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 811-4118
Fidelity Securities Fund
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | July 31 |
Date of reporting period: | July 31, 2003 |
Item 1. Reports to Stockholders
Fidelity®
Blue Chip Value
Fund
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Investment Summary | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commission (SEC's) web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC,
Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) and assuming a constant rate of performance each year. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Average annual total returns take Fidelity® Blue Chip Value Fund cumulative total return and show you what would have happened if Fidelity Blue Chip Value shares had performed at a constant rate each year. These numbers will be reported once the fund is a year old. In addition, the growth of the hypothetical $10,000 investment in the fund will appear in the fund's next annual report.
Annual Report
Investment Summary
Top Ten Stocks as of July 31, 2003 | |
% of fund's | |
Citigroup, Inc. | 4.4 |
Bank of America Corp. | 3.9 |
Verizon Communications, Inc. | 2.8 |
American International Group, Inc. | 2.7 |
Exxon Mobil Corp. | 2.6 |
Tyco International Ltd. | 2.4 |
Merck & Co., Inc. | 2.3 |
ChevronTexaco Corp. | 2.2 |
AOL Time Warner, Inc. | 2.1 |
Bank One Corp. | 2.0 |
27.4 | |
Top Five Market Sectors as of July 31, 2003 | |
% of fund's | |
Financials | 31.2 |
Energy | 11.2 |
Consumer Discretionary | 10.7 |
Industrials | 10.6 |
Information Technology | 7.8 |
Asset Allocation (% of fund's net assets) | |||
As of July 31, 2003 * | |||
Stocks 97.5% | |||
Short-Term | |||
* Foreign investments | 2.4% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 97.5% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 10.7% | |||
Automobiles - 0.1% | |||
Harley-Davidson, Inc. | 400 | $ 18,752 | |
Hotels, Restaurants & Leisure - 1.3% | |||
Darden Restaurants, Inc. | 1,100 | 20,581 | |
Hilton Hotels Corp. | 2,300 | 33,580 | |
McDonald's Corp. | 8,200 | 188,682 | |
242,843 | |||
Household Durables - 0.7% | |||
Garmin Ltd. (a) | 400 | 15,304 | |
KB Home | 800 | 45,288 | |
Sony Corp. sponsored ADR | 2,200 | 68,640 | |
129,232 | |||
Media - 7.0% | |||
AOL Time Warner, Inc. (a) | 26,000 | 401,180 | |
Citadel Broadcasting Corp. | 1,000 | 19,000 | |
Clear Channel Communications, Inc. | 2,000 | 81,900 | |
Comcast Corp. Class A (a) | 3,700 | 112,184 | |
Cox Communications, Inc. Class A (a) | 700 | 22,253 | |
E.W. Scripps Co. Class A | 400 | 33,184 | |
Emmis Communications Corp. Class A (a) | 1,500 | 30,015 | |
Fox Entertainment Group, Inc. Class A (a) | 3,000 | 90,810 | |
Liberty Media Corp. Class A (a) | 11,900 | 131,971 | |
Viacom, Inc. Class B (non-vtg.) | 4,100 | 178,432 | |
Walt Disney Co. | 9,000 | 197,280 | |
1,298,209 | |||
Multiline Retail - 0.2% | |||
99 Cents Only Stores (a) | 800 | 27,360 | |
Tuesday Morning Corp. (a) | 700 | 19,866 | |
47,226 | |||
Specialty Retail - 1.4% | |||
CarMax, Inc. (a) | 800 | 28,400 | |
Home Depot, Inc. | 5,600 | 174,720 | |
Lowe's Companies, Inc. | 800 | 38,048 | |
Sonic Automotive, Inc. Class A (a) | 600 | 15,390 | |
256,558 | |||
TOTAL CONSUMER DISCRETIONARY | 1,992,820 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER STAPLES - 4.5% | |||
Beverages - 0.6% | |||
The Coca-Cola Co. | 2,400 | $ 107,928 | |
Food & Staples Retailing - 0.7% | |||
CVS Corp. | 800 | 23,992 | |
Safeway, Inc. (a) | 3,000 | 64,050 | |
Sysco Corp. | 1,500 | 45,195 | |
133,237 | |||
Food Products - 0.2% | |||
Del Monte Foods Co. (a) | 1,300 | 11,375 | |
Interstate Bakeries Corp. | 2,400 | 24,576 | |
35,951 | |||
Household Products - 0.8% | |||
Procter & Gamble Co. | 1,600 | 140,592 | |
Personal Products - 1.6% | |||
Avon Products, Inc. | 1,500 | 93,585 | |
Gillette Co. | 6,700 | 206,092 | |
299,677 | |||
Tobacco - 0.6% | |||
Altria Group, Inc. | 3,000 | 120,030 | |
TOTAL CONSUMER STAPLES | 837,415 | ||
ENERGY - 11.2% | |||
Energy Equipment & Services - 3.0% | |||
Baker Hughes, Inc. | 1,000 | 31,410 | |
BJ Services Co. (a) | 800 | 27,400 | |
ENSCO International, Inc. | 6,700 | 167,969 | |
National-Oilwell, Inc. (a) | 1,400 | 25,760 | |
Pride International, Inc. (a) | 3,100 | 51,088 | |
Smith International, Inc. (a) | 2,200 | 78,848 | |
Transocean, Inc. (a) | 1,500 | 29,355 | |
Weatherford International Ltd. (a) | 4,200 | 152,334 | |
564,164 | |||
Oil & Gas - 8.2% | |||
Apache Corp. | 1,100 | 68,156 | |
BP PLC sponsored ADR | 2,000 | 83,100 | |
Burlington Resources, Inc. | 1,200 | 55,404 | |
ChevronTexaco Corp. | 5,600 | 403,816 | |
ConocoPhillips | 2,700 | 141,318 | |
Devon Energy Corp. | 1,900 | 90,003 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Exxon Mobil Corp. | 13,600 | $ 483,888 | |
Murphy Oil Corp. | 700 | 34,566 | |
Occidental Petroleum Corp. | 4,000 | 130,760 | |
Valero Energy Corp. | 700 | 25,480 | |
1,516,491 | |||
TOTAL ENERGY | 2,080,655 | ||
FINANCIALS - 31.2% | |||
Capital Markets - 6.2% | |||
Bank of New York Co., Inc. | 3,000 | 90,360 | |
Bear Stearns Companies, Inc. | 1,100 | 73,700 | |
J.P. Morgan Chase & Co. | 7,800 | 273,390 | |
Lehman Brothers Holdings, Inc. | 1,500 | 94,905 | |
Merrill Lynch & Co., Inc. | 6,300 | 342,531 | |
Morgan Stanley | 6,000 | 284,640 | |
1,159,526 | |||
Commercial Banks - 11.0% | |||
Bank of America Corp. | 8,700 | 718,359 | |
Bank One Corp. | 9,300 | 367,908 | |
Fifth Third Bancorp | 1,900 | 104,519 | |
FleetBoston Financial Corp. | 3,600 | 111,924 | |
Valley National Bancorp | 1,700 | 46,801 | |
Wachovia Corp. | 7,600 | 332,044 | |
Wells Fargo & Co. | 7,100 | 358,763 | |
2,040,318 | |||
Consumer Finance - 0.5% | |||
MBNA Corp. | 3,900 | 86,931 | |
Diversified Financial Services - 5.0% | |||
CIT Group, Inc. | 2,600 | 72,488 | |
Citigroup, Inc. | 18,400 | 824,320 | |
Deutsche Boerse AG | 620 | 32,758 | |
929,566 | |||
Insurance - 6.9% | |||
ACE Ltd. | 2,000 | 65,980 | |
AFLAC, Inc. | 2,600 | 83,408 | |
Allstate Corp. | 5,300 | 201,559 | |
AMBAC Financial Group, Inc. | 400 | 26,348 | |
American International Group, Inc. | 7,900 | 507,180 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Insurance - continued | |||
Axis Capital Holdings Ltd. | 700 | $ 18,326 | |
Hartford Financial Services Group, Inc. | 1,400 | 73,066 | |
John Hancock Financial Services, Inc. | 1,900 | 62,035 | |
Montpelier Re Holdings Ltd. | 700 | 22,533 | |
Nationwide Financial Services, Inc. Class A | 700 | 21,665 | |
The Chubb Corp. | 800 | 51,840 | |
Travelers Property Casualty Corp. Class B | 6,900 | 111,366 | |
UnumProvident Corp. | 3,200 | 43,456 | |
1,288,762 | |||
Real Estate - 0.6% | |||
Apartment Investment & Management Co. Class A | 1,600 | 63,056 | |
iStar Financial, Inc. | 1,200 | 43,500 | |
106,556 | |||
Thrifts & Mortgage Finance - 1.0% | |||
Fannie Mae | 1,100 | 70,444 | |
Golden West Financial Corp., Delaware | 460 | 37,996 | |
Sovereign Bancorp, Inc. | 4,100 | 73,554 | |
181,994 | |||
TOTAL FINANCIALS | 5,793,653 | ||
HEALTH CARE - 7.1% | |||
Biotechnology - 0.3% | |||
Cephalon, Inc. (a) | 1,200 | 59,976 | |
Health Care Equipment & Supplies - 1.3% | |||
Bausch & Lomb, Inc. | 1,000 | 42,270 | |
Baxter International, Inc. | 5,500 | 151,855 | |
St. Jude Medical, Inc. (a) | 800 | 42,920 | |
237,045 | |||
Health Care Providers & Services - 1.2% | |||
HealthSouth Corp. (a) | 11,300 | 18,193 | |
IMS Health, Inc. | 1,200 | 23,208 | |
McKesson Corp. | 700 | 22,582 | |
UnitedHealth Group, Inc. | 2,700 | 140,643 | |
WebMD Corp. (a) | 1,100 | 13,288 | |
217,914 | |||
Pharmaceuticals - 4.3% | |||
Bristol-Myers Squibb Co. | 2,500 | 65,500 | |
Merck & Co., Inc. | 7,800 | 431,184 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Schering-Plough Corp. | 11,900 | $ 202,062 | |
Shire Pharmaceuticals Group PLC sponsored ADR (a) | 900 | 21,087 | |
Wyeth | 2,000 | 91,160 | |
810,993 | |||
TOTAL HEALTH CARE | 1,325,928 | ||
INDUSTRIALS - 10.6% | |||
Aerospace & Defense - 3.3% | |||
Boeing Co. | 400 | 13,248 | |
Bombardier, Inc. Class B (sub. vtg.) | 6,300 | 23,109 | |
Honeywell International, Inc. | 3,300 | 93,324 | |
Lockheed Martin Corp. | 4,500 | 235,530 | |
Northrop Grumman Corp. | 800 | 73,792 | |
United Defense Industries, Inc. (a) | 1,000 | 25,390 | |
United Technologies Corp. | 1,900 | 142,937 | |
607,330 | |||
Airlines - 0.3% | |||
Ryanair Holdings PLC sponsored ADR (a) | 300 | 12,867 | |
Southwest Airlines Co. | 2,800 | 45,948 | |
58,815 | |||
Building Products - 0.3% | |||
Masco Corp. | 1,900 | 46,303 | |
Commercial Services & Supplies - 1.5% | |||
Cintas Corp. | 2,200 | 90,574 | |
Monster Worldwide, Inc. | 1,100 | 29,205 | |
Robert Half International, Inc. (a) | 4,000 | 86,840 | |
Waste Management, Inc. | 3,200 | 76,448 | |
283,067 | |||
Construction & Engineering - 0.3% | |||
Chicago Bridge & Iron Co. NV | 800 | 19,728 | |
Granite Construction, Inc. | 1,800 | 32,346 | |
52,074 | |||
Industrial Conglomerates - 3.9% | |||
3M Co. | 1,100 | 154,220 | |
General Electric Co. | 3,600 | 102,384 | |
Textron, Inc. | 700 | 30,394 | |
Tyco International Ltd. | 23,700 | 440,820 | |
727,818 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Machinery - 0.6% | |||
Cummins, Inc. | 300 | $ 13,899 | |
Eaton Corp. | 400 | 33,668 | |
Manitowoc Co., Inc. | 600 | 13,680 | |
Parker Hannifin Corp. | 800 | 36,880 | |
SPX Corp. (a) | 400 | 18,836 | |
116,963 | |||
Road & Rail - 0.4% | |||
Arkansas Best Corp. | 300 | 8,301 | |
Union Pacific Corp. | 1,200 | 73,128 | |
81,429 | |||
TOTAL INDUSTRIALS | 1,973,799 | ||
INFORMATION TECHNOLOGY - 7.8% | |||
Communications Equipment - 0.6% | |||
Motorola, Inc. | 12,300 | 111,192 | |
Computers & Peripherals - 3.0% | |||
Hewlett-Packard Co. | 11,900 | 251,923 | |
International Business Machines Corp. | 2,500 | 203,125 | |
SanDisk Corp. (a) | 200 | 11,338 | |
Seagate Technology | 1,900 | 41,420 | |
Sun Microsystems, Inc. (a) | 14,200 | 53,108 | |
560,914 | |||
Electronic Equipment & Instruments - 1.3% | |||
Agilent Technologies, Inc. (a) | 4,000 | 86,920 | |
Celestica, Inc. (sub. vtg.) (a) | 1,600 | 24,615 | |
PerkinElmer, Inc. | 2,000 | 29,720 | |
Tech Data Corp. (a) | 600 | 18,780 | |
Thermo Electron Corp. (a) | 2,500 | 55,625 | |
Vishay Intertechnology, Inc. (a) | 2,500 | 33,250 | |
248,910 | |||
IT Services - 1.0% | |||
Computer Sciences Corp. (a) | 400 | 16,228 | |
Concord EFS, Inc. (a) | 1,600 | 21,776 | |
First Data Corp. | 2,300 | 86,848 | |
Titan Corp. | 3,500 | 53,690 | |
178,542 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Office Electronics - 0.4% | |||
IKON Office Solutions, Inc. | 4,100 | $ 29,438 | |
Xerox Corp. (a) | 4,100 | 44,280 | |
73,718 | |||
Semiconductors & Semiconductor Equipment - 0.6% | |||
Micron Technology, Inc. (a) | 3,200 | 46,848 | |
National Semiconductor Corp. (a) | 800 | 17,880 | |
Texas Instruments, Inc. | 2,500 | 47,175 | |
111,903 | |||
Software - 0.9% | |||
Autodesk, Inc. | 1,500 | 22,440 | |
Microsoft Corp. | 2,600 | 68,640 | |
Network Associates, Inc. (a) | 4,100 | 46,330 | |
Vastera, Inc. (a) | 4,600 | 28,715 | |
166,125 | |||
TOTAL INFORMATION TECHNOLOGY | 1,451,304 | ||
MATERIALS - 4.0% | |||
Chemicals - 1.6% | |||
Dow Chemical Co. | 4,500 | 158,850 | |
Lyondell Chemical Co. | 1,100 | 16,467 | |
Praxair, Inc. | 1,900 | 122,854 | |
298,171 | |||
Containers & Packaging - 0.6% | |||
Ball Corp. | 300 | 14,910 | |
Crown Holdings, Inc. (a) | 1,400 | 10,458 | |
Owens-Illinois, Inc. (a) | 4,900 | 56,007 | |
Smurfit-Stone Container Corp. (a) | 1,500 | 22,455 | |
103,830 | |||
Metals & Mining - 0.9% | |||
Alcoa, Inc. | 1,700 | 47,209 | |
Freeport-McMoRan Copper & Gold, Inc. Class B | 2,200 | 58,938 | |
Massey Energy Co. | 2,300 | 26,335 | |
Newmont Mining Corp. Holding Co. | 1,000 | 36,100 | |
168,582 | |||
Paper & Forest Products - 0.9% | |||
Bowater, Inc. | 1,200 | 46,224 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - continued | |||
Paper & Forest Products - continued | |||
Georgia-Pacific Corp. | 500 | $ 10,925 | |
International Paper Co. | 2,800 | 109,536 | |
166,685 | |||
TOTAL MATERIALS | 737,268 | ||
TELECOMMUNICATION SERVICES - 5.9% | |||
Diversified Telecommunication Services - 5.2% | |||
Citizens Communications Co. (a) | 6,000 | 71,100 | |
Covad Communications Group, Inc. (a) | 33,500 | 39,865 | |
NTL, Inc. (a) | 700 | 29,267 | |
Qwest Communications International, Inc. (a) | 11,300 | 45,087 | |
SBC Communications, Inc. | 11,200 | 261,632 | |
Verizon Communications, Inc. | 14,700 | 512,442 | |
959,393 | |||
Wireless Telecommunication Services - 0.7% | |||
AT&T Wireless Services, Inc. (a) | 5,800 | 49,474 | |
Crown Castle International Corp. (a) | 2,900 | 28,710 | |
Nextel Communications, Inc. Class A (a) | 3,000 | 54,780 | |
132,964 | |||
TOTAL TELECOMMUNICATION SERVICES | 1,092,357 | ||
UTILITIES - 4.5% | |||
Electric Utilities - 3.5% | |||
Dominion Resources, Inc. | 2,300 | 138,230 | |
Edison International (a) | 2,700 | 44,307 | |
Entergy Corp. | 1,500 | 77,265 | |
FirstEnergy Corp. | 800 | 27,592 | |
FPL Group, Inc. | 1,500 | 92,505 | |
PG&E Corp. (a) | 2,200 | 47,190 | |
Southern Co. | 4,900 | 139,356 | |
TXU Corp. | 3,900 | 78,663 | |
645,108 | |||
Multi-Utilities & Unregulated Power - 1.0% | |||
AES Corp. (a) | 8,900 | 55,981 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
UTILITIES - continued | |||
Multi-Utilities & Unregulated Power - continued | |||
Reliant Resources, Inc. (a) | 10,900 | $ 54,064 | |
SCANA Corp. | 2,200 | 73,040 | |
183,085 | |||
TOTAL UTILITIES | 828,193 | ||
TOTAL COMMON STOCKS (Cost $18,279,159) | 18,113,392 | ||
Cash Equivalents - 4.3% | |||
Maturity | |||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.06%, dated 7/31/03 due 8/1/03) | $ 797,024 | 797,000 | |
TOTAL INVESTMENT PORTFOLIO - 101.8% (Cost $19,076,159) | 18,910,392 | ||
NET OTHER ASSETS - (1.8)% | (328,035) | ||
NET ASSETS - 100% | $ 18,582,357 |
Legend |
(a) Non-income producing |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $19,566,191 and $1,227,397, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $432 for the period. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
July 31, 2003 | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $797,000) (cost $ 19,076,159) - See accompanying schedule | $ 18,910,392 | |
Cash | 43 | |
Receivable for investments sold | 302,983 | |
Receivable for fund shares sold | 123,713 | |
Dividends receivable | 21,816 | |
Prepaid expenses | 19,425 | |
Receivable from investment adviser for expense reductions | 19,759 | |
Total assets | 19,398,131 | |
Liabilities | ||
Payable for investments purchased | $ 720,311 | |
Payable for fund shares redeemed | 31,174 | |
Accrued management fee | 7,242 | |
Other payables and accrued expenses | 57,047 | |
Total liabilities | 815,774 | |
Net Assets | $ 18,582,357 | |
Net Assets consist of: | ||
Paid in capital | $ 18,801,516 | |
Undistributed net investment income | 6,244 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (59,626) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (165,777) | |
Net Assets, for 1,908,982 shares outstanding | $ 18,582,357 | |
Net Asset Value, offering price and redemption price per share ($18,582,357 ÷ 1,908,982 shares) | $ 9.73 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
For the period June 17, 2003 (commencement of operations) to July 31, 2003 | ||
Investment Income | ||
Dividends | $ 26,933 | |
Interest | 1,723 | |
Total income | 28,656 | |
Expenses | ||
Management fee | $ 8,599 | |
Transfer agent fees | 5,524 | |
Accounting fees and expenses | 7,541 | |
Non-interested trustees' compensation | 2 | |
Custodian fees and expenses | 2,731 | |
Registration fees | 3,518 | |
Audit | 22,696 | |
Total expenses before reductions | 50,611 | |
Expense reductions | (28,164) | 22,447 |
Net investment income (loss) | 6,209 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | (59,634) | |
Foreign currency transactions | 42 | |
Total net realized gain (loss) | (59,592) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | (165,767) | |
Assets and liabilities in foreign currencies | (10) | |
Total change in net unrealized appreciation (depreciation) | (165,777) | |
Net gain (loss) | (225,369) | |
Net increase (decrease) in net assets resulting from operations | $ (219,160) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 6,209 |
Net realized gain (loss) | (59,592) |
Change in net unrealized appreciation (depreciation) | (165,777) |
Net increase (decrease) in net assets resulting from operations | (219,160) |
Share transactions | 19,361,566 |
Cost of shares redeemed | (560,049) |
Net increase (decrease) in net assets resulting from share transactions | 18,801,517 |
Total increase (decrease) in net assets | 18,582,357 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $6,244) | $ 18,582,357 |
Other Information Shares | |
Sold | 1,966,232 |
Redeemed | (57,250) |
Net increase (decrease) | 1,908,982 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Period ended July 31, | 2003 E |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | - G |
Net realized and unrealized gain (loss) | (.27) |
Total from investment operations | (.27) |
Net asset value, end of period | $ 9.73 |
Total ReturnB,C | (2.70)% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 3.37% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.50% A |
Net investment income (loss) | .41% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 18,582 |
Portfolio turnover rate | 84% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E For the period June 17, 2003 (commencement of operations) to July 31, 2003.
F Expense ratios reflect operating expenses of the fund. 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 fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers 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 fund.
G Amount represents less than $.01 per-share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
1. Significant Accounting Policies.
Fidelity Blue Chip Value Fund (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Annual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Prepaid Expenses. FMR bears all organizational expenses of the fund, except for the cost of registering and qualifying new shares for distribution under federal and state securities law. These registration expenses are borne by the fund and amortized over one year.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, non-taxable dividends and losses deferred due to wash sales and excise tax regulations.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 441,275 | |
Unrealized depreciation | (655,421) | |
Net unrealized appreciation (depreciation) | (214,146) | |
Undistributed ordinary income | 6,195 | |
Cost for federal income tax purposes | $ 19,124,538 |
Annual Report
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until June 2004. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .57% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .37% of average net assets.
Annual Report
Notes to Financial Statements - continued
4. Fees and Other Transactions with Affiliates - continued
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment advisor. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Expense Reductions.
FMR agreed to reimburse the fund to the extent operating expenses exceeded 1.50% of average net assets. Some expenses, for example interest expense, are excluded from this reimbursement. During the period, this reimbursement reduced the fund's expenses by $28,037.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $127 for the period.
6. Other Information.
At the end of the period, FMR or its affiliates were the owners of record of 26% of the total outstanding shares of the fund.
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Blue Chip Value 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 Blue Chip Value Fund (a fund of Fidelity Securities Fund) at July 31, 2003 and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Blue Chip Value Fund's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at July 31, 2003 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Blue Chip Value (2003). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
Bart A. Grenier (44) | |
Year of Election or Appointment: 2003 Vice President of Blue Chip Value. Mr. Grenier also serves as Vice President of certain Equity Funds (2001), a position he previously held from 1999 to 2000, and Vice President of certain High Income Funds (2002). He is Senior Vice President of FMR (1999) and FMR Co., Inc. (2001), and President and Director of Strategic Advisers, Inc. (2002). He also heads Fidelity's Asset Allocation Group (2000), Fidelity's Growth and Income Group (2001), Fidelity's Value Group (2001), and Fidelity's High Income Division (2001). Previously, Mr. Grenier served as President of Fidelity Ventures (2000), Vice President of certain High Income Funds (1997-2000), High Income Division Head (1997-2000), Group Leader of the Income-Growth and Asset Allocation-Income Groups (1996-2000), and Assistant Equity Division Head (1997-2000). | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 2003 Secretary of Blue Chip Value. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management, Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Blue Chip Value. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2003 President and Treasurer of Blue Chip Value. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2003 Chief Financial Officer of Blue Chip Value. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Blue Chip Value. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Blue Chip Value. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Blue Chip Value. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Blue Chip Value. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Blue Chip Value. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* 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
7373 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
10100 Santa Monica Blvd.
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July 31, 2003
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Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
Distributions |
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Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
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Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) 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. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2003 | Past 1 | Past 5 | Past 10 |
Fidelity® Blue Chip Growth | 9.13% | -2.40% | 9.20% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity® Blue Chip Growth Fund on July 31, 1993. The chart shows how the value of your investment would have grown, and also shows how the Standard & Poor's 500 IndexSM (S&P 500®) did over the same period.
Annual Report
Management's Discussion of Fund Performance
Comments from John McDowell, Portfolio Manager of Fidelity® Blue Chip Growth Fund
Shaking off corporate governance scandals, weak corporate profits, and fears of war and terrorism, U.S. equities climbed sharply higher in the back half of the one-year period ending July 31, 2003, as positive signals emerged that many hoped would mark the end of the stock market's three-year decline. Among the bright spots, the Federal Reserve Board cut the fed funds target rate twice in the period, dropping it to a 45-year low of 1.00%. The 2003 first-quarter earnings season was solid, as was the second-quarter increase in gross domestic product. But the rapid conclusion of major military operations in Iraq seemed to provide the biggest boost. Overall, the mid-March through July rally lifted most equity benchmarks into positive territory for the period, and many enjoyed double-digit returns. The technology-rich NASDAQ Composite® Index advanced 31.22%, the large-cap-oriented Standard & Poor's 500SM Index gained 10.64%, the small-cap-laden Russell 2000® Index leapt 23.11% and the blue chips' bellwether Dow Jones Industrial AverageSM added 8.16%.
