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: | January 31, 2004 |
Item 1. Reports to Stockholders
Fidelity®
Real Estate Income
Fund
Semiannual Report
January 31, 2004
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | <Click Here> | Ned Johnson's message to shareholders. |
Investment Changes | <Click Here> | A summary of major shifts in the fund's investments over the past six months. |
Investments | <Click Here> | A complete list of the fund's investments with their market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and changes in net assets,
as well as financial highlights. |
Notes | <Click Here> | Notes to the financial statements. |
| | |
For a free copy of the fund's proxy voting guidelines 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.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.
With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:
First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.
Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.
Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.
For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.
Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.
Best regards,
/s/Edward C. Johnson 3d
Edward C. Johnson 3d
Semiannual Report
Investment Changes
Top Five Stocks as of January 31, 2004 |
| % of fund's
net assets | % of fund's net assets
6 months ago |
Equity Office Properties Trust Series B, 5.25% | 1.6 | 1.8 |
Apartment Investment & Management Co.
Series T, 8.00% | 1.3 | 1.9 |
Saul Centers, Inc. 8.00% | 1.1 | 0.0 |
Cousins Properties, Inc. Series A, 7.75% | 1.1 | 1.6 |
Parkway Properties, Inc. Series D, 8.00% | 1.1 | 1.9 |
| 6.2 | |
Top Five Bonds as of January 31, 2004 |
(with maturities greater than one year) | % of fund's
net assets | % of fund's net assets
6 months ago |
J.P. Morgan Commercial Mortgage Finance Corp. Series 1997-C5 Class F, 7.5605% 9/15/29 | 1.6 | 0.0 |
Crescent Real Estate Equities LP 7.5% 9/15/07 | 0.9 | 1.1 |
Healthcare Realty Trust, Inc. 8.125% 5/1/11 | 0.8 | 0.6 |
Mariner Health Care, Inc. 8.25% 12/15/13 | 0.7 | 0.0 |
Florida Panthers Holdings, Inc. 9.875% 4/15/09 | 0.7 | 0.3 |
| 4.7 | |
Asset Allocation (% of fund's net assets) |
As of January 31, 2004 * | As of July 31, 2003 ** |
 | Stocks 40.6% | | | Stocks 42.6% | |
 | Bonds 44.4% | | | Bonds 40.8% | |
 | Convertible
Securities 3.9% | | | Convertible
Securities 8.3% | |
 | Other Investments 1.3% | | | Other Investments 0.8% | |
 | Short-Term
Investments and
Net Other Assets 9.8% | | | Short-Term
Investments and
Net Other Assets 7.5% | |
* Foreign
investments | 1.4% | | ** Foreign
investments | 2.8% | |
Semiannual Report
Investments January 31, 2004 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 13.8% |
| Shares | | Value (Note 1) |
FINANCIALS - 13.8% |
Diversified Financial Services - 0.2% |
Origen Financial, Inc. (d) | 100,000 | | $ 1,000,000 |
Real Estate - 13.5% |
Acadia Realty Trust (SBI) | 147,100 | | 1,971,140 |
Alexandria Real Estate Equities, Inc. | 24,000 | | 1,484,400 |
AMB Property Corp. (SBI) | 30,000 | | 1,048,500 |
Annaly Mortgage Management, Inc. | 85,000 | | 1,667,700 |
Apartment Investment & Management Co. Class A | 61,000 | | 2,145,980 |
Archstone-Smith Trust | 39,400 | | 1,080,742 |
Arden Realty, Inc. | 19,900 | | 616,900 |
AvalonBay Communities, Inc. | 32,100 | | 1,576,110 |
Capital Automotive (SBI) | 11,800 | | 416,422 |
CarrAmerica Realty Corp. | 14,000 | | 444,780 |
CBL & Associates Properties, Inc. | 21,200 | | 1,281,540 |
Cedar Shopping Centers, Inc. (a) | 50,000 | | 660,000 |
Commercial Net Lease Realty, Inc. | 40,000 | | 732,000 |
Developers Diversified Realty Corp. | 20,100 | | 691,038 |
Equity Residential (SBI) | 37,800 | | 1,099,980 |
Federal Realty Investment Trust (SBI) | 64,600 | | 2,667,334 |
First Industrial Realty Trust, Inc. | 13,300 | | 486,514 |
First Potomac Realty Trust | 30,300 | | 609,030 |
General Growth Properties, Inc. | 30,300 | | 909,000 |
Getty Realty Corp. | 12,000 | | 320,160 |
Hanover Capital Mortgage Holdings, Inc. | 45,000 | | 582,300 |
Health Care Property Investors, Inc. | 22,800 | | 1,282,044 |
Health Care REIT, Inc. | 15,000 | | 580,500 |
Healthcare Realty Trust, Inc. | 70,000 | | 2,873,500 |
Hersha Hospitality Trust | 108,400 | | 1,195,652 |
Highwoods Properties, Inc. (SBI) | 14,300 | | 390,390 |
Home Properties of New York, Inc. | 15,400 | | 616,770 |
Kilroy Realty Corp. | 15,500 | | 507,625 |
Kimco Realty Corp. | 16,000 | | 738,080 |
LaSalle Hotel Properties (SBI) | 10,000 | | 197,500 |
Lexington Corporate Properties Trust | 92,300 | | 1,947,530 |
Manufactured Home Communities, Inc. | 65,200 | | 2,190,720 |
MFA Mortgage Investments, Inc. | 40,500 | | 404,190 |
Prentiss Properties Trust (SBI) | 16,500 | | 552,750 |
