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- 3855
Fidelity Advisor Series VIII
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | December 31 |
| |
Date of reporting period: | June 30, 2004 |
Item 1. Reports to Stockholders
(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Emerging Markets Income
Fund - Class A, Class T, Class B
and Class C
Semiannual Report
June 30, 2004
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights. |
Notes | <Click Here> | Notes to the financial statements. |
For a free copy of the fund's proxy voting guidelines call 1-877-208-0098, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.
With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:
First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.
Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.
Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.
For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.
Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Investment Changes
Top Five Countries as of June 30, 2004 |
(excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Brazil | 19.8 | 17.5 |
Russia | 14.7 | 15.6 |
Mexico | 12.0 | 11.6 |
Venezuela | 7.9 | 6.8 |
Argentina | 5.2 | 4.2 |
Percentages are adjusted for the effect of open futures contracts, if applicable. Top countries are based upon location of issuer of each security, including where the fund is exposed to potential political and credit risks. |
Top Five Holdings as of June 30, 2004 |
(by issuer, excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Brazilian Federative Republic | 19.1 | 17.1 |
Russian Federation | 11.1 | 11.5 |
United Mexican States | 10.7 | 10.9 |
Venezuelan Republic | 7.9 | 6.0 |
Turkish Republic | 4.7 | 4.6 |
| 53.5 | |
Asset Allocation (% of fund's net assets) |
As of June 30, 2004 | As of December 31, 2003 |
 | Corporate Bonds 15.2% | | | Corporate Bonds 13.2% | |
 | Government
Obligations 80.8% | | | Government
Obligations 71.6% | |
 | Other Investments 0.5% | | | Other Investments 1.2% | |
 | Short-Term
Investments and
Net Other Assets 3.5% | | | Short-Term
Investments and
Net Other Assets 14.0% | |
Semiannual Report
Investments June 30, 2004 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 15.2% |
| Principal
Amount (i) | | Value
(Note 1) |
Argentina - 1.1% |
Pecom Energia SA 8.125% 7/15/10 (Reg. S) | | $ 420,000 | | $ 392,700 |
Telefonica de Argentina SA: | | | | |
9.125% 11/7/10 | | 420,000 | | 403,200 |
11.875% 11/1/07 | | 735,000 | | 815,850 |
TOTAL ARGENTINA | | 1,611,750 |
Bahamas (Nassau) - 0.1% |
Odebrecht Overseas Ltd. 11.5% 2/25/09 (e) | | 170,000 | | 167,025 |
Bermuda - 0.2% |
APP China Group Ltd.: | | | | |
14% 3/15/10 (c)(e) | | 1,125,000 | | 146,250 |
14% 3/15/10 (Reg. S) (c) | | 1,665,000 | | 216,450 |
TOTAL BERMUDA | | 362,700 |
Brazil - 0.7% |
Braskem SA 11.75% 1/22/14 (e) | | 165,000 | | 146,438 |
Compania Siderurgica Paulista 8.25% 1/30/09 (e) | | 170,000 | | 164,050 |
Empresa Brasil de Telecomm SA 11% 12/15/08 (e) | | 385,000 | | 415,800 |
Telemig Cellular SA/Amazonia Cellular SA 8.75% 1/20/09 (e) | | 415,000 | | 381,800 |
TOTAL BRAZIL | | 1,108,088 |
Cayman Islands - 0.1% |
CSN Islands VIII Corp. 9.75% 12/16/13 (e) | | 165,000 | | 148,500 |
Germany - 0.1% |
Citigroup Global Markets Deutschland AG 9.25% 4/19/14 (e) | | 165,000 | | 146,025 |
Indonesia - 0.3% |
APP International Finance (Mauritius) Ltd.: | | | | |
0% 7/5/04 (c)(e) | | 1,235,000 | | 49,400 |
0% 7/5/04 (Reg. S) (c) | | 445,000 | | 17,800 |
MEI Euro Finance Ltd. 8.75% 5/22/10 (e) | | 430,000 | | 384,850 |
TOTAL INDONESIA | | 452,050 |
Luxembourg - 0.5% |
Millicom International Cellular SA 10% 12/1/13 (e) | | 785,000 | | 792,850 |
Malaysia - 1.3% |
Petroliam Nasional BHD (Petronas): | | | | |
7.625% 10/15/26 (Reg. S) | | 1,235,000 | | 1,311,416 |
Nonconvertible Bonds - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Malaysia - continued |
Petroliam Nasional BHD (Petronas): - continued | | | | |
yankee 7.75% 8/15/15 (e) | | $ 330,000 | | $ 375,375 |
Petronas Capital Ltd. 7% 5/22/12 (e) | | 165,000 | | 179,900 |
TOTAL MALAYSIA | | 1,866,691 |
Mexico - 1.3% |
America Movil SA de CV: | | | | |
4.125% 3/1/09 (e) | | 150,000 | | 140,884 |
5.5% 3/1/14 (e) | | 115,000 | | 105,937 |
Banco Nacional de Comerico Exterior SNC 3.875% 1/21/09 (e) | | 155,000 | | 144,925 |
Gruma SA de CV yankee 7.625% 10/15/07 | | 195,000 | | 211,575 |
Grupo Televisa SA de CV 8% 9/13/11 | | 170,000 | | 184,450 |
Innova S. de R.L. 9.375% 9/19/13 | | 185,000 | | 194,250 |
Pemex Project Funding Master Trust 9.125% 10/13/10 | | 665,000 | | 764,750 |
TV Azteca SA de CV euro 10.5% 2/15/07 (Reg. S) | | 170,000 | | 173,400 |
TOTAL MEXICO | | 1,920,171 |
Netherlands - 0.4% |
Hurricane Finance BV 9.625% 2/12/10 (e) | | 340,000 | | 354,450 |
Sun Sage BV 8.25% 3/26/09 (e) | | 170,000 | | 164,900 |
TOTAL NETHERLANDS | | 519,350 |
Russia - 3.6% |
Mobile Telesystems Finance SA 9.75% 1/30/08 (e) | | 2,540,000 | | 2,628,900 |
OAO Gazprom 10.5% 10/21/09 | | 2,465,000 | | 2,791,613 |
TOTAL RUSSIA | | 5,420,513 |
Tunisia - 0.3% |
Banque Centrale de Tunisie 7.375% 4/25/12 | | 400,000 | | 440,500 |
Ukraine - 0.7% |
Kyivstar GSM: | | | | |
12.75% 11/21/05 (e) | | 475,000 | | 514,425 |
12.75% 11/21/05 (Reg. S) | | 510,000 | | 552,330 |
TOTAL UKRAINE | | 1,066,755 |
United States of America - 4.5% |
Freeport-McMoRan Copper & Gold, Inc. 10.125% 2/1/10 | | 680,000 | | 754,800 |
Pemex Project Funding Master Trust: | | | | |
2.94% 10/15/09 (e)(f) | | 2,660,000 | | 2,762,410 |
6.125% 8/15/08 | | 500,000 | | 511,250 |
Nonconvertible Bonds - continued |
| Principal
Amount (i) | | Value
(Note 1) |
United States of America - continued |
Pemex Project Funding Master Trust: - continued | | | | |
7.375% 12/15/14 | | $ 1,745,000 | | $ 1,779,900 |
8.625% 2/1/22 | | 865,000 | | 901,763 |
TOTAL UNITED STATES OF AMERICA | | 6,710,123 |
TOTAL NONCONVERTIBLE BONDS (Cost $24,414,751) | 22,733,091 |
Government Obligations - 80.8% |
|
Argentina - 4.1% |
Argentine Republic: | | | | |
BOCON: | | | | |
4/1/07 February 2002 coupon (c)(h) | | 620,000 | | 209 |
4/1/07 January 2002 coupon (c)(h) | | 620,000 | | 209 |
4/1/07 March 2002 coupon (c)(h) | | 620,000 | | 209 |
2% 4/1/07 (c)(f) | | 436,116 | | 93,000 |
Brady: | | | | |
par L-GP 6% 3/31/23 (c) | | 2,375,000 | | 1,205,313 |
2% 3/29/05 (c)(f) | | 1,282,400 | | 346,248 |
1.2138% 8/3/12 (c)(f) | | 1,280,000 | | 853,306 |
9.75% 9/19/27 (c) | | 2,450,000 | | 667,625 |
11.375% 3/15/10 (c) | | 1,400,000 | | 413,000 |
11.375% 1/30/17 (c) | | 1,440,000 | | 424,800 |
11.75% 4/7/09 (c) | | 1,396,000 | | 418,800 |
11.75% 6/15/15 (c) | | 1,464,000 | | 431,880 |
12.25% 6/19/18 (c) | | 1,252,275 | | 334,984 |
12.375% 2/21/12 (c) | | 880,000 | | 264,000 |
15.5% 12/19/08 (c) | | 2,270,000 | | 624,250 |
82.329% 4/10/05 (c)(f) | | 245,000 | | 78,400 |
TOTAL ARGENTINA | | 6,156,233 |
Brazil - 19.1% |
Brazilian Federative Republic: | | | | |
Brady: | | | | |
capitalization bond 8% 4/15/14 | | 13,287,484 | | 12,232,778 |
debt conversion bond 2.125% 4/15/12 (f) | | 2,272,942 | | 1,909,271 |
7.3094% 6/29/09 (f) | | 795,000 | | 797,783 |
8.875% 4/15/24 | | 2,330,000 | | 1,904,775 |
9.25% 10/22/10 | | 785,000 | | 745,750 |
10% 1/16/07 | | 415,000 | | 437,825 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Brazil - continued |
Brazilian Federative Republic: - continued | | | | |
10% 8/7/11 | | $ 780,000 | | $ 758,550 |
10.25% 6/17/13 | | 890,000 | | 863,300 |
11% 1/11/12 | | 850,000 | | 856,375 |
11% 8/17/40 | | 3,130,000 | | 2,950,025 |
11.25% 7/26/07 | | 1,555,000 | | 1,675,513 |
11.5% 3/12/08 | | 795,000 | | 849,458 |
12% 4/15/10 | | 795,000 | | 844,688 |
14.5% 10/15/09 | | 1,595,000 | | 1,862,163 |
TOTAL BRAZIL | | 28,688,254 |
Bulgaria - 1.0% |
Bulgarian Republic Brady discount A 1.9825% 7/28/24 (f) | | 1,540,000 | | 1,540,000 |
Chile - 0.5% |
Chilean Republic 1.57% 1/28/08 (f) | | 800,000 | | 807,200 |
Colombia - 3.3% |
Colombian Republic: | | | | |
8.125% 5/21/24 | | 280,000 | | 227,500 |
