Ltd. Insured) | 1,180 | 1,211 | ||||||
Rhode Island Health & Edl. Bldg. Corp. Rev. (Johnson & | ||||||||
Wales Univ. Proj.) 5% 4/1/08 (XL Cap. Assurance, | ||||||||
Inc. Insured) | 1,700 | 1,731 | ||||||
5,284 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
22 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
South Carolina – 1.5% | ||||||||
Berkeley County School District 7% 4/1/07 | $ 2,615 | $ 2,676 | ||||||
Charleston County Hosp. Facilities (Care Alliance Health | ||||||||
Services Proj.) Series A: | ||||||||
5% 8/15/06 | 1,000 | 1,001 | ||||||
5% 8/15/07 | 1,700 | 1,717 | ||||||
5% 8/15/08 | 1,690 | 1,711 | ||||||
Greenville County Pub. Facilities Corp. Ctfs. of Prtn. | ||||||||
(Courthouse and Detention Proj.) 5% 4/1/10 | ||||||||
(AMBAC Insured) | 1,450 | 1,504 | ||||||
Greenville County School District Installment Purp. Rev. | ||||||||
5% 12/1/10 | 1,455 | 1,508 | ||||||
Lexington One School Facilities Corp. Rev. (Lexington | ||||||||
County School District No. 1 Proj.) 5% 12/1/09 | 550 | 565 | ||||||
Piedmont Muni. Pwr. Agcy. Elec. Rev. 5.6% 1/1/09 | ||||||||
(MBIA Insured) | 2,345 | 2,441 | ||||||
Rock Hill Util. Sys. Rev. Series 2003 A: | ||||||||
5% 1/1/08 (FSA Insured) | 1,850 | 1,882 | ||||||
5% 1/1/09 (FSA Insured) | 1,945 | 1,997 | ||||||
South Carolina Pub. Svc. Auth. Rev.: | ||||||||
Series 2005 B, 5% 1/1/10 (MBIA Insured) | 3,000 | 3,103 | ||||||
Series A, 5.5% 1/1/11 (MBIA Insured) | 3,000 | 3,175 | ||||||
Spartanburg County School District #5 Pub. Facilities | ||||||||
Corp. Ctfs. of Prtn. 5% 7/1/09 (FSA Insured) | 1,000 | 1,029 | ||||||
24,309 | ||||||||
Tennessee – 1.4% | ||||||||
Clarksville Natural Gas Acquisition Corp. Gas Rev. 5% | ||||||||
12/15/09 | 7,500 | 7,712 | ||||||
Elizabethton Health & Edl. Facilities Board Rev. (First | ||||||||
Mtg. Prog.) 6% 7/1/11 (MBIA Insured) | 2,005 | 2,174 | ||||||
Maury County Gen. Oblig. Series 2004 B, 5% 4/1/10 | ||||||||
(MBIA Insured) | 2,000 | 2,075 | ||||||
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Series A: | ||||||||
4.5% 9/1/08 (MBIA Insured) | 1,620 | 1,642 | ||||||
4.5% 9/1/09 (MBIA Insured) | 1,685 | 1,714 | ||||||
Metropolitan Govt. Nashville & Series A, 5.25% | ||||||||
10/15/09 | 3,795 | 3,950 | ||||||
Metropolitan Nashville Arpt. Auth. Rev. Series C, 5% | ||||||||
7/1/06 (FGIC Insured) (d) | 1,675 | 1,675 | ||||||
Shelby County Health Edl. & Hsg. Facility Board Hosp. | ||||||||
Rev. (Methodist Health Care Proj.) 5.5% 4/1/09 | ||||||||
(MBIA Insured) | 1,200 | 1,244 | ||||||
22,186 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas 14.0% | ||||||||
Alief Independent School District Series 2004 B, 5% | ||||||||
2/15/10 | $ 1,500 | $ 1,554 | ||||||
Austin Util. Sys. Rev.: | ||||||||
Series 1992 A, 0% 11/15/09 (MBIA Insured) | 5,130 | 4,468 | ||||||
Series A, 0% 11/15/10 (MBIA Insured) | 5,300 | 4,420 | ||||||
Austin Wtr. & Wastewtr. Sys. Rev. 5% 11/15/07 | ||||||||
(MBIA Insured) (b) | 3,295 | 3,339 | ||||||
Bexar County Series A: | ||||||||
5% 6/15/09 (FSA Insured) | 2,615 | 2,696 | ||||||
5% 6/15/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Birdville Independent School District 5% 2/15/10 | 1,300 | 1,347 | ||||||
Brownsville Independent School District 5% 8/15/11 | 1,430 | 1,494 | ||||||
Bryan Wtrwks. & Swr. Sys. Rev. 5.5% 7/1/11 (FSA | ||||||||
Insured) | 1,500 | 1,600 | ||||||
College Station Independent School District 5% 2/15/10 | 1,000 | 1,036 | ||||||
Conroe Independent School District Lot B, 0% 2/15/08 . | 3,000 | 2,817 | ||||||
Corpus Christi Util. Sys. Rev. 5% 7/15/12 (FSA Insured) | 1,000 | 1,049 | ||||||
Cypress-Fairbanks Independent School District: | ||||||||
Series B, 0% 8/1/07 (AMBAC Insured) | 10,000 | 9,595 | ||||||
5% 2/15/08 | 2,000 | 2,035 | ||||||
Dallas Independent School District Series 2005, 5.25% | ||||||||
8/15/08 | 2,000 | 2,057 | ||||||
Del Valle Independent School District 5.5% 2/1/09 | 1,205 | 1,252 | ||||||
Denton County Gen. Oblig. 5% 7/15/11 (FSA Insured) . | 3,065 | 3,207 | ||||||
El Paso Wtr. & Swr. Rev. 5% 3/1/08 (AMBAC Insured) . | 2,770 | 2,820 | ||||||
Fort Bend Independent School District 5%, tender | ||||||||
8/15/09 (c) | 5,000 | 5,139 | ||||||
Fort Worth Independent School District 5% 2/15/12 | 1,500 | 1,572 | ||||||
Frisco Gen. Oblig. Series 2003 A, 5% 2/15/10 | ||||||||
(FSA Insured) | 1,710 | 1,772 | ||||||
Garland Independent School District 0% 2/15/07 | 1,610 | 1,573 | ||||||
Harris County Gen. Oblig. Series A, 0% 8/15/07 | ||||||||
(FGIC Insured) | 4,400 | 4,216 | ||||||
Harris County Health Facilities Dev. Corp. Rev. (Saint | ||||||||
Luke’s Episcopal Hosp. Proj.) Series 2001 A, 5.5% | ||||||||
2/15/09 | 3,710 | 3,836 | ||||||
Houston Cmnty. College Sys. Rev.: | ||||||||
5.25% 4/15/11 (FSA Insured) | 3,030 | 3,192 | ||||||
5.25% 4/15/12 (FSA Insured) | 2,000 | 2,120 | ||||||
Houston Util. Sys. Rev. Series A: | ||||||||
5.25% 5/15/10 (MBIA Insured) | 2,835 | 2,965 | ||||||
5.25% 11/15/11 (FSA Insured) | 4,430 | 4,686 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Katy Independent School District Series A, 5.25% | ||||||||
2/15/12 | $ 2,000 | $ 2,121 | ||||||
Lower Colorado River Auth. Rev.: | ||||||||
0% 1/1/09 (Escrowed to Maturity) (e) | 3,000 | 2,713 | ||||||
5.25% 1/1/15 (Pre-Refunded to 1/1/11 @ 100) (e) . | 5,000 | 5,254 | ||||||
Lubbock Gen. Oblig.: | ||||||||
(Wtrwks. Sys. Surplus Proj.) 5% 2/15/11 (FSA | ||||||||
Insured) | 2,465 | 2,571 | ||||||
5% 2/15/09 (MBIA Insured) | 1,615 | 1,659 | ||||||
5% 2/15/10 (MBIA Insured) | 1,845 | 1,911 | ||||||
Lubbock Health Facilities Dev. Corp. Rev. (Carillon, Inc. | ||||||||
Proj.) Series A, 6.5% 7/1/29 (Pre-Refunded to | ||||||||
7/1/09 @ 102) (e) | 4,800 | 5,236 | ||||||
Magnolia Independent School District 8% 8/15/11 | ||||||||
(FGIC Insured) | 1,210 | 1,427 | ||||||
Mesquite Independent School District 3.65%, tender | ||||||||
12/1/08 (Liquidity Facility JPMorgan Chase Bank) (c) | 2,500 | 2,500 | ||||||
New Braunfels Independent School District 0% 2/1/07 . | 2,000 | 1,956 | ||||||
North East Texas Independent School District 7% 2/1/11 | ||||||||
(Pre-Refunded to 2/1/10 @ 100) (e) | 3,600 | 3,961 | ||||||
North Texas Tollway Auth. Dallas North Tollway Sys. Rev. | ||||||||
Series C: | ||||||||
5% 1/1/09 (FSA Insured) | 2,000 | 2,051 | ||||||
5%, tender 7/1/08 (c)(e) | 45 | 46 | ||||||
5%, tender 7/1/08 (FSA Insured) (c) | 2,605 | 2,657 | ||||||
Red River Ed. Fin. Corp. Ed. Rev. (Texas Christian Univ. | ||||||||
Proj.) 5% 3/15/12 (MBIA Insured) | 2,625 | 2,744 | ||||||
Rockwall Independent School District: | ||||||||
5% 2/15/08 | 3,825 | 3,892 | ||||||
5% 2/15/09 | 4,690 | 4,819 | ||||||
Sabine River Auth. Poll. Cont. Rev. (Texas Utils. Elec. Co. | ||||||||
Proj.) Series A, 5.5%, tender 11/1/11 (c) | 1,000 | 1,046 | ||||||
San Angelo Wtrwks. & Swr. Sys. Impt. and Rfdg. Rev. | ||||||||
5% 4/1/10 (FSA Insured) | 1,630 | 1,688 | ||||||
San Antonio Elec. & Gas Sys. Rev.: | ||||||||
Series 2000 A, 5.75% 2/1/15 (Pre-Refunded to | ||||||||
2/1/10 @ 100) (e) | 5,000 | 5,295 | ||||||
Series B, 0% 2/1/09 (Escrowed to Maturity) (e) | 2,500 | 2,253 | ||||||
3.55%, tender 12/1/07 (c) | 6,700 | 6,666 | ||||||
5.25% 2/1/08 | 1,000 | 1,021 | ||||||
San Antonio Independent School District 7% 8/15/08 | 5,000 | 5,312 | ||||||
San Antonio Muni. Drainage Util. Sys. Rev. 5.25% | ||||||||
2/1/12 (MBIA Insured) | 1,545 | 1,637 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
San Antonio Wtr. Sys. Rev. 5% 5/15/10 (FGIC Insured) | $ 1,020 | $ 1,058 | ||||||
Socorro Independent School District 5% 8/15/09 | 2,070 | 2,137 | ||||||
Spring Branch Independent School District Series 2001, | ||||||||
5.375% 2/1/14 | 2,790 | 2,949 | ||||||
Spring Independent School District 5% 2/15/08 | 1,875 | 1,908 | ||||||
Texas Gen. Oblig.: | ||||||||
(College Student Ln. Prog.) 5% 8/1/11 (d) | 3,000 | 3,048 | ||||||
Series 1992 A, 8% 10/1/07 | 10,000 | 10,502 | ||||||
Series A, 6% 10/1/08 (MBIA Insured) | 10,750 | 11,242 | ||||||
Series C: | ||||||||
0% 4/1/08 (Escrowed to Maturity) (e) | 3,100 | 2,897 | ||||||
0% 4/1/09 (Escrowed to Maturity) (e) | 2,320 | 2,077 | ||||||
Texas Pub. Fin. Auth. Rev. (Bldg. and Procurement | ||||||||
Commission Proj.) Series A, 5% 2/1/10 | ||||||||
(AMBAC Insured) | 1,055 | 1,092 | ||||||
Texas Tech Univ. Revs. Ninth Series, 5% 2/15/11 | ||||||||
(AMBAC Insured) | 1,250 | 1,302 | ||||||
Travis County Gen. Oblig. 5.25% 3/1/12 | 4,125 | 4,379 | ||||||
Tyler Health Facilities Dev. Corp. Hosp. Rev. (Mother | ||||||||
Frances Hosp. Reg’l. Health Care Ctr. Proj.): | ||||||||
4.5% 7/1/06 | 1,220 | 1,220 | ||||||
5% 7/1/07 | 1,000 | 1,006 | ||||||
Univ. of Texas Univ. Revs.: | ||||||||
(Fing. Sys. Proj.) Series A, 5.5% 8/15/09 | 1,115 | 1,166 | ||||||
Series B: | ||||||||
5% 8/15/09 | 11,255 | 11,610 | ||||||
5.25% 8/15/11 | 5,025 | 5,312 | ||||||
Webb County Gen. Oblig. 5% 2/15/08 (FGIC Insured) . | 1,170 | 1,191 | ||||||
Wichita Falls Independent School District 0% 2/1/10 | 2,325 | 2,003 | ||||||
219,429 | ||||||||
Utah 0.7% | ||||||||
Salt Lake County Wtr. Conservancy District Rev. Series A: | ||||||||
0% 10/1/11 (AMBAC Insured) | 3,800 | 3,024 | ||||||
0% 10/1/12 (AMBAC Insured) | 3,800 | 2,886 | ||||||
0% 10/1/13 (AMBAC Insured) | 3,760 | 2,719 | ||||||
Utah Bldg. Ownership Auth. Lease Rev. (State Facilities | ||||||||
Master Lease Prog.) Series A, 5% 5/15/11 | 1,700 | 1,777 | ||||||
10,406 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
26 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Virginia – 0.1% | ||||||||
Amelia County Indl. Dev. Auth. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.05%, tender 4/1/08 (c)(d) | $ 1,600 | $ 1,588 | ||||||
Washington 1.6% | ||||||||
Chelan County Pub. Util. District #1 Rev. Series B, 5% | ||||||||
7/1/11 (FGIC Insured) | 1,190 | 1,243 | ||||||
Clark County Pub. Util. District #1 Elec. Rev.: | ||||||||
Series B, 5.25% 1/1/09 (FSA Insured) | 1,595 | 1,645 | ||||||
5% 1/1/11 (MBIA Insured) | 1,680 | 1,748 | ||||||
5.25% 1/1/11 (FSA Insured) | 1,935 | 2,033 | ||||||
King County School District #409, Tahoma 5% 6/1/11 | ||||||||
(FSA Insured) | 1,740 | 1,816 | ||||||
Pierce County Gen. Oblig. 5.75% 8/1/13 | ||||||||
(Pre-Refunded to 8/1/10 @ 100) (e) | 1,155 | 1,232 | ||||||
Port of Seattle Rev. Series D, 5.75% 11/1/15 | ||||||||
(FGIC Insured) (d) | 3,640 | 3,915 | ||||||
Snohomish County Pub. Hosp. District #2 | ||||||||
(Stevens Health Care Proj.) 4.5% 12/1/09 | ||||||||
(FGIC Insured) | 1,000 | 1,015 | ||||||
Snohomish County School District #2, Everett: | ||||||||
5% 6/1/09 (FSA Insured) | 1,045 | 1,076 | ||||||
5% 6/1/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Vancouver Wtr. & Swr. Rev. 5.25% 6/1/11 | ||||||||
(FSA Insured) | 1,000 | 1,055 | ||||||
Washington Gen. Oblig. Series A: | ||||||||
5% 7/1/11 (FGIC Insured) | 1,000 | 1,047 | ||||||
5.5% 7/1/11 | 3,500 | 3,682 | ||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #2 Rev. | ||||||||
Series A, 5.75% 7/1/08 | 3,000 | 3,104 | ||||||
25,648 | ||||||||
Wisconsin – 1.6% | ||||||||
Milwaukee County Gen. Oblig. Series A, 0% 12/1/10 | ||||||||
(FGIC Insured) | 3,370 | 2,788 | ||||||
Wisconsin Gen. Oblig. Series 1, 5% 5/1/10 | ||||||||
(MBIA Insured) | 2,500 | 2,596 | ||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: | ||||||||
(Hosp. Sisters Svcs., Inc. Proj.) Series 2003 B, 4%, | ||||||||
tender 12/1/06 (FSA Insured) (c) | 15,000 | 15,010 | ||||||
(Marshfield Clinic Proj.): | ||||||||
Series 2006 A, 5% 2/15/13 | 875 | 888 | ||||||
Series B, 6.25% 2/15/10 | 1,015 | 1,076 |
See accompanying notes which are an integral part of the financial statements.
27 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Wisconsin – continued | ||||||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: continued | ||||||||||
(Wheaton Franciscan Svcs., Inc. Proj.) Series A: | ||||||||||
5% 8/15/09 | $ 1,000 | $ 1,020 | ||||||||
5% 8/15/10 | 1,870 | 1,907 | ||||||||
25,285 | ||||||||||
TOTAL MUNICIPAL BONDS | ||||||||||
(Cost $1,531,204) | 1,506,399 | |||||||||
Municipal Notes 0.7% | ||||||||||
Illinois – 0.7% | ||||||||||
Chicago O’Hare Int’l. Arpt. Rev. Participating VRDN Series DB | ||||||||||
189, 4% (Liquidity Facility Deutsche Bank AG) (c)(f) | ||||||||||
(Cost $9,998) | 10,000 | 10,000 | ||||||||
TOTAL INVESTMENT PORTFOLIO – 96.5% | ||||||||||
(Cost $1,541,202) | 1,516,399 | |||||||||
NET OTHER ASSETS – 3.5% | 55,766 | |||||||||
NET ASSETS 100% | $ 1,572,165 |
Security Type Abbreviation |
VRDN — VARIABLE RATE DEMAND NOTE |
Legend (a) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. (b) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(c) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (d) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (e) Security collateralized by an amount sufficient to pay interest and principal. (f) Provides evidence of ownership in one or more underlying municipal bonds. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
(g) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $9,019,000 or 0.6% of net assets. |
Additional information on each holding is as follows:
Acquisition | Acquisition | |||||
Security | Date | Cost (000s) | ||||
Univ. of California | ||||||
Revs. (UCLA Med. | ||||||
Ctr. Proj.) 4.55% | ||||||
12/1/09 | 3/6/02 | $ 8,955 |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 43.8% | |
Escrowed/Pre Refunded | 12.2% | |
Electric Utilities | 9.4% | |
Transportation | 6.9% | |
Health Care | 6.6% | |
Special Tax | 5.1% | |
Education | 5.1% | |
Others* (individually less than 5%) | 10.9% | |
100.0% |
* Includes net other assets
Income Tax Information
At December 31, 2005, the fund had a capital loss carryforward of approximately $699,000 all of which will expire on December 31, 2013.
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||||
Assets | ||||||
Investment in securities, at value | ||||||
See accompanying schedule: | ||||||
Unaffiliated issuers (cost $1,541,202) | $ 1,516,399 | |||||
Cash | 2,390 | |||||
Receivable for investments sold | 39,832 | |||||
Receivable for fund shares sold | 1,213 | |||||
Interest receivable | 21,765 | |||||
Prepaid expenses | 4 | |||||
Other receivables | 287 | |||||
Total assets | 1,581,890 | |||||
Liabilities | ||||||
Payable for investments purchased on a delayed delivery | ||||||
basis | $ 6,468 | |||||
Payable for fund shares redeemed | 1,410 | |||||
Distributions payable | 1,008 | |||||
Accrued management fee | 487 | |||||
Distribution fees payable | 13 | |||||
Other affiliated payables | 290 | |||||
Other payables and accrued expenses | 49 | |||||
Total liabilities | 9,725 | |||||
Net Assets | $ 1,572,165 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 1,601,433 | |||||
Distributions in excess of net investment income | (4) | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | (4,461) | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | (24,803) | |||||
Net Assets | $ 1,572,165 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
30 |
Statement of Assets and Liabilities continued | ||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||
Calculation of Maximum Offering Price | ||||
Class A: | ||||
Net Asset Value and redemption price per share | ||||
($11,433 ÷ 1,131.7 shares) | $ 10.10 | |||
Maximum offering price per share (100/96.25 of $10.10) | $ 10.49 | |||
Class T: | ||||
Net Asset Value and redemption price per share | ||||
($14,609 ÷ 1,448.4 shares) | $ 10.09 | |||
Maximum offering price per share (100/97.25 of $10.09) | $ 10.38 | |||
Class B: | ||||
Net Asset Value and offering price per share | ||||
($2,938 ÷ 291.0 shares)A | $ 10.10 | |||
Class C: | ||||
Net Asset Value and offering price per share | ||||
($7,181 ÷ 711.9 shares)A | $ 10.09 | |||
Short Intermediate Municipal Income: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($1,532,599 ÷ 151,921.4 shares) | $ 10.09 | |||
Institutional Class: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($3,405 ÷ 337.4 shares) | $ 10.09 | |||
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Financial Statements continued | ||||||
Statement of Operations | ||||||
Amounts in thousands | Six months ended June 30, 2006 (Unaudited) | |||||
Investment Income | ||||||
Interest | $ 28,079 | |||||
Expenses | ||||||
Management fee | $ 3,091 | |||||
Transfer agent fees | 713 | |||||
Distribution fees | 86 | |||||
Accounting fees and expenses | 165 | |||||
Independent trustees’ compensation | 3 | |||||
Custodian fees and expenses | 13 | |||||
Registration fees | 62 | |||||
Audit | 28 | |||||
Legal | 1 | |||||
Miscellaneous | 8 | |||||
Total expenses before reductions | 4,170 | |||||
Expense reductions | (810) | 3,360 | ||||
Net investment income | 24,719 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | (2,621) | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (15,823) | |||||
Net gain (loss) | (18,444) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 6,275 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
Amounts in thousands | (Unaudited) | 2005 | ||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 24,719 | $ 51,345 | ||||||
Net realized gain (loss) | (2,621) | (1,840) | ||||||
Change in net unrealized appreciation (depreciation) . | (15,823) | (29,976) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 6,275 | 19,529 | ||||||
Distributions to shareholders from net investment income . | (24,720) | (51,341) | ||||||
Distributions to shareholders from net realized gain | — | (549) | ||||||
Total distributions | (24,720) | (51,890) | ||||||
Share transactions - net increase (decrease) | (119,666) | (147,427) | ||||||
Redemption fees | 6 | 25 | ||||||
Total increase (decrease) in net assets | (138,105) | (179,763) | ||||||
Net Assets | ||||||||
Beginning of period | 1,710,270 | 1,890,033 | ||||||
End of period (including distributions in excess of net | ||||||||
investment income of $4 and distributions in excess | ||||||||
of net investment income of $3, respectively) | $ 1,572,165 | $ 1,710,270 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Financial Highlights Class A | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.50 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .144 | .268 | .250 | .115 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.090) | .071 | ||||||||||||
Total from investment operations | 033 | .091 | .160 | .186 | ||||||||||||
Distributions from net investment income . | (.143) | (.268) | (.251) | (.111) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.143) | (.271) | (.270) | (.176) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.50 | ||||||||||||
Total ReturnB,C,D | .32% | .89% | 1.55% | 1.78% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of fee waivers, if any | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of all reductions | .55%A | .58% | .64% | .64%A | ||||||||||||
Net investment income | 2.84%A | 2.61% | 2.41% | 2.52%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 11 | $ 14 | $ 12 | $ 9 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
34 |
Financial Highlights Class T | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.37 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .138 | .257 | .238 | .110 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.167) | (.089) | .050 | ||||||||||||
Total from investment operations | 028 | .090 | .149 | .160 | ||||||||||||
Distributions from net investment income . | (.138) | (.257) | (.240) | (.105) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.138) | (.260) | (.259) | (.170) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.37 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | .27% | .88% | 1.44% | 1.54% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of fee waivers, if any | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of all reductions | .66%A | .69% | .75% | .76%A | ||||||||||||
Net investment income | 2.73%A | 2.50% | 2.30% | 2.41%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 15 | $ 15 | $ 20 | $ 12 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
35 Semiannual Report
Financial Highlights Class B | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .105 | .190 | .172 | .081 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.080) | .059 | ||||||||||||
Total from investment operations | (.006) | .013 | .092 | .140 | ||||||||||||
Distributions from net investment income . | (.104) | (.190) | (.173) | (.075) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.104) | (.193) | (.192) | (.140) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.49 | ||||||||||||
Total ReturnB,C,D | (.06)% | .13% | .89% | 1.34% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of fee waivers, if any | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of all reductions | 1.32%A | 1.34% | 1.39% | 1.39%A | ||||||||||||
Net investment income | 2.07%A | 1.85% | 1.65% | 1.78%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 3 | $ 3 | $ 4 | $ 2 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
36 |
Financial Highlights Class C | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | 099 | .178 | .159 | .077 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.080) | .048 | ||||||||||||
Total from investment operations | (.011) | .002 | .079 | .125 | ||||||||||||
Distributions from net investment income | (.099) | (.179) | (.160) | (.070) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.099) | (.182) | (.179) | (.135) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | (.11)% | .02% | .77% | 1.20% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of fee waivers, if any | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of all reductions | 1.43%A | 1.45% | 1.51% | 1.49%A | ||||||||||||
Net investment income | 1.96%A | 1.74% | 1.53% | 1.67%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) | $ 7 | $ 10 | $ 11 | $ 8 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
37 Semiannual Report
Financial Highlights Short Intermediate Municipal Income | ||||||||||||||
Six months ended | ||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||
Selected Per Share Data | ||||||||||||||
Net asset value, | ||||||||||||||
beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | $ 10.12 | ||||||||
Income from Investment | ||||||||||||||
Operations | ||||||||||||||
Net investment | ||||||||||||||
incomeD | .151 | .284 | .268 | .283 | .336 | .396 | ||||||||
Net realized and unre | ||||||||||||||
alized gain (loss) | (.110) | (.177) | (.080) | .030 | .317 | .173 | ||||||||
Total from investment | ||||||||||||||
operations | .041 | .107 | .188 | .313 | .653 | .569 | ||||||||
Distributions from net | ||||||||||||||
investment income | (.151) | (.284) | (.269) | (.283) | (.339) | (.396) | ||||||||
Distributions from net | ||||||||||||||
realized gain | — | (.003) | (.019) | (.070) | (.064) | (.023) | ||||||||
Total distributions | (.151) | (.287) | (.288) | (.353) | (.403) | (.419) | ||||||||
Redemption fees added | ||||||||||||||
to paid in capitalD,F | — | — | — | — | — | — | ||||||||
Net asset value, | ||||||||||||||
end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | ||||||||
Total ReturnB,C | .40% | 1.06% | 1.82% | 3.01% | 6.47% | 5.70% | ||||||||
Ratios to Average Net AssetsE | ||||||||||||||
Expenses before | ||||||||||||||
reductions | .49%A | .49% | .49% | .49% | .49% | .49% | ||||||||
Expenses net of fee | ||||||||||||||
waivers, if any | .49%A | .49% | .48% | .49% | .49% | .49% | ||||||||
Expenses net of all | ||||||||||||||
reductions | .40%A | .42% | .47% | .47% | .45% | .41% | ||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69% | 3.23% | 3.85% | ||||||||
Supplemental Data | ||||||||||||||
Net assets, end of | ||||||||||||||
period (in millions) . | $ 1,533 | $ 1,665 | $ 1,841 | $ 1,843 | $ 1,683 | $ 1,183 | ||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% | 38% | 43% |
A Annualized 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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
38 |
Financial Highlights Institutional Class | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003E | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeD | 151 | .283 | .265 | .125 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.088) | .059 | ||||||||||||
Total from investment operations | 041 | .107 | .177 | .184 | ||||||||||||
Distributions from net investment income . | (.151) | (.284) | (.268) | (.119) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.151) | (.287) | (.287) | (.184) | ||||||||||||
Redemption fees added to paid | ||||||||||||||||
in capitalD,G | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.49 | ||||||||||||
Total ReturnB,C | 40% | 1.05% | 1.71% | 1.77% | ||||||||||||
Ratios to Average Net AssetsF | ||||||||||||||||
Expenses before reductions | 49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of fee waivers, if any | 49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of all reductions | 39%A | .42% | .48% | .47%A | ||||||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (000 omitted) | $ 3,405 | $ 2,625 | $ 1,253 | $ 414 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
39 Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Short Intermediate Municipal Income Fund (the Fund) is a fund of Fidelity Municipal Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, Short Intermediate Municipal Income, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
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. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Semiannual Report |
40 |
1. Significant Accounting Policies continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount, deferred trustees compensa tion, capital loss carryforwards and losses deferred due to excise tax regulations.
The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,390 | |||
Unrealized depreciation | (27,193) | |||
Net unrealized appreciation (depreciation) | $ (24,803) | |||
Cost for federal income tax purposes | $ 1,541,202 |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund’s net assets and results of operations.
41 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
(Amounts in thousands except ratios) |
1. Significant Accounting Policies continued |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the Fund and accounted for as an addition to paid in capital.
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in the Fund’s Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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 transac tions 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 at the end of the Fund’s Schedule of Investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, aggregated $234,664 and $417,369, respectively.
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 that is based on an annual rate of .25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
Semiannual Report |
42 |
4. Fees and Other Transactions with Affiliates continued
Distribution and Service Plan. In accordance with Rule 12b 1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class’ average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |||||||||||
Fee | Fee | FDC | by FDC | |||||||||||
Class A | 0% | .15% | $ 9 | $ — | ||||||||||
Class T | 0% | .25% | 18 | — | ||||||||||
Class B | .65% | .25% | 15 | 11 | ||||||||||
Class C | .75% | .25% | 44 | 11 | ||||||||||
$ 86 | $ 22 |
Sales Load. FDC receives a front end sales charge of up to 3.75% for selling Class A shares, and 2.75% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, .75% to .50% for certain purchases of Class A shares (.25% prior to February 24, 2006) and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows: | ||||
Retained | ||||
by FDC | ||||
Class A | $ 1 | |||
Class T | 1 | |||
Class B* | 2 | |||
Class C* | 3 | |||
$ 7 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent, and shareholder servicing agent for the Fund’s Class A, Class T, Class B, Class C, Short Intermediate Municipal Income and Institutional Class shares. Citibank has entered into a sub arrangement with Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, with respect to all classes of the Fund, except for Short Intermediate Municipal Income, to perform the transfer, dividend
43 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
(Amounts in thousands except ratios) | ||
4. Fees and Other Transactions with Affiliates continued | ||
Transfer Agent and Accounting Fees continued |
disbursing, and shareholder servicing agent functions. Citibank has also entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, with respect to Short Intermediate Municipal Income, to perform the transfer, dividend disbursing, and shareholder servicing agent functions. FIIOC and FSC receive account fees and asset based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. All fees are paid to FIIOC by Citibank, which is reimbursed by each class for such payments. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
% of | ||||||
Average | ||||||
Amount | Net Assets | |||||
Class A | $ 5 | .09* | ||||
Class T | 7 | .09* | ||||
Class B | 2 | .10* | ||||
Class C | 5 | .11* | ||||
Short Intermediate Municipal Income | 693 | .09* | ||||
Institutional Class | 1 | .08* | ||||
$ 713 | ||||||
* Annualized |
Citibank also has a sub arrangement with FSC to maintain the Fund’s accounting records. The fee is based on the level of average net assets for the month.