Price Legacy Corp. (a) | 97,600 | | 399,184 |
ProLogis | 21,200 | | 691,968 |
Public Storage, Inc. | 22,900 | | 1,087,979 |
Redwood Trust, Inc. | 14,200 | | 781,426 |
Regency Centers Corp. | 46,700 | | 1,947,390 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
FINANCIALS - continued |
Real Estate - continued |
Shurgard Storage Centers, Inc. | 25,800 | | $ 980,658 |
Simon Property Group, Inc. | 73,804 | | 3,841,498 |
Spirit Finance Corp. (d) | 200,000 | | 2,000,000 |
Sun Communities, Inc. | 33,700 | | 1,326,432 |
The Macerich Co. | 29,600 | | 1,424,648 |
The Rouse Co. | 11,000 | | 541,640 |
The St. Joe Co. | 31,600 | | 1,248,200 |
Ventas, Inc. | 74,800 | | 1,870,000 |
Vornado Realty Trust | 27,400 | | 1,533,030 |
| | 55,642,874 |
Thrifts & Mortgage Finance - 0.1% |
New Century Financial Corp. | 10,000 | | 460,100 |
TOTAL COMMON STOCKS (Cost $47,736,275) | 57,102,974 |
Preferred Stocks - 30.7% |
| | | |
Convertible Preferred Stocks - 3.9% |
FINANCIALS - 3.9% |
Real Estate - 3.9% |
Apartment Investment & Management Co. Series P, 9.00% | 25,800 | | 661,770 |
Crescent Real Estate Equities Co. Series A, 6.75% | 36,900 | | 828,405 |
Equity Office Properties Trust Series B, 5.25% | 135,900 | | 6,808,583 |
Glenborough Realty Trust, Inc. Series A, 7.75% | 99,000 | | 2,478,960 |
LTC Properties, Inc. Series E, 8.50% | 67,100 | | 2,059,970 |
Reckson Associates Realty Corp. Series A, 7.625% | 125,600 | | 3,221,640 |
| | 16,059,328 |
Nonconvertible Preferred Stocks - 26.8% |
CONSUMER DISCRETIONARY - 0.0% |
Hotels, Restaurants & Leisure - 0.0% |
Hilton Hotels Corp. 8.00% | 4,800 | | 129,504 |
FINANCIALS - 26.8% |
Real Estate - 26.8% |
Alexandria Real Estate Equities, Inc. Series B, 9.10% | 21,200 | | 581,516 |
American Real Estate Partners LP 5.00% pay-in-kind | 945 | | 8,127 |
Anthracite Capital, Inc. Series C, 9.375% | 36,000 | | 995,400 |
Preferred Stocks - continued |
| Shares | | Value (Note 1) |
Nonconvertible Preferred Stocks - continued |
FINANCIALS - continued |
Real Estate - continued |
Apartment Investment & Management Co.: | | | |
Series D, 8.75% | 16,335 | | $ 412,622 |
Series G, 9.375% | 63,900 | | 1,775,142 |
Series Q, 10.10% | 71,000 | | 1,951,080 |
Series R, 10.00% | 68,300 | | 1,877,567 |
Series T, 8.00% | 204,400 | | 5,212,200 |
Bedford Property Investors, Inc. Series A, 8.75% (d) | 19,000 | | 989,330 |
Brandywine Realty Trust Series C, 7.50% | 90,000 | | 2,283,300 |
Capital Automotive Series A, 7.50% | 20,000 | | 515,000 |
CBL & Associates Properties, Inc. (depositary shares) Series C, 7.75% | 64,500 | | 1,722,150 |
Chelsea Property Group, Inc. Series A, 8.375% | 17,100 | | 1,004,625 |
Colonial Properties Trust (depositary shares) Series D, 8.125% | 29,800 | | 792,084 |
Commercial Net Lease Realty, Inc. Series A, 9.00% | 19,200 | | 529,152 |
Corporate Office Properties Trust Series H, 7.50% | 50,000 | | 1,282,000 |
Cousins Properties, Inc. Series A, 7.75% | 170,000 | | 4,598,500 |
Crescent Real Estate Equities Co. Series B, 9.50% | 18,700 | | 517,990 |
Developers Diversified Realty Corp. (depositary shares): | | | |
Class F, 8.60% | 7,200 | | 196,776 |
Class G, 8.00% | 47,800 | | 1,293,468 |
Class H, 7.375% | 114,000 | | 3,054,060 |
Duke Realty Corp.: | | | |
(depositary shares) Series B, 7.99% | 3,000 | | 163,800 |
(depositary shares) Series D, 7.375% | 3,700 | | 113,442 |
Eastgroup Properties, Inc. Series D, 7.95% | 104,500 | | 2,863,300 |
Equity Inns, Inc. Series B, 8.75% | 60,000 | | 1,650,000 |
Equity Residential (depositary shares) Series N, 6.48% | 14,700 | | 369,999 |
Federal Realty Investment Trust Series B, 8.50% | 11,600 | | 314,940 |
First Industrial Realty Trust, Inc.: | | | |
(depositary shares) Series D, 7.95% | 49,900 | | 1,260,973 |
(depositary shares) Series E, 7.90% | 44,100 | | 1,119,699 |
Gables Residential Trust Series D, 7.50% | 34,700 | | 919,550 |
Glimcher Realty Trust: | | | |
Series F, 8.75% | 62,000 | | 1,650,440 |
Series G, 8.125% (e) | 120,000 | | 3,000,000 |
Health Care Property Investors, Inc. Series F, 7.10% | 40,000 | | 1,024,800 |
Health Care REIT, Inc. Series D, 7.875% | 78,500 | | 2,099,875 |
Highwoods Properties, Inc.: | | | |
(depositary shares) Series D, 8.00% | 36,300 | | 916,575 |
Preferred Stocks - continued |
| Shares | | Value (Note 1) |
Nonconvertible Preferred Stocks - continued |
FINANCIALS - continued |
Real Estate - continued |
Highwoods Properties, Inc.: - continued | | | |
Series A, 8.625% | 214 | | $ 205,440 |
Series B, 8.00% | 37,500 | | 951,000 |
Home Properties of New York, Inc. Series F, 9.00% | 3,300 | | 91,080 |
Host Marriott Corp.: | | | |
Class B, 10.00% | 26,000 | | 699,660 |
Class C, 10.00% | 53,100 | | 1,453,347 |
HRPT Properties Trust: | | | |
Series A, 9.875% | 11,500 | | 317,055 |
Series B, 8.75% | 29,700 | | 828,927 |