8.625% 4/1/08 | | 330,000 | | 352,275 |
9.75% 4/23/09 | | 990,000 | | 1,059,300 |
10% 1/23/12 | | 930,000 | | 962,550 |
10.5% 7/9/10 | | 995,000 | | 1,073,356 |
10.75% 1/15/13 | | 535,000 | | 571,781 |
11.75% 2/25/20 | | 614,000 | | 671,563 |
TOTAL COLOMBIA | | 4,918,325 |
Croatia - 0.3% |
Croatian Republic 2% 7/30/10 (f) | | 390,000 | | 390,000 |
Dominican Republic - 0.3% |
Dominican Republic: | | | | |
9.04% 1/23/13 (e) | | 355,000 | | 214,775 |
9.5% 9/27/06 (Reg. S) | | 290,000 | | 203,000 |
TOTAL DOMINICAN REPUBLIC | | 417,775 |
Ecuador - 1.1% |
Ecuador Republic: | | | | |
7% 8/15/30 (d)(e) | | 911,000 | | 624,035 |
7% 8/15/30 (Reg. S) (d) | | 570,000 | | 390,450 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Ecuador - continued |
Ecuador Republic: - continued | | | | |
12% 11/15/12 (e) | | $ 239,000 | | $ 210,918 |
12% 11/15/12 (Reg. S) | | 530,000 | | 467,725 |
TOTAL ECUADOR | | 1,693,128 |
El Salvador - 0.8% |
El Salvador Republic: | | | | |
7.75% 1/24/23 (Reg. S) | | 505,000 | | 526,463 |
8.25% 4/10/32 (Reg. S) | | 320,000 | | 298,720 |
8.5% 7/25/11 (Reg. S) | | 335,000 | | 362,638 |
TOTAL EL SALVADOR | | 1,187,821 |
Ivory Coast - 0.2% |
Ivory Coast: | | | | |
Brady past due interest 2% 3/29/18 (Reg. S) (c)(f) | | 1,097,250 | | 172,817 |
FLIRB 2% 3/29/18 (Reg. S) (c)(f) | | 1,100,000 | | 165,000 |
TOTAL IVORY COAST | | 337,817 |
Jamaica - 0.4% |
Jamaican Government 11.75% 5/15/11 (Reg. S) | | 465,000 | | 521,963 |
Lebanon - 2.3% |
Lebanese Republic: | | | | |
7.875% 5/20/11 (e) | | 815,000 | | 821,113 |
10.25% 10/6/09 (Reg. S) | | 985,000 | | 1,098,275 |
11.625% 5/11/16 (Reg. S) | | 1,310,000 | | 1,496,675 |
TOTAL LEBANON | | 3,416,063 |
Mexico - 10.7% |
United Mexican States: | | | | |
4.625% 10/8/08 | | 1,245,000 | | 1,227,570 |
6.375% 1/16/13 | | 1,530,000 | | 1,526,940 |
6.625% 3/3/15 | | 650,000 | | 646,100 |
7.5% 4/8/33 | | 5,380,000 | | 5,232,050 |
8.125% 12/30/19 | | 2,085,000 | | 2,239,290 |
8.625% 3/12/08 | | 820,000 | | 925,370 |
11.375% 9/15/16 | | 2,229,000 | | 3,120,600 |
11.5% 5/15/26 | | 805,000 | | 1,129,818 |
TOTAL MEXICO | | 16,047,738 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Nigeria - 1.4% |
Central Bank of Nigeria: | | | | |
promissory note 5.092% 1/5/10 | | $ 2,373,286 | | $ 2,165,890 |
warrants 11/15/20 (a)(g) | | 1,000 | | 350 |
TOTAL NIGERIA | | 2,166,240 |
Pakistan - 0.2% |
Pakistani Republic 6.75% 2/19/09 | | 340,000 | | 334,900 |
Panama - 2.1% |
Panamanian Republic: | | | | |
8.875% 9/30/27 | | 920,000 | | 906,200 |
9.375% 1/16/23 | | 845,000 | | 861,900 |
9.625% 2/8/11 | | 1,225,000 | | 1,353,625 |
TOTAL PANAMA | | 3,121,725 |
Peru - 1.7% |
Peruvian Republic: | | | | |
9.125% 2/21/12 | | 1,255,000 | | 1,286,375 |
euro Brady past due interest 5% 3/7/17 (f) | | 1,501,500 | | 1,291,290 |
TOTAL PERU | | 2,577,665 |
Philippines - 4.3% |
Philippine Republic: | | | | |
8.375% 3/12/09 | | 795,000 | | 824,813 |
8.375% 2/15/11 | | 3,316,000 | | 3,286,985 |
8.875% 4/15/08 | | 500,000 | | 542,500 |
8.875% 3/17/15 | | 415,000 | | 400,475 |
9% 2/15/13 | | 660,000 | | 653,400 |
9.375% 1/18/17 | | 400,000 | | 405,000 |
9.875% 3/16/10 | | 295,000 | | 318,600 |
TOTAL PHILIPPINES | | 6,431,773 |
Russia - 11.1% |
Russian Federation: | | | | |
5% 3/31/30 (d)(e) | | 6,150,000 | | 5,619,562 |
5% 3/31/30 (Reg. S) (d) | | 3,235,000 | | 2,955,981 |
8.25% 3/31/10 (Reg. S) | | 2,720,000 | | 2,924,000 |
11% 7/24/18 (Reg. S) | | 2,277,000 | | 2,869,020 |
12.75% 6/24/28 (Reg. S) | | 1,614,000 | | 2,344,335 |
TOTAL RUSSIA | | 16,712,898 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
South Africa - 1.7% |
South African Republic: | | | | |
6.5% 6/2/14 | | $ 720,000 | | $ 720,000 |
9.125% 5/19/09 | | 650,000 | | 754,813 |
12% 2/28/06 | ZAR | 6,600,000 | | 1,116,717 |
TOTAL SOUTH AFRICA | | 2,591,530 |
Turkey - 4.7% |
Turkish Republic: | | | | |
9.875% 3/19/08 | | 1,135,000 | | 1,200,263 |
10.5% 1/13/08 | | 330,000 | | 355,575 |
11% 1/14/13 | | 1,365,000 | | 1,494,675 |
11.75% 6/15/10 | | 665,000 | | 746,463 |
12.375% 6/15/09 | | 2,775,000 | | 3,170,438 |
TOTAL TURKEY | | 6,967,414 |
Ukraine - 0.8% |
City of Kiev 8.75% 8/8/08 | | 200,000 | | 206,000 |
Ukraine Cabinet of Ministers 7.65% 6/11/13 (e) | | 630,000 | | 600,075 |
Ukraine Government 6.875% 3/4/11 (e) | | 355,000 | | 335,653 |
TOTAL UKRAINE | | 1,141,728 |
Uruguay - 0.8% |
Uruguay Republic: | | | | |
7.25% 2/15/11 | | 355,000 | | 291,988 |
7.5% 3/15/15 | | 710,000 | | 527,175 |
7.875% 1/15/33 pay-in-kind | | 652,828 | | 420,258 |
TOTAL URUGUAY | | 1,239,421 |
Venezuela - 7.9% |
Venezuelan Republic: | | | | |
oil recovery rights 4/15/20 (g) | | 4,005 | | 0 |
2.15% 4/20/11 (f) | | 810,000 | | 623,700 |
5.375% 8/7/10 | | 5,645,000 | | 4,459,550 |
7% 12/1/18 (Reg. S) | | 420,000 | | 305,970 |
9.25% 9/15/27 | | 3,360,000 | | 2,839,200 |
10.75% 9/19/13 | | 1,150,000 | | 1,141,375 |
13.625% 8/15/18 | | 75,000 | | 82,875 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Venezuela - continued |
Venezuelan Republic: - continued | | | | |
13.625% 8/15/18 | | $ 610,000 | | $ 674,050 |
euro Brady debt conversion bond 2.75% 12/18/07 (f) | | 1,749,930 | | 1,662,434 |
TOTAL VENEZUELA | | 11,789,154 |
TOTAL GOVERNMENT OBLIGATIONS (Cost $123,649,203) | 121,196,765 |
Sovereign Loan Participations - 0.5% |
|
Morocco - 0.5% |
Moroccan Kingdom loan participation - JP Morgan 2.0138% 1/2/09 (f)
(Cost $810,961) | | 825,000 | | 808,500 |
Money Market Funds - 0.4% |
| Shares | | |
Fidelity Cash Central Fund, 1.16% (b)
(Cost $604,878) | 604,878 | | 604,878 |
TOTAL INVESTMENT PORTFOLIO - 96.9% (Cost $149,479,793) | 145,343,234 |
NET OTHER ASSETS - 3.1% | | 4,671,810 |
NET ASSETS - 100% | $ 150,015,044 |
Security Type Abbreviations |
FLIRB | - | Front Loaded Interest Reduction Bonds |
Currency Abbreviations |
ZAR | - | South African rand |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments. |
(d) Debt obligation initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $18,741,225 or 12.5% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Quantity represents share amount. |
(h) Represents right to receive interest payment on underlying security. Principal shown is original face of underlying security. |
(i) Principal amount is stated in United States dollars unless otherwise noted. |
Other Information |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
AAA,AA,A | 0.7% |
BBB | 30.9% |
BB | 17.1% |
B | 32.2% |
CCC,CC,C | 12.5% |
D | 0.2% |
Not Rated | 2.9% |
Equities | 0.0% |
Short-Term Investments and Net Other Assets | 3.5% |
| 100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. |
The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $808,500 or 0.5% of net assets. |
Purchases and sales of securities, other than short-term securities, aggregated $194,523,553 and $178,633,701, respectively, of which long-term U.S. government and government agency obligations aggregated $4,198,864 and $4,188,475, respectively. |
Income Tax Information |
At December 31, 2003, the fund had a capital loss carryforward of approximately $328,000 all of which will expire on December 31, 2010. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
| June 30, 2004 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $149,479,793) - See accompanying schedule | | $ 145,343,234 |
Receivable for investments sold | | 2,562,248 |
Receivable for fund shares sold | | 615,617 |
Interest receivable | | 3,044,959 |
Prepaid expenses | | 335 |
Other affiliated receivables | | 42 |
Total assets | | 151,566,435 |
| | |
Liabilities | | |
Payable for investments purchased | $ 792,892 | |
Payable for fund shares redeemed | 449,281 | |
Distributions payable | 91,505 | |
Accrued management fee | 84,273 | |
Distribution fees payable | 49,435 | |
Other affiliated payables | 45,033 | |
Other payables and accrued expenses | 38,972 | |
Total liabilities | | 1,551,391 |
| | |
Net Assets | | $ 150,015,044 |
Net Assets consist of: | | |
Paid in capital | | $ 150,453,967 |
