Fidelity Magellan Fund – ‘N-30D’ for 9/30/98

As of:  Monday, 11/23/98   ·   For:  9/30/98   ·   Accession #:  35331-98-8   ·   File #:  811-01193

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Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual or Semi-Annual Report Mailed to                51±   166K 
                          Shareholders                                           

Document Table of Contents

FIDELITY                                                                        
MAGELLAN(REGISTERED TRADEMARK)                                                  
FUND                                                                            

SEMIANNUAL REPORT                                                               
SEPTEMBER 30, 1998                                                              

(2 fidelity logo graphics)(registered trademark)                                

CONTENTS                                                                        

PRESIDENT'S MESSAGE     3    Ned Johnson on investing strategies.               

PERFORMANCE             4    How the fund has done over time.                   

FUND TALK               6    The manager's review of fund                       
            performance, strategy and outlook.

INVESTMENT CHANGES      10   A summary of major shifts in the fund's            
               investments over the past six months.

INVESTMENTS             11   A complete list of the fund's investments          
   with their market values.

FINANCIAL STATEMENTS    27   Statements of assets and liabilities,              
                operations, and changes in net assets,
          as well as financial highlights.

NOTES                   31   Notes to the financial statements.                 

REPORT OF INDEPENDENT   37   The auditors' opinion.                             
ACCOUNTANTS                                                                     

To reduce expenses and demonstrate respect for our environment, we              
have initiated a project through which we will begin eliminating                
duplicate copies of most financial reports and prospectuses to most             
households, even if they have more than one account in the fund. If             
additional copies of financial reports, prospectuses or historical              
account information are needed, please call 1-800-544-6666.                     

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE                   
SUBMITTED FOR THE GENERAL INFORMATION                                           
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR              
DISTRIBUTION TO PROSPECTIVE INVESTORS                                           
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.          

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED            
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,             
THE                                                                             
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO                   
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNTS              
INVESTED.                                                                       

NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.               
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND                
EXPENSES, CALL 1-800-544-8888 FOR A                                             
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.             

PRESIDENT'S MESSAGE                                                             

(photo_of_Edward_C_Johnson_3d)                                                  

DEAR SHAREHOLDER:                                                               
The stock and bond markets continued to be influenced by competing              
factors as the third quarter of 1998 ended. On the one hand, low                
inflation, low unemployment and moderate growth in the U.S. economy             
provided a foundation for positive returns. But growing concerns about          
U.S. corporate earnings, combined with fears about the health of the            
economies and financial markets in Japan, Russia and many emerging              
markets, led to a continuation of the volatility that has marked most           
of the year.                                                                    
While it's impossible to predict the future direction of the markets            
with any degree of certainty, there are certain basic principles that           
can help investors plan for their future needs.                                 
First, investors are encouraged to take a long-term view of their               
portfolios. If you can afford to leave your money invested through the          
inevitable up and down cycles of the financial markets, you will                
greatly reduce your vulnerability to any single decline. We know from           
experience, for example, that stock prices have gone up over longer             
periods of time, have significantly outperformed other types of                 
investments and have stayed ahead of inflation.                                 
Second, you can further manage your investing risk through                      
diversification. A stock mutual fund, for instance, is already                  
diversified, because it invests in many different companies. You can            
increase your diversification further by investing in a number of               
different stock funds, or in such other investment categories as                
bonds. If you have a short investment time horizon, you might want to           
consider moving some of your investment into a money market fund,               
which seeks income and a stable share price by investing in                     
high-quality, short-term investments. Of course, it's important to              
remember that there is no assurance that a money market fund will               
achieve its goal of maintaining a stable net asset value of $1.00 per           
share, and that these types of funds are neither insured nor                    
guaranteed by any agency of the U.S. government.                                
Finally, no matter what your time horizon or portfolio diversity, it            
makes good sense to follow a regular investment plan, investing a               
certain amount of money in a fund at the same time each month or                
quarter and periodically reviewing your overall portfolio. By doing             
so, you won't get caught up in the excitement of a rapidly rising               
market, nor will you buy all your shares at market highs. While this            
strategy - known as dollar cost averaging - won't assure a profit or            
protect you from a loss in a declining market, it should help you               
lower the average cost of your purchases.                                       
If you have questions, please call us at 1-800-544-8888. We are                 
available 24 hours a day, seven days a week to provide you the                  
information you need to make the investments that are right for you.            
Best regards,                                                                   
Edward C. Johnson 3d                                                            

PERFORMANCE: THE BOTTOM LINE                                                    

There are several ways to evaluate a fund's historical performance.             
You can look at the total percentage change in value, the average               
annual percentage change or the growth of a hypothetical $10,000                
investment. Total return reflects the change in the value of an                 
investment, assuming reinvestment of the fund's dividend income and             
capital gains (the profits earned upon the sale of securities that              
have grown in value).                                                           

CUMULATIVE TOTAL RETURNS                                                        
PERIODS ENDED SEPTEMBER         PAST 6   PAST 1  PAST 5   PAST 10               
30, 1998                        MONTHS   YEAR    YEARS    YEARS                 

FIDELITY MAGELLAN               -8.04%   4.61%   98.83%   395.34%               

FIDELITY MAGELLAN (INCL.        -10.80%  1.47%   92.86%   380.48%               
3.00% SALES CHARGE)                                                             

S&P 500 (registered trademark)  -6.97%   9.05%   147.93%  392.68%               

Growth Funds Average            -11.80%  -1.44%  98.73%   303.03%               

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage              
terms over a set period - in this case, six months, one year, five              
years or 10 years. For example, if you had invested $1,000 in a fund            
that had a 5% return over the past year, the value of your investment           
would be $1,050. You can compare the fund's returns to the performance          
of the Standard & Poor's 500 Index - a widely recognized unmanaged              
index of common stocks. To measure how the fund's performance stacked           
up against its peers, you can compare it to the growth funds average,           
which reflects the performance of mutual funds with similar objectives          
tracked by Lipper Analytical Services, Inc. The past six months                 
average represents a peer group of 1070 mutual funds. These benchmarks          
include reinvested dividends and capital gains, if any, and exclude             
the effect of sales charges.                                                    

AVERAGE ANNUAL TOTAL RETURNS                                                    
PERIODS ENDED SEPTEMBER    PAST 1  PAST 5  PAST 10                              
30, 1998                   YEAR    YEARS   YEARS                                

FIDELITY MAGELLAN          4.61%   14.74%  17.35%                               

FIDELITY MAGELLAN (INCL.   1.47%   14.04%  17.00%                               
3.00% SALES CHARGE)                                                             

S&P 500                    9.05%   19.91%  17.29%                               

Growth Funds Average       -1.44%  14.35%  14.57%                               

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and              
show you what would have happened if the fund had performed at a                
constant rate each year. (Note: Lipper calculates average annual total          
returns by annualizing each fund's total return, then taking an                 
arithmetic average. This may produce a slightly different figure than           
that obtained by averaging the cumulative total returns and                     
annualizing the result.)                                                        

$10,000 OVER 10 YEARS                                                           
Magellan                    S&P 500                   
00021                       SP001                     
1988/09/30       9700.00                    10000.00                        
1988/10/31       9902.34                    10278.00                        
1988/11/30       9768.79                    10131.02                        
1988/12/31       9960.74                    10308.32                        
1989/01/31      10768.81                    11062.89                        
1989/02/28      10593.59                    10787.42                        
1989/03/31      10908.99                    11038.77                        
1989/04/30      11457.33                    11611.68                        
1989/05/31      12062.24                    12081.95                        
1989/06/30      11957.58                    12013.09                        
1989/07/31      12962.25                    13097.87                        
1989/08/31      13301.32                    13354.59                        
1989/09/30      13531.56                    13299.83                        
1989/10/31      13106.67                    12991.28                        
1989/11/30      13322.25                    13256.30                        
1989/12/31      13405.60                    13574.45                        
1990/01/31      12541.02                    12663.60                        
1990/02/28      12798.60                    12826.96                        
1990/03/31      13125.62                    13166.88                        
1990/04/30      12794.12                    12837.71                        
1990/05/31      13932.07                    14089.38                        
1990/06/30      13992.62                    13993.57                        
1990/07/31      13834.25                    13948.80                        
1990/08/31      12478.77                    12687.82                        
1990/09/30      11686.91                    12069.93                        
1990/10/31      11542.51                    12018.03                        
1990/11/30      12415.89                    12794.39                        
1990/12/31      12801.20                    13151.35                        
1991/01/31      13696.07                    13724.75                        
1991/02/28      14885.28                    14706.07                        
1991/03/31      15390.87                    15061.96                        
1991/04/30      15447.84                    15098.11                        
1991/05/31      16328.66                    15750.35                        
1991/06/30      15369.16                    15028.98                        
1991/07/31      16323.76                    15729.33                        
1991/08/31      16825.54                    16102.12                        
1991/09/30      16761.90                    15833.21                        
1991/10/31      16987.09                    16045.38                        
1991/11/30      16147.53                    15398.75                        
1991/12/31      18053.32                    17160.36                        
1992/01/31      18061.21                    16841.18                        
1992/02/29      18426.96                    17060.12                        
1992/03/31      17927.02                    16727.44                        
1992/04/30      18192.78                    17219.23                        
1992/05/31      18367.08                    17303.61                        
1992/06/30      18043.57                    17045.78                        
1992/07/31      18549.94                    17742.95                        
1992/08/31      18147.66                    17379.22                        
1992/09/30      18355.83                    17584.30                        
1992/10/31      18485.24                    17645.84                        
1992/11/30      18952.22                    18247.57                        
1992/12/31      19319.68                    18472.01                        
1993/01/31      19828.66                    18627.18                        
1993/02/28      20242.59                    18880.51                        
1993/03/31      20984.59                    19278.89                        
1993/04/30      21190.02                    18812.34                        
1993/05/31      22025.21                    19316.51                        
1993/06/30      22332.36                    19372.53                        
1993/07/31      22578.72                    19295.04                        
1993/08/31      23906.51                    20026.32                        
1993/09/30      24165.66                    19872.11                        
1993/10/31      24181.66                    20283.47                        
1993/11/30      23384.99                    20090.77                        
1993/12/31      24083.44                    20333.87                        
1994/01/31      25035.22                    21025.22                        
1994/02/28      24851.67                    20455.44                        
1994/03/31      23699.33                    19563.58                        
1994/04/30      23937.28                    19814.00                        
1994/05/31      23661.52                    20138.95                        
1994/06/30      22634.91                    19645.54                        
1994/07/31      23392.48                    20289.92                        
1994/08/31      24500.50                    21121.80                        
1994/09/30      23863.30                    20604.32                        
1994/10/31      24670.43                    21067.92                        
1994/11/30      23318.14                    20300.62                        
1994/12/31      23647.36                    20601.68                        
1995/01/31      23406.64                    21135.88                        
1995/02/28      24719.99                    21959.55                        
1995/03/31      25643.93                    22607.57                        
1995/04/30      26836.92                    23273.37                        
1995/05/31      27587.16                    24203.60                        
1995/06/30      29688.47                    24765.85                        
1995/07/31      31967.54                    25587.09                        
1995/08/31      32244.87                    25651.31                        
1995/09/30      32835.09                    26733.80                        
1995/10/31      31995.99                    26638.36                        
1995/11/30      32707.09                    27807.78                        
1995/12/31      32355.12                    28343.36                        
1996/01/31      32821.74                    29308.17                        
1996/02/29      32607.24                    29579.85                        
1996/03/31      32934.63                    29864.71                        
1996/04/30      33145.37                    30304.91                        
1996/05/31      33295.17                    31086.48                        
1996/06/30      33264.04                    31204.92                        
1996/07/31      31716.47                    29826.28                        
1996/08/31      32516.94                    30455.32                        
1996/09/30      33819.93                    32169.35                        
1996/10/31      34620.40                    33056.58                        
1996/11/30      36861.72                    35555.32                        
1996/12/31      36136.36                    34850.97                        
1997/01/31      37722.51                    37028.46                        
1997/02/28      37216.20                    37318.76                        
1997/03/31      35934.73                    35785.34                        
1997/04/30      37538.80                    37921.72                        
1997/05/31      40216.81                    40230.40                        
1997/06/30      41881.97                    42032.72                        
1997/07/31      45396.28                    45377.26                        
1997/08/31      43376.93                    42835.23                        
1997/09/30      45929.87                    45181.31                        
1997/10/31      44365.91                    43672.26                        
1997/11/30      45230.68                    45693.84                        
1997/12/31      45745.58                    46478.41                        
1998/01/31      46240.16                    46992.46                        
1998/02/28      49745.38                    50381.56                        
1998/03/31      52251.86                    52961.59                        
1998/04/30      52852.07                    53494.39                        
1998/05/31      51807.74                    52574.82                        
1998/06/30      54015.05                    54710.41                        
1998/07/31      53611.03                    54127.74                        
1998/08/31      45308.98                    46301.95                        
1998/09/30      48048.41                    49268.06                        
IMATRL PRASUN   SHR__CHT 19980930 19981008 142354 R00000000000123               

