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)

Scott C. Goebel, Secretary

82 Devonshire St.

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

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

Date of fiscal year end:	August 31

Date of reporting period:	August 31, 2008

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, 2008

(2_fidelity_logos) (Registered_Trademark)

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>
Proxy Voting Results	<Click Here>
Board Approval of Investment Advisory Contracts and Management Fees	<Click Here>

To view a fund's proxy voting guidelines and proxy voting record for the 12-month period ended June 30, visit http://www.fidelity.com (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

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Most domestic and international equity indexes continued to dwell in negative territory, pressured by unfavorable
credit-market conditions, particularly in the United States. On the upside,
investment-grade bonds and money markets generally have served investors well so far this year. 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, if any) and assuming a constant rate of performance each year. The $10,000 table and the fund's returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. During periods of reimbursement by Fidelity, a fund's total return will be greater than it would be had the reimbursement not occurred. How a fund did yesterday is no guarantee of how it will do tomorrow. 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, 2008	Past 1 year	Past 5 years	Past 10 years
Class A (incl. 2.75% sales charge)	-1.50%	2.31%	4.30%
Class T (incl. 2.75% sales charge)	-1.38%	2.25%	4.21%
Class B (incl. contingent deferred sales charge)^A	-2.31%	2.25%	4.27%
Class C (incl. contingent deferred sales charge)^B	-0.43%	2.05%	3.72%

^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. 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.

Annual Report

$10,000 Over 10 Years

Let's say hypothetically that $10,000 was invested in Fidelity® Advisor Intermediate Bond Fund - Class A on August 31, 1998 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.

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In prior years, the performance from year to year was represented by the performance of Class T. Going forward, the fund's performance will be represented by Class A for consistency with other fund materials.

Annual Report

Management's Discussion of Fund Performance

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

Several years of healthy economic growth and a hearty appetite for risk abruptly reversed during the 12-month period ending August 31, 2008, as a meltdown in the subprime mortgage market led to an unnerving credit crisis. Bond investors fled from lower-quality debt instruments and flocked to those with an explicit or implicit guarantee from the U.S. government. The investment-grade bond market as a whole, as measured by the Lehman Brothers® U.S. Aggregate Index, rose 5.86%. Treasuries did the best, benefiting from their reputation as one of the world's safest investments. The Lehman Brothers U.S. Treasury Index gained 8.65% during the period - one of the highest returns of any domestic or international asset class over the past 12 months. At the opposite end of the spectrum, the asset-backed sector - home to weak-performing subprime debt - fell 3.48% according to the Lehman Brothers U.S. Fixed-Rate Asset-Backed Securities Index.

During the past year, the fund's Class A, Class T, Class B and Class C shares returned 1.28%, 1.41%, 0.60% and 0.54%, respectively (excluding sales charges), and the Lehman Brothers Intermediate U.S. Government/Credit Index rose 6.05%. As I review performance, I'll address the aggregate of my direct investments and those I made in Fidelity fixed-income central funds. Underweighting index-topping U.S. Treasuries and government agency securities and overweighting weak securitized bonds accounted for the bulk of the fund's underperformance. Specifically, holdings in asset-backed securities (ABS) backed by subprime mortgages and commercial mortgage-backed securities (CMBS) - sectors not included in the index - caused most of the damage. A sizable portion of our exposure to these segments was through Fidelity Ultra-Short Central Fund. Having a modest stake in other ABS also detracted. By period end, I significantly reduced the fund's exposure to Ultra-Short Central and to securitized bonds I had owned directly. Overweighting corporate bonds hurt because they lagged the index, although we enjoyed good security selection there. In contrast, an out-of-index exposure to Treasury Inflation-Protected Securities (TIPS) helped. Another plus was yield-curve positioning, as we overweighted better-performing intermediate bonds and underweighted lagging long-term issues. To manage the fund's yield-curve positioning, I used interest rate swaps - - contracts that usually involve the exchange of fixed-rate interest payments for floating-rate payments. Elsewhere, out-of-benchmark picks in the prime mortgage sector worked to our advantage.

During the past year, the fund's Institutional Class shares returned 1.71% and the Lehman Brothers Intermediate U.S. Government/Credit Index rose 6.05%. As I review performance, I'll address the aggregate of my direct investments and those I made in Fidelity fixed-income central funds. Underweighting index-topping U.S. Treasuries and government agency securities and overweighting weak securitized bonds accounted for the bulk of the fund's underperformance. Specifically, holdings in asset-backed securities (ABS) backed by subprime mortgages and commercial mortgage-backed securities (CMBS) - sectors not included in the index - caused most of the damage. A sizable portion of our exposure to these segments was through Fidelity Ultra-Short Central Fund. Having a modest stake in other ABS also detracted. By period end, I significantly reduced the fund's exposure to Ultra-Short Central and to securitized bonds I had owned directly. Overweighting corporate bonds hurt because they lagged the index, although we enjoyed good security selection there. In contrast, an out-of-index exposure to Treasury Inflation-Protected Securities (TIPS) helped. Another plus was yield-curve positioning, as we overweighted better-performing intermediate bonds and underweighted lagging long-term issues. To manage the fund's yield-curve positioning, I used interest rate swaps - contracts that usually involve the exchange of fixed-rate interest payments for floating-rate payments. Elsewhere, out-of-benchmark picks in the prime mortgage sector worked to our advantage.

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, 2008 to August 31, 2008).

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

	Beginning Account Value March 1, 2008	Ending Account Value August 31, 2008	Expenses Paid During Period* March 1, 2008 to August 31, 2008
Class A
Actual	$ 1,000.00	$ 980.70	$ 4.28
Hypothetical^A	$ 1,000.00	$ 1,020.81	$ 4.37
Class T
Actual	$ 1,000.00	$ 981.00	$ 4.08
Hypothetical^A	$ 1,000.00	$ 1,021.01	$ 4.17
Class B
Actual	$ 1,000.00	$ 977.40	$ 7.60
Hypothetical^A	$ 1,000.00	$ 1,017.44	$ 7.76
Class C
Actual	$ 1,000.00	$ 977.10	$ 7.90
Hypothetical^A	$ 1,000.00	$ 1,017.14	$ 8.06
Institutional Class
Actual	$ 1,000.00	$ 982.50	$ 2.59
Hypothetical^A	$ 1,000.00	$ 1,022.52	$ 2.64

^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 184/366 (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	.86%
Class T	.82%
Class B	1.53%
Class C	1.59%
Institutional Class	.52%

Annual Report

Investment Changes (Unaudited)

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

Quality Diversification (% of fund's net assets)
As of August 31, 2008		As of February 29, 2008
	U.S. Government and U.S. Government Agency Obligations 39.3%		U.S. Government and U.S. Government Agency Obligations 41.4%
	AAA 14.1%		AAA 13.0%
	AA 8.2%		AA 6.1%
	A 10.8%		A 10.1%
	BBB 20.1%		BBB 17.7%
	BB and Below 4.5%		BB and Below 4.1%
	Not Rated 0.3%		Not Rated 0.5%
	Short-Term Investments and Net Other Assets 2.7%		Short-Term Investments and Net Other Assets 7.1%

fid56

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. Securities rated BB or below were rated investment grade at the time of acquisition.

Weighted Average Maturity as of August 31, 2008
		6 months ago
Years	4.5	4.3

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

Duration as of August 31, 2008
		6 months ago
Years	4.0	3.9

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, 2008 *			As of February 29, 2008 **
	Corporate Bonds 39.2%			Corporate Bonds 32.7%
	U.S. Government and U.S. Government Agency Obligations 39.3%			U.S. Government and U.S. Government Agency Obligations 41.4%
	Asset-Backed Securities 5.3%			Asset-Backed Securities 6.1%
	CMOs and Other Mortgage Related Securities 13.1%			CMOs and Other Mortgage Related Securities 12.3%
	Other Investments 0.4%			Other Investments 0.4%
	Short-Term Investments and Net Other Assets 2.7%			Short-Term Investments and Net Other Assets 7.1%
* Foreign investments		10.1%	** Foreign investments		10.0%
* Futures and Swaps		18.7%	** Futures and Swaps		18.1%

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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, 2008

Showing Percentage of Net Assets

Nonconvertible Bonds - 9.8%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 0.5%
Household Durables - 0.0%
Newell Rubbermaid, Inc. 6.25% 4/15/18	$ 385,000		$ 348,363
Media - 0.5%
Time Warner Cable, Inc.:
5.85% 5/1/17	1,328,000		1,267,674
6.75% 7/1/18	1,250,000		1,261,985
Univision Communications, Inc. 3.875% 10/15/08	1,680,000		1,656,900
Viacom, Inc. 6.125% 10/5/17	905,000		851,539
			5,038,098
TOTAL CONSUMER DISCRETIONARY			5,386,461
CONSUMER STAPLES - 0.9%
Beverages - 0.2%
Diageo Capital PLC 5.75% 10/23/17	1,678,000		1,663,078
Food & Staples Retailing - 0.2%
CVS Caremark Corp. 6.302% 6/1/37 (j)	2,510,000		2,130,363
Food Products - 0.2%
General Mills, Inc. 5.2% 3/17/15	867,000		851,627
Kraft Foods, Inc. 6.125% 2/1/18	1,012,000		993,881
			1,845,508
Tobacco - 0.3%
Philip Morris International, Inc.:
4.875% 5/16/13	851,000		843,024
5.65% 5/16/18	807,000		793,931
Reynolds American, Inc. 7.25% 6/15/37	1,575,000		1,552,295
			3,189,250
TOTAL CONSUMER STAPLES			8,828,199
ENERGY - 1.0%
Energy Equipment & Services - 0.1%
Weatherford International Ltd. 5.15% 3/15/13	1,345,000		1,329,499
Oil, Gas & Consumable Fuels - 0.9%
Anadarko Petroleum Corp. 6.45% 9/15/36	540,000		496,318
Gazstream SA 5.625% 7/22/13 (c)	1,685,785		1,652,069
Nexen, Inc. 6.4% 5/15/37	1,015,000		910,383
NGPL PipeCo LLC 6.514% 12/15/12 (c)	800,000		811,557
Petro-Canada:
6.05% 5/15/18	435,000		421,212
6.8% 5/15/38	285,000		271,130
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
Suncor Energy, Inc. 6.1% 6/1/18	$ 975,000		$ 968,258
TEPPCO Partners LP 6.65% 4/15/18	588,000		591,660
Texas Eastern Transmission LP 6% 9/15/17 (c)	1,138,000		1,110,119
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	525,000		525,000
Valero Energy Corp. 6.625% 6/15/37	745,000		657,349
			8,415,055
TOTAL ENERGY			9,744,554
FINANCIALS - 4.5%
Capital Markets - 0.6%
BlackRock, Inc. 6.25% 9/15/17	1,720,000		1,689,353
Goldman Sachs Group, Inc. 6.75% 10/1/37	1,280,000		1,126,212
Lehman Brothers Holdings, Inc. 6.875% 5/2/18	760,000		707,579
Merrill Lynch & Co., Inc.:
6.15% 4/25/13	360,000		341,149
6.875% 4/25/18	62,000		57,103
Northern Trust Corp. 5.5% 8/15/13	215,000		218,736
UBS AG Stamford Branch 5.75% 4/25/18	1,420,000		1,359,436
			5,499,568
Commercial Banks - 0.9%
American Express Bank FSB 5.5% 4/16/13	1,861,000		1,762,514
Credit Suisse First Boston 6% 2/15/18	1,505,000		1,443,977
HBOS PLC 6.75% 5/21/18 (c)	1,040,000		939,271
Standard Chartered Bank 6.4% 9/26/17 (c)	2,781,000		2,632,139
Wells Fargo & Co. 5.625% 12/11/17	2,063,000		1,982,914
			8,760,815
Consumer Finance - 1.2%
American General Finance Corp. 6.9% 12/15/17	960,000		769,020
General Electric Capital Corp.:
4.8% 5/1/13	5,300,000		5,240,672
5.625% 9/15/17	1,130,000		1,104,459
6.375% 11/15/67 (j)	1,700,000		1,557,003
SLM Corp.:
2.94% 7/27/09 (j)	531,000		503,233
2.96% 7/26/10 (j)	2,025,000		1,825,311
4% 1/15/09	465,000		461,499
4.5% 7/26/10	1,025,000		932,492
			12,393,689
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - 0.3%
GlaxoSmithKline Capital, Inc. 5.65% 5/15/18	$ 670,000		$ 671,919
International Lease Finance Corp. 5.65% 6/1/14	310,000		259,789
TECO Finance, Inc. 7% 5/1/12	1,500,000		1,515,554
ZFS Finance USA Trust V 6.5% 5/9/67 (c)(j)	805,000		693,486
			3,140,748
Insurance - 0.5%
American International Group, Inc. 5.85% 1/16/18	1,715,000		1,444,028
Pacific Life Global Funding 5.15% 4/15/13 (c)	840,000		840,501
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (c)	3,000,000		2,736,099
The Chubb Corp. 5.75% 5/15/18	415,000		398,185
			5,418,813
Real Estate Investment Trusts - 0.5%
Duke Realty LP:
5.4% 8/15/14	530,000		485,588
5.875% 8/15/12	90,000		88,557
5.95% 2/15/17	110,000		101,336
6.25% 5/15/13	1,550,000		1,528,503
6.5% 1/15/18	855,000		797,600
Liberty Property LP 6.625% 10/1/17	735,000		686,044
UDR, Inc. 5.5% 4/1/14	1,470,000		1,385,866
			5,073,494
Real Estate Management & Development - 0.1%
ERP Operating LP:
5.375% 8/1/16	270,000		240,474
5.5% 10/1/12	395,000		379,014
5.75% 6/15/17	790,000		712,074
			1,331,562
Thrifts & Mortgage Finance - 0.4%
Bank of America Corp.:
4.9% 5/1/13	1,500,000		1,451,730
5.65% 5/1/18	1,500,000		1,383,767
Credit Suisse First Boston (New York Branch) 5% 5/15/13	712,000		693,506
			3,529,003
TOTAL FINANCIALS			45,147,692
Nonconvertible Bonds - continued
	Principal Amount		Value
HEALTH CARE - 0.2%
Pharmaceuticals - 0.2%
AstraZeneca PLC:
5.9% 9/15/17	$ 930,000		$ 965,966
6.45% 9/15/37	695,000		712,739
			1,678,705
INDUSTRIALS - 1.0%
Aerospace & Defense - 0.2%
Bombardier, Inc. 6.3% 5/1/14 (c)	1,575,000		1,512,000
Airlines - 0.5%
American Airlines, Inc. pass-thru trust certificates 7.324% 4/15/11	500,000		455,000
Delta Air Lines, Inc. pass-thru trust certificates 7.57% 11/18/10	2,520,000		2,375,100
United Air Lines, Inc. pass-thru trust certificates:
7.032% 4/1/12	555,510		547,177
7.186% 10/1/12	1,381,472		1,362,477
			4,739,754
Industrial Conglomerates - 0.3%
General Electric Co. 5.25% 12/6/17	3,100,000		2,995,952
Road & Rail - 0.0%
CSX Corp. 6.25% 4/1/15	310,000		303,747
TOTAL INDUSTRIALS			9,551,453
MATERIALS - 0.1%
Metals & Mining - 0.1%
Rio Tinto Finance Ltd. 6.5% 7/15/18	780,000		784,769
TELECOMMUNICATION SERVICES - 0.1%
Diversified Telecommunication Services - 0.1%
Verizon Communications, Inc. 6.1% 4/15/18	700,000		698,234
Wireless Telecommunication Services - 0.0%
Sprint Nextel Corp. 6% 12/1/16	230,000		209,875
TOTAL TELECOMMUNICATION SERVICES			908,109
UTILITIES - 1.5%
Electric Utilities - 0.9%
Commonwealth Edison Co.:
5.4% 12/15/11	927,000		937,122
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Electric Utilities - continued
Commonwealth Edison Co.: - continued
5.8% 3/15/18	$ 1,300,000		$ 1,266,242
Duke Energy Carolinas LLC 5.25% 1/15/18	710,000		704,054
EDP Finance BV 6% 2/2/18 (c)	1,295,000		1,284,468
Enel Finance International SA 6.25% 9/15/17 (c)	679,000		688,607
Nevada Power Co. 6.5% 5/15/18	3,950,000		3,950,000
			8,830,493
Independent Power Producers & Energy Traders - 0.4%
PPL Energy Supply LLC:
6.3% 7/15/13	2,000,000		2,022,960
6.5% 5/1/18	865,000		842,930
TXU Corp. 5.55% 11/15/14	1,645,000		1,283,100
			4,148,990
Multi-Utilities - 0.2%
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,654,161
TOTAL UTILITIES			14,633,644
TOTAL NONCONVERTIBLE BONDS (Cost $100,741,722)		96,663,586
U.S. Government and Government Agency Obligations - 19.4%

