SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Fidelity Advisor Series IV
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FIDELITY REAL ESTATE HIGH INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES IV
82 Devonshire Street, Boston, Massachusetts 02109
1-617-563-6414
NOTICE OF PROPOSED ACTION IN LIEU OF SPECIAL MEETING OF SHAREHOLDERS
NOTICE IS HEREBY GIVEN that Action in Lieu of a Special Meeting of
Shareholders of Fidelity Real Estate High Income Fund (the "Fund"), a series of
Fidelity Advisor Series IV (the "Trust"), is proposed to be taken as soon as
possible after shareholder receipt of the attached Statement and consent with
respect to such action is hereby requested. The purpose of the attached consent
is to approve the following proposal.
1. To amend the fundamental investment objective to allow a greater
degree of investment in real estate-related instruments.
The Board of Trustees has fixed the close of business on October 16, 1997
as the record date for the determination of the shareholders of the Fund
entitled to notice of such proposed action and to give such consent.
By order of the Board of Trustees,
ARTHUR S. LORING, Secretary
FIDELITY REAL ESTATE HIGH INCOME FUND
A FUND OF
FIDELITY ADVISOR SERIES IV
82 Devonshire Street, Boston, Massachusetts 02109
1-617-563-6414
STATEMENT SOLICITING CONSENT
This Statement is furnished in connection with action proposed to be taken
by written consent of the shareholders of Fidelity Real Estate High Income Fund,
a fund of Fidelity Advisor Series IV (the trust), as soon as possible after
shareholder receipt of this Statement. The Board of Trustees seeks shareholder
approval to change the fund's fundamental investment objective to allow a
greater degree of investment in real estate-related instruments that are not
commercial mortgage-backed securities, as described more fully below.
The purpose of the attached consent is set forth in the accompanying
notice. The attached shareholder consent will become effective immediately upon
execution by all of the fund's shareholders. The expenses in connection with
preparing this Statement and its enclosures will be borne by Fidelity Management
& Research Company (FMR), the fund's investment adviser. The principal business
address of FMR and Fidelity Distributors Corporation (FDC), the fund's principal
underwriter and distribution agent, is 82 Devonshire Street, Boston,
Massachusetts 02109. This Statement will be furnished to shareholders on or
about November 10, 1997.
On September 30, 1997, there were 3,958,467 shares of the fund issued and
outstanding.
As of September 30, 1997, the trustees and officers of the trust owned, in
the aggregate, less than 1% of the fund's outstanding shares.
To the knowledge of the trust, substantial (5% or more) record or
beneficial ownership of the fund on September 30, 1997 was as follows:
GTE Service Corporation, Stamford, CT 100%
Shareholders of record at the close of business on October 16, 1997 will
be entitled to receive this Statement and to give consent.
FOR A FREE COPY OF THE FUND'S PROSPECTUS ("PROSPECTUS") AND STATEMENT OF
ADDITIONAL INFORMATION ("SAI"), EACH DATED JANUARY 29, 1997, ITS ANNUAL REPORT
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1996 AND ITS SEMIANNUAL REPORT FOR THE
FISCAL PERIOD ENDED MAY 31, 1997, CALL FIDELITY INVESTMENTS AT 1-617-563-6414 OR
WRITE TO FIDELITY DISTRIBUTORS CORPORATION AT 82 DEVONSHIRE STREET, BOSTON,
MASSACHUSETTS 02109.
APPROVAL REQUIRED: This Statement and the attached shareholder consent
have been provided to shareholders in lieu of a special meeting, and the
proposal will be effected only if the consent of all shareholders of the fund is
obtained. Amendment of the fund's investment objective requires the approval of
a "majority of the outstanding voting securities" of the fund under the
Investment Company Act of 1940. For this purpose, a "majority vote of the
outstanding voting securities" means the affirmative vote of the lesser of (a)
67% or more of the shares present at an annual or special meeting of the
security holders duly called if the holders of more than 50% of the outstanding
shares are present or represented by proxy or (b) more than 50% of the
outstanding voting securities.
PROPOSAL TO AMEND THE FUND'S INVESTMENT OBJECTIVE
The Board of Trustees has approved, and recommends that the shareholders
of the fund approve, a proposed amendment to the fund's investment objective
which would allow a greater degree of investment in real estate-related
instruments that are not commercial mortgage-backed securities (CMBS).