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was                
invested in Fidelity Magellan Fund on September 30, 1988, and the               
current 3.00% sales charge was paid. As the chart shows, by September           
30, 1998, the value of the investment would have grown to $48,048 - a           
380.48% increase on the initial investment. For comparison, look at             
how the Standard & Poor's 500 Index did over the same period. With              
dividends and capital gains, if any, reinvested, the same $10,000               
would have grown to $49,268 - a 392.68% increase.                               

(checkmark)UNDERSTANDING                                                        
PERFORMANCE                                                                     
How a fund did yesterday is                                                     
no guarantee of how it will do                                                  
tomorrow. The stock market,                                                     
for example, has a history of                                                   
long-term growth and                                                            
short-term volatility. In turn, the                                             
share price and return of a                                                     
fund that invests in stocks will                                                
vary. That means if you sell                                                    
your shares during a market                                                     
downturn, you might lose                                                        
money. But if you can ride out                                                  
the market's ups and downs,                                                     
you may have a gain.                                                            

FUND TALK: THE MANAGER'S OVERVIEW                                               

MARKET RECAP                                                                    
While it may be a clich<UNDEF> to compare                                       
the performance of a volatile market                                            
to a roller coaster, few comparisons                                            
would be more appropriate for the                                               
ups and downs that equity investors                                             
experienced during the six-month                                                
period ending September 30, 1998.                                               
Consider these swings: On Friday,                                               
July 17, the Dow Jones Industrial                                               
Average - an index of 30 blue-chip                                              
stocks - reached a record high of                                               
9337.97. By the following Friday,                                               
it dropped over 400 points. On                                                  
August 31, the Dow plunged 512.61                                               
points - erasing all previous gains                                             
for the year. The next day, blue-chips                                          
roared back up 288.36. Other                                                    
skyrocketing rallies and precipitous                                            
drops include the record-setting                                                
one-day gain of 380.53 points on                                                
September 8, followed by a                                                      
275.75-point plummet on                                                         
September 9. Appropriately, the                                                 
Dow closed on September 30 with                                                 
a 237.90 loss, triggered by                                                     
investor disappointment over a                                                  
lower-than-hoped-for decrease in                                                
the Federal interest rate. At the                                               
controls of this see-sawing volatility                                          
were several drivers, including the                                             
continuing Asian and Russian                                                    
economic dilemmas, chaotic                                                      
emerging markets and concerns                                                   
over U.S. political leadership.                                                 
Despite these drawbacks, the U.S.                                               
economy demonstrated exceptional                                                
resiliency. Inflation remained benign,                                          
unemployment was at its lowest rate                                             
in decades and interest rates                                                   
continued to decline. For the period,                                           
the Dow was down -10.10%, while                                                 
the Standard & Poor's 500 Index                                                 
- a market-capitalization                                                       
weighted index of 500 widely held                                               
U.S. stocks - returned -6.97%.                                                  

(photograph of Robert Stansky)                                                  

An interview with Robert Stansky, Portfolio Manager of Fidelity                 
Magellan Fund                                                                   
Q. BOB, HOW HAS THE FUND PERFORMED?                                             
A. As I'm sure most Magellan shareholders realize, it's been a very             
tough past few months for investors in the U.S. stock market. The               
fund's performance looks like this: During the six-month period that            
ended September 30, 1998, Magellan Fund had a total return of -8.04%.           
Despite being in negative territory, that return beat the Lipper                
growth funds average, which was -11.80% during the same period. The             
fund's benchmark index, the Standard & Poor's 500 Index, returned               
-6.97%. For the 12-month period that ended September 30, the fund               
returned 4.61%, the growth funds average returned -1.44% and the S&P            
500 returned 9.05%.                                                             
Q. YOU MENTIONED THE RECENT MARKET VOLATILITY. WHAT WERE THE FACTORS            
BEHIND IT, AND HOW DID IT AFFECT THE FUND?                                      
A. The volatility we've experienced in recent months had its roots in           
last October's downdraft of the Asian markets. The economic and                 
financial crisis that began in the Far East - and later spread to               
other parts of the world - created serious global concerns about                
liquidity, or the ability of individuals and companies to convert               
assets to cash without significant losses, and credit risk, or the              
risk of borrowers defaulting on loans. The question that loomed over            
the U.S. market was the extent to which these factors would negatively          
affect the earnings of U.S. companies. At first, it was mostly worries          
about potential earnings shortfalls that caused stock prices to fall.           
Later in the period, however, we saw concrete evidence that these               
concerns were justified. Several large consumer food and personal               
products companies warned investors to lower their expectations                 
regarding future profits. As I've stated many times, stock prices tend          
to follow company earnings over time. And to the extent that earnings           
forecasts are revised downward, stock prices often will head that way           
as well. The market drop over the past three months effectively                 
negated gains made by U.S. stocks - and the fund - in the first half            
of 1998.                                                                        
Q. IN LIGHT OF THIS, HAVE YOU MADE CHANGES TO THE FUND?                         
A. Mainly, I took advantage of lower stock prices by buying more of             
the stocks I was most optimistic about. However, market volatility              
does not change my core strategy. As always, I am focused on                    
accurately forecasting corporate earnings over the next year or two. I          
invest in those companies whose earnings I believe will outpace the             
average earnings in the broad market and whose stocks are selling at            
reasonable valuations. At this point, there is still a healthy                  
selection of companies that fit these criteria, and they are the                
opportunities I've pursued.                                                     
Q. LET'S TAKE A CLOSER LOOK AT THE FUND'S INVESTMENTS. THE TECHNOLOGY           
SECTOR HAS RISEN AS A PERCENTAGE OF THE FUND'S INVESTMENTS FROM 15.3%           
SIX MONTHS AGO TO 21.6% ON SEPTEMBER 30. WHY?                                   
A. Technology names probably make up the bulk of those stocks I've              
been nibbling at since prices dropped so significantly, which accounts          
for part of the increase. At the end of the period, the technology              
sector remained among the most attractive in terms of its strong                
long-term unit growth and earnings potential. The rest of the increase          
is due to market appreciation of many of the fund's existing                    
technology investments over the past six months. The short list of              
stocks that have made the greatest contribution to the fund's returns           
during this period includes Microsoft, Dell Computer, Cisco Systems,            
America Online, EMC, Lucent Technologies and IBM.                               
Q. WHAT OTHER FACTORS INFLUENCED THE FUND'S PERFORMANCE?                        
A. Selected health care stocks such as Schering-Plough and                      
Warner-Lambert benefited from continued strong earnings outlooks,               
particularly relative to stocks in other sectors of the market.                 
Financial stocks were a double-edged sword. While the fund generally            
benefited from being underweighted in financials relative to the broad          
market and some of its peers, many of these stocks fell sharply during          
the period. A number of large U.S. financial institutions such as               
Citicorp and Chase Manhattan had significant overseas exposure.                 
Weakening global economies and potential credit losses raised very              
real concerns about future profit growth for these companies.                   
Q. ANY OTHER SIGNIFICANT DISAPPOINTMENTS?                                       
A. The biggest was Cendant, a services company that owns brands such            
as Avis car rentals, Howard Johnson hotels and Century 21 real estate.          
In mid-April, the company unexpectedly disclosed accounting                     
irregularities. Because Cendant's earnings had been overstated as a             
result, its future growth prospects immediately worsened                        
significantly. That led to heavy selling of the stock and a                     
substantial drop in its price. While this problem caught me by                  
surprise, accounting irregularities of this type within a company can           
be very difficult to detect.                                                    
Q. ON A DIFFERENT SUBJECT, THE NUMBER OF INDIVIDUAL HOLDINGS IN THE             
FUND HAS DECREASED FROM ABOUT 470 ON MARCH 31 TO ABOUT 350 ON                   
SEPTEMBER 30. WHAT'S BEHIND THIS?                                               
A. This is part of a strategy I've gradually been employing as market           
conditions have given me the opportunity. As I've reduced the number            
of overall holdings in the fund, I've increased the concentration of            
the fund's investments in the top 10 and top 50 largest holdings. This          
was a more difficult process when markets were generally rising, but            
the recent volatility has provided me the opportunity to buy more of            
my favorite stocks at attractive prices. Historical analysis I've done          
shows that the fund's largest holdings have had the strongest positive          
influence on its overall performance. Thus, I believe I can                     
incrementally improve Magellan's long-term performance by giving                
heavier weighting to my best ideas. As a result, the percentage of the          
fund's investments concentrated in its top 10 largest holdings has              
increased from 16.6% on March 31 to 21.8% on September 30. The                  
percentage of investments in the top 50 stocks has risen, too.                  
Finally, it's important to note that the fund remained well                     
diversified across more than 300 stocks in more than a dozen different          
industries at the end of the period.                                            
Q. BOB, WHAT'S YOUR PERSPECTIVE GOING FORWARD?                                  
A. As Magellan shareholders know, I don't predict the near-term                 
direction of the market. There is still a great deal of uncertainty             
about how the worldwide economic troubles will impact U.S. corporate            
profits; we'll learn more as companies report their third- and                  
fourth-quarter results. Over longer periods, stock prices generally             
follow earnings, and I will continue to focus on those companies that           
I believe can grow earnings faster than the overall market. The market          
backdrop - in terms of interest rates and inflation - at this point             
still appears relatively favorable. However, we all know that can               
change. If I can pinpoint companies with significant potential for              
earnings growth as well as companies that may be growing more slowly            
but whose stock valuations are historically low, I believe the fund             
has an excellent chance to outperform the market and its peers over             
the long term.                                                                  

THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO               
MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON           
THE COVER. THE MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED          
ON MARKET AND OTHER CONDITIONS.                                                 

(checkmark)FUND FACTS                                                           
GOAL: to increase the value                                                     
of the fund's shares over the                                                   
long term by investing mainly                                                   
in equity securities with growth                                                
potential                                                                       
FUND NUMBER: 021                                                                
TRADING SYMBOL: FMAGX                                                           
START DATE: May 2, 1963                                                         
SIZE: as of September 30, 1998,                                                 
more than $65.8 billion                                                         
MANAGER: Robert Stansky,                                                        
since 1996; manager, Fidelity                                                   
Growth Company Fund and                                                         
Fidelity Advisor Equity Growth,                                                 
1987-1996; Fidelity Emerging                                                    
Growth Fund, 1990-1991;                                                         
Fidelity Select Defense and                                                     
Aerospace Portfolio, 1984-                                                      
1987; joined Fidelity in 1983                                                   

BOB STANSKY ON INVESTING                                                        
IN A VOLATILE MARKET:                                                           
"Volatile market conditions don't                                               
change the fundamental way in                                                   
which I manage money. I believe                                                 
over the long run the best defense                                              
is a good offense. If I can find                                                
companies that are growing                                                      
earnings over a one-, two- or                                                   
three-year period, that are able to                                             
finance their growth and are                                                    
selling at attractive valuations, I've                                          
provided the fund with the                                                      
opportunity for capital                                                         
appreciation. That's opposed to                                                 
battening down the hatches and                                                  
investing in defensive-type stocks                                              
that may not fall as far as others in                                           
a down market. Stocks can make                                                  
strong gains over short periods,                                                
and I don't want to be standing on                                              
the sidelines when upside                                                       
potential is realized.                                                          
"The bottom line is that I don't                                                
time or predict the market; any                                                 
number of factors can make stocks                                               
rise or fall over the course of a day,                                          
week, month or even a year. But                                                 
over the long haul it all gets down                                             
to one thing: earnings. Companies                                               
that can grow their profits                                                     
significantly and whose stocks are                                              
fairly priced or undervalued have the                                           
best chance at appreciation. Those                                              
are the opportunities that will catch                                           
my eye time and time again,                                                     
whether the current direction of                                                
the market is up or down."                                                      

INVESTMENT CHANGES                                                              

                                                                [Download Table]

                                                                              
TOP TEN STOCKS AS OF SEPTEMBER 30, 1998                                       

                                         % OF FUND'S   % OF FUND'S INVESTMENTS
                                         INVESTMENTS   IN THESE STOCKS        
                                                       6 MONTHS AGO           

General Electric Co.                      3.9           3.5                   

Microsoft Corp.                           3.6           2.2                   

Intel Corp.                               2.1           1.0                   

Cisco Systems, Inc.                       2.0           1.1                   

Merck & Co., Inc.                         1.9           1.7                   

Wal-Mart Stores, Inc.                     1.8           1.4                   

Home Depot, Inc.                          1.8           1.4                   

MCI WorldCom, Inc.                        1.7           1.2                   

Lucent Technologies, Inc.                 1.5           0.8                   

America Online, Inc.                      1.5           0.4                   


                                                                [Download Table]

                                                                                 
TOP FIVE MARKET SECTORS AS OF SEPTEMBER 30,                                      
1998                                                                             

                                             % OF FUND'S  % OF FUND'S INVESTMENTS
                                             INVESTMENTS  IN THESE MARKET SECTORS
                                                          6 MONTHS AGO           

TECHNOLOGY                                    21.6         15.3                  

HEALTH                                        11.7         11.7                  

FINANCE                                       11.2         13.1                  

RETAIL & WHOLESALE                            9.3          8.6                   

INDUSTRIAL                                    7.0          8.1                   
MACHINERY &                                                                      
EQUIPMENT                                                                        


ASSET ALLOCATION (% OF FUND'S INVESTMENTS)                                      

AS OF SEPTEMBER 30, 1998 *                                                      
ROW: 1, COL: 1, VALUE: 93.59999999999999                                        
ROW: 1, COL: 2, VALUE: 6.4                                                      
STOCKS 93.6%                                                                    
SHORT-TERM                                                                      
INVESTMENTS 6.4%                                                                
*FOREIGN                                                                        
INVESTMENTS 4.8%                                                                

AS OF MARCH 31, 1998 **                                                         
ROW: 1, COL: 1, VALUE: 96.2                                                     
ROW: 1, COL: 2, VALUE: 3.8                                                      
STOCKS 96.2%                                                                    
SHORT-TERM                                                                      
INVESTMENTS 3.8%                                                                
**FOREIGN                                                                       
INVESTMENTS 8.6%                                                                

INVESTMENTS SEPTEMBER 30, 1998                                                  
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES                   

COMMON STOCKS - 93.6%                                                           

           SHARES       VALUE (NOTE 1)
                (000S)

AEROSPACE & DEFENSE -                                                           
1.3%                                                                            

AEROSPACE & DEFENSE -                                                           
1.2%                                                                            

AlliedSignal, Inc.               7,852,500   $ 277,782                          

Boeing Co.                       2,908,600    99,801                            

Gulfstream Aerospace             938,000      37,755                            
Corp. (a)                                                                       

Textron, Inc.                    1,211,400    73,441                            

United Technologies Corp.        3,821,900    292,136                           

                   780,915

DEFENSE ELECTRONICS - 0.0%                                                      

Raytheon Co. Class B             651,500      35,140                            

SHIP BUILDING & REPAIR -                                                        
0.1%                                                                            

General Dynamics Corp.           1,003,800    50,378                            

TOTAL AEROSPACE &                             866,433                           
DEFENSE                                                                         

BASIC INDUSTRIES - 1.7%                                                         

CHEMICALS & PLASTICS -                                                          
1.0%                                                                            

Air Products & Chemicals,        500,000      14,875                            
Inc.                                                                            

du Pont (E.I.) de Nemours        5,672,300    318,358                           
& Co.                                                                           

Hanna (M.A.) Co.                 1,358,325    15,281                            

Monsanto Co.                     3,982,800    224,530                           

Praxair, Inc.                    1,356,000    44,324                            

Schulman (A.), Inc.              174,625      2,467                             

Synetic, Inc. (a)(c)             1,157,582    48,040                            

Trivest 1992 Special Fund        26.6(d)      4,487                             
Ltd.                                                                            

                   672,362

IRON & STEEL - 0.2%                                                             

Aeroquip-Vickers, Inc.           541,500      15,568                            

Nucor Corp.                      2,692,400    109,379                           

                   124,947

METALS & MINING - 0.2%                                                          

Aluminum Co. of America          1,950,000    138,450                           

PACKAGING & CONTAINERS -                                                        
0.0%                                                                            

Owens-Illinois, Inc. (a)         742,700      18,568                            

PAPER & FOREST PRODUCTS -                                                       
0.3%                                                                            

Fort James Corp.                 737,500      24,199                            

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

BASIC INDUSTRIES -                                                              
CONTINUED                                                                       

PAPER & FOREST PRODUCTS -                                                       
CONTINUED                                                                       

Kimberly-Clark Corp.             2,889,800   $ 117,037                          

Louisiana-Pacific Corp.          2,032,600    41,414                            

                   182,650

TOTAL BASIC                                   1,136,977                         
INDUSTRIES                                                                      

CONSTRUCTION & REAL                                                             
ESTATE - 1.9%                                                                   

BUILDING MATERIALS - 1.0%                                                       

Centex Construction              577,800      19,717                            
Products, Inc.                                                                  

Lafarge Corp. (c)                4,418,943    126,216                           

Masco Corp.                      6,075,800    149,617                           

Owens-Corning                    1,779,100    57,932                            

Sherwin-Williams Co.             6,836,400    147,837                           

Southdown, Inc. (c)              2,199,792    98,991                            

USG Corp.                        2,413,000    104,362                           

                   704,672

CONSTRUCTION - 0.3%                                                             

Centex Corp.                     1,200,000    41,400                            

Clayton Homes, Inc.              1,262,687    22,097                            

Oakwood Homes Corp. (c)          3,719,200    48,815                            

Pulte Corp. (c)                  2,878,000    70,691                            

                   183,003

REAL ESTATE INVESTMENT                                                          
TRUSTS - 0.6%                                                                   

Boston Properties, Inc.          1,105,000    31,493                            

Crescent Real Estate             2,101,900    53,073                            
Equities, Inc.                                                                  

Equity Office Properties         2,086,400    51,117                            
Trust                                                                           

Equity Residential               1,271,500    53,641                            
Properties Trust (SBI)                                                          

Patriot American                 1,988,400    25,352                            
Hospitality, Inc. Unit                                                          

Public Storage, Inc.             1,136,300    30,467                            

Starwood Hotels & Resorts        4,400,327    134,210                           

                   379,353

TOTAL CONSTRUCTION                            1,267,028                         
& REAL ESTATE                                                                   

DURABLES - 3.2%                                                                 

AUTOS, TIRES, & ACCESSORIES                                                     
- 1.5%                                                                          

AutoZone, Inc. (a)               3,135,800    77,219                            

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

DURABLES - CONTINUED                                                            

AUTOS, TIRES, & ACCESSORIES                                                     
- CONTINUED                                                                     

Chrysler Corp.                   1,819,300   $ 87,099                           

Circuit City Stores, Inc. -      224,300      1,318                             
CarMax Group (a)                                                                

