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 811-4707

Fidelity Advisor Series II
(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:	August 31

Date of reporting period:	August 31, 2007

Item 1. Reports to Stockholders

(Fidelity Investment logo)(registered trademark)

Fidelity® Advisor

Intermediate Bond

Fund - Class A, Class T, Class B
and Class C

Annual Report

August 31, 2007

(2_fidelity_logos) (Registered_Trademark)

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

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

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

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

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

Annual Report

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 holdings listing, semiannual report, or annual report on Fidelity's web site at http://www.fidelity.com or http://www.advisor.fidelity.com, as applicable.

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Notes to Shareholders:

As discussed in prior shareholder reports, the fund changed its investment approach in the way it invests in the investment-grade debt market, seeking exposure to various types of securities by investing in central funds as well as investing directly in individual investment-grade securities. Central funds are Fidelity mutual funds used by this fund and other Fidelity funds as an investment vehicle to gain pooled exposure to a particular core market sector, such as corporate bonds or mortgage-backed securities. Instead of multiple funds each investing in investment-grade debt securities individually, they can now take advantage of consolidating investments in a single, larger pool of investment-grade debt by investing directly in central funds. Shares of the central funds are offered only to other Fidelity mutual funds and accounts; investors cannot directly invest in them.

It's important to point out that investing in central funds does not impact the fund's investment objective or risk profile, only the mechanics of how we manage its investment portfolio. The portfolio managers continue to be responsible for choosing appropriate investments for their funds, whether they elect to purchase shares of a central fund or individual securities. Fidelity does not charge any additional management fees for central funds.

Investing in central funds does change the way this report presents the fund's holdings. The Investments section continues to list direct investments of the fund, including each central fund. However, many of the individual investment-grade debt securities previously held by the fund were transferred to the central funds, so they are no longer directly held and thus not listed. The financial statements and a complete schedule of portfolio holdings for each of the fixed-income central funds are available upon request or at the SEC's web site at www.sec.gov.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many stock and bond markets around the world have been unsettled of late; however, volatility can often lead to opportunity for patient investors. Financial markets are always unpredictable, but there are a number of time-tested principles that can put the historical odds in your favor.

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

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

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

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

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Annual Report

Performance: The Bottom Line

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

Average Annual Total Returns

Periods ended August 31, 2007	Past 1 year	Past 5 years	Past 10 years
Class A (incl. 2.75% sales charge)^(dagger)	0.16%	3.15%	4.95%
Class T (incl. 2.75% sales charge)	0.03%	3.06%	4.84%
Class B (incl. contingent deferred sales charge)^A	-0.72%	3.08%	4.94%
Class C (incl. contingent deferred sales charge)^B	1.19%	2.86%	4.34%

^A Class B shares bear a 0.90% 12b-1 fee. Class B shares' contingent deferred sales charge included in the past one year, past five years, and past 10 years total return figures are 3%, 0%, and 0%, respectively.

^B Class C shares bear a 1.00% 12b-1 fee. The initial offering of Class C shares took place on November 3, 1997. Returns prior to November 3, 1997 are those of Class B and reflect Class B shares' 0.90% 12b-1 fee. Had Class C shares' 12b-1 fee been reflected, returns prior to November 3, 1997 would have been lower. Class C shares' contingent deferred sales charge included in the past one year, past five years, and past 10 years total return figures are 1%, 0%, and 0%, respectively.

⁸The current sales charge is as of April 1, 2007. Prior to April 1, 2007, the sales charge was 3.75% for Class A.

Annual Report

Performance - continued

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity® Advisor Intermediate Bond Fund - Class T on August 31, 1997 and the current 2.75% sales charge was paid. The chart shows how the value of your investment would have changed, and also shows how the Lehman Brothers® Intermediate U.S. Government/Credit Index performed over the same period.

Annual Report

Management's Discussion of Fund Performance

Ford O'Neil, Portfolio Manager of Fidelity®Advisor Intermediate Bond Fund

A subprime mortgage loan crisis and an emerging credit crunch contributed to subpar performance for some sectors of the investment-grade bond market during the 12-month period ending August 31, 2007. While returns for high-grade debt were fairly solid overall, they also were tempered to an extent by the Federal Reserve Board's decision not to lower interest rates as bond investors had hoped. The Lehman Brothers® U.S. Aggregate Index - a performance gauge of the taxable, high-quality debt market - gained 5.26%. Within the index, Treasuries - the bond market's highest-quality debt instrument - fared best, as many investors fled riskier fixed-income securities. The asset-backed category - home to volatile subprime mortgages, as well as credit card debt and auto loans - had the weakest performance.

During the period, the fund's Class A, Class T, Class B and Class C shares returned 2.99%, 2.85%, 2.24% and 2.18%, respectively (excluding sales charges), and the Lehman Brothers Intermediate U.S. Government/Credit Index rose 5.54%. By way of a refresher, I hold securities both directly and indirectly through Fidelity fixed-income central funds, available only to other Fidelity funds. They allow me to gain exposure to particular segments of the bond market. I also invested in Fidelity Ultra-Short Central Fund, a diversified pool of short-term assets. As I address fund performance, I will be doing so by looking at the portfolio as a whole, combining my direct investments and those of the central funds. Turning to fund performance, sector selection proved to be the biggest detractor, fueled by a significant underweighting in U.S. Treasury and agency securities and sizable out-of-benchmark investments in high-quality, higher-yielding securities such as commercial mortgage-backed and asset-backed bonds. While Treasuries and agencies were bolstered by a global flight to quality as the subprime mortgage market meltdown and resulting credit contagion forced a repricing of risk, securitized products were hurt by it. Among securitized products, our exposure to subprime mortgage securities detracted meaningfully. An out-of-index exposure to commercial mortgage-backed securities also worked against us. They suffered in response to concerns that the commercial property market could be vulnerable to lax lending standards. I believe my choices regarding the fund's yield-curve positioning - meaning how I allocated the fund's investments across bonds with various maturities - - generally worked in our favor. Security selection in the corporate sector also helped, with solid results from holdings in the real estate investment trust and communications segments.

During the period, the fund's Institutional Class shares returned 3.22%, while the Lehman Brothers Intermediate U.S. Government/Credit Index rose 5.54%. By way of a refresher, I hold securities both directly and indirectly through Fidelity fixed-income central funds, available only to other Fidelity funds. They allow me to gain exposure to particular segments of the bond market. I also invested in Fidelity Ultra-Short Central Fund, a diversified pool of short-term assets. As I address fund performance, I will be doing so by looking at the portfolio as a whole, combining my direct investments and those of the central funds. Turning to fund performance, sector selection proved to be the biggest detractor, fueled by a significant underweighting in U.S. Treasury and agency securities and sizable out-of-benchmark investments in high-quality, higher-yielding securities such as commercial mortgage-backed and asset-backed bonds. While Treasuries and agencies were bolstered by a global flight to quality as the subprime mortgage market meltdown and resulting credit contagion forced a repricing of risk, securitized products were hurt by it. Among securitized products, our exposure to subprime mortgage securities detracted meaningfully. An out-of-index exposure to commercial mortgage-backed securities also worked against us. They suffered in response to concerns that the commercial property market could be vulnerable to lax lending standards. I believe my choices regarding the fund's yield-curve positioning - meaning how I allocated the fund's investments across bonds with various maturities - generally worked in our favor. Security selection in the corporate sector also helped, with solid results from holdings in the real estate investment trust and communications segments.

Annual Report

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

Annual Report

Shareholder Expense Example

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

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2007 to August 31, 2007).

Actual Expenses

The first line of the accompanying table for each class of the Fund provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000.00 (for example, an $8,600 account value divided by $1,000.00 = 8.6), then multiply the result by the number in the first line for a class of the Fund under the heading entitled "Expenses Paid During Period" to estimate the expenses you paid on your account during this period. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

Hypothetical Example for Comparison Purposes

The second line of the accompanying table for each class of the Fund provides information about hypothetical account values and hypothetical expenses based on a Class' actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class' actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds. In addition, the Fund, as a shareholder in the underlying Fidelity Central Funds, will indirectly bear its pro rata share of the fees and expenses incurred by the underlying Fidelity Central Funds. These fees and expenses are not included in the Fund's annualized expense ratio used to calculate the expense estimate in the table below.

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.

Annual Report

Investments - continued

	Beginning Account Value March 1, 2007	Ending Account Value August 31, 2007	Expenses Paid During Period* March 1, 2007 to August 31, 2007
Class A
Actual	$ 1,000.00	$ 999.30	$ 4.13
Hypothetical^A	$ 1,000.00	$ 1,021.07	$ 4.18
Class T
Actual	$ 1,000.00	$ 998.40	$ 4.08
Hypothetical^A	$ 1,000.00	$ 1,021.12	$ 4.13
Class B
Actual	$ 1,000.00	$ 995.90	$ 7.55
Hypothetical^A	$ 1,000.00	$ 1,017.64	$ 7.63
Class C
Actual	$ 1,000.00	$ 995.60	$ 7.90
Hypothetical^A	$ 1,000.00	$ 1,017.29	$ 7.98
Institutional Class
Actual	$ 1,000.00	$ 1,000.70	$ 2.72
Hypothetical^A	$ 1,000.00	$ 1,022.48	$ 2.75

^A 5% return per year before expenses

* 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). The fees and expenses of the underlying Fidelity Central Funds in which the Fund invests are not included in the Fund's annualized expense ratio.

	Annualized Expense Ratio
Class A	.82%
Class T	.81%
Class B	1.50%
Class C	1.57%
Institutional Class	.54%

Annual Report

Investment Changes

The information in the following tables is based on the combined investments of the fund and its pro-rata share of its investments of each Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of August 31, 2007		As of February 28, 2007
	U.S. Government and U.S. Government Agency Obligations 41.0%		U.S. Government and U.S. Government Agency Obligations 37.8%
	AAA 17.0%		AAA 18.9%
	AA 7.9%		AA 7.0%
	A 7.6%		A 9.4%
	BBB 19.9%		BBB 19.9%
	BB and Below 4.1%		BB and Below 3.5%
	Not Rated 0.5%		Not Rated 1.0%
	Short-Term Investments and Net Other Assets 2.0%		Short-Term Investments and Net Other Assets 2.5%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. All ratings are as of the report date and do not reflect subsequent downgrades.

Weighted Average Maturity as of August 31, 2007
		6 months ago
Years	3.8	4.2

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

Duration as of August 31, 2007
		6 months ago
Years	3.6	3.5

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

Asset Allocation (% of fund's net assets)
As of August 31, 2007*			As of February 28, 2007**
	Corporate Bonds 30.2%			Corporate Bonds 29.4%
	U.S. Government and U.S. Government Agency Obligations 41.0%			U.S. Government and U.S. Government Agency Obligations 37.8%
	Asset-Backed Securities 11.3%			Asset-Backed Securities 13.8%
	CMOs and Other Mortgage Related Securities 14.9%			CMOs and Other Mortgage Related Securities 15.7%
	Other Investments 0.6%			Other Investments 0.8%
	Short-Term Investments and Net Other Assets 2.0%			Short-Term Investments and Net Other Assets 2.5%
* Foreign investments		9.7%	** Foreign investments		9.6%
* Futures and Swaps		18.0%	** Futures and Swaps		16.6%

A holdings listing for the Fund, which presents direct holdings as well as the pro-rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com.

Annual Report

Investments August 31, 2007

Showing Percentage of Net Assets

Nonconvertible Bonds - 2.5%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 0.2%
Media - 0.2%
Time Warner Cable, Inc. 5.85% 5/1/17 (c)	$ 1,328,000		$ 1,297,969
Univision Communications, Inc. 3.875% 10/15/08	1,680,000		1,617,000
			2,914,969
CONSUMER STAPLES - 0.3%
Food & Staples Retailing - 0.2%
CVS Caremark Corp. 6.302% 6/1/37 (g)	2,510,000		2,424,522
Tobacco - 0.1%
Reynolds American, Inc. 7.25% 6/15/37	1,575,000		1,596,207
TOTAL CONSUMER STAPLES			4,020,729
ENERGY - 0.4%
Oil, Gas & Consumable Fuels - 0.4%
Gazstream SA 5.625% 7/22/13 (c)	2,220,125		2,170,172
Kinder Morgan Energy Partners LP 6.95% 1/15/38	225,000		226,371
Nexen, Inc. 6.4% 5/15/37	1,015,000		987,434
Talisman Energy, Inc. yankee 6.25% 2/1/38	635,000		596,569
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	1,180,000		1,171,150
Valero Energy Corp. 6.625% 6/15/37	420,000		423,488
			5,575,184
FINANCIALS - 0.6%
Capital Markets - 0.1%
Deutsche Bank AG London 6% 9/1/17	1,220,000		1,230,884
Consumer Finance - 0.2%
SLM Corp.:
4.5% 7/26/10	560,000		518,297
5.5% 7/27/09 (g)	531,000		509,456
5.52% 7/26/10 (g)	2,025,000		1,908,206
			2,935,959
Diversified Financial Services - 0.0%
ZFS Finance USA Trust V 6.5% 5/9/67 (c)(g)	805,000		753,193
Insurance - 0.2%
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (c)	3,000,000		3,007,344
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - 0.1%
Archstone-Smith Operating Trust 5.25% 5/1/15	$ 645,000		$ 622,240
UDR, Inc. 5.5% 4/1/14	1,470,000		1,434,054
			2,056,294
TOTAL FINANCIALS			9,983,674
INDUSTRIALS - 0.4%
Aerospace & Defense - 0.1%
Bombardier, Inc. 6.3% 5/1/14 (c)	1,575,000		1,504,125
Airlines - 0.3%
American Airlines, Inc. pass thru trust certificates 7.324% 4/15/11	500,000		491,250
Delta Air Lines, Inc. pass thru trust certificates 7.57% 11/18/10	2,095,000		2,121,188
United Air Lines, Inc. pass-thru trust certificates:
7.032% 4/1/12	800,478		803,984
7.186% 10/1/12	1,987,712		2,007,589
			5,424,011
TOTAL INDUSTRIALS			6,928,136
UTILITIES - 0.6%
Electric Utilities - 0.3%
Commonwealth Edison Co. 5.4% 12/15/11	927,000		921,375
Nevada Power Co. 6.5% 5/15/18	3,950,000		3,950,000
			4,871,375
Independent Power Producers & Energy Traders - 0.1%
TXU Corp. 5.55% 11/15/14	1,645,000		1,348,900
Multi-Utilities - 0.2%
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,667,639
TECO Energy, Inc. 7% 5/1/12	1,500,000		1,538,213
			3,205,852
TOTAL UTILITIES			9,426,127
TOTAL NONCONVERTIBLE BONDS (Cost $39,580,512)		38,848,819
U.S. Government and Government Agency Obligations - 24.4%
	Principal Amount		Value
U.S. Government Agency Obligations - 3.8%
Fannie Mae:
4.375% 7/17/13	$ 4,850,000		$ 4,712,415
5% 2/16/12	18,000,000		18,160,434
Federal Home Loan Bank 5.375% 8/19/11	10,035,000		10,255,991
Freddie Mac:
5.25% 7/18/11 (b)	24,105,000		24,540,023
5.25% 11/5/12	1,405,000		1,404,149
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			59,073,012
U.S. Treasury Inflation Protected Obligations - 6.7%
U.S. Treasury Inflation-Indexed Notes:
0.875% 4/15/10	30,792,440		29,450,145
2% 4/15/12	5,133,500		5,053,680
2% 1/15/14 (b)	43,071,646		42,060,381
2% 7/15/14 (b)	28,737,020		28,088,081
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			104,652,287
U.S. Treasury Obligations - 13.9%
U.S. Treasury Notes:
4.25% 8/15/14	10,000,000		9,922,660
4.5% 4/30/12 (b)	20,000,000		20,203,120
4.625% 7/31/12 (d)	29,552,000		30,027,258
4.75% 5/15/14 (b)	152,695,000		156,154,454
TOTAL U.S. TREASURY OBLIGATIONS			216,307,492
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $380,479,181)		380,032,791
U.S. Government Agency - Mortgage Securities - 9.7%

