UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-4085

Fidelity Income Fund
(Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)

Scott C. Goebel, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:	July 31

Date of reporting period:	July 31, 2009

Item 1. Reports to Stockholders

Fidelity® Ginnie Mae Fund

Fidelity Intermediate
Government Income Fund

Annual Report

July 31, 2009

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	The Chairman's message to shareholders.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Fidelity Ginnie Mae Fund
	<Click Here>	Performance
	<Click Here>	Management's Discussion of Fund Performance
	<Click Here>	Investment Changes
	<Click Here>	Investments
	<Click Here>	Financial Statements
Fidelity Intermediate Government Income Fund
	<Click Here>	Performance
	<Click Here>	Management's Discussion of Fund Performance
	<Click Here>	Investment Changes
	<Click Here>	Investments
	<Click Here>	Financial Statements
Notes	<Click Here>	Notes to the financial statements
Report of Independent Registered Public Accounting Firm	<Click Here>
Trustees and Officers	<Click Here>
Distributions	<Click Here>
Proxy Voting Results	<Click Here>
Board Approval of Investment Advisory Contracts and Management Fees	<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

Annual Report

This report and the financial statements contained herein are submitted for the general information of the shareholders of the funds. This report is not authorized for distribution to prospective investors in the funds unless preceded or accompanied by an effective prospectus.

A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the funds nor Fidelity Distributors Corporation is a bank.

Annual Report

Chairman's Message

(photo_of_Abigail_P_Johnson)

Dear Shareholder:

We've seen a welcome uptick in the global equity markets this spring and summer, as signs of stabilization in some economic indicators have brought many investors back into the marketplace. But there remain other key measures - notably high unemployment and slack consumer spending - that suggest the road back to economic health could still be a bumpy ride. Financial markets are always unpredictable, of course, but there also are several time-tested investment principles that can help put the historical odds in your favor.

One of the basic tenets is to invest for the long term. Over time, riding out the markets' inevitable ups and downs has proven much more effective than selling into panic or chasing the hottest trend. Even missing only a few of the markets' best days can significantly diminish investor returns. Patience also affords the benefits of compounding - of earning interest on additional income or reinvested dividends and capital gains. There can be tax advantages and cost benefits to consider as well. While staying the course doesn't eliminate risk, it can considerably lessen the effect of short-term declines.

You can further manage your investing risk through diversification. And today, more than ever, geographic diversification should be taken into account. Studies indicate that asset allocation is the single most important determinant of a portfolio's long-term success. The right mix of stocks, bonds and cash - aligned to your particular risk tolerance and investment objective - is very important. Age-appropriate rebalancing is also an essential aspect of asset allocation. For younger investors, an emphasis on equities - which historically have been the best-performing asset class over time - is encouraged. As investors near their specific goal, such as retirement or sending a child to college, consideration may be given to replacing volatile assets (e.g. common stocks) with more-stable fixed investments (bonds or savings plans).

A third principle - investing regularly - can help lower the average cost of your purchases. Investing a certain amount of money each month or quarter helps ensure you won't pay for all your shares at market highs. This strategy - known as dollar cost averaging - also reduces "emotion" from investing, helping shareholders avoid selling weak performers just prior to an upswing, or chasing a hot performer just before a correction.

We invite you to contact us via the Internet, through our Investor Centers or by phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Abigail P. Johnson

Abigail P. Johnson

Annual Report

Shareholder Expense Example

As a shareholder of a Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2009 to July 31, 2009).

Actual Expenses

The first line of the accompanying table for each fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each fund provides information about hypothetical account values and hypothetical expenses based on a fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.

Annual Report

	Annualized Expense Ratio	Beginning Account Value February 1, 2009	Ending Account Value July 31, 2009	Expenses Paid During Period* February 1, 2009 to July 31, 2009
Ginnie Mae Fund	.45%
Actual		$ 1,000.00	$ 1,045.30	$ 2.28
Hypothetical^A		$ 1,000.00	$ 1,022.56	$ 2.26
Intermediate Government Income Fund	.45%
Actual		$ 1,000.00	$ 1,007.50	$ 2.24
Hypothetical^A		$ 1,000.00	$ 1,022.56	$ 2.26

^A 5% return per year before expenses

* Expenses are equal to each Fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Annual Report

Fidelity Ginnie Mae Fund

Performance: The Bottom Line

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

Average Annual Total Returns

Periods ended July 31, 2009	Past 1 year	Past 5 years	Past 10 years
Fidelity® Ginnie Mae Fund	9.69%	5.58%	6.00%

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity® Ginnie Mae Fund on July 31, 1999. The chart shows how the value of your investment would have changed, and also shows how the Barclays Capital GNMA Index performed over the same period.

fid27

Annual Report

Management's Discussion of Fund Performance

Market Recap: In contrast with negative overall returns for major equity indexes during the year ending July 31, 2009, taxable bonds managed to turn in solid positive results for the 12-month period. During that time, U.S. investment-grade bonds gained 7.85%, as measured by the Barclays Capital U.S. Aggregate Bond Index. Mortgage-backed securities (MBS) - as gauged by the Barclays Capital U.S. MBS Index - were the best performers, soaring 10.43%. Though most of the 12 months was marked by a massive flight to quality, the emergence of improving credit conditions and signs of stabilization among certain economic indicators in the later months of the period spurred greater demand for riskier fixed-income securities. Asset-backed securities (ABS) fell into this category, and the Barclays Capital U.S. Fixed-Rate ABS Index advanced 5.85% - a nice improvement from the steep declines ABS saw earlier in the period. Corporate bonds also flourished when investors' risk appetite resurfaced, with the Barclays Capital U.S. Credit Bond Index climbing 8.69% - including a nearly 11% leap in the final six months of the period. Meanwhile, the Barclays Capital U.S. Agency Bond Index rose 7.45% and the Barclays Capital U.S. Treasury Bond Index was up 6.46%.

Comments from William Irving, Portfolio Manager of Fidelity® Ginnie Mae Fund: For the year, the fund returned 9.69%, matching exactly the return of the Barclays Capital GNMA Index. Overall, GNMA securities performed quite well, as investors sought out government-guaranteed securities for the majority of the period. After underperforming Treasuries during the first half of the period, GNMAs outpaced them in the second half, bolstered by various government programs designed to stabilize the financial and housing markets. My preference for securities that offered a measure of protection against prepayments caused the fund to underperform the index early on. More recently, that same strategy boosted the fund's relative performance. Specifically, I invested outside of the index in collateralized mortgage obligations (CMOs) and hybrid adjustable-rate mortgage securities (ARMs). CMOs are securities whose cash flows are carved out into classes - generally known as "tranches" - each with its own expected maturity and cash flow pattern. Hybrid ARMs are backed by 30-year amortizing loans that give homeowners a relatively low fixed interest rate for an initial period and then convert to an ARM, with the interest rate resetting every six or 12 months. I also favored securities backed by "seasoned" mortgages - those that have not been refinanced when the borrowers were presented with opportunities to do so at attractive interest rates - and higher-coupon issues.

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

Annual Report

Fidelity Ginnie Mae Fund

Investment Changes (Unaudited)

Coupon Distribution as of July 31, 2009
	% of fund's investments	% of fund's investments 6 months ago
Less than 4%	1.8	1.4
4 - 4.99%	12.2	8.4
5 - 5.99%	44.8	50.9
6 - 6.99%	29.2	33.4
7 - 7.99%	1.6	2.6
8% and over	0.8	1.3

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

Weighted Average Maturity as of July 31, 2009
		6 months ago
Years	4.5	3.3

The weighted average maturity is based on the dollar-weighted average length of time until principal payments are expected or until securities reach maturity, taking into account any maturity shortening feature such as a call, refunding or redemption provision.

Duration as of July 31, 2009
		6 months ago
Years	2.5	2.5

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)
As of July 31, 2009* ^A			As of January 31, 2009** ^B
	Mortgage Securities 111.6%			Mortgage Securities 108.5%
	CMOs and Other Mortgage Related Securities 9.0%			CMOs and Other Mortgage Related Securities 12.6%
	Short-Term Investments and Net Other Assets ^† (20.6)%			Short-Term Investments and Net Other Assets ^† (21.1)%
* GNMA Securities		113.3%	** GNMA Securities		101.7%
^A Futures and Swaps		(0.4)%	^B Futures and Swaps		(3.6)%
^† Short-Term Investments and Net Other Assets are not included in the pie chart.

fid39

Annual Report

Fidelity Ginnie Mae Fund

Investments July 31, 2009

Showing Percentage of Net Assets

U.S. Government Agency - Mortgage Securities - 111.6%
	Principal Amount (000s)		Value (000s)
Fannie Mae - 4.7%
3.206% 4/1/36 (e)	$ 1,551		$ 1,590
3.29% 10/1/33 (e)	95		97
3.388% 9/1/33 (e)	1,934		1,976
3.505% 10/1/33 (e)	1,896		1,927
3.613% 5/1/35 (e)	46,020		46,869
3.654% 6/1/34 (e)	5,317		5,416
3.715% 2/1/33 (e)	265		271
3.806% 5/1/34 (e)	2,299		2,362
3.828% 7/1/35 (e)	14,988		15,353
3.867% 8/1/34 (e)	1,361		1,395
3.963% 1/1/35 (e)	4,205		4,303
4.046% 3/1/35 (e)	52		53
4.155% 9/1/35 (e)	7,444		7,680
4.209% 11/1/36 (e)	1,232		1,275
4.249% 11/1/34 (e)	7,542		7,736
4.25% 7/1/34 (e)	125		129
4.253% 3/1/37 (e)	9,714		10,050
4.274% 7/1/35 (e)	1,065		1,098
4.274% 11/1/36 (e)	3,214		3,310
4.285% 11/1/36 (e)	2,720		2,794
4.287% 11/1/34 (e)	37,583		38,480
4.29% 3/1/33 (e)	126		130
4.299% 7/1/36 (e)	580		594
4.344% 10/1/33 (e)	4,146		4,275
4.421% 7/1/34 (e)	1,986		2,051
4.421% 7/1/35 (e)	120		123
4.442% 7/1/35 (e)	6,525		6,726
4.489% 10/1/35 (e)	10,665		11,012
4.534% 10/1/33 (e)	223		228
4.592% 8/1/35 (e)	1,321		1,365
4.621% 4/1/35 (e)	287		294
4.649% 10/1/35 (e)	15,933		16,486
4.652% 10/1/35 (e)	4,479		4,615
4.673% 8/1/35 (e)	3,178		3,332
4.717% 11/1/35 (e)	20,783		21,694
4.727% 9/1/35 (e)	1,310		1,362
4.74% 2/1/36 (e)	3,393		3,507
4.744% 2/1/34 (e)	76		79
4.746% 2/1/35 (e)	15,920		16,383
4.813% 3/1/35 (e)	10,600		10,939
4.815% 10/1/34 (e)	2,660		2,714
4.82% 9/1/36 (e)	2,026		2,102
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
4.843% 3/1/33 (e)	$ 629		$ 646
4.875% 9/1/34 (e)	412		426
4.907% 5/1/35 (e)	2,127		2,197
4.91% 1/1/35 (e)	970		999
4.996% 4/1/35 (e)	3,986		4,100
5.058% 9/1/34 (e)	263		269
5.185% 3/1/35 (e)	183		188
5.301% 12/1/34 (e)	353		361
5.492% 9/1/34 (e)	1,452		1,532
5.498% 6/1/47 (e)	722		752
5.5% 11/1/13 to 3/1/20	10,125		10,739
5.758% 4/1/36 (e)	3,886		4,119
5.848% 3/1/36 (e)	3,178		3,371
6.398% 7/1/36 (e)	6,471		6,834
6.5% 10/1/17 to 12/1/24	3,030		3,259
7% 11/1/16 to 3/1/17	1,333		1,433
7.5% 11/1/09 to 4/1/17	803		860
8.5% 12/1/27	180		201
9.5% 9/1/30	16		18
10.25% 10/1/18	7		8
11.5% 5/1/14 to 7/1/15	18		20
12.5% 7/1/14 to 7/1/16	37		41
13.25% 9/1/11	17		18
			306,566
Freddie Mac - 1.7%
2.88% 6/1/33 (e)	1,239		1,262
2.997% 5/1/35 (e)	2,536		2,597
3.096% 6/1/33 (e)	3,507		3,599
3.756% 10/1/35 (e)	4,487		4,631
4.323% 3/1/34 (e)	3,845		3,961
4.411% 6/1/33 (e)	3,320		3,436
4.448% 1/1/35 (e)	3,242		3,334
4.489% 7/1/35 (e)	1,552		1,591
4.494% 5/1/35 (e)	596		618
4.707% 11/1/35 (e)	1,608		1,657
4.709% 10/1/35 (e)	1,749		1,814
4.718% 7/1/36 (e)	3,048		3,118
4.759% 9/1/36 (e)	29,068		30,304
4.819% 5/1/35 (e)	2,506		2,611
4.849% 1/1/35 (e)	3,301		3,405
4.856% 3/1/35 (e)	5,313		5,462
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
5.027% 10/1/36 (e)	$ 1,547		$ 1,614
5.049% 12/1/35 (e)	13,090		13,682
5.161% 10/1/33 (e)	2,447		2,510
5.203% 12/1/35 (e)	1,717		1,798
5.309% 3/1/33 (e)	49		50
5.375% 8/1/34 (e)	524		535
5.446% 3/1/37 (e)	558		575
5.5% 11/1/17 to 1/1/25	9,003		9,421
5.621% 4/1/36 (e)	1,606		1,679
5.807% 11/1/36 (e)	5,859		6,158
5.846% 5/1/37 (e)	543		566
8.5% 5/1/17 to 6/1/25	40		44
9% 1/1/17 to 4/1/21	22		24
9.5% 7/1/30	70		80
10% 8/1/10 to 7/1/19	143		158
10.25% 11/1/09 to 11/1/16	11		12
11.25% 2/1/10	0*		0*
12% 5/1/10 to 6/1/15	35		39
12.5% 11/1/12 to 5/1/15	34		38
13% 5/1/14 to 11/1/14	6		7
13.5% 9/1/14 to 12/1/14	3		4
			112,394
Government National Mortgage Association - 105.2%
2.625% 3/20/35 (e)	619		634
3.5% 3/20/34	969		937
3.625% 4/20/35 (e)	463		475
3.625% 4/20/35 (e)	6,854		7,041
3.625% 5/20/35 (e)	1,467		1,507
3.625% 5/20/35 (e)	7,743		7,954
3.625% 6/20/35 (e)	1,254		1,287
3.75% 4/20/34 (e)	13,110		13,483
3.75% 10/20/35 (e)	2,845		2,932
4% 11/20/33	1,288		1,264
4.25% 7/20/34 (e)	566		585
4.25% 7/20/34 (e)	1,791		1,856
4.5% 7/20/33 to 7/20/39	641,141		646,892
4.5% 9/20/34 (e)	2,462		2,547
4.5% 6/20/35 (e)	2,117		2,188
4.5% 8/20/39 (a)	8,000		8,070
4.5% 8/20/39 (a)	82,000		82,714
4.5% 8/20/39 (a)	70,000		70,609
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Government National Mortgage Association - continued
4.625% 5/20/34 (e)	$ 813		$ 860
5% 8/15/18 to 5/15/39 (d)	546,126		564,227
5% 8/1/39 (a)	74,000		75,960
5% 8/1/39 (a)	2,000		2,053
5% 8/1/39 (a)(b)	146,000		150,017
5% 8/20/39 (a)	24,000		24,636
5% 8/20/39 (a)	44,000		45,165
5% 8/20/39 (a)	16,400		16,851
5% 8/20/39 (a)	73,000		75,009
5% 8/20/39 (a)	50,000		51,376
5% 8/20/39 (a)	29,000		29,798
5% 8/20/39 (a)	115,000		118,164
5% 8/20/39 (a)	73,000		75,009
5% 8/20/39 (a)	2,000		2,053
5% 8/20/39 (a)	2,000		2,053
5% 8/20/39 (a)	3,000		3,079
5% 8/20/39 (a)	3,000		3,079
5% 8/20/39 (a)	8,000		8,220
5% 9/21/39 (a)(b)	146,000		149,407
5.5% 12/20/18 to 5/15/39 (b)	1,372,679		1,436,698
5.5% 8/20/38 (e)	12,340		12,849
5.5% 8/1/39 (a)	83,000		86,320
5.5% 8/1/39 (a)	10,000		10,400
5.5% 8/1/39 (a)	9,000		9,360
5.5% 8/20/39 (a)(b)	430,000		447,200
5.5% 8/20/39 (a)	7,000		7,280
5.5% 8/20/39 (a)	7,000		7,280
5.5% 8/20/39 (a)	3,000		3,120
5.5% 8/20/39 (a)	3,000		3,120
5.5% 8/20/39 (a)	5,000		5,200
5.5% 8/20/39 (a)(b)	5,000		5,200
5.5% 8/20/39 (a)	3,000		3,120
5.5% 8/20/39 (a)	11,000		11,440
5.5% 8/20/39 (a)(b)	200,000		207,996
5.75% 8/20/35 (e)	214		225
6% 8/15/17 to 5/15/39	1,316,784		1,396,518
6% 8/1/39 (a)	4,000		4,199
6% 8/1/39 (a)	4,000		4,199
6% 8/1/39 (a)	3,000		3,149
6% 8/20/39 (a)(b)	60,000		62,978
6% 8/20/39 (a)	6,000		6,298
6% 8/20/39 (a)(b)	48,000		50,389
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Government National Mortgage Association - continued
6% 8/20/39 (a)	$ 16,000		$ 16,796
6% 8/20/39 (a)(b)	28,000		29,393
6% 8/20/39 (a)	28,000		29,393
6% 8/20/39 (a)(b)	43,000		45,140
6% 8/20/39 (a)(b)	14,000		14,697
6% 8/20/39 (a)	24,000		25,194
6% 8/20/39 (a)(b)	2,000		2,100
6% 8/20/39 (a)(b)	3,000		3,149
6% 8/20/39 (a)(b)	4,000		4,199
6% 8/20/39 (a)(b)	4,000		4,199
6% 8/20/39 (a)(b)	76,000		79,772
6.45% 10/15/31 to 11/15/32	1,609		1,736
6.5% 4/15/23 to 1/20/39	430,601		463,009
6.5% 8/20/39 (a)	35,000		37,253
7% 10/20/16 to 9/20/34	79,017		85,890
7.25% 9/15/27	134		147
7.395% 6/20/25 to 11/20/27	1,420		1,552
7.5% 5/15/17 to 9/20/32	31,969		34,947
8% 8/15/18 to 7/15/32	8,230		9,059
8.5% 9/15/09 to 2/15/31	2,539		2,808
9% 3/15/10 to 5/15/30	1,225		1,380
9.5% 12/20/15 to 4/20/17	390		435
10.5% 1/15/14 to 10/15/18	469		530
13% 2/15/11 to 1/15/15	75		85
13.5% 7/15/10 to 1/15/15	8		9
			6,927,401
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $7,199,858)		7,346,361
Collateralized Mortgage Obligations - 8.8%

U.S. Government Agency - 8.8%
Fannie Mae:
floater Series 2007-95 Class A1, 0.535% 8/27/36 (e)	15,080		13,930
Series 2003-39 Class IA, 5.5% 10/25/22 (e)(f)	2,822		221
target amortization class Series G94-2 Class D, 6.45% 1/25/24	1,767		1,849
Fannie Mae Stripped Mortgage-Backed Securities:
Series 331 Class 12, 6.5% 2/1/33 (f)	2,015		319
Series 339 Class 5, 5.5% 7/1/33 (f)	3,175		389
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae Stripped Mortgage-Backed Securities: - continued
Series 343 Class 16, 5.5% 5/1/34 (f)	$ 2,350		$ 278
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2861 Class JF, 0.5881% 4/15/17 (e)	1,596		1,600
Series 3094 Class UF, 0% 9/15/34 (e)	729		674
planned amortization class:
Series 2220 Class PD, 8% 3/15/30	2,945		3,288
Series 40 Class K, 6.5% 8/17/24	1,234		1,333
sequential payer:
Series 2204 Class N, 7.5% 12/20/29	5,412		5,933
Series 2601 Class TI, 5.5% 10/15/22 (f)	11,263		954
Series 2957 Class SW, 5.7119% 4/15/35 (e)(f)	9,271		719
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities sequential payer Series 2002-71:
Class Z, 5.5% 10/20/32	43,175		45,502
Class ZJ, 6% 10/20/32	25,957		27,706
Ginnie Mae guaranteed REMIC pass-thru securities:
floater:
Series 2001-22 Class FM, 0.6388% 5/20/31 (e)	509		509
Series 2002-41 Class HF, 0.6875% 6/16/32 (e)	579		578
Series 2007-22 Class TC, 0% 4/20/37 (e)	857		869
planned amortization class:
Series 1993-13 Class PD, 6% 5/20/29	12,712		13,534
Series 1994-4 Class KQ, 7.9875% 7/16/24	798		895
Series 2000-26 Class PK, 7.5% 9/20/30	2,192		2,348
Series 2002-50 Class PE, 6% 7/20/32	17,485		18,551
Series 2003-31 Class PI, 5.5% 4/16/30 (f)	708		8
Series 2003-70 Class LE, 5% 7/20/32	44,000		45,070
Series 2004-19:
Class DJ, 4.5% 3/20/34	1,494		1,534
Class DP, 5.5% 3/20/34	3,895		4,121
Series 2004-64 Class KE, 5.5% 12/20/33	22,978		24,354
Series 2004-98 Class IG, 5.5% 2/20/30 (f)	2,581		39
Series 2005-17 Class IA, 5.5% 8/20/33 (f)	4,620		167
Series 2005-24 Class TC, 5.5% 3/20/35	5,403		5,673
Series 2005-54 Class BM, 5% 7/20/35	9,658		10,000
Series 2005-57 Class PB, 5.5% 7/20/35	5,673		5,847
Series 2006-50 Class JC, 5% 6/20/36	11,780		11,919
Series 2008-28 Class PC, 5.5% 4/20/34	18,652		19,468
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Ginnie Mae guaranteed REMIC pass-thru securities: - continued
sequential payer:
Series 1995-4 Class CQ, 8% 6/20/25	$ 531		$ 585
Series 2001-40 Class Z, 6% 8/20/31	6,240		6,653
Series 2001-49 Class Z, 7% 10/16/31	2,710		2,953
Series 2002-18 Class ZB, 6% 3/20/32	6,080		6,472
Series 2002-29:
Class SK, 8.25% 5/20/32 (e)(g)	269		288
Class Z, 6.5% 5/16/32	9,009		9,742
Series 2002-33 Class ZJ, 6.5% 5/20/32	5,343		5,757
Series 2002-42 Class ZA, 6% 6/20/32	3,960		4,215
Series 2002-43 Class Z, 6.5% 6/20/32	9,586		10,324
Series 2002-45 Class Z, 6% 6/20/32	2,235		2,373
Series 2002-49 Class ZA, 6.5% 7/20/32	34,120		36,789
Series 2002-67 Class ZA, 6% 9/20/32	90,881		96,834
Series 2003-7 Class VP, 6% 11/20/13	1,679		1,682
Series 2003-75 Class ZA, 5.5% 9/20/33	6,886		7,127
Series 2004-65 Class VE, 5.5% 7/20/15	3,686		3,904
Series 2004-86 Class G, 6% 10/20/34	6,273		7,190
Series 2005-28 Class AJ, 5.5% 4/20/35	28,778		30,062
Series 2005-47 Class ZY, 6% 6/20/35	5,107		5,827
Series 2005-6 Class EX, 5.5% 11/20/34	1,001		1,030
Series 2005-82 Class JV, 5% 6/20/35	3,500		3,602
Series 1995-6 Class Z, 7% 9/20/25	1,655		1,748
Series 2003-11 Class S, 6.2625% 2/16/33 (e)(f)(g)	7,786		801
Series 2003-92 Class SN, 6.1425% 10/16/33 (e)(f)	23,068		2,211
Series 2004-32 Class GS, 6.2125% 5/16/34 (e)(f)(g)	2,157		293
Series 2004-34 Class SA, 6.3113% 5/20/34 (e)(f)	20,604		2,279
Series 2005-6 Class EY, 5.5% 11/20/33 (c)	1,016		1,045
Series 2006-13 Class DS, 10.6669% 3/20/36 (e)(g)	37,337		36,848
Series 2007-18 Class S, 6.5125% 4/16/37 (e)(f)(g)	36,300		4,422
Series 2007-35 Class SC, 38.475% 6/16/37 (e)(g)	12,201		17,390
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $547,276)		580,625
Commercial Mortgage Securities - 0.2%

Fannie Mae subordinate REMIC pass-thru certificates:
Series 1998-M3 Class IB, 0.8102% 1/17/38 (e)(f)	6,856		120
Series 1998-M4 Class N, 0.9619% 2/25/35 (e)(f)	2,793		14
Commercial Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities:
sequential payer Series 2001-58 Class X, 0.9854% 9/16/41 (e)(f)	$ 115,093		$ 1,777
Series 2001-12 Class X, 0.7292% 7/16/40 (e)(f)	32,181		395
Ginnie Mae guaranteed REMIC pass-thru securities:
sequential payer Series 2002-81 Class IO, 1.7974% 9/16/42 (e)(f)	117,051		3,247
Series 2002-62 Class IO, 1.2968% 8/16/42 (e)(f)	65,981		1,640
Series 2002-85 Class X, 1.7066% 3/16/42 (e)(f)	60,489		3,499
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $23,854)		10,692

Cash Equivalents - 12.8%
	Maturity Amount (000s)
Investments in repurchase agreements in a joint trading account at 0.19%, dated 7/31/09 due 8/3/09 (Collateralized by U.S. Treasury Obligations) # (Cost $842,963)	842,977		842,963
TOTAL INVESTMENT PORTFOLIO - 133.4% (Cost $8,613,951)			8,780,641
NET OTHER ASSETS - (33.4)%			(2,198,988)
NET ASSETS - 100%		$ 6,581,653

Futures Contracts
	Expiration Date	Underlying Face Amount at Value (000s)	Unrealized Appreciation/ (Depreciation) (000s)
Sold
Treasury Contracts
34 CBOT 2 Year U.S. Treasury Notes Index Contracts	Oct. 2009	$ 28,155	$ 6

The face value of futures sold as a percentage of net assets - 0.4%

Swap Agreements
		Notional Amount (000s)	Value (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 2.695% with Credit Suisse First Boston	Oct. 2010	$ 26,000	$ (744)

Legend

(a) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(b) A portion of the security is subject to a forward commitment to sell.

