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, 2005 |
Item 1. Reports to Stockholders
Fidelity®
OTC
Portfolio
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 15 | Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. |
Notes | 19 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the share-holder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,097.20 | $ 4.55 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.87 | $ 4.38 |
* Expenses are equal to the Fund's annualized expense ratio of .86%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Microsoft Corp. | 11.4 | 13.2 |
Dell, Inc. | 5.7 | 5.5 |
Intel Corp. | 5.5 | 3.8 |
Cisco Systems, Inc. | 4.7 | 0.2 |
Yahoo!, Inc. | 2.5 | 2.2 |
Nextel Communications, Inc. Class A | 2.2 | 2.1 |
Oracle Corp. | 1.9 | 0.3 |
QUALCOMM, Inc. | 1.7 | 0.0 |
Cognizant Technology Solutions Corp. Class A | 1.4 | 1.1 |
Amgen, Inc. | 1.2 | 0.0 |
38.2 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Information Technology | 64.5 | 59.4 |
Health Care | 10.8 | 10.4 |
Consumer Discretionary | 9.7 | 11.0 |
Industrials | 3.7 | 6.1 |
Telecommunication Services | 3.6 | 4.5 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005 * | As of July 31, 2004 ** | ||||||
![]() | Stocks 97.7% | ![]() | Stocks 98.7% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 6.9% | ** Foreign | 13.3% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.7% | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - 9.7% | |||
Auto Components - 0.2% | |||
Keystone Automotive Industries, Inc. (a) | 574,300 | $ 12,635 | |
Hotels, Restaurants & Leisure - 1.1% | |||
Buffalo Wild Wings, Inc. (a) | 156,100 | 6,320 | |
Panera Bread Co. Class A (a)(d) | 820,880 | 41,865 | |
Penn National Gaming, Inc. (a) | 108,900 | 7,143 | |
Red Robin Gourmet Burgers, Inc. (a) | 365,100 | 17,251 | |
The Cheesecake Factory, Inc. (a) | 378,600 | 12,255 | |
84,834 | |||
Household Durables - 0.3% | |||
LG Electronics, Inc. | 374,230 | 25,739 | |
Internet & Catalog Retail - 1.5% | |||
Amazon.com, Inc. (a) | 516,500 | 22,323 | |
Blue Nile, Inc. (d) | 546,500 | 15,302 | |
Drugstore.com, Inc. (a) | 1,014,900 | 2,898 | |
eBay, Inc. (a) | 731,900 | 59,650 | |
eDiets.com, Inc. (a) | 574,341 | 2,481 | |
Shopping.Com Ltd. | 387,700 | 8,630 | |
111,284 | |||
Media - 3.4% | |||
Comcast Corp.: | |||
Class A (a) | 1,173,500 | 37,775 | |
Class A (special) (a) | 1,194,600 | 37,761 | |
Cumulus Media, Inc. Class A (a) | 595,632 | 8,244 | |
EchoStar Communications Corp. Class A | 1,680,622 | 51,276 | |
Emmis Communications Corp. Class A (a) | 108,000 | 1,898 | |
Lamar Advertising Co. Class A (a) | 877,900 | 37,732 | |
NTL, Inc. (a) | 998,643 | 67,938 | |
XM Satellite Radio Holdings, Inc. Class A (a) | 502,700 | 16,041 | |
258,665 | |||
Specialty Retail - 3.1% | |||
American Eagle Outfitters, Inc. | 337,100 | 17,125 | |
Big 5 Sporting Goods Corp. | 359,000 | 9,829 | |
Hot Topic, Inc. (a) | 2,051,000 | 39,748 | |
Rent-A-Center, Inc. (a) | 219,100 | 5,366 | |
Ross Stores, Inc. | 1,950,000 | 55,809 | |
Select Comfort Corp. (a) | 1,298,100 | 25,404 | |
Staples, Inc. | 1,676,700 | 54,895 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Steiner Leisure Ltd. (a) | 413,700 | $ 12,833 | |
West Marine, Inc. (a) | 779,000 | 18,392 | |
239,401 | |||
Textiles, Apparel & Luxury Goods - 0.1% | |||
Brown Shoe Co., Inc. | 75,600 | 2,189 | |
Warnaco Group, Inc. (a) | 390,000 | 8,428 | |
10,617 | |||
TOTAL CONSUMER DISCRETIONARY | 743,175 | ||
CONSUMER STAPLES - 0.5% | |||
Food & Staples Retailing - 0.5% | |||
Costco Wholesale Corp. | 821,700 | 38,842 | |
ENERGY - 1.7% | |||
Energy Equipment & Services - 1.0% | |||
Patterson-UTI Energy, Inc. | 4,195,600 | 81,604 | |
Oil & Gas - 0.7% | |||
Ashland, Inc. | 38,500 | 2,363 | |
Top Tankers, Inc. (e) | 1,763,200 | 29,780 | |
Valero Energy Corp. | 381,200 | 19,834 | |
51,977 | |||
TOTAL ENERGY | 133,581 | ||
FINANCIALS - 3.2% | |||
Capital Markets - 1.2% | |||
Ameritrade Holding Corp. (a) | 5,725,500 | 74,031 | |
Calamos Asset Management, Inc. Class A | 853,600 | 21,562 | |
95,593 | |||
Commercial Banks - 2.0% | |||
Fifth Third Bancorp | 1,111,600 | 51,656 | |
Nara Bancorp, Inc. | 434,000 | 8,658 | |
Silicon Valley Bancshares (a) | 642,000 | 28,017 | |
Texas Capital Bancshares, Inc. (a) | 400,000 | 9,484 | |
Texas Regional Bancshares, Inc. Class A | 113,800 | 3,522 | |
UCBH Holdings, Inc. | 353,400 | 15,574 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
FINANCIALS - continued | |||
Commercial Banks - continued | |||
Wachovia Corp. | 375,077 | $ 20,573 | |
Zions Bancorp | 181,800 | 12,330 | |
149,814 | |||
TOTAL FINANCIALS | 245,407 | ||
HEALTH CARE - 10.8% | |||
Biotechnology - 5.6% | |||
Affymetrix, Inc. (a) | 485,100 | 19,967 | |
Alkermes, Inc. (a) | 704,800 | 8,930 | |
Amgen, Inc. (a) | 1,526,600 | 95,016 | |
Biogen Idec, Inc. (a) | 968,100 | 62,888 | |
BioMarin Pharmaceutical, Inc. (a) | 1,377,600 | 8,334 | |
Celgene Corp. (a) | 799,800 | 21,867 | |
Cephalon, Inc. (a) | 486,900 | 23,955 | |
Enzon Pharmaceuticals, Inc. (a) | 804,900 | 10,383 | |
Gen-Probe, Inc. (a) | 143,000 | 6,980 | |
Genentech, Inc. (a) | 760,400 | 36,279 | |
ImmunoGen, Inc. (a) | 51,041 | 356 | |
Invitrogen Corp. (a) | 725,700 | 49,863 | |
MedImmune, Inc. (a) | 876,000 | 20,722 | |
Millennium Pharmaceuticals, Inc. (a) | 3,228,400 | 29,734 | |
ONYX Pharmaceuticals, Inc. (a) | 623,100 | 18,095 | |
OSI Pharmaceuticals, Inc. (a) | 181,000 | 11,783 | |
Seattle Genetics, Inc. (a) | 551,300 | 3,264 | |
428,416 | |||
Health Care Equipment & Supplies - 1.3% | |||
American Medical Systems Holdings, Inc. (a) | 605,200 | 23,766 | |
Cytyc Corp. (a) | 484,000 | 12,124 | |
DENTSPLY International, Inc. | 283,650 | 15,904 | |
Respironics, Inc. (a) | 772,300 | 44,716 | |
96,510 | |||
Health Care Providers & Services - 2.9% | |||
Accredo Health, Inc. (a) | 930,100 | 27,698 | |
Caremark Rx, Inc. (a) | 456,660 | 17,855 | |
Express Scripts, Inc. (a) | 501,500 | 37,206 | |
HealthSouth Corp. (a) | 86,700 | 507 | |
Henry Schein, Inc. (a) | 462,100 | 31,451 | |
Humana, Inc. (a) | 1,404,300 | 48,125 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
IMPATH, Inc. (a) | 303,600 | $ 1,312 | |
PacifiCare Health Systems, Inc. (a) | 381,500 | 23,474 | |
Patterson Companies, Inc. (a) | 233,200 | 10,862 | |
Sun Healthcare Group, Inc. (a) | 11,300 | 86 | |
WebMD Corp. (a) | 3,213,300 | 24,260 | |
222,836 | |||
Pharmaceuticals - 1.0% | |||
Elan Corp. PLC sponsored ADR (a) | 470,400 | 12,668 | |
Endo Pharmaceuticals Holdings, Inc. (a) | 2,011,800 | 42,268 | |
Sepracor, Inc. (a) | 19,600 | 1,121 | |
Teva Pharmaceutical Industries Ltd. sponsored ADR | 722,500 | 20,757 | |
76,814 | |||
TOTAL HEALTH CARE | 824,576 | ||
INDUSTRIALS - 3.7% | |||
Air Freight & Logistics - 0.2% | |||
Forward Air Corp. (a) | 275,000 | 11,719 | |
Airlines - 0.7% | |||
JetBlue Airways Corp. (a) | 1,693,156 | 33,508 | |
Ryanair Holdings PLC sponsored ADR (a) | 448,100 | 20,985 | |
54,493 | |||
Building Products - 0.1% | |||
Trex Co., Inc. (a) | 230,100 | 11,286 | |
Commercial Services & Supplies - 1.7% | |||
Apollo Group, Inc. Class A (a) | 240,900 | 18,836 | |
Cintas Corp. | 1,127,200 | 49,033 | |
Herman Miller, Inc. | 1,371,000 | 36,633 | |
Monster Worldwide, Inc. (a) | 193,000 | 6,039 | |
Strayer Education, Inc. | 177,400 | 19,044 | |
129,585 | |||
Machinery - 0.3% | |||
PACCAR, Inc. | 328,150 | 23,187 | |
Road & Rail - 0.5% | |||
Landstar System, Inc. (a) | 1,037,392 | 36,080 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INDUSTRIALS - continued | |||
Trading Companies & Distributors - 0.2% | |||
Rush Enterprises, Inc. Class A (a)(e) | 1,104,395 | $ 16,809 | |
TOTAL INDUSTRIALS | 283,159 | ||
INFORMATION TECHNOLOGY - 64.5% | |||
Communications Equipment - 11.7% | |||
Alcatel SA sponsored ADR (a)(d) | 2,145,100 | 30,718 | |
Alvarion Ltd. (a) | 1,376,500 | 14,233 | |
Andrew Corp. (a) | 1,089,800 | 14,233 | |
Arris Group, Inc. (a) | 758,596 | 4,696 | |
Avaya, Inc. (a) | 500,000 | 7,175 | |
Carrier Access Corp. (a)(e) | 1,968,400 | 14,527 | |
CIENA Corp. (a) | 6,582,600 | 16,786 | |
Cisco Systems, Inc. (a) | 20,015,400 | 361,078 | |
Comverse Technology, Inc. (a) | 1,909,100 | 42,668 | |
Enterasys Networks, Inc. (a) | 9,256,700 | 13,052 | |
Ixia (a) | 360,600 | 5,597 | |
Juniper Networks, Inc. (a) | 3,195,400 | 80,300 | |
Motorola, Inc. | 4,659,230 | 73,336 | |
Nokia Corp. sponsored ADR | 1,068,300 | 16,324 | |
Polycom, Inc. (a) | 748,626 | 12,936 | |
Powerwave Technologies, Inc. (a) | 883,700 | 6,955 | |
QUALCOMM, Inc. | 3,538,500 | 131,774 | |
Research In Motion Ltd. (a) | 578,900 | 41,198 | |
Sonus Networks, Inc. (a) | 1,946,600 | 11,933 | |
899,519 | |||
Computers & Peripherals - 10.9% | |||
Apple Computer, Inc. (a) | 1,127,100 | 86,674 | |
Avid Technology, Inc. (a) | 152,100 | 9,590 | |
Dell, Inc. (a) | 10,408,700 | 434,667 | |
Diebold, Inc. | 848,600 | 45,689 | |
EMC Corp. (a) | 3,165,200 | 41,464 | |
Hutchinson Technology, Inc. (a) | 646,787 | 22,832 | |
Maxtor Corp. (a) | 2,708,000 | 12,809 | |
Network Appliance, Inc. (a) | 244,900 | 7,798 | |
Seagate Technology | 4,774,000 | 80,776 | |
Sun Microsystems, Inc. (a) | 11,574,345 | 50,464 | |
Western Digital Corp. (a) | 4,089,000 | 44,039 | |
836,802 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - 1.6% | |||
CDW Corp. | 472,200 | $ 27,624 | |
DDi Corp. (a) | 519,189 | 1,251 | |
Flextronics International Ltd. (a) | 2,097,900 | 29,685 | |
Hon Hai Precision Industries Co. Ltd. | 4,613,794 | 20,265 | |
Molex, Inc. | 503,400 | 14,458 | |
Nano-Proprietary, Inc. (a) | 2,213,900 | 4,649 | |
Solectron Corp. (a) | 5,257,900 | 26,132 | |
Universal Display Corp. (a) | 69,900 | 527 | |
124,591 | |||
Internet Software & Services - 3.3% | |||
Akamai Technologies, Inc. (a) | 1,272,200 | 16,666 | |
Google, Inc. Class A (sub. vtg.) | 203,400 | 39,791 | |
Marchex, Inc. Class B | 2,300 | 41 | |
Vignette Corp. (a) | 3,278,200 | 4,294 | |
Yahoo!, Inc. (a) | 5,374,116 | 189,223 | |
250,015 | |||
IT Services - 2.0% | |||
Cognizant Technology Solutions Corp. Class A (a) | 2,861,600 | 108,455 | |
Infosys Technologies Ltd. sponsored ADR | 246,300 | 16,266 | |
Paychex, Inc. | 497,400 | 15,166 | |
Syntel, Inc. | 799,300 | 13,436 | |
153,323 | |||
Semiconductors & Semiconductor Equipment - 17.0% | |||
Agere Systems, Inc.: | |||
Class A (a) | 16,484,211 | 23,737 | |
Class B (a) | 16,413,400 | 23,635 | |
Altera Corp. (a) | 585,400 | 11,240 | |
Analog Devices, Inc. | 1,654,300 | 59,373 | |
Applied Materials, Inc. (a) | 5,917,000 | 94,080 | |
ATI Technologies, Inc. (a) | 826,700 | 14,342 | |
ATMI, Inc. (a) | 1,341,111 | 30,483 | |
FEI Co. (a) | 964,500 | 19,444 | |
Freescale Semiconductor, Inc.: | |||
Class A | 1,934,100 | 33,073 | |
Class B (a) | 1,215,334 | 21,232 | |
Integrated Circuit Systems, Inc. (a) | 1,287,600 | 24,464 | |
Intel Corp. | 18,833,400 | 422,810 | |
Intersil Corp. Class A | 679,900 | 10,083 | |
KLA-Tencor Corp. (a) | 371,300 | 17,173 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Semiconductors & Semiconductor Equipment - continued | |||
Linear Technology Corp. | 1,183,500 | $ 44,665 | |
Marvell Technology Group Ltd. (a) | 1,657,600 | 55,447 | |
Maxim Integrated Products, Inc. | 1,205,400 | 47,023 | |
Microchip Technology, Inc. | 1,186,300 | 30,903 | |
Mindspeed Technologies, Inc. (a) | 2,969,033 | 6,903 | |
National Semiconductor Corp. | 2,783,800 | 47,130 | |
NVIDIA Corp. (a) | 1,867,600 | 42,805 | |
Omnivision Technologies, Inc. (a)(d) | 490,000 | 7,953 | |
PMC-Sierra, Inc. (a) | 1,171,100 | 12,039 | |
Samsung Electronics Co. Ltd. | 131,350 | 63,340 | |
Silicon Laboratories, Inc. (a) | 1,259,200 | 42,939 | |
STATS ChipPAC Ltd. ADR (a)(d) | 2,802,270 | 16,085 | |
Texas Instruments, Inc. | 2,151,100 | 49,927 | |
Vitesse Semiconductor Corp. (a) | 3,950,000 | 11,455 | |
Xilinx, Inc. | 610,200 | 17,812 | |
1,301,595 | |||
Software - 18.0% | |||
Activision, Inc. (a) | 100,000 | 2,260 | |
BEA Systems, Inc. (a) | 4,253,943 | 36,244 | |
FileNET Corp. (a) | 1,204,882 | 26,929 | |
Intuit, Inc. (a) | 355,900 | 13,880 | |
Jack Henry & Associates, Inc. | 384,109 | 7,986 | |
Kronos, Inc. (a) | 253,500 | 13,631 | |
Lawson Software, Inc. (a) | 2,646,700 | 17,336 | |
Microsoft Corp. | 33,281,800 | 874,640 | |
Oracle Corp. (a) | 10,796,200 | 148,664 | |
Quest Software, Inc. (a) | 1,691,100 | 24,014 | |
Red Hat, Inc. (a) | 3,103,900 | 33,677 | |
Siebel Systems, Inc. (a) | 5,095,494 | 44,382 | |
Symantec Corp. (a) | 3,643,400 | 85,073 | |
Take-Two Interactive Software, Inc. (a) | 595,300 | 20,984 | |
TIBCO Software, Inc. (a) | 1,808,300 | 19,873 | |
WatchGuard Technologies, Inc. (a) | 1,237,200 | 5,023 | |
1,374,596 | |||
TOTAL INFORMATION TECHNOLOGY | 4,940,441 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
MATERIALS - 0.0% | |||
Containers & Packaging - 0.0% | |||
Anchor Glass Container Corp. (a) | 161,305 | $ 960 | |
TELECOMMUNICATION SERVICES - 3.6% | |||
Diversified Telecommunication Services - 0.1% | |||
AboveNet, Inc. (a) | 99,200 | 2,976 | |
Wireless Telecommunication Services - 3.5% | |||
American Tower Corp. Class A (a) | 1,701,900 | 30,838 | |
Nextel Communications, Inc. Class A (a) | 5,953,900 | 170,817 | |
Nextel Partners, Inc. Class A (a) | 487,200 | 9,690 | |
NII Holdings, Inc. (a) | 1,072,600 | 57,706 | |
269,051 | |||
TOTAL TELECOMMUNICATION SERVICES | 272,027 | ||
TOTAL COMMON STOCKS (Cost $6,992,618) | 7,482,168 | ||
Money Market Funds - 3.2% | |||
Fidelity Cash Central Fund, 2.31% (b) | 166,719,431 | 166,719 | |
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 78,532,300 | 78,532 | |
TOTAL MONEY MARKET FUNDS (Cost $245,251) | 245,251 | ||
TOTAL INVESTMENT PORTFOLIO - 100.9% (Cost $7,237,869) | 7,727,419 | ||
NET OTHER ASSETS - (0.9)% | (65,733) | ||
NET ASSETS - 100% | $ 7,661,686 |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Companies which are affiliates of the fund at period-end are noted in the fund's Schedule of Investments. Transactions during the period with companies which are or were affiliates are as follows: | |||||
Affiliates | Value, beginning of period | Purchases | Sales Proceeds | Dividend Income | Value, |
24/7 Real Media, Inc. | $ 6,713 | $ 7,257 | $ 10,999 | $ - | $ - |
Carrier Access Corp. | - | 19,282 | - | - | 14,527 |
eDiets.com, Inc. | 3,208 | - | 2,218 | - | - |
Homestore, Inc. | 27,581 | 16,819 | 35,800 | - | - |
Redback Networks, Inc. | 15,289 | - | 13,429 | - | - |
Rush Enterprises, Inc. Class A | - | 18,460 | 4,508 | - | 16,809 |
Time Warner Telecom, Inc. Class A | 32,301 | 166 | 28,716 | - | - |
Top Tankers, Inc. | 1,987 | 22,221 | - | 345 | 29,780 |
WatchGuard Technologies, Inc. | 6,848 | 4,362 | 4,158 | - | - |
Wet Seal, Inc. Class A | 7,768 | - | 2,746 | - | - |
Total | $ 101,695 | $ 88,567 | $ 102,574 | $ 345 | $ 61,116 |
Income Tax Information |
At July 31, 2004, the fund had a capital loss carryforward of approximately $5,419,239,000 of which $4,169,344,000 and $1,249,895,000 will expire on July 31, 2010 and 2011, respectively. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2005 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $77,173) (cost $7,237,869) - See accompanying schedule | $ 7,727,419 | |
Foreign currency held at value (cost $157) | 166 | |
Receivable for investments sold | 99,411 | |
Receivable for fund shares sold | 8,031 | |
Dividends receivable | 2,484 | |
Interest receivable | 277 | |
Prepaid expenses | 26 | |
Other affiliated receivables | 30 | |
Other receivables | 599 | |
Total assets | 7,838,443 | |
Liabilities | ||
Payable for investments purchased | $ 80,181 | |
Payable for fund shares redeemed | 12,405 | |
Accrued management fee | 3,761 | |
Other affiliated payables | 1,788 | |
Other payables and accrued expenses | 90 | |
Collateral on securities loaned, at value | 78,532 | |
Total liabilities | 176,757 | |
Net Assets | $ 7,661,686 | |
Net Assets consist of: | ||
Paid in capital | $ 12,082,479 | |
Accumulated net investment loss | (3,909) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (4,906,476) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 489,592 | |
Net Assets, for 232,252 shares outstanding | $ 7,661,686 | |
Net Asset Value, offering price and redemption price per share ($7,661,686 ÷ 232,252 shares) | $ 32.99 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | |
Investment Income | ||
Dividends (including $345 received from affiliated issuers) | $ 16,021 | |
Special Dividends | 106,284 | |
Interest | 647 | |
Security lending | 330 | |
Total income | 123,282 | |
Expenses | ||
Management fee | $ 23,517 | |
Performance adjustment | (1,057) | |
Transfer agent fees | 9,038 | |
Accounting and security lending fees | 580 | |
Non-interested trustees' compensation | 22 | |
Appreciation in deferred trustee compensation account | 3 | |
Custodian fees and expenses | 183 | |
Registration fees | 63 | |
Audit | 42 | |
Legal | 16 | |
Interest | 2 | |
Miscellaneous | 18 | |
Total expenses before reductions | 32,427 | |
Expense reductions | (866) | 31,561 |
Net investment income (loss) | 91,721 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (including realized gain (loss) of $(79,763) from affiliated issuers) | 531,675 | |
Foreign currency transactions | 27 | |
Total net realized gain (loss) | 531,702 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 77,193 | |
Assets and liabilities in foreign currencies | 56 | |
Total change in net unrealized appreciation (depreciation) | 77,249 | |
Net gain (loss) | 608,951 | |
Net increase (decrease) in net assets resulting from operations | $ 700,672 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 91,721 | $ (41,667) |
Net realized gain (loss) | 531,702 | 1,268,916 |
Change in net unrealized appreciation (depreciation) | 77,249 | (703,476) |
Net increase (decrease) in net assets resulting | 700,672 | 523,773 |
Distributions to shareholders from net investment income | (95,497) | - |
Share transactions | 788,333 | 2,620,488 |
Reinvestment of distributions | 94,057 | - |
Cost of shares redeemed | (1,147,881) | (2,863,293) |
Net increase (decrease) in net assets resulting from share transactions | (265,491) | (242,805) |
Total increase (decrease) in net assets | 339,684 | 280,968 |
Net Assets | ||
Beginning of period | 7,322,002 | 7,041,034 |
End of period (including accumulated net investment loss of $3,909 and accumulated net investment loss of $133, respectively) | $ 7,661,686 | $ 7,322,002 |
Other Information Shares | ||
Sold | 24,589 | 82,028 |
Issued in reinvestment of distributions | 2,762 | - |
Redeemed | (35,733) | (89,916) |
Net increase (decrease) | (8,382) | (7,888) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended January 31, 2005 | Years ended July 31, | |||||
(Unaudited) | 2004 | 2003 | 2002 | 2001 | 2000 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 30.43 | $ 28.33 | $ 23.46 | $ 32.96 | $ 69.82 | $ 51.53 |
Income from Investment Operations | ||||||
Net investment income (loss) D | .39 E | (.17) | (.17) | (.24) | (.18) | (.27) |
Net realized and unrealized gain (loss) | 2.58 | 2.27 | 5.04 | (9.26) | (24.02) | 24.07 |
Total from investment operations | 2.97 | 2.10 | 4.87 | (9.50) | (24.20) | 23.80 |
Distributions from net investment income | (.41) | - | - | - | - | - |
Distributions from net realized gain | - | - | - | - | (12.66) | (5.51) |
Total distributions | (.41) | - | - | - | (12.66) | (5.51) |
Net asset value, end of period | $ 32.99 | $ 30.43 | $ 28.33 | $ 23.46 | $ 32.96 | $ 69.82 |
Total Return B, C | 9.72% | 7.41% | 20.76% | (28.82)% | (42.79)% | 50.05% |
Ratios to Average Net Assets F | ||||||
Expenses before expense reductions | .86% A | .91% | 1.18% | 1.14% | .97% | .76% |
Expenses net of voluntary waivers, if any | .86% A | .91% | 1.18% | 1.14% | .97% | .76% |
Expenses net of all reductions | .84% A | .89% | 1.12% | 1.09% | .94% | .75% |
Net investment income (loss) | 2.43% A, E | (.53)% | (.71)% | (.81)% | (.40)% | (.43)% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 7,662 | $ 7,322 | $ 7,041 | $ 5,911 | $ 8,802 | $ 14,548 |
Portfolio turnover rate | 94% A | 61% | 116% | 120% | 219% | 196% |
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 Investment income per share reflects a special dividend which amounted to $.45 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been (.39)%.
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. 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
(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, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - 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 and may include proceeds received from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax 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.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 1,011,942 | |
Unrealized depreciation | (543,068) | |
Net unrealized appreciation (depreciation) | $ 468,874 | |
Cost for federal income tax purposes | $ 7,258,545 |
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 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).
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $3,519,068 and $3,871,144, respectively.
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 .27% 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
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
4. Fees and Other Transactions with Affiliates - continued
Management Fee - continued
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 annualized management fee rate, including the performance adjustment, was .60% 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 .24% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $635 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 were $595 for the period.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. At period end, there were no interfund loans outstanding. The fund's activity in this program during the period was as follows:
Borrower or Lender | Average Daily Loan Balance | Weighted Average Interest Rate | Interest Expense |
Borrower | $ 27,227 | 2.14% | $ 2 |
Semiannual Report
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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. Bank Borrowings.
The fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period amounted to $5,484. The weighted average interest rate was 2.06%. At period end, there were no bank borrowings outstanding.
8. 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 $797 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 $68, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
9. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
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
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(phone_graphic)Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555
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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 Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
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Semiannual Report
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Fidelity Investments
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Fidelity Investments
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Semiannual Report
Semiannual Report
Semiannual Report
Semiannual Report
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Fidelity®
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Fund
Semiannual Report
January 31, 2005
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Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the last six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 15 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 19 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,187.40 | $ 4.80 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.82 | $ 4.43 |
* Expenses are equal to the Fund's annualized expense ratio of .87%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Teekay Shipping Corp. | 6.2 | 6.9 |
AES Corp. | 6.0 | 6.4 |
General Maritime Corp. | 5.6 | 5.6 |
Forest Oil Corp. | 4.7 | 4.1 |
Nextel Communications, Inc. Class A | 3.4 | 3.5 |
Qwest Communications International, Inc. | 3.0 | 3.6 |
Range Resources Corp. | 2.8 | 3.5 |
Tyco International Ltd. | 2.7 | 4.2 |
CMS Energy Corp. | 2.5 | 3.0 |
DaVita, Inc. | 2.1 | 2.2 |
39.0 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's net assets | % of fund's net assets | |
Energy | 34.1 | 31.6 |
Industrials | 11.1 | 10.1 |
Materials | 10.8 | 8.0 |
Telecommunication Services | 9.3 | 12.1 |
Utilities | 8.7 | 9.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005 * | As of July 31, 2004 ** | ||||||
![]() | Stocks 93.6% | ![]() | Stocks 96.4% | ||||
![]() | Convertible | ![]() | Bonds 0.3% | ||||
![]() | Other Investments 0.9% | ![]() | Convertible | ||||
![]() | Short-Term | ![]() | Other Investments 1.2% | ||||
![]() | ![]() | Short-Term | |||||
* Foreign | 20.8% | ** Foreign | 19.7% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 93.3% | ||||
Shares | Value (Note 1) (000s) | |||
CONSUMER DISCRETIONARY - 8.1% | ||||
Auto Components - 0.8% | ||||
Dana Corp. | 204,100 | $ 3,239 | ||
Tenneco Automotive, Inc. (a) | 135,500 | 2,187 | ||
TRW Automotive Holdings Corp. | 618,100 | 12,300 | ||
17,726 | ||||
Hotels, Restaurants & Leisure - 1.2% | ||||
Centerplate, Inc. unit | 363,005 | 4,937 | ||
Friendly Ice Cream Corp. (a)(e) | 423,400 | 3,696 | ||
Six Flags, Inc. (a) | 1,951,100 | 8,351 | ||
Sunterra Corp. (a)(d) | 342,900 | 4,735 | ||
Wyndham International, Inc. Class A (a) | 4,877,800 | 4,634 | ||
26,353 | ||||
Household Durables - 0.0% | ||||
Juno Lighting, Inc. | 3,600 | 144 | ||
Leisure Equipment & Products - 0.4% | ||||
Alliance Gaming Corp. (a)(d) | 896,000 | 8,933 | ||
Media - 4.7% | ||||
Cablevision Systems Corp. - NY Group Class A (a) | 242,900 | 6,653 | ||
Charter Communications, Inc. Class A (a)(d) | 6,307,871 | 10,156 | ||
Gray Television, Inc. | 622,300 | 8,998 | ||
Liberty Media International, Inc. Class A (a) | 11,987 | 543 | ||
News Corp. Class A | 180,888 | 3,075 | ||
NTL, Inc. (a) | 625,907 | 42,580 | ||
Spanish Broadcasting System, Inc. Class A (a) | 209,400 | 2,152 | ||
The DIRECTV Group, Inc. (a) | 619,645 | 9,326 | ||
The Reader's Digest Association, Inc. (non-vtg.) | 752,900 | 12,137 | ||
Time Warner, Inc. (a) | 277,400 | 4,993 | ||
UnitedGlobalCom, Inc. Class A (a) | 582,912 | 5,695 | ||
106,308 | ||||
Specialty Retail - 1.0% | ||||
AutoNation, Inc. (a) | 247,600 | 4,714 | ||
Gap, Inc. | 758,200 | 16,688 | ||
21,402 | ||||
TOTAL CONSUMER DISCRETIONARY | 180,866 | |||
CONSUMER STAPLES - 2.7% | ||||
Food & Staples Retailing - 2.0% | ||||
Koninklijke Ahold NV sponsored ADR (a)(d) | 2,756,800 | 22,799 | ||
Kroger Co. (a) | 371,300 | 6,349 | ||
Common Stocks - continued | ||||
Shares | Value (Note 1) (000s) | |||
CONSUMER STAPLES - continued | ||||
Food & Staples Retailing - continued | ||||
Pathmark Stores, Inc. (a) | 1,297,047 | $ 6,148 | ||
Safeway, Inc. (a) | 445,700 | 8,401 | ||
43,697 | ||||
Food Products - 0.4% | ||||
Kellogg Co. | 184,900 | 8,254 | ||
Personal Products - 0.3% | ||||
Revlon, Inc. Class A (a) | 3,225,199 | 7,740 | ||
TOTAL CONSUMER STAPLES | 59,691 | |||
ENERGY - 34.1% | ||||
Energy Equipment & Services - 4.8% | ||||
Grant Prideco, Inc. (a) | 606,300 | 11,883 | ||
Grey Wolf, Inc. (a) | 6,220,200 | 32,967 | ||
Hanover Compressor Co. (a) | 451,500 | 6,402 | ||
Nabors Industries Ltd. (a) | 163,100 | 8,220 | ||
Petroleum Geo-Services ASA ADR (a)(d) | 296,153 | 20,568 | ||
Pride International, Inc. (a) | 484,300 | 11,328 | ||
Rowan Companies, Inc. | 321,100 | 9,042 | ||
Universal Compression Holdings, Inc. (a) | 184,700 | 7,189 | ||
107,599 | ||||
Oil & Gas - 29.3% | ||||
Burlington Resources, Inc. | 709,500 | 31,012 | ||
Chesapeake Energy Corp. | 2,434,100 | 42,767 | ||
Comstock Resources, Inc. (a) | 311,800 | 7,315 | ||
Forest Oil Corp. (a)(e) | 3,133,300 | 105,561 | ||
Frontier Oil Corp. | 578,600 | 16,183 | ||
Frontline Ltd. (d) | 185,300 | 9,230 | ||
Frontline Ltd. (NY Shares) | 603,900 | 30,648 | ||
General Maritime Corp. (a)(e) | 2,738,500 | 125,697 | ||
Houston Exploration Co. (a) | 89,200 | 4,836 | ||
OMI Corp. (d) | 2,725,200 | 47,691 | ||
Overseas Shipholding Group, Inc. | 123,200 | 6,876 | ||
Range Resources Corp. | 2,814,300 | 62,449 | ||
Ship Finance International Ltd. (d) | 156,252 | 3,556 | ||
Common Stocks - continued | ||||
Shares | Value (Note 1) (000s) | |||
ENERGY - continued | ||||
Oil & Gas - continued | ||||
Teekay Shipping Corp. | 3,096,000 | $ 137,375 | ||
Valero Energy Corp. | 455,200 | 23,684 | ||
654,880 | ||||
TOTAL ENERGY | 762,479 | |||
FINANCIALS - 2.6% | ||||
Consumer Finance - 0.5% | ||||
Metris Companies, Inc. | 937,300 | 11,154 | ||
Insurance - 1.7% | ||||
American Financial Group, Inc., Ohio | 1,002,800 | 30,876 | ||
UnumProvident Corp. | 423,700 | 7,275 | ||
38,151 | ||||
Thrifts & Mortgage Finance - 0.4% | ||||
Capital Crossing Bank (a) | 258,800 | 8,282 | ||
TOTAL FINANCIALS | 57,587 | |||
HEALTH CARE - 3.6% | ||||
Health Care Equipment & Supplies - 0.3% | ||||
Baxter International, Inc. | 184,700 | 6,235 | ||
Health Care Providers & Services - 2.1% | ||||
Carriage Services, Inc. (a) | 14,700 | 73 | ||
DaVita, Inc. (a) | 1,151,600 | 48,321 | ||
48,394 | ||||
Pharmaceuticals - 1.2% | ||||
Elan Corp. PLC sponsored ADR (a) | 987,700 | 26,599 | ||
TOTAL HEALTH CARE | 81,228 | |||
INDUSTRIALS - 11.1% | ||||
Aerospace & Defense - 0.4% | ||||
BE Aerospace, Inc. (a) | 365,424 | 3,943 | ||
Goodrich Corp. | 133,700 | 4,586 | ||
8,529 | ||||
Air Freight & Logistics - 0.2% | ||||
Park-Ohio Holdings Corp. (a) | 162,411 | 4,007 | ||
Airlines - 2.2% | ||||
America West Holding Corp. Class B (a)(d) | 800,600 | 4,011 | ||
Common Stocks - continued | ||||
Shares | Value (Note 1) (000s) | |||
INDUSTRIALS - continued | ||||
Airlines - continued | ||||
AMR Corp. (a)(d) | 2,514,530 | $ 21,625 | ||
Delta Air Lines, Inc. (a)(d) | 3,927,450 | 21,169 | ||
Northwest Airlines Corp. (a)(d) | 455,100 | 3,363 | ||
50,168 | ||||
Building Products - 2.6% | ||||
American Standard Companies, Inc. (a) | 713,200 | 28,557 | ||
Lennox International, Inc. | 230,700 | 4,605 | ||
Royal Group Technologies Ltd. (sub. vtg.) (a) | 564,700 | 5,073 | ||
York International Corp. | 536,700 | 19,493 | ||
57,728 | ||||
Commercial Services & Supplies - 1.3% | ||||
Allied Waste Industries, Inc. (a) | 889,800 | 7,394 | ||
Clean Harbors, Inc. (a)(d) | 140,200 | 2,641 | ||
Corrections Corp. of America (a) | 479,200 | 19,690 | ||
29,725 | ||||
Construction & Engineering - 0.1% | ||||
Integrated Electrical Services, Inc. (a) | 326,200 | 1,298 | ||
Industrial Conglomerates - 2.7% | ||||
Tyco International Ltd. | 1,646,200 | 59,494 | ||
Machinery - 1.0% | ||||
Navistar International Corp. (a) | 234,000 | 9,107 | ||
SPX Corp. | 180,200 | 7,550 | ||
Terex Corp. (a) | 82,700 | 3,560 | ||
Thermadyne Holdings Corp. (a) | 64,900 | 833 | ||
Timken Co. | 92,800 | 2,391 | ||
23,441 | ||||
Marine - 0.1% | ||||
Golden Ocean Group Ltd. (a)(d) | 2,067,600 | 1,218 | ||
Road & Rail - 0.5% | ||||
Central Freight Lines, Inc. (a)(e) | 973,340 | 6,103 | ||
Kansas City Southern (a) | 326,700 | 5,704 | ||
11,807 | ||||
TOTAL INDUSTRIALS | 247,415 | |||
INFORMATION TECHNOLOGY - 3.2% | ||||
Communications Equipment - 0.2% | ||||
Motorola, Inc. | 244,900 | 3,855 | ||
Common Stocks - continued | ||||
Shares | Value (Note 1) (000s) | |||
INFORMATION TECHNOLOGY - continued | ||||
Electronic Equipment & Instruments - 0.9% | ||||
DDi Corp. (a)(d) | 2,071,300 | $ 4,992 | ||
Merix Corp. (a) | 385,000 | 3,550 | ||
Solectron Corp. (a) | 475,100 | 2,361 | ||
Viasystems Group, Inc. (a) | 95,400 | 1,145 | ||
Viasystems Group, Inc. (a)(h) | 625,780 | 7,509 | ||
19,557 | ||||
Semiconductors & Semiconductor Equipment - 2.1% | ||||
Atmel Corp. (a) | 1,776,500 | 5,436 | ||
Conexant Systems, Inc. (a) | 927,700 | 1,521 | ||
Fairchild Semiconductor International, Inc. (a) | 200,000 | 2,854 | ||
Freescale Semiconductor, Inc.: | ||||
Class A | 287,500 | 4,916 | ||
Class B (a) | 27,040 | 472 | ||
ON Semiconductor Corp. (a) | 8,789,700 | 32,170 | ||
47,369 | ||||
TOTAL INFORMATION TECHNOLOGY | 70,781 | |||
MATERIALS - 10.8% | ||||
Chemicals - 4.1% | ||||
Celanese Corp. Class A | 106,300 | 1,715 | ||
Crompton Corp. | 2,974,200 | 34,649 | ||
Great Lakes Chemical Corp. | 813,000 | 21,504 | ||
NOVA Chemicals Corp. | 454,800 | 20,515 | ||
Rhodia SA ADR (d) | 5,081,400 | 12,958 | ||
Solutia, Inc. (a) | 1,779,500 | 1,602 | ||
92,943 | ||||
Construction Materials - 0.3% | ||||
Texas Industries, Inc. | 103,800 | 6,595 | ||
Containers & Packaging - 3.7% | ||||
Anchor Glass Container Corp. (a) | 150,400 | 895 | ||
Owens-Illinois, Inc. (a) | 1,432,890 | 32,555 | ||
Pactiv Corp. (a) | 1,408,200 | 31,276 | ||
Sealed Air Corp. (a) | 156,900 | 8,049 | ||
Smurfit-Stone Container Corp. (a) | 637,000 | 9,580 | ||
82,355 | ||||
Common Stocks - continued | ||||
Shares | Value (Note 1) (000s) | |||
MATERIALS - continued | ||||
Metals & Mining - 0.5% | ||||
Freeport-McMoRan Copper & Gold, Inc. Class B | 282,500 | $ 10,399 | ||
Haynes International, Inc. (a)(f) | 16,834 | 305 | ||
10,704 | ||||
Paper & Forest Products - 2.2% | ||||
Georgia-Pacific Corp. | 301,300 | 9,672 | ||
International Paper Co. | 510,400 | 19,982 | ||
Weyerhaeuser Co. | 318,900 | 19,899 | ||
49,553 | ||||
TOTAL MATERIALS | 242,150 | |||
TELECOMMUNICATION SERVICES - 8.4% | ||||
Diversified Telecommunication Services - 4.0% | ||||
Covad Communications Group, Inc. (a) | 931,615 | 1,574 | ||
General Communications, Inc. Class A (a) | 907,800 | 9,060 | ||
Qwest Communications International, Inc. (a) | 15,875,700 | 66,678 | ||
Telewest Global, Inc. (a) | 590,291 | 9,946 | ||
XO Communications, Inc. (a) | 926,500 | 2,548 | ||
89,806 | ||||
Wireless Telecommunication Services - 4.4% | ||||
American Tower Corp. Class A (a) | 300,300 | 5,441 | ||
Crown Castle International Corp. (a) | 536,100 | 8,792 | ||
Nextel Communications, Inc. Class A (a) | 2,660,585 | 76,332 | ||
NII Holdings, Inc. (a) | 160,800 | 8,651 | ||
99,216 | ||||
TOTAL TELECOMMUNICATION SERVICES | 189,022 | |||
UTILITIES - 8.7% | ||||
Multi-Utilities & Unregulated Power - 8.7% | ||||
AES Corp. (a) | 9,559,458 | 134,310 | ||
Aquila, Inc. (a) | 911,800 | 3,374 | ||
CMS Energy Corp. (a) | 5,352,600 | 56,363 | ||
194,047 | ||||
TOTAL COMMON STOCKS (Cost $1,563,428) | 2,085,266 | |||
Preferred Stocks - 0.3% | ||||
Shares | Value (Note 1) (000s) | |||
Convertible Preferred Stocks - 0.0% | ||||
CONSUMER DISCRETIONARY - 0.0% | ||||
Media - 0.0% | ||||
Emmis Communications Corp. Series A, 6.25% | 32,200 | $ 1,401 | ||
Nonconvertible Preferred Stocks - 0.3% | ||||
CONSUMER STAPLES - 0.3% | ||||
Food Products - 0.3% | ||||
Doane Pet Care Co. 14.25% pay-in-kind (a) | 122,505 | 6,370 | ||
TELECOMMUNICATION SERVICES - 0.0% | ||||
Diversified Telecommunication Services - 0.0% | ||||
PTV, Inc. Series A, 10.00% | 84 | 0 | ||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 6,370 | |||
TOTAL PREFERRED STOCKS (Cost $6,956) | 7,771 | |||
Floating Rate Loans - 0.9% | ||||
Principal Amount (000s) | ||||
TELECOMMUNICATION SERVICES - 0.9% | ||||
Diversified Telecommunication Services - 0.9% | ||||
McLeodUSA, Inc.: | ||||
revolver loan 5.5967% 5/31/07 (g) | $ 5,792 | 2,954 | ||
Tranche A, term loan 5.6002% 5/31/07 (g) | 17,276 | 9,329 | ||
Tranche B, term loan 5.67% 5/30/08 (g) | 15,507 | 7,599 | ||
19,882 | ||||
TOTAL FLOATING RATE LOANS (Cost $27,146) | 19,882 | |||
Money Market Funds - 7.6% | ||||
Shares | Value (Note 1) (000s) | |||
Fidelity Cash Central Fund, 2.31% (b) | 120,955,029 | $ 120,955 | ||
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 48,445,500 | 48,446 | ||
TOTAL MONEY MARKET FUNDS (Cost $169,401) | 169,401 | |||
TOTAL INVESTMENT PORTFOLIO - 102.1% (Cost $1,766,931) | 2,282,320 | |||
NET OTHER ASSETS - (2.1)% | (46,523) | |||
NET ASSETS - 100% | $ 2,235,797 |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
(f) 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 $305,000 or 0.0% of net assets. |
(g) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $7,509,000 or 0.3% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Viasystems Group, Inc. | 2/13/04 | $ 12,594 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 79.2% |
Marshall Islands | 13.9% |
Bermuda | 2.1% |
Ireland | 1.2% |
Canada | 1.1% |
Netherlands | 1.0% |
Others (individually less than 1%) | 1.5% |
100.0% |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Companies which are affiliates of the fund at period-end are noted in the fund's Schedule of Investments. Transactions during the period with companies which are or were affiliates are as follows: |
Affiliates | Value, beginning of period | Purchases | Sales | Dividend | Value, end of period |
Central Freight Lines, Inc. | $ - | $ 6,048 | $ - | $ - | $ 6,103 |
Forest Oil Corp. | 61,599 | 28,862 | - | - | 105,561 |
Friendly Ice Cream Corp. | 3,362 | 792 | - | - | 3,696 |
General Maritime Corp. | 84,190 | 4,005 | 6,432 | - | 125,697 |
Pathmark Stores, Inc. | 11,606 | - | 1,585 | - | - |
Triton PCS Holdings, Inc. Class A | 11,894 | - | 10,296 | - | - |
Total | $ 172,651 | $ 39,707 | $ 18,313 | $ - | $ 241,057 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2005 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $46,149) (cost $1,766,931) - See accompanying schedule | $ 2,282,320 | |
Receivable for investments sold | 77 | |
Receivable for fund shares sold | 13,954 | |
Dividends receivable | 417 | |
Interest receivable | 438 | |
Prepaid expenses | 5 | |
Other affiliated receivables | 2 | |
Other receivables | 315 | |
Total assets | 2,297,528 | |
Liabilities | ||
Payable for investments purchased | $ 8,840 | |
Payable for fund shares redeemed | 2,919 | |
Accrued management fee | 1,103 | |
Other affiliated payables | 390 | |
Other payables and accrued expenses | 33 | |
Collateral on securities loaned, at value | 48,446 | |
Total liabilities | 61,731 | |
Net Assets | $ 2,235,797 | |
Net Assets consist of: | ||
Paid in capital | $ 1,715,631 | |
Undistributed net investment income | 3,913 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 864 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 515,389 | |
Net Assets, for 98,960 shares outstanding | $ 2,235,797 | |
Net Asset Value, offering price and redemption price per share ($2,235,797 ÷ 98,960 shares) | $ 22.59 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | |
Investment Income | ||
Dividends | $ 7,824 | |
Interest | 3,069 | |
Security lending | 645 | |
Total income | 11,538 | |
Expenses | ||
Management fee | $ 5,360 | |
Transfer agent fees | 1,759 | |
Accounting and security lending fees | 261 | |
Non-interested trustees' compensation | 5 | |
Custodian fees and expenses | 14 | |
Registration fees | 68 | |
Audit | 24 | |
Legal | 2 | |
Miscellaneous | 8 | |
Total expenses before reductions | 7,501 | |
Expense reductions | (173) | 7,328 |
Net investment income (loss) | 4,210 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (Including realized gain (loss) of $(3,075) from affiliated issuers) | 14,587 | |
Foreign currency transactions | (53) | |
Total net realized gain (loss) | 14,534 | |
Change in net unrealized appreciation (depreciation) on Investment securities | 262,643 | |
Net gain (loss) | 277,177 | |
Net increase (decrease) in net assets resulting from operations | $ 281,387 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 4,210 | $ 2,937 |
Net realized gain (loss) | 14,534 | 106,434 |
Change in net unrealized appreciation (depreciation) | 262,643 | 162,681 |
Net increase (decrease) in net assets resulting | 281,387 | 272,052 |
Distributions to shareholders from net investment income | (3,319) | - |
Distributions to shareholders from net realized gain | (83,080) | (14,471) |
Total distributions | (86,399) | (14,471) |
Share transactions | 808,922 | 1,359,933 |
Reinvestment of distributions | 82,680 | 13,770 |
Cost of shares redeemed | (355,564) | (847,399) |
Net increase (decrease) in net assets resulting from share transactions | 536,038 | 526,304 |
Redemption fees | 576 | 2,119 |
Total increase (decrease) in net assets | 731,602 | 786,004 |
Net Assets | ||
Beginning of period | 1,504,195 | 718,191 |
End of period (including undistributed net investment income of $3,913 and $3,427, respectively) | $ 2,235,797 | $ 1,504,195 |
Other Information Shares | ||
Sold | 37,544 | 70,707 |
Issued in reinvestment of distributions | 4,282 | 788 |
Redeemed | (17,416) | (45,040) |
Net increase (decrease) | 24,410 | 26,455 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended January 31, 2005 | Years ended July 31, | ||||
(Unaudited) | 2004 | 2003 | 2002 | 2001 E | |
Selected Per-Share Data | |||||
Net asset value, beginning of period | $ 20.18 | $ 14.93 | $ 7.37 | $ 10.66 | $ 10.00 |
Income from Investment Operations | |||||
Net investment income (loss) D | .05 | .04 | .01 | .11 G | .07 |
Net realized and unrealized gain (loss) | 3.51 | 5.45 | 7.49 | (3.22) G | .58 |
Total from investment operations | 3.56 | 5.49 | 7.50 | (3.11) | .65 |
Distributions from net investment income | (.04) | - | - | (.20) | - |
Distributions from net realized gain | (1.12) | (.27) | - | - | - |
Total distributions | (1.16) | (.27) | - | (.20) | - |
Redemption fees added to paid in capital D | .01 | .03 | .06 | .02 | .01 |
Net asset value, end of period | $ 22.59 | $ 20.18 | $ 14.93 | $ 7.37 | $ 10.66 |
Total Return B, C | 18.74% | 37.27% | 102.58% | (29.40)% | 6.60% |
Ratios to Average Net Assets F | |||||
Expenses before expense reductions | .87% A | .88% | .93% | 1.14% | .94% A |
Expenses net of voluntary waivers, if any | .87% A | .88% | .93% | 1.14% | .94% A |
Expenses net of all reductions | .85% A | .85% | .83% | .93% | .83% A |
Net investment income (loss) | .49% A | .23% | .07% | 1.16%G | 1.12% A |
Supplemental Data | |||||
Net assets, end of period | $ 2,236 | $ 1,504 | $ 718 | $ 36 | $ 195 |
Portfolio turnover rate | 20% A | 35% | 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. 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
(Amounts in thousands except ratios)
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, including restricted 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, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 claim a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to foreign currency transactions, market discount, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 625,352 | |
Unrealized depreciation | (107,809) | |
Net unrealized appreciation (depreciation) | $ 517,543 | |
Cost for federal income tax purposes | $ 1,764,777 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Operating Policies - continued
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, including revolving credit facilities, 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. The fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $531,208 and $169,630, respectively.