5. Committed Line of Credit. |
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the “line of credit”) to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions. |
Through arrangements with the Fund’s custodian and each class’ 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 accounting expenses
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44 |
6. Expense Reductions - continued
by $13 and $165, respectively. During the period, credits reduced each class’ transfer agent expense as noted in the table below.
Transfer Agent | ||||
expense reduction | ||||
Class A | $ 5 | |||
Class T | 6 | |||
Class B | 1 | |||
Class C | 3 | |||
Short Intermediate Municipal Income | 616 | |||
Institutional Class | 1 | |||
$ 632 | ||||
7. Other. |
The Fund’s organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders. | ||||||||
Distributions to shareholders of each class were as follows: | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, 2005 | |||||||
From net investment income | ||||||||
Class A | $ 165 | $ 313 | ||||||
Class T | 200 | 465 | ||||||
Class B | 34 | 68 | ||||||
Class C | 86 | 195 | ||||||
Short Intermediate Municipal Income | 24,187 | 50,256 | ||||||
Institutional Class | 48 | 44 | ||||||
Total | $ 24,720 | $ 51,341 | ||||||
From net realized gain | ||||||||
Class A | $ — | $ 4 | ||||||
Class T | — | 6 | ||||||
Class B | — | 1 | ||||||
Class C | — | 3 | ||||||
Short Intermediate Municipal Income | — | 534 | ||||||
Institutional Class | — | 1 | ||||||
Total | $ — | $ 549 | ||||||
45 | Semiannual Report |
Notes to Financial Statements (Unaudited) continued | ||||||||||||
(Amounts in thousands except ratios) | ||||||||||||
9. Share Transactions. | ||||||||||||
Transactions for each class of shares were as follows: | ||||||||||||
Shares | Dollars | |||||||||||
Six months ended | Year ended | Six months ended | Year ended | |||||||||
June 30, 2006 | December 31, 2005 | June 30, 2006 | December 31, 2005 | |||||||||
Class A | ||||||||||||
Shares sold | 122 | 684 | $ 1,238 | $ 6,996 | ||||||||
Reinvestment of | ||||||||||||
distributions | 13 | 23 | 128 | 238 | ||||||||
Shares redeemed | (413) | (498) | (4,210) | (5,104) | ||||||||
Net increase (decrease) | (278) | 209 | $ (2,844) | $ 2,130 | ||||||||
Class T | ||||||||||||
Shares sold | 181 | 517 | $ 1,849 | $ 5,299 | ||||||||
Reinvestment of | ||||||||||||
distributions | 16 | 34 | 161 | 351 | ||||||||
Shares redeemed | (208) | (1,028) | (2,115) | (10,531) | ||||||||
Net increase (decrease) | (11) | (477) | $ (105) | $ (4,881) | ||||||||
Class B | ||||||||||||
Shares sold | 15 | 65 | $ 146 | $ 661 | ||||||||
Reinvestment of | ||||||||||||
distributions | 2 | 4 | 24 | 44 | ||||||||
Shares redeemed | (63) | (100) | (639) | (1,025) | ||||||||
Net increase (decrease) | (46) | (31) | $ (469) | $ (320) | ||||||||
Class C | ||||||||||||
Shares sold | 77 | 438 | $ 786 | $ 4,492 | ||||||||
Reinvestment of | ||||||||||||
distributions | 5 | 11 | 50 | 116 | ||||||||
Shares redeemed | (374) | (541) | (3,803) | (5,552) | ||||||||
Net increase (decrease) | (292) | (92) | $ (2,967) | $ (944) | ||||||||
Short Intermediate | ||||||||||||
Municipal Income | ||||||||||||
Shares sold | 22,395 | 46,854 | $ 227,580 | $ 481,284 | ||||||||
Reinvestment of | ||||||||||||
distributions | 1,708 | 3,476 | 17,330 | 35,648 | ||||||||
Shares redeemed | (35,371) | (64,556) | (359,005) | (661,741) | ||||||||
Net increase (decrease) | (11,268) | (14,226) | $ (114,095) | $ (144,809) | ||||||||
Institutional Class | ||||||||||||
Shares sold | 165 | 194 | $ 1,683 | $ 1,994 | ||||||||
Reinvestment of | ||||||||||||
distributions | 3 | 2 | 26 | 18 | ||||||||
Shares redeemed | (88) | (60) | (895) | (615) | ||||||||
Net increase (decrease) | 80 | 136 | $ 814 | $ 1,397 |
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46 |
Proxy Voting Results
A special meeting of the fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Short Intermediate Municipal Income Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (togeth er, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, considered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s management contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day management of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its share holders; and (iv) whether there have been economies of scale in respect of the man agement of the Fidelity funds, whether the Fidelity funds (including the fund) have
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48 |
appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund’s Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such committee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommendations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for the fund, the Board ulti mately reached a determination, with the assistance of fund counsel and Independent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be
49 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
received by Fidelity under the management contract is consistent with Fidelity’s fiduciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the background of the fund’s portfolio manager and the fund’s investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for the fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund’s compliance policies and procedures.
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50 |
The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying an additional sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) volunta rily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class available to shareholders with higher account balances; (iv) contractu ally agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund’s absolute investment performance for each class, as well as the fund’s relative investment performance for each class measured against (i) a broad based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, as applicable, the cumulative total returns of Class C and Fidelity Short Intermediate Municipal Income (retail class), the cumulative total returns of a broad based securities market index (“benchmark”), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The returns of Class C and Fidelity Short Intermediate Municipal Income (retail class) represent the performance of classes with the highest and lowest 12b 1 fees, respectively (not necessarily with the highest and lowest total expenses). The box within each chart shows the 25th percentile return (bottom of box) and the 75th percen tile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage
51 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
beaten numbers noted below each chart correspond to the percentile box and represent the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the class indicated.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix52x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of Fidelity Short Intermediate Municipal Income (retail class) was in the second quartile for all the periods shown. The Board also stated that the relative investment performance of the fund was lower than its benchmark for all the periods shown. The Board considered that the variations in performance among the fund’s classes reflect the variations in class expenses, which result in lower performance for higher expense classes.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund’s shareholders, particularly in light of the Board’s view that the fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee charac teristics. Combining Lipper investment objective categories aids the Board’s manage ment fee and total expense comparisons by broadening the competitive group used for
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52 |
comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund’s. For example, a TMG % of 13% means that 87% of the funds in the Total Mapped Group had higher management fees than the fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund’s management fee ranked, is also included in the chart and considered by the Board.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix53x1.jpg)
The Board noted that the fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board
53 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
concluded that the fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of each class’s total expenses, the Board considered the fund’s management fee as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund paid 12b 1 fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expenses of each of Class A, Class T, Class B, Fidelity Short Intermediate Municipal Income (retail class), and Institutional Class ranked below its competitive median for 2005, and the total expenses of Class C ranked above its competitive median for 2005. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b 1 fee structure, and that the multiple struc tures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expenses of the classes vary primarily by the level of their 12b 1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the total expenses of each class of the fund were reasonable, although in one case above the median of the universe presented for comparison, in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity.
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The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitabil ity methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the fund’s business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
55 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund’s Advisory Contracts should be renewed.
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Managing Your Investments
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.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix57x1.jpg)
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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.
* 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 guar anteed 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.
57 Semiannual Report
To Visit Fidelity
For directions and hours, please call 1-800-544-9797. Arizona 7001 West Ray Road Chandler, AZ 15445 N. Scottsdale Road Scottsdale, AZ California 815 East Birch Street Brea, CA 1411 Chapin Avenue Burlingame, CA 851 East Hamilton Avenue Campbell, CA 19200 Von Karman Avenue Irvine, CA 601 Larkspur Landing Circle Larkspur, CA 10100 Santa Monica Blvd. Los Angeles, CA 27101 Puerta Real Mission Viejo, CA 73 575 El Paseo Palm Desert, CA 251 University Avenue Palo Alto, CA 123 South Lake Avenue Pasadena, CA 16995 Bernardo Ctr. Drive Rancho Bernardo, CA 1220 Roseville Parkway Roseville, CA 1740 Arden Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 11943 El Camino Real San Diego, CA 8 Montgomery Street San Francisco, CA 3793 State Street Santa Barbara, CA 1200 Wilshire Boulevard Santa Monica, CA 21701 Hawthorne Boulevard Torrance, CA |
2001 North Main Street Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA Colorado 1625 Broadway Denver, CO 9185 Westview Road Lone Tree, CO Connecticut 48 West Putnam Avenue Greenwich, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT Delaware 400 Delaware Avenue Wilmington, DE Florida 4400 N. Federal Highway Boca Raton, FL 121 Alhambra Plaza Coral Gables, FL 2948 N. Federal Highway Ft. Lauderdale, FL 4671 Town Center Parkway Jacksonville, FL 1907 West State Road 434 Longwood, FL 8880 Tamiami Trail, North Naples, FL 3501 PGA Boulevard Palm Beach Gardens, FL 3550 Tamiami Trail, South Sarasota, FL 1502 N. Westshore Blvd. Tampa, FL 2465 State Road 7 Wellington, FL |
Georgia 3445 Peachtree Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA Illinois One North LaSalle Street Chicago, IL 875 North Michigan Ave. Chicago, IL 1415 West 22nd Street Oak Brook, IL 1572 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 7315 Wisconsin Avenue Bethesda, MD One W. Pennsylvania Ave. Towson, MD Massachusetts 801 Boylston Street Boston, MA 155 Congress Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 238 Main Street Cambridge, MA 405 Cochituate Road Framingham, MA 416 Belmont Street Worcester, MA |
Semiannual Report 58
Michigan 500 E. Eisenhower Pkwy. Ann Arbor, MI 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 1524 South Lindbergh Blvd. St. Louis, MO Nevada 2225 Village Walk Drive Henderson, NV New Jersey 150 Essex Street Millburn, NJ 56 South Street Morristown, NJ 396 Route 17, North Paramus, NJ 3518 Route 1 North Princeton, NJ 530 Broad Street Shrewsbury, NJ New York 1055 Franklin Avenue Garden City, NY 37 West Jericho Turnpike Huntington Station, NY 1271 Avenue of the Americas New York, NY 980 Madison Avenue New York, NY 61 Broadway New York, NY 350 Park Avenue New York, NY 200 Fifth Avenue New York, NY 733 Third Avenue New York, NY 11 Penn Plaza New York, NY |
2070 Broadway New York, NY 1075 Northern Blvd. Roslyn, NY 799 Central Park Avenue Scarsdale, NY North Carolina 4611 Sharon Road Charlotte, NC 7011 Fayetteville Road Durham, NC Ohio 3805 Edwards Road Cincinnati, OH 1324 Polaris Parkway Columbus, OH 28699 Chagrin Boulevard Woodmere Village, OH Oregon 7493 SW Bridgeport Road 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 4001 Northwest Parkway Dallas, TX 12532 Memorial Drive Houston, TX 2701 Drexel Drive Houston, TX 6560 Fannin Street Houston, TX 6500 N. MacArthur Blvd. Irving, TX |
6005 West Park Boulevard Plano, TX 14100 San Pedro San Antonio, TX 1576 East Southlake Blvd. Southlake, TX 19740 IH 45 North Spring, TX Utah 279 West South Temple 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
59 Semiannual Report
59
To Write Fidelity
We’ll give your correspondence immediate attention and send you written confirmation upon completion of your request.
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(such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 |
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Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
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Buying shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 Selling shares Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277 0035 Overnight Express Fidelity Investments Attn: Distribution Services 100 Crosby Parkway KC1H Covington, KY 41015 General Correspondence Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 |
Semiannual Report 60
61 Semiannual Report
Semiannual Report |
62 |
63 Semiannual Report
Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Adviser Fidelity Investments Money Management, Inc. Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Service Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
The Fidelity Telephone Connection | ||
Mutual Fund 24 Hour Service | ||
Exchanges/Redemptions | ||
and Account Assistance | 1-800-544-6666 | |
Product Information | 1-800-544-6666 | |
Retirement Accounts | 1-800-544-4774 | |
(8 a.m. - 9 p.m.) | ||
TDD Service | 1-800-544-0118 | |
for the deaf and hearing impaired | ||
(9 a.m. - 9 p.m. Eastern time) | ||
Fidelity Automated Service | ||
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(automated phone logo) Automated line for quickest service |
STM-USAN-0806 1.787790.103 |
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Fidelity Advisor Short-Intermediate Municipal Income Fund - Class A, Class T, Class B and Class C |
Semiannual Report June 30, 2006 |
Class A, Class T, Class B, and Class C are classes of Fidelity® Short Intermediate Municipal Income Fund
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders. | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Investment Changes | 6 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 7 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 30 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 40 | Notes to the financial statements. | ||
Proxy Voting Results | 47 | |||
Board Approval of | 48 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio hold ings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.advisor.fidelity.com. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the fund nor Fidelity Distributors Corporation is a bank. |
Semiannual Report |
2 |
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle investing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b 1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report |
4 |
Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Class A | ||||||||||||
Actual | $ 1,000.00 | $ 1,003.20 | $ 3.23 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.57 | $ 3.26 | |||||||||
Class T | ||||||||||||
Actual | $ 1,000.00 | $ 1,002.70 | $ 3.72 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.08 | $ 3.76 | |||||||||
Class B | ||||||||||||
Actual | $ 1,000.00 | $ 999.40 | $ 7.04 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.75 | $ 7.10 | |||||||||
Class C | ||||||||||||
Actual | $ 1,000.00 | $ 998.90 | $ 7.58 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.21 | $ 7.65 | |||||||||
Short Intermediate Municipal | ||||||||||||
Income | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
Institutional Class | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
A 5% return per year before expenses |
* Expenses are equal to each Class’ annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Class A | .65% | |
Class T | .75% | |
Class B | 1.42% | |
Class C | 1.53% | |
Short Intermediate Municipal Income | .49% | |
Institutional Class | .49% |
5 Semiannual Report
Investment Changes | ||||
Top Five States as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
Texas | 14.0 | 14.7 | ||
New York | 13.0 | 11.8 | ||
Illinois | 11.0 | 9.4 | ||
New Jersey | 6.1 | 6.9 | ||
California | 5.4 | 7.6 | ||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 43.8 | 49.1 | ||
Escrowed/Pre Refunded | 12.2 | 8.2 | ||
Electric Utilities | 9.4 | 13.8 | ||
Transportation | 6.9 | 6.7 | ||
Health Care | 6.6 | 6.5 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 3.6 | 3.5 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 2.9 | 3.0 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
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We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
Semiannual Report 6
Investments June 30, 2006 (Unaudited) | ||||||||
Showing Percentage of Net Assets | ||||||||
Municipal Bonds 95.8% | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Alabama – 3.3% | ||||||||
Birmingham Baptist Med. Ctrs. Spl. Care Facilities Fing. | ||||||||
Auth. Rev. (Baptist Health Sys., Inc. Proj.) Series A, 5% | ||||||||
11/15/09 | $ 1,100 | $ 1,118 | ||||||
Daphne Spl. Care Facilities Fing. Auth. Rev. Series A, 0% | ||||||||
8/15/28 (Pre-Refunded to 8/15/08 @ 100) (e) | 10,000 | 9,203 | ||||||
Health Care Auth. for Baptist Health Series 2006 D: | ||||||||
5% 11/15/08 | 1,475 | 1,499 | ||||||
5% 11/15/11 | 1,000 | 1,026 | ||||||
Huntsville Solid Waste Disp. Auth. & Resource Recovery | ||||||||
Rev.: | ||||||||
5.25% 10/1/07 (MBIA Insured) (d) | 1,750 | 1,775 | ||||||
5.25% 10/1/08 (MBIA Insured) (d) | 2,900 | 2,960 | ||||||
5.75% 10/1/09 (MBIA Insured) (d) | 4,000 | 4,190 | ||||||
Jefferson County Ltd. Oblig. School Warrants Series A, | ||||||||
5% 1/1/07 | 2,210 | 2,220 | ||||||
Jefferson County Swr. Rev.: | ||||||||
Series 1999 A, 5.75% 2/1/38 (Pre-Refunded to | ||||||||
2/1/09 @ 101) (e) | 5,010 | 5,281 | ||||||
Series A: | ||||||||
5% 2/1/33 (Pre-Refunded to 2/1/09 @ 101) (e) | 13,520 | 13,972 | ||||||
5.5% 2/1/40 (Pre-Refunded to 2/1/11 @ 101) (e) . | 3,900 | 4,183 | ||||||
5% 2/1/41 (Pre-Refunded to 8/1/12 @ 100) (e) | 2,060 | 2,158 | ||||||
Mobile County Gen. Oblig. 5% 2/1/08 (MBIA Insured) . | 1,475 | 1,501 | ||||||
51,086 | ||||||||
Alaska – 0.6% | ||||||||
Alaska Student Ln. Corp. Student Ln. Rev. Series A, | ||||||||
5.85% 7/1/13 (AMBAC Insured) (d) | 3,285 | 3,465 | ||||||
Anchorage Gen. Oblig. Series B, 5.75% 12/1/11 | ||||||||
(Pre-Refunded to 12/1/10 @ 100) (e) | 2,500 | 2,684 | ||||||
North Slope Borough Gen. Oblig. Series B, 0% | ||||||||
6/30/08 (MBIA Insured) | 4,240 | 3,923 | ||||||
10,072 | ||||||||
Arizona – 1.6% | ||||||||
Arizona Ctfs. of Prtn. Series B, 5.5% 9/1/10 (FSA | ||||||||
Insured) | 9,025 | 9,513 | ||||||
Arizona School Facilities Board Ctfs. of Prtn. Series C, | ||||||||
5% 9/1/09 (FSA Insured) | 1,115 | 1,152 | ||||||
Maricopa County Unified School District #48 Scottsdale | ||||||||
7.4% 7/1/10 | 3,750 | 4,220 | ||||||
Pima County Unified School District #1 Tucson 7.5% | ||||||||
7/1/08 (FGIC Insured) | 7,060 | 7,543 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Arizona – continued | ||||||||
Pinal County Indl. Dev. Auth. Correctional Facilities | ||||||||
Contract Rev. (Florence West Prison Expansion, LLC | ||||||||
Proj.) Series A, 4.5% 10/1/08 (American Cap. | ||||||||
Access Corp. Insured) | $ 660 | $ 664 | ||||||
Tucson Wtr. Rev. Series A, 5% 7/1/11 (FGIC Insured) | 1,500 | 1,564 | ||||||
24,656 | ||||||||
Arkansas – 0.1% | ||||||||
Arkansas Dev. Fin. Auth. Exempt Facilities Rev. (Waste | ||||||||
Mgmt. Proj.) 3.65%, tender 8/1/06 (c)(d) | 1,000 | 1,000 | ||||||
California – 5.4% | ||||||||
California Dept. of Wtr. Resources Pwr. Supply Rev. | ||||||||
Series A, 5.25% 5/1/12 (MBIA Insured) | 6,000 | 6,370 | ||||||
California Econ. Recovery: | ||||||||
Series 2004 A, 5.25% 7/1/13 | 2,400 | 2,568 | ||||||
Series A: | ||||||||
5.25% 1/1/11 | 6,500 | 6,839 | ||||||
5.25% 7/1/13 (MBIA Insured) | 2,900 | 3,112 | ||||||
California Gen. Oblig.: | ||||||||
5% 2/1/09 | 1,640 | 1,683 | ||||||
5% 2/1/10 | 2,000 | 2,068 | ||||||
5% 2/1/11 | 2,525 | 2,627 | ||||||
5.125% 9/1/12 | 1,000 | 1,043 | ||||||
5.25% 2/1/11 | 5,775 | 6,069 | ||||||
5.5% 3/1/11 (FGIC Insured) | 3,210 | 3,419 | ||||||
5.5% 3/1/11 (XL Cap. Assurance, Inc. Insured) | 3,525 | 3,747 | ||||||
5.75% 10/1/08 | 1,085 | 1,128 | ||||||
6.4% 9/1/08 | 3,075 | 3,231 | ||||||
6.5% 9/1/10 | 1,760 | 1,925 | ||||||
8% 11/1/07 (FGIC Insured) | 4,670 | 4,828 | ||||||
California Health Facilities Fing. Auth. Rev. (Cedars-Sinai | ||||||||
Med. Ctr. Proj.) 5% 11/15/10 | 1,000 | 1,034 | ||||||
California Pub. Works Board Lease Rev.: | ||||||||
(California State Univ. Proj.) Series 1997 A, 5.5% | ||||||||
10/1/07 | 1,075 | 1,094 | ||||||
(Coalinga State Hosp. Proj.) Series 2004 A, 5% | ||||||||
6/1/08 | 6,000 | 6,113 | ||||||
California Statewide Cmntys. Dev. Auth. Rev.: | ||||||||
(Kaiser Fund Hosp./Health Place, Inc. Proj.) | ||||||||
Series 2002 C, 3.85%, tender 6/1/12 (c) | 1,400 | 1,360 | ||||||
(Kaiser Permanente Health Sys. Proj.): | ||||||||
Series 2001 A, 2.55%, tender 1/4/07 (c) | 1,400 | 1,391 | ||||||
Series 2004 G, 2.3%, tender 5/1/07 (c) | 8,000 | 7,899 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
North City West School Facilities Fing. Auth. Spl. Tax | ||||||||
Subseries C: | ||||||||
5% 9/1/07 (AMBAC Insured) | $ 1,975 | $ 2,004 | ||||||
5% 9/1/08 (AMBAC Insured) | 2,080 | 2,132 | ||||||
San Joaquin Hills Trans. Corridor Agcy. Toll Road Rev. | ||||||||
Series A, 0% 1/15/12 (MBIA Insured) | 3,600 | 2,860 | ||||||
Univ. of California Revs. (UCLA Med. Ctr. Proj.) 4.55% | ||||||||
12/1/09 (g) | 8,955 | 9,019 | ||||||
85,563 | ||||||||
Colorado – 0.5% | ||||||||
Denver City & County Arpt. Rev. Series E, 5% 11/15/08 | ||||||||
(XL Cap. Assurance, Inc. Insured) (d) | 5,000 | 5,101 | ||||||
E-470 Pub. Hwy. Auth. Rev. Series 2000 B, 0% 9/1/07 | ||||||||
(Escrowed to Maturity) (e) | 3,200 | 3,057 | ||||||
8,158 | ||||||||
Connecticut – 0.7% | ||||||||
Connecticut Gen. Oblig.: | ||||||||
Series 2001 D, 5.125% 11/15/18 (Pre-Refunded to | ||||||||
11/15/11 @ 100) (e) | 5,000 | 5,269 | ||||||
Series 2002 C, 5% 12/15/08 | 1,930 | 1,981 | ||||||
Connecticut Health & Edl. Facilities Auth. Rev. | ||||||||
(Connecticut Children’s Med. Ctr. Proj.) Series B: | ||||||||
4% 7/1/07 (MBIA Insured) | 1,275 | 1,277 | ||||||
4.5% 7/1/08 (MBIA Insured) | 1,045 | 1,057 | ||||||
5% 7/1/09 (MBIA Insured) | 1,000 | 1,028 | ||||||
10,612 | ||||||||
District Of Columbia – 0.8% | ||||||||
District of Columbia Ctfs. of Prtn. 5.25% 1/1/08 | ||||||||
(AMBAC Insured) | 935 | 953 | ||||||
District of Columbia Gen. Oblig.: | ||||||||
Series A, 5.25% 6/1/09 (FSA Insured) | 1,000 | 1,036 | ||||||
Series B, 0% 6/1/12 (MBIA Insured) | 3,600 | 2,772 | ||||||
Metropolitan Washington Arpt. Auth. Gen. Arpt. Rev. | ||||||||
Series B, 5.5% 10/1/08 (FGIC Insured) (d) | 6,460 | 6,648 | ||||||
Metropolitan Washington Arpt. Auth. Sys. Rev. Series D, | ||||||||
4% 10/1/07 (FSA Insured) (d) | 1,000 | 1,000 | ||||||
12,409 | ||||||||
Florida – 5.2% | ||||||||
Brevard County School Board Ctfs. of Prtn. Series A, | ||||||||
5.5% 7/1/09 (AMBAC Insured) | 2,775 | 2,893 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Florida – continued | ||||||||
Coral Gables Health Facilities Hosp. (Baptist Health | ||||||||
South Florida Obligated Group Proj.) 5% 8/15/06 | $ 1,000 | $ 1,001 | ||||||
Florida Gen. Oblig. (Dept. of Trans. Right of Way Proj.) | ||||||||
Series B, 6.375% 7/1/08 | 3,000 | 3,141 | ||||||
Highlands County Health Facilities Auth. Rev. (Adventist | ||||||||
Health Sys./Sunbelt Obligated Group Proj.): | ||||||||
Series A, 5% 11/15/10 | 1,000 | 1,030 | ||||||
Series B, 5% 11/15/08 | 800 | 816 | ||||||
3.95%, tender 9/1/12 (c) | 7,550 | 7,400 | ||||||
5%, tender 11/16/09 (c) | 4,700 | 4,815 | ||||||
Hillsborough County Indl. Dev. Auth. Poll. Cont. Rev. | ||||||||
(Tampa Elec. Co. Proj.): | ||||||||
4%, tender 8/1/07 (c) | 11,000 | 10,953 | ||||||
4.25%, tender 8/1/07 (c)(d) | 6,000 | 5,990 | ||||||
Lee County Solid Waste Sys. Rev. 5.25% 10/1/09 | ||||||||
(MBIA Insured) (d) | 1,000 | 1,032 | ||||||
Lee Memorial Health Sys. Board of Directors Hosp. Rev. | ||||||||
Series A, 5.75% 4/1/12 (FSA Insured) | 1,980 | 2,139 | ||||||
Miami-Dade County Cap. Asset Acquisition Fixed Rate | ||||||||
Spl. Oblig. Series 2002 A, 5% 4/1/08 (AMBAC | ||||||||
Insured) | 2,825 | 2,880 | ||||||
Miami-Dade County School Board Ctfs. of Prtn. 5%, | ||||||||
tender 5/1/11 (MBIA Insured) (c) | 1,500 | 1,556 | ||||||
Orange County School Board Ctfs. of Prtn. Series A, | ||||||||
5.375% 8/1/22 (Pre-Refunded to 8/1/07 @ 101) (e) | 3,815 | 3,914 | ||||||