U.S. Government Agency Obligations - 6.0%
Fannie Mae:
4.375% 7/17/13	4,850,000		4,910,868
5% 2/16/12	28,035,000		29,155,082
Freddie Mac 5.25% 7/18/11 (e)	24,105,000		25,232,126
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			59,298,076
U.S. Treasury Inflation Protected Obligations - 7.8%
U.S. Treasury Inflation-Indexed Notes:
2% 1/15/14 (e)	33,384,570		34,601,104
2% 7/15/14	30,172,220		31,325,884
2.625% 7/15/17	10,554,300		11,436,849
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			77,363,837
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
U.S. Treasury Obligations - 5.6%
U.S. Treasury Notes:
3.375% 6/30/13 (b)	$ 29,272,000		$ 29,683,623
4.25% 8/15/14	25,000,000		26,417,975
TOTAL U.S. TREASURY OBLIGATIONS			56,101,598
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $187,840,995)		192,763,511
U.S. Government Agency - Mortgage Securities - 13.0%

Fannie Mae - 7.7%
3.711% 10/1/33 (j)	130,507		131,522
3.74% 10/1/33 (j)	109,098		109,769
3.75% 9/1/33 (j)	440,265		446,557
3.75% 1/1/34 (j)	109,735		111,056
3.778% 6/1/34 (j)	629,364		629,950
3.914% 7/1/35 (j)	444,003		444,475
3.986% 10/1/18 (j)	67,034		67,813
4% 8/1/18	2,483,222		2,381,121
4.1% 8/1/33 (j)	159,785		159,976
4.103% 10/1/33 (j)	2,414,841		2,454,937
4.171% 1/1/35 (j)	258,749		260,199
4.235% 1/1/34 (j)	317,411		320,904
4.25% 2/1/35 (j)	133,331		134,333
4.263% 10/1/33 (j)	49,098		49,507
4.295% 1/1/35 (j)	125,040		125,342
4.302% 5/1/33 (j)	30,759		30,820
4.307% 3/1/33 (j)	60,739		61,187
4.328% 1/1/35 (j)	152,398		153,651
4.331% 7/1/35 (j)	400,025		400,499
4.366% 2/1/34 (j)	236,298		239,078
4.39% 2/1/35 (j)	231,427		233,532
4.39% 6/1/35 (j)	469,326		472,439
4.402% 4/1/33 (j)	250,829		251,101
4.402% 12/1/33 (j)	5,279,167		5,301,324
4.408% 5/1/35 (j)	662,350		666,558
4.42% 8/1/34 (j)	325,128		328,585
4.426% 5/1/35 (j)	70,799		71,239
4.429% 3/1/35 (j)	197,576		199,106
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.435% 6/1/35 (j)	$ 515,224		$ 518,622
4.479% 3/1/35 (j)	453,805		456,124
4.493% 2/1/35 (j)	1,679,691		1,695,418
4.499% 3/1/35 (j)	423,564		427,468
4.499% 5/1/35 (j)	312,154		314,375
4.5% 4/1/20 to 3/1/35	1,950,283		1,852,331
4.502% 7/1/35 (j)	49,686		50,022
4.553% 11/1/34 (j)	365,359		367,892
4.562% 2/1/35 (j)	1,365,906		1,380,637
4.579% 6/1/33 (j)	38,753		38,993
4.591% 2/1/35 (j)	346,372		349,678
4.605% 10/1/35 (j)	42,030		42,516
4.648% 2/1/35 (j)	3,255,368		3,282,202
4.654% 11/1/34 (j)	421,111		425,616
4.691% 10/1/34 (j)	455,664		459,253
4.7% 12/1/34 (j)	280,124		282,499
4.702% 7/1/34 (j)	350,097		353,371
4.731% 10/1/35 (j)	288,538		290,900
4.776% 4/1/35 (j)	48,348		48,726
4.777% 12/1/34 (j)	119,616		120,659
4.813% 11/1/34 (j)	359,352		362,962
4.84% 2/1/35 (j)	432,236		433,574
4.86% 10/1/34 (j)	1,488,128		1,502,520
4.872% 8/1/34 (j)	87,779		88,232
4.912% 2/1/35 (j)	33,443		33,686
4.939% 8/1/34 (j)	1,155,272		1,167,826
4.972% 7/1/34 (j)	54,069		54,684
4.986% 4/1/33 (j)	15,871		15,952
5.059% 9/1/34 (j)	938,660		949,420
5.093% 9/1/34 (j)	120,304		121,710
5.096% 7/1/34 (j)	2,948,829		2,980,856
5.098% 8/1/33 (j)	137,006		137,918
5.107% 1/1/36 (j)	852,251		865,265
5.13% 5/1/35 (j)	475,360		481,730
5.148% 5/1/35 (j)	1,341,304		1,359,544
5.185% 3/1/35 (j)	60,898		61,696
5.189% 5/1/35 (j)	83,641		84,542
5.195% 5/1/35 (j)	1,544,408		1,566,270
5.216% 4/1/36 (j)	1,647,915		1,658,839
5.242% 11/1/36 (j)	496,648		506,530
5.259% 2/1/33 (j)	106,170		106,615
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
5.281% 3/1/35 (j)	$ 73,923		$ 74,515
5.305% 12/1/34 (j)	164,026		166,101
5.341% 3/1/35 (j)	706,978		710,027
5.347% 2/1/36 (j)	161,275		163,085
5.384% 3/1/35 (j)	32,082		32,427
5.462% 2/1/36 (j)	2,312,670		2,347,855
5.5% 9/1/10 to 12/1/14	1,817,035		1,852,005
5.528% 11/1/36 (j)	866,916		881,881
5.574% 1/1/36 (j)	702,696		714,599
5.616% 7/1/37 (j)	364,257		370,744
5.8% 1/1/36 (j)	484,116		493,536
5.819% 3/1/36 (j)	1,512,446		1,544,226
5.82% 7/1/46 (j)	4,136,975		4,228,803
5.945% 2/1/35 (j)	27,874		28,217
6% 5/1/16 to 4/1/17	651,075		671,355
6.028% 4/1/36 (j)	284,896		291,493
6.052% 1/1/35 (j)	96,885		97,824
6.057% 3/1/33 (j)	49,306		49,770
6.214% 2/1/35 (j)	70,393		70,708
6.252% 6/1/36 (j)	130,615		132,940
6.309% 4/1/36 (j)	275,552		282,812
6.5% 12/1/13 to 3/1/35	12,418,112		12,895,596
6.549% 9/1/36 (j)	1,788,401		1,841,985
7% 2/1/09 to 6/1/33	1,611,790		1,699,389
7.5% 8/1/17 to 9/1/28	552,159		591,778
8.5% 5/1/21 to 9/1/25	97,127		104,733
9.5% 2/1/25	16,952		18,380
10.5% 8/1/20	19,306		22,318
11% 8/1/15	43,800		45,480
12.5% 12/1/13 to 4/1/15	11,201		12,959
TOTAL FANNIE MAE			75,971,794
Freddie Mac - 2.4%
4.161% 1/1/34 (j)	1,230,630		1,243,253
4.275% 6/1/35 (j)	190,010		190,226
4.309% 12/1/34 (j)	161,316		162,430
4.333% 3/1/35 (j)	284,435		286,244
4.367% 2/1/35 (j)	348,634		350,579
4.406% 3/1/35 (j)	191,898		192,986
4.423% 2/1/34 (j)	134,637		134,656
4.454% 3/1/35 (j)	182,995		184,145
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
4.53% 2/1/35 (j)	$ 333,198		$ 335,728
4.754% 4/1/35 (j)	707,057		711,237
5% 3/1/19	6,400,792		6,432,518
5% 9/1/38 (d)	1,000,000		959,899
5.143% 4/1/35 (j)	861,696		872,293
5.382% 3/1/35 (j)	117,430		118,081
5.525% 1/1/36 (j)	1,048,722		1,062,630
5.58% 2/1/35 (j)	239,369		240,898
5.735% 10/1/35 (j)	239,477		243,163
5.842% 1/1/35 (j)	234,201		234,295
5.853% 6/1/36 (j)	334,006		340,166
5.984% 7/1/37 (j)	1,663,816		1,697,513
6.045% 6/1/36 (j)	314,165		320,617
6.063% 4/1/36 (j)	519,362		530,020
6.11% 6/1/36 (j)	315,394		322,247
6.489% 3/1/33 (j)	32,655		33,019
6.65% 1/1/37 (j)	2,160,182		2,216,894
6.676% 10/1/36 (j)	1,657,338		1,701,603
6.844% 10/1/36 (j)	2,257,595		2,329,555
8.5% 9/1/24 to 8/1/27	77,160		83,907
10% 5/1/09	43		43
10.5% 5/1/21	3,106		3,164
11% 12/1/11	697		735
11.5% 10/1/15	5,425		6,132
11.75% 10/1/10	4,576		4,837
TOTAL FREDDIE MAC			23,545,713
Government National Mortgage Association - 2.9%
5.25% 7/20/34 (j)	350,275		351,482
5.5% 9/1/38 (d)	5,000,000		4,989,749
5.5% 9/1/38 (d)	3,000,000		2,993,849
5.5% 9/1/38 (d)	20,000,000		19,958,994
7% 7/15/28 to 11/15/28	402,166		424,687
7.5% 2/15/28 to 10/15/28	6,884		7,334
8% 6/15/24 to 10/15/24	7,016		7,576
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Government National Mortgage Association - continued
8.5% 5/15/17 to 10/15/21	$ 98,234		$ 107,855
11% 7/20/19 to 8/20/19	4,929		5,760
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			28,847,286
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $126,752,012)		128,364,793
Asset-Backed Securities - 0.7%