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 .27% 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 .62% 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 .21% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting rec-ords. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $639 for the period.
Semiannual Report
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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 $170 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.
8. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
Fidelity Management & Research
(Far East) Inc.
Fidelity Management & Research
(U.K.) 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
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
LSF-USAN-0305
1.789286.101
Fidelity®
Dividend Growth
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 13 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 17 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the share-holder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,058.40 | $ 3.68 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.63 | $ 3.62 |
*Expenses are equal to the Fund's annualized expense ratio of .71%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
American International Group, Inc. | 5.7 | 6.1 |
Cardinal Health, Inc. | 5.5 | 3.7 |
Home Depot, Inc. | 5.4 | 4.3 |
Microsoft Corp. | 5.1 | 5.5 |
Fannie Mae | 4.2 | 4.9 |
SBC Communications, Inc. | 4.1 | 4.2 |
Pfizer, Inc. | 3.9 | 4.4 |
General Electric Co. | 3.8 | 3.7 |
Clear Channel Communications, Inc. | 3.8 | 4.1 |
Wyeth | 3.7 | 3.1 |
45.2 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Financials | 25.8 | 27.0 |
Information Technology | 16.3 | 12.9 |
Health Care | 16.1 | 16.1 |
Consumer Discretionary | 10.6 | 10.1 |
Industrials | 8.5 | 7.0 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005 * | As of July 31, 2004 ** | ||||||
![]() | Stocks 97.3% | ![]() | Stocks and Equity | ||||
![]() | Convertible | ![]() | Convertible | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 2.7% | ** Foreign | 2.4% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 97.3% | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - 10.6% | |||
Hotels, Restaurants & Leisure - 0.4% | |||
McDonald's Corp. | 2,468,600 | $ 79,958 | |
Media - 4.5% | |||
Clear Channel Communications, Inc. | 21,360,940 | 692,735 | |
News Corp. Class A | 7,255,800 | 123,349 | |
Univision Communications, Inc. Class A (a) | 100,300 | 2,739 | |
818,823 | |||
Specialty Retail - 5.7% | |||
Home Depot, Inc. | 23,995,000 | 990,034 | |
Ross Stores, Inc. | 399,176 | 11,424 | |
TJX Companies, Inc. | 1,562,800 | 39,133 | |
1,040,591 | |||
TOTAL CONSUMER DISCRETIONARY | 1,939,372 | ||
CONSUMER STAPLES - 8.1% | |||
Beverages - 0.5% | |||
PepsiCo, Inc. | 1,757,790 | 94,393 | |
Food & Staples Retailing - 4.4% | |||
CVS Corp. | 9,629,500 | 446,327 | |
Safeway, Inc. (a) | 7,476,300 | 140,928 | |
Wal-Mart Stores, Inc. | 4,335,400 | 227,175 | |
814,430 | |||
Household Products - 0.3% | |||
Colgate-Palmolive Co. | 864,100 | 45,400 | |
Procter & Gamble Co. | 168,100 | 8,948 | |
54,348 | |||
Personal Products - 1.3% | |||
Alberto-Culver Co. | 4,196,645 | 227,668 | |
Tobacco - 1.6% | |||
Altria Group, Inc. | 4,628,500 | 295,437 | |
TOTAL CONSUMER STAPLES | 1,486,276 | ||
ENERGY - 4.1% | |||
Energy Equipment & Services - 3.1% | |||
Diamond Offshore Drilling, Inc. (d) | 3,949,300 | 172,861 | |
ENSCO International, Inc. | 2,522,094 | 86,331 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
ENERGY - continued | |||
Energy Equipment & Services - continued | |||
GlobalSantaFe Corp. | 4,138,079 | $ 146,322 | |
Transocean, Inc. (a) | 3,488,000 | 153,472 | |
558,986 | |||
Oil & Gas - 1.0% | |||
ConocoPhillips | 1,710,200 | 158,689 | |
Exxon Mobil Corp. | 574,120 | 29,625 | |
188,314 | |||
TOTAL ENERGY | 747,300 | ||
FINANCIALS - 25.8% | |||
Capital Markets - 3.6% | |||
Goldman Sachs Group, Inc. | 1,625,400 | 175,299 | |
Lehman Brothers Holdings, Inc. | 634,700 | 57,878 | |
Merrill Lynch & Co., Inc. | 3,403,000 | 204,418 | |
Morgan Stanley | 3,454,400 | 193,308 | |
Nuveen Investments, Inc. Class A | 667,500 | 24,764 | |
655,667 | |||
Commercial Banks - 4.4% | |||
Bank of America Corp. | 8,204,698 | 380,452 | |
North Fork Bancorp, Inc., New York | 935,220 | 26,841 | |
Synovus Financial Corp. | 1,428,900 | 38,766 | |
Wachovia Corp. | 3,481,853 | 190,980 | |
Wells Fargo & Co. | 2,910,000 | 178,383 | |
815,422 | |||
Consumer Finance - 0.3% | |||
MBNA Corp. | 2,356,200 | 62,628 | |
Diversified Financial Services - 2.4% | |||
Citigroup, Inc. | 7,127,039 | 349,581 | |
J.P. Morgan Chase & Co. | 2,637,624 | 98,463 | |
448,044 | |||
Insurance - 9.7% | |||
ACE Ltd. | 2,073,600 | 89,994 | |
AFLAC, Inc. | 392,400 | 15,504 | |
AMBAC Financial Group, Inc. | 1,304,200 | 100,267 | |
American International Group, Inc. | 15,837,800 | 1,049,889 | |
Hartford Financial Services Group, Inc. | 3,906,120 | 262,843 | |
MBIA, Inc. | 1,237,900 | 73,952 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
FINANCIALS - continued | |||
Insurance - continued | |||
MetLife, Inc. | 2,685,000 | $ 106,729 | |
PartnerRe Ltd. | 390,300 | 24,733 | |
Prudential Financial, Inc. | 1,007,100 | 54,293 | |
1,778,204 | |||
Thrifts & Mortgage Finance - 5.4% | |||
Fannie Mae | 11,813,780 | 762,934 | |
MGIC Investment Corp. | 1,743,400 | 111,403 | |
New York Community Bancorp, Inc. | 2,156,500 | 38,450 | |
Washington Mutual, Inc. | 1,797,900 | 72,545 | |
985,332 | |||
TOTAL FINANCIALS | 4,745,297 | ||
HEALTH CARE - 16.1% | |||
Health Care Equipment & Supplies - 0.4% | |||
Baxter International, Inc. | 1,029,100 | 34,742 | |
Medtronic, Inc. | 535,700 | 28,119 | |
62,861 | |||
Health Care Providers & Services - 5.7% | |||
Cardinal Health, Inc. | 18,076,470 | 1,018,067 | |
Henry Schein, Inc. (a) | 11,438 | 778 | |
Service Corp. International (SCI) (a) | 1,216,983 | 8,397 | |
UnitedHealth Group, Inc. | 230,700 | 20,509 | |
1,047,751 | |||
Pharmaceuticals - 10.0% | |||
Johnson & Johnson | 5,488,700 | 355,119 | |
Pfizer, Inc. | 29,755,500 | 718,893 | |
Schering-Plough Corp. | 5,151,300 | 95,608 | |
Wyeth | 16,968,700 | 672,470 | |
1,842,090 | |||
TOTAL HEALTH CARE | 2,952,702 | ||
INDUSTRIALS - 8.0% | |||
Aerospace & Defense - 1.1% | |||
Lockheed Martin Corp. | 1,153,400 | 66,678 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INDUSTRIALS - continued | |||
Aerospace & Defense - continued | |||
Northrop Grumman Corp. | 864,300 | $ 44,840 | |
United Technologies Corp. | 817,700 | 82,326 | |
193,844 | |||
Air Freight & Logistics - 0.0% | |||
Ryder System, Inc. | 220,800 | 10,057 | |
Commercial Services & Supplies - 0.4% | |||
Aramark Corp. Class B | 655,100 | 17,026 | |
ChoicePoint, Inc. (a) | 1,222,700 | 56,244 | |
73,270 | |||
Industrial Conglomerates - 5.6% | |||
General Electric Co. | 19,489,900 | 704,170 | |
Tyco International Ltd. | 8,839,700 | 319,467 | |
1,023,637 | |||
Machinery - 0.7% | |||
Ingersoll-Rand Co. Ltd. Class A | 1,772,900 | 131,868 | |
Marine - 0.1% | |||
Alexander & Baldwin, Inc. | 275,616 | 12,678 | |
Road & Rail - 0.1% | |||
CSX Corp. | 614,200 | 24,550 | |
TOTAL INDUSTRIALS | 1,469,904 | ||
INFORMATION TECHNOLOGY - 16.3% | |||
Communications Equipment - 3.1% | |||
Cisco Systems, Inc. (a) | 19,539,000 | 352,484 | |
Comverse Technology, Inc. (a) | 1,921,500 | 42,946 | |
Motorola, Inc. | 8,492,500 | 133,672 | |
Nokia Corp. sponsored ADR | 572,400 | 8,746 | |
QUALCOMM, Inc. | 843,300 | 31,404 | |
569,252 | |||
Computers & Peripherals - 2.4% | |||
Dell, Inc. (a) | 6,914,500 | 288,750 | |
Diebold, Inc. | 602,800 | 32,455 | |
Hewlett-Packard Co. | 6,272,100 | 122,870 | |
444,075 | |||
Electronic Equipment & Instruments - 0.7% | |||
Flextronics International Ltd. (a) | 2,426,800 | 34,339 | |
Jabil Circuit, Inc. (a) | 1,794,700 | 42,301 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
Electronic Equipment & Instruments - continued | |||
Sanmina-SCI Corp. (a) | 2,437,700 | $ 15,065 | |
Solectron Corp. (a)(d) | 9,028,400 | 44,871 | |
136,576 | |||
IT Services - 0.8% | |||
Affiliated Computer Services, Inc. Class A (a) | 1,107,200 | 59,999 | |
First Data Corp. | 1,967,200 | 80,144 | |
140,143 | |||
Semiconductors & Semiconductor Equipment - 3.2% | |||
Analog Devices, Inc. | 317,200 | 11,384 | |
Applied Materials, Inc. (a) | 6,024,200 | 95,785 | |
Freescale Semiconductor, Inc. Class B (a) | 880,868 | 15,389 | |
Intel Corp. | 13,713,000 | 307,857 | |
KLA-Tencor Corp. (a) | 854,700 | 39,530 | |
Lam Research Corp. (a) | 1,133,300 | 30,327 | |
Linear Technology Corp. | 215,400 | 8,129 | |
Novellus Systems, Inc. (a) | 722,700 | 18,899 | |
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR | 3,237,659 | 28,330 | |
United Microelectronics Corp. sponsored ADR (d) | 6,080,176 | 21,463 | |
Xilinx, Inc. | 145,500 | 4,247 | |
581,340 | |||
Software - 6.1% | |||
BEA Systems, Inc. (a) | 5,128,200 | 43,692 | |
Microsoft Corp. | 35,658,737 | 937,112 | |
Symantec Corp. (a) | 860,400 | 20,090 | |
VERITAS Software Corp. (a) | 4,813,234 | 123,796 | |
1,124,690 | |||
TOTAL INFORMATION TECHNOLOGY | 2,996,076 | ||
MATERIALS - 0.5% | |||
Chemicals - 0.2% | |||
Praxair, Inc. | 1,033,500 | 44,596 | |
Metals & Mining - 0.2% | |||
Alcan, Inc. | 1,020,800 | 40,707 | |
Paper & Forest Products - 0.1% | |||
International Paper Co. | 216,200 | 8,464 | |
TOTAL MATERIALS | 93,767 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
TELECOMMUNICATION SERVICES - 6.8% | |||
Diversified Telecommunication Services - 6.5% | |||
BellSouth Corp. | 5,787,100 | $ 151,854 | |
Qwest Communications International, Inc. (a) | 28,571,200 | 119,999 | |
SBC Communications, Inc. | 31,380,791 | 745,608 | |
Verizon Communications, Inc. | 4,808,850 | 171,147 | |
1,188,608 | |||
Wireless Telecommunication Services - 0.3% | |||
Nextel Communications, Inc. Class A (a) | 2,207,600 | 63,336 | |
TOTAL TELECOMMUNICATION SERVICES | 1,251,944 | ||
UTILITIES - 1.0% | |||
Electric Utilities - 1.0% | |||
Entergy Corp. | 679,700 | 47,253 | |
FirstEnergy Corp. | 1,325,700 | 52,710 | |
PG&E Corp. (a) | 2,133,800 | 74,683 | |
174,646 | |||
TOTAL COMMON STOCKS (Cost $16,564,389) | 17,857,284 | ||
Convertible Preferred Stocks - 0.1% | |||
MATERIALS - 0.1% | |||
Paper & Forest Products - 0.1% | |||
International Paper Capital Trust 2.625% | 426,800 | 21,553 | |
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $21,703) | 21,553 |
Convertible Bonds - 0.5% | ||||
Principal Amount (000s) | ||||
INDUSTRIALS - 0.5% | ||||
Industrial Conglomerates - 0.5% | ||||
Tyco International Group SA yankee 3.125% 1/15/23 | $ 51,110 | 86,560 | ||
Convertible Bonds - continued | ||||
Principal Amount (000s) | Value (Note 1) (000s) | |||
INFORMATION TECHNOLOGY - 0.0% | ||||
Communications Equipment - 0.0% | ||||
CIENA Corp. 3.75% 2/1/08 | $ 8,560 | $ 7,597 | ||
TOTAL CONVERTIBLE BONDS (Cost $65,238) | 94,157 |
Money Market Funds - 3.4% | |||
Shares | |||
Fidelity Cash Central Fund, 2.31% (b) | 510,227,343 | 510,227 | |
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 117,266,961 | 117,267 | |
TOTAL MONEY MARKET FUNDS (Cost $627,494) | 627,494 | ||
TOTAL INVESTMENT PORTFOLIO - 101.3% (Cost $17,278,824) | 18,600,488 | ||
NET OTHER ASSETS - (1.3)% | (238,383) | ||
NET ASSETS - 100% | $ 18,362,105 |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
Income Tax Information |
At July 31, 2004, the fund had a capital loss carryforward of approximately $195,547,000 all of which will expire on July 31, 2011. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2005 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $116,673) (cost $17,278,824) - See accompanying schedule | $ 18,600,488 | |
Receivable for investments sold | 102,053 | |
Receivable for fund shares sold | 19,422 | |
Dividends receivable | 20,201 | |
Interest receivable | 969 | |
Prepaid expenses | 65 | |
Other affiliated receivables | 22 | |
Other receivables | 594 | |
Total assets | 18,743,814 | |
Liabilities | ||
Payable for investments purchased | $ 17,897 | |
Payable for fund shares redeemed | 235,666 | |
Accrued management fee | 6,942 | |
Other affiliated payables | 3,803 | |
Other payables and accrued expenses | 134 | |
Collateral on securities loaned, at value | 117,267 | |
Total liabilities | 381,709 | |
Net Assets | $ 18,362,105 | |
Net Assets consist of: | ||
Paid in capital | $ 17,250,971 | |
Undistributed net investment income | 11,656 | |
Accumulated undistributed net realized gain (loss) on investments, foreign currency transactions and futures | (222,186) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 1,321,664 | |
Net Assets, for 661,933 shares outstanding | $ 18,362,105 | |
Net Asset Value, offering price and redemption price per share ($18,362,105 ÷ 661,933 shares) | $ 27.74 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | |
Investment Income | ||
Dividends | $ 150,834 | |
Special Dividends | 106,976 | |
Interest | 7,508 | |
Security lending | 218 | |
Total income | 265,536 | |
Expenses | ||
Management fee | $ 54,133 | |
Performance adjustment | (9,931) | |
Transfer agent fees | 21,180 | |
Accounting and security lending fees | 806 | |
Non-interested trustees' compensation | 55 | |
Appreciation in deferred trustee compensation account | 4 | |
Custodian fees and expenses | 146 | |
Registration fees | 53 | |
Audit | 64 | |
Legal | 23 | |
Miscellaneous | 35 | |
Total expenses before reductions | 66,568 | |
Expense reductions | (932) | 65,636 |
Net investment income (loss) | 199,900 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 58,988 | |
Foreign currency transactions | 2 | |
Futures contracts | 11,990 | |
Total net realized gain (loss) | 70,980 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 805,688 | |
Assets and liabilities in foreign currencies | (16) | |
Futures contracts | 3,469 | |
Total change in net unrealized appreciation (depreciation) | 809,141 | |
Net gain (loss) | 880,121 | |
Net increase (decrease) in net assets resulting from operations | $ 1,080,021 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 199,900 | $ 133,702 |
Net realized gain (loss) | 70,980 | 573,551 |
Change in net unrealized appreciation (depreciation) | 809,141 | 587,273 |
Net increase (decrease) in net assets resulting | 1,080,021 | 1,294,526 |
Distributions to shareholders from net investment income | (269,024) | (142,749) |
Share transactions | 1,842,113 | 5,305,733 |
Reinvestment of distributions | 260,163 | 137,933 |
Cost of shares redeemed | (2,938,031) | (3,945,945) |
Net increase (decrease) in net assets resulting from share transactions | (835,755) | 1,497,721 |
Total increase (decrease) in net assets | (24,758) | 2,649,498 |
Net Assets | ||
Beginning of period | 18,386,863 | 15,737,365 |
End of period (including undistributed net investment income of $11,656 and undistributed net investment income of $80,780, respectively) | $ 18,362,105 | $ 18,386,863 |
Other Information Shares | ||
Sold | 67,603 | 198,128 |
Issued in reinvestment of distributions | 9,419 | 5,341 |
Redeemed | (106,797) | (147,303) |
Net increase (decrease) | (29,775) | 56,166 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | |||||
(Unaudited) | 2004 | 2003 | 2002 | 2001 | 2000 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 26.58 | $ 24.76 | $ 22.20 | $ 29.75 | $ 30.90 | $ 31.14 |
Income from Investment | ||||||
Net investment income (loss) D | .29 E | .20 | .22 | .24 G | .16 | .15 |
Net realized and unrealized gain (loss) | 1.26 | 1.84 | 2.56 | (7.31) G | 1.27 | 1.89 |
Total from investment operations | 1.55 | 2.04 | 2.78 | (7.07) | 1.43 | 2.04 |
Distributions from net investment income | (.39) | (.22) | (.22) | (.15) | (.18) | (.14) |
Distributions from net realized gain | - | - | - | (.33) | (2.40) | (2.14) |
Total distributions | (.39) | (.22) | (.22) | (.48) | (2.58) | (2.28) |
Net asset value, end of period | $ 27.74 | $ 26.58 | $ 24.76 | $ 22.20 | $ 29.75 | $ 30.90 |
Total Return B, C | 5.84% | 8.27% | 12.63% | (24.04)% | 4.58% | 7.00% |
Ratios to Average Net Assets F | ||||||
Expenses before expense reductions | .71% A | .90% | 1.05% | .98% | .97% | .77% |
Expenses net of voluntary waivers, if any | .71% A | .90% | 1.05% | .98% | .97% | .77% |
Expenses net of all reductions | .70% A | .89% | 1.02% | .95% | .94% | .74% |
Net investment income (loss) | 2.12% A, E | .75% | .94% | .90% G | .54% | .52% |
Supplemental Data | ||||||
Net assets, | $ 18,362 | $ 18,387 | $ 15,737 | $ 12,648 | $ 14,463 | $ 10,432 |
Portfolio turnover rate | 30% A | 37% | 51% | 81% | 88% | 86% |
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 Investment income per share reflects a special dividend which amounted to $.15 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been .99%.
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. 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. 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
(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, including restricted 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, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(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 and may include proceeds received from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders. Each year, the fund intends to qualify as a regulated investment company by distributing 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 the 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to futures transactions, foreign currency transactions, market discount, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 2,506,875 | |
Unrealized depreciation | (1,291,309) | |
Net unrealized appreciation (depreciation) | $ 1,215,566 | |
Cost for federal income tax purposes | $ 17,384,922 |
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 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).
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
2. Operating Policies - 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 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.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $2,735,895 and $3,127,176, respectively.
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 .27% 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 annualized management fee rate, including the performance adjustment, was .47% 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 .22% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting rec-ords. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
Semiannual Report
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 $5,910 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 were $155 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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 $798 for the period. In addition, through arrangements with the 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 transfer agent expenses by $134.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
8. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
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
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 International Investment
Advisors
Fidelity Investments Japan Limited
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
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
DGF-USAN-0305
1.789283.101
Fidelity®
Blue Chip Value
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 17 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 21 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the share-holder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,120.70 | $ 5.29 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.21 | $ 5.04 |
* Expenses are equal to the Fund's annualized expense ratio of .99%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
General Electric Co. | 6.0 | 5.8 |
Exxon Mobil Corp. | 3.6 | 3.0 |
Bank of America Corp. | 3.2 | 3.2 |
Honeywell International, Inc. | 2.7 | 2.1 |
American International Group, Inc. | 2.5 | 2.3 |
Altria Group, Inc. | 1.9 | 0.1 |
Wachovia Corp. | 1.8 | 0.6 |
Tyco International Ltd. | 1.8 | 2.1 |
E.I. du Pont de Nemours & Co. | 1.6 | 0.9 |
Baxter International, Inc. | 1.5 | 1.7 |
26.6 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Industrials | 19.3 | 18.9 |
Financials | 18.6 | 24.8 |
Energy | 12.5 | 12.0 |
Health Care | 10.2 | 9.8 |
Consumer Discretionary | 9.3 | 11.1 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005 * | As of July 31, 2004** | ||||||
![]() | Stocks 95.9% | ![]() | Stocks 100.0% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 4.0% | ** Foreign | 3.6% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 95.9% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 9.3% | |||
Auto Components - 0.0% | |||
Amerigon, Inc. (a) | 3,200 | $ 14,848 | |
Automobiles - 0.2% | |||
Toyota Motor Corp. ADR | 2,000 | 156,380 | |
Distributors - 0.2% | |||
WESCO International, Inc. (a) | 5,300 | 179,087 | |
Hotels, Restaurants & Leisure - 0.8% | |||
McDonald's Corp. | 27,300 | 884,247 | |
Household Durables - 1.1% | |||
Blount International, Inc. (a) | 6,300 | 113,085 | |
Centex Corp. | 3,700 | 226,847 | |
KB Home | 3,500 | 380,275 | |
LG Electronics, Inc. | 1,510 | 103,854 | |
Sony Corp. sponsored ADR | 6,000 | 222,120 | |
Techtronic Industries Co. Ltd. | 72,000 | 161,080 | |
1,207,261 | |||
Leisure Equipment & Products - 0.4% | |||
Eastman Kodak Co. | 13,900 | 459,951 | |
Media - 4.5% | |||
Clear Channel Communications, Inc. | 18,400 | 596,712 | |
Emmis Communications Corp. Class A (a) | 8,250 | 144,953 | |
Grupo Televisa SA de CV sponsored ADR | 4,900 | 288,267 | |
Lamar Advertising Co. Class A (a) | 19,000 | 816,620 | |
News Corp. Class A | 5,232 | 88,944 | |
NTL, Inc. (a) | 1,953 | 132,863 | |
Omnicom Group, Inc. | 4,500 | 382,005 | |
Time Warner, Inc. (a) | 19,600 | 352,800 | |
Univision Communications, Inc. Class A (a) | 1,600 | 43,696 | |
Valassis Communications, Inc. (a) | 2,400 | 81,480 | |
Viacom, Inc. Class B (non-vtg.) | 32,341 | 1,207,613 | |
Walt Disney Co. | 30,400 | 870,352 | |
XM Satellite Radio Holdings, Inc. Class A (a) | 2,500 | 79,775 | |
5,086,080 | |||
Multiline Retail - 0.6% | |||
99 Cents Only Stores (a)(d) | 15,000 | 225,000 | |
JCPenney Co., Inc. | 6,200 | 264,864 | |
Nordstrom, Inc. | 4,700 | 226,775 | |
716,639 | |||
Specialty Retail - 1.5% | |||
Asbury Automotive Group, Inc. (a) | 10,000 | 168,800 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
bebe Stores, Inc. | 8,000 | $ 207,280 | |
Blockbuster, Inc. Class A (d) | 10,000 | 91,600 | |
Home Depot, Inc. | 13,100 | 540,506 | |
Sonic Automotive, Inc. Class A (sub. vtg.) | 7,000 | 163,520 | |
The Pep Boys - Manny, Moe & Jack | 5,700 | 98,154 | |
Toys 'R' Us, Inc. (a) | 19,400 | 416,130 | |
1,685,990 | |||
TOTAL CONSUMER DISCRETIONARY | 10,390,483 | ||
CONSUMER STAPLES - 3.5% | |||
Beverages - 0.3% | |||
PepsiCo, Inc. | 5,800 | 311,460 | |
Food & Staples Retailing - 0.4% | |||
Albertsons, Inc. | 6,500 | 148,720 | |
Safeway, Inc. (a) | 14,800 | 278,980 | |
427,700 | |||
Food Products - 0.4% | |||
Bunge Ltd. | 3,500 | 197,890 | |
General Mills, Inc. | 4,100 | 217,259 | |
Smithfield Foods, Inc. (a) | 2,900 | 87,783 | |
502,932 | |||
Household Products - 0.1% | |||
Clorox Co. | 2,160 | 128,347 | |
Personal Products - 0.4% | |||
Gillette Co. | 8,320 | 421,990 | |
Tobacco - 1.9% | |||
Altria Group, Inc. | 34,200 | 2,182,986 | |
TOTAL CONSUMER STAPLES | 3,975,415 | ||
ENERGY - 12.5% | |||
Energy Equipment & Services - 5.2% | |||
Baker Hughes, Inc. | 2,200 | 95,260 | |
BJ Services Co. | 4,300 | 206,615 | |
ENSCO International, Inc. | 6,880 | 235,502 | |
FMC Technologies, Inc. (a) | 10,200 | 312,426 | |
GlobalSantaFe Corp. | 14,500 | 512,720 | |
Halliburton Co. | 26,900 | 1,106,397 | |
Hornbeck Offshore Services, Inc. | 5,600 | 121,520 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Energy Equipment & Services - continued | |||
National-Oilwell, Inc. (a) | 2,700 | $ 99,576 | |
Pride International, Inc. (a) | 24,300 | 568,377 | |
Rowan Companies, Inc. | 8,000 | 225,280 | |
Schlumberger Ltd. (NY Shares) | 8,400 | 571,536 | |
Smith International, Inc. (a) | 4,400 | 260,480 | |
Transocean, Inc. (a) | 12,500 | 550,000 | |
Varco International, Inc. (a) | 18,140 | 555,265 | |
Weatherford International Ltd. (a) | 8,650 | 469,436 | |
5,890,390 | |||
Oil & Gas - 7.3% | |||
Apache Corp. | 5,520 | 300,398 | |
BP PLC sponsored ADR | 2,800 | 166,936 | |
Burlington Resources, Inc. | 10,400 | 454,584 | |
Cheniere Energy, Inc. (a) | 1,000 | 74,900 | |
ChevronTexaco Corp. | 18,000 | 979,200 | |
ConocoPhillips | 5,600 | 519,624 | |
Encore Acquisition Co. (a) | 3,600 | 134,280 | |
Exxon Mobil Corp. | 79,500 | 4,102,200 | |
Occidental Petroleum Corp. | 7,200 | 420,336 | |
Premcor, Inc. | 4,700 | 225,600 | |
Quicksilver Resources, Inc. (a)(d) | 8,200 | 364,326 | |
Valero Energy Corp. | 7,800 | 405,834 | |
8,148,218 | |||
TOTAL ENERGY | 14,038,608 | ||
FINANCIALS - 18.6% | |||
Capital Markets - 3.4% | |||
Bear Stearns Companies, Inc. | 5,800 | 586,148 | |
Lehman Brothers Holdings, Inc. | 8,500 | 775,115 | |
Merrill Lynch & Co., Inc. | 24,500 | 1,471,715 | |
Morgan Stanley | 13,200 | 738,672 | |
optionsXpress Holdings, Inc. | 1,000 | 20,280 | |
State Street Corp. | 4,600 | 206,126 | |
TradeStation Group, Inc. (a) | 10,700 | 65,270 | |
3,863,326 | |||
Commercial Banks - 6.0% | |||
Banco Bradesco SA sponsored ADR (non-vtg.) | 16,400 | 403,440 | |
Bank of America Corp. | 77,216 | 3,580,506 | |
Texas Capital Bancshares, Inc. (a) | 4,300 | 101,953 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Commercial Banks - continued | |||
UCBH Holdings, Inc. | 4,300 | $ 189,501 | |
Wachovia Corp. | 37,356 | 2,048,977 | |
Wells Fargo & Co. | 6,600 | 404,580 | |
6,728,957 | |||
Consumer Finance - 0.4% | |||
Capital One Financial Corp. | 3,100 | 242,668 | |
First Marblehead Corp. (a) | 3,200 | 205,856 | |
448,524 | |||
Diversified Financial Services - 1.5% | |||
Citigroup, Inc. | 23,600 | 1,157,580 | |
J.P. Morgan Chase & Co. | 13,652 | 509,629 | |
1,667,209 | |||
Insurance - 4.9% | |||
ACE Ltd. | 13,480 | 585,032 | |
AFLAC, Inc. | 7,800 | 308,178 | |
AMBAC Financial Group, Inc. | 6,600 | 507,408 | |
American International Group, Inc. | 41,600 | 2,757,664 | |
Hartford Financial Services Group, Inc. | 6,400 | 430,656 | |
Hilb Rogal & Hobbs Co. | 5,600 | 199,136 | |
MetLife, Inc. | 4,300 | 170,925 | |
Scottish Re Group Ltd. | 2,900 | 66,903 | |
Unitrin, Inc. | 2,000 | 85,660 | |
W.R. Berkley Corp. | 8,400 | 400,680 | |
5,512,242 | |||
Real Estate - 0.8% | |||
Apartment Investment & Management Co. Class A | 11,810 | 423,979 | |
Equity Lifestyle Properties, Inc. | 1,400 | 47,992 | |
General Growth Properties, Inc. | 8,100 | 257,337 | |
iStar Financial, Inc. | 2,500 | 104,625 | |
Spirit Finance Corp. (e) | 2,000 | 23,800 | |
857,733 | |||
Thrifts & Mortgage Finance - 1.6% | |||
Fannie Mae | 4,140 | 267,361 | |
Freddie Mac | 3,900 | 254,631 | |
Golden West Financial Corp., Delaware | 4,720 | 305,006 | |
New York Community Bancorp, Inc. | 6,100 | 108,763 | |
Sovereign Bancorp, Inc. | 22,200 | 504,828 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Thrifts & Mortgage Finance - continued | |||
W Holding Co., Inc. | 6,732 | $ 87,785 | |
Washington Mutual, Inc. | 6,200 | 250,170 | |
1,778,544 | |||
TOTAL FINANCIALS | 20,856,535 | ||
HEALTH CARE - 10.2% | |||
Biotechnology - 1.2% | |||
Alexion Pharmaceuticals, Inc. (a) | 6,000 | 148,440 | |
Alkermes, Inc. (a) | 5,400 | 68,418 | |
Amgen, Inc. (a) | 3,300 | 205,392 | |
Biogen Idec, Inc. (a) | 3,800 | 246,848 | |
BioMarin Pharmaceutical, Inc. (a) | 22,800 | 137,940 | |
Genentech, Inc. (a) | 2,100 | 100,191 | |
ImClone Systems, Inc. (a) | 1,900 | 79,705 | |
MedImmune, Inc. (a) | 11,200 | 264,936 | |
Millennium Pharmaceuticals, Inc. (a) | 5,400 | 49,734 | |
1,301,604 | |||
Health Care Equipment & Supplies - 4.1% | |||
Aspect Medical Systems, Inc. (a) | 4,000 | 90,160 | |
Baxter International, Inc. | 50,140 | 1,692,726 | |
Dade Behring Holdings, Inc. (a) | 3,800 | 217,170 | |
Guidant Corp. | 3,000 | 217,470 | |
Medtronic, Inc. | 21,500 | 1,128,535 | |
PerkinElmer, Inc. | 10,300 | 236,797 | |
Thermo Electron Corp. (a) | 3,300 | 98,802 | |
Waters Corp. (a) | 19,200 | 942,336 | |
4,623,996 | |||
Health Care Providers & Services - 1.9% | |||
McKesson Corp. | 13,500 | 465,615 | |
Omnicare, Inc. | 3,000 | 92,250 | |
PacifiCare Health Systems, Inc. (a) | 3,400 | 209,202 | |
Sierra Health Services, Inc. (a) | 5,700 | 313,101 | |
UnitedHealth Group, Inc. | 12,100 | 1,075,690 | |
2,155,858 | |||
Pharmaceuticals - 3.0% | |||
Connetics Corp. (a) | 4,500 | 109,890 | |
Johnson & Johnson | 10,360 | 670,292 | |
Merck & Co., Inc. | 16,300 | 457,215 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Pfizer, Inc. | 15,700 | $ 379,312 | |
Schering-Plough Corp. | 49,710 | 922,618 | |
Wyeth | 20,300 | 804,489 | |
3,343,816 | |||
TOTAL HEALTH CARE | 11,425,274 | ||
INDUSTRIALS - 19.3% | |||
Aerospace & Defense - 4.6% | |||
Engineered Support Systems, Inc. | 1,800 | 104,418 | |
Hexcel Corp. (a) | 8,700 | 128,151 | |
Honeywell International, Inc. | 85,560 | 3,078,449 | |
Lockheed Martin Corp. | 12,720 | 735,343 | |
Precision Castparts Corp. | 4,000 | 281,200 | |
Raytheon Co. | 10,200 | 381,480 | |
The Boeing Co. | 8,200 | 414,920 | |
5,123,961 | |||
Air Freight & Logistics - 0.1% | |||
Expeditors International of Washington, Inc. | 3,300 | 185,262 | |
Airlines - 0.5% | |||
AirTran Holdings, Inc. (a) | 6,200 | 52,948 | |
Delta Air Lines, Inc. (a) | 19,200 | 103,488 | |
JetBlue Airways Corp. (a) | 4,800 | 94,992 | |
Ryanair Holdings PLC sponsored ADR (a) | 1,100 | 51,513 | |
Southwest Airlines Co. | 18,700 | 270,776 | |
573,717 | |||
Building Products - 1.0% | |||
Masco Corp. | 32,300 | 1,188,640 | |
Commercial Services & Supplies - 2.3% | |||
Apollo Group, Inc. Class A (a) | 5,900 | 461,321 | |
Asset Acceptance Capital Corp. | 600 | 12,288 | |
Career Education Corp. (a) | 12,500 | 503,625 | |
Cintas Corp. | 14,116 | 614,046 | |
On Assignment, Inc. (a) | 11,793 | 64,862 | |
Robert Half International, Inc. | 30,530 | 926,280 | |
2,582,422 | |||
Construction & Engineering - 1.2% | |||
Chicago Bridge & Iron Co. NV (NY Shares) | 8,600 | 325,080 | |
Fluor Corp. | 6,900 | 369,426 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Construction & Engineering - continued | |||
Jacobs Engineering Group, Inc. (a) | 6,900 | $ 350,451 | |
MasTec, Inc. (a) | 33,600 | 298,704 | |
1,343,661 | |||
Electrical Equipment - 0.2% | |||
ABB Ltd. sponsored ADR (a) | 15,000 | 82,650 | |
Rockwell Automation, Inc. | 2,000 | 113,300 | |
195,950 | |||
Industrial Conglomerates - 7.9% | |||
General Electric Co. | 184,950 | 6,682,244 | |
Siemens AG sponsored ADR | 2,000 | 158,820 | |
Tyco International Ltd. | 55,940 | 2,021,672 | |
8,862,736 | |||
Machinery - 0.4% | |||
CUNO, Inc. (a) | 2,000 | 114,860 | |
ITT Industries, Inc. | 3,000 | 255,870 | |
Timken Co. | 3,500 | 90,160 | |
460,890 | |||
Marine - 0.1% | |||
Alexander & Baldwin, Inc. | 1,600 | 73,600 | |
Road & Rail - 0.9% | |||
Norfolk Southern Corp. | 14,700 | 513,324 | |
Swift Transportation Co., Inc. (a) | 12,300 | 274,290 | |
Union Pacific Corp. | 4,200 | 250,320 | |
1,037,934 | |||
Trading Companies & Distributors - 0.1% | |||
UAP Holding Corp. | 5,200 | 78,000 | |
TOTAL INDUSTRIALS | 21,706,773 | ||
INFORMATION TECHNOLOGY - 7.8% | |||
Communications Equipment - 1.2% | |||
Cisco Systems, Inc. (a) | 5,300 | 95,612 | |
Comverse Technology, Inc. (a) | 13,700 | 306,195 | |
Foundry Networks, Inc. (a) | 18,000 | 185,040 | |
Juniper Networks, Inc. (a) | 16,500 | 414,645 | |
Motorola, Inc. | 6,300 | 99,162 | |
QUALCOMM, Inc. | 6,100 | 227,164 | |
1,327,818 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Computers & Peripherals - 0.8% | |||
International Business Machines Corp. | 4,220 | $ 394,232 | |
Sun Microsystems, Inc. (a) | 17,400 | 75,864 | |
Western Digital Corp. (a) | 37,200 | 400,644 | |
870,740 | |||
Electronic Equipment & Instruments - 0.8% | |||
Amphenol Corp. Class A | 5,600 | 220,248 | |
BEI Technologies, Inc. | 3,300 | 93,027 | |
Molex, Inc. | 5,000 | 143,600 | |
Solectron Corp. (a) | 6,300 | 31,311 | |
Symbol Technologies, Inc. | 25,000 | 457,500 | |
945,686 | |||
Internet Software & Services - 0.1% | |||
Akamai Technologies, Inc. (a) | 8,200 | 107,420 | |
IT Services - 0.6% | |||
Affiliated Computer Services, Inc. Class A (a) | 9,500 | 514,805 | |
BearingPoint, Inc. (a) | 12,900 | 101,781 | |
Sapient Corp. (a) | 8,600 | 67,768 | |
684,354 | |||
Office Electronics - 0.4% | |||
Xerox Corp. (a) | 25,000 | 397,000 | |
Semiconductors & Semiconductor Equipment - 1.6% | |||
Analog Devices, Inc. | 5,400 | 193,806 | |
Applied Materials, Inc. (a) | 8,900 | 141,510 | |
Cabot Microelectronics Corp. (a) | 9,800 | 298,214 | |
Freescale Semiconductor, Inc. Class A | 20,700 | 353,970 | |
Intel Corp. | 16,500 | 370,425 | |
Lam Research Corp. (a) | 5,261 | 140,784 | |
PMC-Sierra, Inc. (a) | 8,900 | 91,492 | |
Samsung Electronics Co. Ltd. | 440 | 212,177 | |
1,802,378 | |||
Software - 2.3% | |||
BEA Systems, Inc. (a) | 27,659 | 235,655 | |
Macrovision Corp. (a) | 1,800 | 41,994 | |
Microsoft Corp. | 62,760 | 1,649,333 | |
Oracle Corp. (a) | 20,400 | 280,908 | |
Symantec Corp. (a) | 16,400 | 382,940 | |
2,590,830 | |||
TOTAL INFORMATION TECHNOLOGY | 8,726,226 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - 8.8% | |||
Chemicals - 5.5% | |||
Albemarle Corp. | 3,600 | $ 126,396 | |
Celanese Corp. Class A | 5,400 | 87,102 | |
Dow Chemical Co. | 24,600 | 1,222,620 | |
E.I. du Pont de Nemours & Co. | 38,200 | 1,816,792 | |
Lubrizol Corp. | 3,500 | 126,105 | |
Lyondell Chemical Co. | 52,918 | 1,556,848 | |
Monsanto Co. | 11,800 | 638,734 | |
Mosaic Co. (a) | 7,700 | 127,050 | |
Nalco Holding Co. | 10,000 | 193,500 | |
Olin Corp. | 10,156 | 226,174 | |
Valspar Corp. | 2,000 | 98,000 | |
6,219,321 | |||
Construction Materials - 0.1% | |||
Vulcan Materials Co. | 2,000 | 112,960 | |
Containers & Packaging - 1.4% | |||
Crown Holdings, Inc. (a) | 7,000 | 94,430 | |
Owens-Illinois, Inc. (a) | 18,300 | 415,776 | |
Packaging Corp. of America | 18,500 | 412,735 | |
Smurfit-Stone Container Corp. (a) | 41,700 | 627,168 | |
1,550,109 | |||
Metals & Mining - 1.6% | |||
Alcoa, Inc. | 15,300 | 451,503 | |
Allegheny Technologies, Inc. | 7,000 | 168,000 | |
Freeport-McMoRan Copper & Gold, Inc. Class B | 3,900 | 143,559 | |
Industrias Penoles SA de CV | 20,000 | 104,899 | |
International Steel Group, Inc. (a) | 2,500 | 100,625 | |
Massey Energy Co. | 4,200 | 159,306 | |
Metals USA, Inc. (a) | 600 | 10,734 | |
Newmont Mining Corp. | 6,300 | 262,017 | |
Nucor Corp. | 3,720 | 208,915 | |
Phelps Dodge Corp. | 1,700 | 163,710 | |
1,773,268 | |||
Paper & Forest Products - 0.2% | |||
Louisiana-Pacific Corp. | 3,700 | 94,720 | |
Wausau-Mosinee Paper Corp. | 5,000 | 74,100 | |
168,820 | |||
TOTAL MATERIALS | 9,824,478 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
TELECOMMUNICATION SERVICES - 4.0% | |||
Diversified Telecommunication Services - 2.6% | |||
Covad Communications Group, Inc. (a) | 202,200 | $ 341,718 | |
SBC Communications, Inc. | 61,200 | 1,454,112 | |
Telewest Global, Inc. (a) | 17,000 | 286,450 | |
Verizon Communications, Inc. | 24,600 | 875,514 | |
2,957,794 | |||
Wireless Telecommunication Services - 1.4% | |||
American Tower Corp. Class A (a) | 20,500 | 371,460 | |
Leap Wireless International, Inc. (a) | 3,200 | 87,200 | |
Mobile TeleSystems OJSC sponsored ADR (d) | 3,600 | 129,528 | |
Nextel Communications, Inc. Class A (a) | 11,300 | 324,197 | |
Nextel Partners, Inc. Class A (a) | 15,300 | 304,317 | |
SpectraSite, Inc. (a) | 2,700 | 158,220 | |
Vimpel Communications sponsored ADR (a) | 4,000 | 144,800 | |
1,519,722 | |||
TOTAL TELECOMMUNICATION SERVICES | 4,477,516 | ||
UTILITIES - 1.9% | |||
Electric Utilities - 1.3% | |||
Entergy Corp. | 7,600 | 528,352 | |
PG&E Corp. (a) | 13,000 | 455,000 | |
PPL Corp. | 5,700 | 307,800 | |
Southern Co. | 2,660 | 89,828 | |
TXU Corp. | 1,400 | 96,880 | |
1,477,860 | |||
Multi-Utilities & Unregulated Power - 0.6% | |||
AES Corp. (a) | 17,600 | 247,280 | |
CMS Energy Corp. (a) | 33,000 | 347,490 | |
Public Service Enterprise Group, Inc. | 1,500 | 79,125 | |
673,895 | |||
TOTAL UTILITIES | 2,151,755 | ||
TOTAL COMMON STOCKS (Cost $94,329,842) | 107,573,063 | ||
Money Market Funds - 4.3% | |||
Shares | Value (Note 1) | ||
Fidelity Cash Central Fund, 2.31% (b) | 4,034,789 | $ 4,034,789 | |
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 733,700 | 733,700 | |
TOTAL MONEY MARKET FUNDS (Cost $4,768,489) | 4,768,489 | ||
TOTAL INVESTMENT PORTFOLIO - 100.2% (Cost $99,098,331) | 112,341,552 | ||
NET OTHER ASSETS - (0.2)% | (228,398) | ||
NET ASSETS - 100% | $ 112,113,154 |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $23,800 or 0.0% 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, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including securities loaned of $728,432) (cost $99,098,331) - See accompanying schedule | $ 112,341,552 | |
Receivable for investments sold | 806,800 | |
Receivable for fund shares sold | 703,954 | |
Dividends receivable | 76,528 | |
Interest receivable | 7,252 | |
Prepaid expenses | 243 | |
Other receivables | 13,479 | |
Total assets | 113,949,808 | |
Liabilities | ||
Payable to custodian bank | $ 24,660 | |
Payable for investments purchased | 845,905 | |
Payable for fund shares redeemed | 132,854 | |
Accrued management fee | 48,861 | |
Other affiliated payables | 30,090 | |
Other payables and accrued expenses | 20,584 | |
Collateral on securities loaned, at value | 733,700 | |
Total liabilities | 1,836,654 | |
Net Assets | $ 112,113,154 | |
Net Assets consist of: | ||
Paid in capital | $ 98,888,461 | |
Distributions in excess of net investment income | (15,987) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,597) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 13,243,277 | |
Net Assets, for 9,025,616 shares outstanding | $ 112,113,154 | |
Net Asset Value, offering price and redemption price per share ($112,113,154 ÷ 9,025,616 shares) | $ 12.42 |
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, 2005 (Unaudited) | ||
Investment Income | ||
Dividends | $ 697,792 | |
Special Dividends | 153,780 | |
Interest | 25,078 | |
Security lending | 1,820 | |
Total income | 878,470 | |
Expenses | ||
Management fee | $ 249,154 | |
Performance adjustment | (16,810) | |
Transfer agent fees | 134,778 | |
Accounting and security lending fees | 16,756 | |
Non-interested trustees' compensation | 232 | |
Custodian fees and expenses | 16,937 | |
Registration fees | 10,780 | |
Audit | 16,503 | |
Legal | 342 | |
Miscellaneous | 1,413 | |
Total expenses before reductions | 430,085 | |
Expense reductions | (19,006) | 411,079 |
Net investment income (loss) | 467,391 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 381,960 | |
Foreign currency transactions | (219) | |
Total net realized gain (loss) | 381,741 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 8,676,957 | |
Assets and liabilities in foreign currencies | 67 | |
Total change in net unrealized appreciation (depreciation) | 8,677,024 | |
Net gain (loss) | 9,058,765 | |
Net increase (decrease) in net assets resulting from operations | $ 9,526,156 |
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, 2005 (Unaudited) | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 467,391 | $ 253,479 |
Net realized gain (loss) | 381,741 | 342,318 |
Change in net unrealized appreciation (depreciation) | 8,677,024 | 4,732,030 |
Net increase (decrease) in net assets resulting | 9,526,156 | 5,327,827 |
Distributions to shareholders from net investment income | (665,945) | (70,717) |
Distributions to shareholders from net realized gain | (480,889) | (168,054) |
Total distributions | (1,146,834) | (238,771) |
Share transactions | 60,479,485 | 73,889,048 |
Reinvestment of distributions | 1,111,320 | 232,131 |
Cost of shares redeemed | (26,397,781) | (29,251,784) |
Net increase (decrease) in net assets resulting from share transactions | 35,193,024 | 44,869,395 |
Total increase (decrease) in net assets | 43,572,346 | 49,958,451 |
Net Assets | ||
Beginning of period | 68,540,808 | 18,582,357 |
End of period (including distributions in excess of net investment income of $15,987 and undistributed net investment income of $189,382, respectively) | $ 112,113,154 | $ 68,540,808 |
Other Information Shares | ||
Sold | 5,088,440 | 6,816,269 |
Issued in reinvestment of distributions | 95,054 | 21,396 |
Redeemed | (2,254,026) | (2,650,499) |
Net increase (decrease) | 2,929,468 | 4,187,166 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | ||
(Unaudited) | 2004 | 2003 E | |
Selected Per-Share Data | |||
Net asset value, beginning of period | $ 11.24 | $ 9.73 | $ 10.00 |
Income from Investment Operations | |||
Net investment income (loss) D | .06 H | .05 | - G |
Net realized and unrealized gain (loss) | 1.29 | 1.52 | (.27) |
Total from investment operations | 1.35 | 1.57 | (.27) |
Distributions from net investment income | (.09) | (.02) | - |
Distributions from net realized gain | (.08) | (.04) | - |
Total distributions | (.17) | (.06) | - |
Net asset value, end of period | $ 12.42 | $ 11.24 | $ 9.73 |
Total Return B, C | 12.07% | 16.16% | (2.70)% |
Ratios to Average Net Assets F | |||
Expenses before expense reductions | .99% A | 1.17% | 3.37% A |
Expenses net of voluntary waivers, if any | .99% A | 1.17% | 1.50% A |
Expenses net of all reductions | .95% A | 1.13% | 1.50% A |
Net investment income (loss) | 1.08% A, H | .50% | .41% A |
Supplemental Data | |||
Net assets, end of period (000 omitted) | $ 112,113 | $ 68,541 | $ 18,582 |
Portfolio turnover rate | 88% A | 111% | 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.