(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $170,000.

(d) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $554,000.

(e) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(f) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

(g) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security.

* Amount represents less than $1,000.

# Additional information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$842,963,000 due 8/03/09 at 0.19%
BNP Paribas Securities Corp.	$ 37,948
Barclays Capital, Inc.	146,982
Credit Suisse Securities (USA) LLC	38,559
Deutsche Bank Securities, Inc.	123,465
HSBC Securities (USA), Inc.	160,625
ING Financial Markets LLC	176,377
J.P. Morgan Securities, Inc.	26,724
Mizuho Securities USA, Inc.	29,396
Morgan Stanley & Co., Inc.	29,396
Societe Generale, New York Branch	73,491
	$ 842,963

Other Information

The following is a summary of the inputs used, as of July 31, 2009, involving the Fund's assets and liabilities carried at value. The inputs or methodology used for valuing securities may not be an indication of the risk associated with investing in those securities. For more information on valuation inputs, and their aggregation into the levels used in the tables below, please refer to the Security Valuation section in the accompanying Notes to Financial Statements.

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities:
Cash Equivalents	$ 842,963	$ -	$ 842,963	$ -
Collateralized Mortgage Obligations	580,625	-	566,695	13,930
Commercial Mortgage Securities	10,692	-	10,692	-
U.S. Government Agency - Mortgage Securities	7,346,361	-	7,346,361	-
Total Investments in Securities:	$ 8,780,641	$ -	$ 8,766,711	$ 13,930
Derivative Instruments:
Assets
Futures Contracts	$ 6	$ 6	$ -	$ -
Liabilities
Swap Agreements	$ (744)	$ -	$ (744)	$ -
Total Derivative Instruments:	$ (738)	$ 6	$ (744)	$ -
Other Financial Instruments:
Forward Commitments	$ (7,117)	$ -	$ (7,117)	$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities
Beginning Balance	$ 9,063
Total Realized Gain (Loss)	3
Total Unrealized Gain (Loss)	2,567
Cost of Purchases	-
Proceeds of Sales	(10,704)
Amortization/Accretion	(4,825)
Transfers in/out of Level 3	17,826
Ending Balance	$ 13,930
The change in unrealized gain (loss) attributable to Level 3 securities at July 31, 2009	$ (975)

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. Realized and unrealized gains (losses) disclosed in the reconciliation are included in Net Gain (Loss) on the Fund's Statement of Operations.

Value of Derivative Instruments

The following table is a summary of the Fund's value of derivative instruments by risk exposure as of July 31, 2009. For additional information on derivative instruments, please refer to the Derivative Instruments section in the accompanying Notes to Financial Statements.

Risk Exposure / Derivative Type (Amounts in thousands)	Value
	Asset	Liability
Interest Rate Risk
Futures Contracts (a)	$ 6	$ -
Swap Agreements (b)	-	(744)
Total Value of Derivatives	$ 6	$ (744)

(a) Reflects cumulative appreciation/(depreciation) on futures contracts as disclosed on the Schedule of Investments. Only the period end variation margin is separately disclosed on the Statement of Assets and Liabilities.

(b) Value is disclosed on the Statement of Assets and Liabilities under the Unrealized Appreciation and Unrealized Depreciation on Swap Agreements line-items.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)	July 31, 2009

Assets
Investment in securities, at value (including repurchase agreements of $842,963) - See accompanying schedule: Unaffiliated issuers (cost $8,613,951)		$ 8,780,641
Commitment to sell securities on a delayed delivery basis	$ (1,040,296)
Receivable for securities sold on a delayed delivery basis	1,033,179	(7,117)
Cash		1
Receivable for investments sold Regular delivery		2,140
Delayed delivery		517
Receivable for fund shares sold		20,966
Interest receivable		31,403
Other receivables		1,296
Total assets		8,829,847

Liabilities
Payable for investments purchased Regular delivery	$ 17,630
Delayed delivery	2,213,820
Payable for fund shares redeemed	9,783
Distributions payable	2,468
Unrealized depreciation on swap agreements	744
Accrued management fee	1,698
Payable for daily variation on futures contracts	49
Other affiliated payables	705
Other payables and accrued expenses	1,297
Total liabilities		2,248,194

Net Assets		$ 6,581,653
Net Assets consist of:
Paid in capital		$ 6,452,400
Distributions in excess of net investment income		(26,121)
Accumulated undistributed net realized gain (loss) on investments		(3,461)
Net unrealized appreciation (depreciation) on investments		158,835
Net Assets, for 578,691 shares outstanding		$ 6,581,653
Net Asset Value, offering price and redemption price per share ($6,581,653 ÷ 578,691 shares)		$ 11.37

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

Annual Report

Fidelity Ginnie Mae Fund
Financial Statements - continued

Statement of Operations

Amounts in thousands	Year ended July 31, 2009

Investment Income
Interest		$ 237,219

Expenses
Management fee	$ 15,413
Transfer agent fees	4,825
Fund wide operations fee	1,459
Independent trustees' compensation	17
Miscellaneous	22
Total expenses before reductions	21,736
Expense reductions	(2)	21,734
Net investment income		215,485
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	50,160
Futures contracts	(1,817)
Swap agreements	(10,594)
Total net realized gain (loss)		37,749
Change in net unrealized appreciation (depreciation) on: Investment securities	181,473
Futures contracts	94
Swap agreements	3,140
Delayed delivery commitments	(7,066)
Total change in net unrealized appreciation (depreciation)		177,641
Net gain (loss)		215,390
Net increase (decrease) in net assets resulting from operations		$ 430,875

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

Annual Report

Statement of Changes in Net Assets

Amounts in thousands	Year ended July 31, 2009	Year ended July 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 215,485	$ 162,453
Net realized gain (loss)	37,749	16,810
Change in net unrealized appreciation (depreciation)	177,641	45,848
Net increase (decrease) in net assets resulting from operations	430,875	225,111
Distributions to shareholders from net investment income	(222,729)	(165,414)
Share transactions Proceeds from sales of shares	4,570,675	794,966
Reinvestment of distributions	196,614	146,424
Cost of shares redeemed	(1,874,230)	(692,940)
Net increase (decrease) in net assets resulting from share transactions	2,893,059	248,450
Total increase (decrease) in net assets	3,101,205	308,147

Net Assets
Beginning of period	3,480,448	3,172,301
End of period (including distributions in excess of net investment income of $26,121 and distributions in excess of net investment income of $14,848, respectively)	$ 6,581,653	$ 3,480,448
Other Information Shares
Sold	408,345	72,697
Issued in reinvestment of distributions	17,617	13,412
Redeemed	(167,834)	(63,680)
Net increase (decrease)	258,128	22,429

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

Annual Report

Financial Highlights

Years ended July 31,	2009	2008	2007	2006	2005
Selected Per-Share Data
Net asset value, beginning of period	$ 10.86	$ 10.64	$ 10.62	$ 11.00	$ 11.00
Income from Investment Operations
Net investment income^B	.497	.534	.537	.497	.443
Net realized and unrealized gain (loss)	.533	.230	.017	(.315)	.004
Total from investment operations	1.030	.764	.554	.182	.447
Distributions from net investment income	(.520)	(.544)	(.534)	(.542)	(.447)
Distributions from net realized gain	-	-	-	(.020)	-
Total distributions	(.520)	(.544)	(.534)	(.562)	(.447)
Net asset value, end of period	$ 11.37	$ 10.86	$ 10.64	$ 10.62	$ 11.00
Total Return^A	9.69%	7.27%	5.29%	1.70%	4.11%
Ratios to Average Net Assets^C
Expenses before reductions	.45%	.45%	.45%	.45%	.57%
Expenses net of fee waivers, if any	.45%	.45%	.45%	.45%	.57%
Expenses net of all reductions	.45%	.45%	.45%	.45%	.57%
Net investment income	4.47%	4.90%	5.01%	4.61%	4.00%
Supplemental Data
Net assets, end of period (in millions)	$ 6,582	$ 3,480	$ 3,172	$ 3,365	$ 4,033
Portfolio turnover rate	464%	227%	165%	183%	160%

^A Total returns would have been lower had certain expenses not been reduced during the periods shown.

^B Calculated based on average shares outstanding during the period.

^C Expense ratios reflect operating expenses of the Fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or expense offset arrangements and do not represent the amount paid by the Fund during periods when reimbursements or reductions occur. Expenses net of fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the Fund.

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

Annual Report

Fidelity Intermediate Government Income Fund

Performance: The Bottom Line

Average Annual Total Returns

Periods ended July 31, 2009	Past 1 year	Past 5 years	Past 10 years
Fidelity Intermediate Govt Income Fund	6.98%	4.92%	5.63%

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity Intermediate Government Income Fund on July 31, 1999. The chart shows how the value of your investment would have changed, and also shows how the Barclays Capital U.S. Intermediate Government Bond Index performed over the same period.

fid41

Annual Report

Management's Discussion of Fund Performance

Comments from William Irving, Portfolio Manager of Fidelity® Intermediate Government Income Fund: For the year, the fund returned 6.98% and the Barclays Capital U.S. Intermediate Government Bond Index gained 6.32%. Contributing to the fund's outperformance was its out-of-index weighting in mortgage-backed securities issued by government agencies. They recovered strongly in the second half of the period thanks to various government programs designed to shore up the housing market. Within the mortgage sector, security selection generally was favorable, with my focus on out-of-benchmark prepayment-resistant collateralized mortgage obligations and hybrid adjustable-rate mortgage securities aiding performance. Small out-of-benchmark investments in Treasury Inflation-Protected Securities (TIPS) also helped, as they outpaced conventional Treasuries during the time when I had the most exposure to them. Another plus was security selection among conventional Treasury securities, with my preference for "off-the-run" securities bolstering performance. I bought these older issues at what I viewed as very cheap levels relative to newly issued "on-the-run" Treasuries, and they outperformed when the financial markets stabilized. The main disappointment during the period was that I didn't sell some Treasury bonds in December because, in hindsight, it's clear that they had become grossly overvalued at that point.

Annual Report

Fidelity Intermediate Government Income Fund

Investment Changes (Unaudited)

Coupon Distribution as of July 31, 2009
	% of fund's investments	% of fund's investments 6 months ago
Less than 2%	17.6	13.0
2 - 2.99%	20.4	11.9
3 - 3.99%	24.0	20.4
4 - 4.99%	19.2	21.4
5 - 5.99%	11.4	10.5
6 - 6.99%	2.8	4.0
7% and over	1.5	5.1

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

Weighted Average Maturity as of July 31, 2009
		6 months ago
Years	4.4	4.6

Duration as of July 31, 2009
		6 months ago
Years	3.5	3.5

Asset Allocation (% of fund's net assets)
As of July 31, 2009*			As of January 31, 2009**
	Mortgage Securities 12.4%			Mortgage Securities 18.3%
	CMOs and Other Mortgage Related Securities 4.6%			CMOs and Other Mortgage Related Securities 5.9%
	U.S. Treasury Obligations 53.2%			U.S. Treasury Obligations 45.5%
	U.S. Government Agency Obligations ^† 29.6%			U.S. Government Agency Obligations 28.7%
	Short-Term Investments and Net Other Assets 0.2%			Short-Term Investments and Net Other Assets 1.6%
* Futures and Swaps		1.6%	** Futures and Swaps		6.3%
^† Includes FDIC Guaranteed Corporate Securities

fid61

Annual Report

Fidelity Intermediate Government Income Fund

Investments July 31, 2009

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 82.8%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 22.9%
Fannie Mae:
1.375% 4/28/11	$ 14,350		$ 14,418
1.75% 3/23/11	15,240		15,405
1.75% 8/10/12	4,140		4,128
2.5% 5/15/14	14,615		14,428
2.75% 3/13/14	20,740		20,774
2.875% 10/12/10	14,080		14,436
3.25% 8/12/10	9,973		10,237
4.75% 11/19/12	16,010		17,416
4.875% 5/18/12	3,510		3,811
5% 2/16/12	13,800		14,973
6% 5/15/11	8,545		9,275
Federal Home Loan Bank:
1.625% 7/27/11	16,790		16,919
2.25% 4/13/12	12,000		12,157
3.625% 10/18/13 (b)	35,085		36,572
Freddie Mac:
1.625% 4/26/11	9,403		9,486
1.75% 6/15/12	10,711		10,688
2.125% 3/23/12	6,200		6,270
2.5% 4/23/14	22,240		22,047
4.125% 7/12/10	1,300		1,344
4.875% 11/15/13	650		712
4.875% 6/13/18	8,073		8,772
5% 2/16/17	7,000		7,672
5.125% 4/18/11	2,000		2,135
5.125% 11/17/17	34,395		37,896
5.25% 7/18/11	12,000		12,934
5.5% 8/23/17	3,907		4,407
6.875% 9/15/10	2,000		2,137
Israeli State (guaranteed by U.S. Government through Agency for International Development) 6.8% 2/15/12	5,809		5,953
Private Export Funding Corp. secured:
4.974% 8/15/13	3,435		3,751
5.66% 9/15/11 (c)	9,000		9,797
5.685% 5/15/12	3,915		4,326
Small Business Administration guaranteed development participation certificates Series 2004-20H Class 1, 5.17% 8/1/24 (Cost $597)	597		629
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - continued
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A, 6.06% 8/1/10	$ 2,190		$ 2,251
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			358,156
U.S. Treasury Inflation Protected Obligations - 1.6%
U.S. Treasury Inflation-Indexed Notes:
1.375% 7/15/18	9,784		9,525
1.875% 7/15/19	15,022		15,285
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			24,810
U.S. Treasury Obligations - 51.6%
U.S. Treasury Bonds 8.75% 5/15/17	14,750		20,172
U.S. Treasury Notes:
0.875% 3/31/11	2,300		2,297
1% 7/31/11	85,277		85,062
1.25% 11/30/10	2,611		2,629
1.5% 7/15/12	5,470		5,455
1.5% 12/31/13	7,659		7,405
1.875% 6/15/12 (b)	15,096		15,229
1.875% 2/28/14	320		313
1.875% 4/30/14	3,310		3,224
2% 9/30/10	3,523		3,581
2% 11/30/13	8,817		8,721
2.25% 5/31/14	20,325		20,101
2.625% 6/30/14	20,000		20,106
2.625% 4/30/16	50,740		49,281
2.75% 2/28/13	23,958		24,680
2.75% 10/31/13	61,000		62,296
2.75% 2/15/19	20,405		19,169
2.875% 1/31/13	7,180		7,427
3.125% 8/31/13	29,785		30,930
3.125% 9/30/13	54,650		56,712
3.125% 5/15/19	12,386		12,003
3.25% 7/31/16	31,626		31,824
3.375% 6/30/13	26,378		27,687
3.375% 7/31/13	24,100		25,305
3.5% 2/15/18	12,990		13,083
3.625% 5/15/13	2,000		2,118
3.75% 11/15/18	5,261		5,367
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
3.875% 10/31/12	$ 69,161		$ 73,932
3.875% 5/15/18	2,578		2,663
4% 11/15/12	70,099		75,137
4% 8/15/18	13,945		14,508
4.25% 11/15/14	3,620		3,906
4.25% 11/15/17	6,260		6,657
4.5% 5/15/17	19,369		20,999
4.625% 7/31/12	3,985		4,340
4.625% 2/15/17	14,625		15,985
4.75% 8/15/17	23,339		25,689
TOTAL U.S. TREASURY OBLIGATIONS			805,993
Other Government Related - 6.7%
Bank of America Corp. 2.1% 4/30/12 (FDIC Guaranteed) (d)	1,493		1,502
Citibank NA:
1.5% 7/12/11 (FDIC Guaranteed) (d)	4,660		4,673
1.875% 5/7/12 (FDIC Guaranteed) (d)	22,000		21,962
Citigroup Funding, Inc.:
2% 3/30/12 (FDIC Guaranteed) (d)	10,000		10,051
2.125% 7/12/12 (FDIC Guaranteed) (d)	8,480		8,512
General Electric Capital Corp. 1.8% 3/11/11 (FDIC Guaranteed) (d)	15,000		15,148
JPMorgan Chase & Co. 1.65% 2/23/11 (FDIC Guaranteed) (d)	5,240		5,294
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (d)	36,180		37,543
TOTAL OTHER GOVERNMENT RELATED			104,685
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,287,941)		1,293,644
U.S. Government Agency - Mortgage Securities - 12.4%

