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 811-3737
Fidelity Advisor Series IV
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Scott C. Goebel, 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: | November 30 |
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Date of reporting period: | November 30, 2009 |
Item 1. Reports to Stockholders
Fidelity®
Institutional
Short-Intermediate
Government Fund
Annual Report
November 30, 2009
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | The Chairman's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Shareholder Expense Example | An example of shareholder expenses. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. | |
Notes | Notes to the financial statements. | |
Report of Independent Registered Public Accounting Firm |
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Trustees and Officers |
| |
Distributions |
| |
Proxy Voting Results |
| |
Board Approval of Investment Advisory Contracts and Management Fees |
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To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) website at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.
Annual Report
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Annual Report
Chairman's Message
(photo_of_Abigail_P_Johnson)
Dear Shareholder:
We've seen a strong upswing in the global equity markets since last March, as signs of improvement in some economic indicators have brought many investors back into the marketplace. But there remain other key measures - notably high unemployment and slack consumer spending - - that suggest the road back to economic health could still be a bumpy ride. Financial markets are always unpredictable, of course, but there also are several time-tested investment principles that can help 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 can be tax advantages and cost benefits to consider as well. 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 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 "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 by phone. It is our privilege to provide you the information you need to make the investments that are right for you.
Sincerely,
/s/Abigail P. Johnson
Abigail P. Johnson
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value, if any) and assuming a constant rate of performance each year. The $100,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended November 30, 2009 | Past 1 | Past 5 | Past 10 |
Fidelity® Inst Sht-Int Govt Fund | 4.76% | 4.71% | 5.14% |
$100,000 Over 10 Years
Let's say hypothetically that $100,000 was invested in Fidelity® Institutional Short-Intermediate Government Fund on November 30, 1999. The chart shows how the value of your investment would have changed, and also shows how the Barclays Capital U.S. 1-5 Year Government Bond Index performed over the same period.
Annual Report
Management's Discussion of Fund Performance
Market Recap: U.S. taxable investment-grade bonds posted solid results for the year ending November 30, 2009, bolstered by improving credit-market conditions, a better economic environment and favorable monetary/fiscal policies. The Barclays Capital U.S. Aggregate Bond Index gained 11.63% during this time frame. Although the investment-grade bond space was marked by a massive flight to quality last winter, it was characterized by a flight to riskier, higher-yielding assets over much of the remainder of the period. That's when many leading economic indicators turned positive, debt-market liquidity improved and global policy stimulus remained supportive of economic growth and kept interest rates worldwide at low levels. Against that backdrop, investors sought out higher-yielding alternatives to government bonds further out on the risk spectrum. Corporate bonds and asset-backed securities (ABS) benefited the most from investors' renewed appetite for risk, with the Barclays Capital U.S. Credit Bond Index and the Barclays Capital U.S. Fixed-Rate ABS Index climbing 24.56% and 24.09%, respectively. At the other end of the spectrum were very high-quality government bonds, with the Barclays Capital U.S. Treasury Bond Index returning 2.37%.
Comments from William Irving, Lead Portfolio Manager of Fidelity® Institutional Short-Intermediate Government Fund: The fund returned 4.76% during the year, while the Barclays Capital U.S. 1-5 Year Government Bond Index returned 3.56%. Advantageous sector selection was a key factor behind our outperformance. Specifically, the fund benefited from an overweighting in mortgage-backed securities issued by government agencies, a larger-than-benchmark stake in other securities issued by government agencies and an underweighting in U.S. Treasuries. The fund also was helped by its overweighting in hybrid adjustable-rate mortgages (ARMs), which are backed by 30-year amortizing loans that give homeowners a relatively low fixed interest rate for an initial period and then convert to an ARM, with the interest rate resetting every six or 12 months. These securities were cheap at the beginning of the period due to dislocations in the market during the financial crisis, which created many opportunities. As the period progressed and investors regained their risk appetite, hybrid ARMs performed very well. Consequently, toward the end of the period, we sold some of these securities to lock in profits, thereby reducing our overweight. In hindsight, I regret not owning Treasury Inflation-Protected Securities (TIPS) - which are not in the benchmark - in the first half of the period when they strongly outpaced the index.
Note to shareholders: Franco Castagliuolo will become Co-Portfolio Manager of the fund on December 1, 2009.
The views expressed above reflect those of the portfolio manager(s) only through the end of the period as stated on the cover of this report and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, 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 (June 1, 2009 to November 30, 2009).
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.
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.
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.
| Annualized Expense Ratio | Beginning | Ending | Expenses Paid |
Actual | .45% | $ 1,000.00 | $ 1,024.90 | $ 2.28 |
Hypothetical (5% return per year before expenses) |
| $ 1,000.00 | $ 1,022.81 | $ 2.28 |
* Expenses are equal to the Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/365 (to reflect the one-half year period).
Annual Report
Investment Changes (Unaudited)
Coupon Distribution as of November 30, 2009 | ||
| % of fund's investments | % of fund's investments |
Less than 3% | 68.0 | 58.5 |
3 - 3.99% | 12.5 | 14.5 |
4 - 4.99% | 8.5 | 10.0 |
5 - 5.99% | 4.5 | 6.9 |
6% - 6.99% | 2.5 | 5.9 |
7% and over | 0.4 | 0.4 |
Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments. |
Weighted Average Maturity as of November 30, 2009 | ||
|
| 6 months ago |
Years | 2.9 | 3.1 |
The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision. |
Duration as of November 30, 2009 | ||
|
| 6 months ago |
Years | 2.5 | 2.6 |
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. |
Asset Allocation (% of fund's net assets) | |||||||
As of November 30, 2009 | As of May 31, 2009 | ||||||
Mortgage |
| Mortgage |
| ||||
Corporate Bonds 1.1% |
| Corporate Bonds 0.0% |
| ||||
CMOs and Other Mortgage Related Securities 2.2% |
| CMOs and Other Mortgage Related Securities 4.4% |
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U.S. Treasury |
| U.S. Treasury |
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U.S. Government |
| U.S. Government |
| ||||
Short-Term |
| Short-Term |
| ||||
* Futures and Swaps | 1.2% |
| ** Futures and Swaps | 2.4% |
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†Includes FDIC Guaranteed Corporate Securities.