Innkeepers USA Trust Series C, 8.00% | 110,000 | | 2,828,100 |
iStar Financial, Inc.: | | | |
Series D, 8.00% | 23,100 | | 593,439 |
Series E, 7.875% | 88,200 | | 2,309,958 |
Series F, 7.80% | 25,000 | | 650,000 |
Keystone Property Trust Series D, 9.125% | 27,600 | | 753,480 |
Kilroy Realty Corp. Series E, 7.80% | 100,000 | | 2,555,000 |
Koger Equity, Inc. 8.50% | 25,000 | | 685,000 |
Kramont Realty Trust Series E, 8.25% | 140,000 | | 3,738,000 |
La Quinta Properties, Inc. (depositary shares) Series A, 9.00% | 10,000 | | 254,900 |
LaSalle Hotel Properties: | | | |
Series A, 10.25% | 12,400 | | 350,300 |
Series B, 8.375% | 29,400 | | 780,570 |
Lexington Corporate Properties Trust Series B, 8.05% | 124,500 | | 3,299,250 |
LTC Properties, Inc.: | | | |
Series A, 9.50% | 5,220 | | 131,962 |
Series B, 9.00% | 24,400 | | 622,688 |
Maguire Properties, Inc. Series A, 7.625% | 40,000 | | 1,004,800 |
Mid-America Apartment Communities, Inc. Series H, 8.30% | 139,000 | | 3,662,650 |
Nationwide Health Properties, Inc. 7.677% | 18,134 | | 1,722,730 |
New Plan Excel Realty Trust (depositary shares) Series D, 7.80% | 22,231 | | 1,189,359 |
Newcastle Investment Corp. Series B, 9.75% | 122,800 | | 3,401,560 |
Novastar Financial, Inc. Series C, 8.90% | 120,000 | | 3,180,000 |
Omega Healthcare Investors, Inc.: | | | |
Series A, 9.25% | 39,900 | | 1,008,273 |
Series B, 8.625% | 32,000 | | 808,000 |
Parkway Properties, Inc. Series D, 8.00% | 165,000 | | 4,456,650 |
Post Properties, Inc. Series A, 8.50% | 5,800 | | 348,116 |
Preferred Stocks - continued |
| Shares | | Value (Note 1) |
Nonconvertible Preferred Stocks - continued |
FINANCIALS - continued |
Real Estate - continued |
Prime Group Realty Trust Series B, 9.00% (a) | 42,500 | | $ 1,092,250 |
ProLogis Series C, 8.54% | 6,478 | | 388,680 |
PS Business Parks, Inc.: | | | |
(depositary shares) Series F, 8.75% | 21,900 | | 591,300 |
(depositary shares) Series H, 7.00% | 27,000 | | 675,000 |
Series D, 9.50% | 28,100 | | 761,510 |
Realty Income Corp. 8.25% | 31,900 | | 899,580 |
Saul Centers, Inc. 8.00% | 175,800 | | 4,746,600 |
Simon Property Group, Inc. Series G, 7.89% | 11,900 | | 654,500 |
SL Green Realty Corp. Series C, 7.625% | 75,000 | | 1,927,500 |
Taubman Centers, Inc. Series A, 8.30% | 66,500 | | 1,684,445 |
The Mills Corp.: | | | |
Series B, 9.00% | 25,000 | | 685,000 |
Series C, 9.00% | 13,100 | | 356,451 |
Series E, 8.75% | 38,100 | | 1,032,129 |
United Dominion Realty Trust, Inc. Series B, 8.60% | 12,500 | | 343,750 |
Winston Hotels, Inc. Series B, 8.00% (e) | 40,000 | | 1,004,000 |
| | 110,783,471 |
TOTAL NONCONVERTIBLE PREFERRED STOCKS | | 110,912,975 |
TOTAL PREFERRED STOCKS (Cost $119,959,180) | 126,972,303 |
Nonconvertible Bonds - 26.7% |
| Principal Amount | | |
CONSUMER DISCRETIONARY - 4.0% |
Hotels, Restaurants & Leisure - 2.5% |
Courtyard by Marriott II LP/Courtyard II Finance Co. 10.75% 2/1/08 | | $ 1,500,000 | | 1,507,500 |
Extended Stay America, Inc. 9.875% 6/15/11 | | 2,025,000 | | 2,237,625 |
Felcor Lodging LP 8.5% 6/1/11 | | 500,000 | | 535,000 |
Florida Panthers Holdings, Inc. 9.875% 4/15/09 | | 2,800,000 | | 2,968,000 |
Gaylord Entertainment Co. 8% 11/15/13 (d) | | 330,000 | | 353,925 |
Hilton Hotels Corp. 7.625% 5/15/08 | | 1,680,000 | | 1,856,400 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value
(Note 1) |
CONSUMER DISCRETIONARY - continued |
Hotels, Restaurants & Leisure - continued |
HMH Properties, Inc. 7.875% 8/1/08 | | $ 800,000 | | $ 832,000 |
La Quinta Inns, Inc. 7.4% 9/15/05 | | 45,000 | | 46,125 |
| | 10,336,575 |
Household Durables - 1.5% |
D.R. Horton, Inc. 9.375% 3/15/11 | | 300,000 | | 340,500 |
K. Hovnanian Enterprises, Inc. 7.75% 5/15/13 | | 800,000 | | 840,000 |
Ryland Group, Inc. 9.125% 6/15/11 | | 300,000 | | 342,000 |
Standard Pacific Corp. 9.25% 4/15/12 | | 1,600,000 | | 1,888,000 |
WCI Communities, Inc.: | | | | |
7.875% 10/1/13 | | 370,000 | | 394,050 |
9.125% 5/1/12 | | 2,000,000 | | 2,210,000 |
| | 6,014,550 |
TOTAL CONSUMER DISCRETIONARY | | 16,351,125 |
FINANCIALS - 19.6% |
Diversified Financial Services - 1.5% |
American Tower Escrow Corp. 0% 8/1/08 (c) | | 2,300,000 | | 1,598,500 |
John Q. Hammons Hotels LP/John Q. Hammons Hotels Corp. III 8.875% 5/15/12 | | 2,080,000 | | 2,288,000 |
Reckson Operating Partnership LP 7.75% 3/15/09 | | 2,100,000 | | 2,365,331 |
| | 6,251,831 |
Real Estate - 18.1% |
Ahold Lease Series 2001 A1 pass thru trust certificates 7.82% 1/2/20 | | 1,513,167 | | 1,573,693 |
Archstone-Smith Trust 5% 8/15/07 | | 200,000 | | 210,952 |
Arden Realty LP: | | | | |
8.5% 11/15/10 | | 1,000,000 | | 1,207,782 |
8.875% 3/1/05 | | 500,000 | | 535,168 |
AvalonBay Communities, Inc.: | | | | |
6.125% 11/1/12 | | 1,750,000 | | 1,892,662 |
6.625% 9/15/11 | | 260,000 | | 290,518 |