Fannie Mae - 7.3%
3.14% 7/1/35 (e)	215		220
3.206% 4/1/36 (e)	636		652
3.283% 3/1/35 (e)	39		40
3.29% 10/1/33 (e)	21		21
3.384% 5/1/35 (e)	157		160
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
3.613% 5/1/35 (e)	$ 7,354		$ 7,490
3.715% 2/1/33 (e)	56		57
3.806% 5/1/34 (e)	500		513
3.828% 7/1/35 (e)	1,431		1,466
4% 9/1/13 to 5/1/20	2,016		2,085
4.046% 3/1/35 (e)	11		11
4.209% 11/1/36 (e)	339		351
4.25% 7/1/34 (e)	28		28
4.253% 3/1/37 (e)	4,438		4,592
4.263% 8/1/35 (e)	1,081		1,107
4.274% 7/1/35 (e)	221		228
4.275% 6/1/36 (e)	54		56
4.285% 7/1/33 (e)	10,387		10,735
4.299% 3/1/33 (e)	31		31
4.299% 7/1/36 (e)	206		211
4.344% 10/1/33 (e)	347		358
4.421% 7/1/35 (e)	26		27
4.425% 3/1/35 (e)	118		122
4.456% 10/1/35 (e)	111		113
4.462% 2/1/35 (e)	2,730		2,819
4.489% 10/1/35 (e)	1,125		1,161
4.533% 11/1/33 (e)	124		130
4.534% 10/1/33 (e)	46		47
4.597% 7/1/35 (e)	1,082		1,122
4.621% 4/1/35 (e)	704		723
4.643% 7/1/35 (e)	62		64
4.649% 10/1/35 (e)	1,237		1,280
4.652% 10/1/35 (e)	1,056		1,088
4.673% 8/1/35 (e)	720		756
4.717% 11/1/35 (e)	396		413
4.727% 9/1/35 (e)	395		411
4.74% 2/1/36 (e)	778		804
4.744% 2/1/34 (e)	17		18
4.787% 7/1/35 (e)	297		307
4.843% 3/1/33 (e)	144		148
4.895% 2/1/36 (e)	875		908
4.91% 1/1/35 (e)	221		227
4.925% 7/1/35 (e)	703		726
4.955% 11/1/36 (e)	336		348
4.988% 2/1/34 (e)	455		475
4.996% 4/1/35 (e)	695		715
5% 2/1/16 to 4/1/22	416		434
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
5.003% 4/1/36 (e)	$ 377		$ 397
5.006% 12/1/32 (e)	419		430
5.006% 10/1/35 (e)	406		421
5.058% 9/1/34 (e)	53		54
5.125% 10/1/35 (e)	1,938		2,026
5.128% 7/1/35 (e)	369		384
5.152% 8/1/34 (e)	414		427
5.185% 3/1/35 (e)	41		42
5.301% 12/1/34 (e)	71		72
5.344% 2/1/37 (e)	211		218
5.369% 2/1/37 (e)	896		930
5.493% 2/1/37 (e)	1,272		1,329
5.498% 6/1/47 (e)	158		165
5.5% 7/1/11 to 6/1/20	20,425		21,671
5.512% 4/1/36 (e)	10,054		10,551
5.598% 7/1/36 (e)	6,943		7,292
5.626% 4/1/36 (e)	873		917
5.633% 2/1/36 (e)	219		230
5.773% 3/1/36 (e)	1,636		1,716
5.804% 9/1/36 (e)	352		362
5.863% 5/1/36 (e)	212		222
5.883% 12/1/36 (e)	332		351
5.992% 4/1/36 (e)	3,558		3,763
6% 5/1/12 to 3/1/31	10,516		11,195
6.106% 4/1/36 (e)	322		342
6.22% 3/1/37 (e)	119		126
6.5% 6/1/16 to 7/1/32	1,386		1,484
7% 3/1/12 to 9/1/14	164		172
9% 2/1/13	37		39
9.5% 11/15/09	10		10
10.25% 10/1/18	4		4
11% 8/1/10 to 1/1/16	70		74
11.25% 5/1/14 to 1/1/16	35		39
11.5% 9/1/11 to 6/15/19	84		92
12.25% 8/1/13	2		3
12.5% 9/1/12 to 7/1/16	101		116
12.75% 10/1/11 to 6/1/15	32		33
13% 7/1/13 to 7/1/15	45		52
13.25% 9/1/11	28		30
13.5% 11/1/14 to 12/1/14	11		13
15% 4/1/12	2		2
			113,594
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - 5.0%
2.731% 4/1/34 (e)	$ 958		$ 980
2.88% 6/1/33 (e)	271		276
2.997% 5/1/35 (e)	563		576
3.156% 2/1/34 (e)	71		72
3.478% 3/1/35 (e)	203		208
3.796% 7/1/33 (e)	6,243		6,370
3.825% 12/1/33 (e)	568		582
4% 1/1/19 to 11/1/20	3,265		3,381
4.034% 6/1/35 (e)	96		99
4.039% 9/1/36 (e)	248		255
4.448% 1/1/35 (e)	87		90
4.489% 7/1/35 (e)	343		352
4.494% 5/1/35 (e)	392		406
4.533% 5/1/38 (e)	21,446		22,249
4.707% 11/1/35 (e)	350		360
4.709% 10/1/35 (e)	383		397
4.746% 3/1/35 (e)	213		217
4.791% 2/1/36 (e)	87		90
4.834% 9/1/35 (e)	11,017		11,474
4.849% 1/1/35 (e)	719		742
4.995% 7/1/35 (e)	1,309		1,354
5.027% 10/1/36 (e)	353		368
5.099% 4/1/35 (e)	6,775		7,028
5.103% 7/1/35 (e)	265		273
5.251% 2/1/36 (e)	36		38
5.309% 3/1/33 (e)	11		11
5.446% 3/1/37 (e)	124		127
5.478% 4/1/37 (e)	129		133
5.486% 1/1/36 (e)	327		342
5.5% 8/1/14 to 11/1/20	2,093		2,210
5.522% 1/1/36 (e)	459		483
5.61% 3/1/36 (e)	1,372		1,439
5.685% 10/1/35 (e)	96		101
5.737% 5/1/37 (e)	243		254
5.738% 5/1/37 (e)	1,573		1,656
5.778% 3/1/37 (e)	659		676
5.779% 5/1/37 (e)	912		958
5.782% 4/1/37 (e)	699		727
5.819% 6/1/37 (e)	514		534
5.846% 5/1/37 (e)	119		124
5.953% 4/1/36 (e)	2,546		2,692
6% 7/1/16 to 2/1/19	2,347		2,509
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
6.041% 12/1/36 (e)	$ 1,555		$ 1,605
6.078% 6/1/36 (e)	425		446
6.141% 2/1/37 (e)	269		284
6.165% 12/1/36 (e)	493		520
6.22% 7/1/36 (e)	240		253
6.419% 6/1/37 (e)	69		73
6.5% 12/1/21	663		710
6.651% 8/1/37 (e)	462		490
7.347% 4/1/37 (e)	33		35
9% 7/1/16	23		25
9.5% 7/1/16 to 8/1/21	180		200
10% 8/1/13 to 3/1/21	323		365
10.5% 11/1/20 to 1/1/21	5		6
11% 9/1/20	13		15
11.25% 2/1/10 to 6/1/14	39		43
11.5% 10/1/15 to 8/1/19	32		35
12% 10/1/09 to 11/1/19	56		62
12.25% 12/1/11 to 8/1/15	31		35
12.5% 10/1/09 to 6/1/19	297		333
12.75% 2/1/10 to 10/1/10	1		1
13% 9/1/10 to 5/1/17	49		55
13.25% 11/1/10 to 10/1/13	19		21
13.5% 11/1/10 to 8/1/11	10		11
14% 11/1/12 to 4/1/16	3		4
14.5% 12/1/10	0*		0*
14.75% 3/1/10	0*		0*
			78,840
Government National Mortgage Association - 0.1%
8% 12/15/23	310		341
8.5% 6/15/16 to 2/15/17	4		4
10.5% 9/15/15 to 10/15/21	505		585
10.75% 12/15/09 to 3/15/10	1		1
11% 5/20/16 to 1/20/21	35		41
12.5% 12/15/10	1		1
13% 1/15/11 to 10/15/13	24		26
13.25% 8/15/14	7		9
13.5% 12/15/14	2		2
14% 6/15/11	3		4
			1,014
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $186,800)		193,448
Collateralized Mortgage Obligations - 4.6%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - 4.6%
Fannie Mae:
floater:
Series 1994-42 Class FK, 3.13% 4/25/24 (e)	$ 2,550		$ 2,113
Series 2007-95 Class A1, 0.535% 8/27/36 (e)	754		696
planned amortization class:
Series 1988-21 Class G, 9.5% 8/25/18	61		68
Series 2003-28 Class KG, 5.5% 4/25/23	725		754
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2001-38 Class QF, 1.265% 8/25/31 (e)	488		494
Series 2002-60 Class FV, 1.285% 4/25/32 (e)	169		171
Series 2002-74 Class FV, 0.735% 11/25/32 (e)	2,650		2,643
Series 2002-75 Class FA, 1.285% 11/25/32 (e)	346		350
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	441		466
Series 2002-16 Class PG, 6% 4/25/17	916		967
Series 2002-61 Class PG, 5.5% 10/25/17	1,923		2,038
Series 2002-71 Class UC, 5% 11/25/17	3,155		3,333
Series 2002-9 Class PC, 6% 3/25/17	68		73
Series 2003-85 Class GD, 4.5% 9/25/18	1,425		1,476
Series 2004-80 Class LD, 4% 1/25/19	980		1,009
Series 2004-81:
Class KC, 4.5% 4/25/17	638		658
Class KD, 4.5% 7/25/18	1,315		1,370
Series 2005-52 Class PB, 6.5% 12/25/34	1,072		1,151
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	264		280
Series 2002-57 Class BD, 5.5% 9/25/17	240		253
Series 2004-72 Class CB, 4% 9/25/19	5,000		5,009
Series 2004-19 Class AY, 4% 4/25/19	10,000		10,010
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2526 Class FC, 0.6881% 11/15/32 (e)	564		561
Series 2630 Class FL, 0.7881% 6/15/18 (e)	58		58
Series 2925 Class CQ, 0% 1/15/35 (e)	178		162
Series 3344 Class FT, 0.6381% 7/15/34 (e)	13,726		13,577
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
planned amortization class:
Series 2356 Class GD, 6% 9/15/16	$ 278		$ 295
Series 2376 Class JE, 5.5% 11/15/16	256		269
Series 2381 Class OG, 5.5% 11/15/16	195		205
Series 2425 Class JH, 6% 3/15/17	342		366
Series 2628 Class OE, 4.5% 6/15/18	705		730
Series 2640 Class GE, 4.5% 7/15/18	3,690		3,825
Series 2695 Class DG, 4% 10/15/18	1,635		1,652
Series 2802 Class OB, 6% 5/15/34	1,355		1,447
Series 2810 Class PD, 6% 6/15/33	1,020		1,079
Series 2831 Class PB, 5% 7/15/19	1,975		2,062
Series 2866 Class XE, 4% 12/15/18	1,875		1,934
sequential payer:
Series 1929 Class EZ, 7.5% 2/17/27	1,771		1,890
Series 2570 Class CU, 4.5% 7/15/17	125		130
Series 2572 Class HK, 4% 2/15/17	160		164
Series 2617 Class GW, 3.5% 6/15/16	170		169
Series 2729 Class GB, 5% 1/15/19	1,000		1,057
Series 2860 Class CP, 4% 10/15/17	115		118
Series 2998 Class LY, 5.5% 7/15/25	295		305
Series 3007 Class EW, 5.5% 7/15/25	1,125		1,161
Series 3013 Class VJ, 5% 1/15/14	1,442		1,510
Series 2715 Class NG, 4.5% 12/15/18	890		925
Series 2769 Class BU, 5% 3/15/34	436		430
Series 2975 Class NA, 5% 7/15/23	149		149
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $70,255)		71,612

Cash Equivalents - 3.1%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at:
0.19%, dated 7/31/09 due 8/3/09 (Collateralized by U.S. Treasury Obligations) #	$ 5,028		$ 5,028
0.21%, dated 7/31/09 due 8/3/09 (Collateralized by U.S. Government Obligations) # (a)	43,583		43,582
TOTAL CASH EQUIVALENTS (Cost $48,610)		48,610
TOTAL INVESTMENT PORTFOLIO - 102.9% (Cost $1,594,203)			1,607,314
NET OTHER ASSETS - (2.9)%			(44,616)
NET ASSETS - 100%		$ 1,562,698

Swap Agreements
	Expiration Date	Notional Amount (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 5.35% with Bank of America	March 2037	$ 1,800	(388)
Receive semi-annually a fixed rate equal to 3.2238% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	June 2014	9,500	186
Receive semi-annually a fixed rate equal to 3.30% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Sept. 2010	6,750	260
Receive semi-annually a fixed rate equal to 3.33% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	Sept. 2010	8,800	343
		$ 26,850	$ 401

Legend

(a) Includes investment made with cash collateral received from securities on loan.

(b) Security or a portion of the security is on loan at period end.

(c) 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 end of the period, the value of these securities amounted to $9,797,000 or 0.6% of net assets.

(d) Under the Temporary Liquidity Guarantee Program, the Federal Deposit Insurance Corporation guarantees principal and interest in the event of payment default or bankruptcy until the earlier of maturity date of the debt or until June 30, 2012. At the end of the period these securities amounted to $104,685,000 or 6.7% of net assets.

(e) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

* Amount represents less than $1,000.

# Additional information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$5,028,000 due 8/03/09 at 0.19%
BNP Paribas Securities Corp.	$ 226
Barclays Capital, Inc.	877
Credit Suisse Securities (USA) LLC	230
Deutsche Bank Securities, Inc.	736
HSBC Securities (USA), Inc.	958
ING Financial Markets LLC	1,054
J.P. Morgan Securities, Inc.	159
Mizuho Securities USA, Inc.	175
Morgan Stanley & Co., Inc.	175
Societe Generale, New York Branch	438
	$ 5,028
$43,582,000 due 8/03/09 at 0.21%
Banc of America Securities LLC	$ 43,582

Other Information

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities:
Cash Equivalents	$ 48,610	$ -	$ 48,610	$ -
Collateralized Mortgage Obligations	71,612	-	70,916	696
U.S. Government Agency - Mortgage Securities	193,448	-	193,448	-
U.S. Government and Government Agency Obligations	1,293,644	-	1,293,644	-
Total Investments in Securities:	$ 1,607,314	$ -	$ 1,606,618	$ 696
Derivative Instruments:
Assets
Swap Agreements	$ 789	$ -	$ 789	$ -
Liabilities
Swap Agreements	$ (388)	$ -	$ (388)	$ -
Total Derivative Instruments:	$ 401	$ -	$ 401	$ -
Other Financial Instruments:
Forward Commitments	$ (73)	$ -	$ (73)	$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities
Beginning Balance	$ 140
Total Realized Gain (Loss)	14
Total Unrealized Gain (Loss)	21
Cost of Purchases	20
Proceeds of Sales	(617)
Amortization/Accretion	-
Transfers in/out of Level 3	1,118
Ending Balance	$ 696
The changes in unrealized gain (loss) attributable to Level 3 securities at July 31, 2009	$ (49)

The information used in the above reconciliation represents fiscal year to date activity for any Investments in Securities identified as using Level 3 inputs at either the beginning or the end of the current fiscal period. Transfers in or out of Level 3 represents either the beginning value (for transfers in), or the ending value (for transfers out) of any Security or Instrument where a change in the pricing level occurred from the beginning to the end of the period. Realized and unrealized gains (losses) disclosed in the reconciliation are included in the Net Gain (Loss) on the Fund's Statement of Operations.

Value of Derivative Instruments

Risk Exposure / Derivative Type (Amounts in thousands)	Value
	Asset	Liability
Interest Rate Risk
Swap Agreements (a)	$ 789	$ (388)
Total Value of Derivatives	$ 789	$ (388)

(a) Value is disclosed on the Statement of Assets and Liabilities under the Unrealized Appreciation and Unrealized Depreciation on Swap Agreements line-items.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)	July 31, 2009

Assets
Investment in securities, at value (including securities loaned of $42,502 and repurchase agreements of $48,610) - See accompanying schedule: Unaffiliated issuers (cost $1,594,203)		$ 1,607,314
Commitment to sell securities on a delayed delivery basis	$ (19,907)
Receivable for securities sold on a delayed delivery basis	19,834	(73)
Receivable for investments sold, regular delivery		25,612
Cash		6
Receivable for fund shares sold		2,245
Interest receivable		10,954
Unrealized appreciation on swap agreements		789
Total assets		1,646,847

Liabilities
Payable for investments purchased	$ 36,024
Payable for fund shares redeemed	3,350
Distributions payable	214
Unrealized depreciation on swap agreements	388
Accrued management fee	416
Other affiliated payables	175
Collateral on securities loaned, at value	43,582
Total liabilities		84,149

Net Assets		$ 1,562,698
Net Assets consist of:
Paid in capital		$ 1,536,691
Undistributed net investment income		697
Accumulated undistributed net realized gain (loss) on investments		11,871
Net unrealized appreciation (depreciation) on investments		13,439
Net Assets, for 144,752 shares outstanding		$ 1,562,698
Net Asset Value, offering price and redemption price per share ($1,562,698 ÷ 144,752 shares)		$ 10.80

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

Annual Report

Fidelity Intermediate Government Income Fund
Financial Statements - continued

Statement of Operations

Amounts in thousands	Year ended July 31, 2009

Investment Income
Interest		$ 44,287

Expenses
Management fee	$ 4,661
Transfer agent fees	1,459
Fund wide operations fee	439
Independent trustees' compensation	5
Interest	1
Miscellaneous	7
Total expenses before reductions	6,572
Expense reductions	(14)	6,558
Net investment income		37,729
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	36,216
Futures contracts	1,123
Swap agreements	1,734
Total net realized gain (loss)		39,073
Change in net unrealized appreciation (depreciation) on: Investment securities	12,460
Futures contracts	(38)
Swap agreements	499
Delayed delivery commitments	(123)
Total change in net unrealized appreciation (depreciation)		12,798
Net gain (loss)		51,871
Net increase (decrease) in net assets resulting from operations		$ 89,600

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

Annual Report

Statement of Changes in Net Assets

Amounts in thousands	Year ended July 31, 2009	Year ended July 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 37,729	$ 32,272
Net realized gain (loss)	39,073	25,860
Change in net unrealized appreciation (depreciation)	12,798	847
Net increase (decrease) in net assets resulting from operations	89,600	58,979
Distributions to shareholders from net investment income	(37,002)	(33,538)
Share transactions Proceeds from sales of shares	1,251,369	459,861
Reinvestment of distributions	33,859	29,780
Cost of shares redeemed	(749,256)	(241,009)
Net increase (decrease) in net assets resulting from share transactions	535,972	248,632
Total increase (decrease) in net assets	588,570	274,073

Net Assets
Beginning of period	974,128	700,055
End of period (including undistributed net investment income of $697 and undistributed net investment income of $388, respectively)	$ 1,562,698	$ 974,128
Other Information Shares
Sold	117,192	44,265
Issued in reinvestment of distributions	3,156	2,886
Redeemed	(69,652)	(23,326)
Net increase (decrease)	50,696	23,825

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

Annual Report

Financial Highlights

Years ended July 31,	2009	2008	2007	2006	2005
Selected Per-Share Data
Net asset value, beginning of period	$ 10.36	$ 9.97	$ 9.92	$ 10.11	$ 10.18
Income from Investment Operations
Net investment income^B	.278	.398	.435	.414	.330
Net realized and unrealized gain (loss)	.439	.413	.067	(.219)	(.084)
Total from investment operations	.717	.811	.502	.195	.246
Distributions from net investment income	(.277)	(.421)	(.452)	(.385)	(.316)
Net asset value, end of period	$ 10.80	$ 10.36	$ 9.97	$ 9.92	$ 10.11
Total Return^A	6.98%	8.24%	5.14%	1.97%	2.43%
Ratios to Average Net Assets^C
Expenses before reductions	.45%	.45%	.45%	.45%	.57%
Expenses net of fee waivers, if any	.45%	.45%	.45%	.45%	.57%
Expenses net of all reductions	.45%	.45%	.45%	.45%	.57%
Net investment income	2.59%	3.86%	4.36%	4.14%	3.23%
Supplemental Data
Net assets, end of period (in millions)	$ 1,563	$ 974	$ 700	$ 759	$ 884
Portfolio turnover rate	305%	318%	121%	97%	90%

^A Total returns would have been lower had certain expenses not been reduced during the periods shown.

^B Calculated based on average shares outstanding during the period.

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

Annual Report

Notes to Financial Statements

For the period ended July 31, 2009

(Amounts in thousands except ratios)

1. Organization.

Fidelity Ginnie Mae Fund and Fidelity Intermediate Government Income Fund (the Funds) are funds of Fidelity Income Fund (the trust). 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. Each Fund is authorized to issue an unlimited number of shares.

2. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Events or transactions occurring after period end through the date that the financial statements were issued, September 25, 2009, have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Funds:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. Each Fund uses independent pricing services approved by the Board of Trustees to value their investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are classified into three levels. Level 1 includes readily available unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes observable inputs other than quoted prices included in Level 1 that are observable either directly or indirectly. Level 3 includes unobservable inputs when market prices are not readily available or reliable. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy. The aggregate value by input level, as of July 31, 2009, for each Fund's investments, as well as a reconciliation of assets and liabilities for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of each Fund's Schedule of Investments. Valuation techniques of each Fund's major categories of assets and liabilities as presented in the Schedule of Investments are as follows.

Annual Report

2. Significant Accounting Policies - continued

Security Valuation - continued

quality, coupon, maturity and types as well as dealer supplied prices. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

When current market prices or quotations are not readily available or reliable, valuations may be determined in good faith in accordance with procedures adopted by the Board of Trustees. Factors used in determining value may include significant market or security specific events, changes in interest rates and credit quality, and developments in foreign markets which are monitored by evaluating the performance of ADRs, futures contracts and exchange-traded funds. The frequency with which these procedures are used cannot be predicted and may be utilized to a significant extent. The value of securities used for net asset value (NAV) calculation under these procedures may differ from published prices for the same securities.

Investment Transactions and Income. For financial reporting purposes, the Funds' investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. The adjustments to principal due to inflation are reflected as increases or decreases to interest income even though principal is not received until maturity.

Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among each Fund in the trust. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) for Fidelity Ginnie Mae Fund, independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, each Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. Each Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the Funds will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to swap agreements, prior period premium and discount on debt securities, market discount, deferred trustees compensation, futures transactions, financing transactions, capital loss carryforwards and losses deferred due to wash sales.

Annual Report

2. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows for each Fund:

	Cost for Federal Income Tax Purposes	Unrealized Appreciation	Unrealized Depreciation	Net Unrealized Appreciation/ (Depreciation)
Ginnie Mae Fund	$ 8,652,143	$ 160,372	$ (31,874)	$ 128,498
Intermediate Government Income Fund	1,594,800	23,563	(11,049)	12,514

	Undistributed Ordinary Income	Undistributed Long-term Capital Gain
Ginnie Mae Fund	$ 796	$ -
Intermediate Government Income Fund	1,599	11,896

The tax character of distributions paid was as follows:

July 31, 2009	Ordinary Income
Ginnie Mae Fund	$ 222,729
Intermediate Government Income Fund	37,002
July 31, 2008	Ordinary Income
Ginnie Mae Fund	$ 165,414
Intermediate Government Income Fund	33,538

3. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits certain Funds and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. Certain Funds may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Each applicable Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

3. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities. Certain Funds may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in each applicable Fund's Schedule of Investments. Certain Funds may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, each applicable Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. Certain Funds may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of each applicable Fund's Schedule of Investments.

4. Investments in Derivative Instruments.

Objectives and Strategies for Investing in Derivative Instruments. The Funds use derivative instruments ("derivatives"), including futures contracts and swap agreements, in order to meet their investment objectives. The Funds' strategy is to use derivatives as a risk management tool and as an additional way to gain exposure to certain types of assets. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Funds may not achieve their objectives.

While utilizing derivatives in pursuit of their investment objectives, the Funds are exposed to certain financial risk relative to those derivatives. This risk is further explained below:

Interest Rate Risk

Interest rate risk is the risk that the value of interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates.

Annual Report

4. Investments in Derivative Instruments - continued

Objectives and Strategies for Investing in Derivative Instruments - continued

The following notes provide more detailed information about each derivative type held by the Funds:

Futures Contracts. Certain Funds use futures contracts to manage their exposure to the bond market and to fluctuations in interest rates. A futures contract is an agreement between two parties to buy or sell a specified underlying instrument for a fixed price at a specified future date. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a fund's exposure to the underlying instrument. Risks of loss may exceed any futures variation margin reflected in each applicable Fund's Statement of Assets and Liabilities and may include interest rate risk, and potential lack of liquidity in the market. Futures have minimal counterparty risk to the Funds since the exchange's clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default. The underlying face amount at value of any open futures contracts at period end is shown in the Schedule of Investments under the caption "Futures Contracts." This amount reflects each contract's exposure to the underlying instrument at period end.

The purchaser or seller of a futures contract is not required to pay for or deliver the instrument unless the contract is held until the delivery date. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Securities deposited to meet margin requirements are identified in each applicable Fund's Schedule of Investments. Futures contracts are marked-to-market daily and subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities and changes in value are recognized as unrealized gain (loss). Realized gain (loss) is recorded upon the expiration or closing of the futures contract. The net realized gain (loss) and change in unrealized gain (loss) on futures contracts during the period is included on the Statement of Operations. The total underlying face amount of all open futures contracts at period end is indicative of the volume of this derivative type.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

4. Investments in Derivative Instruments - continued

Swap Agreements. The Funds entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Funds' accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Any upfront payments made or received upon entering a swap contract to compensate for differences between stated terms of the agreement and prevailing market conditions (e.g. credit spreads, interest rates or other factors) are recorded as realized gains or losses ratably over the term of the swap in the Funds' accompanying Statements of Operations. Risks of loss may exceed amounts recognized on the Funds' Statements of Asset and Liabilities. In addition, there is the risk of failure by the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Funds' Schedules of Investments under the caption "Swap Agreements." The total notional amount of all open swap agreements at period end is indicative of the volume of this derivative type. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and, if required, is identified in the Funds' Schedules of Investments. The Funds could experience delays and costs in gaining access to the collateral even though it is held in the Funds' custodian bank.

The Funds entered into interest rate swap agreements to manage their exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Risks of loss may include interest rate risk and the possible inability of the counterparty to fulfill its obligations under the agreement. The Funds' maximum risk of loss from counterparty credit risk is the discounted net value of cash flows to be received from/paid to the counterparty over the contract's remaining life, to the extent that amount is positive. This risk is mitigated by the posting of collateral by the counterparty to the Funds to cover the Funds' exposure to the counterparty. Changes in interest rates can have a negative effect on both the value of the Funds' bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

Realized and Change in Unrealized Gain (Loss) on Derivative Instruments. A summary of the Funds' value of derivatives by primary risk exposure as of period end, if any, is included at the end of each Funds' Schedule of Investments. The table below reflects the Funds' realized gain (loss) and change in unrealized gain (loss) for derivatives during the period.

Annual Report

4. Investments in Derivative Instruments - continued

Realized and Change in Unrealized Gain (Loss) on Derivative Instruments - continued

Risk Exposure / Derivative Type	Realized Gain (Loss)	Change in Unrealized Gain (Loss)
Ginnie Mae Fund
Interest Rate Risk
Futures Contracts	$ (1,817)	$ 94
Swap Agreements	(10,594)	3,140
Total Derivatives Realized and Change in Unrealized Gain (Loss) (a)(b)	$ (12,411)	$ 3,234
Intermediate Government Income Fund
Interest Rate Risk
Futures Contracts	$ 1,123	$ (38)
Swap Agreements	1,734	499
Total Derivatives Realized and Change in Unrealized Gain (Loss) (a)(b)	$ 2,857	$ 461

(a) Derivatives realized gain (loss) is included in the Statement of Operations.