Danaher Corp.                    2,507,000    75,210                            

Ford Motor Co.                   11,504,000   539,969                           

Lear Corp. (a)                   1,316,300    57,588                            

Pep Boys-Manny, Moe &            1,155,000    15,448                            
Jack                                                                            

Republic Industries, Inc. (a)    10,379,927   151,158                           

                     1,005,009

CONSUMER DURABLES -                                                             
0.3%                                                                            

Minnesota Mining &               2,909,100    214,364                           
Manufacturing Co.                                                               

CONSUMER ELECTRONICS -                                                          
0.6%                                                                            

Black & Decker Corp. (c)         4,780,000    198,968                           

General Motors Corp.             500,000      18,406                            
Class H                                                                         

Matsushita Electric              614,000      8,335                             
Industrial Co. Ltd.                                                             

Maytag Corp.                     2,600,000    124,150                           

Whirlpool Corp.                  611,000      28,717                            

                   378,576

HOME FURNISHINGS - 0.4%                                                         

Leggett & Platt, Inc. (c)        12,416,700   257,647                           

TEXTILES & APPAREL - 0.4%                                                       

Liz Claiborne, Inc.              2,547,800    66,721                            

NIKE, Inc. Class B               3,398,500    125,107                           

Polo Ralph Lauren Corp.          1,799,000    35,868                            
Class A (a)(c)                                                                  

Tommy Hilfiger (a)               1,100,000    45,100                            

Warnaco Group, Inc. Class        800,000      18,500                            
A                                                                               

                   291,296

TOTAL DURABLES                                2,146,892                         

ENERGY - 6.2%                                                                   

ENERGY SERVICES - 0.5%                                                          

Halliburton Co.                  4,899,600    139,945                           

Schlumberger Ltd.                3,271,300    164,587                           

                   304,532

OIL & GAS - 5.7%                                                                

Amoco Corp.                      5,447,740    293,497                           

Anadarko Petroleum               7,434,100    292,253                           
Corp. (c)                                                                       

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

ENERGY - CONTINUED                                                              

OIL & GAS - CONTINUED                                                           

Apache Corp.                     2,659,715   $ 71,314                           

British Petroleum Co. PLC        13,400,000   194,968                           

Burlington Resources, Inc.       4,082,100    152,568                           

Canadian Natural                 2,702,600    44,127                            
Resources Ltd. (a)                                                              

Chevron Corp.                    3,034,200    255,062                           

Coastal Corp. (The)              5,384,000    181,710                           

Cooper Cameron Corp. (a)         1,671,500    47,011                            

Elf Aquitaine                    1,215,600    151,117                           

Exxon Corp.                      6,253,800    438,939                           

Mobil Corp.                      1,045,000    79,355                            

Occidental Petroleum Corp.       8,571,400    184,285                           

Phillips Petroleum Co.           2,888,300    130,335                           

Poco Petroleums Ltd. (a)         3,481,700    34,222                            

Renaissance Energy Ltd. (a)      1,425,000    19,451                            

Royal Dutch Petroleum Co.        9,600,000    457,200                           
(NY Registry Gilder                                                             
1.25)                                                                           

Texaco, Inc.                     5,852,000    366,847                           

Total SA Class B                 2,344,300    294,361                           

Unocal Corp.                     2,510,369    91,001                            

USX-Marathon Group               550,000      19,491                            

                     3,799,114

TOTAL ENERGY                                  4,103,646                         

FINANCE - 11.2%                                                                 

BANKS - 3.7%                                                                    

BANACCI SA de CV Class           3,840,000    3,382                             
B (a)                                                                           

Banc One Corp.                   1,835,357    78,232                            

BankAmerica Corp.                8,086,900    486,225                           

Chase Manhattan Corp.            5,870,000    253,878                           

Citicorp                         4,429,800    411,695                           

Comerica, Inc.                   775,000      42,480                            

National City Corp.              306,551      20,213                            

NationsBank Corp.                4,051,618    216,762                           

Norwest Corp.                    600,000      21,488                            

Societe Generale, France         485,000      53,720                            
Class A                                                                         

SunTrust Banks, Inc.             100,000      6,200                             

Synovus Finanical Corp.          1,709,775    33,768                            

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

FINANCE - CONTINUED                                                             

BANKS - CONTINUED                                                               

U.S. Bancorp                     6,111,600   $ 217,344                          

Wells Fargo & Co.                1,664,900    591,040                           

                     2,436,427

CREDIT & OTHER FINANCE -                                                        
1.3%                                                                            

American Express Co.             1,100,000    85,388                            

Associates First Capital         4,758,787    310,511                           
Corp.                                                                           

First Chicago NBD Corp.          200,000      13,700                            

Fleet Financial Group, Inc.      1,761,000    129,323                           

Greenpoint Financial Corp.       2,351,800    74,964                            

Household International,         2,620,395    98,265                            
Inc.                                                                            

Providian Financial Corp.        2,201,300    186,698                           

                   898,849

FEDERAL SPONSORED CREDIT                                                        
- 1.9%                                                                          

Fannie Mae                       12,048,000   774,084                           

Freddie Mac                      9,061,600    447,983                           

SLM Holding Corp.                481,950      15,633                            

                     1,237,700

INSURANCE - 3.3%                                                                

Aetna, Inc.                      404,900      28,141                            

AFLAC, Inc.                      4,604,800    131,525                           

Allstate Corp.                   11,813,000   492,454                           

American International           8,009,225    616,710                           
Group, Inc.                                                                     

Chubb Corp. (The)                1,100,000    69,300                            

General Re Corp.                 326,100      66,198                            

Hartford Financial Services      400,000      18,975                            
Group, Inc.                                                                     

Old Republic International       2,087,700    46,973                            
Corp.                                                                           

Progressive Corp.                1,624,700    183,185                           

Provident Companies, Inc.        238,000      8,033                             

Reliastar Financial Corp.        1,691,616    65,973                            

SunAmerica, Inc.                 4,237,450    258,484                           

UNUM Corp.                       4,333,400    215,316                           

                     2,201,267

SAVINGS & LOANS - 0.2%                                                          

Ahmanson (H.F.) & Co.            500,000      27,750                            

Charter One Financial, Inc.      2,590,440    64,437                            

Washington Mutual, Inc.          2,253,750    76,064                            

                   168,251

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

FINANCE - CONTINUED                                                             

SECURITIES INDUSTRY - 0.8%                                                      

Merrill Lynch & Co., Inc.        1,673,200   $ 79,268                           

Morgan Stanley, Dean             2,650,035    114,117                           
Witter, Discover & Co.                                                          

Travelers Group, Inc. (The)      8,815,389    330,577                           

                   523,962

TOTAL FINANCE                                 7,466,456                         

HEALTH - 11.7%                                                                  

DRUGS & PHARMACEUTICALS                                                         
- 8.6%                                                                          

American Home Products           14,295,200   748,711                           
Corp.                                                                           

Bristol-Myers Squibb Co.         9,080,800    943,268                           

Elan Corp. PLC ADR (a)           2,301,000    165,816                           

Lilly (Eli) & Co.                6,351,200    497,378                           

Merck & Co., Inc.                9,587,600    1,242,193                         

Pfizer, Inc.                     4,326,700    458,360                           

Rhone-Poulenc SA Class A         2,000,932    83,499                            

Sankyo Co. Ltd.                  1,514,000    33,459                            

Schering-Plough Corp.            8,328,600    862,531                           

Takeda Chemical Industries       2,130,000    56,891                            
Ltd.                                                                            

Warner-Lambert Co.               8,534,100    644,325                           

XOMA Corp. (a)                   3,030        7                                 

                     5,736,438

MEDICAL EQUIPMENT &                                                             
SUPPLIES - 2.2%                                                                 

Abbott Laboratories              1,470,700    63,884                            

Baxter International, Inc.       300,000      17,850                            

Becton, Dickinson & Co.          2,546,200    104,712                           

Boston Scientific Corp. (a)      4,731,000    243,055                           

Johnson & Johnson                7,900,000    618,175                           

McKesson Corp.                   2,265,000    207,531                           

Medtronic, Inc.                  3,009,000    174,146                           

St. Jude Medical, Inc. (a)       1,198,900    27,725                            

                     1,457,078

MEDICAL FACILITIES                                                              
MANAGEMENT - 0.9%                                                               

Carematrix Corp. (a)(c)          899,100      20,455                            

Columbia/HCA Healthcare          8,529,253    171,118                           
Corp.                                                                           

HEALTHSOUTH Corp. (a)            16,144,800   170,529                           

Humana, Inc. (a)                 900,000      14,738                            

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

HEALTH - CONTINUED                                                              

MEDICAL FACILITIES                                                              
MANAGEMENT - CONTINUED                                                          

Tenet Healthcare Corp. (a)       1,392,195   $ 40,026                           

United HealthCare Corp.          2,494,100    87,294                            

Universal Health Services,       788,100      32,903                            
Inc. Class B (a)                                                                

Wellpoint Health Networks,       1,000,000    56,063                            
Inc. (a)                                                                        

                   593,126

TOTAL HEALTH                                  7,786,642                         

INDUSTRIAL MACHINERY                                                            
& EQUIPMENT - 7.0%                                                              

ELECTRICAL EQUIPMENT -                                                          
4.8%                                                                            

Alcatel Alsthom                  1,356,000    115,204                           
Compagnie Generale                                                              
d'Electricite SA                                                                

Emerson Electric Co.             5,482,400    341,279                           

General Electric Co.             32,803,100   2,609,889                         

Loral Space &                    580,200      8,558                             
Communications Ltd. (a)                                                         

Philips Electronics NV           1,600,000    85,355                            
(Bearer)                                                                        

SLI, Inc. (a)                    519,000      8,012                             

                     3,168,297

INDUSTRIAL MACHINERY &                                                          
EQUIPMENT - 2.0%                                                                

Case Corp. (c)                   4,440,000    96,570                            

Caterpillar, Inc.                1,770,100    78,880                            

Cooper Industries, Inc.          1,150,000    46,863                            

Deere & Co.                      1,880,000    56,870                            

Illinois Tool Works, Inc.        6,400,000    348,800                           

Ingersoll-Rand Co.               902,850      34,252                            

Tyco International Ltd.          12,202,206   674,172                           

                     1,336,407

POLLUTION CONTROL - 0.2%                                                        

Republic Services, Inc.          2,000,000    39,000                            
Class A (a)                                                                     

Waste Management, Inc.           1,652,500    79,423                            

                   118,423

TOTAL INDUSTRIAL                              4,623,127                         
MACHINERY &                                                                     
EQUIPMENT                                                                       