H Investment income per share reflects a special dividend which amounted to $.02 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been .72%.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
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, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 14,517,365 | |
Unrealized depreciation | (1,583,451) | |
Net unrealized appreciation (depreciation) | $ 12,933,914 | |
Cost for federal income tax purposes | $ 99,407,638 |
Semiannual 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. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $67,503,544 and $37,485,405, respectively.
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 .27% 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 annualized management fee rate, including the performance adjustment, was .54% of the fund's average net assets.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
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 shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .31% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $25,064 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 were $4,456 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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
Semiannual Report
6. Security Lending - continued
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 $19,006 for the period.
8. Other Information.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
Semiannual Report
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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.
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Semiannual Report
New Jersey
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Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
Semiannual Report
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.
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Advisors
Fidelity International Investment
Advisors (U.K.) Inc. Limited
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Fidelity Distributors Corporation
Boston, MA
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Servicing Agent
Fidelity Service Company, Inc.
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Brown Brothers Harriman & Co.
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The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
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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
(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
BCV-USAN-0305
1.789732.101
Fidelity®
Growth & Income
Portfolio
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 16 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 20 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,073.90 | $ 3.61 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.73 | $ 3.52 |
*Expenses are equal to the Fund's annualized expense ratio of .69%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
General Electric Co. | 4.0 | 3.9 |
SLM Corp. | 4.0 | 3.4 |
Exxon Mobil Corp. | 3.6 | 3.7 |
Microsoft Corp. | 3.2 | 4.0 |
Verizon Communications, Inc. | 2.6 | 2.8 |
UnitedHealth Group, Inc. | 2.4 | 1.8 |
SBC Communications, Inc. | 2.3 | 2.7 |
Pfizer, Inc. | 2.2 | 3.7 |
Wal-Mart Stores, Inc. | 2.1 | 2.4 |
American International Group, Inc. | 2.1 | 2.2 |
28.5 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Financials | 20.0 | 20.2 |
Health Care | 13.6 | 14.6 |
Consumer Staples | 12.4 | 12.7 |
Industrials | 12.0 | 11.6 |
Consumer Discretionary | 10.6 | 9.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | As of July 31, 2004** | ||||||
![]() | Stocks 94.9% | ![]() | Stocks 96.0% | ||||
![]() | Convertible | ![]() | Convertible | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign | 4.6% | ** Foreign | 5.6% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 94.8% | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - 10.6% | |||
Automobiles - 0.2% | |||
Harley-Davidson, Inc. | 836,200 | $ 50,264 | |
Hotels, Restaurants & Leisure - 2.8% | |||
Carnival Corp. unit | 2,606,900 | 150,157 | |
Harrah's Entertainment, Inc. (d) | 1,986,700 | 125,639 | |
Marriott International, Inc. Class A | 2,930,700 | 185,162 | |
McDonald's Corp. | 6,369,700 | 206,315 | |
MGM MIRAGE (a) | 1,726,728 | 123,996 | |
Starbucks Corp. (a) | 1,441,206 | 77,825 | |
869,094 | |||
Household Durables - 0.0% | |||
D.R. Horton, Inc. | 196,800 | 7,829 | |
Media - 5.0% | |||
Arbitron, Inc. (a) | 492,700 | 20,151 | |
Clear Channel Communications, Inc. | 1,191,700 | 38,647 | |
Comcast Corp. Class A (special) (a) | 2,274,298 | 71,891 | |
E.W. Scripps Co. Class A | 744,600 | 34,520 | |
EchoStar Communications Corp. Class A | 6,366,445 | 194,240 | |
Gannett Co., Inc. | 1,503,800 | 120,364 | |
News Corp. Class B | 6,790,900 | 119,384 | |
Omnicom Group, Inc. | 5,175,700 | 439,365 | |
Time Warner, Inc. (a) | 5,069,146 | 91,245 | |
Tribune Co. | 851,400 | 34,039 | |
Univision Communications, Inc. Class A (a) | 2,707,900 | 73,953 | |
Viacom, Inc. Class B (non-vtg.) | 4,003,047 | 149,474 | |
Walt Disney Co. | 6,603,800 | 189,067 | |
1,576,340 | |||
Multiline Retail - 0.4% | |||
Kohl's Corp. (a) | 1,147,600 | 53,949 | |
Target Corp. | 1,524,800 | 77,414 | |
131,363 | |||
Specialty Retail - 1.9% | |||
Home Depot, Inc. | 11,371,450 | 469,186 | |
Staples, Inc. | 3,886,100 | 127,231 | |
596,417 | |||
Textiles, Apparel & Luxury Goods - 0.3% | |||
NIKE, Inc. Class B | 885,900 | 76,746 | |
TOTAL CONSUMER DISCRETIONARY | 3,308,053 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER STAPLES - 12.4% | |||
Beverages - 1.9% | |||
Anheuser-Busch Companies, Inc. | 1,102,700 | $ 54,231 | |
PepsiCo, Inc. | 5,630,507 | 302,358 | |
The Coca-Cola Co. | 5,397,600 | 223,946 | |
580,535 | |||
Food & Staples Retailing - 4.3% | |||
Costco Wholesale Corp. | 582,000 | 27,511 | |
Safeway, Inc. (a) | 3,345,030 | 63,054 | |
Sysco Corp. | 5,913,600 | 206,799 | |
Wal-Mart Stores, Inc. | 12,657,300 | 663,243 | |
Walgreen Co. | 8,535,000 | 363,676 | |
Whole Foods Market, Inc. | 221,120 | 19,773 | |
1,344,056 | |||
Food Products - 0.4% | |||
General Mills, Inc. | 39,100 | 2,072 | |
Kellogg Co. | 1,451,500 | 64,795 | |
McCormick & Co., Inc. (non-vtg.) | 1,768,600 | 65,739 | |
132,606 | |||
Household Products - 2.4% | |||
Colgate-Palmolive Co. | 3,355,600 | 176,303 | |
Kimberly-Clark Corp. | 2,711,400 | 177,624 | |
Procter & Gamble Co. | 7,303,482 | 388,764 | |
742,691 | |||
Personal Products - 1.2% | |||
Avon Products, Inc. | 1,086,500 | 45,872 | |
Gillette Co. | 6,831,200 | 346,478 | |
392,350 | |||
Tobacco - 2.2% | |||
Altria Group, Inc. | 9,897,100 | 631,732 | |
UST, Inc. | 975,000 | 49,394 | |
681,126 | |||
TOTAL CONSUMER STAPLES | 3,873,364 | ||
ENERGY - 6.3% | |||
Energy Equipment & Services - 0.3% | |||
Halliburton Co. | 473,000 | 19,454 | |
Schlumberger Ltd. (NY Shares) | 983,500 | 66,917 | |
86,371 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
ENERGY - continued | |||
Oil & Gas - 6.0% | |||
Apache Corp. | 1,585,420 | $ 86,279 | |
BP PLC sponsored ADR | 5,706,000 | 340,192 | |
ChevronTexaco Corp. | 5,588,820 | 304,032 | |
Exxon Mobil Corp. | 22,142,594 | 1,142,558 | |
1,873,061 | |||
TOTAL ENERGY | 1,959,432 | ||
FINANCIALS - 19.9% | |||
Capital Markets - 2.6% | |||
Bank of New York Co., Inc. | 1,427,100 | 42,399 | |
Goldman Sachs Group, Inc. | 1,455,780 | 157,006 | |
Merrill Lynch & Co., Inc. | 4,805,300 | 288,654 | |
Morgan Stanley | 4,972,900 | 278,283 | |
Northern Trust Corp. | 989,100 | 43,164 | |
809,506 | |||
Commercial Banks - 3.9% | |||
Bank of America Corp. | 11,987,738 | 555,871 | |
Wachovia Corp. | 3,124,213 | 171,363 | |
Wells Fargo & Co. | 7,887,400 | 483,498 | |
1,210,732 | |||
Consumer Finance - 5.0% | |||
American Express Co. | 4,511,490 | 240,688 | |
Capital One Financial Corp. | 1,008,340 | 78,933 | |
SLM Corp. (e) | 25,048,630 | 1,257,191 | |
1,576,812 | |||
Diversified Financial Services - 2.3% | |||
Citigroup, Inc. | 12,323,438 | 604,465 | |
J.P. Morgan Chase & Co. | 3,641,592 | 135,941 | |
740,406 | |||
Insurance - 2.9% | |||
AFLAC, Inc. | 2,352,800 | 92,959 | |
Allstate Corp. | 160,400 | 8,091 | |
American International Group, Inc. | 9,611,610 | 637,154 | |
MBIA, Inc. | 2,738,100 | 163,574 | |
901,778 | |||
Real Estate - 1.3% | |||
Apartment Investment & Management Co. Class A | 989,100 | 35,509 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
FINANCIALS - continued | |||
Real Estate - continued | |||
Equity Lifestyle Properties, Inc. (e) | 1,466,000 | $ 50,254 | |
Equity Office Properties Trust | 2,995,790 | 83,822 | |
Equity Residential (SBI) | 5,129,870 | 161,796 | |
Simon Property Group, Inc. | 625,400 | 37,086 | |
Vornado Realty Trust | 575,700 | 39,804 | |
408,271 | |||
Thrifts & Mortgage Finance - 1.9% | |||
Fannie Mae | 6,078,120 | 392,525 | |
Freddie Mac | 1,170,000 | 76,389 | |
Golden West Financial Corp., Delaware | 1,788,200 | 115,553 | |
584,467 | |||
TOTAL FINANCIALS | 6,231,972 | ||
HEALTH CARE - 13.6% | |||
Biotechnology - 0.6% | |||
Amgen, Inc. (a) | 757,200 | 47,128 | |
Biogen Idec, Inc. (a) | 1,649,002 | 107,119 | |
Protein Design Labs, Inc. (a) | 1,200,000 | 24,204 | |
178,451 | |||
Health Care Equipment & Supplies - 2.9% | |||
Alcon, Inc. | 2,151,750 | 170,419 | |
Baxter International, Inc. | 1,193,600 | 40,296 | |
Becton, Dickinson & Co. | 2,105,320 | 119,266 | |
Boston Scientific Corp. (a) | 2,281,340 | 75,421 | |
C.R. Bard, Inc. | 1,605,320 | 108,841 | |
Medtronic, Inc. | 3,993,390 | 209,613 | |
St. Jude Medical, Inc. (a) | 2,678,640 | 105,217 | |
Stryker Corp. | 875,200 | 43,007 | |
Zimmer Holdings, Inc. (a) | 459,733 | 36,250 | |
908,330 | |||
Health Care Providers & Services - 3.1% | |||
Aetna, Inc. | 418,160 | 53,127 | |
IMS Health, Inc. | 7,444,919 | 174,062 | |
UnitedHealth Group, Inc. | 8,437,700 | 750,112 | |
977,301 | |||
Pharmaceuticals - 7.0% | |||
Abbott Laboratories | 5,313,300 | 239,205 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
HEALTH CARE - continued | |||
Pharmaceuticals - continued | |||
Allergan, Inc. | 955,100 | $ 72,540 | |
Altana AG sponsored ADR (d) | 590,300 | 34,680 | |
AstraZeneca PLC sponsored ADR | 253,800 | 9,543 | |
Elan Corp. PLC sponsored ADR (a) | 1,378,800 | 37,131 | |
Eli Lilly & Co. | 1,263,402 | 68,527 | |
GlaxoSmithKline PLC sponsored ADR | 1,673,030 | 74,567 | |
Johnson & Johnson | 7,108,600 | 459,926 | |
Merck & Co., Inc. | 1,629,500 | 45,707 | |
Novartis AG sponsored ADR | 3,419,850 | 163,742 | |
Novo Nordisk AS ADR | 639,500 | 34,181 | |
Pfizer, Inc. | 28,518,869 | 689,016 | |
Roche Holding AG (participation certificate) | 1,155,800 | 123,070 | |
Sepracor, Inc. (a) | 275,400 | 15,747 | |
Wyeth | 3,336,700 | 132,233 | |
2,199,815 | |||
TOTAL HEALTH CARE | 4,263,897 | ||
INDUSTRIALS - 12.0% | |||
Aerospace & Defense - 2.8% | |||
Honeywell International, Inc. | 3,826,200 | 137,667 | |
Lockheed Martin Corp. | 3,489,700 | 201,740 | |
Northrop Grumman Corp. | 1,934,545 | 100,364 | |
Raytheon Co. | 2,182,800 | 81,637 | |
The Boeing Co. | 3,123,000 | 158,024 | |
United Technologies Corp. | 1,891,100 | 190,396 | |
869,828 | |||
Air Freight & Logistics - 0.5% | |||
United Parcel Service, Inc. Class B | 2,011,683 | 150,232 | |
Airlines - 0.6% | |||
Southwest Airlines Co. | 12,696,293 | 183,842 | |
Commercial Services & Supplies - 1.1% | |||
Apollo Group, Inc. Class A (a) | 1,524,800 | 119,224 | |
Aramark Corp. Class B | 446,800 | 11,612 | |
Cendant Corp. | 735,000 | 17,309 | |
Cintas Corp. | 1,752,327 | 76,226 | |
Waste Management, Inc. | 4,031,500 | 116,914 | |
341,285 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INDUSTRIALS - continued | |||
Electrical Equipment - 0.2% | |||
Emerson Electric Co. | 1,183,400 | $ 79,572 | |
Industrial Conglomerates - 6.0% | |||
3M Co. | 2,165,780 | 182,705 | |
General Electric Co. | 34,802,200 | 1,257,404 | |
Siemens AG sponsored ADR | 1,155,860 | 91,787 | |
Tyco International Ltd. | 9,672,350 | 349,559 | |
1,881,455 | |||
Machinery - 0.6% | |||
Caterpillar, Inc. | 346,620 | 30,884 | |
Dover Corp. | 859,300 | 32,911 | |
Eaton Corp. | 393,500 | 26,754 | |
Illinois Tool Works, Inc. | 746,800 | 64,957 | |
Ingersoll-Rand Co. Ltd. Class A | 354,800 | 26,390 | |
181,896 | |||
Road & Rail - 0.2% | |||
Burlington Northern Santa Fe Corp. | 1,313,200 | 63,270 | |
TOTAL INDUSTRIALS | 3,751,380 | ||
INFORMATION TECHNOLOGY - 10.1% | |||
Communications Equipment - 1.1% | |||
Cisco Systems, Inc. (a) | 17,360,400 | 313,182 | |
QUALCOMM, Inc. | 989,100 | 36,834 | |
350,016 | |||
Computers & Peripherals - 3.0% | |||
Dell, Inc. (a) | 8,859,200 | 369,960 | |
EMC Corp. (a) | 6,152,700 | 80,600 | |
International Business Machines Corp. | 4,478,700 | 418,400 | |
Lexmark International, Inc. Class A (a) | 911,670 | 75,988 | |
944,948 | |||
Electronic Equipment & Instruments - 0.2% | |||
Flextronics International Ltd. (a) | 4,430,500 | 62,692 | |
Internet Software & Services - 0.3% | |||
Yahoo!, Inc. (a) | 2,581,670 | 90,901 | |
IT Services - 0.8% | |||
Accenture Ltd. Class A (a) | 520,400 | 13,556 | |
Automatic Data Processing, Inc. | 1,759,900 | 76,520 | |
DST Systems, Inc. (a) | 973,600 | 47,200 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
IT Services - continued | |||
First Data Corp. | 1,169,765 | $ 47,656 | |
Paychex, Inc. | 1,457,000 | 44,424 | |
229,356 | |||
Office Electronics - 0.1% | |||
Xerox Corp. (a) | 1,672,500 | 26,559 | |
Semiconductors & Semiconductor Equipment - 1.0% | |||
Analog Devices, Inc. | 616,500 | 22,126 | |
Intel Corp. | 11,644,000 | 261,408 | |
Teradyne, Inc. (a) | 2,235,000 | 31,357 | |
314,891 | |||
Software - 3.6% | |||
Microsoft Corp. | 38,065,600 | 1,000,364 | |
Oracle Corp. (a) | 7,000,872 | 96,402 | |
Symantec Corp. (a) | 491,800 | 11,484 | |
VERITAS Software Corp. (a) | 491,800 | 12,649 | |
1,120,899 | |||
TOTAL INFORMATION TECHNOLOGY | 3,140,262 | ||
MATERIALS - 2.0% | |||
Chemicals - 1.7% | |||
BASF AG sponsored ADR | 565,600 | 38,806 | |
Dow Chemical Co. | 2,367,870 | 117,683 | |
E.I. du Pont de Nemours & Co. | 741,400 | 35,261 | |
Monsanto Co. | 2,027,400 | 109,743 | |
Praxair, Inc. | 5,115,100 | 220,717 | |
522,210 | |||
Metals & Mining - 0.1% | |||
Alcoa, Inc. | 684,300 | 20,194 | |
Paper & Forest Products - 0.2% | |||
International Paper Co. | 2,044,700 | 80,050 | |
TOTAL MATERIALS | 622,454 | ||
TELECOMMUNICATION SERVICES - 6.9% | |||
Diversified Telecommunication Services - 6.6% | |||
ALLTEL Corp. | 1,659,150 | 91,320 | |
BellSouth Corp. | 16,624,700 | 436,232 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
TELECOMMUNICATION SERVICES - continued | |||
Diversified Telecommunication Services - continued | |||
SBC Communications, Inc. | 30,749,200 | $ 730,601 | |
Verizon Communications, Inc. | 22,536,240 | 802,065 | |
2,060,218 | |||
Wireless Telecommunication Services - 0.3% | |||
Crown Castle International Corp. (a) | 1,475,700 | 24,201 | |
Vodafone Group PLC sponsored ADR | 3,053,000 | 79,317 | |
103,518 | |||
TOTAL TELECOMMUNICATION SERVICES | 2,163,736 | ||
UTILITIES - 1.0% | |||
Electric Utilities - 1.0% | |||
Entergy Corp. | 2,224,000 | 154,612 | |
Exelon Corp. | 1,585,750 | 70,169 | |
Southern Co. | 2,259,000 | 76,286 | |
301,067 | |||
TOTAL COMMON STOCKS (Cost $18,815,770) | 29,615,617 | ||
Preferred Stocks - 0.7% | |||
Convertible Preferred Stocks - 0.6% | |||
UTILITIES - 0.6% | |||
Electric Utilities - 0.5% | |||
FPL Group, Inc.: | |||
8.00% | 83,100 | 5,094 | |
8.50% | 2,242,600 | 140,252 | |
145,346 | |||
Gas Utilities - 0.1% | |||
KeySpan Corp. 8.75% MEDS | 615,600 | 32,307 | |
TOTAL UTILITIES | 177,653 | ||
Preferred Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
Nonconvertible Preferred Stocks - 0.1% | |||
FINANCIALS - 0.1% | |||
Thrifts & Mortgage Finance - 0.1% | |||
Fannie Mae 7.00% | 656,400 | $ 37,251 | |
TOTAL PREFERRED STOCKS (Cost $189,170) | 214,904 | ||
Money Market Funds - 4.6% | |||
Fidelity Cash Central Fund, 2.31% (b) | 1,438,048,139 | 1,438,048 | |
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 4,489,500 | 4,490 | |
TOTAL MONEY MARKET FUNDS (Cost $1,442,538) | 1,442,538 | ||
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $20,447,478) | 31,273,059 | ||
NET OTHER ASSETS - (0.1)% | (16,132) | ||
NET ASSETS - 100% | $ 31,256,927 |
Security Type Abbreviations | ||
MEDS | - | Mandatorily Exchangeable Debt Securities |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Affiliated company |
Other Information |
An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Companies which are affiliates of the fund at period-end are noted in the fund's Schedule of Investments. Transactions during the period with companies which are or were affiliates are as follows: |
Affiliates | Value, | Purchases | Sales | Dividend | Value, |
Equity Lifestyle Properties, Inc. (formerly Manufactured Home Communities, Inc.) | $ 46,458 | $ - | $ - | $ 4 | $ 50,254 |
SLM Corp. | 1,024,258 | 26,601 | 122,708 | 10,064 | 1,257,191 |
TOTALS | $ 1,070,716 | $ 26,601 | $ 122,708 | $ 10,068 | $ 1,307,445 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2005 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $4,450) (cost $20,447,478) - See accompanying schedule | $ 31,273,059 | |
Receivable for investments sold | 101,805 | |
Receivable for fund shares sold | 27,587 | |
Dividends receivable | 35,856 | |
Interest receivable | 2,597 | |
Prepaid expenses | 106 | |
Other affiliated receivables | 172 | |
Other receivables | 1,099 | |
Total assets | 31,442,281 | |
Liabilities | ||
Payable for investments purchased | $ 130,027 | |
Payable for fund shares redeemed | 32,056 | |
Accrued management fee | 12,347 | |
Other affiliated payables | 6,225 | |
Other payables and accrued expenses | 209 | |
Collateral on securities loaned, at value | 4,490 | |
Total liabilities | 185,354 | |
Net Assets | $ 31,256,927 | |
Net Assets consist of: | ||
Paid in capital | $ 20,172,500 | |
Undistributed net investment income | 25,441 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 233,405 | |
Net unrealized appreciation (depreciation) on investments | 10,825,581 | |
Net Assets, for 836,748 shares outstanding | $ 31,256,927 | |
Net Asset Value, offering price and redemption price per share ($31,256,927 ÷ 836,748 shares) | $ 37.36 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | |
Investment Income | ||
Dividends (including $10,068 received from affiliated issuers) | $ 278,471 | |
Special Dividends | 110,357 | |
Interest | 13,411 | |
Security lending | 161 | |
Total income | 402,400 | |
Expenses | ||
Management fee | $ 72,832 | |
Transfer agent fees | 31,780 | |
Accounting and security lending fees | 973 | |
Non-interested trustees' compensation | 89 | |
Appreciation in deferred trustee compensation account | 34 | |
Custodian fees and expenses | 162 | |
Registration fees | 52 | |
Audit | 105 | |
Legal | 38 | |
Miscellaneous | 88 | |
Total expenses before reductions | 106,153 | |
Expense reductions | (1,358) | 104,795 |
Net investment income (loss) | 297,605 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities (Including realized gain (loss) of $62,046 from affiliated issuers) | 459,996 | |
Foreign currency transactions | (77) | |
Total net realized gain (loss) | 459,919 | |
Change in net unrealized appreciation (depreciation) on investment securities | 1,423,214 | |
Net gain (loss) | 1,883,133 | |
Net increase (decrease) in net assets resulting from operations | $ 2,180,738 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 297,605 | $ 338,806 |
Net realized gain (loss) | 459,919 | 1,042,653 |
Change in net unrealized appreciation (depreciation) | 1,423,214 | 1,223,009 |
Net increase (decrease) in net assets resulting | 2,180,738 | 2,604,468 |
Distributions to shareholders from net investment income | (308,248) | (349,784) |
Distributions to shareholders from net realized gain | (283,191) | - |
Total distributions | (591,439) | (349,784) |
Share transactions | 1,690,232 | 3,793,282 |
Reinvestment of distributions | 575,264 | 338,999 |
Cost of shares redeemed | (2,373,628) | (4,874,618) |
Net increase (decrease) in net assets resulting from share transactions | (108,132) | (742,337) |
Total increase (decrease) in net assets | 1,481,167 | 1,512,347 |
Net Assets | ||
Beginning of period | 29,775,760 | 28,263,413 |
End of period (including undistributed net investment income of $25,441 and undistributed net investment income of $36,084, respectively) | $ 31,256,927 | $ 29,775,760 |
Other Information Shares | ||
Sold | 45,922 | 108,237 |
Issued in reinvestment of distributions | 15,515 | 9,611 |
Redeemed | (64,425) | (138,812) |
Net increase (decrease) | (2,988) | (20,964) |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended January 31, 2005 | Years ended July 31, | |||||
(Unaudited) | 2004 | 2003 | 2002 | 2001 | 2000 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 35.46 | $ 32.84 | $ 31.61 | $ 39.10 | $ 46.83 | $ 47.27 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .36E | .40 | .40 | .34 | .39 | .38 |
Net realized and unrealized gain (loss) | 2.25 | 2.63 | 1.20 | (7.12) | (3.83) | 2.47 |
Total from investment operations | 2.61 | 3.03 | 1.60 | (6.78) | (3.44) | 2.85 |
Distributions from net investment income | (.37) | (.41) | (.37) | (.33) | (.38) | (.39) |
Distributions from net realized gain | (.34) | - | - | (.38) | (3.91) | (2.90) |
Total distributions | (.71) | (.41) | (.37) | (.71) | (4.29) | (3.29) |
Net asset value, end of period | $ 37.36 | $ 35.46 | $ 32.84 | $ 31.61 | $ 39.10 | $ 46.83 |
Total ReturnB,C | 7.39% | 9.24% | 5.15% | (17.56)% | (8.25)% | 6.34% |
Ratios to Average Net AssetsF | ||||||
Expenses before expense reductions | .69% A | .70% | .73% | .69% | .68% | .67% |
Expenses net of voluntary waivers, if any | .69% A | .70% | .73% | .69% | .68% | .67% |
Expenses net of all reductions | .68% A | .69% | .71% | .68% | .66% | .66% |
Net investment income (loss) | 1.94% A, E | 1.13% | 1.29% | .94% | .94% | .82% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 31,257 | $ 29,776 | $ 28,263 | $ 27,849 | $ 36,099 | $ 41,440 |
Portfolio turnover rate | 21% A | 30% | 33% | 36% | 46% | 41% |
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 Investment income per share reflects a special dividend which amounted to $.13 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been 1.22%.
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. 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
(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, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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.
Semiannual Report
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 and may include proceeds received from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to futures transactions, foreign currency transactions, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 11,287,178 | |
Unrealized depreciation | (486,519) | |
Net unrealized appreciation (depreciation) | $ 10,800,659 | |
Cost for federal income tax purposes | $ 20,472,400 |
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 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).
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $3,123,249 and $3,997,538, respectively.
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 .27% 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 .47% of the fund's average net assets.
Semiannual 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 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 and Security Lending Fees. FSC maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $13,064 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 were $119 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
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 $1,335 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 $22, respectively.
8. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
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
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Semiannual Report
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Semiannual Report
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Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 15 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 19 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,058.90 | $ 3.43 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,021.88 | $ 3.36 |
* Expenses are equal to the Fund's annualized expense ratio of .66%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Ten Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Microsoft Corp. | 4.3 | 4.8 |
General Electric Co. | 4.0 | 3.8 |
Johnson & Johnson | 2.7 | 2.3 |
Pfizer, Inc. | 2.4 | 3.7 |
Intel Corp. | 2.3 | 2.4 |
American International Group, Inc. | 2.2 | 2.4 |
Wal-Mart Stores, Inc. | 2.0 | 1.9 |
Dell, Inc. | 2.0 | 1.7 |
Procter & Gamble Co. | 1.9 | 1.9 |
Cisco Systems, Inc. | 1.8 | 2.4 |
25.6 | ||
Top Five Market Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
Information Technology | 23.5 | 23.8 |
Health Care | 19.7 | 20.3 |
Financials | 13.9 | 13.4 |
Industrials | 12.1 | 11.4 |
Consumer Staples | 11.0 | 11.7 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | As of July 31, 2004** | ||||||
![]() | Stocks 99.4% | ![]() | Stocks 97.9% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 4.6% | ** Foreign investments | 4.3% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 99.4% | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - 10.8% | |||
Hotels, Restaurants & Leisure - 2.0% | |||
Brinker International, Inc. (a) | 2,185,700 | $ 82,204 | |
Carnival Corp. unit | 2,617,000 | 150,739 | |
McDonald's Corp. | 4,470,000 | 144,783 | |
Royal Caribbean Cruises Ltd. | 1,399,800 | 74,189 | |
451,915 | |||
Household Durables - 0.1% | |||
Leggett & Platt, Inc. | 960,800 | 27,383 | |
Internet & Catalog Retail - 0.8% | |||
Amazon.com, Inc. (a) | 1,187,900 | 51,341 | |
eBay, Inc. (a) | 1,471,100 | 119,895 | |
171,236 | |||
Media - 3.9% | |||
Clear Channel Communications, Inc. | 1,377,500 | 44,672 | |
EchoStar Communications Corp. Class A | 1,538,934 | 46,953 | |
Fox Entertainment Group, Inc. Class A (a) | 1,810,900 | 60,937 | |
News Corp. Class B (d) | 5,088,800 | 89,461 | |
Omnicom Group, Inc. | 1,675,500 | 142,233 | |
Time Warner, Inc. (a) | 4,777,332 | 85,992 | |
Tribune Co. | 929,000 | 37,141 | |
Univision Communications, Inc. Class A (a) | 3,401,100 | 92,884 | |
Viacom, Inc. Class B (non-vtg.) | 1,380,596 | 51,551 | |
Walt Disney Co. | 6,413,100 | 183,607 | |
XM Satellite Radio Holdings, Inc. Class A (a) | 1,795,300 | 57,288 | |
892,719 | |||
Multiline Retail - 0.4% | |||
Kohl's Corp. (a) | 865,300 | 40,678 | |
Target Corp. | 994,200 | 50,476 | |
91,154 | |||
Specialty Retail - 2.9% | |||
Home Depot, Inc. | 9,738,400 | 401,806 | |
Lowe's Companies, Inc. | 1,627,600 | 92,757 | |
Ross Stores, Inc. | 1,959,000 | 56,067 | |
Staples, Inc. | 3,450,800 | 112,979 | |
663,609 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - 0.7% | |||
Liz Claiborne, Inc. | 1,084,600 | $ 45,488 | |
NIKE, Inc. Class B | 1,423,200 | 123,292 | |
168,780 | |||
TOTAL CONSUMER DISCRETIONARY | 2,466,796 | ||
CONSUMER STAPLES - 11.0% | |||
Beverages - 1.9% | |||
PepsiCo, Inc. | 6,609,662 | 354,939 | |
The Coca-Cola Co. | 2,041,200 | 84,689 | |
439,628 | |||
Food & Staples Retailing - 3.1% | |||
Costco Wholesale Corp. | 470,400 | 22,236 | |
CVS Corp. | 1,613,100 | 74,767 | |
Sysco Corp. | 1,991,700 | 69,650 | |
Wal-Mart Stores, Inc. | 8,542,455 | 447,625 | |
Walgreen Co. | 2,322,700 | 98,970 | |
713,248 | |||
Food Products - 0.3% | |||
Bunge Ltd. | 1,241,000 | 70,166 | |
Household Products - 2.5% | |||
Colgate-Palmolive Co. | 2,292,200 | 120,432 | |
Procter & Gamble Co. | 8,236,980 | 438,454 | |
558,886 | |||
Personal Products - 2.3% | |||
Avon Products, Inc. | 2,936,600 | 123,983 | |
Estee Lauder Companies, Inc. Class A | 1,277,000 | 57,644 | |
Gillette Co. | 6,850,000 | 347,432 | |
529,059 | |||
Tobacco - 0.9% | |||
Altria Group, Inc. | 3,144,800 | 200,733 | |
TOTAL CONSUMER STAPLES | 2,511,720 | ||
ENERGY - 5.4% | |||
Energy Equipment & Services - 3.5% | |||
Baker Hughes, Inc. | 3,702,100 | 160,301 | |
BJ Services Co. | 1,960,300 | 94,192 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
ENERGY - continued | |||
Energy Equipment & Services - continued | |||
Halliburton Co. | 3,283,500 | $ 135,050 | |
Nabors Industries Ltd. (a) | 1,889,100 | 95,211 | |
Schlumberger Ltd. (NY Shares) | 2,500,300 | 170,120 | |
Transocean, Inc. (a) | 1,697,100 | 74,672 | |
Weatherford International Ltd. (a) | 1,250,500 | 67,865 | |
797,411 | |||
Oil & Gas - 1.9% | |||
Burlington Resources, Inc. | 406,200 | 17,755 | |
ChevronTexaco Corp. | 1,851,200 | 100,705 | |
Exxon Mobil Corp. | 3,436,400 | 177,318 | |
Total SA Series B | 593,000 | 127,554 | |
423,332 | |||
TOTAL ENERGY | 1,220,743 | ||
FINANCIALS - 13.9% | |||
Capital Markets - 2.2% | |||
Goldman Sachs Group, Inc. | 640,600 | 69,089 | |
Lehman Brothers Holdings, Inc. | 1,428,700 | 130,283 | |
Merrill Lynch & Co., Inc. | 1,970,800 | 118,386 | |
Morgan Stanley | 2,558,800 | 143,190 | |
State Street Corp. | 848,800 | 38,035 | |
498,983 | |||
Commercial Banks - 2.2% | |||
Bank of America Corp. | 5,573,600 | 258,448 | |
Wachovia Corp. | 2,264,700 | 124,219 | |
Wells Fargo & Co. | 1,955,400 | 119,866 | |
502,533 | |||
Consumer Finance - 3.0% | |||
American Express Co. | 5,217,529 | 278,355 | |
Capital One Financial Corp. | 1,351,000 | 105,756 | |
MBNA Corp. | 6,741,200 | 179,181 | |
SLM Corp. | 2,178,800 | 109,354 | |
672,646 | |||
Diversified Financial Services - 1.3% | |||
Citigroup, Inc. | 6,071,354 | 297,800 | |
Insurance - 3.2% | |||
AFLAC, Inc. | 1,506,400 | 59,518 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
FINANCIALS - continued | |||
Insurance - continued | |||
AMBAC Financial Group, Inc. | 1,493,200 | $ 114,797 | |
American International Group, Inc. | 7,428,955 | 492,465 | |
MBIA, Inc. | 1,151,650 | 68,800 | |
735,580 | |||
Thrifts & Mortgage Finance - 2.0% | |||
Fannie Mae | 4,621,100 | 298,431 | |
Freddie Mac | 252,100 | 16,460 | |
Golden West Financial Corp., Delaware | 1,971,200 | 127,379 | |
442,270 | |||
TOTAL FINANCIALS | 3,149,812 | ||
HEALTH CARE - 19.7% | |||
Biotechnology - 2.6% | |||
Alkermes, Inc. (a) | 632,500 | 8,014 | |
Amgen, Inc. (a) | 3,598,500 | 223,971 | |
Biogen Idec, Inc. (a) | 2,051,250 | 133,249 | |
Cephalon, Inc. (a) | 843,000 | 41,476 | |
Genentech, Inc. (a) | 3,286,400 | 156,794 | |
Millennium Pharmaceuticals, Inc. (a) | 2,533,900 | 23,337 | |
Protein Design Labs, Inc. (a) | 832,100 | 16,783 | |
603,624 | |||
Health Care Equipment & Supplies - 4.8% | |||
Baxter International, Inc. | 2,800,400 | 94,542 | |
Becton, Dickinson & Co. | 1,634,600 | 92,600 | |
Boston Scientific Corp. (a) | 1,763,980 | 58,317 | |
Cytyc Corp. (a) | 3,088,100 | 77,357 | |
Fisher Scientific International, Inc. (a) | 1,372,200 | 86,654 | |
Guidant Corp. | 1,364,100 | 98,884 | |
Medtronic, Inc. | 5,649,600 | 296,548 | |
Millipore Corp. (a) | 1,156,100 | 50,325 | |
St. Jude Medical, Inc. (a) | 3,586,600 | 140,882 | |
Waters Corp. (a) | 2,187,400 | 107,358 | |
1,103,467 | |||
Health Care Providers & Services - 2.5% | |||
Cardinal Health, Inc. | 1,422,675 | 80,125 | |
Health Management Associates, Inc. Class A | 1,226,100 | 27,072 | |
Laboratory Corp. of America Holdings (a) | 1,348,700 | 64,535 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Quest Diagnostics, Inc. | 683,600 | $ 65,147 | |
UnitedHealth Group, Inc. | 3,666,800 | 325,979 | |
562,858 | |||
Pharmaceuticals - 9.8% | |||
Abbott Laboratories | 5,162,700 | 232,425 | |
Allergan, Inc. | 1,079,200 | 81,965 | |
Barr Pharmaceuticals, Inc. (a) | 1,828,200 | 86,931 | |
Eli Lilly & Co. | 2,090,200 | 113,372 | |
Johnson & Johnson | 9,503,504 | 614,877 | |
Merck & Co., Inc. | 2,973,300 | 83,401 | |
Pfizer, Inc. | 22,987,400 | 555,376 | |
Schering-Plough Corp. | 8,462,500 | 157,064 | |
Watson Pharmaceuticals, Inc. (a) | 208,900 | 6,231 | |
Wyeth | 7,232,200 | 286,612 | |
2,218,254 | |||
TOTAL HEALTH CARE | 4,488,203 | ||
INDUSTRIALS - 12.1% | |||
Aerospace & Defense - 2.4% | |||
EADS NV (d) | 4,900,000 | 149,767 | |
Honeywell International, Inc. | 2,125,100 | 76,461 | |
Northrop Grumman Corp. | 2,323,000 | 120,517 | |
The Boeing Co. | 3,312,100 | 167,592 | |
United Technologies Corp. | 426,600 | 42,950 | |
557,287 | |||
Air Freight & Logistics - 1.1% | |||
FedEx Corp. | 427,300 | 40,871 | |
Ryder System, Inc. | 428,700 | 19,527 | |
United Parcel Service, Inc. Class B | 2,569,100 | 191,860 | |
252,258 | |||
Airlines - 0.3% | |||
Southwest Airlines Co. | 4,593,000 | 66,507 | |
Building Products - 0.3% | |||
Masco Corp. | 1,810,200 | 66,615 | |
Commercial Services & Supplies - 1.1% | |||
Apollo Group, Inc. Class A (a) | 768,800 | 60,112 | |
Avery Dennison Corp. | 402,400 | 24,180 | |
Career Education Corp. (a) | 946,900 | 38,151 | |
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INDUSTRIALS - continued | |||
Commercial Services & Supplies - continued | |||
Cintas Corp. | 1,125,500 | $ 48,959 | |
Robert Half International, Inc. | 2,557,900 | 77,607 | |
249,009 | |||
Construction & Engineering - 0.3% | |||
Fluor Corp. | 1,316,000 | 70,459 | |
Industrial Conglomerates - 6.1% | |||
3M Co. | 2,910,600 | 245,538 | |
General Electric Co. | 25,118,400 | 907,528 | |
Tyco International Ltd. | 6,169,500 | 222,966 | |
1,376,032 | |||
Machinery - 0.5% | |||
Danaher Corp. | 1,388,400 | 76,195 | |
Ingersoll-Rand Co. Ltd. Class A | 589,750 | 43,866 | |
120,061 | |||
TOTAL INDUSTRIALS | 2,758,228 | ||
INFORMATION TECHNOLOGY - 23.5% | |||
Communications Equipment - 3.1% | |||
Cisco Systems, Inc. (a) | 22,588,200 | 407,491 | |
Juniper Networks, Inc. (a) | 1,918,400 | 48,209 | |
QUALCOMM, Inc. | 6,184,400 | 230,307 | |
Telefonaktiebolaget LM Ericsson ADR (a)(d) | 705,500 | 20,692 | |
706,699 | |||
Computers & Peripherals - 4.6% | |||
Dell, Inc. (a) | 10,688,700 | 446,360 | |
EMC Corp. (a) | 11,206,300 | 146,803 | |
International Business Machines Corp. | 4,236,200 | 395,746 | |
Lexmark International, Inc. Class A (a) | 815,842 | 68,000 | |
1,056,909 | |||
Electronic Equipment & Instruments - 0.7% | |||
CDW Corp. | 1,109,000 | 64,877 | |
Flextronics International Ltd. (a) | 5,942,500 | 84,086 | |
148,963 | |||
Internet Software & Services - 1.3% | |||
Google, Inc. Class A (sub. vtg.) | 424,800 | 83,104 | |
Yahoo!, Inc. (a) | 6,114,064 | 215,276 | |
298,380 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
INFORMATION TECHNOLOGY - continued | |||
IT Services - 1.6% | |||
Affiliated Computer Services, Inc. Class A (a) | 1,531,900 | $ 83,014 | |
Automatic Data Processing, Inc. | 663,880 | 28,866 | |
DST Systems, Inc. (a) | 1,526,600 | 74,010 | |
First Data Corp. | 2,843,400 | 115,840 | |
Paychex, Inc. | 2,059,920 | 62,807 | |
364,537 | |||
Semiconductors & Semiconductor Equipment - 6.0% | |||
Altera Corp. (a) | 2,978,400 | 57,185 | |
Analog Devices, Inc. | 3,286,100 | 117,938 | |
Applied Materials, Inc. (a) | 4,619,700 | 73,453 | |
Intel Corp. | 23,646,840 | 530,872 | |
Intersil Corp. Class A | 2,528,000 | 37,490 | |
KLA-Tencor Corp. (a) | 2,175,800 | 100,631 | |
Lam Research Corp. (a) | 1,286,400 | 34,424 | |
Linear Technology Corp. | 1,506,160 | 56,842 | |
Marvell Technology Group Ltd. (a) | 2,386,000 | 79,812 | |
Microchip Technology, Inc. | 813,700 | 21,197 | |
PMC-Sierra, Inc. (a) | 3,169,500 | 32,582 | |
Teradyne, Inc. (a) | 1,680,900 | 23,583 | |
Texas Instruments, Inc. | 5,878,500 | 136,440 | |
Xilinx, Inc. | 1,883,400 | 54,976 | |
1,357,425 | |||
Software - 6.2% | |||
Adobe Systems, Inc. | 755,668 | 42,998 | |
BEA Systems, Inc. (a) | 3,577,500 | 30,480 | |
Cadence Design Systems, Inc. (a) | 1,926,600 | 25,682 | |
McAfee, Inc. (a) | 1,766,500 | 45,664 | |
Microsoft Corp. | 37,157,800 | 976,509 | |
Oracle Corp. (a) | 10,391,000 | 143,084 | |
Siebel Systems, Inc. (a) | 1,914,900 | 16,679 | |
Symantec Corp. (a) | 1,278,600 | 29,855 | |
Synopsys, Inc. (a) | 1,762,654 | 29,965 | |
VERITAS Software Corp. (a) | 2,253,528 | 57,961 | |
1,398,877 | |||
TOTAL INFORMATION TECHNOLOGY | 5,331,790 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) (000s) | ||
MATERIALS - 2.1% | |||
Chemicals - 1.9% | |||
Dow Chemical Co. | 3,130,200 | $ 155,571 | |
Monsanto Co. | 1,721,700 | 93,196 | |
Potash Corp. of Saskatchewan | 797,200 | 64,718 | |
Praxair, Inc. | 2,671,800 | 115,288 | |
428,773 | |||
Containers & Packaging - 0.2% | |||
Smurfit-Stone Container Corp. (a) | 2,825,716 | 42,499 | |
TOTAL MATERIALS | 471,272 | ||
TELECOMMUNICATION SERVICES - 0.9% | |||
Diversified Telecommunication Services - 0.3% | |||
Verizon Communications, Inc. | 2,045,400 | 72,796 | |
Wireless Telecommunication Services - 0.6% | |||
Nextel Communications, Inc. Class A (a) | 4,561,200 | 130,861 | |
TOTAL TELECOMMUNICATION SERVICES | 203,657 | ||
TOTAL COMMON STOCKS (Cost $18,474,883) | 22,602,221 | ||
Convertible Preferred Stocks - 0.0% | |||
INFORMATION TECHNOLOGY - 0.0% | |||
Communications Equipment - 0.0% | |||
Chorum Technologies, Inc. Series E (a)(e) | 132,000 | 0 | |
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $1,980) | 0 | ||
Money Market Funds - 1.3% | |||
Shares | Value (Note 1) | ||
Fidelity Cash Central Fund, 2.31% (b) | 138,307,139 | $ 138,307 | |
Fidelity Securities Lending Cash Central Fund, 2.29% (b)(c) | 144,577,000 | 144,577 | |
TOTAL MONEY MARKET FUNDS (Cost $282,884) | 282,884 | ||
TOTAL INVESTMENT PORTFOLIO - 100.7% (Cost $18,759,747) | 22,885,105 | ||
NET OTHER ASSETS - (0.7)% | (156,329) | ||
NET ASSETS - 100% | $ 22,728,776 |
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) Includes investment made with cash collateral received from securities on loan. |
(d) Security or a portion of the security is on loan at period end. |
(e) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $0 or 0.0% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost (000s) |
Chorum Technologies, Inc. Series E | 9/19/00 | $ 2,276 |
Income Tax Information |
At July 31, 2004, the fund had a capital loss carryforward of approximately $2,889,394,000 of which $1,006,654,000 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.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
Amounts in thousands (except per-share amount) | January 31, 2005 (Unaudited) | |
Assets | ||
Investment in securities, at value (including securities loaned of $140,101) (cost $18,759,747) - See accompanying schedule | $ 22,885,105 | |
Receivable for investments sold | 37,641 | |
Receivable for fund shares sold | 24,494 | |
Dividends receivable | 9,390 | |
Interest receivable | 440 | |
Prepaid expenses | 79 | |
Other affiliated receivables | 88 | |
Other receivables | 600 | |
Total assets | 22,957,837 | |
Liabilities | ||
Payable for investments purchased | $ 25,906 | |
Payable for fund shares redeemed | 45,644 | |
Accrued management fee | 7,534 | |
Other affiliated payables | 5,241 | |
Other payables and accrued expenses | 159 | |
Collateral on securities loaned, at value | 144,577 | |
Total liabilities | 229,061 | |
Net Assets | $ 22,728,776 | |
Net Assets consist of: | ||
Paid in capital | $ 21,144,789 | |
Undistributed net investment income | 233 | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | (2,541,603) | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,125,357 | |
Net Assets, for 559,625 shares outstanding | $ 22,728,776 | |
Net Asset Value, offering price and redemption price per share ($22,728,776 ÷ 559,625 shares) | $ 40.61 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
Amounts in thousands | Six months ended January 31, 2005 (Unaudited) | |
Investment Income | ||
Dividends | $ 130,049 | |
Special Dividends | 111,473 | |
Interest | 3,737 | |
Security lending | 315 | |
Total income | 245,574 | |
Expenses | ||
Management fee | $ 64,850 | |
Performance adjustment | (19,569) | |
Transfer agent fees | 28,031 | |
Accounting and security lending fees | 878 | |
Non-interested trustees' compensation | 66 | |
Appreciation in deferred trustee compensation account | 9 | |
Custodian fees and expenses | 175 | |
Registration fees | 97 | |
Audit | 73 | |
Legal | 28 | |
Miscellaneous | 102 | |
Total expenses before reductions | 74,740 | |
Expense reductions | (1,127) | 73,613 |
Net investment income (loss) | 171,961 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 357,952 | |
Foreign currency transactions | 47 | |
Total net realized gain (loss) | 357,999 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 771,296 | |
Assets and liabilities in foreign currencies | (16) | |
Total change in net unrealized appreciation (depreciation) | 771,280 | |
Net gain (loss) | 1,129,279 | |
Net increase (decrease) in net assets resulting from operations | $ 1,301,240 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Amounts in thousands | Six months ended | Year ended |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 171,961 | $ 106,237 |
Net realized gain (loss) | 357,999 | 750,921 |
Change in net unrealized appreciation (depreciation) | 771,280 | 695,358 |
Net increase (decrease) in net assets resulting | 1,301,240 | 1,552,516 |
Distributions to shareholders from net investment income | (220,167) | (122,754) |
Share transactions | 2,048,238 | 4,701,393 |
Reinvestment of distributions | 214,432 | 119,640 |
Cost of shares redeemed | (2,717,105) | (4,084,178) |
Net increase (decrease) in net assets resulting from share transactions | (454,435) | 736,855 |
Total increase (decrease) in net assets | 626,638 | 2,166,617 |
Net Assets | ||
Beginning of period | 22,102,138 | 19,935,521 |
End of period (including undistributed net investment income of $233 and undistributed net investment income of $48,439, respectively) | $ 22,728,776 | $ 22,102,138 |
Other Information Shares | ||
Sold | 51,229 | 120,270 |
Issued in reinvestment of distributions | 5,283 | 3,151 |
Redeemed | (67,655) | (104,362) |
Net increase (decrease) | (11,143) | 19,059 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | |||||
(Unaudited) | 2004 | 2003 | 2002 | 2001 | 2000 | |
Selected Per-Share Data | ||||||
Net asset value, beginning of period | $ 38.72 | $ 36.13 | $ 33.24 | $ 45.08 | $ 60.25 | $ 53.20 |
Income from Investment Operations | ||||||
Net investment income (loss)D | .30E | .19 | .21 | .10 | .01 | (.01) |
Net realized and unrealized gain (loss) | 1.98 | 2.62 | 2.81 | (11.88) | (12.66) | 9.27 |
Total from investment operations | 2.28 | 2.81 | 3.02 | (11.78) | (12.65) | 9.26 |
Distributions from net investment income | (.39) | (.22) | (.13) | (.06) | - | (.14) |
Distributions from net realized gain | - | - | - | - | (2.52) | (2.07) |
Total distributions | (.39) | (.22) | (.13) | (.06) | (2.52) | (2.21) |
Net asset value, end of period | $ 40.61 | $ 38.72 | $ 36.13 | $ 33.24 | $ 45.08 | $ 60.25 |
Total ReturnB, C | 5.89% | 7.79% | 9.13% | (26.16)% | (21.92)% | 17.97% |
Ratios to Average Net AssetsF | ||||||
Expenses before expense reductions | .66%A | .68% | .71% | .76% | .89% | .88% |
Expenses net of voluntary waivers, if any | .66%A | .68% | .71% | .76% | .89% | .88% |
Expenses net of all reductions | .65%A | .67% | .69% | .74% | .87% | .86% |
Net investment income (loss) | 1.52%A,E | .48% | .64% | .25% | .01% | (.02)% |
Supplemental Data | ||||||
Net assets, end of period (in millions) | $ 22,729 | $ 22,102 | $ 19,936 | $ 17,021 | $ 23,032 | $ 29,154 |
Portfolio turnover rate | 18%A | 23% | 24% | 33% | 46% | 40% |
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 Investment income per share reflects a special dividend which amounted to $.20 per share. Excluding the special dividend, the ratio of net investment income to average net assets would have been .54%.
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. 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.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
(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, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - 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 and may include proceeds received from litigation. 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Large, non-recurring dividends recognized by the fund are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Book-tax differences are primarily due to foreign currency transactions, capital loss carryforwards, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 5,303,481 | |
Unrealized depreciation | (1,188,278) | |
Net unrealized appreciation (depreciation) | $ 4,115,203 | |
Cost for federal income tax purposes | $ 18,769,902 |
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 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).
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.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $2,013,748 and $2,186,296, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
(Amounts in thousands except ratios)
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 .27% 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 annualized 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 prior to October 12, 1990 are subject to a 1% deferred sales charge upon redemption. For the period, FDC received sales charges of $10 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 shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .25% of average net assets.
Accounting and Security Lending Fees. FSC maintains the fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.
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 $3,735 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 were $78 for the period.
Semiannual Report
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The 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 $913 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 transfer agent expenses by $214, respectively.
8. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
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
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
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-USAN-0305
1.789282.101
Fidelity Advisor
Small Cap Growth
Fund - Class A, Class T,
Class B and Class C
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Class A, Class T, Class B,
and Class C are classes
of Fidelity® Small Cap
Growth Fund
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of the fund's investments. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
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Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.98B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63C |
Class T | |||
Actual | $ 1,000.00 | $ 1,150.00 | $ 4.64B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89C |
Class B | |||
Actual | $ 1,000.00 | $ 1,148.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Class C | |||
Actual | $ 1,000.00 | $ 1,149.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 1,152.00 | $ 3.32B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.31B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Growth | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 4.4 |
EVCI Career Colleges, Inc. | 4.4 |
Collegiate Pacific, Inc. | 3.8 |
Lionbridge Technologies, Inc. | 3.0 |
Pediatrix Medical Group, Inc. | 2.6 |
Career Education Corp. | 2.3 |
Range Resources Corp. | 1.9 |
Pacific Sunwear of California, Inc. | 1.8 |
ICON PLC sponsored ADR | 1.8 |
Big 5 Sporting Goods Corp. | 1.6 |
27.6 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 20.5 |
Information Technology | 17.6 |
Energy | 16.8 |
Health Care | 14.5 |
Industrials | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 90.5% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign investments | 14.8% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 90.5% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 20.5% | |||
Hotels, Restaurants & Leisure - 4.4% | |||
Ambassadors Group, Inc. | 3,200 | $ 108,800 | |
Brinker International, Inc. (a) | 1,900 | 71,459 | |
Buffalo Wild Wings, Inc. (a) | 1,900 | 76,931 | |
Century Casinos, Inc. (a) | 147,478 | 1,234,391 | |
Ctrip.com International Ltd. ADR (a) | 14,000 | 576,786 | |
Friendly Ice Cream Corp. (a) | 7,700 | 67,221 | |
Penn National Gaming, Inc. (a) | 3,200 | 209,888 | |
Sportingbet PLC (a) | 300,000 | 1,347,573 | |
3,693,049 | |||
Household Durables - 1.6% | |||
Interface, Inc. Class A (a) | 69,700 | 657,271 | |
Jarden Corp. (a) | 15,000 | 690,000 | |
1,347,271 | |||
Internet & Catalog Retail - 4.7% | |||
Blue Nile, Inc. | 25,900 | 725,200 | |
Collegiate Pacific, Inc. | 242,900 | 3,184,419 | |
3,909,619 | |||
Leisure Equipment & Products - 0.8% | |||
RC2 Corp. (a) | 22,800 | 660,060 | |
Multiline Retail - 0.4% | |||
Tuesday Morning Corp. (a) | 12,300 | 353,379 | |
Specialty Retail - 7.3% | |||
Big 5 Sporting Goods Corp. | 50,100 | 1,371,738 | |
Cost Plus, Inc. (a) | 23,500 | 616,405 | |
Hibbett Sporting Goods, Inc. (a) | 19,500 | 503,100 | |
Hot Topic, Inc. (a) | 10,500 | 203,490 | |
Jos. A. Bank Clothiers, Inc. (a) | 13,000 | 373,100 | |
Pacific Sunwear of California, Inc. (a) | 62,400 | 1,528,176 | |
RONA, Inc. (a) | 22,000 | 800,548 | |
Select Comfort Corp. (a) | 27,500 | 538,175 | |
Steiner Leisure Ltd. (a) | 6,100 | 189,216 | |
6,123,948 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
Bijou Brigitte Modische Accessoires AG | 1,665 | 251,413 | |
Carter's, Inc. (a) | 7,300 | 266,888 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Lakeland Industries, Inc. (a) | 20,300 | $ 400,925 | |
Oxford Industries, Inc. | 4,100 | 152,438 | |
1,071,664 | |||
TOTAL CONSUMER DISCRETIONARY | 17,158,990 | ||
CONSUMER STAPLES - 2.6% | |||
Beverages - 0.5% | |||
C&C Group PLC | 100,000 | 422,302 | |
Food & Staples Retailing - 0.6% | |||
Caffe Nero Group PLC (a) | 199,000 | 462,874 | |
Food Products - 0.5% | |||
Poore Brothers, Inc. (a) | 47,100 | 158,727 | |
Rocky Mountain Chocolate Factory, Inc. | 14,100 | 235,188 | |
393,915 | |||
Personal Products - 1.0% | |||
NBTY, Inc. (a) | 31,800 | 870,684 | |
TOTAL CONSUMER STAPLES | 2,149,775 | ||
ENERGY - 16.8% | |||
Energy Equipment & Services - 3.1% | |||
AKITA Drilling Ltd. Class A (non-vtg.) | 32,000 | 701,342 | |
Oil States International, Inc. (a) | 29,200 | 556,260 | |
Pason Systems, Inc. | 39,800 | 1,235,001 | |
Superior Energy Services, Inc. (a) | 5,300 | 84,376 | |
2,576,979 | |||
Oil & Gas - 13.7% | |||
Blackrock Ventures, Inc. (a) | 70,000 | 545,425 | |
Denbury Resources, Inc. (a) | 28,700 | 838,040 | |
Encore Acquisition Co. (a) | 19,200 | 716,160 | |
Forest Oil Corp. (a) | 34,000 | 1,145,460 | |
GMX Resources, Inc. (a) | 35,400 | 295,590 | |
Holly Corp. | 44,700 | 1,352,622 | |
Quicksilver Resources, Inc. (a) | 83,500 | 3,709,904 | |
Range Resources Corp. | 71,000 | 1,575,490 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Thunder Energy, Inc. (a) | 107,000 | $ 726,812 | |
World Fuel Services Corp. | 12,100 | 613,228 | |
11,518,731 | |||
TOTAL ENERGY | 14,095,710 | ||
FINANCIALS - 5.4% | |||
Commercial Banks - 1.0% | |||
Center Financial Corp., California | 37,600 | 782,456 | |
Nara Bancorp, Inc. | 6,000 | 119,700 | |
902,156 | |||
Insurance - 4.3% | |||
Hilb Rogal & Hobbs Co. | 13,800 | 490,728 | |
IPC Holdings Ltd. | 9,000 | 379,890 | |
PXRE Group Ltd. | 17,615 | 457,109 | |
Specialty Underwriters' Alliance, Inc. | 50,700 | 495,339 | |
United America Indemnity Ltd. Class A | 41,700 | 750,600 | |
USI Holdings Corp. (a) | 90,100 | 1,018,130 | |
3,591,796 | |||
Thrifts & Mortgage Finance - 0.1% | |||
W Holding Co., Inc. | 5,508 | 71,824 | |
TOTAL FINANCIALS | 4,565,776 | ||
HEALTH CARE - 14.5% | |||
Health Care Equipment & Supplies - 2.8% | |||
DJ Orthopedics, Inc. (a) | 41,000 | 990,150 | |
Enpath Medical, Inc. (a) | 17,000 | 173,570 | |
Kensey Nash Corp. (a) | 9,300 | 300,297 | |
Mentor Corp. | 2,700 | 84,537 | |
Orthofix International NV (a) | 1,900 | 75,962 | |
Regeneration Technologies, Inc. (a) | 68,900 | 708,637 | |
2,333,153 | |||
Health Care Providers & Services - 11.7% | |||
America Service Group, Inc. (a) | 23,900 | 655,577 | |
American Dental Partners, Inc. (a) | 16,800 | 338,520 | |
AmSurg Corp. (a) | 42,300 | 1,117,143 | |
Bio-Reference Laboratories, Inc. (a) | 11,200 | 159,152 | |
Cedara Software Corp. (a) | 17,200 | 182,942 | |
DaVita, Inc. (a) | 14,100 | 591,636 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Horizon Health Corp. (a) | 17,700 | $ 538,965 | |
ICON PLC sponsored ADR (a) | 42,500 | 1,492,600 | |
LCA-Vision, Inc. | 10,000 | 266,500 | |
Medtox Scientific, Inc. (a) | 50,300 | 412,460 | |
Molina Healthcare, Inc. (a) | 11,330 | 563,441 | |
Omnicare, Inc. | 21,400 | 658,050 | |
Pediatrix Medical Group, Inc. (a) | 33,000 | 2,204,070 | |
Per-Se Technologies, Inc. (a) | 46,400 | 677,440 | |
9,858,496 | |||
TOTAL HEALTH CARE | 12,191,649 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 1.5% | |||
BE Aerospace, Inc. (a) | 26,000 | 280,540 | |
DRS Technologies, Inc. (a) | 5,800 | 235,480 | |
SI International, Inc. (a) | 28,700 | 734,720 | |
1,250,740 | |||
Commercial Services & Supplies - 9.2% | |||
Career Education Corp. (a) | 49,000 | 1,974,210 | |
Corinthian Colleges, Inc. (a) | 41,700 | 801,891 | |
EVCI Career Colleges, Inc. (a) | 412,606 | 3,676,319 | |
Exponent, Inc. (a) | 2,595 | 64,745 | |
Learning Care Group, Inc. (a) | 62,120 | 227,359 | |
The Geo Group, Inc. (a) | 31,600 | 946,420 | |
7,690,944 | |||
Construction & Engineering - 0.2% | |||
Infrasource Services, Inc. | 14,100 | 170,610 | |
Electrical Equipment - 0.2% | |||
A.O. Smith Corp. | 7,200 | 195,192 | |
Machinery - 0.5% | |||
The Weir Group PLC | 20,000 | 123,363 | |
Watts Water Technologies, Inc. Class A | 7,500 | 240,375 | |
363,738 | |||
Marine - 0.3% | |||
Alexander & Baldwin, Inc. | 6,000 | 276,000 | |
TOTAL INDUSTRIALS | 9,947,224 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - 17.6% | |||
Communications Equipment - 0.2% | |||
NETGEAR, Inc. (a) | 8,900 | $ 133,856 | |
Electronic Equipment & Instruments - 2.4% | |||
Aeroflex, Inc. (a) | 25,700 | 247,234 | |
Arrow Electronics, Inc. (a) | 26,200 | 618,582 | |
Bell Microproducts, Inc. (a) | 9,550 | 77,451 | |
Leica Geosystems AG (a) | 465 | 138,841 | |
Measurement Specialties, Inc. (a) | 36,500 | 937,685 | |
2,019,793 | |||
Internet Software & Services - 4.4% | |||
Akamai Technologies, Inc. (a) | 75,800 | 992,980 | |
Cryptologic, Inc. | 13,200 | 326,636 | |
Homestore, Inc. (a) | 75,000 | 177,000 | |
iMergent, Inc. (a) | 50,400 | 1,063,440 | |
Intermix Media, Inc. (a) | 60,000 | 391,800 | |
j2 Global Communications, Inc. (a) | 11,900 | 386,512 | |
Marchex, Inc. Class B | 3,900 | 70,239 | |
Sina Corp. (a) | 6,000 | 159,000 | |
Vitria Technology, Inc. (a) | 26,400 | 108,240 | |
3,675,847 | |||
IT Services - 5.0% | |||
BearingPoint, Inc. (a) | 48,800 | 385,032 | |
Lionbridge Technologies, Inc. (a) | 399,946 | 2,511,661 | |
Tyler Technologies, Inc. (a) | 173,200 | 1,324,980 | |
4,221,673 | |||
Semiconductors & Semiconductor Equipment - 3.1% | |||
ATMI, Inc. (a) | 10,000 | 227,300 | |
Axcelis Technologies, Inc. (a) | 26,000 | 194,220 | |
Cascade Microtech, Inc. | 12,300 | 130,380 | |
Exar Corp. (a) | 1,800 | 25,866 | |
Fairchild Semiconductor International, Inc. (a) | 40,700 | 580,789 | |
FormFactor, Inc. (a) | 9,000 | 204,930 | |
Integrated Device Technology, Inc. (a) | 34,300 | 402,682 | |
Microsemi Corp. (a) | 8,900 | 137,327 | |
O2Micro International Ltd. (a) | 300 | 2,661 | |
ON Semiconductor Corp. (a) | 12,200 | 44,652 | |
Pericom Semiconductor Corp. (a) | 17,900 | 150,181 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 13,800 | 473,064 | |
2,574,052 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - 2.5% | |||
DATATRAK International, Inc. (a) | 2,200 | $ 23,826 | |
DATATRAK International, Inc. (a)(b) | 10,000 | 92,055 | |
DATATRAK International, Inc. warrants 12/31/49 (a)(b) | 1,500 | 0 | |
Moldflow Corp. (a) | 21,000 | 354,900 | |
MSC.Software Corp. (a) | 17,900 | 184,549 | |
Pegasystems, Inc. (a) | 26,900 | 182,113 | |
Pervasive Software, Inc. (a) | 36,200 | 146,610 | |
Phase Forward, Inc. | 163,900 | 1,111,242 | |
2,095,295 | |||
TOTAL INFORMATION TECHNOLOGY | 14,720,516 | ||
MATERIALS - 1.2% | |||
Metals & Mining - 0.9% | |||
Apex Silver Mines Ltd. (a) | 14,000 | 226,240 | |
Goldcorp, Inc. | 17,000 | 238,894 | |
Meridian Gold, Inc. (a) | 17,000 | 312,316 | |
777,450 | |||
Paper & Forest Products - 0.3% | |||
Sino-Forest Corp. (a) | 74,041 | 247,589 | |
TOTAL MATERIALS | 1,025,039 | ||
TOTAL COMMON STOCKS (Cost $71,172,341) | 75,854,679 | ||
Cash Equivalents - 11.8% | |||
Maturity Amount | |||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 2.45%, dated 1/31/05 due 2/1/05) (c) | $ 9,895,672 | $ 9,895,000 | |
TOTAL INVESTMENT PORTFOLIO - 102.3% (Cost $81,067,341) | 85,749,679 | ||
NET OTHER ASSETS - (2.3)% | (1,895,075) | ||
NET ASSETS - 100% | $ 83,854,604 |
Legend |
(a) Non-income producing |
(b) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $92,055 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
DATATRAK International, Inc. | 12/27/04 | $ 95,000 |
DATATRAK International, Inc. warrants 12/31/49 | 12/27/04 | $ 0 |
(c) Additional information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/ | Value |
$9,895,000 due 2/1/05 at 2.45%: | |
Banc of America Securites LLC | $ 1,289,357 |
Barclays Capital Inc. | 1,482,761 |
Bear Stearns & Co. Inc. | 644,679 |
Credit Suisse First Boston LLC | 1,289,357 |
Deutsche Bank Securities Inc. | 1,934,036 |
J.P. Morgan Securities, Inc. | 644,679 |
Lehman Brothers Inc. | 277,212 |
Morgan Stanley & Co. Incorporated | 386,230 |
BNP Paribas Securities Corp. | 1,934,036 |
UBS Securities LLC | 12,653 |
$ 9,895,000 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.2% |
Canada | 6.4% |
United Kingdom | 2.4% |
Ireland | 2.3% |
Cayman Islands | 1.8% |
Bermuda | 1.0% |
Others (individually less than 1%) | 0.9% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $9,895,000) (cost $81,067,341) - See accompanying schedule | $ 85,749,679 | |
Cash | 402 | |
Foreign currency held at value (cost $34,077) | 34,039 | |
Receivable for investments sold | 296,580 | |
Receivable for fund shares sold | 1,003,904 | |
Dividends receivable | 1,272 | |
Prepaid expenses | 69,563 | |
Receivable from investment adviser for expense reductions | 5,265 | |
Other affiliated receivables | 894 | |
Other receivables | 15,572 | |
Total assets | 87,177,170 | |
Liabilities | ||
Payable for investments purchased | $ 3,188,305 | |
Payable for fund shares redeemed | 59,636 | |
Accrued management fee | 42,777 | |
Distribution fees payable | 2,755 | |
Other affiliated payables | 14,271 | |
Other payables and accrued expenses | 14,822 | |
Total liabilities | 3,322,566 | |
Net Assets | $ 83,854,604 | |
Net Assets consist of: | ||
Paid in capital | $ 78,977,678 | |
Accumulated net investment loss | (76,926) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 271,551 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,682,301 | |
Net Assets | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.51 | |
Maximum offering price per share (100/94.25 of $11.51) | $ 12.21 | |
Class T: | $ 11.50 | |
Maximum offering price per share (100/96.50 of $11.50) | $ 11.92 | |
Class B: | $ 11.48 | |
Class C: | $ 11.49 | |
Small Cap Growth: | $ 11.52 | |
Institutional Class: | $ 11.51 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period November 3, 2004 (commencement of operations) | ||
Investment Income | ||
Dividends | $ 20,978 | |
Interest | 36,181 | |
Total income | 57,159 | |
Expenses | ||
Management fee | $ 83,521 | |
Transfer agent fees | 30,566 | |
Distribution fees | 6,700 | |
Accounting fees and expenses | 7,681 | |
Non-interested trustees' compensation | 27 | |
Custodian fees and expenses | 9,985 | |
Registration fees | 30,108 | |
Audit | 11,607 | |
Legal | 10 | |
Total expenses before reductions | 180,205 | |
Expense reductions | (46,120) | 134,085 |
Net investment income (loss) | (76,926) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 275,347 | |
Foreign currency transactions | (3,796) | |
Total net realized gain (loss) | 271,551 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 4,682,338 | |
Assets and liabilities in foreign currencies | (37) | |
Total change in net unrealized appreciation (depreciation) | 4,682,301 | |
Net gain (loss) | 4,953,852 | |
Net increase (decrease) in net assets resulting from operations | $ 4,876,926 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (76,926) |
Net realized gain (loss) | 271,551 |
Change in net unrealized appreciation (depreciation) | 4,682,301 |
Net increase (decrease) in net assets resulting | 4,876,926 |
Share transactions - net increase (decrease) | 78,956,576 |
Redemption fees | 21,102 |
Total increase (decrease) in net assets | 83,854,604 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $76,926) | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.51 |
Total Return B, C, D | 15.10% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.88% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.36% A |
Net investment income (loss) | (.86)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,393 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.50 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.50 |
Total Return B, C, D | 15.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.10% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.61% A |
Net investment income (loss) | (1.11)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,217 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.52 |
Total from investment operations | 1.48 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.48 |
Total Return B, C, D | 14.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.71% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 868 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.49 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.49 |
Total Return B, C, D | 14.90% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.64% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,286 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.54 |
Total from investment operations | 1.52 |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.52 |
Total Return B, C | 15.20% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.50% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 76,979 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital D | - |
Net asset value, end of period | $ 11.51 |
Total Return B, C | 15.10% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.59% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,112 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 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 is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 6,146,534 | |
Unrealized depreciation | (1,464,196) | |
Net unrealized appreciation (depreciation) | $ 4,682,338 | |
Cost for federal income tax purposes | $ 81,067,341 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $75,829,046 and $4,932,053, respectively.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .72% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 648 | $ 386 |
Class T | .25% | .25% | 2,020 | 742 |
Class B | .75% | .25% | 1,792 | 1,738 |
Class C | .75% | .25% | 2,240 | 1,988 |
$ 6,700 | $ 4,854 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | ||
Class A | $ 1,683 | |
Class T | 772 | |
Class B* | 7 | |
Class C* | - | |
$ 2,462 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Growth. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Growth shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 585 | .23* |
Class T | 1,039 | .26* |
Class B | 426 | .24* |
Class C | 503 | .23* |
Small Cap Growth | 27,654 | .27* |
Institutional Class | 359 | .17* |
$ 30,566 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
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 were $5,006 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 985 |
Class T | 1.75% | 1,409 |
Class B | 2.25% | 816 |
Class C | 2.25% | 869 |
Small Cap Growth | 1.25% | 25,756 |
Institutional Class | 1.25% | 713 |
$ 30,548 |
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 $15,572 for the period.
6. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 12% of the outstanding shares of the fund.
Semiannual Report
7. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
For the period | For the period | |
Class A | ||
Shares sold | 121,341 | $ 1,256,152 |
Shares redeemed | (316) | (3,547) |
Net increase (decrease) | 121,025 | $ 1,252,605 |
Class T | ||
Shares sold | 192,771 | $ 2,026,359 |
Shares redeemed | - | - |
Net increase (decrease) | 192,771 | $ 2,026,359 |
Class B | ||
Shares sold | 75,583 | $ 770,623 |
Shares redeemed | (29) | (316) |
Net increase (decrease) | 75,554 | $ 770,307 |
Class C | ||
Shares sold | 111,985 | $ 1,174,349 |
Shares redeemed | - | - |
Net increase (decrease) | 111,985 | $ 1,174,349 |
Small Cap Growth | ||
Shares sold | 6,813,279 | $ 74,190,613 |
Shares redeemed | (130,949) | (1,461,306) |
Net increase (decrease) | 6,682,330 | $ 72,729,307 |
Institutional Class | ||
Shares sold | 96,575 | $ 1,003,649 |
Shares redeemed | - | - |
Net increase (decrease) | 96,575 | $ 1,003,649 |
Semiannual Report
Semiannual 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 International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
ASCP-USAN-0305
1.803716.100
Fidelity Advisor
Small Cap Growth
Fund - Institutional Class
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Institutional Class
is a class of Fidelity®
Small Cap Growth
Fund
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of the fund's investments. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.98B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63C |
Class T | |||
Actual | $ 1,000.00 | $ 1,150.00 | $ 4.64B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89C |
Class B | |||
Actual | $ 1,000.00 | $ 1,148.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Class C | |||
Actual | $ 1,000.00 | $ 1,149.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 1,152.00 | $ 3.32B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.31B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Growth | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 4.4 |
EVCI Career Colleges, Inc. | 4.4 |
Collegiate Pacific, Inc. | 3.8 |
Lionbridge Technologies, Inc. | 3.0 |
Pediatrix Medical Group, Inc. | 2.6 |
Career Education Corp. | 2.3 |
Range Resources Corp. | 1.9 |
Pacific Sunwear of California, Inc. | 1.8 |
ICON PLC sponsored ADR | 1.8 |
Big 5 Sporting Goods Corp. | 1.6 |
27.6 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 20.5 |
Information Technology | 17.6 |
Energy | 16.8 |
Health Care | 14.5 |
Industrials | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 90.5% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign investments | 14.8% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 90.5% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 20.5% | |||
Hotels, Restaurants & Leisure - 4.4% | |||
Ambassadors Group, Inc. | 3,200 | $ 108,800 | |
Brinker International, Inc. (a) | 1,900 | 71,459 | |
Buffalo Wild Wings, Inc. (a) | 1,900 | 76,931 | |
Century Casinos, Inc. (a) | 147,478 | 1,234,391 | |
Ctrip.com International Ltd. ADR (a) | 14,000 | 576,786 | |
Friendly Ice Cream Corp. (a) | 7,700 | 67,221 | |
Penn National Gaming, Inc. (a) | 3,200 | 209,888 | |
Sportingbet PLC (a) | 300,000 | 1,347,573 | |
3,693,049 | |||
Household Durables - 1.6% | |||
Interface, Inc. Class A (a) | 69,700 | 657,271 | |
Jarden Corp. (a) | 15,000 | 690,000 | |
1,347,271 | |||
Internet & Catalog Retail - 4.7% | |||
Blue Nile, Inc. | 25,900 | 725,200 | |
Collegiate Pacific, Inc. | 242,900 | 3,184,419 | |
3,909,619 | |||
Leisure Equipment & Products - 0.8% | |||
RC2 Corp. (a) | 22,800 | 660,060 | |
Multiline Retail - 0.4% | |||
Tuesday Morning Corp. (a) | 12,300 | 353,379 | |
Specialty Retail - 7.3% | |||
Big 5 Sporting Goods Corp. | 50,100 | 1,371,738 | |
Cost Plus, Inc. (a) | 23,500 | 616,405 | |
Hibbett Sporting Goods, Inc. (a) | 19,500 | 503,100 | |
Hot Topic, Inc. (a) | 10,500 | 203,490 | |
Jos. A. Bank Clothiers, Inc. (a) | 13,000 | 373,100 | |
Pacific Sunwear of California, Inc. (a) | 62,400 | 1,528,176 | |
RONA, Inc. (a) | 22,000 | 800,548 | |
Select Comfort Corp. (a) | 27,500 | 538,175 | |
Steiner Leisure Ltd. (a) | 6,100 | 189,216 | |
6,123,948 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
Bijou Brigitte Modische Accessoires AG | 1,665 | 251,413 | |
Carter's, Inc. (a) | 7,300 | 266,888 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Lakeland Industries, Inc. (a) | 20,300 | $ 400,925 | |
Oxford Industries, Inc. | 4,100 | 152,438 | |
1,071,664 | |||
TOTAL CONSUMER DISCRETIONARY | 17,158,990 | ||
CONSUMER STAPLES - 2.6% | |||
Beverages - 0.5% | |||
C&C Group PLC | 100,000 | 422,302 | |
Food & Staples Retailing - 0.6% | |||
Caffe Nero Group PLC (a) | 199,000 | 462,874 | |
Food Products - 0.5% | |||
Poore Brothers, Inc. (a) | 47,100 | 158,727 | |
Rocky Mountain Chocolate Factory, Inc. | 14,100 | 235,188 | |
393,915 | |||
Personal Products - 1.0% | |||
NBTY, Inc. (a) | 31,800 | 870,684 | |
TOTAL CONSUMER STAPLES | 2,149,775 | ||
ENERGY - 16.8% | |||
Energy Equipment & Services - 3.1% | |||
AKITA Drilling Ltd. Class A (non-vtg.) | 32,000 | 701,342 | |
Oil States International, Inc. (a) | 29,200 | 556,260 | |
Pason Systems, Inc. | 39,800 | 1,235,001 | |
Superior Energy Services, Inc. (a) | 5,300 | 84,376 | |
2,576,979 | |||
Oil & Gas - 13.7% | |||
Blackrock Ventures, Inc. (a) | 70,000 | 545,425 | |
Denbury Resources, Inc. (a) | 28,700 | 838,040 | |
Encore Acquisition Co. (a) | 19,200 | 716,160 | |
Forest Oil Corp. (a) | 34,000 | 1,145,460 | |
GMX Resources, Inc. (a) | 35,400 | 295,590 | |
Holly Corp. | 44,700 | 1,352,622 | |
Quicksilver Resources, Inc. (a) | 83,500 | 3,709,904 | |
Range Resources Corp. | 71,000 | 1,575,490 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Thunder Energy, Inc. (a) | 107,000 | $ 726,812 | |
World Fuel Services Corp. | 12,100 | 613,228 | |
11,518,731 | |||
TOTAL ENERGY | 14,095,710 | ||
FINANCIALS - 5.4% | |||
Commercial Banks - 1.0% | |||
Center Financial Corp., California | 37,600 | 782,456 | |
Nara Bancorp, Inc. | 6,000 | 119,700 | |
902,156 | |||
Insurance - 4.3% | |||
Hilb Rogal & Hobbs Co. | 13,800 | 490,728 | |
IPC Holdings Ltd. | 9,000 | 379,890 | |
PXRE Group Ltd. | 17,615 | 457,109 | |
Specialty Underwriters' Alliance, Inc. | 50,700 | 495,339 | |
United America Indemnity Ltd. Class A | 41,700 | 750,600 | |
USI Holdings Corp. (a) | 90,100 | 1,018,130 | |
3,591,796 | |||
Thrifts & Mortgage Finance - 0.1% | |||
W Holding Co., Inc. | 5,508 | 71,824 | |
TOTAL FINANCIALS | 4,565,776 | ||
HEALTH CARE - 14.5% | |||
Health Care Equipment & Supplies - 2.8% | |||
DJ Orthopedics, Inc. (a) | 41,000 | 990,150 | |
Enpath Medical, Inc. (a) | 17,000 | 173,570 | |
Kensey Nash Corp. (a) | 9,300 | 300,297 | |
Mentor Corp. | 2,700 | 84,537 | |
Orthofix International NV (a) | 1,900 | 75,962 | |
Regeneration Technologies, Inc. (a) | 68,900 | 708,637 | |
2,333,153 | |||
Health Care Providers & Services - 11.7% | |||
America Service Group, Inc. (a) | 23,900 | 655,577 | |
American Dental Partners, Inc. (a) | 16,800 | 338,520 | |
AmSurg Corp. (a) | 42,300 | 1,117,143 | |
Bio-Reference Laboratories, Inc. (a) | 11,200 | 159,152 | |
Cedara Software Corp. (a) | 17,200 | 182,942 | |
DaVita, Inc. (a) | 14,100 | 591,636 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Horizon Health Corp. (a) | 17,700 | $ 538,965 | |
ICON PLC sponsored ADR (a) | 42,500 | 1,492,600 | |
LCA-Vision, Inc. | 10,000 | 266,500 | |
Medtox Scientific, Inc. (a) | 50,300 | 412,460 | |
Molina Healthcare, Inc. (a) | 11,330 | 563,441 | |
Omnicare, Inc. | 21,400 | 658,050 | |
Pediatrix Medical Group, Inc. (a) | 33,000 | 2,204,070 | |
Per-Se Technologies, Inc. (a) | 46,400 | 677,440 | |
9,858,496 | |||
TOTAL HEALTH CARE | 12,191,649 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 1.5% | |||
BE Aerospace, Inc. (a) | 26,000 | 280,540 | |
DRS Technologies, Inc. (a) | 5,800 | 235,480 | |
SI International, Inc. (a) | 28,700 | 734,720 | |
1,250,740 | |||
Commercial Services & Supplies - 9.2% | |||
Career Education Corp. (a) | 49,000 | 1,974,210 | |
Corinthian Colleges, Inc. (a) | 41,700 | 801,891 | |
EVCI Career Colleges, Inc. (a) | 412,606 | 3,676,319 | |
Exponent, Inc. (a) | 2,595 | 64,745 | |
Learning Care Group, Inc. (a) | 62,120 | 227,359 | |
The Geo Group, Inc. (a) | 31,600 | 946,420 | |
7,690,944 | |||
Construction & Engineering - 0.2% | |||
Infrasource Services, Inc. | 14,100 | 170,610 | |
Electrical Equipment - 0.2% | |||
A.O. Smith Corp. | 7,200 | 195,192 | |
Machinery - 0.5% | |||
The Weir Group PLC | 20,000 | 123,363 | |
Watts Water Technologies, Inc. Class A | 7,500 | 240,375 | |
363,738 | |||
Marine - 0.3% | |||
Alexander & Baldwin, Inc. | 6,000 | 276,000 | |
TOTAL INDUSTRIALS | 9,947,224 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - 17.6% | |||
Communications Equipment - 0.2% | |||
NETGEAR, Inc. (a) | 8,900 | $ 133,856 | |
Electronic Equipment & Instruments - 2.4% | |||
Aeroflex, Inc. (a) | 25,700 | 247,234 | |
Arrow Electronics, Inc. (a) | 26,200 | 618,582 | |
Bell Microproducts, Inc. (a) | 9,550 | 77,451 | |
Leica Geosystems AG (a) | 465 | 138,841 | |
Measurement Specialties, Inc. (a) | 36,500 | 937,685 | |
2,019,793 | |||
Internet Software & Services - 4.4% | |||
Akamai Technologies, Inc. (a) | 75,800 | 992,980 | |
Cryptologic, Inc. | 13,200 | 326,636 | |
Homestore, Inc. (a) | 75,000 | 177,000 | |
iMergent, Inc. (a) | 50,400 | 1,063,440 | |
Intermix Media, Inc. (a) | 60,000 | 391,800 | |
j2 Global Communications, Inc. (a) | 11,900 | 386,512 | |
Marchex, Inc. Class B | 3,900 | 70,239 | |
Sina Corp. (a) | 6,000 | 159,000 | |
Vitria Technology, Inc. (a) | 26,400 | 108,240 | |
3,675,847 | |||
IT Services - 5.0% | |||
BearingPoint, Inc. (a) | 48,800 | 385,032 | |
Lionbridge Technologies, Inc. (a) | 399,946 | 2,511,661 | |
Tyler Technologies, Inc. (a) | 173,200 | 1,324,980 | |
4,221,673 | |||
Semiconductors & Semiconductor Equipment - 3.1% | |||
ATMI, Inc. (a) | 10,000 | 227,300 | |
Axcelis Technologies, Inc. (a) | 26,000 | 194,220 | |
Cascade Microtech, Inc. | 12,300 | 130,380 | |
Exar Corp. (a) | 1,800 | 25,866 | |
Fairchild Semiconductor International, Inc. (a) | 40,700 | 580,789 | |
FormFactor, Inc. (a) | 9,000 | 204,930 | |
Integrated Device Technology, Inc. (a) | 34,300 | 402,682 | |
Microsemi Corp. (a) | 8,900 | 137,327 | |
O2Micro International Ltd. (a) | 300 | 2,661 | |
ON Semiconductor Corp. (a) | 12,200 | 44,652 | |
Pericom Semiconductor Corp. (a) | 17,900 | 150,181 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 13,800 | 473,064 | |
2,574,052 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - 2.5% | |||
DATATRAK International, Inc. (a) | 2,200 | $ 23,826 | |
DATATRAK International, Inc. (a)(b) | 10,000 | 92,055 | |
DATATRAK International, Inc. warrants 12/31/49 (a)(b) | 1,500 | 0 | |
Moldflow Corp. (a) | 21,000 | 354,900 | |
MSC.Software Corp. (a) | 17,900 | 184,549 | |
Pegasystems, Inc. (a) | 26,900 | 182,113 | |
Pervasive Software, Inc. (a) | 36,200 | 146,610 | |
Phase Forward, Inc. | 163,900 | 1,111,242 | |
2,095,295 | |||
TOTAL INFORMATION TECHNOLOGY | 14,720,516 | ||
MATERIALS - 1.2% | |||
Metals & Mining - 0.9% | |||
Apex Silver Mines Ltd. (a) | 14,000 | 226,240 | |
Goldcorp, Inc. | 17,000 | 238,894 | |
Meridian Gold, Inc. (a) | 17,000 | 312,316 | |
777,450 | |||
Paper & Forest Products - 0.3% | |||
Sino-Forest Corp. (a) | 74,041 | 247,589 | |
TOTAL MATERIALS | 1,025,039 | ||
TOTAL COMMON STOCKS (Cost $71,172,341) | 75,854,679 | ||
Cash Equivalents - 11.8% | |||
Maturity Amount | |||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 2.45%, dated 1/31/05 due 2/1/05) (c) | $ 9,895,672 | $ 9,895,000 | |
TOTAL INVESTMENT PORTFOLIO - 102.3% (Cost $81,067,341) | 85,749,679 | ||
NET OTHER ASSETS - (2.3)% | (1,895,075) | ||
NET ASSETS - 100% | $ 83,854,604 |
Legend |
(a) Non-income producing |
(b) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $92,055 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
DATATRAK International, Inc. | 12/27/04 | $ 95,000 |
DATATRAK International, Inc. warrants 12/31/49 | 12/27/04 | $ 0 |
(c) Additional information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/ | Value |
$9,895,000 due 2/1/05 at 2.45%: | |
Banc of America Securites LLC | $ 1,289,357 |
Barclays Capital Inc. | 1,482,761 |
Bear Stearns & Co. Inc. | 644,679 |
Credit Suisse First Boston LLC | 1,289,357 |
Deutsche Bank Securities Inc. | 1,934,036 |
J.P. Morgan Securities, Inc. | 644,679 |
Lehman Brothers Inc. | 277,212 |
Morgan Stanley & Co. Incorporated | 386,230 |
BNP Paribas Securities Corp. | 1,934,036 |
UBS Securities LLC | 12,653 |
$ 9,895,000 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.2% |
Canada | 6.4% |
United Kingdom | 2.4% |
Ireland | 2.3% |
Cayman Islands | 1.8% |
Bermuda | 1.0% |
Others (individually less than 1%) | 0.9% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $9,895,000) (cost $81,067,341) - See accompanying schedule | $ 85,749,679 | |
Cash | 402 | |
Foreign currency held at value (cost $34,077) | 34,039 | |
Receivable for investments sold | 296,580 | |
Receivable for fund shares sold | 1,003,904 | |
Dividends receivable | 1,272 | |
Prepaid expenses | 69,563 | |
Receivable from investment adviser for expense reductions | 5,265 | |
Other affiliated receivables | 894 | |
Other receivables | 15,572 | |
Total assets | 87,177,170 | |
Liabilities | ||
Payable for investments purchased | $ 3,188,305 | |
Payable for fund shares redeemed | 59,636 | |
Accrued management fee | 42,777 | |
Distribution fees payable | 2,755 | |
Other affiliated payables | 14,271 | |
Other payables and accrued expenses | 14,822 | |
Total liabilities | 3,322,566 | |
Net Assets | $ 83,854,604 | |
Net Assets consist of: | ||
Paid in capital | $ 78,977,678 | |
Accumulated net investment loss | (76,926) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 271,551 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,682,301 | |
Net Assets | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.51 | |
Maximum offering price per share (100/94.25 of $11.51) | $ 12.21 | |
Class T: | $ 11.50 | |
Maximum offering price per share (100/96.50 of $11.50) | $ 11.92 | |
Class B: | $ 11.48 | |
Class C: | $ 11.49 | |
Small Cap Growth: | $ 11.52 | |
Institutional Class: | $ 11.51 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
For the period November 3, 2004 (commencement of operations) | ||
Investment Income | ||
Dividends | $ 20,978 | |
Interest | 36,181 | |
Total income | 57,159 | |
Expenses | ||
Management fee | $ 83,521 | |
Transfer agent fees | 30,566 | |
Distribution fees | 6,700 | |
Accounting fees and expenses | 7,681 | |
Non-interested trustees' compensation | 27 | |
Custodian fees and expenses | 9,985 | |
Registration fees | 30,108 | |
Audit | 11,607 | |
Legal | 10 | |
Total expenses before reductions | 180,205 | |
Expense reductions | (46,120) | 134,085 |
Net investment income (loss) | (76,926) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 275,347 | |
Foreign currency transactions | (3,796) | |
Total net realized gain (loss) | 271,551 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 4,682,338 | |
Assets and liabilities in foreign currencies | (37) | |
Total change in net unrealized appreciation (depreciation) | 4,682,301 | |
Net gain (loss) | 4,953,852 | |
Net increase (decrease) in net assets resulting from operations | $ 4,876,926 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (76,926) |
Net realized gain (loss) | 271,551 |
Change in net unrealized appreciation (depreciation) | 4,682,301 |
Net increase (decrease) in net assets resulting | 4,876,926 |
Share transactions - net increase (decrease) | 78,956,576 |
Redemption fees | 21,102 |
Total increase (decrease) in net assets | 83,854,604 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $76,926) | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.51 |
Total Return B, C, D | 15.10% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.88% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.36% A |
Net investment income (loss) | (.86)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,393 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.50 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.50 |
Total Return B, C, D | 15.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.10% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.61% A |
Net investment income (loss) | (1.11)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,217 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.52 |
Total from investment operations | 1.48 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.48 |
Total Return B, C, D | 14.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.71% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 868 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.49 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.49 |
Total Return B, C, D | 14.90% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.64% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,286 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.54 |
Total from investment operations | 1.52 |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.52 |
Total Return B, C | 15.20% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.50% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 76,979 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital D | - |
Net asset value, end of period | $ 11.51 |
Total Return B, C | 15.10% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.59% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,112 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Foreign Currency - continued
Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 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 is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 6,146,534 | |
Unrealized depreciation | (1,464,196) | |
Net unrealized appreciation (depreciation) | $ 4,682,338 | |
Cost for federal income tax purposes | $ 81,067,341 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $75,829,046 and $4,932,053, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .72% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 648 | $ 386 |
Class T | .25% | .25% | 2,020 | 742 |
Class B | .75% | .25% | 1,792 | 1,738 |
Class C | .75% | .25% | 2,240 | 1,988 |
$ 6,700 | $ 4,854 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
Semiannual Report
4. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | ||
Class A | $ 1,683 | |
Class T | 772 | |
Class B* | 7 | |
Class C* | - | |
$ 2,462 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Growth. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Growth shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 585 | .23* |
Class T | 1,039 | .26* |
Class B | 426 | .24* |
Class C | 503 | .23* |
Small Cap Growth | 27,654 | .27* |
Institutional Class | 359 | .17* |
$ 30,566 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
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 were $5,006 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 985 |
Class T | 1.75% | 1,409 |
Class B | 2.25% | 816 |
Class C | 2.25% | 869 |
Small Cap Growth | 1.25% | 25,756 |
Institutional Class | 1.25% | 713 |
$ 30,548 |
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 $15,572 for the period.
6. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 12% of the outstanding shares of the fund.
Semiannual Report
7. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
For the period | For the period | |
Class A | ||
Shares sold | 121,341 | $ 1,256,152 |
Shares redeemed | (316) | (3,547) |
Net increase (decrease) | 121,025 | $ 1,252,605 |
Class T | ||
Shares sold | 192,771 | $ 2,026,359 |
Shares redeemed | - | - |
Net increase (decrease) | 192,771 | $ 2,026,359 |
Class B | ||
Shares sold | 75,583 | $ 770,623 |
Shares redeemed | (29) | (316) |
Net increase (decrease) | 75,554 | $ 770,307 |
Class C | ||
Shares sold | 111,985 | $ 1,174,349 |
Shares redeemed | - | - |
Net increase (decrease) | 111,985 | $ 1,174,349 |
Small Cap Growth | ||
Shares sold | 6,813,279 | $ 74,190,613 |
Shares redeemed | (130,949) | (1,461,306) |
Net increase (decrease) | 6,682,330 | $ 72,729,307 |
Institutional Class | ||
Shares sold | 96,575 | $ 1,003,649 |
Shares redeemed | - | - |
Net increase (decrease) | 96,575 | $ 1,003,649 |
Semiannual Report
Semiannual 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 International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
ASCPI-USAN-0305
1.803724.100
Fidelity®
Small Cap Growth
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the fund's most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.98B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63C |
Class T | |||
Actual | $ 1,000.00 | $ 1,150.00 | $ 4.64B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89C |
Class B | |||
Actual | $ 1,000.00 | $ 1,148.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Class C | |||
Actual | $ 1,000.00 | $ 1,149.00 | $ 5.96B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42C |
Small Cap Growth | |||
Actual | $ 1,000.00 | $ 1,152.00 | $ 3.32B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,151.00 | $ 3.31B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Growth | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 4.4 |
EVCI Career Colleges, Inc. | 4.4 |
Collegiate Pacific, Inc. | 3.8 |
Lionbridge Technologies, Inc. | 3.0 |
Pediatrix Medical Group, Inc. | 2.6 |
Career Education Corp. | 2.3 |
Range Resources Corp. | 1.9 |
Pacific Sunwear of California, Inc. | 1.8 |
ICON PLC sponsored ADR | 1.8 |
Big 5 Sporting Goods Corp. | 1.6 |
27.6 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 20.5 |
Information Technology | 17.6 |
Energy | 16.8 |
Health Care | 14.5 |
Industrials | 11.9 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 90.5% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign investments | 14.8% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 90.5% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 20.5% | |||
Hotels, Restaurants & Leisure - 4.4% | |||
Ambassadors Group, Inc. | 3,200 | $ 108,800 | |
Brinker International, Inc. (a) | 1,900 | 71,459 | |
Buffalo Wild Wings, Inc. (a) | 1,900 | 76,931 | |
Century Casinos, Inc. (a) | 147,478 | 1,234,391 | |
Ctrip.com International Ltd. ADR (a) | 14,000 | 576,786 | |
Friendly Ice Cream Corp. (a) | 7,700 | 67,221 | |
Penn National Gaming, Inc. (a) | 3,200 | 209,888 | |
Sportingbet PLC (a) | 300,000 | 1,347,573 | |
3,693,049 | |||
Household Durables - 1.6% | |||
Interface, Inc. Class A (a) | 69,700 | 657,271 | |
Jarden Corp. (a) | 15,000 | 690,000 | |
1,347,271 | |||
Internet & Catalog Retail - 4.7% | |||
Blue Nile, Inc. | 25,900 | 725,200 | |
Collegiate Pacific, Inc. | 242,900 | 3,184,419 | |
3,909,619 | |||
Leisure Equipment & Products - 0.8% | |||
RC2 Corp. (a) | 22,800 | 660,060 | |
Multiline Retail - 0.4% | |||
Tuesday Morning Corp. (a) | 12,300 | 353,379 | |
Specialty Retail - 7.3% | |||
Big 5 Sporting Goods Corp. | 50,100 | 1,371,738 | |
Cost Plus, Inc. (a) | 23,500 | 616,405 | |
Hibbett Sporting Goods, Inc. (a) | 19,500 | 503,100 | |
Hot Topic, Inc. (a) | 10,500 | 203,490 | |
Jos. A. Bank Clothiers, Inc. (a) | 13,000 | 373,100 | |
Pacific Sunwear of California, Inc. (a) | 62,400 | 1,528,176 | |
RONA, Inc. (a) | 22,000 | 800,548 | |
Select Comfort Corp. (a) | 27,500 | 538,175 | |
Steiner Leisure Ltd. (a) | 6,100 | 189,216 | |
6,123,948 | |||
Textiles, Apparel & Luxury Goods - 1.3% | |||
Bijou Brigitte Modische Accessoires AG | 1,665 | 251,413 | |
Carter's, Inc. (a) | 7,300 | 266,888 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Textiles, Apparel & Luxury Goods - continued | |||
Lakeland Industries, Inc. (a) | 20,300 | $ 400,925 | |
Oxford Industries, Inc. | 4,100 | 152,438 | |
1,071,664 | |||
TOTAL CONSUMER DISCRETIONARY | 17,158,990 | ||
CONSUMER STAPLES - 2.6% | |||
Beverages - 0.5% | |||
C&C Group PLC | 100,000 | 422,302 | |
Food & Staples Retailing - 0.6% | |||
Caffe Nero Group PLC (a) | 199,000 | 462,874 | |
Food Products - 0.5% | |||
Poore Brothers, Inc. (a) | 47,100 | 158,727 | |
Rocky Mountain Chocolate Factory, Inc. | 14,100 | 235,188 | |
393,915 | |||
Personal Products - 1.0% | |||
NBTY, Inc. (a) | 31,800 | 870,684 | |
TOTAL CONSUMER STAPLES | 2,149,775 | ||
ENERGY - 16.8% | |||
Energy Equipment & Services - 3.1% | |||
AKITA Drilling Ltd. Class A (non-vtg.) | 32,000 | 701,342 | |
Oil States International, Inc. (a) | 29,200 | 556,260 | |
Pason Systems, Inc. | 39,800 | 1,235,001 | |
Superior Energy Services, Inc. (a) | 5,300 | 84,376 | |
2,576,979 | |||
Oil & Gas - 13.7% | |||
Blackrock Ventures, Inc. (a) | 70,000 | 545,425 | |
Denbury Resources, Inc. (a) | 28,700 | 838,040 | |
Encore Acquisition Co. (a) | 19,200 | 716,160 | |
Forest Oil Corp. (a) | 34,000 | 1,145,460 | |
GMX Resources, Inc. (a) | 35,400 | 295,590 | |
Holly Corp. | 44,700 | 1,352,622 | |
Quicksilver Resources, Inc. (a) | 83,500 | 3,709,904 | |
Range Resources Corp. | 71,000 | 1,575,490 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Thunder Energy, Inc. (a) | 107,000 | $ 726,812 | |
World Fuel Services Corp. | 12,100 | 613,228 | |
11,518,731 | |||
TOTAL ENERGY | 14,095,710 | ||
FINANCIALS - 5.4% | |||
Commercial Banks - 1.0% | |||
Center Financial Corp., California | 37,600 | 782,456 | |
Nara Bancorp, Inc. | 6,000 | 119,700 | |
902,156 | |||
Insurance - 4.3% | |||
Hilb Rogal & Hobbs Co. | 13,800 | 490,728 | |
IPC Holdings Ltd. | 9,000 | 379,890 | |
PXRE Group Ltd. | 17,615 | 457,109 | |
Specialty Underwriters' Alliance, Inc. | 50,700 | 495,339 | |
United America Indemnity Ltd. Class A | 41,700 | 750,600 | |
USI Holdings Corp. (a) | 90,100 | 1,018,130 | |
3,591,796 | |||
Thrifts & Mortgage Finance - 0.1% | |||
W Holding Co., Inc. | 5,508 | 71,824 | |
TOTAL FINANCIALS | 4,565,776 | ||
HEALTH CARE - 14.5% | |||
Health Care Equipment & Supplies - 2.8% | |||
DJ Orthopedics, Inc. (a) | 41,000 | 990,150 | |
Enpath Medical, Inc. (a) | 17,000 | 173,570 | |
Kensey Nash Corp. (a) | 9,300 | 300,297 | |
Mentor Corp. | 2,700 | 84,537 | |
Orthofix International NV (a) | 1,900 | 75,962 | |
Regeneration Technologies, Inc. (a) | 68,900 | 708,637 | |
2,333,153 | |||
Health Care Providers & Services - 11.7% | |||
America Service Group, Inc. (a) | 23,900 | 655,577 | |
American Dental Partners, Inc. (a) | 16,800 | 338,520 | |
AmSurg Corp. (a) | 42,300 | 1,117,143 | |
Bio-Reference Laboratories, Inc. (a) | 11,200 | 159,152 | |
Cedara Software Corp. (a) | 17,200 | 182,942 | |
DaVita, Inc. (a) | 14,100 | 591,636 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Horizon Health Corp. (a) | 17,700 | $ 538,965 | |
ICON PLC sponsored ADR (a) | 42,500 | 1,492,600 | |
LCA-Vision, Inc. | 10,000 | 266,500 | |
Medtox Scientific, Inc. (a) | 50,300 | 412,460 | |
Molina Healthcare, Inc. (a) | 11,330 | 563,441 | |
Omnicare, Inc. | 21,400 | 658,050 | |
Pediatrix Medical Group, Inc. (a) | 33,000 | 2,204,070 | |
Per-Se Technologies, Inc. (a) | 46,400 | 677,440 | |
9,858,496 | |||
TOTAL HEALTH CARE | 12,191,649 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 1.5% | |||
BE Aerospace, Inc. (a) | 26,000 | 280,540 | |
DRS Technologies, Inc. (a) | 5,800 | 235,480 | |
SI International, Inc. (a) | 28,700 | 734,720 | |
1,250,740 | |||
Commercial Services & Supplies - 9.2% | |||
Career Education Corp. (a) | 49,000 | 1,974,210 | |
Corinthian Colleges, Inc. (a) | 41,700 | 801,891 | |
EVCI Career Colleges, Inc. (a) | 412,606 | 3,676,319 | |
Exponent, Inc. (a) | 2,595 | 64,745 | |
Learning Care Group, Inc. (a) | 62,120 | 227,359 | |
The Geo Group, Inc. (a) | 31,600 | 946,420 | |
7,690,944 | |||
Construction & Engineering - 0.2% | |||
Infrasource Services, Inc. | 14,100 | 170,610 | |
Electrical Equipment - 0.2% | |||
A.O. Smith Corp. | 7,200 | 195,192 | |
Machinery - 0.5% | |||
The Weir Group PLC | 20,000 | 123,363 | |
Watts Water Technologies, Inc. Class A | 7,500 | 240,375 | |
363,738 | |||
Marine - 0.3% | |||
Alexander & Baldwin, Inc. | 6,000 | 276,000 | |
TOTAL INDUSTRIALS | 9,947,224 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - 17.6% | |||
Communications Equipment - 0.2% | |||
NETGEAR, Inc. (a) | 8,900 | $ 133,856 | |
Electronic Equipment & Instruments - 2.4% | |||
Aeroflex, Inc. (a) | 25,700 | 247,234 | |
Arrow Electronics, Inc. (a) | 26,200 | 618,582 | |
Bell Microproducts, Inc. (a) | 9,550 | 77,451 | |
Leica Geosystems AG (a) | 465 | 138,841 | |
Measurement Specialties, Inc. (a) | 36,500 | 937,685 | |
2,019,793 | |||
Internet Software & Services - 4.4% | |||
Akamai Technologies, Inc. (a) | 75,800 | 992,980 | |
Cryptologic, Inc. | 13,200 | 326,636 | |
Homestore, Inc. (a) | 75,000 | 177,000 | |
iMergent, Inc. (a) | 50,400 | 1,063,440 | |
Intermix Media, Inc. (a) | 60,000 | 391,800 | |
j2 Global Communications, Inc. (a) | 11,900 | 386,512 | |
Marchex, Inc. Class B | 3,900 | 70,239 | |
Sina Corp. (a) | 6,000 | 159,000 | |
Vitria Technology, Inc. (a) | 26,400 | 108,240 | |
3,675,847 | |||
IT Services - 5.0% | |||
BearingPoint, Inc. (a) | 48,800 | 385,032 | |
Lionbridge Technologies, Inc. (a) | 399,946 | 2,511,661 | |
Tyler Technologies, Inc. (a) | 173,200 | 1,324,980 | |
4,221,673 | |||
Semiconductors & Semiconductor Equipment - 3.1% | |||
ATMI, Inc. (a) | 10,000 | 227,300 | |
Axcelis Technologies, Inc. (a) | 26,000 | 194,220 | |
Cascade Microtech, Inc. | 12,300 | 130,380 | |
Exar Corp. (a) | 1,800 | 25,866 | |
Fairchild Semiconductor International, Inc. (a) | 40,700 | 580,789 | |
FormFactor, Inc. (a) | 9,000 | 204,930 | |
Integrated Device Technology, Inc. (a) | 34,300 | 402,682 | |
Microsemi Corp. (a) | 8,900 | 137,327 | |
O2Micro International Ltd. (a) | 300 | 2,661 | |
ON Semiconductor Corp. (a) | 12,200 | 44,652 | |
Pericom Semiconductor Corp. (a) | 17,900 | 150,181 | |
Varian Semiconductor Equipment Associates, Inc. (a) | 13,800 | 473,064 | |
2,574,052 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INFORMATION TECHNOLOGY - continued | |||
Software - 2.5% | |||
DATATRAK International, Inc. (a) | 2,200 | $ 23,826 | |
DATATRAK International, Inc. (a)(b) | 10,000 | 92,055 | |
DATATRAK International, Inc. warrants 12/31/49 (a)(b) | 1,500 | 0 | |
Moldflow Corp. (a) | 21,000 | 354,900 | |
MSC.Software Corp. (a) | 17,900 | 184,549 | |
Pegasystems, Inc. (a) | 26,900 | 182,113 | |
Pervasive Software, Inc. (a) | 36,200 | 146,610 | |
Phase Forward, Inc. | 163,900 | 1,111,242 | |
2,095,295 | |||
TOTAL INFORMATION TECHNOLOGY | 14,720,516 | ||
MATERIALS - 1.2% | |||
Metals & Mining - 0.9% | |||
Apex Silver Mines Ltd. (a) | 14,000 | 226,240 | |
Goldcorp, Inc. | 17,000 | 238,894 | |
Meridian Gold, Inc. (a) | 17,000 | 312,316 | |
777,450 | |||
Paper & Forest Products - 0.3% | |||
Sino-Forest Corp. (a) | 74,041 | 247,589 | |
TOTAL MATERIALS | 1,025,039 | ||
TOTAL COMMON STOCKS (Cost $71,172,341) | 75,854,679 | ||
Cash Equivalents - 11.8% | |||
Maturity Amount | |||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 2.45%, dated 1/31/05 due 2/1/05) (c) | $ 9,895,672 | $ 9,895,000 | |
TOTAL INVESTMENT PORTFOLIO - 102.3% (Cost $81,067,341) | 85,749,679 | ||
NET OTHER ASSETS - (2.3)% | (1,895,075) | ||
NET ASSETS - 100% | $ 83,854,604 |
Legend |
(a) Non-income producing |
(b) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $92,055 or 0.1% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
DATATRAK International, Inc. | 12/27/04 | $ 95,000 |
DATATRAK International, Inc. warrants 12/31/49 | 12/27/04 | $ 0 |
(c) Additional information on each counterparty to the repurchase agreement is as follows: |
Repurchase Agreement/ | Value |
$9,895,000 due 2/1/05 at 2.45%: | |
Banc of America Securites LLC | $ 1,289,357 |
Barclays Capital Inc. | 1,482,761 |
Bear Stearns & Co. Inc. | 644,679 |
Credit Suisse First Boston LLC | 1,289,357 |
Deutsche Bank Securities Inc. | 1,934,036 |
J.P. Morgan Securities, Inc. | 644,679 |
Lehman Brothers Inc. | 277,212 |
Morgan Stanley & Co. Incorporated | 386,230 |
BNP Paribas Securities Corp. | 1,934,036 |
UBS Securities LLC | 12,653 |
$ 9,895,000 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 85.2% |
Canada | 6.4% |
United Kingdom | 2.4% |
Ireland | 2.3% |
Cayman Islands | 1.8% |
Bermuda | 1.0% |
Others (individually less than 1%) | 0.9% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $9,895,000) (cost $81,067,341) - See accompanying schedule | $ 85,749,679 | |
Cash | 402 | |
Foreign currency held at value (cost $34,077) | 34,039 | |
Receivable for investments sold | 296,580 | |
Receivable for fund shares sold | 1,003,904 | |
Dividends receivable | 1,272 | |
Prepaid expenses | 69,563 | |
Receivable from investment adviser for expense reductions | 5,265 | |
Other affiliated receivables | 894 | |
Other receivables | 15,572 | |
Total assets | 87,177,170 | |
Liabilities | ||
Payable for investments purchased | $ 3,188,305 | |
Payable for fund shares redeemed | 59,636 | |
Accrued management fee | 42,777 | |
Distribution fees payable | 2,755 | |
Other affiliated payables | 14,271 | |
Other payables and accrued expenses | 14,822 | |
Total liabilities | 3,322,566 | |
Net Assets | $ 83,854,604 | |
Net Assets consist of: | ||
Paid in capital | $ 78,977,678 | |
Accumulated net investment loss | (76,926) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 271,551 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 4,682,301 | |
Net Assets | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.51 | |
Maximum offering price per share (100/94.25 of $11.51) | $ 12.21 | |
Class T: | $ 11.50 | |
Maximum offering price per share (100/96.50 of $11.50) | $ 11.92 | |
Class B: | $ 11.48 | |
Class C: | $ 11.49 | |
Small Cap Growth: | $ 11.52 | |
Institutional Class: | $ 11.51 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
For the period November 3, 2004 (commencement of operations) | ||
Investment Income | ||
Dividends | $ 20,978 | |
Interest | 36,181 | |
Total income | 57,159 | |
Expenses | ||
Management fee | $ 83,521 | |
Transfer agent fees | 30,566 | |
Distribution fees | 6,700 | |
Accounting fees and expenses | 7,681 | |
Non-interested trustees' compensation | 27 | |
Custodian fees and expenses | 9,985 | |
Registration fees | 30,108 | |
Audit | 11,607 | |
Legal | 10 | |
Total expenses before reductions | 180,205 | |
Expense reductions | (46,120) | 134,085 |
Net investment income (loss) | (76,926) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 275,347 | |
Foreign currency transactions | (3,796) | |
Total net realized gain (loss) | 271,551 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 4,682,338 | |
Assets and liabilities in foreign currencies | (37) | |
Total change in net unrealized appreciation (depreciation) | 4,682,301 | |
Net gain (loss) | 4,953,852 | |
Net increase (decrease) in net assets resulting from operations | $ 4,876,926 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (76,926) |
Net realized gain (loss) | 271,551 |
Change in net unrealized appreciation (depreciation) | 4,682,301 |
Net increase (decrease) in net assets resulting | 4,876,926 |
Share transactions - net increase (decrease) | 78,956,576 |
Redemption fees | 21,102 |
Total increase (decrease) in net assets | 83,854,604 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $76,926) | $ 83,854,604 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.51 |
Total Return B, C, D | 15.10% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.88% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.36% A |
Net investment income (loss) | (.86)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,393 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.50 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.50 |
Total Return B, C, D | 15.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.10% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.61% A |
Net investment income (loss) | (1.11)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,217 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.52 |
Total from investment operations | 1.48 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.48 |
Total Return B, C, D | 14.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.71% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 868 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.04) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.49 |
Redemption fees added to paid in capital E | - |
Net asset value, end of period | $ 11.49 |
Total Return B, C, D | 14.90% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.64% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.11% A |
Net investment income (loss) | (1.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,286 |
Portfolio turnover rate | 49% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Growth
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.54 |
Total from investment operations | 1.52 |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.52 |
Total Return B, C | 15.20% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.50% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 76,979 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.02) |
Net realized and unrealized gain (loss) | 1.53 |
Total from investment operations | 1.51 |
Redemption fees added to paid in capital D | - |
Net asset value, end of period | $ 11.51 |
Total Return B, C | 15.10% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.59% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.11% A |
Net investment income (loss) | (.61)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,112 |
Portfolio turnover rate | 49% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Growth, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
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 is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 6,146,534 | |
Unrealized depreciation | (1,464,196) | |
Net unrealized appreciation (depreciation) | $ 4,682,338 | |
Cost for federal income tax purposes | $ 81,067,341 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $75,829,046 and $4,932,053, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .72% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 648 | $ 386 |
Class T | .25% | .25% | 2,020 | 742 |
Class B | .75% | .25% | 1,792 | 1,738 |
Class C | .75% | .25% | 2,240 | 1,988 |
$ 6,700 | $ 4,854 |
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Sales Load - continued
For the period, sales charge amounts retained by FDC were as follows:
Retained | ||
Class A | $ 1,683 | |
Class T | 772 | |
Class B* | 7 | |
Class C* | - | |
$ 2,462 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Growth. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Growth shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 585 | .23* |
Class T | 1,039 | .26* |
Class B | 426 | .24* |
Class C | 503 | .23* |
Small Cap Growth | 27,654 | .27* |
Institutional Class | 359 | .17* |
$ 30,566 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
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 were $5,006 for the period.
Semiannual Report
5. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 985 |
Class T | 1.75% | 1,409 |
Class B | 2.25% | 816 |
Class C | 2.25% | 869 |
Small Cap Growth | 1.25% | 25,756 |
Institutional Class | 1.25% | 713 |
$ 30,548 |
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 $15,572 for the period.
6. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 12% of the outstanding shares of the fund.
Semiannual Report
7. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
For the period | For the period | |
Class A | ||
Shares sold | 121,341 | $ 1,256,152 |
Shares redeemed | (316) | (3,547) |
Net increase (decrease) | 121,025 | $ 1,252,605 |
Class T | ||
Shares sold | 192,771 | $ 2,026,359 |
Shares redeemed | - | - |
Net increase (decrease) | 192,771 | $ 2,026,359 |
Class B | ||
Shares sold | 75,583 | $ 770,623 |
Shares redeemed | (29) | (316) |
Net increase (decrease) | 75,554 | $ 770,307 |
Class C | ||
Shares sold | 111,985 | $ 1,174,349 |
Shares redeemed | - | - |
Net increase (decrease) | 111,985 | $ 1,174,349 |
Small Cap Growth | ||
Shares sold | 6,813,279 | $ 74,190,613 |
Shares redeemed | (130,949) | (1,461,306) |
Net increase (decrease) | 6,682,330 | $ 72,729,307 |
Institutional Class | ||
Shares sold | 96,575 | $ 1,003,649 |
Shares redeemed | - | - |
Net increase (decrease) | 96,575 | $ 1,003,649 |
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
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
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
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
SCP-USAN-0305
1.803699.100
Fidelity®
Small Cap Value
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of the fund's investments. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,109.50 | $ 3.90 B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 C |
Class T | |||
Actual | $ 1,000.00 | $ 1,110.00 | $ 4.55 B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89 C |
Class B | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Class C | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Value | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 5.4 |
RC2 Corp. | 4.9 |
Steven Madden Ltd. | 2.3 |
Holly Corp. | 2.1 |
Watts Water Technologies, Inc. Class A | 1.9 |
Oxford Industries, Inc. | 1.8 |
Pason Systems, Inc. | 1.8 |
Jarden Corp. | 1.6 |
Encore Acquisition Co. | 1.5 |
Interface, Inc. Class A | 1.4 |
24.7 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 28.4 |
Financials | 20.7 |
Energy | 17.6 |
Industrials | 11.9 |
Health Care | 5.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 92.1% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign | 12.0% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.1% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 28.4% | |||
Auto Components - 0.7% | |||
Spartan Motors, Inc. | 113,410 | $ 1,254,315 | |
Automobiles - 0.3% | |||
National R.V. Holdings, Inc. (a) | 57,700 | 615,659 | |
Distributors - 0.4% | |||
WESCO International, Inc. (a) | 25,000 | 844,750 | |
Hotels, Restaurants & Leisure - 3.7% | |||
Ambassadors Group, Inc. | 3,650 | 124,100 | |
CBRL Group, Inc. | 13,600 | 559,096 | |
Cosi, Inc. (a) | 147,200 | 883,200 | |
Famous Dave's of America, Inc. (a) | 89,900 | 1,069,810 | |
Kerzner International Ltd. (a) | 14,470 | 872,975 | |
La Quinta Corp. unit (a) | 106,300 | 923,747 | |
Penn National Gaming, Inc. (a) | 29,340 | 1,924,411 | |
Wyndham International, Inc. Class A (a) | 834,380 | 792,661 | |
7,150,000 | |||
Household Durables - 3.0% | |||
Interface, Inc. Class A (a) | 284,090 | 2,678,969 | |
Jarden Corp. (a) | 65,650 | 3,019,900 | |
Lifetime Hoan Corp. | 3,358 | 50,571 | |
5,749,440 | |||
Leisure Equipment & Products - 6.1% | |||
Marine Products Corp. | 35,820 | 907,321 | |
MarineMax, Inc. (a) | 48,300 | 1,519,518 | |
RC2 Corp. (a) | 322,990 | 9,350,561 | |
11,777,400 | |||
Media - 0.5% | |||
Emmis Communications Corp. Class A (a) | 51,900 | 911,883 | |
Multiline Retail - 0.7% | |||
Saks, Inc. | 40,300 | 573,469 | |
Tuesday Morning Corp. (a) | 27,300 | 784,329 | |
1,357,798 | |||
Specialty Retail - 7.4% | |||
Asbury Automotive Group, Inc. (a) | 57,800 | 975,664 | |
Cost Plus, Inc. (a) | 60,630 | 1,590,325 | |
Genesco, Inc. (a) | 32,990 | 954,731 | |
Hot Topic, Inc. (a) | 90,915 | 1,761,933 | |
Kirkland's, Inc. (a) | 77,000 | 800,030 | |
La Senza Corp. (sub. vtg.) | 19,100 | 186,221 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Le Chateau, Inc.: | |||
Class A (sub. vtg.) (c) | 17,400 | $ 312,304 | |
Class A (sub. vtg.) | 15,100 | 301,136 | |
Lithia Motors, Inc. Class A (sub. vtg.) | 37,525 | 1,019,930 | |
Monro Muffler Brake, Inc. (a) | 4,100 | 106,354 | |
Pacific Sunwear of California, Inc. (a) | 56,300 | 1,378,787 | |
RONA, Inc. (a) | 58,240 | 2,119,269 | |
Select Comfort Corp. (a) | 31,340 | 613,324 | |
Sonic Automotive, Inc. Class A (sub. vtg.) | 39,800 | 929,728 | |
Steiner Leisure Ltd. (a) | 17,030 | 528,254 | |
The Cato Corp. Class A (sub. vtg.) | 17,240 | 524,096 | |
14,102,086 | |||
Textiles, Apparel & Luxury Goods - 5.6% | |||
Ashworth, Inc. (a) | 39,900 | 449,673 | |
Oxford Industries, Inc. | 91,560 | 3,404,201 | |
Steven Madden Ltd. (a) | 223,110 | 4,283,712 | |
Tommy Hilfiger Corp. (a) | 161,130 | 1,582,297 | |
True Religion Apparel, Inc. (a) | 103,900 | 950,685 | |
10,670,568 | |||
TOTAL CONSUMER DISCRETIONARY | 54,433,899 | ||
CONSUMER STAPLES - 1.8% | |||
Food Products - 1.8% | |||
Green Mountain Coffee Roasters, Inc. (a) | 99,480 | 2,432,286 | |
Hines Horticulture, Inc. (a) | 72,530 | 275,614 | |
Poore Brothers, Inc. (a) | 122,530 | 412,926 | |
Ridley, Inc. (a) | 44,600 | 344,998 | |
3,465,824 | |||
ENERGY - 17.6% | |||
Energy Equipment & Services - 3.3% | |||
Maverick Tube Corp. (a) | 58,620 | 1,996,597 | |
Oil States International, Inc. (a) | 28,860 | 549,783 | |
Pason Systems, Inc. | 107,650 | 3,340,398 | |
Willbros Group, Inc. (a) | 19,960 | 427,942 | |
6,314,720 | |||
Oil & Gas - 14.3% | |||
Blackrock Ventures, Inc. (a) | 166,490 | 1,297,255 | |
Denbury Resources, Inc. (a) | 75,590 | 2,207,228 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Encore Acquisition Co. (a) | 79,080 | $ 2,949,684 | |
General Maritime Corp. (a) | 8,660 | 397,494 | |
Holly Corp. | 132,750 | 4,017,015 | |
Penn Virginia Corp. | 45,670 | 1,934,581 | |
Quicksilver Resources, Inc. (a) | 231,100 | 10,267,765 | |
Range Resources Corp. | 102,150 | 2,266,709 | |
Thunder Energy, Inc. (a) | 268,860 | 1,826,268 | |
Top Tankers, Inc. | 20,400 | 344,556 | |
27,508,555 | |||
TOTAL ENERGY | 33,823,275 | ||
FINANCIALS - 20.7% | |||
Capital Markets - 0.2% | |||
Affiliated Managers Group, Inc. (a) | 6,000 | 380,460 | |
Commercial Banks - 3.0% | |||
Cathay General Bancorp | 30,120 | 1,094,260 | |
Center Financial Corp., California | 82,960 | 1,726,398 | |
Hanmi Financial Corp. | 37,520 | 1,333,086 | |
Nara Bancorp, Inc. | 25,300 | 504,735 | |
Wintrust Financial Corp. | 20,260 | 1,124,025 | |
5,782,504 | |||
Consumer Finance - 0.5% | |||
ACE Cash Express, Inc. (a) | 35,490 | 936,936 | |
Diversified Financial Services - 0.9% | |||
Marlin Business Services Corp. (a) | 99,100 | 1,803,620 | |
Insurance - 8.0% | |||
Arch Capital Group Ltd. (a) | 11,090 | 407,336 | |
HCC Insurance Holdings, Inc. | 54,680 | 1,797,332 | |
Hilb Rogal & Hobbs Co. | 24,650 | 876,554 | |
IPC Holdings Ltd. | 54,600 | 2,304,666 | |
National Interstate Corp. | 1,300 | 20,215 | |
Philadelphia Consolidated Holding Corp. (a) | 12,580 | 843,741 | |
RLI Corp. | 37,520 | 1,630,619 | |
Specialty Underwriters' Alliance, Inc. | 174,900 | 1,708,773 | |
StanCorp Financial Group, Inc. | 11,900 | 1,011,500 | |
United America Indemnity Ltd. Class A | 127,412 | 2,293,416 | |
USI Holdings Corp. (a) | 214,230 | 2,420,799 | |
15,314,951 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Real Estate - 6.7% | |||
American Campus Communities, Inc. | 44,620 | $ 903,555 | |
American Financial Realty Trust (SBI) | 63,800 | 960,190 | |
CarrAmerica Realty Corp. | 18,360 | 557,226 | |
Education Realty Trust, Inc. | 56,300 | 945,277 | |
Extra Space Storage, Inc. | 47,000 | 609,590 | |
Far East Consortium International Ltd. | 1,175,000 | 459,464 | |
Feldman Mall Properties, Inc. | 125,000 | 1,600,000 | |
GMH Communities Trust | 69,100 | 901,064 | |
Highwoods Properties, Inc. (SBI) | 43,900 | 1,075,550 | |
Kilroy Realty Corp. | 37,080 | 1,449,086 | |
Macquarie Goodman Industrial Trust | 920,400 | 1,697,130 | |
Pan Pacific Retail Properties, Inc. | 14,500 | 839,405 | |
Reckson Associates Realty Corp. | 24,570 | 753,808 | |
12,751,345 | |||
Thrifts & Mortgage Finance - 1.4% | |||
Bank Mutual Corp. | 88,100 | 1,064,248 | |
KNBT Bancorp, Inc. | 25,600 | 424,448 | |
NetBank, Inc. | 118,100 | 1,127,855 | |
2,616,551 | |||
TOTAL FINANCIALS | 39,586,367 | ||
HEALTH CARE - 5.4% | |||
Biotechnology - 0.2% | |||
Stratagene Corp. (a) | 61,700 | 407,220 | |
Health Care Equipment & Supplies - 1.3% | |||
Dade Behring Holdings, Inc. (a) | 9,540 | 545,211 | |
DJ Orthopedics, Inc. (a) | 59,880 | 1,446,102 | |
Orthofix International NV (a) | 10,790 | 431,384 | |
2,422,697 | |||
Health Care Providers & Services - 3.7% | |||
Air Methods Corp. (a) | 104,700 | 778,968 | |
America Service Group, Inc. (a) | 32,860 | 901,350 | |
DaVita, Inc. (a) | 9,650 | 404,914 | |
Horizon Health Corp. (a) | 18,400 | 560,280 | |
ICON PLC sponsored ADR (a) | 52,960 | 1,859,955 | |
Medtox Scientific, Inc. (a) | 199,090 | 1,632,538 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Per-Se Technologies, Inc. (a) | 31,957 | $ 466,572 | |
PSS World Medical, Inc. (a) | 32,730 | 410,762 | |
7,015,339 | |||
Pharmaceuticals - 0.2% | |||
Connetics Corp. (a) | 11,500 | 280,830 | |
Par Pharmaceutical Companies, Inc. (a) | 4,000 | 151,600 | |
432,430 | |||
TOTAL HEALTH CARE | 10,277,686 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 0.5% | |||
BE Aerospace, Inc. (a) | 65,760 | 709,550 | |
Ceramic Protection Corp. (a) | 16,700 | 318,243 | |
1,027,793 | |||
Air Freight & Logistics - 1.6% | |||
Dynamex, Inc. (a) | 13,820 | 250,142 | |
Hub Group, Inc. Class A (a) | 10,660 | 580,544 | |
Park-Ohio Holdings Corp. (a) | 92,620 | 2,284,935 | |
3,115,621 | |||
Building Products - 0.2% | |||
Quixote Corp. | 22,300 | 445,777 | |
Commercial Services & Supplies - 1.7% | |||
Banta Corp. | 10,900 | 472,079 | |
Cenveo, Inc. (a) | 213,130 | 628,734 | |
Herman Miller, Inc. | 36,380 | 972,074 | |
Standard Parking Corp. | 50,200 | 761,534 | |
Waste Services, Inc. (a) | 95,000 | 313,500 | |
3,147,921 | |||
Construction & Engineering - 1.9% | |||
Comfort Systems USA, Inc. (a) | 339,600 | 2,312,676 | |
Granite Construction, Inc. | 11,400 | 283,860 | |
URS Corp. (a) | 35,000 | 987,350 | |
3,583,886 | |||
Electrical Equipment - 1.1% | |||
A.O. Smith Corp. | 16,000 | 433,760 | |
Acuity Brands, Inc. | 61,650 | 1,693,526 | |
2,127,286 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Industrial Conglomerates - 0.9% | |||
Carlisle Companies, Inc. | 20,800 | $ 1,311,856 | |
Walter Industries, Inc. | 11,600 | 406,232 | |
1,718,088 | |||
Machinery - 3.6% | |||
Manitowoc Co., Inc. | 42,960 | 1,563,744 | |
Tennant Co. | 24,000 | 929,040 | |
Trinity Industries, Inc. | 6,082 | 183,981 | |
Wabtec Corp. | 35,900 | 669,176 | |
Watts Water Technologies, Inc. Class A | 111,410 | 3,570,691 | |
6,916,632 | |||
Marine - 0.1% | |||
Alexander & Baldwin, Inc. | 4,000 | 184,000 | |
Trading Companies & Distributors - 0.3% | |||
UAP Holding Corp. | 32,000 | 480,000 | |
TOTAL INDUSTRIALS | 22,747,004 | ||
INFORMATION TECHNOLOGY - 4.0% | |||
Electronic Equipment & Instruments - 1.2% | |||
KEMET Corp. (a) | 123,800 | 1,046,110 | |
Mettler-Toledo International, Inc. (a) | 18,430 | 924,449 | |
Winland Electronics, Inc. (a) | 72,860 | 289,254 | |
2,259,813 | |||
Internet Software & Services - 1.0% | |||
Cryptologic, Inc. | 20,260 | 501,337 | |
j2 Global Communications, Inc. (a) | 3,960 | 128,621 | |
Mediagrif Interactive Technologies, Inc. (a) | 101,250 | 803,604 | |
Vitria Technology, Inc. (a) | 105,590 | 432,919 | |
1,866,481 | |||
Semiconductors & Semiconductor Equipment - 1.1% | |||
Cascade Microtech, Inc. | 37,000 | 392,200 | |
Fairchild Semiconductor International, Inc. (a) | 70,000 | 998,900 | |
MKS Instruments, Inc. (a) | 47,700 | 746,505 | |
2,137,605 | |||
Software - 0.7% | |||
Moldflow Corp. (a) | 79,580 | 1,344,902 | |
TOTAL INFORMATION TECHNOLOGY | 7,608,801 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - 2.3% | |||
Chemicals - 2.0% | |||
Albemarle Corp. | 16,500 | $ 579,315 | |
Cytec Industries, Inc. | 15,070 | 768,570 | |
Pioneer Companies, Inc. (a) | 115,290 | 2,463,747 | |
3,811,632 | |||
Metals & Mining - 0.3% | |||
Massey Energy Co. | 18,250 | 692,223 | |
TOTAL MATERIALS | 4,503,855 | ||
TOTAL COMMON STOCKS (Cost $170,461,828) | 176,446,711 | ||
Money Market Funds - 8.6% | |||
Fidelity Cash Central Fund, 2.31% (b) | 16,381,642 | 16,381,642 | |
TOTAL INVESTMENT PORTFOLIO - 100.7% (Cost $186,843,470) | 192,828,353 | ||
NET OTHER ASSETS - (0.7)% | (1,341,346) | ||
NET ASSETS - 100% | $ 191,487,007 |
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) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $312,304 or 0.2% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Le Chateau, Inc. Class A (sub. vtg.) | 12/16/04 | $ 321,007 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 88.0% |
Canada | 6.0% |
Bermuda | 1.4% |
Cayman Islands | 1.2% |
Ireland | 1.0% |
Others (individually less than 1%) | 2.4% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (cost $186,843,470) - See accompanying schedule | $ 192,828,353 | |
Foreign currency held at value (cost $113,820) | 113,669 | |
Receivable for investments sold | 2,558,421 | |
Receivable for fund shares sold | 1,234,960 | |
Dividends receivable | 40,072 | |
Interest receivable | 34,569 | |
Prepaid expenses | 69,563 | |
Other affiliated receivables | 1,055 | |
Other receivables | 28,689 | |
Total assets | 196,909,351 | |
Liabilities | ||
Payable for investments purchased | $ 5,180,265 | |
Payable for fund shares redeemed | 70,768 | |
Accrued management fee | 116,361 | |
Distribution fees payable | 4,145 | |
Other affiliated payables | 32,382 | |
Other payables and accrued expenses | 18,423 | |
Total liabilities | 5,422,344 | |
Net Assets | $ 191,487,007 | |
Net Assets consist of: | ||
Paid in capital | $ 185,399,299 | |
Accumulated net investment loss | (173,598) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 276,113 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,985,193 | |
Net Assets | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.09 | |
Maximum offering price per share (100/94.25 of $11.09) | $ 11.77 | |
Class T: | $ 11.10 | |
Maximum offering price per share (100/96.50 of $11.10) | $ 11.50 | |
Class B: | $ 11.08 | |
Class C: | $ 11.08 | |
Small Cap Value: | $ 11.10 | |
Institutional Class: | $ 11.10 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | ||
Investment Income | ||
Dividends | $ 122,601 | |
Interest | 70,806 | |
Total income | 193,407 | |
Expenses | ||
Management fee | $ 186,717 | |
Transfer agent fees | 60,981 | |
Distribution fees | 7,997 | |
Accounting fees and expenses | 12,551 | |
Non-interested trustees' compensation | 51 | |
Custodian fees and expenses | 21,404 | |
Registration fees | 43,403 | |
Audit | 11,637 | |
Legal | 12 | |
Total expenses before reductions | 344,753 | |
Expense reductions | (47,342) | 297,411 |
Net investment income (loss) | (104,004) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 256,343 | |
Foreign currency transactions | 19,770 | |
Total net realized gain (loss) | 276,113 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 5,984,883 | |
Assets and liabilities in foreign currencies | 310 | |
Total change in net unrealized appreciation (depreciation) | 5,985,193 | |
Net gain (loss) | 6,261,306 | |
Net increase (decrease) in net assets resulting from operations | $ 6,157,302 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (104,004) |
Net realized gain (loss) | 276,113 |
Change in net unrealized appreciation (depreciation) | 5,985,193 |
Net increase (decrease) in net assets resulting | 6,157,302 |
Distributions to shareholders from net investment income | (69,594) |
Share transactions - net increase (decrease) | 185,372,117 |
Redemption fees | 27,182 |
Total increase (decrease) in net assets | 191,487,007 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $173,598) | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.09 |
Total Return B, C, D | 10.95% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.75% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.39% A |
Net investment income (loss) | (.63)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,147 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.10 |
Total Return B, C, D | 11.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.07% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.64% A |
Net investment income (loss) | (.88)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,304 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.56% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,414 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.43% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 3,040 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.31% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 181,522 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.48% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,060 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G 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, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 10,083,627 | |
Unrealized depreciation | (4,158,686) | |
Net unrealized appreciation (depreciation) | $ 5,924,941 | |
Cost for federal income tax purposes | $ 186,903,412 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
Semiannual Report
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $181,634,225 and $11,402,518, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .73% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 846 | $ 366 |
Class T | .25% | .25% | 1,730 | 732 |
Class B | .75% | .25% | 2,162 | 1,999 |
Class C | .75% | .25% | 3,259 | 2,344 |
$ 7,997 | $ 5,441 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 4,302 |
Class T | 1,849 |
Class B * | 98 |
Class C * | - |
$ 6,249 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Value. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Value shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 868 | .26* |
Class T | 1,158 | .34* |
Class B | 534 | .25* |
Class C | 627 | .19* |
Small Cap Value | 57,440 | .24* |
Institutional Class | 354 | .17* |
$ 60,981 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
Semiannual Report
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 $61,054 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 were $14,231 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 839 |
Class T | 1.75% | 1,091 |
Class B | 2.25% | 666 |
Class C | 2.25% | 571 |
Small Cap Value | 1.25% | 15,034 |
Institutional Class | 1.25% | 476 |
$ 18,677 |
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 $28,665 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
November 3, 2004 (commencement of operations) to | |
From net investment income | |
Class A | $ 723 |
Small Cap Value | 68,438 |
Institutional Class | 433 |
Total | $ 69,594 |
Semiannual Report
9. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
November 3, 2004 (commencement of operations) to January 31, 2005 | November 3, 2004 (commencement of operations) to January 31, 2005 | |
Class A | ||
Shares sold | 193,487 | $ 2,028,329 |
Reinvestment of distributions | 54 | 590 |
Net increase (decrease) | 193,541 | $ 2,028,919 |
Class T | ||
Shares sold | 207,872 | $ 2,197,638 |
Shares redeemed | (229) | (2,544) |
Net increase (decrease) | 207,643 | $ 2,195,094 |
Class B | ||
Shares sold | 127,792 | $ 1,329,789 |
Shares redeemed | (189) | (2,048) |
Net increase (decrease) | 127,603 | $ 1,327,741 |
Class C | ||
Shares sold | 276,817 | $ 2,931,865 |
Shares redeemed | (2,521) | (27,703) |
Net increase (decrease) | 274,296 | $ 2,904,162 |
Small Cap Value | ||
Shares sold | 16,534,181 | $ 177,946,027 |
Reinvestment of distributions | 6,024 | 66,449 |
Shares redeemed | (191,628) | (2,079,070) |
Net increase (decrease) | 16,348,577 | $ 175,933,406 |
Institutional Class | ||
Shares sold | 95,449 | $ 982,362 |
Reinvestment of distributions | 39 | 433 |
Net increase (decrease) | 95,488 | $ 982,795 |
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
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
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
SCV-USAN-0305
1.803708.100
Fidelity®
Real Estate Income
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Changes | 6 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 24 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 28 | Notes to the financial statements. |
Report of Independent Registered Public Accounting Firm | 33 | |
Top Fifty Securities and Derivatives of Fidelity's Fixed-Income Central Fund | 35 |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,071.80 | $ 4.49 |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,020.87 | $ 4.38 |
* Expenses are equal to the Fund's annualized expense ratio of .86%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Changes
Top Five Stocks as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
MFA Mortgage Investments, Inc. Series A, 8.50% | 0.9 | 0.9 |
Annaly Mortgage Management, Inc. | 0.9 | 1.1 |
Apartment Investment & Management Co. | 0.9 | 1.2 |
LaSalle Hotel Properties Series A, 10.25% | 0.8 | 1.2 |
Affordable Residential Communties, Inc. | 0.8 | 1.1 |
4.3 | ||
Top Five Bonds as of January 31, 2005 | ||
(with maturities greater than one year) | % of fund's | % of fund's net assets |
J.P. Morgan Commercial Mortgage Finance Corp. Series 1997-C5 Class F, 7.5605% 9/15/29 | 1.1 | 1.3 |
MeriStar Hospitality Corp. 9% 1/15/08 | 0.7 | 0.7 |
LNR Property Corp. Tranche B, term loan 5.59% 1/31/08 | 0.7 | 0.0 |
Banc of America Large Loan, Inc. floater Series 2003-BBA2 Class A3, 2.8% 11/15/15 | 0.7 | 0.0 |
Cohen Financial Capital Management LLC 9% 6/1/14 | 0.7 | 0.0 |
3.9 | ||
Top Five REIT Sectors as of January 31, 2005 | ||
% of fund's | % of fund's net assets | |
REITs - Mortgage | 10.2 | 6.7 |
REITs - Office Buildings | 7.5 | 8.7 |
REITs - Management/Investment | 6.8 | 5.7 |
REITs - Shopping Centers | 6.6 | 7.3 |
REITs - Apartments | 6.6 | 6.1 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005 * | As of July 31, 2004 ** | ||||||
![]() | Stocks 45.0% | ![]() | Stocks 45.7% | ||||
![]() | Bonds 45.1% | ![]() | Bonds 43.5% | ||||
![]() | Convertible | ![]() | Convertible | ||||
![]() | Other Investments 3.3% | ![]() | Other Investments 2.3% | ||||
![]() | Short-Term | ![]() | Short-Term | ||||
* Foreign investments | 1.4% | ** Foreign investments | 1.4% |
The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.