Fidelity Blue Chip Growth Fund gained 9.13% during the past year, trailing the LipperSM Growth Funds Average, which returned 11.18%, and the S&P 500® index. The fund also lagged its growth benchmark, the Russell 1000® Growth Index, which returned 11.64%. Despite becoming more aggressive in anticipation of an economic recovery, we remained more conservatively positioned than the Russell index, which hurt the fund's performance amid the powerful post-war rally. At the same time, our peer group tended to have more exposure than we did to small- and mid-sized companies, which strongly outpaced their large-cap counterparts. Relative to the S&P®, much of the shortfall came during the first half of the period, as the fund's more-aggressive positioning versus this index took its toll in the down market. Despite favorable sector positioning for the period overall, disappointing security selection dampened relative returns. Many of the fund's largest detractors - including McDonald's, Schering-Plough, Gillette and Northrop Grumman - didn't suffer major earnings problems, but didn't have big cyclical earnings recoveries coming out of the recession either. We've since sold McDonald's. Companies with large earnings gains off of depressed levels did particularly well, but we're traditionally underexposed to this group. That said, the stocks we did own with these characteristics - including Boston Scientific, Merrill Lynch, Yahoo!, Ericsson and Comcast - were among our top contributors.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Investment Changes
Top Ten Stocks as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Microsoft Corp. | 4.8 | 5.0 |
Pfizer, Inc. | 3.9 | 3.8 |
General Electric Co. | 3.7 | 3.4 |
Wal-Mart Stores, Inc. | 2.5 | 2.5 |
Citigroup, Inc. | 2.4 | 2.1 |
American International Group, Inc. | 2.3 | 2.3 |
Johnson & Johnson | 2.2 | 2.6 |
Intel Corp. | 2.2 | 1.6 |
Merck & Co., Inc. | 2.2 | 2.4 |
Cisco Systems, Inc. | 2.1 | 1.6 |
28.3 | ||
Top Five Market Sectors as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Information Technology | 23.4 | 18.1 |
Health Care | 20.7 | 21.7 |
Financials | 15.0 | 15.9 |
Consumer Staples | 11.7 | 10.5 |
Consumer Discretionary | 9.7 | 11.6 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2003 * | As of January 31, 2003 ** | ||||||
Stocks 97.6% | Stocks 96.8% | ||||||
Short-Term | Short-Term | ||||||
* Foreign investments | 2.0% | ** Foreign investments | 1.7% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 97.6% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 9.7% | |||
Hotels, Restaurants & Leisure - 0.3% | |||
Brinker International, Inc. (a) | 1,780,500 | $ 62,318 | |
Household Durables - 0.4% | |||
Leggett & Platt, Inc. | 1,834,000 | 40,605 | |
Lennar Corp. Class A | 503,100 | 32,797 | |
73,402 | |||
Internet & Catalog Retail - 0.8% | |||
Amazon.com, Inc. (a) | 1,088,700 | 45,421 | |
eBay, Inc. (a) | 681,100 | 73,014 | |
InterActiveCorp (a) | 1,004,600 | 40,656 | |
159,091 | |||
Media - 4.6% | |||
AOL Time Warner, Inc. (a) | 12,341,532 | 190,430 | |
Citadel Broadcasting Corp. | 47,200 | 897 | |
Clear Channel Communications, Inc. | 2,151,000 | 88,083 | |
Comcast Corp.: | |||
Class A (a) | 1,142,052 | 34,627 | |
Class A (special) (a) | 3,467,100 | 101,586 | |
Cox Communications, Inc. Class A (a) | 712,600 | 22,654 | |
EchoStar Communications Corp. Class A (a) | 1,013,600 | 36,763 | |
Fox Entertainment Group, Inc. Class A (a) | 1,846,000 | 55,878 | |
Omnicom Group, Inc. | 981,300 | 72,498 | |
The New York Times Co. Class A | 1,566,800 | 69,879 | |
Univision Communications, Inc. Class A (a) | 2,209,000 | 68,921 | |
Viacom, Inc. Class B (non-vtg.) | 3,374,796 | 146,871 | |
Walt Disney Co. | 1,542,200 | 33,805 | |
922,892 | |||
Multiline Retail - 0.8% | |||
Family Dollar Stores, Inc. | 1,316,500 | 49,382 | |
Kohl's Corp. (a) | 1,165,200 | 69,155 | |
Target Corp. | 1,091,100 | 41,811 | |
160,348 | |||
Specialty Retail - 2.2% | |||
AutoZone, Inc. (a) | 377,700 | 31,447 | |
Best Buy Co., Inc. (a) | 1,404,550 | 61,309 | |
Home Depot, Inc. | 7,914,700 | 246,939 | |
Lowe's Companies, Inc. | 1,638,600 | 77,932 | |
Office Depot, Inc. (a) | 1,810,500 | 30,054 | |
447,681 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles Apparel & Luxury Goods - 0.6% | |||
Liz Claiborne, Inc. | 1,593,100 | $ 54,850 | |
NIKE, Inc. Class B | 1,108,700 | 57,364 | |
112,214 | |||
TOTAL CONSUMER DISCRETIONARY | 1,937,946 | ||
CONSUMER STAPLES - 11.7% | |||
Beverages - 2.9% | |||
Anheuser-Busch Companies, Inc. | 1,489,200 | 77,170 | |
PepsiCo, Inc. | 3,746,462 | 172,600 | |
The Coca-Cola Co. | 7,528,400 | 338,552 | |
588,322 | |||
Food & Staples Retailing - 3.6% | |||
CVS Corp. | 1,685,000 | 50,533 | |
Rite Aid Corp. | 2,254,000 | 10,661 | |
Sysco Corp. | 2,802,200 | 84,430 | |
Wal-Mart Stores, Inc. | 8,883,755 | 496,691 | |
Walgreen Co. | 2,119,100 | 63,403 | |
Whole Foods Market, Inc. (a) | 296,600 | 15,119 | |
720,837 | |||
Food Products - 0.2% | |||
Wm. Wrigley Jr. Co. | 688,200 | 37,362 | |
Household Products - 2.3% | |||
Colgate-Palmolive Co. | 3,015,200 | 164,630 | |
Procter & Gamble Co. | 3,248,290 | 285,427 | |
450,057 | |||
Personal Products - 2.1% | |||
Avon Products, Inc. | 2,611,400 | 162,925 | |
Gillette Co. | 8,352,400 | 256,920 | |
419,845 | |||
Tobacco - 0.6% | |||
Altria Group, Inc. | 3,084,500 | 123,411 | |
TOTAL CONSUMER STAPLES | 2,339,834 | ||
ENERGY - 5.0% | |||
Energy Equipment & Services - 2.0% | |||
Baker Hughes, Inc. | 3,452,800 | 108,452 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Energy Equipment & Services - continued | |||
BJ Services Co. (a) | 1,928,400 | $ 66,048 | |
Helmerich & Payne, Inc. | 417,600 | 11,171 | |
Nabors Industries Ltd. (a) | 1,477,600 | 52,898 | |
Schlumberger Ltd. (NY Shares) | 1,968,100 | 88,702 | |
Transocean, Inc. (a) | 1,697,100 | 33,212 | |
Weatherford International Ltd. (a) | 1,180,000 | 42,799 | |
403,282 | |||
Oil & Gas - 3.0% | |||
Apache Corp. | 722,595 | 44,772 | |
Burlington Resources, Inc. | 1,162,800 | 53,686 | |
ChevronTexaco Corp. | 1,445,200 | 104,213 | |
ConocoPhillips | 1,343,600 | 70,324 | |
Devon Energy Corp. | 920,900 | 43,623 | |
Exxon Mobil Corp. | 4,943,200 | 175,879 | |
Total SA Series B | 679,400 | 100,008 | |
Valero Energy Corp. | 220,000 | 8,008 | |
600,513 | |||
TOTAL ENERGY | 1,003,795 | ||
FINANCIALS - 15.0% | |||
Capital Markets - 2.6% | |||
Bank of New York Co., Inc. | 2,378,200 | 71,631 | |
Charles Schwab Corp. | 2,640,100 | 27,483 | |
Goldman Sachs Group, Inc. | 296,400 | 25,828 | |
J.P. Morgan Chase & Co. | 1,688,200 | 59,171 | |
Lehman Brothers Holdings, Inc. | 503,500 | 31,856 | |
Merrill Lynch & Co., Inc. | 2,693,000 | 146,418 | |
Morgan Stanley | 2,328,500 | 110,464 | |
State Street Corp. | 836,300 | 38,386 | |
511,237 | |||
Commercial Banks - 2.5% | |||
Bank of America Corp. | 2,004,400 | 165,503 | |
Bank One Corp. | 2,405,100 | 95,146 | |
Fifth Third Bancorp | 2,027,000 | 111,505 | |
Wachovia Corp. | 2,226,100 | 97,258 | |
Wells Fargo & Co. | 712,700 | 36,013 | |
505,425 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Consumer Finance - 2.0% | |||
American Express Co. | 4,364,429 | $ 192,777 | |
MBNA Corp. | 6,145,600 | 136,985 | |
SLM Corp. | 1,847,800 | 76,610 | |
406,372 | |||
Diversified Financial Services - 2.4% | |||
Citigroup, Inc. | 10,705,954 | 479,627 | |
Insurance - 3.9% | |||
AFLAC, Inc. | 2,142,100 | 68,719 | |
Allstate Corp. | 2,775,400 | 105,548 | |
AMBAC Financial Group, Inc. | 965,100 | 63,571 | |
American International Group, Inc. | 7,130,755 | 457,794 | |
MBIA, Inc. | 1,049,550 | 53,128 | |
Travelers Property Casualty Corp.: | |||
Class A | 404,999 | 6,561 | |
Class B | 832,093 | 13,430 | |
768,751 | |||
Real Estate - 0.0% | |||
Corrections Corp. of America (a) | 5,488 | 135 | |
Thrifts & Mortgage Finance - 1.6% | |||
Fannie Mae | 3,374,100 | 216,077 | |
Freddie Mac | 664,200 | 32,446 | |
Golden West Financial Corp., Delaware | 728,500 | 60,174 | |
308,697 | |||
TOTAL FINANCIALS | 2,980,244 | ||
HEALTH CARE - 20.7% | |||
Biotechnology - 2.5% | |||
Amgen, Inc. (a) | 5,378,800 | 374,257 | |
Biogen, Inc. (a) | 936,200 | 35,969 | |
Cephalon, Inc. (a) | 167,500 | 8,372 | |
Genentech, Inc. (a) | 586,200 | 47,336 | |
MedImmune, Inc. (a) | 711,800 | 27,895 | |
493,829 | |||
Health Care Equipment & Supplies - 2.9% | |||
Baxter International, Inc. | 2,754,900 | 76,063 | |
Boston Scientific Corp. (a) | 1,508,890 | 95,407 | |
Medtronic, Inc. | 4,744,200 | 244,326 | |
Millipore Corp. (a) | 717,100 | 31,904 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Equipment & Supplies - continued | |||
St. Jude Medical, Inc. (a) | 1,764,200 | $ 94,649 | |
Zimmer Holdings, Inc. (a) | 943,780 | 45,122 | |
587,471 | |||
Health Care Providers & Services - 2.3% | |||
Cardinal Health, Inc. | 1,167,175 | 63,903 | |
Health Management Associates, Inc. Class A | 2,163,800 | 43,211 | |
Laboratory Corp. of America Holdings (a) | 1,441,700 | 45,803 | |
McKesson Corp. | 1,510,100 | 48,716 | |
Quest Diagnostics, Inc. (a) | 753,000 | 44,999 | |
UnitedHealth Group, Inc. | 4,234,200 | 220,559 | |
467,191 | |||
Pharmaceuticals - 13.0% | |||
Abbott Laboratories | 5,768,200 | 226,402 | |
Allergan, Inc. | 931,800 | 74,991 | |
AstraZeneca PLC sponsored ADR | 1,614,100 | 64,919 | |
Bristol-Myers Squibb Co. | 2,086,400 | 54,664 | |
Eli Lilly & Co. | 1,458,900 | 96,054 | |
Forest Laboratories, Inc. (a) | 1,230,300 | 58,907 | |
Johnson & Johnson | 8,638,304 | 447,378 | |
Merck & Co., Inc. | 7,861,400 | 434,578 | |
Mylan Laboratories, Inc. | 877,650 | 29,638 | |
Pfizer, Inc. | 23,117,300 | 771,193 | |
Schering-Plough Corp. | 4,294,100 | 72,914 | |
Wyeth | 5,513,700 | 251,314 | |
2,582,952 | |||
TOTAL HEALTH CARE | 4,131,443 | ||
INDUSTRIALS - 9.4% | |||
Aerospace & Defense - 0.8% | |||
Lockheed Martin Corp. | 1,875,100 | 98,143 | |
Northrop Grumman Corp. | 763,500 | 70,425 | |
168,568 | |||
Air Freight & Logistics - 0.5% | |||
United Parcel Service, Inc. Class B | 1,460,400 | 92,122 | |
Airlines - 0.3% | |||
Southwest Airlines Co. | 3,409,900 | 55,956 | |
Building Products - 0.2% | |||
Masco Corp. | 1,847,700 | 45,028 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Commercial Services & Supplies - 1.1% | |||
Apollo Group, Inc. Class A (a) | 547,400 | $ 35,450 | |
Avery Dennison Corp. | 1,206,800 | 65,119 | |
Cendant Corp. (a) | 1,044,300 | 18,745 | |
ChoicePoint, Inc. (a) | 459,200 | 17,514 | |
Cintas Corp. | 771,200 | 31,750 | |
Waste Management, Inc. | 2,509,300 | 59,947 | |
228,525 | |||
Industrial Conglomerates - 5.3% | |||
3M Co. | 1,610,900 | 225,848 | |
General Electric Co. | 26,133,500 | 743,237 | |
Tyco International Ltd. | 4,288,200 | 79,761 | |
1,048,846 | |||
Machinery - 1.2% | |||
Danaher Corp. | 516,900 | 37,320 | |
Illinois Tool Works, Inc. | 900,600 | 62,727 | |
Ingersoll-Rand Co. Ltd. Class A | 1,204,050 | 65,308 | |
Parker Hannifin Corp. | 1,564,900 | 72,142 | |
237,497 | |||
TOTAL INDUSTRIALS | 1,876,542 | ||
INFORMATION TECHNOLOGY - 23.4% | |||
Communications Equipment - 3.0% | |||
Cisco Systems, Inc. (a) | 22,006,200 | 429,561 | |
Motorola, Inc. | 7,197,800 | 65,068 | |
Nortel Networks Corp. (a) | 3,766,500 | 11,111 | |
QUALCOMM, Inc. | 954,600 | 35,759 | |
Telefonaktiebolaget LM Ericsson ADR (a) | 3,432,300 | 48,979 | |
UTStarcom, Inc. (a) | 419,600 | 17,862 | |
608,340 | |||
Computers & Peripherals - 4.2% | |||
Apple Computer, Inc. (a) | 2,931,000 | 61,698 | |
Dell, Inc. (a) | 8,979,300 | 302,423 | |
EMC Corp. (a) | 5,755,700 | 61,241 | |
Hewlett-Packard Co. | 4,625,500 | 97,922 | |
International Business Machines Corp. | 3,595,800 | 292,159 | |
Sun Microsystems, Inc. (a) | 6,061,500 | 22,670 | |
838,113 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - 1.0% | |||
Agilent Technologies, Inc. (a) | 2,648,274 | $ 57,547 | |
CDW Corp. | 675,300 | 32,333 | |
Flextronics International Ltd. (a) | 5,050,600 | 55,557 | |
Waters Corp. (a) | 1,477,000 | 46,836 | |
192,273 | |||
Internet Software & Services - 0.4% | |||
Overture Services, Inc. (a) | 419,400 | 9,931 | |
Yahoo!, Inc. (a) | 2,145,313 | 66,784 | |
76,715 | |||
IT Services - 2.1% | |||
Affiliated Computer Services, Inc. Class A (a) | 470,000 | 23,289 | |
Automatic Data Processing, Inc. | 663,880 | 24,617 | |
Computer Sciences Corp. (a) | 2,276,200 | 92,345 | |
First Data Corp. | 6,029,400 | 227,670 | |
Paychex, Inc. | 1,650,420 | 53,688 | |
421,609 | |||
Semiconductors & Semiconductor Equipment - 5.7% | |||
Altera Corp. (a) | 710,200 | 13,664 | |
Analog Devices, Inc. (a) | 2,809,500 | 106,621 | |
Applied Materials, Inc. (a) | 3,066,800 | 59,803 | |
Intel Corp. | 17,761,040 | 443,138 | |
Intersil Corp. Class A (a) | 2,266,300 | 55,887 | |
KLA-Tencor Corp. (a) | 1,429,200 | 73,818 | |
Lam Research Corp. (a) | 1,182,000 | 25,720 | |
Linear Technology Corp. | 1,391,560 | 51,321 | |
Marvell Technology Group Ltd. (a) | 964,900 | 33,926 | |
Microchip Technology, Inc. | 835,400 | 22,021 | |
Micron Technology, Inc. (a) | 3,295,900 | 48,252 | |
Teradyne, Inc. (a) | 993,200 | 16,338 | |
Texas Instruments, Inc. | 7,493,500 | 141,402 | |
Xilinx, Inc. (a) | 1,567,700 | 41,199 | |
1,133,110 | |||
Software - 7.0% | |||
Adobe Systems, Inc. | 1,536,568 | 50,215 | |
BEA Systems, Inc. (a) | 3,353,200 | 44,262 | |
Electronic Arts, Inc. (a) | 1,020,184 | 85,695 | |
Microsoft Corp. | 36,322,200 | 958,913 | |
Network Associates, Inc. (a) | 2,316,300 | 26,174 | |
Oracle Corp. (a) | 9,403,600 | 112,843 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - continued | |||
PeopleSoft, Inc. (a) | 632,800 | $ 10,549 | |
Siebel Systems, Inc. (a) | 836,900 | 7,850 | |
Synopsys, Inc. (a) | 927,753 | 57,994 | |
VERITAS Software Corp. (a) | 1,384,928 | 42,656 | |
1,397,151 | |||
TOTAL INFORMATION TECHNOLOGY | 4,667,311 | ||
MATERIALS - 1.3% | |||
Chemicals - 0.9% | |||
Dow Chemical Co. | 2,829,200 | 99,871 | |
Praxair, Inc. | 1,184,500 | 76,590 | |
176,461 | |||
Containers & Packaging - 0.2% | |||
Smurfit-Stone Container Corp. (a) | 2,213,316 | 33,133 | |
Metals & Mining - 0.2% | |||
Alcoa, Inc. | 1,665,100 | 46,240 | |
TOTAL MATERIALS | 255,834 | ||
TELECOMMUNICATION SERVICES - 1.4% | |||
Diversified Telecommunication Services - 0.8% | |||
Qwest Communications International, Inc. (a) | 7,284,800 | 29,066 | |
Verizon Communications, Inc. | 3,663,700 | 127,717 | |
156,783 | |||
Wireless Telecommunication Services - 0.6% | |||
AT&T Wireless Services, Inc. (a) | 7,764,200 | 66,229 | |
Nextel Communications, Inc. Class A (a) | 2,517,700 | 45,973 | |
112,202 | |||
TOTAL TELECOMMUNICATION SERVICES | 268,985 | ||
TOTAL COMMON STOCKS (Cost $16,801,074) | 19,461,934 | ||
Convertible Preferred Stocks - 0.0% | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - 0.0% | |||
Communications Equipment - 0.0% | |||
Chorum Technologies Series E (c) | 132,000 | $ 132 | |
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $2,276) | 132 | ||
Money Market Funds - 2.5% | |||
Fidelity Cash Central Fund, 1.12% (b) | 484,886,250 | 484,886 | |
Fidelity Securities Lending Cash Central Fund, 1.13% (b) | 13,130,000 | 13,130 | |
TOTAL MONEY MARKET FUNDS (Cost $498,016) | 498,016 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $17,301,366) | 19,960,082 | ||
NET OTHER ASSETS - (0.1)% | (24,561) | ||
NET ASSETS - 100% | $ 19,935,521 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Restricted securities - Investment in securities not registered under the Securities Act of 1933. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Chorum Technologies Series E | 9/19/00 | $ 2,276 |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $5,313,378,000 and $3,979,474,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $285,000 for the period. |
The fund invested in securities that are not registered under the Securities Act of 1933. At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $132,000 or 0.0% of net assets. |
Income Tax Information |
At July 31, 2003, the fund had a capital loss carryforward of approximately $3,454,821,000 of which $1,572,081,000 and $1,882,740,000 will expire on July 31, 2010 and 2011, respectively. |
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, 2003 | |
Assets | ||
Investment in securities, at value (including securities loaned of $12,846) (cost $17,301,366) - See accompanying schedule | $ 19,960,082 | |
Receivable for investments sold | 18,346 | |
Receivable for fund shares sold | 23,291 | |
Dividends receivable | 15,807 | |
Interest receivable | 560 | |
Other receivables | 55 | |
Total assets | 20,018,141 | |
Liabilities | ||
Payable for investments purchased | $ 39,426 | |
Payable for fund shares redeemed | 19,782 | |
Accrued management fee | 6,236 | |
Other payables and accrued expenses | 4,046 | |
Collateral on securities loaned, at value | 13,130 | |
Total liabilities | 82,620 | |
Net Assets | $ 19,935,521 | |
Net Assets consist of: | ||
Paid in capital | $ 20,862,369 | |
Undistributed net investment income | 64,958 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (3,650,525) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 2,658,719 | |
Net Assets, for 551,709 shares outstanding | $ 19,935,521 | |
Net Asset Value, offering price and redemption price per share ($19,935,521 ÷ 551,709 shares) | $ 36.13 |
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, 2003 | |
Investment Income | ||
Dividends | $ 224,337 | |
Interest | 7,311 | |
Security lending | 107 | |
Total income | 231,755 | |
Expenses | ||
Management fee | $ 101,812 | |
Performance adjustment | (32,077) | |
Transfer agent fees | 49,787 | |
Accounting and security lending fees | 1,201 | |
Non-interested trustees' compensation | 68 | |
Depreciation in deferred trustee compensation account | (19) | |
Custodian fees and expenses | 271 | |
Registration fees | 79 | |
Audit | 139 | |
Legal | 68 | |
Miscellaneous | 2,102 | |
Total expenses before reductions | 123,431 | |
Expense reductions | (2,702) | 120,729 |
Net investment income (loss) | 111,026 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | (755,939) | |
Foreign currency transactions | 7 | |
Total net realized gain (loss) | (755,932) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 2,271,035 | |
Assets and liabilities in foreign currencies | (3) | |
Total change in net unrealized appreciation (depreciation) | 2,271,032 | |
Net gain (loss) | 1,515,100 | |
Net increase (decrease) in net assets resulting from operations | $ 1,626,126 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands | Year ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 111,026 | $ 50,773 |
Net realized gain (loss) | (755,932) | (1,774,203) |
Change in net unrealized appreciation (depreciation) | 2,271,032 | (4,362,255) |
Net increase (decrease) in net assets resulting from operations | 1,626,126 | (6,085,685) |
Distributions to shareholders from net investment income | (67,396) | (30,589) |
Share transactions | 5,002,352 | 5,075,169 |
Reinvestment of distributions | 65,634 | 29,819 |
Cost of shares redeemed | (3,712,003) | (5,000,331) |
Net increase (decrease) in net assets resulting from share transactions | 1,355,983 | 104,657 |
Total increase (decrease) in net assets | 2,914,713 | (6,011,617) |
Net Assets | ||
Beginning of period | 17,020,808 | 23,032,425 |
End of period (including undistributed net investment income of $64,958 and undistributed net investment income of $21,321, respectively) | $ 19,935,521 | $ 17,020,808 |
Other Information Shares | ||
Sold | 151,627 | 127,561 |
Issued in reinvestment of distributions | 2,019 | 701 |
Redeemed | (113,950) | (127,201) |
Net increase (decrease) | 39,696 | 1,061 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | |||||
Net asset value, beginning of period | $ 33.24 | $ 45.08 | $ 60.25 | $ 53.20 | $ 47.06 |
Income from Investment Operations | |||||
Net investment income (loss) C | .21 | .10 | .01 | (.01) | .16 |
Net realized and unrealized gain (loss) | 2.81 | (11.88) | (12.66) | 9.27 | 8.14 |
Total from investment operations | 3.02 | (11.78) | (12.65) | 9.26 | 8.30 |
Distributions from net investment income | (.13) | (.06) | - | (.14) | (.10) |
Distributions from net realized gain | - | - | (2.52) | (2.07) | (2.06) |
Total distributions | (.13) | (.06) | (2.52) | (2.21) | (2.16) |
Net asset value, end of period | $ 36.13 | $ 33.24 | $ 45.08 | $ 60.25 | $ 53.20 |
Total Return A,B | 9.13% | (26.16)% | (21.92)% | 17.97% | 19.30% |
Ratios to Average Net Assets D | |||||
Expenses before expense reductions | .71% | .76% | .89% | .88% | .71% |
Expenses net of voluntary waivers, if any | .71% | .76% | .89% | .88% | .71% |
Expenses net of all reductions | .69% | .74% | .87% | .86% | .70% |
Net investment income (loss) | .64% | .25% | .01% | (.02)% | .32% |
Supplemental Data | |||||
Net assets, end of period (in millions) | $ 19,936 | $ 17,021 | $ 23,032 | $ 29,154 | $ 23,684 |
Portfolio turnover rate | 24% | 33% | 46% | 40% | 38% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Total returns do not include the effect of the former one time sales charges.
C Calculated based on average shares outstanding during the period.
D Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers 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 fund.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Blue Chip Growth Fund (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 4,104,913 | | |
Unrealized depreciation | (1,456,058) | |
Net unrealized appreciation (depreciation) | 2,648,855 | |
Undistributed ordinary income | 64,958 | |
Capital loss carryforward | (3,454,821) | |
Cost for federal income tax purposes | $ 17,311,227 |
The tax character of distributions paid was as follows:
July 31, | July 31, | |
Ordinary Income | $ 67,396 | $ 30,589 |
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .40% of the fund's average net assets.
Sales Load. Fidelity Distributors Corporation (FDC), an affiliate of FMR, is the general distributor of the fund. Shares purchased before October 12, 1990 are subject to a 1% deferred sales charge upon redemption. For the period, FDC received deferred sales charges of $15 on redemption of shares of the fund
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .29% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $7,311 for the period.
Annual Report
4. Fee and Other Transactions with Affiliates - continued
Annual Report
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.
7. Expense Reductions.
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $2,498 for the period. In addition, through arrangements with the fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody and transfer agent expenses by $1 and $203, respectively.
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity Blue Chip Growth Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Blue Chip Growth Fund (the Fund), a fund of Fidelity Securities Fund, including the portfolio of investments, as of July 31, 2003, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Blue Chip Growth Fund as of July 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 12, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Blue Chip Growth (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of the The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
John B. McDowell (44) | |
Year of Election or Appointment: 1996 Vice President of Blue Chip Growth. Mr. McDowell also serves as Vice President of certain Equity Funds (2002). He is Senior Vice President of FMR (1999), FMR Co., Inc. (2001), and Fidelity Management Trust Company (FMTC). Since joining Fidelity Investments in 1985, Mr. McDowell has worked as a research analyst and manager. | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 1998 Secretary of Blue Chip Growth. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management, Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Blue Chip Growth. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2002 President and Treasurer of Blue Chip Growth. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2002 Chief Financial Officer of Blue Chip Growth. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Blue Chip Growth. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 1986 Assistant Treasurer of Blue Chip Growth. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Blue Chip Growth. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Blue Chip Growth. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2000 Assistant Treasurer of Blue Chip Growth. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
Distributions
The fund designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* 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
7373 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
10100 Santa Monica Blvd.
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
8 Montgomery Street
San Francisco, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
Colorado
1625 Broadway
Denver, CO
9185 East Westview Road
Littleton, 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
222 Delaware Avenue
Wilmington, DE
Florida
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
3501 PGA Boulevard
West Palm Beach, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
405 Cochituate Road
Framingham, MA
416 Belmont Street
Worcester, MA
Annual Report
Michigan
280 Old N. Woodward Ave.
Birmingham, MI
43420 Grand River Avenue
Novi, MI
29155 Northwestern Hwy.
Southfield, MI
Minnesota
7600 France Avenue South
Edina, MN
Missouri
8885 Ladue Road
Ladue, MO
New Jersey
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
3518 Route 1 North
Princeton, NJ
New York
1055 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
North Carolina
4611 Sharon Road
Charlotte, NC
Ohio
3805 Edwards Road
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
16850 SW 72nd Avenue
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
47 Providence Place
Providence, RI
Tennessee
6150 Poplar Avenue
Memphis, TN
Texas
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
6005 West Park Boulevard
Plano, TX 75093
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Utah
215 South State Street
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
411 108th Avenue, N.E.
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
595 North Barker Road
Brookfield, WI
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
Fidelity's Growth Funds
Aggressive Growth Fund
Blue Chip Growth Fund
Blue Chip Value Fund
Capital Appreciation Fund
Contrafund ®
Disciplined Equity Fund
Discovery Fund
Dividend Growth Fund
Export and Multinational Fund
Fidelity Fifty ®
Fidelity Value Discovery Fund
Focused Stock Fund
Growth Company Fund
Independence Fund
Large Cap Stock Fund
Leveraged Company Stock Fund
Low-Priced Stock Fund
Magellan® Fund
Mid-Cap Stock Fund
New Millennium Fund®
OTC Portfolio
Small Cap Independence Fund
Small Cap Stock Fund
Stock Selector
Structured Large Cap Growth Fund
Structured Large Cap Value Fund
Structured Mid Cap Growth Fund
Structured Mid Cap Value Fund
Tax Managed Stock Fund
Trend Fund
Value Fund
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
BCF-UANN-0903
1.789244.100
Fidelity®
OTC
Portfolio
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) 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. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2003 | Past 1 | Past 5 | Past 10 |
Fidelity® OTC Portfolio | 20.76% | 0.44% | 9.15% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity ® OTC Portfolio on July 31, 1993. The chart shows how the value of your investment would have grown, and also shows how the NASDAQ Composite® Index did over the same period.
Annual Report
Management's Discussion of Fund Performance
Comments from Shep Perkins, Portfolio Manager of Fidelity® OTC Portfolio
Shaking off corporate governance scandals, weak corporate profits, and fears of war and terrorism, U.S. equities climbed sharply higher in the back half of the one-year period ending July 31, 2003, as positive signals emerged that many hoped would mark the end of the stock market's three-year decline. Among the bright spots, the Federal Reserve Board cut the fed funds target rate twice in the period, dropping it to a 45-year low of 1.00%. The 2003 first-quarter earnings season was solid, as was the second-quarter increase in gross domestic product. But the rapid conclusion of major military operations in Iraq seemed to provide the biggest boost. Overall, the mid-March through July rally lifted most equity benchmarks into positive territory for the period, and many enjoyed double-digit returns. The technology-rich NASDAQ Composite® Index advanced 31.22%, the large-cap-oriented Standard & Poor's 500SM Index gained 10.64%, the small-cap-laden Russell 2000® Index leapt 23.11% and the blue chips' bellwether Dow Jones Industrial AverageSM added 8.16%.