Annual Report
Investments November 30, 2009
Showing Percentage of Net Assets
U.S. Government and Government Agency Obligations - 87.9% | ||||
| Principal Amount | Value | ||
Other Government Related - 12.2% | ||||
Bank of America Corp. 2.1% 4/30/12 (FDIC Guaranteed) (a) | $ 577,000 | $ 589,781 | ||
Citibank NA: | ||||
1.5% 7/12/11 (FDIC Guaranteed) (a) | 320,000 | 323,939 | ||
1.75% 12/28/12 (FDIC Guaranteed) (a) | 2,000,000 | 2,019,014 | ||
1.875% 5/7/12 (FDIC Guaranteed) (a) | 12,500,000 | 12,698,838 | ||
Citigroup Funding, Inc.: | ||||
1.875% 10/22/12 (FDIC Guaranteed) (a) | 4,250,000 | 4,308,242 | ||
1.875% 11/15/12 (FDIC Guaranteed) (a) | 1,600,000 | 1,622,952 | ||
2% 3/30/12 (FDIC Guaranteed) (a) | 5,000,000 | 5,095,000 | ||
2.125% 7/12/12 (FDIC Guaranteed) (a) | 934,000 | 956,685 | ||
General Electric Capital Corp.: | ||||
1.8% 3/11/11 (FDIC Guaranteed) (a) | 12,000,000 | 12,192,408 | ||
2% 9/28/12 (FDIC Guaranteed) (a) | 4,000,000 | 4,072,736 | ||
2.625% 12/28/12 (FDIC Guaranteed) (a) | 1,702,000 | 1,760,465 | ||
3% 12/9/11 (FDIC Guaranteed) (a) | 420,000 | 437,441 | ||
JPMorgan Chase & Co.: | ||||
2.125% 12/26/12 (FDIC Guaranteed) (a) | 7,000,000 | 7,150,388 | ||
3.125% 12/1/11 (FDIC Guaranteed) (a) | 70,000 | 73,100 | ||
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (a) | 11,696,000 | 12,242,730 | ||
TOTAL OTHER GOVERNMENT RELATED | 65,543,719 | |||
U.S. Government Agency Obligations - 18.0% | ||||
Fannie Mae: | ||||
1% 11/23/11 | 3,400,000 | 3,415,977 | ||
1.75% 8/10/12 | 8,624,000 | 8,757,301 | ||
2.5% 5/15/14 | 4,126,000 | 4,213,508 | ||
2.75% 3/13/14 | 5,850,000 | 6,047,648 | ||
4.75% 11/19/12 | 2,500,000 | 2,749,113 | ||
5% 2/16/12 | 2,110,000 | 2,296,543 | ||
6% 5/15/11 | 935,000 | 1,009,799 | ||
Federal Home Loan Bank: | ||||
1.625% 9/26/12 | 10,000,000 | 10,107,860 | ||
3.625% 10/18/13 | 13,230,000 | 14,139,351 | ||
Freddie Mac: | ||||
1.125% 12/15/11 | 1,650,000 | 1,659,550 | ||
1.75% 6/15/12 | 25,838,000 | 26,271,846 | ||
2.125% 3/23/12 | 3,192,000 | 3,271,047 | ||
2.125% 9/21/12 | 8,980,000 | 9,206,835 | ||
2.5% 4/23/14 | 1,200,000 | 1,224,295 | ||
4.875% 11/15/13 | 250,000 | 279,194 | ||
U.S. Government and Government Agency Obligations - continued | ||||
| Principal Amount | Value | ||
U.S. Government Agency Obligations - continued | ||||
Israeli State (guaranteed by U.S. Government through Agency for International Development) 6.8% 2/15/12 | $ 1,639,880 | $ 1,743,679 | ||
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates 6.77% 11/15/13 | 523,076 | 558,906 | ||
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS | 96,952,452 | |||
U.S. Treasury Inflation Protected Obligations - 5.1% | ||||
U.S. Treasury Inflation-Indexed Notes 4.25% 1/15/10 | 27,379,828 | 27,538,727 | ||
U.S. Treasury Obligations - 52.6% | ||||
U.S. Treasury Notes: | ||||
0.75% 11/30/11 | 8,109,000 | 8,122,307 | ||
0.875% 2/28/11 | 6,486,000 | 6,527,549 | ||
0.875% 3/31/11 | 8,180,000 | 8,233,677 | ||
1.125% 12/15/11 | 2,203,000 | 2,221,761 | ||
1.125% 1/15/12 | 7,356,000 | 7,413,465 | ||
1.375% 2/15/12 | 27,286,000 | 27,644,129 | ||
1.375% 4/15/12 | 29,050,000 | 29,419,920 | ||
1.375% 11/15/12 | 2,188,000 | 2,205,093 | ||
1.5% 12/31/13 | 1,403,000 | 1,397,081 | ||
1.75% 11/15/11 | 1,789,000 | 1,827,435 | ||
1.875% 6/15/12 | 12,945,000 | 13,265,596 | ||
1.875% 2/28/14 | 995,000 | 1,003,396 | ||
1.875% 4/30/14 | 20,188,000 | 20,282,641 | ||
2% 11/30/13 | 5,577,000 | 5,675,903 | ||
2.125% 11/30/14 | 7,000,000 | 7,041,020 | ||
2.25% 5/31/14 | 8,025,000 | 8,188,638 | ||
2.375% 8/31/14 | 11,687,000 | 11,942,653 | ||
2.375% 9/30/14 | 4,750,000 | 4,849,085 | ||
2.375% 10/31/14 | 5,575,000 | 5,680,814 | ||
2.625% 6/30/14 | 2,353,000 | 2,437,193 | ||
2.625% 4/30/16 | 2,073,000 | 2,089,194 | ||
2.75% 2/28/13 | 12,669,000 | 13,301,462 | ||
2.75% 10/31/13 | 25,475,000 | 26,673,115 | ||
2.875% 1/31/13 | 20,900,000 | 22,021,745 | ||
3.125% 8/31/13 | 21,667,000 | 23,009,336 | ||
3.125% 9/30/13 | 3,970,000 | 4,215,953 | ||
3.375% 6/30/13 | 10,561,000 | 11,320,896 | ||
U.S. Government and Government Agency Obligations - continued | ||||
| Principal Amount | Value | ||
U.S. Treasury Obligations - continued | ||||
U.S. Treasury Notes: - continued | ||||
4.625% 7/31/12 | $ 508,000 | $ 557,768 | ||
4.75% 5/31/12 | 4,500,000 | 4,932,423 | ||
TOTAL U.S. TREASURY OBLIGATIONS | 283,501,248 | |||
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $463,703,678) | 473,536,146 | |||
U.S. Government Agency - Mortgage Securities - 8.4% | ||||
| ||||
Fannie Mae - 6.0% | ||||
2.713% 8/1/35 (d) | 510,928 | 532,154 | ||
2.756% 10/1/33 (d) | 21,129 | 21,761 | ||
2.783% 2/1/33 (d) | 27,684 | 28,446 | ||
2.804% 7/1/35 (d) | 84,336 | 87,854 | ||
2.998% 4/1/36 (d) | 314,682 | 321,107 | ||
3.026% 7/1/35 (d) | 11,786 | 12,117 | ||
3.046% 3/1/35 (d) | 5,748 | 5,941 | ||
3.071% 10/1/33 (d) | 23,748 | 24,754 | ||
3.117% 7/1/36 (d) | 97,770 | 101,369 | ||
3.147% 4/1/33 (d) | 260,232 | 267,318 | ||
3.147% 10/1/35 (d) | 43,949 | 45,554 | ||
3.179% 12/1/34 (d) | 40,231 | 41,332 | ||
3.253% 3/1/35 (d) | 16,230 | 16,693 | ||
3.264% 9/1/34 (d) | 212,707 | 219,533 | ||
3.273% 7/1/35 (d) | 664,200 | 689,346 | ||
3.288% 4/1/36 (d) | 61,982 | 63,373 | ||
3.302% 12/1/32 (d) | 70,205 | 72,670 | ||
3.358% 7/1/34 (d) | 14,233 | 14,692 | ||
3.378% 7/1/35 (d) | 111,654 | 115,538 | ||
3.586% 10/1/35 (d) | 469,733 | 485,679 | ||
3.697% 5/1/34 (d) | 225,627 | 233,202 | ||
3.746% 11/1/36 (d) | 149,355 | 155,481 | ||
3.864% 1/1/35 (d) | 103,893 | 107,194 | ||
3.9% 9/1/36 (d) | 164,642 | 171,337 | ||
3.961% 11/1/36 (d) | 152,786 | 158,459 | ||
3.981% 4/1/35 (d) | 294,922 | 306,605 | ||
4% 9/1/13 | 123,303 | 126,707 | ||
4% 12/1/24 (b)(c) | 975,000 | 1,001,250 | ||
4.067% 3/1/33 (d) | 61,449 | 63,533 | ||
U.S. Government Agency - Mortgage Securities - continued | ||||
| Principal Amount | Value | ||
Fannie Mae - continued | ||||
4.069% 3/1/34 (d) | $ 153,882 | $ 158,716 | ||
4.211% 8/1/35 (d) | 323,914 | 340,024 | ||
4.251% 2/1/35 (d) | 1,126,601 | 1,157,370 | ||
4.291% 6/1/36 (d) | 24,501 | 25,450 | ||
4.299% 3/1/33 (d) | 16,191 | 16,769 | ||
4.405% 4/1/36 (d) | 169,491 | 177,599 | ||
4.433% 3/1/35 (d) | 55,091 | 56,975 | ||
4.507% 7/1/35 (d) | 466,674 | 483,799 | ||
4.521% 2/1/34 (d) | 6,599 | 6,836 | ||
4.522% 7/1/35 (d) | 314,055 | 322,192 | ||
4.539% 11/1/33 (d) | 58,404 | 60,982 | ||
4.546% 7/1/35 (d) | 29,315 | 30,373 | ||
4.613% 9/1/35 (d) | 176,115 | 183,410 | ||
4.639% 11/1/35 (d) | 538,499 | 556,464 | ||
4.652% 2/1/36 (d) | 352,690 | 366,889 | ||
4.728% 11/1/35 (d) | 173,065 | 180,837 | ||
4.776% 7/1/35 (d) | 136,191 | 141,489 | ||
4.892% 2/1/36 (d) | 398,953 | 414,029 | ||
4.97% 12/1/32 (d) | 183,942 | 189,791 | ||
4.982% 10/1/35 (d) | 172,000 | 176,315 | ||
5% 2/1/16 | 17,971 | 19,102 | ||
5% 12/1/24 (b)(c) | 3,000,000 | 3,186,355 | ||
5% 12/1/24 (b) | 400,000 | 424,847 | ||
5.005% 2/1/34 (d) | 196,388 | 206,674 | ||
5.141% 7/1/35 (d) | 163,523 | 167,850 | ||
5.181% 2/1/37 (d) | 428,435 | 445,094 | ||
5.182% 6/1/35 (d) | 5,816,885 | 6,013,414 | ||
5.185% 3/1/35 (d) | 20,274 | 20,733 | ||
5.283% 2/1/37 (d) | 679,650 | 708,829 | ||
5.498% 6/1/47 (d) | 74,630 | 77,745 | ||
5.5% 4/1/16 to 1/1/24 | 1,084,514 | 1,165,486 | ||
5.5% 12/1/24 (b)(c) | 275,000 | 294,432 | ||