Semiannual Report
Investments January 31, 2005
Showing Percentage of Net Assets
Common Stocks - 15.8% | |||
Shares | Value | ||
CONSUMER DISCRETIONARY - 0.4% | |||
Household Durables - 0.4% | |||
KB Home | 12,200 | $ 1,325,530 | |
Ryland Group, Inc. | 18,000 | 1,167,660 | |
2,493,190 | |||
FINANCIALS - 15.4% | |||
Real Estate - 15.4% | |||
Aames Investment Corp. Maryland | 50,000 | 524,500 | |
Acadia Realty Trust (SBI) | 190,300 | 3,056,218 | |
AMB Property Corp. (SBI) | 21,000 | 781,830 | |
American Campus Communities, Inc. | 62,000 | 1,255,500 | |
American Financial Realty Trust (SBI) | 91,600 | 1,378,580 | |
Annaly Mortgage Management, Inc. | 52,000 | 1,019,200 | |
Anworth Mortgage Asset Corp. | 86,500 | 861,540 | |
Apartment Investment & Management Co. Class A | 18,000 | 646,200 | |
Arbor Realty Trust, Inc. | 36,900 | 878,220 | |
Arden Realty, Inc. | 20,100 | 677,772 | |
AvalonBay Communities, Inc. | 18,900 | 1,264,788 | |
Bimini Mortgage Management, Inc. | 176,700 | 2,669,937 | |
BNP Residential Properties, Inc. | 64,400 | 1,038,128 | |
Boston Properties, Inc. | 27,200 | 1,571,616 | |
Capital Lease Funding, Inc. | 105,000 | 1,310,400 | |
Catellus Development Corp. | 42,200 | 1,131,804 | |
Commercial Net Lease Realty, Inc. | 34,800 | 652,500 | |
Cornerstone Realty Income Trust, Inc. | 207,600 | 1,995,036 | |
Duke Realty Corp. | 77,000 | 2,394,700 | |
Eagle Hospitality Properties Trust, Inc. | 141,600 | 1,386,264 | |
Education Realty Trust, Inc. | 79,900 | 1,341,521 | |
Equity Lifestyle Properties, Inc. | 68,030 | 2,332,068 | |
Equity Residential (SBI) | 81,300 | 2,564,202 | |
Federal Realty Investment Trust (SBI) | 66,200 | 3,123,316 | |
General Growth Properties, Inc. | 117,740 | 3,740,600 | |
Glenborough Realty Trust, Inc. | 92,800 | 1,787,328 | |
GMH Communities Trust | 76,000 | 991,040 | |
Health Care Property Investors, Inc. | 11,500 | 298,540 | |
Health Care REIT, Inc. | 61,100 | 2,046,850 | |
Healthcare Realty Trust, Inc. | 42,800 | 1,560,916 | |
Hersha Hospitality Trust | 127,700 | 1,405,977 | |
Home Properties of New York, Inc. | 6,000 | 242,400 | |
HomeBanc Mortgage Corp., Georgia | 127,000 | 1,191,260 | |
Impac Mortgage Holdings, Inc. | 32,700 | 746,868 | |
Common Stocks - continued | |||
Shares | Value | ||
FINANCIALS - continued | |||
Real Estate - continued | |||
Inland Real Estate Corp. | 221,100 | $ 3,354,087 | |
Kimco Realty Corp. | 55,700 | 2,950,986 | |
Lexington Corporate Properties Trust | 99,300 | 2,125,020 | |
LTC Properties, Inc. | 35,000 | 681,800 | |
Luminent Mortgage Capital, Inc. | 50,000 | 556,500 | |
MeriStar Hospitality Corp. (a) | 110,000 | 849,200 | |
MFA Mortgage Investments, Inc. | 115,600 | 966,416 | |
MortgageIT Holdings, Inc. | 126,600 | 2,297,790 | |
Nationwide Health Properties, Inc. | 55,700 | 1,208,133 | |
New Century Financial Corp. | 23,300 | 1,395,437 | |
Newcastle Investment Corp. | 45,500 | 1,375,920 | |
Origen Financial, Inc. (d) | 100,000 | 800,000 | |
Origen Financial, Inc. | 70,600 | 564,800 | |
Prentiss Properties Trust (SBI) | 40,600 | 1,454,698 | |
Redwood Trust, Inc. | 17,000 | 963,220 | |
Regency Centers Corp. | 18,500 | 913,900 | |
Saxon Capital, Inc. | 39,500 | 855,175 | |
Simon Property Group, Inc. | 47,004 | 2,787,337 | |
Spirit Finance Corp. (d) | 200,000 | 2,380,000 | |
Spirit Finance Corp. | 50,000 | 595,000 | |
Sunstone Hotel Investors, Inc. | 67,700 | 1,414,930 | |
The St. Joe Co. | 10,100 | 694,880 | |
Trizec Properties, Inc. | 132,000 | 2,337,720 | |
U-Store-It Trust | 60,000 | 984,000 | |
U.S. Restaurant Properties, Inc. | 25,100 | 420,425 | |
United Dominion Realty Trust, Inc. (SBI) | 68,900 | 1,530,958 | |
Ventas, Inc. | 89,400 | 2,288,640 | |
Vornado Realty Trust | 38,500 | 2,661,890 | |
W.P. Carey & Co. LLC | 40,900 | 1,321,070 | |
92,597,551 | |||
TOTAL COMMON STOCKS (Cost $84,444,496) | 95,090,741 | ||
Preferred Stocks - 30.0% | |||
Shares | Value | ||
Convertible Preferred Stocks - 0.8% | |||
FINANCIALS - 0.8% | |||
Real Estate - 0.8% | |||
Crescent Real Estate Equities Co. Series A, 6.75% | 17,700 | $ 393,825 | |
Equity Office Properties Trust Series B, 5.25% | 74,000 | 3,777,700 | |
Glenborough Realty Trust, Inc. Series A, 7.75% | 38,330 | 976,265 | |
5,147,790 | |||
Nonconvertible Preferred Stocks - 29.2% | |||
CONSUMER DISCRETIONARY - 0.0% | |||
Hotels, Restaurants & Leisure - 0.0% | |||
Hilton Hotels Corp. 8.00% | 4,800 | 126,288 | |
FINANCIALS - 29.2% | |||
Diversified Financial Services - 0.6% | |||
Westcoast Hospitality Capital Trust 9.50% | 135,000 | 3,600,450 | |
Real Estate - 28.6% | |||
Accredited Mortgage Loan Trust Series A, 9.75% | 162,595 | 4,349,416 | |
Affordable Residential Communties, Inc. Series A, 8.25% | 184,000 | 4,839,200 | |
Alexandria Real Estate Equities, Inc.: | |||
Series B, 9.10% | 101,200 | 2,747,580 | |
Series C, 8.375% | 25,000 | 669,000 | |
American Home Mortgage Investment Corp.: | |||
Series A, 9.375% | 120,000 | 3,199,200 | |
Series B, 9.25% | 82,000 | 2,148,400 | |
Annaly Mortgage Management, Inc. Series A, 7.875% | 207,000 | 5,222,610 | |
Anthracite Capital, Inc. Series C, 9.375% | 46,000 | 1,239,700 | |
Anworth Mortgage Asset Corp. Series A, 8.625% | 66,727 | 1,684,857 | |
Apartment Investment & Management Co.: | |||
Series G, 9.375% | 66,600 | 1,811,520 | |
Series Q, 10.10% | 82,490 | 2,205,783 | |
Series R, 10.00% | 96,800 | 2,605,856 | |
Series T, 8.00% | 204,400 | 5,222,420 | |
Series U, 7.75% | 48,812 | 1,225,181 | |
Series V, 8.00% | 40,000 | 1,023,600 | |
Series Y, 7.875% | 40,000 | 1,003,200 | |
Ashford Hospitality Trust, Inc. Series A, 8.55% | 100,000 | 2,640,000 | |
Bedford Property Investors, Inc.: | |||
Series A, 8.75% (d) | 69,000 | 3,657,000 | |
Series B, 7.625% | 64,800 | 1,668,600 | |
Brandywine Realty Trust Series C, 7.50% | 54,000 | 1,385,100 | |
Capital Automotive 6.75% | 153,000 | 3,880,080 | |
Preferred Stocks - continued | |||
Shares | Value | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
CBL & Associates Properties, Inc.: | |||
(depositary shares) Series C, 7.75% | 48,600 | $ 1,275,750 | |
Series B, 8.75% | 60,000 | 3,297,000 | |
Cedar Shopping Centers, Inc. 8.875% | 80,000 | 2,144,000 | |
CenterPoint Properties Trust Series D, 5.377% | 3,000 | 3,000,000 | |
Colonial Properties Trust Series C, 9.25% | 30,000 | 793,800 | |
Commercial Net Lease Realty, Inc. Series A, 9.00% | 19,200 | 520,320 | |
Cousins Properties, Inc.: | |||
Series A, 7.75% | 131,700 | 3,397,860 | |
Series B, 7.50% | 40,000 | 1,010,000 | |
Crescent Real Estate Equities Co. Series B, 9.50% | 10,400 | 276,120 | |
CRT Properties, Inc. Series A, 8.50% | 25,000 | 660,500 | |
Developers Diversified Realty Corp. (depositary shares): | |||
Class F, 8.60% | 7,200 | 194,040 | |
Class G, 8.00% | 42,800 | 1,144,044 | |
Duke Realty Corp. (depositary shares) Series B, 7.99% | 63,700 | 3,264,625 | |
Eastgroup Properties, Inc. Series D, 7.95% | 104,000 | 2,766,400 | |
Entertainment Properties Trust Series A 9.50% | 40,000 | 1,096,000 | |
Equity Inns, Inc. Series B, 8.75% | 60,000 | 1,592,400 | |
Federal Realty Investment Trust Series B, 8.50% | 11,600 | 310,416 | |
Glimcher Realty Trust: | |||
Series F, 8.75% | 62,000 | 1,626,260 | |
Series G, 8.125% | 127,000 | 3,302,000 | |
Health Care REIT, Inc.: | |||
Series D, 7.875% | 30,000 | 788,100 | |
Series F, 7.625% | 40,000 | 1,020,000 | |
Highwoods Properties, Inc.: | |||
(depositary shares) Series D, 8.00% | 36,300 | 910,404 | |
Series A, 8.625% | 214 | 213,465 | |
Series B, 8.00% | 37,500 | 947,250 | |
Host Marriott Corp.: | |||
Class B, 10.00% | 22,300 | 570,434 | |
Class C, 10.00% | 8,500 | 226,270 | |
Series E, 8.875% | 40,000 | 1,108,000 | |
HRPT Properties Trust: | |||
Series A, 9.875% | 11,500 | 304,750 | |
Series B, 8.75% | 29,700 | 807,840 | |
Impac Mortgage Holdings, Inc. Series C, 9.125% | 130,000 | 3,347,500 | |
Innkeepers USA Trust Series C, 8.00% | 70,000 | 1,799,000 | |
Preferred Stocks - continued | |||
Shares | Value | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
iStar Financial, Inc.: | |||
Series D, 8.00% | 4,000 | $ 102,320 | |
Series E, 7.875% | 27,000 | 704,700 | |
Series F, 7.80% | 13,800 | 360,870 | |
Kilroy Realty Corp. Series E, 7.80% | 44,000 | 1,117,600 | |
Kramont Realty Trust Series E, 8.25% | 140,000 | 3,542,000 | |
La Quinta Properties, Inc. (depositary shares) Series A, 9.00% (a) | 10,000 | 257,500 | |
LaSalle Hotel Properties: | |||
Series A, 10.25% | 178,900 | 4,955,530 | |
Series B, 8.375% | 19,400 | 529,620 | |
Lexington Corporate Properties Trust Series B, 8.05% | 124,500 | 3,261,900 | |
LTC Properties, Inc. Series F, 8.00% | 79,300 | 2,061,800 | |
MFA Mortgage Investments, Inc. Series A, 8.50% | 209,400 | 5,371,110 | |
Mid-America Apartment Communities, Inc. Series H, 8.30% | 127,800 | 3,361,140 | |
Nationwide Health Properties, Inc. 7.677% | 36,439 | 3,807,876 | |
New Plan Excel Realty Trust (depositary shares) Series D, 7.80% | 22,231 | 1,161,570 | |
Newcastle Investment Corp. Series B, 9.75% | 149,700 | 4,139,205 | |
Novastar Financial, Inc. Series C, 8.90% | 35,800 | 918,986 | |
Omega Healthcare Investors, Inc.: | |||
Series B, 8.625% | 32,000 | 813,440 | |
Series D, 8.375% | 159,800 | 4,135,624 | |
Parkway Properties, Inc. Series D, 8.00% | 165,000 | 4,323,000 | |
Prime Group Realty Trust Series B, 9.00% | 45,600 | 1,140,000 | |
ProLogis Series C, 8.54% | 6,478 | 370,866 | |
PS Business Parks, Inc.: | |||
(depositary shares) 7.60% | 32,500 | 835,250 | |
(depositary shares) Series F, 8.75% | 21,500 | 577,275 | |
Series D, 9.50% | 28,100 | 751,675 | |
RAIT Investment Trust: | |||
Series A, 7.75% | 185,900 | 4,666,090 | |
Series B, 8.375% | 111,300 | 2,820,342 | |
Realty Income Corp. 8.25% | 76,800 | 2,162,688 | |
Saul Centers, Inc. 8.00% | 156,800 | 4,131,680 | |
Simon Property Group, Inc.: | |||
Series G, 7.89% | 28,900 | 1,550,485 | |
Series J, 8.375% | 17,100 | 1,026,000 | |
SNH Capital Trust I Series Z, 10.125% | 43,300 | 1,162,605 | |
Preferred Stocks - continued | |||
Shares | Value | ||
Nonconvertible Preferred Stocks - continued | |||
FINANCIALS - continued | |||
Real Estate - continued | |||
Taubman Centers, Inc.: | |||
Series A, 8.30% | 86,500 | $ 2,184,125 | |
Series G, 8.00% | 25,000 | 643,750 | |
The Mills Corp.: | |||
Series B, 9.00% | 25,000 | 682,500 | |
Series C, 9.00% | 63,100 | 1,720,106 | |
Series E, 8.75% | 44,100 | 1,193,346 | |
United Dominion Realty Trust, Inc. Series B, 8.60% | 12,500 | 341,125 | |
Winston Hotels, Inc. Series B, 8.00% | 35,600 | 916,700 | |
171,945,250 | |||
TOTAL FINANCIALS | 175,545,700 | ||
TOTAL NONCONVERTIBLE PREFERRED STOCKS | 175,671,988 | ||
TOTAL PREFERRED STOCKS (Cost $174,727,150) | 180,819,778 |
Nonconvertible Bonds - 25.1% | ||||
Principal Amount | ||||
CONSUMER DISCRETIONARY - 3.5% | ||||
Hotels, Restaurants & Leisure - 1.4% | ||||
Felcor Lodging LP 9% 6/1/11 (f) | $ 1,000,000 | 1,125,000 | ||
Hilton Hotels Corp. 7.625% 5/15/08 | 1,680,000 | 1,862,700 | ||
HMH Properties, Inc. 7.875% 8/1/08 | 202,000 | 208,060 | ||
Host Marriott LP: | ||||
7% 8/15/12 (d) | 1,500,000 | 1,565,700 | ||
7.125% 11/1/13 | 1,503,000 | 1,583,786 | ||
John Q. Hammons Hotels LP/John Q. Hammons Hotels Corp. III 8.875% 5/15/12 | 2,080,000 | 2,314,000 | ||
8,659,246 | ||||
Household Durables - 2.1% | ||||
Beazer Homes USA, Inc. 8.375% 4/15/12 | 1,000,000 | 1,100,000 | ||
D.R. Horton, Inc.: | ||||
4.875% 1/15/10 | 1,000,000 | 995,000 | ||
9.375% 3/15/11 | 300,000 | 331,875 | ||
K. Hovnanian Enterprises, Inc.: | ||||
6% 1/15/10 (d) | 420,000 | 420,000 | ||
7.75% 5/15/13 | 1,500,000 | 1,605,000 | ||
Nonconvertible Bonds - continued | ||||
Principal Amount | Value | |||
CONSUMER DISCRETIONARY - continued | ||||
Household Durables - continued | ||||
KB Home: | ||||
5.875% 1/15/15 | $ 1,000,000 | $ 990,000 | ||
7.75% 2/1/10 | 1,000,000 | 1,085,000 | ||
Ryland Group, Inc. 9.125% 6/15/11 | 1,000,000 | 1,102,500 | ||
Standard Pacific Corp. 9.25% 4/15/12 | 1,600,000 | 1,848,000 | ||
WCI Communities, Inc.: | ||||
7.875% 10/1/13 | 370,000 | 394,975 | ||
9.125% 5/1/12 | 1,500,000 | 1,668,750 | ||
William Lyon Homes, Inc. 7.5% 2/15/14 | 1,000,000 | 957,500 | ||
12,498,600 | ||||
TOTAL CONSUMER DISCRETIONARY | 21,157,846 | |||
FINANCIALS - 19.5% | ||||
Diversified Financial Services - 0.7% | ||||
Cohen Financial Capital Management LLC 9% 6/1/14 (d)(e) | 4,000,000 | 4,000,000 | ||
Real Estate - 18.8% | ||||
Ahold Lease Series 2001 A1 pass thru trust certificates 7.82% 1/2/20 | 1,512,867 | 1,637,678 | ||
AMB Property LP: | ||||
6.9% 6/30/15 (f) | 1,200,000 | 1,219,682 | ||
7.2% 12/15/05 | 1,080,000 | 1,113,504 | ||
American Health Properties, Inc. 7.5% 1/15/07 | 1,000,000 | 1,059,159 | ||
American Real Estate Partners/American Real Estate Finance Corp. 8.125% 6/1/12 | 3,190,000 | 3,389,375 | ||
Archstone-Smith Trust 5% 8/15/07 | 200,000 | 204,500 | ||
Arden Realty LP: | ||||
5.2% 9/1/11 | 500,000 | 506,191 | ||
7% 11/15/07 | 1,000,000 | 1,082,854 | ||
8.5% 11/15/10 | 1,000,000 | 1,181,723 | ||
8.875% 3/1/05 | 500,000 | 502,260 | ||
Bay Apartment Communities, Inc. 6.625% 1/15/08 | 840,000 | 897,168 | ||
Brandywine Operating Partnership LP 4.5% 11/1/09 | 1,000,000 | 992,657 | ||
Camden Property Trust 4.375% 1/15/10 | 620,000 | 616,122 | ||
Nonconvertible Bonds - continued | ||||
Principal Amount | Value | |||
FINANCIALS - continued | ||||
Real Estate - continued | ||||
CarrAmerica Realty Corp.: | ||||
3.625% 4/1/09 | $ 1,000,000 | $ 970,106 | ||
5.25% 11/30/07 | 1,525,000 | 1,565,814 | ||
CB Richard Ellis Services, Inc. 9.75% 5/15/10 | 1,932,000 | 2,202,480 | ||
Colonial Properties Trust: | ||||
6.25% 6/15/14 | 1,000,000 | 1,071,114 | ||
7% 7/14/07 | 1,000,000 | 1,057,559 | ||
Commercial Net Lease Realty, Inc. 6.25% 6/15/14 | 500,000 | 523,690 | ||
Crescent Real Estate Equities LP 7.5% 9/15/07 (f) | 1,500,000 | 1,560,000 | ||
Crescent Real Estate Equities LP/Crescent Finance Co. 9.25% 4/15/09 | 2,000,000 | 2,170,000 | ||
Developers Diversified Realty Corp.: | ||||
4.625% 8/1/10 | 1,505,000 | 1,494,251 | ||
6.625% 1/15/08 | 550,000 | 582,651 | ||
7.5% 7/15/18 | 200,000 | 224,631 | ||
Duke Realty LP: | ||||
5.25% 1/15/10 | 200,000 | 207,114 | ||
6.8% 2/12/09 | 1,500,000 | 1,651,106 | ||
EOP Operating LP: | ||||
3.16% 10/1/10 (f) | 3,000,000 | 3,014,601 | ||
8.375% 3/15/06 | 1,000,000 | 1,049,230 | ||
ERP Operating LP 6.63% 4/13/15 | 450,000 | 453,172 | ||
Evans Withycombe Residential LP 7.625% 4/15/07 | 1,675,000 | 1,793,756 | ||
Federal Realty Investment Trust 6.125% 11/15/07 | 1,200,000 | 1,259,467 | ||
First Industrial LP: | ||||
5.25% 6/15/09 | 1,000,000 | 1,025,591 | ||
7.375% 3/15/11 | 2,100,000 | 2,351,517 | ||
7.6% 5/15/07 | 1,000,000 | 1,077,120 | ||
Gables Realty LP: | ||||
5.75% 7/15/07 | 1,100,000 | 1,137,195 | ||
7.25% 2/15/06 | 500,000 | 514,328 | ||
Health Care REIT, Inc.: | ||||
6% 11/15/13 | 1,000,000 | 1,038,487 | ||
7.5% 8/15/07 | 1,500,000 | 1,614,747 | ||
8% 9/12/12 | 1,450,000 | 1,704,807 | ||
Healthcare Realty Trust, Inc. 8.125% 5/1/11 | 2,790,000 | 3,289,379 | ||
Heritage Property Investment Trust, Inc. 4.5% 10/15/09 (d) | 1,500,000 | 1,477,982 | ||
Highwoods/Forsyth LP: | ||||
7% 12/1/06 | 500,000 | 520,706 | ||
Nonconvertible Bonds - continued | ||||
Principal Amount | Value | |||
FINANCIALS - continued | ||||
Real Estate - continued | ||||
Highwoods/Forsyth LP: - continued | ||||
7.125% 2/1/08 | $ 950,000 | $ 1,012,550 | ||
7.5% 4/15/18 | 1,250,000 | 1,361,544 | ||
Hospitality Properties Trust 6.75% 2/15/13 | 1,610,000 | 1,787,382 | ||
HRPT Properties Trust 6.5% 1/15/13 | 200,000 | 216,860 | ||
iStar Financial, Inc.: | ||||
5.125% 4/1/11 | 1,000,000 | 1,002,790 | ||
6.5% 12/15/13 | 1,000,000 | 1,067,500 | ||
7% 3/15/08 | 1,800,000 | 1,923,750 | ||
Liberty Property LP 7.25% 8/15/07 | 1,500,000 | 1,608,858 | ||
LNR Property Corp. 7.625% 7/15/13 | 1,000,000 | 1,130,000 | ||
Mack-Cali Realty LP 7.25% 3/15/09 | 100,000 | 109,854 | ||
MeriStar Hospitality Corp. 9% 1/15/08 | 4,000,000 | 4,220,000 | ||
MeriStar Hospitality Operating Partnership LP/MeriStar Hospitality Finance Corp. III 9.125% 1/15/11 | 750,000 | 810,000 | ||
Nationwide Health Properties, Inc. 8.25% 7/1/12 | 1,300,000 | 1,494,678 | ||
Omega Healthcare Investors, Inc.: | ||||
7% 4/1/14 | 1,970,000 | 1,970,000 | ||
7% 4/1/14 (d) | 500,000 | 500,000 | ||
Post Apartment Homes LP: | ||||
5.125% 10/12/11 | 1,500,000 | 1,503,945 | ||
6.85% 3/16/15 (f) | 2,085,000 | 2,090,848 | ||
7.7% 12/20/10 | 2,500,000 | 2,854,470 | ||
Price Development Co. LP 7.29% 3/11/08 | 2,200,000 | 2,343,000 | ||
ProLogis 7.1% 4/15/08 | 775,000 | 846,175 | ||
Reckson Operating Partnership LP 7.75% 3/15/09 | 2,600,000 | 2,900,872 | ||
Security Capital Industrial Trust 7.95% 5/15/08 | 130,000 | 141,707 | ||
Senior Housing Properties Trust: | ||||
7.875% 4/15/15 | 585,000 | 640,575 | ||
8.625% 1/15/12 | 1,500,000 | 1,710,000 | ||
Shopping Center Associates 7.625% 5/15/05 (d) | 1,500,000 | 1,516,428 | ||
Shurgard Storage Centers, Inc. 5.875% 3/15/13 | 1,000,000 | 1,039,312 | ||
Simon Property Group LP: | ||||
5.375% 8/28/08 | 550,000 | 571,221 | ||
7.125% 6/24/05 | 775,000 | 786,703 | ||
Tanger Properties LP 9.125% 2/15/08 | 300,000 | 337,500 | ||
The Rouse Co.: | ||||
3.625% 3/15/09 | 1,000,000 | 940,493 | ||
5.375% 11/26/13 | 2,000,000 | 1,931,116 | ||
7.2% 9/15/12 | 3,220,000 | 3,496,308 | ||
Nonconvertible Bonds - continued | ||||
Principal Amount | Value | |||
FINANCIALS - continued | ||||
Real Estate - continued | ||||
Thornburg Mortgage, Inc. 8% 5/15/13 | $ 3,000,000 | $ 3,180,000 | ||
United Dominion Realty Trust: | ||||
5% 1/15/12 | 1,000,000 | 996,615 | ||
7.95% 7/12/06 | 2,200,000 | 2,322,971 | ||
United Dominion Realty Trust, Inc. 6.5% 6/15/09 | 325,000 | 350,678 | ||
Ventas Realty LP/Ventas Capital Corp.: | ||||
6.625% 10/15/14 | 1,670,000 | 1,686,700 | ||
8.75% 5/1/09 | 800,000 | 888,000 | ||
9% 5/1/12 | 1,961,000 | 2,274,760 | ||
Vornado Realty LP 4.5% 8/15/09 | 1,000,000 | 997,957 | ||
Vornado Realty Trust 5.625% 6/15/07 | 1,700,000 | 1,759,458 | ||
113,329,052 | ||||
TOTAL FINANCIALS | 117,329,052 | |||
HEALTH CARE - 0.8% | ||||
Health Care Providers & Services - 0.8% | ||||
Beverly Enterprises, Inc. 7.875% 6/15/14 (d) | 1,030,000 | 1,153,600 | ||
Extendicare Health Services, Inc. 6.875% 5/1/14 | 1,500,000 | 1,518,750 | ||
Genesis HealthCare Corp. 8% 10/15/13 | 2,080,000 | 2,246,400 | ||
4,918,750 | ||||
TELECOMMUNICATION SERVICES - 1.3% | ||||
Wireless Telecommunication Services - 1.3% | ||||
American Tower Corp. 7.125% 10/15/12 (d) | 1,500,000 | 1,503,750 | ||
American Tower Escrow Corp. 0% 8/1/08 (c) | 2,000,000 | 1,502,600 | ||
Crown Castle International Corp.: | ||||
Series B, 7.5% 12/1/13 | 2,160,000 | 2,284,200 | ||
7.5% 12/1/13 | 90,000 | 95,175 | ||
9.375% 8/1/11 | 2,000,000 | 2,215,000 | ||
7,600,725 | ||||
TOTAL NONCONVERTIBLE BONDS (Cost $146,938,587) | 151,006,373 | |||
Asset-Backed Securities - 1.9% | ||||
ABSC NIMS Trust: | ||||
Series 2003-HE4 Class A, 7% 8/17/33 (d) | 412,857 | 413,889 | ||
Series 2003-HE5 Class A, 7% 8/17/33 (d) | 264,518 | 265,576 | ||
Series 2003-HE7 Class A, 7% 12/15/33 (d) | 489,129 | 492,797 | ||
Asset-Backed Securities - continued | ||||
Principal Amount | Value | |||
Conseco Finance Securitizations Corp. Series 2000-4 Class A4, 7.73% 4/1/31 | $ 1,175,458 | $ 1,127,617 | ||
Countrywide Home Loans Series 2004-11N Class N, 5.25% 4/25/36 (d) | 650,210 | 648,337 | ||
Crest Dartmouth Street Ltd./Crest Dartmouth Street Corp. Series 2003-1A Class D, 9% 6/28/38 (d) | 850,000 | 931,016 | ||
Fremont NIMS Trust Series 2003-B Class NOTE, 5.65% 11/25/33 (d) | 71,574 | 71,663 | ||
Green Tree Financial Corp. Series 1996-4 Class M1, 7.75% 6/15/27 | 1,788,179 | 1,426,011 | ||
GS Mortgage Securities Corp. 5.5% 11/25/32 (d) | 81,116 | 81,116 | ||
Home Equity Asset Trust Series 2003-6 Class NIMS 22, 6.5% 3/27/34 (d) | 624,971 | 625,753 | ||
Home Equity Asset Trust NIMS Trust Series 2003-2N Class A, 8% 9/27/33 (d) | 6,851 | 6,851 | ||
Morgan Stanley Dean Witter Capital I Trust Series 2001-NC2 Class B1, 4.48% 1/25/32 (f) | 188,237 | 187,932 | ||
OMI Trust: | ||||
Series 2000-A Class A2, 7.765% 5/15/17 | 989,543 | 833,711 | ||
Series 2002-B Class A4, 7.09% 6/15/32 | 2,000,000 | 1,899,475 | ||
Park Place NIMS Trust Series 2004-WCW1, 5.65% 9/25/34 (d) | 927,661 | 929,980 | ||
Park Place Securities NIM Trust Series 2004-WHQN2 Class A, 4% 2/25/35 (d) | 1,162,384 | 1,160,640 | ||
TOTAL ASSET-BACKED SECURITIES (Cost $11,241,298) | 11,102,364 | |||
Collateralized Mortgage Obligations - 1.8% | ||||
Private Sponsor - 1.7% | ||||
Countrywide Home Loans, Inc.: | ||||
Series 2002-38 Class B3, 5% 2/25/18 (d) | 225,201 | 209,507 | ||
Series 2002-R2 Class 2B3, 4.3457% 7/25/33 (d)(f) | 279,799 | 176,798 | ||
Series 2003-40 Class B3, 4.5% 10/25/18 | 280,961 | 248,826 | ||
Series 2003-R2 Class B3, 5.5% 5/25/43 (d) | 599,458 | 444,161 | ||
Series 2003-R3: | ||||
Class B2, 5.5% 11/25/33 | 1,896,757 | 1,625,876 | ||
Class B3, 5.5% 11/25/33 | 567,950 | 446,018 | ||
Series 2004-R1 Class 1B3, 5.5% 11/25/34 (f) | 666,031 | 514,509 | ||
CS First Boston Mortgage Securities Corp. Series 2003-TFLA Class F, 2.9433% 4/15/13 (d)(f) | 2,000,000 | 1,998,938 | ||
Collateralized Mortgage Obligations - continued | ||||
Principal Amount | Value | |||
Private Sponsor - continued | ||||
Residential Finance LP/Residential Finance Development Corp. floater: | ||||
Series 2002-A Class B10, 18.62% 10/10/34 (f) | $ 557,951 | $ 584,454 | ||
Series 2003-B Class B9, 14.37% 7/10/35 (d)(f) | 974,518 | 1,021,119 | ||
Series 2004-C Class B5, 3.77% 9/10/36 (f) | 398,232 | 398,232 | ||
Residential Funding Mortgage Securities I, Inc. | 90,772 | 86,432 | ||
Residential Funding Securities Corp. Series 2002-RM1 Class BI1, 5.5% 12/25/17 (d) | 189,723 | 167,283 | ||
Resix Finance Ltd. floater: | ||||
Series 2003-D Class B8, 8.92% 12/10/35 (d)(f) | 736,508 | 762,809 | ||
Series 2004-A Class B7, 6.87% 2/10/36 (d)(f) | 691,878 | 691,874 | ||
Series 2004-B Class B7, 6.42% 2/10/36 (d)(f) | 831,998 | 834,738 | ||
TOTAL PRIVATE SPONSOR | 10,211,574 | |||
U.S. Government Agency - 0.1% | ||||
Fannie Mae REMIC Trust Series 2003-W1 Subordinate REMIC Pass-Through Certificate, Class B3, 5.75% 12/25/42 | 339,334 | 258,795 | ||
Fannie Mae REMIC Trust Series 2003-W4 Subordinate REMIC Pass-Through Certificate, Class 2B3, 4.4504% 10/25/42 | 85,610 | 53,935 | ||
Fannie Mae REMIC Trust Series 2003-W10 Subordinate REMIC Pass-Through Certificate, Class 2B3, 4.2536% 6/25/43 | 199,730 | 122,959 | ||
Fannie Mae REMIC Trust Series 2001-W3 Subordinate REMIC Pass-Through Certificate, Class B3, 7% 9/25/41 | 299,409 | 252,065 | ||
Fannie Mae REMIC Trust Series 2002-W1 Subordinate REMIC Pass-Through Certificate, Class 3B3, 4.2721% 2/25/42 | 174,614 | 117,155 | ||
TOTAL U.S. GOVERNMENT AGENCY | 804,909 | |||
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $10,889,723) | 11,016,483 | |||
Commercial Mortgage Securities - 13.4% | ||||
Principal Amount | Value | |||
Asset Securitization Corp. Series 1997-D4: | ||||
Class B1, 7.525% 4/14/29 | $ 2,500,000 | $ 2,890,020 | ||
Class B2, 7.525% 4/14/29 | 515,000 | 516,428 | ||
Banc of America Commercial Mortgage, Inc.: | ||||
Series 2002-PB2 Class XC, 0.3709% 6/11/35 (d)(f)(h) | 76,322,590 | 1,810,891 | ||
Series 2003-2: | ||||
Class BWD, 6.947% 10/11/37 (d) | 432,893 | 439,265 | ||
Class BWE, 7.226% 10/11/37 (d) | 586,501 | 594,665 | ||
Class BWF, 7.55% 10/11/37 (d) | 517,677 | 525,920 | ||
Class BWG, 8.155% 10/11/37 (d) | 501,717 | 506,016 | ||
Class BWH, 9.073% 10/11/37 (d) | 263,327 | 270,060 | ||
Class BWJ, 9.99% 10/11/37 (d) | 432,893 | 442,625 | ||
Class BWK, 10.676% 10/11/37 (d) | 340,130 | 349,755 | ||
Class BWL, 10.1596% 10/11/37 (d) | 573,534 | 544,413 | ||
Banc of America Large Loan, Inc. floater Series 2003-BBA2 Class A3, 2.8% 11/15/15 (d)(f) | 4,000,000 | 4,006,734 | ||
Commercial Mortgage Asset Trust Series 1999-C1 | 16,932,461 | 827,891 | ||
Commercial Mortgage pass thru certificates: | ||||
floater Series 2004-CNL: | ||||
Class G, 3.46% 9/15/14 (d)(f) | 125,000 | 125,194 | ||
Class H, 3.56% 9/15/14 (d)(f) | 135,000 | 135,209 | ||
Series 2000-C1 Class G, 6.85% 8/15/33 (d) | 2,800,000 | 2,738,895 | ||
CS First Boston Mortgage Securities Corp.: | ||||
floater Series 2004-HC1 Class E, 6.23% 12/15/21 (d)(f) | 2,000,000 | 1,999,986 | ||
Series 1998-C1 Class F, 6% 5/17/40 (d) | 4,250,000 | 3,120,592 | ||
Series 1998-C2 Class F, 6.75% 11/11/30 (d) | 2,000,000 | 2,007,313 | ||
Series 2003-TFLA Class AX, 0.5318% 4/15/13 (d)(f)(h) | 21,595,000 | 79,902 | ||
Series 2004-C3 Class AX, 0.0718% 7/15/36 (d)(f)(h) | 60,917,219 | 1,047,130 | ||
Series 2004-TF2A Class AX, 1.4278% 11/15/19 (d)(f)(h) | 63,399,921 | 1,445,518 | ||
Series 2004-TFLA Class AX, 1.7479% 2/15/14 (d)(f)(h) | 55,773,388 | 1,227,015 | ||
DLJ Commercial Mortgage Corp. Series 1998-CF2 | 2,000,000 | 2,001,775 | ||
EQI Financing Partnership I LP Series 1997-1 Class C, 7.58% 2/20/17 (d) | 2,500,000 | 2,549,022 | ||
Commercial Mortgage Securities - continued | ||||
Principal Amount | Value | |||
First Chicago/Lennar Trust I: | ||||
Series 1997-CHL1 Class E, 7.8633% 4/29/39 (d)(f) | $ 3,500,001 | $ 3,637,266 | ||
weighted average coupon Series 1997-CHL1 Class D, 7.8633% 4/29/39 (d)(f) | 1,750,000 | 1,832,305 | ||
Global Signal Trust Series 2004-1: | ||||
Class F, 8.08% 1/15/34 (d)(f) | 2,860,000 | 2,962,536 | ||
Class G, 10% 1/15/34 (d)(f) | 2,640,000 | 2,710,446 | ||
Greenwich Capital Commercial Funding Corp. floater: | ||||
Series 2003-FL1 Class MCH, 5.65% 7/5/18 (d)(f) | 1,047,643 | 1,047,643 | ||
Series 2004-FL2A Class NMV, 4.15% 11/5/19 (d)(f) | 2,000,000 | 2,006,250 | ||
J.P. Morgan Chase Commercial Mortgage Securities Corp. Series 2001-A: | ||||
Class G, 6% 10/15/32 (d)(f) | 2,895,000 | 2,115,290 | ||
Class X, 1.7955% 10/15/32 (d)(f)(h) | 21,904,730 | 1,037,907 | ||
J.P. Morgan Commercial Mortgage Finance Corp.: | ||||
Series 1997-C5 Class F, 7.5605% 9/15/29 | 5,885,000 | 6,518,646 | ||
Series 1999-C7 Class F, 6% 10/15/35 (d) | 350,000 | 364,949 | ||
Series 2000-BAT1 Class P, 10/15/32 (d)(i) | 6,550,000 | 2,816,500 | ||
Lehman Brothers Floating Rate Commercial Mortgage Trust floater Series 2003-C4A Class F, 4.68% 7/11/15 (d)(f) | 136,171 | 136,321 | ||
LTC Commercial Mortgage pass thru certificates Series 1998-1: | ||||
Class D, 6.96% 5/28/30 (d) | 2,250,000 | 2,323,847 | ||
Class E, 7.792% 5/28/30 (d) | 2,020,000 | 2,047,942 | ||
Meristar Commercial Mortgage Trust Series 1999-C1: | ||||
Class C, 8.29% 3/3/16 (d) | 1,500,000 | 1,670,332 | ||
Class X, 0.2154% 3/3/16 (d)(h) | 36,650,000 | 307,985 | ||
Merrill Lynch Mortgage Investors, Inc. Series 2001-HRPA Class G, 6.778% 2/3/16 (d) | 820,000 | 882,805 | ||
Mezz Capital Commercial Mortgage Trust Series 2004-C1: | ||||
Class D, 6.988% 9/15/13 | 750,000 | 749,517 | ||
Class E, 7.983% 10/15/13 | 1,453,000 | 1,443,594 | ||
Class X, 7.8532% 1/15/18 (f)(h) | 7,192,953 | 3,241,324 | ||
Morgan Stanley Capital I, Inc.: | ||||
Series 1997-C1 Class F, 6.85% 2/15/20 (d) | 500,000 | 532,483 | ||
Series 1997-HF1 Class G, 6.86% 7/15/29 (d) | 555,000 | 572,309 | ||
Series 1998-HF1 Class F, 7.18% 3/15/30 (d) | 1,500,000 | 1,626,746 | ||
Nationslink Funding Corp. Series 1998-2 Class F, 7.105% 8/20/30 (d) | 2,075,000 | 2,281,376 | ||
Commercial Mortgage Securities - continued | ||||
Principal Amount | Value | |||
Nomura Asset Securities Corp. Series 1998-D6 Class B1, 6% 3/15/30 (d) | $ 2,800,000 | $ 2,959,313 | ||
Trizechahn Office Properties Trust Series 2001-TZHA Class E4, 7.604% 5/15/16 (d) | 790,000 | 885,730 | ||
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $76,412,820) | 80,913,596 | |||
Floating Rate Loans - 3.2% | ||||
CONSUMER DISCRETIONARY - 0.6% | ||||
Hotels, Restaurants & Leisure - 0.6% | ||||
Lake Las Vegas LLC Tranche 1, term loan 5.1575% 11/1/09 (f) | 400,261 | 403,263 | ||
Wyndham International, Inc. term loan 7.1875% 6/30/06 (f) | 3,185,953 | 3,193,918 | ||
3,597,181 | ||||
FINANCIALS - 2.5% | ||||
Diversified Financial Services - 0.4% | ||||
American Tower LP Tranche B, term loan 4.2299% 8/31/11 (f) | 995,000 | 1,004,950 | ||
Landsource Communication Development LLC Tranche B, term loan 5.0625% 3/31/10 (f) | 1,200,000 | 1,215,000 | ||
2,219,950 | ||||
Real Estate - 2.1% | ||||
Apartment Investment & Management Co. term loan 4.75% 11/2/09 (f) | 2,000,000 | 2,030,000 | ||
Crescent Real Estate Funding XII LP term loan 4.64% 1/12/06 (f) | 2,181,761 | 2,214,487 | ||
General Growth Properties, Inc.: | ||||
Tranche A, term loan 4.64% 11/12/07 (f) | 2,987,027 | 2,994,495 | ||
Tranche B, term loan 4.64% 11/12/08 (f) | 1,500,000 | 1,515,000 | ||
LNR Property Corp. Tranche B, term loan 5.59% 1/31/08 (e)(f) | 4,000,000 | 4,030,000 | ||
Newkirk Master LP term loan 7.0212% 11/24/06 (f) | 209,771 | 212,863 | ||
12,996,845 | ||||
TOTAL FINANCIALS | 15,216,795 | |||
Floating Rate Loans - continued | ||||
Principal Amount | Value | |||
HEALTH CARE - 0.0% | ||||
Health Care Providers & Services - 0.0% | ||||
Beverly Enterprises, Inc. term loan 5.0818% 10/22/08 (f) | $ 197,500 | $ 198,488 | ||
TELECOMMUNICATION SERVICES - 0.1% | ||||
Wireless Telecommunication Services - 0.1% | ||||
SpectraSite Communications, Inc. Tranche B, term loan 4.03% 5/19/12 (f) | 450,000 | 453,375 | ||
TOTAL FLOATING RATE LOANS (Cost $19,228,433) | 19,465,839 |
Preferred Securities - 0.1% | |||
FINANCIALS - 0.1% | |||
Diversified Financial Services - 0.1% | |||
Crest Dartmouth Street 2003 1 Ltd. Series 2003-1A | 590,000 | 608,414 | |
Fixed-Income Funds - 4.2% | |||
Shares | |||
Fidelity Ultra-Short Central Fund (g) | 251,145 | 24,996,462 | |
Money Market Funds - 5.6% | |||
Fidelity Cash Central Fund, 2.31% (b) | 33,690,385 | 33,690,385 | |
TOTAL INVESTMENT PORTFOLIO - 101.1% (Cost $583,162,869) | 608,710,435 | ||
NET OTHER ASSETS - (1.1)% | (6,694,758) | ||
NET ASSETS - 100% | $ 602,015,677 |
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 $95,241,101 or 15.8% 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) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent quarter end is available upon request. |
(h) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool. |
(i) Principal Only Strips represent the right to receive the monthly principal payments on an underlying pool of mortgage loans. |
Other Information |
The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited): |
U.S. Government and | 0.5% |
AAA,AA,A | 5.0% |
BBB | 16.1% |
BB | 13.8% |
B | 7.1% |
CCC,CC,C | 0.5% |
Not Rated | 5.4% |
Equities | 45.8% |
Short-Term Investments and Net Other Assets | 5.8% |
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. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 | ||
Assets | ||
Investment in securities, at value (cost $583,162,869) - See accompanying schedule | $ 608,710,435 | |
Cash | 1,096,259 | |
Receivable for investments sold | 558,445 | |
Receivable for fund shares sold | 1,447,992 | |
Dividends receivable | 621,642 | |
Interest receivable | 3,453,984 | |
Prepaid expenses | 1,498 | |
Other affiliated receivables | 268 | |
Other receivables | 7,804 | |
Total assets | 615,898,327 | |
Liabilities | ||
Payable for investments purchased | $ 2,443,235 | |
Delayed delivery | 8,043,000 | |
Payable for fund shares redeemed | 2,948,767 | |
Accrued management fee | 283,984 | |
Other affiliated payables | 122,349 | |
Other payables and accrued expenses | 41,315 | |
Total liabilities | 13,882,650 | |
Net Assets | $ 602,015,677 | |
Net Assets consist of: | ||
Paid in capital | $ 570,910,971 | |
Undistributed net investment income | 1,509,309 | |
Accumulated undistributed net realized gain (loss) on investments | 4,047,831 | |
Net unrealized appreciation (depreciation) on investments | 25,547,566 | |
Net Assets, for 51,265,708 shares outstanding | $ 602,015,677 | |
Net Asset Value, offering price and redemption price per share ($602,015,677 ÷ 51,265,708 shares) | $ 11.74 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
Six months ended January 31, 2005 | ||
Investment Income | ||
Dividends | $ 6,902,390 | |
Interest | 9,008,864 | |
Total income | 15,911,254 | |
Expenses | ||
Management fee | $ 1,529,257 | |
Transfer agent fees | 554,682 | |
Accounting fees and expenses | 102,123 | |
Non-interested trustees' compensation | 1,462 | |
Custodian fees and expenses | 9,484 | |
Registration fees | 41,728 | |
Audit | 40,975 | |
Legal | 1,739 | |
Miscellaneous | 4,470 | |
Total expenses before reductions | 2,285,920 | |
Expense reductions | (11,064) | 2,274,856 |
Net investment income (loss) | 13,636,398 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on investment securities | 4,770,410 | |
Change in net unrealized appreciation (depreciation) on investment securities | 16,660,793 | |
Net gain (loss) | 21,431,203 | |
Net increase (decrease) in net assets resulting from operations | $ 35,067,601 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
Six months ended | Year ended | |
Increase (Decrease) in Net Assets | ||
Operations | ||
Net investment income (loss) | $ 13,636,398 | $ 19,812,277 |
Net realized gain (loss) | 4,770,410 | 10,307,573 |
Change in net unrealized appreciation (depreciation) | 16,660,793 | 3,123,862 |
Net increase (decrease) in net assets resulting | 35,067,601 | 33,243,712 |
Distributions to shareholders from net investment income | (16,847,468) | (17,564,086) |
Distributions to shareholders from net realized gain | (7,090,927) | (1,945,418) |
Total distributions | (23,938,395) | (19,509,504) |
Share transactions | 218,297,025 | 411,886,173 |
Reinvestment of distributions | 20,876,241 | 16,882,212 |
Cost of shares redeemed | (70,943,407) | (248,916,115) |
Net increase (decrease) in net assets resulting from share transactions | 168,229,859 | 179,852,270 |
Redemption fees | 105,297 | 420,153 |
Total increase (decrease) in net assets | 179,464,362 | 194,006,631 |
Net Assets | ||
Beginning of period | 422,551,315 | 228,544,684 |
End of period (including undistributed net investment income of $1,509,309 and undistributed net investment income of $4,720,379, respectively) | $ 602,015,677 | $ 422,551,315 |
Other Information Shares | ||
Sold | 18,726,640 | 36,337,200 |
Issued in reinvestment of distributions | 1,802,839 | 1,514,555 |
Redeemed | (6,050,512) | (22,005,866) |
Net increase (decrease) | 14,478,967 | 15,845,889 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Six months ended | Years ended July 31, | ||
2005 | 2004 | 2003 E | |
Selected Per-Share Data | |||
Net asset value, beginning of period | $ 11.49 | $ 10.91 | $ 10.00 |
Income from Investment Operations | |||
Net investment income (loss) D | .30 | .59 | .27 |
Net realized and unrealized gain (loss) | .51 | .60 | .71 |
Total from investment operations | .81 | 1.19 | .98 |
Distributions from net investment income | (.38) | (.55) | (.07) |
Distributions from net realized gain | (.18) | (.07) | - |
Total distributions | (.56) | (.62) | (.07) |
Redemption fees added to paid in capital D | - G | .01 | - G |
Net asset value, end of period | $ 11.74 | $ 11.49 | $ 10.91 |
Total Return B, C | 7.18% | 11.31% | 9.83% |
Ratios to Average Net Assets F | |||
Expenses before expense reductions | .86% A | .85% | .97% A |
Expenses net of voluntary waivers, if any | .86% A | .85% | .97% A |
Expenses net of all reductions | .86% A | .85% | .94% A |
Net investment income (loss) | 5.13% A | 5.25% | 5.10% A |
Supplemental Data | |||
Net assets, end of period (000 omitted) | $ 602,016 | $ 422,551 | $ 228,545 |
Portfolio turnover rate | 27% A | 61% | 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 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.