Undistributed net investment income | | 1,866,852 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 1,830,491 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (4,136,266) |
Net Assets | | $ 150,015,044 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
| June 30, 2004 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($24,195,112 ÷ 2,192,282 shares) | | $ 11.04 |
| | |
Maximum offering price per share (100/95.25 of $11.04) | | $ 11.59 |
Class T:
Net Asset Value and redemption price per share ($76,445,813 ÷ 6,940,455 shares) | | $ 11.01 |
| | |
Maximum offering price per share (100/96.50 of $11.01) | | $ 11.41 |
Class B:
Net Asset Value and offering price per share ($25,977,220 ÷ 2,339,471 shares) A | | $ 11.10 |
| | |
Class C:
Net Asset Value and offering price per share ($12,616,665 ÷ 1,139,092 shares) A | | $ 11.08 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($10,780,234 ÷ 985,894 shares) | | $ 10.93 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
| Six months ended June 30, 2004 (Unaudited) |
| | |
Investment Income | | |
Interest | | $ 5,816,836 |
| | |
Expenses | | |
Management fee | $ 553,457 | |
Transfer agent fees | 242,793 | |
Distribution fees | 324,904 | |
Accounting fees and expenses | 45,057 | |
Non-interested trustees' compensation | 394 | |
Custodian fees and expenses | 30,527 | |
Registration fees | 60,052 | |
Audit | 28,733 | |
Legal | 11,279 | |
Miscellaneous | 1,436 | |
Total expenses before reductions | 1,298,632 | |
Expense reductions | (2,319) | 1,296,313 |
Net investment income (loss) | | 4,520,523 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities | 2,382,821 | |
Foreign currency transactions | 11,747 | |
Total net realized gain (loss) | | 2,394,568 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (12,723,930) | |
Assets and liabilities in foreign currencies | 287 | |
Total change in net unrealized appreciation (depreciation) | | (12,723,643) |
Net gain (loss) | | (10,329,075) |
Net increase (decrease) in net assets resulting from operations | | $ (5,808,552) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
| Six months ended
June 30, 2004
(Unaudited) | Year ended
December 31,
2003 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 4,520,523 | $ 9,626,923 |
Net realized gain (loss) | 2,394,568 | 24,059,578 |
Change in net unrealized appreciation (depreciation) | (12,723,643) | 1,234,998 |
Net increase (decrease) in net assets resulting
from operations | (5,808,552) | 34,921,499 |
Distributions to shareholders from net investment income | (4,317,213) | (10,257,470) |
Share transactions - net increase (decrease) | (3,065,487) | 31,529,048 |
Redemption fees | 10,543 | - |
Total increase (decrease) in net assets | (13,180,709) | 56,193,077 |
| | |
Net Assets | | |
Beginning of period | 163,195,753 | 107,002,676 |
End of period (including undistributed net investment income of $1,866,852 and undistributed net investment income of $1,663,542, respectively) | $ 150,015,044 | $ 163,195,753 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.70 | $ 9.67 | $ 9.37 | $ 9.81 | $ 9.68 | $ 7.78 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .332 | .802 | .714H | 1.030G,H | .899 | .821 |
Net realized and unrealized gain (loss) | (.676) | 2.064 | .348H | (.431)G,H | .391 | 1.884 |
Total from investment operations | (.344) | 2.866 | 1.062 | .599 | 1.290 | 2.705 |
Distributions from net investment income | (.317) | (.836) | (.762) | (1.039) | (.947) | (.805) |
Distributions in excess of net investment income | - | - | - | - | (.213) | - |
Total distributions | (.317) | (.836) | (.762) | (1.039) | (1.160) | (.805) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.04 | $ 11.70 | $ 9.67 | $ 9.37 | $ 9.81 | $ 9.68 |
Total ReturnB,C,D | (2.98)% | 30.43% | 11.80% | 6.35% | 13.69% | 36.35% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 1.34%A | 1.32% | 1.36% | 1.45% | 1.41% | 1.46% |
Expenses net of voluntary waivers, if any | 1.34%A | 1.32% | 1.36% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.34%A | 1.32% | 1.35% | 1.40% | 1.39% | 1.40% |
Net investment income (loss) | 5.80%A | 7.31% | 7.56%H | 10.66%G,H | 8.98% | 9.57% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 24,195 | $ 26,787 | $ 13,920 | $ 7,601 | $ 6,010 | $ 2,140 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.070 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.17% and 11.39% to 7.56% and 10.66%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.68 | $ 9.66 | $ 9.36 | $ 9.80 | $ 9.67 | $ 7.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .324 | .787 | .706H | 1.024G,H | .899 | .815 |
Net realized and unrealized gain (loss) | (.684) | 2.057 | .346H | (.435)G,H | .385 | 1.886 |
Total from investment operations | (.360) | 2.844 | 1.052 | .589 | 1.284 | 2.701 |
Distributions from net investment income | (.311) | (.824) | (.752) | (1.029) | (.942) | (.801) |
Distributions in excess of net investment income | - | - | - | - | (.212) | - |
Total distributions | (.311) | (.824) | (.752) | (1.029) | (1.154) | (.801) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.01 | $ 11.68 | $ 9.66 | $ 9.36 | $ 9.80 | $ 9.67 |
Total ReturnB,C,D | (3.13)% | 30.22% | 11.70% | 6.25% | 13.64% | 36.34% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 1.45%A | 1.43% | 1.47% | 1.53% | 1.46% | 1.42% |
Expenses net of voluntary waivers, if any | 1.45%A | 1.43% | 1.47% | 1.50% | 1.46% | 1.42% |
Expenses net of all reductions | 1.45%A | 1.43% | 1.46% | 1.50% | 1.45% | 1.42% |
Net investment income (loss) | 5.69%A | 7.20% | 7.46%H | 10.56%G,H | 8.92% | 9.54% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 76,446 | $ 82,811 | $ 57,154 | $ 46,740 | $ 49,125 | $ 55,715 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.06% and 11.29% to 7.46% and 10.56%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.77 | $ 9.73 | $ 9.42 | $ 9.85 | $ 9.72 | $ 7.80 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .288 | .719 | .646H | .968G,H | .835 | .761 |
Net realized and unrealized gain (loss) | (.688) | 2.071 | .352H | (.433)G,H | .383 | 1.904 |
Total from investment operations | (.400) | 2.790 | .998 | .535 | 1.218 | 2.665 |
Distributions from net investment income | (.271) | (.750) | (.688) | (.965) | (.888) | (.745) |
Distributions in excess of net investment income | - | - | - | - | (.200) | - |
Total distributions | (.271) | (.750) | (.688) | (.965) | (1.088) | (.745) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.10 | $ 11.77 | $ 9.73 | $ 9.42 | $ 9.85 | $ 9.72 |
Total ReturnB,C,D | (3.44)% | 29.34% | 10.99% | 5.62% | 12.83% | 35.58% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 2.14%A | 2.09% | 2.13% | 2.22% | 2.14% | 2.10% |
Expenses net of voluntary waivers, if any | 2.14%A | 2.09% | 2.13% | 2.15% | 2.14% | 2.10% |
Expenses net of all reductions | 2.14%A | 2.09% | 2.12% | 2.15% | 2.12% | 2.10% |
Net investment income (loss) | 5.00%A | 6.53% | 6.79%H | 9.91%G,H | 8.25% | 8.86% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 25,977 | $ 30,088 | $ 20,903 | $ 15,736 | $ 18,637 | $ 19,054 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 7.39% and 10.64% to 6.79% and 9.91%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.74 | $ 9.71 | $ 9.40 | $ 9.84 | $ 9.70 | $ 7.79 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .282 | .709 | .633H | .954G,H | .821 | .750 |
Net realized and unrealized gain (loss) | (.675) | 2.060 | .355H | (.438)G,H | .395 | 1.893 |
Total from investment operations | (.393) | 2.769 | .988 | .516 | 1.216 | 2.643 |
Distributions from net investment income | (.268) | (.739) | (.678) | (.956) | (.878) | (.733) |
Distributions in excess of net investment income | - | - | - | - | (.198) | - |
Total distributions | (.268) | (.739) | (.678) | (.956) | (1.076) | (.733) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.08 | $ 11.74 | $ 9.71 | $ 9.40 | $ 9.84 | $ 9.70 |
Total ReturnB,C,D | (3.39)% | 29.18% | 10.90% | 5.43% | 12.84% | 35.31% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 2.21%A | 2.19% | 2.24% | 2.32% | 2.25% | 2.23% |