5.5% 12/1/24 (b)(c) | 1,500,000 | 1,605,993 | ||
5.599% 4/1/36 (d) | 404,032 | 426,245 | ||
5.651% 2/1/36 (d) | 79,477 | 82,641 | ||
5.856% 5/1/36 (d) | 93,545 | 99,567 | ||
6% 5/1/12 to 3/1/22 | 1,436,865 | 1,554,300 | ||
6% 12/1/39 (b) | 2,000,000 | 2,143,765 | ||
6.002% 4/1/36 (d) | 1,429,318 | 1,497,286 | ||
6.22% 3/1/37 (d) | 58,318 | 62,072 | ||
6.5% 6/1/15 to 7/1/32 | 338,143 | 366,667 | ||
7% 6/1/12 to 11/1/14 | 143,684 | 152,484 | ||
U.S. Government Agency - Mortgage Securities - continued | ||||
| Principal Amount | Value | ||
Fannie Mae - continued | ||||
7.146% 12/1/32 (d) | $ 939,283 | $ 972,057 | ||
9% 2/1/13 to 8/1/21 | 91,025 | 101,134 | ||
9.5% 11/1/21 | 403 | 454 | ||
10.5% 8/1/20 | 12,876 | 15,269 | ||
11% 11/1/10 to 9/1/14 | 16,440 | 16,898 | ||
11.5% 11/1/15 to 7/15/19 | 61,262 | 68,457 | ||
12% 4/1/15 | 10,277 | 11,989 | ||
12.5% 3/1/16 | 956 | 1,114 | ||
| 32,446,261 | |||
Freddie Mac - 2.4% | ||||
2.731% 4/1/34 (d) | 448,216 | 465,218 | ||
2.862% 6/1/33 (d) | 127,109 | 131,056 | ||
2.997% 5/1/35 (d) | 254,473 | 264,521 | ||
3.155% 2/1/34 (d) | 36,263 | 37,449 | ||
3.374% 7/1/35 (d) | 166,920 | 172,638 | ||
3.471% 3/1/35 (d) | 96,631 | 99,470 | ||
3.648% 3/1/35 (d) | 94,725 | 96,386 | ||
3.776% 4/1/35 (d) | 324,585 | 339,541 | ||
3.813% 12/1/33 (d) | 254,397 | 261,679 | ||
4% 12/1/24 (b)(c) | 500,000 | 513,461 | ||
4.031% 6/1/35 (d) | 92,122 | 95,861 | ||
4.193% 10/1/35 (d) | 176,032 | 181,844 | ||
4.418% 11/1/35 (d) | 156,555 | 161,697 | ||
4.46% 5/1/35 (d) | 179,920 | 186,252 | ||
4.55% 10/1/36 (d) | 163,434 | 170,833 | ||
4.58% 1/1/35 (d) | 328,165 | 341,383 | ||
4.625% 7/1/35 (d) | 575,415 | 590,983 | ||
4.789% 2/1/36 (d) | 38,740 | 40,635 | ||
5% 9/1/35 | 9,478 | 9,966 | ||
5.034% 3/1/37 (d) | 295,257 | 300,695 | ||
5.11% 7/1/35 (d) | 103,393 | 106,546 | ||
5.227% 3/1/33 (d) | 5,325 | 5,531 | ||
5.274% 2/1/36 (d) | 16,399 | 17,183 | ||
5.359% 5/1/37 (d) | 59,323 | 61,548 | ||
5.446% 3/1/37 (d) | 60,412 | 62,439 | ||
5.479% 4/1/37 (d) | 61,914 | 64,271 | ||
5.5% 12/1/24 (b)(c) | 2,000,000 | 2,140,700 | ||
5.515% 1/1/36 (d) | 183,951 | 193,423 | ||
5.521% 1/1/36 (d) | 132,995 | 138,671 | ||
5.588% 3/1/36 (d) | 609,913 | 646,126 | ||
5.692% 10/1/35 (d) | 41,061 | 43,499 | ||
U.S. Government Agency - Mortgage Securities - continued | ||||
| Principal Amount | Value | ||
Freddie Mac - continued | ||||
5.724% 5/1/37 (d) | $ 119,834 | $ 123,793 | ||
5.737% 5/1/37 (d) | 745,400 | 774,001 | ||
5.748% 5/1/37 (d) | 396,954 | 411,283 | ||
5.758% 4/1/37 (d) | 304,957 | 314,403 | ||
5.823% 6/1/37 (d) | 236,663 | 247,093 | ||
6% 11/1/16 to 2/1/19 | 1,071,457 | 1,163,749 | ||
6.003% 12/1/36 (d) | 689,432 | 714,930 | ||
6.222% 2/1/37 (d) | 88,985 | 93,760 | ||
6.237% 7/1/36 (d) | 104,744 | 109,257 | ||
6.42% 6/1/37 (d) | 34,259 | 36,343 | ||
6.5% 12/1/21 | 290,671 | 315,070 | ||
6.653% 8/1/37 (d) | 208,254 | 221,661 | ||
7.347% 4/1/37 (d) | 15,246 | 16,227 | ||
7.5% 11/1/12 | 43,883 | 46,384 | ||
9% 10/1/16 to 12/1/18 | 34,547 | 38,513 | ||
9.5% 2/1/17 to 12/1/22 | 81,940 | 91,531 | ||
10% 6/1/18 to 6/1/20 | 5,812 | 6,809 | ||
10.5% 9/1/20 | 132 | 157 | ||
11.5% 10/1/15 | 3,219 | 3,658 | ||
12% 10/1/13 to 11/1/19 | 11,009 | 12,477 | ||
12.25% 11/1/14 | 13,355 | 14,995 | ||
12.5% 8/1/10 to 6/1/19 | 44,225 | 50,093 | ||
| 12,747,692 | |||
Government National Mortgage Association - 0.0% | ||||
8% 12/15/23 | 147,858 | 163,785 | ||
8.5% 5/15/16 to 3/15/17 | 33,477 | 37,097 | ||
10.5% 1/15/16 to 1/15/18 | 30,791 | 35,405 | ||
11% 10/20/13 | 1,133 | 1,261 | ||
| 237,548 | |||
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $44,398,843) | 45,431,501 | |||
Collateralized Mortgage Obligations - 2.2% | ||||
| ||||
U.S. Government Agency - 2.2% | ||||
Fannie Mae floater: | ||||
Series 1994-42 Class FK, 2.93% 4/25/24 (d) | 1,016,538 | 1,006,527 | ||
Series 2007-95 Class A1, 0.4859% 8/27/36 (d) | 257,564 | 239,535 | ||
Collateralized Mortgage Obligations - continued | ||||
| Principal Amount | Value | ||
U.S. Government Agency - continued | ||||
Fannie Mae subordinate REMIC pass-thru certificates: | ||||
floater: | ||||
Series 2001-38 Class QF, 1.2159% 8/25/31 (d) | $ 239,862 | $ 242,505 | ||
Series 2002-49 Class FB, 0.8375% 11/18/31 (d) | 368,939 | 368,461 | ||
Series 2002-60 Class FV, 1.2359% 4/25/32 (d) | 82,327 | 83,178 | ||
Series 2002-74 Class FV, 0.6859% 11/25/32 (d) | 979,668 | 976,475 | ||
Series 2002-75 Class FA, 1.2359% 11/25/32 (d) | 168,646 | 170,389 | ||
planned amortization class: | ||||
Series 2002-16 Class PG, 6% 4/25/17 | 442,523 | 476,276 | ||
Series 2002-9 Class PC, 6% 3/25/17 | 651,829 | 707,089 | ||
Series 2003-85 Class GD, 4.5% 9/25/18 | 395,000 | 421,662 | ||
Series 2004-81 Class KC, 4.5% 4/25/17 | 250,711 | 259,285 | ||
Series 2005-52 Class PB, 6.5% 12/25/34 | 459,011 | 495,449 | ||
sequential payer: | ||||
Series 2002-56 Class MC, 5.5% 9/25/17 | 102,049 | 110,216 | ||
Series 2002-57 Class BD, 5.5% 9/25/17 | 107,288 | 116,692 | ||
Series 2004-95 Class AN, 5.5% 1/25/25 | 320,252 | 346,859 | ||
Freddie Mac Multi-class participation certificates guaranteed: | ||||
floater: | ||||
Series 2448 Class FT, 1.2388% 3/15/32 (d) | 373,165 | 377,198 | ||
Series 2526 Class FC, 0.6388% 11/15/32 (d) | 206,911 | 205,206 | ||
Series 2530 Class FE, 0.8388% 2/15/32 (d) | 208,581 | 208,254 | ||
Series 2630 Class FL, 0.7388% 6/15/18 (d) | 24,979 | 24,985 | ||
Series 2925 Class CQ, 0% 1/15/35 (d) | 73,067 | 66,884 | ||
planned amortization class: | ||||
Series 2356 Class GD, 6% 9/15/16 | 107,470 | 115,254 | ||
Series 2363 Class PF, 6% 9/15/16 | 141,375 | 151,525 | ||
Series 2376 Class JE, 5.5% 11/15/16 | 115,966 | 125,559 | ||
Series 2381 Class OG, 5.5% 11/15/16 | 82,370 | 89,460 | ||
Series 2425 Class JH, 6% 3/15/17 | 146,120 | 159,035 | ||
Series 2628 Class OE, 4.5% 6/15/18 | 335,000 | 360,724 | ||
Series 2695 Class DG, 4% 10/15/18 | 805,000 | 839,415 | ||
sequential payer: | ||||
Series 1929 Class EZ, 7.5% 2/17/27 | 805,491 | 867,948 | ||
Series 2570 Class CU, 4.5% 7/15/17 | 49,800 | 51,813 | ||
Series 2572 Class HK, 4% 2/15/17 | 63,034 | 64,811 | ||
Series 2672 Class HA, 4% 9/15/16 | 541,153 | 559,963 | ||
Series 2729 Class GB, 5% 1/15/19 | 545,000 | 589,632 | ||
Series 2860 Class CP, 4% 10/15/17 | 45,071 | 46,192 | ||
Collateralized Mortgage Obligations - continued | ||||
| Principal Amount | Value | ||
U.S. Government Agency - continued | ||||
Freddie Mac Multi-class participation certificates guaranteed: - continued | ||||
sequential payer: | ||||
Series 3013 Class VJ, 5% 1/15/14 | $ 716,767 | $ 762,638 | ||
Series 2975 Class NA, 5% 7/15/23 | 28,288 | 28,276 | ||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $11,301,396) | 11,715,370 | |||
Nonconvertible Bonds - 1.1% | ||||
| ||||
FINANCIALS - 1.1% | ||||
Consumer Finance - 1.1% | ||||
GMAC, Inc. 1.75% 10/30/12 (Cost $5,999,460) | 6,000,000 | 6,061,128 |
Cash Equivalents - 3.8% | |||
Maturity Amount |
| ||
Investments in repurchase agreements in a joint trading account at 0.17%, dated 11/30/09 due 12/1/09 (Collateralized by U.S. Government Obligations) # | $ 20,322,094 | 20,322,000 | |
TOTAL INVESTMENT PORTFOLIO - 103.4% (Cost $545,725,377) | 557,066,145 | ||
NET OTHER ASSETS - (3.4)% | (18,232,317) | ||
NET ASSETS - 100% | 538,833,828 |
Swap Agreements | |||||