Fannie Mae - 5.8%
3.72% 10/1/33 (g)	163,186		159,874
3.75% 9/1/33 (g)	669,427		660,279
3.75% 1/1/34 (g)	149,714		147,700
3.754% 10/1/33 (g)	150,421		149,670
3.785% 6/1/34 (g)	736,723		724,338
3.823% 4/1/33 (g)	442,407		442,275
3.845% 10/1/33 (g)	3,759,173		3,726,649
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
3.934% 5/1/33 (g)	$ 48,135		$ 47,541
4% 8/1/18	2,867,569		2,694,097
4% 10/1/18 (g)	104,194		102,862
4.025% 4/1/33 (g)	38,257		38,204
4.067% 2/1/35 (g)	65,100		64,977
4.098% 1/1/35 (g)	236,992		235,903
4.167% 1/1/35 (g)	338,444		333,039
4.249% 1/1/34 (g)	416,230		412,531
4.25% 2/1/35 (g)	164,183		161,747
4.26% 5/1/35 (g)	161,591		161,177
4.27% 10/1/33 (g)	65,426		64,852
4.285% 3/1/33 (g)	162,334		162,192
4.288% 8/1/33 (g)	270,965		271,275
4.295% 3/1/35 (g)	137,836		138,707
4.297% 3/1/33 (g)	75,119		73,963
4.303% 6/1/33 (g)	85,915		85,967
4.304% 4/1/35 (g)	83,271		82,933
4.343% 1/1/35 (g)	179,955		177,551
4.356% 2/1/34 (g)	316,682		314,190
4.391% 2/1/35 (g)	251,181		247,762
4.413% 5/1/35 (g)	109,904		109,395
4.417% 12/1/33 (g)	6,691,850		6,605,890
4.43% 5/1/35 (g)	437,243		435,955
4.434% 3/1/35 (g)	238,559		235,437
4.452% 8/1/34 (g)	447,746		444,593
4.481% 1/1/35 (g)	181,232		179,691
4.487% 3/1/35 (g)	503,412		497,378
4.5% 4/1/20 to 3/1/35	2,154,034		2,025,444
4.502% 10/1/35 (g)	63,755		63,324
4.503% 2/1/35 (g)	801,358		803,768
4.506% 2/1/35 (g)	122,791		122,624
4.509% 3/1/35 (g)	501,800		495,986
4.513% 2/1/35 (g)	2,288,865		2,274,735
4.517% 2/1/35 (g)	68,863		69,016
4.528% 7/1/35 (g)	506,257		501,745
4.57% 11/1/34 (g)	442,800		438,734
4.57% 2/1/35 (g)	1,561,483		1,545,202
4.57% 7/1/35 (g)	582,174		582,993
4.575% 2/1/35 (g)	436,456		432,227
4.613% 7/1/34 (g)	4,993,538		4,949,914
4.631% 2/1/35 (g)	4,034,439		3,996,441
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.657% 3/1/35 (g)	$ 1,040,976		$ 1,045,151
4.668% 11/1/34 (g)	510,041		506,483
4.7% 10/1/34 (g)	525,886		522,550
4.708% 12/1/34 (g)	338,147		335,784
4.709% 3/1/35 (g)	51,229		51,563
4.717% 7/1/34 (g)	414,728		412,576
4.776% 12/1/34 (g)	143,596		142,652
4.799% 6/1/35 (g)	684,040		681,188
4.807% 11/1/34 (g)	445,234		442,738
4.808% 2/1/33 (g)	216,473		218,014
4.856% 10/1/34 (g)	1,796,186		1,788,318
4.87% 5/1/33 (g)	5,960		5,992
4.884% 10/1/35 (g)	331,306		327,825
4.945% 8/1/34 (g)	1,455,697		1,452,173
5.016% 7/1/34 (g)	70,505		70,380
5.045% 5/1/35 (g)	847,855		850,391
5.062% 8/1/34 (g)	120,878		120,972
5.07% 9/1/34 (g)	1,259,206		1,257,436
5.079% 9/1/34 (g)	144,454		144,306
5.112% 1/1/36 (g)	1,211,661		1,210,815
5.138% 3/1/35 (g)	70,024		69,918
5.144% 5/1/35 (g)	544,683		543,842
5.157% 5/1/35 (g)	1,598,161		1,596,108
5.173% 6/1/35 (g)	608,451		610,579
5.176% 8/1/33 (g)	207,066		207,351
5.197% 5/1/35 (g)	1,723,676		1,722,769
5.22% 4/1/36 (g)	2,282,145		2,274,192
5.261% 11/1/36 (g)	581,566		582,626
5.297% 7/1/35 (g)	80,487		80,763
5.317% 12/1/34 (g)	214,376		214,740
5.37% 2/1/36 (g)	209,932		210,041
5.475% 2/1/36 (g)	2,732,195		2,742,218
5.5% 9/1/10 to 12/1/14	2,501,130		2,515,898
5.532% 11/1/36 (g)	1,175,101		1,179,367
5.602% 1/1/36 (g)	806,378		811,335
5.651% 7/1/37 (g)	464,989		467,733
5.815% 1/1/36 (g)	552,665		556,334
5.819% 7/1/46 (d)(g)	4,648,263		4,688,069
5.829% 3/1/36 (g)	1,761,715		1,777,172
6% 5/1/16 to 4/1/17	865,569		879,592
6.061% 4/1/36 (g)	331,831		335,851
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
6.256% 6/1/36 (g)	$ 162,501		$ 164,012
6.319% 4/1/36 (g)	293,113		297,689
6.5% 12/1/13 to 3/1/35	10,816,413		11,043,896
6.575% 9/1/36 (g)	2,323,920		2,359,403
7% 2/1/09 to 6/1/33	1,938,351		2,006,105
7.5% 8/1/17 to 9/1/28	675,216		716,575
8.5% 6/1/11 to 9/1/25	112,967		121,434
9.5% 2/1/25	20,504		22,354
10.5% 8/1/20	20,269		23,449
11% 8/1/15	100,583		105,797
12.5% 12/1/13 to 4/1/15	12,531		14,578
TOTAL FANNIE MAE			91,221,844
Freddie Mac - 1.3%
4.064% 1/1/35 (g)	518,019		518,053
4.173% 1/1/34 (g)	1,749,854		1,728,379
4.289% 3/1/35 (g)	179,954		180,366
4.292% 2/1/35 (g)	383,941		384,891
4.307% 12/1/34 (g)	218,405		214,858
4.342% 3/1/35 (g)	360,415		354,347
4.375% 2/1/35 (g)	418,558		411,727
4.423% 3/1/35 (g)	217,970		214,332
4.423% 6/1/35 (g)	277,715		274,850
4.426% 2/1/34 (g)	187,900		186,029
4.455% 3/1/35 (g)	235,378		231,722
4.539% 2/1/35 (g)	391,970		386,316
4.807% 3/1/33 (g)	69,692		70,111
4.99% 4/1/35 (g)	962,495		963,416
5.131% 4/1/35 (g)	986,429		982,123
5.534% 1/1/36 (g)	1,276,118		1,277,669
5.787% 10/1/35 (g)	301,392		302,781
5.877% 6/1/36 (g)	373,419		375,785
6.044% 6/1/36 (g)	364,508		367,439
6.049% 7/1/37 (g)	1,890,000		1,903,605
6.089% 4/1/36 (g)	613,915		618,593
6.1% 6/1/36 (g)	343,339		346,926
6.744% 10/1/36 (g)	2,054,132		2,081,326
6.747% 1/1/37 (g)	2,874,199		2,921,662
6.853% 10/1/36 (g)	2,844,165		2,893,535
8.5% 9/1/24 to 8/1/27	88,854		96,480
10% 5/1/09	1,154		1,172
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
10.5% 5/1/21	$ 12,654		$ 13,059
11% 12/1/11	1,210		1,283
11.5% 10/1/15	6,128		6,969
11.75% 10/1/10	7,189		7,765
TOTAL FREDDIE MAC			20,317,569
Government National Mortgage Association - 2.6%
4.25% 7/20/34 (g)	534,556		532,400
6.5% 9/1/37 (d)	38,000,000		38,724,994
7% 7/15/28 to 11/15/28	505,722		526,803
7.5% 2/15/28 to 10/15/28	8,454		8,894
8% 6/15/24 to 10/15/24	7,398		7,898
8.5% 4/15/17 to 10/15/21	105,514		115,104
11% 7/20/19 to 8/20/19	5,193		6,076
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			39,922,169
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $151,519,383)		151,461,582
Asset-Backed Securities - 0.7%

Advanta Business Card Master Trust Series 2007-D1 Class D, 6.9375% 1/22/13 (c)(g)	1,420,000		1,393,855
AmeriCredit Automobile Receivables Trust Series 2006-1 Class E1, 6.62% 5/6/13 (c)	739,138		591,310
Bear Stearns Asset Backed Securities Trust Series 2005-HE2 Class M2, 6.255% 2/25/35 (g)	570,000		394,448
Capital Auto Receivables Asset Trust Series 2006-SN1A:
Class B, 5.5% 4/20/10 (c)	245,000		244,109
Class C, 5.77% 5/20/10 (c)	235,000		233,422
Class D, 6.15% 4/20/11 (c)	400,000		399,771
Carrington Mortgage Loan Trust Series 2006-NC3 Class M10, 7.505% 8/25/36 (c)(g)	215,000		47,031
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (c)	715,000		734,915
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (c)	850,000		845,855
Series 2006-C Class D, 6.89% 5/15/13 (c)	585,000		582,025
Series 2007-A Class D, 7.05% 12/15/13 (c)	310,000		294,500
Asset-Backed Securities - continued
	Principal Amount		Value
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (c)	$ 1,030,000		$ 1,007,690
GSAMP Trust Series 2004-AR1 Class B4, 5% 6/25/34 (c)(g)	290,000		145,000
Long Beach Mortgage Loan Trust Series 2006-7 Class M11, 8.005% 8/25/36 (g)	1,000,000		120,000
Merna Reinsurance Ltd. Series 2007-1 Class B, 7.11% 6/30/12 (c)(g)	1,695,000		1,695,000
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	1,045,000		1,030,823
Structured Asset Securities Corp. Series 2006-BC1 Class B1, 8.005% 3/25/36 (c)(g)	700,000		107,170
Wachovia Auto Loan Trust Series 2006-2A Class E, 7.05% 5/20/14 (c)	955,000		918,390
WaMu Asset-Backed Certificates Series 2006-HE5 Class B1, 8.005% 10/25/36 (c)(g)	825,000		165,000
TOTAL ASSET-BACKED SECURITIES (Cost $13,361,298)		10,950,314
Collateralized Mortgage Obligations - 3.0%

Private Sponsor - 0.4%
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.3588% 2/25/37 (g)	166,810		164,432
Countrywide Home Loans pass-thru certificates Series 2007-HY5 Class 3A1, 6.2335% 9/25/37 (g)	1,255,000		1,236,175
Credit Suisse First Boston Mortgage Securities Corp. floater Series 2007-AR7 Class 2A1, 4.6454% 11/25/34 (g)	701,284		688,994
JPMorgan Mortgage Trust Series 2007-A1 Class 3A2, 5.0072% 7/25/35 (g)	731,103		719,888
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B6, 8.2% 7/10/35 (c)(g)	738,246		745,628
Series 2003-CB1:
Class B4, 7% 6/10/35 (c)(g)	691,230		694,686
Class B5, 7.6% 6/10/35 (c)(g)	470,037		472,387
Class B6, 8.1% 6/10/35 (c)(g)	281,100		283,911
Structured Asset Securities Corp. floater Series 2006-BC5 Class B, 8.005% 12/25/36 (c)(g)	650,000		231,530
Wells Fargo Mortgage Backed Securities Trust:
Series 2005-AR12 Class 2A6, 4.3186% 7/25/35 (g)	218,828		213,408
Series 2005-AR3 Class 2A1, 4.187% 3/25/35 (g)	428,617		420,446
TOTAL PRIVATE SPONSOR			5,871,485
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - 2.6%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 5.755% 10/25/35 (g)	$ 4,879,808		$ 4,850,026
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,158,480		1,160,765
Series 2002-9 Class PC, 6% 3/25/17	235,449		237,769
Series 2003-84 Class GC, 4.5% 5/25/15	1,540,000		1,530,488
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,848,998
Series 2006-4 Class PB, 6% 9/25/35	2,899,419		2,936,041
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	828,261		828,629
Series 2004-3 Class BA, 4% 7/25/17	136,430		131,943
Series 2004-45 Class AV, 4.5% 10/25/22	1,086,165		1,081,695
Series 2004-86 Class KC, 4.5% 5/25/19	603,331		589,382
Series 2004-91 Class AH, 4.5% 5/25/29	1,252,716		1,223,495
Freddie Mac planned amortization class:
Series 2104 Class PG, 6% 12/15/28	1,326,031		1,349,770
Series 2356 Class GD, 6% 9/15/16	920,294		935,773
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,082,441
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2363 Class PF, 6% 9/15/16	1,222,493		1,242,841
Series 2702 Class WB, 5% 4/15/17	2,480,000		2,479,767
Series 2952 Class EC, 5.5% 11/15/28	2,785,000		2,800,591
Series 3018 Class UD, 5.5% 9/15/30	1,735,000		1,746,311
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,512,322
Series 3117 Class PC, 5% 6/15/31	4,000,000		3,963,738
sequential payer:
Series 2528 Class HN, 5% 11/15/17	1,515,000		1,488,298
Series 2777 Class AB, 4.5% 6/15/29	2,899,514		2,830,939
Series 2809 Class UA, 4% 12/15/14	638,373		632,408
TOTAL U.S. GOVERNMENT AGENCY			40,484,430
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $46,339,149)		46,355,915
Commercial Mortgage Securities - 0.9%
	Principal Amount		Value
Bear Stearns Commercial Mortgage Securities, Inc. Series 2003-T12 Class X2, 0.5582% 8/13/39 (c)(g)(i)	$ 5,227,242		$ 84,170
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,994,830
Credit Suisse Commercial Mortgage Trust Series 2007-C2 Class A1, 5.269% 1/15/49	593,124		590,325
DLJ Commercial Mortgage Corp. sequential payer Series 1999-CG1 Class A1B, 6.46% 3/10/32	3,787,006		3,822,693
Ginnie Mae guaranteed Multi-family pass-thru securities sequential payer Series 2002-35 Class C, 5.8739% 10/16/23 (g)	113,105		114,181
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	2,656,817		2,604,087
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		2,911,883
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6778% 12/10/41 (g)(i)	11,458,015		221,849
LB-UBS Commercial Mortgage Trust:
sequential payer Series 2006-C7 Class A1, 5.279% 11/15/38	361,909		361,401
Series 2007-C2 Class A1, 5.226% 2/15/40	454,099		452,385
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $14,443,782)		14,157,804

Fixed-Income Funds - 59.7%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (h)	1,222,536		116,678,845
Fidelity 2-5 Year Duration Securitized Bond Central Fund (h)	1,583,675		154,867,605
Fidelity Corporate Bond 1-10 Year Central Fund (h)	3,937,791		389,723,224
Fidelity Corporate Bond 1-5 Year Central Fund (h)	262,206		25,963,647
Fidelity Specialized High Income Central Fund (h)	235,830		22,875,519
Fidelity Ultra-Short Central Fund (h)	2,306,145		218,046,027
TOTAL FIXED-INCOME FUNDS (Cost $955,705,166)		928,154,867
Cash Equivalents - 21.5%
	Maturity Amount		Value
Investments in repurchase agreements in a joint trading account at:
5.37%, dated 8/31/07 due 9/4/07 (Collateralized by U.S. Government Obligations) #	$ 62,090,045		$ 62,053,000
5.4%, dated 8/31/07 due 9/4/07 (Collateralized by U.S. Government Obligations) # (a)	272,785,573		272,622,000
TOTAL CASH EQUIVALENTS (Cost $334,675,000)		334,675,000
TOTAL INVESTMENT PORTFOLIO - 122.4% (Cost $1,936,103,471)			1,904,637,092
NET OTHER ASSETS - (22.4)%			(348,714,403)
NET ASSETS - 100%		$ 1,555,922,689