CarrAmerica Realty Corp.: | | | | |
5.25% 11/30/07 | | 600,000 | | 634,597 |
7.125% 1/15/12 | | 225,000 | | 255,461 |
CB Richard Ellis Services, Inc. 9.75% 5/15/10 | | 1,210,000 | | 1,367,300 |
Colonial Realty LP 7% 7/14/07 | | 1,000,000 | | 1,111,244 |
Crescent Real Estate Equities LP 7.5% 9/15/07 (f) | | 3,500,000 | | 3,710,000 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value
(Note 1) |
FINANCIALS - continued |
Real Estate - continued |
Crescent Real Estate Equities LP/Crescent Finance Co. 9.25% 4/15/09 | | $ 1,500,000 | | $ 1,665,000 |
Developers Diversified Realty Corp.: | | | | |
4.625% 8/1/10 | | 335,000 | | 335,262 |
6.625% 1/15/08 | | 400,000 | | 439,138 |
7.5% 7/15/18 | | 200,000 | | 227,218 |
Duke Realty LP 5.25% 1/15/10 | | 200,000 | | 211,592 |
First Industrial LP: | | | | |
6.875% 4/15/12 | | 1,000,000 | | 1,100,524 |
7.375% 3/15/11 | | 2,100,000 | | 2,368,351 |
Forest City Enterprises, Inc. 7.625% 6/1/15 | | 2,000,000 | | 2,140,000 |
Gables Realty LP: | | | | |
5.75% 7/15/07 | | 1,100,000 | | 1,177,567 |
7.25% 2/15/06 | | 500,000 | | 541,135 |
Health Care Property Investors, Inc. 6% 3/1/15 | | 1,500,000 | | 1,575,710 |
Health Care REIT, Inc.: | | | | |
6% 11/15/13 | | 2,000,000 | | 2,063,654 |
7.5% 8/15/07 | | 1,500,000 | | 1,696,338 |
8% 9/12/12 | | 1,450,000 | | 1,686,591 |
Healthcare Realty Trust, Inc. 8.125% 5/1/11 | | 2,790,000 | | 3,262,238 |
Highwoods/Forsyth LP: | | | | |
7% 12/1/06 | | 500,000 | | 543,205 |
7.125% 2/1/08 | | 950,000 | | 1,045,987 |
7.5% 4/15/18 | | 1,250,000 | | 1,397,431 |
Hospitality Properties Trust 6.75% 2/15/13 | | 1,500,000 | | 1,585,740 |
HRPT Properties Trust 6.5% 1/15/13 | | 200,000 | | 215,882 |
iStar Financial, Inc.: | | | | |
6% 12/15/10 | | 1,000,000 | | 1,037,500 |
6.5% 12/15/13 | | 1,000,000 | | 1,037,500 |
7% 3/15/08 | | 1,800,000 | | 1,944,000 |
La Quinta Properties, Inc. 8.875% 3/15/11 | | 1,300,000 | | 1,446,250 |
LNR Property Corp.: | | | | |
7.25% 10/15/13 (d) | | 1,500,000 | | 1,597,500 |
7.625% 7/15/13 | | 1,500,000 | | 1,605,000 |
Mack-Cali Realty LP 7.25% 3/15/09 | | 100,000 | | 114,028 |
MeriStar Hospitality Corp. 9% 1/15/08 | | 2,000,000 | | 2,095,000 |
Nationwide Health Properties, Inc. 8.25% 7/1/12 | | 1,300,000 | | 1,359,145 |
Post Apartment Homes LP: | | | | |
6.85% 3/16/15 (f) | | 2,085,000 | | 2,164,810 |
7.7% 12/20/10 | | 1,500,000 | | 1,729,490 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value
(Note 1) |
FINANCIALS - continued |
Real Estate - continued |
Price Development Co. LP 7.29% 3/11/08 | | $ 2,200,000 | | $ 2,351,250 |
ProLogis 7.1% 4/15/08 | | 775,000 | | 872,941 |
Regency Centers LP 7.95% 1/15/11 | | 500,000 | | 592,422 |
Security Capital Industrial Trust 7.95% 5/15/08 | | 130,000 | | 144,528 |
Senior Housing Properties Trust 8.625% 1/15/12 | | 2,100,000 | | 2,341,500 |
Shurgard Storage Centers, Inc. 5.875% 3/15/13 | | 2,000,000 | | 2,054,146 |
Simon Property Group LP 5.375% 8/28/08 | | 550,000 | | 583,808 |
Summit Properties Partnership LP 6.95% 8/15/04 | | 300,000 | | 306,522 |
Sun Communties Operating LP 5.75% 4/15/10 | | 1,000,000 | | 1,024,885 |
Tanger Properties LP: | | | | |
7.875% 10/24/04 (d) | | 1,500,000 | | 1,537,500 |
9.125% 2/15/08 (d) | | 300,000 | | 330,000 |
The Rouse Co. 7.2% 9/15/12 | | 2,220,000 | | 2,525,976 |
Thornburg Mortgage, Inc.: | | | | |
8% 5/15/13 (d) | | 2,500,000 | | 2,587,500 |
8% 5/15/13 (d) | | 500,000 | | 517,500 |
Ventas Realty LP/Ventas Capital Corp.: | | | | |
8.75% 5/1/09 | | 800,000 | | 900,000 |
9% 5/1/12 | | 1,000,000 | | 1,130,000 |
Vornado Realty Trust 5.625% 6/15/07 | | 900,000 | | 964,824 |
| | 74,963,465 |
TOTAL FINANCIALS | | 81,215,296 |
HEALTH CARE - 1.9% |
Health Care Providers & Services - 1.9% |
Beverly Enterprises, Inc. 9.625% 4/15/09 | | 2,000,000 | | 2,240,000 |
Genesis HealthCare Corp. 8% 10/15/13 (d) | | 1,420,000 | | 1,483,900 |
Manor Care, Inc.: | | | | |
7.5% 6/15/06 | | 390,000 | | 426,075 |
8% 3/1/08 | | 700,000 | | 792,750 |
Mariner Health Care, Inc. 8.25% 12/15/13 (d) | | 2,950,000 | | 2,979,500 |
| | 7,922,225 |
TELECOMMUNICATION SERVICES - 1.2% |
Wireless Telecommunication Services - 1.2% |
American Towers, Inc. 7.25% 12/1/11 (d) | | 1,000,000 | | 1,022,500 |
Crown Castle International Corp.: | | | | |
7.5% 12/1/13 (d) | | 500,000 | | 510,000 |
Nonconvertible Bonds - continued |
| Principal Amount | | Value
(Note 1) |
TELECOMMUNICATION SERVICES - continued |
Wireless Telecommunication Services - continued |
Crown Castle International Corp.: - continued | | | | |
9.375% 8/1/11 | | $ 1,500,000 | | $ 1,657,500 |
SpectraSite, Inc. 8.25% 5/15/10 | | 1,500,000 | | 1,605,000 |
| | 4,795,000 |
TOTAL NONCONVERTIBLE BONDS (Cost $105,281,988) | 110,283,646 |
Asset-Backed Securities - 2.9% |
|
ABSC NIMS Trust: | | | | |