Advanta Business Card Master Trust Series 2007-D1 Class D, 3.8706% 1/22/13 (c)(j)	1,420,000		800,321
Bear Stearns Asset Backed Securities I Trust Series 2005-HE2 Class M2, 3.2219% 2/25/35 (j)	570,000		393,186
Carrington Mortgage Loan Trust Series 2006-NC3 Class M10, 4.4719% 8/25/36 (c)(j)	215,000		10,277
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (c)	715,000		536,250
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (c)	850,000		786,856
Series 2006-C Class D, 6.89% 5/15/13 (c)	585,000		529,854
Series 2007-A Class D, 7.05% 12/15/13 (c)	310,000		270,531
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (c)	600,433		567,904
GSAMP Trust Series 2004-AR1 Class B4, 5% 6/25/34 (c)(j)	142,877		12,591
Merna Reinsurance Ltd. Series 2007-1 Class B, 4.5506% 6/30/12 (c)(j)	1,695,000		1,628,217
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	1,045,000		967,278
Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 3.7219% 5/25/35 (j)	409,000		23,518
Structured Asset Securities Corp. Series 2006-BC1 Class B1, 4.9719% 3/25/36 (c)(j)	566,901		7,092
Wachovia Auto Loan Owner Trust Series 2006-2A Class E, 7.05% 5/20/14 (c)	955,000		505,360
WaMu Asset-Backed Certificates Series 2006-HE5 Class B1, 4.9719% 10/25/36 (c)(j)	825,000		131,196
TOTAL ASSET-BACKED SECURITIES (Cost $10,311,948)		7,170,431
Collateralized Mortgage Obligations - 3.3%
	Principal Amount		Value
Private Sponsor - 0.4%
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.3742% 2/25/37 (j)	$ 281,880		$ 266,376
Credit Suisse First Boston Mortgage Securities Corp. floater Series 2007-AR7 Class 2A1, 4.5993% 11/25/34 (j)	593,705		552,156
JPMorgan Mortgage Trust Series 2006-A2 Class 5A1, 3.7741% 11/25/33 (j)	593,038		559,033
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.7027% 10/25/35 (j)	997,955		919,870
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B6, 5.3131% 7/10/35 (c)(j)	670,969		494,997
Series 2003-CB1:
Class B4, 4.1131% 6/10/35 (c)(j)	514,692		387,406
Class B5, 4.7131% 6/10/35 (c)(j)	349,990		278,133
Class B6, 5.2131% 6/10/35 (c)(j)	209,308		150,816
Structured Asset Securities Corp. floater Series 2006-BC5 Class B, 4.9719% 12/25/36 (c)(j)	650,000		30,355
Wells Fargo Mortgage Backed Securities Trust:
Series 2005-AR12 Class 2A6, 4.3173% 7/25/35 (j)	184,305		168,164
Series 2005-AR3 Class 2A1, 4.2121% 3/25/35 (j)	336,787		307,793
TOTAL PRIVATE SPONSOR			4,115,099
U.S. Government Agency - 2.9%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 2.7219% 10/25/35 (j)	4,223,115		4,088,529
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,223,827		1,249,404
Series 2002-9 Class PC, 6% 3/25/17	184,833		190,499
Series 2003-84 Class GC, 4.5% 5/25/15	1,540,000		1,550,192
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,906,495
Series 2006-4 Class PB, 6% 9/25/35	2,454,799		2,507,516
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	665,960		685,463
Series 2004-3 Class BA, 4% 7/25/17	110,558		109,269
Series 2004-45 Class AV, 4.5% 10/25/22	460,615		461,480
Series 2004-86 Class KC, 4.5% 5/25/19	501,224		501,569
Series 2004-91 Class AH, 4.5% 5/25/29	1,073,967		1,063,425
Freddie Mac planned amortization class Series 2104 Class PG, 6% 12/15/28	1,134,963		1,148,815
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2356 Class GD, 6% 9/15/16	$ 692,078		$ 709,864
Series 2363 Class PF, 6% 9/15/16	963,457		987,746
Series 2702 Class WB, 5% 4/15/17	2,139,230		2,161,783
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,097,532
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,547,123
sequential payer:
Series 2528 Class HN, 5% 11/15/17	1,515,000		1,541,011
Series 2777 Class AB, 4.5% 6/15/29	2,441,601		2,415,625
Series 2809 Class UA, 4% 12/15/14	390,293		391,530
TOTAL U.S. GOVERNMENT AGENCY			28,314,870
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $33,047,063)		32,429,969
Commercial Mortgage Securities - 1.4%

Bear Stearns Commercial Mortgage Securities Trust Series 2003-T12 Class X2, 0.4809% 8/13/39 (c)(j)(l)	11,515,427		151,305
Citigroup Commercial Mortgage Trust Series 2007-C6 Class A1, 5.622% 12/10/49 (j)	2,201,362		2,162,094
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,853,539
Credit Suisse Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.269% 1/15/49	500,445		493,504
DLJ Commercial Mortgage Corp. sequential payer Series 1999-CG1 Class A1B, 6.46% 3/10/32	2,320,688		2,326,974
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities sequential payer Series 2002-35 Class C, 5.8724% 10/16/23 (j)	50,096		50,742
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	1,875,837		1,874,637
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		2,996,420
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6614% 12/10/41 (j)(l)	10,257,338		146,429
Commercial Mortgage Securities - continued
	Principal Amount		Value
LB-UBS Commercial Mortgage Trust sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	$ 320,423		$ 317,593
Series 2007-C2 Class A1, 5.226% 2/15/40	403,858		398,199
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $14,129,202)		13,771,436
Bank Notes - 0.1%

National City Bank, Cleveland 2.7819% 3/1/13 (j) (Cost $663,517)	1,000,000		618,714

Fixed-Income Funds - 53.8%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (k)	562,395		47,438,002
Fidelity Commercial Mortgage-Backed Securities Central Fund (k)	1,121,995		99,633,125
Fidelity Corporate Bond 1-10 Year Central Fund (k)	2,863,124		275,919,248
Fidelity Corporate Bond 1-5 Year Central Fund (k)	192,402		18,814,985
Fidelity Specialized High Income Central Fund (k)	253,311		23,421,149
Fidelity Ultra-Short Central Fund (k)	836,659		68,380,155
TOTAL FIXED-INCOME FUNDS (Cost $583,792,741)		533,606,664
Cash Equivalents - 4.7%
	Maturity Amount
Investments in repurchase agreements in a joint trading account at:
2.12%, dated 8/29/08 due 9/2/08 (Collateralized by U.S. Government Obligations) #	$ 20,975,942		20,971,000
2.14%, dated 8/29/08 due 9/2/08 (Collateralized by U.S. Government Obligations) # (a)	25,906,158		25,900,000
TOTAL CASH EQUIVALENTS (Cost $46,871,000)		46,871,000
TOTAL INVESTMENT PORTFOLIO - 106.2% (Cost $1,104,150,200)			1,052,260,104
NET OTHER ASSETS - (6.2)%			(60,970,047)
NET ASSETS - 100%		$ 991,290,057

Swap Agreements
	Expiration Date	Notional Amount	Value
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	$ 133,469	$ (108,100)
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	129,521	(97,691)
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, 6.3950% 8/25/34	Sept. 2034	119,548	(110,641)
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	175,868	(159,922)
Receive from Citibank upon credit event of Merrill Lynch & Co., Inc., par value of the notional amount of Merrill Lynch & Co., Inc. 5% 1/15/15, and pay quarterly notional amount multiplied by .90%	Dec. 2012	900,000	72,752
Receive from Goldman Sachs upon credit event of Lowe's Companies, Inc., par value of the notional amount of Lowe's Companies, Inc. 8.25% 6/1/10, and pay quarterly notional amount multiplied by 1.07%	March 2013	400,000	(6,078)
Receive from Lehman Brothers, Inc. upon credit event of Lowe's Companies, Inc., par value of the notional amount of Lowe's Companies, Inc. 8.25% 6/1/10, and pay quarterly notional amount multiplied by 1.03%	March 2013	400,000	(5,387)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive from Morgan Stanley, Inc. upon credit event of H.J. Heinz Co., par value of the notional amount of H.J. Heinz Co. 6% 3/15/08, and pay quarterly notional amount multiplied by .65%	March 2013	$ 600,000	$ (4,161)
Receive monthly a fixed rate of .15% multiplied by the notional amount and pay to Lehman Brothers, Inc. upon each credit event of one of the issues of Dow Jones ABX AA 07-1 Index, par value of the proportional notional amount (i)	Sept. 2037	1,500,000	(1,365,000)
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	(885,293)
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	(528,586)
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	106,402	(51,876)
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	(542,511)
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	(190,046)
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 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	$ 368,891	$ (77,815)
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	(348,725)
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	252,517	(218,291)
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	(32,101)
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	58,600	(44,845)
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	806	(709)
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	(2,230,917)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
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	$ (618,931)
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	(305,787)
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	(642,924)
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	(632,505)
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 (g)	June 2010	10,000,000	(249,569)
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 (h)	Dec. 2010	15,000,000	(432,237)
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 (f)	March 2010	6,373,600	(104,138)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive quarterly notional amount multiplied by .72% and pay Bank of America 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	$ 1,400,000	$ (28,132)
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	(25,126)
TOTAL CREDIT DEFAULT SWAPS		$ 48,158,237	$ (9,975,292)
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 3.475% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Jan. 2013	25,000,000	(467,060)
Receive semi-annually a fixed rate equal to 3.567% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2011	19,783,000	169,797
Receive semi-annually a fixed rate equal to 4.449% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2018	6,931,000	59,235
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	1,372,218
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	1,052,536
TOTAL INTEREST RATE SWAPS		$ 96,714,000	$ 2,186,726
		$ 144,872,237	$ (7,788,566)

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 $22,179,777 or 2.2% of net assets.

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

(e) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $3,450,487.

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

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

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

(i) Represents a tradable index of credit default swaps on home equity asset-backed debt securities.

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

(k) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete unaudited 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. An unaudited 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.

(l) 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.

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

Repurchase Agreement / Counterparty	Value
$20,971,000 due 9/02/08 at 2.12%
ABN AMRO Bank N.V., New York Branch	$ 607,735
Banc of America Securities LLC	1,642,913
Bank of America, NA	6,077,350
Barclays Capital, Inc.	10,939,198
Greenwich Capital Markets, Inc.	607,735
ING Financial Markets LLC	792,201
Repurchase Agreement / Counterparty	Value
RBC Capital Markets Corp.	$ 303,868
	$ 20,971,000
$25,900,000 due 9/02/08 at 2.14%
Banc of America Securities LLC	$ 8,237,559
Bank of America, NA	17,662,441
	$ 25,900,000

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	$ 3,632,904
Fidelity Commercial Mortgage-Backed Securities Central Fund	6,565,559
Fidelity Corporate Bond 1-10 Year Central Fund	17,867,294
Fidelity Corporate Bond 1-5 Year Central Fund	1,043,039
Fidelity Specialized High Income Central Fund	1,674,019
Fidelity Ultra-Short Central Fund	5,952,754
Total	$ 36,735,569

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	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity 1-3 Year Duration Securitized Bond Central Fund	$ 116,678,845	$ 3,632,904	$ 63,716,412	$ 47,438,002	3.2%
Fidelity Commercial Mortgage- Backed Securities Central Fund	154,867,605	6,565,559	51,902,896	99,633,125	2.9%
Fidelity Corporate Bond 1-10 Year Central Fund	389,723,224	17,867,292	124,812,056	275,919,248	3.5%
Fund	Value, beginning of period	Purchases	Sales Proceeds	Value, end of period	% ownership, end of period
Fidelity Corporate Bond 1-5 Year Central Fund	$ 25,963,647	$ 1,043,039	$ 7,989,467	$ 18,814,985	2.9%
Fidelity Specialized High Income Central Fund	22,875,519	1,674,019	-	23,421,149	5.7%
Fidelity Ultra-Short Central Fund	218,046,027	7,770,821	136,586,236	68,380,155	1.9%
Total	$ 928,154,867	$ 38,553,634	$ 385,007,067	$ 533,606,664

Other Information

Distribution of investments by country of issue, as a percentage of total net assets, is as follows: (Unaudited)

United States of America	89.9%
United Kingdom	2.8%
Canada	1.3%
Luxembourg	1.0%
Others (individually less than 1%)	5.0%
	100.0%

Income Tax Information

At August 31, 2008, the fund had a capital loss carryforward of approximately $16,598,133 of which $8,055,126 and $8,543,007 will expire on August 31, 2014 and 2016, respectively.