Swap Agreements
	Expiration Date	Notional Amount
Credit Default Swaps
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE8 Class B3, 7.3913% 9/25/34	Oct. 2034	$ 409,000	(71,809)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34	Oct. 2034	400,000	(88,466)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34	Sept. 2034	409,000	(101,148)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC7, Class B3, 7.6913% 7/25/34	August 2034	$ 409,000	$ (63,089)
Receive monthly notional amount multiplied by 2.5% and pay Credit Suisse First Boston upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R11 Class M9, 8.03% 11/25/34	Dec. 2034	625,000	(175,227)
Receive monthly notional amount multiplied by .52% and pay Bank of America upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R8 Class M6, 6.835% 9/25/34	Oct. 2034	1,900,000	(274,757)
Receive monthly notional amount multiplied by .8% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WCH1 Class M6, 6.365% 1/25/35	Feb. 2035	600,000	(123,534)
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34	August 2034	409,000	(45,445)
Receive monthly notional amount multiplied by .85% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M6, 6.105% 5/25/35	June 2035	600,000	(183,816)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34	Nov. 2034	$ 409,000	$ (68,265)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34	Oct. 2034	409,000	(57,852)
Receive monthly notional amount multiplied by 1.6% and pay Morgan Stanley, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 5.4413% 5/25/35	June 2035	370,000	(114,741)
Receive monthly notional amount multiplied by 1.66% and pay Morgan Stanley, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 5.4413% 5/25/35	June 2035	409,000	(126,282)
Receive monthly notional amount multiplied by 2% and pay Goldman Sachs upon credit event of Long Beach Mortgage Loan Trust, par value of the notional amount of Long Beach Mortgage Loan Trust Series 2006-7 Class M9, 7.14% 8/25/36	Sept. 2036	1,000,000	(782,702)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32	April 2032	36,015	(1,106)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34	March 2034	$ 85,922	$ (12,179)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34	Feb. 2034	39,777	(32,287)
Receive monthly notional amount multiplied by 2.7% and pay Merrill Lynch, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M9, 6.4606% 5/25/35	June 2035	2,410,000	(1,043,383)
Receive monthly notional amount multiplied by 3% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2005-R4 Class M9, 7.07% 7/25/35	August 2035	700,000	(254,597)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33	May 2033	409,000	(118,167)
Receive monthly notional amount multiplied by 5.55% and pay Deutsche Bank upon credit event of Carrington Mortgage Loan Trust, par value of the notional amount of Carrington Mortgage Loan Trust Series 2006-FRE1 Class M10, 7.74% 7/25/36	August 2036	700,000	(293,815)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 6.25% and pay Deutsche Bank upon credit event of Residential Asset Mortgage Products, Inc., par value of the notional amount of Residential Asset Mortgage Products, Inc. Series 2006-RS5, 7.17% 9/25/36	Oct. 2036	$ 700,000	$ (490,380)
Receive quarterly a fixed rate of .4% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 4 Index, par value of the proportional notional amount (f)	June 2010	10,000,000	(22,252)
Receive quarterly a fixed rate of .45% multiplied by the notional amount and pay to Goldman Sachs, upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 5 Index, par value of the proportional notional amount (j)	Dec. 2010	15,000,000	(16,463)
Receive quarterly a fixed rate of .5% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 3 Index, par value of the proportional notional amount (e)	March 2010	6,373,600	11,433
Receive quarterly notional amount multiplied by .72% and pay Bank of America upon credit event of Alleghany Energy Supply Co. LLC, par value of the notional amount of Alleghany Energy Supply Co. LLC 8.25% 4/15/12	June 2012	1,400,000	(28,670)
Receive quarterly notional amount multiplied by .78% and pay Deutsche Bank upon credit event of Allegheny Energy Supply Co. LLC, par value of the notional amount of Allegheny Energy Supply Co. LLC 8.25% 4/15/12	June 2012	1,405,000	(25,633)
TOTAL CREDIT DEFAULT SWAPS		47,617,314	(4,604,632)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 4.795% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	Dec. 2011	$ 15,000,000	$ (109,041)
Receive semi-annually a fixed rate equal to 4.9375% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	March 2012	25,000,000	269,198
Receive semi-annually a fixed rate equal to 5.022% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	Nov. 2011	20,000,000	312,024
Receive semi-annually a fixed rate equal to 5.095% and pay quarterly a floating rate based on 3-month LIBOR with Bank of America	Feb. 2012	30,000,000	172,572
Receive semi-annually a fixed rate equal to 5.145% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Feb. 2012	60,000,000	461,595
Receive semi-annually a fixed rate equal to 5.186% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	Sept. 2011	15,000,000	326,518
TOTAL INTEREST RATE SWAPS		165,000,000	1,432,866
		$ 212,617,314	$ (3,171,766)

Legend

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

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

(c) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the end of the period, the value of these securities amounted to $20,650,158 or 1.3% of net assets.

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

(e) Dow Jones CDX N.A. Investment Grade 3 is a tradable index of credit default swaps on investment grade debt of U.S. companies.

(f) Dow Jones CDX N.A. Investment Grade 4 is a tradable index of credit default swaps on investment grade debt of U.S. companies.

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

(h) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete schedule of portfolio holdings for each Fidelity Central Fund is filed with the SEC for the first and third quarters of each fiscal year on Form N-Q and is available upon request or at the SEC's web site at www.sec.gov. A holdings listing for the Fund, which presents direct holdings as well as the pro rata share of securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. In addition, each Fidelity Central Fund's financial statements, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

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

(j) Dow Jones CDX N.A. Investment Grade 5 is a tradable index of credit default swaps on investment grade debt of U.S. companies.

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

Repurchase Agreement / Counterparty	Value
$62,053,000 due 9/04/07 at 5.37%
BNP Paribas Securities Corp.	$ 1,433,828
Banc of America Securities LLC	21,973,330
Bank of America, NA	9,876,280
Bear Stearns & Co., Inc.	1,234,535
Citigroup Global Markets, Inc.	3,893,682
Credit Suisse Securities (USA) LLC	2,469,070
Greenwich Capital Markets, Inc.	1,234,535
HSBC Securities (USA), Inc.	2,469,070
ING Financial Markets LLC	4,938,140
Societe Generale, New York Branch	7,407,210
UBS Securities LLC	2,407,343
WestLB AG	2,715,977
	$ 62,053,000

$272,622,000 due 9/04/07 at 5.40%
Barclays Capital, Inc.	$ 174,709,423
Citigroup Global Markets, Inc.	23,037,110
Countrywide Securities Corp.	74,875,467
	$ 272,622,000

Affiliated Central Funds

Information regarding fiscal year to date income earned by the Fund from investments in Fidelity Central Funds is as follows:

Fund	Income earned
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 5,460,167
Fidelity 2-5 Year Duration Securitized Bond Central Fund	6,857,269
Fidelity Corporate Bond 1-10 Year Central Fund	18,620,019
Fidelity Corporate Bond 1-5 Year Central Fund	1,322,191
Fidelity Specialized High Income Central Fund	1,086,186
Fidelity Ultra-Short Central Fund	13,826,190
Total	$ 47,172,022

Additional information regarding the Fund's fiscal year to date purchases and sales, including the ownership percentage, of the non Money Market Central Funds is as follows:

Fund (Amounts in thousands)	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ -	$ 122,200,190*	$ -	$ 116,678,845	4.2%
Fidelity 2-5 Year Duration Securitized Bond Central Fund	-	158,281,936*	-	154,867,605	4.1%
Fidelity Corporate Bond 1-10 Year Central Fund	-	428,551,841*	34,972,651	389,723,224	5.5%
Fidelity Corporate Bond 1-5 Year Central Fund	-	40,285,352*	13,992,114	25,963,647	2.8%
Fidelity Specialized High Income Central Fund	14,777,196	8,240,174	-	22,875,519	6.7%
Fidelity Ultra-Short Central Fund	218,844,967	111,366,065*	98,508,193	218,046,027	1.7%
Total	$ 233,622,163	$ 868,925,558	$ 147,472,958	$ 928,154,867

* Includes the value of shares received through in-kind contributions. See Note 6 of the Notes to
Financial Statements.

Income Tax Information

At August 31, 2007, the fund had a capital loss carryforward of approximately $8,055,126 all of which will expire on August 31, 2014.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

	August 31, 2007

Assets
Investment in securities, at value (including securities loaned of $264,659,727 and repurchase agreements of $334,675,000) - See accompanying schedule: Unaffiliated issuers (cost $980,398,305)	$ 976,482,225
Fidelity Central Funds (cost $955,705,166)	928,154,867
Total Investments (cost $1,936,103,471)		$ 1,904,637,092
Cash		256,820
Receivable for investments sold		194,729
Receivable for swap agreements		29,491
Receivable for fund shares sold		1,318,779
Interest receivable		4,807,965
Distributions receivable from Fidelity Central Funds		4,680,666
Prepaid expenses		2,005
Total assets		1,915,927,547

Liabilities
Payable for investments purchased Regular delivery	$ 5,471,383
Delayed delivery	73,465,919
Payable for fund shares redeemed	3,914,605
Distributions payable	319,665
Swap agreements, at value	3,171,766
Accrued management fee	408,652
Distribution fees payable	223,546
Other affiliated payables	301,236
Other payables and accrued expenses	105,586
Collateral on securities loaned, at value	272,622,500
Total liabilities		360,004,858

Net Assets		$ 1,555,922,689
Net Assets consist of:
Paid in capital		$ 1,602,292,429
Undistributed net investment income		3,153,954
Accumulated undistributed net realized gain (loss) on investments		(14,961,031)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		(34,562,663)
Net Assets		$ 1,555,922,689

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

Annual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

	August 31, 2007

Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($255,591,257 ÷ 24,030,211 shares)		$ 10.64

Maximum offering price per share (100/97.25 of $10.64)		$ 10.94
Class T: Net Asset Value and redemption price per share ($503,737,463 ÷ 47,338,110 shares)		$ 10.64

Maximum offering price per share (100/97.25 of $10.64)		$ 10.94
Class B: Net Asset Value and offering price per share ($22,608,709 ÷ 2,127,590 shares) ^A		$ 10.63

Class C: Net Asset Value and offering price per share ($58,693,038 ÷ 5,528,151 shares) ^A		$ 10.62

Institutional Class: Net Asset Value, offering price and redemption price per share ($715,292,222 ÷ 67,110,845 shares)		$ 10.66

^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.

Annual Report

Statement of Operations

	Year ended August 31, 2007

Investment Income
Interest		$ 35,506,229
Income from Fidelity Central Funds		47,172,022
Total income		82,678,251

Expenses
Management fee	$ 4,952,905
Transfer agent fees	3,087,976
Distribution fees	2,727,644
Accounting and security lending fees	544,049
Custodian fees and expenses	39,822
Independent trustees' compensation	5,161
Registration fees	112,452
Audit	85,794
Legal	10,065
Miscellaneous	13,351
Total expenses before reductions	11,579,219
Expense reductions	(64,283)	11,514,936
Net investment income		71,163,315
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	(4,111,362)
Fidelity Central Funds	(2,027,324)
Swap agreements	(2,249,051)
Capital gain distributions from Fidelity Central Funds	31,496
Total net realized gain (loss)		(8,356,241)
Change in net unrealized appreciation (depreciation) on:
Investment securities:
Unaffiliated issuers	8,966,099
Fidelity Central Funds	(24,833,592)
Swap agreements	(1,887,640)
Total change in net unrealized appreciation (depreciation)		(17,755,133)
Net gain (loss)		(26,111,374)
Net increase (decrease) in net assets resulting from operations		$ 45,051,941

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

Annual Report

Financial Statements - continued

Statement of Changes in Net Assets

	Year ended August 31, 2007	Ten months ended August 31, 2006*	Year ended October 31, 2005
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 71,163,315	$ 52,322,457	$ 48,634,982
Net realized gain (loss)	(8,356,241)	(10,023,592)	7,895,285
Change in net unrealized appreciation (depreciation)	(17,755,133)	4,063,334	(50,939,491)
Net increase (decrease) in net assets resulting from operations	45,051,941	46,362,199	5,590,776
Distributions to shareholders from net investment income	(67,133,368)	(51,890,296)	(46,348,627)
Distributions to shareholders from net realized gain	-	(6,729,699)	(17,912,078)
Total distributions	(67,133,368)	(58,619,995)	(64,260,705)
Share transactions - net increase (decrease)	92,477,521	43,358,947	165,772,627
Total increase (decrease) in net assets	70,396,094	31,101,151	107,102,698

Net Assets
Beginning of period	1,485,526,595	1,454,425,444	1,347,322,746
End of period (including undistributed net investment income of $3,153,954, $2,339,755 and $5,771,423, respectively)	$ 1,555,922,689	$ 1,485,526,595	$ 1,454,425,444

* The Fund changed its fiscal year end from October 31 to August 31, effective August 31, 2006.

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

Annual Report

Financial Highlights - Class A

Years ended August 31,	2007	2006^H	2005^K	2004^K	2003^K	2002^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.78	$ 10.87	$ 11.34	$ 11.32	$ 11.06	$ 11.01
Income from Investment Operations
Net investment income^E	.487	.385	.397	.385	.420	.521
Net realized and unrealized gain (loss)	(.167)	(.043)	(.338)	.120	.254	.055
Total from investment operations	.320	.342	.059	.505	.674	.576
Distributions from net investment income	(.460)	(.382)	(.379)	(.385)	(.414)	(.526)
Distributions from net realized gain	-	(.050)	(.150)	(.100)	-	-
Total distributions	(.460)	(.432)	(.529)	(.485)	(.414)	(.526)
Net asset value, end of period	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32	$ 11.06
Total Return^{B, C, D}	2.99%	3.23%	.54%	4.58%	6.16%	5.44%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	.79%	.75%^A	.81%	.84%	.81%	.83%
Expenses net of fee waivers, if any	.79%	.75%^A	.81%	.84%	.81%	.83%
Expenses net of all reductions	.78%	.74%^A	.80%	.84%	.81%	.82%
Net investment income	4.52%	4.30%^A	3.60%	3.42%	3.72%	4.82%
Supplemental Data
Net assets, end of period (000 omitted)	$ 255,591	$ 229,490	$ 219,441	$ 186,748	$ 166,701	$ 133,236
Portfolio turnover rate^G	89%^J	43%^A	73%	96%	108%	121%

^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 Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006.

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

^J Portfolio turnover rate excludes securities received or delivered through non-taxable in-kind activity.

^K For the period ended October 31.

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

Annual Report

Financial Highlights - Class T

Years ended August 31,	2007	2006^H	2005^K	2004^K	2003^K	2002^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.79	$ 10.88	$ 11.35	$ 11.32	$ 11.06	$ 11.02
Income from Investment Operations
Net investment income^E	.484	.377	.386	.374	.408	.508
Net realized and unrealized gain (loss)	(.178)	(.043)	(.338)	.130	.253	.044
Total from investment operations	.306	.334	.048	.504	.661	.552
Distributions from net investment income	(.456)	(.374)	(.368)	(.374)	(.401)	(.512)
Distributions from net realized gain	-	(.050)	(.150)	(.100)	-	-
Total distributions	(.456)	(.424)	(.518)	(.474)	(.401)	(.512)
Net asset value, end of period	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32	$ 11.06
Total Return^{B, C, D}	2.85%	3.15%	.43%	4.56%	6.03%	5.21%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	.82%	.84%^A	.91%	.95%	.93%	.95%
Expenses net of fee waivers, if any	.82%	.84%^A	.91%	.95%	.93%	.95%
Expenses net of all reductions	.82%	.83%^A	.91%	.95%	.93%	.95%
Net investment income	4.48%	4.21%^A	3.49%	3.32%	3.60%	4.70%
Supplemental Data
Net assets, end of period (000 omitted)	$ 503,737	$ 563,677	$ 622,245	$ 680,947	$ 711,263	$ 684,618
Portfolio turnover rate^G	89%^J	43%^A	73%	96%	108%	121%

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006.

^J Portfolio turnover rate excludes securities received or delivered through non-taxable in-kind activity.

^K For the period ended October 31.

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

Annual Report

Financial Highlights - Class B

Years ended August 31,	2007	2006^H	2005^K	2004^K	2003^K	2002^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.77	$ 10.86	$ 11.33	$ 11.31	$ 11.05	$ 11.01
Income from Investment Operations
Net investment income^E	.409	.316	.310	.295	.331	.436
Net realized and unrealized gain (loss)	(.169)	(.043)	(.338)	.120	.253	.044
Total from investment operations	.240	.273	(.028)	.415	.584	.480
Distributions from net investment income	(.380)	(.313)	(.292)	(.295)	(.324)	(.440)
Distributions from net realized gain	-	(.050)	(.150)	(.100)	-	-
Total distributions	(.380)	(.363)	(.442)	(.395)	(.324)	(.440)
Net asset value, end of period	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31	$ 11.05
Total Return^{B, C, D}	2.24%	2.57%	(.25)%	3.75%	5.32%	4.52%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	1.52%	1.52%^A	1.61%	1.66%	1.60%	1.61%
Expenses net of fee waivers, if any	1.52%	1.52%^A	1.60%	1.65%	1.60%	1.61%
Expenses net of all reductions	1.52%	1.52%^A	1.60%	1.65%	1.60%	1.61%
Net investment income	3.78%	3.52%^A	2.80%	2.62%	2.92%	4.03%
Supplemental Data
Net assets, end of period (000 omitted)	$ 22,609	$ 46,344	$ 73,017	$ 118,751	$ 154,697	$ 178,062
Portfolio turnover rate^G	89%^J	43%^A	73%	96%	108%	121%

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006.

^J Portfolio turnover rate excludes securities received or delivered through non-taxable in-kind activity.

^K For the period ended October 31.

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

Annual Report

Financial Highlights - Class C

Years ended August 31,	2007	2006^H	2005^K	2004^K	2003^K	2002^K
Selected Per-Share Data
Net asset value, beginning of period	$ 10.76	$ 10.85	$ 11.32	$ 11.30	$ 11.04	$ 11.00
Income from Investment Operations
Net investment income^E	.400	.308	.301	.289	.322	.428
Net realized and unrealized gain (loss)	(.167)	(.042)	(.337)	.120	.254	.044
Total from investment operations	.233	.266	(.036)	.409	.576	.472
Distributions from net investment income	(.373)	(.306)	(.284)	(.289)	(.316)	(.432)
Distributions from net realized gain	-	(.050)	(.150)	(.100)	-	-
Total distributions	(.373)	(.356)	(.434)	(.389)	(.316)	(.432)
Net asset value, end of period	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30	$ 11.04
Total Return^{B, C, D}	2.18%	2.51%	(.33)%	3.70%	5.26%	4.45%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	1.59%	1.60%^A	1.67%	1.70%	1.67%	1.68%
Expenses net of fee waivers, if any	1.59%	1.60%^A	1.67%	1.70%	1.67%	1.68%
Expenses net of all reductions	1.58%	1.60%^A	1.67%	1.70%	1.67%	1.68%
Net investment income	3.72%	3.45%^A	2.73%	2.57%	2.86%	3.96%
Supplemental Data
Net assets, end of period (000 omitted)	$ 58,693	$ 63,946	$ 74,522	$ 91,149	$ 113,849	$ 98,158
Portfolio turnover rate^G	89%^J	43%^A	73%	96%	108%	121%

^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.