Expenses net of voluntary waivers, if any | 2.21%A | 2.19% | 2.24% | 2.25% | 2.25% | 2.23% |
Expenses net of all reductions | 2.20%A | 2.19% | 2.23% | 2.25% | 2.24% | 2.23% |
Net investment income (loss) | 4.93%A | 6.43% | 6.69%H | 9.81%G,H | 8.13% | 8.73% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 12,617 | $ 12,516 | $ 6,641 | $ 3,411 | $ 3,157 | $ 2,402 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 7.29% and 10.54% to 6.69% and 9.81%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.60 | $ 9.60 | $ 9.30 | $ 9.75 | $ 9.62 | $ 7.74 |
Income from Investment Operations | | | | | | |
Net investment income (loss)D | .345 | .820 | .736G | 1.048F,G | .928 | .837 |
Net realized and unrealized gain (loss) | (.681) | 2.045 | .352G | (.437)F,G | .392 | 1.868 |
Total from investment operations | (.336) | 2.865 | 1.088 | .611 | 1.320 | 2.705 |
Distributions from net investment income | (.335) | (.865) | (.788) | (1.061) | (.972) | (.825) |
Distributions in excess of net investment income | - | - | - | - | (.218) | - |
Total distributions | (.335) | (.865) | (.788) | (1.061) | (1.190) | (.825) |
Redemption fees added to paid in capitalD | .001 | - | - | - | - | - |
Net asset value, end of period | $ 10.93 | $ 11.60 | $ 9.60 | $ 9.30 | $ 9.75 | $ 9.62 |
Total ReturnB,C | (2.95)% | 30.69% | 12.21% | 6.53% | 14.11% | 36.59% |
Ratios to Average Net AssetsE | | | | | |
Expenses before expense reductions | 1.04%A | 1.06% | 1.09% | 1.17% | 1.12% | 1.14% |
Expenses net of voluntary waivers, if any | 1.04%A | 1.06% | 1.09% | 1.17% | 1.12% | 1.14% |
Expenses net of all reductions | 1.04%A | 1.06% | 1.08% | 1.17% | 1.11% | 1.13% |
Net investment income (loss) | 6.10%A | 7.56% | 7.83%G | 10.89%F,G | 9.27% | 9.83% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 10,780 | $ 10,993 | $ 8,386 | $ 7,028 | $ 6,754 | $ 5,778 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. F Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. G As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.070 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.44% and 11.62% to 7.83% and 10.89%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2004 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Emerging Markets Income Fund (the fund) is a fund of Fidelity Advisor Series VIII (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, prior period premium and discount on debt securities, market discount, capital loss carryforwards and losses deferred due to wash sales.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 4,708,848 | | |
Unrealized depreciation | (8,292,998) | |
Net unrealized appreciation (depreciation) | $ (3,584,150) | |
Cost for federal income tax purposes | $ 148,927,384 | |
Short-Term Trading (Redemption) Fees. Shares purchased after March 31, 2004 and held in the fund less than 90 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management and Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Options. The fund may use options to manage its exposure to the bond market and to fluctuations in interest rates. Writing puts and buying calls tend to increase the fund's exposure to the underlying instrument. Buying puts and writing calls tend to decrease the fund's exposure to the underlying instrument, or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparties do not perform under the contracts' terms. Gains and losses are realized upon the expiration or closing of the options. Realized gains (losses) on purchased options are included in realized gains (losses) on investment securities.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price. Options traded over-the-counter are valued using dealer-supplied valuations.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Operating Policies - continued
Restricted Securities - continued
these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .55% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .68% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .15% | $ 20,439 | $ 109 |
Class T | 0% | .25% | 102,605 | 4,025 |
Class B | .65% | .25% | 133,590 | 96,804 |
Class C | .75% | .25% | 68,270 | 28,261 |
| | | $ 324,904 | $ 129,199 |
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 17,566 |
Class T | 7,963 |
Class B* | 27,717 |
Class C* | 2,743 |
| $ 55,989 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets |
Class A | $ 39,940 | .29* |
Class T | 124,282 | .30* |
Class B | 50,055 | .34* |
Class C | 20,640 | .30* |
Institutional Class | 7,876 | .14* |
| $ 242,793 | |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Central Funds - continued
earned by the fund are recorded as income in the accompanying financial statements and totaled $38,118 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $43 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $2,276.
7. Credit Risk.
The fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the fund's investments and the income they generate, as well as the fund's ability to repatriate such amounts.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30,
2004 | Year ended
December 31,
2003 |
From net investment income | | |
Class A | $ 749,526 | $ 1,488,347 |
Class T | 2,228,351 | 5,459,502 |
Class B | 696,381 | 1,799,755 |
Class C | 316,029 | 704,702 |
Institutional Class | 326,926 | 805,164 |
Total | $ 4,317,213 | $ 10,257,470 |
Semiannual Report
9. Other Information.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 10% of the total outstanding shares of the fund.
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30,
2004 | Year ended
December 31,
2003 | Six months ended
June 30,
2004 | Year ended
December 31,
2003 |
Class A | | | | |
Shares sold | 1,069,055 | 1,379,713 | $ 12,465,136 | $ 15,462,841 |
Reinvestment of distributions | 53,684 | 112,074 | 612,121 | 1,253,221 |
Shares redeemed | (1,219,671) | (641,390) | (13,995,044) | (7,024,445) |
Net increase (decrease) | (96,932) | 850,397 | $ (917,787) | $ 9,691,617 |
Class T | | | | |
Shares sold | 1,637,513 | 4,616,553 | $ 18,967,437 | $ 50,392,450 |
Reinvestment of distributions | 176,775 | 418,008 | 2,010,119 | 4,641,133 |
Shares redeemed | (1,962,853) | (3,862,676) | (22,267,833) | (42,509,446) |
Net increase (decrease) | (148,565) | 1,171,885 | $ (1,290,277) | $ 12,524,137 |
Class B | | | | |
Shares sold | 324,941 | 1,167,865 | $ 3,796,525 | $ 12,828,423 |
Reinvestment of distributions | 47,222 | 124,436 | 541,661 | 1,391,107 |
Shares redeemed | (588,165) | (885,265) | (6,640,159) | (9,864,283) |
Net increase (decrease) | (216,002) | 407,036 | $ (2,301,973) | $ 4,355,247 |
Class C | | | | |
Shares sold | 362,991 | 1,090,965 | $ 4,230,563 | $ 12,027,056 |
Reinvestment of distributions | 20,142 | 46,863 | 230,202 | 525,240 |
Shares redeemed | (309,704) | (756,214) | (3,472,193) | (8,323,557) |
Net increase (decrease) | 73,429 | 381,614 | $ 988,572 | $ 4,228,739 |
Institutional Class | | | | |
Shares sold | 125,678 | 402,448 | $ 1,451,080 | $ 4,329,829 |
Reinvestment of distributions | 22,159 | 59,506 | 250,160 | 652,028 |
Shares redeemed | (109,700) | (388,058) | (1,245,262) | (4,252,549) |
Net increase (decrease) | 38,137 | 73,896 | $ 455,978 | $ 729,308 |
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Custodian
JP Morgan Chase Bank
New York, NY
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
EMI-USAN-0804
1.787773.101
(Fidelity Investment logo)(registered trademark)
Fidelity ® Advisor
Emerging Markets Income
Fund - Institutional Class
Semiannual Report
June 30, 2004
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights. |
Notes | <Click Here> | Notes to the financial statements. |
For a free copy of the fund's proxy voting guidelines call 1-877-208-0098, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.
With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:
First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.
Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.
Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.
For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.
Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Investment Changes
Top Five Countries as of June 30, 2004 |
(excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Brazil | 19.8 | 17.5 |
Russia | 14.7 | 15.6 |
Mexico | 12.0 | 11.6 |
Venezuela | 7.9 | 6.8 |
Argentina | 5.2 | 4.2 |
Percentages are adjusted for the effect of open futures contracts, if applicable. Top countries are based upon location of issuer of each security, including where the fund is exposed to potential political and credit risks. |
Top Five Holdings as of June 30, 2004 |
(by issuer, excluding cash equivalents) | % of fund's
net assets | % of fund's net assets
6 months ago |
Brazilian Federative Republic | 19.1 | 17.1 |
Russian Federation | 11.1 | 11.5 |
United Mexican States | 10.7 | 10.9 |
Venezuelan Republic | 7.9 | 6.0 |
Turkish Republic | 4.7 | 4.6 |
| 53.5 | |
Asset Allocation (% of fund's net assets) |
As of June 30, 2004 | As of December 31, 2003 |
| Corporate Bonds 15.2% | | | Corporate Bonds 13.2% | |
| Government
Obligations 80.8% | | | Government
Obligations 71.6% | |
| Other Investments 0.5% | | | Other Investments 1.2% | |
| Short-Term
Investments and
Net Other Assets 3.5% | | | Short-Term
Investments and
Net Other Assets 14.0% | |
Semiannual Report
Investments June 30, 2004 (Unaudited)
Showing Percentage of Net Assets
Nonconvertible Bonds - 15.2% |
| Principal
Amount (i) | | Value
(Note 1) |
Argentina - 1.1% |
Pecom Energia SA 8.125% 7/15/10 (Reg. S) | | $ 420,000 | | $ 392,700 |
Telefonica de Argentina SA: | | | | |
9.125% 11/7/10 | | 420,000 | | 403,200 |
11.875% 11/1/07 | | 735,000 | | 815,850 |
TOTAL ARGENTINA | | 1,611,750 |
Bahamas (Nassau) - 0.1% |
Odebrecht Overseas Ltd. 11.5% 2/25/09 (e) | | 170,000 | | 167,025 |
Bermuda - 0.2% |
APP China Group Ltd.: | | | | |
14% 3/15/10 (c)(e) | | 1,125,000 | | 146,250 |
14% 3/15/10 (Reg. S) (c) | | 1,665,000 | | 216,450 |
TOTAL BERMUDA | | 362,700 |
Brazil - 0.7% |
Braskem SA 11.75% 1/22/14 (e) | | 165,000 | | 146,438 |
Compania Siderurgica Paulista 8.25% 1/30/09 (e) | | 170,000 | | 164,050 |
Empresa Brasil de Telecomm SA 11% 12/15/08 (e) | | 385,000 | | 415,800 |
Telemig Cellular SA/Amazonia Cellular SA 8.75% 1/20/09 (e) | | 415,000 | | 381,800 |
TOTAL BRAZIL | | 1,108,088 |
Cayman Islands - 0.1% |
CSN Islands VIII Corp. 9.75% 12/16/13 (e) | | 165,000 | | 148,500 |
Germany - 0.1% |
Citigroup Global Markets Deutschland AG 9.25% 4/19/14 (e) | | 165,000 | | 146,025 |
Indonesia - 0.3% |
APP International Finance (Mauritius) Ltd.: | | | | |
0% 7/5/04 (c)(e) | | 1,235,000 | | 49,400 |
0% 7/5/04 (Reg. S) (c) | | 445,000 | | 17,800 |
MEI Euro Finance Ltd. 8.75% 5/22/10 (e) | | 430,000 | | 384,850 |
TOTAL INDONESIA | | 452,050 |
Luxembourg - 0.5% |
Millicom International Cellular SA 10% 12/1/13 (e) | | 785,000 | | 792,850 |
Malaysia - 1.3% |
Petroliam Nasional BHD (Petronas): | | | | |
7.625% 10/15/26 (Reg. S) | | 1,235,000 | | 1,311,416 |
Nonconvertible Bonds - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Malaysia - continued |
Petroliam Nasional BHD (Petronas): - continued | | | | |
yankee 7.75% 8/15/15 (e) | | $ 330,000 | | $ 375,375 |
Petronas Capital Ltd. 7% 5/22/12 (e) | | 165,000 | | 179,900 |
TOTAL MALAYSIA | | 1,866,691 |
Mexico - 1.3% |
America Movil SA de CV: | | | | |
4.125% 3/1/09 (e) | | 150,000 | | 140,884 |
5.5% 3/1/14 (e) | | 115,000 | | 105,937 |
Banco Nacional de Comerico Exterior SNC 3.875% 1/21/09 (e) | | 155,000 | | 144,925 |
Gruma SA de CV yankee 7.625% 10/15/07 | | 195,000 | | 211,575 |
Grupo Televisa SA de CV 8% 9/13/11 | | 170,000 | | 184,450 |
Innova S. de R.L. 9.375% 9/19/13 | | 185,000 | | 194,250 |
Pemex Project Funding Master Trust 9.125% 10/13/10 | | 665,000 | | 764,750 |
TV Azteca SA de CV euro 10.5% 2/15/07 (Reg. S) | | 170,000 | | 173,400 |
TOTAL MEXICO | | 1,920,171 |
Netherlands - 0.4% |
Hurricane Finance BV 9.625% 2/12/10 (e) | | 340,000 | | 354,450 |
Sun Sage BV 8.25% 3/26/09 (e) | | 170,000 | | 164,900 |
TOTAL NETHERLANDS | | 519,350 |
Russia - 3.6% |
Mobile Telesystems Finance SA 9.75% 1/30/08 (e) | | 2,540,000 | | 2,628,900 |
OAO Gazprom 10.5% 10/21/09 | | 2,465,000 | | 2,791,613 |
TOTAL RUSSIA | | 5,420,513 |
Tunisia - 0.3% |
Banque Centrale de Tunisie 7.375% 4/25/12 | | 400,000 | | 440,500 |
Ukraine - 0.7% |
Kyivstar GSM: | | | | |
12.75% 11/21/05 (e) | | 475,000 | | 514,425 |
12.75% 11/21/05 (Reg. S) | | 510,000 | | 552,330 |
TOTAL UKRAINE | | 1,066,755 |
United States of America - 4.5% |
Freeport-McMoRan Copper & Gold, Inc. 10.125% 2/1/10 | | 680,000 | | 754,800 |
Pemex Project Funding Master Trust: | | | | |
2.94% 10/15/09 (e)(f) | | 2,660,000 | | 2,762,410 |
6.125% 8/15/08 | | 500,000 | | 511,250 |
Nonconvertible Bonds - continued |
| Principal
Amount (i) | | Value
(Note 1) |
United States of America - continued |
Pemex Project Funding Master Trust: - continued | | | | |
7.375% 12/15/14 | | $ 1,745,000 | | $ 1,779,900 |
8.625% 2/1/22 | | 865,000 | | 901,763 |
TOTAL UNITED STATES OF AMERICA | | 6,710,123 |
TOTAL NONCONVERTIBLE BONDS (Cost $24,414,751) | 22,733,091 |
Government Obligations - 80.8% |
|
Argentina - 4.1% |
Argentine Republic: | | | | |
BOCON: | | | | |
4/1/07 February 2002 coupon (c)(h) | | 620,000 | | 209 |
4/1/07 January 2002 coupon (c)(h) | | 620,000 | | 209 |
4/1/07 March 2002 coupon (c)(h) | | 620,000 | | 209 |
2% 4/1/07 (c)(f) | | 436,116 | | 93,000 |
Brady: | | | | |
par L-GP 6% 3/31/23 (c) | | 2,375,000 | | 1,205,313 |
2% 3/29/05 (c)(f) | | 1,282,400 | | 346,248 |
1.2138% 8/3/12 (c)(f) | | 1,280,000 | | 853,306 |
9.75% 9/19/27 (c) | | 2,450,000 | | 667,625 |
11.375% 3/15/10 (c) | | 1,400,000 | | 413,000 |
11.375% 1/30/17 (c) | | 1,440,000 | | 424,800 |
11.75% 4/7/09 (c) | | 1,396,000 | | 418,800 |
11.75% 6/15/15 (c) | | 1,464,000 | | 431,880 |
12.25% 6/19/18 (c) | | 1,252,275 | | 334,984 |
12.375% 2/21/12 (c) | | 880,000 | | 264,000 |
15.5% 12/19/08 (c) | | 2,270,000 | | 624,250 |
82.329% 4/10/05 (c)(f) | | 245,000 | | 78,400 |
TOTAL ARGENTINA | | 6,156,233 |
Brazil - 19.1% |
Brazilian Federative Republic: | | | | |
Brady: | | | | |
capitalization bond 8% 4/15/14 | | 13,287,484 | | 12,232,778 |
debt conversion bond 2.125% 4/15/12 (f) | | 2,272,942 | | 1,909,271 |
7.3094% 6/29/09 (f) | | 795,000 | | 797,783 |
8.875% 4/15/24 | | 2,330,000 | | 1,904,775 |
9.25% 10/22/10 | | 785,000 | | 745,750 |
10% 1/16/07 | | 415,000 | | 437,825 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Brazil - continued |
Brazilian Federative Republic: - continued | | | | |
10% 8/7/11 | | $ 780,000 | | $ 758,550 |
10.25% 6/17/13 | | 890,000 | | 863,300 |
11% 1/11/12 | | 850,000 | | 856,375 |
11% 8/17/40 | | 3,130,000 | | 2,950,025 |
11.25% 7/26/07 | | 1,555,000 | | 1,675,513 |
11.5% 3/12/08 | | 795,000 | | 849,458 |
12% 4/15/10 | | 795,000 | | 844,688 |
14.5% 10/15/09 | | 1,595,000 | | 1,862,163 |
TOTAL BRAZIL | | 28,688,254 |
Bulgaria - 1.0% |
Bulgarian Republic Brady discount A 1.9825% 7/28/24 (f) | | 1,540,000 | | 1,540,000 |
Chile - 0.5% |
Chilean Republic 1.57% 1/28/08 (f) | | 800,000 | | 807,200 |
Colombia - 3.3% |
Colombian Republic: | | | | |
8.125% 5/21/24 | | 280,000 | | 227,500 |
8.625% 4/1/08 | | 330,000 | | 352,275 |
9.75% 4/23/09 | | 990,000 | | 1,059,300 |
10% 1/23/12 | | 930,000 | | 962,550 |
10.5% 7/9/10 | | 995,000 | | 1,073,356 |
10.75% 1/15/13 | | 535,000 | | 571,781 |
11.75% 2/25/20 | | 614,000 | | 671,563 |
TOTAL COLOMBIA | | 4,918,325 |
Croatia - 0.3% |
Croatian Republic 2% 7/30/10 (f) | | 390,000 | | 390,000 |
Dominican Republic - 0.3% |
Dominican Republic: | | | | |
9.04% 1/23/13 (e) | | 355,000 | | 214,775 |
9.5% 9/27/06 (Reg. S) | | 290,000 | | 203,000 |
TOTAL DOMINICAN REPUBLIC | | 417,775 |
Ecuador - 1.1% |
Ecuador Republic: | | | | |
7% 8/15/30 (d)(e) | | 911,000 | | 624,035 |
7% 8/15/30 (Reg. S) (d) | | 570,000 | | 390,450 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Ecuador - continued |
Ecuador Republic: - continued | | | | |
12% 11/15/12 (e) | | $ 239,000 | | $ 210,918 |
12% 11/15/12 (Reg. S) | | 530,000 | | 467,725 |
TOTAL ECUADOR | | 1,693,128 |
El Salvador - 0.8% |
El Salvador Republic: | | | | |
7.75% 1/24/23 (Reg. S) | | 505,000 | | 526,463 |
8.25% 4/10/32 (Reg. S) | | 320,000 | | 298,720 |
8.5% 7/25/11 (Reg. S) | | 335,000 | | 362,638 |
TOTAL EL SALVADOR | | 1,187,821 |
Ivory Coast - 0.2% |
Ivory Coast: | | | | |
Brady past due interest 2% 3/29/18 (Reg. S) (c)(f) | | 1,097,250 | | 172,817 |
FLIRB 2% 3/29/18 (Reg. S) (c)(f) | | 1,100,000 | | 165,000 |
TOTAL IVORY COAST | | 337,817 |
Jamaica - 0.4% |
Jamaican Government 11.75% 5/15/11 (Reg. S) | | 465,000 | | 521,963 |
Lebanon - 2.3% |
Lebanese Republic: | | | | |
7.875% 5/20/11 (e) | | 815,000 | | 821,113 |
10.25% 10/6/09 (Reg. S) | | 985,000 | | 1,098,275 |
11.625% 5/11/16 (Reg. S) | | 1,310,000 | | 1,496,675 |
TOTAL LEBANON | | 3,416,063 |
Mexico - 10.7% |
United Mexican States: | | | | |
4.625% 10/8/08 | | 1,245,000 | | 1,227,570 |
6.375% 1/16/13 | | 1,530,000 | | 1,526,940 |
6.625% 3/3/15 | | 650,000 | | 646,100 |
7.5% 4/8/33 | | 5,380,000 | | 5,232,050 |