Fidelity OTC Portfolio returned 20.76% during the past year, trailing the NASDAQ® but outpacing the LipperSM Mid-Cap Funds Average, which rose 15.57%. Lower-quality companies led the market rally as investors grew less risk averse. This backdrop was less than ideal for the fund, which had been conservatively positioned and focused on higher-quality growth names with less volatility than the index. In addition, we were underexposed to the best-performing groups in the NASDAQ, namely technology, biotechnology and telecommunication services. The fund's stake in these areas was enough, however, to beat its average peer, which tended to be much lighter in these groups. Security selection in health care hurt the most versus the index, largely due to our more-defensive equipment and services stocks, which struggled. Notable detractors included Province Healthcare, LifePoint Hospitals and Accredo Health. Elsewhere, our overweighting in retailing helped, but it was outweighed by weak stock picking in the group. Dollar Tree Stores hurt results, as did generally shying away from such red-hot Internet retailers as eBay. On the plus side, several of the fund's tech and telecom stocks waged big comebacks, most notably Comverse Technology, VERITAS Software and Qwest Communications. Our positioning in financials also contributed, as we had scant exposure to lagging bank stocks.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Investment Changes
Top Ten Stocks as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Microsoft Corp. | 12.3 | 11.5 |
Amgen, Inc. | 3.9 | 0.0 |
Fifth Third Bancorp | 3.5 | 1.2 |
Dell, Inc. | 2.4 | 0.8 |
Comcast Corp. Class A (special) | 2.0 | 0.6 |
Samsung Electronics Co. Ltd. | 1.8 | 0.0 |
InterActiveCorp | 1.7 | 0.0 |
Nextel Communications, Inc. Class A | 1.7 | 0.2 |
eBay, Inc. | 1.5 | 0.0 |
Seagate Technology | 1.3 | 0.0 |
32.1 | ||
Top Five Market Sectors as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Information Technology | 45.2 | 33.0 |
Consumer Discretionary | 19.2 | 19.1 |
Health Care | 14.7 | 18.0 |
Industrials | 6.9 | 10.7 |
Financials | 6.7 | 3.3 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2003 * | As of January 31, 2003 ** | ||||||
Stocks 99.2% | Stocks 89.8% | ||||||
Short-Term | Short-Term | ||||||
* Foreign | 10.2% | ** Foreign | 3.9% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 99.2% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 19.2% | |||
Auto Components - 0.2% | |||
Gentex Corp. (a) | 139,448 | $ 4,956 | |
Keystone Automotive Industries, Inc. (a) | 574,300 | 11,170 | |
16,126 | |||
Hotels, Restaurants & Leisure - 0.9% | |||
Applebee's International, Inc. | 869,092 | 27,724 | |
Panera Bread Co. Class A (a) | 644,100 | 26,646 | |
Starbucks Corp. (a) | 262,300 | 7,169 | |
61,539 | |||
Household Durables - 0.6% | |||
Garmin Ltd. (a) | 986,216 | 37,733 | |
Internet & Catalog Retail - 4.1% | |||
Amazon.com, Inc. (a) | 1,412,200 | 58,917 | |
eBay, Inc. (a) | 993,100 | 106,460 | |
InterActiveCorp (a) | 2,982,400 | 120,698 | |
286,075 | |||
Leisure Equipment & Products - 0.3% | |||
SCP Pool Corp. (a) | 492,800 | 19,101 | |
Media - 6.4% | |||
AOL Time Warner, Inc. (a) | 3,880,400 | 59,875 | |
Charter Communications, Inc. Class A (a) | 5,299,800 | 25,810 | |
Citadel Broadcasting Corp. | 16,000 | 304 | |
Comcast Corp.: | |||
Class A (a) | 2,093,400 | 63,472 | |
Class A (special) (a) | 4,877,100 | 142,899 | |
Cumulus Media, Inc. Class A (a) | 1,464,400 | 25,612 | |
EchoStar Communications Corp. Class A (a) | 345,171 | 12,519 | |
Emmis Communications Corp. Class A (a) | 327,100 | 6,545 | |
Gemstar-TV Guide International, Inc. (a) | 3,783,700 | 17,821 | |
General Motors Corp. Class H (a) | 1,269,700 | 17,433 | |
Lamar Advertising Co. Class A (a) | 966,600 | 33,164 | |
Liberty Media Corp. Class A (a) | 2,781,200 | 30,844 | |
Pixar (a) | 247,200 | 16,760 | |
453,058 | |||
Multiline Retail - 0.4% | |||
Dollar Tree Stores, Inc. (a) | 814,700 | 29,883 | |
Specialty Retail - 6.3% | |||
AC Moore Arts & Crafts, Inc. (a) | 816,200 | 20,193 | |
American Eagle Outfitters, Inc. (a) | 283,000 | 6,271 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Bed Bath & Beyond, Inc. (a) | 290,100 | $ 11,224 | |
Guitar Center, Inc. (a) | 1,072,500 | 36,143 | |
Hollywood Entertainment Corp. (a)(c) | 3,430,100 | 57,420 | |
Hot Topic, Inc. (a) | 1,262,200 | 36,478 | |
Movie Gallery, Inc. (a) | 947,050 | 18,941 | |
O'Reilly Automotive, Inc. (a) | 208,600 | 7,948 | |
PETCO Animal Supplies, Inc. (a) | 1,296,600 | 32,532 | |
PETsMART, Inc. | 1,860,900 | 36,902 | |
Regis Corp. | 1,108,300 | 34,125 | |
Ross Stores, Inc. | 1,235,800 | 56,476 | |
Select Comfort Corp. (a) | 454,300 | 9,990 | |
Staples, Inc. (a) | 2,251,900 | 45,353 | |
Steiner Leisure Ltd. (a) | 440,800 | 7,119 | |
Urban Outfitters, Inc. (a) | 351,800 | 13,981 | |
West Marine, Inc. (a) | 189,800 | 3,927 | |
Wet Seal, Inc. Class A (a) | 948,000 | 10,693 | |
445,716 | |||
TOTAL CONSUMER DISCRETIONARY | 1,349,231 | ||
CONSUMER STAPLES - 2.0% | |||
Food & Staples Retailing - 1.2% | |||
Performance Food Group Co. (a) | 1,720,150 | 64,987 | |
Whole Foods Market, Inc. (a) | 431,280 | 21,985 | |
86,972 | |||
Food Products - 0.3% | |||
Central Garden & Pet Co. Class A (a) | 741,500 | 20,347 | |
Personal Products - 0.5% | |||
NBTY, Inc. (a) | 1,334,600 | 32,898 | |
TOTAL CONSUMER STAPLES | 140,217 | ||
ENERGY - 1.4% | |||
Energy Equipment & Services - 1.4% | |||
Cal Dive International, Inc. (a) | 593,200 | 11,745 | |
Patterson-UTI Energy, Inc. (a) | 2,833,700 | 78,210 | |
W-H Energy Services, Inc. (a) | 343,800 | 6,250 | |
96,205 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - 6.7% | |||
Capital Markets - 1.3% | |||
Ameritrade Holding Corp. (a) | 3,980,800 | $ 38,216 | |
Investors Financial Services Corp. | 910,579 | 29,020 | |
Northern Trust Corp. | 163,600 | 7,143 | |
T. Rowe Price Group, Inc. | 349,400 | 14,182 | |
88,561 | |||
Commercial Banks - 5.1% | |||
Fifth Third Bancorp | 4,520,700 | 248,684 | |
Silicon Valley Bancshares (a) | 651,000 | 16,034 | |
SouthTrust Corp. | 1,532,300 | 43,916 | |
Texas Regional Bancshares, Inc. Class A | 217,500 | 7,173 | |
UCBH Holdings, Inc. | 353,400 | 10,895 | |
Zions Bancorp | 593,200 | 33,124 | |
359,826 | |||
Insurance - 0.2% | |||
Cincinnati Financial Corp. | 346,000 | 13,598 | |
Real Estate - 0.0% | |||
Corrections Corp. of America (a) | 3,061 | 76 | |
Thrifts & Mortgage Finance - 0.1% | |||
NetBank, Inc. | 535,600 | 6,647 | |
TOTAL FINANCIALS | 468,708 | ||
HEALTH CARE - 14.7% | |||
Biotechnology - 7.9% | |||
Amgen, Inc. (a) | 3,996,700 | 278,090 | |
Biogen, Inc. (a) | 1,490,400 | 57,261 | |
BioMarin Pharmaceutical, Inc. (a) | 494,300 | 5,358 | |
Cephalon, Inc. (a) | 1,368,000 | 68,373 | |
CV Therapeutics, Inc. (a) | 149,900 | 5,350 | |
Exact Sciences Corp. (a) | 692,000 | 11,840 | |
Genentech, Inc. (a) | 323,000 | 26,082 | |
Gilead Sciences, Inc. (a) | 98,900 | 6,750 | |
IDEXX Laboratories, Inc. (a) | 670,200 | 27,123 | |
Invitrogen Corp. (a) | 626,400 | 32,448 | |
MedImmune, Inc. (a) | 705,600 | 27,652 | |
Trimeris, Inc. (a) | 197,900 | 8,777 | |
555,104 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Equipment & Supplies - 3.1% | |||
Advanced Neuromodulation Systems, Inc. (a) | 214,050 | $ 8,802 | |
Align Technology, Inc. (a) | 536,192 | 6,970 | |
American Medical Systems Holdings, Inc. (a) | 927,200 | 16,662 | |
Biomet, Inc. | 1,396,838 | 41,360 | |
Biosite, Inc. (a) | 353,300 | 15,241 | |
Cooper Companies, Inc. | 816,400 | 28,615 | |
Cytyc Corp. (a) | 891,200 | 10,534 | |
DENTSPLY International, Inc. | 833,350 | 36,176 | |
Respironics, Inc. (a) | 954,100 | 38,145 | |
SurModics, Inc. (a) | 550,700 | 20,673 | |
223,178 | |||
Health Care Providers & Services - 2.0% | |||
Henry Schein, Inc. (a) | 366,400 | 21,412 | |
IMPATH, Inc. (a) | 219,900 | 1,989 | |
LifePoint Hospitals, Inc. (a) | 987,300 | 27,871 | |
Patterson Dental Co. (a) | 680,000 | 36,380 | |
WebMD Corp. (a) | 4,398,400 | 53,133 | |
140,785 | |||
Pharmaceuticals - 1.7% | |||
Atrix Laboratories, Inc. (a) | 701,900 | 17,267 | |
Johnson & Johnson | 611,600 | 31,675 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 1,236,400 | 70,895 | |
119,837 | |||
TOTAL HEALTH CARE | 1,038,904 | ||
INDUSTRIALS - 6.9% | |||
Air Freight & Logistics - 0.3% | |||
C.H. Robinson Worldwide, Inc. | 247,108 | 9,123 | |
Expeditors International of Washington, Inc. | 379,020 | 12,724 | |
21,847 | |||
Airlines - 0.9% | |||
Atlantic Coast Airlines Holdings, Inc. (a) | 605,800 | 4,586 | |
JetBlue Airways Corp. (a) | 993,104 | 45,246 | |
Ryanair Holdings PLC sponsored ADR (a) | 329,000 | 14,111 | |
63,943 | |||
Commercial Services & Supplies - 3.3% | |||
Apollo Group, Inc. - University of Phoenix Online (a) | 197,700 | 11,386 | |
Cintas Corp. | 692,000 | 28,490 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Commercial Services & Supplies - continued | |||
Corinthian Colleges, Inc. (a) | 625,900 | $ 34,180 | |
Education Management Corp. (a) | 63,200 | 3,670 | |
Herman Miller, Inc. | 1,512,600 | 33,444 | |
Monster Worldwide, Inc. (a) | 325,100 | 8,631 | |
Stericycle, Inc. (a) | 300,800 | 13,575 | |
Strayer Education, Inc. (c) | 679,000 | 57,355 | |
Sylvan Learning Systems, Inc. (a) | 988,600 | 26,287 | |
Waste Management, Inc. | 679,500 | 16,233 | |
233,251 | |||
Industrial Conglomerates - 0.5% | |||
Siemens AG sponsored ADR | 300,600 | 16,867 | |
Tyco International Ltd. | 926,800 | 17,238 | |
34,105 | |||
Machinery - 0.3% | |||
PACCAR, Inc. | 250,900 | 19,369 | |
Road & Rail - 1.3% | |||
Arkansas Best Corp. | 1,219,108 | 33,733 | |
Heartland Express, Inc. (a) | 296,600 | 7,534 | |
Laidlaw International, Inc. (a) | 750,000 | 7,772 | |
Landstar System, Inc. (a) | 255,600 | 16,399 | |
USF Corp. | 600,000 | 18,900 | |
Werner Enterprises, Inc. | 305,787 | 7,290 | |
91,628 | |||
Trading Companies & Distributors - 0.3% | |||
Fastenal Co. | 649,800 | 24,692 | |
TOTAL INDUSTRIALS | 488,835 | ||
INFORMATION TECHNOLOGY - 45.2% | |||
Communications Equipment - 4.7% | |||
ADC Telecommunications, Inc. (a) | 7,890,400 | 17,201 | |
Adtran, Inc. | 319,900 | 15,624 | |
Alcatel SA sponsored ADR (a) | 6,055,900 | 59,711 | |
Arris Group, Inc. (a) | 715,200 | 3,569 | |
Avocent Corp. (a) | 394,900 | 10,575 | |
Comverse Technology, Inc. (a) | 4,798,500 | 70,778 | |
Corvis Corp. (a) | 4,448,700 | 6,406 | |
JDS Uniphase Corp. (a) | 2,699,300 | 8,125 | |
Marconi Corp. PLC (a) | 11,033,100 | 12,966 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Communications Equipment - continued | |||
Motorola, Inc. | 4,867,630 | $ 44,003 | |
NetScreen Technologies, Inc. (a) | 463,100 | 10,017 | |
Nortel Networks Corp. (a) | 988,600 | 2,916 | |
Telefonaktiebolaget LM Ericsson ADR (a) | 5,080,600 | 72,500 | |
334,391 | |||
Computers & Peripherals - 6.3% | |||
Apple Computer, Inc. (a) | 2,206,200 | 46,441 | |
ATI Technologies, Inc. (a) | 583,200 | 7,232 | |
Dell, Inc. (a) | 5,051,500 | 170,135 | |
Electronics for Imaging, Inc. (a) | 1,356,999 | 28,497 | |
Hutchinson Technology, Inc. (a) | 294,200 | 8,449 | |
Komag, Inc. (a) | 91,500 | 1,258 | |
Maxtor Corp. (a) | 734,300 | 7,343 | |
Neoware Systems, Inc. (a) | 204,100 | 3,506 | |
Palm, Inc. (a) | 477,800 | 7,669 | |
SanDisk Corp. (a) | 248,000 | 14,059 | |
Seagate Technology | 4,178,600 | 91,093 | |
Sun Microsystems, Inc. (a) | 5,594,100 | 20,922 | |
Synaptics, Inc. (a) | 724,700 | 9,667 | |
Western Digital Corp. (a) | 2,474,000 | 24,641 | |
440,912 | |||
Electronic Equipment & Instruments - 3.3% | |||
CDW Corp. | 501,200 | 23,997 | |
Celestica, Inc. (sub. vtg.) (a) | 2,420,000 | 37,231 | |
Flextronics International Ltd. (a) | 5,264,900 | 57,914 | |
Ingram Micro, Inc. Class A (a) | 855,200 | 11,759 | |
National Instruments Corp. | 163,800 | 5,833 | |
Pioneer Standard Electronics, Inc. | 259,621 | 2,331 | |
Sanmina-SCI Corp. (a) | 4,615,400 | 36,646 | |
Solectron Corp. (a) | 7,500,000 | 38,325 | |
Tech Data Corp. (a) | 265,400 | 8,307 | |
Trimble Navigation Ltd. (a) | 250,500 | 6,851 | |
229,194 | |||
Internet Software & Services - 1.3% | |||
DoubleClick, Inc. (a) | 741,500 | 8,320 | |
Overture Services, Inc. (a) | 741,500 | 17,559 | |
ParthusCeva, Inc. (a) | 1 | 0 | |
VeriSign, Inc. (a) | 868,400 | 11,593 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Internet Software & Services - continued | |||
Vignette Corp. (a) | 988,600 | $ 2,096 | |
Yahoo!, Inc. (a) | 1,751,300 | 54,518 | |
94,086 | |||
IT Services - 2.4% | |||
Anteon International Corp. (a) | 508,970 | 16,083 | |
CheckFree Corp. (a) | 260,100 | 6,999 | |
Cognizant Technology Solutions Corp. Class A (a) | 2,505,000 | 77,104 | |
InterCept, Inc. (a)(c) | 1,661,446 | 17,777 | |
ManTech International Corp. Class A (a) | 214,000 | 5,031 | |
Paychex, Inc. | 222,100 | 7,225 | |
Sabre Holdings Corp. Class A | 301,700 | 6,963 | |
Syntel, Inc. (a) | 878,900 | 19,687 | |
The BISYS Group, Inc. (a) | 541,000 | 8,954 | |
165,823 | |||
Semiconductors & Semiconductor Equipment - 7.9% | |||
Agere Systems, Inc. Class A (a) | 7,010,000 | 19,698 | |
Applied Micro Circuits Corp. (a) | 2,087,200 | 11,960 | |
ARM Holdings PLC sponsored ADR (a) | 3,855,600 | 16,733 | |
Atmel Corp. (a) | 3,152,700 | 10,120 | |
ATMI, Inc. (a) | 1,341,111 | 34,560 | |
Conexant Systems, Inc. (a) | 3,115,200 | 15,327 | |
Cree, Inc. (a) | 1,473,400 | 19,685 | |
Cymer, Inc. (a) | 935,881 | 37,856 | |
GlobespanVirata, Inc. (a) | 882,400 | 6,089 | |
Integrated Silicon Solution, Inc. (a) | 437,400 | 3,184 | |
Intersil Corp. Class A (a) | 950,200 | 23,432 | |
KLA-Tencor Corp. (a) | 307,300 | 15,872 | |
Linear Technology Corp. | 691,800 | 25,514 | |
Marvell Technology Group Ltd. (a) | 1,680,600 | 59,090 | |
Mindspeed Technologies, Inc. (a) | 3,347,733 | 10,713 | |
NVIDIA Corp. (a) | 2,194,600 | 41,961 | |
Omnivision Technologies, Inc. (a) | 854,100 | 34,668 | |
PMC-Sierra, Inc. (a) | 841,300 | 10,314 | |
Samsung Electronics Co. Ltd. | 359,500 | 126,685 | |
STMicroelectronics NV (NY Shares) | 158,400 | 3,388 | |
Teradyne, Inc. (a) | 565,700 | 9,306 | |
Vitesse Semiconductor Corp. (a) | 533,400 | 3,440 | |
Xilinx, Inc. (a) | 636,600 | 16,730 | |
556,325 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - 19.3% | |||
Adobe Systems, Inc. | 1,375,200 | $ 44,942 | |
Amdocs Ltd. (a) | 278,100 | 5,668 | |
Autodesk, Inc. | 1,152,600 | 17,243 | |
Barra, Inc. (a) | 840,300 | 33,444 | |
BEA Systems, Inc. (a) | 1,320,800 | 17,435 | |
Business Objects SA sponsored ADR (a) | 286,100 | 6,955 | |
Check Point Software Technologies Ltd. (a) | 505,600 | 8,995 | |
Citrix Systems, Inc. (a) | 1,582,200 | 28,717 | |
Electronic Arts, Inc. (a) | 403,500 | 33,894 | |
EPIQ Systems, Inc. (a) | 567,000 | 9,928 | |
Intuit, Inc. (a) | 1,303,600 | 56,081 | |
Jack Henry & Associates, Inc. | 1,042,109 | 19,477 | |
JDA Software Group, Inc. (a) | 276,500 | 4,081 | |
Kronos, Inc. (a) | 616,100 | 34,132 | |
Microsoft Corp. | 32,683,300 | 862,840 | |
Parametric Technology Corp. (a) | 1,811,600 | 5,779 | |
Quest Software, Inc. (a) | 558,800 | 4,945 | |
Red Hat, Inc. (a) | 2,575,575 | 16,278 | |
Siebel Systems, Inc. (a) | 5,265,900 | 49,394 | |
Synopsys, Inc. (a) | 479,200 | 29,955 | |
Take-Two Interactive Software, Inc. (a) | 384,300 | 10,222 | |
THQ, Inc. (a) | 368,200 | 6,068 | |
VERITAS Software Corp. (a) | 1,793,300 | 55,234 | |
1,361,707 | |||
TOTAL INFORMATION TECHNOLOGY | 3,182,438 | ||
TELECOMMUNICATION SERVICES - 3.1% | |||
Diversified Telecommunication Services - 0.8% | |||
Level 3 Communications, Inc. (a) | 296,600 | 1,364 | |
NTL, Inc. (a) | 617,500 | 25,818 | |
Qwest Communications International, Inc. (a) | 5,954,300 | 23,758 | |
Time Warner Telecom, Inc. Class A (a) | 667,300 | 4,504 | |
55,444 | |||
Wireless Telecommunication Services - 2.3% | |||
American Tower Corp. Class A (a) | 1,718,200 | 15,636 | |
Arch Wireless, Inc. Class A (a) | 18,400 | 175 | |
Nextel Communications, Inc. Class A (a) | 6,523,600 | 119,121 | |
Nextel Partners, Inc. Class A (a) | 300,000 | 2,661 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
TELECOMMUNICATION SERVICES - continued | |||
Wireless Telecommunication Services - continued | |||
NII Holdings, Inc. Class B (a) | 247,200 | $ 12,219 | |
Sprint Corp. - PCS Group Series 1 (a) | 1,977,200 | 12,160 | |
161,972 | |||
TOTAL TELECOMMUNICATION SERVICES | 217,416 | ||
TOTAL COMMON STOCKS (Cost $5,866,137) | 6,981,954 | ||
Money Market Funds - 5.0% | |||
Fidelity Cash Central Fund, 1.12% (b) | 60,506,421 | 60,506 | |
Fidelity Securities Lending Cash Central Fund, 1.13% (b) | 292,625,000 | 292,625 | |
TOTAL MONEY MARKET FUNDS (Cost $353,131) | 353,131 | ||
TOTAL INVESTMENT PORTFOLIO - 104.2% (Cost $6,219,268) | 7,335,085 | ||
NET OTHER ASSETS - (4.2)% | (294,051) | ||
NET ASSETS - 100% | $ 7,041,034 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Affiliated company |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 89.8% |
Cayman Islands | 1.9% |
Korea (South) | 1.8% |
Israel | 1.1% |
Sweden | 1.0% |
France | 1.0% |
Others (individually less than 1%) | 3.4% |
100.0% |
Purchases and sales of securities, other than short-term securities, aggregated $7,064,174,000 and $6,506,575,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $963,000 for the period. |
Income Tax Information |
At July 31, 2003, the fund had a capital loss carryforward of approximately $6,593,078,000 of which $5,343,183,000 and $1,249,895,000 will expire on July 31, 2010 and 2011, respectively. |
The fund intends to elect to defer to its fiscal year ending July 31, 2004 approximately $86,130,000 of losses recognized during the period November 1, 2002 to July 31, 2003. |
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, 2003 | |
Assets | ||
Investment in securities, at value (including securities loaned of $285,773) (cost $6,219,268) - See accompanying schedule | $ 7,335,085 | |
Receivable for investments sold | 46,453 | |
Receivable for fund shares sold | 8,776 | |
Dividends receivable | 937 | |
Interest receivable | 60 | |
Other receivables | 474 | |
Total assets | 7,391,785 | |
Liabilities | ||
Payable for investments purchased | $ 41,633 | |
Payable for fund shares redeemed | 12,094 | |
Accrued management fee | 4,065 | |
Other payables and accrued expenses | 334 | |
Collateral on securities loaned, at value | 292,625 | |
Total liabilities | 350,751 | |
Net Assets | $ 7,041,034 | |
Net Assets consist of: | ||
Paid in capital | $ 12,632,419 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (6,707,204) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,115,819 | |
Net Assets, for 248,522 shares outstanding | $ 7,041,034 | |
Net Asset Value, offering price and redemption price per share ($7,041,034 ÷ 248,522 shares) | $ 28.33 |
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, 2003 | |
Investment Income | ||
Dividends (including $315 received from affiliated issuers) | $ 14,784 | |
Interest | 7,229 | |
Security lending | 2,720 | |
Total income | 24,733 | |
Expenses | ||
Management fee | $ 38,368 | |
Performance adjustment | 13,986 | |
Transfer agent fees | 17,108 | |
Accounting and security lending fees | 748 | |
Non-interested trustees' compensation | 24 | |
Depreciation in deferred trustee compensation account | (14) | |
Custodian fees and expenses | 298 | |
Registration fees | 65 | |
Audit | 82 | |
Legal | 74 | |
Miscellaneous | 636 | |
Total expenses before reductions | 71,375 | |
Expense reductions | (3,854) | 67,521 |
Net investment income (loss) | (42,788) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (including realized gain (loss) of ($43,361) on sales of investments in affiliated issuers) | (469,757) | |
Foreign currency transactions | (416) | |
Total net realized gain (loss) | (470,173) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,696,082 | |
Assets and liabilities in foreign currencies | 11 | |
Total change in net unrealized appreciation (depreciation) | 1,696,093 | |
Net gain (loss) | 1,225,920 | |
Net increase (decrease) in net assets resulting from operations | $ 1,183,132 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands | Year ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ (42,788) | $ (61,508) |
Net realized gain (loss) | (470,173) | (1,655,519) |
Change in net unrealized appreciation (depreciation) | 1,696,093 | (772,568) |
Net increase (decrease) in net assets resulting from operations | 1,183,132 | (2,489,595) |
Share transactions | 2,196,106 | 3,639,638 |
Cost of shares redeemed | (2,249,434) | (4,040,535) |
Net increase (decrease) in net assets resulting from share transactions | (53,328) | (400,897) |
Total increase (decrease) in net assets | 1,129,804 | (2,890,492) |
Net Assets | ||
Beginning of period | 5,911,230 | 8,801,722 |
End of period | $ 7,041,034 | $ 5,911,230 |
Other Information Shares | ||
Sold | 89,080 | 125,205 |
Redeemed | (92,491) | (140,340) |
Net increase (decrease) | (3,411) | (15,135) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | |||||
Net asset value, beginning of period | $ 23.46 | $ 32.96 | $ 69.82 | $ 51.53 | $ 40.03 |
Income from Investment Operations | |||||
Net investment income (loss) C | (.17) | (.24) | (.18) | (.27) | (.07) |
Net realized and unrealized gain (loss) | 5.04 | (9.26) | (24.02) | 24.07 | 13.95 |
Total from investment operations | 4.87 | (9.50) | (24.20) | 23.80 | 13.88 |
Distributions from net realized gain | - | - | (12.66) | (5.51) | (2.38) |
Net asset value, end of period | $ 28.33 | $ 23.46 | $ 32.96 | $ 69.82 | $ 51.53 |
Total Return A,B | 20.76% | (28.82)% | (42.79)% | 50.05% | 38.54% |
Ratios to Average Net Assets D | |||||
Expenses before expense reductions | 1.18% | 1.14% | .97% | .76% | .75% |
Expenses net of voluntary waivers, if any | 1.18% | 1.14% | .97% | .76% | .75% |
Expenses net of all reductions | 1.12% | 1.09% | .94% | .75% | .74% |
Net investment income (loss) | (.71)% | (.81)% | (.40)% | (.43)% | (.16)% |
Supplemental Data | |||||
Net assets, end of period (in millions) | $ 7,041 | $ 5,911 | $ 8,802 | $ 14,548 | $ 7,298 |
Portfolio turnover rate | 116% | 120% | 219% | 196% | 117% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Total returns do not include the effect of the former sales charges.
C Calculated based on average shares outstanding during the period.
D Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers 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 fund.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity OTC Portfolio (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, net operating losses, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 1,307,229 | | |
Unrealized depreciation | (219,406) | |
Net unrealized appreciation (depreciation) | 1,087,823 | |
Capital loss carryforward | (6,593,078) | |
Cost for federal income tax purposes | $ 6,247,262 |
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .35% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ±.20% of the fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the fund's relative investment performance as compared
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
4. Fee and Other Transactions with Affiliates - continued
Annual Report
Management Fee - continued
to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .86% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .28% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $7,215 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $3,782 for the period. In addition, through arrangements with the fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody and transfer agent and accounting expenses by $3 and $69, respectively.
Annual Report
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate | Purchase | Sales | Dividend | Value |
Accredo Health, Inc. | $ 9,561 | $ 10,205 | $ - | $ - |
American Medical Systems Holdings, Inc. | 16,334 | 20,709 | - | - |
Cognizant Technology Solutions Corp. | 20,385 | - | - | - |
Comverse Technology, Inc. | - | 63,894 | - | - |
Cree, Inc. | 11,479 | 15,371 | - | - |
Cymer, Inc. | 24,605 | 38,760 | - | - |
Dollar Tree Stores, Inc. | 56,633 | 70,653 | - | - |
EPIQ Systems, Inc. | 2,444 | 8,959 | - | - |
Hollywood Entertainment Corp. | 22,214 | 11,742 | - | 57,420 |
Hot Topic, Inc. | 3,978 | 2,707 | - | - |
InterCept, Inc. | 3,196 | 5,408 | - | 17,777 |
LifePoint Hospitals, Inc. | 37,795 | 40,504 | - | - |
MTC Technologies, Inc. | 6,184 | 7,319 | - | - |
On Assignment, Inc. | 2,805 | 12,258 | - | - |
Panera Bread Co. Class A | 5,168 | 7,236 | - | - |
Perrigo Co. | - | 3,438 | - | - |
Precision Software Solutions Ltd. | - | 9,577 | - | - |
Province Healthcare Co. | - | 3,896 | - | - |
Respironics, Inc. | 13,201 | 14,251 | - | - |
Strayer Education, Inc. | - | 24,453 | - | 57,355 |
SurModics, Inc. | 13,079 | 14,934 | 315 | - |
Techne Corp. | - | 9,721 | - | - |
TOTALS | $ 249,061 | $ 395,995 | $ 315 | $ 132,552 |
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity OTC Portfolio:
We have audited the accompanying statement of assets and liabilities of Fidelity OTC Portfolio (the Fund), a fund of Fidelity Securities Fund, including the portfolio of investments, as of July 31, 2003, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity OTC Portfolio as of July 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 12, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of OTC (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity Magellan Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
John B. McDowell (44) | |
Year of Election or Appointment: 2002 Vice President of OTC. Mr. McDowell also serves as Vice President of certain Equity Funds (2002). He is Senior Vice President of FMR (1999), FMR Co., Inc. (2001), and Fidelity Management Trust Company (FMTC). Since joining Fidelity Investments in 1985, Mr. McDowell has worked as a research analyst and manager. | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 1998 Secretary of OTC. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of OTC. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2002 President and Treasurer of OTC. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2002 Chief Financial Officer of OTC. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of OTC. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 1986 Assistant Treasurer of OTC. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2002 Assistant Treasurer of OTC. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2002 Assistant Treasurer of OTC. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2000 Assistant Treasurer of OTC. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* 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
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Georgia
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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
1000 Abernathy Road
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One North LaSalle Street
Chicago, IL
1415 West 22nd Street
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Maine
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Maryland
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One W. Pennsylvania Ave.