Orlando Utils. Commission Util. Sys. Rev. 5.25% 7/1/09 | 6,000 | 6,231 | ||||||
Palm Beach County School Board Ctfs. of Prtn. Series A, | ||||||||
6% 8/1/22 (Pre-Refunded to 8/1/10 @ 101) (e) | 7,000 | 7,591 | ||||||
Polk County Cap. Impt. Rev.: | ||||||||
Series 2004, 5.5%, tender 12/1/10 (FSA Insured) (c) | 9,000 | 9,440 | ||||||
5.5% 12/1/11 (FGIC Insured) | 3,470 | 3,726 | ||||||
Seminole County School Board Ctfs. of Prtn. Series A, | ||||||||
4.5% 7/1/08 (MBIA Insured) | 1,250 | 1,264 | ||||||
Univ. Athletic Assoc., Inc. Athletic Prog. Rev. Series | ||||||||
2001: | ||||||||
2.8%, tender 10/1/08, LOC SunTrust Banks of | ||||||||
Florida, Inc. (c) | 2,000 | 1,945 | ||||||
3%, tender 10/1/09, LOC SunTrust Banks, Inc. (c) | 1,000 | 966 | ||||||
Volusia County School Board Ctfs. of Prtn. (School Board | ||||||||
of Volusia County Master Lease Prog.) 5% 8/1/08 | ||||||||
(FSA Insured) | 1,625 | 1,659 | ||||||
82,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Georgia – 0.6% | ||||||||
Columbia County Gen. Oblig. 5% 1/1/09 (FSA Insured) | $ 1,505 | $ 1,546 | ||||||
Fulton DeKalb Hosp. Auth. Hosp. Rev. 5% 1/1/08 | ||||||||
(FSA Insured) | 2,250 | 2,286 | ||||||
Georgia Muni. Elec. Auth. Pwr. Rev. Series 1992 B, | ||||||||
8.25% 1/1/11 (MBIA Insured) | 4,105 | 4,802 | ||||||
Henry County Wtr. & Swr. Auth. Rev. 5% 2/1/08 | ||||||||
(MBIA Insured) | 1,095 | 1,115 | ||||||
9,749 | ||||||||
Hawaii – 2.4% | ||||||||
Hawaii Arpt. Sys. Rev. Series 2000 B, 8% 7/1/10 | ||||||||
(FGIC Insured) (d) | 3,850 | 4,379 | ||||||
Hawaii Gen. Oblig. Series CU: | ||||||||
5.75% 10/1/11 (MBIA Insured) | 3,040 | 3,248 | ||||||
5.75% 10/1/11 (Pre-Refunded to 10/1/10 @ | ||||||||
100) (e) | 170 | 182 | ||||||
Honolulu City & County Gen. Oblig. Series B, 8% | ||||||||
10/1/09 | 26,940 | 30,172 | ||||||
37,981 | ||||||||
Illinois – 10.3% | ||||||||
Chicago Gen. Oblig. Series A, 5.25% 1/1/12 | ||||||||
(FSA Insured) | 1,000 | 1,059 | ||||||
Chicago Midway Arpt. Rev. Series B: | ||||||||
5% 1/1/10 (AMBAC Insured) | 1,225 | 1,264 | ||||||
5% 1/1/11 (AMBAC Insured) | 3,625 | 3,763 | ||||||
Chicago O’Hare Int’l. Arpt. Rev.: | ||||||||
Series A: | ||||||||
5% 1/1/12 (MBIA Insured) | 1,135 | 1,184 | ||||||
5.5% 1/1/08 (AMBAC Insured) | 5,000 | 5,093 | ||||||
5.5% 1/1/10 (AMBAC Insured) (d) | 5,000 | 5,214 | ||||||
Chicago Park District: | ||||||||
Series B, 5% 1/1/11 (AMBAC Insured) | 5,750 | 5,982 | ||||||
Series C, 5% 1/1/11 (AMBAC Insured) | 2,515 | 2,616 | ||||||
Chicago School Fin. Auth. Series B, 5% 6/1/09 | ||||||||
(FSA Insured) | 12,825 | 13,198 | ||||||
Chicago Tax Increment Rev. Series 2000 A, 0% | ||||||||
12/1/08 (AMBAC Insured) | 10,000 | 9,084 | ||||||
Chicago Transit Auth. Cap. Grant Receipts Rev. (Fed. | ||||||||
Transit Administration Section 5307 Formula Funds | ||||||||
Proj.) Series A, 5.25% 6/1/10 (AMBAC Insured) | 4,785 | 5,004 | ||||||
Chicago Wastewtr. Transmission Rev. 5.5% 1/1/09 | ||||||||
(FGIC Insured) | 2,975 | 3,085 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Cook County Cmnty. College District #508 Ctfs. of Prtn. | ||||||||
8.75% 1/1/07 (FGIC Insured) | $ 8,000 | $ 8,188 | ||||||
DuPage Wtr. Commission Wtr. Rev. 5% 5/1/08 | ||||||||
(AMBAC Insured) | 4,525 | 4,613 | ||||||
Granite City Solid Waste Disp. Rev. (Waste Mgmt., Inc. | ||||||||
Proj.) 3.85%, tender 5/1/08 (c)(d) | 2,200 | 2,176 | ||||||
Hodgkins Tax Increment Rev.: | ||||||||
5% 1/1/07 | 1,000 | 1,004 | ||||||
5% 1/1/09 | 1,805 | 1,843 | ||||||
Illinois Dev. Fin. Auth. Gas Supply Rev. (The Peoples Gas | ||||||||
Lt. & Coke Co. Proj.) Series 2003 B, 3.05%, tender | ||||||||
2/1/08 (AMBAC Insured) (c) | 6,100 | 5,957 | ||||||
Illinois Dev. Fin. Auth. Rev. (DePaul Univ. Proj.) Series | ||||||||
2004 C, 5.5% 10/1/10 | 1,900 | 1,998 | ||||||
Illinois Edl. Facilities Auth. Revs.: | ||||||||
(Art Institute of Chicago Proj.) Series 2003, 3.85%, | ||||||||
tender 3/1/11 (c) | 12,800 | 12,527 | ||||||
(Field Museum of Natural History Proj.) 4.05%, tender | ||||||||
11/1/11 (c) | 3,250 | 3,219 | ||||||
(Univ. of Chicago Proj.): | ||||||||
Series 2004 B1, 3.45%, tender 7/1/08 (c) | 6,100 | 6,039 | ||||||
Series A, 5.25% 7/1/41 (Pre-Refunded to 7/1/11 | ||||||||
@ 101) (e) | 2,640 | 2,809 | ||||||
Series B: | ||||||||
3.1%, tender 7/1/07 (c)(e) | 5 | 5 | ||||||
3.1%, tender 7/1/07 (c) | 3,895 | 3,845 | ||||||
Illinois Fin. Auth. Rev. (DePaul Univ. Proj.): | ||||||||
5% 10/1/06 | 1,115 | 1,117 | ||||||
5% 10/1/07 | 1,225 | 1,236 | ||||||
5% 10/1/08 | 1,000 | 1,020 | ||||||
Illinois Gen. Oblig.: | ||||||||
First Series 2001, 5.25% 5/1/11 (FSA Insured) | 1,475 | 1,557 | ||||||
First Series: | ||||||||
5.25% 4/1/08 (MBIA Insured) | 1,035 | 1,059 | ||||||
5.375% 7/1/11 (MBIA Insured) | 6,745 | 7,170 | ||||||
5.5% 8/1/10 | 1,415 | 1,495 | ||||||
6% 1/1/11 (Pre-Refunded to 1/1/10 @ 100) (e) | 7,075 | 7,552 | ||||||
Series A, 5% 10/1/09 | 2,600 | 2,683 | ||||||
5.75% 4/1/12 (Pre-Refunded to 4/1/10 @ 100) (e) . | 1,000 | 1,063 | ||||||
Illinois Health Facilities Auth. Rev. (Condell Med. Ctr. Proj.): | ||||||||
5% 5/15/07 | 500 | 502 | ||||||
5% 5/15/08 | 700 | 707 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Kane & DeKalb Counties Cmnty. Unit School District | ||||||||
#301 0% 12/1/10 (AMBAC Insured) | $ 2,000 | $ 1,658 | ||||||
Kane & DuPage Counties Cmnty. Unit School District | ||||||||
#303, Saint Charles Series A, 5.5% 1/1/12 (FSA | ||||||||
Insured) | 2,270 | 2,430 | ||||||
Kane County School District #129, Aurora West Side | ||||||||
Series A, 5.75% 2/1/14 (Pre-Refunded to 2/1/12 @ | ||||||||
100) (e) | 1,600 | 1,740 | ||||||
Kane, McHenry, Cook & DeKalb Counties Cmnty. Unit | ||||||||
School District #300, Carpentersville 5.5% 12/1/13 | ||||||||
(Pre-Refunded to 12/1/11 @ 100) (e) | 5,000 | 5,374 | ||||||
Lake County Cmnty. High School District #128, | ||||||||
Libertyville Series 2004, 5% 1/1/11 | 2,365 | 2,461 | ||||||
Rosemont Gen. Oblig.: | ||||||||
Series 3: | ||||||||
0% 12/1/07 (Escrowed to Maturity) (e) | 2,375 | 2,251 | ||||||
0% 12/1/07 (FGIC Insured) | 625 | 592 | ||||||
Series A, 0% 12/1/11 (FGIC Insured) | 3,695 | 2,949 | ||||||
Univ. of Illinois Auxiliary Facilities Sys. Rev. Series 2001 | ||||||||
A, 5% 4/1/08 (AMBAC Insured) | 2,035 | 2,072 | ||||||
Univ. of Illinois Ctfs. of Prtn. (Util. Infrastructure Proj.) 5% | ||||||||
8/15/11 (AMBAC Insured) | 1,360 | 1,418 | ||||||
Will County School District #122 Series B, 0% 11/1/08 | ||||||||
(FSA Insured) | 1,280 | 1,165 | ||||||
162,040 | ||||||||
Indiana – 3.7% | ||||||||
Carmel High School Bldg. Corp. 5% 1/10/11 (FSA | ||||||||
Insured) | 1,000 | 1,041 | ||||||
Ctr. Grove 2000 Bldg. Corp.: | ||||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,785 | 1,910 | ||||||
5.5% 7/15/18 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,885 | 2,017 | ||||||
Hamilton Southeastern Consolidated School Bldg. Corp.: | ||||||||
Series A: | ||||||||
5% 1/10/10 (FSA Insured) | 1,750 | 1,810 | ||||||
5.25% 7/10/11 (FSA Insured) | 2,295 | 2,425 | ||||||
5.25% 1/10/12 (FSA Insured) | 1,355 | 1,436 | ||||||
5% 1/15/10 (FSA Insured) | 1,835 | 1,898 | ||||||
5% 1/15/11 (FSA Insured) | 1,910 | 1,989 | ||||||
5% 1/15/12 (FSA Insured) | 1,990 | 2,085 | ||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,855 | 1,985 | ||||||
Indiana Health Facility Fing. Auth. Rev. (Ascension Health | ||||||||
Cr. Group Prog.) Series 2002 F, 5.5% 11/15/06 | 1,000 | 1,006 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Indiana – continued | ||||||||
Indiana Univ. Student Fee Revs. Series H, 0% 8/1/09 | ||||||||
(AMBAC Insured) | $ 3,875 | $ 3,420 | ||||||
Indianapolis Local Pub. Impt. Bond Bank | ||||||||
(Indianapolis Arpt. Auth. Proj.) Series I, 5% 1/1/08 | ||||||||
(MBIA Insured) (d) | 1,550 | 1,571 | ||||||
Indianapolis Resource Recovery Rev. (Ogden Martin | ||||||||
Sys., Inc. Proj.) 6.75% 12/1/07 (AMBAC Insured) | 3,000 | 3,084 | ||||||
Ivy Tech State College Series I, 5% 7/1/09 | ||||||||
(AMBAC Insured) | 1,405 | 1,448 | ||||||
Logansport High School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,000 | 1,047 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,020 | 1,073 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,045 | 1,102 | ||||||
5.25% 7/15/12 (MBIA Insured) | 1,075 | 1,139 | ||||||
Mount Vernon of Hancock County Multi-School Corp. | ||||||||
Series B: | ||||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,605 | 1,717 | ||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,695 | 1,814 | ||||||
Muncie School Bldg. Corp. 5.25% 7/10/12 | ||||||||
(MBIA Insured) | 1,585 | 1,687 | ||||||
New Albany Floyd County Independent School Bldg. | ||||||||
Corp. 5% 1/15/11 (FSA Insured) | 1,000 | 1,041 | ||||||
Rockport Poll. Cont. Rev.: | ||||||||
(AEP Generating Co. Proj.) Series 1995 A, 4.15%, | ||||||||
tender 7/15/11 (AMBAC Insured) (b)(c) | 1,600 | 1,608 | ||||||
4.9%, tender 6/1/07 (c) | 4,000 | 4,015 | ||||||
Saint Joseph County Ind. Edl. Facilities Rev. (Univ. of | ||||||||
Notre Dame Du Lac Proj.) 2.5%, tender 12/3/07 (c) . | 10,000 | 9,787 | ||||||
West Clark 2000 School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,065 | 1,118 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,125 | 1,186 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,150 | 1,216 | ||||||
58,675 | ||||||||
Kansas 0.2% | ||||||||
Burlington Envir. Impt. Rev. (Kansas City Pwr. & Lt. Co. | ||||||||
Proj.) Series A, 4.75%, tender 10/1/07 (c) | 2,400 | 2,420 | ||||||
Kansas Dev. Fin. Auth. Health Facilities Rev. (Hays Med. | ||||||||
Ctr. Proj.) Series 2005 L: | ||||||||
5.25% 11/15/10 | 545 | 567 | ||||||
5.25% 11/15/12 | 680 | 709 | ||||||
3,696 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Kentucky 0.2% | ||||||||
Kenton County Arpt. Board Arpt. Rev. Series B, 5% | ||||||||
3/1/09 (MBIA Insured) (d) | $ 1,185 | $ 1,211 | ||||||
Owensboro Elec. Lt. & Pwr. Rev. Series B, 0% 1/1/09 | ||||||||
(AMBAC Insured) | 2,000 | 1,805 | ||||||
3,016 | ||||||||
Louisiana – 0.2% | ||||||||
East Baton Rouge Parish Pub. Impt. Sales Tax Rev. | ||||||||
Series B, 5% 2/1/12 (AMBAC Insured) | 1,000 | 1,046 | ||||||
Louisiana Offshore Term. Auth. Deepwater Port Rev. | ||||||||
(LOOP LLC Proj.) Series 2003 D, 4%, tender | ||||||||
9/1/08 (c) | 2,700 | 2,695 | ||||||
3,741 | ||||||||
Maryland 0.1% | ||||||||
Prince Georges County Ctfs. of Prtn. (Equip. Acquisition | ||||||||
Prog.) 5.25% 5/15/10 (MBIA Insured) | 1,535 | 1,605 | ||||||
Massachusetts 3.7% | ||||||||
Massachusetts Bay Trans. Auth. Series A, 7% 3/1/09 | 6,880 | 7,403 | ||||||
Massachusetts Dev. Fin. Agcy. Rev. (Massachusetts | ||||||||
Biomedical Research Corp. Proj.) Series C: | ||||||||
5.75% 8/1/06 | 1,200 | 1,201 | ||||||
5.875% 8/1/08 | 1,630 | 1,675 | ||||||
Massachusetts Fed. Hwy.: | ||||||||
Series 2000 A, 5.75% 6/15/13 | 3,000 | 3,193 | ||||||
Series B, 5.125% 12/15/14 (Pre-Refunded to | ||||||||
12/15/08 @ 101) (e) | 2,775 | 2,875 | ||||||
Massachusetts Gen. Oblig.: | ||||||||
Series 1999 C, 5.625% 9/1/12 (Pre-Refunded to | ||||||||
9/1/09 @ 101) (e) | 2,570 | 2,716 | ||||||
Series 2000 A, 6% 2/1/10 | 2,500 | 2,671 | ||||||
Series 2001 A, 5.5% 1/1/11 | 5,000 | 5,307 | ||||||
Series 2003 A, 5.375% 8/1/08 | 5,165 | 5,317 | ||||||
Series 2003 C, 5.5% 10/1/10 (MBIA Insured) | 1,130 | 1,200 | ||||||
Series A, 4.5% 1/1/09 (Pre-Refunded to 1/1/08 @ | ||||||||
101) (e) | 2,055 | 2,094 | ||||||
Series C: | ||||||||
5.25% 11/1/30 (Pre-Refunded to 11/1/12 @ | ||||||||
100) (e) | 2,495 | 2,659 | ||||||
5.5% 11/1/10 (FSA Insured) | 10,000 | 10,626 | ||||||
Massachusetts Health & Edl. Facilities Auth. Rev. | ||||||||
(Berkshire Health Sys., Inc. Proj.) Series F, 5% | ||||||||
10/1/08 | 2,720 | 2,768 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Massachusetts continued | ||||||||||
Massachusetts Port Auth. Spl. Facilities Rev. | ||||||||||
(Delta Air Lines, Inc. Proj.) Series A, 5.5% 1/1/12 | ||||||||||
(AMBAC Insured) (d) | $ 1,000 | $ 1,043 | ||||||||
Massachusetts Wtr. Resources Auth. Series A, 5.75% | ||||||||||
8/1/39 (Pre-Refunded to 8/1/10 @ 101) (e) | 5,000 | 5,376 | ||||||||
58,124 | ||||||||||
Michigan – 3.1% | ||||||||||
Chippewa Valley Schools 5% 5/1/08 | 1,260 | 1,285 | ||||||||
Detroit City School District Series A, 5.5% 5/1/11 | ||||||||||
(FSA Insured) | 1,200 | 1,280 | ||||||||
Detroit Gen. Oblig.: | ||||||||||
Series 2004 A, 5% 4/1/08 (FSA Insured) | 7,275 | 7,414 | ||||||||
5% 4/1/08 (MBIA Insured) | 14,545 | 14,823 | ||||||||
5% 4/1/09 (MBIA Insured) | 10,620 | 10,900 | ||||||||
Detroit Swr. Disp. Rev. Series A, 5.75% 7/1/26 | ||||||||||
(Pre-Refunded to 1/1/10 @ 101) (e) | 2,000 | 2,126 | ||||||||
Greater Detroit Resource Recovery Auth. Rev. Series A, | ||||||||||
6.25% 12/13/07 (AMBAC Insured) | 4,000 | 4,132 | ||||||||
Hazel Park School District 5% 5/1/08 | 1,275 | 1,300 | ||||||||
Livonia Pub. School District Series II, 0% 5/1/21 | ||||||||||
(FGIC Insured) (Pre Refunded to 5/1/07 @ 39.31) (e) | 8,000 | 3,046 | ||||||||
Troy School District 5% 5/1/11 (MBIA Insured) | 1,000 | 1,045 | ||||||||
Wayne-Westland Cmnty. Schools 5% 5/1/10 | ||||||||||
(FSA Insured) | 1,225 | 1,272 | ||||||||
48,623 | ||||||||||
Minnesota 0.2% | ||||||||||
Minneapolis & Saint Paul Hsg. & Redev. Auth. Health | ||||||||||
Care Sys. Rev. (Health Partners Oblig. Group Proj.): | ||||||||||
5.25% 12/1/08 | 1,200 | 1,228 | ||||||||
5.25% 12/1/10 | 500 | 518 | ||||||||
Saint Paul Port Auth. Lease Rev. (HealthEast Midway | ||||||||||
Campus Proj.) Series 2003 A, 5% 5/1/10 | 625 | 622 | ||||||||
Waconia Independent School District #110 Series A, 5% | ||||||||||
2/1/11 (FSA Insured) | 940 | 981 | ||||||||
3,349 | ||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 16 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Mississippi – 0.2% | ||||||||
Mississippi Bus. Fin. Corp. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.4%, tender 3/1/11 (c)(d) | $ 1,100 | $ 1,087 | ||||||
Mississippi Higher Ed. Student Ln. Series 2000 B3, 5.3% | ||||||||
9/1/08 (d) | 1,190 | 1,215 | ||||||
2,302 | ||||||||
Missouri – 0.4% | ||||||||
Fenton Tax Increment Rev. (Gravois Bluffs Redev. Proj.) | ||||||||
5% 4/1/11 | 1,430 | 1,465 | ||||||
Kansas City School District Bldg. Corp. Rev.: | ||||||||
(School District Elementary School Proj.) Series B, 5% | ||||||||
2/1/11 (FGIC Insured) | 1,850 | 1,930 | ||||||
Series A, 5% 2/1/08 (FGIC Insured) | 2,000 | 2,037 | ||||||
Saint Louis Muni. Fin. Corp. Leasehold Rev. (Callahan | ||||||||
Courthouse Proj.) Series A, 5.75% 2/15/14 | ||||||||
(FGIC Insured) | 1,050 | 1,140 | ||||||
6,572 | ||||||||
Montana 0.3% | ||||||||
Forsyth Poll. Cont. Rev. (Portland Gen. Elec. Co. Proj.) | ||||||||
Series A, 5.2%, tender 5/1/09 (c) | 4,000 | 4,090 | ||||||
Nevada 2.4% | ||||||||
Clark County Arpt. Rev. Series C: | ||||||||
5% 7/1/06 (AMBAC Insured) (d) | 800 | 800 | ||||||
5% 7/1/08 (AMBAC Insured) (d) | 2,215 | 2,253 | ||||||
5% 7/1/09 (AMBAC Insured) (d) | 2,700 | 2,763 | ||||||
5% 7/1/10 (AMBAC Insured) (d) | 1,225 | 1,260 | ||||||
5% 7/1/11 (AMBAC Insured) (d) | 1,790 | 1,849 | ||||||
Clark County Hwy. Impt. Rev. (Motor Vehicle Fuel Tax) | ||||||||
5% 7/1/11 (AMBAC Insured) | 3,230 | 3,373 | ||||||
Clark County School District: | ||||||||
Series 2000 A, 5.75% 6/15/17 (Pre-Refunded to | ||||||||
6/15/10 @ 100) (e) | 1,600 | 1,705 | ||||||
Series C, 5% 6/15/10 (MBIA Insured) | 1,075 | 1,115 | ||||||
Series D, 5% 6/15/09 (MBIA Insured) | 13,890 | 14,303 | ||||||
Series F, 5.375% 6/15/11 (FSA Insured) | 4,090 | 4,338 | ||||||
Henderson Health Care Facility Rev. (Catholic Healthcare | ||||||||
West Proj.) Series 2005 B, 5% 7/1/08 | 1,100 | 1,121 | ||||||
Lyon Co. School District Gen. Oblig. 5% 6/1/09 | 695 | 715 | ||||||
Washoe County School District Gen. Oblig. Series D, 5% | ||||||||
6/1/10 (MBIA Insured) | 2,410 | 2,500 | ||||||
38,095 |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Investments (Unaudited) continued | ||||||||||||
Municipal Bonds continued | ||||||||||||
Principal | Value (Note 1) | |||||||||||
Amount (000s) | (000s) | |||||||||||
New Hampshire – 0.3% | ||||||||||||
New Hampshire Bus. Fin. Auth. Poll. Cont. Rev. (United | ||||||||||||
Illumination Co.) Series A, 3.65%, tender 2/1/10 | ||||||||||||
(AMBAC Insured) (c)(d) | $ 2,500 | $ 2,435 | ||||||||||
New Hampshire Tpk. Sys. Rev. 5% 5/1/07 | ||||||||||||
(AMBAC Insured) (b) | 1,500 | 1,512 | ||||||||||
3,947 | ||||||||||||
New Jersey – 6.1% | ||||||||||||
Camden County Impt. Auth. Rev. (Cooper Health Sys. | ||||||||||||
Obligated Group Proj.) Series B, 5.25% 2/15/09 | 1,250 | 1,273 | ||||||||||
Casino Reinvestment Dev. Auth. Hotel Room Fee Rev.: | ||||||||||||
5% 1/1/08 (AMBAC Insured) | 920 | 934 | ||||||||||
5% 1/1/09 (AMBAC Insured) | 1,000 | 1,024 | ||||||||||
Elizabeth Gen. Oblig. 5.25% 8/15/09 (MBIA Insured) | . | 1,225 | 1,275 | |||||||||
Garden State Preservation Trust Open Space & | ||||||||||||
Farmland Preservation Series B: | ||||||||||||
6.25% 11/1/09 (MBIA Insured) | 4,000 | 4,283 | ||||||||||
6.375% 11/1/11 (MBIA Insured) | 7,470 | 8,308 | ||||||||||
New Jersey Econ. Dev. Auth. Rev. 5% 6/15/07 | 7,500 | 7,570 | ||||||||||
New Jersey Tpk. Auth. Tpk. Rev. Series A: | ||||||||||||
5.75% 1/1/18 (Pre-Refunded to 1/1/10 @ 100) (e) | . | 3,215 | 3,406 | |||||||||
6% 1/1/11 (MBIA Insured) | 17,180 | 18,607 | ||||||||||
New Jersey Trans. Trust Fund Auth.: | ||||||||||||
Series B: | ||||||||||||
5.25% 12/15/10 (FGIC Insured) | 4,550 | 4,779 | ||||||||||
6.5% 6/15/11 (MBIA Insured) | 5,000 | 5,548 | ||||||||||
Series C, 5.5% 12/15/10 (FSA Insured) | 25,000 | 26,512 | ||||||||||
New Jersey Transit Corp. Series 2000 B, 5.5% 2/1/08 | ||||||||||||
(AMBAC Insured) | 1,000 | 1,025 | ||||||||||
New Jersey Transit Corp. Ctfs. of Prtn. Series A, 6% | ||||||||||||
9/15/13 (Pre-Refunded to 9/15/09 @ 100) (e) | 7,000 | 7,417 | ||||||||||
Tobacco Settlement Fing. Corp. 4.375% 6/1/19 | 4,065 | 4,058 | ||||||||||
96,019 | ||||||||||||
New Jersey/Pennsylvania – 0.3% | ||||||||||||
Delaware River Joint Toll Bridge Commission Bridge Rev. | ||||||||||||
5% 7/1/09 | 5,170 | 5,313 | ||||||||||
New York – 13.0% | ||||||||||||
Grand Central District Mgmt. Assoc., Inc.: | ||||||||||||
5% 1/1/10 | 1,200 | 1,237 | ||||||||||
5% 1/1/12 | 1,175 | 1,221 | ||||||||||
Metropolitan Trans. Auth. Commuter Facilities Rev. | ||||||||||||
Series A, 5.375% 7/1/09 (Escrowed to Maturity) (e) | . | 3,635 | 3,788 | |||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||||
Semiannual Report | 18 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Metropolitan Trans. Auth. Rev. Series 2005 C: | ||||||||
5% 11/15/10 | $ 2,000 | $ 2,078 | ||||||
5% 11/15/11 | 2,750 | 2,865 | ||||||
Nassau County Gen. Oblig. Series Z, 5% 9/1/11 (FGIC | ||||||||
Insured) | 800 | 834 | ||||||
New York City Gen. Oblig.: | ||||||||
Series 1996 B, 6.5% 8/15/09 | 3,425 | 3,667 | ||||||
Series 1997 H, 6% 8/1/12 (FGIC Insured) | 1,300 | 1,432 | ||||||
Series 2000 A, 6.5% 5/15/11 | 1,985 | 2,168 | ||||||
Series 2002 G, 5.5% 8/1/10 | 2,720 | 2,865 | ||||||
Series 2003 F, 5.5% 12/15/11 | 4,305 | 4,581 | ||||||
Series 2004 G, 5% 8/1/09 | 8,000 | 8,226 | ||||||
Series 2005 C, 5% 8/1/12 | 19,770 | 20,641 | ||||||
Series 2005 D, 5% 8/1/12 | 4,925 | 5,142 | ||||||
Series 2005 G, 5.625% 8/1/13 (MBIA Insured) | 5,075 | 5,478 | ||||||
Series 2005 K: | ||||||||
5% 8/1/11 | 7,120 | 7,404 | ||||||
5% 8/1/12 | 4,360 | 4,552 | ||||||
Series 2005 O, 5% 6/1/12 | 7,500 | 7,822 | ||||||
Series A, 5.25% 11/1/14 (MBIA Insured) | 600 | 635 | ||||||
Series B, 5.75% 8/1/14 | 1,000 | 1,084 | ||||||
Series G, 5.25% 8/1/14 (AMBAC Insured) | 1,000 | 1,053 | ||||||
Subseries 2005 F1, 5% 9/1/15 | 3,560 | 3,722 | ||||||
New York City Indl. Dev. Agcy. Spl. Facilities Rev. | ||||||||
(Terminal One Group Assoc. Proj.) 5% 1/1/07 (d) | 1,700 | 1,706 | ||||||
New York Counties Tobacco Trust I Series B, 6.5% | ||||||||
6/1/35 (Pre-Refunded to 6/1/10 @ 101) (e) | 5,900 | 6,492 | ||||||
New York State Dorm. Auth. Revs.: | ||||||||
(City Univ. Sys. Consolidation Proj.): | ||||||||
Series 2000 A, 6.125% 7/1/12 (AMBAC Insured) . | 5,540 | 6,043 | ||||||
Series A: | ||||||||
5.75% 7/1/13 | 3,500 | 3,747 | ||||||
5.75% 7/1/13 (AMBAC Insured) | 1,000 | 1,073 | ||||||
Series C, 7.5% 7/1/10 | 3,100 | 3,307 | ||||||
Series B, 5.25%, tender 5/15/12 (c) | 13,000 | 13,688 | ||||||
New York State Urban Dev. Corp. Rev. 5% 1/1/12 | 5,000 | 5,214 | ||||||
New York Transitional Fin. Auth. Rev.: | ||||||||
Series 2003 E: | ||||||||
4.5% 2/1/08 | 1,500 | 1,517 | ||||||
5% 2/1/09 | 2,035 | 2,093 | ||||||
Series B, 5.25% 2/1/29 (a) | 2,700 | 2,829 | ||||||
Series E, 4.5% 2/1/07 | 245 | 246 |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Tobacco Settlement Fing. Corp.: | ||||||||
Series 2004 B1, 5% 6/1/09 | $ 3,800 | $ 3,896 | ||||||
Series A1: | ||||||||
5% 6/1/10 | 1,875 | 1,934 | ||||||
5.25% 6/1/12 | 5,000 | 5,006 | ||||||
5.25% 6/1/13 | 17,500 | 17,932 | ||||||
5.5% 6/1/14 | 2,700 | 2,805 | ||||||
Series C1: | ||||||||
5.5% 6/1/15 | 700 | �� | 734 | |||||
5.5% 6/1/17 | 3,400 | 3,589 | ||||||
TSASC, Inc. Rev. Series 1: | ||||||||
5.5% 7/15/24 (Pre-Refunded to 7/15/12 @ 100) (e) | 7,015 | 7,450 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 1,200 | 1,281 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,490 | 2,658 | ||||||
6% 7/15/20 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,280 | 2,434 | ||||||
6% 7/15/21 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,310 | 2,466 | ||||||
6.25% 7/15/34 (Pre-Refunded to 7/15/09 @ | ||||||||
101) (e) | 11,270 | 12,112 | ||||||
204,747 | ||||||||
New York & New Jersey – 0.6% | ||||||||
Port Auth. of New York & New Jersey: | ||||||||
124th Series, 5% 8/1/13 (FGIC Insured) (d) | 1,200 | 1,227 | ||||||
127th Series, 5% 12/15/08 (AMBAC Insured) (d) | 3,510 | 3,587 | ||||||
Port Auth. of New York & New Jersey Spl. Oblig. Rev. | ||||||||
(JFK Int’l. Air Term. Spl. Proj.) Series 6, 6.25% | ||||||||
12/1/13 (MBIA Insured) (d) | 4,100 | 4,564 | ||||||
9,378 | ||||||||
North Carolina – 1.5% | ||||||||
Charlotte Ctfs. of Prtn. (FY 2004 Equip. Acquisition Proj.) | ||||||||
Series 2004 C, 4% 3/1/08 | 4,940 | 4,955 | ||||||
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.: | ||||||||
Series 1993 B, 7% 1/1/08 (MBIA Insured) | 600 | 628 | ||||||
Series A, 5.5% 1/1/10 | 3,000 | 3,121 | ||||||
Series B, 7.25% 1/1/07 | 9,375 | 9,517 | ||||||
Series C, 5% 1/1/08 | 1,190 | 1,205 | ||||||
Series D, 5.375% 1/1/10 | 3,715 | 3,850 | ||||||
23,276 | ||||||||
Ohio – 1.6% | ||||||||
Akron Ctfs. of Prtn. 5% 12/1/07 | 2,350 | 2,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
20 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Ohio – continued | ||||||||
Cleveland Pub. Pwr. Sys. Rev. (First Mtg. Prog.) | ||||||||
Series 1994 A, 0% 11/15/09 (MBIA Insured) | $ 2,250 | $ 1,954 | ||||||
Franklin County Rev. (OCLC Online Computer Library | ||||||||
Ctr., Inc. Proj.) 5% 4/15/07 | 1,960 | 1,971 | ||||||
Lakewood Hosp. Impt. Rev. (Lakewood Hosp. Assoc. | ||||||||
Proj.) 5.5% 2/15/07 | 1,420 | 1,431 | ||||||
Ohio Air Quality Dev. Auth. Rev. Series 2002 A, 4.25%, | ||||||||
tender 7/1/06 (c) | 1,000 | 1,000 | ||||||
Ohio Gen. Oblig.: | ||||||||
Series 2000 E, 5.5% 5/1/09 | 1,905 | 1,987 | ||||||
Series 2003 D, 2.45%, tender 9/14/07 (c) | 12,300 | 12,069 | ||||||
Univ. of Cincinnati Gen. Receipts Series A, 5.5% 6/1/09 | ||||||||
(FGIC Insured) | 2,000 | 2,089 | ||||||
24,883 | ||||||||
Oklahoma – 0.1% | ||||||||
Cherokee County Econ. Dev. Auth. Series A, 0% | ||||||||
11/1/11 (Escrowed to Maturity) (e) | 1,000 | 793 | ||||||
Oregon – 0.3% | ||||||||
Beaverton Wtr. Rev. Series B, 5% 6/1/10 (FSA Insured) . | 1,210 | 1,257 | ||||||
Oregon Dept. Administrative Svcs. Ctfs. of Prtn. Series B: | ||||||||
5% 5/1/09 (FSA Insured) | 1,000 | 1,027 | ||||||
5% 5/1/11 (FSA Insured) | 1,000 | 1,039 | ||||||
Oregon Gen. Oblig. 8.25% 1/1/07 | 1,000 | 1,021 | ||||||
4,344 | ||||||||
Pennsylvania – 3.9% | ||||||||
Allegheny County Arpt. Rev. (Pittsburgh Int’l. Arpt. Proj.) | ||||||||
Series A1, 5.75% 1/1/12 (MBIA Insured) (d) | 1,300 | 1,384 | ||||||
Allegheny County Hosp. Dev. Auth. Rev. (Univ. of | ||||||||
Pittsburgh Med. Ctr. Proj.) Series B, 5.5% 6/15/07 | 2,000 | 2,030 | ||||||
Allegheny County Indl. Dev. Auth. Rev. (Watson Institute | ||||||||
Ed. Ctr. Proj.) 3.375%, tender 5/1/08, LOC PNC | ||||||||
Bank NA, Pittsburgh (c) | 4,500 | 4,438 | ||||||
Allegheny County San. Auth. Swr. Rev. 6% 12/1/11 | ||||||||
(MBIA Insured) | 1,495 | 1,630 | ||||||
Luzerne County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||||
(Pennsylvania-American Wtr. Co. Proj.) 3.6%, tender | ||||||||
12/1/09 (AMBAC Insured) (c)(d) | 10,000 | 9,672 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities | ||||||||
Rev. (Shippingport Proj.) Series A, 4.35%, tender | ||||||||
6/1/10 (c)(d) | 2,100 | 2,082 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: | ||||||||
(Univ. of Pennsylvania Health Sys. Proj.) Series A: | ||||||||
4% 8/15/06 | $ 1,405 | $ 1,405 | ||||||
5% 8/15/07 | 1,735 | 1,757 | ||||||
5% 8/15/08 | 2,000 | 2,041 | ||||||
(UPMC Health Sys. Proj.) Series 2001 A, 5.75% | ||||||||
1/15/09 | 1,750 | 1,824 | ||||||
Series B, 5.25% 9/1/08 | 5,860 | 6,025 | ||||||
Pennsylvania Indl. Dev. Auth. Rev. 5.25% 7/1/10 | ||||||||
(AMBAC Insured) | 2,750 | 2,885 | ||||||
Philadelphia Gas Works Rev. (1975 Gen. Ordinance | ||||||||
Proj.) 17th Series, 5% 7/1/08 (FSA Insured) | 7,410 | 7,561 | ||||||
Philadelphia Muni. Auth. Rev.: | ||||||||
Series A, 5% 5/15/08 (FSA Insured) | 5,000 | 5,102 | ||||||
Series B, 5.25% 11/15/11 (FSA Insured) | 3,400 | 3,588 | ||||||
Philadelphia School District: | ||||||||
Series 2005 D, 5.25% 6/1/12 (FSA Insured) | 1,465 | 1,551 | ||||||
Series B, 5% 4/1/11 (AMBAC Insured) | 2,160 | 2,251 | ||||||
Pittsburgh School District Series A, 5% 9/1/09 | ||||||||
(MBIA Insured) | 1,600 | 1,641 | ||||||
Westmoreland County Muni. Auth. Muni. Svc. Rev. | ||||||||
Series K, 0% 7/1/12 (Escrowed to Maturity) (e) | 2,355 | 1,828 | ||||||
60,695 | ||||||||
Puerto Rico 0.7% | ||||||||
Puerto Rico Convention Ctr. District Auth. Hotel | ||||||||
Occupancy Tax Rev. Series 2006 A, 5% 7/1/10 | 2,000 | 2,056 | ||||||
Puerto Rico Govt. Dev. Bank 5% 12/1/10 | 8,000 | 8,216 | ||||||