Series 2003-HE4 Class A, 7% 8/17/33 (d) | | 1,871,345 | | 1,824,561 |
Series 2003-HE5 Class A, 7% 8/17/33 (d) | | 1,013,499 | | 990,695 |
Series 2004-HE1 Class A, 7% 1/17/34 | | 2,820,000 | | 2,777,700 |
Bombardier Capital Mortgage Securitization Corp. Series 2000-A Class A3, 7.83% 6/15/30 | | 1,723,148 | | 1,448,249 |
Conseco Finance Securitizations Corp. Series 2000-4 Class A6, 8.31% 5/1/32 | | 2,040,000 | | 1,685,651 |
Fremont NIMS Trust Series 2003-B Class NOTE, 5.65% 11/25/33 (d) | | 872,286 | | 870,105 |
Green Tree Financial Corp. Series 1999-5 Class A5, 7.86% 3/1/30 | | 1,662,000 | | 1,461,849 |
Home Equity Asset Trust NIMS Trust: | | | | |
Series 2003-2N Class A, 8% 9/27/33 (d) | | 61,679 | | 60,445 |
Series 2003-3N Class A, 8% 9/27/33 (d) | | 205,212 | | 201,621 |
IndyMac Manufactured Housing Contract Series 1997-1 Class M, 7.105% 2/25/28 | | 3,000,000 | | 911,341 |
Morgan Stanley Dean Witter Capital I Trust Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (d) | | 12,847 | | 12,870 |
TOTAL ASSET-BACKED SECURITIES (Cost $12,203,183) | 12,245,087 |
Collateralized Mortgage Obligations - 2.6% |
|
Private Sponsor - 2.4% |
Countrywide Home Loans, Inc.: | | | | |
Series 2002-38 Class B3, 5% 2/25/18 (d) | | 238,151 | | 214,262 |
Series 2002-R2 Class 2B3, 5.0525% 7/25/33 (d)(f) | | 287,014 | | 181,447 |
Series 2003-40 Class B3, 4.5% 10/25/18 | | 295,184 | | 249,799 |
Series 2003-R2 Class B3, 5.5% 5/25/43 (d) | | 609,069 | | 441,956 |
Collateralized Mortgage Obligations - continued |
| Principal Amount | | Value
(Note 1) |
Private Sponsor - continued |
Countrywide Home Loans, Inc.: - continued | | | | |
Series 2003-R3: | | | | |
Class B2, 5.5% 11/25/33 | | $ 1,927,502 | | $ 1,630,546 |
Class B3, 5.5% 11/25/33 | | 577,156 | | 418,258 |
CS First Boston Mortgage Securities Corp. Series 2003-TFLA Class F, 1.9433% 4/15/13 (d)(f) | | 2,000,000 | | 1,969,960 |
Residential Asset Mortgage Products, Inc. Series 2002-RM1 Class Bl1, 5.5% 12/25/17 (d) | | 199,773 | | 176,424 |
Residential Finance LP/Residential Finance Development Corp.: | | | | |
floater Series 2003-B: | | | | |
Class B8, 7.81% 7/10/35 (d)(f) | | 1,982,356 | | 2,070,556 |
Class B9, 13.06% 7/10/35 (d)(f) | | 991,178 | | 1,044,686 |
Series 2002-A Class B10, 17.31% 10/10/34 (f) | | 567,406 | | 580,172 |
Residential Funding Mortgage Securities I, Inc. Series 2002-S20 Class M3, 5.25% 12/25/17 | | 95,446 | | 91,837 |
Resix Finance Ltd. floater Series 2003-D Class B8, 7.61% 12/10/35 (d)(f) | | 748,988 | | 748,988 |
TOTAL PRIVATE SPONSOR | | 9,818,891 |
U.S. Government Agency - 0.2% |
Fannie Mae guaranteed REMIC pass thru certificates Series 2003-W10 Class 2B3, 4.8751% 6/25/43 (f) | | 204,528 | | 125,082 |
Fannie Mae REMIC pass thru certificates: | | | | |
Series 2001-W3 Class B3, 7% 9/25/41 | | 306,665 | | 257,024 |
Series 2002-W1 Class 3B3, 4.9842% 2/25/42 (d)(f) | | 179,287 | | 119,702 |
Series 2003-W1 Class B3, 5.75% 12/25/42 | | 344,912 | | 257,390 |
Series 2003-W4 Class 2B3, 5.1266% 10/25/42 (d)(f) | | 87,585 | | 54,823 |
TOTAL U.S. GOVERNMENT AGENCY | | 814,021 |
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $10,461,233) | 10,632,912 |
Commercial Mortgage Securities - 12.2% |
|
Asset Securitization Corp. Series 1997-D4: | | | | |
Class B1, 7.525% 4/14/29 | | 2,500,000 | | 2,414,398 |
Class B2, 7.525% 4/14/29 | | 515,000 | | 396,007 |
Commercial Mortgage Securities - continued |
| Principal Amount | | Value
(Note 1) |
Banc of America Commercial Mortgage, Inc.: | | | | |
Series 2002-PB2 Class XC, 0.4567% 6/11/35 (d)(f)(g) | | $ 77,737,810 | | $ 2,003,824 |
Series 2003-2: | | | | |
Class BWD, 6.947% 10/11/37 (d) | | 434,000 | | 421,556 |
Class BWE, 7.226% 10/11/37 (d) | | 588,000 | | 571,003 |
Class BWF, 7.55% 10/11/37 (d) | | 519,000 | | 503,795 |
Class BWG, 8.155% 10/11/37 (d) | | 503,000 | | 485,120 |
Class BWH, 9.073% 10/11/37 (d) | | 264,000 | | 258,132 |
Class BWJ, 9.99% 10/11/37 (d) | | 434,000 | | 423,777 |
Class BWK, 10.676% 10/11/37 (d) | | 341,000 | | 332,688 |
Class BWL, 10.1596% 10/11/37 (d) | | 575,000 | | 515,299 |
Capital Lease Funding Securtization LP Series 1997-CTL1 Class D, 6.162% 6/22/24 (d) | | 1,500,000 | | 1,303,770 |
Columbia Center Trust floater Series 2000-CCT Class E, 2.6% 12/15/09 (d)(f) | | 800,000 | | 775,832 |
Commercial Mortgage Asset Trust Series 1999-C1
Class X, 1.1488% 1/17/32 (d)(f)(g) | | 17,661,260 | | 1,000,864 |
Commercial Mortgage pass thru certificates Series 2000-C1 Class G, 6.85% 8/15/33 (d) | | 2,800,000 | | 2,522,352 |
Crest Dartmouth Street 2003 1 Ltd./Crest Dartmouth Street 2003 1 Corp. Series 2003-1A Class D, 9% 6/28/38 (d) | | 850,000 | | 798,336 |
CS First Boston Mortgage Securities Corp. Series 2003-TFLA Class AX, 0.5318% 4/15/13 (d)(f)(g) | | 102,500,000 | | 871,250 |