^G Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^H For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006.

^J Portfolio turnover rate excludes securities received or delivered through non-taxable in-kind activity.

^K For the period ended October 31.

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

Annual Report

Financial Highlights - Institutional Class

Years ended August 31,	2007	2006^G	2005^J	2004^J	2003^J	2002^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.80	$ 10.89	$ 11.36	$ 11.34	$ 11.08	$ 11.03
Income from Investment Operations
Net investment income^D	.513	.401	.417	.400	.437	.539
Net realized and unrealized gain (loss)	(.169)	(.043)	(.339)	.122	.254	.053
Total from investment operations	.344	.358	.078	.522	.691	.592
Distributions from net investment income	(.484)	(.398)	(.398)	(.402)	(.431)	(.542)
Distributions from net realized gain	-	(.050)	(.150)	(.100)	-	-
Total distributions	(.484)	(.448)	(.548)	(.502)	(.431)	(.542)
Net asset value, end of period	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34	$ 11.08
Total Return^{B, C}	3.22%	3.37%	.71%	4.72%	6.30%	5.59%
Ratios to Average Net Assets^{E, H}
Expenses before reductions	.55%	.57%^A	.63%	.70%	.66%	.67%
Expenses net of fee waivers, if any	.55%	.57%^A	.63%	.70%	.66%	.67%
Expenses net of all reductions	.55%	.57%^A	.63%	.70%	.66%	.67%
Net investment income	4.75%	4.48%^A	3.77%	3.57%	3.87%	4.97%
Supplemental Data
Net assets, end of period (000 omitted)	$ 715,292	$ 582,070	$ 465,201	$ 269,727	$ 155,302	$ 114,546
Portfolio turnover rate^F	89%^I	43%^A	73%	96%	108%	121%

^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 Fees and expenses of the underlying Fidelity Central Funds are not included in the Fund's expense ratio. The Fund indirectly bears its proportionate share of the expenses of any underlying Fidelity Central Funds.

^F Amount does not include the portfolio activity of any underlying Fidelity Central Funds.

^G For the ten month period ended August 31. The Fund changed its fiscal year from October 31 to August 31, effective August 31, 2006.

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

^I Portfolio turnover rate excludes securities received or delivered through non-taxable in-kind activity.

^J For the period ended October 31.

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

Annual Report

Notes to Financial Statements

For the period ended August 31, 2007

1. Organization.

Fidelity Advisor Intermediate Bond Fund (the Fund) is a fund of Fidelity Advisor Series II (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The Fund offers Class A, Class T, Class B, Class C, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of four years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the Fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the Fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

2. Investments in Fidelity Central Funds.

The Fund may invest in Fidelity Central Funds which are open-end investment companies available only to other investment companies and accounts managed by Fidelity Management & Research Company (FMR) and its affiliates. The Fund's Schedule of Investments lists each of the Fidelity Central Funds as an investment of the Fund, but does not include the underlying holdings of each Fidelity Central Fund. As an Investing Fund, the Fund indirectly bears its proportionate share of the expenses of the underlying Fidelity Central Funds.

Based on their investment objective, each Fidelity Central Fund may invest or participate in various investment vehicles or strategies that are similar to those of the Fund. These strategies are consistent with the investment objectives of the Fund and may involve certain economic risks which may cause a decline in value of each of the Fidelity Central Funds and thus a decline in the value of the Fund. The following summarizes the Fund's investment in each Fidelity Central Fund.

Annual Report

Notes to Financial Statements - continued

2. Investments in Fidelity Central Funds - continued

Fidelity Central Fund	Investment Manager	Investment Objective	Investment Practices
Fidelity 1-3 Year Duration Securitized Bond Central Fund	Fidelity Investment Money Management, Inc. (FIMM)	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Futures Repurchase Agreements Restricted Securities Swap Agreements
Fidelity 2-5 Year Duration Securitized Bond Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade securitized debt securities and repurchase agreements for those securities.	Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-5 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Corporate Bond 1-10 Year Central Fund	FIMM	Seeks a high level of income by normally investing in investment-grade corporate bonds and other corporate debt securities and repurchase agreements for those securities.	Repurchase Agreements Restricted Securities Swap Agreements
Fidelity Specialized High Income Central Fund	Fidelity Management & Research Company, Inc. (FMRC)	Seeks a high level of current income by normally investing in income-producing debt securities, with an emphasis on lower-quality debt securities.	Loans & Direct Debt Instruments Repurchase Agreements Restricted Securities
Fidelity Ultra-Short Central Fund	FIMM	Seeks to obtain a high level of current income consistent with preservation of capital by investing in U.S. dollar denominated money market and investment-grade debt securities.	Futures Mortgage Dollar Rolls Repurchase Agreements Restricted Securities Swap Agreements

The Central Funds may invest a portion of their assets in securities of issuers that hold mortgage securities, including subprime mortgage securities. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates.

A holdings listing for the Fund, which presents direct holdings as well as the pro rata share of any securities and other investments held indirectly through its investment in underlying non-money market Fidelity Central Funds, is available at advisor.fidelity.com. A complete list of holdings for each Fidelity Central Fund is available upon request or at the SEC's web site at www.sec.gov. In addition, the financial statements of the Fidelity Central Funds, which are not covered by the Fund's Report of Independent Registered Public Accounting Firm, are available on the SEC's web site or upon request.

Annual Report

3. Significant Accounting Policies.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the Fund:

Security Valuation. Investments are valued and net asset value per share is calculated (NAV calculation) as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Wherever possible, the Fund uses independent pricing services approved by the Board of Trustees to value its investments. Debt securities, including restricted securities, for which quotations are readily available, are valued by independent pricing services or by dealers who make markets in such securities. Pricing services consider yield or price of bonds of comparable quality, coupon, maturity and type as well as available dealer supplied prices. Certain of the Fund's securities may be valued by a single source or dealer.

When current market prices or quotations are not readily available or do not accurately reflect fair value, valuations may be determined in accordance with procedures adopted by the Board of Trustees. Factors used in the determination of fair value may include current market trading activity, interest rates, credit quality and default rates. The frequency of when fair value pricing is used is unpredictable. The value of securities used for NAV calculation under fair value pricing may differ from published prices for the same securities. Investments in open-end mutual funds, including the Fidelity Central Funds, are valued at their closing net asset value each business day. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost, which approximates value.

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV for processing shareholder transactions includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Interest income and income and capital gain distributions from the Fidelity Central Funds are accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. Any increase in the principal amount of an inflation-indexed bond is recorded as interest income, even though principal is not received until maturity.

Annual Report

Notes to Financial Statements - continued

3. Significant Accounting Policies - continued

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

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.

Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. Certain adjustments have been made to the accounts relating to prior periods. Collectively, 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 the short-term gain distributions from the Fidelity Central Funds, swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, financing transactions, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

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

Unrealized appreciation	$ 6,647,824
Unrealized depreciation	(39,603,312)
Net unrealized appreciation (depreciation)	(32,955,488)
Undistributed ordinary income	2,913,250
Capital loss carryforward	(8,055,126)

Cost for federal income tax purposes	$ 1,937,592,580

Annual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

The tax character of distributions paid was as follows:

	August 31, 2007	Ten months ended August 31, 2006	October 31, 2005
Ordinary Income	$ 67,133,368	$ 51,890,296	$ 48,736,904
Long-term Capital Gains	-	6,729,699	15,523,801
Total	$ 67,133,368	$ 58,619,995	$ 64,260,705

New Accounting Pronouncements. In July 2006, Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes - an interpretation of FASB Statement 109 (FIN 48), was issued and is effective on the last business day of the semiannual reporting period for fiscal years beginning after December 15, 2006. FIN 48 sets forth a threshold for financial statement recognition, measurement and disclosure of a tax position taken or expected to be taken on a tax return. Management has concluded that the adoption of FIN 48 will not result in a material impact on the Fund's net assets, results of operations and financial statement disclosures.

In addition, in September 2006, Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for fiscal years beginning after November 15, 2007. SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. Management is currently evaluating the impact the adoption of SFAS 157 will have on the Fund's financial statement disclosures.

4. 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 which are then invested in repurchase agreements. The Fund may also invest directly with institutions in repurchase agreements. Repurchase agreements are collateralized by government or non-government securities. Upon settlement date, collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. The Fund monitors, on a daily basis, the value of the collateral to ensure it is at least equal to the principal amount of the repurchase agreement (including accrued interest). In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the value of the collateral may decline.

Annual Report

Notes to Financial Statements - continued

4. Operating Policies - continued

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.

Swap Agreements. The Fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact a fund.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The Fund may enter into credit default swaps in which either it or its counterparty act as guarantors. By acting as the guarantor of a swap, a fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value.

Annual Report

4. Operating Policies - continued

Swap Agreements - continued

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Periodic payments and premiums received or made by the Fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with a fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the Fund's Schedule of Investments under the caption "Swap Agreements."

Mortgage Dollar Rolls. To earn additional income, the Fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but may be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, a fund's right to repurchase or sell securities may be limited.

5. Purchases and Sales of Investments.

Purchases and sales of securities, (including the Fixed-Income Central Funds) other than short-term securities, U.S. government securities and non-taxable in-kind transactions, aggregated $305,915,415 and $263,076,867 respectively.

Annual Report

Notes to Financial Statements - continued

6. Fees and Other Transactions with Affiliates.

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

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

	Distribution Fee	Service Fee	Paid to FDC	Retained by FDC
Class A	0%	.25%	$ 469,300	$ 39,466
Class T	0%	.25%	1,345,728	8,483
Class B	.65%	.25%	299,937	216,826
Class C	.75%	.25%	612,679	49,090
			$ 2,727,644	$ 313,865

On January 18, 2007, the Board of Trustees approved an increase in Class A's Service fee from .15% to .25%, effective April 1, 2007.

Sales Load. FDC receives a front-end sales charge of up to 2.75% for selling Class A shares and Class T shares (3.75% for Class A shares prior to April 1, 2007), 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 3% to 1% for Class B, 1% for Class C, .75% to .50% for certain purchases of Class A shares and .25% for certain purchases of Class T shares.

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

	Retained by FDC
Class A	$ 39,276
Class T	11,160
Class B*	37,653
Class C*	3,849
	$ 91,938

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Annual Report

6. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent for each class of the Fund. FIIOC receives account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the Fund. FIIOC pays for typesetting, printing and mailing of shareholder reports, except proxy statements. For the period, the total transfer agent fees paid by each class to FIIOC, were as follows:

	Amount	% of Average Net Assets
Class A	$ 550,602	.23
Class T	1,079,578	.20
Class B	83,607	.25
Class C	134,594	.22
Institutional Class	1,239,595	.18
	$ 3,087,976

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, 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.

Exchange-In-Kind. During the period, the Fund exchanged securities for shares of four newly created Fidelity Fixed-Income Central Funds, all of which are affiliated investment companies managed by FIMM, an affiliate of FMR. The Fund delivered securities to each Fixed-Income Central Fund in exchange for shares of each respective Fixed-Income Central Fund, as presented in the accompanying table. Each exchange is considered a non-taxable exchange for federal income tax purposes, with no gain or loss recognized by the Fund or its shareholders.

Fidelity Fixed-Income Central Fund	Value of Securities Delivered (including accrued interest)	Unrealized Appreciation/ (Depreciation)	Shares of Fixed-Income Central Fund Exchanged
1-3 Year Duration Securitized Bond Central Fund	$ 72,681,098	$ (1,084,210)	726,811
2-5 Year Duration Securitized Bond Central Fund	135,346,599	(892,353)	1,353,466
Corporate Bond 1-5 Year Central Fund	30,000,000	-	300,000
Corporate Bond 1-10 Year Central Fund	424,874,550	(879,534)	4,248,746
Total	$ 662,902,247	$ (2,856,097)	6,629,023

Annual Report

Notes to Financial Statements - continued

6. Fees and Other Transactions with Affiliates - continued

Exchange-In-Kind - continued

On April 27, 2007, the Fund purchased 569,139 shares of Fidelity Ultra-Short Central Fund, an affiliated entity, valued at $56,367,554 by transferring securities of equal value, including accrued interest. This is considered taxable for federal income tax purposes, and the Fund recognized a gain of $147,862.

7. 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, which amounted to $3,570 and is reflected in Miscellaneous Expense on the Statement of Operations. During the period, there were no borrowings on this line of credit.

8. Security Lending.

The Fund lends portfolio securities from time to time in order to earn additional income. On the settlement date of the loan, the Fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the Fund and any additional required collateral is delivered to the Fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Any cash collateral received is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the Fund's Statement of Assets and Liabilities. Security lending income represents the income earned on investing cash collateral, less fees and expenses associated with the loan, plus any premium payments that may be received on the loan of certain types of securities. Security lending income is presented in the Statement of Operations as a component of interest income. Net income from lending portfolio securities during the period amounted to $366,476.

Annual Report

9. Expense Reductions.

Through arrangements with the Fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the Fund's expenses. During the period, these credits reduced the Fund's custody expenses by $9,464. During the period, credits reduced each class' transfer agent expense as noted in the table below.

	Transfer Agent expense reduction
Class A	$ 18,166
Class T	19,896
Class C	3,600
Institutional Class	10,347
	$ 52,009

10. 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.

In September 2006, FIIOC, the Fund's transfer agent, notified the Fund that the Fund's books and records did not reflect a conversion of certain Class B to Class A shares upon their conversion date. In March 2007, FIIOC converted the relevant Class B shares to Class A shares and recorded the conversion in the books and records of the Fund which did not result in a material impact to the Fund's reported net assets or results of operations in the accompanying financial statements. FIIOC has remediated affected shareholders and reimbursed the Fund for all related audit and legal expenses.

The Fidelity Advisor Freedom Funds were the owners of record, in the aggregate, of approximately 22% of the total outstanding shares of the Fund.

Annual Report

Notes to Financial Statements - continued

11. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

	Year ended August 31, 2007	Ten months ended August 31, 2006	Year ended October 31, 2006
From net investment income
Class A	$ 10,370,477	$ 8,237,954	$ 6,750,916
Class T	22,730,353	20,024,907	21,938,255
Class B	1,169,158	1,706,342	2,468,615
Class C	2,124,376	1,937,516	2,155,983
Institutional Class	30,739,004	19,983,577	13,034,858
Total	$ 67,133,368	$ 51,890,296	$ 46,348,627

From net realized gain
Class A	$ -	$ 1,020,134	$ 2,485,599
Class T	-	2,809,300	8,985,225
Class B	-	314,308	1,506,398
Class C	-	331,629	1,194,745
Institutional Class	-	2,254,328	3,740,111
Total	$ -	$ 6,729,699	$ 17,912,078

12. Share Transactions.

Transactions for each class of shares were as follows:

	Shares
	Year ended August 31, 2007	Ten months ended August 31, 2006	Year ended October 31, 2006
Class A
Shares sold	10,574,585	8,278,094	8,880,810
Reinvestment of distributions	820,864	742,446	712,081
Shares redeemed	(8,653,270)	(7,918,238)	(5,873,872)
Net increase (decrease)	2,742,179	1,102,302	3,719,019
Class T
Shares sold	13,148,613	13,931,574	17,421,833
Reinvestment of distributions	1,987,509	2,015,582	2,664,683
Shares redeemed	(20,062,229)	(20,897,941)	(22,891,513)
Net increase (decrease)	(4,926,107)	(4,950,785)	(2,804,997)
Class B
Shares sold	600,059	671,993	796,684
Reinvestment of distributions	92,579	158,557	293,999
Shares redeemed	(2,868,103)	(3,250,226)	(4,848,523)
Net increase (decrease)	(2,175,465)	(2,419,676)	(3,757,840)

Annual Report

12. Share Transactions - continued

	Shares
	Year ended August 31, 2007	Ten months ended August 31, 2006	Year ended October 31, 2006
Class C
Shares sold	1,488,943	883,428	1,502,035
Reinvestment of distributions	163,983	176,528	254,887
Shares redeemed	(2,066,746)	(1,984,475)	(2,940,524)
Net increase (decrease)	(413,820)	(924,519)	(1,183,602)
Institutional Class
Shares sold	19,511,051	18,293,682	21,107,727
Reinvestment of distributions	2,781,278	2,006,280	1,430,815
Shares redeemed	(9,069,558)	(9,124,283)	(3,567,194)
Net increase (decrease)	13,222,771	11,175,679	18,971,348
	Dollars
	Year ended August 31, 2007	Ten months ended August 31, 2006	Year ended October 31, 2006
Class A
Shares sold	$ 114,058,074	$ 88,900,621	$ 98,032,653
Reinvestment of distributions	8,855,890	7,978,925	7,878,261
Shares redeemed	(93,273,700)	(85,054,294)	(64,959,678)
Net increase (decrease)	$ 29,640,264	$ 11,825,252	$ 40,951,236
Class T
Shares sold	$ 141,957,847	$ 149,419,842	$ 192,781,788
Reinvestment of distributions	21,458,242	21,688,566	29,505,458
Shares redeemed	(216,499,859)	(224,614,505)	(253,165,506)
Net increase (decrease)	$ (53,083,770)	$ (53,506,097)	$ (30,878,260)
Class B
Shares sold	$ 6,457,505	$ 7,195,245	$ 8,809,947
Reinvestment of distributions	999,355	1,704,584	3,254,211
Shares redeemed	(30,956,416)	(34,885,370)	(53,542,026)
Net increase (decrease)	$ (23,499,556)	$ (25,985,541)	$ (41,477,868)
Class C
Shares sold	$ 16,006,140	$ 9,467,312	$ 16,597,884
Reinvestment of distributions	1,766,938	1,895,452	2,818,224
Shares redeemed	(22,267,059)	(21,287,935)	(32,438,326)
Net increase (decrease)	$ (4,493,981)	$ (9,925,171)	$ (13,022,218)
Institutional Class
Shares sold	$ 211,209,559	$ 197,223,981	$ 233,901,844
Reinvestment of distributions	30,063,141	21,595,701	15,843,665
Shares redeemed	(97,358,136)	(97,869,178)	(39,545,772)
Net increase (decrease)	$ 143,914,564	$ 120,950,504	$ 210,199,737

Annual Report

Notes to Financial Statements - continued

13. Credit Risk.

The Fund invests a portion of its assets in securities of issuers that hold mortgage securities, including subprime mortgage securities. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market's perception of the issuers and changes in interest rates.