MEDIA & LEISURE - 5.3%                                                          

BROADCASTING - 2.7%                                                             

CBS Corp.                        12,464,164   302,256                           

Chancellor Media Corp. (a)       100,000      3,338                             

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

MEDIA & LEISURE -                                                               
CONTINUED                                                                       

BROADCASTING - CONTINUED                                                        

Clear Channel                    7,849,680   $ 372,860                          
Communications, Inc. (a)                                                        

Comcast Corp. Class A            875,000      41,070                            
(special)                                                                       

Cox Communications, Inc.         844,700      46,142                            
Class A (a)                                                                     

Heftel Broadcasting Corp.        663,800      25,058                            
Class A (a)                                                                     

MediaOne Group, Inc. (a)         1,450,000    64,434                            

Metromedia Fiber                 164,200      5,378                             
Network, Inc. Class A                                                           

Nielsen Media Research,          472,966      4,848                             
Inc. (a)                                                                        

Tele-Communications, Inc.        1,936,201    75,754                            
(TCI Group) Series A (a)                                                        

Time Warner, Inc.                9,459,603    828,306                           

Univision Communications,        595,000      17,701                            
Inc. Class A (a)                                                                

USA Networks, Inc. (a)           1,196,980    23,266                            

                     1,810,411

ENTERTAINMENT - 1.2%                                                            

Alliance Gaming                  17,753       36                                
Corp. (a)(e)                                                                    

Disney (Walt) Co.                9,557,000    241,912                           

News Corp. Ltd. ADR              3,400,000    87,125                            

Viacom, Inc. Class B             8,254,400    478,755                           
(non-vtg.) (a)                                                                  

                   807,828

LODGING & GAMING - 0.4%                                                         

Extended Stay America,           4,828,503    38,628                            
Inc. (a)(c)                                                                     

Hilton Hotels Corp.              3,929,200    67,042                            

Host Marriott Corp. (a)(c)       13,228,400   167,835                           

Prime Hospitality Corp. (a)      1,577,600    11,043                            

Promus Hotel Corp. (a)           100,000      2,756                             

                   287,304

PUBLISHING - 0.4%                                                               

Gannet Co., Inc.                 2,010,400    107,682                           

Harcourt General, Inc.           848,900      41,066                            

Houghton Mifflin Co.             17,100       530                               

McGraw-Hill Companies,           163,000      12,918                            
Inc.                                                                            

Times Mirror Co. Class A         697,300      37,044                            

Tribune Co.                      823,100      41,412                            

                   240,652

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

MEDIA & LEISURE -                                                               
CONTINUED                                                                       

RESTAURANTS - 0.6%                                                              

Host Marriott Services           2,832,100   $ 25,843                           
Corp. (a)(c)                                                                    

McDonald's Corp.                 6,282,200    374,969                           

                   400,812

TOTAL MEDIA & LEISURE                         3,547,007                         

NONDURABLES - 4.2%                                                              

BEVERAGES - 0.9%                                                                

Coca-Cola Co. (The)              5,466,800    315,024                           

Coca-Cola Enterprises, Inc.      525,000      13,256                            

PepsiCo, Inc.                    9,656,800    284,272                           

Stroh Brewery Co.                21,307       76                                
warrants 7/1/01 (a)                                                             

                   612,628

FOODS - 0.1%                                                                    

Bestfoods                        800,000      38,750                            

Heinz (H.J.) Co.                 585,800      29,949                            

Sara Lee Corp.                   500,000      27,000                            

                  95,699

HOUSEHOLD PRODUCTS -                                                            
1.7%                                                                            

Avon Products, Inc.              2,346,000    65,835                            

Clorox Co.                       70,200       5,792                             

Estee Lauder Companies,          863,000      44,229                            
Inc.                                                                            

Gillette Co.                     9,775,800    373,924                           

Procter & Gamble Co.             6,247,300    443,168                           

Revlon, Inc. Class A (a)         200,000      6,363                             

Unilever NV (NY shares)          3,029,700    185,569                           

                     1,124,880

TOBACCO - 1.5%                                                                  

Philip Morris Companies,         21,410,200   986,207                           
Inc.                                                                            

TOTAL NONDURABLES                             2,819,414                         

RETAIL & WHOLESALE -                                                            
9.3%                                                                            

APPAREL STORES - 1.3%                                                           

Gap, Inc.                        11,355,800   599,018                           

Intimate Brands, Inc. Class      1,090,300    20,648                            
A                                                                               

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

RETAIL & WHOLESALE -                                                            
CONTINUED                                                                       

APPAREL STORES -                                                                
CONTINUED                                                                       

Lamonts Apparel, Inc. (a):                                                      

Class A                          433,431     $ 271                              

Class A warrants                 269,324      67                                
1/31/08                                                                         

Class B warrants                 85,594       21                                
1/31/08                                                                         

Limited, Inc. (The)              5,100,400    111,890                           

TJX Companies, Inc.              5,496,800    97,912                            

                   829,827

DRUG STORES - 0.7%                                                              

CVS Corp.                        9,776,286    428,324                           

Rite Aid Corp.                   1,008,200    35,791                            

                   464,115

GENERAL MERCHANDISE                                                             
STORES - 3.0%                                                                   

Consolidated Stores              2,519,068    49,437                            
Corp. (a)                                                                       

Costco Companies, Inc. (a)       855,500      40,529                            

Dayton Hudson Corp.              12,509,400   447,211                           

Federated Department             4,215,700    153,346                           
Stores, Inc. (a)                                                                

Ito-Yokado Co. Ltd.              88,000       4,186                             

J.C. Penney Co., Inc.            1,907,100    85,700                            

Neiman-Marcus Group,             668,700      14,461                            
Inc. (a)                                                                        

Wal-Mart Stores, Inc.            22,172,500   1,211,173                         

                     2,006,043

GROCERY STORES - 0.8%                                                           

Meyer (Fred), Inc. (a)           1,405,000    54,619                            

Safeway, Inc. (a)                10,954,400   508,010                           

                   562,629

RETAIL & WHOLESALE,                                                             
MISCELLANEOUS - 3.5%                                                            

AgriBioTech, Inc. (a)            1,137,500    12,655                            

Circuit City Stores, Inc. -      1,202,500    40,058                            
Circuit City Group                                                              

Home Depot, Inc.                 30,402,450   1,200,897                         

Lowe's Companies, Inc.           13,047,000   415,058                           

N2K, Inc.                        394,700      2,837                             

Office Depot, Inc. (a)           8,644,400    193,959                           

Pier 1 Imports, Inc.             600,000      4,500                             

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

RETAIL & WHOLESALE -                                                            
CONTINUED                                                                       

RETAIL & WHOLESALE,                                                             
MISCELLANEOUS - CONTINUED                                                       

Staples, Inc. (a)                12,582,900  $ 369,623                          

Tandy Corp.                      1,722,600    92,159                            

                     2,331,746

TOTAL RETAIL &                                6,194,360                         
WHOLESALE                                                                       

SERVICES - 1.5%                                                                 

ADVERTISING - 0.7%                                                              

Interpublic Group of             200,000      10,788                            
Companies, Inc.                                                                 

Omnicom Group, Inc.              8,151,576    366,821                           

Outdoor Systems, Inc. (a)        5,975,437    116,521                           

                   494,130

LEASING & RENTAL - 0.0%                                                         

Hertz Corp. Class A              203,000      8,399                             

PRINTING - 0.0%                                                                 

Wallace Computer                 575,300      10,319                            
Services, Inc.                                                                  

SERVICES - 0.8%                                                                 

AccuStaff, Inc. (a)              532,000      7,747                             

Assisted Living Concepts,        1,103,000    15,649                            
Inc. (a)(c)                                                                     

Cendant Corp. (a)                14,487,000   168,411                           

Manpower, Inc.                   2,955,900    60,411                            

Rentokil Initial PLC             10,566,935   65,207                            

Robert Half International,       3,338,950    144,201                           
Inc. (a)                                                                        

Service Corp. International      1,200,000    38,250                            

                   499,876

TOTAL SERVICES                                1,012,724                         

TECHNOLOGY - 21.6%                                                              

COMMUNICATIONS                                                                  
EQUIPMENT - 4.6%                                                                

3Com Corp. (a)                   2,866,700    86,180                            

Ascend Communications,           4,079,600    185,622                           
Inc. (a)                                                                        

Cisco Systems, Inc. (a)          21,980,200   1,358,651                         

Lucent Technologies, Inc.        14,817,724   1,023,349                         

Newbridge Networks               2,116,200    37,959                            
Corp. (a)                                                                       

Northern Telecom Ltd.            105,900      3,396                             

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

TECHNOLOGY - CONTINUED                                                          

COMMUNICATIONS                                                                  
EQUIPMENT - CONTINUED                                                           

OY Nokia AB:                                                                    

Series A                         1,200,000   $ 94,088                           

sponsored ADR                    3,577,000    280,571                           

                     3,069,816

COMPUTER SERVICES &                                                             
SOFTWARE - 8.0%                                                                 

America Online, Inc.             9,065,100    1,008,492                         

BMC Software, Inc.               4,817,700    289,363                           

Ceridian Corp. (a)               1,250,700    71,759                            

CompUSA, Inc. (a)                2,085,700    36,109                            

Computer Associates              5,052,900    186,957                           
International, Inc.                                                             

Compuware Corp. (a)              1,100,000    64,763                            

DST Systems, Inc. (a)            200,400      10,571                            

Electronic Arts, Inc. (a)        1,711,100    75,075                            

Equifax, Inc.                    870,170      31,054                            

First Data Corp.                 4,424,000    103,964                           

HBO & Co.                        6,000,000    173,250                           

IMS Health, Inc.                 1,418,900    87,883                            

Keane, Inc. (a)                  600,000      21,075                            

Lycos, Inc. (a)                  100,000      3,381                             

Microsoft Corp. (a)              22,097,700   2,432,128                         

Netscape Communications          1,370,000    29,969                            
Corp. (a)                                                                       

Oracle Corp. (a)                 17,315,600   504,317                           

Parametric Technology            3,405,000    34,263                            
Corp. (a)                                                                       

PeopleSoft, Inc. (a)             3,559,200    116,119                           

SAP AG sponsored ADR             417,000      16,237                            

Sportsline USA, Inc.             400,000      6,975                             

Yahoo, Inc. (a)                  400,000      51,800                            

                     5,355,504

COMPUTERS & OFFICE                                                              
EQUIPMENT - 5.5%                                                                

Comdisco, Inc. (c)               9,900,000    134,888                           

Compaq Computer Corp.            17,765,500   561,834                           

Dell Computer Corp. (a)          9,688,400    637,012                           

EMC Corp. (a)                    9,660,482    552,459                           

Fore Systems, Inc. (a)           1,400,000    23,275                            

Hewlett-Packard Co.              770,600      40,794                            

International Business           6,928,400    886,835                           
Machines Corp.                                                                  