EQI Financing Partnership I LP Series 1997-1 Class C, 7.58% 2/20/17 (d) | | 2,500,000 | | 2,593,500 |
First Chicago/Lennar Trust I: | | | | |
Series 1997-CHL1 Class C, 7.962% 4/29/39 (d)(f) | | 950,000 | | 983,844 |
weighted average coupon Series 1997-CHL1 Class D, 7.9609% 4/29/39 (d)(f) | | 1,750,000 | | 1,751,914 |
Global Signal Trust Series 2004-1: | | | | |
Class F, 8.08% 1/15/34 (e) | | 2,860,000 | | 2,860,000 |
Class G, 10% 1/15/34 (e) | | 2,640,000 | | 2,640,000 |
GMAC Commercial Mortgage Securities, Inc. sequential pay Series 1999-C1 Class A2, 6.175% 5/15/33 | | 650,000 | | 720,328 |
Greenwich Capital Commercial Funding Corp. Series 2003-FL1 Class MCH, 4.37% 7/5/18 (d)(f) | | 1,319,633 | | 1,319,633 |
J.P. Morgan Commercial Mortgage Finance Corp.: | | | | |
Series 1997-C5 Class F, 7.5605% 9/15/29 | | 7,885,000 | | 6,515,837 |
Series 1999-C7 Class F, 6% 10/15/35 (d) | | 350,000 | | 325,024 |
Commercial Mortgage Securities - continued |
| Principal Amount | | Value
(Note 1) |
Lehman Brothers Floating Rate Commercial Mortgage Trust Series 2003-C4A Class F, 3.36% 7/11/15 (d)(f) | | $ 207,834 | | $ 208,029 |
LTC Commercial Mortgage pass thru certificates Series 1998-1 Class D, 6.96% 5/28/30 (d) | | 2,250,000 | | 2,250,000 |
Meristar Commercial Mortgage Trust Series 1999-C1 Class X, 0.2154% 3/3/16 (d)(g) | | 36,650,000 | | 350,455 |
Merrill Lynch Mortgage Trust Series 2002-MW1 Class H, 5.695% 7/12/34 (d) | | 820,000 | | 726,084 |
Morgan Stanley Capital I, Inc.: | | | | |
sequential pay Series 1999-WF1 Class A2, 6.21% 11/15/31 | | 200,000 | | 221,386 |
Series 1995-GAL1 Class E, 8.25% 8/15/27 (d) | | 2,134,737 | | 2,225,714 |
Series 1997-C1 Class F, 6.85% 2/15/20 (d) | | 500,000 | | 525,352 |
Series 1997-HF1 Class G, 6.86% 7/15/29 (d) | | 555,000 | | 539,044 |
Series 1998-HF1 Class F, 7.18% 3/15/30 (d) | | 1,500,000 | | 1,571,953 |
Mortgage Capital Funding, Inc. Series 1998-MC3
Class F, 7.3005% 11/18/31 (d)(f) | | 350,000 | | 347,607 |
Nationslink Funding Corp. Series 1998-2 Class F, 7.105% 8/20/30 (d) | | 2,075,000 | | 1,979,923 |
Nomura Asset Securities Corp. Series 1998-D6
Class B1, 6% 3/15/30 (d) | | 600,000 | | 573,352 |
Trizechahn Office Properties Trust Series 2001-TZHA Class E4, 7.604% 5/15/16 (d) | | 2,790,000 | | 2,922,235 |
Wachovia Bank Commercial Mortgage Trust Series 2003-C4 Class J, 4.932% 4/15/35 (d) | | 600,000 | | 492,545 |
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $49,504,137) | 50,241,762 |
Floating Rate Loans - 1.2% |
|
CONSUMER DISCRETIONARY - 0.5% |
Hotels, Restaurants & Leisure - 0.5% |
Wyndham International, Inc. term loan 5.875% 6/30/06 (f) | | 1,928,766 | | 1,870,903 |
FINANCIALS - 0.5% |
Diversified Financial Services - 0.4% |
American Tower LP Tranche B term loan 3.35% 12/31/07 (f) | | 642,421 | | 650,451 |
Landsource Communication Development LLC Tranche B term loan 0% 3/31/10 (f) | | 1,200,000 | | 1,203,000 |
| | 1,853,451 |
Floating Rate Loans - continued |
| Principal Amount | | Value
(Note 1) |
FINANCIALS - continued |
Real Estate - 0.1% |
Newkirk Master LP term loan 5.7095% 11/24/06 (f) | | $ 242,692 | | $ 246,940 |
TOTAL FINANCIALS | | 2,100,391 |
HEALTH CARE - 0.0% |
Health Care Providers & Services - 0.0% |
Beverly Enterprises, Inc. term loan 4.407% 10/22/08 (f) | | 199,500 | | 201,744 |
TELECOMMUNICATION SERVICES - 0.2% |
Wireless Telecommunication Services - 0.2% |
SpectraSite Communications, Inc. Tranche B term loan 4.24% 12/31/07 (f) | | 621,758 | | 628,753 |
TOTAL FLOATING RATE LOANS (Cost $4,708,531) | 4,801,791 |
Preferred Securities - 0.1% |
| Shares | | |
Diversified Financials - 0.1% |
Crest Dartmouth Street 2003 1 Ltd. Series 2003-1A Class PS, 10.3772% 6/28/38 (d)(f)
(Cost $590,000) | 590,000 | | 581,772 |
Money Market Funds - 10.0% |
Fidelity Cash Central Fund, 1.08% (b)
(Cost $41,430,307) | 41,430,307 | 41,430,307 |
TOTAL INVESTMENT PORTFOLIO - 100.2% (Cost $391,874,834) | 414,292,554 |
NET OTHER ASSETS - (0.2)% | (755,315) |
NET ASSETS - 100% | $ 413,537,239 |
Legend |
(a) Non-income producing |
(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end. |
(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 $61,080,334 or 14.8% of net assets. |
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(g) 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 |
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 | 13.8% |
BB | 15.8% |
B | 9.6% |
CCC,CC,C | 0.0% |
Not Rated | 4.5% |
Equities | 44.5% |
Short-Term Investments and Net Other Assets | 9.8% |
| 100.0% |
We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. |