(b) Derivatives change in unrealized gain (loss) is included in the Statement of Operations.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Funds with investment management related services for which the Funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and a group fee rate. The individual fund fee rate is applied to each Fund's average net assets. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, each Fund's annual management fee rate expressed as a percentage of each Fund's average net assets was as follows:

	Individual Rate	Group Rate	Total
Ginnie Mae Fund	.20%	.12%	.32%
Intermediate Government Income Fund	.20%	.12%	.32%

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the Funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives an asset-based fee of .10% of each Fund's average net assets. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

5. Fees and Other Transactions with Affiliates - continued

Fundwide Operations Fee. Pursuant to the Fundwide Operations and Expense Agreement (FWOE), FMR has agreed to provide for fund level expenses (which do not include transfer agent, the compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fees were equivalent to the following annual rates expressed as a percentage of average net assets:

Ginnie Mae Fund	.03%
Intermediate Government Income Fund	.03%

6. Committed Line of Credit.

Certain Funds participate with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The participating funds have agreed to pay commitment fees on their pro-rata portion of the line of credit, which is reflected in Miscellaneous Expense on the Statement of Operations, and is as follows:

Ginnie Mae Fund	$ 22
Intermediate Government Income Fund	7

During the period, there were no borrowings on this line of credit.

7. Security Lending.

Certain Funds lend portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, each applicable Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Funds and any additional required collateral is delivered to the Funds on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on each applicable Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented on each applicable Fund's Statement of

Annual Report

7. Security Lending - continued

Operations as a component of interest income Net income from lending portfolio securities during the period amounted to:

Intermediate Government Income Fund

$ 203

8. Bank Borrowings.

Each Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. Each Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. Each applicable Fund's activity in this program during the period for which loans were outstanding was as follows:

	Average Daily Loan Balance	Weighted Average Interest Rate	Interest Expense
Intermediate Government Income Fund	$ 17,920	.55%	$ -*

* Amount represents less than one thousand.

9. Expense Reductions.

Through arrangements with each applicable Fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce each applicable Fund's expenses. All of the applicable expense reductions are noted in the table below.

	Custody expense reduction	Transfer Agent expense reduction

Ginnie Mae Fund	$ 1	$ 1
Intermediate Government Income Fund	13	1

10. Other.

The Funds' organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Funds. In the normal course of business, the Funds may also enter into contracts that provide general indemnifications. The Funds' maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Funds. The risk of material loss from such claims is considered remote.

Annual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Income Fund and the Shareholders of Fidelity Ginnie Mae Fund and Fidelity Intermediate Government Income Fund:

In our opinion, the accompanying statements of assets and liabilities, including the schedules of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial positions of Fidelity Ginnie Mae Fund and Fidelity Intermediate Government Income Fund (funds of Fidelity Income Fund) at July 31, 2009, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Income Fund's management Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at July 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts
September 25, 2009

Annual Report

Trustees and Officers

The Trustees and executive officers of the trust and funds, as applicable, are listed below. The Board of Trustees governs each fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee each fund's activities, review contractual arrangements with companies that provide services to each fund, and review each fund's performance. Except for Abigail P. Johnson, James C. Curvey, and Michael E. Kenneally, each of the Trustees oversees 172 funds advised by FMR or an affiliate. Ms. Johnson, Mr. Curvey, and Mr. Kenneally oversee 171, 392, and 171 funds, respectively, advised by FMR or an affiliate.

The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. Each Trustee who is not an interested person (as defined in the 1940 Act) (Independent Trustee), shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The Independent Trustees may waive this mandatory retirement age policy with respect to individual Trustees. The executive officers hold office without limit in time, except that any officer may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.

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

Interested Trustees*:

Correspondence intended for each Trustee who is an interested person may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.

Name, Age; Principal Occupation
Abigail P. Johnson (47)
	Year of Election or Appointment: 2009 Ms. Johnson is Trustee and Chairman of the Board of Trustees of certain Trusts. Ms. Johnson serves as President of Personal and Workplace Investing (2005-present). Ms. Johnson is a Director of FMR LLC. Previously, Ms. Johnson served as President and a Director of FMR (2001-2005), a Trustee of other investment companies advised by FMR, Fidelity Investments Money Management, Inc., and FMR Co., Inc. (2001-2005), Senior Vice President of the Fidelity funds (2001-2005), and managed a number of Fidelity funds. Ms. Abigail P. Johnson and Mr. Arthur E. Johnson are not related.
James C. Curvey (74)
	Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006-present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University.

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

Independent Trustees:

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

Name, Age; Principal Occupation
Albert R. Gamper, Jr. (67)
	Year of Election or Appointment: 2006 Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President. Mr. Gamper currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities), a member of the Board of Trustees, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System. Previously, Mr. Gamper served as Chairman of the Board of Governors, Rutgers University (2004-2007).
Arthur E. Johnson (62)
	Year of Election or Appointment: 2008 Mr. Johnson serves as a member of the Board of Directors of Eaton Corporation (diversified power management, 2009-present) and AGL Resources, Inc. (holding company). Previously, Mr. Johnson served as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor, 1999-2009), and on the Board of Directors of IKON Office Solutions, Inc. (1999-2008). Mr. Arthur E. Johnson and Ms. Abigail P. Johnson are not related.
Michael E. Kenneally (55)
	Year of Election or Appointment: 2009 Mr. Kenneally also serves as Trustee (2009-present) or Member of the Advisory Board (2008-present) of other Fidelity Fixed Income and Asset Allocation Funds. Previously, Mr. Kenneally served as Chairman and Global Chief Executive Officer of Credit Suisse Asset Management (2003-2005). Mr. Kenneally was a Director of The Credit Suisse Funds (U.S. Mutual Fund, 2004-2008) and was awarded the Chartered Financial Analyst (CFA) designation in 1991.
James H. Keyes (68)
	Year of Election or Appointment: 2007 Mr. Keyes serves as a member of the Boards of Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines) and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions). Previously, Mr. Keyes served as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008).
Marie L. Knowles (62)
	Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. Ms. Knowles currently serves as a Director of McKesson Corporation (healthcare service). Ms. Knowles is an Honorary Trustee of the Brookings Institution and a member of the Board of the Catalina Island Conservancy and of the Santa Catalina Island Company (2009-present). She also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California and the Foundation Board of the School of Architecture at the University of Virginia (2007-present). Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007).
Kenneth L. Wolfe (70)
	Year of Election or Appointment: 2005 Mr. Wolfe served as Chairman and a Director (2007-2009) and Chairman and Chief Executive Officer of Hershey Foods Corporation, and as a member of the Boards of Adelphia Communications Corporation (telecommunications, 2003-2006), Bausch & Lomb, Inc. (medical/pharmaceutical, 1993-2007), and Revlon, Inc. (2004-2009).

Annual Report

Trustees and Officers - continued

Executive Officers:

Correspondence intended for each executive officer may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.

Name, Age; Principal Occupation
John R. Hebble (51)
	Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Hebble also serves as Assistant Treasurer of other Fidelity funds (2009-present) and is an employee of Fidelity Investments.
Boyce I. Greer (53)
	Year of Election or Appointment: 2005 or 2006 Vice President of Fidelity's Fixed Income Funds (2006) and Asset Allocation Funds (2005). Mr. Greer is also a Trustee of other investment companies advised by FMR. Mr. Greer is President of the Asset Allocation Division (2008-present), President and a Director of Strategic Advisers, Inc. (2008-present), President and a Director of Fidelity Investments Money Management, Inc. (2007-present), and an Executive Vice President of FMR and FMR Co., Inc. (2005-present). Previously, Mr. Greer served as a Director and Managing Director of Strategic Advisers, Inc. (2002-2005).
Christopher P. Sullivan (55)
	Year of Election or Appointment: 2009 Vice President of Fidelity's Bond Funds. Mr. Sullivan also serves as President of Fidelity's Bond Group (2009-present). Previously, Mr. Sullivan served as Managing Director, Co-Head of U.S. Fixed Income at Goldman Sachs Asset Management (2001-2009).
Scott C. Goebel (41)
	Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); Deputy General Counsel of FMR LLC; Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), Fidelity Investments Money Management, Inc. (2008-present), Fidelity Management & Research (U.K.) Inc. (2008-present), and Fidelity Research and Analysis Company (2008-present). Previously, Mr. Goebel served as Assistant Secretary of the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Holly C. Laurent (55)
	Year of Election or Appointment: 2008 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Laurent is an employee of Fidelity Investments. Previously, Ms. Laurent was Senior Vice President and Head of Legal for Fidelity Business Services India Pvt. Ltd. (2006-2008), and Senior Vice President, Deputy General Counsel and Group Head for FMR LLC (2005-2006).
Christine Reynolds (50)
	Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007).
Michael H. Whitaker (42)
	Year of Election or Appointment: 2008 Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Whitaker is an employee of Fidelity Investments (2007-present). Prior to joining Fidelity Investments, Mr. Whitaker worked at MFS Investment Management where he served as Senior Vice President and Chief Compliance Officer (2004-2006), and Assistant General Counsel.
Jeffrey S. Christian (47)
	Year of Election or Appointment: 2009 Deputy Treasurer of the Fidelity funds. Mr. Christian also serves as Chief Financial Officer of other Fidelity funds (2008-present) and is an employee of Fidelity Investments. Previously, Mr. Christian served as Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (2004-2009) and as Vice President of Business Analysis (2003-2004).
Bryan A. Mehrmann (48)
	Year of Election or Appointment: 2005 Deputy Treasurer of the Fidelity funds. Mr. Mehrmann is an employee of Fidelity Investments. Previously, Mr. Mehrmann served as Vice President of Fidelity Investments Institutional Services Group (FIIS)/Fidelity Investments Institutional Operations Company, Inc. (FIIOC) Client Services (1998-2004).
Stephanie J. Dorsey (40)
	Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Dorsey is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Paul M. Murphy (62)
	Year of Election or Appointment: 2007 Assistant Treasurer of the Fidelity funds. Mr. Murphy is an employee of Fidelity Investments. Previously, Mr. Murphy served as Chief Financial Officer of the Fidelity funds (2005-2006), Vice President and Associate General Counsel of FMR (2007), and Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (1994-2007).
Kenneth B. Robins (39)
	Year of Election or Appointment: 2009 Assistant Treasurer of the Fidelity Fixed Income and Asset Allocation Funds. Mr. Robins also serves as President and Treasurer of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Before joining Fidelity Investments, Mr. Robins worked at KPMG LLP, where he was a partner in KPMG's department of professional practice (2002-2004).
Gary W. Ryan (50)
	Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005).

Annual Report

Distributions (Unaudited)

The Board of Trustees of each fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities, and dividends derived from net investment income:

Fund	Pay Date	Record Date	Dividends	Capital Gains
Ginnie Mae	09/14/09	09/11/09	$-	$-
Intermediate Government Income	09/14/09	09/11/09	$-	$0.09

The funds hereby designate as capital gain dividend the amounts noted below for the taxable year ended July 31, 2009, or, if subsequently determined to be different, the net capital gain of such year.

Intermediate Government Income

$11,895,716

A percentage of the dividends distributed during the fiscal year for the following funds was derived from interest on U.S. Government securities which is generally exempt from state income tax:

Intermediate Government Income

42.78%

The funds hereby designate the amounts noted below as distributions paid during the period January 1, 2009 to July 31, 2009 as qualifying to be taxed as interest-related dividends for nonresident alien shareholders:

Fund
Ginnie Mae	$ 132,899,258
Intermediate Government Income	$ 21,152,347

The fund will notify shareholders in January 2010 of amounts for use in preparing 2009 income tax returns.

Annual Report

Proxy Voting Results

A special meeting of each fund's shareholders was held on July 15, 2009. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.

PROPOSAL 1
To elect a Board of Trustees.^A
	# of Votes	% of Votes
James C. Curvey
Affirmative	14,013,293,778.94	95.195
Withheld	707,255,451.85	4.805
TOTAL	14,720,549,230.79	100.000
Albert R. Gamper, Jr.
Affirmative	14,076,416,168.78	95.624
Withheld	644,133,062.01	4.376
TOTAL	14,720,549,230.79	100.000
Abigail P. Johnson
Affirmative	14,008,124,232.06	95.160
Withheld	712,424,998.73	4.840
TOTAL	14,720,549,230.79	100.000
Arthur E. Johnson
Affirmative	14,050,921,135.52	95.451
Withheld	669,628,095.27	4.549
TOTAL	14,720,549,230.79	100.000
Michael E. Kenneally
Affirmative	14,109,579,658.34	95.850
Withheld	610,969,572.45	4.150
TOTAL	14,720,549,230.79	100.000
James H. Keyes
Affirmative	14,092,011,663.11	95.730
Withheld	628,537,567.68	4.270
TOTAL	14,720,549,230.79	100.000
Marie L. Knowles
Affirmative	14,092,143,532.07	95.731
Withheld	628,405,698.72	4.269
TOTAL	14,720,549,230.79	100.000
Kenneth L. Wolfe
Affirmative	14,052,555,742.75	95.462
Withheld	667,993,488.04	4.538
TOTAL	14,720,549,230.79	100.000
PROPOSAL 2
To amend the Declaration of Trust to reduce the required quorum for future shareholder meetings.^A
	# of Votes	% of Votes
Affirmative	10,799,375,525.31	73.363
Against	2,448,219,135.99	16.631
Abstain	720,949,491.20	4.898
Broker Non-Votes	752,005,078.29	5.108
TOTAL	14,720,549,230.79	100.000

^A Denotes trust-wide proposal and voting results.

Annual Report

Board Approval of Investment Advisory Contracts and Management Fees

Fidelity Ginnie Mae Fund/Fidelity Intermediate Government Income Fund

On May 21, 2009, the Board of Trustees, including the Independent Trustees (together, the Board), voted to continue the management contract and subadvisory agreements (together, the Advisory Contracts) for each fund for four months, through September 30, 2009, in connection with the reorganization of the Board's new meeting schedule. The Board considered that the contractual terms of and fees payable under each fund's Advisory Contracts involve no changes in (i) the investment process or strategies employed in the management of each fund's assets; (ii) the nature or level of services provided under each fund's Advisory Contracts; or (iii) the day-to-day management of each fund or the persons primarily responsible for such management. The Board concluded that each fund's Advisory Contracts are fair and reasonable, and that each fund's Advisory Contracts should be renewed, without modification, through September 30, 2009, with the understanding that the Board will consider their renewal in September 2009.

Annual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

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

Press

fid63 For mutual fund and brokerage trading.

fid65 For quotes.*

fid67 For account balances and holdings.

fid69 To review orders and mutual
fund activity.

fid71 To change your PIN.

fid73 fid75 To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.

Annual Report

To Visit Fidelity

For directions and hours,
please call 1-800-544-9797.

Arizona

7001 West Ray Road
Chandler, AZ

15445 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

2000 Avenue of the Stars
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

123 South Lake Avenue
Pasadena, CA

16656 Bernardo Ctr. Drive
Rancho Bernardo, CA

1220 Roseville Parkway
Roseville, CA

1740 Arden Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

11943 El Camino Real
San Diego, CA

8 Montgomery Street
San Francisco, CA

3793 State Street
Santa Barbara, CA

1200 Wilshire Boulevard
Santa Monica, CA

398 West El Camino Real
Sunnyvale, CA

111 South Westlake Blvd
Thousand Oaks, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6326 Canoga Avenue
Woodland Hills, CA

Colorado

281 East Flatiron Circle
Broomfield, CO

1625 Broadway
Denver, CO

9185 Westview Road
Lone Tree, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

400 Delaware Avenue
Wilmington, DE

Florida

175 East Altamonte Drive
Altamonte Springs, FL

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

4671 Town Center Parkway
Jacksonville, FL

8880 Tamiami Trail, North
Naples, FL

230 Royal Palm Way
Palm Beach, FL

3501 PGA Boulevard
Palm Beach Gardens, FL

3550 Tamiami Trail, South
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

2465 State Road 7
Wellington, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

401 North Michigan Avenue
Chicago, IL

One Skokie Valley Road
Highland Park, IL

1415 West 22nd Street
Oak Brook, IL

15105 S LaGrange Road
Orland Park, IL

1572 East Golf Road
Schaumburg, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

8480 Keystone Crossing
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7315 Wisconsin Avenue
Bethesda, MD

610 York Road
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

238 Main Street
Cambridge, MA

200 Endicott Street
Danvers, MA

Annual Report

405 Cochituate Road
Framingham, MA

551 Boston Turnpike
Shrewsbury, MA

Michigan

500 E. Eisenhower Pkwy.
Ann Arbor, MI

280 Old N. Woodward Ave.
Birmingham, MI

30200 Northwestern Hwy.
Farmington Hills, MI

43420 Grand River Avenue
Novi, MI

Minnesota

7740 France Avenue South
Edina, MN

8342 3rd Street North
Oakdale, MN

Missouri

1524 South Lindbergh Blvd.
St. Louis, MO

Nevada

2225 Village Walk Drive
Henderson, NV

New Jersey

501 Route 73 South
Marlton, NJ

150 Essex Street
Millburn, NJ

35 Morris Street
Morristown, NJ

396 Route 17, North
Paramus, NJ

3518 Route 1 North
Princeton, NJ

530 Broad Street
Shrewsbury, NJ

New Mexico

2261 Q Street NE
Albuquerque, NM

New York

1130 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

980 Madison Avenue
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

200 Fifth Avenue
New York, NY

733 Third Avenue
New York, NY

11 Penn Plaza
New York, NY

2070 Broadway
New York, NY

1075 Northern Blvd.
Roslyn, NY

799 Central Park Avenue
Scarsdale, NY

North Carolina

4611 Sharon Road
Charlotte, NC

7011 Fayetteville Road
Durham, NC

Ohio

3805 Edwards Road
Cincinnati, OH

1324 Polaris Parkway
Columbus, OH

1800 Crocker Road
Westlake, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

7493 SW Bridgeport Road
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

10 Memorial Boulevard
Providence, RI

Tennessee

3018 Peoples Street
Johnson City, TN

7628 West Farmington Blvd.
Germantown, TN

2035 Mallory Lane
Franklin, TN

Texas

10000 Research Boulevard
Austin, TX

4001 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

6560 Fannin Street
Houston, TX

1701 Lake Robbins Drive
The Woodlands, TX

6500 N. MacArthur Blvd.
Irving, TX

6005 West Park Boulevard
Plano, TX

14100 San Pedro
San Antonio, TX

1576 East Southlake Blvd.
Southlake, TX

Utah

279 West South Temple
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

10500 NE 8th Street
Bellevue, WA

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

16020 West Bluemound Road
Brookfield, WI

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Annual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Annual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

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

Fidelity Investments
Money Management, Inc.

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional
Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

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

Product Information 1-800-544-6666

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

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

Fidelity Automated Service
Telephone (FAST®) fid77 1-800-544-5555

Automated line for quickest service

GMIG-UANN-0909
1.844592.102

fid80

Fidelity®
Government Income
Fund

Annual Report

July 31, 2009

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	The Chairman's message to shareholders.
Performance	<Click Here>	How the fund has done over time.
Management's Discussion	<Click Here>	The manager's review of fund performance, strategy and outlook.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.
Report of Independent Registered Public Accounting Firm	<Click Here>
Trustees and Officers	<Click Here>
Distributions	<Click Here>
Proxy Voting Results	<Click Here>
Board Approval of Investment Advisory Contracts and Management Fees	<Click Here>

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

Annual Report

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Chairman's Message

(photo_of_Abigail_P_Johnson)

Dear Shareholder:

We invite you to contact us via the Internet, through our Investor Centers or by phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Abigail P. Johnson

Abigail P. Johnson

Annual Report

Performance: The Bottom Line

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

Average Annual Total Returns

Periods ended July 31, 2009	Past 1 year	Past 5 years	Past 10 years
Government Income	8.49%	5.52%	6.09%

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Government Income on July 31, 1999. The chart shows how the value of your investment would have changed, and also shows how the Barclays Capital U.S. Government Bond Index performed over the same period.

cfid69

Annual Report

Management's Discussion of Fund Performance

Comments from William Irving, Portfolio Manager of Fidelity® Government Income Fund: For the year, the fund's Retail Class shares returned 8.49% and the Barclays Capital 75% U.S. Government/25% U.S. Mortgage-Backed Securities Index gained 7.62%. Contributing to the fund's solid showing was an overweighting in mortgage-backed securities issued by government agencies, which recovered strongly in the second half of the period thanks to various government programs designed to shore up the housing market. Within the mortgage sector, security selection generally was favorable as well, with my focus on prepayment-resistant collateralized mortgage obligations and hybrid adjustable-rate mortgage securities - sectors not included in the index - aiding performance. Small out-of-benchmark investments in Treasury Inflation-Protected Securities also helped, because they generally outpaced conventional Treasuries when I held them. Security selection among conventional Treasuries was another plus, as my preference for "off-the-run" securities paid off. I bought these older issues at what I viewed as very cheap levels relative to newly issued "on-the-run" Treasuries, and they outperformed when the financial markets stabilized. The main disappointment during the period was that I didn't sell some Treasury bonds in December because, in hindsight, it's clear that they had become grossly overvalued at that point.

Annual Report

Shareholder Expense Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2009 to July 31, 2009).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.