8.125% 12/30/19 | | 2,085,000 | | 2,239,290 |
8.625% 3/12/08 | | 820,000 | | 925,370 |
11.375% 9/15/16 | | 2,229,000 | | 3,120,600 |
11.5% 5/15/26 | | 805,000 | | 1,129,818 |
TOTAL MEXICO | | 16,047,738 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Nigeria - 1.4% |
Central Bank of Nigeria: | | | | |
promissory note 5.092% 1/5/10 | | $ 2,373,286 | | $ 2,165,890 |
warrants 11/15/20 (a)(g) | | 1,000 | | 350 |
TOTAL NIGERIA | | 2,166,240 |
Pakistan - 0.2% |
Pakistani Republic 6.75% 2/19/09 | | 340,000 | | 334,900 |
Panama - 2.1% |
Panamanian Republic: | | | | |
8.875% 9/30/27 | | 920,000 | | 906,200 |
9.375% 1/16/23 | | 845,000 | | 861,900 |
9.625% 2/8/11 | | 1,225,000 | | 1,353,625 |
TOTAL PANAMA | | 3,121,725 |
Peru - 1.7% |
Peruvian Republic: | | | | |
9.125% 2/21/12 | | 1,255,000 | | 1,286,375 |
euro Brady past due interest 5% 3/7/17 (f) | | 1,501,500 | | 1,291,290 |
TOTAL PERU | | 2,577,665 |
Philippines - 4.3% |
Philippine Republic: | | | | |
8.375% 3/12/09 | | 795,000 | | 824,813 |
8.375% 2/15/11 | | 3,316,000 | | 3,286,985 |
8.875% 4/15/08 | | 500,000 | | 542,500 |
8.875% 3/17/15 | | 415,000 | | 400,475 |
9% 2/15/13 | | 660,000 | | 653,400 |
9.375% 1/18/17 | | 400,000 | | 405,000 |
9.875% 3/16/10 | | 295,000 | | 318,600 |
TOTAL PHILIPPINES | | 6,431,773 |
Russia - 11.1% |
Russian Federation: | | | | |
5% 3/31/30 (d)(e) | | 6,150,000 | | 5,619,562 |
5% 3/31/30 (Reg. S) (d) | | 3,235,000 | | 2,955,981 |
8.25% 3/31/10 (Reg. S) | | 2,720,000 | | 2,924,000 |
11% 7/24/18 (Reg. S) | | 2,277,000 | | 2,869,020 |
12.75% 6/24/28 (Reg. S) | | 1,614,000 | | 2,344,335 |
TOTAL RUSSIA | | 16,712,898 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
South Africa - 1.7% |
South African Republic: | | | | |
6.5% 6/2/14 | | $ 720,000 | | $ 720,000 |
9.125% 5/19/09 | | 650,000 | | 754,813 |
12% 2/28/06 | ZAR | 6,600,000 | | 1,116,717 |
TOTAL SOUTH AFRICA | | 2,591,530 |
Turkey - 4.7% |
Turkish Republic: | | | | |
9.875% 3/19/08 | | 1,135,000 | | 1,200,263 |
10.5% 1/13/08 | | 330,000 | | 355,575 |
11% 1/14/13 | | 1,365,000 | | 1,494,675 |
11.75% 6/15/10 | | 665,000 | | 746,463 |
12.375% 6/15/09 | | 2,775,000 | | 3,170,438 |
TOTAL TURKEY | | 6,967,414 |
Ukraine - 0.8% |
City of Kiev 8.75% 8/8/08 | | 200,000 | | 206,000 |
Ukraine Cabinet of Ministers 7.65% 6/11/13 (e) | | 630,000 | | 600,075 |
Ukraine Government 6.875% 3/4/11 (e) | | 355,000 | | 335,653 |
TOTAL UKRAINE | | 1,141,728 |
Uruguay - 0.8% |
Uruguay Republic: | | | | |
7.25% 2/15/11 | | 355,000 | | 291,988 |
7.5% 3/15/15 | | 710,000 | | 527,175 |
7.875% 1/15/33 pay-in-kind | | 652,828 | | 420,258 |
TOTAL URUGUAY | | 1,239,421 |
Venezuela - 7.9% |
Venezuelan Republic: | | | | |
oil recovery rights 4/15/20 (g) | | 4,005 | | 0 |
2.15% 4/20/11 (f) | | 810,000 | | 623,700 |
5.375% 8/7/10 | | 5,645,000 | | 4,459,550 |
7% 12/1/18 (Reg. S) | | 420,000 | | 305,970 |
9.25% 9/15/27 | | 3,360,000 | | 2,839,200 |
10.75% 9/19/13 | | 1,150,000 | | 1,141,375 |
13.625% 8/15/18 | | 75,000 | | 82,875 |
Government Obligations - continued |
| Principal
Amount (i) | | Value
(Note 1) |
Venezuela - continued |
Venezuelan Republic: - continued | | | | |
13.625% 8/15/18 | | $ 610,000 | | $ 674,050 |
euro Brady debt conversion bond 2.75% 12/18/07 (f) | | 1,749,930 | | 1,662,434 |
TOTAL VENEZUELA | | 11,789,154 |
TOTAL GOVERNMENT OBLIGATIONS (Cost $123,649,203) | 121,196,765 |
Sovereign Loan Participations - 0.5% |
|
Morocco - 0.5% |
Moroccan Kingdom loan participation - JP Morgan 2.0138% 1/2/09 (f)
(Cost $810,961) | | 825,000 | | 808,500 |
Money Market Funds - 0.4% |
| Shares | | |
Fidelity Cash Central Fund, 1.16% (b)
(Cost $604,878) | 604,878 | | 604,878 |
TOTAL INVESTMENT PORTFOLIO - 96.9% (Cost $149,479,793) | 145,343,234 |
NET OTHER ASSETS - 3.1% | | 4,671,810 |
NET ASSETS - 100% | $ 150,015,044 |
Security Type Abbreviations |
FLIRB | - | Front Loaded Interest Reduction Bonds |
Currency Abbreviations |
ZAR | - | South African rand |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments. |
(d) Debt obligation initially issued at one coupon which converts to a higher coupon at a specified date. The rate shown is the rate at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $18,741,225 or 12.5% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Quantity represents share amount. |
(h) Represents right to receive interest payment on underlying security. Principal shown is original face of underlying security. |
(i) Principal amount is stated in United States dollars unless otherwise noted. |
Other Information |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
AAA,AA,A | 0.7% |
BBB | 30.9% |
BB | 17.1% |
B | 32.2% |
CCC,CC,C | 12.5% |
D | 0.2% |
Not Rated | 2.9% |
Equities | 0.0% |
Short-Term Investments and Net Other Assets | 3.5% |
| 100.0% |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. |
The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $808,500 or 0.5% of net assets. |
Purchases and sales of securities, other than short-term securities, aggregated $194,523,553 and $178,633,701, respectively, of which long-term U.S. government and government agency obligations aggregated $4,198,864 and $4,188,475, respectively. |
Income Tax Information |
At December 31, 2003, the fund had a capital loss carryforward of approximately $328,000 all of which will expire on December 31, 2010. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
| June 30, 2004 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $149,479,793) - See accompanying schedule | | $ 145,343,234 |
Receivable for investments sold | | 2,562,248 |
Receivable for fund shares sold | | 615,617 |
Interest receivable | | 3,044,959 |
Prepaid expenses | | 335 |
Other affiliated receivables | | 42 |
Total assets | | 151,566,435 |
| | |
Liabilities | | |
Payable for investments purchased | $ 792,892 | |
Payable for fund shares redeemed | 449,281 | |
Distributions payable | 91,505 | |
Accrued management fee | 84,273 | |
Distribution fees payable | 49,435 | |
Other affiliated payables | 45,033 | |
Other payables and accrued expenses | 38,972 | |
Total liabilities | | 1,551,391 |
| | |
Net Assets | | $ 150,015,044 |
Net Assets consist of: | | |
Paid in capital | | $ 150,453,967 |
Undistributed net investment income | | 1,866,852 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | 1,830,491 |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | (4,136,266) |
Net Assets | | $ 150,015,044 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Assets and Liabilities - continued
| June 30, 2004 (Unaudited) |
| | |
Calculation of Maximum Offering Price Class A:
Net Asset Value and redemption price per share ($24,195,112 ÷ 2,192,282 shares) | | $ 11.04 |
| | |
Maximum offering price per share (100/95.25 of $11.04) | | $ 11.59 |
Class T:
Net Asset Value and redemption price per share ($76,445,813 ÷ 6,940,455 shares) | | $ 11.01 |
| | |
Maximum offering price per share (100/96.50 of $11.01) | | $ 11.41 |
Class B:
Net Asset Value and offering price per share ($25,977,220 ÷ 2,339,471 shares) A | | $ 11.10 |
| | |
Class C:
Net Asset Value and offering price per share ($12,616,665 ÷ 1,139,092 shares) A | | $ 11.08 |
| | |
Institutional Class:
Net Asset Value, offering price and redemption price per share ($10,780,234 ÷ 985,894 shares) | | $ 10.93 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
| Six months ended June 30, 2004 (Unaudited) |
| | |
Investment Income | | |
Interest | | $ 5,816,836 |
| | |
Expenses | | |
Management fee | $ 553,457 | |
Transfer agent fees | 242,793 | |
Distribution fees | 324,904 | |
Accounting fees and expenses | 45,057 | |
Non-interested trustees' compensation | 394 | |
Custodian fees and expenses | 30,527 | |
Registration fees | 60,052 | |
Audit | 28,733 | |
Legal | 11,279 | |
Miscellaneous | 1,436 | |
Total expenses before reductions | 1,298,632 | |
Expense reductions | (2,319) | 1,296,313 |
Net investment income (loss) | | 4,520,523 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities | 2,382,821 | |
Foreign currency transactions | 11,747 | |
Total net realized gain (loss) | | 2,394,568 |
Change in net unrealized appreciation (depreciation) on: Investment securities | (12,723,930) | |
Assets and liabilities in foreign currencies | 287 | |
Total change in net unrealized appreciation (depreciation) | | (12,723,643) |
Net gain (loss) | | (10,329,075) |
Net increase (decrease) in net assets resulting from operations | | $ (5,808,552) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Changes in Net Assets
| Six months ended
June 30, 2004
(Unaudited) | Year ended
December 31,
2003 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 4,520,523 | $ 9,626,923 |
Net realized gain (loss) | 2,394,568 | 24,059,578 |
Change in net unrealized appreciation (depreciation) | (12,723,643) | 1,234,998 |
Net increase (decrease) in net assets resulting
from operations | (5,808,552) | 34,921,499 |
Distributions to shareholders from net investment income | (4,317,213) | (10,257,470) |
Share transactions - net increase (decrease) | (3,065,487) | 31,529,048 |