Pitney Bowes, Inc.               4,875,600    266,025                           

Seagate Technology,              2,455,300    61,536                            
Inc. (a)                                                                        

Sun Microsystems, Inc. (a)       3,950,000    196,759                           

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

TECHNOLOGY - CONTINUED                                                          

COMPUTERS & OFFICE                                                              
EQUIPMENT - CONTINUED                                                           

Tech Data Corp. (a)              788,800     $ 39,489                           

Xerox Corp.                      3,200,000    271,200                           

                     3,672,106

ELECTRONIC INSTRUMENTS -                                                        
0.1%                                                                            

Thermo Electron Corp. (a)        2,733,200    41,169                            

Thermo Instruments               200,000      2,200                             
Systems, Inc. (a)                                                               

Waters Corp. (a)                 765,800      51,309                            

                  94,678

ELECTRONICS - 3.2%                                                              

Altera Corp. (a)                 200,000      7,025                             

Analog Devices, Inc. (a)         1,453,866    23,353                            

Intel Corp.                      16,408,800   1,407,055                         

Lattice Semiconductor            77,100       1,908                             
Corp. (a)                                                                       

Linear Technology Corp.          1,588,300    79,415                            

LSI Logic Corp. (a)              900,000      11,363                            

Maxim Integrated Products,       1,889,200    52,661                            
Inc. (a)                                                                        

Micron Technology, Inc. (a)      1,200,000    36,525                            

Motorola, Inc.                   1,309,400    55,895                            

Rambus, Inc. (a)                 800,000      51,200                            

Rohm Co. Ltd.                    483,000      45,948                            

Solectron Corp. (a)              1,430,100    68,645                            

Texas Instruments, Inc.          5,397,000    284,692                           

Xilinx, Inc. (a)                 100,000      3,500                             

                     2,129,185

PHOTOGRAPHIC EQUIPMENT -                                                        
0.2%                                                                            

Fuji Photo Film Co. Ltd.         3,032,000    104,280                           

TOTAL TECHNOLOGY                              14,425,569                        

TRANSPORTATION - 1.3%                                                           

AIR TRANSPORTATION - 0.2%                                                       

AMR Corp. (a)                    1,978,100    109,661                           

Delta Air Lines, Inc.            563,300      54,781                            

                   164,442

RAILROADS - 0.9%                                                                

Bombardier, Inc. Class B         8,700        95                                

Burlington Northern Santa        1,741,920    55,741                            
Fe Corp.                                                                        

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

TRANSPORTATION -                                                                
CONTINUED                                                                       

RAILROADS - CONTINUED                                                           

CSX Corp.                        6,895,600   $ 290,046                          

Norfolk Southern Corp.           8,409,100    244,389                           

                   590,271

TRUCKING & FREIGHT - 0.2%                                                       

CNF Transportation, Inc.         642,000      18,698                            

Landstar System, Inc. (a)(c)     901,200      25,403                            

Swift Transportation Co.,        3,333,250    57,915                            
Inc. (a)(c)                                                                     

                   102,016

TOTAL                                         856,729                           
TRANSPORTATION                                                                  

UTILITIES - 6.2%                                                                

CELLULAR - 0.4%                                                                 

AirTouch Communications,         1,990,000    113,430                           
Inc. (a)                                                                        

Nextel Communications,           1,700,000    34,319                            
Inc. Class A (a)                                                                

Teleglobe, Inc.                  400,000      10,410                            

Vodafone Group PLC               782,900      88,272                            
sponsored ADR                                                                   

                   246,431

ELECTRIC UTILITY - 0.4%                                                         

Duke Energy Corp.                1,382,000    91,471                            

PG&E Corp.                       5,413,048    172,879                           

                   264,350

GAS - 0.2%                                                                      

Enron Corp.                      2,581,300    136,325                           

TELEPHONE SERVICES - 5.2%                                                       

ALLTEL Corp.                     213,000      10,091                            

Ameritech Corp.                  3,018,400    142,997                           

AT&T Corp.                       12,367,280   722,713                           

Bell Atlantic Corp.              979,100      47,425                            

BellSouth Corp.                  5,228,700    393,460                           

GTE Corp.                        6,770,800    372,394                           

MCI WorldCom, Inc. (a)           23,027,341   1,125,461                         

Qwest Communications             1,100,000    34,444                            
International, Inc. (a)                                                         

SBC Communications, Inc.         7,332,800    325,851                           

Sprint Corp.                     1,444,700    104,018                           

Telebras sponsored ADR           1,338,300    92,343                            

COMMON STOCKS - CONTINUED                                                       

           SHARES       VALUE (NOTE 1)
                (000S)

UTILITIES - CONTINUED                                                           

TELEPHONE SERVICES -                                                            
CONTINUED                                                                       

Telecom Italia Mobile Spa        13,960,000  $ 81,455                           

Telefonica de Espana SA          813,000      29,696                            

                     3,482,348

TOTAL UTILITIES                               4,129,454                         

TOTAL COMMON                                  62,382,458                        
STOCKS                                                                          
(Cost $43,727,761)                                                              

PREFERRED STOCKS - 0.0%                                                         

CONVERTIBLE PREFERRED                                                           
STOCKS - 0.0%                                                                   

BASIC INDUSTRIES - 0.0%                                                         

CHEMICALS & PLASTICS -                                                          
0.0%                                                                            

Sealed Air Corp. Series A,       416,242      15,037                            
$2.00                                                                           

INDUSTRIAL MACHINERY                                                            
& EQUIPMENT - 0.0%                                                              

ELECTRICAL EQUIPMENT -                                                          
0.0%                                                                            

Ampex Corp. 8%                   631          984                               
non-cumulative (a)                                                              

TOTAL CONVERTIBLE                             16,021                            
PREFERRED STOCKS                                                                

NONCONVERTIBLE                                                                  
PREFERRED STOCKS -                                                              
0.0%                                                                            

INDUSTRIAL MACHINERY                                                            
& EQUIPMENT - 0.0%                                                              

ELECTRICAL EQUIPMENT -                                                          
0.0%                                                                            

Ampex Corp. 8%                   1,379        2,151                             
non-cumulative (a)                                                              

TOTAL PREFERRED                               18,172                            
STOCKS                                                                          
(Cost $21,748)                                                                  

COMMERCIAL MORTGAGE SECURITIES - 0.0%                                           

MOODY    PRINCIPAL              
'S       AMOUNT (000S)          
RATING                          
S                               
(UNAUD                          
ITED)                           

Bardell Associates Note -        $ 4,278      4,545                             
Trust                                                                           
12.5%, 11/1/08 (e)                                                              
(Cost $4,349)                                                                   

CASH EQUIVALENTS - 6.4%                                                         

              MATURITY      VALUE (NOTE 1)
      AMOUNT (000S) (000S)

Investments in repurchase        $ 1,864,146   $ 1,863,864                      
agreements (U.S.                                                                
Treasury obligations), in                                                       
a joint trading account at                                                      
5.44%,                                                                          
dated 9/30/98 due                                                               
10/1/98                                                                         

SHARES        

Taxable Central Cash             2,424,151,337 2,424,151                        
Fund (b)                                                                        

TOTAL CASH                                     4,288,015                        
EQUIVALENTS                                                                     
(Cost $4,288,015)                                                               

TOTAL INVESTMENT                               $ 66,693,190                     
IN SECURITIES -                                                                 
100%                                                                            
(Cost $48,041,873)                                                              

LEGEND                                                                          
(a) Non-income producing                                                        
(b) At period end, the seven-day yield on the Taxable Central Cash              
Fund was 5.36%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          
(c) Affiliated company (see Note 6 of Notes to Financial Statements).           
(d) Share amount represents number of units held.                               
(e) Restricted securities - Investment in securities not registered             
under the Securities Act of 1933 (see Note 2 of Notes to Financial              
Statements).                                                                    

Additional information on each holding is as follows:                           

SECURITY             ACQUISTION   ACQUISITION                                   
DATE         COST (000S)              

Alliance Gaming      7/28/98      $ -                                           
Corp.                                                                         

Bardell Associates   4/19/94      $ 4,349                                       
Note Trust 12.5%,                                                             
11/1/08                                                                       

INCOME TAX INFORMATION                                                          
At September 30, 1998, the aggregate cost of investment securities for          
income tax purposes was $48,087,491,000. Net unrealized appreciation            
aggregated $18,605,699,000, of which $21,131,111,000 related to                 
appreciated investment securities and $2,525,412,000 related to                 
depreciated investment securities.                                              

FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             

                                                        [Enlarge/Download Table]

                                                                                             
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) SEPTEMBER 30, 1998                           

ASSETS                                                                                       

INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE                         $ 66,693,190
AGREEMENTS OF $1,863,864) (COST $48,041,873) -                                               
SEE ACCOMPANYING SCHEDULE                                                                    

CASH                                                                              1,732      

RECEIVABLE FOR INVESTMENTS SOLD                                                   315,480    

RECEIVABLE FOR FUND SHARES SOLD                                                   59,373     

DIVIDENDS RECEIVABLE                                                              72,186     

INTEREST RECEIVABLE                                                               9,689      

OTHER RECEIVABLES                                                                 5,310      

 TOTAL ASSETS                                                                     67,156,960 

LIABILITIES                                                                                  

PAYABLE FOR INVESTMENTS PURCHASED                                   $ 1,177,181              

PAYABLE FOR FUND SHARES REDEEMED                                     112,794                 

ACCRUED MANAGEMENT FEE                                               22,661                  

OTHER PAYABLES AND ACCRUED EXPENSES                                  11,273                  

 TOTAL LIABILITIES                                                                1,323,909  

NET ASSETS                                                                       $ 65,833,051

NET ASSETS CONSIST OF:                                                                       

PAID IN CAPITAL                                                                  $ 45,314,135

UNDISTRIBUTED NET INVESTMENT INCOME                                               246,239    

ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON                             1,620,172  
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS                                                

NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS                         18,652,505 
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES                                             

NET ASSETS, FOR 675,075 SHARES OUTSTANDING                                       $ 65,833,051

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE                                    $97.52     
($65,833,051 (DIVIDED BY) 675,075 SHARES)                                                    

MAXIMUM OFFERING PRICE PER SHARE (100/97.00 OF $97.52)                            $100.54    


STATEMENT OF OPERATIONS                                                         

                                                        [Enlarge/Download Table]