| Expiration Date | Notional Amount | Value | ||
Interest Rate Swaps | |||||
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 4.28% with JPMorgan Chase, Inc. | April 2018 | $ 2,500,000 | $ (238,045) | ||
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 5.35% with Bank of America | March 2037 | 850,000 | (201,754) | ||
Receive semi-annually a fixed rate equal to 3.3175% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc. | June 2010 | 9,000,000 | 275,731 | ||
| $ 12,350,000 | $ (164,068) |
Legend |
(a) Under the Temporary Liquidity Guarantee Program, the Federal Deposit Insurance Corporation guarantees principal and interest in the event of payment default or bankruptcy until the earlier of maturity date of the debt or until June 30, 2012. At the end of the period these securities amounted to $65,543,719 or 12.2% of net assets. |
(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(c) A portion of the security is subject to a forward commitment to sell. |
(d) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
# Additional information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement / Counterparty | Value |
$20,322,000 due 12/01/09 at 0.17% | |
Deutsche Bank Securities, Inc. | $ 3,977,962 |
J.P. Morgan Securities, Inc. | 1,988,981 |
Mizuho Securities USA, Inc. | 7,259,780 |
RBC Capital Markets Corp. | 133,844 |
UBS Securities LLC | 6,961,433 |
| $ 20,322,000 |
Other Information |
The following is a summary of the inputs used, as of November 30, 2009, involving the Fund's assets and liabilities carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements. |
Valuation Inputs at Reporting Date: | ||||
Description | Total | Level 1 | Level 2 | Level 3 |
Investments in Securities: | ||||
U.S. Government and Government Agency Obligations | $ 473,536,146 | $ - | $ 473,536,146 | $ - |
U.S. Government Agency - Mortgage Securities | 45,431,501 | - | 45,431,501 | - |
Collateralized Mortgage Obligations | 11,715,370 | - | 11,475,835 | 239,535 |
Corporate Bonds | 6,061,128 | - | 6,061,128 | - |
Cash Equivalents | 20,322,000 | - | 20,322,000 | - |
Total Investments in Securities: | $ 557,066,145 | $ - | $ 556,826,610 | $ 239,535 |
Derivative Instruments: | ||||
Assets | ||||
Swap Agreements | $ 275,731 | $ - | $ 275,731 | $ - |
Liabilities | ||||
Swap Agreements | $ (439,799) | $ - | $ (439,799) | $ - |
Total Derivative Instruments: | $ (164,068) | $ - | $ (164,068) | $ - |
Other Financial Instruments: | ||||
Forward Commitments | $ (39,873) | $ - | $ (39,873) | $ - |
The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value: |
Investments in Securities: | |
Beginning Balance | $ 692,160 |
Total Realized Gain (Loss) | 54 |
Total Unrealized Gain (Loss) | (17,521) |
Cost of Purchases | - |
Proceeds of Sales | (297,163) |
Amortization/Accretion | - |
Transfers in/out of Level 3 | (137,995) |
Ending Balance | $ 239,535 |
The change in unrealized gain (loss) attributable to Level 3 securities at November 30, 2009 | $ (15,036) |
The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations. |
Value of Derivative Instruments |
The following table is a summary of the Fund's value of derivative instruments by risk exposure as of November 30, 2009. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements. |
Risk Exposure / | Value | |
| Asset | Liability |
Interest Rate Risk | ||
Swap Agreements (a) | $ 275,731 | $ (439,799) |
Total Value of Derivatives | $ 275,731 | $ (439,799) |
(a) Value is disclosed on the Statement of Assets and Liabilities in the Unrealized Appreciation and Unrealized Depreciation on Swap Agreements line-items. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
| November 30, 2009 | |
|
|
|
Assets | ||
Investment in securities, at value (including repurchase agreements of $20,322,000) - See accompanying schedule: Unaffiliated issuers (cost $545,725,377) |
| $ 557,066,145 |
Commitment to sell securities on a delayed delivery basis | (8,742,191) | |
Receivable for securities sold on a delayed delivery basis | 8,702,318 | (39,873) |
Receivable for investments sold, regular delivery | 20,319,756 | |
Cash | 859 | |
Receivable for fund shares sold | 1,173,521 | |
Interest receivable | 2,921,966 | |
Unrealized appreciation on swap agreements | 275,731 | |
Total assets | 581,718,105 | |
|
|
|
Liabilities | ||
Payable for investments purchased | $ 8,117,572 | |
Delayed delivery | 11,271,309 | |
Payable for fund shares redeemed | 22,825,570 | |
Distributions payable | 17,088 | |
Unrealized depreciation on swap agreements | 439,799 | |
Accrued management fee | 212,681 | |
Other affiliated payables | 258 | |
Total liabilities | 42,884,277 | |
|
|
|
Net Assets | $ 538,833,828 | |
Net Assets consist of: |
| |
Paid in capital | $ 520,877,587 | |
Distributions in excess of net investment income | (143,667) | |
Accumulated undistributed net realized gain (loss) on investments | 6,963,081 | |
Net unrealized appreciation (depreciation) on investments | 11,136,827 | |
Net Assets, for 52,266,162 shares outstanding | $ 538,833,828 | |
Net Asset Value, offering price and redemption price per share ($538,833,828 ÷ 52,266,162 shares) | $ 10.31 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
| Year ended November 30, 2009 | |
|
|
|
Investment Income |
|
|
Interest |
| $ 14,941,070 |
|
|
|
Expenses | ||
Management fee | $ 2,787,476 | |
Independent trustees' compensation | 2,316 | |
Interest | 1,719 | |
Miscellaneous | 3,265 | |
Total expenses before reductions | 2,794,776 | |
Expense reductions | (4,304) | 2,790,472 |
Net investment income | 12,150,598 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities: |
|
|
Unaffiliated issuers | 14,321,761 | |
Investment not meeting investment restrictions | 7,810 | |
Futures contracts | 209,422 | |
Swap agreements | 1,925,268 |
|
Total net realized gain (loss) |
| 16,464,261 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 606,674 | |
Swap agreements | (923,059) | |
Delayed delivery commitments | (39,873) |
|
Total change in net unrealized appreciation (depreciation) |
| (356,258) |
Net gain (loss) | 16,108,003 | |
Net increase (decrease) in net assets resulting from operations | $ 28,258,601 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
| Year ended | Year ended |
Increase (Decrease) in Net Assets |
|
|
Operations |
|
|
Net investment income | $ 12,150,598 | $ 14,503,625 |
Net realized gain (loss) | 16,464,261 | 9,505,975 |
Change in net unrealized appreciation (depreciation) | (356,258) | 5,588,111 |
Net increase (decrease) in net assets resulting | 28,258,601 | 29,597,711 |
Distributions to shareholders from net investment income | (12,414,165) | (14,814,474) |
Share transactions | 343,545,192 | 396,363,632 |
Reinvestment of distributions | 12,185,520 | 14,557,009 |
Cost of shares redeemed | (445,270,143) | (179,755,621) |
Net increase (decrease) in net assets resulting from share transactions | (89,539,431) | 231,165,020 |
Total increase (decrease) in net assets | (73,694,995) | 245,948,257 |
|
|
|
Net Assets | ||
Beginning of period | 612,528,823 | 366,580,566 |
End of period (including distributions in excess of net investment income of $143,667 and undistributed net investment income of $282,640, respectively) | $ 538,833,828 | $ 612,528,823 |