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Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
405 Cochituate Road
Framingham, MA
416 Belmont Street
Worcester, MA
Annual Report
Michigan
280 Old N. Woodward Ave.
Birmingham, MI
43420 Grand River Avenue
Novi, MI
29155 Northwestern Hwy.
Southfield, MI
Minnesota
7600 France Avenue South
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Missouri
8885 Ladue Road
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New Jersey
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56 South Street
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501 Route 17, South
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3518 Route 1 North
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New York
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1271 Avenue of the Americas
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North Carolina
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Ohio
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28699 Chagrin Boulevard
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Oregon
16850 SW 72nd Avenue
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Pennsylvania
600 West DeKalb Pike
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1735 Market Street
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12001 Perry Highway
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Rhode Island
47 Providence Place
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Tennessee
6150 Poplar Avenue
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Texas
10000 Research Boulevard
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4017 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
6005 West Park Boulevard
Plano, TX 75093
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Utah
215 South State Street
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
411 108th Avenue, N.E.
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
595 North Barker Road
Brookfield, WI
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investments
Advisors
Fidelity International Investments
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
Brown Brothers Harriman & Co.
Boston, MA
Fidelity's Growth Funds
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OTC Portfolio
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The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
OTC-UANN-0903
1.789250.100
Fidelity®
Leveraged Company Stock
Fund
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Investment Changes | A summary of major shifts in the fund's investments over the last six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
Distributions |
For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securites and Exchange Commission (SEC)'s web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
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.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) 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. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2003 | Past 1 | Life of | |
Fidelity® Leveraged Company Stock Fund | 102.58% | 17.51% |
A From December 19, 2000
$10,000 Over Life of Fund
Let's say hypothetically that $10,000 was invested in Fidelity ® Leveraged Company Stock Fund on December 19, 2000. The chart shows how the value of your investment would have grown, and also shows how the Standard & Poor'sSM 500 Index did over the same period.
Annual Report
Management's Discussion of Fund Performance
Comments from Thomas Soviero, Portfolio Manager of Fidelity® Leveraged Company Stock Fund
Shaking off corporate governance scandals, weak corporate profits, and fears of war and terrorism, U.S. equities climbed sharply higher in the back half of the one-year period ending July 31, 2003, as positive signals emerged that many hoped would mark the end of the stock market's three-year decline. Among the bright spots, the Federal Reserve Board cut the fed funds target rate twice in the period, dropping it to a 45-year low of 1.00%. The 2003 first-quarter earnings season was solid, as was the second-quarter increase in gross domestic product. But the rapid conclusion of major military operations in Iraq seemed to provide the biggest boost. Overall, the mid-March through July rally lifted most equity benchmarks into positive territory for the period, and many enjoyed double-digit returns. The technology-rich NASDAQ Composite® Index advanced 31.22%, the large-cap-oriented Standard & Poor's 500SM Index gained 10.64%, the small-cap-laden Russell 2000® Index leapt 23.11% and the blue chips' bellwether Dow Jones Industrial AverageSM added 8.16%.
Fidelity Leveraged Company Stock Fund returned 102.58% during the past 12 months, dramatically outperforming the Standard & Poor's 500 Index, the Credit Suisse First Boston Leveraged Equity Index and the LipperSM Capital Appreciation Funds Average, which returned 10.64%, 26.12% and 11.27%, respectively. The fund's outperformance resulted from strong stock selection in several top-performing sectors, including telecommunications, media, transportation and finance. Holding concentrated positions in these stocks as well as avoiding some poor-performing securities also helped fund performance. Stock selection and an underweighting in technology detracted from the fund's performance relative to the S&P 500®, as did stock selection in health care. Among the stocks that propelled performance were satellite-TV provider EchoStar Communications, wireless telecommunications provider Nextel Communications, electric utility AES, telecom service provider Qwest Communications, airline company AMR and credit card firm AmeriCredit. Detractors from performance included Tenet Healthcare, Level 3 Communications and Pathmark Stores.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Investment Changes
Top Ten Stocks as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Nextel Communications, Inc. Class A | 5.2 | 4.2 |
AES Corp. | 3.5 | 4.8 |
PG&E Corp. | 3.4 | 2.0 |
AMR Corp. | 3.4 | 0.0 |
American Financial Group, Inc., Ohio | 3.2 | 2.5 |
NTL, Inc. | 2.9 | 2.3 |
Tyco International Ltd. | 2.8 | 2.3 |
Teekay Shipping Corp. | 2.6 | 3.3 |
NII Holdings, Inc. Class B | 2.4 | 2.0 |
AmeriCredit Corp. | 2.3 | 1.0 |
31.7 | ||
Top Five Market Sectors as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Telecommunication Services | 16.2 | 15.5 |
Energy | 12.7 | 16.2 |
Industrials | 11.8 | 3.1 |
Utilities | 11.7 | 11.2 |
Consumer Discretionary | 9.4 | 18.6 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2003 * | As of January 31, 2003 ** | ||||||
Stocks 86.5% | Stocks 88.8% | ||||||
Bonds 2.5% | Bonds 1.5% | ||||||
Convertible | Convertible | ||||||
Short-Term | Short-Term | ||||||
* Foreign investments | 5.6% | ** Foreign investments | 5.4% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 86.5% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 8.8% | |||
Auto Components - 0.4% | |||
Safety Components International, Inc. (a)(d) | 333,135 | $ 2,831,648 | |
Media - 8.4% | |||
AMC Entertainment, Inc. (a) | 494,240 | 5,500,891 | |
AOL Time Warner, Inc. (a) | 276,700 | 4,269,481 | |
Cablevision Systems Corp. - NY Group Class A (a) | 172,100 | 3,665,730 | |
EchoStar Communications Corp. Class A (a) | 429,780 | 15,588,121 | |
General Motors Corp. Class H (a) | 910,700 | 12,503,911 | |
Granite Broadcasting Corp. (non vtg.) (a) | 692,058 | 2,076,174 | |
Liberty Media Corp. Class A (a) | 474,790 | 5,265,421 | |
LodgeNet Entertainment Corp. (a) | 148,100 | 1,923,819 | |
Pegasus Communications Corp. Class A (a) | 110,376 | 3,952,565 | |
PRIMEDIA, Inc. (a) | 372,200 | 1,280,368 | |
Spanish Broadcasting System, Inc. Class A (a) | 209,400 | 1,710,798 | |
UnitedGlobalCom, Inc. Class A (a) | 455,400 | 2,887,236 | |
60,624,515 | |||
TOTAL CONSUMER DISCRETIONARY | 63,456,163 | ||
CONSUMER STAPLES - 5.7% | |||
Food & Staples Retailing - 5.3% | |||
Pathmark Stores, Inc. (a)(d) | 1,625,547 | 12,185,263 | |
Rite Aid Corp. (a) | 3,448,000 | 16,309,040 | |
Safeway, Inc. (a) | 458,700 | 9,793,245 | |
38,287,548 | |||
Personal Products - 0.4% | |||
Revlon, Inc. Class A (a) | 897,335 | 3,006,072 | |
TOTAL CONSUMER STAPLES | 41,293,620 | ||
ENERGY - 12.6% | |||
Energy Equipment & Services - 3.8% | |||
Grant Prideco, Inc. (a) | 796,500 | 8,562,375 | |
Grey Wolf, Inc. (a) | 366,700 | 1,294,451 | |
Key Energy Services, Inc. (a) | 707,900 | 6,590,549 | |
Nabors Industries Ltd. (a) | 163,100 | 5,838,980 | |
Pride International, Inc. (a) | 141,000 | 2,323,680 | |
Rowan Companies, Inc. (a) | 105,300 | 2,311,335 | |
26,921,370 | |||
Oil & Gas - 8.8% | |||
Burlington Resources, Inc. | 208,500 | 9,626,445 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Chesapeake Energy Corp. | 933,400 | $ 8,932,638 | |
General Maritime Corp. (a) | 1,076,500 | 13,057,945 | |
Houston Exploration Co. (a) | 182,600 | 5,863,286 | |
Range Resources Corp. (a) | 1,124,800 | 7,266,208 | |
Teekay Shipping Corp. | 422,000 | 18,601,760 | |
63,348,282 | |||
TOTAL ENERGY | 90,269,652 | ||
FINANCIALS - 8.3% | |||
Consumer Finance - 3.7% | |||
AmeriCredit Corp. (a) | 2,260,200 | 16,793,286 | |
Capital One Financial Corp. | 121,800 | 5,835,438 | |
Metris Companies, Inc. | 1,046,700 | 3,872,790 | |
26,501,514 | |||
Insurance - 4.6% | |||
American Financial Group, Inc., Ohio | 1,002,800 | 22,964,120 | |
Infinity Property & Casualty Corp. | 196,200 | 5,158,098 | |
Markel Corp. (a) | 17,100 | 4,625,379 | |
32,747,597 | |||
TOTAL FINANCIALS | 59,249,111 | ||
HEALTH CARE - 3.2% | |||
Health Care Providers & Services - 2.5% | |||
DaVita, Inc. (a) | 514,700 | 14,411,600 | |
HealthSouth Corp. (a) | 1,849,500 | 2,977,695 | |
Tenet Healthcare Corp. (a) | 75,600 | 1,041,768 | |
18,431,063 | |||
Pharmaceuticals - 0.7% | |||
Pfizer, Inc. | 143,600 | 4,790,496 | |
TOTAL HEALTH CARE | 23,221,559 | ||
INDUSTRIALS - 11.8% | |||
Aerospace & Defense - 1.1% | |||
BE Aerospace, Inc. (a) | 365,424 | 1,370,340 | |
Goodrich Corp. | 294,100 | 6,764,300 | |
8,134,640 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Airlines - 4.4% | |||
America West Holding Corp. Class B (a) | 800,600 | $ 6,204,650 | |
AMR Corp. (a) | 2,614,530 | 24,445,856 | |
Northwest Airlines Corp. (a) | 123,700 | 1,125,670 | |
31,776,176 | |||
Building Products - 0.6% | |||
American Standard Companies, Inc. (a) | 52,300 | 3,995,720 | |
Industrial Conglomerates - 2.8% | |||
Tyco International Ltd. | 1,098,500 | 20,432,100 | |
Machinery - 1.3% | |||
Navistar International Corp. (a) | 32,400 | 1,264,248 | |
Terex Corp. (a) | 323,200 | 6,932,640 | |
Thermadyne Holdings Corp. (a) | 64,900 | 778,800 | |
8,975,688 | |||
Road & Rail - 1.6% | |||
Kansas City Southern (a) | 929,200 | 11,289,780 | |
TOTAL INDUSTRIALS | 84,604,104 | ||
INFORMATION TECHNOLOGY - 2.8% | |||
Communications Equipment - 2.0% | |||
Motorola, Inc. | 1,612,100 | 14,573,384 | |
Semiconductors & Semiconductor Equipment - 0.1% | |||
ChipPAC, Inc. Class A (a) | 84,100 | 479,370 | |
Software - 0.7% | |||
Microsoft Corp. | 195,800 | 5,169,120 | |
TOTAL INFORMATION TECHNOLOGY | 20,221,874 | ||
MATERIALS - 6.1% | |||
Chemicals - 1.8% | |||
Monsanto Co. | 554,100 | 12,744,300 | |
Construction Materials - 0.8% | |||
Texas Industries, Inc. | 235,500 | 5,630,805 | |
Containers & Packaging - 2.4% | |||
Owens-Illinois, Inc. (a) | 605,390 | 6,919,608 | |
Sealed Air Corp. | 156,900 | 7,488,837 | |
Smurfit-Stone Container Corp. (a) | 173,600 | 2,598,792 | |
17,007,237 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - continued | |||
Metals & Mining - 1.1% | |||
Freeport-McMoRan Copper & Gold, Inc. Class B | 282,500 | $ 7,568,175 | |
Haynes Holdings, Inc. (a)(g) | 448,390 | 627,746 | |
8,195,921 | |||
TOTAL MATERIALS | 43,578,263 | ||
TELECOMMUNICATION SERVICES - 16.0% | |||
Diversified Telecommunication Services - 5.3% | |||
Focal Communications Corp. warrants 12/14/07 (a) | 235,989 | 2 | |
Level 3 Communications, Inc. (a) | 2,790,200 | 12,834,920 | |
NTL, Inc. (a) | 502,195 | 20,996,773 | |
Qwest Communications International, Inc. (a) | 1,039,100 | 4,146,009 | |
37,977,704 | |||
Wireless Telecommunication Services - 10.7% | |||
American Tower Corp. Class A (a) | 300,300 | 2,732,730 | |
AT&T Wireless Services, Inc. (a) | 263,500 | 2,247,655 | |
Millicom International Cellular SA (a) | 268,200 | 8,963,244 | |
Nextel Communications, Inc. Class A (a) | 2,059,285 | 37,602,543 | |
NII Holdings, Inc. Class B (a) | 342,400 | 16,924,832 | |
Triton PCS Holdings, Inc. Class A (a) | 1,573,800 | 8,655,900 | |
77,126,904 | |||
TOTAL TELECOMMUNICATION SERVICES | 115,104,608 | ||
UTILITIES - 11.2% | |||
Electric Utilities - 7.3% | |||
CMS Energy Corp. | 2,076,600 | 13,497,900 | |
PG&E Corp. (a) | 1,154,200 | 24,757,590 | |
TXU Corp. | 713,600 | 14,393,312 | |
52,648,802 | |||
Multi-Utilities & Unregulated Power - 3.9% | |||
AES Corp. (a) | 3,976,258 | 25,010,663 | |
Williams Companies, Inc. | 440,600 | 2,797,810 | |
27,808,473 | |||
TOTAL UTILITIES | 80,457,275 | ||
TOTAL COMMON STOCKS (Cost $531,640,872) | 621,456,229 | ||
Nonconvertible Preferred Stocks - 0.0% | |||
Shares | Value (Note 1) | ||
TELECOMMUNICATION SERVICES - 0.0% | |||
Diversified Telecommunication Services - 0.0% | |||
NTL Europe, Inc. Series A, 10.00% | 91 | $ 273 | |
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $17) | 273 |
Corporate Bonds - 2.7% | ||||
Principal | ||||
Convertible Bonds - 0.2% | ||||
TELECOMMUNICATION SERVICES - 0.2% | ||||
Diversified Telecommunication Services - 0.2% | ||||
Level 3 Communications, Inc. 6% 9/15/09 | $ 1,865,000 | 1,156,300 | ||
Nonconvertible Bonds - 2.5% | ||||
CONSUMER DISCRETIONARY - 0.6% | ||||
Media - 0.6% | ||||
Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.: | ||||
8.625% 4/1/09 | 2,385,000 | 1,764,900 | ||
9.625% 11/15/09 | 2,775,000 | 2,109,000 | ||
10.25% 1/15/10 | 35,000 | 27,650 | ||
Satelites Mexicanos SA de CV 5.6% 6/30/04 (e)(f) | 113,000 | 97,180 | ||
3,998,730 | ||||
CONSUMER STAPLES - 0.7% | ||||
Personal Products - 0.7% | ||||
Revlon Consumer Products Corp. 8.625% 2/1/08 | 11,255,000 | 5,289,850 | ||
ENERGY - 0.1% | ||||
Oil & Gas - 0.1% | ||||
The Coastal Corp. 7.5% 8/15/06 | 930,000 | 813,750 | ||
HEALTH CARE - 0.2% | ||||
Health Care Providers & Services - 0.2% | ||||
HealthSouth Corp. 7.625% 6/1/12 (c) | 1,860,000 | 1,543,800 | ||
INFORMATION TECHNOLOGY - 0.4% | ||||
Communications Equipment - 0.4% | ||||
Qwest Services Corp. 13.5% 12/15/10 (e) | 2,500,000 | 2,712,500 | ||
Corporate Bonds - continued | ||||
Principal | Value (Note 1) | |||
Nonconvertible Bonds - continued | ||||
UTILITIES - 0.5% | ||||
Multi-Utilities & Unregulated Power - 0.5% | ||||
AES Corp. 9% 5/15/15 (e) | $ 1,020,000 | $ 999,600 | ||
El Paso Corp. 7.875% 6/15/12 (e) | 920,000 | 740,600 | ||
Williams Companies, Inc. 9.25% 3/15/04 | 1,860,000 | 1,878,600 | ||
3,618,800 | ||||
TOTAL NONCONVERTIBLE BONDS | 17,977,430 | |||
TOTAL CORPORATE BONDS (Cost $18,884,390) | 19,133,730 | |||
U.S. Treasury Obligations - 0.3% | ||||
U.S. Treasury Bills, yield at date of purchase 0.82% 8/21/03 | 2,300,000 | 2,298,882 |
Money Market Funds - 21.6% | |||
Shares | |||
Fidelity Cash Central Fund, 1.12% (b) | 95,914,949 | 95,914,949 | |
Fidelity Securities Lending Cash Central Fund, 1.13% (b) | 59,209,620 | 59,209,620 | |
TOTAL MONEY MARKET FUNDS (Cost $155,124,569) | 155,124,569 | ||
TOTAL INVESTMENT PORTFOLIO - 111.1% (Cost $707,948,748) | 798,013,683 | ||
NET OTHER ASSETS - (11.1)% | (79,823,126) | ||
NET ASSETS - 100% | $ 718,190,557 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments. |
(d) Affiliated company |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $4,549,880 or 0.6% of net assets. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) Restricted securities - Investment in securities not registered under the Securities Act of 1933. |
Additional information on each holding is as follows: |
Security | Acquisition | Acquisition |
Haynes Holdings, Inc. | 5/2/03 | $ 627,746 |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $629,309,716 and $152,161,209, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $139,480 for the period. |
The fund invested in securities that are not registered under the Securities Act of 1933. At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $627,746 or 0.1% of net assets. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
July 31, 2003 | ||
Assets | ||
Investment in securities, at value (including securities loaned of $54,861,727) (cost $707,948,748) - See accompanying schedule | $ 798,013,683 | |
Cash | 91,275 | |
Receivable for investments sold | 65,315 | |
Receivable for fund shares sold | 1,558,550 | |
Dividends receivable | 128,852 | |
Interest receivable | 944,132 | |
Redemption fees receivable | 65,705 | |
Other receivables | 87,155 | |
Total assets | 800,954,667 | |
Liabilities | ||
Payable for investments purchased | $ 10,163,785 | |
Payable for fund shares redeemed | 12,920,605 | |
Accrued management fee | 403,030 | |
Other payables and accrued expenses | 67,070 | |
Collateral on securities loaned, at value | 59,209,620 | |
Total liabilities | 82,764,110 | |
Net Assets | $ 718,190,557 | |
Net Assets consist of: | ||
Paid in capital | $ 628,863,321 | |
Undistributed net investment income | 257,135 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (994,834) | |
Net unrealized appreciation (depreciation) on investments | 90,064,935 | |
Net Assets, for 48,094,975 shares outstanding | $ 718,190,557 | |
Net Asset Value, offering price and redemption price per share ($718,190,557 ÷ 48,094,975 shares) | $ 14.93 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
Year ended July 31, 2003 | ||
Investment Income | ||
Dividends | $ 988,345 | |
Interest | 796,598 | |
Security lending | 163,610 | |
Total income | 1,948,553 | |
Expenses | ||
Management fee | $ 1,347,340 | |
Transfer agent fees | 435,770 | |
Accounting and security lending fees | 95,706 | |
Non-interested trustees' compensation | 609 | |
Custodian fees and expenses | 12,680 | |
Registration fees | 76,182 | |
Audit | 32,594 | |
Legal | 236 | |
Miscellaneous | 4,270 | |
Total expenses before reductions | 2,005,387 | |
Expense reductions | (217,562) | 1,787,825 |
Net investment income (loss) | 160,728 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 21,704,685 | |
Foreign currency transactions | 12,037 | |
Futures contracts | (314,459) | |
Total net realized gain (loss) | 21,402,263 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 106,408,531 | |
Assets and liabilities in foreign currencies | 5 | |
Total change in net unrealized appreciation (depreciation) | 106,408,536 | |
Net gain (loss) | 127,810,799 | |
Net increase (decrease) in net assets resulting from operations | $ 127,971,527 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Year ended | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 160,728 | $ 771,316 |
Net realized gain (loss) | 21,402,263 | (8,967,943) |
Change in net unrealized appreciation (depreciation) | 106,408,536 | (23,002,614) |
Net increase (decrease) in net assets resulting from operations | 127,971,527 | (31,199,241) |
Distributions to shareholders from net investment income | - | (1,693,352) |
Share transactions | 717,300,996 | 28,112,721 |
Reinvestment of distributions | - | 1,556,225 |
Cost of shares redeemed | (164,501,171) | (155,175,972) |
Net increase (decrease) in net assets resulting from share transactions | 552,799,825 | (125,507,026) |
Redemption fees | 1,079,740 | 154,770 |
Total increase (decrease) in net assets | 681,851,092 | (158,244,849) |
Net Assets | ||
Beginning of period | 36,339,465 | 194,584,314 |
End of period (including undistributed net investment income of $257,135 and undistributed net investment income of $122,638, respectively) | $ 718,190,557 | $ 36,339,465 |
Other Information Shares | ||
Sold | 55,221,344 | 2,875,744 |
Issued in reinvestment of distributions | - | 164,222 |
Redeemed | (12,055,812) | (16,365,761) |
Net increase (decrease) | 43,165,532 | (13,325,795) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, | 2003 | 2002 | 2001 E |
Selected Per-Share Data | |||
Net asset value, beginning of period | $ 7.37 | $ 10.66 | $ 10.00 |
Income from Investment Operations | |||
Net investment income (loss) D | .01 | .11 G | .07 |
Net realized and unrealized gain (loss) | 7.49 | (3.22) G | .58 |
Total from investment operations | 7.50 | (3.11) | .65 |
Distributions from net investment income | - | (.20) | - |
Redemption fees added to paid in capital D | .06 | .02 | .01 |
Net asset value, end of period | $ 14.93 | $ 7.37 | $ 10.66 |
Total ReturnB,C | 102.58% | (29.40)% | 6.60% |
Ratios to Average Net Assets F | |||
Expenses before expense reductions | .93% | 1.14% | .94% A |
Expenses net of voluntary waivers, if any | .93% | 1.14% | .94% A |
Expenses net of all reductions | .83% | .93% | .83% A |
Net investment income (loss) | .07% | 1.16% G | 1.12% A |
Supplemental Data | |||
Net assets, end of period (000 omitted) | $ 718,191 | $ 36,339 | $ 194,584 |
Portfolio turnover rate | 79% | 203% | 230% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E For the period December 19, 2000 (commencement of operations) to July 31, 2001.
F Expense ratios reflect operating expenses of the fund. 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 fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers 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 fund.
G Effective August 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
1. Significant Accounting Policies.
Fidelity Leveraged Company Stock Fund (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Annual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the fund will treat a portion of the proceeds from shares redeemed as a distribution from net investment income and realized gain for income tax purposes. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax
Annual Report
1. Significant Accounting Policies - continued
Annual Report
Income Tax Information and Distributions to Shareholders - continued
differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, foreign currency transactions, market discount, and losses deferred due to wash sales.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 108,136,916 | |
Unrealized depreciation | (19,896,998) | |
Net unrealized appreciation (depreciation) | 88,239,918 | |
Undistributed ordinary income | 4,542,619 | |
Cost for federal income tax purposes | $ 709,773,765 |
The tax character of distributions paid was as follows:
July 31, | July 31, | |
Ordinary Income | $ - | $ 1,693,352 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a short-term trading fee equal to 1.50% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Notes to Financial Statements - continued
Futures Contracts. The fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Losses may arise from changes in the value of the underlying instruments or if the counter-parties do not perform under the
Annual Report
2. Operating Policies - continued
Futures Contracts - continued
contracts' terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .35% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .63% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .20% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Annual Report
Notes to Financial Statements - continued
4. Fees and Other Transactions with Affiliates - continued
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $375,397 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $215,938 for the period. In addition,
Annual Report
7. Expense Reductions - continued
through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $1,624.
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate | Purchase | Sales | Dividend | Value |
Pathmark Stores, Inc. | $ - | $ - | $ - | $ 12,185,263 |
Safety Components International, Inc. | - | - | - | 2,831,648 |
TOTALS | $ - | $ - | $ - | $ 15,016,911 |
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Leveraged Company Stock Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Leveraged Company Stock Fund (a fund of Fidelity Securities Fund) at July 31, 2003 and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Leveraged Company Stock Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at July 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Leveraged Company Stock (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
Bart A. Grenier (44) | |
Year of Election or Appointment: 2002 Vice President of Leveraged Company Stock. Mr. Grenier also serves as Vice President of certain Equity Funds (2001), a position he previously held from 1999 to 2000, and Vice President of certain High Income Funds (2002). He is Senior Vice President of FMR (1999) and FMR Co., Inc. (2001), and President and Director of Strategic Advisers, Inc. (2002). He also heads Fidelity's Asset Allocation Group (2000), Fidelity's Growth and Income Group (2001), Fidelity's Value Group (2001), and Fidelity's High Income Division (2001). Previously, Mr. Grenier served as President of Fidelity Ventures (2000), Vice President of certain High Income Funds (1997-2000), High Income Division Head (1997-2000), Group Leader of the Income-Growth and Asset Allocation-Income Groups (1996-2000), and Assistant Equity Division Head (1997-2000). | |
Tomas Soviero (39) | |
Year of Election or Appointment: 2003 Vice President of Leverage Company Stock Fund. Mr. Soviero also serves as Vice President of other funds advised by FMR. Prior to assuming his current responsibilities, Mr. Soviero managed a variety of Fidelity funds. | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 2000 Secretary of Leveraged Company Stock. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Leveraged Company Stock. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2002 President and Treasurer of Leveraged Company Stock. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2002 Chief Financial Officer of Leveraged Company Stock. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Leveraged Company Stock. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 2000 Assistant Treasurer of Leveraged Company Stock. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Leveraged Company Stock. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Leveraged Company Stock. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2000 Assistant Treasurer of Leveraged Company Stock. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
Distributions
The Board of Trustees of Fidelity Leveraged Company Stock Fund voted to pay on September 8, 2003, to shareholders of record at the opening of business on September 5, 2003, a distribution of $.10 per share derived from capital gains realized from sales of portfolio securities.
The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Annual Report
To Write Fidelity
We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.
(letter_graphic)Making Changes
To Your Account
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(letter_graphic)For Non-Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(letter_graphic)For Retirement
Accounts
Buying shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
Selling shares
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035
Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015
General Correspondence
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
Annual Report
To Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
Arizona
7001 West Ray Road
Chandler, AZ
7373 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
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Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
1415 West 22nd Street
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1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
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Indiana
4729 East 82nd Street
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
405 Cochituate Road
Framingham, MA
416 Belmont Street
Worcester, MA
Annual Report
Michigan
280 Old N. Woodward Ave.
Birmingham, MI
43420 Grand River Avenue
Novi, MI
29155 Northwestern Hwy.
Southfield, MI
Minnesota
7600 France Avenue South
Edina, MN
Missouri
8885 Ladue Road
Ladue, MO
New Jersey
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
3518 Route 1 North
Princeton, NJ
New York
1055 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
North Carolina
4611 Sharon Road
Charlotte, NC
Ohio
3805 Edwards Road
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
16850 SW 72nd Avenue
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
47 Providence Place
Providence, RI
Tennessee
6150 Poplar Avenue
Memphis, TN
Texas
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
6005 West Park Boulevard
Plano, TX 75093
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Utah
215 South State Street
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
411 108th Avenue, N.E.
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
595 North Barker Road
Brookfield, WI
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisors
Fidelity International Investment
Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
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The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
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(8 a.m. - 9 p.m.)