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

Annual Report

Financial Statements

Statement of Assets and Liabilities

	August 31, 2008

Assets
Investment in securities, at value (including securities loaned of $25,351,550 and repurchase agreements of $46,871,000) - See accompanying schedule: Unaffiliated issuers (cost $520,357,459)	$ 518,653,440
Fidelity Central Funds (cost $583,792,741)	533,606,664
Total Investments (cost $1,104,150,200)		$ 1,052,260,104
Cash		252
Receivable for investments sold		392,727
Receivable for swap agreements		22,955
Receivable for fund shares sold		726,459
Interest receivable		3,239,961
Distributions receivable from Fidelity Central Funds		2,344,108
Unrealized appreciation on swap agreements		2,726,538
Prepaid expenses		1,289
Total assets		1,061,714,393

Liabilities
Payable for investments purchased Regular delivery	$ 2,192,821
Delayed delivery	28,682,472
Payable for swap agreements	1,000,000
Payable for fund shares redeemed	1,089,548
Distributions payable	236,071
Unrealized depreciation on swap agreements	10,515,104
Accrued management fee	264,654
Distribution fees payable	175,205
Other affiliated payables	186,524
Other payables and accrued expenses	181,937
Collateral on securities loaned, at value	25,900,000
Total liabilities		70,424,336

Net Assets		$ 991,290,057
Net Assets consist of:
Paid in capital		$ 1,068,151,923
Undistributed net investment income		1,520,348
Accumulated undistributed net realized gain (loss) on investments		(19,031,419)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		(59,350,795)
Net Assets		$ 991,290,057

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, 2008

Calculation of Maximum Offering Price Class A: Net Asset Value and redemption price per share ($216,682,833 ÷ 21,009,459 shares)		$ 10.31
Maximum offering price per share (100/97.25 of $10.31)		$ 10.60
Class T: Net Asset Value and redemption price per share ($344,229,104 ÷ 33,359,656 shares)		$ 10.32
Maximum offering price per share (100/97.25 of $10.32)		$ 10.61
Class B: Net Asset Value and offering price per share ($15,141,247 ÷ 1,469,566 shares)^A		$ 10.30
Class C: Net Asset Value and offering price per share ($52,528,747 ÷ 5,102,707 shares)^A		$ 10.29
Institutional Class: Net Asset Value, offering price and redemption price per share ($362,708,126 ÷ 35,089,728 shares)		$ 10.34

^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, 2008

Investment Income
Interest		$ 27,521,975
Income from Fidelity Central Funds		36,735,569
Total income		64,257,544

Expenses
Management fee	$ 3,918,835
Transfer agent fees	2,314,521
Distribution fees	2,463,999
Accounting and security lending fees	439,976
Custodian fees and expenses	29,494
Independent trustees' compensation	5,457
Registration fees	94,171
Audit	101,986
Legal	6,883
Miscellaneous	88,294
Total expenses before reductions	9,463,616
Expense reductions	(28,859)	9,434,757
Net investment income		54,822,787
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities:
Unaffiliated issuers	16,369,849
Fidelity Central Funds	(25,458,991)
Swap agreements	5,012,696
Total net realized gain (loss)		(4,076,446)
Change in net unrealized appreciation (depreciation) on: Investment securities	(20,423,717)
Swap agreements	(4,364,415)
Total change in net unrealized appreciation (depreciation)		(24,788,132)
Net gain (loss)		(28,864,578)
Net increase (decrease) in net assets resulting from operations		$ 25,958,209

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, 2008	Year ended August 31, 2007
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 54,822,787	$ 71,163,315
Net realized gain (loss)	(4,076,446)	(8,356,241)
Change in net unrealized appreciation (depreciation)	(24,788,132)	(17,755,133)
Net increase (decrease) in net assets resulting from operations	25,958,209	45,051,941
Distributions to shareholders from net investment income	(56,702,503)	(67,133,368)
Share transactions - net increase (decrease)	(533,888,338)	92,477,521
Total increase (decrease) in net assets	(564,632,632)	70,396,094

Net Assets
Beginning of period	1,555,922,689	1,485,526,595
End of period (including undistributed net investment income of $1,520,348 and undistributed net investment income of $3,153,954, respectively)	$ 991,290,057	$ 1,555,922,689

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

Annual Report

Financial Highlights - Class A

Years ended August 31,	2008	2007	2006^H	2005^J	2004^J	2003^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income^E	.457	.487	.385	.397	.385	.420
Net realized and unrealized gain (loss)	(.319)	(.167)	(.043)	(.338)	.120	.254
Total from investment operations	.138	.320	.342	.059	.505	.674
Distributions from net investment income	(.468)	(.460)	(.382)	(.379)	(.385)	(.414)
Distributions from net realized gain	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.468)	(.460)	(.432)	(.529)	(.485)	(.414)
Net asset value, end of period	$ 10.31	$ 10.64	$ 10.78	$ 10.87	$ 11.34	$ 11.32
Total Return^{B ,C , D}	1.28%	2.99%	3.23%	.54%	4.58%	6.16%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	.85%	.79%	.75%^A	.81%	.84%	.81%
Expenses net of fee waivers, if any	.85%	.79%	.75%^A	.81%	.84%	.81%
Expenses net of all reductions	.85%	.78%	.74%^A	.80%	.84%	.81%
Net investment income	4.32%	4.52%	4.30%^A	3.60%	3.42%	3.72%
Supplemental Data
Net assets, end of period (000 omitted)	$ 216,683	$ 255,591	$ 229,490	$ 219,441	$ 186,748	$ 166,701
Portfolio turnover rate^G	81%	89%^K	43%^A	73%	96%	108%

^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 For the period ended October 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class T

Years ended August 31,	2008	2007	2006^H	2005^J	2004^J	2003^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32	$ 11.06
Income from Investment Operations
Net investment income^E	.462	.484	.377	.386	.374	.408
Net realized and unrealized gain (loss)	(.310)	(.178)	(.043)	(.338)	.130	.253
Total from investment operations	.152	.306	.334	.048	.504	.661
Distributions from net investment income	(.472)	(.456)	(.374)	(.368)	(.374)	(.401)
Distributions from net realized gain	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.472)	(.456)	(.424)	(.518)	(.474)	(.401)
Net asset value, end of period	$ 10.32	$ 10.64	$ 10.79	$ 10.88	$ 11.35	$ 11.32
Total Return^{B, C, D}	1.41%	2.85%	3.15%	.43%	4.56%	6.03%
Ratios to Average Net Assets^F,I
Expenses before reductions	.82%	.82%	.84%^A	.91%	.95%	.93%
Expenses net of fee waivers, if any	.82%	.82%	.84%^A	.91%	.95%	.93%
Expenses net of all reductions	.82%	.82%	.83%^A	.91%	.95%	.93%
Net investment income	4.35%	4.48%	4.21%^A	3.49%	3.32%	3.60%
Supplemental Data
Net assets, end of period (000 omitted)	$ 344,229	$ 503,737	$ 563,677	$ 622,245	$ 680,947	$ 711,263
Portfolio turnover rate^G	81%	89%^K	43%^A	73%	96%	108%

^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 For the period ended October 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class B

Years ended August 31,	2008	2007	2006^H	2005^J	2004^J	2003^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31	$ 11.05
Income from Investment Operations
Net investment income^E	.385	.409	.316	.310	.295	.331
Net realized and unrealized gain (loss)	(.318)	(.169)	(.043)	(.338)	.120	.253
Total from investment operations	.067	.240	.273	(.028)	.415	.584
Distributions from net investment income	(.397)	(.380)	(.313)	(.292)	(.295)	(.324)
Distributions from net realized gain	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.397)	(.380)	(.363)	(.442)	(.395)	(.324)
Net asset value, end of period	$ 10.30	$ 10.63	$ 10.77	$ 10.86	$ 11.33	$ 11.31
Total Return^{B, C, D}	.60%	2.24%	2.57%	(.25)%	3.75%	5.32%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	1.53%	1.52%	1.52%^A	1.61%	1.66%	1.60%
Expenses net of fee waivers, if any	1.53%	1.52%	1.52%^A	1.60%	1.65%	1.60%
Expenses net of all reductions	1.53%	1.52%	1.52%^A	1.60%	1.65%	1.60%
Net investment income	3.64%	3.78%	3.52%^A	2.80%	2.62%	2.92%
Supplemental Data
Net assets, end of period (000 omitted)	$ 15,141	$ 22,609	$ 46,344	$ 73,017	$ 118,751	$ 154,697
Portfolio turnover rate^G	81%	89%^K	43%^A	73%	96%	108%

^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 For the period ended October 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Class C

Years ended August 31,	2008	2007	2006^H	2005^J	2004^J	2003^J
Selected Per-Share Data
Net asset value, beginning of period	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30	$ 11.04
Income from Investment Operations
Net investment income^E	.378	.400	.308	.301	.289	.322
Net realized and unrealized gain (loss)	(.317)	(.167)	(.042)	(.337)	.120	.254
Total from investment operations	.061	.233	.266	(.036)	.409	.576
Distributions from net investment income	(.391)	(.373)	(.306)	(.284)	(.289)	(.316)
Distributions from net realized gain	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.391)	(.373)	(.356)	(.434)	(.389)	(.316)
Net asset value, end of period	$ 10.29	$ 10.62	$ 10.76	$ 10.85	$ 11.32	$ 11.30
Total Return^{B, C, D}	.54%	2.18%	2.51%	(.33)%	3.70%	5.26%
Ratios to Average Net Assets^{F, I}
Expenses before reductions	1.59%	1.59%	1.60%^A	1.67%	1.70%	1.67%
Expenses net of fee waivers, if any	1.59%	1.59%	1.60%^A	1.67%	1.70%	1.67%
Expenses net of all reductions	1.59%	1.58%	1.60%^A	1.67%	1.70%	1.67%
Net investment income	3.58%	3.72%	3.45%^A	2.73%	2.57%	2.86%
Supplemental Data
Net assets, end of period (000 omitted)	$ 52,529	$ 58,693	$ 63,946	$ 74,522	$ 91,149	$ 113,849
Portfolio turnover rate^G	81%	89%^K	43%^A	73%	96%	108%

^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 For the period ended October 31.

^K Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Financial Highlights - Institutional Class

Years ended August 31,	2008	2007	2006^G	2005^I	2004^I	2003^I
Selected Per-Share Data
Net asset value, beginning of period	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34	$ 11.08
Income from Investment Operations
Net investment income^D	.494	.513	.401	.417	.400	.437
Net realized and unrealized gain (loss)	(.311)	(.169)	(.043)	(.339)	.122	.254
Total from investment operations	.183	.344	.358	.078	.522	.691
Distributions from net investment income	(.503)	(.484)	(.398)	(.398)	(.402)	(.431)
Distributions from net realized gain	-	-	(.050)	(.150)	(.100)	-
Total distributions	(.503)	(.484)	(.448)	(.548)	(.502)	(.431)
Net asset value, end of period	$ 10.34	$ 10.66	$ 10.80	$ 10.89	$ 11.36	$ 11.34
Total Return^{B, C}	1.71%	3.22%	3.37%	.71%	4.72%	6.30%
Ratios to Average Net Assets^{E, H}
Expenses before reductions	.53%	.55%	.57%^A	.63%	.70%	.66%
Expenses net of fee waivers, if any	.53%	.55%	.57%^A	.63%	.70%	.66%
Expenses net of all reductions	.53%	.55%	.57%^A	.63%	.70%	.66%
Net investment income	4.64%	4.75%	4.48%^A	3.77%	3.57%	3.87%
Supplemental Data
Net assets, end of period (000 omitted)	$ 362,708	$ 715,292	$ 582,070	$ 465,201	$ 269,727	$ 155,302
Portfolio turnover rate^F	81%	89%^J	43%^A	73%	96%	108%

^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 For the period ended October 31.

^J Portfolio turnover rate excludes securities received or delivered in-kind.

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

Annual Report

Notes to Financial Statements

For the period ended August 31, 2008

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 Commercial Mortgage-Backed Securities Central Fund	FIMM	Seeks a high level of income by normally investing in investment- grade commercial mortgage-backed 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.	Delayed Delivery & When Issued 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.	Delayed Delivery & When Issued Securities Repurchase Agreements Restricted Securities Swap Agreements

Annual Report

2. Investments in Fidelity Central Funds - continued

Fidelity Central Fund

Investment
Manager

Investment
Objective

Investment
Practices

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

Repurchase Agreements

Restricted Securities

Swap Agreements

An unaudited 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 unaudited 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.

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. Actual results could differ from those estimates. The following summarizes the significant accounting policies of the Fund:

Annual Report

Notes to Financial Statements - continued

3. Significant Accounting Policies - continued

Security Valuation - continued

Debt securities, including restricted securities, 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 dealer supplied prices. Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). 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. Actual prices received at disposition may differ.

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

Investment Transactions and Income. For financial reporting purposes, the Fund's investment holdings and NAV include trades executed through the end of the last business day of the period. The NAV per share for processing shareholder transactions is calculated as of the close of business of the New York Stock Exchange (NYSE), normally 4:00 pm Eastern time and includes trades executed through the end of the prior business day. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds received from litigation. Interest income and 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.

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

Annual Report

3. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, the Fund intends to qualify as a regulated investment company by distributing substantially all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code and filing its U.S. federal tax return. As a result, no provision for income taxes is required. The Fund is subject to the provisions of FASB Interpretation No. 48, Accounting for Uncertainties in Income Taxes (FIN 48). FIN 48 sets forth a minimum threshold for financial statement recognition of the benefit of a tax position taken or expected to be taken in a tax return. The implementation of FIN 48 did not result in any unrecognized tax benefits in the accompanying financial statements. Each of the Fund's federal tax returns for the prior three fiscal years remains subject to examination by the Internal Revenue Service (IRS).

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. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to swap agreements, prior period premium and discount on debt securities, market discount, partnerships (including allocations from Fidelity Central Funds), deferred trustees compensation, 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	$ 7,428,564
Unrealized depreciation	(63,262,725)
Net unrealized appreciation (depreciation)	(55,834,161)
Undistributed ordinary income	1,236,670
Capital loss carryforward	(16,598,133)

Cost for federal income tax purposes	$ 1,108,094,265

The tax character of distributions paid was as follows:

	August 31, 2008	August 31, 2007
Ordinary Income	$ 56,702,503	$ 67,133,368

Annual Report

Notes to Financial Statements - continued

3. Significant Accounting Policies - continued

New Accounting Pronouncements. 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 results in expanded disclosures about fair value measurements.