Other Information Shares | ||
Sold | 33,843,264 | 40,149,047 |
Issued in reinvestment of distributions | 1,198,312 | 1,479,153 |
Redeemed | (43,803,413) | (18,257,450) |
Net increase (decrease) | (8,761,837) | 23,370,750 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended November 30, | 2009 | 2008 | 2007 | 2006 | 2005 |
Selected Per-Share Data |
|
|
|
|
|
Net asset value, beginning of period | $ 10.04 | $ 9.73 | $ 9.55 | $ 9.52 | $ 9.65 |
Income from Investment Operations |
|
|
|
|
|
Net investment income B | .199 | .316 | .411 | .382 | .293 |
Net realized and unrealized gain (loss) | .274 | .326 | .196 | .012 | (.160) |
Total from investment operations | .473 | .642 | .607 | .394 | .133 |
Distributions from net investment income | (.203) | (.332) | (.427) | (.364) | (.263) |
Net asset value, end of period | $ 10.31 | $ 10.04 | $ 9.73 | $ 9.55 | $ 9.52 |
Total Return A | 4.76% | 6.72% | 6.54% | 4.24% | 1.39% |
Ratios to Average Net Assets C |
|
|
|
|
|
Expenses before reductions | .45% | .45% | .45% | .45% | .45% |
Expenses net of fee waivers, if any | .45% | .45% | .45% | .45% | .45% |
Expenses net of all reductions | .45% | .44% | .44% | .44% | .44% |
Net investment income | 1.96% | 3.22% | 4.31% | 4.03% | 3.05% |
Supplemental Data |
|
|
|
|
|
Net assets, end of period (000 omitted) | $ 538,834 | $ 612,529 | $ 366,581 | $ 343,125 | $ 428,686 |
Portfolio turnover rate | 347% | 238% | 257% | 126% | 96% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or 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.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended November 30, 2009
1. Organization.
Fidelity Institutional Short-Intermediate Government Fund (the Fund) is a fund of Fidelity Advisor Series IV (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.
2. Significant Accounting Policies.
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. Actual results could differ from those estimates. Events or transactions occurring after period end through the date that the financial statements were issued, January 15, 2010, have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:
Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are classified into three levels. Level 1 includes readily available unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes observable inputs other than quoted prices included in Level 1 that are observable either directly or indirectly. Level 3 includes unobservable inputs when market prices are not readily available or reliable. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy. The aggregate value by input level, as of November 30, 2009, for the Fund's investments, as well as a reconciliation of assets and liabilities for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments. Valuation techniques of the Fund's major categories of assets and liabilities as presented in the Schedule of Investments are as follows.
Debt securities, including restricted securities, are valued based on quotations received from dealers who make markets in such securities or by independent pricing services. For corporate bonds and U.S. government and government agency obligations, pricing services generally utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. For collateralized mortgage obligations and U.S. government agency mortgage securities, pricing services generally utilize matrix pricing which considers prepayment speed
Annual Report
2. Significant Accounting Policies - continued
Security Valuation - continued
assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and types as well as dealer supplied prices. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). 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. Actual prices received at disposition may differ.
When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.
Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. 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. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. The adjustments to principal due to inflation are reflected as increases or decreases to interest income even though principal is not received until maturity.
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. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Annual Report
Notes to Financial Statements - continued
2. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. There are no unrecognized tax benefits in the accompanying financial statements in connection with the tax positions taken by the Fund. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.
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, 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 futures transactions, swap agreements, market discount, deferred trustees compensation, financing transactions, capital loss carryforwards, and losses deferred due to wash sales.
The federal tax cost of investment securities and unrealized appreciation (depreciation) as of period end were as follows:
Gross unrealized appreciation | $ 11,374,633 |
Gross unrealized depreciation | (151,217) |
Net unrealized appreciation (depreciation) | $ 11,223,416 |
|
|
Tax Cost | $ 545,842,729 |
The tax-based components of distributable earnings as of period end were as follows:
Undistributed ordinary income | $ 1,864,973 |
Undistributed long-term capital gain | $ 5,248,238 |
Net unrealized appreciation (depreciation) | $ 10,843,303 |
The tax character of distributions paid was as follows:
| November 30, 2009 | November 30, 2008 |
Ordinary Income | $ 12,414,165 | $ 14,814,474 |
Annual Report
3. Operating Policies.
Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.
Delayed Delivery Transactions and When-Issued Securities. 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.
4. Investments in Derivative Instruments.
Objectives and Strategies for Investing in Derivative Instruments. The Fund uses derivative instruments ("derivatives"), including futures contracts and swap agreements, in order to meet its investment objectives. The Fund's strategy is to use derivatives as a risk management tool and as an additional way to gain exposure to certain types of assets. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.
Annual Report
Notes to Financial Statements - continued
4. Investments in Derivative Instruments - continued
Objectives and Strategies for Investing in Derivative Instruments - continued
While utilizing derivatives in pursuit of its investment objectives, the Fund is exposed to certain financial risk relative to those derivatives. This risk is further explained below:
Interest Rate Risk | Interest rate risk is the risk that the value of interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates. |
The following notes provide more detailed information about each derivative type held by the Fund:
Futures Contracts. The Fund uses futures contracts to manage its exposure to the bond market and to fluctuations in interest rates. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. 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. Risks of loss may include interest rate risk, and potential lack of liquidity in the market. Futures have minimal counterparty risk to the Fund since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.