Puerto Rico Pub. Bldg. Auth. Rev. Series K, 4%, tender | ||||||||
7/1/07 (MBIA Insured) (c) | 1,000 | 1,001 | ||||||
11,273 | ||||||||
Rhode Island – 0.3% | ||||||||
Providence Spl. Oblig. Series 2005 E: | ||||||||
4% 6/1/08 (Radian Asset Assurance Ltd. Insured) | 1,000 | 998 | ||||||
5% 6/1/09 (Radian Asset Assurance Ltd. Insured) | 1,315 | 1,344 | ||||||
5% 6/1/10 (Radian Asset Assurance Ltd. Insured) | 1,180 | 1,211 | ||||||
Rhode Island Health & Edl. Bldg. Corp. Rev. (Johnson & | ||||||||
Wales Univ. Proj.) 5% 4/1/08 (XL Cap. Assurance, | ||||||||
Inc. Insured) | 1,700 | 1,731 | ||||||
5,284 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
22 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
South Carolina – 1.5% | ||||||||
Berkeley County School District 7% 4/1/07 | $ 2,615 | $ 2,676 | ||||||
Charleston County Hosp. Facilities (Care Alliance Health | ||||||||
Services Proj.) Series A: | ||||||||
5% 8/15/06 | 1,000 | 1,001 | ||||||
5% 8/15/07 | 1,700 | 1,717 | ||||||
5% 8/15/08 | 1,690 | 1,711 | ||||||
Greenville County Pub. Facilities Corp. Ctfs. of Prtn. | ||||||||
(Courthouse and Detention Proj.) 5% 4/1/10 | ||||||||
(AMBAC Insured) | 1,450 | 1,504 | ||||||
Greenville County School District Installment Purp. Rev. | ||||||||
5% 12/1/10 | 1,455 | 1,508 | ||||||
Lexington One School Facilities Corp. Rev. (Lexington | ||||||||
County School District No. 1 Proj.) 5% 12/1/09 | 550 | 565 | ||||||
Piedmont Muni. Pwr. Agcy. Elec. Rev. 5.6% 1/1/09 | ||||||||
(MBIA Insured) | 2,345 | 2,441 | ||||||
Rock Hill Util. Sys. Rev. Series 2003 A: | ||||||||
5% 1/1/08 (FSA Insured) | 1,850 | 1,882 | ||||||
5% 1/1/09 (FSA Insured) | 1,945 | 1,997 | ||||||
South Carolina Pub. Svc. Auth. Rev.: | ||||||||
Series 2005 B, 5% 1/1/10 (MBIA Insured) | 3,000 | 3,103 | ||||||
Series A, 5.5% 1/1/11 (MBIA Insured) | 3,000 | 3,175 | ||||||
Spartanburg County School District #5 Pub. Facilities | ||||||||
Corp. Ctfs. of Prtn. 5% 7/1/09 (FSA Insured) | 1,000 | 1,029 | ||||||
24,309 | ||||||||
Tennessee – 1.4% | ||||||||
Clarksville Natural Gas Acquisition Corp. Gas Rev. 5% | ||||||||
12/15/09 | 7,500 | 7,712 | ||||||
Elizabethton Health & Edl. Facilities Board Rev. (First | ||||||||
Mtg. Prog.) 6% 7/1/11 (MBIA Insured) | 2,005 | 2,174 | ||||||
Maury County Gen. Oblig. Series 2004 B, 5% 4/1/10 | ||||||||
(MBIA Insured) | 2,000 | 2,075 | ||||||
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Series A: | ||||||||
4.5% 9/1/08 (MBIA Insured) | 1,620 | 1,642 | ||||||
4.5% 9/1/09 (MBIA Insured) | 1,685 | 1,714 | ||||||
Metropolitan Govt. Nashville & Series A, 5.25% | ||||||||
10/15/09 | 3,795 | 3,950 | ||||||
Metropolitan Nashville Arpt. Auth. Rev. Series C, 5% | ||||||||
7/1/06 (FGIC Insured) (d) | 1,675 | 1,675 | ||||||
Shelby County Health Edl. & Hsg. Facility Board Hosp. | ||||||||
Rev. (Methodist Health Care Proj.) 5.5% 4/1/09 | ||||||||
(MBIA Insured) | 1,200 | 1,244 | ||||||
22,186 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas 14.0% | ||||||||
Alief Independent School District Series 2004 B, 5% | ||||||||
2/15/10 | $ 1,500 | $ 1,554 | ||||||
Austin Util. Sys. Rev.: | ||||||||
Series 1992 A, 0% 11/15/09 (MBIA Insured) | 5,130 | 4,468 | ||||||
Series A, 0% 11/15/10 (MBIA Insured) | 5,300 | 4,420 | ||||||
Austin Wtr. & Wastewtr. Sys. Rev. 5% 11/15/07 | ||||||||
(MBIA Insured) (b) | 3,295 | 3,339 | ||||||
Bexar County Series A: | ||||||||
5% 6/15/09 (FSA Insured) | 2,615 | 2,696 | ||||||
5% 6/15/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Birdville Independent School District 5% 2/15/10 | 1,300 | 1,347 | ||||||
Brownsville Independent School District 5% 8/15/11 | 1,430 | 1,494 | ||||||
Bryan Wtrwks. & Swr. Sys. Rev. 5.5% 7/1/11 (FSA | ||||||||
Insured) | 1,500 | 1,600 | ||||||
College Station Independent School District 5% 2/15/10 | 1,000 | 1,036 | ||||||
Conroe Independent School District Lot B, 0% 2/15/08 . | 3,000 | 2,817 | ||||||
Corpus Christi Util. Sys. Rev. 5% 7/15/12 (FSA Insured) | 1,000 | 1,049 | ||||||
Cypress-Fairbanks Independent School District: | ||||||||
Series B, 0% 8/1/07 (AMBAC Insured) | 10,000 | 9,595 | ||||||
5% 2/15/08 | 2,000 | 2,035 | ||||||
Dallas Independent School District Series 2005, 5.25% | ||||||||
8/15/08 | 2,000 | 2,057 | ||||||
Del Valle Independent School District 5.5% 2/1/09 | 1,205 | 1,252 | ||||||
Denton County Gen. Oblig. 5% 7/15/11 (FSA Insured) . | 3,065 | 3,207 | ||||||
El Paso Wtr. & Swr. Rev. 5% 3/1/08 (AMBAC Insured) . | 2,770 | 2,820 | ||||||
Fort Bend Independent School District 5%, tender | ||||||||
8/15/09 (c) | 5,000 | 5,139 | ||||||
Fort Worth Independent School District 5% 2/15/12 | 1,500 | 1,572 | ||||||
Frisco Gen. Oblig. Series 2003 A, 5% 2/15/10 | ||||||||
(FSA Insured) | 1,710 | 1,772 | ||||||
Garland Independent School District 0% 2/15/07 | 1,610 | 1,573 | ||||||
Harris County Gen. Oblig. Series A, 0% 8/15/07 | ||||||||
(FGIC Insured) | 4,400 | 4,216 | ||||||
Harris County Health Facilities Dev. Corp. Rev. (Saint | ||||||||
Luke’s Episcopal Hosp. Proj.) Series 2001 A, 5.5% | ||||||||
2/15/09 | 3,710 | 3,836 | ||||||
Houston Cmnty. College Sys. Rev.: | ||||||||
5.25% 4/15/11 (FSA Insured) | 3,030 | 3,192 | ||||||
5.25% 4/15/12 (FSA Insured) | 2,000 | 2,120 | ||||||
Houston Util. Sys. Rev. Series A: | ||||||||
5.25% 5/15/10 (MBIA Insured) | 2,835 | 2,965 | ||||||
5.25% 11/15/11 (FSA Insured) | 4,430 | 4,686 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Katy Independent School District Series A, 5.25% | ||||||||
2/15/12 | $ 2,000 | $ 2,121 | ||||||
Lower Colorado River Auth. Rev.: | ||||||||
0% 1/1/09 (Escrowed to Maturity) (e) | 3,000 | 2,713 | ||||||
5.25% 1/1/15 (Pre-Refunded to 1/1/11 @ 100) (e) . | 5,000 | 5,254 | ||||||
Lubbock Gen. Oblig.: | ||||||||
(Wtrwks. Sys. Surplus Proj.) 5% 2/15/11 (FSA | ||||||||
Insured) | 2,465 | 2,571 | ||||||
5% 2/15/09 (MBIA Insured) | 1,615 | 1,659 | ||||||
5% 2/15/10 (MBIA Insured) | 1,845 | 1,911 | ||||||
Lubbock Health Facilities Dev. Corp. Rev. (Carillon, Inc. | ||||||||
Proj.) Series A, 6.5% 7/1/29 (Pre-Refunded to | ||||||||
7/1/09 @ 102) (e) | 4,800 | 5,236 | ||||||
Magnolia Independent School District 8% 8/15/11 | ||||||||
(FGIC Insured) | 1,210 | 1,427 | ||||||
Mesquite Independent School District 3.65%, tender | ||||||||
12/1/08 (Liquidity Facility JPMorgan Chase Bank) (c) | 2,500 | 2,500 | ||||||
New Braunfels Independent School District 0% 2/1/07 . | 2,000 | 1,956 | ||||||
North East Texas Independent School District 7% 2/1/11 | ||||||||
(Pre-Refunded to 2/1/10 @ 100) (e) | 3,600 | 3,961 | ||||||
North Texas Tollway Auth. Dallas North Tollway Sys. Rev. | ||||||||
Series C: | ||||||||
5% 1/1/09 (FSA Insured) | 2,000 | 2,051 | ||||||
5%, tender 7/1/08 (c)(e) | 45 | 46 | ||||||
5%, tender 7/1/08 (FSA Insured) (c) | 2,605 | 2,657 | ||||||
Red River Ed. Fin. Corp. Ed. Rev. (Texas Christian Univ. | ||||||||
Proj.) 5% 3/15/12 (MBIA Insured) | 2,625 | 2,744 | ||||||
Rockwall Independent School District: | ||||||||
5% 2/15/08 | 3,825 | 3,892 | ||||||
5% 2/15/09 | 4,690 | 4,819 | ||||||
Sabine River Auth. Poll. Cont. Rev. (Texas Utils. Elec. Co. | ||||||||
Proj.) Series A, 5.5%, tender 11/1/11 (c) | 1,000 | 1,046 | ||||||
San Angelo Wtrwks. & Swr. Sys. Impt. and Rfdg. Rev. | ||||||||
5% 4/1/10 (FSA Insured) | 1,630 | 1,688 | ||||||
San Antonio Elec. & Gas Sys. Rev.: | ||||||||
Series 2000 A, 5.75% 2/1/15 (Pre-Refunded to | ||||||||
2/1/10 @ 100) (e) | 5,000 | 5,295 | ||||||
Series B, 0% 2/1/09 (Escrowed to Maturity) (e) | 2,500 | 2,253 | ||||||
3.55%, tender 12/1/07 (c) | 6,700 | 6,666 | ||||||
5.25% 2/1/08 | 1,000 | 1,021 | ||||||
San Antonio Independent School District 7% 8/15/08 | 5,000 | 5,312 | ||||||
San Antonio Muni. Drainage Util. Sys. Rev. 5.25% | ||||||||
2/1/12 (MBIA Insured) | 1,545 | 1,637 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
San Antonio Wtr. Sys. Rev. 5% 5/15/10 (FGIC Insured) | $ 1,020 | $ 1,058 | ||||||
Socorro Independent School District 5% 8/15/09 | 2,070 | 2,137 | ||||||
Spring Branch Independent School District Series 2001, | ||||||||
5.375% 2/1/14 | 2,790 | 2,949 | ||||||
Spring Independent School District 5% 2/15/08 | 1,875 | 1,908 | ||||||
Texas Gen. Oblig.: | ||||||||
(College Student Ln. Prog.) 5% 8/1/11 (d) | 3,000 | 3,048 | ||||||
Series 1992 A, 8% 10/1/07 | 10,000 | 10,502 | ||||||
Series A, 6% 10/1/08 (MBIA Insured) | 10,750 | 11,242 | ||||||
Series C: | ||||||||
0% 4/1/08 (Escrowed to Maturity) (e) | 3,100 | 2,897 | ||||||
0% 4/1/09 (Escrowed to Maturity) (e) | 2,320 | 2,077 | ||||||
Texas Pub. Fin. Auth. Rev. (Bldg. and Procurement | ||||||||
Commission Proj.) Series A, 5% 2/1/10 | ||||||||
(AMBAC Insured) | 1,055 | 1,092 | ||||||
Texas Tech Univ. Revs. Ninth Series, 5% 2/15/11 | ||||||||
(AMBAC Insured) | 1,250 | 1,302 | ||||||
Travis County Gen. Oblig. 5.25% 3/1/12 | 4,125 | 4,379 | ||||||
Tyler Health Facilities Dev. Corp. Hosp. Rev. (Mother | ||||||||
Frances Hosp. Reg’l. Health Care Ctr. Proj.): | ||||||||
4.5% 7/1/06 | 1,220 | 1,220 | ||||||
5% 7/1/07 | 1,000 | 1,006 | ||||||
Univ. of Texas Univ. Revs.: | ||||||||
(Fing. Sys. Proj.) Series A, 5.5% 8/15/09 | 1,115 | 1,166 | ||||||
Series B: | ||||||||
5% 8/15/09 | 11,255 | 11,610 | ||||||
5.25% 8/15/11 | 5,025 | 5,312 | ||||||
Webb County Gen. Oblig. 5% 2/15/08 (FGIC Insured) . | 1,170 | 1,191 | ||||||
Wichita Falls Independent School District 0% 2/1/10 | 2,325 | 2,003 | ||||||
219,429 | ||||||||
Utah 0.7% | ||||||||
Salt Lake County Wtr. Conservancy District Rev. Series A: | ||||||||
0% 10/1/11 (AMBAC Insured) | 3,800 | 3,024 | ||||||
0% 10/1/12 (AMBAC Insured) | 3,800 | 2,886 | ||||||
0% 10/1/13 (AMBAC Insured) | 3,760 | 2,719 | ||||||
Utah Bldg. Ownership Auth. Lease Rev. (State Facilities | ||||||||
Master Lease Prog.) Series A, 5% 5/15/11 | 1,700 | 1,777 | ||||||
10,406 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
26 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Virginia – 0.1% | ||||||||
Amelia County Indl. Dev. Auth. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.05%, tender 4/1/08 (c)(d) | $ 1,600 | $ 1,588 | ||||||
Washington 1.6% | ||||||||
Chelan County Pub. Util. District #1 Rev. Series B, 5% | ||||||||
7/1/11 (FGIC Insured) | 1,190 | 1,243 | ||||||
Clark County Pub. Util. District #1 Elec. Rev.: | ||||||||
Series B, 5.25% 1/1/09 (FSA Insured) | 1,595 | 1,645 | ||||||
5% 1/1/11 (MBIA Insured) | 1,680 | 1,748 | ||||||
5.25% 1/1/11 (FSA Insured) | 1,935 | 2,033 | ||||||
King County School District #409, Tahoma 5% 6/1/11 | ||||||||
(FSA Insured) | 1,740 | 1,816 | ||||||
Pierce County Gen. Oblig. 5.75% 8/1/13 | ||||||||
(Pre-Refunded to 8/1/10 @ 100) (e) | 1,155 | 1,232 | ||||||
Port of Seattle Rev. Series D, 5.75% 11/1/15 | ||||||||
(FGIC Insured) (d) | 3,640 | 3,915 | ||||||
Snohomish County Pub. Hosp. District #2 | ||||||||
(Stevens Health Care Proj.) 4.5% 12/1/09 | ||||||||
(FGIC Insured) | 1,000 | 1,015 | ||||||
Snohomish County School District #2, Everett: | ||||||||
5% 6/1/09 (FSA Insured) | 1,045 | 1,076 | ||||||
5% 6/1/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Vancouver Wtr. & Swr. Rev. 5.25% 6/1/11 | ||||||||
(FSA Insured) | 1,000 | 1,055 | ||||||
Washington Gen. Oblig. Series A: | ||||||||
5% 7/1/11 (FGIC Insured) | 1,000 | 1,047 | ||||||
5.5% 7/1/11 | 3,500 | 3,682 | ||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #2 Rev. | ||||||||
Series A, 5.75% 7/1/08 | 3,000 | 3,104 | ||||||
25,648 | ||||||||
Wisconsin – 1.6% | ||||||||
Milwaukee County Gen. Oblig. Series A, 0% 12/1/10 | ||||||||
(FGIC Insured) | 3,370 | 2,788 | ||||||
Wisconsin Gen. Oblig. Series 1, 5% 5/1/10 | ||||||||
(MBIA Insured) | 2,500 | 2,596 | ||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: | ||||||||
(Hosp. Sisters Svcs., Inc. Proj.) Series 2003 B, 4%, | ||||||||
tender 12/1/06 (FSA Insured) (c) | 15,000 | 15,010 | ||||||
(Marshfield Clinic Proj.): | ||||||||
Series 2006 A, 5% 2/15/13 | 875 | 888 | ||||||
Series B, 6.25% 2/15/10 | 1,015 | 1,076 | ||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||
27 | Semiannual Report |
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Wisconsin – continued | ||||||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: continued | ||||||||||
(Wheaton Franciscan Svcs., Inc. Proj.) Series A: | ||||||||||
5% 8/15/09 | $ 1,000 | $ 1,020 | ||||||||
5% 8/15/10 | 1,870 | 1,907 | ||||||||
25,285 | ||||||||||
TOTAL MUNICIPAL BONDS | ||||||||||
(Cost $1,531,204) | 1,506,399 | |||||||||
Municipal Notes 0.7% | ||||||||||
Illinois – 0.7% | ||||||||||
Chicago O’Hare Int’l. Arpt. Rev. Participating VRDN Series DB | ||||||||||
189, 4% (Liquidity Facility Deutsche Bank AG) (c)(f) | ||||||||||
(Cost $9,998) | 10,000 | 10,000 | ||||||||
TOTAL INVESTMENT PORTFOLIO – 96.5% | ||||||||||
(Cost $1,541,202) | 1,516,399 | |||||||||
NET OTHER ASSETS – 3.5% | 55,766 | |||||||||
NET ASSETS 100% | $ 1,572,165 |
Security Type Abbreviation |
VRDN — VARIABLE RATE DEMAND NOTE |
Legend (a) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. (b) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(c) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (d) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (e) Security collateralized by an amount sufficient to pay interest and principal. (f) Provides evidence of ownership in one or more underlying municipal bonds. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
(g) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $9,019,000 or 0.6% of net assets. |
Additional information on each holding is as follows:
Acquisition | Acquisition | |||||
Security | Date | Cost (000s) | ||||
Univ. of California | ||||||
Revs. (UCLA Med. | ||||||
Ctr. Proj.) 4.55% | ||||||
12/1/09 | 3/6/02 | $ 8,955 |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 43.8% | |
Escrowed/Pre Refunded | 12.2% | |
Electric Utilities | 9.4% | |
Transportation | 6.9% | |
Health Care | 6.6% | |
Special Tax | 5.1% | |
Education | 5.1% | |
Others* (individually less than 5%) | 10.9% | |
100.0% |
* Includes net other assets
Income Tax Information
At December 31, 2005, the fund had a capital loss carryforward of approximately $699,000 all of which will expire on December 31, 2013.
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||||
Assets | ||||||
Investment in securities, at value | ||||||
See accompanying schedule: | ||||||
Unaffiliated issuers (cost $1,541,202) | $ 1,516,399 | |||||
Cash | 2,390 | |||||
Receivable for investments sold | 39,832 | |||||
Receivable for fund shares sold | 1,213 | |||||
Interest receivable | 21,765 | |||||
Prepaid expenses | 4 | |||||
Other receivables | 287 | |||||
Total assets | 1,581,890 | |||||
Liabilities | ||||||
Payable for investments purchased on a delayed delivery | ||||||
basis | $ 6,468 | |||||
Payable for fund shares redeemed | 1,410 | |||||
Distributions payable | 1,008 | |||||
Accrued management fee | 487 | |||||
Distribution fees payable | 13 | |||||
Other affiliated payables | 290 | |||||
Other payables and accrued expenses | 49 | |||||
Total liabilities | 9,725 | |||||
Net Assets | $ 1,572,165 | |||||
Net Assets consist of: | ||||||
Paid in capital | $ 1,601,433 | |||||
Distributions in excess of net investment income | (4) | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | (4,461) | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | (24,803) | |||||
Net Assets | $ 1,572,165 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
30 |
Statement of Assets and Liabilities continued | ||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||
Calculation of Maximum Offering Price | ||||
Class A: | ||||
Net Asset Value and redemption price per share | ||||
($11,433 ÷ 1,131.7 shares) | $ 10.10 | |||
Maximum offering price per share (100/96.25 of $10.10) | $ 10.49 | |||
Class T: | ||||
Net Asset Value and redemption price per share | ||||
($14,609 ÷ 1,448.4 shares) | $ 10.09 | |||
Maximum offering price per share (100/97.25 of $10.09) | $ 10.38 | |||
Class B: | ||||
Net Asset Value and offering price per share | ||||
($2,938 ÷ 291.0 shares)A | $ 10.10 | |||
Class C: | ||||
Net Asset Value and offering price per share | ||||
($7,181 ÷ 711.9 shares)A | $ 10.09 | |||
Short Intermediate Municipal Income: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($1,532,599 ÷ 151,921.4 shares) | $ 10.09 | |||
Institutional Class: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($3,405 ÷ 337.4 shares) | $ 10.09 | |||
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Financial Statements continued | ||||||
Statement of Operations | ||||||
Amounts in thousands | Six months ended June 30, 2006 (Unaudited) | |||||
Investment Income | ||||||
Interest | $ 28,079 | |||||
Expenses | ||||||
Management fee | $ 3,091 | |||||
Transfer agent fees | 713 | |||||
Distribution fees | 86 | |||||
Accounting fees and expenses | 165 | |||||
Independent trustees’ compensation | 3 | |||||
Custodian fees and expenses | 13 | |||||
Registration fees | 62 | |||||
Audit | 28 | |||||
Legal | 1 | |||||
Miscellaneous | 8 | |||||
Total expenses before reductions | 4,170 | |||||
Expense reductions | (810) | 3,360 | ||||
Net investment income | 24,719 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | (2,621) | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (15,823) | |||||
Net gain (loss) | (18,444) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 6,275 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
Amounts in thousands | (Unaudited) | 2005 | ||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 24,719 | $ 51,345 | ||||||
Net realized gain (loss) | (2,621) | (1,840) | ||||||
Change in net unrealized appreciation (depreciation) . | (15,823) | (29,976) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 6,275 | 19,529 | ||||||
Distributions to shareholders from net investment income . | (24,720) | (51,341) | ||||||
Distributions to shareholders from net realized gain | — | (549) | ||||||
Total distributions | (24,720) | (51,890) | ||||||
Share transactions - net increase (decrease) | (119,666) | (147,427) | ||||||
Redemption fees | 6 | 25 | ||||||
Total increase (decrease) in net assets | (138,105) | (179,763) | ||||||
Net Assets | ||||||||
Beginning of period | 1,710,270 | 1,890,033 | ||||||
End of period (including distributions in excess of net | ||||||||
investment income of $4 and distributions in excess | ||||||||
of net investment income of $3, respectively) | $ 1,572,165 | $ 1,710,270 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Financial Highlights Class A | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.50 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .144 | .268 | .250 | .115 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.090) | .071 | ||||||||||||
Total from investment operations | 033 | .091 | .160 | .186 | ||||||||||||
Distributions from net investment income . | (.143) | (.268) | (.251) | (.111) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.143) | (.271) | (.270) | (.176) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.50 | ||||||||||||
Total ReturnB,C,D | .32% | .89% | 1.55% | 1.78% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of fee waivers, if any | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of all reductions | .55%A | .58% | .64% | .64%A | ||||||||||||
Net investment income | 2.84%A | 2.61% | 2.41% | 2.52%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 11 | $ 14 | $ 12 | $ 9 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
34 |
Financial Highlights Class T | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.37 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .138 | .257 | .238 | .110 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.167) | (.089) | .050 | ||||||||||||
Total from investment operations | 028 | .090 | .149 | .160 | ||||||||||||
Distributions from net investment income . | (.138) | (.257) | (.240) | (.105) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.138) | (.260) | (.259) | (.170) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.37 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | .27% | .88% | 1.44% | 1.54% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of fee waivers, if any | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of all reductions | .66%A | .69% | .75% | .76%A | ||||||||||||
Net investment income | 2.73%A | 2.50% | 2.30% | 2.41%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 15 | $ 15 | $ 20 | $ 12 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
35 Semiannual Report
Financial Highlights Class B | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .105 | .190 | .172 | .081 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.080) | .059 | ||||||||||||
Total from investment operations | (.006) | .013 | .092 | .140 | ||||||||||||
Distributions from net investment income . | (.104) | (.190) | (.173) | (.075) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.104) | (.193) | (.192) | (.140) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.49 | ||||||||||||
Total ReturnB,C,D | (.06)% | .13% | .89% | 1.34% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of fee waivers, if any | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of all reductions | 1.32%A | 1.34% | 1.39% | 1.39%A | ||||||||||||
Net investment income | 2.07%A | 1.85% | 1.65% | 1.78%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 3 | $ 3 | $ 4 | $ 2 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
36 |
Financial Highlights Class C | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .099 | .178 | .159 | .077 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.080) | .048 | ||||||||||||
Total from investment operations | (.011) | .002 | .079 | .125 | ||||||||||||
Distributions from net investment income | (.099) | (.179) | (.160) | (.070) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.099) | (.182) | (.179) | (.135) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | (.11)% | .02% | .77% | 1.20% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of fee waivers, if any | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of all reductions | 1.43%A | 1.45% | 1.51% | 1.49%A | ||||||||||||
Net investment income | 1.96%A | 1.74% | 1.53% | 1.67%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) | $ 7 | $ 10 | $ 11 | $ 8 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
37 Semiannual Report
Financial Highlights Short Intermediate Municipal Income | ||||||||||||||
Six months ended | ||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||
Selected Per Share Data | ||||||||||||||
Net asset value, | ||||||||||||||
beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | $ 10.12 | ||||||||
Income from Investment | ||||||||||||||
Operations | ||||||||||||||
Net investment | ||||||||||||||
incomeD | .151 | .284 | .268 | .283 | .336 | .396 | ||||||||
Net realized and unre | ||||||||||||||
alized gain (loss) | (.110) | (.177) | (.080) | .030 | .317 | .173 | ||||||||
Total from investment | ||||||||||||||
operations | .041 | .107 | .188 | .313 | .653 | .569 | ||||||||
Distributions from net | ||||||||||||||
investment income | (.151) | (.284) | (.269) | (.283) | (.339) | (.396) | ||||||||
Distributions from net | ||||||||||||||
realized gain | — | (.003) | (.019) | (.070) | (.064) | (.023) | ||||||||
Total distributions | (.151) | (.287) | (.288) | (.353) | (.403) | (.419) | ||||||||
Redemption fees added | ||||||||||||||
to paid in capitalD,F | — | — | — | — | — | — | ||||||||
Net asset value, | ||||||||||||||
end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | ||||||||
Total ReturnB,C | .40% | 1.06% | 1.82% | 3.01% | 6.47% | 5.70% | ||||||||
Ratios to Average Net AssetsE | ||||||||||||||
Expenses before | ||||||||||||||
reductions | .49%A | .49% | .49% | .49% | .49% | .49% | ||||||||
Expenses net of fee | ||||||||||||||
waivers, if any | .49%A | .49% | .48% | .49% | .49% | .49% | ||||||||
Expenses net of all | ||||||||||||||
reductions | .40%A | .42% | .47% | .47% | .45% | .41% | ||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69% | 3.23% | 3.85% | ||||||||
Supplemental Data | ||||||||||||||
Net assets, end of | ||||||||||||||
period (in millions) . | $ 1,533 | $ 1,665 | $ 1,841 | $ 1,843 | $ 1,683 | $ 1,183 | ||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% | 38% | 43% |
A Annualized 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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
38 |
Financial Highlights Institutional Class | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003E | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeD | .151 | .283 | .265 | .125 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.088) | .059 | ||||||||||||
Total from investment operations | 041 | .107 | .177 | .184 | ||||||||||||
Distributions from net investment income . | (.151) | (.284) | (.268) | (.119) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.151) | (.287) | (.287) | (.184) | ||||||||||||
Redemption fees added to paid | ||||||||||||||||
in capitalD,G | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.49 | ||||||||||||
Total ReturnB,C | .40% | 1.05% | 1.71% | 1.77% | ||||||||||||
Ratios to Average Net AssetsF | ||||||||||||||||
Expenses before reductions | .49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of fee waivers, if any | .49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of all reductions | .39%A | .42% | .48% | .47%A | ||||||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (000 omitted) | $ 3,405 | $ 2,625 | $ 1,253 | $ 414 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
39 Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Short Intermediate Municipal Income Fund (the Fund) is a fund of Fidelity Municipal Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, Short Intermediate Municipal Income, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
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. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Semiannual Report |
40 |
1. Significant Accounting Policies continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distribu tions from realized gains, if any, are recorded on the ex dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount, deferred trustees compensa tion, capital loss carryforwards and losses deferred due to excise tax regulations.