In addition, in March 2008, Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS 161), was issued and is effective for reporting periods beginning after November 15, 2008. SFAS 161 requires enhanced disclosures to provide information about the reasons the Fund invests in derivative instruments, the accounting treatment and the effect derivatives have on financial performance.

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.

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.

Annual Report

4. Operating Policies - continued

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

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."

Annual Report

Notes to Financial Statements - continued

5. Purchases and Sales of Investments.

Purchases and sales of securities (including the Fixed-Income Central Funds), other than short-term securities and U.S. government securities, aggregated $121,060,008 and $408,008,978, respectively.

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%	$ 626,830	$ 61,832
Class T	0%	.25%	1,094,299	3,609
Class B	.65%	.25%	166,161	120,037
Class C	.75%	.25%	576,709	41,816
			$ 2,463,999	$ 227,294

Sales Load. FDC receives a front-end sales charge of up to 2.75% for selling Class A shares and Class T shares, some of which is paid to financial intermediaries for selling shares of the Fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 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.

Annual Report

6. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

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

	Retained by FDC
Class A	$ 20,486
Class T	14,641
Class B*	22,452
Class C*	8,763
	$ 66,342

* 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.

	Amount	% of Average Net Assets
Class A	$ 568,060	.23
Class T	839,698	.19
Class B	46,645	.25
Class C	123,001	.21
Institutional Class	737,117	.15
	$ 2,314,521

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.

Annual Report

Notes to Financial Statements - continued

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 $2,517 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 $620,706.

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 $2,564. During the period, credits reduced each class' transfer agent expense as noted in the table below.

	Transfer Agent expense reduction
Class A	$ 10,708
Class T	6,948
Class C	1,219
Institutional Class	7,420
	$ 26,295

Annual Report

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.

The Fidelity Advisor Freedom Funds were the owners of record, in the aggregate, of approximatley 28% of the total outstanding shares of the Fund.

11. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Years ended August 31,	2008	2007
From net investment income
Class A	$ 11,114,337	$ 10,370,477
Class T	19,685,484	22,730,353
Class B	698,735	1,169,158
Class C	2,134,294	2,124,376
Institutional Class	23,069,653	30,739,004
Total	$ 56,702,503	$ 67,133,368

12. Share Transactions.

Transactions for each class of shares were as follows:

	Shares		Dollars
Years ended August 31,	2008	2007	2008	2007
Class A
Shares sold	7,478,814	10,574,585	$ 79,389,123	$ 114,058,074
Reinvestment of distributions	913,344	820,864	9,656,597	8,855,890
Shares redeemed	(11,412,910)	(8,653,270)	(120,176,822)	(93,273,700)
Net increase (decrease)	(3,020,752)	2,742,179	$ (31,131,102)	$ 29,640,264
Class T
Shares sold	10,443,380	13,148,613	$ 110,997,567	$ 141,957,847
Reinvestment of distributions	1,758,963	1,987,509	18,626,931	21,458,242
Shares redeemed	(26,180,797)	(20,062,229)	(277,194,128)	(216,499,859)
Net increase (decrease)	(13,978,454)	(4,926,107)	$ (147,569,630)	$ (53,083,770)

Annual Report

Notes to Financial Statements - continued

12. Share Transactions - continued

	Shares		Dollars
Years ended August 31,	2008	2007	2008	2007
Class B
Shares sold	542,893	600,059	$ 5,772,343	$ 6,457,505
Reinvestment of distributions	58,357	92,579	616,990	999,355
Shares redeemed	(1,259,274)	(2,868,103)	(13,340,826)	(30,956,416)
Net increase (decrease)	(658,024)	(2,175,465)	$ (6,951,493)	$ (23,499,556)
Class C
Shares sold	1,247,916	1,488,943	$ 13,263,460	$ 16,006,140
Reinvestment of distributions	166,125	163,983	1,753,152	1,766,938
Shares redeemed	(1,839,485)	(2,066,746)	(19,383,480)	(22,267,059)
Net increase (decrease)	(425,444)	(413,820)	$ (4,366,868)	$ (4,493,981)
Institutional Class
Shares sold	4,941,786	19,511,051	$ 52,330,544	$ 211,209,559
Reinvestment of distributions	2,074,699	2,781,278	22,020,750	30,063,141
Shares redeemed	(39,037,602)	(9,069,558)	(418,220,539)	(97,358,136)
Net increase (decrease)	(32,021,117)	13,222,771	$ (343,869,245)	$ 143,914,564

13. Credit Risk.

The Fund invests a portion of its assets, directly or indirectly, in structured securities of issuers backed by residential mortgage loans, credit card receivables and automotive loans. The value and related income of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults. Continuing shifts in the market's perception of credit quality on structured securities have resulted in increased volatility of market price and periods of decreased market activity that have adversely impacted the valuation of certain issuers of the Fund.

Subsequent to period end, Lehman Brothers Holdings, Inc. (LBHI) and certain of its affiliates sought protection under the insolvency laws of their jurisdictions of organization, including the United States, the United Kingdom and Japan. During this period, the Fund had outstanding securities trades and other transactions with counterparties affiliated with LBHI, which may include interest rate and credit default swap agreements, and commitments to purchase securities on a delayed delivery or when-issued basis. As a result of these events, LBHI's affiliates are unable to fulfill their commitments and, in certain cases, the Fund may have terminated its trades and related agreements with the relevant entities and, where appropriate, is in the process of initiating claims for damages. FMR believes that the financial impact to the Fund relating to these events is immaterial.

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, 2008, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity 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, 2008 by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

Boston, Massachusetts

October 23, 2008

Annual Report

Trustees and Officers

The Trustees, Member 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 Edward C. Johnson 3d and James C. Curvey, each of the Trustees oversees 218 funds advised by FMR or an affiliate. Messrs. Johnson and Curvey oversee 376 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 Member 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 (78)
	Year of Election or Appointment: 1986 Mr. Johnson is Chairman of the Board of Trustees. Mr. Johnson serves as 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 and a Director of FMR Co., Inc. In addition, Mr. Johnson serves as Chairman and Director of FIL Limited. Previously, Mr. Johnson served as President of FMR LLC (2006-2007). Mr. Edward C. Johnson 3d and Mr. Arthur E. Johnson are not related.
James C. Curvey (73)
	Year of Election or Appointment: 2007 Mr. Curvey also serves as Trustee (2007-present) of other investment companies advised by FMR. Mr. Curvey is a Director of FMR and FMR Co., Inc. (2007-present). Mr. Curvey is also Vice Chairman (2006- present) and Director of FMR LLC. In addition, Mr. Curvey serves as an Overseer for the Boston Symphony Orchestra and a member of the Trustees of Villanova University.

* Trustees have been determined to be "Interested Trustees" by virtue of, among other things, their affiliation with the trust or various entities under common control with FMR. FMR Corp. merged with and into 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
Albert R. Gamper, Jr. (66)
	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), a member of the Board of Governors, Rutgers University (2004-present), and Chairman of the Board of Saint Barnabas Health Care System. Previously, Mr. Gamper served as Chairman of the Board of Governors, Rutgers University (2004-2007).
George H. Heilmeier (72)
	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), Compaq, Automatic Data Processing, Inc. (ADP) (technology-based business outsourcing), 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.
Arthur E. Johnson (61)
	Year of Election or Appointment: 2008 Mr. Johnson serves as Senior Vice President of Corporate Strategic Development of Lockheed Martin Corporation (defense contractor). In addition, Mr. Johnson serves as a member of the Board of Directors of AGL Resources, Inc. (holding company), and IKON Office Solutions, Inc. (document management systems and services). Mr. Arthur E. Johnson and Mr. Edward C. Johnson 3d are not related.
James H. Keyes (67)
	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 Navistar International Corporation (manufacture and sale of trucks, buses, and diesel engines) and Pitney Bowes, Inc. (integrated mail, messaging, and document management solutions). Previously, Mr. Keyes served as a member of the Board of LSI Logic Corporation (semiconductor technologies, 1984-2008).
Marie L. Knowles (61)
	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 McKesson Corporation (healthcare service). 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. Previously, Ms. Knowles served as a Director of Phelps Dodge Corporation (copper mining and manufacturing, 1994-2007).
Kenneth L. Wolfe (69)
	Year of Election or Appointment: 2005 Mr. Wolfe is Chairman and a Director of Hershey Foods Corporation (2007-present), where prior to his retirement in 2001, he was Chairman and Chief Executive Officer. Mr. Wolfe currently serves as a member of the board of Revlon Inc. (2004-present). Previously, Mr. Wolfe served as a member of the boards of Adelphia Communications Corporation (2003-2006) and Bausch & Lomb, Inc. (1993-2007).

Advisory Board Member and Executive Officers**:

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 (64)
	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.
John R. Hebble (50)
	Year of Election or Appointment: 2008 President and Treasurer of Advisor Intermediate Bond. Mr. Hebble also serves as President and Treasurer of Fidelity's Fixed Income and Asset Allocation Funds (2008-present) and is an employee of FMR (2003-present). Before joining Fidelity Investments, Mr. Hebble worked at Deutsche Asset Management where he served as Director of Fund Accounting (2002-2003) and Assistant Treasurer of the Scudder Funds.
Boyce I. Greer (52)
	Year of Election or Appointment: 2006 Vice President of Advisor Intermediate Bond. Mr. Greer also serves as Vice President of 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 President and a Director of Fidelity Investments Money Management, Inc. (2007-present), and an Executive Vice President of FMR and FMR Co., Inc. (2005-present). Previously, Mr. Greer served as a Director and Managing Director of Strategic Advisers, Inc. (2002-2005).
Dwight D. Churchill (54)
	Year of Election or Appointment: 2008 Vice President of Advisor Intermediate Bond. Mr. Churchill also serves as Vice President of Fidelity's Bond Funds (2008-present). Mr. Churchill is Executive Vice President of FMR (2005-present), FMR Co., Inc. (2005- present) and Fidelity Investments Money Management, Inc. (2008- present). Previously, Mr. Churchill served as Senior Vice President of FMR (1997-2005) and Senior Vice President of Fidelity Investments Money Management, Inc. (2000-2006).
Scott C. Goebel (40)
	Year of Election or Appointment: 2008 Secretary and Chief Legal Officer (CLO) of Advisor Intermediate Bond. Mr. Goebel also serves as Secretary and CLO of other Fidelity funds (2008-present); General Counsel, Secretary, and Senior Vice President of FMR (2008-present); and Deputy General Counsel of FMR LLC. Previously, Mr. Goebel served as Assistant Secretary of the Funds (2007-2008) and as Vice President and Secretary of Fidelity Distributors Corporation (FDC) (2005-2007).
Nancy D. Prior (41)
	Year of Election or Appointment: 2008 Assistant Secretary of Advisor Intermediate Bond. Ms. Prior also serves as Assistant Secretary of Fidelity's Fixed Income and Asset Allocation Funds (2008-present) and is an employee of FMR (2002-present).
Holly C. Laurent (54)
	Year of Election or Appointment: 2008 Anti-Money Laundering (AML) Officer of Advisor Intermediate Bond. Ms. Laurent also serves as AML Officer of other Fidelity funds (2008- present) and is an employee of FMR LLC. Previously, Ms. Laurent was Senior Vice President and Head of Legal for Fidelity Business Services India Pvt. Ltd. (2006-2008), Senior Vice President, Deputy General Counsel and Group Head for FMR LLC (2005-2006).
Christine Reynolds (49)
	Year of Election or Appointment: 2008 Chief Financial Officer of Advisor Intermediate Bond. Ms. Reynolds also serves as Chief Financial Officer of other Fidelity funds (2008-present). Ms. Reynolds became President of Fidelity Pricing and Cash Management Services (FPCMS) in August 2008. She served as Chief Operating Officer of FPCMS from 2007 through July 2008. Previously, Ms. Reynolds served as President, Treasurer, and Anti-Money Laundering officer of the Fidelity funds (2004-2007). Before joining Fidelity Investments, Ms. Reynolds worked at PricewaterhouseCoopers LLP (PwC) (1980-2002), where she was an audit partner with PwC's investment management practice.
Michael H. Whitaker (41)
	Year of Election or Appointment: 2008 Chief Compliance Officer of Advisor Intermediate Bond. Mr. Whitaker also serves as Chief Compliance Officer of Fidelity's Fixed Income and Asset Allocation Funds (2008-present) and is an employee of FMR (2007-present). Prior to joining Fidelity Investments, Mr. Whitaker worked at MFS Investment Management where he served as Senior Vice President and Chief Compliance Officer (2004-2006), and Assistant General Counsel.
Bryan A. Mehrmann (47)
	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).
Robert G. Byrnes (41)
	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 Fidelity Pricing and Cash Management Services (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 (54)
	Year of Election or Appointment: 2004 Assistant Treasurer of Advisor Intermediate Bond. Mr. Lydecker also serves as Assistant Treasurer of other Fidelity funds (2004-present) and is an employee of FMR.
Paul M. Murphy (61)
	Year of Election or Appointment: 2007 Assistant Treasurer of Advisor Intermediate Bond. Mr. Murphy also serves as Assistant Treasurer of other Fidelity funds (2007-present) and is an employee of FMR (2007-present). Previously, Mr. Murphy served as Chief Financial Officer of the Fidelity Funds (2005-2006), Vice President and Associate General Counsel of FMR (2007), and Senior Vice President of Fidelity Pricing and Cash Management Services (FPCMS) (1994-2007).
Gary W. Ryan (50)
	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 Fidelity Pricing and Cash Management Services (FPCMS) (1999-2005).