Annual Report

Shareholder Expense Example - continued

	Annualized Expense Ratio	Beginning Account Value February 1, 2009	Ending Account Value July 31, 2009	Expenses Paid During Period* February 1, 2009 to July 31, 2009
Class A	.77%
Actual		$ 1,000.00	$ 1,015.10	$ 3.85
Hypothetical^A		$ 1,000.00	$ 1,020.98	$ 3.86
Class T	.76%
Actual		$ 1,000.00	$ 1,015.20	$ 3.80
Hypothetical^A		$ 1,000.00	$ 1,021.03	$ 3.81
Class B	1.50%
Actual		$ 1,000.00	$ 1,011.50	$ 7.48
Hypothetical^A		$ 1,000.00	$ 1,017.36	$ 7.50
Class C	1.52%
Actual		$ 1,000.00	$ 1,011.40	$ 7.58
Hypothetical^A		$ 1,000.00	$ 1,017.26	$ 7.60
Government Income	.46%
Actual		$ 1,000.00	$ 1,016.70	$ 2.30
Hypothetical^A		$ 1,000.00	$ 1,022.51	$ 2.31
Institutional Class	.52%
Actual		$ 1,000.00	$ 1,016.40	$ 2.60
Hypothetical^A		$ 1,000.00	$ 1,022.22	$ 2.61

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Annual Report

Investment Changes (Unaudited)

Coupon Distribution as of July 31, 2009
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	2.3	1.9
Less than 1%	0.7	1.8
1 - 1.99%	15.4	5.4
2 - 2.99%	7.6	7.2
3 - 3.99%	8.1	8.1
4 - 4.99%	9.7	10.0
5 - 5.99%	28.3	27.1
6 - 6.99%	14.1	16.0
7% and over	4.1	8.2

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

Weighted Average Maturity as of July 31, 2009
		6 months ago
Years	5.3	4.8

Duration as of July 31, 2009
		6 months ago
Years	4.3	4.4

Asset Allocation (% of fund's net assets)
As of July 31, 2009*			As of January 31, 2009**
	Mortgage Securities 31.7%			Mortgage Securities 34.3%
	CMOs and Other Mortgage Related Securities 12.7%			CMOs and Other Mortgage Related Securities 11.3%
	U.S. Treasury Obligations 34.7%			U.S. Treasury Obligations 31.6%
	U.S. Government Agency Obligations† 26.0%			U.S. Government Agency Obligations 25.8%
	Short-Term Investments and Net Other Assets*** (5.1)%			Short-Term Investments and Net Other Assets*** (3.0)%
* Futures and Swaps		1.2%	** Futures and Swaps		3.0%
† Includes FDIC Guaranteed Corporate Securities
*** Short-Term Investments and Net Other Assets are not included in the pie chart.

cfid86

Annual Report

Investments July 31, 2009

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 60.7%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 20.4%
Fannie Mae:
1.75% 3/23/11	$ 8,370		$ 8,460
1.75% 8/10/12	16,830		16,782
2.5% 5/15/14	7,739		7,640
2.75% 3/13/14	10,980		10,998
2.875% 10/12/10	58,835		60,324
4.75% 11/19/12	7,255		7,892
4.875% 5/18/12 (b)	53,750		58,363
6% 5/15/11	10,130		10,995
Federal Home Loan Bank:
1.625% 7/27/11	23,320		23,499
3.625% 9/16/11	3,000		3,144
3.625% 10/18/13 (b)	78,950		82,295
Freddie Mac:
1.625% 4/26/11	5,154		5,200
1.75% 6/15/12	102,572		102,348
2.125% 3/23/12 (b)	74,860		75,705
2.5% 4/23/14	12,390		12,282
4.875% 11/15/13	600		657
4.875% 6/13/18	17,225		18,716
5% 1/30/14	25,000		27,240
5% 2/16/17	41,000		44,933
5.125% 11/17/17 (b)	105,891		116,670
5.75% 1/15/12	73,906		81,449
6.875% 9/15/10	120,000		128,213
Israeli State (guaranteed by U.S. Government through Agency for International Development):
5.5% 9/18/23	110,500		118,348
6.8% 2/15/12	23,235		23,813
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates:
6.77% 11/15/13	4,604		4,903
6.99% 5/21/16	16,670		18,602
Private Export Funding Corp. secured:
4.974% 8/15/13	22,940		25,049
5.66% 9/15/11 (c)	18,000		19,595
5.685% 5/15/12	24,035		26,555
6.67% 9/15/09	3,500		3,526
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - continued
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	$ 5,033		$ 5,218
Series 2002-20K Class 1, 5.08% 11/1/22	10,954		11,482
Series 2003-P10B, Class 1 5.136% 8/10/13	5,034		5,240
Series 2004-20H Class 1, 5.17% 8/1/24	3,093		3,257
Tennessee Valley Authority 5.375% 4/1/56	8,429		8,580
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A, 5.96% 8/1/09	3,940		3,940
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			1,181,913
U.S. Treasury Inflation Protected Obligations - 2.0%
U.S. Treasury Inflation-Indexed Bonds 2.5% 1/15/29	57,916		60,504
U.S. Treasury Inflation-Indexed Notes 1.375% 7/15/18	54,540		53,092
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			113,596
U.S. Treasury Obligations - 32.7%
U.S. Treasury Bonds:
3.5% 2/15/39	24,565		21,230
4.25% 5/15/39	30,094		29,784
4.375% 2/15/38	35,860		36,196
5% 5/15/37	68,200		75,873
5.25% 2/15/29	16,538		18,587
6.125% 11/15/27	37,365		46,076
6.125% 8/15/29	20,127		25,033
6.25% 8/15/23	43,500		53,179
7.25% 5/15/16	132,937		166,805
7.5% 11/15/16	45,574		58,146
8% 11/15/21 (g)	14,605		20,219
9.875% 11/15/15	10,285		14,373
U.S. Treasury Notes:
0.875% 3/31/11	5,500		5,494
1% 7/31/11	257,128		256,485
1.25% 11/30/10	11,435		11,514
1.5% 7/15/12 (b)	60,008		59,839
1.75% 11/15/11	22,521		22,759
1.875% 6/15/12 (b)	165,910		167,375
1.875% 2/28/14	5,720		5,593
1.875% 4/30/14	75,909		73,934
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
2% 11/30/13	$ 25,398		$ 25,120
2.25% 5/31/14	91,473		90,465
2.375% 8/31/10	9,861		10,055
2.625% 6/30/14 (b)	36,000		36,191
2.625% 4/30/16	72,291		70,213
3.125% 8/31/13	20,625		21,418
3.125% 9/30/13	18,130		18,814
3.125% 5/15/19 (b)	121,176		117,427
3.25% 7/31/16	112,788		113,493
3.375% 7/31/13	28,650		30,083
3.625% 5/15/13	19,440		20,591
3.75% 11/15/18	15,801		16,120
3.875% 5/15/18	46,250		47,768
4% 2/15/15	23,619		25,160
4.25% 11/15/17	27,475		29,218
4.5% 5/15/17	24,685		26,762
4.625% 8/31/11	593		635
4.625% 7/31/12	20		22
4.625% 11/15/16	8,000		8,756
4.75% 8/15/17	12,983		14,290
TOTAL U.S. TREASURY OBLIGATIONS			1,891,095
Other Government Related - 5.6%
Bank of America Corp. 2.1% 4/30/12 (FDIC Guaranteed) (d)	6,060		6,095
Citibank NA:
1.5% 7/12/11 (FDIC Guaranteed) (d)	18,670		18,724
1.875% 5/7/12 (FDIC Guaranteed) (d)	87,150		86,998
1.875% 6/4/12 (FDIC Guaranteed) (d)	33,000		32,884
Citigroup Funding, Inc.:
2% 3/30/12 (FDIC Guaranteed) (d)	16,000		16,082
2.125% 7/12/12 (FDIC Guaranteed) (d)	31,240		31,358
General Electric Capital Corp. 1.8% 3/11/11 (FDIC Guaranteed) (d)	60,000		60,594
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
Other Government Related - continued
JPMorgan Chase & Co. 1.65% 2/23/11 (FDIC Guaranteed) (d)	$ 24,070		$ 24,318
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (d)	43,000		44,619
TOTAL OTHER GOVERNMENT RELATED			321,672
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $3,457,219)		3,508,276
U.S. Government Agency - Mortgage Securities - 31.7%

Fannie Mae - 20.7%
3.14% 7/1/35 (h)	2,082		2,134
3.206% 4/1/36 (h)	2,565		2,629
3.283% 3/1/35 (h)	328		336
3.29% 10/1/33 (h)	178		182
3.6% 10/1/33 (h)	437		447
3.715% 2/1/33 (h)	512		523
3.828% 7/1/35 (h)	1,890		1,936
4% 9/1/13 to 6/1/20	18,262		18,899
4.046% 3/1/35 (h)	97		100
4.209% 11/1/36 (h)	337		349
4.25% 7/1/34 (h)	237		244
4.253% 3/1/37 (h)	2,795		2,892
4.274% 7/1/35 (h)	1,771		1,826
4.275% 6/1/36 (h)	571		593
4.29% 3/1/33 (h)	175		182
4.299% 3/1/33 (h)	208		214
4.344% 10/1/33 (h)	496		512
4.421% 7/1/35 (h)	224		229
4.425% 3/1/35 (h)	790		813
4.5% 8/18/24 (e)	10,000		10,265
4.5% 8/18/24 (e)	33,000		33,874
4.533% 11/1/33 (h)	1,180		1,235
4.534% 10/1/33 (h)	367		375
4.621% 4/1/35 (h)	3,913		4,015
4.643% 7/1/35 (h)	808		838
4.649% 10/1/35 (h)	2,818		2,916
4.717% 11/1/35 (h)	4,063		4,241
4.727% 9/1/35 (h)	4,050		4,212
4.744% 2/1/34 (h)	155		161
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
4.787% 7/1/35 (h)	$ 3,141		$ 3,247
4.988% 2/1/34 (h)	4,797		5,013
4.996% 4/1/35 (h)	1,520		1,564
5% 6/1/14 to 6/1/39	245,953		253,613
5% 8/13/39 (e)(f)	7,000		7,169
5.003% 4/1/36 (h)	3,797		3,993
5.058% 9/1/34 (h)	526		538
5.072% 1/1/37 (h)	4,615		4,791
5.128% 7/1/35 (h)	5,241		5,451
5.152% 8/1/34 (h)	4,243		4,377
5.185% 3/1/35 (h)	324		335
5.261% 5/1/35 (h)	3,988		4,217
5.301% 12/1/34 (h)	721		737
5.344% 2/1/37 (h)	2,230		2,312
5.451% 8/1/36 (h)	4,898		5,181
5.5% 3/1/12 to 3/1/39	316,901		331,374
5.5% 8/18/24 (e)(f)	66,250		69,413
5.5% 8/1/39 (e)(f)	63,000		65,273
5.633% 2/1/36 (h)	2,313		2,431
5.773% 3/1/36 (h)	5,891		6,178
5.836% 6/1/35 (h)	1,496		1,583
5.848% 3/1/36 (h)	6,817		7,230
5.863% 5/1/36 (h)	2,162		2,268
5.87% 3/1/36 (h)	5,425		5,721
5.883% 12/1/36 (h)	3,489		3,697
5.992% 4/1/36 (h)	37,406		39,568
6% 4/1/12 to 8/1/37 (f)	167,185		177,511
6% 8/1/39 (e)(f)	5,000		5,240
6.106% 4/1/36 (h)	3,303		3,500
6.22% 3/1/37 (h)	1,268		1,345
6.223% 5/1/36 (h)	10,261		10,807
6.427% 8/1/36 (h)	25,575		27,125
6.5% 2/1/12 to 4/1/37	28,036		30,086
7% 7/1/13 to 7/1/32	4,332		4,759
7.5% 8/1/10 to 4/1/29	50		53
8.5% 1/1/15 to 7/1/31	385		420
9% 11/1/11 to 5/1/14	348		366
9.5% 11/15/09 to 10/1/20	443		497
11% 8/1/10	1		1
11.25% 5/1/14	4		5
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
11.5% 6/15/19 to 1/15/21	$ 748		$ 823
12.5% 8/1/15 to 3/1/16	1		1
			1,196,985
Freddie Mac - 5.9%
3.156% 2/1/34 (h)	433		442
3.478% 3/1/35 (h)	1,415		1,452
4% 5/1/19 to 11/1/20	19,794		20,487
4.034% 6/1/35 (h)	739		761
4.039% 9/1/36 (h)	2,617		2,690
4.448% 1/1/35 (h)	595		612
4.494% 5/1/35 (h)	1,400		1,451
4.5% 8/1/33	3,188		3,222
4.549% 4/1/35 (h)	4,957		5,119
4.703% 2/1/34 (h)	5,028		5,227
4.746% 3/1/35 (h)	2,171		2,220
4.791% 2/1/36 (h)	900		935
5% 3/1/18 to 6/1/38	56,115		58,924
5% 8/13/39 (e)	10,000		10,233
5.023% 4/1/35 (h)	394		413
5.103% 7/1/35 (h)	2,619		2,701
5.118% 6/1/35 (h)	2,141		2,255
5.251% 2/1/36 (h)	276		290
5.309% 3/1/33 (h)	92		95
5.486% 1/1/36 (h)	3,237		3,381
5.5% 8/1/14 to 7/1/36	69,964		73,998
5.5% 8/18/24 (e)(f)	47,500		49,701
5.522% 1/1/36 (h)	4,458		4,691
5.685% 10/1/35 (h)	989		1,046
5.737% 5/1/37 (h)	2,500		2,604
6% 7/1/16 to 9/1/38	29,787		31,696
6.078% 6/1/36 (h)	4,339		4,556
6.22% 7/1/36 (h)	2,461		2,588
6.5% 11/1/10 to 3/1/36	35,919		38,461
6.613% 1/1/37 (h)	7,059		7,473
7% 4/1/11	2		2
7.5% 5/1/11 to 7/1/16	1,195		1,286
8.5% 5/1/17 to 9/1/29	157		174
9% 11/1/10 to 10/1/20	33		36
9.5% 5/1/17 to 8/1/21	201		222
9.75% 8/1/14	121		133
10% 3/1/10 to 8/1/21	13		15
11% 8/1/13 to 5/1/14	44		49
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
12% 8/1/13 to 3/1/15	$ 1		$ 2
12.5% 2/1/10 to 6/1/19	9		10
13% 8/1/10 to 6/1/15	4		4
			341,657
Government National Mortgage Association - 5.1%
4.25% 7/20/34 (h)	566		585
5% 2/20/33 to 12/20/36	64,225		66,382
5% 8/20/39 (e)	500		513
5% 8/20/39 (e)	10,000		10,275
5% 9/21/39 (e)	10,000		10,223
5.5% 12/15/33 to 7/20/38	55,408		58,198
6% 12/15/10 to 1/15/36	100,259		106,602
6% 8/20/39 (e)(f)	22,000		23,092
6.5% 2/15/24 to 10/15/35	16,032		17,326
7% 10/15/26 to 8/15/32	87		94
7.5% 3/15/28 to 8/15/29	109		120
8% 7/15/19 to 12/15/23	1,011		1,110
8.5% 1/15/25	4		4
9% 12/15/09	0*		0*
9.5% 2/15/25	1		1
10.5% 4/15/14 to 1/20/18	72		83
			294,608
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $1,773,129)		1,833,250
Collateralized Mortgage Obligations - 12.7%

U.S. Government Agency - 12.7%
Fannie Mae:
planned amortization class:
Series 1992-168 Class KB, 7% 10/25/22	1,143		1,233
Series 1993-207 Class H, 6.5% 11/25/23	16,696		18,041
Series 1993-240 Class PD, 6.25% 12/25/13	2,899		3,050
Series 1994-23:
Class PG, 6% 4/25/23	23		23
Class PZ, 6% 2/25/24	11,335		12,355
Series 1996-28 Class PK, 6.5% 7/25/25	3,175		3,433
Series 2003-28 Class KG, 5.5% 4/25/23	4,940		5,137
Series 2006-45 Class OP, 6/25/36 (j)	5,105		4,204
Series 2006-62 Class KP, 4/25/36 (j)	10,940		8,769
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
sequential payer:
Series 1997-41 Class J, 7.5% 6/18/27	$ 2,213		$ 2,438
Series 2007-115 Class BE, 4.5% 12/25/22	15,400		15,838
Series 2003-22 Class IO, 6% 4/25/33 (i)	14,785		1,989
Fannie Mae Grantor Trust planned amortization class Series 2005-81 Class PC, 5.5% 9/25/35	2,150		2,277
Fannie Mae Stripped Mortgage-Backed Securities:
sequential payer Series 377 Class 1, 10/1/36 (j)	18,503		15,903
Series 384 Class 6, 5% 7/25/37 (i)	21,600		3,240
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2001-38 Class QF, 1.265% 8/25/31 (h)	522		528
Series 2002-49 Class FB, 0.8888% 11/18/31 (h)	788		786
Series 2002-60 Class FV, 1.285% 4/25/32 (h)	338		342
Series 2002-75 Class FA, 1.285% 11/25/32 (h)	692		701
Series 2007-36:
Class FB, 0.685% 4/25/37 (h)	32,090		31,356
Class FG, 0.685% 4/25/37 (h)	6,319		6,180
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	4,674		4,931
Series 2003-113 Class PE, 4% 11/25/18	7,545		7,601
Series 2004-21 Class QE, 4.5% 11/25/32	1,500		1,525
Series 2005-102 Class CO, 11/25/35 (j)	5,224		4,359
Series 2006-12 Class BO, 10/25/35 (j)	23,752		19,919
Series 2006-37 Class OW, 5/25/36 (j)	5,750		4,925
sequential payer:
Series 2001-20 Class Z, 6% 5/25/31	16,201		17,182
Series 2001-46 Class ZG, 6% 9/25/31	5,904		6,245
Series 2002-79 Class Z, 5.5% 11/25/22	12,495		13,060
Series 2003-84 Class JK, 4.5% 9/25/18	10,000		10,317
Series 2004-3 Class BA, 4% 7/25/17	455		468
Series 2005-117, Class JN, 4.5% 1/25/36	645		631
Series 2006-72 Class CY, 6% 8/25/26	10,215		10,940
Series 2007-36:
Class GO, 4/25/37 (j)	1,009		847
Class PO, 4/25/37 (j)	2,262		1,740
Class SB, 6.315% 4/25/37 (h)(i)(k)	29,379		3,483
Class SG, 6.315% 4/25/37 (h)(i)(k)	13,121		1,350
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac:
planned amortization class:
Series 2115 Class PE, 6% 1/15/14	$ 528		$ 559
Series 3149 Class OD, 5/15/36 (j)	28,646		23,026
sequential payer Series 2114 Class ZM, 6% 1/15/29	1,841		1,960
Freddie Mac Manufactured Housing participation certificates guaranteed:
floater Series 1686 Class FA, 1.2125% 2/15/24 (h)	1,017		1,027
planned amortization class Series 1681 Class PJ, 7% 12/15/23	3,582		3,662
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2530 Class FE, 0.8881% 2/15/32 (h)	460		460
Series 2630 Class FL, 0.7881% 6/15/18 (h)	550		551
Series 3008 Class SM, 7/15/35 (h)	279		259
planned amortization class:
Series 1141 Class G, 9% 9/15/21	294		344
Series 1614 Class L, 6.5% 7/15/23	1,932		1,961
Series 2006-15 Class OP, 3/25/36 (j)	6,509		5,206
Series 2131 Class BG, 6% 3/15/29	38,830		41,122
Series 2356 Class GD, 6% 9/15/16	367		389
Series 2376 Class JE, 5.5% 11/15/16	2,621		2,749
Series 2381 Class OG, 5.5% 11/15/16	1,995		2,097
Series 2628 Class OE, 4.5% 6/15/18	6,815		7,059
Series 2640 Class GE, 4.5% 7/15/18	7,310		7,577
Series 2682 Class LD, 4.5% 10/15/33	777		784
Series 2802 Class OB, 6% 5/15/34	10,455		11,168
Series 2810 Class PD, 6% 6/15/33	995		1,052
Series 2937 Class KC, 4.5% 2/15/20	19,686		20,442
Series 2962 Class BE, 4.5% 4/15/20	15,015		15,446
Series 3077 Class TO, 4/15/35 (j)	14,228		11,623
Series 3110 Class OP, 9/15/35 (j)	13,436		11,078
Series 3119 Class PO, 2/15/36 (j)	16,354		13,080
Series 3121 Class KO, 3/15/36 (j)	5,362		4,482
Series 3123 Class LO, 3/15/36 (j)	10,626		8,549
Series 3145 Class GO, 4/15/36 (j)	9,520		7,652
Series 3151 Class PO, 5/15/36 (j)	10,330		8,387
sequential payer:
Series 2546 Class MJ, 5.5% 3/15/23	2,861		2,965
Series 2570 Class CU, 4.5% 7/15/17	1,181		1,223
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
sequential payer:
Series 2574 Class HP, 5% 2/15/18	$ 42,150		$ 44,516
Series 2587 Class AD, 4.71% 3/15/33	5,785		5,607
Series 2601 Class TB, 5.5% 4/15/23	869		899
Series 2611 Class CH, 4.5% 5/15/18	37,220		38,391
Series 2617 Class GW, 3.5% 6/15/16	413		412
Series 2677 Class BC, 4% 9/15/18	20,040		20,262
Series 2729 Class GB, 5% 1/15/19	9,255		9,783
Series 2770 Class TW, 4.5% 3/15/19	19,670		20,275
Series 2773 Class HC, 4.5% 4/15/19	704		724
Series 2809 Class UA, 4% 12/15/14	607		606
Series 2860 Class CP, 4% 10/15/17	1,204		1,232
Series 2874 Class BC, 5% 10/15/19	43,000		45,303
Series 2920 Class KC, 4.5% 5/15/19	44,385		46,190
Series 2998 Class LY, 5.5% 7/15/25	2,011		2,077
Series 3007 Class EW, 5.5% 7/15/25	8,875		9,157
Series 3013 Class VJ, 5% 1/15/14	1,438		1,506
Series 2769 Class BU, 5% 3/15/34	2,456		2,419
Series 2863 Class DB, 4% 9/15/14	1,081		1,106
Series 2957 Class SW, 5.7119% 4/15/35 (h)(i)	21,253		1,649
Series 3002 Class SN, 6.2119% 7/15/35 (h)(i)(k)	21,167		2,073
target amortization class:
Series 2156 Class TC, 6.25% 5/15/29	7,177		7,646
Series 2877 Class JC, 5% 10/15/34	1,167		1,212
Ginnie Mae guaranteed REMIC pass-thru securities planned amortization class Series 1997-8 Class PE, 7.5% 5/16/27	3,597		3,906
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $694,285)		732,236

Cash Equivalents - 11.2%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.21%, dated 7/31/09 due 8/3/09 (Collateralized by U.S. Government Obligations) # (a) (Cost $644,498)	$ 644,509		$ 644,498
TOTAL INVESTMENT PORTFOLIO - 116.3% (Cost $6,569,131)			6,718,260
NET OTHER ASSETS - (16.3)%			(940,248)
NET ASSETS - 100%		$ 5,778,012

Swap Agreements
	Expiration Date	Notional Amount (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 4.64% with JPMorgan Chase, Inc.	April 2038	$ 20,000	(1,877)
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 5.57% with Goldman Sachs	August 2017	66,000	(9,613)
Receive semi-annually a fixed rate equal to 1.6613% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	March 2011	50,000	665
Receive semi-annually a fixed rate equal to 2.8575% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	April 2011	24,500	861
Receive semi-annually a fixed rate equal to 3.7975% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	May 2019	4,000	48
Swap Agreements - continued
	Expiration Date	Notional Amount (000s)	Value (000s)
Interest Rate Swaps - continued
Receive semi-annually a fixed rate equal to 4.19% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	August 2013	$ 13,445	$ 1,040
Receive semi-annually a fixed rate equal to 4.42% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Oct. 2009	48,400	1,006
		$ 226,345	$ (7,870)

Legend

(a) Includes investment made with cash collateral received from securities on loan.

(b) Security or a portion of the security is on loan at period end.

(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(f) A portion of the security is subject to a forward commitment to sell.

(g) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $11,774,000.

(h) The coupon rate shown on floating or adjustable rate securities represents the rate at period end.

(i) Security represents right to receive monthly interest payments on an underlying pool of mortgages or assets. Principal shown is the outstanding par amount of the pool held as of the end of the period.

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

(k) Coupon is inversely indexed to a floating interest rate multiplied by a specified factor. The price may be considerably more volatile than the price of a comparable fixed rate security.

* Amounts represents less than $1,000.