Annual Report

Report of Independent Registered Public Accounting Firm

To the Trustees of Fidelity Advisor Series II and the Shareholders of Fidelity Advisor Intermediate Bond Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Advisor Intermediate Bond Fund (a fund of Fidelity Advisor Series II) at August 31, 2007, the results of its operations for the year then ended, the changes in its net assets for each of the periods indicated and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Advisor Intermediate Bond Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at August 31, 2007 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

October 30, 2007

Annual Report

Trustees and Officers

The Trustees, Members of the Advisory Board, and executive officers of the trust and fund, as applicable, are listed below. The Board of Trustees governs the fund and is responsible for protecting the interests of shareholders. The Trustees are experienced executives who meet periodically throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review the fund's performance. Except for James C. Curvey, each of the Trustees oversees 369 funds advised by FMR or an affiliate. Mr. Curvey oversees 339 funds advised by FMR or an affiliate.

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

The fund's Statement of Additional Information (SAI) includes more information about the Trustees. To request a free copy, call Fidelity at 1-877-208-0098.

Interested Trustees*:

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

Name, Age; Principal Occupation
Edward C. Johnson 3d (77)
	Year of Election or Appointment: 1986 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as President (2006-present), Chief Executive Officer, Chairman, and a Director of FMR LLC; Chairman and a Director of FMR; Chairman and a Director of Fidelity Research & Analysis Company (FRAC); Chairman and a Director of Fidelity Investments Money Management, Inc.; and Chairman (2001-present) and a Director of FMR Co., Inc. In addition, Mr. Johnson serves as Chairman and Director of Fidelity International Limited (FIL).
James C. Curvey (72)
	Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) or Member of the Advisory Board (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006-present) and Director of FMR LLC. Mr. Curvey joined Fidelity in 1982 and served in numerous senior management positions, including President and Chief Operating Officer of FMR LLC (1997-2000) and President of Fidelity Strategic Investments (2000-2002). In addition, he serves as a member of the Board of Directors of Geerlings & Wade, Inc. (wine distribution).

* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR. FMR Corp. merged with FMR LLC on October 1, 2007. Any references to FMR LLC for prior periods are deemed to be references to the prior entity.

Independent Trustees:

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

Name, Age; Principal Occupation
Dennis J. Dirks (59)
	Year of Election or Appointment: 2005 Prior to his retirement in May 2003, Mr. Dirks was Chief Operating Officer and a member of the Board of The Depository Trust & Clearing Corporation (DTCC) (1999-2003). He also served as President, Chief Operating Officer, and Board member of The Depository Trust Company (DTC) (1999-2003) and President and Board member of the National Securities Clearing Corporation (NSCC) (1999-2003). In addition, Mr. Dirks served as Chief Executive Officer and Board member of the Government Securities Clearing Corporation (2001-2003) and Chief Executive Officer and Board member of the Mortgage-Backed Securities Clearing Corporation (2001-2003). Mr. Dirks also serves as a Trustee and a member of the Finance Committee of Manhattan College (2005-present) and a Trustee and a member of the Finance Committee of AHRC of Nassau County (2006-present).
Albert R. Gamper, Jr. (65)
	Year of Election or Appointment: 2006 Prior to his retirement in December 2004, Mr. Gamper served as Chairman of the Board of CIT Group Inc. (commercial finance). During his tenure with CIT Group Inc. Mr. Gamper served in numerous senior management positions, including Chairman (1987-1989; 1999-2001; 2002-2004), Chief Executive Officer (1987-2004), and President (1989-2002). He currently serves as a member of the Board of Directors of Public Service Enterprise Group (utilities, 2001-present), Chairman of the Board of Governors, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System.
George H. Heilmeier (71)
	Year of Election or Appointment: 2004 Dr. Heilmeier is Chairman Emeritus of Telcordia Technologies (communication software and systems), where prior to his retirement, he served as company Chairman and Chief Executive Officer. He currently serves on the Boards of Directors of The Mitre Corporation (systems engineering and information technology support for the government), and HRL Laboratories (private research and development, 2004-present). He is Chairman of the General Motors Science & Technology Advisory Board and a Life Fellow of the Institute of Electrical and Electronics Engineers (IEEE). Dr. Heilmeier is a member of the Defense Science Board and the National Security Agency Advisory Board. He is also a member of the National Academy of Engineering, the American Academy of Arts and Sciences, and the Board of Overseers of the School of Engineering and Applied Science of the University of Pennsylvania. Previously, Dr. Heilmeier served as a Director of TRW Inc. (automotive, space, defense, and information technology, 1992-2002), Compaq (1994-2002), Automatic Data Processing, Inc. (ADP) (technology-based business outsourcing, 1995-2002), INET Technologies Inc. (telecommunications network surveillance, 2001-2004), and Teletech Holdings (customer management services). He is the recipient of the 2005 Kyoto Prize in Advanced Technology for his invention of the liquid crystal display, and a member of the Consumer Electronics Hall of Fame.
James H. Keyes (66)
	Year of Election or Appointment: 2007 Prior to his retirement in 2003, Mr. Keyes was Chairman, President, and Chief Executive Officer of Johnson Controls, Inc. (automotive supplier, 1993-2003). He currently serves as a member of the boards of LSI Logic Corporation (semiconductor technologies), Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines, 2002-present), and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions).
Marie L. Knowles (60)
	Year of Election or Appointment: 2001 Prior to Ms. Knowles' retirement in June 2000, she served as Executive Vice President and Chief Financial Officer of Atlantic Richfield Company (ARCO) (diversified energy, 1996-2000). From 1993 to 1996, she was a Senior Vice President of ARCO and President of ARCO Transportation Company. She served as a Director of ARCO from 1996 to 1998. She currently serves as a Director of Phelps Dodge Corporation (copper mining and manufacturing) and McKesson Corporation (healthcare service, 2002-present). Ms. Knowles is a Trustee of the Brookings Institution and the Catalina Island Conservancy and also serves as a member of the Advisory Board for the School of Engineering of the University of Southern California.
Ned C. Lautenbach (63)
	Year of Election or Appointment: 2000 Mr. Lautenbach is Chairman of the Independent Trustees (2006-present). Mr. Lautenbach has been a partner of Clayton, Dubilier & Rice, Inc. (private equity investment firm) since September 1998. Previously, Mr. Lautenbach was with the International Business Machines Corporation (IBM) from 1968 until his retirement in 1998. Mr. Lautenbach serves as a Director of Sony Corporation (2006-present) and Eaton Corporation (diversified industrial) as well as the Philharmonic Center for the Arts in Naples, Florida. He also is a member of the Board of Trustees of Fairfield University (2005-present), as well as a member of the Council on Foreign Relations.
Cornelia M. Small (63)
	Year of Election or Appointment: 2005 Ms. Small is a member (2000-present) and Chairperson (2002-present) of the Investment Committee, and a member (2002-present) of the Board of Trustees of Smith College. Previously, she served as Chief Investment Officer (1999-2000), Director of Global Equity Investments (1996-1999), and a member of the Board of Directors of Scudder, Stevens & Clark (1990-1997) and Scudder Kemper Investments (1997-1999). In addition, Ms. Small served as Co-Chair (2000-2003) of the Annual Fund for the Fletcher School of Law and Diplomacy.
William S. Stavropoulos (68)
	Year of Election or Appointment: 2001 Mr. Stavropoulos is Chairman Emeritus of the Board of Directors of The Dow Chemical Company. Since joining The Dow Chemical Company in 1967, Mr. Stavropoulos served in numerous senior management positions, including President (1993-2000; 2002-2003), CEO (1995-2000; 2002-2004), and Chairman of the Executive Committee (2000-2004). Currently, he is a Director of NCR Corporation (data warehousing and technology solutions), Chemical Financial Corporation, Maersk Inc. (industrial conglomerate, 2002-present), Tyco International, Inc. (multinational manufacturing and services, 2007-present), and a member of the Advisory Board for Metalmark Capital (private equity investment firm, 2005-present). He is a special advisor to Clayton, Dubilier & Rice, Inc., a private equity investment firm. He also serves as a member of the Board of Trustees of the American Enterprise Institute for Public Policy Research. In addition, Mr. Stavropoulos is a member of The Business Council, J.P. Morgan International Council and the University of Notre Dame Advisory Council for the College of Science.
Kenneth L. Wolfe (68)
	Year of Election or Appointment: 2005 Prior to his retirement in 2001, Mr. Wolfe was Chairman and Chief Executive Officer of Hershey Foods Corporation (1993-2001). He currently serves as a member of the boards of Adelphia Communications Corporation (2003-present), Bausch & Lomb, Inc., and Revlon Inc. (2004-present).

Advisory Board Members and Executive Officers**:

Correspondence intended for Mr. Mauriello and Mr. Wiley may be sent to Fidelity Investments, P.O. Box 55235, Boston, Massachusetts 02205-5235. Correspondence intended for each executive officer and Mr. Lynch may be sent to Fidelity Investments, 82 Devonshire Street, Boston, Massachusetts 02109.

Name, Age; Principal Occupation
Peter S. Lynch (63)
	Year of Election or Appointment: 2003 Member of the Advisory Board of Fidelity Advisor Series II. Mr. Lynch is Vice Chairman and a Director of FMR, and Vice Chairman (2001-present) and a Director of FMR Co., Inc. Previously, Mr. Lynch served as a Trustee of the Fidelity funds (1990-2003). In addition, he serves as a Trustee of Boston College and as the Chairman of the Inner-City Scholarship Fund.
Joseph Mauriello (62)
	Year of Election or Appointment: 2007 Member of the Advisory Board of Fidelity Advisor Series II. Prior to his retirement in January 2006, Mr. Mauriello served in numerous senior management positions including Deputy Chairman and Chief Operating Officer (2004-2005), and Vice Chairman of Financial Services (2002-2004) of KPMG LLP US (professional services firm, 1965-2005). Mr. Mauriello currently serves as a member of the Board of Directors of XL Capital Ltd., (global insurance and re-insurance company, 2006-present) and of Arcadia Resources Inc., (health care services and products, 2007-present). He also served as a Director of the Hamilton Funds of the Bank of New York (2006-2007).
Michael E. Wiley (56)
	Year of Election or Appointment: 2007 Member of the Advisory Board of Fidelity Advisor Series II. Mr. Wiley also serves as Sr. Energy Advisor of Katzenbach Partners, LLC (consulting firm, 2006-present) and a member of the Board of Trustees of the University of Tulsa (2000-2006; 2007-present). He serves as a Director of Tesoro Corporation (independent oil refiner and marketer, 2005-present), and a Director of Bill Barrett Corporation (exploration and production company, 2005-present). In addition, he also serves as a Director of Post Oak Bank (privately-held bank, 2004-present), and an Advisory Director of Riverstone Holdings (private investment firm). Previously, Mr. Wiley served as Chairman, President, and CEO of Baker Hughes, Inc. (oilfield services company, 2000-2004), and as Director of Spinnaker Exploration Company (exploration and production company, 2001-2005).
Kimberley H. Monasterio (43)
	Year of Election or Appointment: 2007 President and Treasurer of Advisor Intermediate Bond. Ms. Monasterio also serves as President and Treasurer of other Fidelity funds (2007-present) and is an employee of FMR (2004-present). Previously, Ms. Monasterio served as Deputy Treasurer of the Fidelity funds (2004-2006). Before joining Fidelity Investments, Ms. Monasterio served as Treasurer (2000-2004) and Chief Financial Officer (2002-2004) of the Franklin Templeton Funds and Senior Vice President of Franklin Templeton Services, LLC (2000-2004).
Boyce I. Greer (51)
	Year of Election or Appointment: 2006 Vice President of Advisor Intermediate Bond. Mr. Greer also serves as Vice President of certain Asset Allocation Funds (2005-present), Fixed-Income Funds (2006-present), and Money Market Funds (2006-present). Mr. Greer is also a Trustee of other investment companies advised by FMR (2003-present). Mr. Greer is an Executive Vice President of FMR (2005-present) and FMR Co., Inc. (2005-present), and Senior Vice President of Fidelity Investments Money Management, Inc. (2006-present). Previously, Mr. Greer served as Vice President of certain Fidelity Equity Funds (2005-2007), a Director and Managing Director of Strategic Advisers, Inc. (2002-2005), and Executive Vice President (2000-2002) and Money Market Group Leader (1997-2002) of the Fidelity Investments Fixed Income Division. Mr. Greer also served as Vice President of Fidelity's Money Market Funds (1997-2002), Senior Vice President of FMR (1997-2002), and Vice President of FIMM (1998-2002).
David L. Murphy (59)
	Year of Election or Appointment: 2005 Vice President of Advisor Intermediate Bond. Mr. Murphy also serves as Vice President of Fidelity's Money Market Funds (2002-present) and Fixed-Income Funds (2005-present). Mr. Murphy serves as Senior Vice President (2000-present) and Head (2004-present) of the Fidelity Investments Fixed Income Division. Mr. Murphy is also a Senior Vice President of Fidelity Investments Money Management, Inc. (2003-present) and an Executive Vice President of FMR (2005-present). Previously, Mr. Murphy served as Money Market Group Leader (2002-2004), Bond Group Leader (2000-2002), and Vice President of certain Asset Allocation Funds (2003-2007), Balanced Funds (2005-2007), Fidelity's Taxable Bond Funds (2000-2002) and Fidelity's Municipal Bond Funds (2001-2002).
Thomas J. Silvia (46)
	Year of Election or Appointment: 2005 Vice President of Advisor Intermediate Bond. Mr. Silvia also serves as Vice President of Fidelity's Fixed-Income Funds (2005-present) and Senior Vice President and Bond Group Leader of the Fidelity Investments Fixed-Income Division (2005-present). Previously, Mr. Silvia served as Vice President of certain Balanced Funds (2005-2007), certain Asset Allocation Funds (2005-2007), a Director of Fidelity's Taxable Bond portfolio managers (2002-2004) and a portfolio manager in the Bond Group (1997-2004).
Eric D. Roiter (58)
	Year of Election or Appointment: 1998 Secretary of Advisor Intermediate Bond. He also serves as Secretary of other Fidelity funds; Vice President, General Counsel, and Secretary of FMR Co., Inc. (2001-present) and FMR; Assistant Secretary of Fidelity Management & Research (U.K.) Inc. (2001-present), Fidelity Research & Analysis Company (2001-present), and Fidelity Investments Money Management, Inc. (2001-present). Mr. Roiter is an Adjunct Member, Faculty of Law, at Boston College Law School (2003-present). Previously, Mr. Roiter served as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (1998-2005).
Scott C. Goebel (39)
	Year of Election or Appointment: 2007 Assistant Secretary of Advisor Intermediate Bond. Mr. Goebel also serves as Assistant Secretary of other Fidelity funds (2007-present), and is an employee of FMR.
R. Stephen Ganis (41)
	Year of Election or Appointment: 2006 Anti-Money Laundering (AML) officer of Advisor Intermediate Bond. Mr. Ganis also serves as AML officer of other Fidelity funds (2006-present) and FMR LLC (2003-present). Before joining Fidelity Investments, Mr. Ganis practiced law at Goodwin Procter, LLP (2000-2002).
Joseph B. Hollis (59)
	Year of Election or Appointment: 2006 Chief Financial Officer of Advisor Intermediate Bond. Mr. Hollis also serves as Chief Financial Officer of other Fidelity funds. Mr. Hollis is President of Fidelity Pricing and Cash Management Services (FPCMS) (2005-present). Mr. Hollis also serves as President and Director of Fidelity Service Company, Inc. (2006-present). Previously, Mr. Hollis served as Senior Vice President of Cash Management Services (1999-2002) and Investment Management Operations (2002-2005).
Kenneth A. Rathgeber (60)
	Year of Election or Appointment: 2004 Chief Compliance Officer of Advisor Intermediate Bond. Mr. Rathgeber also serves as Chief Compliance Officer of other Fidelity funds (2004-present) and Executive Vice President of Risk Oversight for Fidelity Investments (2002-present). He is Chief Compliance Officer of FMR (2005-present), FMR Co., Inc. (2005-present), Fidelity Management & Research (U.K.) Inc. (2005-present), Fidelity Research & Analysis Company (2005-present), Fidelity Investments Money Management, Inc. (2005-present), and Strategic Advisers, Inc. (2005-present). Previously, Mr. Rathgeber served as Executive Vice President and Chief Operating Officer for Fidelity Investments Institutional Services Company, Inc. (1998-2002).
Bryan A. Mehrmann (46)
	Year of Election or Appointment: 2005 Deputy Treasurer of Advisor Intermediate Bond. Mr. Mehrmann also serves as Deputy Treasurer of other Fidelity funds (2005-present) and is an employee of FMR. Previously, Mr. Mehrmann served as Vice President of Fidelity Investments Institutional Services Group (FIIS)/Fidelity Investments Institutional Operations Corporation, Inc. (FIIOC) Client Services (1998-2004).
Kenneth B. Robins (38)
	Year of Election or Appointment: 2005 Deputy Treasurer of Advisor Intermediate Bond. Mr. Robins also serves as Deputy Treasurer of other Fidelity funds (2005-present) and is an employee of FMR (2004-present). Before joining Fidelity Investments, Mr. Robins worked at KPMG LLP, where he was a partner in KPMG's department of professional practice (2002-2004) and a Senior Manager (1999-2000). In addition, Mr. Robins served as Assistant Chief Accountant, United States Securities and Exchange Commission (2000-2002).
Robert G. Byrnes (40)
	Year of Election or Appointment: 2005 Assistant Treasurer of Advisor Intermediate Bond. Mr. Byrnes also serves as Assistant Treasurer of other Fidelity funds (2005-present) and is an employee of FMR (2005-present). Previously, Mr. Byrnes served as Vice President of FPCMS (2003-2005). Before joining Fidelity Investments, Mr. Byrnes worked at Deutsche Asset Management where he served as Vice President of the Investment Operations Group (2000-2003).
Peter L. Lydecker (53)
	Year of Election or Appointment: 2004 Assistant Treasurer of Advisor Intermediate Bond. Mr. Lydecker also serves as Assistant Treasurer of other Fidelity funds (2004) and is an employee of FMR.
Gary W. Ryan (49)
	Year of Election or Appointment: 2005 Assistant Treasurer of Advisor Intermediate Bond. Mr. Ryan also serves as Assistant Treasurer of other Fidelity funds (2005-present) and is an employee of FMR (2005-present). Previously, Mr. Ryan served as Vice President of Fund Reporting in FPCMS (1999-2005).