Semiannual Report
See accompanying notes which are an integral part of the financial statements.
Notes to Financial Statements
For the period ended January 31, 2005
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, including restricted 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, including restricted securities, for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund
Semiannual Report
1. Significant Accounting Policies - continued
Investment Transactions and Income - continued
estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. The fund follows the provisions of Emerging Issues Task Force Issue No. 99-20 (EITF 99-20), "Recognition of Interest Income and Impairment on Purchased and Retained Beneficial Interests in Securitized Financial Assets" for certain lower credit quality securitized assets that have contractual cash flows (for example, asset backed securities, collateralized mortgage obligations and commercial mortgage-backed securities). Under EITF 99-20, if there is a change in the estimated cash flows for any of these securities, based on an evaluation of current information, then the estimated yield is adjusted on a prospective basis over the remaining life of the security.
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. In addition, the fund claimed a portion of the payment made to redeeming shareholders as a distribution for income tax purposes.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
Book-tax differences are primarily due to market discount, partnerships, and losses deferred due to wash sales and excise tax regulations.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 28,907,164 | |
Unrealized depreciation | (3,329,398) | |
Net unrealized appreciation (depreciation) | $ 25,577,766 | |
Cost for federal income tax purposes | $ 583,132,669 |
Semiannual Report
Notes to Financial Statements - continued
1. Significant Accounting Policies - continued
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to .75% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract's terms, or if the issuer does not issue the securities due to political, economic, or other factors.
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.
Semiannual Report
2. Operating Policies - continued
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, including revolving credit facilities, 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. The fund may be contractually obligated to receive approval from the agent bank and/or borrower prior to the sale of these investments.
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $225,256,928 and $65,899,865, respectively.
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 .27% 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 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.
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 $546,867 for the period.
Semiannual Report
Notes to Financial Statements - continued
4. Fees and Other Transactions with Affiliates - continued
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 were $12,434 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $9,814 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 $1,250.
7. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
Semiannual Report
Report of Independent Registered Public Accounting Firm
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 January 31, 2005, and the related statement of operations for the six months then ended, the statement of changes in net assets for the six months ended January 31, 2005 and the year ended July 31, 2004 and the financial highlights for the six months ended January 31, 2005, the year ended July 31, 2004 and 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 Funds' 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 standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion. An audit also 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, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of January 31, 2005, by correspondence with custodians and brokers; where replies were not received from brokers, we performed other auditing procedures. 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 Real Estate Income Fund as of January 31, 2005, the results of its operations for the six months then ended, the changes in its net assets for the six months ended January 31, 2005 and the year ended July 31, 2004 and its financial highlights for the six months ended January 31, 2005, the year ended July 31, 2004 and 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
Semiannual Report
Boston, Massachusetts
March 15, 2005
Semiannual Report
Fidelity Ultra-Short Central Fund
January 31, 2005 (Unaudited)
Top Fifty Securities and Derivatives |
Maturity | % of Fund's | ||
Investments in repurchase agreements: (Collateralized by U.S. Government Obligations, in a joint trading account at 2.51%, dated 1/31/05 due 2/1/05) | $ 1,484,022,606 | $ 1,483,919,000 | 25.5 |
With Goldman Sachs & Co. at 2.35%, dated 1/6/05 due 2/3/05 (Collateralized by Mortgage Loan Obligations with principal amounts of $270,555,985, 4.08%- 5.21%, 2/25/35 - 10/25/43) | 265,484,361 | 264,998,172 | 4.6 |
Principal | |||
Federal Home Loan Bank 1.265% 3/15/05 | $ 200,000,000 | 199,659,389 | 3.4 |
Fannie Mae 1.55% 5/4/05 | 90,000,000 | 89,739,000 | 1.6 |
Federal Home Loan Bank 1.35% 4/29/05 | 90,000,000 | 89,715,960 | 1.5 |
Fannie Mae 1.8% 5/27/05 | 60,000,000 | 59,827,740 | 1.0 |
Bank One Issuance Trust Series 2002-C2 Class C2, 3.47% 5/15/08 | 35,785,000 | 35,935,193 | 0.6 |
Fannie Mae 6.25% 3/22/12 | 34,005,000 | 34,173,325 | 0.6 |
Sears Credit Account Master Trust II Series 2002-4 Class B, 2.905% 8/18/09 | 33,300,000 | 33,344,289 | 0.6 |
Discover Card Master Trust I Series 2002-1 Class B, 2.88% 7/15/07 | 30,637,000 | 30,634,574 | 0.5 |
MBNA Credit Card Master Note Trust: | |||
Series 2001-B2 Class B2, 2.84% 1/15/09 | 30,353,000 | 30,462,611 | 0.5 |
Series 2001-B1 Class B1, 2.855% 10/15/08 | 30,000,000 | 30,069,528 | 0.5 |
Sears Credit Account Master Trust II: | |||
Series 2002-5 Class B, 3.73% 11/17/09 | 30,000,000 | 30,052,917 | 0.5 |
Series 2002-4 Class A, 2.61% 8/18/09 | 27,000,000 | 27,016,246 | 0.5 |
Thornburg Mortgage Securities Trust floater Series 2004-3 Class A, 2.9% 9/25/34 | 25,918,906 | 25,962,033 | 0.5 |
Amortizing Residential Collateral Trust Series 2002-BC6 Class M1, 3.28% 8/25/32 | 24,900,000 | 25,084,701 | 0.4 |
AmeriCredit Automobile Receivables Trust Series 2002-EM Class A4A, 3.67% 6/8/09 | 25,000,000 | 25,075,038 | 0.4 |
Citibank Credit Card Issuance Trust Series 2003-B1 Class B1, 2.74% 3/7/08 | 25,000,000 | 25,042,223 | 0.4 |
Holmes Financing No. 8 PLC floater Series 2 Class A, 2.72% 4/15/11 | 25,000,000 | 24,990,235 | 0.4 |
Calwest Industrial Trust floater Series 2002-CALW Class AFL, 2.86% 2/15/12 | 24,300,000 | 24,359,824 | 0.4 |
Bear Stearns Alt-A Trust floater Series 2005-1 Class A1, 2.8388% 1/25/35 | 23,650,000 | 23,650,000 | 0.4 |
Top Fifty Securities and Derivatives |
Principal | Value | % of Fund's | |
ACE Securities Corp. Series 2002-HE2 Class M1, 3.38% 8/25/32 | $ 21,525,000 | $ 21,644,195 | 0.4 |
Asset Backed Securities Corp. Home Equity Loan Trust Series 2004-HE6 Class A2, 2.89% 6/25/34 | 23,589,523 | 23,588,502 | 0.4 |
Household Credit Card Master Trust I Series 2002-1 Class B, 3.13% 7/15/08 | 22,589,000 | 22,663,483 | 0.4 |
Holmes Financing No. 8 PLC floater Series 1 Class C, 3.26% 7/15/40 | 22,640,000 | 22,647,075 | 0.4 |
CDC Mortgage Capital Trust Series 2002-HE3 Class M1, 3.63% 3/25/33 | 21,499,948 | 21,961,275 | 0.4 |
Bank One Issuance Trust Series 2002-B1 Class B1, 2.86% 12/15/09 | 20,655,000 | 20,765,926 | 0.4 |
Argent Securities, Inc. Series 2003-W3 Class M2, 4.33% 9/25/33 | 20,000,000 | 20,687,082 | 0.4 |
MBNA Credit Card Master Note Trust Series 2002-B2 Class B2, 2.86% 10/15/09 | 20,000,000 | 20,111,192 | 0.3 |
Wells Fargo Mortgage Backed Securities Trust Series 2004-M Class A3, 4.725% 8/25/34 | 19,880,000 | 20,064,387 | 0.3 |
MBNA Master Credit Card Trust II Series 1998-G Class B, 2.88% 2/17/09 | 20,000,000 | 20,060,062 | 0.3 |
American Express Credit Account Master Trust Series 2004-C Class C, 2.98% 2/15/12 | 20,000,000 | 20,037,482 | 0.3 |
Ford Credit Auto Owner Trust Series 2003-B Class B2, 2.91% 10/15/07 | 19,600,000 | 19,698,284 | 0.3 |
Long Beach Mortgage Loan Trust Series 2003-2 Class M1, 3.35% 6/25/33 | 19,500,000 | 19,690,182 | 0.3 |
Capital One Master Trust Series 2001-1 Class B, 2.99% 12/15/10 | 19,500,000 | 19,671,680 | 0.3 |
British Telecommunications PLC 7.875% 12/15/05 | 18,145,000 | 18,836,288 | 0.3 |
Nissan Auto Lease Trust Series 2003-A Class A3A, 2.62% 6/15/09 | 18,550,330 | 18,571,028 | 0.3 |
Citibank Credit Card Issuance Trust Series 2003-C1 Class C1, 3.69% 4/7/10 | 17,785,000 | 18,217,047 | 0.3 |
SDG Macerich Properties LP floater Series 2000-1 Class A3, 2.82% 5/15/09 | 18,000,000 | 18,020,322 | 0.3 |
Keycorp Student Loan Trust Series 1999-A Class A2, 2.28% 12/27/09 | 17,947,151 | 18,005,482 | 0.3 |
Capital One Multi-Asset Execution Trust Series 2002-B1 Class B1, 3.16% 7/15/08 | 17,705,000 | 17,743,951 | 0.3 |
Citibank Credit Card Issuance Trust Series 2002-C1 Class C1, 3.2% 2/9/09 | 17,500,000 | 17,737,743 | 0.3 |
Top Fifty Securities and Derivatives |
Principal | Value | % of Fund's | |
Sequoia Mortgage Trust floater Series 2004-8 Class A2, 2.35% 9/20/34 | $ 17,715,665 | $ 17,702,403 | 0.3 |
Citibank Credit Card Issuance Trust Series 2000-C2 Class C2, 3.31% 10/15/07 | 17,500,000 | 17,538,220 | 0.3 |
Freddie Mac Multi-class participation certificates guaranteed planned amortization class Series 2136 Class PE, 6% 1/15/28 | 17,331,818 | 17,496,765 | 0.3 |
AmeriCredit Automobile Receivables Trust Series 2003-CF Class A3, 2.75% 10/9/07 | 17,500,000 | 17,439,151 | 0.3 |
Liberty Media Corp. 3.99% 9/17/06 | 17,000,000 | 17,198,730 | 0.3 |
Deutsche Telekom International Finance BV 8.25% 6/15/05 | 16,638,000 | 16,943,557 | 0.3 |
Merrill Lynch Mortgage Investors, Inc. floater Series 2004-C Class A2, 3.07% 7/25/29 | 16,713,022 | 16,676,810 | 0.3 |
Countrywide Home Loans, Inc. floater Series 2005-1 Class 2A1, 2.84% 3/25/35 | 16,450,000 | 16,450,000 | 0.3 |
Top Fifty securities as a percentage of the Fund's net assets - 54.2% |
Futures Contracts | |||||
Expiration Date | Underlying Face Amount at Value | Unrealized Appreciation/ | |||
Sold | |||||
Eurodollar Contracts | |||||
201 Eurodollar 90 Day Index Contracts | June 2005 | $ 199,356,825 | $ (145,062) | ||
123 Eurodollar 90 Day Index Contracts | Sept. 2005 | 121,920,675 | (121,462) | ||
69 Eurodollar 90 Day Index Contracts | Dec. 2005 | 68,362,612 | (66,654) | ||
18 Eurodollar 90 Day Index Contracts | March 2006 | 17,827,650 | (17,765) | ||
4 Eurodollar 90 Day Index Contracts | June 2006 | 3,960,700 | (7,566) | ||
TOTAL EURODOLLAR CONTRACTS | (358,509) | ||||
Swap Agreements | |||||
Notional Amount | Value | ||||
Credit Default Swap | |||||
Receive quarterly notional amount multiplied by 1.12% and pay Morgan Stanley, Inc. upon default of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11 | June 2006 | $ 10,000,000 | $ 125,807 |
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 Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Semiannual Report
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
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Texas
10000 Research Boulevard
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4001 Northwest Parkway
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12532 Memorial Drive
Houston, TX
2701 Drexel Drive
Houston, TX
6500 N. MacArthur Blvd.
Irving, TX
6005 West Park Boulevard
Plano, TX
14100 San Pedro
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1576 East Southlake Blvd.
Southlake, TX
19740 IH 45 North
Spring, TX
Utah
215 South State Street
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Virginia
1861 International Drive
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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
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
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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(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
REI-USAN-0305
1.789734.101
Fidelity®
International Real Estate
Fund
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 5 | A summary of major shifts in the fund's investments over the past six months. |
Investments | 6 | A complete list of the fund's investments with their market values. |
Financial Statements | 9 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 13 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-800-544-8544 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com/holdings.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including redemption fees, and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (September 8, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below provides information about hypothetical account values and hypothetical expenses based on the Fund's actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund's actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning | Ending | Expenses Paid | |
Actual | $ 1,000.00 | $ 1,168.00 | $ 6.50 A |
Hypothetical (5% return per year before expenses) | $ 1,000.00 | $ 1,017.64 | $ 7.63 B |
A Actual expenses are equal to the Fund's expense ratio of 1.50%; multiplied by the average account value over the period, multiplied by 146/365 (to reflect the period September 8, 2004 to January 31, 2005).
B Hypothetical expenses are equal to the Fund's annualized expense ratio of 1.50%; multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Westfield Group unit | 9.0 |
Sun Hung Kai Properties Ltd. | 4.8 |
Mitsui Fudosan Co. Ltd. | 4.7 |
British Land Co. PLC | 4.5 |
Mitsubishi Estate Co. Ltd. | 3.9 |
Land Securities Group PLC | 3.0 |
Stockland | 2.9 |
Slough Estates PLC | 2.9 |
Rodamco Europe NV | 2.4 |
Gecina SA | 2.3 |
40.4 | |
Top Five Countries as of January 31, 2005 | |
(excluding cash equivalents) | % of fund's |
United Kingdom | 22.6 |
Australia | 20.5 |
Japan | 16.0 |
Hong Kong | 13.8 |
Netherlands | 7.0 |
Percentages are adjusted for the effect of open futures contracts, if applicable. |
Top Five REIT Sectors as of January 31, 2005 | |
% of fund's | |
REITs - Management/Investment | 28.0 |
REITs - Office Buildings | 3.9 |
REITs - Shopping Centers | 1.0 |
REITs - Industrial Buildings | 0.6 |
Asset Allocation (% of fund's net assets) | |||
As of January 31, 2005 | |||
![]() | Stocks 96.6% | ||
![]() | Short-Term |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.6% | |||
Shares | Value (Note 1) | ||
Australia - 20.5% | |||
Centro Properties Group unit | 622,500 | $ 2,575,385 | |
CFS Gandel Retail Trust | 1,701,800 | 2,109,551 | |
Commonwealth Property Office Fund | 1,020,100 | 980,000 | |
DB RREEF Trust unit | 713,638 | 713,229 | |
General Property Trust | 553,800 | 1,660,449 | |
Macquarie Goodman Industrial Trust | 1,753,100 | 3,232,550 | |
Multiplex Group unit | 278,959 | 1,262,161 | |
Stockland unit | 946,700 | 4,305,386 | |
Westfield Group unit | 992,300 | 13,100,085 | |
TOTAL AUSTRALIA | 29,938,796 | ||
Austria - 0.6% | |||
IMMOFINANZ Immobilien Anlagen AG (a) | 98,300 | 909,682 | |
Finland - 1.0% | |||
Citycon Oyj | 374,000 | 1,442,916 | |
France - 6.1% | |||
Gecina SA | 33,000 | 3,385,060 | |
Klepierre SA | 27,500 | 2,390,762 | |
Unibail (Reg.) | 26,500 | 3,153,511 | |
TOTAL FRANCE | 8,929,333 | ||
Greece - 1.1% | |||
Babis Vovos International Technical SA | 111,980 | 1,675,560 | |
Hong Kong - 13.8% | |||
Cheung Kong Holdings Ltd. ADR | 133,600 | 1,229,120 | |
China Overseas Land & Investment Ltd. | 2,700,000 | 675,013 | |
Great Eagle Holdings Ltd. | 220,000 | 504,882 | |
Hang Lung Properties Ltd. | 621,000 | 931,518 | |
Henderson Land Development Co. Ltd. | 609,700 | 2,892,222 | |
Hong Kong Land Holdings Ltd. | 711,000 | 1,677,960 | |
Hysan Development Co. Ltd. | 547,000 | 1,044,930 | |
Kerry Properties Ltd. | 403,500 | 848,401 | |
New World Development Co. Ltd. | 1,508,000 | 1,469,362 | |
Sino Land Co. | 2,136,000 | 1,903,267 | |
Sun Hung Kai Properties Ltd. | 755,000 | 6,993,564 | |
TOTAL HONG KONG | 20,170,239 | ||
Italy - 1.8% | |||
Beni Stabili Spa | 1,241,100 | 1,287,002 | |
Pirelli & C. Real Estate Spa | 25,000 | 1,376,065 | |
TOTAL ITALY | 2,663,067 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
Japan - 16.0% | |||
Japan Prime Realty Investment Corp. | 400 | $ 1,107,841 | |
Japan Real Estate Investment Corp. | 154 | 1,307,793 | |
Japan Retail Fund Investment Corp. | 174 | 1,469,240 | |
Mitsubishi Estate Co. Ltd. | 451,000 | 5,697,071 | |
Mitsui Fudosan Co. Ltd. | 557,000 | 6,923,194 | |
Nippon Building Fund, Inc. | 306 | 2,574,977 | |
NTT Urban Development Co. | 200 | 895,537 | |
Sumitomo Realty & Development Co. Ltd. | 156,000 | 2,179,860 | |
Tokyu Land Corp. | 271,000 | 1,247,450 | |
TOTAL JAPAN | 23,402,963 | ||
Netherlands - 7.0% | |||
Corio NV | 33,645 | 1,965,487 | |
Eurocommercial Properties NV | 44,999 | 1,592,394 | |
Nieuwe Steen Investments NV | 56,270 | 1,349,499 | |
Rodamco Europe NV | 45,700 | 3,463,727 | |
Wereldhave NV | 18,500 | 1,904,919 | |
TOTAL NETHERLANDS | 10,276,026 | ||
Singapore - 3.9% | |||
Ascendas Real Estate Investment Trust (A-REIT) | 668,900 | 804,821 | |
CapitaLand Ltd. | 1,236,000 | 1,728,724 | |
Keppel Land Ltd. | 535,000 | 751,542 | |
Singapore Land Ltd. | 458,000 | 1,524,522 | |
Suntec (REIT) | 1,245,000 | 920,082 | |
TOTAL SINGAPORE | 5,729,691 | ||
Spain - 0.8% | |||
Inmobiliaria Colonial | 26,600 | 1,178,795 | |
Sweden - 0.5% | |||
Castellum AB | 20,700 | 688,529 | |
Switzerland - 0.9% | |||
PSP Swiss Property AG | 31,707 | 1,346,737 | |
United Kingdom - 22.6% | |||
British Land Co. PLC | 406,400 | 6,590,212 | |
Brixton PLC | 208,900 | 1,377,048 | |
Capital & Regional PLC | 230,600 | 3,114,017 | |
CLS Holdings PLC (a) | 168,889 | 1,304,151 | |
Derwent Valley Holdings PLC | 49,300 | 1,012,083 | |
Development Securities PLC | 142,400 | 1,357,073 | |
Eurocastle Investment Ltd. | 19,700 | 429,576 | |
Great Portland Estates PLC | 82,400 | 518,342 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
United Kingdom - continued | |||
Hammerson PLC | 193,900 | $ 3,094,996 | |
Land Securities Group PLC | 171,700 | 4,452,940 | |
Liberty International PLC | 110,600 | 2,020,549 | |
Minerva PLC | 102,500 | 504,822 | |
Shaftesbury PLC | 81,600 | 584,005 | |
Slough Estates PLC | 443,900 | 4,274,261 | |
Unite Group PLC | 307,200 | 1,770,456 | |
Workspace Group PLC | 16,500 | 723,762 | |
TOTAL UNITED KINGDOM | 33,128,293 | ||
TOTAL COMMON STOCKS (Cost $134,153,604) | 141,480,627 | ||
Cash Equivalents - 2.4% | |||
Maturity Amount | |||
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 2.45%, dated 1/31/05 due 2/1/05) | $ 3,481,237 | 3,481,000 | |
TOTAL INVESTMENT PORTFOLIO - 99.0% (Cost $137,634,604) | 144,961,627 | ||
NET OTHER ASSETS - 1.0% | 1,434,043 | ||
NET ASSETS - 100% | $ 146,395,670 |
Legend |
(a) Non-income producing |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (including repurchase agreements of $3,481,000) (cost $137,634,604) - See accompanying schedule | $ 144,961,627 | |
Cash | 596 | |
Foreign currency held at value (cost $51,170) | 51,071 | |
Receivable for investments sold | 1,314,457 | |
Receivable for fund shares sold | 3,779,574 | |
Dividends receivable | 400,249 | |
Prepaid expenses | 15,060 | |
Other affiliated receivables | 368 | |
Other receivables | 4,763 | |
Total assets | 150,527,765 | |
Liabilities | ||
Payable for investments purchased | $ 3,905,929 | |
Payable for fund shares redeemed | 45,346 | |
Accrued management fee | 101,779 | |
Other affiliated payables | 28,193 | |
Other payables and accrued expenses | 50,848 | |
Total liabilities | 4,132,095 | |
Net Assets | $ 146,395,670 | |
Net Assets consist of: | ||
Paid in capital | $ 138,694,856 | |
Distributions in excess of net investment income | (35,424) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 403,787 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 7,332,451 | |
Net Assets, for 12,601,396 shares outstanding | $ 146,395,670 | |
Net Asset Value, offering price and redemption price per share ($146,395,670 ÷ 12,601,396 shares) | $ 11.62 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements - continued
Statement of Operations
For the period September 8, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | ||
Investment Income | ||
Dividends | $ 705,836 | |
Interest | 31,429 | |
737,265 | ||
Less foreign taxes withheld | (119,160) | |
Total income | 618,105 | |
Expenses | ||
Management fee | $ 182,055 | |
Transfer agent fees | 64,073 | |
Accounting fees and expenses | 16,853 | |
Non-interested trustees' compensation | 70 | |
Custodian fees and expenses | 165,031 | |
Registration fees | 22,499 | |
Audit | 19,223 | |
Legal | 27 | |
Miscellaneous | 27 | |
Total expenses before reductions | 469,858 | |
Expense reductions | (101,251) | 368,607 |
Net investment income (loss) | 249,498 | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 702,661 | |
Foreign currency transactions | (13,952) | |
Total net realized gain (loss) | 688,709 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 7,327,023 | |
Assets and liabilities in foreign currencies | 5,428 | |
Total change in net unrealized appreciation (depreciation) | 7,332,451 | |
Net gain (loss) | 8,021,160 | |
Net increase (decrease) in net assets resulting from operations | $ 8,270,658 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
For the period | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ 249,498 |
Net realized gain (loss) | 688,709 |
Change in net unrealized appreciation (depreciation) | 7,332,451 |
Net increase (decrease) in net assets resulting | 8,270,658 |
Distributions to shareholders from net investment income | (284,922) |
Distributions to shareholders from net realized gain | (284,922) |
Total distributions | (569,844) |
Share transactions | 142,637,891 |
Reinvestment of distributions | 534,380 |
Cost of shares redeemed | (4,517,151) |
Net increase (decrease) in net assets resulting from share transactions | 138,655,120 |
Redemption fees | 39,736 |
Total increase (decrease) in net assets | 146,395,670 |
Net Assets | |
Beginning of period | - |
End of period (including distributions in excess of net investment income of $35,424) | $ 146,395,670 |
Other Information Shares | |
Sold | 12,951,007 |
Issued in reinvestment of distributions | 46,067 |
Redeemed | (395,678) |
Net increase (decrease) | 12,601,396 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights
Period ended January 31, | 2005 E |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | .04 |
Net realized and unrealized gain (loss) | 1.63 |
Total from investment operations | 1.67 |
Distributions from net investment income | (.03) |
Distributions from net realized gain | (.03) |
Total distributions | (.06) |
Redemption fees added to paid in capital D | .01 |
Net asset value, end of period | $ 11.62 |
Total Return B, C | 16.80% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.89% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.48% A |
Net investment income (loss) | 1.00% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 146,396 |
Portfolio turnover rate | 39% 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 September 8, 2004 (commencement of operations) to January 31, 2005.
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.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Notes to Financial Statements
For the period ended January 31, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity International Real Estate 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, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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.
Semiannual Report
Notes to Financial Statements (Unaudited) - 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 9,266,869 | |
Unrealized depreciation | (1,997,046) | |
Net unrealized appreciation (depreciation) | $ 7,269,823 | |
Cost for federal income tax purposes | $ 137,691,804 |
Semiannual Report
1. Significant Accounting Policies - continued
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management and Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $145,711,651 and $11,550,485, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 .73% 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 .26% 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.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
5. Expense Reductions.
FMR voluntarily agreed to reimburse the fund to the extent annual 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 $96,350.
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 $4,868 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 $33.
6. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
At the end of the period, one otherwise unaffiliated shareholder was the owner of record of 11% of the total outstanding shares of the fund.
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 Visit Fidelity
For directions and hours,
please call 1-800-544-9797.
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Maine
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Maryland
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Massachusetts
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Michigan
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Semiannual Report
Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC
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Ohio
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Virginia
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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
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Buying shares
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General Correspondence
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(letter_graphic)For Retirement
Accounts
Buying shares
Fidelity Investments
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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
Semiannual Report
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.
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Fidelity International Investment
Advisers
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Advisers (U.K.) Limited
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Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Service Company, Inc.
Boston, MA
Custodian
Mellon Bank, N.A.
Pittsburgh, PA
The Fidelity Telephone Connection
Mutual Fund 24-Hour Service
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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
(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
IRE-USAN-0305
1.801329.100
Fidelity Advisor
Small Cap Value
Fund - Class A, Class T,
Class B and Class C
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Class A, Class T, Class B
and Class C are classes of
Fidelity® Small Cap Value Fund
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of the fund's investments. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,109.50 | $ 3.90 B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 C |
Class T | |||
Actual | $ 1,000.00 | $ 1,110.00 | $ 4.55 B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89 C |
Class B | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Class C | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Value | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 5.4 |
RC2 Corp. | 4.9 |
Steven Madden Ltd. | 2.3 |
Holly Corp. | 2.1 |
Watts Water Technologies, Inc. Class A | 1.9 |
Oxford Industries, Inc. | 1.8 |
Pason Systems, Inc. | 1.8 |
Jarden Corp. | 1.6 |
Encore Acquisition Co. | 1.5 |
Interface, Inc. Class A | 1.4 |
24.7 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 28.4 |
Financials | 20.7 |
Energy | 17.6 |
Industrials | 11.9 |
Health Care | 5.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 92.1% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign | 12.0% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.1% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 28.4% | |||
Auto Components - 0.7% | |||
Spartan Motors, Inc. | 113,410 | $ 1,254,315 | |
Automobiles - 0.3% | |||
National R.V. Holdings, Inc. (a) | 57,700 | 615,659 | |
Distributors - 0.4% | |||
WESCO International, Inc. (a) | 25,000 | 844,750 | |
Hotels, Restaurants & Leisure - 3.7% | |||
Ambassadors Group, Inc. | 3,650 | 124,100 | |
CBRL Group, Inc. | 13,600 | 559,096 | |
Cosi, Inc. (a) | 147,200 | 883,200 | |
Famous Dave's of America, Inc. (a) | 89,900 | 1,069,810 | |
Kerzner International Ltd. (a) | 14,470 | 872,975 | |
La Quinta Corp. unit (a) | 106,300 | 923,747 | |
Penn National Gaming, Inc. (a) | 29,340 | 1,924,411 | |
Wyndham International, Inc. Class A (a) | 834,380 | 792,661 | |
7,150,000 | |||
Household Durables - 3.0% | |||
Interface, Inc. Class A (a) | 284,090 | 2,678,969 | |
Jarden Corp. (a) | 65,650 | 3,019,900 | |
Lifetime Hoan Corp. | 3,358 | 50,571 | |
5,749,440 | |||
Leisure Equipment & Products - 6.1% | |||
Marine Products Corp. | 35,820 | 907,321 | |
MarineMax, Inc. (a) | 48,300 | 1,519,518 | |
RC2 Corp. (a) | 322,990 | 9,350,561 | |
11,777,400 | |||
Media - 0.5% | |||
Emmis Communications Corp. Class A (a) | 51,900 | 911,883 | |
Multiline Retail - 0.7% | |||
Saks, Inc. | 40,300 | 573,469 | |
Tuesday Morning Corp. (a) | 27,300 | 784,329 | |
1,357,798 | |||
Specialty Retail - 7.4% | |||
Asbury Automotive Group, Inc. (a) | 57,800 | 975,664 | |
Cost Plus, Inc. (a) | 60,630 | 1,590,325 | |
Genesco, Inc. (a) | 32,990 | 954,731 | |
Hot Topic, Inc. (a) | 90,915 | 1,761,933 | |
Kirkland's, Inc. (a) | 77,000 | 800,030 | |
La Senza Corp. (sub. vtg.) | 19,100 | 186,221 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Le Chateau, Inc.: | |||
Class A (sub. vtg.) (c) | 17,400 | $ 312,304 | |
Class A (sub. vtg.) | 15,100 | 301,136 | |
Lithia Motors, Inc. Class A (sub. vtg.) | 37,525 | 1,019,930 | |
Monro Muffler Brake, Inc. (a) | 4,100 | 106,354 | |
Pacific Sunwear of California, Inc. (a) | 56,300 | 1,378,787 | |
RONA, Inc. (a) | 58,240 | 2,119,269 | |
Select Comfort Corp. (a) | 31,340 | 613,324 | |
Sonic Automotive, Inc. Class A (sub. vtg.) | 39,800 | 929,728 | |
Steiner Leisure Ltd. (a) | 17,030 | 528,254 | |
The Cato Corp. Class A (sub. vtg.) | 17,240 | 524,096 | |
14,102,086 | |||
Textiles, Apparel & Luxury Goods - 5.6% | |||
Ashworth, Inc. (a) | 39,900 | 449,673 | |
Oxford Industries, Inc. | 91,560 | 3,404,201 | |
Steven Madden Ltd. (a) | 223,110 | 4,283,712 | |
Tommy Hilfiger Corp. (a) | 161,130 | 1,582,297 | |
True Religion Apparel, Inc. (a) | 103,900 | 950,685 | |
10,670,568 | |||
TOTAL CONSUMER DISCRETIONARY | 54,433,899 | ||
CONSUMER STAPLES - 1.8% | |||
Food Products - 1.8% | |||
Green Mountain Coffee Roasters, Inc. (a) | 99,480 | 2,432,286 | |
Hines Horticulture, Inc. (a) | 72,530 | 275,614 | |
Poore Brothers, Inc. (a) | 122,530 | 412,926 | |
Ridley, Inc. (a) | 44,600 | 344,998 | |
3,465,824 | |||
ENERGY - 17.6% | |||
Energy Equipment & Services - 3.3% | |||
Maverick Tube Corp. (a) | 58,620 | 1,996,597 | |
Oil States International, Inc. (a) | 28,860 | 549,783 | |
Pason Systems, Inc. | 107,650 | 3,340,398 | |
Willbros Group, Inc. (a) | 19,960 | 427,942 | |
6,314,720 | |||
Oil & Gas - 14.3% | |||
Blackrock Ventures, Inc. (a) | 166,490 | 1,297,255 | |
Denbury Resources, Inc. (a) | 75,590 | 2,207,228 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Encore Acquisition Co. (a) | 79,080 | $ 2,949,684 | |
General Maritime Corp. (a) | 8,660 | 397,494 | |
Holly Corp. | 132,750 | 4,017,015 | |
Penn Virginia Corp. | 45,670 | 1,934,581 | |
Quicksilver Resources, Inc. (a) | 231,100 | 10,267,765 | |
Range Resources Corp. | 102,150 | 2,266,709 | |
Thunder Energy, Inc. (a) | 268,860 | 1,826,268 | |
Top Tankers, Inc. | 20,400 | 344,556 | |
27,508,555 | |||
TOTAL ENERGY | 33,823,275 | ||
FINANCIALS - 20.7% | |||
Capital Markets - 0.2% | |||
Affiliated Managers Group, Inc. (a) | 6,000 | 380,460 | |
Commercial Banks - 3.0% | |||
Cathay General Bancorp | 30,120 | 1,094,260 | |
Center Financial Corp., California | 82,960 | 1,726,398 | |
Hanmi Financial Corp. | 37,520 | 1,333,086 | |
Nara Bancorp, Inc. | 25,300 | 504,735 | |
Wintrust Financial Corp. | 20,260 | 1,124,025 | |
5,782,504 | |||
Consumer Finance - 0.5% | |||
ACE Cash Express, Inc. (a) | 35,490 | 936,936 | |
Diversified Financial Services - 0.9% | |||
Marlin Business Services Corp. (a) | 99,100 | 1,803,620 | |
Insurance - 8.0% | |||
Arch Capital Group Ltd. (a) | 11,090 | 407,336 | |
HCC Insurance Holdings, Inc. | 54,680 | 1,797,332 | |
Hilb Rogal & Hobbs Co. | 24,650 | 876,554 | |
IPC Holdings Ltd. | 54,600 | 2,304,666 | |
National Interstate Corp. | 1,300 | 20,215 | |
Philadelphia Consolidated Holding Corp. (a) | 12,580 | 843,741 | |
RLI Corp. | 37,520 | 1,630,619 | |
Specialty Underwriters' Alliance, Inc. | 174,900 | 1,708,773 | |
StanCorp Financial Group, Inc. | 11,900 | 1,011,500 | |
United America Indemnity Ltd. Class A | 127,412 | 2,293,416 | |
USI Holdings Corp. (a) | 214,230 | 2,420,799 | |
15,314,951 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Real Estate - 6.7% | |||
American Campus Communities, Inc. | 44,620 | $ 903,555 | |
American Financial Realty Trust (SBI) | 63,800 | 960,190 | |
CarrAmerica Realty Corp. | 18,360 | 557,226 | |
Education Realty Trust, Inc. | 56,300 | 945,277 | |
Extra Space Storage, Inc. | 47,000 | 609,590 | |
Far East Consortium International Ltd. | 1,175,000 | 459,464 | |
Feldman Mall Properties, Inc. | 125,000 | 1,600,000 | |
GMH Communities Trust | 69,100 | 901,064 | |
Highwoods Properties, Inc. (SBI) | 43,900 | 1,075,550 | |
Kilroy Realty Corp. | 37,080 | 1,449,086 | |
Macquarie Goodman Industrial Trust | 920,400 | 1,697,130 | |
Pan Pacific Retail Properties, Inc. | 14,500 | 839,405 | |
Reckson Associates Realty Corp. | 24,570 | 753,808 | |
12,751,345 | |||
Thrifts & Mortgage Finance - 1.4% | |||
Bank Mutual Corp. | 88,100 | 1,064,248 | |
KNBT Bancorp, Inc. | 25,600 | 424,448 | |
NetBank, Inc. | 118,100 | 1,127,855 | |
2,616,551 | |||
TOTAL FINANCIALS | 39,586,367 | ||
HEALTH CARE - 5.4% | |||
Biotechnology - 0.2% | |||
Stratagene Corp. (a) | 61,700 | 407,220 | |
Health Care Equipment & Supplies - 1.3% | |||
Dade Behring Holdings, Inc. (a) | 9,540 | 545,211 | |
DJ Orthopedics, Inc. (a) | 59,880 | 1,446,102 | |
Orthofix International NV (a) | 10,790 | 431,384 | |
2,422,697 | |||
Health Care Providers & Services - 3.7% | |||
Air Methods Corp. (a) | 104,700 | 778,968 | |
America Service Group, Inc. (a) | 32,860 | 901,350 | |
DaVita, Inc. (a) | 9,650 | 404,914 | |
Horizon Health Corp. (a) | 18,400 | 560,280 | |
ICON PLC sponsored ADR (a) | 52,960 | 1,859,955 | |
Medtox Scientific, Inc. (a) | 199,090 | 1,632,538 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Per-Se Technologies, Inc. (a) | 31,957 | $ 466,572 | |
PSS World Medical, Inc. (a) | 32,730 | 410,762 | |
7,015,339 | |||
Pharmaceuticals - 0.2% | |||
Connetics Corp. (a) | 11,500 | 280,830 | |
Par Pharmaceutical Companies, Inc. (a) | 4,000 | 151,600 | |
432,430 | |||
TOTAL HEALTH CARE | 10,277,686 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 0.5% | |||
BE Aerospace, Inc. (a) | 65,760 | 709,550 | |
Ceramic Protection Corp. (a) | 16,700 | 318,243 | |
1,027,793 | |||
Air Freight & Logistics - 1.6% | |||
Dynamex, Inc. (a) | 13,820 | 250,142 | |
Hub Group, Inc. Class A (a) | 10,660 | 580,544 | |
Park-Ohio Holdings Corp. (a) | 92,620 | 2,284,935 | |
3,115,621 | |||
Building Products - 0.2% | |||
Quixote Corp. | 22,300 | 445,777 | |
Commercial Services & Supplies - 1.7% | |||
Banta Corp. | 10,900 | 472,079 | |
Cenveo, Inc. (a) | 213,130 | 628,734 | |
Herman Miller, Inc. | 36,380 | 972,074 | |
Standard Parking Corp. | 50,200 | 761,534 | |
Waste Services, Inc. (a) | 95,000 | 313,500 | |
3,147,921 | |||
Construction & Engineering - 1.9% | |||
Comfort Systems USA, Inc. (a) | 339,600 | 2,312,676 | |
Granite Construction, Inc. | 11,400 | 283,860 | |
URS Corp. (a) | 35,000 | 987,350 | |
3,583,886 | |||
Electrical Equipment - 1.1% | |||
A.O. Smith Corp. | 16,000 | 433,760 | |
Acuity Brands, Inc. | 61,650 | 1,693,526 | |
2,127,286 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Industrial Conglomerates - 0.9% | |||
Carlisle Companies, Inc. | 20,800 | $ 1,311,856 | |
Walter Industries, Inc. | 11,600 | 406,232 | |
1,718,088 | |||
Machinery - 3.6% | |||
Manitowoc Co., Inc. | 42,960 | 1,563,744 | |
Tennant Co. | 24,000 | 929,040 | |
Trinity Industries, Inc. | 6,082 | 183,981 | |
Wabtec Corp. | 35,900 | 669,176 | |
Watts Water Technologies, Inc. Class A | 111,410 | 3,570,691 | |
6,916,632 | |||
Marine - 0.1% | |||
Alexander & Baldwin, Inc. | 4,000 | 184,000 | |
Trading Companies & Distributors - 0.3% | |||
UAP Holding Corp. | 32,000 | 480,000 | |
TOTAL INDUSTRIALS | 22,747,004 | ||
INFORMATION TECHNOLOGY - 4.0% | |||
Electronic Equipment & Instruments - 1.2% | |||
KEMET Corp. (a) | 123,800 | 1,046,110 | |
Mettler-Toledo International, Inc. (a) | 18,430 | 924,449 | |
Winland Electronics, Inc. (a) | 72,860 | 289,254 | |
2,259,813 | |||
Internet Software & Services - 1.0% | |||
Cryptologic, Inc. | 20,260 | 501,337 | |
j2 Global Communications, Inc. (a) | 3,960 | 128,621 | |
Mediagrif Interactive Technologies, Inc. (a) | 101,250 | 803,604 | |
Vitria Technology, Inc. (a) | 105,590 | 432,919 | |
1,866,481 | |||
Semiconductors & Semiconductor Equipment - 1.1% | |||
Cascade Microtech, Inc. | 37,000 | 392,200 | |
Fairchild Semiconductor International, Inc. (a) | 70,000 | 998,900 | |
MKS Instruments, Inc. (a) | 47,700 | 746,505 | |
2,137,605 | |||
Software - 0.7% | |||
Moldflow Corp. (a) | 79,580 | 1,344,902 | |
TOTAL INFORMATION TECHNOLOGY | 7,608,801 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - 2.3% | |||
Chemicals - 2.0% | |||
Albemarle Corp. | 16,500 | $ 579,315 | |
Cytec Industries, Inc. | 15,070 | 768,570 | |
Pioneer Companies, Inc. (a) | 115,290 | 2,463,747 | |
3,811,632 | |||
Metals & Mining - 0.3% | |||
Massey Energy Co. | 18,250 | 692,223 | |
TOTAL MATERIALS | 4,503,855 | ||
TOTAL COMMON STOCKS (Cost $170,461,828) | 176,446,711 | ||
Money Market Funds - 8.6% | |||
Fidelity Cash Central Fund, 2.31% (b) | 16,381,642 | 16,381,642 | |
TOTAL INVESTMENT PORTFOLIO - 100.7% (Cost $186,843,470) | 192,828,353 | ||
NET OTHER ASSETS - (0.7)% | (1,341,346) | ||
NET ASSETS - 100% | $ 191,487,007 |
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) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $312,304 or 0.2% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Le Chateau, Inc. Class A (sub. vtg.) | 12/16/04 | $ 321,007 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 88.0% |
Canada | 6.0% |
Bermuda | 1.4% |
Cayman Islands | 1.2% |
Ireland | 1.0% |
Others (individually less than 1%) | 2.4% |
100.0% |
Semiannual Report
See accompanying notes which are an integral part of the financial statements.