The purchaser or seller of a futures contract is not required to pay for or deliver the instrument unless the contract is held until the delivery date. 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. Securities deposited to meet margin requirements are identified in the Fund's Schedule of Investments. Futures contracts are marked-to-market daily and subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities and changes in value are recognized as unrealized gain (loss). Realized gain (loss) is recorded upon the expiration or closing of the futures contract. The net realized gain (loss) and change in unrealized gain (loss) on futures contracts during the period is included on the Statement of Operations.
At the end of the period, the Fund had no open futures contracts.
Annual Report
4. Investments in Derivative Instruments - continued
Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Any upfront payments made or received upon entering a swap contract to compensate for differences between stated terms of the agreement and prevailing market conditions (e.g. credit spreads, interest rates or other factors) are recorded as realized gains or losses ratably over the term of the swap in the Fund's accompanying Statement of Operations. Risks of loss may exceed amounts recognized on the Fund's Statement of Assets and Liabilities. In addition, there is the risk of failure by the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." The total notional amount of all open swap agreements at period end is indicative of the volume of this derivative type. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and, if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.
The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Risks of loss may include interest rate risk and the possible inability of the counterparty to fulfill its obligations under the agreement. The Fund's maximum risk of loss from counterparty credit risk is the discounted net value of cash flows to be received from/paid to the counterparty over the contract's remaining life, to the extent that amount is positive. This risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund's exposure to the counterparty. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.
Annual Report
Notes to Financial Statements - continued
4. Investments in Derivative Instruments - continued
Realized and Change in Unrealized Gain (Loss) on Derivative Instruments. A summary of the Fund's value of derivatives by primary risk exposure as of period end, if any, is included at the end of the Fund's Schedule of Investments. The table below reflects the Fund's realized gain (loss) and change in unrealized gain (loss) for derivatives during the period.
Risk Exposure / Derivative Type | Realized | Change in Unrealized |
Interest Rate Risk |
|
|
Futures Contracts | $ 209,422 | $ - |
Swap Agreements | 1,925,268 | (923,059) |
Total Interest Rate Risk | 2,134,690 | (923,059) |
Total Derivatives Realized and Change in Unrealized Gain (Loss) (a)(b) | $ 2,134,690 | $ (923,059) |
(a) Total derivatives realized gain (loss) included in the Statement of Operations is comprised of $209,422 for futures contracts and $1,925,268 for swap agreements.
(b) Total derivatives change in unrealized gain (loss) included in the Statement of Operations is comprised of $(923,059) for swap agreements.
5. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $91,451,299 and $21,070,606, respectively.
The Fund realized a gain on the sale of an investment not meeting the investment restrictions of the Fund.
6. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee that is based on an annual rate of .45% of the Fund's average net assets. FMR pays all other expenses, except the compensation 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.
7. Committed Line of Credit.
The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $3,265 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.
Annual Report
8. Security Lending.
The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. At period end, there were no security loans outstanding. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $47,520.
9. Bank Borrowings.
The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period for which loans were outstanding amounted to $35,414,000. The weighted average interest rate was .78%. The interest expense amounted to $765 under the bank borrowing program. At period end, there were no bank borrowings outstanding.
10. 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 management fee. During the period, these credits reduced the Fund's management fee by $4,304.
11. 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
Annual Report
Notes to Financial Statements - continued
11. Other - continued
exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.
Annual Report
Report of Independent Registered Public Accounting Firm
To the Trustees of Fidelity Advisor Series IV and the Shareholders of Fidelity Institutional Short-Intermediate Government Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Institutional Short-Intermediate Government Fund (a fund of Fidelity Advisor Series IV) at November 30, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Institutional Short-Intermediate Government Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at November 30, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
January 15, 2010
Annual Report
Trustees and Officers
The Trustees and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for James C. Curvey, each of the Trustees oversees 188 funds advised by FMR or an affiliate. Mr. Curvey oversees 411 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) (Independent Trustee), shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. The executive officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an interested person may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Abigail P. Johnson (47) | |
| Year of Election or Appointment: 2009 Ms. Johnson is Trustee and Chairman of the Board of Trustees of certain Trusts. Ms. Johnson serves as President of Personal and Workplace Investing (2005-present). Ms. Johnson is a Director of FMR LLC. Previously, Ms. Johnson served as President and a Director of FMR (2001- |
James C. Curvey (74) | |
| Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006-present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University. |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
Independent Trustees:
Correspondence intended for each Independent Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
Albert R. Gamper, Jr. (67) | |
| Year of Election or Appointment: 2006 Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President. Mr. Gamper currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities), a member of the Board of Trustees, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System. Previously, Mr. Gamper served as Chairman of the Board of Governors, Rutgers University (2004-2007). |
Arthur E. Johnson (62) | |
| Year of Election or Appointment: 2008 Mr. Johnson serves as a member of the Board of Directors of Eaton Corporation (diversified power management, 2009-present) and AGL Resources, Inc. (holding company). Previously, Mr. Johnson served as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor, 1999-2009), and on the Board of Directors of IKON Office Solutions, Inc. (1999-2008). Mr. Arthur E. Johnson and Ms. Abigail P. Johnson are not related. |
Michael E. Kenneally (55) | |
| Year of Election or Appointment: 2009 Previously, Mr. Kenneally served as a Member of the Advisory Board for certain Fidelity Fixed Income and Asset Allocation Funds (2008-2009). Mr. Kenneally served as Chairman and Global Chief Executive Officer of Credit Suisse Asset Management (2003-2005). Mr. Kenneally was a Director of The Credit Suisse Funds (U.S. Mutual Fund, 2004-2008) and was awarded the Chartered Financial Analyst (CFA) designation in 1991. |
James H. Keyes (69) | |
| Year of Election or Appointment: 2007 Mr. Keyes serves as a member of the Boards of Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines) and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions). Previously, Mr. Keyes served as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008). |
Marie L. Knowles (63) | |
| Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. Ms. Knowles currently serves as a Director of McKesson Corporation (healthcare service). Ms. Knowles is an Honorary Trustee of the Brookings Institution and a member of the Board of the Catalina Island Conservancy and of the Santa Catalina Island Company (2009-present). She also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California and the Foundation Board of the School of Architecture at the University of Virginia (2007-present). Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007). |
Kenneth L. Wolfe (70) | |
| Year of Election or Appointment: 2005 Mr. Wolfe served as Chairman and a Director (2007-2009) and Chairman and Chief Executive Officer of Hershey Foods Corporation, and as a member of the Boards of Adelphia Communications Corporation (telecommunications, 2003-2006), Bausch & Lomb, Inc. (medical/pharmaceutical, 1993-2007), and Revlon, Inc. (2004-2009). |
Annual Report
Executive Officers:
Correspondence intended for each executive officer may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
John R. Hebble (51) | |
| Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Hebble also serves as Assistant Treasurer of other Fidelity funds (2009-present) and is an employee of Fidelity Investments. |
Boyce I. Greer (53) | |
| Year of Election or Appointment: 2005 or 2006 Vice President of Fidelity's Fixed Income Funds (2006) and Asset Allocation Funds (2005). Mr. Greer is also a Trustee of other investment companies advised by FMR. Mr. Greer is President of the Asset Allocation Division (2008-present), President and a Director of Strategic Advisers, Inc. (2008- |
Christopher P. Sullivan (55) | |
| Year of Election or Appointment: 2009 Vice President of Fidelity's Bond Funds. Mr. Sullivan also serves as President of Fidelity's Bond Group (2009-present). Previously, Mr. Sullivan served as Managing Director, Co-Head of U.S. Fixed Income at Goldman Sachs Asset Management (2001-2009). |
Scott C. Goebel (41) | |
| Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); Deputy General Counsel of FMR LLC; Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), Fidelity Investments Money Management, Inc. (2008-present), Fidelity Management & Research (U.K.) Inc. (2008-present), and Fidelity Research and Analysis Company (2008-present). Previously, Mr. Goebel served as Assistant Secretary of the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007). |
Holly C. Laurent (55) | |
| Year of Election or Appointment: 2008 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Laurent is an employee of Fidelity Investments. Previously, Ms. Laurent was Senior Vice President and Head of Legal for Fidelity Business Services India Pvt. Ltd. (2006-2008), and Senior Vice President, Deputy General Counsel and Group Head for FMR LLC (2005-2006). |
Christine Reynolds (51) | |
| Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). |
Michael H. Whitaker (42) | |
| Year of Election or Appointment: 2008 Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Whitaker is an employee of Fidelity Investments (2007-present). Prior to joining Fidelity Investments, Mr. Whitaker worked at MFS Investment Management where he served as Senior Vice President and Chief Compliance Officer (2004-2006), and Assistant General Counsel. |
Jeffrey S. Christian (48) | |
| Year of Election or Appointment: 2009 Deputy Treasurer of the Fidelity funds. Mr. Christian is an employee of Fidelity Investments. Previously, Mr. Christian served as Chief Financial Officer (2008-2009) of certain Fidelity funds, Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (2004-2009), and as Vice President of Business Analysis (2003-2004). |
Bryan A. Mehrmann (48) | |
| Year of Election or Appointment: 2005 Deputy Treasurer of the Fidelity funds. Mr. Mehrmann is an employee of Fidelity Investments. Previously, Mr. Mehrmann served as Vice President of Fidelity Investments Institutional Services Group (FIIS)/Fidelity Investments Institutional Operations Company, Inc. (FIIOC) Client Services (1998-2004). |
Stephanie J. Dorsey (40) | |
| Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Dorsey is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank. |
Paul M. Murphy (62) | |
| Year of Election or Appointment: 2007 Assistant Treasurer of the Fidelity funds. Mr. Murphy is an employee of Fidelity Investments. Previously, Mr. Murphy served as Chief Financial Officer of the Fidelity funds (2005-2006), Vice President and Associate General Counsel of FMR (2007), and Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (1994-2007). |
Kenneth B. Robins (40) | |
| Year of Election or Appointment: 2009 Assistant Treasurer of the Fidelity Fixed Income and Asset Allocation Funds. Mr. Robins also serves as President and Treasurer of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Before joining Fidelity Investments, Mr. Robins worked at KPMG LLP, where he was a partner in KPMG's department of professional practice (2002-2004). |
Gary W. Ryan (51) | |
| Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005). |
Annual Report
Distributions (Unaudited)
The fund hereby designates as a capital gain with respect to the taxable year ended November 30, 2009 $5,248,238, or, if subsequently determined to be different, the net capital gain of such year.