Purchases and sales of securities, other than short-term securities, aggregated $186,293,651 and $42,532,395, respectively, of which long-term U.S. government and government agency obligations aggregated $301,173 and $8,454, 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 $5,851 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 $4,801,791 or 1.2% of net assets. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
| January 31, 2004 (Unaudited) |
| | |
Assets | | |
Investment in securities, at value (cost $391,874,834) - See accompanying schedule | | $ 414,292,554 |
Cash | | 113 |
Receivable for investments sold | | 196,357 |
Receivable for fund shares sold | | 7,336,911 |
Dividends receivable | | 672,071 |
Interest receivable | | 2,517,252 |
Prepaid expenses | | 1,297 |
Other affiliated receivables | | 3 |
Other receivables | | 5,016 |
Total assets | | 425,021,574 |
| | |
Liabilities | | |
Payable for investments purchased
Regular delivery | $ 1,256,568 | |
Delayed delivery | 9,500,000 | |
Payable for fund shares redeemed | 433,478 | |
Accrued management fee | 188,382 | |
Other affiliated payables | 67,977 | |
Other payables and accrued expenses | 37,930 | |
Total liabilities | | 11,484,335 |
| | |
Net Assets | | $ 413,537,239 |
Net Assets consist of: | | |
Paid in capital | | $ 387,315,587 |
Undistributed net investment income | | 866,957 |
Accumulated undistributed net realized gain (loss) on investments | | 2,936,975 |
Net unrealized appreciation (depreciation) on investments | | 22,417,720 |
Net Assets, for 35,903,271 shares outstanding | | $ 413,537,239 |
Net Asset Value, offering price and redemption price per share ($413,537,239 ÷ 35,903,271 shares) | | $ 11.52 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
| Six months ended January 31, 2004 (Unaudited) |
| | |
Investment Income | | |
Dividends | | $ 4,088,305 |
Interest | | 5,198,462 |
Total income | | 9,286,767 |
| | |
Expenses | | |
Management fee | $ 904,805 | |
Transfer agent fees | 301,555 | |
Accounting fees and expenses | 57,683 | |
Non-interested trustees' compensation | 623 | |
Custodian fees and expenses | 7,160 | |
Registration fees | 61,468 | |
Audit | 23,748 | |
Legal | 263 | |
Miscellaneous | 316 | |
Total expenses before reductions | 1,357,621 | |
Expense reductions | (14,720) | 1,342,901 |
Net investment income (loss) | | 7,943,866 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on investment securities | | 4,053,899 |
Change in net unrealized appreciation (depreciation) on investment securities | | 16,654,809 |
Net gain (loss) | | 20,708,708 |
Net increase (decrease) in net assets resulting from operations | | $ 28,652,574 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
| Six months ended
January 31, 2004
(Unaudited) | For the period February 4, 2003 (commencement of operations) to
July 31,
2003 |
Increase (Decrease) in Net Assets | | |
Operations | | |
Net investment income (loss) | $ 7,943,866 | $ 2,856,929 |
Net realized gain (loss) | 4,053,899 | 903,571 |
Change in net unrealized appreciation (depreciation) | 16,654,809 | 5,762,911 |
Net increase (decrease) in net assets resulting
from operations | 28,652,574 | 9,523,411 |
Distributions to shareholders from net investment income | (9,194,737) | (739,035) |
Distributions to shareholders from net realized gain | (1,945,418) | - |
Total distributions | (11,140,155) | (739,035) |
Share transactions
Net proceeds from sales of shares | 222,666,752 | 228,397,082 |
Reinvestment of distributions | 9,625,488 | 660,162 |
Cost of shares redeemed | (64,887,815) | (9,331,894) |
Net increase (decrease) in net assets resulting from share transactions | 167,404,425 | 219,725,350 |
Redemption fees | 75,711 | 34,958 |
Total increase (decrease) in net assets | 184,992,555 | 228,544,684 |
| | |
Net Assets | | |
Beginning of period | 228,544,684 | - |
End of period (including undistributed net investment income of $866,957 and undistributed net investment income of $2,117,828, respectively) | $ 413,537,239 | $ 228,544,684 |
Other Information Shares | | |
Sold | 19,922,273 | 21,747,045 |
Issued in reinvestment of distributions | 867,632 | 62,753 |
Redeemed | (5,827,486) | (868,946) |
Net increase (decrease) | 14,962,419 | 20,940,852 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
| Six months ended
January 31, 2004 | Year ended
July 31, |
| (Unaudited) | 2003 E |
Selected Per-Share Data | | |
Net asset value, beginning of period | $ 10.91 | $ 10.00 |
Income from Investment Operations | | |
Net investment income (loss) D | .28 | .27 |
Net realized and unrealized gain (loss) | .73 | .71 |
Total from investment operations | 1.01 | .98 |
Distributions from net investment income | (.33) | (.07) |
Distributions from net realized gain | (.07) | - |
Total distributions | (.40) | (.07) |
Redemption fees added to paid in capital D | - G | - G |
Net asset value, end of period | $ 11.52 | $ 10.91 |
Total Return B,C | 9.44% | 9.83% |