** FMR Corp. merged with FMR LLC on October 1, 2007. Any references to FMR LLC for prior periods are deemed to be references to the prior entity.

Annual Report

Distributions

A total of 6.17% of the dividends distributed during the fiscal year was derived from interest on U.S. Government securities which is generally exempt from state income tax.

The fund designates $60,044,812 of distributions paid during the period January 1, 2007 to August 31, 2007, as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.

The fund will notify shareholders in January 2008 of amounts for use in preparing 2007 income tax returns.

Annual Report

Board Approval of Investment Advisory Contracts and Management Fees

Fidelity Advisor Intermediate Bond Fund

Each year, typically in June, the Board of Trustees, including the Independent Trustees (together, the Board), votes on the renewal of the management contract and sub-advisory agreements (together, the Advisory Contracts) for the fund. The Board, assisted by the advice of fund counsel and Independent Trustees' counsel, requests and considers a broad range of information throughout the year.

The Board meets regularly each month except August and takes into account throughout the year matters bearing on Advisory Contracts. The Board, acting directly and through its separate committees, considers at each of its meetings factors that are relevant to the annual renewal of the fund's Advisory Contracts, including the services and support provided to the fund and its shareholders. At the time of the renewal, the Board had 12 standing committees, each composed of Independent Trustees with varying backgrounds, to which the Board has assigned specific subject matter responsibilities in order to enhance effective decision-making by the Board. Each committee has adopted a written charter outlining the structure and purposes of the committee. One such committee, the Fixed-Income Contract Committee, meets periodically as needed throughout the year to consider matters specifically related to the annual renewal of Advisory Contracts. The committee requests and receives information on, and makes recommendations to the Independent Trustees concerning, the approval and annual review of the Advisory Contracts.

At its June 2007 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the Advisory Contracts for the fund. In reaching its determination, the Board considered all factors it believed relevant, including (i) the nature, extent, and quality of the services to be provided to the fund and its shareholders (including the investment performance of the fund); (ii) the competitiveness of the management fee and total expenses of the fund; (iii) the total costs of the services to be provided by and the profits to be realized by the investment adviser and its affiliates from the relationship with the fund; (iv) the extent to which economies of scale would be realized as the fund grows; and (v) whether fee levels reflect these economies of scale, if any, for the benefit of fund shareholders. The Board also approved amendments to the fund's agreements with foreign sub-advisers to clarify that each sub-adviser provides services as an independent contractor.

In determining whether to renew the Advisory Contracts for the fund, the Board ultimately reached a determination, with the assistance of fund counsel and Independent Trustees' counsel, that the renewal of the Advisory Contracts and the compensation to be received by Fidelity under the management contract is consistent with Fidelity's fiduciary duty under applicable law. In addition to evaluating the specific factors noted above, the Board, in reaching its determination, is aware that shareholders in the fund have a broad range of investment choices available to them, including a wide choice among mutual funds offered by competitors to Fidelity, and that the fund's shareholders, with the opportunity to review and weigh the disclosure provided by the fund in its prospectus and other public disclosures, have chosen to invest in this fund, managed by Fidelity.

Annual Report

Board Approval of Investment Advisory Contracts and
Management Fees - continued

Nature, Extent, and Quality of Services Provided. The Board considered staffing within the investment adviser, FMR, and the sub-advisers (together, the Investment Advisers), including the background of the fund's portfolio manager and the fund's investment objective and discipline. The Independent Trustees also had discussions with senior management of Fidelity's investment operations and investment groups. The Board considered the structure of the portfolio manager compensation program and whether this structure provides appropriate incentives.

Resources Dedicated to Investment Management and Support Services. The Board reviewed the size, education, and experience of the Investment Advisers' investment staff, their use of technology, and the Investment Advisers' approach to recruiting, training, and retaining portfolio managers and other research, advisory, and management personnel. The Board considered Fidelity's extensive global research capabilities that enable the Investment Advisers to aggregate data from various sources in an effort to produce positive investment results. The Board noted that Fidelity's analysts have access to a variety of technological tools that enable them to perform both fundamental and quantitative analysis and to specialize in various disciplines. The Board also considered that Fidelity's portfolio managers and analysts have access to daily portfolio attribution that allows for monitoring of a fund's portfolio, as well as an electronic communication system that provides immediate real-time access to research concerning issuers and credit enhancers. In addition, the Board considered the trading resources that are an integrated part of the fixed-income portfolio management investment process.

Shareholder and Administrative Services. The Board considered (i) the nature, extent, quality, and cost of advisory, administrative, distribution, and shareholder services performed by the Investment Advisers and their affiliates under the Advisory Contracts and under separate agreements covering transfer agency, pricing and bookkeeping, and securities lending services for the fund; (ii) the nature and extent of the Investment Advisers' supervision of third party service providers, principally custodians and subcustodians; and (iii) the resources devoted to, and the record of compliance with, the fund's compliance policies and procedures.

The Board noted that the growth of fund assets across the complex allows Fidelity to reinvest in the development of services designed to enhance the value or convenience of the Fidelity funds as investment vehicles. These services include 24-hour access to account information and market information through phone representatives and over the Internet, and investor education materials and asset allocation tools.

Annual Report

Investment in a Large Fund Family. The Board considered the benefits to shareholders of investing in a Fidelity fund, including the benefits of investing in a fund that is part of a large family of funds offering a variety of investment disciplines and providing for a large variety of mutual fund investor services. For example, fund shareholders are offered the privilege of exchanging shares of the fund for shares of other Fidelity funds, as set forth in the fund's prospectus, without paying a sales charge. The Board noted that, since the last Advisory Contract renewals in June 2006, Fidelity has taken a number of actions that benefited particular funds, including (i) dedicating additional resources to investment research and to restructure the investment research teams; (ii) contractually agreeing to reduce the management fee on Fidelity Advisor Floating Rate High Income Fund; (iii) contractually agreeing to reduce the management fees on Fidelity's California, Massachusetts, New Jersey, and New York AMT Tax-Free Money Market Funds, launching new Institutional Classes and Service Classes of these funds, and contractually agreeing to impose expense limitations on these funds; (iv) eliminating the exchange fee on the Fidelity Select Portfolios and reducing the pricing and bookkeeping fee rates for these funds; (v) reducing the maximum transfer agency fee rates on high income funds and certain equity funds; (vi) proposing amended management contracts that, if approved by shareholders, will add a performance adjustment component to the management fees paid by 18 Fidelity Advisor equity funds; (vii) contractually agreeing to reduce fees for Ultra-Short Central Fund and the money market Central Funds; (viii) waiving the Fidelity Advisor funds' contingent deferred sales charge on certain redemptions made through systematic withdrawal programs; and (ix) amending the management contracts for equity and fixed-income funds whose management contracts incorporate a "group fee" structure by adding four new fee "breakpoints" to the group fee rate schedules.

Investment Performance. The Board considered whether the fund has operated within its investment objective, as well as its record of compliance with its investment restrictions. It also reviewed the fund's absolute investment performance for each class, as well as the fund's relative investment performance for each class measured against (i) a broad-based securities market index, and (ii) a peer group of mutual funds deemed appropriate by the Board over multiple periods. The following charts considered by the Board show, over the one-, three-, and five-year periods ended December 31, 2006, the cumulative total returns of Institutional Class (Class I) and Class C of the fund, the cumulative total returns of a broad-based securities market index ("benchmark"), and a range of cumulative total returns of a peer group of mutual funds identified by Lipper Inc. as having an investment objective similar to that of the fund. The returns of Institutional Class (Class I) and Class C show the performance of the highest and lowest performing classes, respectively (based on three-year performance). The box within each chart shows the 25th percentile return (bottom of box) and the 75th percentile return (top of box) of the peer group. Returns shown above the box are in the first quartile and returns shown below the box are in the fourth quartile. The percentage beaten numbers noted below each chart correspond to the percentile box and represent the percentage of funds in the peer group whose performance was equal to or lower than that of the class indicated.

Annual Report

Board Approval of Investment Advisory Contracts and
Management Fees - continued

Fidelity Advisor Intermediate Bond Fund

The Board reviewed the fund's relative investment performance against its peer group and stated that the performance of Institutional Class (Class I) of the fund was in the first quartile for all the periods shown. The Board also stated that the relative investment performance of Institutional Class (Class I) of the fund compared favorably to its benchmark for all the periods shown. The Board considered that the variations in performance among the fund's classes reflect the variations in class expenses, which result in lower performance for higher expense classes.

Based on its review, and giving particular weight to the nature and quality of the resources dedicated by the Investment Advisers to maintain and improve relative performance, the Board concluded that the nature, extent, and quality of the services provided to the fund will benefit the fund's shareholders, particularly in light of the Board's view that the fund's shareholders benefit from investing in a fund that is part of a large family of funds offering a variety of investment disciplines and services.

Competitiveness of Management Fee and Total Fund Expenses. The Board considered the fund's management fee and total expenses compared to "mapped groups" of competitive funds and classes. Fidelity creates "mapped groups" by combining similar Lipper investment objective categories that have comparable management fee characteristics. Combining Lipper investment objective categories aids the Board's management fee and total expense comparisons by broadening the competitive group used for comparison and by reducing the number of universes to which various Fidelity funds are compared.

Annual Report

The Board considered two proprietary management fee comparisons for the 12-month periods shown in the chart below. The group of Lipper funds used by the Board for management fee comparisons is referred to below as the "Total Mapped Group" and, for the reasons explained above, is broader than the Lipper peer group used by the Board for performance comparisons. The Total Mapped Group comparison focuses on a fund's standing relative to the total universe of comparable funds available to investors, in terms of gross management fees before expense reimbursements or caps. "TMG %" represents the percentage of funds in the Total Mapped Group that had management fees that were lower than the fund's. For example, a TMG % of 8% means that 92% of the funds in the Total Mapped Group had higher management fees than the fund. The "Asset-Size Peer Group" (ASPG) comparison focuses on a fund's standing relative to non-Fidelity funds similar in size to the fund within the Total Mapped Group. The ASPG represents at least 15% of the funds in the Total Mapped Group with comparable asset size and management fee characteristics, subject to a minimum of 50 funds (or all funds in the Total Mapped Group if fewer than 50). Additional information, such as the ASPG quartile in which the fund's management fee ranked, is also included in the chart and considered by the Board.

Fidelity Advisor Intermediate Bond Fund

The Board noted that the fund's management fee ranked below the median of its Total Mapped Group and below the median of its ASPG for 2006.

Annual Report

Board Approval of Investment Advisory Contracts and
Management Fees - continued

Furthermore, the Board considered that it had approved an amendment (effective June 1, 2005) to the fund's management contract that lowered the fund's individual fund fee rate from 30 basis points to 20 basis points. The Board considered that the chart reflects the fund's lower management fee for 2005, as if the lower rate were in effect for the entire year.

Based on its review, the Board concluded that the fund's management fee was fair and reasonable in light of the services that the fund receives and the other factors considered.

In its review of each class's total expenses, the Board considered the fund's management fee as well as other fund or class expenses, as applicable, such as transfer agent fees, pricing and bookkeeping fees, fund-paid 12b-1 fees, and custodial, legal, and audit fees. The Board also noted the effects of any waivers and reimbursements on fees and expenses. As part of its review, the Board also considered current and historical total expenses of each class of the fund compared to competitive fund median expenses. Each class of the fund is compared to those funds and classes in the Total Mapped Group (used by the Board for management fee comparisons) that have a similar sales load structure.

The Board noted that each class's total expenses ranked below its competitive median for 2006.

In its review of total expenses, the Board also considered Fidelity fee structures and other information on clients that FMR and its affiliates service in other competitive markets, such as other mutual funds advised or subadvised by FMR or its affiliates, pension plan clients, and other institutional clients.

Based on its review, the Board concluded that the total expenses of each class of the fund were reasonable in light of the services that the fund and its shareholders receive and the other factors considered.

Costs of the Services and Profitability. The Board considered the revenues earned and the expenses incurred by Fidelity in conducting the business of developing, marketing, distributing, managing, administering and servicing the fund and its shareholders. The Board also considered the level of Fidelity's profits in respect of all the Fidelity funds.

On an annual basis, FMR presents to the Board Fidelity's profitability for the fund. Fidelity calculates the profitability for each fund, as well as aggregate profitability for groups of Fidelity funds and all Fidelity funds, using a series of detailed revenue and cost allocation methodologies which originate with the audited books and records of Fidelity. The Audit Committee of the Board reviews any significant changes from the prior year's methodologies.

Annual Report

PricewaterhouseCoopers LLP (PwC), independent registered public accounting firm and auditor to Fidelity and certain Fidelity funds, has been engaged annually by the Board as part of the Board's assessment of the results of Fidelity's profitability analysis. PwC's engagement includes the review and assessment of Fidelity's methodologies used in determining the revenues and expenses attributable to Fidelity's mutual fund business, and completion of agreed-upon procedures surrounding the mathematical accuracy of fund profitability and its conformity to allocation methodologies. After considering PwC's reports issued under the engagement and information provided by Fidelity, the Board believes that while other allocation methods may also be reasonable, Fidelity's profitability methodologies are reasonable in all material respects.

The Board has also reviewed Fidelity's non-fund businesses and any fall-out benefits related to the mutual fund business as well as cases where Fidelity's affiliates may benefit from or be related to the fund's business.

The Board considered the costs of the services provided by and the profits realized by Fidelity in connection with the operation of the fund and determined that the amount of profit is a fair entrepreneurial profit for the management of the fund.