** FMR Corp. merged with and into 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 (Unaudited)

A total of 7.63% 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 $44,771,891 of distributions paid during the period January 1, 2008 to August 31, 2008 as qualifying to be taxed as interest-related dividends for nonresident alien shareholders.

The fund will notify shareholders in January 2009 of amounts for use in preparing 2008 income tax returns.

Annual Report

Proxy Voting Results

A special meeting of the fund's shareholders was held on April 16, 2008. The results of votes taken among shareholders on the proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting.

PROPOSAL 1
To elect a Board of Trustees. ^A
	# of Votes	% of Votes
James C. Curvey
Affirmative	5,702,930,355.79	97.148
Withheld	167,419,011.13	2.852
TOTAL	5,870,349,366.92	100.000
Albert R. Gamper, Jr.
Affirmative	5,709,010,282.30	97.252
Withheld	161,339,084.62	2.748
TOTAL	5,870,349,366.92	100.000
George H. Heilmeier
Affirmative	5,704,835,115.57	97.181
Withheld	165,514,251.35	2.819
TOTAL	5,870,349,366.92	100.000
Arthur E. Johnson
Affirmative	5,706,699,643.22	97.212
Withheld	163,649,723.70	2.788
TOTAL	5,870,349,366.92	100.000
Edward C. Johnson 3d
Affirmative	5,699,509,964.40	97.090
Withheld	170,839,402.52	2.910
TOTAL	5,870,349,366.92	100.000
James H. Keyes
Affirmative	5,708,066,853.56	97.236
Withheld	162,282,513.36	2.764
TOTAL	5,870,349,366.92	100.000
Marie L. Knowles
Affirmative	5,708,358,882.98	97.241
Withheld	161,990,483.94	2.759
TOTAL	5,870,349,366.92	100.000
	# of Votes	% of Votes
Kenneth L. Wolfe
Affirmative	5,707,638,179.43	97.228
Withheld	162,711,187.49	2.772
TOTAL	5,870,349,366.92	100.000
PROPOSAL 2
To amend the Declaration of Trust to reduce the required quorum for future shareholder meetings.^A
	# of Votes	% of Votes
Affirmative	3,675,213,378.12	62.606
Against	496,448,961.43	8.457
Abstain	253,235,394.26	4.314
Broker Non-Votes	1,445,451,633.11	24.623
TOTAL	5,870,349,366.92	100.000

^A Denotes trust-wide proposal and voting results.

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 and, acting directly and through its separate committees, requests and receives information concerning, and considers at each of its meetings factors that are relevant to, its annual consideration of the 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 a written charter outlining the structure and purposes of the committee. The Board also meets as needed to consider matters specifically related to the Board's annual consideration of the renewal of Advisory Contracts.

At its June 2008 meeting, the Board of Trustees, including the Independent Trustees, unanimously determined to renew the fund's Advisory Contracts. 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 fund's management fee and total expenses; (iii) the total costs of the services to be provided by and the profits to be realized by Fidelity from its 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 agreements with foreign sub-advisers Fidelity Management & Research (U.K.) Inc., Fidelity Management & Research (Japan) Inc., and Fidelity Management & Research (Hong Kong) Limited.

In considering 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 and through the exercise of its business judgment, 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. The Board's decision to renew the Advisory Contracts was not based on any single factor noted above, but rather was based on a comprehensive consideration of all the information provided to the Board at its meetings throughout the year. The Board, in reaching its determination to renew the Advisory Contracts, 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 backgrounds of the fund's investment personnel 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 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 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 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 Fidelity has taken a number of actions over the previous year 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 fees on Fidelity's Institutional Money Market Funds and launching Class IV and Institutional Class of certain of these funds; (iii) reducing the transfer agent fees for the Fidelity Select Portfolios and Investor Class of the VIP funds; and (iv) launching Class K of 29 equity funds as a lower-fee class available to certain employer-sponsored retirement plans.

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, 2007, 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

fid72

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 fourth quartile for the one-year period, the third quartile for the three-year period, and the second quartile for the five-year period. The Board also stated that the investment performance of the fund was lower than 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. The Board discussed with FMR actions that may be taken by FMR to improve the fund's more recent disappointing performance and how investment personnel evaluate potential for incremental return against the risks involved in obtaining that incremental return. The Board considered the steps that FMR has taken to strengthen and refine its risk management processes in light of recent credit events that have affected various sectors of the fixed-income markets. The Board will continue to closely monitor the performance of the fund in the coming year.

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 9% means that 91% 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

fid74

Annual Report

Board Approval of Investment Advisory Contracts and
Management Fees - continued

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 2007.

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 2007.

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.

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. 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 certain topics, including (i) fund performance trends and actions to be taken by FMR to improve certain funds' overall performance; (ii) portfolio manager changes that have occurred during the past year; (iii) Fidelity's fund profitability methodology, the profitability of certain fund service providers, and profitability trends for certain funds; (iv) Fidelity's compensation structure for portfolio managers and key personnel, including its effects on fund profitability and the extent to which portfolio manager compensation is linked to fund performance; (v) Fidelity's fee structures; (vi) the funds' sub-advisory arrangements; and (vii) accounts managed by Fidelity other than the Fidelity funds.

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.

FIL Investment Advisors

FIL Investment Advisors
(U.K.) Ltd.

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

Fidelity Management & Research
(Hong Kong) Limited

Fidelity Management & Research
(Japan) Inc.

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Service Agents

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

LTB-UANN-1008
1.784752.105

fid76

(Fidelity Investment logo)(registered trademark)
Fidelity® Advisor
Intermediate Bond
Fund - Institutional Class

Annual Report

August 31, 2008

(2_fidelity_logos) (Registered_Trademark)

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>
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Annual Report

NOT FDIC INSURED · MAY LOSE VALUE · NO BANK GUARANTEE

Neither the fund nor Fidelity Distributors Corporation is a bank.

Annual Report

Chairman's Message

(photo_of_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, 2008		Past 1 year	Past 5 years	Past 10 years
Institutional Class		1.71%	3.11%	4.80%

$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, 1998. 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.

fid91

Annual Report

Management's Discussion of Fund Performance

Comments from 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, 2008 to August 31, 2008).

Actual Expenses

Hypothetical Example for Comparison Purposes

Annual Report

Shareholder Expense Example - continued

	Beginning Account Value March 1, 2008	Ending Account Value August 31, 2008	Expenses Paid During Period* March 1, 2008 to August 31, 2008
Class A
Actual	$ 1,000.00	$ 980.70	$ 4.28
Hypothetical^A	$ 1,000.00	$ 1,020.81	$ 4.37
Class T
Actual	$ 1,000.00	$ 981.00	$ 4.08
Hypothetical^A	$ 1,000.00	$ 1,021.01	$ 4.17
Class B
Actual	$ 1,000.00	$ 977.40	$ 7.60
Hypothetical^A	$ 1,000.00	$ 1,017.44	$ 7.76
Class C
Actual	$ 1,000.00	$ 977.10	$ 7.90
Hypothetical^A	$ 1,000.00	$ 1,017.14	$ 8.06
Institutional Class
Actual	$ 1,000.00	$ 982.50	$ 2.59
Hypothetical^A	$ 1,000.00	$ 1,022.52	$ 2.64

^A 5% return per year before expenses

	Annualized Expense Ratio
Class A	.86%
Class T	.82%
Class B	1.53%
Class C	1.59%
Institutional Class	.52%

Annual Report

Investment Changes (Unaudited)

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

Quality Diversification (% of fund's net assets)
As of August 31, 2008		As of February 29, 2008
	U.S. Government and U.S. Government Agency Obligations 39.3%		U.S. Government and U.S. Government Agency Obligations 41.4%
	AAA 14.1%		AAA 13.0%
	AA 8.2%		AA 6.1%
	A 10.8%		A 10.1%
	BBB 20.1%		BBB 17.7%
	BB and Below 4.5%		BB and Below 4.1%
	Not Rated 0.3%		Not Rated 0.5%
	Short-Term Investments and Net Other Assets 2.7%		Short-Term Investments and Net Other Assets 7.1%

fid109

Weighted Average Maturity as of August 31, 2008
		6 months ago
Years	4.5	4.3

Duration as of August 31, 2008
		6 months ago
Years	4.0	3.9

Asset Allocation (% of fund's net assets)
As of August 31, 2008 *			As of February 29, 2008 **
	Corporate Bonds 39.2%			Corporate Bonds 32.7%
	U.S. Government and U.S. Government Agency Obligations 39.3%			U.S. Government and U.S. Government Agency Obligations 41.4%
	Asset-Backed Securities 5.3%			Asset-Backed Securities 6.1%
	CMOs and Other Mortgage Related Securities 13.1%			CMOs and Other Mortgage Related Securities 12.3%
	Other Investments 0.4%			Other Investments 0.4%
	Short-Term Investments and Net Other Assets 2.7%			Short-Term Investments and Net Other Assets 7.1%
* Foreign investments		10.1%	** Foreign investments		10.0%
* Futures and Swaps		18.7%	** Futures and Swaps		18.1%