The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,390 | |||
Unrealized depreciation | (27,193) | |||
Net unrealized appreciation (depreciation) | $ (24,803) | |||
Cost for federal income tax purposes | $ 1,541,202 |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund’s net assets and results of operations.
41 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
(Amounts in thousands except ratios) |
1. Significant Accounting Policies continued |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the Fund and accounted for as an addition to paid in capital.
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in the Fund’s Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underly ing securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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 transac tions 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 at the end of the Fund’s Schedule of Investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, aggregated $234,664 and $417,369, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment manage ment related services for which the Fund pays a monthly management fee. The manage ment fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
Semiannual Report |
42 |
4. Fees and Other Transactions with Affiliates continued
Distribution and Service Plan. In accordance with Rule 12b 1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class’ average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |||||||||||
Fee | Fee | FDC | by FDC | |||||||||||
Class A | 0% | .15% | $ 9 | $ — | ||||||||||
Class T | 0% | .25% | $ 18 | — | ||||||||||
Class B | .65% | .25% | $ 15 | 11 | ||||||||||
Class C | .75% | .25% | $ 44 | 11 | ||||||||||
$ 86 | $ 22 |
Sales Load. FDC receives a front end sales charge of up to 3.75% for selling Class A shares, and 2.75% for selling Class T shares, some of which is paid to financial interme diaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, .75% to .50% for certain purchases of Class A shares (.25% prior to February 24, 2006) and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows: | ||||
Retained | ||||
by FDC | ||||
Class A | $ 1 | |||
Class T | 1 | |||
Class B* | 2 | |||
Class C* | 3 | |||
$ 7 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent, and shareholder servicing agent for the Fund’s Class A, Class T, Class B, Class C, Short Intermediate Municipal Income and Institutional Class shares. Citibank has entered into a sub arrangement with Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, with respect to all classes of the Fund, except for Short Intermediate Municipal Income, to perform the transfer, dividend
43 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
(Amounts in thousands except ratios) | ||
4. Fees and Other Transactions with Affiliates continued | ||
Transfer Agent and Accounting Fees continued |
disbursing, and shareholder servicing agent functions. Citibank has also entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, with respect to Short Intermediate Municipal Income, to perform the transfer, dividend disbursing, and shareholder servicing agent functions. FIIOC and FSC receive account fees and asset based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. All fees are paid to FIIOC by Citibank, which is reimbursed by each class for such payments. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
% of | ||||||
Average | ||||||
Amount | Net Assets | |||||
Class A | $ 5 | .09* | ||||
Class T | 7 | .09* | ||||
Class B | 2 | .10* | ||||
Class C | 5 | .11* | ||||
Short Intermediate Municipal Income | 693 | .09* | ||||
Institutional Class | 1 | .08* | ||||
$ 713 | ||||||
* Annualized |
Citibank also has a sub arrangement with FSC to maintain the Fund’s accounting records. The fee is based on the level of average net assets for the month.
5. Committed Line of Credit. |
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the “line of credit”) to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions. |
Through arrangements with the Fund’s custodian and each class’ 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 accounting expenses
Semiannual Report |
44 |
6. Expense Reductions - continued
by $13 and $165, respectively. During the period, credits reduced each class’ transfer agent expense as noted in the table below.
Transfer Agent | ||||
expense reduction | ||||
Class A | $ 5 | |||
Class T | 6 | |||
Class B | 1 | |||
Class C | 3 | |||
Short Intermediate Municipal Income | 616 | |||
Institutional Class | 1 | |||
$ 632 | ||||
7. Other. |
The Fund’s organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders. | ||||||||
Distributions to shareholders of each class were as follows: | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, 2005 | |||||||
From net investment income | ||||||||
Class A | $ 165 | $ 313 | ||||||
Class T | 200 | 465 | ||||||
Class B | 34 | 68 | ||||||
Class C | 86 | 195 | ||||||
Short Intermediate Municipal Income | 24,187 | 50,256 | ||||||
Institutional Class | 48 | 44 | ||||||
Total | $ 24,720 | $ 51,341 | ||||||
From net realized gain | ||||||||
Class A | $ — | $ 4 | ||||||
Class T | — | 6 | ||||||
Class B | — | 1 | ||||||
Class C | — | 3 | ||||||
Short Intermediate Municipal Income | — | 534 | ||||||
Institutional Class | — | 1 | ||||||
Total | $ — | $ 549 | ||||||
45 | Semiannual Report |
Notes to Financial Statements (Unaudited) continued | ||||||||||||
(Amounts in thousands except ratios) | ||||||||||||
9. Share Transactions. | ||||||||||||
Transactions for each class of shares were as follows: | ||||||||||||
Shares | Dollars | |||||||||||
Six months ended | Year ended | Six months ended | Year ended | |||||||||
June 30, 2006 | December 31, 2005 | June 30, 2006 | December 31, 2005 | |||||||||
Class A | ||||||||||||
Shares sold | 122 | 684 | $ 1,238 | $ 6,996 | ||||||||
Reinvestment of | ||||||||||||
distributions | 13 | 23 | 128 | 238 | ||||||||
Shares redeemed | (413) | (498) | (4,210) | (5,104) | ||||||||
Net increase (decrease) | (278) | 209 | $ (2,844) | $ 2,130 | ||||||||
Class T | ||||||||||||
Shares sold | 181 | 517 | $ 1,849 | $ 5,299 | ||||||||
Reinvestment of | ||||||||||||
distributions | 16 | 34 | 161 | 351 | ||||||||
Shares redeemed | (208) | (1,028) | (2,115) | (10,531) | ||||||||
Net increase (decrease) | (11) | (477) | $ (105) | $ (4,881) | ||||||||
Class B | ||||||||||||
Shares sold | 15 | 65 | $ 146 | $ 661 | ||||||||
Reinvestment of | ||||||||||||
distributions | 2 | 4 | 24 | 44 | ||||||||
Shares redeemed | (63) | (100) | (639) | (1,025) | ||||||||
Net increase (decrease) | (46) | (31) | $ (469) | $ (320) | ||||||||
Class C | ||||||||||||
Shares sold | 77 | 438 | $ 786 | $ 4,492 | ||||||||
Reinvestment of | ||||||||||||
distributions | 5 | 11 | 50 | 116 | ||||||||
Shares redeemed | (374) | (541) | (3,803) | (5,552) | ||||||||
Net increase (decrease) | (292) | (92) | $ (2,967) | $ (944) | ||||||||
Short Intermediate | ||||||||||||
Municipal Income | ||||||||||||
Shares sold | 22,395 | 46,854 | $ 227,580 | $ 481,284 | ||||||||
Reinvestment of | ||||||||||||
distributions | 1,708 | 3,476 | 17,330 | 35,648 | ||||||||
Shares redeemed | (35,371) | (64,556) | (359,005) | (661,741) | ||||||||
Net increase (decrease) | (11,268) | (14,226) | $ (114,095) | $ (144,809) | ||||||||
Institutional Class | ||||||||||||
Shares sold | 165 | 194 | $ 1,683 | $ 1,994 | ||||||||
Reinvestment of | ||||||||||||
distributions | 3 | 2 | 26 | 18 | ||||||||
Shares redeemed | (88) | (60) | (895) | (615) | ||||||||
Net increase (decrease) | 80 | 136 | $ 814 | $ 1,397 |
Semiannual Report |
46 |
Proxy Voting Results
A special meeting of the fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Short Intermediate Municipal Income Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (togeth er, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, consid ered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s management contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day management of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment perfor mance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its shareholders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have
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48 |
appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund’s Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such committee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommen dations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for the fund, the Board ulti mately reached a determination, with the assistance of fund counsel and Independent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be
49 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
received by Fidelity under the management contract is consistent with Fidelity’s fidu ciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the background of the fund’s portfolio manager and the fund’s investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for the fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund’s compliance policies and procedures.
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The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying an additional sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) volunta rily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class available to shareholders with higher account balances; (iv) contractu ally agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restric tions. It also reviewed the fund’s absolute investment performance for each class, as well as the fund’s relative investment performance for each class measured against (i) a broad based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, as applicable, the cumulative total returns of Class C and Fidelity Short Intermediate Municipal Income (retail class), the cumulative total returns of a broad based securities market index (“benchmark”), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The returns of Class C and Fidelity Short Intermediate Municipal Income (retail class) represent the performance of classes with the highest and lowest 12b 1 fees, respectively (not necessarily with the highest and lowest total expenses). The box within each chart shows the 25th percentile return (bottom of box) and the 75th percen tile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage
51 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
beaten numbers noted below each chart correspond to the percentile box and represent the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the class indicated.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix116x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of Fidelity Short Intermediate Municipal Income (retail class) was in the second quartile for all the periods shown. The Board also stated that the relative investment performance of the fund was lower than its benchmark for all the periods shown. The Board considered that the variations in performance among the fund’s classes reflect the variations in class expenses, which result in lower performance for higher expense classes.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund’s shareholders, particularly in light of the Board’s view that the fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board’s management fee and total expense comparisons by broadening the competitive group used for
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comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund’s. For example, a TMG % of 13% means that 87% of the funds in the Total Mapped Group had higher management fees than the fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund’s management fee ranked, is also included in the chart and considered by the Board.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix117x1.jpg)
The Board noted that the fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board
53 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
concluded that the fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of each class’s total expenses, the Board considered the fund’s management fee as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund paid 12b 1 fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expenses of each of Class A, Class T, Class B, Fidelity Short Intermediate Municipal Income (retail class), and Institutional Class ranked below its competitive median for 2005, and the total expenses of Class C ranked above its competitive median for 2005. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b 1 fee structure, and that the multiple struc tures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expenses of the classes vary primarily by the level of their 12b 1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the total expenses of each class of the fund were reasonable, although in one case above the median of the universe presented for comparison, in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, market ing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity.
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The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitabil ity methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the fund’s business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s manage ment increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
55 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund’s Advisory Contracts should be renewed.
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57 Semiannual Report
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59 Semiannual Report
Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Advisers Fidelity Investments Money Management, Inc. Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Investments Institutional Operations Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
ASTM-USAN-0806 1.803547.102 |
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix125x1.jpg)
Fidelity Advisor Short-Intermediate Municipal Income Fund - Institutional Class |
Semiannual Report June 30, 2006 |
Institutional Class is a class of Fidelity® Short Intermediate Municipal Income Fund
Contents | ||||
Chairman’s Message | 3 | Ned Johnson’s message to shareholders. | ||
Shareholder Expense | 4 | An example of shareholder expenses. | ||
Example | ||||
Investment Changes | 6 | A summary of major shifts in the fund’s | ||
investments over the past six months. | ||||
Investments | 7 | A complete list of the fund’s investments | ||
with their market values. | ||||
Financial Statements | 30 | Statements of assets and liabilities, | ||
operations, and changes in net assets, | ||||
as well as financial highlights. | ||||
Notes | 40 | Notes to the financial statements. | ||
Proxy Voting Results | 47 | |||
Board Approval of | 48 | |||
Investment Advisory | ||||
Contracts and | ||||
Management Fees |
To view a fund’s proxy voting guidelines and proxy voting record for the 12 month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commis sion’s (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines. Standard & Poor’s, S&P and S&P 500 are registered service marks of The McGraw Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation. Other third party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company. |
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus. A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N Q. Forms N Q are available on the SEC’s web site at http://www.sec.gov. A fund’s Forms N Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC. Information regarding the operation of the SEC’s Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund’s portfolio hold ings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity’s web site at http://www.advisor.fidelity.com. NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE Neither the fund nor Fidelity Distributors Corporation is a bank. |
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2 |
Chairman’s Message
(photograph of Edward C. Johnson 3d)
Dear Shareholder:
Although many securities markets made gains in early 2006, inflation concerns led to mixed results through the year’s mid point. Financial markets are always unpredictable. There are, however, a number of time tested principles that can put the historical odds in your favor.
One of the basic tenets is to invest for the long term. Over time, riding out the markets’ inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets’ best days can significantly diminish investor returns. Patience also affords the benefits of compounding of earning interest on additional income or reinvested dividends and capital gains. There are tax advantages and cost benefits to consider as well. The more you sell, the more taxes you pay, and the more you trade, the higher the costs. While staying the course doesn’t eliminate risk, it can considerably lessen the effect of short term declines.
You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio’s long term success. The right mix of stocks, bonds and cash aligned to your particular risk tolerance and investment objective is very important. Age appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities which historically have been the best performing asset class over time is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more stable fixed investments (bonds or savings plans).
A third investment principle invest ing regularly can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won’t pay for all your shares at market highs. This strategy known as dollar cost averaging also reduces unconstructive “emotion” from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.
We invite you to contact us via the Internet, through our Investor Centers or over the phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/ Edward C. Johnson 3d
Edward C. Johnson 3d
3 Semiannual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b 1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006 to June 30, 2006).
Actual Expenses |
The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes
The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
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Expenses Paid | ||||||||||||
Beginning | Ending | During Period* | ||||||||||
Account Value | Account Value | January 1, 2006 | ||||||||||
January 1, 2006 | June 30, 2006 | to June 30, 2006 | ||||||||||
Class A | ||||||||||||
Actual | $ 1,000.00 | $ 1,003.20 | $ 3.23 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.57 | $ 3.26 | |||||||||
Class T | ||||||||||||
Actual | $ 1,000.00 | $ 1,002.70 | $ 3.72 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,021.08 | $ 3.76 | |||||||||
Class B | ||||||||||||
Actual | $ 1,000.00 | $ 999.40 | $ 7.04 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.75 | $ 7.10 | |||||||||
Class C | ||||||||||||
Actual | $ 1,000.00 | $ 998.90 | $ 7.58 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,017.21 | $ 7.65 | |||||||||
Short Intermediate Municipal | ||||||||||||
Income | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
Institutional Class | ||||||||||||
Actual | $ 1,000.00 | $ 1,004.00 | $ 2.43 | |||||||||
HypotheticalA | $ 1,000.00 | $ 1,022.36 | $ 2.46 | |||||||||
A 5% return per year before expenses |
* Expenses are equal to each Class’ annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one half year period).
Annualized | ||
Expense Ratio | ||
Class A | .65% | |
Class T | .75% | |
Class B | 1.42% | |
Class C | 1.53% | |
Short Intermediate Municipal Income | .49% | |
Institutional Class | .49% |
5 Semiannual Report
Investment Changes | ||||
Top Five States as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
Texas | 14.0 | 14.7 | ||
New York | 13.0 | 11.8 | ||
Illinois | 11.0 | 9.4 | ||
New Jersey | 6.1 | 6.9 | ||
California | 5.4 | 7.6 | ||
Top Five Sectors as of June 30, 2006 | ||||
% of fund’s | % of fund’s net assets | |||
net assets | 6 months ago | |||
General Obligations | 43.8 | 49.1 | ||
Escrowed/Pre Refunded | 12.2 | 8.2 | ||
Electric Utilities | 9.4 | 13.8 | ||
Transportation | 6.9 | 6.7 | ||
Health Care | 6.6 | 6.5 | ||
Average Years to Maturity as of June 30, 2006 | ||||
6 months ago | ||||
Years | 3.6 | 3.5 |
Average years to maturity is based on the average time remaining to the stated maturity date of each bond, weighted by the market value of each bond.
Duration as of June 30, 2006 | ||||||
6 months ago | ||||||
Years | 2.9 | 3.0 |
Duration shows how much a bond fund’s price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund’s performance and share price. Accordingly, a bond fund’s actual performance may differ from this example.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix130x1.jpg)
We have used ratings from Moody’s® Investors Services, Inc. Where Moody’s ratings are not available, we have used S&P® ratings.
Semiannual Report 6
Investments June 30, 2006 (Unaudited) | ||||||||
Showing Percentage of Net Assets | ||||||||
Municipal Bonds 95.8% | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Alabama – 3.3% | ||||||||
Birmingham Baptist Med. Ctrs. Spl. Care Facilities Fing. | ||||||||
Auth. Rev. (Baptist Health Sys., Inc. Proj.) Series A, 5% | ||||||||
11/15/09 | $ 1,100 | $ 1,118 | ||||||
Daphne Spl. Care Facilities Fing. Auth. Rev. Series A, 0% | ||||||||
8/15/28 (Pre-Refunded to 8/15/08 @ 100) (e) | 10,000 | 9,203 | ||||||
Health Care Auth. for Baptist Health Series 2006 D: | ||||||||
5% 11/15/08 | 1,475 | 1,499 | ||||||
5% 11/15/11 | 1,000 | 1,026 | ||||||
Huntsville Solid Waste Disp. Auth. & Resource Recovery | ||||||||
Rev.: | ||||||||
5.25% 10/1/07 (MBIA Insured) (d) | 1,750 | 1,775 | ||||||
5.25% 10/1/08 (MBIA Insured) (d) | 2,900 | 2,960 | ||||||
5.75% 10/1/09 (MBIA Insured) (d) | 4,000 | 4,190 | ||||||
Jefferson County Ltd. Oblig. School Warrants Series A, | ||||||||
5% 1/1/07 | 2,210 | 2,220 | ||||||
Jefferson County Swr. Rev.: | ||||||||
Series 1999 A, 5.75% 2/1/38 (Pre-Refunded to | ||||||||
2/1/09 @ 101) (e) | 5,010 | 5,281 | ||||||
Series A: | ||||||||
5% 2/1/33 (Pre-Refunded to 2/1/09 @ 101) (e) | 13,520 | 13,972 | ||||||
5.5% 2/1/40 (Pre-Refunded to 2/1/11 @ 101) (e) . | 3,900 | 4,183 | ||||||
5% 2/1/41 (Pre-Refunded to 8/1/12 @ 100) (e) | 2,060 | 2,158 | ||||||
Mobile County Gen. Oblig. 5% 2/1/08 (MBIA Insured) . | 1,475 | 1,501 | ||||||
51,086 | ||||||||
Alaska – 0.6% | ||||||||
Alaska Student Ln. Corp. Student Ln. Rev. Series A, | ||||||||
5.85% 7/1/13 (AMBAC Insured) (d) | 3,285 | 3,465 | ||||||
Anchorage Gen. Oblig. Series B, 5.75% 12/1/11 | ||||||||
(Pre-Refunded to 12/1/10 @ 100) (e) | 2,500 | 2,684 | ||||||
North Slope Borough Gen. Oblig. Series B, 0% | ||||||||
6/30/08 (MBIA Insured) | 4,240 | 3,923 | ||||||
10,072 | ||||||||
Arizona – 1.6% | ||||||||
Arizona Ctfs. of Prtn. Series B, 5.5% 9/1/10 (FSA | ||||||||
Insured) | 9,025 | 9,513 | ||||||
Arizona School Facilities Board Ctfs. of Prtn. Series C, | ||||||||
5% 9/1/09 (FSA Insured) | 1,115 | 1,152 | ||||||
Maricopa County Unified School District #48 Scottsdale | ||||||||
7.4% 7/1/10 | 3,750 | 4,220 | ||||||
Pima County Unified School District #1 Tucson 7.5% | ||||||||
7/1/08 (FGIC Insured) | 7,060 | 7,543 |
See accompanying notes which are an integral part of the financial statements.
7 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Arizona – continued | ||||||||
Pinal County Indl. Dev. Auth. Correctional Facilities | ||||||||
Contract Rev. (Florence West Prison Expansion, LLC | ||||||||
Proj.) Series A, 4.5% 10/1/08 (American Cap. | ||||||||
Access Corp. Insured) | $ 660 | $ 664 | ||||||
Tucson Wtr. Rev. Series A, 5% 7/1/11 (FGIC Insured) | 1,500 | 1,564 | ||||||
24,656 | ||||||||
Arkansas – 0.1% | ||||||||
Arkansas Dev. Fin. Auth. Exempt Facilities Rev. (Waste | ||||||||
Mgmt. Proj.) 3.65%, tender 8/1/06 (c)(d) | 1,000 | 1,000 | ||||||
California – 5.4% | ||||||||
California Dept. of Wtr. Resources Pwr. Supply Rev. | ||||||||
Series A, 5.25% 5/1/12 (MBIA Insured) | 6,000 | 6,370 | ||||||
California Econ. Recovery: | ||||||||
Series 2004 A, 5.25% 7/1/13 | 2,400 | 2,568 | ||||||
Series A: | ||||||||
5.25% 1/1/11 | 6,500 | 6,839 | ||||||
5.25% 7/1/13 (MBIA Insured) | 2,900 | 3,112 | ||||||
California Gen. Oblig.: | ||||||||
5% 2/1/09 | 1,640 | 1,683 | ||||||
5% 2/1/10 | 2,000 | 2,068 | ||||||
5% 2/1/11 | 2,525 | 2,627 | ||||||
5.125% 9/1/12 | 1,000 | 1,043 | ||||||
5.25% 2/1/11 | 5,775 | 6,069 | ||||||
5.5% 3/1/11 (FGIC Insured) | 3,210 | 3,419 | ||||||
5.5% 3/1/11 (XL Cap. Assurance, Inc. Insured) | 3,525 | 3,747 | ||||||
5.75% 10/1/08 | 1,085 | 1,128 | ||||||
6.4% 9/1/08 | 3,075 | 3,231 | ||||||
6.5% 9/1/10 | 1,760 | 1,925 | ||||||
8% 11/1/07 (FGIC Insured) | 4,670 | 4,828 | ||||||
California Health Facilities Fing. Auth. Rev. (Cedars-Sinai | ||||||||
Med. Ctr. Proj.) 5% 11/15/10 | 1,000 | 1,034 | ||||||
California Pub. Works Board Lease Rev.: | ||||||||
(California State Univ. Proj.) Series 1997 A, 5.5% | ||||||||
10/1/07 | 1,075 | 1,094 | ||||||
(Coalinga State Hosp. Proj.) Series 2004 A, 5% | ||||||||
6/1/08 | 6,000 | 6,113 | ||||||
California Statewide Cmntys. Dev. Auth. Rev.: | ||||||||
(Kaiser Fund Hosp./Health Place, Inc. Proj.) | ||||||||
Series 2002 C, 3.85%, tender 6/1/12 (c) | 1,400 | 1,360 | ||||||
(Kaiser Permanente Health Sys. Proj.): | ||||||||
Series 2001 A, 2.55%, tender 1/4/07 (c) | 1,400 | 1,391 | ||||||
Series 2004 G, 2.3%, tender 5/1/07 (c) | 8,000 | 7,899 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
8 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
California – continued | ||||||||
North City West School Facilities Fing. Auth. Spl. Tax | ||||||||
Subseries C: | ||||||||
5% 9/1/07 (AMBAC Insured) | $ 1,975 | $ 2,004 | ||||||
5% 9/1/08 (AMBAC Insured) | 2,080 | 2,132 | ||||||
San Joaquin Hills Trans. Corridor Agcy. Toll Road Rev. | ||||||||
Series A, 0% 1/15/12 (MBIA Insured) | 3,600 | 2,860 | ||||||
Univ. of California Revs. (UCLA Med. Ctr. Proj.) 4.55% | ||||||||
12/1/09 (g) | 8,955 | 9,019 | ||||||
85,563 | ||||||||
Colorado – 0.5% | ||||||||
Denver City & County Arpt. Rev. Series E, 5% 11/15/08 | ||||||||
(XL Cap. Assurance, Inc. Insured) (d) | 5,000 | 5,101 | ||||||
E-470 Pub. Hwy. Auth. Rev. Series 2000 B, 0% 9/1/07 | ||||||||
(Escrowed to Maturity) (e) | 3,200 | 3,057 | ||||||
8,158 | ||||||||
Connecticut – 0.7% | ||||||||
Connecticut Gen. Oblig.: | ||||||||
Series 2001 D, 5.125% 11/15/18 (Pre-Refunded to | ||||||||
11/15/11 @ 100) (e) | 5,000 | 5,269 | ||||||
Series 2002 C, 5% 12/15/08 | 1,930 | 1,981 | ||||||
Connecticut Health & Edl. Facilities Auth. Rev. | ||||||||
(Connecticut Children’s Med. Ctr. Proj.) Series B: | ||||||||
4% 7/1/07 (MBIA Insured) | 1,275 | 1,277 | ||||||
4.5% 7/1/08 (MBIA Insured) | 1,045 | 1,057 | ||||||
5% 7/1/09 (MBIA Insured) | 1,000 | 1,028 | ||||||
10,612 | ||||||||
District Of Columbia – 0.8% | ||||||||
District of Columbia Ctfs. of Prtn. 5.25% 1/1/08 | ||||||||
(AMBAC Insured) | 935 | 953 | ||||||
District of Columbia Gen. Oblig.: | ||||||||
Series A, 5.25% 6/1/09 (FSA Insured) | 1,000 | 1,036 | ||||||
Series B, 0% 6/1/12 (MBIA Insured) | 3,600 | 2,772 | ||||||
Metropolitan Washington Arpt. Auth. Gen. Arpt. Rev. | ||||||||
Series B, 5.5% 10/1/08 (FGIC Insured) (d) | 6,460 | 6,648 | ||||||
Metropolitan Washington Arpt. Auth. Sys. Rev. Series D, | ||||||||
4% 10/1/07 (FSA Insured) (d) | 1,000 | 1,000 | ||||||
12,409 | ||||||||
Florida – 5.2% | ||||||||
Brevard County School Board Ctfs. of Prtn. Series A, | ||||||||
5.5% 7/1/09 (AMBAC Insured) | 2,775 | 2,893 |
See accompanying notes which are an integral part of the financial statements.
9 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Florida – continued | ||||||||
Coral Gables Health Facilities Hosp. (Baptist Health | ||||||||
South Florida Obligated Group Proj.) 5% 8/15/06 | $ 1,000 | $ 1,001 | ||||||
Florida Gen. Oblig. (Dept. of Trans. Right of Way Proj.) | ||||||||
Series B, 6.375% 7/1/08 | 3,000 | 3,141 | ||||||
Highlands County Health Facilities Auth. Rev. (Adventist | ||||||||
Health Sys./Sunbelt Obligated Group Proj.): | ||||||||
Series A, 5% 11/15/10 | 1,000 | 1,030 | ||||||
Series B, 5% 11/15/08 | 800 | 816 | ||||||
3.95%, tender 9/1/12 (c) | 7,550 | 7,400 | ||||||
5%, tender 11/16/09 (c) | 4,700 | 4,815 | ||||||
Hillsborough County Indl. Dev. Auth. Poll. Cont. Rev. | ||||||||
(Tampa Elec. Co. Proj.): | ||||||||
4%, tender 8/1/07 (c) | 11,000 | 10,953 | ||||||
4.25%, tender 8/1/07 (c)(d) | 6,000 | 5,990 | ||||||
Lee County Solid Waste Sys. Rev. 5.25% 10/1/09 | ||||||||
(MBIA Insured) (d) | 1,000 | 1,032 | ||||||
Lee Memorial Health Sys. Board of Directors Hosp. Rev. | ||||||||
Series A, 5.75% 4/1/12 (FSA Insured) | 1,980 | 2,139 | ||||||
Miami-Dade County Cap. Asset Acquisition Fixed Rate | ||||||||
Spl. Oblig. Series 2002 A, 5% 4/1/08 (AMBAC | ||||||||
Insured) | 2,825 | 2,880 | ||||||
Miami-Dade County School Board Ctfs. of Prtn. 5%, | ||||||||
tender 5/1/11 (MBIA Insured) (c) | 1,500 | 1,556 | ||||||
Orange County School Board Ctfs. of Prtn. Series A, | ||||||||
5.375% 8/1/22 (Pre-Refunded to 8/1/07 @ 101) (e) | 3,815 | 3,914 | ||||||
Orlando Utils. Commission Util. Sys. Rev. 5.25% 7/1/09 | 6,000 | 6,231 | ||||||
Palm Beach County School Board Ctfs. of Prtn. Series A, | ||||||||
6% 8/1/22 (Pre-Refunded to 8/1/10 @ 101) (e) | 7,000 | 7,591 | ||||||
Polk County Cap. Impt. Rev.: | ||||||||
Series 2004, 5.5%, tender 12/1/10 (FSA Insured) (c) | 9,000 | 9,440 | ||||||
5.5% 12/1/11 (FGIC Insured) | 3,470 | 3,726 | ||||||
Seminole County School Board Ctfs. of Prtn. Series A, | ||||||||
4.5% 7/1/08 (MBIA Insured) | 1,250 | 1,264 | ||||||
Univ. Athletic Assoc., Inc. Athletic Prog. Rev. Series | ||||||||
2001: | ||||||||
2.8%, tender 10/1/08, LOC SunTrust Banks of | ||||||||
Florida, Inc. (c) | 2,000 | 1,945 | ||||||
3%, tender 10/1/09, LOC SunTrust Banks, Inc. (c) | 1,000 | 966 | ||||||
Volusia County School Board Ctfs. of Prtn. (School Board | ||||||||
of Volusia County Master Lease Prog.) 5% 8/1/08 | ||||||||
(FSA Insured) | 1,625 | 1,659 | ||||||
82,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
10 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Georgia – 0.6% | ||||||||
Columbia County Gen. Oblig. 5% 1/1/09 (FSA Insured) | $ 1,505 | $ 1,546 | ||||||
Fulton DeKalb Hosp. Auth. Hosp. Rev. 5% 1/1/08 | ||||||||
(FSA Insured) | 2,250 | 2,286 | ||||||
Georgia Muni. Elec. Auth. Pwr. Rev. Series 1992 B, | ||||||||
8.25% 1/1/11 (MBIA Insured) | 4,105 | 4,802 | ||||||
Henry County Wtr. & Swr. Auth. Rev. 5% 2/1/08 | ||||||||
(MBIA Insured) | 1,095 | 1,115 | ||||||
9,749 | ||||||||
Hawaii – 2.4% | ||||||||
Hawaii Arpt. Sys. Rev. Series 2000 B, 8% 7/1/10 | ||||||||
(FGIC Insured) (d) | 3,850 | 4,379 | ||||||
Hawaii Gen. Oblig. Series CU: | ||||||||
5.75% 10/1/11 (MBIA Insured) | 3,040 | 3,248 | ||||||
5.75% 10/1/11 (Pre-Refunded to 10/1/10 @ | ||||||||
100) (e) | 170 | 182 | ||||||
Honolulu City & County Gen. Oblig. Series B, 8% | ||||||||
10/1/09 | 26,940 | 30,172 | ||||||
37,981 | ||||||||
Illinois – 10.3% | ||||||||
Chicago Gen. Oblig. Series A, 5.25% 1/1/12 | ||||||||
(FSA Insured) | 1,000 | 1,059 | ||||||
Chicago Midway Arpt. Rev. Series B: | ||||||||
5% 1/1/10 (AMBAC Insured) | 1,225 | 1,264 | ||||||
5% 1/1/11 (AMBAC Insured) | 3,625 | 3,763 | ||||||
Chicago O’Hare Int’l. Arpt. Rev.: | ||||||||
Series A: | ||||||||
5% 1/1/12 (MBIA Insured) | 1,135 | 1,184 | ||||||
5.5% 1/1/08 (AMBAC Insured) | 5,000 | 5,093 | ||||||
5.5% 1/1/10 (AMBAC Insured) (d) | 5,000 | 5,214 | ||||||
Chicago Park District: | ||||||||
Series B, 5% 1/1/11 (AMBAC Insured) | 5,750 | 5,982 | ||||||
Series C, 5% 1/1/11 (AMBAC Insured) | 2,515 | 2,616 | ||||||
Chicago School Fin. Auth. Series B, 5% 6/1/09 | ||||||||
(FSA Insured) | 12,825 | 13,198 | ||||||
Chicago Tax Increment Rev. Series 2000 A, 0% | ||||||||
12/1/08 (AMBAC Insured) | 10,000 | 9,084 | ||||||
Chicago Transit Auth. Cap. Grant Receipts Rev. (Fed. | ||||||||
Transit Administration Section 5307 Formula Funds | ||||||||
Proj.) Series A, 5.25% 6/1/10 (AMBAC Insured) | 4,785 | 5,004 | ||||||
Chicago Wastewtr. Transmission Rev. 5.5% 1/1/09 | ||||||||
(FGIC Insured) | 2,975 | 3,085 |
See accompanying notes which are an integral part of the financial statements.