Economies of Scale. The Board considered whether there have been economies of scale in respect of the management of the Fidelity funds, whether the Fidelity funds (including the fund) have appropriately benefited from any such economies of scale, and whether there is potential for realization of any further economies of scale. The Board considered the extent to which the fund will benefit from economies of scale through increased services to the fund, through waivers or reimbursements, or through fee or expense reductions, including reductions that occur through operation of the transfer agent agreement. The transfer agent fee varies in part based on the number of accounts in the fund. If the number of accounts decreases or the average account size increases, the overall transfer agent fee rate decreases.

The Board recognized that the fund's management contract incorporates a "group fee" structure, which provides for lower group fee rates as total fund assets under FMR's management increase, and for higher group fee rates as total fund assets under FMR's management decrease. FMR determines the group fee rates based on a tiered asset "breakpoint" schedule. In connection with the renewal of the fund's management contract, the Board approved amendments to the fund's management contract that added four new fee breakpoints to the group fee rate schedule for assets under FMR's management above $1,386 billion. The Board considered that the group fee rate declines under both the present and amended schedules, but that under the amended schedule, the group fee rate declines faster as assets under FMR's management exceed $1,386 billion. The Board considered that the group fee is designed to deliver the benefits of economies of scale to fund shareholders when total fund assets increase, even if assets of any particular fund are unchanged or have declined, because some portion of Fidelity's costs are attributable to services provided to all Fidelity funds, and all funds benefit if those costs can be allocated among more assets. The Board concluded that, given the group fee structure, fund shareholders will achieve a certain level of economies of scale as assets under FMR's management increase at the fund complex level, regardless of whether Fidelity achieves any such economies of scale.

Annual Report

Board Approval of Investment Advisory Contracts and
Management Fees - continued

The Board further concluded that any potential economies of scale are being shared between fund shareholders and Fidelity in an appropriate manner.

Additional Information Requested by the Board. In order to develop fully the factual basis for consideration of the Fidelity funds' Advisory Contracts, the Board requested and received additional information on several topics, including (i) Fidelity's fund profitability methodology, profitability by investment discipline, and profitability trends within certain funds; (ii) Fidelity's compensation structure relative to competitors and its effect on profitability; (iii) funds and accounts managed by Fidelity other than the Fidelity funds, including fee arrangements; (iv) the total expenses of certain funds and classes relative to competitors; (v) fund performance trends; (vi) fall-out benefits received by certain Fidelity affiliates; and (vii) Fidelity's fee structures.

Based on its evaluation of all of the conclusions noted above, and after considering all material factors, the Board ultimately concluded that the advisory fee structures are fair and reasonable, and that the fund's Advisory Contracts should be renewed.

Annual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Research & Analysis Company

Fidelity Investments Money
Management, 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 Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

(Fidelity Investment logo)(registered trademark)
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
www.fidelity.com

LTB-UANN-1007
1.784752.104

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor

Intermediate Bond

Fund - Institutional Class

Annual Report

August 31, 2007

(2_fidelity_logos) (Registered_Trademark)

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

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

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

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

Annual Report

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

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Notes to Shareholders:

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Sincerely,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Annual Report

Performance: The Bottom Line

Average Annual Total Returns

Periods ended August 31, 2007		Past 1 year	Past 5 years	Past 10 years
Institutional Class		3.22%	3.90%	5.43%

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity® Advisor Intermediate Bond Fund - Institutional Class on August 31, 1997. The chart shows how the value of your investment would have changed, and also shows how the Lehman Brothers® Intermediate U.S. Government/Credit Index performed over the same period.

Annual Report

Management's Discussion of Fund Performance

Ford O'Neil, Portfolio Manager of Fidelity®Advisor Intermediate Bond Fund

Annual Report

Shareholder Expense Example

The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (March 1, 2007 to August 31, 2007).

Actual Expenses

Hypothetical Example for Comparison Purposes

Annual Report

Investments - continued

	Beginning Account Value March 1, 2007	Ending Account Value August 31, 2007	Expenses Paid During Period* March 1, 2007 to August 31, 2007
Class A
Actual	$ 1,000.00	$ 999.30	$ 4.13
Hypothetical^A	$ 1,000.00	$ 1,021.07	$ 4.18
Class T
Actual	$ 1,000.00	$ 998.40	$ 4.08
Hypothetical^A	$ 1,000.00	$ 1,021.12	$ 4.13
Class B
Actual	$ 1,000.00	$ 995.90	$ 7.55
Hypothetical^A	$ 1,000.00	$ 1,017.64	$ 7.63
Class C
Actual	$ 1,000.00	$ 995.60	$ 7.90
Hypothetical^A	$ 1,000.00	$ 1,017.29	$ 7.98
Institutional Class
Actual	$ 1,000.00	$ 1,000.70	$ 2.72
Hypothetical^A	$ 1,000.00	$ 1,022.48	$ 2.75

^A 5% return per year before expenses

	Annualized Expense Ratio
Class A	.82%
Class T	.81%
Class B	1.50%
Class C	1.57%
Institutional Class	.54%

Annual Report

Investment Changes

The information in the following tables is based on the combined investments of the fund and its pro-rata share of its investments of each Fidelity Central Fund.

Quality Diversification (% of fund's net assets)
As of August 31, 2007		As of February 28, 2007
	U.S. Government and U.S. Government Agency Obligations 41.0%		U.S. Government and U.S. Government Agency Obligations 37.8%
	AAA 17.0%		AAA 18.9%
	AA 7.9%		AA 7.0%
	A 7.6%		A 9.4%
	BBB 19.9%		BBB 19.9%
	BB and Below 4.1%		BB and Below 3.5%
	Not Rated 0.5%		Not Rated 1.0%
	Short-Term Investments and Net Other Assets 2.0%		Short-Term Investments and Net Other Assets 2.5%

Weighted Average Maturity as of August 31, 2007
		6 months ago
Years	3.8	4.2

Duration as of August 31, 2007
		6 months ago
Years	3.6	3.5

Asset Allocation (% of fund's net assets)
As of August 31, 2007*			As of February 28, 2007**
	Corporate Bonds 30.2%			Corporate Bonds 29.4%
	U.S. Government and U.S. Government Agency Obligations 41.0%			U.S. Government and U.S. Government Agency Obligations 37.8%
	Asset-Backed Securities 11.3%			Asset-Backed Securities 13.8%
	CMOs and Other Mortgage Related Securities 14.9%			CMOs and Other Mortgage Related Securities 15.7%
	Other Investments 0.6%			Other Investments 0.8%
	Short-Term Investments and Net Other Assets 2.0%			Short-Term Investments and Net Other Assets 2.5%
* Foreign investments		9.7%	** Foreign investments		9.6%
* Futures and Swaps		18.0%	** Futures and Swaps		16.6%

Annual Report

Investments August 31, 2007

Showing Percentage of Net Assets

Nonconvertible Bonds - 2.5%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 0.2%
Media - 0.2%
Time Warner Cable, Inc. 5.85% 5/1/17 (c)	$ 1,328,000		$ 1,297,969
Univision Communications, Inc. 3.875% 10/15/08	1,680,000		1,617,000
			2,914,969
CONSUMER STAPLES - 0.3%
Food & Staples Retailing - 0.2%
CVS Caremark Corp. 6.302% 6/1/37 (g)	2,510,000		2,424,522
Tobacco - 0.1%
Reynolds American, Inc. 7.25% 6/15/37	1,575,000		1,596,207
TOTAL CONSUMER STAPLES			4,020,729
ENERGY - 0.4%
Oil, Gas & Consumable Fuels - 0.4%
Gazstream SA 5.625% 7/22/13 (c)	2,220,125		2,170,172
Kinder Morgan Energy Partners LP 6.95% 1/15/38	225,000		226,371
Nexen, Inc. 6.4% 5/15/37	1,015,000		987,434
Talisman Energy, Inc. yankee 6.25% 2/1/38	635,000		596,569
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	1,180,000		1,171,150
Valero Energy Corp. 6.625% 6/15/37	420,000		423,488
			5,575,184
FINANCIALS - 0.6%
Capital Markets - 0.1%
Deutsche Bank AG London 6% 9/1/17	1,220,000		1,230,884
Consumer Finance - 0.2%
SLM Corp.:
4.5% 7/26/10	560,000		518,297
5.5% 7/27/09 (g)	531,000		509,456
5.52% 7/26/10 (g)	2,025,000		1,908,206
			2,935,959
Diversified Financial Services - 0.0%
ZFS Finance USA Trust V 6.5% 5/9/67 (c)(g)	805,000		753,193
Insurance - 0.2%
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (c)	3,000,000		3,007,344
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Real Estate Investment Trusts - 0.1%
Archstone-Smith Operating Trust 5.25% 5/1/15	$ 645,000		$ 622,240
UDR, Inc. 5.5% 4/1/14	1,470,000		1,434,054
			2,056,294
TOTAL FINANCIALS			9,983,674
INDUSTRIALS - 0.4%
Aerospace & Defense - 0.1%
Bombardier, Inc. 6.3% 5/1/14 (c)	1,575,000		1,504,125
Airlines - 0.3%
American Airlines, Inc. pass thru trust certificates 7.324% 4/15/11	500,000		491,250
Delta Air Lines, Inc. pass thru trust certificates 7.57% 11/18/10	2,095,000		2,121,188
United Air Lines, Inc. pass-thru trust certificates:
7.032% 4/1/12	800,478		803,984
7.186% 10/1/12	1,987,712		2,007,589
			5,424,011
TOTAL INDUSTRIALS			6,928,136
UTILITIES - 0.6%
Electric Utilities - 0.3%
Commonwealth Edison Co. 5.4% 12/15/11	927,000		921,375
Nevada Power Co. 6.5% 5/15/18	3,950,000		3,950,000
			4,871,375
Independent Power Producers & Energy Traders - 0.1%
TXU Corp. 5.55% 11/15/14	1,645,000		1,348,900
Multi-Utilities - 0.2%
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,667,639
TECO Energy, Inc. 7% 5/1/12	1,500,000		1,538,213
			3,205,852
TOTAL UTILITIES			9,426,127
TOTAL NONCONVERTIBLE BONDS (Cost $39,580,512)		38,848,819
U.S. Government and Government Agency Obligations - 24.4%
	Principal Amount		Value
U.S. Government Agency Obligations - 3.8%
Fannie Mae:
4.375% 7/17/13	$ 4,850,000		$ 4,712,415
5% 2/16/12	18,000,000		18,160,434
Federal Home Loan Bank 5.375% 8/19/11	10,035,000		10,255,991
Freddie Mac:
5.25% 7/18/11 (b)	24,105,000		24,540,023
5.25% 11/5/12	1,405,000		1,404,149
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			59,073,012
U.S. Treasury Inflation Protected Obligations - 6.7%
U.S. Treasury Inflation-Indexed Notes:
0.875% 4/15/10	30,792,440		29,450,145
2% 4/15/12	5,133,500		5,053,680
2% 1/15/14 (b)	43,071,646		42,060,381
2% 7/15/14 (b)	28,737,020		28,088,081
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			104,652,287
U.S. Treasury Obligations - 13.9%
U.S. Treasury Notes:
4.25% 8/15/14	10,000,000		9,922,660
4.5% 4/30/12 (b)	20,000,000		20,203,120
4.625% 7/31/12 (d)	29,552,000		30,027,258
4.75% 5/15/14 (b)	152,695,000		156,154,454
TOTAL U.S. TREASURY OBLIGATIONS			216,307,492
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $380,479,181)		380,032,791
U.S. Government Agency - Mortgage Securities - 9.7%

Fannie Mae - 5.8%
3.72% 10/1/33 (g)	163,186		159,874
3.75% 9/1/33 (g)	669,427		660,279
3.75% 1/1/34 (g)	149,714		147,700
3.754% 10/1/33 (g)	150,421		149,670
3.785% 6/1/34 (g)	736,723		724,338
3.823% 4/1/33 (g)	442,407		442,275
3.845% 10/1/33 (g)	3,759,173		3,726,649
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
3.934% 5/1/33 (g)	$ 48,135		$ 47,541
4% 8/1/18	2,867,569		2,694,097
4% 10/1/18 (g)	104,194		102,862
4.025% 4/1/33 (g)	38,257		38,204
4.067% 2/1/35 (g)	65,100		64,977
4.098% 1/1/35 (g)	236,992		235,903
4.167% 1/1/35 (g)	338,444		333,039
4.249% 1/1/34 (g)	416,230		412,531
4.25% 2/1/35 (g)	164,183		161,747
4.26% 5/1/35 (g)	161,591		161,177
4.27% 10/1/33 (g)	65,426		64,852
4.285% 3/1/33 (g)	162,334		162,192
4.288% 8/1/33 (g)	270,965		271,275
4.295% 3/1/35 (g)	137,836		138,707
4.297% 3/1/33 (g)	75,119		73,963
4.303% 6/1/33 (g)	85,915		85,967
4.304% 4/1/35 (g)	83,271		82,933
4.343% 1/1/35 (g)	179,955		177,551
4.356% 2/1/34 (g)	316,682		314,190
4.391% 2/1/35 (g)	251,181		247,762
4.413% 5/1/35 (g)	109,904		109,395
4.417% 12/1/33 (g)	6,691,850		6,605,890
4.43% 5/1/35 (g)	437,243		435,955
4.434% 3/1/35 (g)	238,559		235,437
4.452% 8/1/34 (g)	447,746		444,593
4.481% 1/1/35 (g)	181,232		179,691
4.487% 3/1/35 (g)	503,412		497,378
4.5% 4/1/20 to 3/1/35	2,154,034		2,025,444
4.502% 10/1/35 (g)	63,755		63,324
4.503% 2/1/35 (g)	801,358		803,768
4.506% 2/1/35 (g)	122,791		122,624
4.509% 3/1/35 (g)	501,800		495,986
4.513% 2/1/35 (g)	2,288,865		2,274,735
4.517% 2/1/35 (g)	68,863		69,016
4.528% 7/1/35 (g)	506,257		501,745
4.57% 11/1/34 (g)	442,800		438,734
4.57% 2/1/35 (g)	1,561,483		1,545,202
4.57% 7/1/35 (g)	582,174		582,993
4.575% 2/1/35 (g)	436,456		432,227
4.613% 7/1/34 (g)	4,993,538		4,949,914
4.631% 2/1/35 (g)	4,034,439		3,996,441
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.657% 3/1/35 (g)	$ 1,040,976		$ 1,045,151
4.668% 11/1/34 (g)	510,041		506,483
4.7% 10/1/34 (g)	525,886		522,550
4.708% 12/1/34 (g)	338,147		335,784
4.709% 3/1/35 (g)	51,229		51,563
4.717% 7/1/34 (g)	414,728		412,576
4.776% 12/1/34 (g)	143,596		142,652
4.799% 6/1/35 (g)	684,040		681,188
4.807% 11/1/34 (g)	445,234		442,738
4.808% 2/1/33 (g)	216,473		218,014
4.856% 10/1/34 (g)	1,796,186		1,788,318
4.87% 5/1/33 (g)	5,960		5,992
4.884% 10/1/35 (g)	331,306		327,825
4.945% 8/1/34 (g)	1,455,697		1,452,173
5.016% 7/1/34 (g)	70,505		70,380
5.045% 5/1/35 (g)	847,855		850,391
5.062% 8/1/34 (g)	120,878		120,972
5.07% 9/1/34 (g)	1,259,206		1,257,436
5.079% 9/1/34 (g)	144,454		144,306
5.112% 1/1/36 (g)	1,211,661		1,210,815
5.138% 3/1/35 (g)	70,024		69,918
5.144% 5/1/35 (g)	544,683		543,842
5.157% 5/1/35 (g)	1,598,161		1,596,108
5.173% 6/1/35 (g)	608,451		610,579
5.176% 8/1/33 (g)	207,066		207,351
5.197% 5/1/35 (g)	1,723,676		1,722,769
5.22% 4/1/36 (g)	2,282,145		2,274,192
5.261% 11/1/36 (g)	581,566		582,626
5.297% 7/1/35 (g)	80,487		80,763
5.317% 12/1/34 (g)	214,376		214,740
5.37% 2/1/36 (g)	209,932		210,041
5.475% 2/1/36 (g)	2,732,195		2,742,218
5.5% 9/1/10 to 12/1/14	2,501,130		2,515,898
5.532% 11/1/36 (g)	1,175,101		1,179,367
5.602% 1/1/36 (g)	806,378		811,335
5.651% 7/1/37 (g)	464,989		467,733
5.815% 1/1/36 (g)	552,665		556,334
5.819% 7/1/46 (d)(g)	4,648,263		4,688,069
5.829% 3/1/36 (g)	1,761,715		1,777,172
6% 5/1/16 to 4/1/17	865,569		879,592
6.061% 4/1/36 (g)	331,831		335,851
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
6.256% 6/1/36 (g)	$ 162,501		$ 164,012
6.319% 4/1/36 (g)	293,113		297,689
6.5% 12/1/13 to 3/1/35	10,816,413		11,043,896
6.575% 9/1/36 (g)	2,323,920		2,359,403
7% 2/1/09 to 6/1/33	1,938,351		2,006,105
7.5% 8/1/17 to 9/1/28	675,216		716,575
8.5% 6/1/11 to 9/1/25	112,967		121,434
9.5% 2/1/25	20,504		22,354
10.5% 8/1/20	20,269		23,449
11% 8/1/15	100,583		105,797
12.5% 12/1/13 to 4/1/15	12,531		14,578
TOTAL FANNIE MAE			91,221,844
Freddie Mac - 1.3%
4.064% 1/1/35 (g)	518,019		518,053
4.173% 1/1/34 (g)	1,749,854		1,728,379
4.289% 3/1/35 (g)	179,954		180,366
4.292% 2/1/35 (g)	383,941		384,891
4.307% 12/1/34 (g)	218,405		214,858
4.342% 3/1/35 (g)	360,415		354,347
4.375% 2/1/35 (g)	418,558		411,727
4.423% 3/1/35 (g)	217,970		214,332
4.423% 6/1/35 (g)	277,715		274,850
4.426% 2/1/34 (g)	187,900		186,029
4.455% 3/1/35 (g)	235,378		231,722
4.539% 2/1/35 (g)	391,970		386,316
4.807% 3/1/33 (g)	69,692		70,111
4.99% 4/1/35 (g)	962,495		963,416
5.131% 4/1/35 (g)	986,429		982,123
5.534% 1/1/36 (g)	1,276,118		1,277,669
5.787% 10/1/35 (g)	301,392		302,781
5.877% 6/1/36 (g)	373,419		375,785
6.044% 6/1/36 (g)	364,508		367,439
6.049% 7/1/37 (g)	1,890,000		1,903,605
6.089% 4/1/36 (g)	613,915		618,593
6.1% 6/1/36 (g)	343,339		346,926
6.744% 10/1/36 (g)	2,054,132		2,081,326
6.747% 1/1/37 (g)	2,874,199		2,921,662
6.853% 10/1/36 (g)	2,844,165		2,893,535
8.5% 9/1/24 to 8/1/27	88,854		96,480
10% 5/1/09	1,154		1,172
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
10.5% 5/1/21	$ 12,654		$ 13,059
11% 12/1/11	1,210		1,283
11.5% 10/1/15	6,128		6,969
11.75% 10/1/10	7,189		7,765
TOTAL FREDDIE MAC			20,317,569
Government National Mortgage Association - 2.6%
4.25% 7/20/34 (g)	534,556		532,400
6.5% 9/1/37 (d)	38,000,000		38,724,994
7% 7/15/28 to 11/15/28	505,722		526,803
7.5% 2/15/28 to 10/15/28	8,454		8,894
8% 6/15/24 to 10/15/24	7,398		7,898
8.5% 4/15/17 to 10/15/21	105,514		115,104
11% 7/20/19 to 8/20/19	5,193		6,076
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			39,922,169
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $151,519,383)		151,461,582
Asset-Backed Securities - 0.7%