                                                                                      
AMOUNTS IN THOUSANDS  SIX MONTHS ENDED SEPTEMBER 30, 1998                             

INVESTMENT INCOME                                                        $ 385,684    
DIVIDENDS (INCLUDING $10,453 RECEIVED FROM                                            
AFFILIATED ISSUERS)                                                                   

INTEREST                                                                  76,169      

 TOTAL INCOME                                                             461,853     

EXPENSES                                                                              

MANAGEMENT FEE                                             $ 211,873                  
BASIC FEE                                                                             

 PERFORMANCE ADJUSTMENT                                     (58,099)                  

TRANSFER AGENT FEES                                         62,525                    

ACCOUNTING FEES AND EXPENSES                                481                       

NON-INTERESTED TRUSTEES' COMPENSATION                       214                       

CUSTODIAN FEES AND EXPENSES                                 1,401                     

REGISTRATION FEES                                           610                       

AUDIT                                                       263                       

LEGAL                                                       123                       

MISCELLANEOUS                                               22                        

 TOTAL EXPENSES BEFORE REDUCTIONS                           219,413                   

 EXPENSE REDUCTIONS                                         (5,767)       213,646     

NET INVESTMENT INCOME                                                     248,207     

REALIZED AND UNREALIZED GAIN (LOSS)                                                   
NET REALIZED GAIN (LOSS) ON:                                                          

 INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF          1,716,288                 
$105,644 ON SALES OF INVESTMENTS IN AFFILIATED ISSUERS)                               

 FOREIGN CURRENCY TRANSACTIONS                              (1,085)       1,715,203   

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:                              

 INVESTMENT SECURITIES                                      (7,763,165)               

 ASSETS AND LIABILITIES IN FOREIGN CURRENCIES               1,458         (7,761,707) 

NET GAIN (LOSS)                                                           (6,046,504) 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING                          $ (5,798,297)
FROM OPERATIONS                                                                       


STATEMENT OF CHANGES IN NET ASSETS                                              

                                                        [Enlarge/Download Table]

                                                                                       
AMOUNTS IN THOUSANDS                                    SIX MONTHS ENDED  YEAR ENDED   
                                                        SEPTEMBER 30,     MARCH 31,    
                                                        1998              1998         

INCREASE (DECREASE) IN NET ASSETS                                                      

OPERATIONS                                              $ 248,207         $ 474,821    
NET INVESTMENT INCOME                                                                  

 NET REALIZED GAIN (LOSS)                                1,715,203         4,386,409   

 CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION)    (7,761,707)       17,839,293  

 NET INCREASE (DECREASE) IN NET ASSETS RESULTING         (5,798,297)       22,700,523  
FROM OPERATIONS                                                                        

DISTRIBUTIONS TO SHAREHOLDERS                            (132,542)         (794,010)   
FROM NET INVESTMENT INCOME                                                             

 FROM NET REALIZED GAIN                                  (1,736,276)       (3,324,791) 

 TOTAL DISTRIBUTIONS                                     (1,868,818)       (4,118,801) 

SHARE TRANSACTIONS                                       6,444,543         11,459,995  
NET PROCEEDS FROM SALES OF SHARES                                                      

 REINVESTMENT OF DISTRIBUTIONS                           1,838,256         4,050,132   

 COST OF SHARES REDEEMED                                 (6,750,918)       (13,367,016)

 NET INCREASE (DECREASE) IN NET ASSETS RESULTING         1,531,881         2,143,111   
FROM SHARE TRANSACTIONS                                                                

  TOTAL INCREASE (DECREASE) IN NET ASSETS                (6,135,234)       20,724,833  

NET ASSETS                                                                             

 BEGINNING OF PERIOD                                     71,968,285        51,243,452  

 END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT  $ 65,833,051      $ 71,968,285 
INCOME OF $246,239 AND $152,096, RESPECTIVELY)                                         

OTHER INFORMATION                                                                      
SHARES                                                                                 

 SOLD                                                    60,562            119,540     

 ISSUED IN REINVESTMENT OF DISTRIBUTIONS                 17,018            44,167      

 REDEEMED                                                (63,887)          (141,304)   

 NET INCREASE (DECREASE)                                 13,693            22,403      


FINANCIAL HIGHLIGHTS                                                            

                                                        [Enlarge/Download Table]

                                                                                          
                      SIX MONTHS ENDED            YEARS ENDED MARCH 31,                   
                          SEPTEMBER 30,                                                   

                              1998        1998      1997      1996      1995      1994    

SELECTED PER-SHARE DATA                                                                   

NET ASSET VALUE, BEGINNING    $ 108.82    $ 80.20   $ 87.52   $ 72.44   $ 69.72   $ 68.44 
OF PERIOD                                                                                 

INCOME FROM INVESTMENT                                                                    
OPERATIONS                                                                                

 NET INVESTMENT INCOME         .37 D       .73 D     1.38 D    .79       .27       .61    

 NET REALIZED AND              (8.85)      34.35     5.25      19.57     5.22      7.92   
 UNREALIZED GAIN (LOSS)                                                                   

 TOTAL FROM INVESTMENT         (8.48)      35.08     6.63      20.36     5.49      8.53   
 OPERATIONS                                                                               

LESS DISTRIBUTIONS                                                                        

 FROM NET INVESTMENT           (.20)       (1.25)    (1.10)    (.59)     (.14)     (.75)  
 INCOME                                                                                   

 FROM NET REALIZED GAIN        (2.62)      (5.21)    (12.85)   (4.69)    (2.63)    (6.50) 

 TOTAL DISTRIBUTIONS           (2.82)      (6.46)    (13.95)   (5.28)    (2.77)    (7.25) 

NET ASSET VALUE, END          $ 97.52     $ 108.82  $ 80.20   $ 87.52   $ 72.44   $ 69.72 
OF PERIOD                                                                                 

TOTAL RETURN B, C              (8.04)%     45.41%    9.11%     28.43%    8.21%     12.94% 

RATIOS AND SUPPLEMENTAL DATA                                                              

NET ASSETS, END OF PERIOD     $ 65,833    $ 71,968  $ 51,243  $ 56,179  $ 39,803  $ 33,119
(IN MILLIONS)                                                                             

RATIO OF EXPENSES TO           .60% A      .62%      .66%      .95%      .99%      1.00%  
AVERAGE NET ASSETS                                                                        

RATIO OF EXPENSES TO           .59% A, E   .61% E    .64% E    .92% E    .96% E    .99% E 
AVERAGE NET ASSETS AFTER                                                                  
EXPENSE REDUCTIONS                                                                        

RATIO OF NET INVESTMENT        .68% A      .77%      1.75%     .95%      .39%      1.07%  
INCOME TO AVERAGE                                                                         
NET ASSETS                                                                                

PORTFOLIO TURNOVER RATE        37% A       34%       67%       155%      120%      132%   


A ANNUALIZED                                                                    
B THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT              
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO                   
FINANCIAL STATEMENTS).                                                          
C TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR                
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.                               
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE          
SHARES OUTSTANDING DURING THE PERIOD.                                           
E FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD              
PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES             
(SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).                                  

NOTES TO FINANCIAL STATEMENTS                                                   
For the period ended September 30, 1998                                         

1. SIGNIFICANT ACCOUNTING POLICIES.                                             
Fidelity Magellan Fund (the fund) 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 and is authorized to issue an unlimited number of shares.                 
Effective at the close of business on September 30, 1997, the fund was          
closed to new accounts. The financial statements have been prepared in          
conformity with generally accepted accounting principles which require          
management to make certain estimates and assumptions at the date of             
the financial statements. The following summarizes the significant              
accounting policies of the fund:                                                
SECURITY VALUATION. Securities for which exchange quotations are                
readily available are valued at the last sale price, or if no sale              
price, at the closing bid price. Foreign securities are valued based            
on quotations from the principal market in which such securities are            
normally traded. If trading or events occurring in other markets after          
the close of the principal market in which foreign securities are               
traded, and before the close of business of the fund, are expected to           
materially affect the value of those securities, then they are valued           
at their fair value taking this trading or these events into account.           
Fair value is determined in good faith under consistently applied               
procedures under the general supervision of the Board of Trustees.              
Securities (including restricted securities) for which exchange                 
quotations are not readily available (and in certain cases debt                 
securities which trade on an exchange) are valued primarily using               
dealer-supplied valuations or at their fair value. Short-term                   
securities with remaining maturities of sixty days or less for which            
quotations are not readily available are valued at amortized cost or            
original cost plus accrued interest, both of which approximate current          
value.                                                                          
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are            
maintained in U.S. dollars. Investment securities and other assets and          
liabilities denominated in a foreign currency are translated into U.S.          
dollars at the prevailing rates of exchange at period end. Purchases            
and sales of securities, income receipts and expense payments are               
translated into U.S. dollars at the prevailing exchange rate on the             
respective dates of the transactions.                                           
Net realized gains and losses on foreign currency transactions                  
represent net gains and losses from sales and maturities of foreign             
currency contracts, disposition of foreign currencies, the difference           
between the amount of net investment income accrued and the U.S.                
dollar amount actually received, and gains and losses between trade             
date and settlement on purchases and sales of securities. The effects           
of changes in foreign currency exchange rates on investments in                 
securities are included with the net realized and unrealized gain or            
loss on investment securities.                                                  
INCOME TAXES. As a qualified regulated investment company under                 
Subchapter M of the Internal Revenue Code, the fund is not subject to           
income taxes to the extent that it distributes substantially all of             
its                                                                             

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED                                  
INCOME TAXES - CONTINUED                                                        
taxable income for its fiscal year. The schedule of investments                 
includes information regarding income taxes under the caption "Income           
Tax Information."                                                               
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend               
date, except certain dividends from foreign securities where the                
ex-dividend date may have passed, are recorded as soon as the fund is           
informed of the ex-dividend date. Non-cash dividends included in                
dividend income, if any, are recorded at the fair market value of the           
securities received. Interest income is accrued as earned. Investment           
income is recorded net of foreign taxes withheld where recovery of              
such taxes is uncertain.                                                        
DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the          
Plan) non-interested Trustees must defer receipt of a portion of, and           
may elect to defer receipt of an additional portion of, their annual            
compensation. Deferred amounts are treated as though equivalent dollar          
amounts had been invested in shares of the fund or are invested in a            
cross-section of other Fidelity funds. Deferred amounts remain in the           
fund until distributed in accordance with the Plan.                             
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the                
ex-dividend date.                                                               
Income and capital gain distributions are determined in accordance              
with income tax regulations which may differ from generally accepted            
accounting principles. These differences, which may result in                   
distribution reclassifications, are primarily due to differing                  
treatments for litigation proceeds, foreign currency transactions,              
partnerships and losses deferred due to wash sales. The fund also               
utilized earnings and profits distributed to shareholders on                    
redemption of shares as a part of the dividends paid deduction for              
income tax purposes.                                                            
Permanent book and tax basis differences relating to shareholder                
distributions will result in reclassifications to paid in capital.              
Undistributed net investment income and accumulated undistributed net           
realized gain (loss) on investments and foreign currency transactions           
may include temporary book and tax basis differences which will                 
reverse in a subsequent period. Any taxable income or gain remaining            
at fiscal year end is distributed in the following year.                        
SECURITY TRANSACTIONS. Security transactions are accounted for as of            
trade date. Gains and losses on securities sold are determined on the           
basis of identified cost.                                                       