A total of 40.35% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund designates $10,836,710 of distributions paid during the period January 1, 2009 to November 30, 2009, as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.
The fund will notify shareholders in January 2010 of amounts for use in preparing 2009 income tax returns.
Annual Report
Proxy Voting Results
A special meeting of the fund's shareholders was held on September 16, 2009. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.
PROPOSAL 1 | ||
To elect a Board of Trustees.A | ||
| # of | % of |
James C. Curvey | ||
Affirmative | 306,198,252.46 | 94.460 |
Withheld | 17,957,147.60 | 5.540 |
TOTAL | 324,155,400.06 | 100.000 |
Albert R. Gamper, Jr. | ||
Affirmative | 305,886,389.01 | 94.364 |
Withheld | 18,269,011.05 | 5.636 |
TOTAL | 324,155,400.06 | 100.000 |
Abigail P. Johnson | ||
Affirmative | 305,421,509.54 | 94.221 |
Withheld | 18,733,890.52 | 5.779 |
TOTAL | 324,155,400.06 | 100.000 |
Arthur E. Johnson | ||
Affirmative | 306,033,909.39 | 94.410 |
Withheld | 18,121,490.67 | 5.590 |
TOTAL | 324,155,400.06 | 100.000 |
Michael E. Kenneally | ||
Affirmative | 306,713,632.52 | 94.619 |
Withheld | 17,441,767.54 | 5.381 |
TOTAL | 324,155,400.06 | 100.000 |
James H. Keyes | ||
Affirmative | 306,673,074.62 | 94.607 |
Withheld | 17,482,325.44 | 5.393 |
TOTAL | 324,155,400.06 | 100.000 |
Marie L. Knowles | ||
Affirmative | 306,297,939.04 | 94.491 |
Withheld | 17,857,461.02 | 5.509 |
TOTAL | 324,155,400.06 | 100.000 |
Kenneth L. Wolfe | ||
Affirmative | 304,994,123.82 | 94.089 |
Withheld | 19,161,276.24 | 5.911 |
TOTAL | 324,155,400.06 | 100.000 |
PROPOSAL 2 | ||
To amend the Declaration of Trust to reduce the required quorum for future shareholder meetings.A | ||
| # of | % of |
Affirmative | 257,051,900.19 | 79.299 |
Against | 49,261,757.80 | 15.197 |
Abstain | 14,842,212.44 | 4.579 |
Broker | 2,999,529.63 | 0.925 |
TOTAL | 324,155,400.06 | 100.000 |
A Denotes trust-wide proposal and voting results. |
Annual Report
Board Approval of Investment Advisory Contracts and Management Fees
Fidelity Institutional Short-Intermediate Government Fund
Each year, 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 and considers at each of its meetings factors that are relevant to its annual consideration of the renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. The Board has established three standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. The Operations Committee meets regularly throughout the year and, among other matters, considers matters specifically related to the annual consideration of the renewal of the fund's Advisory Contracts. The Board, acting directly and through its Committees, requests and receives information concerning the annual consideration of the renewal of the fund's Advisory Contracts. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.
At its September 2009 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders.
In considering whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel and through the exercise of its business judgment, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, 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.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
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 fund's investment personnel 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 management personnel. In response to the recent financial crisis, Fidelity took a number of actions intended to cut costs and improve efficiency without weakening the investment teams or resources. The Board specifically noted Fidelity's response to the 2008 credit market crisis. The Board noted that Fidelity's analysts have access to a variety of technological tools and market and securities data that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. 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 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 integral part of the fixed-income portfolio management investment process.
Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the 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 over time across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.
Annual Report
Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing a large variety of mutual fund investor services. The Board noted that Fidelity had taken a number of actions over the previous year that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure and broaden the focus of the investment research teams; (ii) bolstering the senior management team that oversees asset management; (iii) contractually agreeing to reduce the management fee on Fidelity U.S. Bond Index Fund; and (iv) expanding Class A and Class T load waiver categories to increase rollover retention opportunities and create consistent policies across the classes.
Investment Performance. The Board considered whether the fund has operated in accordance with its investment objective, as well as its record of compliance with its investment restrictions. 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, 2008, the fund's cumulative total returns, 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 box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the 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 peer group whose performance was equal to or lower than that of the fund.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Fidelity Institutional Short-Intermediate Government Fund
The Board reviewed the fund's relative investment performance against its 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 investment performance of the fund was lower than its benchmark for all the periods shown. The Board discussed with FMR actions that have been taken by FMR to improve the fund's below-benchmark performance and how investment personnel evaluate potential for incremental return against the risks involved in obtaining that incremental return. The Board considered the steps that FMR has taken to strengthen and refine its risk management processes in light of recent credit events that have affected various sectors of the fixed-income markets. The Board also reviewed the fund's performance during 2009.
Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance and factoring in the unprecedented recent market events, 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 comparison and by reducing the number of universes to which various Fidelity funds are compared.
Annual Report
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 4% means that 96% 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. For a more meaningful comparison of management fees, the 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 bookkeeping 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.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
Fidelity Institutional Short-Intermediate Government Fund
The Board noted that the fund's hypothetical net management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2008.
Based on its review, the Board 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 the 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 reimbursements on fees and expenses. As part of its review, the Board also considered 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 2008.
In its review, 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.
Annual Report
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, 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. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.
PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of 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.
Annual Report
Board Approval of Investment Advisory Contracts and
Management Fees - continued
In February 2009, the Board created an Ad Hoc Committee (the "Committee") to analyze economies of scale. The Committee was formed to consider whether FMR attains economies of scale in respect of the management and servicing of the Fidelity funds, whether the Fidelity funds have appropriately benefited from such economies of scale, and whether there is potential for realization of any further economies of scale.