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (cost $186,843,470) - See accompanying schedule | $ 192,828,353 | |
Foreign currency held at value (cost $113,820) | 113,669 | |
Receivable for investments sold | 2,558,421 | |
Receivable for fund shares sold | 1,234,960 | |
Dividends receivable | 40,072 | |
Interest receivable | 34,569 | |
Prepaid expenses | 69,563 | |
Other affiliated receivables | 1,055 | |
Other receivables | 28,689 | |
Total assets | 196,909,351 | |
Liabilities | ||
Payable for investments purchased | $ 5,180,265 | |
Payable for fund shares redeemed | 70,768 | |
Accrued management fee | 116,361 | |
Distribution fees payable | 4,145 | |
Other affiliated payables | 32,382 | |
Other payables and accrued expenses | 18,423 | |
Total liabilities | 5,422,344 | |
Net Assets | $ 191,487,007 | |
Net Assets consist of: | ||
Paid in capital | $ 185,399,299 | |
Accumulated net investment loss | (173,598) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 276,113 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,985,193 | |
Net Assets | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.09 | |
Maximum offering price per share (100/94.25 of $11.09) | $ 11.77 | |
Class T: | $ 11.10 | |
Maximum offering price per share (100/96.50 of $11.10) | $ 11.50 | |
Class B: | $ 11.08 | |
Class C: | $ 11.08 | |
Small Cap Value: | $ 11.10 | |
Institutional Class: | $ 11.10 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | ||
Investment Income | ||
Dividends | $ 122,601 | |
Interest | 70,806 | |
Total income | 193,407 | |
Expenses | ||
Management fee | $ 186,717 | |
Transfer agent fees | 60,981 | |
Distribution fees | 7,997 | |
Accounting fees and expenses | 12,551 | |
Non-interested trustees' compensation | 51 | |
Custodian fees and expenses | 21,404 | |
Registration fees | 43,403 | |
Audit | 11,637 | |
Legal | 12 | |
Total expenses before reductions | 344,753 | |
Expense reductions | (47,342) | 297,411 |
Net investment income (loss) | (104,004) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 256,343 | |
Foreign currency transactions | 19,770 | |
Total net realized gain (loss) | 276,113 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 5,984,883 | |
Assets and liabilities in foreign currencies | 310 | |
Total change in net unrealized appreciation (depreciation) | 5,985,193 | |
Net gain (loss) | 6,261,306 | |
Net increase (decrease) in net assets resulting from operations | $ 6,157,302 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (104,004) |
Net realized gain (loss) | 276,113 |
Change in net unrealized appreciation (depreciation) | 5,985,193 |
Net increase (decrease) in net assets resulting | 6,157,302 |
Distributions to shareholders from net investment income | (69,594) |
Share transactions - net increase (decrease) | 185,372,117 |
Redemption fees | 27,182 |
Total increase (decrease) in net assets | 191,487,007 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $173,598) | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.09 |
Total Return B, C, D | 10.95% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.75% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.39% A |
Net investment income (loss) | (.63)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,147 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.10 |
Total Return B, C, D | 11.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.07% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.64% A |
Net investment income (loss) | (.88)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,304 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.56% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,414 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.43% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 3,040 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.31% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 181,522 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.48% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,060 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G 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, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Semiannual Report
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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 10,083,627 | |
Unrealized depreciation | (4,158,686) | |
Net unrealized appreciation (depreciation) | $ 5,924,941 | |
Cost for federal income tax purposes | $ 186,903,412 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
Semiannual Report
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $181,634,225 and $11,402,518, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .73% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 846 | $ 366 |
Class T | .25% | .25% | 1,730 | 732 |
Class B | .75% | .25% | 2,162 | 1,999 |
Class C | .75% | .25% | 3,259 | 2,344 |
$ 7,997 | $ 5,441 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 4,302 |
Class T | 1,849 |
Class B * | 98 |
Class C * | - |
$ 6,249 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Value. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Value shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 868 | .26* |
Class T | 1,158 | .34* |
Class B | 534 | .25* |
Class C | 627 | .19* |
Small Cap Value | 57,440 | .24* |
Institutional Class | 354 | .17* |
$ 60,981 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
Semiannual Report
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 $61,054 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 were $14,231 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 839 |
Class T | 1.75% | 1,091 |
Class B | 2.25% | 666 |
Class C | 2.25% | 571 |
Small Cap Value | 1.25% | 15,034 |
Institutional Class | 1.25% | 476 |
$ 18,677 |
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 $28,665 for the period.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
November 3, 2004 (commencement of operations) to | |
From net investment income | |
Class A | $ 723 |
Small Cap Value | 68,438 |
Institutional Class | 433 |
Total | $ 69,594 |
Semiannual Report
9. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
November 3, 2004 (commencement of operations) to January 31, 2005 | November 3, 2004 (commencement of operations) to January 31, 2005 | |
Class A | ||
Shares sold | 193,487 | $ 2,028,329 |
Reinvestment of distributions | 54 | 590 |
Net increase (decrease) | 193,541 | $ 2,028,919 |
Class T | ||
Shares sold | 207,872 | $ 2,197,638 |
Shares redeemed | (229) | (2,544) |
Net increase (decrease) | 207,643 | $ 2,195,094 |
Class B | ||
Shares sold | 127,792 | $ 1,329,789 |
Shares redeemed | (189) | (2,048) |
Net increase (decrease) | 127,603 | $ 1,327,741 |
Class C | ||
Shares sold | 276,817 | $ 2,931,865 |
Shares redeemed | (2,521) | (27,703) |
Net increase (decrease) | 274,296 | $ 2,904,162 |
Small Cap Value | ||
Shares sold | 16,534,181 | $ 177,946,027 |
Reinvestment of distributions | 6,024 | 66,449 |
Shares redeemed | (191,628) | (2,079,070) |
Net increase (decrease) | 16,348,577 | $ 175,933,406 |
Institutional Class | ||
Shares sold | 95,449 | $ 982,362 |
Reinvestment of distributions | 39 | 433 |
Net increase (decrease) | 95,488 | $ 982,795 |
Semiannual 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 International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
ASCV-USAN-0305
1.803737.100
Fidelity Advisor
Small Cap Value
Fund - Institutional Class
Semiannual Report
January 31, 2005
(2_fidelity_logos) (Registered_Trademark)
Institutional Class
is a class of Fidelity®
Small Cap Value Fund
Contents
Chairman's Message | 3 | Ned Johnson's message to shareholders. |
Shareholder Expense Example | 4 | An example of shareholder expenses. |
Investment Summary | 6 | A summary of the fund's investments. |
Investments | 7 | A complete list of the fund's investments with their market values. |
Financial Statements | 14 | Statements of assets and liabilities, operations, and changes in net assets, |
Notes | 24 | Notes to the financial statements. |
To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit www.fidelity.com/proxyvotingresults or visit the Securities and Exchange Commission's (SEC) web site at www.sec.gov. You may also call 1-877-208-0098 to request a free copy of the proxy voting guidelines.
Standard & Poor's, S&P and S&P 500 are registered service marks of The McGraw-Hill Companies, Inc. and have been licensed for use by Fidelity Distributors Corporation.
Other third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR 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.
A fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Forms N-Q are available on the SEC's web site at http://www.sec.gov. A fund's Forms N-Q may be reviewed and copied at the SEC's Public Reference Room in Washington, DC. Information regarding the operation of the SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. For a complete list of a fund's portfolio holdings, view the most recent quarterly holdings report, semiannual report, or annual report on Fidelity's web site at http://www.advisor.fidelity.com.
NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Chairman's Message
(photo_of_Edward_C_Johnson_3d)
Dear Shareholder:
During the past year or so, much has been reported about the mutual fund industry, and much of it has been more critical than I believe is warranted. Allegations that some companies have been less than forthright with their shareholders have cast a shadow on the entire industry. I continue to find these reports disturbing, and assert that they do not create an accurate picture of the industry overall. Therefore, I would like to remind everyone where Fidelity stands on these issues. I will say two things specifically regarding allegations that some mutual fund companies were in violation of the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities.
First, Fidelity has no agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not a new policy. This is not to say that someone could not deceive the company through fraudulent acts. However, we are extremely diligent in preventing fraud from occurring in this manner - and in every other. But I underscore again that Fidelity has no so-called "agreements" that sanction illegal practices.
Second, Fidelity continues to stand on record, as we have for years, in opposition to predatory short-term trading that adversely affects shareholders in a mutual fund. Back in the 1980s, we initiated a fee - which is returned to the fund and, therefore, to investors - - to discourage this activity. Further, we took the lead several years ago in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. I am confident we will find other ways to make it more difficult for predatory traders to operate. However, this will only be achieved through close cooperation among regulators, legislators and the industry.
Yes, there have been unfortunate instances of unethical and illegal activity within the mutual fund industry from time to time. That is true of any industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. But we are still concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems. Every system can be improved, and we support and 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.
For nearly 60 years, Fidelity 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. 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
Shareholder Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments or redemption proceeds, redemption fees, and (2) ongoing costs, including management fees, distribution and/or service (12b-1) fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The actual expense Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (November 3, 2004 to January 31, 2005). The hypothetical expense Example is based on an investment of $1,000 invested for the one-half year period (August 1, 2004 to January 31, 2005).
Actual Expenses
The first line of the table below for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Hypothetical Example for Comparison Purposes
The second line of the table below for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. A small balance maintenance fee of $12.00 that is charged once a year may apply for certain accounts with a value of less than $2,000. This fee is not included in the table below. If it was, the estimate of expenses you paid during the period would be higher, and your ending account value lower, by this amount.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Semiannual Report
Beginning | Ending | Expenses Paid | |
Class A | |||
Actual | $ 1,000.00 | $ 1,109.50 | $ 3.90 B |
HypotheticalA | $ 1,000.00 | $ 1,017.64 | $ 7.63 C |
Class T | |||
Actual | $ 1,000.00 | $ 1,110.00 | $ 4.55 B |
HypotheticalA | $ 1,000.00 | $ 1,016.38 | $ 8.89 C |
Class B | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Class C | |||
Actual | $ 1,000.00 | $ 1,108.00 | $ 5.85 B |
HypotheticalA | $ 1,000.00 | $ 1,013.86 | $ 11.42 C |
Small Cap Value | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
Institutional Class | |||
Actual | $ 1,000.00 | $ 1,110.50 | $ 3.25 B |
HypotheticalA | $ 1,000.00 | $ 1,018.90 | $ 6.36 C |
A 5% return per year before expenses
B Actual expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 90/365 (to reflect the period November 3, 2004 to January 31, 2005).
C Hypothetical expenses are equal to each Class' annualized expense ratio (shown in the table below); multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Annualized | |
Class A | 1.50% |
Class T | 1.75% |
Class B | 2.25% |
Class C | 2.25% |
Small Cap Value | 1.25% |
Institutional Class | 1.25% |
Semiannual Report
Investment Summary
Top Ten Stocks as of January 31, 2005 | |
% of fund's | |
Quicksilver Resources, Inc. | 5.4 |
RC2 Corp. | 4.9 |
Steven Madden Ltd. | 2.3 |
Holly Corp. | 2.1 |
Watts Water Technologies, Inc. Class A | 1.9 |
Oxford Industries, Inc. | 1.8 |
Pason Systems, Inc. | 1.8 |
Jarden Corp. | 1.6 |
Encore Acquisition Co. | 1.5 |
Interface, Inc. Class A | 1.4 |
24.7 | |
Top Five Market Sectors as of January 31, 2005 | |
% of fund's | |
Consumer Discretionary | 28.4 |
Financials | 20.7 |
Energy | 17.6 |
Industrials | 11.9 |
Health Care | 5.4 |
Asset Allocation (% of fund's net assets) | |||||||
As of January 31, 2005* | |||||||
![]() | Stocks 92.1% | ![]() | |||||
![]() | Short-Term | ![]() | |||||
* Foreign | 12.0% |
Semiannual Report
Investments January 31, 2005 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 92.1% | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - 28.4% | |||
Auto Components - 0.7% | |||
Spartan Motors, Inc. | 113,410 | $ 1,254,315 | |
Automobiles - 0.3% | |||
National R.V. Holdings, Inc. (a) | 57,700 | 615,659 | |
Distributors - 0.4% | |||
WESCO International, Inc. (a) | 25,000 | 844,750 | |
Hotels, Restaurants & Leisure - 3.7% | |||
Ambassadors Group, Inc. | 3,650 | 124,100 | |
CBRL Group, Inc. | 13,600 | 559,096 | |
Cosi, Inc. (a) | 147,200 | 883,200 | |
Famous Dave's of America, Inc. (a) | 89,900 | 1,069,810 | |
Kerzner International Ltd. (a) | 14,470 | 872,975 | |
La Quinta Corp. unit (a) | 106,300 | 923,747 | |
Penn National Gaming, Inc. (a) | 29,340 | 1,924,411 | |
Wyndham International, Inc. Class A (a) | 834,380 | 792,661 | |
7,150,000 | |||
Household Durables - 3.0% | |||
Interface, Inc. Class A (a) | 284,090 | 2,678,969 | |
Jarden Corp. (a) | 65,650 | 3,019,900 | |
Lifetime Hoan Corp. | 3,358 | 50,571 | |
5,749,440 | |||
Leisure Equipment & Products - 6.1% | |||
Marine Products Corp. | 35,820 | 907,321 | |
MarineMax, Inc. (a) | 48,300 | 1,519,518 | |
RC2 Corp. (a) | 322,990 | 9,350,561 | |
11,777,400 | |||
Media - 0.5% | |||
Emmis Communications Corp. Class A (a) | 51,900 | 911,883 | |
Multiline Retail - 0.7% | |||
Saks, Inc. | 40,300 | 573,469 | |
Tuesday Morning Corp. (a) | 27,300 | 784,329 | |
1,357,798 | |||
Specialty Retail - 7.4% | |||
Asbury Automotive Group, Inc. (a) | 57,800 | 975,664 | |
Cost Plus, Inc. (a) | 60,630 | 1,590,325 | |
Genesco, Inc. (a) | 32,990 | 954,731 | |
Hot Topic, Inc. (a) | 90,915 | 1,761,933 | |
Kirkland's, Inc. (a) | 77,000 | 800,030 | |
La Senza Corp. (sub. vtg.) | 19,100 | 186,221 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
CONSUMER DISCRETIONARY - continued | |||
Specialty Retail - continued | |||
Le Chateau, Inc.: | |||
Class A (sub. vtg.) (c) | 17,400 | $ 312,304 | |
Class A (sub. vtg.) | 15,100 | 301,136 | |
Lithia Motors, Inc. Class A (sub. vtg.) | 37,525 | 1,019,930 | |
Monro Muffler Brake, Inc. (a) | 4,100 | 106,354 | |
Pacific Sunwear of California, Inc. (a) | 56,300 | 1,378,787 | |
RONA, Inc. (a) | 58,240 | 2,119,269 | |
Select Comfort Corp. (a) | 31,340 | 613,324 | |
Sonic Automotive, Inc. Class A (sub. vtg.) | 39,800 | 929,728 | |
Steiner Leisure Ltd. (a) | 17,030 | 528,254 | |
The Cato Corp. Class A (sub. vtg.) | 17,240 | 524,096 | |
14,102,086 | |||
Textiles, Apparel & Luxury Goods - 5.6% | |||
Ashworth, Inc. (a) | 39,900 | 449,673 | |
Oxford Industries, Inc. | 91,560 | 3,404,201 | |
Steven Madden Ltd. (a) | 223,110 | 4,283,712 | |
Tommy Hilfiger Corp. (a) | 161,130 | 1,582,297 | |
True Religion Apparel, Inc. (a) | 103,900 | 950,685 | |
10,670,568 | |||
TOTAL CONSUMER DISCRETIONARY | 54,433,899 | ||
CONSUMER STAPLES - 1.8% | |||
Food Products - 1.8% | |||
Green Mountain Coffee Roasters, Inc. (a) | 99,480 | 2,432,286 | |
Hines Horticulture, Inc. (a) | 72,530 | 275,614 | |
Poore Brothers, Inc. (a) | 122,530 | 412,926 | |
Ridley, Inc. (a) | 44,600 | 344,998 | |
3,465,824 | |||
ENERGY - 17.6% | |||
Energy Equipment & Services - 3.3% | |||
Maverick Tube Corp. (a) | 58,620 | 1,996,597 | |
Oil States International, Inc. (a) | 28,860 | 549,783 | |
Pason Systems, Inc. | 107,650 | 3,340,398 | |
Willbros Group, Inc. (a) | 19,960 | 427,942 | |
6,314,720 | |||
Oil & Gas - 14.3% | |||
Blackrock Ventures, Inc. (a) | 166,490 | 1,297,255 | |
Denbury Resources, Inc. (a) | 75,590 | 2,207,228 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
ENERGY - continued | |||
Oil & Gas - continued | |||
Encore Acquisition Co. (a) | 79,080 | $ 2,949,684 | |
General Maritime Corp. (a) | 8,660 | 397,494 | |
Holly Corp. | 132,750 | 4,017,015 | |
Penn Virginia Corp. | 45,670 | 1,934,581 | |
Quicksilver Resources, Inc. (a) | 231,100 | 10,267,765 | |
Range Resources Corp. | 102,150 | 2,266,709 | |
Thunder Energy, Inc. (a) | 268,860 | 1,826,268 | |
Top Tankers, Inc. | 20,400 | 344,556 | |
27,508,555 | |||
TOTAL ENERGY | 33,823,275 | ||
FINANCIALS - 20.7% | |||
Capital Markets - 0.2% | |||
Affiliated Managers Group, Inc. (a) | 6,000 | 380,460 | |
Commercial Banks - 3.0% | |||
Cathay General Bancorp | 30,120 | 1,094,260 | |
Center Financial Corp., California | 82,960 | 1,726,398 | |
Hanmi Financial Corp. | 37,520 | 1,333,086 | |
Nara Bancorp, Inc. | 25,300 | 504,735 | |
Wintrust Financial Corp. | 20,260 | 1,124,025 | |
5,782,504 | |||
Consumer Finance - 0.5% | |||
ACE Cash Express, Inc. (a) | 35,490 | 936,936 | |
Diversified Financial Services - 0.9% | |||
Marlin Business Services Corp. (a) | 99,100 | 1,803,620 | |
Insurance - 8.0% | |||
Arch Capital Group Ltd. (a) | 11,090 | 407,336 | |
HCC Insurance Holdings, Inc. | 54,680 | 1,797,332 | |
Hilb Rogal & Hobbs Co. | 24,650 | 876,554 | |
IPC Holdings Ltd. | 54,600 | 2,304,666 | |
National Interstate Corp. | 1,300 | 20,215 | |
Philadelphia Consolidated Holding Corp. (a) | 12,580 | 843,741 | |
RLI Corp. | 37,520 | 1,630,619 | |
Specialty Underwriters' Alliance, Inc. | 174,900 | 1,708,773 | |
StanCorp Financial Group, Inc. | 11,900 | 1,011,500 | |
United America Indemnity Ltd. Class A | 127,412 | 2,293,416 | |
USI Holdings Corp. (a) | 214,230 | 2,420,799 | |
15,314,951 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
FINANCIALS - continued | |||
Real Estate - 6.7% | |||
American Campus Communities, Inc. | 44,620 | $ 903,555 | |
American Financial Realty Trust (SBI) | 63,800 | 960,190 | |
CarrAmerica Realty Corp. | 18,360 | 557,226 | |
Education Realty Trust, Inc. | 56,300 | 945,277 | |
Extra Space Storage, Inc. | 47,000 | 609,590 | |
Far East Consortium International Ltd. | 1,175,000 | 459,464 | |
Feldman Mall Properties, Inc. | 125,000 | 1,600,000 | |
GMH Communities Trust | 69,100 | 901,064 | |
Highwoods Properties, Inc. (SBI) | 43,900 | 1,075,550 | |
Kilroy Realty Corp. | 37,080 | 1,449,086 | |
Macquarie Goodman Industrial Trust | 920,400 | 1,697,130 | |
Pan Pacific Retail Properties, Inc. | 14,500 | 839,405 | |
Reckson Associates Realty Corp. | 24,570 | 753,808 | |
12,751,345 | |||
Thrifts & Mortgage Finance - 1.4% | |||
Bank Mutual Corp. | 88,100 | 1,064,248 | |
KNBT Bancorp, Inc. | 25,600 | 424,448 | |
NetBank, Inc. | 118,100 | 1,127,855 | |
2,616,551 | |||
TOTAL FINANCIALS | 39,586,367 | ||
HEALTH CARE - 5.4% | |||
Biotechnology - 0.2% | |||
Stratagene Corp. (a) | 61,700 | 407,220 | |
Health Care Equipment & Supplies - 1.3% | |||
Dade Behring Holdings, Inc. (a) | 9,540 | 545,211 | |
DJ Orthopedics, Inc. (a) | 59,880 | 1,446,102 | |
Orthofix International NV (a) | 10,790 | 431,384 | |
2,422,697 | |||
Health Care Providers & Services - 3.7% | |||
Air Methods Corp. (a) | 104,700 | 778,968 | |
America Service Group, Inc. (a) | 32,860 | 901,350 | |
DaVita, Inc. (a) | 9,650 | 404,914 | |
Horizon Health Corp. (a) | 18,400 | 560,280 | |
ICON PLC sponsored ADR (a) | 52,960 | 1,859,955 | |
Medtox Scientific, Inc. (a) | 199,090 | 1,632,538 | |
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
HEALTH CARE - continued | |||
Health Care Providers & Services - continued | |||
Per-Se Technologies, Inc. (a) | 31,957 | $ 466,572 | |
PSS World Medical, Inc. (a) | 32,730 | 410,762 | |
7,015,339 | |||
Pharmaceuticals - 0.2% | |||
Connetics Corp. (a) | 11,500 | 280,830 | |
Par Pharmaceutical Companies, Inc. (a) | 4,000 | 151,600 | |
432,430 | |||
TOTAL HEALTH CARE | 10,277,686 | ||
INDUSTRIALS - 11.9% | |||
Aerospace & Defense - 0.5% | |||
BE Aerospace, Inc. (a) | 65,760 | 709,550 | |
Ceramic Protection Corp. (a) | 16,700 | 318,243 | |
1,027,793 | |||
Air Freight & Logistics - 1.6% | |||
Dynamex, Inc. (a) | 13,820 | 250,142 | |
Hub Group, Inc. Class A (a) | 10,660 | 580,544 | |
Park-Ohio Holdings Corp. (a) | 92,620 | 2,284,935 | |
3,115,621 | |||
Building Products - 0.2% | |||
Quixote Corp. | 22,300 | 445,777 | |
Commercial Services & Supplies - 1.7% | |||
Banta Corp. | 10,900 | 472,079 | |
Cenveo, Inc. (a) | 213,130 | 628,734 | |
Herman Miller, Inc. | 36,380 | 972,074 | |
Standard Parking Corp. | 50,200 | 761,534 | |
Waste Services, Inc. (a) | 95,000 | 313,500 | |
3,147,921 | |||
Construction & Engineering - 1.9% | |||
Comfort Systems USA, Inc. (a) | 339,600 | 2,312,676 | |
Granite Construction, Inc. | 11,400 | 283,860 | |
URS Corp. (a) | 35,000 | 987,350 | |
3,583,886 | |||
Electrical Equipment - 1.1% | |||
A.O. Smith Corp. | 16,000 | 433,760 | |
Acuity Brands, Inc. | 61,650 | 1,693,526 | |
2,127,286 | |||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
INDUSTRIALS - continued | |||
Industrial Conglomerates - 0.9% | |||
Carlisle Companies, Inc. | 20,800 | $ 1,311,856 | |
Walter Industries, Inc. | 11,600 | 406,232 | |
1,718,088 | |||
Machinery - 3.6% | |||
Manitowoc Co., Inc. | 42,960 | 1,563,744 | |
Tennant Co. | 24,000 | 929,040 | |
Trinity Industries, Inc. | 6,082 | 183,981 | |
Wabtec Corp. | 35,900 | 669,176 | |
Watts Water Technologies, Inc. Class A | 111,410 | 3,570,691 | |
6,916,632 | |||
Marine - 0.1% | |||
Alexander & Baldwin, Inc. | 4,000 | 184,000 | |
Trading Companies & Distributors - 0.3% | |||
UAP Holding Corp. | 32,000 | 480,000 | |
TOTAL INDUSTRIALS | 22,747,004 | ||
INFORMATION TECHNOLOGY - 4.0% | |||
Electronic Equipment & Instruments - 1.2% | |||
KEMET Corp. (a) | 123,800 | 1,046,110 | |
Mettler-Toledo International, Inc. (a) | 18,430 | 924,449 | |
Winland Electronics, Inc. (a) | 72,860 | 289,254 | |
2,259,813 | |||
Internet Software & Services - 1.0% | |||
Cryptologic, Inc. | 20,260 | 501,337 | |
j2 Global Communications, Inc. (a) | 3,960 | 128,621 | |
Mediagrif Interactive Technologies, Inc. (a) | 101,250 | 803,604 | |
Vitria Technology, Inc. (a) | 105,590 | 432,919 | |
1,866,481 | |||
Semiconductors & Semiconductor Equipment - 1.1% | |||
Cascade Microtech, Inc. | 37,000 | 392,200 | |
Fairchild Semiconductor International, Inc. (a) | 70,000 | 998,900 | |
MKS Instruments, Inc. (a) | 47,700 | 746,505 | |
2,137,605 | |||
Software - 0.7% | |||
Moldflow Corp. (a) | 79,580 | 1,344,902 | |
TOTAL INFORMATION TECHNOLOGY | 7,608,801 | ||
Common Stocks - continued | |||
Shares | Value (Note 1) | ||
MATERIALS - 2.3% | |||
Chemicals - 2.0% | |||
Albemarle Corp. | 16,500 | $ 579,315 | |
Cytec Industries, Inc. | 15,070 | 768,570 | |
Pioneer Companies, Inc. (a) | 115,290 | 2,463,747 | |
3,811,632 | |||
Metals & Mining - 0.3% | |||
Massey Energy Co. | 18,250 | 692,223 | |
TOTAL MATERIALS | 4,503,855 | ||
TOTAL COMMON STOCKS (Cost $170,461,828) | 176,446,711 | ||
Money Market Funds - 8.6% | |||
Fidelity Cash Central Fund, 2.31% (b) | 16,381,642 | 16,381,642 | |
TOTAL INVESTMENT PORTFOLIO - 100.7% (Cost $186,843,470) | 192,828,353 | ||
NET OTHER ASSETS - (0.7)% | (1,341,346) | ||
NET ASSETS - 100% | $ 191,487,007 |
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) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $312,304 or 0.2% of net assets. |
Additional information on each holding is as follows: |
Security | Acquisition Date | Acquisition Cost |
Le Chateau, Inc. Class A (sub. vtg.) | 12/16/04 | $ 321,007 |
Other Information |
Distribution of investments by country of issue, as a percentage of total net assets, is as follows: |
United States of America | 88.0% |
Canada | 6.0% |
Bermuda | 1.4% |
Cayman Islands | 1.2% |
Ireland | 1.0% |
Others (individually less than 1%) | 2.4% |
100.0% |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Statements
Statement of Assets and Liabilities
January 31, 2005 (Unaudited) | ||
Assets | ||
Investment in securities, at value (cost $186,843,470) - See accompanying schedule | $ 192,828,353 | |
Foreign currency held at value (cost $113,820) | 113,669 | |
Receivable for investments sold | 2,558,421 | |
Receivable for fund shares sold | 1,234,960 | |
Dividends receivable | 40,072 | |
Interest receivable | 34,569 | |
Prepaid expenses | 69,563 | |
Other affiliated receivables | 1,055 | |
Other receivables | 28,689 | |
Total assets | 196,909,351 | |
Liabilities | ||
Payable for investments purchased | $ 5,180,265 | |
Payable for fund shares redeemed | 70,768 | |
Accrued management fee | 116,361 | |
Distribution fees payable | 4,145 | |
Other affiliated payables | 32,382 | |
Other payables and accrued expenses | 18,423 | |
Total liabilities | 5,422,344 | |
Net Assets | $ 191,487,007 | |
Net Assets consist of: | ||
Paid in capital | $ 185,399,299 | |
Accumulated net investment loss | (173,598) | |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | 276,113 | |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | 5,985,193 | |
Net Assets | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Assets and Liabilities - continued
January 31, 2005 (Unaudited) | ||
Calculation of Maximum Offering Price | $ 11.09 | |
Maximum offering price per share (100/94.25 of $11.09) | $ 11.77 | |
Class T: | $ 11.10 | |
Maximum offering price per share (100/96.50 of $11.10) | $ 11.50 | |
Class B: | $ 11.08 | |
Class C: | $ 11.08 | |
Small Cap Value: | $ 11.10 | |
Institutional Class: | $ 11.10 |
A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Operations
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | ||
Investment Income | ||
Dividends | $ 122,601 | |
Interest | 70,806 | |
Total income | 193,407 | |
Expenses | ||
Management fee | $ 186,717 | |
Transfer agent fees | 60,981 | |
Distribution fees | 7,997 | |
Accounting fees and expenses | 12,551 | |
Non-interested trustees' compensation | 51 | |
Custodian fees and expenses | 21,404 | |
Registration fees | 43,403 | |
Audit | 11,637 | |
Legal | 12 | |
Total expenses before reductions | 344,753 | |
Expense reductions | (47,342) | 297,411 |
Net investment income (loss) | (104,004) | |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | ||
Investment securities | 256,343 | |
Foreign currency transactions | 19,770 | |
Total net realized gain (loss) | 276,113 | |
Change in net unrealized appreciation (depreciation) on: Investment securities | 5,984,883 | |
Assets and liabilities in foreign currencies | 310 | |
Total change in net unrealized appreciation (depreciation) | 5,985,193 | |
Net gain (loss) | 6,261,306 | |
Net increase (decrease) in net assets resulting from operations | $ 6,157,302 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Statement of Changes in Net Assets
November 3, 2004 (commencement of operations) to January 31, 2005 (Unaudited) | |
Increase (Decrease) in Net Assets | |
Operations | |
Net investment income (loss) | $ (104,004) |
Net realized gain (loss) | 276,113 |
Change in net unrealized appreciation (depreciation) | 5,985,193 |
Net increase (decrease) in net assets resulting | 6,157,302 |
Distributions to shareholders from net investment income | (69,594) |
Share transactions - net increase (decrease) | 185,372,117 |
Redemption fees | 27,182 |
Total increase (decrease) in net assets | 191,487,007 |
Net Assets | |
Beginning of period | - |
End of period (including accumulated net investment loss of $173,598) | $ 191,487,007 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class A
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.09 |
Total Return B, C, D | 10.95% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 1.75% A |
Expenses net of voluntary waivers, if any | 1.50% A |
Expenses net of all reductions | 1.39% A |
Net investment income (loss) | (.63)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,147 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class T
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.02) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.10 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.10 |
Total Return B, C, D | 11.00% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.07% A |
Expenses net of voluntary waivers, if any | 1.75% A |
Expenses net of all reductions | 1.64% A |
Net investment income (loss) | (.88)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 2,304 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the sales charges.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class B
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.56% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,414 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Class C
Period ended January 31, 2005 F | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) E | (.03) |
Net realized and unrealized gain (loss) | 1.11 |
Total from investment operations | 1.08 |
Redemption fees added to paid in capital E | - H |
Net asset value, end of period | $ 11.08 |
Total Return B, C, D | 10.80% |
Ratios to Average Net Assets G | |
Expenses before expense reductions | 2.43% A |
Expenses net of voluntary waivers, if any | 2.25% A |
Expenses net of all reductions | 2.14% A |
Net investment income (loss) | (1.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 3,040 |
Portfolio turnover rate | 51% 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 Total returns do not include the effect of the contingent deferred sales charge.
E Calculated based on average shares outstanding during the period.
F For the period November 3, 2004 (commencement of operations) to January 31, 2005.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Small Cap Value
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.31% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 181,522 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per share.
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Financial Highlights - Institutional Class
Period ended January 31, 2005 E | |
(Unaudited) | |
Selected Per-Share Data | |
Net asset value, beginning of period | $ 10.00 |
Income from Investment Operations | |
Net investment income (loss) D | (.01) |
Net realized and unrealized gain (loss) | 1.12 |
Total from investment operations | 1.11 |
Distributions from net investment income | (.01) |
Redemption fees added to paid in capital D | - G |
Net asset value, end of period | $ 11.10 |
Total Return B, C | 11.05% |
Ratios to Average Net Assets F | |
Expenses before expense reductions | 1.48% A |
Expenses net of voluntary waivers, if any | 1.25% A |
Expenses net of all reductions | 1.14% A |
Net investment income (loss) | (.38)% A |
Supplemental Data | |
Net assets, end of period (000 omitted) | $ 1,060 |
Portfolio turnover rate | 51% 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 November 3, 2004 (commencement of operations) to January 31, 2005.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G 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, 2005 (Unaudited)
1. Significant Accounting Policies.
Fidelity Small Cap 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 fund offers Class A, Class T, Class B, Class C, Small Cap Value and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
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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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The fund estimates the components of distributions received that may be considered return of capital distributions or capital gain distributions. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
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 the 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 dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.
The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows:
Unrealized appreciation | $ 10,083,627 | |
Unrealized depreciation | (4,158,686) | |
Net unrealized appreciation (depreciation) | $ 5,924,941 | |
Cost for federal income tax purposes | $ 186,903,412 |
Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a redemption fee equal to 1.50% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the fund and accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
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.
Semiannual Report
3. Purchases and Sales of Investments.
Purchases and sales of securities, other than short-term securities and U.S. government securities, aggregated $181,634,225 and $11,402,518, respectively.
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 .45% of the fund's average net assets and a group fee rate that averaged .27% 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 investment performance of the asset-weighted return of all classes as compared to an appropriate benchmark index. The fund's performance adjustment will not take effect until November 1, 2005. Subsequent months will be added until the performance period includes 36 months. For the period, the total annualized management fee rate was .73% of the fund's average net assets.
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:
Distribution | Service | Paid to | Retained | |
Class A | 0% | .25% | $ 846 | $ 366 |
Class T | .25% | .25% | 1,730 | 732 |
Class B | .75% | .25% | 2,162 | 1,999 |
Class C | .75% | .25% | 3,259 | 2,344 |
$ 7,997 | $ 5,441 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
4. Fees and Other Transactions with Affiliates - continued
Sales Load. FDC receives a front-end sales charge of up to 5.75% for selling Class A shares, and 3.50% for selling Class T shares, some of which is paid to financial intermediaries for selling shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.
For the period, sales charge amounts retained by FDC were as follows:
Retained | |
Class A | $ 4,302 |
Class T | 1,849 |
Class B * | 98 |
Class C * | - |
$ 6,249 |
* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the fund, except for Small Cap Value. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Small Cap Value shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period the total transfer agent fees paid by each class to FIIOC or FSC, were as follows:
Amount | % of | |
Class A | $ 868 | .26* |
Class T | 1,158 | .34* |
Class B | 534 | .25* |
Class C | 627 | .19* |
Small Cap Value | 57,440 | .24* |
Institutional Class | 354 | .17* |
$ 60,981 |
* Annualized
Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month.
Semiannual Report
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 $61,054 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 were $14,231 for the period.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $4.2 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Expense Reductions.
FMR voluntarily agreed to reimburse each class to the extent annual operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.
Expense | Reimbursement | |
Class A | 1.50% | $ 839 |
Class T | 1.75% | 1,091 |
Class B | 2.25% | 666 |
Class C | 2.25% | 571 |
Small Cap Value | 1.25% | 15,034 |
Institutional Class | 1.25% | 476 |
$ 18,677 |
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 $28,665 for the period.
Semiannual Report
7. Other.
The fund's organizational documents provide former and current trustees and officers with a limited indemnification against liabilities arising in connection with the performance of their duties to the fund. In the normal course of business, the fund may also enter into contracts that provide general indemnifications. The fund's maximum exposure under these arrangements is unknown as this would be dependent on future claims that may be made against the fund. The risk of material loss from such claims is considered remote.
8. Distributions to Shareholders.
Distributions to shareholders of each class were as follows:
November 3, 2004 (commencement of operations) to | |
From net investment income | |
Class A | $ 723 |
Small Cap Value | 68,438 |
Institutional Class | 433 |
Total | $ 69,594 |
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
9. Share Transactions.
Transactions for each class of shares were as follows:
Shares | Dollars | |
November 3, 2004 (commencement of operations) to January 31, 2005 | November 3, 2004 (commencement of operations) to January 31, 2005 | |
Class A | ||
Shares sold | 193,487 | $ 2,028,329 |
Reinvestment of distributions | 54 | 590 |
Net increase (decrease) | 193,541 | $ 2,028,919 |
Class T | ||
Shares sold | 207,872 | $ 2,197,638 |
Shares redeemed | (229) | (2,544) |
Net increase (decrease) | 207,643 | $ 2,195,094 |
Class B | ||
Shares sold | 127,792 | $ 1,329,789 |
Shares redeemed | (189) | (2,048) |
Net increase (decrease) | 127,603 | $ 1,327,741 |
Class C | ||
Shares sold | 276,817 | $ 2,931,865 |
Shares redeemed | (2,521) | (27,703) |
Net increase (decrease) | 274,296 | $ 2,904,162 |
Small Cap Value | ||
Shares sold | 16,534,181 | $ 177,946,027 |
Reinvestment of distributions | 6,024 | 66,449 |
Shares redeemed | (191,628) | (2,079,070) |
Net increase (decrease) | 16,348,577 | $ 175,933,406 |
Institutional Class | ||
Shares sold | 95,449 | $ 982,362 |
Reinvestment of distributions | 39 | 433 |
Net increase (decrease) | 95,488 | $ 982,795 |
Semiannual 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 International Investment Advisors
Fidelity Investments Japan Limited
Fidelity International Investment Advisors (U.K.) Limited
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder
Servicing Agent
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
Custodian
Citibank, N.A.
New York, NY
(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com
ASCVI-USAN-0305
1.803748.100
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Schedule of Investments
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
There were no material changes to the procedures by which shareholders may recommend nominees to the Fidelity Securities Fund's Board of Trustees.
Item 11. 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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.
Item 12. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT. |
(a) | (3) | Not applicable. |
(b) | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Fidelity Securities Fund
By: | /s/Christine Reynolds |
Christine Reynolds | |
President and Treasurer | |
Date: | March 23, 2005 |
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 23, 2005 |
By: | /s/Timothy F. Hayes |
Timothy F. Hayes | |
Chief Financial Officer | |
Date: | March 23, 2005 |