# Additional information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement / Counterparty	Value (Amounts in thousands)
$644,498,000 due 8/03/09 at 0.21%
Banc of America Securities LLC	$ 644,498

Other Information

Valuation Inputs at Reporting Date:
Description (Amounts in thousands)	Total	Level 1	Level 2	Level 3
Investments in Securities:
Cash Equivalents	$ 644,498	$ -	$ 644,498	$ -
Collateralized Mortgage Obligations	732,236	-	732,236	-
U.S. Government Agency - Mortgage Securities	1,833,250	-	1,833,250	-
U.S. Government and Government Agency Obligations	3,508,276	-	3,503,373	4,903
Total Investments in Securities:	$ 6,718,260	$ -	$ 6,713,357	$ 4,903
Derivative Instruments:
Assets
Swap Agreements	$ 3,620	$ -	$ 3,620	$ -
Liabilities
Swap Agreements	$ (11,490)	$ -	$ (11,490)	$ -
Total Derivative Instruments:	$ (7,870)	$ -	$ (7,870)	$ -
Other Financial Instruments:
Forward Commitments	$ (2,966)	$ -	$ (2,966)	$ -

The following is a reconciliation of Investments in Securities for which Level 3 inputs were used in determining value:

(Amounts in thousands)	Investments in Securities
Beginning Balance	$ 1,454
Total Realized Gain (Loss)	-
Total Unrealized Gain (Loss)	235
Cost of Purchases	-
Proceeds of Sales	(1,023)
Amortization/Accretion	(58)
Transfer in/out of Level 3	4,295
Ending Balance	$ 4,903
The change in unrealized gain (loss) attributable to Level 3 securities at July 31, 2009	$ (18)

Value of Derivative Instruments

Risk Exposure / Derivative Type (Amounts in thousands)	Value
	Asset	Liability
Interest Rate Risk
Swap Agreements (a)	$ 3,620	$ (11,490)
Total Value of Derivatives	$ 3,620	$ (11,490)

(a) Value is disclosed on the Statement of Assets and Liabilities under the Unrealized Appreciation and Unrealized Depreciation on Swap Agreements line-items.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)	July 31, 2009

Assets
Investment in securities, at value (including securities loaned of $630,084 and repurchase agreements of $644,498) - See accompanying schedule: Unaffiliated issuers (cost $6,569,131)		$ 6,718,260
Commitment to sell securities on a delayed delivery basis	$ (527,733)
Receivable for securities sold on a delayed delivery basis	524,767	(2,966)
Receivable for investments sold, regular delivery		71,800
Receivable for fund shares sold		9,179
Interest receivable		38,524
Unrealized appreciation on swap agreements		3,620
Other affiliated receivables		634
Other receivables		751
Total assets		6,839,802

Liabilities
Payable to custodian bank	$ 283
Payable for investments purchased Regular delivery	90,228
Delayed delivery	295,115
Payable for fund shares redeemed	15,963
Distributions payable	920
Unrealized depreciation on swap agreements	11,490
Accrued management fee	1,533
Distribution fees payable	309
Other affiliated payables	698
Other payables and accrued expenses	753
Collateral on securities loaned, at value	644,498
Total liabilities		1,061,790

Net Assets		$ 5,778,012
Net Assets consist of:
Paid in capital		$ 5,487,511
Undistributed net investment income		1,884
Accumulated undistributed net realized gain (loss) on investments		150,324
Net unrealized appreciation (depreciation) on investments		138,293
Net Assets		$ 5,778,012

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

Annual Report

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)	July 31, 2009

Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($436,555 ÷ 40,523 shares)		$ 10.77

Maximum offering price per share (100/96.00 of $10.77)		$ 11.22
Class T: Net Asset Value and redemption price per share ($323,906 ÷ 30,069 shares)		$ 10.77

Maximum offering price per share (100/96.00 of $10.77)		$ 11.22
Class B: Net Asset Value and offering price per share ($48,449 ÷ 4,498 shares)^A		$ 10.77

Class C: Net Asset Value and offering price per share ($130,863 ÷ 12,149 shares)^A		$ 10.77

Government Income: Net Asset Value, offering price and redemption price per share ($4,637,779 ÷ 431,057 shares)		$ 10.76

Institutional Class: Net Asset Value, offering price and redemption price per share ($200,460 ÷ 18,608 shares)		$ 10.77

^ARedemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

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

Annual Report

Financial Statements - continued

Statement of Operations

Amounts in thousands	Year ended July 31, 2009

Investment Income
Interest		$ 308,612

Expenses
Management fee	$ 24,044
Transfer agent fees	8,414
Distribution fees	3,558
Fund wide operations fee	2,278
Independent trustees' compensation	29
Interest	19
Miscellaneous	39
Total expenses before reductions	38,381
Expense reductions	(113)	38,268
Net investment income		270,344
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	228,956
Futures contracts	7,560
Swap agreements	33,265
Total net realized gain (loss)		269,781
Change in net unrealized appreciation (depreciation) on: Investment securities	119,538
Swap agreements	(19,147)
Delayed delivery commitments	(4,539)
Total change in net unrealized appreciation (depreciation)		95,852
Net gain (loss)		365,633
Net increase (decrease) in net assets resulting from operations		$ 635,977

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

Annual Report

Statement of Changes in Net Assets

Amounts in thousands	Year ended July 31, 2009	Year ended July 31, 2008
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 270,344	$ 337,289
Net realized gain (loss)	269,781	203,220
Change in net unrealized appreciation (depreciation)	95,852	61,605
Net increase (decrease) in net assets resulting from operations	635,977	602,114
Distributions to shareholders from net investment income	(271,454)	(333,995)
Distributions to shareholders from net realized gain	(88,360)	-
Total distributions	(359,814)	(333,995)
Share transactions - net increase (decrease)	(3,981,793)	1,973,783
Total increase (decrease) in net assets	(3,705,630)	2,241,902

Net Assets
Beginning of period	9,483,642	7,241,740
End of period (including undistributed net investment income of $1,884 and undistributed net investment income of $6,028, respectively)	$ 5,778,012	$ 9,483,642

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

Annual Report

Financial Highlights - Class A

Years ended July 31,	2009	2008	2007 ^F
Selected Per-Share Data
Net asset value, beginning of period	$ 10.40	$ 10.01	$ 9.98
Income from Investment Operations
Net investment income ^E	.356	.402	.311
Net realized and unrealized gain (loss)	.466	.387	.033
Total from investment operations	.822	.789	.344
Distributions from net investment income	(.352)	(.399)	(.314)
Distributions from net realized gain	(.100)	-	-
Total distributions	(.452)	(.399)	(.314)
Net asset value, end of period	$ 10.77	$ 10.40	$ 10.01
Total Return ^{B, C, D}	8.03%	7.96%	3.49%
Ratios to Average Net Assets ^G
Expenses before reductions	.77%	.81%	.78% ^A
Expenses net of fee waivers, if any	.77%	.81%	.78% ^A
Expenses net of all reductions	.77%	.80%	.77% ^A
Net investment income	3.33%	3.88%	4.08% ^A
Supplemental Data
Net assets, end of period (in millions)	$ 437	$ 232	$ 145
Portfolio turnover rate	380% ^H	269%	164% ^H

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Total returns do not include the effect of the sales charges.

^E Calculated based on average shares outstanding during the period.

^F For the period October 24, 2006 (commencement of sale of shares) to July 31, 2007.

^G 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. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after 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.

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

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

Annual Report

Financial Highlights - Class T

Years ended July 31,	2009	2008	2007^F
Selected Per-Share Data
Net asset value, beginning of period	$ 10.40	$ 10.01	$ 9.98
Income from Investment Operations
Net investment income^E	.357	.404	.306
Net realized and unrealized gain (loss)	.466	.387	.036
Total from investment operations	.823	.791	.342
Distributions from net investment income	(.353)	(.401)	(.312)
Distributions from net realized gain	(.100)	-	-
Total distributions	(.453)	(.401)	(.312)
Net asset value, end of period	$ 10.77	$ 10.40	$ 10.01
Total Return ^{B, C, D}	8.04%	7.98%	3.46%
Ratios to Average Net Assets^G
Expenses before reductions	.76%	.78%	.79%^A
Expenses net of fee waivers, if any	.76%	.78%	.79%^A
Expenses net of all reductions	.76%	.78%	.79%^A
Net investment income	3.33%	3.90%	4.02%^A
Supplemental Data
Net assets, end of period (in millions)	$ 324	$ 236	$ 181
Portfolio turnover rate	380%^H	269%	164%^H

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Total returns do not include the effect of the sales charges.

^E Calculated based on average shares outstanding during the period.

^F For the period October 24, 2006 (commencement of sale of shares) to July 31, 2007.

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

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

Annual Report

Financial Highlights - Class B

Years ended July 31,	2009	2008	2007^F
Selected Per-Share Data
Net asset value, beginning of period	$ 10.40	$ 10.01	$ 9.98
Income from Investment Operations
Net investment income^E	.278	.329	.251
Net realized and unrealized gain (loss)	.467	.387	.037
Total from investment operations	.745	.716	.288
Distributions from net investment income	(.275)	(.326)	(.258)
Distributions from net realized gain	(.100)	-	-
Total distributions	(.375)	(.326)	(.258)
Net asset value, end of period	$ 10.77	$ 10.40	$ 10.01
Total Return ^{B, C, D}	7.25%	7.21%	2.91%
Ratios to Average Net Assets^G
Expenses before reductions	1.50%	1.51%	1.50%^A
Expenses net of fee waivers, if any	1.50%	1.51%	1.50%^A
Expenses net of all reductions	1.50%	1.50%	1.50%^A
Net investment income	2.60%	3.17%	3.30%^A
Supplemental Data
Net assets, end of period (in millions)	$ 48	$ 41	$ 43
Portfolio turnover rate	380%^H	269%	164%^H

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Total returns do not include the effect of the contingent deferred sales charge.

^E Calculated based on average shares outstanding during the period.

^F For the period October 24, 2006 (commencement of sale of shares) to July 31, 2007.

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

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

Annual Report

Financial Highlights - Class C

Years ended July 31,	2009	2008	2007^F
Selected Per-Share Data
Net asset value, beginning of period	$ 10.40	$ 10.01	$ 9.98
Income from Investment Operations
Net investment income^E	.275	.326	.249
Net realized and unrealized gain (loss)	.468	.387	.033
Total from investment operations	.743	.713	.282
Distributions from net investment income	(.273)	(.323)	(.252)
Distributions from net realized gain	(.100)	-	-
Total distributions	(.373)	(.323)	(.252)
Net asset value, end of period	$ 10.77	$ 10.40	$ 10.01
Total Return ^{B, C, D}	7.23%	7.18%	2.85%
Ratios to Average Net Assets^G
Expenses before reductions	1.52%	1.53%	1.55%^A
Expenses net of fee waivers, if any	1.52%	1.53%	1.55%^A
Expenses net of all reductions	1.51%	1.53%	1.55%^A
Net investment income	2.58%	3.15%	3.26%^A
Supplemental Data
Net assets, end of period (in millions)	$ 131	$ 71	$ 39
Portfolio turnover rate	380%^H	269%	164%^H

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Total returns do not include the effect of the contingent deferred sales charge.

^E Calculated based on average shares outstanding during the period.

^F For the period October 24, 2006 (commencement of sale of shares) to July 31, 2007.

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

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

Annual Report

Financial Highlights - Government Income

Years ended July 31,	2009	2008	2007	2006	2005
Selected Per-Share Data
Net asset value, beginning of period	$ 10.38	$ 10.00	$ 9.95	$ 10.20	$ 10.13
Income from Investment Operations
Net investment income ^B	.390	.438	.443	.429	.329
Net realized and unrealized gain (loss)	.476	.378	.068	(.274)	.097
Total from investment operations	.866	.816	.511	.155	.426
Distributions from net investment income	(.386)	(.436)	(.456)	(.405)	(.321)
Distributions from net realized gain	(.100)	-	(.005)	-	(.035)
Total distributions	(.486)	(.436)	(.461)	(.405)	(.356)
Net asset value, end of period	$ 10.76	$ 10.38	$ 10.00	$ 9.95	$ 10.20
Total Return ^A	8.49%	8.25%	5.22%	1.56%	4.24%
Ratios to Average Net Assets ^C
Expenses before reductions	.45%	.45%	.45%	.45%	.58%
Expenses net of fee waivers, if any	.45%	.45%	.45%	.45%	.58%
Expenses net of all reductions	.45%	.45%	.44%	.44%	.58%
Net investment income	3.65%	4.23%	4.42%	4.27%	3.21%
Supplemental Data
Net assets, end of period (in millions)	$ 4,638	$ 8,154	$ 6,118	$ 5,331	$ 5,127
Portfolio turnover rate	380% ^D	269%	164% ^D	108%	114%

^A Total returns would have been lower had certain expenses not been reduced during the periods shown.

^B Calculated based on average shares outstanding during the period.

^C Expense ratios reflect operating expenses of the 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 fee waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

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

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

Annual Report

Financial Highlights - Institutional Class

Years ended July 31,	2009	2008	2007^E
Selected Per-Share Data
Net asset value, beginning of period	$ 10.40	$ 10.01	$ 9.98
Income from Investment Operations
Net investment income^D	.385	.432	.329
Net realized and unrealized gain (loss)	.466	.388	.034
Total from investment operations	.851	.820	.363
Distributions from net investment income	(.381)	(.430)	(.333)
Distributions from net realized gain	(.100)	-	-
Total distributions	(.481)	(.430)	(.333)
Net asset value, end of period	$ 10.77	$ 10.40	$ 10.01
Total Return ^{B, C}	8.32%	8.28%	3.67%
Ratios to Average Net Assets^F
Expenses before reductions	.51%	.51%	.53%^A
Expenses net of fee waivers, if any	.51%	.51%	.53%^A
Expenses net of all reductions	.51%	.51%	.53%^A
Net investment income	3.59%	4.17%	4.32%^A
Supplemental Data
Net assets, end of period (in millions)	$ 200	$ 750	$ 715
Portfolio turnover rate	380%^G	269%	164%^G

^A Annualized

^B Total returns for periods of less than one year are not annualized.

^C Total returns would have been lower had certain expenses not been reduced during the periods shown.

^D Calculated based on average shares outstanding during the period.

^E For the period October 24, 2006 (commencement of sale of shares) to July 31, 2007.

^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. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of fee waivers reflect expenses after 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 The portfolio turnover rate does not include the assets acquired in the merger.

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

Annual Report

Notes to Financial Statements

For the period ended July 31, 2009
(Amounts in thousands except ratios)

1. Organization.

Fidelity Government Income Fund (the Fund) is a fund of Fidelity Income Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, Government Income, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of 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.

2. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. Actual results could differ from those estimates. Events or transactions occurring after period end through the date that the financial statements were issued, October 8, 2009, have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued as of 4:00 p.m. Eastern time on the last calendar day of the period. The Fund uses independent pricing services approved by the Board of Trustees to value its investments. Generally Accepted Accounting Principles (GAAP) establishes a disclosure hierarchy that categorizes the inputs to valuation techniques used to value assets and liabilities at measurement date. These inputs are classified into three levels. Level 1 includes readily available unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes observable inputs other than quoted prices included in Level 1 that are observable either directly or indirectly. Level 3 includes unobservable inputs when market prices are not readily available or reliable. Changes in valuation techniques may result in transfers in or out of an investment's assigned level within the hierarchy. The aggregate value by input level, as of July 31, 2009, for the Fund's investments, as well as a reconciliation of assets and liabilities for which significant unobservable inputs (Level 3) were used in determining value, is included at the end of the Fund's Schedule of Investments. Valuation techniques of the Fund's major categories of assets and liabilities as presented in the Schedule of Investments are as follows.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Security Valuation - continued

Debt securities, including restricted securities, are valued based on quotations received from dealers who make markets in such securities or by independent pricing services. For U.S. government and government agency obligations, pricing services generally utilize matrix pricing which considers yield or price of bonds of comparable quality, coupon, maturity and type as well as dealer supplied prices. For collateralized mortgage obligations, and U.S. government agency mortgage securities, pricing services generally utilize matrix pricing which considers prepayment speed assumptions, attributes of the collateral, yield or price of bonds of comparable quality, coupon, maturity and types as well as dealer supplied prices. Swaps are marked-to-market daily based on valuations from independent pricing services or dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Investments in open-end mutual funds are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value. Actual prices received at disposition may differ.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. The adjustments to principal due to inflation are reflected as increases or decreases to interest income even though principal is not received until maturity.

Annual Report

2. Significant Accounting Policies - continued

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), independent Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are invested in a cross-section of Fidelity funds, are marked-to-market and remain in the Fund until distributed in accordance with the Plan. The investment of deferred amounts and the offsetting payable to the Trustees are included in the accompanying Statement of Assets and Liabilities.

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. There are no unrecognized tax benefits in the accompanying financial statements. A Fund's federal tax return is subject to examination by the Internal Revenue Service (IRS) for a period of three years.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income 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. In addition, the Fund will claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.

Book-tax differences are primarily due to swap agreements, market discount, deferred trustees compensation, futures transactions, capital loss carryforwards, and losses deferred due to wash sales.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

2. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:

Unrealized appreciation	$ 164,228
Unrealized depreciation	(29,761)
Net unrealized appreciation (depreciation)	$ 134,467

Undistributed ordinary income	$ 19,246
Undistributed long-term capital gain	$ 136,803

Cost for federal income tax purposes	$ 6,583,793

The tax character of distributions paid was as follows:

	July 31, 2009	July 31, 2008
Ordinary Income	$ 307,284	$ 333,995
Long-term Capital Gains	52,530	-
Total	$ 359,814	$ 333,995

3. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the Fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Delayed Delivery Transactions and When-Issued Securities. The Fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a

Annual Report

3. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

delayed delivery or when-issued basis are identified as such in the Fund's Schedule of Investments. The Fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the Fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The Fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the Fund's Schedule of Investments.

4. Investments in Derivative Instruments.

Objectives and Strategies for Investing in Derivative Instruments. The Fund uses derivative instruments ("derivatives"), including futures contracts and swap agreements, in order to meet its investment objectives. The Fund's strategy is to use derivatives as a risk management tool and as an additional way to gain exposure to certain types of assets. The success of any strategy involving derivatives depends on analysis of numerous economic factors, and if the strategies for investment do not work as intended, the Fund may not achieve its objectives.

While utilizing derivatives in pursuit of its investment objectives, the Fund is exposed to certain financial risk relative to those derivatives. This risk is further explained below:

Interest Rate Risk

Interest rate risk is the risk that the value of interest-bearing financial instruments will fluctuate due to changes in the prevailing levels of market interest rates.

The following notes provide more detailed information about each derivative type held by the Fund:

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

4. Investments in Derivative Instruments - continued

Futures Contracts - continued

clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

The purchaser or seller of a futures contract is not required to pay for or deliver the instrument unless the contract is held until the delivery date. Upon entering into a futures contract, a fund is required to deposit with a clearing broker, no later than the following business day, an amount ("initial margin") equal to a certain percentage of the face value of the contract. The initial margin may be in the form of cash or securities and is transferred to a segregated account on settlement date. Securities deposited to meet margin requirements are identified in the Fund's Schedule of Investments. Futures contracts are marked-to-market daily and subsequent payments ("variation margin") are made or received by a fund depending on the daily fluctuations in the value of the futures contract. These amounts are reflected as receivables or payables on the Statement of Assets and Liabilities and changes in value are recognized as unrealized gain (loss). Realized gain (loss) is recorded upon the expiration or closing of the futures contract. The net realized gain (loss) and change in unrealized gain (loss) on futures contracts during the period is included on the Statement of Operations. The total underlying face amount of all open futures contracts at period end is indicative of the volume of this derivative type.

Swap Agreements. The Fund entered into swap agreements, which are contracts between two parties to exchange future cash flows at periodic intervals based on a notional principal amount. Payments are exchanged at specified intervals, accrued daily commencing with the effective date of the contract and recorded as realized gains or losses in the Fund's accompanying Statement of Operations. Gains or losses are realized in the event of an early termination of a swap agreement. Any upfront payments made or received upon entering a swap contract to compensate for differences between stated terms of the agreement and prevailing market conditions (e.g. credit spreads, interest rates or other factors) are recorded as realized gains or losses ratably over the term of the swap in the Fund's accompanying Statement of Operations. Risks of loss may exceed amounts recognized on the Fund's Statement of Asset and Liabilities. In addition, there is the risk of failure by the counterparty to perform under the terms of the agreement and lack of liquidity in the market. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements." The total notional amount of all open swap agreements at period end is indicative of the volume of this derivative type. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian bank in accordance with the swap agreement and, if required, is identified in the Fund's Schedule of Investments. The Fund could experience delays and costs in gaining access to the collateral even though it is held in the Fund's custodian bank.

Annual Report

4. Investments in Derivative Instruments - continued

Swap Agreements - continued

The Fund entered into interest rate swap agreements to manage its exposure to interest rate changes. Interest rate swaps represent an agreement between counterparties to exchange cash flows based on the difference between two interest rates (e.g. fixed rate, floating rate), applied to a notional principal amount. Risks of loss may include interest rate risk and the possible inability of the counterparty to fulfill its obligations under the agreement. The Fund's maximum risk of loss from counterparty credit risk is the discounted net value of cash flows to be received from/paid to the counterparty over the contract's remaining life, to the extent that amount is positive. This risk is mitigated by the posting of collateral by the counterparty to the Fund to cover the Fund's exposure to the counterparty. Changes in interest rates can have a negative effect on both the value of the Fund's bond holdings as well as the amount of interest income earned. In general, the value of bonds can fall when interest rates rise and can rise when interest rates fall.

Realized and Change in Unrealized Gain (Loss) on Derivative Instruments. A summary of the Fund's value of derivatives by primary risk exposure as of period end, if any, is included at the end of the Fund's Schedule of Investments. The table below reflects the Fund's realized gain (loss) and change in unrealized gain (loss) for derivatives during the period.

Risk Exposure / Derivative Type	Realized Gain (Loss)	Change in Unrealized Gain (Loss)
Interest Rate Risk
Futures Contracts	$ 7,560	$ -
Swap Agreements	33,265	(19,147)
Total Derivatives Realized and Change in Unrealized Gain (Loss) (a)(b)	$ 40,825	$ (19,147)

(a) Total derivatives realized gain (loss) included in the Statement of Operations is comprised of $7,560 for futures contracts and $33,265 for swap agreements.

(b) Total derivatives change in unrealized gain (loss) included in the Statement of Operations is comprised of $(19,147) for swap agreements.

5. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the Fund with investment management related services for which the Fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the Fund's average net assets and a group fee rate that averaged .12% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .32% of the Fund's average net assets.

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

5. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the Fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	0 %	.25%	$ 999	$ 52
Class T	0 %	.25%	781	2
Class B	.65%	.25%	478	347
Class C	.75%	.25%	1,300	375
			$ 3,558	$ 776

Sales Load. FDC receives a front-end sales charge of up to 4.00% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. 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,.75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

	Retained by FDC
Class A	$ 125
Class T	22
Class B*	125
Class C*	49
	$ 321

* 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.

Annual Report

5. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class were as follows:

	Amount	% of Average Net Assets
Class A	$ 669	.17
Class T	506	.16
Class B	131	.25
Class C	214	.16
Government Income	6,172	.10
Institutional Class	722	.16
	$ 8,414

Fundwide Operations Fee. Pursuant to the Fundwide Operations and Expense Agreement (FWOE), FMR has agreed to provide for fund level expenses (which do not include transfer agent, Rule 12b-1 fees, compensation of the independent Trustees, interest (including commitment fees), taxes or extraordinary expenses, if any) in return for a FWOE fee equal to .35% less the total amount of the management fee. The FWOE paid by the Fund is reduced by an amount equal to the fees and expenses paid to the independent Trustees. For the period, the FWOE fee was equivalent to an annual rate of .03% of average net assets.

6. Committed Line of Credit.

The Fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The Fund has agreed to pay commitment fees on its pro-rata portion of the line of credit, which amounted to $36 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

7. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

7. Security Lending - continued

experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $2,387.

8. Bank Borrowings.

The Fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The Fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period for which loans were outstanding amounted to $96,617. The weighted average interest rate was .78%. The interest expense amounted to $2 under the bank borrowing program. At period end, there were no bank borrowings outstanding.

9. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's expenses by $65. During the period, credits reduced each class' transfer agent expense as noted in the table below.

	Transfer Agent expense reduction
Government Income	46
Institutional Class	2
	$ 48

Annual Report

10. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Years ended July 31,	2009	2008
From net investment income
Class A	$ 13,006	$ 7,464
Class T	10,251	8,439
Class B	1,363	1,398
Class C	3,300	1,798
Government Income	226,663	288,379
Institutional Class	16,871	26,517
Total	$ 271,454	$ 333,995
From net realized gain
Class A	$ 2,833	$ -
Class T	2,506	-
Class B	436	-
Class C	907	-
Government Income	74,900	-
Institutional Class	6,778	-
Total	$ 88,360	$ -

11. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
Years ended July 31,	2009	2008	2009	2008
Class A
Shares sold	35,692	17,630	$ 380,999	$ 183,928
Issued in exchange for shares of Capital One U.S. Government Income fund	6,641	-	70,327	-
Reinvestment of distributions	1,253	653	13,436	6,798
Shares redeemed	(25,396)	(10,466)	(272,901)	(108,879)
Net increase (decrease)	18,190	7,817	$ 191,861	$ 81,847
Class T
Shares sold	23,887	15,236	$ 254,848	$ 158,292
Reinvestment of distributions	1,145	772	12,255	8,030
Shares redeemed	(17,656)	(11,375)	(189,289)	(118,003)
Net increase (decrease)	7,376	4,633	$ 77,814	$ 48,319
Class B
Shares sold	4,098	2,313	$ 43,522	$ 24,145
Reinvestment of distributions	135	108	1,442	1,126
Shares redeemed	(3,673)	(2,809)	(39,286)	(29,186)
Net increase (decrease)	560	(388)	$ 5,678	$ (3,915)

Annual Report

Notes to Financial Statements - continued

(Amounts in thousands except ratios)

11. Share Transactions - continued

Transactions for each class of shares were as follows - continued

	Shares		Dollars
Years ended July 31,	2009	2008	2009	2008
Class C
Shares sold	12,983	5,069	$ 137,496	$ 52,892
Reinvestment of distributions	275	114	2,940	1,185
Shares redeemed	(7,938)	(2,289)	(84,780)	(23,797)
Net increase (decrease)	5,320	2,894	$ 55,656	$ 30,280
Government Income
Shares sold	375,847	308,696	$ 3,997,128	$ 3,217,869
Reinvestment of distributions	27,412	27,173	291,319	282,009
Shares redeemed	(757,431)	(162,519)	(8,030,938)	(1,689,834)
Net increase (decrease)	(354,172)	173,350	$ (3,742,491)	$ 1,810,044
Institutional Class
Shares sold	21,256	30,491	$ 226,158	$ 316,702
Reinvestment of distributions	2,190	2,538	23,273	26,319
Shares redeemed	(76,962)	(32,353)	(819,742)	(335,813)
Net increase (decrease)	(53,516)	676	$ (570,311)	$ 7,208

12. Other.

The Fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the Fund. In the normal course of business, the Fund may also enter into contracts that provide general indemnifications. The Fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the Fund. The risk of material loss from such claims is considered remote.