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for the deaf and hearing impaired
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Telephone (FAST ®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
LSF-UANN-0903
1.789248.100
Fidelity®
Dividend Growth
Fund
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
Distributions | ||
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Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) 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. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2003 | Past 1 | Past 5 | Past 10 |
Fidelity® Dividend Growth Fund | 12.63% | 3.14% | 14.26% |
$10,000 Over 10 years
Let's say hypothetically that $10,000 was invested in Fidelity ® Dividend Growth Fund on July 31, 1993. The chart shows how the value of your investment would have grown, and also shows how the Standard & Poor's 500SM Index did over the same period.
Annual Report
Management's Discussion of Fund Performance
Comments from Charles Mangum, Portfolio Manager of Fidelity Dividend Growth Fund
Shaking off corporate governance scandals, weak corporate profits, and fears of war and terrorism, U.S. equities climbed sharply higher in the back half of the one-year period ending July 31, 2003, as positive signals emerged that many hoped would mark the end of the stock market's three-year decline. Among the bright spots, the Federal Reserve Board cut the fed funds target rate twice in the period, dropping it to a 45-year low of 1.00%. The 2003 first-quarter earnings season was solid, as was the second-quarter increase in gross domestic product. But the rapid conclusion of major military operations in Iraq seemed to provide the biggest boost. Overall, the mid-March through July rally lifted most equity benchmarks into positive territory for the period, and many enjoyed double-digit returns. The technology-rich NASDAQ Composite® Index advanced 31.22%, the large-cap-oriented Standard & Poor's 500 Index gained 10.64%, the small-cap-laden Russell 2000® Index leapt 23.11% and the blue chips' bellwether Dow Jones Industrial AverageSM added 8.16%.
For the 12 months ending July 31, 2003, the fund returned 12.63%, compared to 10.64% for the S&P 500® and 11.18% for the LipperSM Growth Funds Average. The fund realized solid gains from several stocks within the media and financial sectors. On a negative note, the fund was held back by the overall performance of its health care positions, most notably in the pharmaceuticals area. Also, the fund continued to emphasize steady, long-term growers, and investors' appetite for aggressive, faster-growing stocks during the period was not anticipated. The fund's top performer was media conglomerate Clear Channel Communications, which benefited from positive advertising trends. Brokerage stocks Merrill Lynch and Citigroup also contributed positively, as capital-raising activity rose. The fund's largest detractors included drug distributor Cardinal Health, which was bypassed by the market in favor of more-aggressive health stocks, and government mortgage lender Fannie Mae, which fell in sympathy with the accounting controversy faced by its sibling organization, Freddie Mac.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Investment Changes
Top Ten Stocks as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Cardinal Health, Inc. | 6.1 | 7.2 |
American International Group, Inc. | 5.7 | 4.9 |
Clear Channel Communications, Inc. | 5.3 | 5.9 |
Merck & Co., Inc. | 5.1 | 4.0 |
Johnson & Johnson | 4.8 | 0.0 |
General Electric Co. | 4.5 | 4.3 |
Citigroup, Inc. | 4.4 | 4.0 |
Fannie Mae | 4.2 | 4.6 |
Home Depot, Inc. | 3.7 | 2.3 |
Microsoft Corp. | 3.3 | 2.5 |
47.1 | ||
Top Five Market Sectors as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Financials | 22.3 | 22.9 |
Health Care | 20.8 | 18.6 |
Consumer Discretionary | 13.0 | 12.9 |
Information Technology | 10.5 | 10.9 |
Consumer Staples | 8.9 | 7.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2003 * | As of January 31, 2003 ** | ||||||
Stocks 95.9% | Stocks 95.1% | ||||||
Bonds 0.0% | Bonds 0.1% | ||||||
Convertible | Convertible | ||||||
Short-Term | Short-Term | ||||||
* Foreign | 2.2% | ** Foreign investments | 1.5% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 12.5% | |||
Hotels, Restaurants & Leisure - 0.4% | |||
McDonald's Corp. | 2,087,600 | $ 48,036 | |
Wendy's International, Inc. | 476,300 | 13,998 | |
62,034 | |||
Media - 8.0% | |||
AOL Time Warner, Inc. (a) | 25,821,982 | 398,433 | |
Citadel Broadcasting Corp. | 47,700 | 906 | |
Clear Channel Communications, Inc. | 20,306,440 | 831,549 | |
McGraw-Hill Companies, Inc. | 531,500 | 32,305 | |
1,263,193 | |||
Specialty Retail - 4.1% | |||
Home Depot, Inc. | 18,790,600 | 586,267 | |
Limited Brands, Inc. | 1,320,000 | 22,057 | |
Office Depot, Inc. (a) | 383,700 | 6,369 | |
Staples, Inc. (a) | 1,331,700 | 26,820 | |
641,513 | |||
TOTAL CONSUMER DISCRETIONARY | 1,966,740 | ||
CONSUMER STAPLES - 8.9% | |||
Beverages - 2.8% | |||
PepsiCo, Inc. | 4,811,290 | 221,656 | |
The Coca-Cola Co. | 4,679,600 | 210,442 | |
432,098 | |||
Food & Staples Retailing - 2.2% | |||
CVS Corp. | 8,251,100 | 247,450 | |
Safeway, Inc. (a) | 4,407,500 | 94,100 | |
341,550 | |||
Food Products - 0.5% | |||
Kraft Foods, Inc. Class A | 745,000 | 20,718 | |
Unilever NV (NY Shares) | 1,085,400 | 61,303 | |
82,021 | |||
Household Products - 0.5% | |||
Procter & Gamble Co. | 932,700 | 81,956 | |
Personal Products - 1.3% | |||
Alberto-Culver Co. Class A (c) | 3,875,700 | 210,761 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER STAPLES - continued | |||
Tobacco - 1.6% | |||
Altria Group, Inc. | 6,115,300 | $ 244,673 | |
TOTAL CONSUMER STAPLES | 1,393,059 | ||
ENERGY - 7.7% | |||
Energy Equipment & Services - 3.1% | |||
BJ Services Co. (a) | 616,800 | 21,125 | |
Cooper Cameron Corp. (a) | 502,800 | 24,039 | |
Diamond Offshore Drilling, Inc. | 4,012,800 | 78,089 | |
ENSCO International, Inc. | 3,173,159 | 79,551 | |
GlobalSantaFe Corp. | 4,866,079 | 108,270 | |
Grant Prideco, Inc. (a) | 716,100 | 7,698 | |
Nabors Industries Ltd. (a) | 895,600 | 32,062 | |
Rowan Companies, Inc. (a) | 999,725 | 21,944 | |
Schlumberger Ltd. (NY Shares) | 460,600 | 20,759 | |
Transocean, Inc. (a) | 5,043,500 | 98,701 | |
492,238 | |||
Oil & Gas - 4.6% | |||
ChevronTexaco Corp. | 2,687,400 | 193,788 | |
ConocoPhillips | 6,852,211 | 358,645 | |
Exxon Mobil Corp. | 4,851,800 | 172,627 | |
725,060 | |||
TOTAL ENERGY | 1,217,298 | ||
FINANCIALS - 22.2% | |||
Capital Markets - 3.8% | |||
Merrill Lynch & Co., Inc. | 4,820,800 | 262,107 | |
Morgan Stanley | 7,058,600 | 334,860 | |
596,967 | |||
Commercial Banks - 1.6% | |||
Bank One Corp. | 2,972,400 | 117,588 | |
Synovus Financial Corp. | 1,677,200 | 39,465 | |
Wachovia Corp. | 2,345,262 | 102,464 | |
259,517 | |||
Diversified Financial Services - 4.4% | |||
Citigroup, Inc. | 15,399,239 | 689,886 | |
Insurance - 7.8% | |||
AFLAC, Inc. | 2,505,900 | 80,389 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Insurance - continued | |||
Allmerica Financial Corp. (a) | 1,895,300 | $ 42,341 | |
AMBAC Financial Group, Inc. | 219,500 | 14,458 | |
American International Group, Inc. | 14,055,400 | 902,357 | |
Hartford Financial Services Group, Inc. | 2,551,320 | 133,153 | |
MBIA, Inc. | 274,100 | 13,875 | |
PartnerRe Ltd. | 344,000 | 16,639 | |
Travelers Property Casualty Corp. Class B | 1,185,468 | 19,133 | |
1,222,345 | |||
Real Estate - 0.2% | |||
Apartment Investment & Management Co. Class A | 611,500 | 24,099 | |
Thrifts & Mortgage Finance - 4.4% | |||
Fannie Mae | 10,308,380 | 660,149 | |
MGIC Investment Corp. | 724,300 | 40,199 | |
700,348 | |||
TOTAL FINANCIALS | 3,493,162 | ||
HEALTH CARE - 20.8% | |||
Health Care Equipment & Supplies - 1.3% | |||
Baxter International, Inc. | 7,428,000 | 205,087 | |
Health Care Providers & Services - 6.1% | |||
Cardinal Health, Inc. | 17,477,270 | 956,883 | |
Pharmaceuticals - 13.4% | |||
Johnson & Johnson | 14,516,300 | 751,799 | |
Merck & Co., Inc. | 14,515,300 | 802,406 | |
Pfizer, Inc. | 6,339,100 | 211,472 | |
Recordati Spa | 382,800 | 7,146 | |
Schering-Plough Corp. | 6,586,400 | 111,837 | |
Wyeth | 5,098,900 | 232,408 | |
2,117,068 | |||
TOTAL HEALTH CARE | 3,279,038 | ||
INDUSTRIALS - 7.8% | |||
Aerospace & Defense - 0.4% | |||
United Technologies Corp. | 813,100 | 61,170 | |
Commercial Services & Supplies - 0.5% | |||
Aramark Corp. Class B (a) | 655,100 | 14,707 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Commercial Services & Supplies - continued | |||
Avery Dennison Corp. | 217,600 | $ 11,742 | |
ChoicePoint, Inc. (a) | 1,395,800 | 53,236 | |
79,685 | |||
Industrial Conglomerates - 6.1% | |||
General Electric Co. | 24,723,500 | 703,136 | |
Tyco International Ltd. | 13,985,100 | 260,123 | |
963,259 | |||
Machinery - 0.6% | |||
Ingersoll-Rand Co. Ltd. Class A | 1,786,800 | 96,916 | |
Road & Rail - 0.2% | |||
CSX Corp. | 369,200 | 11,556 | |
Union Pacific Corp. | 187,400 | 11,420 | |
22,976 | |||
TOTAL INDUSTRIALS | 1,224,006 | ||
INFORMATION TECHNOLOGY - 10.0% | |||
Communications Equipment - 1.4% | |||
Cisco Systems, Inc. (a) | 2,103,500 | 41,060 | |
Comverse Technology, Inc. (a) | 3,800,000 | 56,050 | |
Motorola, Inc. | 13,788,000 | 124,644 | |
221,754 | |||
Computers & Peripherals - 2.1% | |||
Dell, Inc. (a) | 3,292,500 | 110,891 | |
Hewlett-Packard Co. | 7,723,200 | 163,500 | |
Sun Microsystems, Inc. (a) | 14,212,300 | 53,154 | |
327,545 | |||
Electronic Equipment & Instruments - 1.0% | |||
Celestica, Inc. (sub. vtg.) (a) | 1,540,500 | 23,700 | |
Flextronics International Ltd. (a) | 2,426,800 | 26,695 | |
Jabil Circuit, Inc. (a) | 1,177,600 | 27,144 | |
Sanmina-SCI Corp. (a) | 2,574,900 | 20,445 | |
Solectron Corp. (a) | 9,259,600 | 47,317 | |
Thermo Electron Corp. (a) | 697,900 | 15,528 | |
160,829 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
IT Services - 0.8% | |||
Affiliated Computer Services, Inc. Class A (a) | 272,100 | $ 13,483 | |
First Data Corp. | 2,872,300 | 108,458 | |
121,941 | |||
Semiconductors & Semiconductor Equipment - 1.0% | |||
Intel Corp. | 1,589,200 | 39,651 | |
KLA-Tencor Corp. (a) | 339,500 | 17,535 | |
Lam Research Corp. (a) | 716,800 | 15,598 | |
Linear Technology Corp. | 215,400 | 7,944 | |
Micron Technology, Inc. (a) | 1,096,200 | 16,048 | |
Novellus Systems, Inc. (a) | 166,500 | 5,962 | |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR (a) | 2,837,894 | 28,379 | |
United Microelectronics Corp. sponsored ADR (a) | 5,664,322 | 23,507 | |
Xilinx, Inc. (a) | 145,500 | 3,824 | |
158,448 | |||
Software - 3.7% | |||
Activision, Inc. (a) | 1,473,000 | 17,160 | |
Adobe Systems, Inc. | 67,870 | 2,218 | |
Microsoft Corp. | 19,600,937 | 517,465 | |
VERITAS Software Corp. (a) | 1,507,734 | 46,438 | |
583,281 | |||
TOTAL INFORMATION TECHNOLOGY | 1,573,798 | ||
MATERIALS - 1.0% | |||
Chemicals - 0.3% | |||
Dow Chemical Co. | 1,485,000 | 52,421 | |
Metals & Mining - 0.6% | |||
Alcan, Inc. | 1,138,000 | 39,668 | |
Alcoa, Inc. | 1,604,800 | 44,565 | |
84,233 | |||
Paper & Forest Products - 0.1% | |||
Bowater, Inc. | 267,500 | 10,304 | |
International Paper Co. | 216,200 | 8,458 | |
18,762 | |||
TOTAL MATERIALS | 155,416 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
TELECOMMUNICATION SERVICES - 4.3% | |||
Diversified Telecommunication Services - 4.3% | |||
Qwest Communications International, Inc. (a) | 25,076,000 | $ 100,053 | |
SBC Communications, Inc. | 10,267,491 | 239,849 | |
Verizon Communications, Inc. | 9,556,450 | 333,138 | |
673,040 | |||
UTILITIES - 0.7% | |||
Electric Utilities - 0.6% | |||
FirstEnergy Corp. | 1,912,500 | 65,962 | |
Southern Co. | 465,500 | 13,239 | |
Wisconsin Energy Corp. | 534,200 | 15,038 | |
94,239 | |||
Gas Utilities - 0.1% | |||
NiSource, Inc. | 683,400 | 13,190 | |
TOTAL UTILITIES | 107,429 | ||
TOTAL COMMON STOCKS (Cost $15,168,043) | 15,082,986 |
Corporate Bonds - 1.1% | ||||
Principal | ||||
Convertible Bonds - 1.1% | ||||
CONSUMER DISCRETIONARY - 0.5% | ||||
Hotels, Restaurants & Leisure - 0.1% | ||||
Hilton Hotels Corp. 3.375% 4/15/23 (d) | $ 16,220 | 16,098 | ||
Media - 0.3% | ||||
Interpublic Group of Companies, Inc. 4.5% 3/15/23 (d) | 8,780 | 12,073 | ||
Liberty Media Corp. 3.25% 3/15/31 | 43,340 | 43,472 | ||
55,545 | ||||
Specialty Retail - 0.1% | ||||
Gap, Inc. 5.75% 3/15/09 (d) | 11,560 | 15,032 | ||
TOTAL CONSUMER DISCRETIONARY | 86,675 | |||
FINANCIALS - 0.1% | ||||
Diversified Financial Services - 0.1% | ||||
IOS Capital LLC 5% 5/1/07 (d) | 13,360 | 12,108 | ||
Corporate Bonds - continued | ||||
Principal | Value (Note 1) | |||
Convertible Bonds - continued | ||||
INFORMATION TECHNOLOGY - 0.5% | ||||
Communications Equipment - 0.3% | ||||
Brocade Communications Systems, Inc. 2% 1/1/07 | $ 18,810 | $ 15,471 | ||
CIENA Corp. 3.75% 2/1/08 | 28,505 | 23,909 | ||
39,380 | ||||
Semiconductors & Semiconductor Equipment - 0.2% | ||||
Micron Technology, Inc. 2.5% 2/1/10 (d) | 3,290 | 4,610 | ||
Vitesse Semiconductor Corp. 4% 3/15/05 | 31,270 | 30,019 | ||
34,629 | ||||
TOTAL INFORMATION TECHNOLOGY | 74,009 | |||
TOTAL CONVERTIBLE BONDS | 172,792 | |||
Nonconvertible Bonds - 0.0% | ||||
UTILITIES - 0.0% | ||||
Multi-Utilities & Unregulated Power - 0.0% | ||||
AES Corp.: | ||||
9.375% 9/15/10 | 2,603 | 2,427 | ||
9.5% 6/1/09 | 866 | 816 | ||
3,243 | ||||
TOTAL CORPORATE BONDS (Cost $165,740) | 176,035 |
Money Market Funds - 3.1% | |||
Shares | Value (Note 1) | ||
Fidelity Cash Central Fund, 1.12% (b) | 487,353,857 | $ 487,354 | |
Fidelity Securities Lending Cash Central Fund, 1.13% (b) | 3,327,400 | 3,327 | |
TOTAL MONEY MARKET FUNDS (Cost $490,681) | 490,681 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $15,824,464) | 15,749,702 | ||
NET OTHER ASSETS - (0.1)% | (12,337) | ||
NET ASSETS - 100% | $ 15,737,365 |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Affiliated company |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $59,921,000 or 0.4% of net assets. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $8,608,357,000 and $6,803,267,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $844,000 for the period. |
Income Tax Information |
At July 31, 2003, the fund had a capital loss carryforward of approximately $665,957,000 of which $221,038,000 and $444,919,000 will expire on July 31, 2010 and 2011, respectively. |
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, 2003 | |
Assets | ||
Investment in securities, at value (including securities loaned of $3,233) (cost $15,824,464) - See accompanying schedule | $ 15,749,702 | |
Cash | 7 | |
Receivable for investments sold | 51,816 | |
Receivable for fund shares sold | 21,338 | |
Dividends receivable | 23,578 | |
Interest receivable | 2,862 | |
Other receivables | 7 | |
Total assets | 15,849,310 | |
Liabilities | ||
Payable for investments purchased | $ 83,298 | |
Payable for fund shares redeemed | 12,905 | |
Accrued management fee | 9,988 | |
Other payables and accrued expenses | 2,427 | |
Collateral on securities loaned, at value | 3,327 | |
Total liabilities | 111,945 | |
Net Assets | $ 15,737,365 | |
Net Assets consist of: | ||
Paid in capital | $ 16,589,005 | |
Undistributed net investment income | 88,324 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (865,214) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | (74,750) | |
Net Assets, for 635,542 shares outstanding | $ 15,737,365 | |
Net Asset Value, offering price and redemption price per share ($15,737,365 ÷ 635,542 shares) | $ 24.76 |
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, 2003 | |
Investment Income | ||
Dividends (including $1,940 received from affiliated issuers) | $ 235,001 | |
Interest | 34,830 | |
Security lending | 81 | |
Total income | 269,912 | |
Expenses | ||
Management fee | $ 80,326 | |
Performance adjustment | 26,102 | |
Transfer agent fees | 35,116 | |
Accounting and security lending fees | 1,039 | |
Non-interested trustees' compensation | 54 | |
Appreciation in deferred trustee compensation account | 7 | |
Custodian fees and expenses | 223 | |
Registration fees | 132 | |
Audit | 100 | |
Legal | 47 | |
Miscellaneous | 909 | |
Total expenses before reductions | 144,055 | |
Expense reductions | (3,827) | 140,228 |
Net investment income (loss) | 129,684 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (including realized gain (loss) of $2,346 on sales of investments in affiliated issuers) | (488,011) | |
Foreign currency transactions | 8 | |
Total net realized gain (loss) | (488,003) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,996,633 | |
Assets and liabilities in foreign currencies | 8 | |
Total change in net unrealized appreciation (depreciation) | 1,996,641 | |
Net gain (loss) | 1,508,638 | |
Net increase (decrease) in net assets resulting from operations | $ 1,638,322 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands | Year ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 129,684 | $ 131,642 |
Net realized gain (loss) | (488,003) | (259,073) |
Change in net unrealized appreciation (depreciation) | 1,996,641 | (3,908,757) |
Net increase (decrease) in net assets resulting from operations | 1,638,322 | (4,036,188) |
Distributions to shareholders from net investment income | (128,580) | (76,000) |
Distributions to shareholders from net realized gain | - | (163,168) |
Total distributions | (128,580) | (239,168) |
Share transactions | 4,924,391 | 6,234,565 |
Reinvestment of distributions | 123,895 | 230,633 |
Cost of shares redeemed | (3,468,842) | (4,004,387) |
Net increase (decrease) in net assets resulting from share transactions | 1,579,444 | 2,460,811 |
Total increase (decrease) in net assets | 3,089,186 | (1,814,545) |
Net Assets | ||
Beginning of period | 12,648,179 | 14,462,724 |
End of period (including undistributed net investment income of $88,324 and undistributed net investment income of $89,855, respectively) | $ 15,737,365 | $ 12,648,179 |
Other Information Shares | ||
Sold | 214,274 | 229,387 |
Issued in reinvestment of distributions | 5,510 | 8,598 |
Redeemed | (153,994) | (154,448) |
Net increase (decrease) | 65,790 | 83,537 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | |||||
Net asset value, | $ 22.20 | $ 29.75 | $ 30.90 | $ 31.14 | $ 28.11 |
Income from Investment Operations | |||||
Net investment income (loss) B | .22 | .24 D | .16 | .15 | .17 |
Net realized and | 2.56 | (7.31) D | 1.27 | 1.89 | 5.18 |
Total from investment operations | 2.78 | (7.07) | 1.43 | 2.04 | 5.35 |
Distributions from | (.22) | (.15) | (.18) | (.14) | (.13) |
Distributions from | - | (.33) | (2.40) | (2.14) | (2.19) |
Total distributions | (.22) | (.48) | (2.58) | (2.28) | (2.32) |
Net asset value, end of period | $ 24.76 | $ 22.20 | $ 29.75 | $ 30.90 | $ 31.14 |
Total Return A | 12.63% | (24.04)% | 4.58% | 7.00% | 21.90% |
Ratios to Average Net Assets C | |||||
Expenses before expense reductions | 1.05% | .98% | .97% | .77% | .87% |
Expenses net of | 1.05% | .98% | .97% | .77% | .87% |
Expenses net of all reductions | 1.02% | .95% | .94% | .74% | .84% |
Net investment income (loss) | .94% | .90% D | .54% | .52% | .58% |
Supplemental Data | |||||
Net assets, end of period (in millions) | $ 15,737 | $ 12,648 | $ 14,463 | $ 10,432 | $ 14,283 |
Portfolio turnover rate | 51% | 81% | 88% | 86% | 104% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers 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 fund.
D Effective August 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities, as required. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Dividend Growth Fund (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results
Annual Report
1. Significant Accounting Policies - continued
Annual Report
Income Tax Information and Distributions to Shareholders - continued
of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, market discount, capital loss carryforwards and losses deferred due to wash sales.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 1,417,045 | | |
Unrealized depreciation | (1,567,704) | |
Net unrealized appreciation (depreciation) | (150,659) | |
Undistributed ordinary income | 82,766 | |
Capital loss carryforward | (665,957) | |
Cost for federal income tax purposes | $ 15,900,361 |
The tax character of distributions paid was as follows:
July 31, | July 31, | |
Ordinary Income | $ 128,580 | $ 77,524 |
Long-term Capital Gains | - | 161,644 |
Total | $ 128,580 | $ 239,168 |
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
Annual Report
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. In addition, the management fee is subject to a performance adjustment (up to a maximum of ± .20% of the fund's average net assets over a 36 month performance period). The upward or downward adjustment to the management fee is based on the fund's relative investment performance as compared to an appropriate benchmark index. For the period, the total annual management fee rate, including the performance adjustment, was .77% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .26% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $6,860 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $3,677 for the period. In addition, through arrangements with the fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody and transfer agent expenses by $1 and $149, respectively.
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Annual Report
Affiliate | Purchase | Sales | Dividend | Value |
Alberto-Culver Co. Class A | $ - | $ 2,959 | $ 1,940 | $ 210,761 |
Annual Report
Report of Independent Auditors
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Dividend Growth Fund:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Dividend Growth Fund (a fund of Fidelity Securities Fund) at July 31, 2003 and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Dividend Growth Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at July 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Dividend Growth. Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Annual Report
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity® Magellan® Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
John B. McDowell (44) | |
Year of Election or Appointment: 2002 Vice President of Dividend Growth. Mr. McDowell also serves as Vice President of certain Equity Funds (2002). He is Senior Vice President of FMR (1999), FMR Co., Inc. (2001), and Fidelity Management Trust Company (FMTC). Since joining Fidelity Investments in 1985, Mr. McDowell has worked as a research analyst and manager. | |
Charles Mangum (38) | |
Year of Election or Appointment: 1997 | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 1998 Secretary of Dividend Growth. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Dividend Growth. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2002 President and Treasurer of Dividend Growth. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2002 Chief Financial Officer of Dividend Growth. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Dividend Growth. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 1993 Assistant Treasurer of Dividend Growth. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Dividend Growth. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Dividend Growth. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2000 Assistant Treasurer of Dividend Growth. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
Distributions
The fund designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* When you call the quotes line, please remember that a fund's yield and return will vary and, except for money market funds, share price will also vary. This means that you may have a gain or loss when you sell your shares. There is no assurance that money market funds will be able to maintain a stable $1 share price; an investment in a money market fund is not insured or guaranteed by the U.S. government. Total returns are historical and include changes in share price, reinvestment of dividends and capital gains, and the effects of any sales charges.
Annual Report
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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
1000 Abernathy Road
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Annual Report
Michigan
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43420 Grand River Avenue
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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Utah
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Annual Report
To Write Fidelity
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Covington, KY 41015
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P.O. Box 500
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Annual Report
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub Advisers
FMR Co., Inc.
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Fidelity®
Growth & Income
Portfolio
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | How the fund has done over time. | |
Management's Discussion | The manager's review of fund performance, strategy and outlook. | |
Investment Changes | A summary of major shifts in the fund's investments over the past six months. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Auditors' Opinion | The auditors' opinion. | |
Trustees and Officers | ||
Distributions | ||
For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic)
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
This report is printed on recycled paper using soy-based inks.Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) 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. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Periods ended July 31, 2003 | Past 1 | Past 5 | Past 10 |
Fidelity® Growth & Income Portfolio | -5.15% | -0.52% | 9.96% |
$10,000 Over 10 Years
Let's say hypothetically that $10,000 was invested in Fidelity ® Growth & Income Portfolio on July 31, 1993. The chart shows how the value of your investment would have grown, and also shows how the Standard & Poor's 500SM Index did over the same period.
Annual Report
Management's Discussion of Fund Performance
Comments from Steve Kaye, Portfolio Manager of Fidelity® Growth & Income Portfolio
Shaking off corporate governance scandals, weak corporate profits, and fears of war and terrorism, U.S. equities climbed sharply higher in the back half of the one-year period ending July 31, 2003, as positive signals emerged that many hoped would mark the end of the stock market's three-year decline. Among the bright spots, the Federal Reserve Board cut the fed funds target rate twice in the period, dropping it to a 45-year low of 1.00%. The 2003 first-quarter earnings season was solid, as was the second-quarter increase in gross domestic product. But the rapid conclusion of major military operations in Iraq seemed to provide the biggest boost. Overall, the mid-March through July rally lifted most equity benchmarks into positive territory for the period, and many enjoyed double-digit returns. The technology-rich NASDAQ Composite® Index advanced 31.22%, the large-cap-oriented Standard & Poor's 500SM Index gained 10.64%, the small-cap-laden Russell 2000® Index leapt 23.11% and the blue chips' bellwether Dow Jones Industrial AverageSM added 8.16%.
Fidelity Growth & Income Portfolio gained 5.15% during the 12-month period, trailing the Standard & Poor's 500SM Index and the LipperSM Growth & Income Funds Average, which returned 10.64% and 8.79%, respectively. The primary reason for the fund's shortfall was its underweighting in technology. Having scant or no exposure to such strong performers as Intel, Cisco, Applied Materials, eBay and Dell Computer resulted in a cumulative return of 6.15% for the fund's technology stake, compared to 10.70% for those in the index - a disparity that represents the vast majority of the fund's overall underperformance of the S&P 500®. Regional Bell operating companies Verizon and BellSouth also detracted, as did government-sponsored enterprises Fannie Mae and Freddie Mac. On the plus side, an overweighting and strong stock selection in diversified financials - particularly equity-sensitive names such as Citigroup, Merrill Lynch and Morgan Stanley - accounted for the fund's best performance on an industry basis. Stock selection in the health care sector also was a significant positive. Nine of the fund's top-20 contributors on a relative basis were health-related. Positive contributors in this area included Amgen, Alcon, Boston Scientific and Becton Dickinson.
The views expressed in this statement reflect those of the portfolio manager only through the end of the period of the report as stated on the cover and do not necessarily represent the views of Fidelity or any other person in the Fidelity organization. Any such views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund.