The Board concluded, considering the findings of the Committee, 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 Fidelity funds' Advisory Contracts, the Board requested and received additional information on certain topics, including (i) fund performance trends, actions to be taken by FMR to improve certain funds' overall performance and Fidelity's long-term strategies for certain funds; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability, and the extent to which current market conditions have affected retention and recruitment; (v) the selection of and compensation paid by FMR to fund sub-advisers; (vi) Fidelity's fee structures and rationale for recommending different fees among categories of funds; (vii) the rationale for any differences between fund fee structures and fee structures in place for other Fidelity clients; and (viii) explanations for the relative total expenses borne by certain funds and classes, total expense competitive trends, and actions that might be taken by FMR to reduce total expenses for certain funds and classes.
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.
Annual 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.
(phone_graphic)
Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
Press
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)
Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Annual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)
Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)
For Non-Retirement
Accounts
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
(letter_graphic)
For Retirement
Accounts
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
Annual 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
2000 Avenue of the Stars
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
16656 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
398 West El Camino Real
Sunnyvale, CA
111 South Westlake Blvd
Thousand Oaks, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6326 Canoga Avenue
Woodland Hills, CA
Colorado
281 East Flatiron Circle
Broomfield, CO
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
175 East Altamonte Drive
Altamonte Springs, FL
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
8880 Tamiami Trail, North
Naples, FL
230 Royal Palm Way
Palm Beach, 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
401 North Michigan Avenue
Chicago, IL
One Skokie Valley Road
Highland Park, IL
1415 West 22nd Street
Oak Brook, IL
15105 S LaGrange Road
Orland Park, IL
1572 East Golf Road
Schaumburg, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
8480 Keystone Crossing
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7315 Wisconsin Avenue
Bethesda, MD
610 York Road
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
200 Endicott Street
Danvers, MA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
405 Cochituate Road
Framingham, MA
551 Boston Turnpike
Shrewsbury, MA
Michigan
500 E. Eisenhower Pkwy.
Ann Arbor, MI
280 Old N. Woodward Ave.
Birmingham, MI
30200 Northwestern Hwy.
Farmington Hills, MI
43420 Grand River Avenue
Novi, MI
Minnesota
7740 France Avenue South
Edina, MN
8342 3rd Street North
Oakdale, MN
Missouri
1524 South Lindbergh Blvd.
St. Louis, MO
Nevada
2225 Village Walk Drive
Henderson, NV
New Jersey
501 Route 73 South
Marlton, NJ
150 Essex Street
Millburn, NJ
35 Morris Street
Morristown, NJ
396 Route 17, North
Paramus, NJ
3518 Route 1 North
Princeton, NJ
530 Broad Street
Shrewsbury, NJ
New Mexico
2261 Q Street NE
Albuquerque, NM
New York
1130 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
1800 Crocker Road
Westlake, 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
10 Memorial Boulevard
Providence, RI
Tennessee
3018 Peoples Street
Johnson City, TN
7628 West Farmington Blvd.
Germantown, TN
2035 Mallory Lane
Franklin, 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
1701 Lake Robbins Drive
The Woodlands, 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
Utah
279 West South Temple
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
10500 NE 8th Street
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
16020 West Bluemound Road
Brookfield, WI
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
Fidelity Investments Money
Management, Inc.
FIL Investment Advisors
FIL Investment Advisors (U.K.) Ltd.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Hong Kong) Limited
Fidelity Management & Research
(Japan) Inc.
Fidelity Research & Analysis Company
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Service Agents
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Fidelity Service Company, Inc.
Boston, MA
Custodian
The Bank of New York Mellon
New York, NY
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) 1-800-544-5555
Automated line for quickest service
ISIG-UANN-0110 1.786710.106
Item 2. Code of Ethics
As of the end of the period, November 30, 2009, Fidelity Advisor Series IV (the trust) has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert
The Board of Trustees of the trust has determined that Marie L. Knowles is an audit committee financial expert, as defined in Item 3 of Form N-CSR. Ms. Knowles is independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services
Fees and Services
The following table presents fees billed by PricewaterhouseCoopers LLP ("PwC") in each of the last two fiscal years for services rendered to Fidelity Institutional Short-Intermediate Government Fund (the "Fund"):
Services Billed by PwC
November 30, 2009 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Institutional Short-Intermediate Government Fund | $54,000 | $- | $3,200 | $1,700 |
November 30, 2008 FeesA
| Audit Fees | Audit-Related Fees | Tax Fees | All Other Fees |
Fidelity Institutional Short-Intermediate Government Fund | $46,000 | $- | $3,700 | $1,700 |
A Amounts may reflect rounding.
The following table presents fees billed by PwC that were required to be approved by the Audit Committee for services that relate directly to the operations and financial reporting of the Fund and that are rendered on behalf of Fidelity Management & Research Company ("FMR") and entities controlling, controlled by, or under common control with FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) that provide ongoing services to the Fund ("Fund Service Providers"):
Services Billed by PwC
| November 30, 2009A | November 30, 2008A |
Audit-Related Fees | $2,755,000 | $2,360,000B |
Tax Fees | $- | $2,000 |
All Other Fees | $- | $-B |
A Amounts may reflect rounding.
B Reflects current period presentation.
"Audit-Related Fees" represent fees billed for assurance and related services that are reasonably related to the performance of the fund audit or the review of the fund's financial statements and that are not reported under Audit Fees.
"Tax Fees" represent fees billed for tax compliance, tax advice or tax planning that relate directly to the operations and financial reporting of the fund.
"All Other Fees" represent fees billed for assurance services provided to the fund or Fund Service Provider that relate directly to the operations and financial reporting of the fund, excluding those services that are reported under Audit Fees, Audit-Related Fees or Tax Fees.
Assurance services must be performed by an independent public accountant.
* * *
The aggregate non-audit fees billed by PwC for services rendered to the Fund, FMR (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any Fund Service Provider for each of the last two fiscal years of the Fund are as follows:
Billed By | November 30, 2009 A | November 30, 2008 A |
PwC | $4,415,000 | $3,310,000B |
A Amounts may reflect rounding.
B Reflects current period presentation.
The trust's Audit Committee has considered non-audit services that were not pre-approved that were provided by PwC to Fund Service Providers to be compatible with maintaining the independence of PwC in its audit of the Fund, taking into account representations from PwC, in accordance with Public Company Accounting Oversight Board rules, regarding its independence from the Fund and its related entities and FMR's review of the appropriateness and permissibility under applicable law of such non-audit services prior to their provision to the Fund Service Providers.
Audit Committee Pre-Approval Policies and Procedures
The trust's Audit Committee must pre-approve all audit and non-audit services provided by a fund's independent registered public accounting firm relating to the operations or financial reporting of the fund. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee's consideration of non-audit services by the audit firms that audit the Fidelity funds. The policies and procedures require that any non-audit service provided by a fund audit firm to a Fidelity fund and any non-audit service provided by a fund auditor to a Fund Service Provider that relates directly to the operations and financial reporting of a Fidelity fund ("Covered Service") are subject to approval by the Audit Committee before such service is provided.
All Covered Services must be approved in advance of provision of the service either: (i) by formal resolution of the Audit Committee, or (ii) by oral or written approval of the service by the Chair of the Audit Committee (or if the Chair is unavailable, such other member of the Audit Committee as may be designated by the Chair to act in the Chair's absence). The approval contemplated by (ii) above is permitted where the Treasurer determines that action on such an engagement is necessary before the next meeting of the Audit Committee.
Non-audit services provided by a fund audit firm to a Fund Service Provider that do not relate directly to the operations and financial reporting of a Fidelity fund are reported to the Audit Committee on a periodic basis.
Non-Audit Services Approved Pursuant to Rule 2-01(c)(7)(i)(C) and (ii) of Regulation S-X ("De Minimis Exception")
There were no non-audit services approved or required to be approved by the Audit Committee pursuant to the De Minimis Exception during the Fund's last two fiscal years relating to services provided to (i) the Fund or (ii) any Fund Service Provider that relate directly to the operations and financial reporting of the Fund.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Not applicable.
(b) 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 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 trust's 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) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(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 Advisor Series IV
By: | /s/John R. Hebble |
| John R. Hebble |
| President and Treasurer |
|
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Date: | January 27, 2010 |
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/John R. Hebble |
| John R. Hebble |
| President and Treasurer |
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Date: | January 27, 2010 |
By: | /s/Christine Reynolds |
| Christine Reynolds |
| Chief Financial Officer |
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Date: | January 27, 2010 |