fid123

Annual Report

Investments August 31, 2008

Showing Percentage of Net Assets

Nonconvertible Bonds - 9.8%
	Principal Amount		Value
CONSUMER DISCRETIONARY - 0.5%
Household Durables - 0.0%
Newell Rubbermaid, Inc. 6.25% 4/15/18	$ 385,000		$ 348,363
Media - 0.5%
Time Warner Cable, Inc.:
5.85% 5/1/17	1,328,000		1,267,674
6.75% 7/1/18	1,250,000		1,261,985
Univision Communications, Inc. 3.875% 10/15/08	1,680,000		1,656,900
Viacom, Inc. 6.125% 10/5/17	905,000		851,539
			5,038,098
TOTAL CONSUMER DISCRETIONARY			5,386,461
CONSUMER STAPLES - 0.9%
Beverages - 0.2%
Diageo Capital PLC 5.75% 10/23/17	1,678,000		1,663,078
Food & Staples Retailing - 0.2%
CVS Caremark Corp. 6.302% 6/1/37 (j)	2,510,000		2,130,363
Food Products - 0.2%
General Mills, Inc. 5.2% 3/17/15	867,000		851,627
Kraft Foods, Inc. 6.125% 2/1/18	1,012,000		993,881
			1,845,508
Tobacco - 0.3%
Philip Morris International, Inc.:
4.875% 5/16/13	851,000		843,024
5.65% 5/16/18	807,000		793,931
Reynolds American, Inc. 7.25% 6/15/37	1,575,000		1,552,295
			3,189,250
TOTAL CONSUMER STAPLES			8,828,199
ENERGY - 1.0%
Energy Equipment & Services - 0.1%
Weatherford International Ltd. 5.15% 3/15/13	1,345,000		1,329,499
Oil, Gas & Consumable Fuels - 0.9%
Anadarko Petroleum Corp. 6.45% 9/15/36	540,000		496,318
Gazstream SA 5.625% 7/22/13 (c)	1,685,785		1,652,069
Nexen, Inc. 6.4% 5/15/37	1,015,000		910,383
NGPL PipeCo LLC 6.514% 12/15/12 (c)	800,000		811,557
Petro-Canada:
6.05% 5/15/18	435,000		421,212
6.8% 5/15/38	285,000		271,130
Nonconvertible Bonds - continued
	Principal Amount		Value
ENERGY - continued
Oil, Gas & Consumable Fuels - continued
Suncor Energy, Inc. 6.1% 6/1/18	$ 975,000		$ 968,258
TEPPCO Partners LP 6.65% 4/15/18	588,000		591,660
Texas Eastern Transmission LP 6% 9/15/17 (c)	1,138,000		1,110,119
Transcontinental Gas Pipe Line Corp. 6.4% 4/15/16	525,000		525,000
Valero Energy Corp. 6.625% 6/15/37	745,000		657,349
			8,415,055
TOTAL ENERGY			9,744,554
FINANCIALS - 4.5%
Capital Markets - 0.6%
BlackRock, Inc. 6.25% 9/15/17	1,720,000		1,689,353
Goldman Sachs Group, Inc. 6.75% 10/1/37	1,280,000		1,126,212
Lehman Brothers Holdings, Inc. 6.875% 5/2/18	760,000		707,579
Merrill Lynch & Co., Inc.:
6.15% 4/25/13	360,000		341,149
6.875% 4/25/18	62,000		57,103
Northern Trust Corp. 5.5% 8/15/13	215,000		218,736
UBS AG Stamford Branch 5.75% 4/25/18	1,420,000		1,359,436
			5,499,568
Commercial Banks - 0.9%
American Express Bank FSB 5.5% 4/16/13	1,861,000		1,762,514
Credit Suisse First Boston 6% 2/15/18	1,505,000		1,443,977
HBOS PLC 6.75% 5/21/18 (c)	1,040,000		939,271
Standard Chartered Bank 6.4% 9/26/17 (c)	2,781,000		2,632,139
Wells Fargo & Co. 5.625% 12/11/17	2,063,000		1,982,914
			8,760,815
Consumer Finance - 1.2%
American General Finance Corp. 6.9% 12/15/17	960,000		769,020
General Electric Capital Corp.:
4.8% 5/1/13	5,300,000		5,240,672
5.625% 9/15/17	1,130,000		1,104,459
6.375% 11/15/67 (j)	1,700,000		1,557,003
SLM Corp.:
2.94% 7/27/09 (j)	531,000		503,233
2.96% 7/26/10 (j)	2,025,000		1,825,311
4% 1/15/09	465,000		461,499
4.5% 7/26/10	1,025,000		932,492
			12,393,689
Nonconvertible Bonds - continued
	Principal Amount		Value
FINANCIALS - continued
Diversified Financial Services - 0.3%
GlaxoSmithKline Capital, Inc. 5.65% 5/15/18	$ 670,000		$ 671,919
International Lease Finance Corp. 5.65% 6/1/14	310,000		259,789
TECO Finance, Inc. 7% 5/1/12	1,500,000		1,515,554
ZFS Finance USA Trust V 6.5% 5/9/67 (c)(j)	805,000		693,486
			3,140,748
Insurance - 0.5%
American International Group, Inc. 5.85% 1/16/18	1,715,000		1,444,028
Pacific Life Global Funding 5.15% 4/15/13 (c)	840,000		840,501
Pennsylvania Mutual Life Insurance Co. 6.65% 6/15/34 (c)	3,000,000		2,736,099
The Chubb Corp. 5.75% 5/15/18	415,000		398,185
			5,418,813
Real Estate Investment Trusts - 0.5%
Duke Realty LP:
5.4% 8/15/14	530,000		485,588
5.875% 8/15/12	90,000		88,557
5.95% 2/15/17	110,000		101,336
6.25% 5/15/13	1,550,000		1,528,503
6.5% 1/15/18	855,000		797,600
Liberty Property LP 6.625% 10/1/17	735,000		686,044
UDR, Inc. 5.5% 4/1/14	1,470,000		1,385,866
			5,073,494
Real Estate Management & Development - 0.1%
ERP Operating LP:
5.375% 8/1/16	270,000		240,474
5.5% 10/1/12	395,000		379,014
5.75% 6/15/17	790,000		712,074
			1,331,562
Thrifts & Mortgage Finance - 0.4%
Bank of America Corp.:
4.9% 5/1/13	1,500,000		1,451,730
5.65% 5/1/18	1,500,000		1,383,767
Credit Suisse First Boston (New York Branch) 5% 5/15/13	712,000		693,506
			3,529,003
TOTAL FINANCIALS			45,147,692
Nonconvertible Bonds - continued
	Principal Amount		Value
HEALTH CARE - 0.2%
Pharmaceuticals - 0.2%
AstraZeneca PLC:
5.9% 9/15/17	$ 930,000		$ 965,966
6.45% 9/15/37	695,000		712,739
			1,678,705
INDUSTRIALS - 1.0%
Aerospace & Defense - 0.2%
Bombardier, Inc. 6.3% 5/1/14 (c)	1,575,000		1,512,000
Airlines - 0.5%
American Airlines, Inc. pass-thru trust certificates 7.324% 4/15/11	500,000		455,000
Delta Air Lines, Inc. pass-thru trust certificates 7.57% 11/18/10	2,520,000		2,375,100
United Air Lines, Inc. pass-thru trust certificates:
7.032% 4/1/12	555,510		547,177
7.186% 10/1/12	1,381,472		1,362,477
			4,739,754
Industrial Conglomerates - 0.3%
General Electric Co. 5.25% 12/6/17	3,100,000		2,995,952
Road & Rail - 0.0%
CSX Corp. 6.25% 4/1/15	310,000		303,747
TOTAL INDUSTRIALS			9,551,453
MATERIALS - 0.1%
Metals & Mining - 0.1%
Rio Tinto Finance Ltd. 6.5% 7/15/18	780,000		784,769
TELECOMMUNICATION SERVICES - 0.1%
Diversified Telecommunication Services - 0.1%
Verizon Communications, Inc. 6.1% 4/15/18	700,000		698,234
Wireless Telecommunication Services - 0.0%
Sprint Nextel Corp. 6% 12/1/16	230,000		209,875
TOTAL TELECOMMUNICATION SERVICES			908,109
UTILITIES - 1.5%
Electric Utilities - 0.9%
Commonwealth Edison Co.:
5.4% 12/15/11	927,000		937,122
Nonconvertible Bonds - continued
	Principal Amount		Value
UTILITIES - continued
Electric Utilities - continued
Commonwealth Edison Co.: - continued
5.8% 3/15/18	$ 1,300,000		$ 1,266,242
Duke Energy Carolinas LLC 5.25% 1/15/18	710,000		704,054
EDP Finance BV 6% 2/2/18 (c)	1,295,000		1,284,468
Enel Finance International SA 6.25% 9/15/17 (c)	679,000		688,607
Nevada Power Co. 6.5% 5/15/18	3,950,000		3,950,000
			8,830,493
Independent Power Producers & Energy Traders - 0.4%
PPL Energy Supply LLC:
6.3% 7/15/13	2,000,000		2,022,960
6.5% 5/1/18	865,000		842,930
TXU Corp. 5.55% 11/15/14	1,645,000		1,283,100
			4,148,990
Multi-Utilities - 0.2%
CMS Energy Corp. 6.55% 7/17/17	1,740,000		1,654,161
TOTAL UTILITIES			14,633,644
TOTAL NONCONVERTIBLE BONDS (Cost $100,741,722)		96,663,586
U.S. Government and Government Agency Obligations - 19.4%

U.S. Government Agency Obligations - 6.0%
Fannie Mae:
4.375% 7/17/13	4,850,000		4,910,868
5% 2/16/12	28,035,000		29,155,082
Freddie Mac 5.25% 7/18/11 (e)	24,105,000		25,232,126
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			59,298,076
U.S. Treasury Inflation Protected Obligations - 7.8%
U.S. Treasury Inflation-Indexed Notes:
2% 1/15/14 (e)	33,384,570		34,601,104
2% 7/15/14	30,172,220		31,325,884
2.625% 7/15/17	10,554,300		11,436,849
TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS			77,363,837
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value
U.S. Treasury Obligations - 5.6%
U.S. Treasury Notes:
3.375% 6/30/13 (b)	$ 29,272,000		$ 29,683,623
4.25% 8/15/14	25,000,000		26,417,975
TOTAL U.S. TREASURY OBLIGATIONS			56,101,598
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $187,840,995)		192,763,511
U.S. Government Agency - Mortgage Securities - 13.0%

Fannie Mae - 7.7%
3.711% 10/1/33 (j)	130,507		131,522
3.74% 10/1/33 (j)	109,098		109,769
3.75% 9/1/33 (j)	440,265		446,557
3.75% 1/1/34 (j)	109,735		111,056
3.778% 6/1/34 (j)	629,364		629,950
3.914% 7/1/35 (j)	444,003		444,475
3.986% 10/1/18 (j)	67,034		67,813
4% 8/1/18	2,483,222		2,381,121
4.1% 8/1/33 (j)	159,785		159,976
4.103% 10/1/33 (j)	2,414,841		2,454,937
4.171% 1/1/35 (j)	258,749		260,199
4.235% 1/1/34 (j)	317,411		320,904
4.25% 2/1/35 (j)	133,331		134,333
4.263% 10/1/33 (j)	49,098		49,507
4.295% 1/1/35 (j)	125,040		125,342
4.302% 5/1/33 (j)	30,759		30,820
4.307% 3/1/33 (j)	60,739		61,187
4.328% 1/1/35 (j)	152,398		153,651
4.331% 7/1/35 (j)	400,025		400,499
4.366% 2/1/34 (j)	236,298		239,078
4.39% 2/1/35 (j)	231,427		233,532
4.39% 6/1/35 (j)	469,326		472,439
4.402% 4/1/33 (j)	250,829		251,101
4.402% 12/1/33 (j)	5,279,167		5,301,324
4.408% 5/1/35 (j)	662,350		666,558
4.42% 8/1/34 (j)	325,128		328,585
4.426% 5/1/35 (j)	70,799		71,239
4.429% 3/1/35 (j)	197,576		199,106
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
4.435% 6/1/35 (j)	$ 515,224		$ 518,622
4.479% 3/1/35 (j)	453,805		456,124
4.493% 2/1/35 (j)	1,679,691		1,695,418
4.499% 3/1/35 (j)	423,564		427,468
4.499% 5/1/35 (j)	312,154		314,375
4.5% 4/1/20 to 3/1/35	1,950,283		1,852,331
4.502% 7/1/35 (j)	49,686		50,022
4.553% 11/1/34 (j)	365,359		367,892
4.562% 2/1/35 (j)	1,365,906		1,380,637
4.579% 6/1/33 (j)	38,753		38,993
4.591% 2/1/35 (j)	346,372		349,678
4.605% 10/1/35 (j)	42,030		42,516
4.648% 2/1/35 (j)	3,255,368		3,282,202
4.654% 11/1/34 (j)	421,111		425,616
4.691% 10/1/34 (j)	455,664		459,253
4.7% 12/1/34 (j)	280,124		282,499
4.702% 7/1/34 (j)	350,097		353,371
4.731% 10/1/35 (j)	288,538		290,900
4.776% 4/1/35 (j)	48,348		48,726
4.777% 12/1/34 (j)	119,616		120,659
4.813% 11/1/34 (j)	359,352		362,962
4.84% 2/1/35 (j)	432,236		433,574
4.86% 10/1/34 (j)	1,488,128		1,502,520
4.872% 8/1/34 (j)	87,779		88,232
4.912% 2/1/35 (j)	33,443		33,686
4.939% 8/1/34 (j)	1,155,272		1,167,826
4.972% 7/1/34 (j)	54,069		54,684
4.986% 4/1/33 (j)	15,871		15,952
5.059% 9/1/34 (j)	938,660		949,420
5.093% 9/1/34 (j)	120,304		121,710
5.096% 7/1/34 (j)	2,948,829		2,980,856
5.098% 8/1/33 (j)	137,006		137,918
5.107% 1/1/36 (j)	852,251		865,265
5.13% 5/1/35 (j)	475,360		481,730
5.148% 5/1/35 (j)	1,341,304		1,359,544
5.185% 3/1/35 (j)	60,898		61,696
5.189% 5/1/35 (j)	83,641		84,542
5.195% 5/1/35 (j)	1,544,408		1,566,270
5.216% 4/1/36 (j)	1,647,915		1,658,839
5.242% 11/1/36 (j)	496,648		506,530
5.259% 2/1/33 (j)	106,170		106,615
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Fannie Mae - continued
5.281% 3/1/35 (j)	$ 73,923		$ 74,515
5.305% 12/1/34 (j)	164,026		166,101
5.341% 3/1/35 (j)	706,978		710,027
5.347% 2/1/36 (j)	161,275		163,085
5.384% 3/1/35 (j)	32,082		32,427
5.462% 2/1/36 (j)	2,312,670		2,347,855
5.5% 9/1/10 to 12/1/14	1,817,035		1,852,005
5.528% 11/1/36 (j)	866,916		881,881
5.574% 1/1/36 (j)	702,696		714,599
5.616% 7/1/37 (j)	364,257		370,744
5.8% 1/1/36 (j)	484,116		493,536
5.819% 3/1/36 (j)	1,512,446		1,544,226
5.82% 7/1/46 (j)	4,136,975		4,228,803
5.945% 2/1/35 (j)	27,874		28,217
6% 5/1/16 to 4/1/17	651,075		671,355
6.028% 4/1/36 (j)	284,896		291,493
6.052% 1/1/35 (j)	96,885		97,824
6.057% 3/1/33 (j)	49,306		49,770
6.214% 2/1/35 (j)	70,393		70,708
6.252% 6/1/36 (j)	130,615		132,940
6.309% 4/1/36 (j)	275,552		282,812
6.5% 12/1/13 to 3/1/35	12,418,112		12,895,596
6.549% 9/1/36 (j)	1,788,401		1,841,985
7% 2/1/09 to 6/1/33	1,611,790		1,699,389
7.5% 8/1/17 to 9/1/28	552,159		591,778
8.5% 5/1/21 to 9/1/25	97,127		104,733
9.5% 2/1/25	16,952		18,380
10.5% 8/1/20	19,306		22,318
11% 8/1/15	43,800		45,480
12.5% 12/1/13 to 4/1/15	11,201		12,959
TOTAL FANNIE MAE			75,971,794
Freddie Mac - 2.4%
4.161% 1/1/34 (j)	1,230,630		1,243,253
4.275% 6/1/35 (j)	190,010		190,226
4.309% 12/1/34 (j)	161,316		162,430
4.333% 3/1/35 (j)	284,435		286,244
4.367% 2/1/35 (j)	348,634		350,579
4.406% 3/1/35 (j)	191,898		192,986
4.423% 2/1/34 (j)	134,637		134,656
4.454% 3/1/35 (j)	182,995		184,145
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Freddie Mac - continued
4.53% 2/1/35 (j)	$ 333,198		$ 335,728
4.754% 4/1/35 (j)	707,057		711,237
5% 3/1/19	6,400,792		6,432,518
5% 9/1/38 (d)	1,000,000		959,899
5.143% 4/1/35 (j)	861,696		872,293
5.382% 3/1/35 (j)	117,430		118,081
5.525% 1/1/36 (j)	1,048,722		1,062,630
5.58% 2/1/35 (j)	239,369		240,898
5.735% 10/1/35 (j)	239,477		243,163
5.842% 1/1/35 (j)	234,201		234,295
5.853% 6/1/36 (j)	334,006		340,166
5.984% 7/1/37 (j)	1,663,816		1,697,513
6.045% 6/1/36 (j)	314,165		320,617
6.063% 4/1/36 (j)	519,362		530,020
6.11% 6/1/36 (j)	315,394		322,247
6.489% 3/1/33 (j)	32,655		33,019
6.65% 1/1/37 (j)	2,160,182		2,216,894
6.676% 10/1/36 (j)	1,657,338		1,701,603
6.844% 10/1/36 (j)	2,257,595		2,329,555
8.5% 9/1/24 to 8/1/27	77,160		83,907
10% 5/1/09	43		43
10.5% 5/1/21	3,106		3,164
11% 12/1/11	697		735
11.5% 10/1/15	5,425		6,132
11.75% 10/1/10	4,576		4,837
TOTAL FREDDIE MAC			23,545,713
Government National Mortgage Association - 2.9%
5.25% 7/20/34 (j)	350,275		351,482
5.5% 9/1/38 (d)	5,000,000		4,989,749
5.5% 9/1/38 (d)	3,000,000		2,993,849
5.5% 9/1/38 (d)	20,000,000		19,958,994
7% 7/15/28 to 11/15/28	402,166		424,687
7.5% 2/15/28 to 10/15/28	6,884		7,334
8% 6/15/24 to 10/15/24	7,016		7,576
U.S. Government Agency - Mortgage Securities - continued
	Principal Amount		Value
Government National Mortgage Association - continued
8.5% 5/15/17 to 10/15/21	$ 98,234		$ 107,855
11% 7/20/19 to 8/20/19	4,929		5,760
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			28,847,286
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $126,752,012)		128,364,793
Asset-Backed Securities - 0.7%