Annual Report
Investment Changes
Top Ten Stocks as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
SLM Corp. | 4.5 | 5.0 |
Microsoft Corp. | 3.5 | 3.3 |
General Electric Co. | 3.5 | 3.1 |
Pfizer, Inc. | 3.3 | 3.4 |
Citigroup, Inc. | 3.3 | 2.2 |
Exxon Mobil Corp. | 2.9 | 2.9 |
Wal-Mart Stores, Inc. | 2.8 | 2.7 |
Verizon Communications, Inc. | 2.5 | 2.4 |
American International Group, Inc. | 2.0 | 2.1 |
Fannie Mae | 2.0 | 3.6 |
30.3 | ||
Top Five Market Sectors as of July 31, 2003 | ||
% of fund's | % of fund's net assets | |
Financials | 22.4 | 22.8 |
Health Care | 17.1 | 19.5 |
Consumer Staples | 12.2 | 10.2 |
Industrials | 10.2 | 10.5 |
Consumer Discretionary | 9.5 | 9.6 |
Asset Allocation (% of fund's net assets) | |||||||
As of July 31, 2003* | As of January 31, 2003 ** | ||||||
Stocks and | Stocks 88.1% | ||||||
Bonds 0.0% | Bonds 0.4% | ||||||
Convertible | Convertible | ||||||
Short-Term | Short-Term | ||||||
* Foreign investments | 1.9% | ** Foreign investments | 1.5% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 92.1% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 9.5% | |||
Hotels, Restaurants & Leisure - 1.9% | |||
Harrah's Entertainment, Inc. | 2,106,800 | $ 91,962 | |
Marriott International, Inc. Class A | 3,080,900 | 126,625 | |
McDonald's Corp. | 6,891,700 | 158,578 | |
MGM MIRAGE (a) | 2,369,128 | 81,261 | |
Starbucks Corp. (a) | 2,944,760 | 80,480 | |
538,906 | |||
Household Durables - 0.1% | |||
Garmin Ltd. (a) | 441,835 | 16,905 | |
Media - 5.9% | |||
AOL Time Warner, Inc. (a) | 8,715,546 | 134,481 | |
Citadel Broadcasting Corp. | 67,000 | 1,273 | |
Clear Channel Communications, Inc. | 1,292,000 | 52,907 | |
Comcast Corp. Class A (special) (a) | 4,579,900 | 134,191 | |
Cox Communications, Inc. Class A (a) | 2,189,300 | 69,598 | |
E.W. Scripps Co. Class A | 515,800 | 42,791 | |
EchoStar Communications Corp. Class A (a) | 2,974,663 | 107,891 | |
Gannett Co., Inc. | 1,252,500 | 96,230 | |
General Motors Corp. Class H (a) | 984,400 | 13,516 | |
Knight-Ridder, Inc. | 516,900 | 35,475 | |
News Corp. Ltd. ADR | 1,105,300 | 33,612 | |
Omnicom Group, Inc. | 3,900,620 | 288,178 | |
Tribune Co. | 950,000 | 44,859 | |
Univision Communications, Inc. Class A (a) | 2,461,900 | 76,811 | |
Viacom, Inc. Class B (non-vtg.) | 7,832,997 | 340,892 | |
Walt Disney Co. | 8,206,900 | 179,895 | |
1,652,600 | |||
Multiline Retail - 0.3% | |||
Family Dollar Stores, Inc. | 393,800 | 14,771 | |
Kohl's Corp. (a) | 1,295,500 | 76,888 | |
91,659 | |||
Specialty Retail - 1.2% | |||
Best Buy Co., Inc. (a) | 1,300,300 | 56,758 | |
Home Depot, Inc. | 9,006,450 | 281,001 | |
337,759 | |||
Textiles Apparel & Luxury Goods - 0.1% | |||
NIKE, Inc. Class B | 787,600 | 40,750 | |
TOTAL CONSUMER DISCRETIONARY | 2,678,579 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER STAPLES - 12.2% | |||
Beverages - 2.4% | |||
Anheuser-Busch Companies, Inc. | 1,983,400 | $ 102,780 | |
PepsiCo, Inc. | 5,430,007 | 250,160 | |
The Coca-Cola Co. | 7,292,800 | 327,957 | |
680,897 | |||
Food & Staples Retailing - 4.2% | |||
Sysco Corp. | 7,148,800 | 215,393 | |
Wal-Mart Stores, Inc. | 14,199,400 | 793,888 | |
Walgreen Co. | 5,765,700 | 172,510 | |
Whole Foods Market, Inc. (a) | 369,000 | 18,810 | |
1,200,601 | |||
Food Products - 0.3% | |||
Kellogg Co. | 418,400 | 14,364 | |
McCormick & Co., Inc. (non-vtg.) | 2,362,800 | 60,393 | |
Unilever NV (NY Shares) | 309,100 | 17,458 | |
92,215 | |||
Household Products - 2.5% | |||
Colgate-Palmolive Co. | 2,996,100 | 163,587 | |
Kimberly-Clark Corp. | 2,664,200 | 128,947 | |
Procter & Gamble Co. | 4,593,900 | 403,666 | |
696,200 | |||
Personal Products - 1.3% | |||
Avon Products, Inc. | 863,800 | 53,892 | |
Gillette Co. | 10,187,400 | 313,364 | |
367,256 | |||
Tobacco - 1.5% | |||
Altria Group, Inc. | 8,755,900 | 350,324 | |
UST, Inc. | 2,050,000 | 68,163 | |
418,487 | |||
TOTAL CONSUMER STAPLES | 3,455,656 | ||
ENERGY - 4.3% | |||
Energy Equipment & Services - 0.1% | |||
Schlumberger Ltd. (NY Shares) | 935,400 | 42,158 | |
Oil & Gas - 4.2% | |||
Apache Corp. | 1,457,960 | 90,335 | |
ChevronTexaco Corp. | 3,008,410 | 216,936 | |
ConocoPhillips | 234,018 | 12,249 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Exxon Mobil Corp. | 23,045,794 | $ 819,969 | |
Royal Dutch Petroleum Co. (NY Shares) | 795,000 | 34,646 | |
1,174,135 | |||
TOTAL ENERGY | 1,216,293 | ||
FINANCIALS - 22.3% | |||
Capital Markets - 3.6% | |||
Goldman Sachs Group, Inc. | 3,746,100 | 326,435 | |
Merrill Lynch & Co., Inc. | 6,663,200 | 362,278 | |
Morgan Stanley | 6,970,800 | 330,695 | |
1,019,408 | |||
Commercial Banks - 4.0% | |||
Bank of America Corp. | 4,690,646 | 387,307 | |
Bank One Corp. | 3,146,500 | 124,476 | |
Fifth Third Bancorp | 1,784,900 | 98,187 | |
FleetBoston Financial Corp. | 422,398 | 13,132 | |
Wachovia Corp. | 3,811,413 | 166,521 | |
Wells Fargo & Co. | 6,857,800 | 346,525 | |
1,136,148 | |||
Consumer Finance - 5.3% | |||
American Express Co. | 5,006,490 | 221,137 | |
SLM Corp. (c) | 30,630,530 | 1,269,938 | |
1,491,075 | |||
Diversified Financial Services - 3.4% | |||
CIT Group, Inc. | 738,380 | 20,586 | |
Citigroup, Inc. | 20,801,938 | 931,927 | |
952,513 | |||
Insurance - 2.7% | |||
AFLAC, Inc. | 1,329,100 | 42,638 | |
American International Group, Inc. | 8,979,800 | 576,503 | |
MBIA, Inc. | 2,413,900 | 122,192 | |
The Chubb Corp. | 492,400 | 31,908 | |
773,241 | |||
Real Estate - 1.1% | |||
Equity Office Properties Trust | 3,982,090 | 110,463 | |
Equity Residential (SBI) | 4,936,950 | 137,741 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Real Estate - continued | |||
Manufactured Home Communities, Inc. | 925,000 | $ 33,855 | |
Simon Property Group, Inc. | 734,900 | 31,123 | |
313,182 | |||
Thrifts & Mortgage Finance - 2.2% | |||
Fannie Mae | 8,679,720 | 555,849 | |
Freddie Mac | 353,670 | 17,277 | |
Golden West Financial Corp., Delaware | 672,600 | 55,557 | |
628,683 | |||
TOTAL FINANCIALS | 6,314,250 | ||
HEALTH CARE - 17.1% | |||
Biotechnology - 1.6% | |||
Amgen, Inc. (a) | 5,140,700 | 357,690 | |
Genzyme Corp. - General Division (a) | 1,279,900 | 64,558 | |
MedImmune, Inc. (a) | 912,200 | 35,749 | |
457,997 | |||
Health Care Equipment & Supplies - 3.4% | |||
Alcon, Inc. | 4,017,120 | 204,753 | |
Baxter International, Inc. | 2,034,500 | 56,173 | |
Becton, Dickinson & Co. | 2,699,320 | 98,876 | |
Boston Scientific Corp. (a) | 1,043,020 | 65,950 | |
C.R. Bard, Inc. | 404,560 | 27,737 | |
Guidant Corp. | 748,900 | 35,363 | |
Medtronic, Inc. | 4,436,290 | 228,469 | |
St. Jude Medical, Inc. (a) | 1,291,320 | 69,279 | |
Stryker Corp. | 994,800 | 76,122 | |
Zimmer Holdings, Inc. (a) | 1,887,793 | 90,255 | |
952,977 | |||
Health Care Providers & Services - 2.2% | |||
HCA, Inc. | 489,300 | 17,248 | |
IMS Health, Inc. | 1,303,919 | 25,218 | |
Tenet Healthcare Corp. (a) | 1,805,900 | 24,885 | |
UnitedHealth Group, Inc. | 9,883,980 | 514,857 | |
WellPoint Health Networks, Inc. (a) | 593,900 | 49,680 | |
631,888 | |||
Pharmaceuticals - 9.9% | |||
Abbott Laboratories | 2,352,000 | 92,316 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Allergan, Inc. | 1,300,400 | $ 104,656 | |
AstraZeneca PLC sponsored ADR | 1,617,400 | 65,052 | |
Bristol-Myers Squibb Co. | 3,845,400 | 100,749 | |
Eli Lilly & Co. | 2,768,552 | 182,281 | |
Forest Laboratories, Inc. (a) | 1,325,800 | 63,479 | |
Johnson & Johnson | 6,271,800 | 324,817 | |
Merck & Co., Inc. | 9,939,700 | 549,467 | |
Novartis AG sponsored ADR | 1,599,900 | 61,740 | |
Pfizer, Inc. | 27,990,369 | 933,759 | |
Shire Pharmaceuticals Group PLC sponsored ADR (a) | 418,400 | 9,803 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 366,000 | 20,986 | |
Wyeth | 6,178,500 | 281,616 | |
2,790,721 | |||
TOTAL HEALTH CARE | 4,833,583 | ||
INDUSTRIALS - 9.5% | |||
Aerospace & Defense - 1.6% | |||
Boeing Co. | 737,700 | 24,433 | |
Lockheed Martin Corp. | 3,542,600 | 185,420 | |
Northrop Grumman Corp. | 625,100 | 57,659 | |
Raytheon Co. | 787,500 | 24,176 | |
United Technologies Corp. | 1,965,600 | 147,872 | |
439,560 | |||
Airlines - 0.5% | |||
Southwest Airlines Co. | 8,714,643 | 143,007 | |
Commercial Services & Supplies - 1.1% | |||
Arbitron, Inc. (a) | 598,300 | 22,257 | |
Avery Dennison Corp. | 1,031,300 | 55,649 | |
ChoicePoint, Inc. (a) | 721,866 | 27,532 | |
Pitney Bowes, Inc. | 2,173,920 | 82,826 | |
Viad Corp. | 1,433,900 | 31,818 | |
Waste Management, Inc. | 3,368,300 | 80,469 | |
300,551 | |||
Electrical Equipment - 0.2% | |||
Emerson Electric Co. | 1,331,300 | 71,491 | |
Industrial Conglomerates - 5.0% | |||
3M Co. | 1,933,240 | 271,040 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Industrial Conglomerates - continued | |||
General Electric Co. | 34,937,200 | $ 993,614 | |
Tyco International Ltd. | 8,284,170 | 154,086 | |
1,418,740 | |||
Machinery - 0.9% | |||
Dover Corp. | 1,181,400 | 43,251 | |
Eaton Corp. | 230,700 | 19,418 | |
Illinois Tool Works, Inc. | 1,091,500 | 76,023 | |
Ingersoll-Rand Co. Ltd. Class A | 646,100 | 35,044 | |
Pall Corp. | 3,150,500 | 71,107 | |
244,843 | |||
Road & Rail - 0.2% | |||
Burlington Northern Santa Fe Corp. | 1,509,600 | 41,605 | |
Union Pacific Corp. | 492,300 | 30,001 | |
71,606 | |||
TOTAL INDUSTRIALS | 2,689,798 | ||
INFORMATION TECHNOLOGY - 8.7% | |||
Communications Equipment - 0.9% | |||
Cisco Systems, Inc. (a) | 10,859,400 | 211,975 | |
Motorola, Inc. | 5,956,500 | 53,847 | |
265,822 | |||
Computers & Peripherals - 2.3% | |||
Dell, Inc. (a) | 5,002,900 | 168,498 | |
Hewlett-Packard Co. | 7,271,000 | 153,927 | |
International Business Machines Corp. | 3,302,300 | 268,312 | |
Lexmark International, Inc. Class A (a) | 812,200 | 52,119 | |
642,856 | |||
Internet Software & Services - 0.1% | |||
Yahoo!, Inc. (a) | 795,200 | 24,755 | |
IT Services - 0.9% | |||
Automatic Data Processing, Inc. | 968,600 | 35,916 | |
First Data Corp. | 4,482,250 | 169,250 | |
Paychex, Inc. | 1,260,100 | 40,991 | |
246,157 | |||
Office Electronics - 0.3% | |||
Xerox Corp. (a) | 6,350,100 | 68,581 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Semiconductors & Semiconductor Equipment - 0.5% | |||
Analog Devices, Inc. (a) | 1,490,000 | $ 56,546 | |
Intel Corp. | 651,000 | 16,242 | |
Samsung Electronics Co. Ltd. | 175,000 | 61,669 | |
Texas Instruments, Inc. | 492,300 | 9,290 | |
143,747 | |||
Software - 3.7% | |||
Adobe Systems, Inc. | 1,012,400 | 33,085 | |
Microsoft Corp. | 37,743,400 | 996,426 | |
Network Associates, Inc. (a) | 984,600 | 11,126 | |
Oracle Corp. (a) | 1,264,018 | 15,168 | |
1,055,805 | |||
TOTAL INFORMATION TECHNOLOGY | 2,447,723 | ||
MATERIALS - 1.6% | |||
Chemicals - 1.3% | |||
Dow Chemical Co. | 4,142,370 | 146,226 | |
E.I. du Pont de Nemours & Co. | 717,100 | 31,509 | |
Praxair, Inc. | 3,037,600 | 196,411 | |
374,146 | |||
Metals & Mining - 0.1% | |||
Alcoa, Inc. | 1,277,300 | 35,471 | |
Paper & Forest Products - 0.2% | |||
International Paper Co. | 961,700 | 37,622 | |
TOTAL MATERIALS | 447,239 | ||
TELECOMMUNICATION SERVICES - 6.0% | |||
Diversified Telecommunication Services - 6.0% | |||
ALLTEL Corp. | 1,899,350 | 88,871 | |
BellSouth Corp. | 14,703,900 | 374,508 | |
SBC Communications, Inc. | 22,553,400 | 526,847 | |
Verizon Communications, Inc. | 20,339,240 | 709,026 | |
1,699,252 | |||
UTILITIES - 0.9% | |||
Electric Utilities - 0.9% | |||
Entergy Corp. | 2,905,800 | 149,678 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
UTILITIES - continued | |||
Electric Utilities - continued | |||
FirstEnergy Corp. | 472,100 | $ 16,283 | |
Southern Co. | 3,393,300 | 96,505 | |
262,466 | |||
TOTAL COMMON STOCKS (Cost $17,853,084) | 26,044,839 | ||
Convertible Preferred Stocks - 1.6% | |||
FINANCIALS - 0.1% | |||
Diversified Financial Services - 0.1% | |||
Union Pacific Capital Trust 6.25% (d) | 420,604 | 21,214 | |
Insurance - 0.0% | |||
Travelers Property Casualty Corp. 4.50% | 652,000 | 15,299 | |
TOTAL FINANCIALS | 36,513 | ||
INDUSTRIALS - 0.7% | |||
Aerospace & Defense - 0.7% | |||
Northrop Grumman Corp. 7.25% | 738,900 | 76,661 | |
Raytheon Co. 8.25% | 2,122,100 | 118,521 | |
195,182 | |||
INFORMATION TECHNOLOGY - 0.1% | |||
Communications Equipment - 0.1% | |||
Motorola, Inc. 7.00% | 914,900 | 28,547 | |
UTILITIES - 0.7% | |||
Electric Utilities - 0.6% | |||
FPL Group, Inc.: | |||
8.00% | 221,600 | 11,953 | |
8.50% | 2,242,600 | 124,868 | |
TXU Corp. 8.125% PRIDES | 738,100 | 24,127 | |
160,948 | |||
Convertible Preferred Stocks - continued | |||
Shares | Value (Note 1) | ||
UTILITIES - continued | |||
Gas Utilities - 0.1% | |||
KeySpan Corp. 8.75% MEDS | 615,600 | $ 32,147 | |
TOTAL UTILITIES | 193,095 | ||
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $458,407) | 453,337 |
Convertible Bonds - 0.2% | ||||
Principal | ||||
INFORMATION TECHNOLOGY - 0.2% | ||||
Electronic Equipment & Instruments - 0.2% | ||||
Agilent Technologies, Inc. 3% 12/1/21 | $ 46,760 | 45,998 | ||
TOTAL CONVERTIBLE BONDS (Cost $51,329) | 45,998 | |||
U.S. Treasury Obligations - 0.1% | ||||
U.S. Treasury Bills, yield at date of purchase 1.01% 8/21/03 (e) | 26,000 | 25,987 | ||
U.S. Treasury Bonds 8.125% 8/15/19 | 10,000 | 13,118 | ||
TOTAL U.S. TREASURY OBLIGATIONS (Cost $36,196) | 39,105 |
Money Market Funds - 6.1% | |||
Shares | Value (Note 1) | ||
Fidelity Cash Central Fund, 1.12% (b) | 1,711,783,837 | $ 1,711,784 | |
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $20,110,800) | 28,295,063 | ||
NET OTHER ASSETS - (0.1)% | (31,650) | ||
NET ASSETS - 100% | $ 28,263,413 |
Futures Contracts | |||||
Expiration | Underlying | Unrealized | |||
Purchased | |||||
Equity Index Contracts | |||||
1,700 S&P 500 Index Contracts | Sept. 2003 | $ 420,453 | $ (4,919) |
The face value of futures purchased as a percentage of net assets - 1.5% |
Security Type Abbreviations |
MEDS - Mandatory Exchangeable PRIDES - Preferred Redeemable |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Affiliated company |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $21,214,000 or 0.1% of net assets. |
(e) 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 $25,987,000. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $8,045,534,000 and $8,611,948,000, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $500,000 for the period. |
Income Tax Information |
At July 31, 2003, the fund had a capital loss carryforward of approximately $902,579,000 of which $266,818,000 and $635,761,000 will expire on July 31, 2010 and 2011, respectively. |
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, 2003 | |
Assets | ||
Investment in securities, at value (cost $20,110,800) - See accompanying schedule | $ 28,295,063 | |
Receivable for investments sold | 27,876 | |
Receivable for fund shares sold | 21,079 | |
Dividends receivable | 41,314 | |
Interest receivable | 2,433 | |
Receivable for daily variation on futures contracts | 1,148 | |
Other receivables | 103 | |
Total assets | 28,389,016 | |
Liabilities | ||
Payable for investments purchased | $ 50,883 | |
Payable for fund shares redeemed | 58,780 | |
Accrued management fee | 11,430 | |
Other payables and accrued expenses | 4,510 | |
Total liabilities | 125,603 | |
Net Assets | $ 28,263,413 | |
Net Assets consist of: | ||
Paid in capital | $ 20,985,949 | |
Undistributed net investment income | 49,460 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (951,354) | |
Net unrealized appreciation (depreciation) on investments | 8,179,358 | |
Net Assets, for 860,700 shares outstanding | $ 28,263,413 | |
Net Asset Value, offering price and redemption price per share ($28,263,413 ÷ 860,700 shares) | $ 32.84 |
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, 2003 | |
Investment Income | ||
Dividends (including $13,988 received from affiliated issuers) | $ 495,840 | |
Interest | 39,174 | |
Security lending | 13 | |
Total income | 535,027 | |
Expenses | ||
Management fee | $ 129,618 | |
Transfer agent fees | 60,416 | |
Accounting and security lending fees | 1,539 | |
Non-interested trustees' compensation | 106 | |
Depreciation in deferred trustee compensation account | (36) | |
Custodian fees and expenses | 281 | |
Registration fees | 70 | |
Audit | 193 | |
Legal | 112 | |
Miscellaneous | 1,942 | |
Total expenses before reductions | 194,241 | |
Expense reductions | (4,070) | 190,171 |
Net investment income (loss) | 344,856 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (including realized gain (loss) of $141,275 on sales of investments in affiliated issuers) | (94,517) | |
Foreign currency transactions | (152) | |
Futures contracts | 920 | |
Total net realized gain (loss) | (93,749) | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 1,062,282 | |
Futures contracts | (4,919) | |
Total change in net unrealized appreciation (depreciation) | 1,057,363 | |
Net gain (loss) | 963,614 | |
Net increase (decrease) in net assets resulting from operations | $ 1,308,470 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
Amounts in thousands | Year ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 344,856 | $ 308,109 |
Net realized gain (loss) | (93,749) | (826,722) |
Change in net unrealized appreciation (depreciation) | 1,057,363 | (5,663,958) |
Net increase (decrease) in net assets resulting from operations | 1,308,470 | (6,182,571) |
Distributions to shareholders from net investment income | (319,655) | (301,174) |
Distributions to shareholders from net realized gain | - | (349,292) |
Total distributions | (319,655) | (650,466) |
Share transactions | 3,679,661 | 4,007,898 |
Reinvestment of distributions | 309,163 | 630,005 |
Cost of shares redeemed | (4,563,028) | (6,054,662) |
Net increase (decrease) in net assets resulting from share transactions | (574,204) | (1,416,759) |
Total increase (decrease) in net assets | 414,611 | (8,249,796) |
Net Assets | ||
Beginning of period | 27,848,802 | 36,098,598 |
End of period (including undistributed net investment income of $49,460 and undistributed net investment income of $30,785, respectively) | $ 28,263,413 | $ 27,848,802 |
Other Information Shares | ||
Sold | 118,325 | 111,402 |
Issued in reinvestment of distributions | 10,093 | 17,431 |
Redeemed | (148,741) | (171,139) |
Net increase (decrease) | (20,323) | (42,306) |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Years ended July 31, | 2003 | 2002 | 2001 | 2000 | 1999 |
Selected Per-Share Data | |||||
Net asset value, beginning of period | $ 31.61 | $ 39.10 | $ 46.83 | $ 47.27 | $ 43.73 |
Income from Investment Operations | |||||
Net investment income (loss) B | .40 | .34 | .39 | .38 | .39 |
Net realized and unrealized gain (loss) | 1.20 | (7.12) | (3.83) | 2.47 | 5.69 |
Total from investment operations | 1.60 | (6.78) | (3.44) | 2.85 | 6.08 |
Distributions from net investment income | (.37) | (.33) | (.38) | (.39) | (.38) |
Distributions from net realized gain | - | (.38) | (3.91) | (2.90) | (2.16) |
Total distributions | (.37) | (.71) | (4.29) | (3.29) | (2.54) |
Net asset value, end of period | $ 32.84 | $ 31.61 | $ 39.10 | $ 46.83 | $ 47.27 |
Total Return A | 5.15% | (17.56)% | (8.25)% | 6.34% | 15.20% |
Ratios to Average Net Assets C | |||||
Expenses before expense reductions | .73% | .69% | .68% | .67% | .68% |
Expenses net of voluntary waivers, if any | .73% | .69% | .68% | .67% | .68% |
Expenses net of all reductions | .71% | .68% | .66% | .66% | .66% |
Net investment income (loss) | 1.29% | .94% | .94% | .82% | .88% |
Supplemental Data | |||||
Net assets, end of period (in millions) | $ 28,263 | $ 27,849 | $ 36,099 | $ 41,440 | $ 48,595 |
Portfolio turnover rate | 33% | 36% | 46% | 41% | 35% |
A Total returns would have been lower had certain expenses not been reduced during the periods shown.
B Calculated based on average shares outstanding during the period.
C Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers 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 fund.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
(Amounts in thousands except ratios)
1. Significant Accounting Policies.
Fidelity Growth & Income Portfolio (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Distributions are recorded on the ex-dividend date.
Annual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, foreign currency transactions, prior period premium and discount on debt securities, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 8,873,394 | | |
Unrealized depreciation | (732,320) | |
Net unrealized appreciation (depreciation) | 8,141,074 | |
Undistributed ordinary income | 38,968 | |
Capital loss carryforward | (902,579) | |
Cost for federal income tax purposes | $ 20,153,989 |
The tax character of distributions paid was as follows:
July 31, 2003 | July 31, 2002 | |
Ordinary Income | $ 319,655 | $ 307,740 |
Long-term Capital Gains | - | 342,726 |
Total | $ 319,655 | $ 650,466 |
2. 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. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
2. Operating Policies - continued
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
Futures Contracts. The fund may use futures contracts to manage its exposure to the stock market. Buying futures tends to increase the fund's exposure to the underlying instrument, while selling futures tends to decrease the fund's exposure to the underlying instrument or hedge other fund investments. Futures contracts involve, to varying degrees, risk of loss in excess of any futures variation margin reflected in the Statement of Assets and Liabilities. 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. Losses may arise from changes in the value of the underlying instruments or if the counter-parties do not perform under the contracts' terms. Gains (losses) are realized upon the expiration or closing of the futures contracts. Futures contracts are valued at the settlement price established each day by the board of trade or exchange on which they are traded.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annual management fee rate was .48% of the fund's average net assets.
Annual Report
4. Fees and Other Transactions with Affiliates - continued
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .23% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $29,731 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of
Annual Report
Notes to Financial Statements - continued
(Amounts in thousands except ratios)
6. Security Lending - continued
Annual Report
insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.
7. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $4,069 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's expenses by $1.
8. Transactions with Affiliated Companies.
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
Affiliate | Purchase | Sales | Dividend | Value |
SLM Corp | $ 34,903 | $ 130,837 | $ 13,988 | $ 1,269,938 |
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and the Shareholders of Fidelity Growth & Income Portfolio:
In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Growth & Income Portfolio (a fund of Fidelity Securities Fund) at July 31, 2003 and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Growth & Income Portfolio's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States of America which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at July 31, 2003 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
/s/PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Boston, Massachusetts
September 10, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Growth & Income (2001). Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stvropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity Magellan Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
Bart A. Grenier (44) | |
Year of Election or Appointment: 2001 Vice President of Growth & Income. Mr. Grenier also serves as Vice President of certain Equity Funds (2001), a position he previously held from 1999 to 2000, and Vice President of certain High Income Funds (2002). He is Senior Vice President of FMR (1999) and FMR Co., Inc. (2001), and President and Director of Strategic Advisers, Inc. (2002). He also heads Fidelity's Asset Allocation Group (2000), Fidelity's Growth and Income Group (2001), Fidelity's Value Group (2001), and Fidelity's High Income Division (2001). Previously, Mr. Grenier served as President of Fidelity Ventures (2000), Vice President of certain High Income Funds (1997-2000), High Income Division Head (1997-2000), Group Leader of the Income-Growth and Asset Allocation-Income Groups (1996-2000), and Assistant Equity Division Head (1997-2000). | |
Steven Kaye (44) | |
Year of Election or Appointment: 1993 Vice President of Growth & Income. | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 1998 Secretary of Growth & Income. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Growth & Income. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2002 President and Treasurer of Growth & Income. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2002 Chief Financial Officer of Growth & Income. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Growth & Income. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 1986 Assistant Treasurer of Growth & Income. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Growth & Income. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2002 Assistant Treasurer of Growth & Income. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2000 Assistant Treasurer of Growth & Income. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
Distributions
A total of .75% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.
The fund designates 100% of the dividends distributed during the fiscal year as qualifying for the dividends-received deduction for corporate shareholders.
The fund designates 100% of the dividends distributed in March and June during the fiscal year as amounts which may be taken into account as a dividend for purposes of the maximum rate under Section 1(h)(11) of the Internal Revenue Code.
The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.