13. Merger Information.

On November 21, 2008, the Fund acquired all of the assets and assumed all of the liabilities (other than any deferred, accrued or prepaid expenses) of Capital One U.S. Government Income Fund pursuant to an agreement and plan of reorganization approved by the Board of Trustees on June 19, 2008. The acquisition was accomplished by an exchange of 6,641 shares of Class A of the Fund for 7,089 shares then outstanding (valued at $9.92 per share) of Capital One U.S. Government Income Fund. The reorganization qualified as a tax-free reorganization for federal income tax purposes with no gain or loss recognized to the funds or their shareholders. Capital One U.S. Government Income Fund's net assets were combined with the Fund's net assets of $7,489,277 for total net assets after the acquisition of $7,559,604.

Annual Report

Report of Independent Registered Public Accounting Firm

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

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Government Income Fund (a fund of Fidelity Income Fund) at July 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Government Income Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at July 31, 2009 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

October 8, 2009

Annual Report

Trustees and Officers

The Trustees and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for Abigail P. Johnson, James C. Curvey and Michael E. Kenneally, each of the Trustees oversees 172 funds advised by FMR or an affiliate. Ms. Johnson, Mr. Curvey, and Mr. Kenneally oversee 171, 392, and 171 funds, respectively, advised by FMR or an affiliate.

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

Interested Trustees*:

Correspondence intended for each Trustee who is an interested person may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.

Name, Age; Principal Occupation
Abigail P. Johnson (47)
	Year of Election or Appointment: 2009 Ms. Johnson is Trustee and Chairman of the Board of Trustees of certain Trusts. Ms. Johnson serves as President of Personal and Workplace Investing (2005-present). Ms. Johnson is a Director of FMR LLC. Previously, Ms. Johnson served as President and a Director of FMR (2001-2005), a Trustee of other investment companies advised by FMR, Fidelity Investments Money Management, Inc., and FMR Co., Inc. (2001-2005), Senior Vice President of the Fidelity funds (2001-2005), and managed a number of Fidelity funds. Ms. Abigail P. Johnson and Mr. Arthur E. Johnson are not related.
James C. Curvey (74)
	Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006-present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University.

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

Independent Trustees:

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

Name, Age; Principal Occupation
Albert R. Gamper, Jr. (67)
	Year of Election or Appointment: 2006 Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President. Mr. Gamper currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities), a member of the Board of Trustees, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System. Previously, Mr. Gamper served as Chairman of the Board of Governors, Rutgers University (2004-2007).
Arthur E. Johnson (62)
	Year of Election or Appointment: 2008 Mr. Johnson serves as a member of the Board of Directors of Eaton Corporation (diversified power management, 2009-present) and AGL Resources, Inc. (holding company). Previously, Mr. Johnson served as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor, 1999-2009), and on the Board of Directors of IKON Office Solutions, Inc. (1999-2008). Mr. Arthur E. Johnson and Ms. Abigail P. Johnson are not related.
Michael E. Kenneally (55)
	Year of Election or Appointment: 2009 Mr. Kenneally also serves as Trustee (2009-present) or Member of the Advisory Board (2008-present) of other Fidelity Fixed Income and Asset Allocation Funds. Previously, Mr. Kenneally served as Chairman and Global Chief Executive Officer of Credit Suisse Asset Management (2003-2005). Mr. Kenneally was a Director of The Credit Suisse Funds (U.S. Mutual Fund, 2004-2008) and was awarded the Chartered Financial Analyst (CFA) designation in 1991.
James H. Keyes (68)
	Year of Election or Appointment: 2007 Mr. Keyes serves as a member of the Boards of Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines) and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions). Previously, Mr. Keyes served as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008).
Marie L. Knowles (62)
	Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. Ms. Knowles currently serves as a Director of McKesson Corporation (healthcare service). Ms. Knowles is an Honorary Trustee of the Brookings Institution and a member of the Board of the Catalina Island Conservancy and of the Santa Catalina Island Company (2009-present). She also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California and the Foundation Board of the School of Architecture at the University of Virginia (2007-present). Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007).
Kenneth L. Wolfe (70)
	Year of Election or Appointment: 2005 Mr. Wolfe served as Chairman and a Director (2007-2009) and Chairman and Chief Executive Officer of Hershey Foods Corporation, and as a member of the Boards of Adelphia Communications Corporation (telecommunications, 2003-2006), Bausch & Lomb, Inc. (medical/pharmaceutical, 1993-2007), and Revlon, Inc. (2004-2009).

Annual Report

Executive Officers:

Correspondence intended for each executive officer may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.

Name, Age; Principal Occupation
John R. Hebble (51)
	Year of Election or Appointment: 2008 President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Hebble also serves as Assistant Treasurer of other Fidelity funds (2009-present) and is an employee of Fidelity Investments.
Boyce I. Greer (53)
	Year of Election or Appointment: 2005 or 2006 Vice President of Fidelity's Fixed Income Funds (2006) and Asset Allocation Funds (2005). Mr. Greer is also a Trustee of other investment companies advised by FMR. Mr. Greer is President of the Asset Allocation Division (2008-present), President and a Director of Strategic Advisers, Inc. (2008-present), President and a Director of Fidelity Investments Money Management, Inc. (2007-present), and an Executive Vice President of FMR and FMR Co., Inc. (2005-present). Previously, Mr. Greer served as a Director and Managing Director of Strategic Advisers, Inc. (2002-2005).
Christopher P. Sullivan (55)
	Year of Election or Appointment: 2009 Vice President of Fidelity's Bond Funds. Mr. Sullivan also serves as President of Fidelity's Bond Group (2009-present). Previously, Mr. Sullivan served as Managing Director, Co-Head of U.S. Fixed Income at Goldman Sachs Asset Management (2001-2009).
Scott C. Goebel (41)
	Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of the Fidelity funds. Mr. Goebel also serves as General Counsel, Secretary, and Senior Vice President of FMR (2008-present) and FMR Co., Inc. (2008-present); Deputy General Counsel of FMR LLC; Chief Legal Officer of Fidelity Management & Research (Hong Kong) Limited (2008-present) and Assistant Secretary of Fidelity Management & Research (Japan) Inc. (2008-present), Fidelity Investments Money Management, Inc. (2008-present), Fidelity Management & Research (U.K.) Inc. (2008-present), and Fidelity Research and Analysis Company (2008-present). Previously, Mr. Goebel served as Assistant Secretary of the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Holly C. Laurent (55)
	Year of Election or Appointment: 2008 Anti-Money Laundering (AML) Officer of the Fidelity funds. Ms. Laurent is an employee of Fidelity Investments. Previously, Ms. Laurent was Senior Vice President and Head of Legal for Fidelity Business Services India Pvt. Ltd. (2006-2008), and Senior Vice President, Deputy General Counsel and Group Head for FMR LLC (2005-2006).
Christine Reynolds (50)
	Year of Election or Appointment: 2008 Chief Financial Officer of the Fidelity funds. Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. Ms. Reynolds served as Chief Operating Officer of FPCMS (2007-2008). Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007).
Michael H. Whitaker (42)
	Year of Election or Appointment: 2008 Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds. Mr. Whitaker is an employee of Fidelity Investments (2007-present). Prior to joining Fidelity Investments, Mr. Whitaker worked at MFS Investment Management where he served as Senior Vice President and Chief Compliance Officer (2004-2006), and Assistant General Counsel.
Jeffrey S. Christian (47)
	Year of Election or Appointment: 2009 Deputy Treasurer of the Fidelity funds. Mr. Christian also serves as Chief Financial Officer of other Fidelity funds (2008-present) and is an employee of Fidelity Investments. Previously, Mr. Christian served as Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (2004-2009) and as Vice President of Business Analysis (2003-2004).
Bryan A. Mehrmann (48)
	Year of Election or Appointment: 2005 Deputy Treasurer of the Fidelity funds. Mr. Mehrmann is an employee of Fidelity Investments. Previously, Mr. Mehrmann served as Vice President of Fidelity Investments Institutional Services Group (FIIS)/Fidelity Investments Institutional Operations Company, Inc. (FIIOC) Client Services (1998-2004).
Stephanie J. Dorsey (40)
	Year of Election or Appointment: 2008 Deputy Treasurer of Fidelity's Fixed Income and Asset Allocation Funds. Ms. Dorsey is an employee of Fidelity Investments (2008-present). Previously, Ms. Dorsey served as Treasurer (2004-2008) of the JPMorgan Mutual Funds and Vice President (2004-2008) of JPMorgan Chase Bank.
Paul M. Murphy (62)
	Year of Election or Appointment: 2007 Assistant Treasurer of the Fidelity funds. Mr. Murphy is an employee of Fidelity Investments. Previously, Mr. Murphy served as Chief Financial Officer of the Fidelity funds (2005-2006), Vice President and Associate General Counsel of FMR (2007), and Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (1994-2007).
Kenneth B. Robins (39)
	Year of Election or Appointment: 2009 Assistant Treasurer of the Fidelity Fixed Income and Asset Allocation Funds. Mr. Robins also serves as President and Treasurer of other Fidelity funds and is an employee of Fidelity Investments (2004-present). Before joining Fidelity Investments, Mr. Robins worked at KPMG LLP, where he was a partner in KPMG's department of professional practice (2002-2004).
Gary W. Ryan (50)
	Year of Election or Appointment: 2005 Assistant Treasurer of the Fidelity funds. Mr. Ryan is an employee of Fidelity Investments. Previously, Mr. Ryan served as Vice President of Fund Reporting in Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005).

Annual Report

Distributions (Unaudited)

The Board of Trustees of Advisor Government Income Fund voted to pay on September 14, 2009, to shareholders of record at the opening of business on September 11, 2009, a distribution of $.295 per share derived from capital gains realized from sales of portfolio securities.

A total of 21.95% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.

The fund hereby designates as a capital gain dividend with respect to the taxable year ended July 31, 2009, $153,019,773, or, if subsequently determined to be different, the net capital gain of such year.

The fund designates $123,945,800 of distributions paid during the period January 1, 2009 to July 31, 2009 as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.

The fund will notify shareholders in January 2010 of amounts for use in preparing 2009 income tax returns.

Annual Report

Proxy Voting Results

A special meeting of the fund's shareholders was held on July 15, 2009. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.

PROPOSAL 1
To elect a Board of Trustees.^A
	# of Votes	% of Votes
James C. Curvey
Affirmative	14,013,293,778.94	95.195
Withheld	707,255,451.85	4.805
TOTAL	14,720,549,230.79	100.000
Albert R. Gamper, Jr.
Affirmative	14,076,416,168.78	95.624
Withheld	644,133,062.01	4.376
TOTAL	14,720,549,230.79	100.000
Abigail P. Johnson
Affirmative	14,008,124,232.06	95.160
Withheld	712,424,998.73	4.840
TOTAL	14,720,549,230.79	100.000
Arthur E. Johnson
Affirmative	14,050,921,135.52	95.451
Withheld	669,628,095.27	4.549
TOTAL	14,720,549,230.79	100.000
Michael E. Kenneally
Affirmative	14,109,579,658.34	95.850
Withheld	610,969,572.45	4.150
TOTAL	14,720,549,230.79	100.000
James H. Keyes
Affirmative	14,092,011,663.11	95.730
Withheld	628,537,567.68	4.270
TOTAL	14,720,549,230.79	100.000
Marie L. Knowles
Affirmative	14,092,143,532.07	95.731
Withheld	628,405,698.72	4.269
TOTAL	14,720,549,230.79	100.000
Kenneth L. Wolfe
Affirmative	14,052,555,742.75	95.462
Withheld	667,993,488.04	4.538
TOTAL	14,720,549,230.79	100.000
PROPOSAL 2
To amend the Declaration of Trust to reduce the required quorum for future shareholder meetings.^A
	# of Votes	% of Votes
Affirmative	10,799,375,525.31	73.363
Against	2,448,219,135.99	16.631
Abstain	720,949,491.20	4.898
Broker Non-Votes	752,005,078.29	5.108
TOTAL	14,720,549,230.79	100.000

^A Denotes trust-wide proposal and voting results.

Annual Report

Board Approval of Investment Advisory Contracts and Management Fees

Fidelity Government Income Fund

On May 21, 2009, the Board of Trustees, including the Independent Trustees (together, the Board), voted to continue the management contract and subadvisory agreements (together, the Advisory Contracts) for the fund for four months, through September 30, 2009, in connection with the reorganization of the Board's new meeting schedule. The Board considered that the contractual terms of and fees payable under the fund's Advisory Contracts involve no changes in (i) the investment process or strategies employed in the management of the fund's assets; (ii) the nature or level of services provided under the fund's Advisory Contracts; or (iii) the day-to-day management of the fund or the persons primarily responsible for such management. The Board concluded that the fund's Advisory Contracts are fair and reasonable, and that the fund's Advisory Contracts should be renewed, without modification, through September 30, 2009, with the understanding that the Board will consider their renewal in September 2009.

Annual Report

Managing Your Investments

By Phone

(phone_graphic)

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

Press

cfid88 For mutual fund and brokerage trading.

cfid90 For quotes.*

cfid92 For account balances and holdings.

cfid94 To review orders and mutual
fund activity.

cfid96 To change your PIN.

cfid98 cfid100 To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

Annual Report

To Visit Fidelity

For directions and hours,
please call 1-800-544-9797.

Arizona

7001 West Ray Road
Chandler, AZ

15445 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

2000 Avenue of the Stars
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

123 South Lake Avenue
Pasadena, CA

16656 Bernardo Ctr. Drive
Rancho Bernardo, CA

1220 Roseville Parkway
Roseville, CA

1740 Arden Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

11943 El Camino Real
San Diego, CA

8 Montgomery Street
San Francisco, CA

3793 State Street
Santa Barbara, CA

1200 Wilshire Boulevard
Santa Monica, CA

398 West El Camino Real
Sunnyvale, CA

111 South Westlake Blvd
Thousand Oaks, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6326 Canoga Avenue
Woodland Hills, CA

Colorado

281 East Flatiron Circle
Broomfield, CO

1625 Broadway
Denver, CO

9185 Westview Road
Lone Tree, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

400 Delaware Avenue
Wilmington, DE

Florida

175 East Altamonte Drive
Altamonte Springs, FL

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

4671 Town Center Parkway
Jacksonville, FL

8880 Tamiami Trail, North
Naples, FL

230 Royal Palm Way
Palm Beach, FL

3501 PGA Boulevard
Palm Beach Gardens, FL

3550 Tamiami Trail, South
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

2465 State Road 7
Wellington, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

401 North Michigan Avenue
Chicago, IL

One Skokie Valley Road
Highland Park, IL

1415 West 22nd Street
Oak Brook, IL

15105 S LaGrange Road
Orland Park, IL

1572 East Golf Road
Schaumburg, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

8480 Keystone Crossing
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7315 Wisconsin Avenue
Bethesda, MD

610 York Road
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

238 Main Street
Cambridge, MA

200 Endicott Street
Danvers, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Annual Report

405 Cochituate Road
Framingham, MA

551 Boston Turnpike
Shrewsbury, MA

Michigan

500 E. Eisenhower Pkwy.
Ann Arbor, MI

280 Old N. Woodward Ave.
Birmingham, MI

30200 Northwestern Hwy.
Farmington Hills, MI

43420 Grand River Avenue
Novi, MI

Minnesota

7740 France Avenue South
Edina, MN

8342 3rd Street North
Oakdale, MN

Missouri

1524 South Lindbergh Blvd.
St. Louis, MO

Nevada

2225 Village Walk Drive
Henderson, NV

New Jersey

501 Route 73 South
Marlton, NJ

150 Essex Street
Millburn, NJ

35 Morris Street
Morristown, NJ

396 Route 17, North
Paramus, NJ

3518 Route 1 North
Princeton, NJ

530 Broad Street
Shrewsbury, NJ

New Mexico

2261 Q Street NE
Albuquerque, NM

New York

1130 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

980 Madison Avenue
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

200 Fifth Avenue
New York, NY

733 Third Avenue
New York, NY

11 Penn Plaza
New York, NY

2070 Broadway
New York, NY

1075 Northern Blvd.
Roslyn, NY

799 Central Park Avenue
Scarsdale, NY

North Carolina

4611 Sharon Road
Charlotte, NC

7011 Fayetteville Road
Durham, NC

Ohio

3805 Edwards Road
Cincinnati, OH

1324 Polaris Parkway
Columbus, OH

1800 Crocker Road
Westlake, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

7493 SW Bridgeport Road
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

10 Memorial Boulevard
Providence, RI

Tennessee

3018 Peoples Street
Johnson City, TN

7628 West Farmington Blvd.
Germantown, TN

2035 Mallory Lane
Franklin, TN

Texas

10000 Research Boulevard
Austin, TX

4001 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

6560 Fannin Street
Houston, TX

1701 Lake Robbins Drive
The Woodlands, TX

6500 N. MacArthur Blvd.
Irving, TX

6005 West Park Boulevard
Plano, TX

14100 San Pedro
San Antonio, TX

1576 East Southlake Blvd.
Southlake, TX

Utah

279 West South Temple
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

10500 NE 8th Street
Bellevue, WA

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

16020 West Bluemound Road
Brookfield, WI

Annual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Annual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

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

Fidelity Investments
Money Management, Inc.

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional

Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York Mellon

New York, NY

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

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

Product Information 1-800-544-6666

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

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

Fidelity Automated Service
Telephone (FAST®) cfid102 1-800-544-5555

Automated line for quickest service

GVT-UANN-0909
1.789246.106

cfid105

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor
Government Income
Fund - Class A, Class T, Class B
and Class C

Annual Report

July 31, 2009

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

(2_fidelity_logos) (Registered_Trademark)

Chairman's Message	<Click Here>	The Chairman's message to shareholders.
Performance	<Click Here>	How the fund has done over time.
Management's Discussion	<Click Here>	The manager's review of fund performance, strategy and outlook.
Shareholder Expense Example	<Click Here>	An example of shareholder expenses.
Investment Changes	<Click Here>	A summary of major shifts in the fund's investments over the past six months.
Investments	<Click Here>	A complete list of the fund's investments with their market values.
Financial Statements	<Click Here>	Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights.
Notes	<Click Here>	Notes to the financial statements.
Report of Independent Registered Public Accounting Firm	<Click Here>
Trustees and Officers	<Click Here>
Distributions	<Click Here>
Proxy Voting Results	<Click Here>
Board Approval of Investment Advisory Contracts and Management Fees	<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com /proxyvotngresults or visit the Securities and Exchange Commission's (SEC) web site at http://www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.

Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.

Other third party marks appearing herein are the property of their respective owners.

All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company.

Annual Report

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Chairman's Message

(photo_of_Abigail_P_Johnson)

Dear Shareholder:

We invite you to contact us via the Internet, through our Investor Centers or by phone. It is our privilege to provide you the information you need to make the investments that are right for you.

Sincerely,

/s/Abigail P. Johnson

Abigail P. Johnson

Annual Report

Performance: The Bottom Line

Average Annual Total Returns

Periods ended July 31, 2009	Past 1 year	Past 5 years	Past 10 years
Class A (incl. 4.00% sales charge) ^A	3.71%	4.48%	5.57%
Class T (incl. 4.00% sales charge) ^B	3.72%	4.49%	5.57%
Class B (incl. contingent deferred sales charge)^C	2.25%	4.59%	5.79%
Class C (incl. contingent deferred sales charge)^D	6.23%	4.90%	5.78%

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

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

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

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

Annual Report

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity Advisor Government Income Fund - Class A on July 31, 1999, and the current 4.00% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the Barclays Capital U.S. Government Bond Index performed over the same period. The initial offering of Class A took place on October 24, 2006. See the previous page for additional information regarding the performance of Class A.

cfid120

Annual Report

Management's Discussion of Fund Performance

Comments from William Irving, Portfolio Manager of Fidelity Advisor Government Income Fund: For the year, the fund's Class A, Class T, Class B and Class C shares returned 8.03%, 8.04%, 7.25% and 7.23%, respectively (excluding sales charges), and the Barclays Capital 75% U.S. Government/25% U.S. Mortgage-Backed Securities Index gained 7.62%. Contributing to the fund's solid showing was an overweighting in mortgage-backed securities issued by government agencies, which recovered strongly in the second half of the period thanks to various government programs designed to shore up the housing market. Within the mortgage sector, security selection generally was favorable as well, with my focus on prepayment-resistant collateralized mortgage obligations and hybrid adjustable-rate mortgage securities - sectors not included in the index - aiding performance. Small out-of-benchmark investments in Treasury Inflation-Protected Securities also helped, because they generally outpaced conventional Treasuries when I held them. Security selection among conventional Treasuries was another plus, as my preference for "off-the-run" securities paid off. I bought these older issues at what I viewed as very cheap levels relative to newly issued "on-the-run" Treasuries, and they outperformed when the financial markets stabilized. The main disappointment during the period was that I didn't sell some Treasury bonds in December because, in hindsight, it's clear that they had become grossly overvalued at that point.

Annual Report

Shareholder Expense Example

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (February 1, 2009 to July 31, 2009).

Actual Expenses

Hypothetical Example for Comparison Purposes

Annual Report

	Annualized Expense Ratio	Beginning Account Value February 1, 2009	Ending Account Value July 31, 2009	Expenses Paid During Period* February 1, 2009 to July 31, 2009
Class A	.77%
Actual		$ 1,000.00	$ 1,015.10	$ 3.85
Hypothetical^A		$ 1,000.00	$ 1,020.98	$ 3.86
Class T	.76%
Actual		$ 1,000.00	$ 1,015.20	$ 3.80
Hypothetical^A		$ 1,000.00	$ 1,021.03	$ 3.81
Class B	1.50%
Actual		$ 1,000.00	$ 1,011.50	$ 7.48
Hypothetical^A		$ 1,000.00	$ 1,017.36	$ 7.50
Class C	1.52%
Actual		$ 1,000.00	$ 1,011.40	$ 7.58
Hypothetical^A		$ 1,000.00	$ 1,017.26	$ 7.60
Government Income	.46%
Actual		$ 1,000.00	$ 1,016.70	$ 2.30
Hypothetical^A		$ 1,000.00	$ 1,022.51	$ 2.31
Institutional Class	.52%
Actual		$ 1,000.00	$ 1,016.40	$ 2.60
Hypothetical^A		$ 1,000.00	$ 1,022.22	$ 2.61

^A 5% return per year before expenses

* Expenses are equal to each Class' annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period).