Advanta Business Card Master Trust Series 2007-D1 Class D, 3.8706% 1/22/13 (c)(j)	1,420,000		800,321
Bear Stearns Asset Backed Securities I Trust Series 2005-HE2 Class M2, 3.2219% 2/25/35 (j)	570,000		393,186
Carrington Mortgage Loan Trust Series 2006-NC3 Class M10, 4.4719% 8/25/36 (c)(j)	215,000		10,277
DB Master Finance LLC Series 2006-1 Class M1, 8.285% 6/20/31 (c)	715,000		536,250
Ford Credit Auto Owner Trust:
Series 2006-B Class D, 7.26% 2/15/13 (c)	850,000		786,856
Series 2006-C Class D, 6.89% 5/15/13 (c)	585,000		529,854
Series 2007-A Class D, 7.05% 12/15/13 (c)	310,000		270,531
GS Auto Loan Trust Series 2006-1 Class D, 6.25% 1/15/14 (c)	600,433		567,904
GSAMP Trust Series 2004-AR1 Class B4, 5% 6/25/34 (c)(j)	142,877		12,591
Merna Reinsurance Ltd. Series 2007-1 Class B, 4.5506% 6/30/12 (c)(j)	1,695,000		1,628,217
Onyx Acceptance Owner Trust Series 2005-B Class A4, 4.34% 5/15/12	1,045,000		967,278
Park Place Securities, Inc. Series 2005-WHQ2 Class M7, 3.7219% 5/25/35 (j)	409,000		23,518
Structured Asset Securities Corp. Series 2006-BC1 Class B1, 4.9719% 3/25/36 (c)(j)	566,901		7,092
Wachovia Auto Loan Owner Trust Series 2006-2A Class E, 7.05% 5/20/14 (c)	955,000		505,360
WaMu Asset-Backed Certificates Series 2006-HE5 Class B1, 4.9719% 10/25/36 (c)(j)	825,000		131,196
TOTAL ASSET-BACKED SECURITIES (Cost $10,311,948)		7,170,431
Collateralized Mortgage Obligations - 3.3%
	Principal Amount		Value
Private Sponsor - 0.4%
Chase Mortgage Finance Trust Series 2007-A1 Class 1A5, 4.3742% 2/25/37 (j)	$ 281,880		$ 266,376
Credit Suisse First Boston Mortgage Securities Corp. floater Series 2007-AR7 Class 2A1, 4.5993% 11/25/34 (j)	593,705		552,156
JPMorgan Mortgage Trust Series 2006-A2 Class 5A1, 3.7741% 11/25/33 (j)	593,038		559,033
Provident Funding Mortgage Loan Trust Series 2005-2 Class 3A, 4.7027% 10/25/35 (j)	997,955		919,870
RESI Finance LP/RESI Finance DE Corp. floater:
Series 2003-B Class B6, 5.3131% 7/10/35 (c)(j)	670,969		494,997
Series 2003-CB1:
Class B4, 4.1131% 6/10/35 (c)(j)	514,692		387,406
Class B5, 4.7131% 6/10/35 (c)(j)	349,990		278,133
Class B6, 5.2131% 6/10/35 (c)(j)	209,308		150,816
Structured Asset Securities Corp. floater Series 2006-BC5 Class B, 4.9719% 12/25/36 (c)(j)	650,000		30,355
Wells Fargo Mortgage Backed Securities Trust:
Series 2005-AR12 Class 2A6, 4.3173% 7/25/35 (j)	184,305		168,164
Series 2005-AR3 Class 2A1, 4.2121% 3/25/35 (j)	336,787		307,793
TOTAL PRIVATE SPONSOR			4,115,099
U.S. Government Agency - 2.9%
Fannie Mae Grantor Trust floater Series 2005-90 Class FG, 2.7219% 10/25/35 (j)	4,223,115		4,088,529
Fannie Mae subordinate REMIC pass-thru certificates:
planned amortization class:
Series 2001-68 Class QZ, 5.5% 12/25/16	1,223,827		1,249,404
Series 2002-9 Class PC, 6% 3/25/17	184,833		190,499
Series 2003-84 Class GC, 4.5% 5/25/15	1,540,000		1,550,192
Series 2005-67 Class HD, 5.5% 12/25/30	2,835,000		2,906,495
Series 2006-4 Class PB, 6% 9/25/35	2,454,799		2,507,516
sequential payer:
Series 2002-56 Class MC, 5.5% 9/25/17	665,960		685,463
Series 2004-3 Class BA, 4% 7/25/17	110,558		109,269
Series 2004-45 Class AV, 4.5% 10/25/22	460,615		461,480
Series 2004-86 Class KC, 4.5% 5/25/19	501,224		501,569
Series 2004-91 Class AH, 4.5% 5/25/29	1,073,967		1,063,425
Freddie Mac planned amortization class Series 2104 Class PG, 6% 12/15/28	1,134,963		1,148,815
Collateralized Mortgage Obligations - continued
	Principal Amount		Value
U.S. Government Agency - continued
Freddie Mac Multi-class participation certificates guaranteed:
planned amortization class:
Series 2356 Class GD, 6% 9/15/16	$ 692,078		$ 709,864
Series 2363 Class PF, 6% 9/15/16	963,457		987,746
Series 2702 Class WB, 5% 4/15/17	2,139,230		2,161,783
Series 3033 Class UD, 5.5% 10/15/30	1,075,000		1,097,532
Series 3049 Class DB, 5.5% 6/15/31	2,495,000		2,547,123
sequential payer:
Series 2528 Class HN, 5% 11/15/17	1,515,000		1,541,011
Series 2777 Class AB, 4.5% 6/15/29	2,441,601		2,415,625
Series 2809 Class UA, 4% 12/15/14	390,293		391,530
TOTAL U.S. GOVERNMENT AGENCY			28,314,870
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $33,047,063)		32,429,969
Commercial Mortgage Securities - 1.4%

Bear Stearns Commercial Mortgage Securities Trust Series 2003-T12 Class X2, 0.4809% 8/13/39 (c)(j)(l)	11,515,427		151,305
Citigroup Commercial Mortgage Trust Series 2007-C6 Class A1, 5.622% 12/10/49 (j)	2,201,362		2,162,094
Citigroup/Deutsche Bank Commercial Mortgage Trust sequential payer Series 2006-CD3 Class A3, 5.607% 10/15/48	3,000,000		2,853,539
Credit Suisse Commercial Mortgage Trust sequential payer Series 2007-C2 Class A1, 5.269% 1/15/49	500,445		493,504
DLJ Commercial Mortgage Corp. sequential payer Series 1999-CG1 Class A1B, 6.46% 3/10/32	2,320,688		2,326,974
Ginnie Mae guaranteed Multi-family REMIC pass-thru securities sequential payer Series 2002-35 Class C, 5.8724% 10/16/23 (j)	50,096		50,742
Ginnie Mae guaranteed REMIC pass-thru securities sequential payer:
Series 2003-47 Class C, 4.227% 10/16/27	1,875,837		1,874,637
Series 2003-59 Class D, 3.654% 10/16/27	3,060,000		2,996,420
GMAC Commercial Mortgage Securities, Inc. Series 2004-C3 Class X2, 0.6614% 12/10/41 (j)(l)	10,257,338		146,429
Commercial Mortgage Securities - continued
	Principal Amount		Value
LB-UBS Commercial Mortgage Trust sequential payer:
Series 2006-C7 Class A1, 5.279% 11/15/38	$ 320,423		$ 317,593
Series 2007-C2 Class A1, 5.226% 2/15/40	403,858		398,199
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $14,129,202)		13,771,436
Bank Notes - 0.1%

National City Bank, Cleveland 2.7819% 3/1/13 (j) (Cost $663,517)	1,000,000		618,714

Fixed-Income Funds - 53.8%
	Shares
Fidelity 1-3 Year Duration Securitized Bond Central Fund (k)	562,395		47,438,002
Fidelity Commercial Mortgage-Backed Securities Central Fund (k)	1,121,995		99,633,125
Fidelity Corporate Bond 1-10 Year Central Fund (k)	2,863,124		275,919,248
Fidelity Corporate Bond 1-5 Year Central Fund (k)	192,402		18,814,985
Fidelity Specialized High Income Central Fund (k)	253,311		23,421,149
Fidelity Ultra-Short Central Fund (k)	836,659		68,380,155
TOTAL FIXED-INCOME FUNDS (Cost $583,792,741)		533,606,664
Cash Equivalents - 4.7%
	Maturity Amount
Investments in repurchase agreements in a joint trading account at:
2.12%, dated 8/29/08 due 9/2/08 (Collateralized by U.S. Government Obligations) #	$ 20,975,942		20,971,000
2.14%, dated 8/29/08 due 9/2/08 (Collateralized by U.S. Government Obligations) # (a)	25,906,158		25,900,000
TOTAL CASH EQUIVALENTS (Cost $46,871,000)		46,871,000
TOTAL INVESTMENT PORTFOLIO - 106.2% (Cost $1,104,150,200)			1,052,260,104
NET OTHER ASSETS - (6.2)%			(60,970,047)
NET ASSETS - 100%		$ 991,290,057

Swap Agreements
	Expiration Date	Notional Amount	Value
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	$ 133,469	$ (108,100)
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	129,521	(97,691)
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, 6.3950% 8/25/34	Sept. 2034	119,548	(110,641)
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	175,868	(159,922)
Receive from Citibank upon credit event of Merrill Lynch & Co., Inc., par value of the notional amount of Merrill Lynch & Co., Inc. 5% 1/15/15, and pay quarterly notional amount multiplied by .90%	Dec. 2012	900,000	72,752
Receive from Goldman Sachs upon credit event of Lowe's Companies, Inc., par value of the notional amount of Lowe's Companies, Inc. 8.25% 6/1/10, and pay quarterly notional amount multiplied by 1.07%	March 2013	400,000	(6,078)
Receive from Lehman Brothers, Inc. upon credit event of Lowe's Companies, Inc., par value of the notional amount of Lowe's Companies, Inc. 8.25% 6/1/10, and pay quarterly notional amount multiplied by 1.03%	March 2013	400,000	(5,387)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive from Morgan Stanley, Inc. upon credit event of H.J. Heinz Co., par value of the notional amount of H.J. Heinz Co. 6% 3/15/08, and pay quarterly notional amount multiplied by .65%	March 2013	$ 600,000	$ (4,161)
Receive monthly a fixed rate of .15% multiplied by the notional amount and pay to Lehman Brothers, Inc. upon each credit event of one of the issues of Dow Jones ABX AA 07-1 Index, par value of the proportional notional amount (i)	Sept. 2037	1,500,000	(1,365,000)
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	(885,293)
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	(528,586)
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	106,402	(51,876)
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	(542,511)
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	(190,046)
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 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	$ 368,891	$ (77,815)
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	(348,725)
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	252,517	(218,291)
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	(32,101)
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	58,600	(44,845)
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	806	(709)
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	(2,230,917)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
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	$ (618,931)
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	(305,787)
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	(642,924)
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	(632,505)
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 (g)	June 2010	10,000,000	(249,569)
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 (h)	Dec. 2010	15,000,000	(432,237)
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 (f)	March 2010	6,373,600	(104,138)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Credit Default Swaps - continued
Receive quarterly notional amount multiplied by .72% and pay Bank of America 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	$ 1,400,000	$ (28,132)
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	(25,126)
TOTAL CREDIT DEFAULT SWAPS		$ 48,158,237	$ (9,975,292)
Interest Rate Swaps
Receive semi-annually a fixed rate equal to 3.475% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	Jan. 2013	25,000,000	(467,060)
Receive semi-annually a fixed rate equal to 3.567% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2011	19,783,000	169,797
Receive semi-annually a fixed rate equal to 4.449% and pay quarterly a floating rate based on 3-month LIBOR with Credit Suisse First Boston	May 2018	6,931,000	59,235
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	1,372,218
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	1,052,536
TOTAL INTEREST RATE SWAPS		$ 96,714,000	$ 2,186,726
		$ 144,872,237	$ (7,788,566)