Annual Report
Annual Report
Fidelity®
Real Estate Income
Fund
Annual Report
July 31, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | Ned Johnson's message to shareholders. | |
Performance | 4 | How the fund has done over time. |
Investment Summary | A summary of the fund's investments. | |
Investments | A complete list of the fund's investments with their market values. | |
Financial Statements | Statements of assets and liabilities, operations, and changes in net assets, | |
Notes | Notes to the financial statements. | |
Independent Auditors' Report | ||
Trustees and Officers | ||
Distributions | ||
For a free copy of the fund's proxy voting guidelines visit www.fidelity.com/goto/proxyguidelines, call 1-800-544-8544, or visit the Securities and Exchange Commision's website at www.sec.gov.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.
Annual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
This shareholder update and report on the performance of your fund is among the first to be produced under the new Sarbanes-Oxley Public Company Accounting and Investor Protection Act of 2002. This act requires that public companies certify, under penalty of law, the financial information they report to shareholders. It was adopted by Congress in reaction to several incidents of corporate malfeasance that brought the integrity of management of some publicly traded companies into question.
After the act was signed into law, the Securities and Exchange Commission interpreted it as applying to mutual funds as well as public companies. Thus, every mutual fund now is required to certify that the financial information provided in annual and semiannual reports to shareholders fully and fairly presents its financial position.
There is little doubt that the intent of Congress and regulators in this matter is a noble one - to improve the accuracy and accountability of financial reporting to investors by corporate America. We in no way condone any of the activities that brought about these requirements, and we welcome any and every reasonable proposal to strengthen investor protection and information disclosure.
That said, we are proud that mutual funds have always provided full and fair disclosure. Governed by the Investment Company Act of 1940 - and monitored and regulated by federal and state agencies, industry oversight associations, and independent directors - mutual funds are among the most transparent of all financial products. For example, the prices of mutual fund shares are established and published every business day, and the majority of members of the Board of Trustees that oversees our funds are not affiliated with the business of Fidelity. The disclosure standards of mutual funds actually have become models for governance and transparency across corporate America.
We are, of course, complying in full with the letter of this new requirement and hope that any future efforts by Congress to reassure investors about the honesty of corporate America will focus on practical and substantive solutions of genuine value to shareholders.
This sort of careful consideration was evident as Congress deliberated President Bush's tax cut package this spring, then enacted legislation that contains a variety of benefits for American families, investors and businesses. Although the final bill did not completely eliminate the tax that individual investors pay when they receive dividends from companies, it still will benefit American investors, and we applaud it in the spirit of compromise that marked the debate in Congress.
At Fidelity, we are committed to acting at all times in accordance with the highest standards of integrity and in the best interests of our fund shareholders. We are proud of the amount of information we provide to those who invest in our funds and pleased to continue that level of communication with you in these reports.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Annual Report
Performance: The Bottom Line
Average annual total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value) and assuming a constant rate of performance each year. How a fund did yesterday is no guarantee of how it will do tomorrow.
Average Annual Total Returns
Average annual total returns take Fidelity® Real Estate Income Fund cumulative total return and show you what would have happened if Fidelity Real Estate Income Fund shares had performed at a constant rate each year. These numbers will be reported once the fund is a year old. In addition, the growth of the hypothetical $10,000 investment in the fund will appear in the fund's next annual report.
Annual Report
Investment Summary
Top Five Stocks as of July 31, 2003 | |
% of fund's | |
Equity Residential (depositary shares) Series G, 7.25% | 1.9 |
Parkway Properties, Inc. Series D, 8.00% | 1.9 |
Apartment Investment & Management Co. Series T, 8.00% | 1.9 |
Equity Office Properties Trust Series B, 5.25% | 1.8 |
Simon Property Group, Inc. 6.50% | 1.7 |
9.2 | |
Top Five Bond Issuers as of July 31, 2003 | |
(with maturities greater than one year) | % of fund's |
Residential Finance LP/Residential Finance Development Corp. | 2.2 |
Morgan Stanley Capital I, Inc. | 2.0 |
Post Apartment Homes LP | 1.7 |
CS First Boston Mortgage Securities Corp. | 1.4 |
CP LP | 1.3 |
8.6 |
Asset Allocation (% of fund's net assets) | |||
As of July 31, 2003 * | |||
Stocks 42.6% | |||
Bonds 40.8% | |||
Convertible | |||
Other Investments 0.8% | |||
Short-Term | |||
* Foreign investments | 2.8% |
Annual Report
Investments July 31, 2003
Showing Percentage of Net Assets
Common Stocks - 10.7% | |||
Shares | Value (Note 1) | ||
FINANCIALS - 10.7% | |||
Real Estate - 10.7% | |||
Acadia Realty Trust (SBI) | 89,000 | $ 890,000 | |
Alexandria Real Estate Equities, Inc. | 8,200 | 375,150 | |
AMB Property Corp. (SBI) | 24,100 | 677,210 | |
Annaly Mortgage Management, Inc. | 8,700 | 166,605 | |
Apartment Investment & Management Co. Class A | 25,900 | 1,020,719 | |
Archstone-Smith Trust | 45,600 | 1,178,760 | |
Arden Realty, Inc. | 10,900 | 305,200 | |
AvalonBay Communities, Inc. | 26,000 | 1,221,480 | |
Capital Automotive (SBI) | 6,300 | 193,599 | |
CBL & Associates Properties, Inc. | 15,000 | 722,700 | |
Colonial Properties Trust (SBI) | 3,900 | 137,748 | |
Developers Diversified Realty Corp. | 6,500 | 193,050 | |
Equity Residential (SBI) | 15,000 | 418,500 | |
Federal Realty Investment Trust (SBI) | 47,300 | 1,649,351 | |
First Industrial Realty Trust, Inc. | 12,400 | 375,720 | |
Gables Residential Trust (SBI) | 12,800 | 406,400 | |
General Growth Properties, Inc. | 5,600 | 381,808 | |
Getty Realty Corp. | 11,300 | 272,782 | |
Health Care Property Investors, Inc. | 20,900 | 916,047 | |
Healthcare Realty Trust, Inc. | 57,600 | 1,888,704 | |
Hospitality Properties Trust (SBI) | 10,400 | 327,808 | |
Kilroy Realty Corp. | 2,100 | 60,417 | |
Kimco Realty Corp. | 5,600 | 229,208 | |
Lexington Corporate Properties Trust | 60,700 | 1,097,456 | |
Liberty Property Trust (SBI) | 9,900 | 343,431 | |
Manufactured Home Communities, Inc. | 6,700 | 245,220 | |
MFA Mortgage Investments, Inc. | 37,700 | 399,620 | |
Nationwide Health Properties, Inc. | 25,000 | 428,000 | |
Newcastle Investment Corp. | 8,500 | 181,220 | |
Post Properties, Inc. | 6,800 | 183,940 | |
Prentiss Properties Trust (SBI) | 5,300 | 164,035 | |
Price Legacy Corp. (a) | 42,300 | 161,163 | |
ProLogis | 19,900 | 548,245 | |
Public Storage, Inc. | 16,100 | 582,820 | |
Redwood Trust, Inc. | 15,000 | 612,000 | |
Regency Centers Corp. | 37,500 | 1,364,250 | |
Shurgard Storage Centers, Inc. Class A | 21,000 | 738,150 | |
Simon Property Group, Inc. | 21,700 | 918,995 | |
Sovran Self Storage, Inc. | 5,300 | 168,063 | |
Sun Communities, Inc. | 17,100 | 694,260 | |
The Macerich Co. | 6,300 | 235,179 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Real Estate - continued | |||
The Rouse Co. | 3,800 | $ 151,962 | |
The St. Joe Co. | 6,800 | 220,660 | |
Ventas, Inc. | 43,800 | 724,890 | |
Vornado Realty Trust | 8,200 | 375,888 | |
24,548,413 | |||
TOTAL COMMON STOCKS (Cost $22,144,692) | 24,548,413 | ||
Preferred Stocks - 40.2% | |||
Convertible Preferred Stocks - 8.3% | |||
FINANCIALS - 8.3% | |||
Real Estate - 8.3% | |||
Apartment Investment & Management Co. Series P, 9.00% | 25,800 | 651,450 | |
Crescent Real Estate Equities Co. Series A, 6.75% | 21,900 | 446,760 | |
Duke Realty Corp. (depositary shares) Series D, 7.375% | 3,700 | 101,121 | |
Equity Office Properties Trust Series B, 5.25% | 85,100 | 4,186,920 | |
Equity Residential (depositary shares) Series G, 7.25% | 170,200 | 4,391,155 | |
Glenborough Realty Trust, Inc. Series A, 7.75% | 94,400 | 2,289,200 | |
Innkeepers USA Trust Series A, 8.625% | 22,100 | 554,710 | |
Reckson Associates Realty Corp. Series A, 7.625% | 100,600 | 2,406,352 | |
Simon Property Group, Inc. 6.50% | 35,500 | 3,917,425 | |
18,945,093 | |||
Nonconvertible Preferred Stocks - 31.9% | |||
CONSUMER DISCRETIONARY - 0.0% | |||
Hotels, Restaurants & Leisure - 0.0% | |||
Hilton Hotels Corp. 8.00% | 4,800 | 122,448 | |
FINANCIALS - 31.9% | |||
Real Estate - 31.9% | |||
Alexandria Real Estate Equities, Inc. Series B, 9.10% | 21,200 | 559,680 | |
AMB Property Corp. Series L, 6.50% | 30,000 | 738,000 | |
American Real Estate Partners LP 5.00% pay-in-kind | 945 | 8,127 | |
Anthracite Capital, Inc. Series C, 9.375% | 36,000 | 918,000 | |
Apartment Investment & Management Co.: | |||
Series D, 8.75% | 25,400 | 637,794 | |
Series G, 9.375% | 63,900 | 1,713,798 | |
Series H, 9.50% | 4,000 | 100,680 | |
Preferred Stocks - continued | |||
Shares | Value (Note 1) | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
Apartment Investment & Management Co.: - continued | |||
Series Q, 10.10% | 16,300 | $ 437,329 | |
Series R, 10.00% | 63,100 | 1,687,925 | |
Series T, 8.00% | 170,000 | 4,250,000 | |
Bedford Property Investors, Inc. Series A, 8.75% (b) | 19,000 | 950,000 | |
Chelsea Property Group, Inc. Series A, 8.375% | 17,100 | 881,163 | |
Colonial Properties Trust (depositary shares) Series D, 8.125% | 38,200 | 985,560 | |
Commercial Net Lease Realty, Inc. Series A, 9.00% | 19,200 | 523,200 | |
Cousins Properties, Inc. Series A, 7.75% | 150,000 | 3,750,000 | |
Crescent Real Estate Equities Co. Series B, 9.50% | 18,800 | 485,040 | |
Developers Diversified Realty Corp. (depositary shares): | |||
Class F, 8.60% | 7,200 | 191,448 | |
Class G, 8.00% | 47,800 | 1,211,730 | |
Class H, 7.375% | 125,000 | 3,062,500 | |
Duke Realty Corp. (depositary shares) Series B, 7.99% | 2,000 | 103,500 | |
Eastgroup Properties, Inc. Series D, 7.95% | 110,800 | 2,991,600 | |
Equity Inns, Inc. Series B, 8.75% (c) | 60,000 | 1,500,000 | |
Equity Residential (depositary shares) Series N, 6.48% | 25,000 | 606,250 | |
Federal Realty Investment Trust Series B, 8.50% | 11,800 | 315,532 | |
First Industrial Realty Trust, Inc.: | |||
(depositary shares) Series D, 7.95% | 44,900 | 1,122,949 | |
(depositary shares) Series E, 7.90% | 39,100 | 975,545 | |
Gables Residential Trust Series D, 7.50% | 74,700 | 1,882,440 | |
Health Care Property Investors, Inc. Series B, 8.70% | 13,700 | 347,295 | |
Health Care REIT, Inc. Series D, 7.875% | 95,000 | 2,428,200 | |
Highwoods Properties, Inc.: | |||
(depositary shares) Series D, 8.00% | 23,300 | 577,840 | |
Series A, 8.625% | 158 | 140,620 | |
Series B, 8.00% | 27,500 | 690,250 | |
Home Properties of New York, Inc. Series F, 9.00% | 5,600 | 158,200 | |
Hospitality Properties Trust Series B, 8.875% | 13,800 | 364,872 | |
Host Marriott Corp.: | |||
Class A, 10.00% | 20,400 | 474,300 | |
Class B, 10.00% | 18,900 | 430,920 | |
Class C, 10.00% | 29,300 | 668,040 | |
HRPT Properties Trust: | |||
Series A, 9.875% | 11,500 | 311,650 | |
Series B, 8.75% | 29,700 | 790,020 | |
Preferred Stocks - continued | |||
Shares | Value (Note 1) | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
iStar Financial, Inc.: | |||
Series D, 8.00% | 32,200 | $ 811,440 | |
Series E, 7.875% | 94,200 | 2,355,000 | |
Keystone Property Trust Series D, 9.125% | 27,100 | 714,085 | |
La Quinta Properties, Inc. (depositary shares) Series A, 9.00% | 4,100 | 101,229 | |
LaSalle Hotel Properties Series A, 10.25% | 12,400 | 331,700 | |
Lexington Corporate Properties Trust Series B, 8.05% | 154,500 | 3,916,575 | |
LTC Properties, Inc.: | |||
Series A, 9.50% | 19,100 | 481,320 | |
Series B, 9.00% | 24,400 | 609,756 | |
Mid-America Apartment Communities, Inc. Series H, 8.30% (c) | 150,000 | 3,765,000 | |
Nationwide Health Properties, Inc. 7.677% | 3,734 | 279,117 | |
New Plan Excel Realty Trust: | |||
(depositary shares) Series D, 7.80% | 20,200 | 1,020,100 | |
(depositary shares) Series E, 7.625% | 21,200 | 551,200 | |
Newcastle Investment Corp. Series B, 9.75% | 112,600 | 3,006,420 | |
Omega Healthcare Investors, Inc.: | |||
Series A, 9.25% | 40,300 | 1,192,880 | |
Series B, 8.625% | 36,500 | 1,044,265 | |
Parkway Properties, Inc. Series D, 8.00% | 165,000 | 4,347,750 | |
Post Properties, Inc. Series A, 8.50% | 5,800 | 317,260 | |
Prime Group Realty Trust Series B, 9.00% | 30,500 | 691,130 | |
ProLogis: | |||
Series C, 8.54% | 6,478 | 362,768 | |
Series D, 7.92% | 8,700 | 220,371 | |
PS Business Parks, Inc.: | |||
Series D, 9.50% | 28,100 | 747,460 | |
Series F, 2.1875% | 21,900 | 584,730 | |
Realty Income Corp. 8.25% | 29,400 | 812,910 | |
Regency Centers Corp. (depositary shares) Series 3, 7.45% | 5,300 | 138,065 | |
Simon Property Group, Inc. Series G, 7.89% | 11,900 | 632,485 | |
Taubman Centers, Inc. Series A, 8.30% | 64,500 | 1,618,950 | |
The Mills Corp.: | |||
Series B, 9.00% | 25,000 | 654,500 | |
Series C, 9.00% | 8,100 | 213,435 | |
Preferred Stocks - continued | |||
Shares | Value (Note 1) | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
The Mills Corp.: - continued | |||
Series E, 8.75% | 38,100 | $ 988,695 | |
United Dominion Realty Trust, Inc. Series B, 8.60% | 14,000 | 371,980 | |
72,854,573 | |||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 72,977,021 | ||
TOTAL PREFERRED STOCKS (Cost $89,449,312) | 91,922,114 |
Nonconvertible Bonds - 29.7% | ||||
Principal | ||||
CONSUMER DISCRETIONARY - 3.9% | ||||
Hotels, Restaurants & Leisure - 2.0% | ||||
Extended Stay America, Inc. 9.875% 6/15/11 | $ 1,725,000 | 1,837,125 | ||
Felcor Lodging LP 8.5% 6/1/11 | 500,000 | 511,250 | ||
Florida Panthers Holdings, Inc. 9.875% 4/15/09 | 640,000 | 678,400 | ||
Hilton Hotels Corp. 7.625% 5/15/08 | 1,180,000 | 1,241,950 | ||
HMH Properties, Inc. 7.875% 8/1/05 | 140,000 | 140,700 | ||
La Quinta Inns, Inc. 7.4% 9/15/05 | 45,000 | 46,350 | ||
4,455,775 | ||||
Household Durables - 1.9% | ||||
D.R. Horton, Inc. 6.875% 5/1/13 | 300,000 | 289,500 | ||
K. Hovnanian Enterprises, Inc. 7.75% 5/15/13 (b) | 800,000 | 812,000 | ||
Ryland Group, Inc. 9.125% 6/15/11 | 300,000 | 336,000 | ||
Standard Pacific Corp. 9.25% 4/15/12 | 1,200,000 | 1,302,000 | ||
WCI Communities, Inc. 9.125% 5/1/12 | 1,500,000 | 1,567,500 | ||
4,307,000 | ||||
TOTAL CONSUMER DISCRETIONARY | 8,762,775 | |||
FINANCIALS - 23.2% | ||||
Diversified Financial Services - 0.9% | ||||
John Q. Hammons Hotels LP/John Q. Hammons Hotels Corp. III 8.875% 5/15/12 | 2,080,000 | 2,173,600 | ||
Insurance - 0.1% | ||||
ITT Corp. 6.75% 11/15/03 | 170,000 | 173,400 | ||
Nonconvertible Bonds - continued | ||||
Principal | Value | |||
FINANCIALS - continued | ||||
Real Estate - 22.2% | ||||
Ahold Lease Series 2001 A1 pass thru trust certificates 7.82% 1/2/20 | $ 1,513,167 | $ 1,407,246 | ||
Archstone-Smith Trust 5% 8/15/07 | 200,000 | 206,662 | ||
Arden Realty LP 8.875% 3/1/05 | 500,000 | 548,424 | ||
AvalonBay Communities, Inc.: | ||||
6.125% 11/1/12 | 750,000 | 780,061 | ||
6.625% 9/15/11 | 260,000 | 280,345 | ||
CarrAmerica Realty Corp.: | ||||
5.25% 11/30/07 | 600,000 | 616,577 | ||
7.125% 1/15/12 | 225,000 | 246,563 | ||
CBRE Escrow, Inc. 9.75% 5/15/10 (b) | 1,210,000 | 1,294,700 | ||
Colonial Realty LP 7% 7/14/07 | 1,000,000 | 1,080,369 | ||
CP LP 7.125% 11/1/11 | 2,900,000 | 2,989,993 | ||
Crescent Real Estate Equities LP 7.5% 9/15/07 (d) | 2,500,000 | 2,518,750 | ||
Crescent Real Estate Equities LP/Crescent Finance Co. 9.25% 4/15/09 | 1,000,000 | 1,068,750 | ||
Developers Diversified Realty Corp.: | ||||
4.625% 8/1/10 (b) | 335,000 | 319,995 | ||
6.625% 1/15/08 | 400,000 | 429,049 | ||
7.5% 7/15/18 | 200,000 | 213,055 | ||
Duke Realty LP 5.25% 1/15/10 | 200,000 | 202,991 | ||
ERP Operating LP 5.2% 4/1/13 | 1,000,000 | 979,577 | ||
Forest City Enterprises, Inc. 7.625% 6/1/15 | 2,000,000 | 2,065,000 | ||
Gables Realty LP: | ||||
5.75% 7/15/07 | 1,100,000 | 1,141,810 | ||
7.25% 2/15/06 | 500,000 | 539,774 | ||
Health Care Property Investors, Inc. 6% 3/1/15 | 1,000,000 | 966,133 | ||
Health Care REIT, Inc.: | ||||
7.5% 8/15/07 | 1,000,000 | 1,070,476 | ||
8% 9/12/12 | 1,450,000 | 1,553,507 | ||
Healthcare Realty Trust, Inc. 8.125% 5/1/11 | 1,370,000 | 1,446,591 | ||
Highwoods/Forsyth LP 7.125% 2/1/08 | 950,000 | 968,326 | ||
Hospitality Properties Trust 6.75% 2/15/13 | 100,000 | 99,248 | ||
HRPT Properties Trust 6.5% 1/15/13 | 200,000 | 204,333 | ||
iStar Financial, Inc.: | ||||
7% 3/15/08 | 1,800,000 | 1,890,000 | ||
8.75% 8/15/08 | 200,000 | 218,000 | ||
La Quinta Properties, Inc. 8.875% 3/15/11 (b) | 800,000 | 844,000 | ||
LNR Property Corp.: | ||||
7.625% 7/15/13 (b) | 1,500,000 | 1,470,000 | ||
Nonconvertible Bonds - continued | ||||
Principal | Value | |||
FINANCIALS - continued | ||||
Real Estate - continued | ||||
LNR Property Corp.: - continued | ||||
9.375% 3/15/08 | $ 1,000,000 | $ 1,047,500 | ||
10.5% 1/15/09 | 140,000 | 148,400 | ||
Mack-Cali Realty LP 7.25% 3/15/09 | 100,000 | 112,479 | ||
MeriStar Hospitality Corp. 9% 1/15/08 | 1,800,000 | 1,755,000 | ||
Nationwide Health Properties, Inc. 8.25% 7/1/12 | 1,300,000 | 1,317,888 | ||
Pan Pacific Retail Properties, Inc. 4.7% 6/1/13 | 500,000 | 459,798 | ||
Post Apartment Homes LP: | ||||
6.85% 3/16/15 (d) | 2,085,000 | 2,183,389 | ||
7.7% 12/20/10 | 1,500,000 | 1,597,107 | ||
ProLogis 7.1% 4/15/08 | 775,000 | 868,212 | ||
Regency Centers LP: | ||||
6.75% 1/15/12 | 500,000 | 537,609 | ||
7.95% 1/15/11 | 500,000 | 582,100 | ||
Security Capital Industrial Trust 7.95% 5/15/08 | 130,000 | 143,203 | ||
Senior Housing Properties Trust 8.625% 1/15/12 | 1,600,000 | 1,680,000 | ||
Simon Property Group LP 5.375% 8/28/08 | 550,000 | 571,691 | ||
Summit Properties Partnership LP 6.95% 8/15/04 | 300,000 | 310,785 | ||
Sun Communties Operating LP 5.75% 4/15/10 | 1,000,000 | 1,014,790 | ||
Tanger Properties LP: | ||||
7.875% 10/24/04 | 1,500,000 | 1,515,000 | ||
9.125% 2/15/08 | 300,000 | 318,000 | ||
The Rouse Co. 7.2% 9/15/12 | 1,000,000 | 1,085,109 | ||
Thornburg Mortgage, Inc. 8% 5/15/13 (b) | 2,000,000 | 2,040,000 | ||
Ventas Realty LP/Ventas Capital Corp.: | ||||
8.75% 5/1/09 | 500,000 | 530,000 | ||
9% 5/1/12 | 500,000 | 542,500 | ||
Vornado Realty Trust 5.625% 6/15/07 | 700,000 | 728,312 | ||
50,749,177 | ||||
TOTAL FINANCIALS | 53,096,177 | |||
HEALTH CARE - 1.2% | ||||
Health Care Providers & Services - 1.2% | ||||
Beverly Enterprises, Inc. 9.625% 4/15/09 | 2,000,000 | 2,040,000 | ||
Manor Care, Inc. 8% 3/1/08 | 700,000 | 756,000 | ||
2,796,000 | ||||
Nonconvertible Bonds - continued | ||||
Principal | Value | |||
TELECOMMUNICATION SERVICES - 1.4% | ||||
Wireless Telecommunication Services - 1.4% | ||||
Crown Castle International Corp. 9.375% 8/1/11 | $ 2,000,000 | $ 2,060,000 | ||
SpectraSite, Inc. 8.25% 5/15/10 (b) | 1,000,000 | 1,050,000 | ||
3,110,000 | ||||
TOTAL NONCONVERTIBLE BONDS (Cost $67,059,411) | 67,764,952 | |||
Asset-Backed Securities - 1.5% | ||||
Home Equity Asset Trust NIMS Trust: | ||||
Series 2003-2N Class A, 8% 9/27/33 (b) | 91,256 | 89,339 | ||
Series 2003-3N Class A, 8% 9/27/33 (b) | 300,000 | 291,000 | ||
Morgan Stanley Dean Witter Capital I Trust Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (b) | 36,993 | 36,993 | ||
Residential Finance LP/Residential Finance Development Corp. Series 2003-B: | ||||
Class B8, 7.6106% 7/10/35 (b)(d) | 2,000,000 | 2,000,000 | ||
Class B9, 12.8606% 7/10/35 (b)(d) | 1,000,000 | 1,000,000 | ||
TOTAL ASSET-BACKED SECURITIES (Cost $3,422,626) | 3,417,332 | |||
Collateralized Mortgage Obligations - 1.3% | ||||
Private Sponsor - 1.1% | ||||
Countrywide Home Loans Series 2002-38 Class B3, 5% 2/25/18 (b) | 243,905 | 212,502 | ||
Residential Asset Mortgage Products, Inc. Series 2002-RM1 Class Bl1, 5.5% 12/25/17 (b) | 204,232 | 176,597 | ||
Residential Finance LP/Residential Finance Development Corp.: | ||||
floater Series 2003-A Class B7, 6.8606% 3/10/35 (b)(d) | 1,493,046 | 1,493,046 | ||
Series 2002-A Class B10, 17.1106% 10/10/34 (d) | 571,412 | 583,287 | ||
Residential Funding Mortgage Securities I, Inc. Series 2002-S20 Class M3, 5.25% 12/25/17 | 97,587 | 92,189 | ||
TOTAL PRIVATE SPONSOR | 2,557,621 | |||
Collateralized Mortgage Obligations - continued | ||||
Principal | Value (Note 1) | |||
U.S. Government Agency - 0.2% | ||||
Fannie Mae Series 2003-W1 Class B3, 5.75% 12/25/42 | $ 347,504 | $ 258,890 | ||
Fannie Mae REMIC pass thru certificates Series 2001-W3 Class B3, 7% 9/25/41 | 309,924 | 255,832 | ||
TOTAL U.S. GOVERNMENT AGENCY | 514,722 | |||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $3,079,520) | 3,072,343 | |||
Commercial Mortgage Securities - 8.3% | ||||
Banc America Commercial Mortgage, Inc. Series 2002-PB2 Class XC, 0.4308% 6/11/35 (b)(d)(e) | 79,090,450 | 2,091,642 | ||
CBA Mortgage Corp. Series 1993-C1 Class F, 6.72% 12/25/03 (b)(d) | 700,000 | 672,000 | ||
Crest Dartmouth Street 2003 1 Ltd. Series 2003-1A Class PS, 34.039% 6/28/38 (b)(d) | 590,000 | 608,760 | ||
Crest Dartmouth Street 2003 1 Ltd./Crest Dartmouth Street 2003 1 Corp. Series 2003-1A Class D, 9% 6/28/38 (b) | 850,000 | 774,332 | ||
CS First Boston Mortgage Securities Corp.: | ||||
Series 1995-WF1 Class E, 8.2432% 12/21/27 (b)(d) | 2,250,000 | 2,278,782 | ||
Series 2003-TFLA Class AX, 0.5318% 4/15/13 (b)(d)(e) | 102,500,000 | 973,238 | ||
GMAC Commercial Mortgage Securities, Inc. sequential pay Series 1999-C1 Class A2, 6.175% 5/15/33 | 650,000 | 705,686 | ||
Greenwich Capital Commercial Funding Corp. Series 2003-FL1 Class MCH, 4.3675% 7/5/18 (b)(d) | 1,455,465 | 1,455,010 | ||
J.P. Morgan Commercial Mortgage Finance Corp. Series 1999-C7 Class F, 6% 10/15/35 (b) | 350,000 | 318,878 | ||
Lehman Brothers Floating Rate Commercial Mortgage Trust Series 2003-C4A Class F, 3.3513% 7/11/15 (b)(d) | 221,000 | 221,207 | ||
Merrill Lynch Mortgage Trust Series 2002-MW1 Class H, 5.695% 7/12/34 (b) | 820,000 | 678,038 | ||
Morgan Stanley Capital I, Inc.: | ||||
sequential pay Series 1999-WF1 Class A2, 6.21% 11/15/31 | 200,000 | 218,003 | ||
Series 1995-GAL1 Class E, 8.25% 8/15/27 (b) | 2,134,737 | 2,219,126 | ||
Series 1997-HF1 Class G, 6.86% 7/15/29 (b) | 555,000 | 523,174 | ||
Series 1998-HF1 Class F, 7.18% 3/15/30 (b) | 1,500,000 | 1,548,281 | ||
Commercial Mortgage Securities - continued | ||||
Principal | Value | |||
Mortgage Capital Funding, Inc. Series 1998-MC3 Class F, 7.3048% 11/18/31 (b)(d) | $ 350,000 | $ 342,904 | ||
Nationslink Funding Corp. Series 1998-2 Class F, 7.105% 8/20/30 (b) | 2,075,000 | 1,939,801 | ||
Nomura Asset Securities Corp. Series 1998-D6 Class B1, 6% 3/15/30 (b) | 600,000 | 530,381 | ||
Penn Mutual Life Insurance Co./Penn Insurance & Annuity Co. Series 1996-PML Class K, 7.9% 11/15/26 (b) | 400,000 | 417,375 | ||
Wachovia Bank Commercial Mortgage Trust Series 2003-C4 Class J, 4.932% 4/15/35 (b) | 600,000 | 473,899 | ||
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $18,888,663) | 18,990,517 | |||
Floating Rate Loans - 0.8% | ||||
FINANCIALS - 0.5% | ||||
Diversified Financial Services - 0.5% | ||||
American Tower LP Tranche B term loan 4.61% 12/31/07 (d) | 997,494 | 1,004,975 | ||
TELECOMMUNICATION SERVICES - 0.3% | ||||
Wireless Telecommunication Services - 0.3% | ||||
SpectraSite Communications, Inc. Tranche B term loan 5.3245% 12/31/07 (d) | 724,876 | 729,407 | ||
TOTAL FLOATING RATE LOANS (Cost $1,642,918) | 1,734,382 |
Cash Equivalents - 9.7% | |||
Maturity | Value | ||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.06%, dated 7/31/03 due 8/1/03) | $ 22,153,654 | $ 22,153,000 | |
TOTAL INVESTMENT PORTFOLIO - 102.2% (Cost $227,840,142) | 233,603,053 | ||
NET OTHER ASSETS - (2.2)% | (5,058,369) | ||
NET ASSETS - 100% | $ 228,544,684 |
Legend |
(a) Non-income producing |
(b) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $32,147,000 or 14.1% of net assets. |
(c) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(d) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(e) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $225,031,267 and $20,865,536, respectively, of which long-term U.S. government and government agency obligations aggregated $2,829,676 and $2,840,402, respectively. |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S.Government and U.S.Government Agency Obligations | 0.2% |
AAA,AA,A | 1.8 |
BBB | 11.8 |
BB | 16.5 |
B | 8.4 |
CCC,CC,C | 0.0 |
Not Rated | 2.9 |
Equities | 50.9 |
Short-Term Investments and | 7.5 |
We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $4,202 for the period. |
The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $1,734,382 or 0.8% of net assets. |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements
Statement of Assets and Liabilities
July 31, 2003 | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $22,153,000) (cost $227,840,142) - See accompanying schedule | $ 233,603,053 | |
Cash | 874 | |
Receivable for investments sold | 957,694 | |
Receivable for fund shares sold | 1,588,039 | |
Dividends receivable | 218,092 | |
Interest receivable | 1,466,074 | |
Prepaid Expenses | 12,899 | |
Redemption fees receivable | 1,180 | |
Total assets | 237,847,905 | |
Liabilities | ||
Payable for investments purchased | $ 3,469,553 | |
Delayed delivery | 5,250,000 | |
Payable for fund shares redeemed | 376,919 | |
Accrued management fee | 120,694 | |
Other payables and accrued expenses | 86,055 | |
Total liabilities | 9,303,221 | |
Net Assets | $ 228,544,684 | |
Net Assets consist of: | ||
Paid in capital | $ 219,760,306 | |
Undistributed net investment income | 2,117,828 | |
Accumulated undistributed net realized gain (loss) on investments | 903,639 | |
Net unrealized appreciation (depreciation) on investments | 5,762,911 | |
Net Assets, for 20,940,852 shares outstanding | $ 228,544,684 | |
Net Asset Value, offering price and redemption price per share ($228,544,684 ÷ 20,940,852 shares) | $ 10.91 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Statements - continued
Statement of Operations
For the period February 4, 2003 (commencement of operations) to July 31, 2003 | ||
Investment Income | ||
Dividends | $ 1,703,451 | |
Interest | 1,680,243 | |
Total income | 3,383,694 | |
Expenses | ||
Management fee | $ 319,875 | |
Transfer agent fees | 119,457 | |
Accounting fees and expenses | 31,690 | |
Non-interested trustees' compensation | 152 | |
Custodian fees and expenses | 13,576 | |
Registration fees | 33,033 | |
Audit | 25,290 | |
Legal | 151 | |
Miscellaneous | 13 | |
Total expenses before reductions | 543,237 | |
Expense reductions | (16,472) | 526,765 |
Net investment income (loss) | 2,856,929 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on investment securities | 903,571 | |
Change in net unrealized appreciation (depreciation) on investment securities | 5,762,911 | |
Net gain (loss) | 6,666,482 | |
Net increase (decrease) in net assets resulting from operations | $ 9,523,411 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 2,856,929 |
Net realized gain (loss) | 903,571 |
Change in net unrealized appreciation (depreciation) | 5,762,911 |
Net increase (decrease) in net assets resulting from operations | 9,523,411 |
Distributions to shareholders from net investment income | (739,035) |
Share transactions | 228,397,082 |
Reinvestment of distributions | 660,162 |
Cost of shares redeemed | (9,331,894) |
Net increase (decrease) in net assets resulting from share transactions | 219,725,350 |
Redemption fees | 34,958 |
Total increase (decrease) in net assets | 228,544,684 |
Net Assets | |
Beginning of period | - |
End of period (including undistributed net investment income of $2,117,828) | $ 228,544,684 |
Other Information Shares | |
Sold | 21,747,045 |
Issued in reinvestment of distributions | 62,753 |
Redeemed | (868,946) |
Net increase (decrease) | 20,940,852 |
See accompanying notes which are an integral part of the financial statements.