Redemption fees | 10,543 | - |
Total increase (decrease) in net assets | (13,180,709) | 56,193,077 |
| | |
Net Assets | | |
Beginning of period | 163,195,753 | 107,002,676 |
End of period (including undistributed net investment income of $1,866,852 and undistributed net investment income of $1,663,542, respectively) | $ 150,015,044 | $ 163,195,753 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.70 | $ 9.67 | $ 9.37 | $ 9.81 | $ 9.68 | $ 7.78 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .332 | .802 | .714H | 1.030G,H | .899 | .821 |
Net realized and unrealized gain (loss) | (.676) | 2.064 | .348H | (.431)G,H | .391 | 1.884 |
Total from investment operations | (.344) | 2.866 | 1.062 | .599 | 1.290 | 2.705 |
Distributions from net investment income | (.317) | (.836) | (.762) | (1.039) | (.947) | (.805) |
Distributions in excess of net investment income | - | - | - | - | (.213) | - |
Total distributions | (.317) | (.836) | (.762) | (1.039) | (1.160) | (.805) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.04 | $ 11.70 | $ 9.67 | $ 9.37 | $ 9.81 | $ 9.68 |
Total ReturnB,C,D | (2.98)% | 30.43% | 11.80% | 6.35% | 13.69% | 36.35% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 1.34%A | 1.32% | 1.36% | 1.45% | 1.41% | 1.46% |
Expenses net of voluntary waivers, if any | 1.34%A | 1.32% | 1.36% | 1.40% | 1.40% | 1.40% |
Expenses net of all reductions | 1.34%A | 1.32% | 1.35% | 1.40% | 1.39% | 1.40% |
Net investment income (loss) | 5.80%A | 7.31% | 7.56%H | 10.66%G,H | 8.98% | 9.57% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 24,195 | $ 26,787 | $ 13,920 | $ 7,601 | $ 6,010 | $ 2,140 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.070 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.17% and 11.39% to 7.56% and 10.66%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.68 | $ 9.66 | $ 9.36 | $ 9.80 | $ 9.67 | $ 7.77 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .324 | .787 | .706H | 1.024G,H | .899 | .815 |
Net realized and unrealized gain (loss) | (.684) | 2.057 | .346H | (.435)G,H | .385 | 1.886 |
Total from investment operations | (.360) | 2.844 | 1.052 | .589 | 1.284 | 2.701 |
Distributions from net investment income | (.311) | (.824) | (.752) | (1.029) | (.942) | (.801) |
Distributions in excess of net investment income | - | - | - | - | (.212) | - |
Total distributions | (.311) | (.824) | (.752) | (1.029) | (1.154) | (.801) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.01 | $ 11.68 | $ 9.66 | $ 9.36 | $ 9.80 | $ 9.67 |
Total ReturnB,C,D | (3.13)% | 30.22% | 11.70% | 6.25% | 13.64% | 36.34% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 1.45%A | 1.43% | 1.47% | 1.53% | 1.46% | 1.42% |
Expenses net of voluntary waivers, if any | 1.45%A | 1.43% | 1.47% | 1.50% | 1.46% | 1.42% |
Expenses net of all reductions | 1.45%A | 1.43% | 1.46% | 1.50% | 1.45% | 1.42% |
Net investment income (loss) | 5.69%A | 7.20% | 7.46%H | 10.56%G,H | 8.92% | 9.54% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 76,446 | $ 82,811 | $ 57,154 | $ 46,740 | $ 49,125 | $ 55,715 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the sales charges. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.06% and 11.29% to 7.46% and 10.56%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.77 | $ 9.73 | $ 9.42 | $ 9.85 | $ 9.72 | $ 7.80 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .288 | .719 | .646H | .968G,H | .835 | .761 |
Net realized and unrealized gain (loss) | (.688) | 2.071 | .352H | (.433)G,H | .383 | 1.904 |
Total from investment operations | (.400) | 2.790 | .998 | .535 | 1.218 | 2.665 |
Distributions from net investment income | (.271) | (.750) | (.688) | (.965) | (.888) | (.745) |
Distributions in excess of net investment income | - | - | - | - | (.200) | - |
Total distributions | (.271) | (.750) | (.688) | (.965) | (1.088) | (.745) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.10 | $ 11.77 | $ 9.73 | $ 9.42 | $ 9.85 | $ 9.72 |
Total ReturnB,C,D | (3.44)% | 29.34% | 10.99% | 5.62% | 12.83% | 35.58% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 2.14%A | 2.09% | 2.13% | 2.22% | 2.14% | 2.10% |
Expenses net of voluntary waivers, if any | 2.14%A | 2.09% | 2.13% | 2.15% | 2.14% | 2.10% |
Expenses net of all reductions | 2.14%A | 2.09% | 2.12% | 2.15% | 2.12% | 2.10% |
Net investment income (loss) | 5.00%A | 6.53% | 6.79%H | 9.91%G,H | 8.25% | 8.86% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 25,977 | $ 30,088 | $ 20,903 | $ 15,736 | $ 18,637 | $ 19,054 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 7.39% and 10.64% to 6.79% and 9.91%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.74 | $ 9.71 | $ 9.40 | $ 9.84 | $ 9.70 | $ 7.79 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .282 | .709 | .633H | .954G,H | .821 | .750 |
Net realized and unrealized gain (loss) | (.675) | 2.060 | .355H | (.438)G,H | .395 | 1.893 |
Total from investment operations | (.393) | 2.769 | .988 | .516 | 1.216 | 2.643 |
Distributions from net investment income | (.268) | (.739) | (.678) | (.956) | (.878) | (.733) |
Distributions in excess of net investment income | - | - | - | - | (.198) | - |
Total distributions | (.268) | (.739) | (.678) | (.956) | (1.076) | (.733) |
Redemption fees added to paid in capitalE | .001 | - | - | - | - | - |
Net asset value, end of period | $ 11.08 | $ 11.74 | $ 9.71 | $ 9.40 | $ 9.84 | $ 9.70 |
Total ReturnB,C,D | (3.39)% | 29.18% | 10.90% | 5.43% | 12.84% | 35.31% |
Ratios to Average Net AssetsF | | | | | |
Expenses before expense reductions | 2.21%A | 2.19% | 2.24% | 2.32% | 2.25% | 2.23% |
Expenses net of voluntary waivers, if any | 2.21%A | 2.19% | 2.24% | 2.25% | 2.25% | 2.23% |
Expenses net of all reductions | 2.20%A | 2.19% | 2.23% | 2.25% | 2.24% | 2.23% |
Net investment income (loss) | 4.93%A | 6.43% | 6.69%H | 9.81%G,H | 8.13% | 8.73% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 12,617 | $ 12,516 | $ 6,641 | $ 3,411 | $ 3,157 | $ 2,402 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Total returns do not include the effect of the contingent deferred sales charge. E Calculated based on average shares outstanding during the period. F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. G Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.071 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 7.29% and 10.54% to 6.69% and 9.81%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
| Six months ended
June 30, 2004 | Years ended December 31, |
| (Unaudited) | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 11.60 | $ 9.60 | $ 9.30 | $ 9.75 | $ 9.62 | $ 7.74 |
Income from Investment Operations | | | | | | |
Net investment income (loss)D | .345 | .820 | .736G | 1.048F,G | .928 | .837 |
Net realized and unrealized gain (loss) | (.681) | 2.045 | .352G | (.437)F,G | .392 | 1.868 |
Total from investment operations | (.336) | 2.865 | 1.088 | .611 | 1.320 | 2.705 |
Distributions from net investment income | (.335) | (.865) | (.788) | (1.061) | (.972) | (.825) |
Distributions in excess of net investment income | - | - | - | - | (.218) | - |
Total distributions | (.335) | (.865) | (.788) | (1.061) | (1.190) | (.825) |
Redemption fees added to paid in capitalD | .001 | - | - | - | - | - |
Net asset value, end of period | $ 10.93 | $ 11.60 | $ 9.60 | $ 9.30 | $ 9.75 | $ 9.62 |
Total ReturnB,C | (2.95)% | 30.69% | 12.21% | 6.53% | 14.11% | 36.59% |
Ratios to Average Net AssetsE | | | | | |
Expenses before expense reductions | 1.04%A | 1.06% | 1.09% | 1.17% | 1.12% | 1.14% |
Expenses net of voluntary waivers, if any | 1.04%A | 1.06% | 1.09% | 1.17% | 1.12% | 1.14% |
Expenses net of all reductions | 1.04%A | 1.06% | 1.08% | 1.17% | 1.11% | 1.13% |
Net investment income (loss) | 6.10%A | 7.56% | 7.83%G | 10.89%F,G | 9.27% | 9.83% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 10,780 | $ 10,993 | $ 8,386 | $ 7,028 | $ 6,754 | $ 5,778 |
Portfolio turnover rate | 239%A | 260% | 222% | 271% | 293% | 275% |
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns would have been lower had certain expenses not been reduced during the periods shown. D Calculated based on average shares outstanding during the period. E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class. F Effective January 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per-share data and ratios for periods prior to adoption have not been restated to reflect this change. G As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this charge for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.057 and $.070 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.44% and 11.62% to 7.83% and 10.89%, respectively. The reclassification has no impact on the net assets of the fund.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended June 30, 2004 (Unaudited)
1. Significant Accounting Policies.
Fidelity Advisor Emerging Markets Income Fund (the fund) is a fund of Fidelity Advisor Series VIII (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.