11 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Cook County Cmnty. College District #508 Ctfs. of Prtn. | ||||||||
8.75% 1/1/07 (FGIC Insured) | $ 8,000 | $ 8,188 | ||||||
DuPage Wtr. Commission Wtr. Rev. 5% 5/1/08 | ||||||||
(AMBAC Insured) | 4,525 | 4,613 | ||||||
Granite City Solid Waste Disp. Rev. (Waste Mgmt., Inc. | ||||||||
Proj.) 3.85%, tender 5/1/08 (c)(d) | 2,200 | 2,176 | ||||||
Hodgkins Tax Increment Rev.: | ||||||||
5% 1/1/07 | 1,000 | 1,004 | ||||||
5% 1/1/09 | 1,805 | 1,843 | ||||||
Illinois Dev. Fin. Auth. Gas Supply Rev. (The Peoples Gas | ||||||||
Lt. & Coke Co. Proj.) Series 2003 B, 3.05%, tender | ||||||||
2/1/08 (AMBAC Insured) (c) | 6,100 | 5,957 | ||||||
Illinois Dev. Fin. Auth. Rev. (DePaul Univ. Proj.) Series | ||||||||
2004 C, 5.5% 10/1/10 | 1,900 | 1,998 | ||||||
Illinois Edl. Facilities Auth. Revs.: | ||||||||
(Art Institute of Chicago Proj.) Series 2003, 3.85%, | ||||||||
tender 3/1/11 (c) | 12,800 | 12,527 | ||||||
(Field Museum of Natural History Proj.) 4.05%, tender | ||||||||
11/1/11 (c) | 3,250 | 3,219 | ||||||
(Univ. of Chicago Proj.): | ||||||||
Series 2004 B1, 3.45%, tender 7/1/08 (c) | 6,100 | 6,039 | ||||||
Series A, 5.25% 7/1/41 (Pre-Refunded to 7/1/11 | ||||||||
@ 101) (e) | 2,640 | 2,809 | ||||||
Series B: | ||||||||
3.1%, tender 7/1/07 (c)(e) | 5 | 5 | ||||||
3.1%, tender 7/1/07 (c) | 3,895 | 3,845 | ||||||
Illinois Fin. Auth. Rev. (DePaul Univ. Proj.): | ||||||||
5% 10/1/06 | 1,115 | 1,117 | ||||||
5% 10/1/07 | 1,225 | 1,236 | ||||||
5% 10/1/08 | 1,000 | 1,020 | ||||||
Illinois Gen. Oblig.: | ||||||||
First Series 2001, 5.25% 5/1/11 (FSA Insured) | 1,475 | 1,557 | ||||||
First Series: | ||||||||
5.25% 4/1/08 (MBIA Insured) | 1,035 | 1,059 | ||||||
5.375% 7/1/11 (MBIA Insured) | 6,745 | 7,170 | ||||||
5.5% 8/1/10 | 1,415 | 1,495 | ||||||
6% 1/1/11 (Pre-Refunded to 1/1/10 @ 100) (e) | 7,075 | 7,552 | ||||||
Series A, 5% 10/1/09 | 2,600 | 2,683 | ||||||
5.75% 4/1/12 (Pre-Refunded to 4/1/10 @ 100) (e) . | 1,000 | 1,063 | ||||||
Illinois Health Facilities Auth. Rev. (Condell Med. Ctr. Proj.): | ||||||||
5% 5/15/07 | 500 | 502 | ||||||
5% 5/15/08 | 700 | 707 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
12 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Illinois – continued | ||||||||
Kane & DeKalb Counties Cmnty. Unit School District | ||||||||
#301 0% 12/1/10 (AMBAC Insured) | $ 2,000 | $ 1,658 | ||||||
Kane & DuPage Counties Cmnty. Unit School District | ||||||||
#303, Saint Charles Series A, 5.5% 1/1/12 (FSA | ||||||||
Insured) | 2,270 | 2,430 | ||||||
Kane County School District #129, Aurora West Side | ||||||||
Series A, 5.75% 2/1/14 (Pre-Refunded to 2/1/12 @ | ||||||||
100) (e) | 1,600 | 1,740 | ||||||
Kane, McHenry, Cook & DeKalb Counties Cmnty. Unit | ||||||||
School District #300, Carpentersville 5.5% 12/1/13 | ||||||||
(Pre-Refunded to 12/1/11 @ 100) (e) | 5,000 | 5,374 | ||||||
Lake County Cmnty. High School District #128, | ||||||||
Libertyville Series 2004, 5% 1/1/11 | 2,365 | 2,461 | ||||||
Rosemont Gen. Oblig.: | ||||||||
Series 3: | ||||||||
0% 12/1/07 (Escrowed to Maturity) (e) | 2,375 | 2,251 | ||||||
0% 12/1/07 (FGIC Insured) | 625 | 592 | ||||||
Series A, 0% 12/1/11 (FGIC Insured) | 3,695 | 2,949 | ||||||
Univ. of Illinois Auxiliary Facilities Sys. Rev. Series 2001 | ||||||||
A, 5% 4/1/08 (AMBAC Insured) | 2,035 | 2,072 | ||||||
Univ. of Illinois Ctfs. of Prtn. (Util. Infrastructure Proj.) 5% | ||||||||
8/15/11 (AMBAC Insured) | 1,360 | 1,418 | ||||||
Will County School District #122 Series B, 0% 11/1/08 | ||||||||
(FSA Insured) | 1,280 | 1,165 | ||||||
162,040 | ||||||||
Indiana – 3.7% | ||||||||
Carmel High School Bldg. Corp. 5% 1/10/11 (FSA | ||||||||
Insured) | 1,000 | 1,041 | ||||||
Ctr. Grove 2000 Bldg. Corp.: | ||||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,785 | 1,910 | ||||||
5.5% 7/15/18 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,885 | 2,017 | ||||||
Hamilton Southeastern Consolidated School Bldg. Corp.: | ||||||||
Series A: | ||||||||
5% 1/10/10 (FSA Insured) | 1,750 | 1,810 | ||||||
5.25% 7/10/11 (FSA Insured) | 2,295 | 2,425 | ||||||
5.25% 1/10/12 (FSA Insured) | 1,355 | 1,436 | ||||||
5% 1/15/10 (FSA Insured) | 1,835 | 1,898 | ||||||
5% 1/15/11 (FSA Insured) | 1,910 | 1,989 | ||||||
5% 1/15/12 (FSA Insured) | 1,990 | 2,085 | ||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,855 | 1,985 | ||||||
Indiana Health Facility Fing. Auth. Rev. (Ascension Health | ||||||||
Cr. Group Prog.) Series 2002 F, 5.5% 11/15/06 | 1,000 | 1,006 |
See accompanying notes which are an integral part of the financial statements.
13 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Indiana – continued | ||||||||
Indiana Univ. Student Fee Revs. Series H, 0% 8/1/09 | ||||||||
(AMBAC Insured) | $ 3,875 | $ 3,420 | ||||||
Indianapolis Local Pub. Impt. Bond Bank | ||||||||
(Indianapolis Arpt. Auth. Proj.) Series I, 5% 1/1/08 | ||||||||
(MBIA Insured) (d) | 1,550 | 1,571 | ||||||
Indianapolis Resource Recovery Rev. (Ogden Martin | ||||||||
Sys., Inc. Proj.) 6.75% 12/1/07 (AMBAC Insured) | 3,000 | 3,084 | ||||||
Ivy Tech State College Series I, 5% 7/1/09 | ||||||||
(AMBAC Insured) | 1,405 | 1,448 | ||||||
Logansport High School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,000 | 1,047 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,020 | 1,073 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,045 | 1,102 | ||||||
5.25% 7/15/12 (MBIA Insured) | 1,075 | 1,139 | ||||||
Mount Vernon of Hancock County Multi-School Corp. | ||||||||
Series B: | ||||||||
5.5% 7/15/16 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,605 | 1,717 | ||||||
5.5% 7/15/17 (Pre-Refunded to 7/15/11 @ 100) (e) | 1,695 | 1,814 | ||||||
Muncie School Bldg. Corp. 5.25% 7/10/12 | ||||||||
(MBIA Insured) | 1,585 | 1,687 | ||||||
New Albany Floyd County Independent School Bldg. | ||||||||
Corp. 5% 1/15/11 (FSA Insured) | 1,000 | 1,041 | ||||||
Rockport Poll. Cont. Rev.: | ||||||||
(AEP Generating Co. Proj.) Series 1995 A, 4.15%, | ||||||||
tender 7/15/11 (AMBAC Insured) (b)(c) | 1,600 | 1,608 | ||||||
4.9%, tender 6/1/07 (c) | 4,000 | 4,015 | ||||||
Saint Joseph County Ind. Edl. Facilities Rev. (Univ. of | ||||||||
Notre Dame Du Lac Proj.) 2.5%, tender 12/3/07 (c) . | 10,000 | 9,787 | ||||||
West Clark 2000 School Bldg. Corp.: | ||||||||
5.25% 1/15/11 (MBIA Insured) | 1,065 | 1,118 | ||||||
5.25% 7/15/11 (MBIA Insured) | 1,125 | 1,186 | ||||||
5.25% 1/15/12 (MBIA Insured) | 1,150 | 1,216 | ||||||
58,675 | ||||||||
Kansas 0.2% | ||||||||
Burlington Envir. Impt. Rev. (Kansas City Pwr. & Lt. Co. | ||||||||
Proj.) Series A, 4.75%, tender 10/1/07 (c) | 2,400 | 2,420 | ||||||
Kansas Dev. Fin. Auth. Health Facilities Rev. (Hays Med. | ||||||||
Ctr. Proj.) Series 2005 L: | ||||||||
5.25% 11/15/10 | 545 | 567 | ||||||
5.25% 11/15/12 | 680 | 709 | ||||||
3,696 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
14 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Kentucky 0.2% | ||||||||
Kenton County Arpt. Board Arpt. Rev. Series B, 5% | ||||||||
3/1/09 (MBIA Insured) (d) | $ 1,185 | $ 1,211 | ||||||
Owensboro Elec. Lt. & Pwr. Rev. Series B, 0% 1/1/09 | ||||||||
(AMBAC Insured) | 2,000 | 1,805 | ||||||
3,016 | ||||||||
Louisiana – 0.2% | ||||||||
East Baton Rouge Parish Pub. Impt. Sales Tax Rev. | ||||||||
Series B, 5% 2/1/12 (AMBAC Insured) | 1,000 | 1,046 | ||||||
Louisiana Offshore Term. Auth. Deepwater Port Rev. | ||||||||
(LOOP LLC Proj.) Series 2003 D, 4%, tender | ||||||||
9/1/08 (c) | 2,700 | 2,695 | ||||||
3,741 | ||||||||
Maryland 0.1% | ||||||||
Prince Georges County Ctfs. of Prtn. (Equip. Acquisition | ||||||||
Prog.) 5.25% 5/15/10 (MBIA Insured) | 1,535 | 1,605 | ||||||
Massachusetts 3.7% | ||||||||
Massachusetts Bay Trans. Auth. Series A, 7% 3/1/09 | 6,880 | 7,403 | ||||||
Massachusetts Dev. Fin. Agcy. Rev. (Massachusetts | ||||||||
Biomedical Research Corp. Proj.) Series C: | ||||||||
5.75% 8/1/06 | 1,200 | 1,201 | ||||||
5.875% 8/1/08 | 1,630 | 1,675 | ||||||
Massachusetts Fed. Hwy.: | ||||||||
Series 2000 A, 5.75% 6/15/13 | 3,000 | 3,193 | ||||||
Series B, 5.125% 12/15/14 (Pre-Refunded to | ||||||||
12/15/08 @ 101) (e) | 2,775 | 2,875 | ||||||
Massachusetts Gen. Oblig.: | ||||||||
Series 1999 C, 5.625% 9/1/12 (Pre-Refunded to | ||||||||
9/1/09 @ 101) (e) | 2,570 | 2,716 | ||||||
Series 2000 A, 6% 2/1/10 | 2,500 | 2,671 | ||||||
Series 2001 A, 5.5% 1/1/11 | 5,000 | 5,307 | ||||||
Series 2003 A, 5.375% 8/1/08 | 5,165 | 5,317 | ||||||
Series 2003 C, 5.5% 10/1/10 (MBIA Insured) | 1,130 | 1,200 | ||||||
Series A, 4.5% 1/1/09 (Pre-Refunded to 1/1/08 @ | ||||||||
101) (e) | 2,055 | 2,094 | ||||||
Series C: | ||||||||
5.25% 11/1/30 (Pre-Refunded to 11/1/12 @ | ||||||||
100) (e) | 2,495 | 2,659 | ||||||
5.5% 11/1/10 (FSA Insured) | 10,000 | 10,626 | ||||||
Massachusetts Health & Edl. Facilities Auth. Rev. | ||||||||
(Berkshire Health Sys., Inc. Proj.) Series F, 5% | ||||||||
10/1/08 | 2,720 | 2,768 |
See accompanying notes which are an integral part of the financial statements.
15 Semiannual Report
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Massachusetts continued | ||||||||||
Massachusetts Port Auth. Spl. Facilities Rev. | ||||||||||
(Delta Air Lines, Inc. Proj.) Series A, 5.5% 1/1/12 | ||||||||||
(AMBAC Insured) (d) | $ 1,000 | $ 1,043 | ||||||||
Massachusetts Wtr. Resources Auth. Series A, 5.75% | ||||||||||
8/1/39 (Pre-Refunded to 8/1/10 @ 101) (e) | 5,000 | 5,376 | ||||||||
58,124 | ||||||||||
Michigan – 3.1% | ||||||||||
Chippewa Valley Schools 5% 5/1/08 | 1,260 | 1,285 | ||||||||
Detroit City School District Series A, 5.5% 5/1/11 | ||||||||||
(FSA Insured) | 1,200 | 1,280 | ||||||||
Detroit Gen. Oblig.: | ||||||||||
Series 2004 A, 5% 4/1/08 (FSA Insured) | 7,275 | 7,414 | ||||||||
5% 4/1/08 (MBIA Insured) | 14,545 | 14,823 | ||||||||
5% 4/1/09 (MBIA Insured) | 10,620 | 10,900 | ||||||||
Detroit Swr. Disp. Rev. Series A, 5.75% 7/1/26 | ||||||||||
(Pre-Refunded to 1/1/10 @ 101) (e) | 2,000 | 2,126 | ||||||||
Greater Detroit Resource Recovery Auth. Rev. Series A, | ||||||||||
6.25% 12/13/07 (AMBAC Insured) | 4,000 | 4,132 | ||||||||
Hazel Park School District 5% 5/1/08 | 1,275 | 1,300 | ||||||||
Livonia Pub. School District Series II, 0% 5/1/21 | ||||||||||
(FGIC Insured) (Pre Refunded to 5/1/07 @ 39.31) (e) | 8,000 | 3,046 | ||||||||
Troy School District 5% 5/1/11 (MBIA Insured) | 1,000 | 1,045 | ||||||||
Wayne-Westland Cmnty. Schools 5% 5/1/10 | ||||||||||
(FSA Insured) | 1,225 | 1,272 | ||||||||
48,623 | ||||||||||
Minnesota 0.2% | ||||||||||
Minneapolis & Saint Paul Hsg. & Redev. Auth. Health | ||||||||||
Care Sys. Rev. (Health Partners Oblig. Group Proj.): | ||||||||||
5.25% 12/1/08 | 1,200 | 1,228 | ||||||||
5.25% 12/1/10 | 500 | 518 | ||||||||
Saint Paul Port Auth. Lease Rev. (HealthEast Midway | ||||||||||
Campus Proj.) Series 2003 A, 5% 5/1/10 | 625 | 622 | ||||||||
Waconia Independent School District #110 Series A, 5% | ||||||||||
2/1/11 (FSA Insured) | 940 | 981 | ||||||||
3,349 | ||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||
Semiannual Report | 16 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Mississippi – 0.2% | ||||||||
Mississippi Bus. Fin. Corp. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.4%, tender 3/1/11 (c)(d) | $ 1,100 | $ 1,087 | ||||||
Mississippi Higher Ed. Student Ln. Series 2000 B3, 5.3% | ||||||||
9/1/08 (d) | 1,190 | 1,215 | ||||||
2,302 | ||||||||
Missouri – 0.4% | ||||||||
Fenton Tax Increment Rev. (Gravois Bluffs Redev. Proj.) | ||||||||
5% 4/1/11 | 1,430 | 1,465 | ||||||
Kansas City School District Bldg. Corp. Rev.: | ||||||||
(School District Elementary School Proj.) Series B, 5% | ||||||||
2/1/11 (FGIC Insured) | 1,850 | 1,930 | ||||||
Series A, 5% 2/1/08 (FGIC Insured) | 2,000 | 2,037 | ||||||
Saint Louis Muni. Fin. Corp. Leasehold Rev. (Callahan | ||||||||
Courthouse Proj.) Series A, 5.75% 2/15/14 | ||||||||
(FGIC Insured) | 1,050 | 1,140 | ||||||
6,572 | ||||||||
Montana 0.3% | ||||||||
Forsyth Poll. Cont. Rev. (Portland Gen. Elec. Co. Proj.) | ||||||||
Series A, 5.2%, tender 5/1/09 (c) | 4,000 | 4,090 | ||||||
Nevada 2.4% | ||||||||
Clark County Arpt. Rev. Series C: | ||||||||
5% 7/1/06 (AMBAC Insured) (d) | 800 | 800 | ||||||
5% 7/1/08 (AMBAC Insured) (d) | 2,215 | 2,253 | ||||||
5% 7/1/09 (AMBAC Insured) (d) | 2,700 | 2,763 | ||||||
5% 7/1/10 (AMBAC Insured) (d) | 1,225 | 1,260 | ||||||
5% 7/1/11 (AMBAC Insured) (d) | 1,790 | 1,849 | ||||||
Clark County Hwy. Impt. Rev. (Motor Vehicle Fuel Tax) | ||||||||
5% 7/1/11 (AMBAC Insured) | 3,230 | 3,373 | ||||||
Clark County School District: | ||||||||
Series 2000 A, 5.75% 6/15/17 (Pre-Refunded to | ||||||||
6/15/10 @ 100) (e) | 1,600 | 1,705 | ||||||
Series C, 5% 6/15/10 (MBIA Insured) | 1,075 | 1,115 | ||||||
Series D, 5% 6/15/09 (MBIA Insured) | 13,890 | 14,303 | ||||||
Series F, 5.375% 6/15/11 (FSA Insured) | 4,090 | 4,338 | ||||||
Henderson Health Care Facility Rev. (Catholic Healthcare | ||||||||
West Proj.) Series 2005 B, 5% 7/1/08 | 1,100 | 1,121 | ||||||
Lyon Co. School District Gen. Oblig. 5% 6/1/09 | 695 | 715 | ||||||
Washoe County School District Gen. Oblig. Series D, 5% | ||||||||
6/1/10 (MBIA Insured) | 2,410 | 2,500 | ||||||
38,095 |
See accompanying notes which are an integral part of the financial statements.
17 Semiannual Report
Investments (Unaudited) continued | ||||||||||||
Municipal Bonds continued | ||||||||||||
Principal | Value (Note 1) | |||||||||||
Amount (000s) | (000s) | |||||||||||
New Hampshire – 0.3% | ||||||||||||
New Hampshire Bus. Fin. Auth. Poll. Cont. Rev. (United | ||||||||||||
Illumination Co.) Series A, 3.65%, tender 2/1/10 | ||||||||||||
(AMBAC Insured) (c)(d) | $ 2,500 | $ 2,435 | ||||||||||
New Hampshire Tpk. Sys. Rev. 5% 5/1/07 | ||||||||||||
(AMBAC Insured) (b) | 1,500 | 1,512 | ||||||||||
3,947 | ||||||||||||
New Jersey – 6.1% | ||||||||||||
Camden County Impt. Auth. Rev. (Cooper Health Sys. | ||||||||||||
Obligated Group Proj.) Series B, 5.25% 2/15/09 | 1,250 | 1,273 | ||||||||||
Casino Reinvestment Dev. Auth. Hotel Room Fee Rev.: | ||||||||||||
5% 1/1/08 (AMBAC Insured) | 920 | 934 | ||||||||||
5% 1/1/09 (AMBAC Insured) | 1,000 | 1,024 | ||||||||||
Elizabeth Gen. Oblig. 5.25% 8/15/09 (MBIA Insured) | 1,225 | 1,275 | ||||||||||
Garden State Preservation Trust Open Space & | ||||||||||||
Farmland Preservation Series B: | ||||||||||||
6.25% 11/1/09 (MBIA Insured) | 4,000 | 4,283 | ||||||||||
6.375% 11/1/11 (MBIA Insured) | 7,470 | 8,308 | ||||||||||
New Jersey Econ. Dev. Auth. Rev. 5% 6/15/07 | 7,500 | 7,570 | ||||||||||
New Jersey Tpk. Auth. Tpk. Rev. Series A: | ||||||||||||
5.75% 1/1/18 (Pre-Refunded to 1/1/10 @ 100) (e) | 3,215 | 3,406 | ||||||||||
6% 1/1/11 (MBIA Insured) | 17,180 | 18,607 | ||||||||||
New Jersey Trans. Trust Fund Auth.: | ||||||||||||
Series B: | ||||||||||||
5.25% 12/15/10 (FGIC Insured) | 4,550 | 4,779 | ||||||||||
6.5% 6/15/11 (MBIA Insured) | 5,000 | 5,548 | ||||||||||
Series C, 5.5% 12/15/10 (FSA Insured) | 25,000 | 26,512 | ||||||||||
New Jersey Transit Corp. Series 2000 B, 5.5% 2/1/08 | ||||||||||||
(AMBAC Insured) | 1,000 | 1,025 | ||||||||||
New Jersey Transit Corp. Ctfs. of Prtn. Series A, 6% | ||||||||||||
9/15/13 (Pre-Refunded to 9/15/09 @ 100) (e) | 7,000 | 7,417 | ||||||||||
Tobacco Settlement Fing. Corp. 4.375% 6/1/19 | 4,065 | 4,058 | ||||||||||
96,019 | ||||||||||||
New Jersey/Pennsylvania – 0.3% | ||||||||||||
Delaware River Joint Toll Bridge Commission Bridge Rev. | ||||||||||||
5% 7/1/09 | 5,170 | 5,313 | ||||||||||
New York – 13.0% | ||||||||||||
Grand Central District Mgmt. Assoc., Inc.: | ||||||||||||
5% 1/1/10 | 1,200 | 1,237 | ||||||||||
5% 1/1/12 | 1,175 | 1,221 | ||||||||||
Metropolitan Trans. Auth. Commuter Facilities Rev. | ||||||||||||
Series A, 5.375% 7/1/09 (Escrowed to Maturity) (e) | 3,635 | 3,788 | ||||||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||||||
Semiannual Report | 18 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Metropolitan Trans. Auth. Rev. Series 2005 C: | ||||||||
5% 11/15/10 | $ 2,000 | $ 2,078 | ||||||
5% 11/15/11 | 2,750 | 2,865 | ||||||
Nassau County Gen. Oblig. Series Z, 5% 9/1/11 (FGIC | ||||||||
Insured) | 800 | 834 | ||||||
New York City Gen. Oblig.: | ||||||||
Series 1996 B, 6.5% 8/15/09 | 3,425 | 3,667 | ||||||
Series 1997 H, 6% 8/1/12 (FGIC Insured) | 1,300 | 1,432 | ||||||
Series 2000 A, 6.5% 5/15/11 | 1,985 | 2,168 | ||||||
Series 2002 G, 5.5% 8/1/10 | 2,720 | 2,865 | ||||||
Series 2003 F, 5.5% 12/15/11 | 4,305 | 4,581 | ||||||
Series 2004 G, 5% 8/1/09 | 8,000 | 8,226 | ||||||
Series 2005 C, 5% 8/1/12 | 19,770 | 20,641 | ||||||
Series 2005 D, 5% 8/1/12 | 4,925 | 5,142 | ||||||
Series 2005 G, 5.625% 8/1/13 (MBIA Insured) | 5,075 | 5,478 | ||||||
Series 2005 K: | ||||||||
5% 8/1/11 | 7,120 | 7,404 | ||||||
5% 8/1/12 | 4,360 | 4,552 | ||||||
Series 2005 O, 5% 6/1/12 | 7,500 | 7,822 | ||||||
Series A, 5.25% 11/1/14 (MBIA Insured) | 600 | 635 | ||||||
Series B, 5.75% 8/1/14 | 1,000 | 1,084 | ||||||
Series G, 5.25% 8/1/14 (AMBAC Insured) | 1,000 | 1,053 | ||||||
Subseries 2005 F1, 5% 9/1/15 | 3,560 | 3,722 | ||||||
New York City Indl. Dev. Agcy. Spl. Facilities Rev. | ||||||||
(Terminal One Group Assoc. Proj.) 5% 1/1/07 (d) | 1,700 | 1,706 | ||||||
New York Counties Tobacco Trust I Series B, 6.5% | ||||||||
6/1/35 (Pre-Refunded to 6/1/10 @ 101) (e) | 5,900 | 6,492 | ||||||
New York State Dorm. Auth. Revs.: | ||||||||
(City Univ. Sys. Consolidation Proj.): | ||||||||
Series 2000 A, 6.125% 7/1/12 (AMBAC Insured) . | 5,540 | 6,043 | ||||||
Series A: | ||||||||
5.75% 7/1/13 | 3,500 | 3,747 | ||||||
5.75% 7/1/13 (AMBAC Insured) | 1,000 | 1,073 | ||||||
Series C, 7.5% 7/1/10 | 3,100 | 3,307 | ||||||
Series B, 5.25%, tender 5/15/12 (c) | 13,000 | 13,688 | ||||||
New York State Urban Dev. Corp. Rev. 5% 1/1/12 | 5,000 | 5,214 | ||||||
New York Transitional Fin. Auth. Rev.: | ||||||||
Series 2003 E: | ||||||||
4.5% 2/1/08 | 1,500 | 1,517 | ||||||
5% 2/1/09 | 2,035 | 2,093 | ||||||
Series B, 5.25% 2/1/29 (a) | 2,700 | 2,829 | ||||||
Series E, 4.5% 2/1/07 | 245 | 246 |
See accompanying notes which are an integral part of the financial statements.