Annual Report
Financial Highlights
Year ended July 31, | 2003 E |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .27 |
Net realized and unrealized gain (loss) | .71 |
Total from investment operations | .98 |
Distributions from net investment income | (.07) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 10.91 |
Total ReturnB,C | 9.83% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | .97% A |
Expenses net of voluntary waivers, if any | .97% A |
Expenses net of all reductions | .94% A |
Net investment income (loss) | 5.10% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 228,545 |
Portfolio turnover rate | 41% A |
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the period shown.
D Calculated based on average shares outstanding during the period.
E For the period February 4, 2003 (commencement of operations) to July 31, 2003.
F Expense ratios reflect operating expenses of the fund. 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 fund during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers 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 fund.
G Amount represents less than $.01 per-share.
See accompanying notes which are an integral part of the financial statements.
Annual Report
Notes to Financial Statements
For the period ended July 31, 2003
1. Significant Accounting Policies.
Fidelity Real Estate Income Fund (the fund) is a fund of Fidelity Securities Fund (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. The fund estimates the components of distributions received from Real Estate Investment Trusts (REITs). Distributions received in excess of income are recorded as a reduction of cost of investments and/or realized gain. Interest income, which includes amortization of premium and accretion of discount on debt securities is accrued as earned.
Annual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Annual Report
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Prepaid Expenses. Fidelity Management & Research Company (FMR) bears all organizational expenses of the fund, except for the cost of registering and qualifying new shares for distribution under federal and state securities law. These registration expenses are borne by the fund and amortized over one year.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Distributions are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. In addition, the fund will treat a portion of the proceeds from shares redeemed as a distribution from net investment income for income tax purposes. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to market discount, non-taxable dividends and losses deferred due to wash sales.
The tax-basis components of distributable earnings and the federal tax cost as of period end were as follows:
Unrealized appreciation | $ 7,005,730 | | |
Unrealized depreciation | (1,207,825) | |
Net unrealized appreciation (depreciation) | 5,797,905 | |
Undistributed ordinary income | 2,809,904 | |
Undistributed long-term capital gain | 101,425 | |
Cost for federal income tax purposes | $ 227,805,148 |
The tax character of distributions paid was as follows:
July 31, | ||
Ordinary Income | $ 739,035 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a short-term trading fee equal to .75% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.
Annual Report
Notes to Financial Statements - continued
2. Operating Policies.
Annual Report
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, 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 under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
Annual Report
Notes to Financial Statements - continued
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .57% of the fund's average net assets.
Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .21% of average net assets.
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $12,931 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $3,541.
Annual Report
Independent Auditors' Report
To the Trustees of Fidelity Securities Fund and Shareholders of Fidelity Real Estate Income Fund:
We have audited the accompanying statement of assets and liabilities of Fidelity Real Estate Income Fund (the Fund), a fund of Fidelity Securities Fund, including the portfolio of investments, as of July 31, 2003, and the related statement of operations, the statement of changes in net assets, and the financial highlights for the period from February 4, 2003 (commencement of operations) to July 31, 2003. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of July 31, 2003, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Real Estate Income Fund as of July 31, 2003, and the results of its operations, the changes in its net assets, and its financial highlights for the period from February 4, 2003 (commencement of operations) to July 31, 2003, in conformity with accounting principles generally accepted in the United States of America.
/s/DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Boston, Massachusetts
September 12, 2003
Annual Report
Trustees and Officers
The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for William O. McCoy, each of the Trustees oversees 279 funds advised by FMR or an affiliate. Mr. McCoy oversees 281 funds advised by FMR or an affiliate.
The Trustees hold office without limit in time except that (a) any Trustee may resign; (b) any Trustee may be removed by written instrument, signed by at least two-thirds of the number of Trustees prior to such removal; (c) any Trustee who requests to be retired or who has become incapacitated by illness or injury may be retired by written instrument signed by a majority of the other Trustees; and (d) any Trustee may be removed at any special meeting of shareholders by a two-thirds vote of the outstanding voting securities of the trust. In any event, each non-interested Trustee shall retire not later than the last day of the calendar year in which his or her 72nd birthday occurs. The executive officers and Advisory Board Members hold office without limit in time, except that any officer and Advisory Board Member may resign or may be removed by a vote of a majority of the Trustees at any regular meeting or any special meeting of the Trustees. Except as indicated, each individual has held the office shown or other offices in the same company for the past five years.
The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-800-544-8544.
Interested Trustees*:
Correspondence intended for each Trustee who is an "interested person" (as defined in the 1940 Act) may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
Edward C. Johnson 3d (73)** | |
Year of Election or Appointment: 1984 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as Chief Executive Officer, Chairman, and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of Fidelity Management & Research (Far East) Inc.; Chairman (1998) and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001) and a Director (2000) of FMR Co., Inc. | |
Abigail P. Johnson (41)** | |
Year of Election or Appointment: 2001 Senior Vice President of Real Estate Income. Ms. Johnson also serves as Senior Vice President of other Fidelity funds (2001). She is President and a Director of FMR (2001), Fidelity Investments Money Management, Inc. (2001), FMR Co., Inc. (2001), and a Director of FMR Corp. Previously, Ms. Johnson managed a number of Fidelity funds. | |
Laura B. Cronin (49) | |
Year of Election or Appointment: 2003 Ms. Cronin is an Executive Vice President (2002) and Chief Financial Officer (2002) of FMR Corp. and is a member of the Fidelity Management Committee (2003). Previously, Ms. Cronin served as Vice President of Finance of FMR (1997-1999), and Chief Financial Officer of FMR (1999-2001), Fidelity Personal Investments (2001), and Fidelity Brokerage Company (2001-2002). | |
Robert L. Reynolds (51) | |
Year of Election or Appointment: 2003 Mr. Reynolds is a Director (2003) and Chief Operating Officer (2002) of FMR Corp. and is the head of the Fidelity Management Committee (2003). He also serves on the Board at Fidelity Investments Canada, Ltd. (2000). Previously, Mr. Reynolds served as President of Fidelity Investments Institutional Retirement Group (1996-2000). |
* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR.
** Edward C. Johnson 3d, Trustee, is Abigail P. Johnson's father.
Annual Report
Non-Interested Trustees:
Correspondence intended for each non-interested Trustee (that is, the Trustees other than the Interested Trustees) may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235.
Name, Age; Principal Occupation | |
J. Michael Cook (60) | |
Year of Election or Appointment: 2001 Prior to Mr. Cook's retirement in May 1999, he served as Chairman and Chief Executive Officer of Deloitte & Touche LLP (accounting/consulting), Chairman of the Deloitte & Touche Foundation, and a member of the Board of Deloitte Touche Tohmatsu. He currently serves as a Director of Comcast (telecommunications, 2002), International Flavors & Fragrances, Inc. (2000), Rockwell Automation (2000) and The Dow Chemical Company (2000). He is a Member of the Diversity Advisory Council of Marakon (2003) and the Advisory Board of the Directorship Search Group, Chairman Emeritus of the Board of Catalyst (a leading organization for the advancement of women in business), and is Chairman of the Accountability Advisory Council to the Comptroller General of the United States. He also serves as a Member of the Advisory Board of the Graduate School of Business of the University of Florida, his alma mater. | |
Ralph F. Cox (71) | |
Year of Election or Appointment: 1991 Mr. Cox is President of RABAR Enterprises (management consulting for the petroleum industry). Prior to February 1994, he was President of Greenhill Petroleum Corporation (petroleum exploration and production). Until March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of CH2M Hill Companies (engineering), and Abraxas Petroleum (petroleum exploration and production, 1999). In addition, he is a member of advisory boards of Texas A&M University and the University of Texas at Austin. | |
Phyllis Burke Davis (71) | |
Year of Election or Appointment: 1992 Mrs. Davis is retired from Avon Products, Inc. (consumer products) where she held various positions including Senior Vice President of Corporate Affairs and Group Vice President of U.S. product marketing, sales, distribution, and manufacturing. Mrs. Davis is a member of the Board of Directors of the Southampton Hospital in Southampton, N.Y. (1998). Previously, she served as a Director of BellSouth Corporation (telecommunications), Eaton Corporation (diversified industrial), the TJX Companies, Inc. (retail stores), Hallmark Cards, Inc., and Nabisco Brands, Inc. | |
Robert M. Gates (59) | |
Year of Election or Appointment: 1997 Dr. Gates is President of Texas A&M University (2002). He was Director of the Central Intelligence Agency (CIA) from 1991 to 1993. From 1989 to 1991, Dr. Gates served as Assistant to the President of the United States and Deputy National Security Advisor. Dr. Gates is a Director of NACCO Industries, Inc. (mining and manufacturing), and Parker Drilling Co., Inc. (drilling and rental tools for the energy industry, 2001). He also serves as a member of the Advisory Board of VoteHere.net (secure internet voting, 2001). Previously, Dr. Gates served as a Director of LucasVarity PLC (automotive components and diesel engines), a Director of TRW Inc. (automotive, space, defense, and information technology), and Dean of the George Bush School of Government and Public Service at Texas A&M University (1999-2001). Dr. Gates also is a Trustee of the Forum for International Policy. | |
Donald J. Kirk (70) | |
Year of Election or Appointment: 1987 Mr. Kirk is a Governor of the American Stock Exchange (2001), a Trustee and former Chairman of the Board of Trustees of the Greenwich Hospital Association, a Director of the Yale-New Haven Health Services Corp. (1998), and a Director Emeritus and former Chairman of the Board of Directors of National Arts Strategies Inc. Mr. Kirk was an Executive-in-Residence (1995-2000) and a Professor (1987-1995) at Columbia University Graduate School of Business. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Previously, Mr. Kirk served as a Governor of the National Association of Securities Dealers, Inc. (1996-2002), a member and Vice Chairman of the Public Oversight Board of the American Institute of Certified Public Accountants' SEC Practice Section (1995-2002), a Director of General Re Corporation (reinsurance, 1987-1998) and as a Director of Valuation Research Corp. (appraisals and valuations). | |
Marie L. Knowles (56) | |
Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing), URS Corporation (multidisciplinary engineering, 1999), and McKesson Corporation (healthcare service, 2002). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California. | |
Ned C. Lautenbach (59) | |
Year of Election or Appointment: 2000 Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. He was most recently Senior Vice President and Group Executive of Worldwide Sales and Services. From 1993 to 1995, he was Chairman of IBM World Trade Corporation, and from 1994 to 1998 was a member of IBM's Corporate Executive Committee. Mr. Lautenbach serves as Chairman and as a Director (1998) of Acterna Corporation (communications test equipment). He is also Co-Chairman of Covansys, Inc. (global provider of business and technology solutions, 2000). In addition, he is a Director of Eaton Corporation (diversified industrial) and the Philharmonic Center for the Arts in Naples, Florida (1999). He also is a member of the Council on Foreign Relations. | |
Marvin L. Mann (70) | |
Year of Election or Appointment: 1993 Mr. Mann is Chairman of the non-interested Trustees (2001). He is Chairman Emeritus of Lexmark International, Inc. (computer peripherals) where he remains a member of the Board. Prior to 1991, he held the positions of Vice President of International Business Machines Corporation (IBM) and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Board member of Imation Corp. (imaging and information storage) and Acterna Corporation (communications test equipment, 1999). He is also a member of the Director Services Committee of the Investment Company Institute. In addition, Mr. Mann is a member of the President's Cabinet at the University of Alabama and the Board of Visitors of the Culverhouse College of Commerce and Business Administration at the University of Alabama. | |
William O. McCoy (69) | |
Year of Election or Appointment: 1997 Prior to his retirement in December 1994, Mr. McCoy was Vice Chairman of the Board of BellSouth Corporation (telecommunications) and President of BellSouth Enterprises. He is currently a Director of Liberty Corporation (holding company), Duke Realty Corporation (real estate), Progress Energy, Inc. (electric utility), and Acterna Corporation (communications test equipment, 1999). He is also a partner of Franklin Street Partners (private investment management firm) and a member of the Research Triangle Foundation Board. In addition, Mr. McCoy served as the Interim Chancellor (1999-2000) and a member of the Board of Visitors (1994-1998) for the University of North Carolina at Chapel Hill and currently serves on the Board of Directors of the University of North Carolina Health Care System and the Board of Visitors of the Kenan-Flagler Business School (University of North Carolina at Chapel Hill). He also served as Vice President of Finance for the University of North Carolina (16-school system, 1995-1998). | |
William S. Stavropoulos (64) | |
Year of Election or Appointment: 2002 Mr. Stavropoulos is Chairman of the Board, President and CEO (2002), and Chairman of the Executive Committee (2000) and a Director of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000) and Chief Executive Officer (1995-2000). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), BellSouth Corporation (telecommunications), Chemical Financial Corporation, and Maersk Inc. (industrial conglomerate, 2002). He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council, World Business Council for Sustainable Development, and the University of Notre Dame Advisory Council for the College of Science. |
Annual Report
Trustees and Officers - continued
Advisory Board Members and Executive Officers:
Correspondence intended for Dr. Heilmeier may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to 82 Devonshire Street, Boston, Massachusetts 02109.
Name, Age; Principal Occupation | |
George H. Heilmeier (67) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), INET Technologies Inc. (telecommunications network surveillance, 2001) and Teletech Holdings (customer management services, 1998). He is Chairman of the General Motors Technology Advisory Committee and a Life Fellow of the IEEE (2000). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences and The Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. | |
Peter S. Lynch (60) | |
Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Securities Fund. Vice Chairman and a Director of FMR, and Vice Chairman (2001) and a Director (2000) of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). Prior to May 31, 1990, he was a Director of FMR and Executive Vice President of FMR (a position he held until March 31, 1991), Vice President of Fidelity®Magellan®Fund and FMR Growth Group Leader, and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services. In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield, John F. Kennedy Library, and the Museum of Fine Arts of Boston. | |
Philip L. Bullen (43) | |
Year of Election or Appointment: 2003 Vice President of Real Estate Income. Mr. Bullen also serves as Vice President of certain Equity Funds (2001) and certain High Income Funds (2001). He is Senior Vice President of FMR (2001) and FMR Co., Inc. (2001), President and a Director of Fidelity Management & Research (Far East) Inc. (2001), President and a Director of Fidelity Management & Research (U.K.) Inc. (2002), and a Director of Strategic Advisers, Inc. (2002). Before joining Fidelity Investments, Mr. Bullen was President and Chief Investment Officer of Santander Global Advisors (1997-2000) and President and Chief Executive Officer of Boston's Baring Asset Management Inc. (1994-1997). | |
Mark P. Snyderman (46) | |
Year of Election or Appointment: 2003 Vice President of Real Estate Income. Prior to assuming his current responsibilities, Mr. Snyderman served as an investment officer for commercial mortgage-backed securities in Fidelity's real estate group and as a portfolio manager of real estate stock and real estate bond mutual funds and institutional accounts. | |
Eric D. Roiter (54) | |
Year of Election or Appointment: 2003 Secretary of Real Estate Income. He also serves as Secretary of other Fidelity funds (1998); Vice President, General Counsel, and Clerk of FMR Co., Inc. (2001) and FMR (1998); Vice President and Clerk of FDC (1998); Assistant Clerk of Fidelity Management & Research (U.K.) Inc. (2001) and Fidelity Management & Research (Far East) Inc. (2001); and Assistant Secretary of Fidelity Investments Money Management Inc. (2001). Prior to joining Fidelity, Mr. Roiter was with the law firm of Debevoise & Plimpton, as an associate (1981-1984) and as a partner (1985-1997), and served as an Assistant General Counsel of the U.S. Securities and Exchange Commission (1979-1981). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003). | |
Stuart Fross (43) | |
Year of Election or Appointment: 2003 Assistant Secretary of Real Estate Income. Mr. Fross also serves as Assistant Secretary of other Fidelity funds (2003) and is an employee of FMR. | |
Name, Age; Principal Occupation | |
Maria F. Dwyer (44) | |
Year of Election or Appointment: 2003 President and Treasurer of Real Estate Income. Ms. Dwyer also serves as President and Treasurer of other Fidelity funds (2002) and is a Vice President (1999) and an employee (1996) of FMR. Prior to joining Fidelity, Ms. Dwyer served as Director of Compliance for MFS Investment Management. | |
Timothy F. Hayes (52) | |
Year of Election or Appointment: 2003 Chief Financial Officer of Real Estate Income. Mr. Hayes also serves as Chief Financial Officer of other Fidelity funds (2002). Recently he was appointed President of Fidelity Service Company (2003) where he also serves as a Director. Mr. Hayes also serves as President of Fidelity Investments Operations Group (FIOG, 2002), which includes Fidelity Pricing and Cash Management Services Group (FPCMS), where he was appointed President in 1998. Previously, Mr. Hayes served as Chief Financial Officer of Fidelity Investments Corporate Systems and Service Group (1998) and Fidelity Systems Company (1997-1998). | |
John R. Hebble (45) | |
Year of Election or Appointment: 2003 Deputy Treasurer of Real Estate Income. Mr. Hebble also serves as Deputy Treasurer of other Fidelity funds (2003), and is an employee of FMR. Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds (1998-2003). | |
John H. Costello (56) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Real Estate Income. Mr. Costello also serves as Assistant Treasurer of other Fidelity funds and is an employee of FMR. | |
Francis V. Knox, Jr. (56) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Real Estate Income. Mr. Knox also serves as Assistant Treasurer of other Fidelity funds (2002), and is a Vice President and an employee of FMR. Previously, Mr. Knox served as Vice President of Investment & Advisor Compliance (1990-2001), and Compliance Officer of Fidelity Management & Research (U.K.) Inc. (1992-2002), Fidelity Management & Research (Far East) Inc. (1991-2002), and FMR Corp. (1995-2002). | |
Mark Osterheld (48) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Real Estate Income. Mr. Osterheld also serves as Assistant Treasurer of other Fidelity funds (2002) and is an employee of FMR. | |
Thomas J. Simpson (45) | |
Year of Election or Appointment: 2003 Assistant Treasurer of Real Estate Income. Mr. Simpson is Assistant Treasurer of other Fidelity funds (2000) and an employee of FMR (1996). Prior to joining FMR, Mr. Simpson was Vice President and Fund Controller of Liberty Investment Services (1987-1995). |
Annual Report
Distributions
The Board of Trustees of Fidelity Real Estate Income Fund voted to pay on September 8, 2003, to shareholders of record at the opening of business on September 5, 2003, a distribution of $.03 per share derived from capital gains realized from sales of portfolio securities.
A total of .13% 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 will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.
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
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
By PC
Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.
(computer_graphic)Fidelity's Web Site
www.fidelity.com
* 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
7373 N. Scottsdale Road
Scottsdale, AZ
California
815 East Birch Street
Brea, CA
1411 Chapin Avenue
Burlingame, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19200 Von Karman Avenue
Irvine, CA
601 Larkspur Landing Circle
Larkspur, CA
10100 Santa Monica Blvd.
Los Angeles, CA
27101 Puerta Real
Mission Viejo, CA
73-575 El Paseo
Palm Desert, CA
251 University Avenue
Palo Alto, CA
1760 Challenge Way
Sacramento, CA
7676 Hazard Center Drive
San Diego, CA
8 Montgomery Street
San Francisco, CA
21701 Hawthorne Boulevard
Torrance, CA
2001 North Main Street
Walnut Creek, CA
6300 Canoga Avenue
Woodland Hills, CA
Colorado
1625 Broadway
Denver, CO
9185 East Westview Road
Littleton, 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
222 Delaware Avenue
Wilmington, DE
Florida
4400 N. Federal Highway
Boca Raton, FL
121 Alhambra Plaza
Coral Gables, FL
2948 N. Federal Highway
Ft. Lauderdale, FL
1907 West State Road 434
Longwood, FL
8880 Tamiami Trail, North
Naples, FL
3501 PGA Boulevard
West Palm Beach, FL
8065 Beneva Road
Sarasota, FL
1502 N. Westshore Blvd.
Tampa, FL
Georgia
3445 Peachtree Road, N.E.
Atlanta, GA
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
1000 Abernathy Road
Atlanta, GA
Illinois
One North LaSalle Street
Chicago, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
3232 Lake Avenue
Wilmette, IL
Indiana
4729 East 82nd Street
Indianapolis, IN
Kansas
5400 College Boulevard
Overland Park, KS
Maine
Three Canal Plaza
Portland, ME
Maryland
7401 Wisconsin Avenue
Bethesda, MD
One W. Pennsylvania Ave.
Towson, MD
Massachusetts
801 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
405 Cochituate Road
Framingham, MA
416 Belmont Street
Worcester, MA
Annual Report
Michigan
280 Old N. Woodward Ave.
Birmingham, MI
43420 Grand River Avenue
Novi, MI
29155 Northwestern Hwy.
Southfield, MI
Minnesota
7600 France Avenue South
Edina, MN
Missouri
8885 Ladue Road
Ladue, MO
New Jersey
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
3518 Route 1 North
Princeton, NJ
New York
1055 Franklin Avenue
Garden City, NY
37 West Jericho Turnpike
Huntington Station, NY
1271 Avenue of the Americas
New York, NY
61 Broadway
New York, NY
350 Park Avenue
New York, NY
North Carolina
4611 Sharon Road
Charlotte, NC
Ohio
3805 Edwards Road
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
Oregon
16850 SW 72nd Avenue
Tigard, OR
Pennsylvania
600 West DeKalb Pike
King of Prussia, PA
1735 Market Street
Philadelphia, PA
12001 Perry Highway
Wexford, PA
Rhode Island
47 Providence Place
Providence, RI
Tennessee
6150 Poplar Avenue
Memphis, TN
Texas
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
6005 West Park Boulevard
Plano, TX 75093
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Annual Report
Utah
215 South State Street
Salt Lake City, UT
Virginia
1861 International Drive
McLean, VA
Washington
411 108th Avenue, N.E.
Bellevue, WA
1518 6th Avenue
Seattle, WA
Washington, DC
1900 K Street, N.W.
Washington, DC
Wisconsin
595 North Barker Road
Brookfield, WI
Annual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(U.K.) Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Investments Japan Limited
Fidelity International Investment
Advisers
Fidelity International Investment
Advisers (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
Brown Brothers Harriman & Co.
Boston, MA
Fidelity's Growth and Income Funds
Balanced Fund
Convertible Securities Fund
Equity-Income Fund
Equity-Income II Fund
Fidelity® Fund
Global Balanced Fund
Growth & Income Portfolio
Growth & Income II Portfolio
Puritan® Fund
Real Estate Income Fund
Real Estate Investment Portfolio
Utilities Fund
REI-UANN-0903
1.789710.100
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
Exchanges/Redemptions
and Account Assistance 1-800-544-6666
Product Information 1-800-544-6666
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
Fidelity Automated Service
Telephone (FAST®) (automated graphic) 1-800-544-5555
(automated graphic) Automated line for quickest service(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
Item 2. Code of Ethics
As of the end of the period, July 31, 2003, the Fidelity Securities Fund has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its President and Treasurer and its Chief Financial Officer. A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
Item 3. Audit Committee Financial Expert
The Board of Trustees of Fidelity Securities Fund has determined that Marie L. Knowles and Donald J. Kirk are each audit committee financial experts, as defined in Item 3 of Form N-CSR. Ms. Knowles and Mr. Kirk are each independent for purposes of Item 3 of Form N-CSR.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Reserved
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Reserved
Item 9. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Securities Fund's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 10. Exhibits
(a) | (1) | Code of Ethics pursuant to Item 2 of Form N-CSR is filed and attached hereto as EX-99.CODE ETH. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Securities Fund
By: | /s/Maria Dwyer |
Maria Dwyer | |
President and Treasurer | |
Date: | September 24, 2003 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Maria Dwyer |
Maria Dwyer | |
President and Treasurer | |
Date: | September 24, 2003 |
By: | /s/Timothy F. Hayes |
Timothy F. Hayes | |
Chief Financial Officer | |
Date: | September 24, 2003 |