The fund offers Class A, Class T, Class B, Class C, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests.
Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, prior period premium and discount on debt securities, market discount, capital loss carryforwards and losses deferred due to wash sales.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 4,708,848 | | |
Unrealized depreciation | (8,292,998) | |
Net unrealized appreciation (depreciation) | $ (3,584,150) | |
Cost for federal income tax purposes | $ 148,927,384 | |
Short-Term Trading (Redemption) Fees. Shares purchased after March 31, 2004 and held in the fund less than 90 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management and Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Options. The fund may use options to manage its exposure to the bond market and to fluctuations in interest rates. Writing puts and buying calls tend to increase the fund's exposure to the underlying instrument. Buying puts and writing calls tend to decrease the fund's exposure to the underlying instrument, or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments, if there is an illiquid secondary market for the contracts, or if the counterparties do not perform under the contracts' terms. Gains and losses are realized upon the expiration or closing of the options. Realized gains (losses) on purchased options are included in realized gains (losses) on investment securities.
Exchange-traded options are valued using the last sale price or, in the absence of a sale, the last offering price. Options traded over-the-counter are valued using dealer-supplied valuations.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
2. Operating Policies - continued
Restricted Securities - continued
these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .55% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .68% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
| Distribution
Fee | Service
Fee | Paid to
FDC | Retained
by FDC |
Class A | 0% | .15% | $ 20,439 | $ 109 |
Class T | 0% | .25% | 102,605 | 4,025 |
Class B | .65% | .25% | 133,590 | 96,804 |
Class C | .75% | .25% | 68,270 | 28,261 |
| | | $ 324,904 | $ 129,199 |
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
| Retained
by FDC |
Class A | $ 17,566 |
Class T | 7,963 |
Class B* | 27,717 |
Class C* | 2,743 |
| $ 55,989 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC, were as follows:
| Amount | % of
Average
Net Assets |
Class A | $ 39,940 | .29* |
Class T | 124,282 | .30* |
Class B | 50,055 | .34* |
Class C | 20,640 | .30* |
Institutional Class | 7,876 | .14* |
| $ 242,793 | |
* Annualized
Accounting Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Central Funds - continued
earned by the fund are recorded as income in the accompanying financial statements and totaled $38,118 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $43 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $2,276.
7. Credit Risk.
The fund's relatively large investment in countries with limited or developing capital markets may involve greater risks than investments in more developed markets and the prices of such investments may be volatile. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The consequences of political, social or economic changes in these markets may have disruptive effects on the market prices of the fund's investments and the income they generate, as well as the fund's ability to repatriate such amounts.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
| Six months ended
June 30,
2004 | Year ended
December 31,
2003 |
From net investment income | | |
Class A | $ 749,526 | $ 1,488,347 |
Class T | 2,228,351 | 5,459,502 |
Class B | 696,381 | 1,799,755 |
Class C | 316,029 | 704,702 |
Institutional Class | 326,926 | 805,164 |
Total | $ 4,317,213 | $ 10,257,470 |
Semiannual Report
9. Other Information.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 10% of the total outstanding shares of the fund.
10. Share Transactions.
Transactions for each class of shares were as follows:
| Shares | Dollars |
| Six months ended
June 30,
2004 | Year ended
December 31,
2003 | Six months ended
June 30,
2004 | Year ended
December 31,
2003 |
Class A | | | | |
Shares sold | 1,069,055 | 1,379,713 | $ 12,465,136 | $ 15,462,841 |
Reinvestment of distributions | 53,684 | 112,074 | 612,121 | 1,253,221 |
Shares redeemed | (1,219,671) | (641,390) | (13,995,044) | (7,024,445) |
Net increase (decrease) | (96,932) | 850,397 | $ (917,787) | $ 9,691,617 |
Class T | | | | |
Shares sold | 1,637,513 | 4,616,553 | $ 18,967,437 | $ 50,392,450 |
Reinvestment of distributions | 176,775 | 418,008 | 2,010,119 | 4,641,133 |
Shares redeemed | (1,962,853) | (3,862,676) | (22,267,833) | (42,509,446) |
Net increase (decrease) | (148,565) | 1,171,885 | $ (1,290,277) | $ 12,524,137 |
Class B | | | | |
Shares sold | 324,941 | 1,167,865 | $ 3,796,525 | $ 12,828,423 |
Reinvestment of distributions | 47,222 | 124,436 | 541,661 | 1,391,107 |
Shares redeemed | (588,165) | (885,265) | (6,640,159) | (9,864,283) |
Net increase (decrease) | (216,002) | 407,036 | $ (2,301,973) | $ 4,355,247 |
Class C | | | | |
Shares sold | 362,991 | 1,090,965 | $ 4,230,563 | $ 12,027,056 |
Reinvestment of distributions | 20,142 | 46,863 | 230,202 | 525,240 |
Shares redeemed | (309,704) | (756,214) | (3,472,193) | (8,323,557) |
Net increase (decrease) | 73,429 | 381,614 | $ 988,572 | $ 4,228,739 |
Institutional Class | | | | |
Shares sold | 125,678 | 402,448 | $ 1,451,080 | $ 4,329,829 |
Reinvestment of distributions | 22,159 | 59,506 | 250,160 | 652,028 |
Shares redeemed | (109,700) | (388,058) | (1,245,262) | (4,252,549) |
Net increase (decrease) | 38,137 | 73,896 | $ 455,978 | $ 729,308 |
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Custodian
JP Morgan Chase Bank
New York, NY
Semiannual Report
Fidelity Advisor Aggressive Growth Fund |
Fidelity Advisor Asset Allocation Fund |
Fidelity Advisor Balanced Fund |
Fidelity Advisor Biotechnology Fund |
Fidelity Advisor California Municipal Income Fund |
Fidelity Advisor Consumer Industries Fund |
Fidelity Advisor Cyclical Industries Fund |
Fidelity Advisor Developing Communications Fund |
Fidelity Advisor Diversified International Fund |
Fidelity Advisor Dividend Growth Fund |
Fidelity Advisor Dynamic Capital
Appreciation Fund |
Fidelity Advisor Electronics Fund |
Fidelity Advisor Emerging Asia Fund |
Fidelity Advisor Emerging Markets Fund |
Fidelity Advisor Emerging Markets Income Fund |
Fidelity Advisor Equity Growth Fund |
Fidelity Advisor Equity Income Fund |
Fidelity Advisor Equity Value Fund |
Fidelity Advisor Europe Capital
Appreciation Fund |
Fidelity Advisor Fifty Fund |
Fidelity Advisor Financial Services Fund |
Fidelity Advisor Floating Rate High Income Fund |
Fidelity Advisor Freedom Income, 2005, 2010, 2015, 2020, 2025, 2030, 2035, 2040 FundsSM |
Fidelity Advisor Global Equity Fund |
Fidelity Advisor Government Investment Fund |
Fidelity Advisor Growth & Income Fund |
Fidelity Advisor Growth Opportunities Fund |
Fidelity Advisor Health Care Fund |
Fidelity Advisor High Income Advantage Fund |
Fidelity Advisor High Income Fund |
Fidelity Advisor Inflation-Protected Bond Fund |
Fidelity Advisor Intermediate Bond Fund |
Fidelity Advisor International Capital Appreciation Fund |
Fidelity Advisor International
Small Cap Fund |
Fidelity Advisor Investment Grade Bond Fund |
Fidelity Advisor Japan Fund |
Fidelity Advisor Korea Fund |
Fidelity Advisor Large Cap Fund |
Fidelity Advisor Latin America Fund |
Fidelity Advisor Leveraged Company Stock Fund |
Fidelity Advisor Mid Cap Fund |
Fidelity Advisor Mortgage Securities Fund |
Fidelity Advisor Municipal Income Fund |
Fidelity Advisor Natural Resources Fund |
Fidelity Advisor New Insights Fund |
Fidelity Advisor New York Municipal
Income Fund |
Fidelity Advisor Overseas Fund |
Fidelity Advisor Real Estate Fund |
Fidelity Advisor Short Fixed-Income Fund |
Fidelity Advisor Short Intermediate Municipal Income Fund |
Fidelity Advisor Small Cap Fund |
Fidelity Advisor Strategic Dividend &
Income Fund |
Fidelity Advisor Strategic Growth Fund |
Fidelity Advisor Strategic Income Fund |
Fidelity Advisor Tax Managed Stock Fund |
Fidelity Advisor Technology Fund |
Fidelity Advisor Telecommunications &
Utilities Growth Fund |
Fidelity Advisor Total Bond Fund |
Fidelity Advisor Ultra-Short Bond Fund |
Fidelity Advisor Value Fund |
Fidelity Advisor Value Leaders Fund |
Fidelity Advisor Value Strategies Fund |
Prime Fund |
Tax-Exempt Fund |
Treasury Fund |
EMII-USAN-0804
1.787774.101
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Advisor Series VIII's Board of Trustees.
Item 10. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Advisor Series VIII's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 11. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Advisor Series VIII
By: | /s/Christine Reynolds |
| Christine Reynolds |
| President and Treasurer |
| |
Date: | August 17, 2004 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Christine Reynolds |
| Christine Reynolds |
| President and Treasurer |
| |
Date: | August 17, 2004 |
By: | /s/Timothy F. Hayes |
| Timothy F. Hayes |
| Chief Financial Officer |
| |
Date: | August 17, 2004 |