19 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
New York – continued | ||||||||
Tobacco Settlement Fing. Corp.: | ||||||||
Series 2004 B1, 5% 6/1/09 | $ 3,800 | $ 3,896 | ||||||
Series A1: | ||||||||
5% 6/1/10 | 1,875 | 1,934 | ||||||
5.25% 6/1/12 | 5,000 | 5,006 | ||||||
5.25% 6/1/13 | 17,500 | 17,932 | ||||||
5.5% 6/1/14 | 2,700 | 2,805 | ||||||
Series C1: | ||||||||
5.5% 6/1/15 | 700 | 734 | ||||||
5.5% 6/1/17 | 3,400 | 3,589 | ||||||
TSASC, Inc. Rev. Series 1: | ||||||||
5.5% 7/15/24 (Pre-Refunded to 7/15/12 @ 100) (e) | 7,015 | 7,450 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 1,200 | 1,281 | ||||||
6% 7/15/18 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,490 | 2,658 | ||||||
6% 7/15/20 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,280 | 2,434 | ||||||
6% 7/15/21 (Pre-Refunded to 7/15/09 @ 101) (e) | 2,310 | 2,466 | ||||||
6.25% 7/15/34 (Pre-Refunded to 7/15/09 @ | ||||||||
101) (e) | 11,270 | 12,112 | ||||||
204,747 | ||||||||
New York & New Jersey – 0.6% | ||||||||
Port Auth. of New York & New Jersey: | ||||||||
124th Series, 5% 8/1/13 (FGIC Insured) (d) | 1,200 | 1,227 | ||||||
127th Series, 5% 12/15/08 (AMBAC Insured) (d) | 3,510 | 3,587 | ||||||
Port Auth. of New York & New Jersey Spl. Oblig. Rev. | ||||||||
(JFK Int’l. Air Term. Spl. Proj.) Series 6, 6.25% | ||||||||
12/1/13 (MBIA Insured) (d) | 4,100 | 4,564 | ||||||
9,378 | ||||||||
North Carolina – 1.5% | ||||||||
Charlotte Ctfs. of Prtn. (FY 2004 Equip. Acquisition Proj.) | ||||||||
Series 2004 C, 4% 3/1/08 | 4,940 | 4,955 | ||||||
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev.: | ||||||||
Series 1993 B, 7% 1/1/08 (MBIA Insured) | 600 | 628 | ||||||
Series A, 5.5% 1/1/10 | 3,000 | 3,121 | ||||||
Series B, 7.25% 1/1/07 | 9,375 | 9,517 | ||||||
Series C, 5% 1/1/08 | 1,190 | 1,205 | ||||||
Series D, 5.375% 1/1/10 | 3,715 | 3,850 | ||||||
23,276 | ||||||||
Ohio – 1.6% | ||||||||
Akron Ctfs. of Prtn. 5% 12/1/07 | 2,350 | 2,382 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
20 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Ohio – continued | ||||||||
Cleveland Pub. Pwr. Sys. Rev. (First Mtg. Prog.) | ||||||||
Series 1994 A, 0% 11/15/09 (MBIA Insured) | $ 2,250 | $ 1,954 | ||||||
Franklin County Rev. (OCLC Online Computer Library | ||||||||
Ctr., Inc. Proj.) 5% 4/15/07 | 1,960 | 1,971 | ||||||
Lakewood Hosp. Impt. Rev. (Lakewood Hosp. Assoc. | ||||||||
Proj.) 5.5% 2/15/07 | 1,420 | 1,431 | ||||||
Ohio Air Quality Dev. Auth. Rev. Series 2002 A, 4.25%, | ||||||||
tender 7/1/06 (c) | 1,000 | 1,000 | ||||||
Ohio Gen. Oblig.: | ||||||||
Series 2000 E, 5.5% 5/1/09 | 1,905 | 1,987 | ||||||
Series 2003 D, 2.45%, tender 9/14/07 (c) | 12,300 | 12,069 | ||||||
Univ. of Cincinnati Gen. Receipts Series A, 5.5% 6/1/09 | ||||||||
(FGIC Insured) | 2,000 | 2,089 | ||||||
24,883 | ||||||||
Oklahoma – 0.1% | ||||||||
Cherokee County Econ. Dev. Auth. Series A, 0% | ||||||||
11/1/11 (Escrowed to Maturity) (e) | 1,000 | 793 | ||||||
Oregon – 0.3% | ||||||||
Beaverton Wtr. Rev. Series B, 5% 6/1/10 (FSA Insured) . | 1,210 | 1,257 | ||||||
Oregon Dept. Administrative Svcs. Ctfs. of Prtn. Series B: | ||||||||
5% 5/1/09 (FSA Insured) | 1,000 | 1,027 | ||||||
5% 5/1/11 (FSA Insured) | 1,000 | 1,039 | ||||||
Oregon Gen. Oblig. 8.25% 1/1/07 | 1,000 | 1,021 | ||||||
4,344 | ||||||||
Pennsylvania – 3.9% | ||||||||
Allegheny County Arpt. Rev. (Pittsburgh Int’l. Arpt. Proj.) | ||||||||
Series A1, 5.75% 1/1/12 (MBIA Insured) (d) | 1,300 | 1,384 | ||||||
Allegheny County Hosp. Dev. Auth. Rev. (Univ. of | ||||||||
Pittsburgh Med. Ctr. Proj.) Series B, 5.5% 6/15/07 | 2,000 | 2,030 | ||||||
Allegheny County Indl. Dev. Auth. Rev. (Watson Institute | ||||||||
Ed. Ctr. Proj.) 3.375%, tender 5/1/08, LOC PNC | ||||||||
Bank NA, Pittsburgh (c) | 4,500 | 4,438 | ||||||
Allegheny County San. Auth. Swr. Rev. 6% 12/1/11 | ||||||||
(MBIA Insured) | 1,495 | 1,630 | ||||||
Luzerne County Indl. Dev. Auth. Wtr. Facilities Rev. | ||||||||
(Pennsylvania-American Wtr. Co. Proj.) 3.6%, tender | ||||||||
12/1/09 (AMBAC Insured) (c)(d) | 10,000 | 9,672 | ||||||
Pennsylvania Econ. Dev. Fing. Auth. Exempt Facilities | ||||||||
Rev. (Shippingport Proj.) Series A, 4.35%, tender | ||||||||
6/1/10 (c)(d) | 2,100 | 2,082 |
See accompanying notes which are an integral part of the financial statements.
21 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Pennsylvania – continued | ||||||||
Pennsylvania Higher Edl. Facilities Auth. Rev.: | ||||||||
(Univ. of Pennsylvania Health Sys. Proj.) Series A: | ||||||||
4% 8/15/06 | $ 1,405 | $ 1,405 | ||||||
5% 8/15/07 | 1,735 | 1,757 | ||||||
5% 8/15/08 | 2,000 | 2,041 | ||||||
(UPMC Health Sys. Proj.) Series 2001 A, 5.75% | ||||||||
1/15/09 | 1,750 | 1,824 | ||||||
Series B, 5.25% 9/1/08 | 5,860 | 6,025 | ||||||
Pennsylvania Indl. Dev. Auth. Rev. 5.25% 7/1/10 | ||||||||
(AMBAC Insured) | 2,750 | 2,885 | ||||||
Philadelphia Gas Works Rev. (1975 Gen. Ordinance | ||||||||
Proj.) 17th Series, 5% 7/1/08 (FSA Insured) | 7,410 | 7,561 | ||||||
Philadelphia Muni. Auth. Rev.: | ||||||||
Series A, 5% 5/15/08 (FSA Insured) | 5,000 | 5,102 | ||||||
Series B, 5.25% 11/15/11 (FSA Insured) | 3,400 | 3,588 | ||||||
Philadelphia School District: | ||||||||
Series 2005 D, 5.25% 6/1/12 (FSA Insured) | 1,465 | 1,551 | ||||||
Series B, 5% 4/1/11 (AMBAC Insured) | 2,160 | 2,251 | ||||||
Pittsburgh School District Series A, 5% 9/1/09 | ||||||||
(MBIA Insured) | 1,600 | 1,641 | ||||||
Westmoreland County Muni. Auth. Muni. Svc. Rev. | ||||||||
Series K, 0% 7/1/12 (Escrowed to Maturity) (e) | 2,355 | 1,828 | ||||||
60,695 | ||||||||
Puerto Rico 0.7% | ||||||||
Puerto Rico Convention Ctr. District Auth. Hotel | ||||||||
Occupancy Tax Rev. Series 2006 A, 5% 7/1/10 | 2,000 | 2,056 | ||||||
Puerto Rico Govt. Dev. Bank 5% 12/1/10 | 8,000 | 8,216 | ||||||
Puerto Rico Pub. Bldg. Auth. Rev. Series K, 4%, tender | ||||||||
7/1/07 (MBIA Insured) (c) | 1,000 | 1,001 | ||||||
11,273 | ||||||||
Rhode Island – 0.3% | ||||||||
Providence Spl. Oblig. Series 2005 E: | ||||||||
4% 6/1/08 (Radian Asset Assurance Ltd. Insured) | 1,000 | 998 | ||||||
5% 6/1/09 (Radian Asset Assurance Ltd. Insured) | 1,315 | 1,344 | ||||||
5% 6/1/10 (Radian Asset Assurance Ltd. Insured) | 1,180 | 1,211 | ||||||
Rhode Island Health & Edl. Bldg. Corp. Rev. (Johnson & | ||||||||
Wales Univ. Proj.) 5% 4/1/08 (XL Cap. Assurance, | ||||||||
Inc. Insured) | 1,700 | 1,731 | ||||||
5,284 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
22 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
South Carolina – 1.5% | ||||||||
Berkeley County School District 7% 4/1/07 | $ 2,615 | $ 2,676 | ||||||
Charleston County Hosp. Facilities (Care Alliance Health | ||||||||
Services Proj.) Series A: | ||||||||
5% 8/15/06 | 1,000 | 1,001 | ||||||
5% 8/15/07 | 1,700 | 1,717 | ||||||
5% 8/15/08 | 1,690 | 1,711 | ||||||
Greenville County Pub. Facilities Corp. Ctfs. of Prtn. | ||||||||
(Courthouse and Detention Proj.) 5% 4/1/10 | ||||||||
(AMBAC Insured) | 1,450 | 1,504 | ||||||
Greenville County School District Installment Purp. Rev. | ||||||||
5% 12/1/10 | 1,455 | 1,508 | ||||||
Lexington One School Facilities Corp. Rev. (Lexington | ||||||||
County School District No. 1 Proj.) 5% 12/1/09 | 550 | 565 | ||||||
Piedmont Muni. Pwr. Agcy. Elec. Rev. 5.6% 1/1/09 | ||||||||
(MBIA Insured) | 2,345 | 2,441 | ||||||
Rock Hill Util. Sys. Rev. Series 2003 A: | ||||||||
5% 1/1/08 (FSA Insured) | 1,850 | 1,882 | ||||||
5% 1/1/09 (FSA Insured) | 1,945 | 1,997 | ||||||
South Carolina Pub. Svc. Auth. Rev.: | ||||||||
Series 2005 B, 5% 1/1/10 (MBIA Insured) | 3,000 | 3,103 | ||||||
Series A, 5.5% 1/1/11 (MBIA Insured) | 3,000 | 3,175 | ||||||
Spartanburg County School District #5 Pub. Facilities | ||||||||
Corp. Ctfs. of Prtn. 5% 7/1/09 (FSA Insured) | 1,000 | 1,029 | ||||||
24,309 | ||||||||
Tennessee – 1.4% | ||||||||
Clarksville Natural Gas Acquisition Corp. Gas Rev. 5% | ||||||||
12/15/09 | 7,500 | 7,712 | ||||||
Elizabethton Health & Edl. Facilities Board Rev. (First | ||||||||
Mtg. Prog.) 6% 7/1/11 (MBIA Insured) | 2,005 | 2,174 | ||||||
Maury County Gen. Oblig. Series 2004 B, 5% 4/1/10 | ||||||||
(MBIA Insured) | 2,000 | 2,075 | ||||||
Memphis-Shelby County Arpt. Auth. Arpt. Rev. Series A: | ||||||||
4.5% 9/1/08 (MBIA Insured) | 1,620 | 1,642 | ||||||
4.5% 9/1/09 (MBIA Insured) | 1,685 | 1,714 | ||||||
Metropolitan Govt. Nashville & Series A, 5.25% | ||||||||
10/15/09 | 3,795 | 3,950 | ||||||
Metropolitan Nashville Arpt. Auth. Rev. Series C, 5% | ||||||||
7/1/06 (FGIC Insured) (d) | 1,675 | 1,675 | ||||||
Shelby County Health Edl. & Hsg. Facility Board Hosp. | ||||||||
Rev. (Methodist Health Care Proj.) 5.5% 4/1/09 | ||||||||
(MBIA Insured) | 1,200 | 1,244 | ||||||
22,186 |
See accompanying notes which are an integral part of the financial statements.
23 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas 14.0% | ||||||||
Alief Independent School District Series 2004 B, 5% | ||||||||
2/15/10 | $ 1,500 | $ 1,554 | ||||||
Austin Util. Sys. Rev.: | ||||||||
Series 1992 A, 0% 11/15/09 (MBIA Insured) | 5,130 | 4,468 | ||||||
Series A, 0% 11/15/10 (MBIA Insured) | 5,300 | 4,420 | ||||||
Austin Wtr. & Wastewtr. Sys. Rev. 5% 11/15/07 | ||||||||
(MBIA Insured) (b) | 3,295 | 3,339 | ||||||
Bexar County Series A: | ||||||||
5% 6/15/09 (FSA Insured) | 2,615 | 2,696 | ||||||
5% 6/15/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Birdville Independent School District 5% 2/15/10 | 1,300 | 1,347 | ||||||
Brownsville Independent School District 5% 8/15/11 | 1,430 | 1,494 | ||||||
Bryan Wtrwks. & Swr. Sys. Rev. 5.5% 7/1/11 (FSA | ||||||||
Insured) | 1,500 | 1,600 | ||||||
College Station Independent School District 5% 2/15/10 | 1,000 | 1,036 | ||||||
Conroe Independent School District Lot B, 0% 2/15/08 . | 3,000 | 2,817 | ||||||
Corpus Christi Util. Sys. Rev. 5% 7/15/12 (FSA Insured) | 1,000 | 1,049 | ||||||
Cypress-Fairbanks Independent School District: | ||||||||
Series B, 0% 8/1/07 (AMBAC Insured) | 10,000 | 9,595 | ||||||
5% 2/15/08 | 2,000 | 2,035 | ||||||
Dallas Independent School District Series 2005, 5.25% | ||||||||
8/15/08 | 2,000 | 2,057 | ||||||
Del Valle Independent School District 5.5% 2/1/09 | 1,205 | 1,252 | ||||||
Denton County Gen. Oblig. 5% 7/15/11 (FSA Insured) . | 3,065 | 3,207 | ||||||
El Paso Wtr. & Swr. Rev. 5% 3/1/08 (AMBAC Insured) . | 2,770 | 2,820 | ||||||
Fort Bend Independent School District 5%, tender | ||||||||
8/15/09 (c) | 5,000 | 5,139 | ||||||
Fort Worth Independent School District 5% 2/15/12 | 1,500 | 1,572 | ||||||
Frisco Gen. Oblig. Series 2003 A, 5% 2/15/10 | ||||||||
(FSA Insured) | 1,710 | 1,772 | ||||||
Garland Independent School District 0% 2/15/07 | 1,610 | 1,573 | ||||||
Harris County Gen. Oblig. Series A, 0% 8/15/07 | ||||||||
(FGIC Insured) | 4,400 | 4,216 | ||||||
Harris County Health Facilities Dev. Corp. Rev. (Saint | ||||||||
Luke’s Episcopal Hosp. Proj.) Series 2001 A, 5.5% | ||||||||
2/15/09 | 3,710 | 3,836 | ||||||
Houston Cmnty. College Sys. Rev.: | ||||||||
5.25% 4/15/11 (FSA Insured) | 3,030 | 3,192 | ||||||
5.25% 4/15/12 (FSA Insured) | 2,000 | 2,120 | ||||||
Houston Util. Sys. Rev. Series A: | ||||||||
5.25% 5/15/10 (MBIA Insured) | 2,835 | 2,965 | ||||||
5.25% 11/15/11 (FSA Insured) | 4,430 | 4,686 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
24 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
Katy Independent School District Series A, 5.25% | ||||||||
2/15/12 | $ 2,000 | $ 2,121 | ||||||
Lower Colorado River Auth. Rev.: | ||||||||
0% 1/1/09 (Escrowed to Maturity) (e) | 3,000 | 2,713 | ||||||
5.25% 1/1/15 (Pre-Refunded to 1/1/11 @ 100) (e) . | 5,000 | 5,254 | ||||||
Lubbock Gen. Oblig.: | ||||||||
(Wtrwks. Sys. Surplus Proj.) 5% 2/15/11 (FSA | ||||||||
Insured) | 2,465 | 2,571 | ||||||
5% 2/15/09 (MBIA Insured) | 1,615 | 1,659 | ||||||
5% 2/15/10 (MBIA Insured) | 1,845 | 1,911 | ||||||
Lubbock Health Facilities Dev. Corp. Rev. (Carillon, Inc. | ||||||||
Proj.) Series A, 6.5% 7/1/29 (Pre-Refunded to | ||||||||
7/1/09 @ 102) (e) | 4,800 | 5,236 | ||||||
Magnolia Independent School District 8% 8/15/11 | ||||||||
(FGIC Insured) | 1,210 | 1,427 | ||||||
Mesquite Independent School District 3.65%, tender | ||||||||
12/1/08 (Liquidity Facility JPMorgan Chase Bank) (c) | 2,500 | 2,500 | ||||||
New Braunfels Independent School District 0% 2/1/07 . | 2,000 | 1,956 | ||||||
North East Texas Independent School District 7% 2/1/11 | ||||||||
(Pre-Refunded to 2/1/10 @ 100) (e) | 3,600 | 3,961 | ||||||
North Texas Tollway Auth. Dallas North Tollway Sys. Rev. | ||||||||
Series C: | ||||||||
5% 1/1/09 (FSA Insured) | 2,000 | 2,051 | ||||||
5%, tender 7/1/08 (c)(e) | 45 | 46 | ||||||
5%, tender 7/1/08 (FSA Insured) (c) | 2,605 | 2,657 | ||||||
Red River Ed. Fin. Corp. Ed. Rev. (Texas Christian Univ. | ||||||||
Proj.) 5% 3/15/12 (MBIA Insured) | 2,625 | 2,744 | ||||||
Rockwall Independent School District: | ||||||||
5% 2/15/08 | 3,825 | 3,892 | ||||||
5% 2/15/09 | 4,690 | 4,819 | ||||||
Sabine River Auth. Poll. Cont. Rev. (Texas Utils. Elec. Co. | ||||||||
Proj.) Series A, 5.5%, tender 11/1/11 (c) | 1,000 | 1,046 | ||||||
San Angelo Wtrwks. & Swr. Sys. Impt. and Rfdg. Rev. | ||||||||
5% 4/1/10 (FSA Insured) | 1,630 | 1,688 | ||||||
San Antonio Elec. & Gas Sys. Rev.: | ||||||||
Series 2000 A, 5.75% 2/1/15 (Pre-Refunded to | ||||||||
2/1/10 @ 100) (e) | 5,000 | 5,295 | ||||||
Series B, 0% 2/1/09 (Escrowed to Maturity) (e) | 2,500 | 2,253 | ||||||
3.55%, tender 12/1/07 (c) | 6,700 | 6,666 | ||||||
5.25% 2/1/08 | 1,000 | 1,021 | ||||||
San Antonio Independent School District 7% 8/15/08 | 5,000 | 5,312 | ||||||
San Antonio Muni. Drainage Util. Sys. Rev. 5.25% | ||||||||
2/1/12 (MBIA Insured) | 1,545 | 1,637 |
See accompanying notes which are an integral part of the financial statements.
25 Semiannual Report
Investments (Unaudited) continued | ||||||||
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Texas continued | ||||||||
San Antonio Wtr. Sys. Rev. 5% 5/15/10 (FGIC Insured) | $ 1,020 | $ 1,058 | ||||||
Socorro Independent School District 5% 8/15/09 | 2,070 | 2,137 | ||||||
Spring Branch Independent School District Series 2001, | ||||||||
5.375% 2/1/14 | 2,790 | 2,949 | ||||||
Spring Independent School District 5% 2/15/08 | 1,875 | 1,908 | ||||||
Texas Gen. Oblig.: | ||||||||
(College Student Ln. Prog.) 5% 8/1/11 (d) | 3,000 | 3,048 | ||||||
Series 1992 A, 8% 10/1/07 | 10,000 | 10,502 | ||||||
Series A, 6% 10/1/08 (MBIA Insured) | 10,750 | 11,242 | ||||||
Series C: | ||||||||
0% 4/1/08 (Escrowed to Maturity) (e) | 3,100 | 2,897 | ||||||
0% 4/1/09 (Escrowed to Maturity) (e) | 2,320 | 2,077 | ||||||
Texas Pub. Fin. Auth. Rev. (Bldg. and Procurement | ||||||||
Commission Proj.) Series A, 5% 2/1/10 | ||||||||
(AMBAC Insured) | 1,055 | 1,092 | ||||||
Texas Tech Univ. Revs. Ninth Series, 5% 2/15/11 | ||||||||
(AMBAC Insured) | 1,250 | 1,302 | ||||||
Travis County Gen. Oblig. 5.25% 3/1/12 | 4,125 | 4,379 | ||||||
Tyler Health Facilities Dev. Corp. Hosp. Rev. (Mother | ||||||||
Frances Hosp. Reg’l. Health Care Ctr. Proj.): | ||||||||
4.5% 7/1/06 | 1,220 | 1,220 | ||||||
5% 7/1/07 | 1,000 | 1,006 | ||||||
Univ. of Texas Univ. Revs.: | ||||||||
(Fing. Sys. Proj.) Series A, 5.5% 8/15/09 | 1,115 | 1,166 | ||||||
Series B: | ||||||||
5% 8/15/09 | 11,255 | 11,610 | ||||||
5.25% 8/15/11 | 5,025 | 5,312 | ||||||
Webb County Gen. Oblig. 5% 2/15/08 (FGIC Insured) . | 1,170 | 1,191 | ||||||
Wichita Falls Independent School District 0% 2/1/10 | 2,325 | 2,003 | ||||||
219,429 | ||||||||
Utah 0.7% | ||||||||
Salt Lake County Wtr. Conservancy District Rev. Series A: | ||||||||
0% 10/1/11 (AMBAC Insured) | 3,800 | 3,024 | ||||||
0% 10/1/12 (AMBAC Insured) | 3,800 | 2,886 | ||||||
0% 10/1/13 (AMBAC Insured) | 3,760 | 2,719 | ||||||
Utah Bldg. Ownership Auth. Lease Rev. (State Facilities | ||||||||
Master Lease Prog.) Series A, 5% 5/15/11 | 1,700 | 1,777 | ||||||
10,406 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
26 |
Municipal Bonds continued | ||||||||
Principal | Value (Note 1) | |||||||
Amount (000s) | (000s) | |||||||
Virginia – 0.1% | ||||||||
Amelia County Indl. Dev. Auth. Solid Waste Disp. Rev. | ||||||||
(Waste Mgmt., Inc. Proj.) 4.05%, tender 4/1/08 (c)(d) | $ 1,600 | $ 1,588 | ||||||
Washington 1.6% | ||||||||
Chelan County Pub. Util. District #1 Rev. Series B, 5% | ||||||||
7/1/11 (FGIC Insured) | 1,190 | 1,243 | ||||||
Clark County Pub. Util. District #1 Elec. Rev.: | ||||||||
Series B, 5.25% 1/1/09 (FSA Insured) | 1,595 | 1,645 | ||||||
5% 1/1/11 (MBIA Insured) | 1,680 | 1,748 | ||||||
5.25% 1/1/11 (FSA Insured) | 1,935 | 2,033 | ||||||
King County School District #409, Tahoma 5% 6/1/11 | ||||||||
(FSA Insured) | 1,740 | 1,816 | ||||||
Pierce County Gen. Oblig. 5.75% 8/1/13 | ||||||||
(Pre-Refunded to 8/1/10 @ 100) (e) | 1,155 | 1,232 | ||||||
Port of Seattle Rev. Series D, 5.75% 11/1/15 | ||||||||
(FGIC Insured) (d) | 3,640 | 3,915 | ||||||
Snohomish County Pub. Hosp. District #2 | ||||||||
(Stevens Health Care Proj.) 4.5% 12/1/09 | ||||||||
(FGIC Insured) | 1,000 | 1,015 | ||||||
Snohomish County School District #2, Everett: | ||||||||
5% 6/1/09 (FSA Insured) | 1,045 | 1,076 | ||||||
5% 6/1/10 (FSA Insured) | 1,000 | 1,037 | ||||||
Vancouver Wtr. & Swr. Rev. 5.25% 6/1/11 | ||||||||
(FSA Insured) | 1,000 | 1,055 | ||||||
Washington Gen. Oblig. Series A: | ||||||||
5% 7/1/11 (FGIC Insured) | 1,000 | 1,047 | ||||||
5.5% 7/1/11 | 3,500 | 3,682 | ||||||
Washington Pub. Pwr. Supply Sys. Nuclear Proj. #2 Rev. | ||||||||
Series A, 5.75% 7/1/08 | 3,000 | 3,104 | ||||||
25,648 | ||||||||
Wisconsin – 1.6% | ||||||||
Milwaukee County Gen. Oblig. Series A, 0% 12/1/10 | ||||||||
(FGIC Insured) | 3,370 | 2,788 | ||||||
Wisconsin Gen. Oblig. Series 1, 5% 5/1/10 | ||||||||
(MBIA Insured) | 2,500 | 2,596 | ||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: | ||||||||
(Hosp. Sisters Svcs., Inc. Proj.) Series 2003 B, 4%, | ||||||||
tender 12/1/06 (FSA Insured) (c) | 15,000 | 15,010 | ||||||
(Marshfield Clinic Proj.): | ||||||||
Series 2006 A, 5% 2/15/13 | 875 | 888 | ||||||
Series B, 6.25% 2/15/10 | 1,015 | 1,076 | ||||||
See accompanying notes which are an integral part of the financial statements. | ||||||||
27 | Semiannual Report |
Investments (Unaudited) continued | ||||||||||
Municipal Bonds continued | ||||||||||
Principal | Value (Note 1) | |||||||||
Amount (000s) | (000s) | |||||||||
Wisconsin – continued | ||||||||||
Wisconsin Health & Edl. Facilities Auth. Rev.: continued | ||||||||||
(Wheaton Franciscan Svcs., Inc. Proj.) Series A: | ||||||||||
5% 8/15/09 | $ 1,000 | $ 1,020 | ||||||||
5% 8/15/10 | 1,870 | 1,907 | ||||||||
25,285 | ||||||||||
TOTAL MUNICIPAL BONDS | ||||||||||
(Cost $1,531,204) | 1,506,399 | |||||||||
Municipal Notes 0.7% | ||||||||||
Illinois – 0.7% | ||||||||||
Chicago O’Hare Int’l. Arpt. Rev. Participating VRDN Series DB | ||||||||||
189, 4% (Liquidity Facility Deutsche Bank AG) (c)(f) | ||||||||||
(Cost $9,998) | 10,000 | 10,000 | ||||||||
TOTAL INVESTMENT PORTFOLIO – 96.5% | ||||||||||
(Cost $1,541,202) | 1,516,399 | |||||||||
NET OTHER ASSETS – 3.5% | 55,766 | |||||||||
NET ASSETS 100% | $ 1,572,165 |
Security Type Abbreviation |
VRDN — VARIABLE RATE DEMAND NOTE |
Legend (a) Security initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. (b) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(c) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. (d) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals. (e) Security collateralized by an amount sufficient to pay interest and principal. (f) Provides evidence of ownership in one or more underlying municipal bonds. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report 28
(g) Restricted securities – Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $9,019,000 or 0.6% of net assets. |
Additional information on each holding is as follows:
Acquisition | Acquisition | |||||
Security | Date | Cost (000s) | ||||
Univ. of California | ||||||
Revs. (UCLA Med. | ||||||
Ctr. Proj.) 4.55% | ||||||
12/1/09 | 3/6/02 | $ 8,955 |
Other Information
The distribution of municipal securities by revenue source, as a percentage of total net assets, is as follows:
General Obligations | 43.8% | |
Escrowed/Pre Refunded | 12.2% | |
Electric Utilities | 9.4% | |
Transportation | 6.9% | |
Health Care | 6.6% | |
Special Tax | 5.1% | |
Education | 5.1% | |
Others* (individually less than 5%) | 10.9% | |
100.0% |
* Includes net other assets
Income Tax Information
At December 31, 2005, the fund had a capital loss carryforward of approximately $699,000 all of which will expire on December 31, 2013.
See accompanying notes which are an integral part of the financial statements.
29 Semiannual Report
Financial Statements | ||||||
Statement of Assets and Liabilities | ||||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||||
Assets | ||||||
Investment in securities, at value | ||||||
See accompanying schedule: | ||||||
Unaffiliated issuers (cost $1,541,202) | $ 1,516,399 | |||||
Cash | 2,390 | |||||
Receivable for investments sold | 39,832 | |||||
Receivable for fund shares sold | 1,213 | |||||
Interest receivable | 21,765 | |||||
Prepaid expenses | 4 | |||||
Other receivables | 287 | |||||
Total assets | 1,581,890 | |||||
Liabilities | ||||||
Payable for investments purchased on a delayed delivery | ||||||
basis | $ 6,468 | |||||
Payable for fund shares redeemed | 1,410 | |||||
Distributions payable | 1,008 | |||||
Accrued management fee | 487 | |||||
Distribution fees payable | 13 | |||||
Other affiliated payables | 290 | |||||
Other payables and accrued expenses | 49 | |||||
Total liabilities | 9,725 | |||||
Net Assets | $ | $ 1,572,165 | ||||
Net Assets consist of: | ||||||
Paid in capital | $ 1,601,433 | |||||
Distributions in excess of net investment income | (4) | |||||
Accumulated undistributed net realized gain (loss) on | ||||||
investments | (4,461) | |||||
Net unrealized appreciation (depreciation) on | ||||||
investments | (24,803) | |||||
Net Assets | $ 1,572,165 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
30 |
Statement of Assets and Liabilities continued | ||||
Amounts in thousands (except per share amounts) | June 30, 2006 (Unaudited) | |||
Calculation of Maximum Offering Price | ||||
Class A: | ||||
Net Asset Value and redemption price per share | ||||
($11,433 ÷ 1,131.7 shares) | $ 10.10 | |||
Maximum offering price per share (100/96.25 of $10.10) | $ 10.49 | |||
Class T: | ||||
Net Asset Value and redemption price per share | ||||
($14,609 ÷ 1,448.4 shares) | $ 10.09 | |||
Maximum offering price per share (100/97.25 of $10.09) | $ 10.38 | |||
Class B: | ||||
Net Asset Value and offering price per share | ||||
($2,938 ÷ 291.0 shares)A | $ 10.10 | |||
Class C: | ||||
Net Asset Value and offering price per share | ||||
($7,181 ÷ 711.9 shares)A | $ 10.09 | |||
Short Intermediate Municipal Income: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($1,532,599 ÷ 151,921.4 shares) | $ 10.09 | |||
Institutional Class: | ||||
Net Asset Value, offering price and redemption price per | ||||
share ($3,405 ÷ 337.4 shares) | $ 10.09 | |||
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
See accompanying notes which are an integral part of the financial statements.