Fidelity Real Estate High Income Fund's current fundamental investment
objective is as follows:
The fund seeks a high level of current income by investing primarily
in commercial mortgage-backed securities.
The Trustees recommend that shareholders of the fund consent to replacing
the fund's current fundamental investment objective with the following amended
fundamental investment objective:
The fund seeks a high level of current income by investing primarily
in real estate-related instruments. As a secondary objective, the
fund also seeks growth of capital.
Approval of the amended fundamental investment objective would effect two
changes to the existing investment objective of the fund: (1) it would expand
the range of debt instruments in which the fund may invest; and (2) it would
establish growth of capital as a secondary objective.
Since the fund commenced operations, the relative return of CMBS, taking
credit and other risk into account, has diminished compared to that of other
high-yielding bonds. When the fund was introduced, high-yielding CMBS offered
200-300 basis points greater yield than comparable high-yielding corporate bonds
with similar risk. Because the number of buyers has increased, this magnitude of
additional yield is generally no longer available, and other real estate-related
instruments sometimes offer what FMR believes to be better risk/return profiles.
In conjunction with the proposed change to the fund's fundamental
investment objective, the Trustees have approved revising the fund's
non-fundamental name test policy. Under the fund's current non-fundamental name
test policy, at least 65% of the fund's total assets will normally be invested
in lower-quality real estate debt securities, primarily commercial
mortgage-backed securities and other mortgage-related securities. The revised
policy would state that "FMR normally will invest at least 65% of the fund's
total assets in real estate-related instruments."
Changes in non-fundamental investment policies can be made without
shareholder approval but are subject to the supervision of the Board of
Trustees, and to appropriate disclosure to fund shareholders and prospective
investors.
Real estate-related instruments may include, in addition to CMBS, other
real estate-related asset-backed securities, other types of mortgage securities,
and securities of companies engaged in real estate-related businesses (including
REITs). For a further discussion of other real estate-related instruments in
which the fund may invest, see "Investment Principles and Risks - Securities and
Investment Practices" in the fund's Prospectus and "Investment Policies and
Limitations" in the SAI, each of which is incorporated herein by this reference.
FMR believes that, over time, any real estate-related security instrument should
be eligible for investment to maximize investment flexibility, consistent with
the fund's objectives.
FMR believes that the broader fundamental investment objective and
policies will benefit shareholders of the fund because the broader flexibility
to invest in real estate-related securities of all types should assist FMR in
enhancing the fund's performance through security selection and would allow for
increased diversification.
In addition, FMR believes that the establishment of growth of capital as a
secondary objective of the fund is consistent with its investment in high yield
instruments since a significant portion of the return on such instruments may be
derived from appreciation in the value of the underlying security.
Conclusion. The Board of Trustees has considered this proposal and
believes that the revision to the fund's fundamental investment objective and
policies will benefit the fund and its shareholders. The Trustees recommend that
shareholders consent to the proposed revision to the fund's fundamental
investment objective. If shareholder consent is obtained, the revised
fundamental investment objective and policies will become effective when the
fund's Prospectus is revised or supplemented. If shareholder consent is not
obtained, the fund's current fundamental investment objective and policies will
remain in effect and unchanged.
SUBMISSION OF CERTAIN SHAREHOLDER PROPOSALS
The trust does not hold annual shareholder meetings. Shareholders wishing
to submit proposals for inclusion in a proxy statement for a subsequent
shareholder meeting should send their written proposals to the Secretary of the
Trust, 82 Devonshire Street, Boston, Massachusetts 02109.
Action in Lieu of a Special Meeting of Shareholders
of Fidelity Real Estate High Income Fund
Having waived notice, the undersigned, being the sole shareholder of
Fidelity Real Estate High Income Fund (the "Fund"), a fund of Fidelity Advisor
Series IV, upon due consideration and consultation, hereby approves, adopts and
consents to the following resolution effective on the date written below:
RESOLVED: That the investment objective of the Fund be, and hereby
is, amended to read as follows:
The fund seeks a high level of current income by
investing primarily in real estate-related instruments.
As a secondary objective, the fund also seeks growth of
capital.
DATED: , 1997
GTE Service Corporation
By: ____________________________
Name:
Title:
Attest:
_____________________________