Annual Report

Investment Changes (Unaudited)

Coupon Distribution as of July 31, 2009
	% of fund's investments	% of fund's investments 6 months ago
Zero coupon bonds	2.3	1.9
Less than 1%	0.7	1.8
1 - 1.99%	15.4	5.4
2 - 2.99%	7.6	7.2
3 - 3.99%	8.1	8.1
4 - 4.99%	9.7	10.0
5 - 5.99%	28.3	27.1
6 - 6.99%	14.1	16.0
7% and over	4.1	8.2

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

Weighted Average Maturity as of July 31, 2009
		6 months ago
Years	5.3	4.8

Duration as of July 31, 2009
		6 months ago
Years	4.3	4.4

Asset Allocation (% of fund's net assets)
As of July 31, 2009*			As of January 31, 2009**
	Mortgage Securities 31.7%			Mortgage Securities 34.3%
	CMOs and Other Mortgage Related Securities 12.7%			CMOs and Other Mortgage Related Securities 11.3%
	U.S. Treasury Obligations 34.7%			U.S. Treasury Obligations 31.6%
	U.S. Government Agency Obligations† 26.0%			U.S. Government Agency Obligations 25.8%
	Short-Term Investments and Net Other Assets*** (5.1)%			Short-Term Investments and Net Other Assets*** (3.0)%
* Futures and Swaps		1.2%	** Futures and Swaps		3.0%
† Includes FDIC Guaranteed Corporate Securities
*** Short-Term Investments and Net Other Assets are not included in the pie chart.

cfid132

Annual Report

Investments July 31, 2009

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 60.7%
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - 20.4%
Fannie Mae:
1.75% 3/23/11	$ 8,370		$ 8,460
1.75% 8/10/12	16,830		16,782
2.5% 5/15/14	7,739		7,640
2.75% 3/13/14	10,980		10,998
2.875% 10/12/10	58,835		60,324
4.75% 11/19/12	7,255		7,892
4.875% 5/18/12 (b)	53,750		58,363
6% 5/15/11	10,130		10,995
Federal Home Loan Bank:
1.625% 7/27/11	23,320		23,499
3.625% 9/16/11	3,000		3,144
3.625% 10/18/13 (b)	78,950		82,295
Freddie Mac:
1.625% 4/26/11	5,154		5,200
1.75% 6/15/12	102,572		102,348
2.125% 3/23/12 (b)	74,860		75,705
2.5% 4/23/14	12,390		12,282
4.875% 11/15/13	600		657
4.875% 6/13/18	17,225		18,716
5% 1/30/14	25,000		27,240
5% 2/16/17	41,000		44,933
5.125% 11/17/17 (b)	105,891		116,670
5.75% 1/15/12	73,906		81,449
6.875% 9/15/10	120,000		128,213
Israeli State (guaranteed by U.S. Government through Agency for International Development):
5.5% 9/18/23	110,500		118,348
6.8% 2/15/12	23,235		23,813
Overseas Private Investment Corp. U.S. Government guaranteed participation certificates:
6.77% 11/15/13	4,604		4,903
6.99% 5/21/16	16,670		18,602
Private Export Funding Corp. secured:
4.974% 8/15/13	22,940		25,049
5.66% 9/15/11 (c)	18,000		19,595
5.685% 5/15/12	24,035		26,555
6.67% 9/15/09	3,500		3,526
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency Obligations - continued
Small Business Administration guaranteed development participation certificates:
Series 2002-20J Class 1, 4.75% 10/1/22	$ 5,033		$ 5,218
Series 2002-20K Class 1, 5.08% 11/1/22	10,954		11,482
Series 2003-P10B, Class 1 5.136% 8/10/13	5,034		5,240
Series 2004-20H Class 1, 5.17% 8/1/24	3,093		3,257
Tennessee Valley Authority 5.375% 4/1/56	8,429		8,580
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A, 5.96% 8/1/09	3,940		3,940
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			1,181,913
U.S. Treasury Inflation Protected Obligations - 2.0%
U.S. Treasury Inflation-Indexed Bonds 2.5% 1/15/29	57,916		60,504
U.S. Treasury Inflation-Indexed Notes 1.375% 7/15/18	54,540		53,092
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			113,596
U.S. Treasury Obligations - 32.7%
U.S. Treasury Bonds:
3.5% 2/15/39	24,565		21,230
4.25% 5/15/39	30,094		29,784
4.375% 2/15/38	35,860		36,196
5% 5/15/37	68,200		75,873
5.25% 2/15/29	16,538		18,587
6.125% 11/15/27	37,365		46,076
6.125% 8/15/29	20,127		25,033
6.25% 8/15/23	43,500		53,179
7.25% 5/15/16	132,937		166,805
7.5% 11/15/16	45,574		58,146
8% 11/15/21 (g)	14,605		20,219
9.875% 11/15/15	10,285		14,373
U.S. Treasury Notes:
0.875% 3/31/11	5,500		5,494
1% 7/31/11	257,128		256,485
1.25% 11/30/10	11,435		11,514
1.5% 7/15/12 (b)	60,008		59,839
1.75% 11/15/11	22,521		22,759
1.875% 6/15/12 (b)	165,910		167,375
1.875% 2/28/14	5,720		5,593
1.875% 4/30/14	75,909		73,934
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
2% 11/30/13	$ 25,398		$ 25,120
2.25% 5/31/14	91,473		90,465
2.375% 8/31/10	9,861		10,055
2.625% 6/30/14 (b)	36,000		36,191
2.625% 4/30/16	72,291		70,213
3.125% 8/31/13	20,625		21,418
3.125% 9/30/13	18,130		18,814
3.125% 5/15/19 (b)	121,176		117,427
3.25% 7/31/16	112,788		113,493
3.375% 7/31/13	28,650		30,083
3.625% 5/15/13	19,440		20,591
3.75% 11/15/18	15,801		16,120
3.875% 5/15/18	46,250		47,768
4% 2/15/15	23,619		25,160
4.25% 11/15/17	27,475		29,218
4.5% 5/15/17	24,685		26,762
4.625% 8/31/11	593		635
4.625% 7/31/12	20		22
4.625% 11/15/16	8,000		8,756
4.75% 8/15/17	12,983		14,290
TOTAL U.S. TREASURY OBLIGATIONS			1,891,095
Other Government Related - 5.6%
Bank of America Corp. 2.1% 4/30/12 (FDIC Guaranteed) (d)	6,060		6,095
Citibank NA:
1.5% 7/12/11 (FDIC Guaranteed) (d)	18,670		18,724
1.875% 5/7/12 (FDIC Guaranteed) (d)	87,150		86,998
1.875% 6/4/12 (FDIC Guaranteed) (d)	33,000		32,884
Citigroup Funding, Inc.:
2% 3/30/12 (FDIC Guaranteed) (d)	16,000		16,082
2.125% 7/12/12 (FDIC Guaranteed) (d)	31,240		31,358
General Electric Capital Corp. 1.8% 3/11/11 (FDIC Guaranteed) (d)	60,000		60,594
U.S. Government and Government Agency Obligations - continued
	Principal Amount (000s)		Value (000s)
Other Government Related - continued
JPMorgan Chase & Co. 1.65% 2/23/11 (FDIC Guaranteed) (d)	$ 24,070		$ 24,318
Morgan Stanley 3.25% 12/1/11 (FDIC Guaranteed) (d)	43,000		44,619
TOTAL OTHER GOVERNMENT RELATED			321,672
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $3,457,219)		3,508,276
U.S. Government Agency - Mortgage Securities - 31.7%

Fannie Mae - 20.7%
3.14% 7/1/35 (h)	2,082		2,134
3.206% 4/1/36 (h)	2,565		2,629
3.283% 3/1/35 (h)	328		336
3.29% 10/1/33 (h)	178		182
3.6% 10/1/33 (h)	437		447
3.715% 2/1/33 (h)	512		523
3.828% 7/1/35 (h)	1,890		1,936
4% 9/1/13 to 6/1/20	18,262		18,899
4.046% 3/1/35 (h)	97		100
4.209% 11/1/36 (h)	337		349
4.25% 7/1/34 (h)	237		244
4.253% 3/1/37 (h)	2,795		2,892
4.274% 7/1/35 (h)	1,771		1,826
4.275% 6/1/36 (h)	571		593
4.29% 3/1/33 (h)	175		182
4.299% 3/1/33 (h)	208		214
4.344% 10/1/33 (h)	496		512
4.421% 7/1/35 (h)	224		229
4.425% 3/1/35 (h)	790		813
4.5% 8/18/24 (e)	10,000		10,265
4.5% 8/18/24 (e)	33,000		33,874
4.533% 11/1/33 (h)	1,180		1,235
4.534% 10/1/33 (h)	367		375
4.621% 4/1/35 (h)	3,913		4,015
4.643% 7/1/35 (h)	808		838
4.649% 10/1/35 (h)	2,818		2,916
4.717% 11/1/35 (h)	4,063		4,241
4.727% 9/1/35 (h)	4,050		4,212
4.744% 2/1/34 (h)	155		161
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
4.787% 7/1/35 (h)	$ 3,141		$ 3,247
4.988% 2/1/34 (h)	4,797		5,013
4.996% 4/1/35 (h)	1,520		1,564
5% 6/1/14 to 6/1/39	245,953		253,613
5% 8/13/39 (e)(f)	7,000		7,169
5.003% 4/1/36 (h)	3,797		3,993
5.058% 9/1/34 (h)	526		538
5.072% 1/1/37 (h)	4,615		4,791
5.128% 7/1/35 (h)	5,241		5,451
5.152% 8/1/34 (h)	4,243		4,377
5.185% 3/1/35 (h)	324		335
5.261% 5/1/35 (h)	3,988		4,217
5.301% 12/1/34 (h)	721		737
5.344% 2/1/37 (h)	2,230		2,312
5.451% 8/1/36 (h)	4,898		5,181
5.5% 3/1/12 to 3/1/39	316,901		331,374
5.5% 8/18/24 (e)(f)	66,250		69,413
5.5% 8/1/39 (e)(f)	63,000		65,273
5.633% 2/1/36 (h)	2,313		2,431
5.773% 3/1/36 (h)	5,891		6,178
5.836% 6/1/35 (h)	1,496		1,583
5.848% 3/1/36 (h)	6,817		7,230
5.863% 5/1/36 (h)	2,162		2,268
5.87% 3/1/36 (h)	5,425		5,721
5.883% 12/1/36 (h)	3,489		3,697
5.992% 4/1/36 (h)	37,406		39,568
6% 4/1/12 to 8/1/37 (f)	167,185		177,511
6% 8/1/39 (e)(f)	5,000		5,240
6.106% 4/1/36 (h)	3,303		3,500
6.22% 3/1/37 (h)	1,268		1,345
6.223% 5/1/36 (h)	10,261		10,807
6.427% 8/1/36 (h)	25,575		27,125
6.5% 2/1/12 to 4/1/37	28,036		30,086
7% 7/1/13 to 7/1/32	4,332		4,759
7.5% 8/1/10 to 4/1/29	50		53
8.5% 1/1/15 to 7/1/31	385		420
9% 11/1/11 to 5/1/14	348		366
9.5% 11/15/09 to 10/1/20	443		497
11% 8/1/10	1		1
11.25% 5/1/14	4		5
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Fannie Mae - continued
11.5% 6/15/19 to 1/15/21	$ 748		$ 823
12.5% 8/1/15 to 3/1/16	1		1
			1,196,985
Freddie Mac - 5.9%
3.156% 2/1/34 (h)	433		442
3.478% 3/1/35 (h)	1,415		1,452
4% 5/1/19 to 11/1/20	19,794		20,487
4.034% 6/1/35 (h)	739		761
4.039% 9/1/36 (h)	2,617		2,690
4.448% 1/1/35 (h)	595		612
4.494% 5/1/35 (h)	1,400		1,451
4.5% 8/1/33	3,188		3,222
4.549% 4/1/35 (h)	4,957		5,119
4.703% 2/1/34 (h)	5,028		5,227
4.746% 3/1/35 (h)	2,171		2,220
4.791% 2/1/36 (h)	900		935
5% 3/1/18 to 6/1/38	56,115		58,924
5% 8/13/39 (e)	10,000		10,233
5.023% 4/1/35 (h)	394		413
5.103% 7/1/35 (h)	2,619		2,701
5.118% 6/1/35 (h)	2,141		2,255
5.251% 2/1/36 (h)	276		290
5.309% 3/1/33 (h)	92		95
5.486% 1/1/36 (h)	3,237		3,381
5.5% 8/1/14 to 7/1/36	69,964		73,998
5.5% 8/18/24 (e)(f)	47,500		49,701
5.522% 1/1/36 (h)	4,458		4,691
5.685% 10/1/35 (h)	989		1,046
5.737% 5/1/37 (h)	2,500		2,604
6% 7/1/16 to 9/1/38	29,787		31,696
6.078% 6/1/36 (h)	4,339		4,556
6.22% 7/1/36 (h)	2,461		2,588
6.5% 11/1/10 to 3/1/36	35,919		38,461
6.613% 1/1/37 (h)	7,059		7,473
7% 4/1/11	2		2
7.5% 5/1/11 to 7/1/16	1,195		1,286
8.5% 5/1/17 to 9/1/29	157		174
9% 11/1/10 to 10/1/20	33		36
9.5% 5/1/17 to 8/1/21	201		222
9.75% 8/1/14	121		133
10% 3/1/10 to 8/1/21	13		15
11% 8/1/13 to 5/1/14	44		49
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount (000s)		Value (000s)
Freddie Mac - continued
12% 8/1/13 to 3/1/15	$ 1		$ 2
12.5% 2/1/10 to 6/1/19	9		10
13% 8/1/10 to 6/1/15	4		4
			341,657
Government National Mortgage Association - 5.1%
4.25% 7/20/34 (h)	566		585
5% 2/20/33 to 12/20/36	64,225		66,382
5% 8/20/39 (e)	500		513
5% 8/20/39 (e)	10,000		10,275
5% 9/21/39 (e)	10,000		10,223
5.5% 12/15/33 to 7/20/38	55,408		58,198
6% 12/15/10 to 1/15/36	100,259		106,602
6% 8/20/39 (e)(f)	22,000		23,092
6.5% 2/15/24 to 10/15/35	16,032		17,326
7% 10/15/26 to 8/15/32	87		94
7.5% 3/15/28 to 8/15/29	109		120
8% 7/15/19 to 12/15/23	1,011		1,110
8.5% 1/15/25	4		4
9% 12/15/09	0*		0*
9.5% 2/15/25	1		1
10.5% 4/15/14 to 1/20/18	72		83
			294,608
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $1,773,129)		1,833,250
Collateralized Mortgage Obligations - 12.7%

U.S. Government Agency - 12.7%
Fannie Mae:
planned amortization class:
Series 1992-168 Class KB, 7% 10/25/22	1,143		1,233
Series 1993-207 Class H, 6.5% 11/25/23	16,696		18,041
Series 1993-240 Class PD, 6.25% 12/25/13	2,899		3,050
Series 1994-23:
Class PG, 6% 4/25/23	23		23
Class PZ, 6% 2/25/24	11,335		12,355
Series 1996-28 Class PK, 6.5% 7/25/25	3,175		3,433
Series 2003-28 Class KG, 5.5% 4/25/23	4,940		5,137
Series 2006-45 Class OP, 6/25/36 (j)	5,105		4,204
Series 2006-62 Class KP, 4/25/36 (j)	10,940		8,769
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Fannie Mae: - continued
sequential payer:
Series 1997-41 Class J, 7.5% 6/18/27	$ 2,213		$ 2,438
Series 2007-115 Class BE, 4.5% 12/25/22	15,400		15,838
Series 2003-22 Class IO, 6% 4/25/33 (i)	14,785		1,989
Fannie Mae Grantor Trust planned amortization class Series 2005-81 Class PC, 5.5% 9/25/35	2,150		2,277
Fannie Mae Stripped Mortgage-Backed Securities:
sequential payer Series 377 Class 1, 10/1/36 (j)	18,503		15,903
Series 384 Class 6, 5% 7/25/37 (i)	21,600		3,240
Fannie Mae subordinate REMIC pass-thru certificates:
floater:
Series 2001-38 Class QF, 1.265% 8/25/31 (h)	522		528
Series 2002-49 Class FB, 0.8888% 11/18/31 (h)	788		786
Series 2002-60 Class FV, 1.285% 4/25/32 (h)	338		342
Series 2002-75 Class FA, 1.285% 11/25/32 (h)	692		701
Series 2007-36:
Class FB, 0.685% 4/25/37 (h)	32,090		31,356
Class FG, 0.685% 4/25/37 (h)	6,319		6,180
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	4,674		4,931
Series 2003-113 Class PE, 4% 11/25/18	7,545		7,601
Series 2004-21 Class QE, 4.5% 11/25/32	1,500		1,525
Series 2005-102 Class CO, 11/25/35 (j)	5,224		4,359
Series 2006-12 Class BO, 10/25/35 (j)	23,752		19,919
Series 2006-37 Class OW, 5/25/36 (j)	5,750		4,925
sequential payer:
Series 2001-20 Class Z, 6% 5/25/31	16,201		17,182
Series 2001-46 Class ZG, 6% 9/25/31	5,904		6,245
Series 2002-79 Class Z, 5.5% 11/25/22	12,495		13,060
Series 2003-84 Class JK, 4.5% 9/25/18	10,000		10,317
Series 2004-3 Class BA, 4% 7/25/17	455		468
Series 2005-117, Class JN, 4.5% 1/25/36	645		631
Series 2006-72 Class CY, 6% 8/25/26	10,215		10,940
Series 2007-36:
Class GO, 4/25/37 (j)	1,009		847
Class PO, 4/25/37 (j)	2,262		1,740
Class SB, 6.315% 4/25/37 (h)(i)(k)	29,379		3,483
Class SG, 6.315% 4/25/37 (h)(i)(k)	13,121		1,350
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac:
planned amortization class:
Series 2115 Class PE, 6% 1/15/14	$ 528		$ 559
Series 3149 Class OD, 5/15/36 (j)	28,646		23,026
sequential payer Series 2114 Class ZM, 6% 1/15/29	1,841		1,960
Freddie Mac Manufactured Housing participation certificates guaranteed:
floater Series 1686 Class FA, 1.2125% 2/15/24 (h)	1,017		1,027
planned amortization class Series 1681 Class PJ, 7% 12/15/23	3,582		3,662
Freddie Mac Multi-class participation certificates guaranteed:
floater:
Series 2530 Class FE, 0.8881% 2/15/32 (h)	460		460
Series 2630 Class FL, 0.7881% 6/15/18 (h)	550		551
Series 3008 Class SM, 7/15/35 (h)	279		259
planned amortization class:
Series 1141 Class G, 9% 9/15/21	294		344
Series 1614 Class L, 6.5% 7/15/23	1,932		1,961
Series 2006-15 Class OP, 3/25/36 (j)	6,509		5,206
Series 2131 Class BG, 6% 3/15/29	38,830		41,122
Series 2356 Class GD, 6% 9/15/16	367		389
Series 2376 Class JE, 5.5% 11/15/16	2,621		2,749
Series 2381 Class OG, 5.5% 11/15/16	1,995		2,097
Series 2628 Class OE, 4.5% 6/15/18	6,815		7,059
Series 2640 Class GE, 4.5% 7/15/18	7,310		7,577
Series 2682 Class LD, 4.5% 10/15/33	777		784
Series 2802 Class OB, 6% 5/15/34	10,455		11,168
Series 2810 Class PD, 6% 6/15/33	995		1,052
Series 2937 Class KC, 4.5% 2/15/20	19,686		20,442
Series 2962 Class BE, 4.5% 4/15/20	15,015		15,446
Series 3077 Class TO, 4/15/35 (j)	14,228		11,623
Series 3110 Class OP, 9/15/35 (j)	13,436		11,078
Series 3119 Class PO, 2/15/36 (j)	16,354		13,080
Series 3121 Class KO, 3/15/36 (j)	5,362		4,482
Series 3123 Class LO, 3/15/36 (j)	10,626		8,549
Series 3145 Class GO, 4/15/36 (j)	9,520		7,652
Series 3151 Class PO, 5/15/36 (j)	10,330		8,387
sequential payer:
Series 2546 Class MJ, 5.5% 3/15/23	2,861		2,965
Series 2570 Class CU, 4.5% 7/15/17	1,181		1,223
Collateralized Mortgage Obligations - continued
	Principal Amount (000s)		Value (000s)
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed: - continued
sequential payer:
Series 2574 Class HP, 5% 2/15/18	$ 42,150		$ 44,516
Series 2587 Class AD, 4.71% 3/15/33	5,785		5,607
Series 2601 Class TB, 5.5% 4/15/23	869		899
Series 2611 Class CH, 4.5% 5/15/18	37,220		38,391
Series 2617 Class GW, 3.5% 6/15/16	413		412
Series 2677 Class BC, 4% 9/15/18	20,040		20,262
Series 2729 Class GB, 5% 1/15/19	9,255		9,783
Series 2770 Class TW, 4.5% 3/15/19	19,670		20,275
Series 2773 Class HC, 4.5% 4/15/19	704		724
Series 2809 Class UA, 4% 12/15/14	607		606
Series 2860 Class CP, 4% 10/15/17	1,204		1,232
Series 2874 Class BC, 5% 10/15/19	43,000		45,303
Series 2920 Class KC, 4.5% 5/15/19	44,385		46,190
Series 2998 Class LY, 5.5% 7/15/25	2,011		2,077
Series 3007 Class EW, 5.5% 7/15/25	8,875		9,157
Series 3013 Class VJ, 5% 1/15/14	1,438		1,506
Series 2769 Class BU, 5% 3/15/34	2,456		2,419
Series 2863 Class DB, 4% 9/15/14	1,081		1,106
Series 2957 Class SW, 5.7119% 4/15/35 (h)(i)	21,253		1,649
Series 3002 Class SN, 6.2119% 7/15/35 (h)(i)(k)	21,167		2,073
target amortization class:
Series 2156 Class TC, 6.25% 5/15/29	7,177		7,646
Series 2877 Class JC, 5% 10/15/34	1,167		1,212
Ginnie Mae guaranteed REMIC pass-thru securities planned amortization class Series 1997-8 Class PE, 7.5% 5/16/27	3,597		3,906
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $694,285)		732,236

Cash Equivalents - 11.2%
	Maturity Amount (000s)		Value (000s)
Investments in repurchase agreements in a joint trading account at 0.21%, dated 7/31/09 due 8/3/09 (Collateralized by U.S. Government Obligations) # (a) (Cost $644,498)	$ 644,509		$ 644,498
TOTAL INVESTMENT PORTFOLIO - 116.3% (Cost $6,569,131)			6,718,260
NET OTHER ASSETS - (16.3)%			(940,248)
NET ASSETS - 100%		$ 5,778,012

Swap Agreements
	Expiration Date	Notional Amount (000s)
Interest Rate Swaps
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 4.64% with JPMorgan Chase, Inc.	April 2038	$ 20,000	(1,877)
Receive quarterly a floating rate based on 3-month LIBOR and pay semi-annually a fixed rate equal to 5.57% with Goldman Sachs	August 2017	66,000	(9,613)
Receive semi-annually a fixed rate equal to 1.6613% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	March 2011	50,000	665
Receive semi-annually a fixed rate equal to 2.8575% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	April 2011	24,500	861
Receive semi-annually a fixed rate equal to 3.7975% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	May 2019	4,000	48
Swap Agreements - continued
	Expiration Date	Notional Amount (000s)	Value (000s)
Interest Rate Swaps - continued
Receive semi-annually a fixed rate equal to 4.19% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	August 2013	$ 13,445	$ 1,040
Receive semi-annually a fixed rate equal to 4.42% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Oct. 2009	48,400	1,006
		$ 226,345	$ (7,870)