31 Semiannual Report
Financial Statements continued | ||||||
Statement of Operations | ||||||
Amounts in thousands | Six months ended June 30, 2006 (Unaudited) | |||||
Investment Income | ||||||
Interest | $ 28,079 | |||||
Expenses | ||||||
Management fee | $ 3,091 | |||||
Transfer agent fees | 713 | |||||
Distribution fees | 86 | |||||
Accounting fees and expenses | 165 | |||||
Independent trustees’ compensation | 3 | |||||
Custodian fees and expenses | 13 | |||||
Registration fees | 62 | |||||
Audit | 28 | |||||
Legal | 1 | |||||
Miscellaneous | 8 | |||||
Total expenses before reductions | 4,170 | |||||
Expense reductions | (810) | 3,360 | ||||
Net investment income | 24,719 | |||||
Realized and Unrealized Gain (Loss) | ||||||
Net realized gain (loss) on: | ||||||
Investment securities: | ||||||
Unaffiliated issuers | (2,621) | |||||
Change in net unrealized appreciation (depreciation) on | ||||||
investment securities | (15,823) | |||||
Net gain (loss) | (18,444) | |||||
Net increase (decrease) in net assets resulting from | ||||||
operations | $ 6,275 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
32 |
Statement of Changes in Net Assets | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, | |||||||
Amounts in thousands | (Unaudited) | 2005 | ||||||
Increase (Decrease) in Net Assets | ||||||||
Operations | ||||||||
Net investment income | $ 24,719 | $ 51,345 | ||||||
Net realized gain (loss) | (2,621) | (1,840) | ||||||
Change in net unrealized appreciation (depreciation) . | (15,823) | (29,976) | ||||||
Net increase (decrease) in net assets resulting | ||||||||
from operations | 6,275 | 19,529 | ||||||
Distributions to shareholders from net investment income . | (24,720) | (51,341) | ||||||
Distributions to shareholders from net realized gain | — | (549) | ||||||
Total distributions | (24,720) | (51,890) | ||||||
Share transactions - net increase (decrease) | (119,666) | (147,427) | ||||||
Redemption fees | 6 | 25 | ||||||
Total increase (decrease) in net assets | (138,105) | (179,763) | ||||||
Net Assets | ||||||||
Beginning of period | 1,710,270 | 1,890,033 | ||||||
End of period (including distributions in excess of net | ||||||||
investment income of $4 and distributions in excess | ||||||||
of net investment income of $3, respectively) | $ 1,572,165 | $ 1,710,270 |
See accompanying notes which are an integral part of the financial statements.
33 Semiannual Report
Financial Highlights Class A | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.50 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .144 | .268 | .250 | .115 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.090) | .071 | ||||||||||||
Total from investment operations | 033 | .091 | .160 | .186 | ||||||||||||
Distributions from net investment income . | (.143) | (.268) | (.251) | (.111) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.143) | (.271) | (.270) | (.176) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.50 | ||||||||||||
Total ReturnB,C,D | .32% | .89% | 1.55% | 1.78% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of fee waivers, if any | .65%A | .65% | .65% | .65%A | ||||||||||||
Expenses net of all reductions | .55%A | .58% | .64% | .64%A | ||||||||||||
Net investment income | 2.84%A | 2.61% | 2.41% | 2.52%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 11 | $ 14 | $ 12 | $ 9 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
34 |
Financial Highlights Class T | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.37 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .138 | .257 | .238 | .110 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.167) | (.089) | .050 | ||||||||||||
Total from investment operations | 028 | .090 | .149 | .160 | ||||||||||||
Distributions from net investment income . | (.138) | (.257) | (.240) | (.105) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.138) | (.260) | (.259) | (.170) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.37 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | .27% | .88% | 1.44% | 1.54% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of fee waivers, if any | .75%A | .76% | .76% | .77%A | ||||||||||||
Expenses net of all reductions | .66%A | .69% | .75% | .76%A | ||||||||||||
Net investment income | 2.73%A | 2.50% | 2.30% | 2.41%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 15 | $ 15 | $ 20 | $ 12 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
35 Semiannual Report
Financial Highlights Class B | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003F | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.21 | $ 10.39 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .105 | .190 | .172 | .081 | ||||||||||||
Net realized and unrealized gain (loss) | (.111) | (.177) | (.080) | .059 | ||||||||||||
Total from investment operations | (.006) | .013 | .092 | .140 | ||||||||||||
Distributions from net investment income . | (.104) | (.190) | (.173) | (.075) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.104) | (.193) | (.192) | (.140) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.10 | $ 10.21 | $ 10.39 | $ 10.49 | ||||||||||||
Total ReturnB,C,D | (.06)% | .13% | .89% | 1.34% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of fee waivers, if any | 1.42%A | 1.41% | 1.40% | 1.40%A | ||||||||||||
Expenses net of all reductions | 1.32%A | 1.34% | 1.39% | 1.39%A | ||||||||||||
Net investment income | 2.07%A | 1.85% | 1.65% | 1.78%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) . | $ 3 | $ 3 | $ 4 | $ 2 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
36 |
Financial Highlights Class C | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | �� | 2003F | ||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeE | .099 | .178 | .159 | .077 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.080) | .048 | ||||||||||||
Total from investment operations | (.011) | .002 | .079 | .125 | ||||||||||||
Distributions from net investment income | (.099) | (.179) | (.160) | (.070) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.099) | (.182) | (.179) | (.135) | ||||||||||||
Redemption fees added to paid in | ||||||||||||||||
capitalE,H | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | ||||||||||||
Total ReturnB,C,D | (.11)% | .02% | .77% | 1.20% | ||||||||||||
Ratios to Average Net AssetsG | ||||||||||||||||
Expenses before reductions | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of fee waivers, if any | 1.53%A | 1.52% | 1.52% | 1.50%A | ||||||||||||
Expenses net of all reductions | 1.43%A | 1.45% | 1.51% | 1.49%A | ||||||||||||
Net investment income | 1.96%A | 1.74% | 1.53% | 1.67%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (in millions) | $ 7 | $ 10 | $ 11 | $ 8 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. H Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
37 Semiannual Report
Financial Highlights Short Intermediate Municipal Income | ||||||||||||||
Six months ended | ||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||
(Unaudited) | 2005 | 2004 | 2003 | 2002 | 2001 | |||||||||
Selected Per Share Data | ||||||||||||||
Net asset value, | ||||||||||||||
beginning of period | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | $ 10.12 | ||||||||
Income from Investment | ||||||||||||||
Operations | ||||||||||||||
Net investment | ||||||||||||||
incomeD | .151 | .284 | .268 | .283 | .336 | .396 | ||||||||
Net realized and unre | ||||||||||||||
alized gain (loss) | (.110) | (.177) | (.080) | .030 | .317 | .173 | ||||||||
Total from investment | ||||||||||||||
operations | .041 | .107 | .188 | .313 | .653 | .569 | ||||||||
Distributions from net | ||||||||||||||
investment income | (.151) | (.284) | (.269) | (.283) | (.339) | (.396) | ||||||||
Distributions from net | ||||||||||||||
realized gain | — | (.003) | (.019) | (.070) | (.064) | (.023) | ||||||||
Total distributions | (.151) | (.287) | (.288) | (.353) | (.403) | (.419) | ||||||||
Redemption fees added | ||||||||||||||
to paid in capitalD,F | — | — | — | — | — | — | ||||||||
Net asset value, | ||||||||||||||
end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.48 | $ 10.52 | $ 10.27 | ||||||||
Total ReturnB,C | .40% | 1.06% | 1.82% | 3.01% | 6.47% | 5.70% | ||||||||
Ratios to Average Net AssetsE | ||||||||||||||
Expenses before | ||||||||||||||
reductions | .49%A | .49% | .49% | .49% | .49% | .49% | ||||||||
Expenses net of fee | ||||||||||||||
waivers, if any | .49%A | .49% | .48% | .49% | .49% | .49% | ||||||||
Expenses net of all | ||||||||||||||
reductions | .40%A | .42% | .47% | .47% | .45% | .41% | ||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69% | 3.23% | 3.85% | ||||||||
Supplemental Data | ||||||||||||||
Net assets, end of | ||||||||||||||
period (in millions) . | $ 1,533 | $ 1,665 | $ 1,841 | $ 1,843 | $ 1,683 | $ 1,183 | ||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% | 38% | 43% |
A Annualized 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 Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. F Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report |
38 |
Financial Highlights Institutional Class | ||||||||||||||||
Six months ended | ||||||||||||||||
June 30, 2006 | Years ended December 31, | |||||||||||||||
(Unaudited) | 2005 | 2004 | 2003E | |||||||||||||
Selected Per Share Data | ||||||||||||||||
Net asset value, beginning of period | $ 10.20 | $ 10.38 | $ 10.49 | $ 10.49 | ||||||||||||
Income from Investment Operations | ||||||||||||||||
Net investment incomeD | .151 | .283 | .265 | .125 | ||||||||||||
Net realized and unrealized gain (loss) | (.110) | (.176) | (.088) | .059 | ||||||||||||
Total from investment operations | .041 | .107 | .177 | .184 | ||||||||||||
Distributions from net investment income . | (.151) | (.284) | (.268) | (.119) | ||||||||||||
Distributions from net realized gain | (.003) | (.019) | (.065) | |||||||||||||
Total distributions | (.151) | (.287) | (.287) | (.184) | ||||||||||||
Redemption fees added to paid | ||||||||||||||||
in capitalD,G | — | — | — | — | ||||||||||||
Net asset value, end of period | $ 10.09 | $ 10.20 | $ 10.38 | $ 10.49 | ||||||||||||
Total ReturnB,C | .40% | 1.05% | 1.71% | 1.77% | ||||||||||||
Ratios to Average Net AssetsF | ||||||||||||||||
Expenses before reductions | .49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of fee waivers, if any | .49%A | .49% | .49% | .48%A | ||||||||||||
Expenses net of all reductions | .39%A | .42% | .48% | .47%A | ||||||||||||
Net investment income | 3.00%A | 2.77% | 2.57% | 2.69%A | ||||||||||||
Supplemental Data | ||||||||||||||||
Net assets, end of period (000 omitted) | $ 3,405 | $ 2,625 | $ 1,253 | $ 414 | ||||||||||||
Portfolio turnover rate | 29%A | 27% | 45% | 34% |
A Annualized 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 For the period July 23, 2003 (commencement of sale of shares) to December 31, 2003. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the class 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 fee waivers reflect expenses after reimburse ment by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Amount represents less than $.001 per share. |
See accompanying notes which are an integral part of the financial statements.
39 Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2006 (Unaudited)
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Short Intermediate Municipal Income Fund (the Fund) is a fund of Fidelity Municipal Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open end management investment company organized as a Massachusetts business trust.
The Fund offers Class A, Class T, Class B, Class C, Short Intermediate Municipal Income, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
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. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotes are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open end mutual funds are valued at their closing net asset value each business day. Short term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.
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. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities.
Semiannual Report |
40 |
1. Significant Accounting Policies continued
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements.
Dividends are declared daily and paid monthly from net investment income. Distribu tions from realized gains, if any, are recorded on the ex dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book tax differences will reverse in a subsequent period.
Book tax differences are primarily due to market discount, deferred trustees compensa tion, capital loss carryforwards and losses deferred due to excise tax regulations.
The Fund purchases municipal securities whose interest, in the opinion of the issuer, is free from federal income tax. There is no assurance that the Internal Revenue Service (IRS) will agree with this opinion. In the event the IRS determines that the issuer does not comply with relevant tax requirements, interest payments from a security could become federally taxable, possibly retroactively to the date the security was issued.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,390 | |||
Unrealized depreciation | (27,193) | |||
Net unrealized appreciation (depreciation) | $ (24,803) | |||
Cost for federal income tax purposes | $ 1,541,202 |
New Accounting Pronouncement. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an interpretation of FASB Statement 109 (FIN 48) was issued and is effective for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management is currently evaluating the impact, if any, the adoption of FIN 48 will have on the Fund’s net assets and results of operations.
41 Semiannual Report
Notes to Financial Statements (Unaudited) continued |
(Amounts in thousands except ratios) |
1. Significant Accounting Policies continued |
Short-Term Trading (Redemption) Fees. Shares held in the Fund less than 30 days are subject to a redemption fee equal to .50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the Fund and accounted for as an addition to paid in capital.
2. Operating Policies. |
Delayed Delivery Transactions and When Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when issued basis are identified as such in the Fund’s Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underly ing securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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 transac tions 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 at the end of the Fund’s Schedule of Investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short term securities, aggregated $234,664 and $417,369, respectively.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment manage ment related services for which the Fund pays a monthly management fee. The manage ment fee is the sum of an individual fund fee rate that is based on an annual rate of .25% of the Fund’s average net assets and a group fee rate that averaged .12% 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 annualized management fee rate was .37% of the Fund’s average net assets.
Semiannual Report |
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4. Fees and Other Transactions with Affiliates continued
Distribution and Service Plan. In accordance with Rule 12b 1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class’ average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |||||||||||
Fee | Fee | FDC | by FDC | |||||||||||
Class A | 0% | .15% | $ 9 | $ — | ||||||||||
Class T | 0% | .25% | 18 | — | ||||||||||
Class B | .65% | .25% | 15 | 11 | ||||||||||
Class C | .75% | .25% | 44 | 11 | ||||||||||
$ 86 | $ 22 |
Sales Load. FDC receives a front end sales charge of up to 3.75% for selling Class A shares, and 2.75% for selling Class T shares, some of which is paid to financial interme diaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 3% to 1% for Class B, 1% for Class C, .75% to .50% for certain purchases of Class A shares (.25% prior to February 24, 2006) and .25% for certain purchases of Class T shares.
For the period, sales charge amounts retained by FDC were as follows: | ||||
Retained | ||||
by FDC | ||||
Class A | $ 1 | |||
Class T | 1 | |||
Class B* | 2 | |||
Class C* | 3 | |||
$ 7 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent and Accounting Fees. Citibank, N.A. (Citibank) is the custodian, transfer agent, and shareholder servicing agent for the Fund’s Class A, Class T, Class B, Class C, Short Intermediate Municipal Income and Institutional Class shares. Citibank has entered into a sub arrangement with Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, with respect to all classes of the Fund, except for Short Intermediate Municipal Income, to perform the transfer, dividend
43 Semiannual Report
Notes to Financial Statements (Unaudited) continued | ||
(Amounts in thousands except ratios) | ||
4. Fees and Other Transactions with Affiliates continued | ||
Transfer Agent and Accounting Fees continued |
disbursing, and shareholder servicing agent functions. Citibank has also entered into a sub arrangement with Fidelity Service Company, Inc. (FSC), an affiliate of FMR, with respect to Short Intermediate Municipal Income, to perform the transfer, dividend disbursing, and shareholder servicing agent functions. FIIOC and FSC receive account fees and asset based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. All fees are paid to FIIOC by Citibank, which is reimbursed by each class for such payments. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, each class paid the following transfer agent fees:
% of | ||||||
Average | ||||||
Amount | Net Assets | |||||
Class A | $ 5 | .09* | ||||
Class T | 7 | .09* | ||||
Class B | 2 | .10* | ||||
Class C | 5 | .11* | ||||
Short Intermediate Municipal Income | 693 | .09* | ||||
Institutional Class | 1 | .08* | ||||
$ 713 | ||||||
* Annualized |
Citibank also has a sub arrangement with FSC to maintain the Fund’s accounting records. The fee is based on the level of average net assets for the month.
5. Committed Line of Credit. |
The Fund participates with other funds managed by FMR in a $4.2 billion credit facility (the “line of credit”) to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short term liquidity purposes. The Fund has agreed to pay commitment fees on its pro rata portion of the line of credit, which amounts to $2 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
6. Expense Reductions. |
Through arrangements with the Fund’s custodian and each class’ 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 accounting expenses
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44 |
6. Expense Reductions - continued
by $13 and $165, respectively. During the period, credits reduced each class’ transfer agent expense as noted in the table below.
Transfer Agent | ||||
expense reduction | ||||
Class A | $ 5 | |||
Class T | 6 | |||
Class B | 1 | |||
Class C | 3 | |||
Short Intermediate Municipal Income | 616 | |||
Institutional Class | 1 | |||
$ 632 | ||||
7. Other. |
The Fund’s organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders. | ||||||||
Distributions to shareholders of each class were as follows: | ||||||||
Six months ended | Year ended | |||||||
June 30, 2006 | December 31, 2005 | |||||||
From net investment income | ||||||||
Class A | $ 165 | $ 313 | ||||||
Class T | 200 | 465 | ||||||
Class B | 34 | 68 | ||||||
Class C | 86 | 195 | ||||||
Short Intermediate Municipal Income | 24,187 | 50,256 | ||||||
Institutional Class | 48 | 44 | ||||||
Total | $ 24,720 | $ 51,341 | ||||||
From net realized gain | ||||||||
Class A | $ — | $ 4 | ||||||
Class T | — | 6 | ||||||
Class B | — | 1 | ||||||
Class C | — | 3 | ||||||
Short Intermediate Municipal Income | — | 534 | ||||||
Institutional Class | — | 1 | ||||||
Total | $ — | $ 549 | ||||||
45 | Semiannual Report |
Notes to Financial Statements (Unaudited) continued | ||||||||||||
(Amounts in thousands except ratios) | ||||||||||||
9. Share Transactions. | ||||||||||||
Transactions for each class of shares were as follows: | ||||||||||||
Shares | Dollars | |||||||||||
Six months ended | Year ended | Six months ended | Year ended | |||||||||
June 30, 2006 | December 31, 2005 | June 30, 2006 | December 31, 2005 | |||||||||
Class A | ||||||||||||
Shares sold | 122 | 684 | $ 1,238 | $ 6,996 | ||||||||
Reinvestment of | ||||||||||||
distributions | 13 | 23 | 128 | 238 | ||||||||
Shares redeemed | (413) | (498) | (4,210) | (5,104) | ||||||||
Net increase (decrease) | (278) | 209 | $ (2,844) | $ 2,130 | ||||||||
Class T | ||||||||||||
Shares sold | 181 | 517 | $ 1,849 | $ 5,299 | ||||||||
Reinvestment of | ||||||||||||
distributions | 16 | 34 | 161 | 351 | ||||||||
Shares redeemed | (208) | (1,028) | (2,115) | (10,531) | ||||||||
Net increase (decrease) | (11) | (477) | $ (105) | $ (4,881) | ||||||||
Class B | ||||||||||||
Shares sold | 15 | 65 | $ 146 | $ 661 | ||||||||
Reinvestment of | ||||||||||||
distributions | 2 | 4 | 24 | 44 | ||||||||
Shares redeemed | (63) | (100) | (639) | (1,025) | ||||||||
Net increase (decrease) | (46) | (31) | $ (469) | $ (320) | ||||||||
Class C | ||||||||||||
Shares sold | 77 | 438 | $ 786 | $ 4,492 | ||||||||
Reinvestment of | ||||||||||||
distributions | 5 | 11 | 50 | 116 | ||||||||
Shares redeemed | (374) | (541) | (3,803) | (5,552) | ||||||||
Net increase (decrease) | (292) | (92) | $ (2,967) | $ (944) | ||||||||
Short Intermediate | ||||||||||||
Municipal Income | ||||||||||||
Shares sold | 22,395 | 46,854 | $ 227,580 | $ 481,284 | ||||||||
Reinvestment of | ||||||||||||
distributions | 1,708 | 3,476 | 17,330 | 35,648 | ||||||||
Shares redeemed | (35,371) | (64,556) | (359,005) | (661,741) | ||||||||
Net increase (decrease) | (11,268) | (14,226) | $ (114,095) | $ (144,809) | ||||||||
Institutional Class | ||||||||||||
Shares sold | 165 | 194 | $ 1,683 | $ 1,994 | ||||||||
Reinvestment of | ||||||||||||
distributions | 3 | 2 | 26 | 18 | ||||||||
Shares redeemed | (88) | (60) | (895) | (615) | ||||||||
Net increase (decrease) | 80 | 136 | $ 814 | $ 1,397 |
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46 |
Proxy Voting Results
A special meeting of the fund’s shareholders was held on January 18, 2006. The results of votes taken among shareholders on the proposal 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 elect a Board of Trustees.A | ||||
# of | % of | |||
Votes | Votes | |||
Dennis J. Dirks | ||||
Affirmative | 4,012,578,790.76 | 95.238 | ||
Withheld | 200,653,306.55 | 4.762 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Albert R. Gamper, Jr. | ||||
Affirmative | 4,015,643,707.84 | 95.310 | ||
Withheld | 197,588,389.47 | 4.690 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert M. Gates | ||||
Affirmative | 4,004,345,809.00 | 95.042 | ||
Withheld | 208,886,288.31 | 4.958 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
George H. Heilmeier | ||||
Affirmative | 4,008,127,523.93 | 95.132 | ||
Withheld | 205,104,573.38 | 4.868 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Abigail P. Johnson | ||||
Affirmative | 3,993,175,527.66 | 94.777 | ||
Withheld | 220,056,569.65 | 5.223 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Edward C. Johnson 3d | ||||
Affirmative | 3,987,333,615.26 | 94.638 | ||
Withheld | 225,898,482.05 | 5.362 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Stephen P. Jonas | ||||
Affirmative | 4,010,007,680.52 | 95.177 | ||
Withheld | 203,224,416.79 | 4.823 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
# of | % of | |||
Votes | Votes | |||
Marie L. Knowles | ||||
Affirmative | 4,010,231,303.96 | 95.182 | ||
Withheld | 203,000,793.35 | 4.818 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Ned C. Lautenbach | ||||
Affirmative | 4,009,136,177.44 | 95.156 | ||
Withheld | 204,095,919.87 | 4.844 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William O. McCoy | ||||
Affirmative | 4,001,996,735.35 | 94.986 | ||
Withheld | 211,235,361.96 | 5.014 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Robert L. Reynolds | ||||
Affirmative | 4,010,560,206.65 | 95.190 | ||
Withheld | 202,671,890.66 | 4.810 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Cornelia M. Small | ||||
Affirmative | 4,011,161,760.21 | 95.204 | ||
Withheld | 202,070,337.10 | 4.796 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
William S. Stavropoulos | ||||
Affirmative | 4,001,217,912.57 | 94.968 | ||
Withheld | 212,014,184.74 | 5.032 | ||
TOTAL | 4,213,232,097.31 | 100.000 | ||
Kenneth L. Wolfe | ||||
Affirmative | 4,011,439,868.05 | 95.211 | ||
Withheld | 201,792,229.26 | 4.789 | ||
TOTAL | 4,213,232,097.31 | 100.000 |
A Denotes trust-wide proposal and voting results.
47 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Short Intermediate Municipal Income Fund
On January 19, 2006, the Board of Trustees, including the Independent Trustees (together, the Board), voted to approve a general research services agreement (the Agreement) between FMR, FMR Co., Inc. (FMRC), Fidelity Investments Money Management, Inc. (FIMM), and Fidelity Research & Analysis Company (FRAC) (together, the Investment Advisers) for the fund, effective January 20, 2006, pursuant to which FRAC may provide general research and investment advisory support services to FMRC and FIMM. The Board considered that it has approved previously various sub advisory agreements for the fund with affiliates of FMR that allow FMR to obtain research, non discretionary advice, or discretionary portfolio management at no additional expense to the fund. The Board, assisted by the advice of fund counsel and independent Trustees’ counsel, considered a broad range of information and determined that it would be beneficial for the fund to access the research and investment advisory support services supplied by FRAC at no additional expense to the fund.
The Board reached this determination in part because the new arrangement will involve no changes in (i) the contractual terms of and fees payable under the fund’s manage ment contract or sub advisory agreements; (ii) the investment process or strategies employed in the management of the fund’s assets; (iii) the nature or level of services provided under the fund’s management contract or sub advisory agreements; (iv) the day to day management of the fund or the persons primarily responsible for such management; or (v) the ultimate control or beneficial ownership of FMR, FMRC, or FIMM. The Board also considered that the establishment of the Agreement would not necessitate prior shareholder approval of the Agreement or result in an assignment and termination of the fund’s management contract or sub advisory agreements under the Investment Company Act of 1940.
Because the Board was approving an arrangement with FRAC under which the fund will not bear any additional management fees or expenses and under which the fund’s portfolio manager would not change, it did not consider the fund’s investment performance, competitiveness of management fee and total expenses, costs of services and profitability, or economies of scale to be significant factors in its decision.
In connection with its future renewal of the fund’s management contract and sub advisory agreements, the Board will consider: (i) the nature, extent, and quality of services provided to the fund, including shareholder and administrative services and investment performance; (ii) the competitiveness of the fund’s management fee and total expenses; (iii) the costs of the services and profitability, including the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering, and servicing the fund and its share holders; and (iv) whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have
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appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the fund’s Agreement is fair and reasonable, and that the fund’s Agreement should be approved.
Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees’ counsel, requests and considers a broad range of information throughout the year.
The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund’s Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying back grounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such committee, the Fixed Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommendations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.
At its June 2006 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In determining whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees’ counsel, that the renewal of the Advisory Contracts and the compensation to be
49 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
received by Fidelity under the management contract is consistent with Fidelity’s fidu ciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund’s shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.
Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub advisers (together, the Investment Advisers), including the background of the fund’s portfolio manager and the fund’s investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity’s investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.
Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers’ investment staff, their use of technology, and the Investment Advisers’ approach to recruiting, training, and retaining portfolio managers and other research, advisory, and manage ment personnel. The Board considered Fidelity’s extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity’s analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also con sidered that Fidelity’s portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund’s portfolio, as well as an electronic communication system that provides immediate real time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency and pricing and bookkeeping services for the fund; (ii) the nature and extent of the Investment Advisers’ supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund’s compliance policies and procedures.
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The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24 hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund’s prospectus, without paying an additional sales charge. The Board noted that, since the last Advisory Contract renewals in June 2005, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) voluntarily entering into contractual arrangements with certain brokers pursuant to which Fidelity pays for research products and services separately out of its own resources, rather than bundling with fund commissions; (iii) launching the Fidelity Advantage Class of its five Spartan stock index funds and three Spartan bond index funds, which is a lower fee class available to shareholders with higher account balances; (iv) contractually agreeing to impose expense limitations on Fidelity U.S. Bond Index Fund and reducing the fund’s initial investment minimum; and (v) offering shareholders of each of the Fidelity Institutional Money Market Funds the privilege of exchanging shares of the fund for shares of other Fidelity funds.
Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund’s absolute investment performance for each class, as well as the fund’s relative investment performance for each class measured against (i) a broad based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one , three , and five year periods ended December 31, 2005, as applicable, the cumulative total returns of Class C and Fidelity Short Intermediate Municipal Income (retail class), the cumulative total returns of a broad based securities market index (“benchmark”), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The returns of Class C and Fidelity Short Intermediate Municipal Income (retail class) represent the performance of classes with the highest and lowest 12b 1 fees, respectively (not necessarily with the highest and lowest total expenses). The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the Lipper peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage
51 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
beaten numbers noted below each chart correspond to the percentile box and represent the percentage of funds in the Lipper peer group whose performance was equal to or lower than that of the class indicated.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix176x1.jpg)
The Board reviewed the fund’s relative investment performance against its Lipper peer group and stated that the performance of Fidelity Short Intermediate Municipal Income (retail class) was in the second quartile for all the periods shown. The Board also stated that the relative investment performance of the fund was lower than its benchmark for all the periods shown. The Board considered that the variations in performance among the fund’s classes reflect the variations in class expenses, which result in lower performance for higher expense classes.
Based on its review, and giving particular weight to the nature and quality of the re sources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund’s shareholders, particularly in light of the Board’s view that the fund’s shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.
Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund’s management fee and total expenses compared to “mapped groups” of competitive funds and classes. Fidelity creates “mapped groups” by combining similar Lipper investment objective categories that have comparable management fee charac teristics. Combining Lipper investment objective categories aids the Board’s manage ment fee and total expense comparisons by broadening the competitive group used for
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comparison and by reducing the number of universes to which various Fidelity funds are compared.
The Board considered two proprietary management fee comparisons for the 12 month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the “Total Mapped Group” and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund’s standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. “TMG %” represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund’s. For example, a TMG % of 13% means that 87% of the funds in the Total Mapped Group had higher management fees than the fund. The “Asset Size Peer Group” (ASPG) comparison focuses on a fund’s standing relative to non Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund’s management fee ranked, is also included in the chart and considered by the Board.
![](https://capedge.com/proxy/N-CSRS/0000880799-06-000005/shtintmnisemix177x1.jpg)
The Board noted that the fund’s management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2005. Based on its review, the Board
53 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
concluded that the fund’s management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.
In its review of each class’s total expenses, the Board considered the fund’s management fee as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund paid 12b 1 fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.
The Board noted that the total expenses of each of Class A, Class T, Class B, Fidelity Short Intermediate Municipal Income (retail class), and Institutional Class ranked below its competitive median for 2005, and the total expenses of Class C ranked above its competitive median for 2005. The Board noted that the fund offers multiple classes, each of which has a different sales load and 12b 1 fee structure, and that the multiple struc tures are intended to offer a range of pricing options for the intermediary market. The Board also noted that the total expenses of the classes vary primarily by the level of their 12b 1 fees, although differences in transfer agent fees may also cause expenses to vary from class to class.
In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.
Based on its review, the Board concluded that the total expenses of each class of the fund were reasonable, although in one case above the median of the universe presented for comparison, in light of the services that the fund and its shareholders receive and the other factors considered.
Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity’s profits in respect of all the Fidelity funds.
On an annual basis, FMR presents to the Board Fidelity’s profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity.
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The Audit Committee of the Board reviews any significant changes from the prior year’s methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board’s assessment of the results of Fidelity’s profitability analysis. PwC’s engagement includes the review and assessment of Fidelity’s methodologies used in determining the revenues and expenses attributable to Fidelity’s mutual fund business, and completion of agreed upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC’s reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity’s profitability methodologies are reasonable in all material respects.
The Board has also reviewed Fidelity’s non fund businesses and any fall out benefits related to the mutual fund business as well as cases where Fidelity’s affiliates may benefit from or be related to the fund’s business.
The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.
Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.
The Board recognized that the fund’s management contract incorporates a “group fee” structure, which provides for lower fee rates as total fund assets under FMR’s management increase, and for higher fee rates as total fund assets under FMR’s management decrease. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity’s costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR’s management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.
55 Semiannual Report
Board Approval of Investment Advisory Contracts and Management Fees continued
The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.
Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Advisory Contracts, the Board requested additional information on several topics, including (i) Fidelity’s fund profitability methodology and profitability trends within certain funds; (ii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iii) the total expenses of certain funds and classes relative to competitors; (iv) fund performance trends; and (v) Fidelity’s fee structures.
Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund’s Advisory Contracts should be renewed.
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Investment Adviser Fidelity Management & Research Company Boston, MA Investment Sub Advisers Fidelity Investments Money Management, Inc. Fidelity Research & Analysis Company (formerly Fidelity Management & Research (Far East) Inc.) Fidelity International Investment Advisors Fidelity International Investment Advisors (U.K.) Limited General Distributor Fidelity Distributors Corporation Boston, MA Transfer and Service Agents Citibank, N.A. New York, NY Fidelity Investments Institutional Operations Company, Inc. Boston, MA Custodian Citibank, N.A. New York, NY |
ASTMI-USAN-0806 1.803550.102 |
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Municipal Trust's Board of Trustees.
Item 11. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Municipal Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Municipal Trust
By: | /s/Christine Reynolds |
Christine Reynolds | |
President and Treasurer | |
Date: | August 17, 2006 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Christine Reynolds |
Christine Reynolds | |
President and Treasurer | |
Date: | August 17, 2006 |
By: | /s/Joseph B. Hollis |
Joseph B. Hollis | |
Chief Financial Officer | |
Date: | August 17, 2006 |