Advanta Business Card Master Trust Series 2007-D1 Class D, 6.9375% 1/22/13 (c)(g)	1,420,000		1,393,855
AmeriCredit Automobile Receivables Trust Series 2006-1 Class E1, 6.62% 5/6/13 (c)	739,138		591,310
Bear Stearns Asset Backed Securities Trust Series 2005-HE2 Class M2, 6.255% 2/25/35 (g)	570,000		394,448
Capital Auto Receivables Asset Trust Series 2006-SN1A:
Class B, 5.5% 4/20/10 (c)	245,000		244,109
Class C, 5.77% 5/20/10 (c)	235,000		233,422
Class D, 6.15% 4/20/11 (c)	400,000		399,771
Carrington Mortgage Loan Trust Series 2006-NC3 Class M10, 7.505% 8/25/36 (c)(g)	215,000		47,031
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (c)	715,000		734,915
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (c)	850,000		845,855
Series 2006-C Class D, 6.89% 5/15/13 (c)	585,000		582,025
Series 2007-A Class D, 7.05% 12/15/13 (c)	310,000		294,500
Asset-Backed Securities - continued
	Principal Amount		Value
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (c)	$ 1,030,000		$ 1,007,690
GSAMP Trust Series 2004-AR1 Class B4, 5% 6/25/34 (c)(g)	290,000		145,000
Long Beach Mortgage Loan Trust Series 2006-7 Class M11, 8.005% 8/25/36 (g)	1,000,000		120,000
Merna Reinsurance Ltd. Series 2007-1 Class B, 7.11% 6/30/12 (c)(g)	1,695,000		1,695,000
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	1,045,000		1,030,823
Structured Asset Securities Corp. Series 2006-BC1 Class B1, 8.005% 3/25/36 (c)(g)	700,000		107,170
Wachovia Auto Loan Trust Series 2006-2A Class E, 7.05% 5/20/14 (c)	955,000		918,390
WaMu Asset-Backed Certificates Series 2006-HE5 Class B1, 8.005% 10/25/36 (c)(g)	825,000		165,000
TOTAL ASSET-BACKED SECURITIES (Cost $13,361,298)		10,950,314
Collateralized Mortgage Obligations - 3.0%

Private Sponsor - 0.4%
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.3588% 2/25/37 (g)	166,810		164,432
Countrywide Home Loans pass-thru certificates Series 2007-HY5 Class 3A1, 6.2335% 9/25/37 (g)	1,255,000		1,236,175
Credit Suisse First Boston Mortgage Securities Corp. floater Series 2007-AR7 Class 2A1, 4.6454% 11/25/34 (g)	701,284		688,994
JPMorgan Mortgage Trust Series 2007-A1 Class 3A2, 5.0072% 7/25/35 (g)	731,103		719,888
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B6, 8.2% 7/10/35 (c)(g)	738,246		745,628
Series 2003-CB1:
Class B4, 7% 6/10/35 (c)(g)	691,230		694,686
Class B5, 7.6% 6/10/35 (c)(g)	470,037		472,387
Class B6, 8.1% 6/10/35 (c)(g)	281,100		283,911
Structured Asset Securities Corp. floater Series 2006-BC5 Class B, 8.005% 12/25/36 (c)(g)	650,000		231,530
Wells Fargo Mortgage Backed Securities Trust:
Series 2005-AR12 Class 2A6, 4.3186% 7/25/35 (g)	218,828		213,408
Series 2005-AR3 Class 2A1, 4.187% 3/25/35 (g)	428,617		420,446
TOTAL PRIVATE SPONSOR			5,871,485
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - 2.6%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 5.755% 10/25/35 (g)	$ 4,879,808		$ 4,850,026
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,158,480		1,160,765
Series 2002-9 Class PC, 6% 3/25/17	235,449		237,769
Series 2003-84 Class GC, 4.5% 5/25/15	1,540,000		1,530,488
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,848,998
Series 2006-4 Class PB, 6% 9/25/35	2,899,419		2,936,041
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	828,261		828,629
Series 2004-3 Class BA, 4% 7/25/17	136,430		131,943
Series 2004-45 Class AV, 4.5% 10/25/22	1,086,165		1,081,695
Series 2004-86 Class KC, 4.5% 5/25/19	603,331		589,382
Series 2004-91 Class AH, 4.5% 5/25/29	1,252,716		1,223,495
Freddie Mac planned amortization class:
Series 2104 Class PG, 6% 12/15/28	1,326,031		1,349,770
Series 2356 Class GD, 6% 9/15/16	920,294		935,773
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,082,441
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2363 Class PF, 6% 9/15/16	1,222,493		1,242,841
Series 2702 Class WB, 5% 4/15/17	2,480,000		2,479,767
Series 2952 Class EC, 5.5% 11/15/28	2,785,000		2,800,591
Series 3018 Class UD, 5.5% 9/15/30	1,735,000		1,746,311
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,512,322
Series 3117 Class PC, 5% 6/15/31	4,000,000		3,963,738
sequential payer:
Series 2528 Class HN, 5% 11/15/17	1,515,000		1,488,298
Series 2777 Class AB, 4.5% 6/15/29	2,899,514		2,830,939
Series 2809 Class UA, 4% 12/15/14	638,373		632,408
TOTAL U.S. GOVERNMENT AGENCY			40,484,430
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $46,339,149)		46,355,915
Commercial Mortgage Securities - 0.9%
	Principal Amount		Value
Bear Stearns Commercial Mortgage Securities, Inc. Series 2003-T12 Class X2, 0.5582% 8/13/39 (c)(g)(i)	$ 5,227,242		$ 84,170
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,994,830
Credit Suisse Commercial Mortgage Trust Series 2007-C2 Class A1, 5.269% 1/15/49	593,124		590,325
DLJ Commercial Mortgage Corp. sequential payer Series 1999-CG1 Class A1B, 6.46% 3/10/32	3,787,006		3,822,693
Ginnie Mae guaranteed Multi-family pass-thru securities sequential payer Series 2002-35 Class C, 5.8739% 10/16/23 (g)	113,105		114,181
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	2,656,817		2,604,087
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		2,911,883
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6778% 12/10/41 (g)(i)	11,458,015		221,849
LB-UBS Commercial Mortgage Trust:
sequential payer Series 2006-C7 Class A1, 5.279% 11/15/38	361,909		361,401
Series 2007-C2 Class A1, 5.226% 2/15/40	454,099		452,385
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $14,443,782)		14,157,804

Fixed-Income Funds - 59.7%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (h)	1,222,536		116,678,845
Fidelity 2-5 Year Duration Securitized Bond Central Fund (h)	1,583,675		154,867,605
Fidelity Corporate Bond 1-10 Year Central Fund (h)	3,937,791		389,723,224
Fidelity Corporate Bond 1-5 Year Central Fund (h)	262,206		25,963,647
Fidelity Specialized High Income Central Fund (h)	235,830		22,875,519
Fidelity Ultra-Short Central Fund (h)	2,306,145		218,046,027
TOTAL FIXED-INCOME FUNDS (Cost $955,705,166)		928,154,867
Cash Equivalents - 21.5%
	Maturity Amount		Value
Investments in repurchase agreements in a joint trading account at:
5.37%, dated 8/31/07 due 9/4/07 (Collateralized by U.S. Government Obligations) #	$ 62,090,045		$ 62,053,000
5.4%, dated 8/31/07 due 9/4/07 (Collateralized by U.S. Government Obligations) # (a)	272,785,573		272,622,000
TOTAL CASH EQUIVALENTS (Cost $334,675,000)		334,675,000
TOTAL INVESTMENT PORTFOLIO - 122.4% (Cost $1,936,103,471)			1,904,637,092
NET OTHER ASSETS - (22.4)%			(348,714,403)
NET ASSETS - 100%		$ 1,555,922,689

Swap Agreements
	Expiration Date	Notional Amount
Credit Default Swaps
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE8 Class B3, 7.3913% 9/25/34	Oct. 2034	$ 409,000	(71,809)
Receive monthly notional amount multiplied by 3.05% and pay Merrill Lynch upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8, Class B3, 7.2913% 9/25/34	Oct. 2034	400,000	(88,466)
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-HE7, Class B3, 9.01% 8/25/34	Sept. 2034	409,000	(101,148)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 3.35% and pay Morgan Stanley, Inc. upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC7, Class B3, 7.6913% 7/25/34	August 2034	$ 409,000	$ (63,089)
Receive monthly notional amount multiplied by 2.5% and pay Credit Suisse First Boston upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R11 Class M9, 8.03% 11/25/34	Dec. 2034	625,000	(175,227)
Receive monthly notional amount multiplied by .52% and pay Bank of America upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R8 Class M6, 6.835% 9/25/34	Oct. 2034	1,900,000	(274,757)
Receive monthly notional amount multiplied by .8% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WCH1 Class M6, 6.365% 1/25/35	Feb. 2035	600,000	(123,534)
Receive monthly notional amount multiplied by .82% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC6 Class M3, 5.6413% 7/25/34	August 2034	409,000	(45,445)
Receive monthly notional amount multiplied by .85% and pay Deutsche Bank upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M6, 6.105% 5/25/35	June 2035	600,000	(183,816)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2004-R9 Class M5, 5.5913% 10/25/34	Nov. 2034	$ 409,000	$ (68,265)
Receive monthly notional amount multiplied by .85% and pay UBS upon credit event of Morgan Stanley ABS Capital I, Inc., par value of the notional amount of Morgan Stanley ABS Capital I, Inc. Series 2004-NC8 Class M6, 5.4413% 9/25/34	Oct. 2034	409,000	(57,852)
Receive monthly notional amount multiplied by 1.6% and pay Morgan Stanley, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 5.4413% 5/25/35	June 2035	370,000	(114,741)
Receive monthly notional amount multiplied by 1.66% and pay Morgan Stanley, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 5.4413% 5/25/35	June 2035	409,000	(126,282)
Receive monthly notional amount multiplied by 2% and pay Goldman Sachs upon credit event of Long Beach Mortgage Loan Trust, par value of the notional amount of Long Beach Mortgage Loan Trust Series 2006-7 Class M9, 7.14% 8/25/36	Sept. 2036	1,000,000	(782,702)
Receive monthly notional amount multiplied by 2.54% and pay Merrill Lynch upon credit event of Countrywide Home Loans, Inc., par value of the notional amount of Countrywide Home Loans, Inc. Series 2003-BC1 Class B1, 7.6913% 3/25/32	April 2032	36,015	(1,106)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-1 Class M9, 7.3913% 2/25/34	March 2034	$ 85,922	$ (12,179)
Receive monthly notional amount multiplied by 2.61% and pay Goldman Sachs upon credit event of Fremont Home Loan Trust, par value of the notional amount of Fremont Home Loan Trust Series 2004-A Class B3, 7.0413% 1/25/34	Feb. 2034	39,777	(32,287)
Receive monthly notional amount multiplied by 2.7% and pay Merrill Lynch, Inc. upon credit event of Park Place Securities, Inc., par value of the notional amount of Park Place Securities, Inc. Series 2005-WHQ2 Class M9, 6.4606% 5/25/35	June 2035	2,410,000	(1,043,383)
Receive monthly notional amount multiplied by 3% and pay UBS upon credit event of Ameriquest Mortgage Securities, Inc., par value of the notional amount of Ameriquest Mortgage Securities, Inc. Series 2005-R4 Class M9, 7.07% 7/25/35	August 2035	700,000	(254,597)
Receive monthly notional amount multiplied by 5% and pay Deutsche Bank upon credit event of MASTR Asset Backed Securities Trust, par value of the notional amount of MASTR Asset Backed Securities Trust Series 2003-NC1 Class M6, 8.1913% 4/25/33	May 2033	409,000	(118,167)
Receive monthly notional amount multiplied by 5.55% and pay Deutsche Bank upon credit event of Carrington Mortgage Loan Trust, par value of the notional amount of Carrington Mortgage Loan Trust Series 2006-FRE1 Class M10, 7.74% 7/25/36	August 2036	700,000	(293,815)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive monthly notional amount multiplied by 6.25% and pay Deutsche Bank upon credit event of Residential Asset Mortgage Products, Inc., par value of the notional amount of Residential Asset Mortgage Products, Inc. Series 2006-RS5, 7.17% 9/25/36	Oct. 2036	$ 700,000	$ (490,380)
Receive quarterly a fixed rate of .4% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 4 Index, par value of the proportional notional amount (f)	June 2010	10,000,000	(22,252)
Receive quarterly a fixed rate of .45% multiplied by the notional amount and pay to Goldman Sachs, upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 5 Index, par value of the proportional notional amount (j)	Dec. 2010	15,000,000	(16,463)
Receive quarterly a fixed rate of .5% multiplied by the notional amount and pay to Merrill Lynch, Inc., upon each credit event of one of the issues of Dow Jones CDX N.A. Investment Grade 3 Index, par value of the proportional notional amount (e)	March 2010	6,373,600	11,433
Receive quarterly notional amount multiplied by .72% and pay Bank of America upon credit event of Alleghany Energy Supply Co. LLC, par value of the notional amount of Alleghany Energy Supply Co. LLC 8.25% 4/15/12	June 2012	1,400,000	(28,670)
Receive quarterly notional amount multiplied by .78% and pay Deutsche Bank upon credit event of Allegheny Energy Supply Co. LLC, par value of the notional amount of Allegheny Energy Supply Co. LLC 8.25% 4/15/12	June 2012	1,405,000	(25,633)
TOTAL CREDIT DEFAULT SWAPS		47,617,314	(4,604,632)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 4.795% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	Dec. 2011	$ 15,000,000	$ (109,041)
Receive semi-annually a fixed rate equal to 4.9375% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	March 2012	25,000,000	269,198
Receive semi-annually a fixed rate equal to 5.022% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.	Nov. 2011	20,000,000	312,024
Receive semi-annually a fixed rate equal to 5.095% and pay quarterly a floating rate based on 3-month LIBOR with Bank of America	Feb. 2012	30,000,000	172,572
Receive semi-annually a fixed rate equal to 5.145% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Feb. 2012	60,000,000	461,595
Receive semi-annually a fixed rate equal to 5.186% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.	Sept. 2011	15,000,000	326,518
TOTAL INTEREST RATE SWAPS		165,000,000	1,432,866
		$ 212,617,314	$ (3,171,766)