Ratios to Average Net Assets F | | |
Expenses before expense reductions | .87% A | .97% A |
Expenses net of voluntary waivers, if any | .87% A | .97% A |
Expenses net of all reductions | .86% A | .94% A |
Net investment income (loss) | 5.09% A | 5.10% A |
Supplemental Data | | |
Net assets, end of period (000 omitted) | $ 413,537 | $ 228,545 |
Portfolio turnover rate | 30% A | 41% A |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns would have been lower had certain expenses not been reduced during the periods shown.
D Calculated based on average shares outstanding during the period.
E For the period 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2004 (Unaudited)
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 valuation models. 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 as a realized gain. Interest income is accrued as
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.
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. 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 market discount, non-taxable dividends and losses deferred due to wash sales.
The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:
Unrealized appreciation | $ 23,500,144 | | |
Unrealized depreciation | (905,187) | |
Net unrealized appreciation (depreciation) | $ 22,594,957 | |
Cost for federal income tax purposes | $ 391,697,597 | |
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.
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. Collateral is held in segregated
Semiannual Report
2. Operating Policies - continued
Repurchase Agreements - continued
accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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 fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.
Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
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Notes to Financial Statements (Unaudited) - continued
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
Semiannual Report
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 .58% 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 shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .19% 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.
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 $22,338 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. 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 $12,450 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $2,270.
Semiannual Report
Managing Your Investments
Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.
By Phone
Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.
(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.
Semiannual 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
Semiannual 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
123 South Lake Avenue
Pasadena, 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
Semiannual Report
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
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
Semiannual 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
1324 Polaris Parkway
Columbus, 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
Semiannual Report
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
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
Semiannual Report
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Advisers
FMR Co., Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Management & Research
(U.K.) 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
Citibank, N.A.
New York, NY
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-USAN-0304
1.789734.100
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
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Reserved
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Reserved
Item 9. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to Fidelity Securities Fund: Fidelity Real Estate Income Fund's Board of Trustees.
Item 10. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Securities Fund: Fidelity Real Estate Income Fund's (the "Fund") 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 Fund 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 Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Fund's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting.
Item 11. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(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/Christine Reynolds |
| Christine Reynolds |
| President and Treasurer |
| |
Date: | March 31, 2004 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/Christine Reynolds |
| Christine Reynolds |
| President and Treasurer |
| |
Date: | March 31, 2004 |
By: | /s/Timothy F. Hayes |
| Timothy F. Hayes |
| Chief Financial Officer |
| |
Date: | March 31, 2004 |