2. OPERATING POLICIES.                                                          
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency            
contracts to facilitate transactions in foreign-denominated                     
securities. Losses may arise from changes in the value of the foreign           
currency or if the counterparties do not perform under the contracts'           
terms. The U.S. dollar value of foreign currency contracts is                   
determined using                                                                

2. OPERATING POLICIES - CONTINUED                                               
FOREIGN CURRENCY CONTRACTS - CONTINUED                                          
contractual currency exchange rates established at the time of each             
trade.                                                                          
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the             
Securities and Exchange Commission (the SEC), the fund, along with              
other affiliated entities of Fidelity Management & Research Company             
(FMR), may transfer uninvested cash balances into one or more joint             
trading accounts. These balances are invested in one or more                    
repurchase agreements for U.S. Treasury or Federal Agency obligations.          
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency           
securities are transferred to an account of the fund, or to the Joint           
Trading Account, at a bank custodian. The securities are                        
marked-to-market daily and maintained at a value at least equal to the          
principal amount of the repurchase agreement (including accrued                 
interest). FMR, the fund's investment adviser, is responsible for               
determining that the value of the underlying securities remains in              
accordance with the market value requirements stated above.                     
TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by             
the SEC, the fund may invest in the Taxable Central Cash Fund (the              
Cash Fund) managed by Fidelity Investments Money Management, Inc., an           
affiliate of FMR. The Cash Fund is an open-end money market fund                
available only to investment companies and other accounts managed by            
FMR and its affiliates. The Cash Fund seeks preservation of capital,            
liquidity, and current income by investing in U.S. Treasury securities          
and repurchase agreements for these securities. Income distributions            
from the Cash Fund are declared daily and paid monthly from net                 
interest income. Income distributions earned by the fund are recorded           
as interest income in the accompanying financial statements.                    
WHEN-ISSUED SECURITIES. The fund may purchase or sell securities on a           
when-issued basis. Payment and delivery may take place a month or more          
after the date of the transaction. The price of the underlying                  
securities is fixed at the time the transaction is negotiated. The              
fund may receive compensation for interest forgone in the purchase of           
a when-issued security. With respect to purchase commitments, the fund          
identifies securities as segregated in its custodial records with a             
value at least equal to the amount of the commitment. Losses may arise          
due to changes in the market value of the underlying securities, if             
the counterparty does not perform under the contract, or if the issuer          
does not issue the securities due to political, economic, or other              
factors.                                                                        
RESTRICTED SECURITIES. The fund is permitted to 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                                                         

2. OPERATING POLICIES - CONTINUED                                               
RESTRICTED SECURITIES - CONTINUED                                               
sale at an acceptable price may be difficult. At the end of the                 
period, restricted securities (excluding 144A issues) amounted to               
$4,581,000 or 0% of net assets.                                                 

3. PURCHASES AND SALES OF INVESTMENTS.                                          
Purchases and sales of securities, other than short-term securities,            
aggregated $12,627,139,000 and $13,809,041,000, respectively.                   

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.                                 
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a                
monthly basic fee that is calculated on the basis of a group fee rate           
plus a fixed individual fund fee rate applied to the average net                
assets of the fund. The group fee rate is the weighted average of a             
series of rates and is based on the monthly average net assets of all           
the mutual funds advised by FMR. The rates ranged from .2500% to                
.5200% for the period. The annual individual fund fee rate is .30%. In        
the event that these rates were lower than the contractual rates in             
effect during the period, FMR voluntarily implemented the above rates,          
as they resulted in the same or a lower management fee. The basic fee           
is subject to a performance adjustment (up to a maximum of                      
(plus/minus).20% of the fund's average net assets over the performance          
period) based on the fund's investment performance as compared to the           
appropriate index over a specified period of time. For the period, the          
management fee was equivalent to an annualized rate of .42% of average          
net assets after the performance adjustment.                                    
SALES LOAD. For the period, Fidelity Distributors Corporation (FDC),            
an affiliate of FMR and the general distributor of the fund, received           
sales charges of $4,054,000 on sales of shares of the fund of which             
$4,044,000 was retained.                                                        
TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an                   
affiliate of FMR, is the fund's transfer, dividend disbursing and               
shareholder servicing agent. FSC receives account fees and asset-based          
fees that vary according to account size and type of account. FSC pays          
for typesetting, printing and mailing of all shareholder reports,               
except proxy statements. For the period, the transfer agent fees were           
equivalent to an annualized rate of .17% of average net assets.                 
ACCOUNTING FEES. FSC maintains the fund's accounting records. The fee           
is based on the level of average net assets for the month plus                  
out-of-pocket expenses.                                                         
BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio               
transactions with brokerage firms which are affiliates of FMR. The              
commissions paid to these affiliated firms were $2,003,000 for the              
period.                                                                         

5. EXPENSE REDUCTIONS.                                                          
FMR has directed certain portfolio trades to brokers who paid a                 
portion of the fund's expenses. For the period, the fund's expenses             
were reduced by $3,315,000 under this arrangement.                              

5. EXPENSE REDUCTION - CONTINUED                                                
In addition, the fund has entered into arrangements with its custodian          
and transfer agent whereby credits realized as a result of uninvested           
cash balances were used to reduce a portion of the fund's expenses.             
During the period, the fund's custodian and transfer agent fees were            
reduced by $4,000 and $2,448,000, respectively, under these                     
arrangements.                                                                   

6. TRANSACTIONS WITH AFFILIATED COMPANIES.                                      
An affiliated company is a company in which the fund has ownership of           
at least 5% of the voting securities. Transactions during the period            
with companies which are or were affiliates are as follows:                     

SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES                               

AMOUNTS IN THOUSANDS           PURCHASE SALES    DIVIDEND VALUE                 
AFFILIATE                      COST     COST     INCOME                         
Aeroquip-Vickers, Inc.         $-       $ 1,280  $ 317    $ -                   
Anadarko Petroleum Corp.        -       28,373   827      292,253               
Assisted Living Concepts, Inc.  -       -        -        15,649                
Black & Decker Corp.            8,727   26,391   1,281    198,968               
Canadian Natural Resources Ltd. -       30,868   -        -                     
Carematrix Corp.                -       -        -        20,455                
Case Corp.                      -       58,511   542      96,570                
Comdisco, Inc.                  -       4,030    524      134,888               
Extended Stay America, Inc.     -       -        -        38,628                
Halter Marine Group, Inc.       -       1,222    -        -                     
Hanna (M.A.) Co.                -       6,522    634      -                     
Host Marriott Services Corp.    -       1,773    -        25,843                
Host Marriott Corp.             -       15,592   -        167,835               
IDEX Corp.                      -       2,015    440      -                     
Lafarge Corp.                   1,234   14,000   1,172    126,216               
Landstar System, Inc.           -       -        -        25,403                
Leggett & Platt, Inc.           -       4,659    2,003    257,647               
Oakwood Homes Corp.             -       -        74       48,815                
Omnicom Group, Inc.             -       269      1,063    -                     
Polo Ralph Lauren Corp. Class A 1,429   -        -        35,868                
Prime Hospitality Corp.         -       4,950    -        -                     
Pulte Corp.                     -       19,285   279      70,691                
Renaissance Energy Ltd.         -       -        -        -                     
Smith (A.O.) Corp. Class B      -       10,173   303      -                     
Southdown, Inc.                 9,348   21,131   447      98,991                
Swift Transportation Co., Inc.  -       2,763    -        57,915                
Synetic, Inc.                   -       -        -        48,040                
Trinity Industries, Inc.        -       29,852   547      -                     
UCAR International, Inc.        -       18,986   -        -                     
USG Corp.                       -       -        -        -                     
TOTALS                          $20,738 $302,645 $10,453  $1,760,675            

7. LITIGATION                                                                   
In August 1998, the NGC Asbestos Disease and Property Damage                    
Settlement Trust commenced an action against FMR and other unrelated            
parties. The complaint alleges that during the reorganization of                
National Gypsum Company, the defendants (including FMR acting on                
behalf of the fund and another) failed to disclose information                  
material to the valuation of the reorganized entity. FMR denies the             
allegations and intends to defend the lawsuit vigorously.                       

REPORT OF INDEPENDENT ACCOUNTANTS                                               

To the Trustees and the Shareholders of Fidelity Magellan 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 Magellan Fund at September 30, 1998, and the results of its            
operations, the changes in its net assets and the financial highlights          
for the periods indicated, in conformity with generally accepted                
accounting principles. These financial statements and financial                 
highlights (hereafter referred to as "financial statements") are the            
responsibility of the Fidelity Magellan 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 generally accepted auditing standards             
which 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 September 30, 1998 by correspondence with the                  
custodian                                                                       
and brokers, provide a reasonable basis for the opinion expressed               
above.                                                                          

/s/PricewaterhouseCoopers LLP                                                   
PricewaterhouseCoopers LLP                                                      
Boston, Massachusetts                                                           
October 28, 1998                                                                

MANAGING YOUR INVESTMENTS                                                       

Fidelity offers several ways to conveniently manage your personal               
investments via your telephone or PC. You can access your account               
information, conduct trades and research your investments 24 hours a            
day.                                                                            

BY PHONE                                                                        
Fidelity TouchTone Xpress(registered trademark) provides a single               
toll-free number to access account balances, positions, quotes and              
trading. It's easy to navigate the service, and on your first call,             
the system will help you create a personal identification number (PIN)          
for security.                                                                   

(PHONE_GRAPHIC)TOUCHTONE XPRESS                                                 
1-800-544-5555                                                                  
PRESS                                                                           
1 For mutual fund and brokerage trading.                                        
2 For quotes.*                                                                  
3 For account balances and holdings.                                            
4 To review orders and mutual fund activity.                                    
5 To change your PIN.                                                           
*0 To speak to a Fidelity representative.                                       

BY PC                                                                           
Fidelity's Web site on the Internet provides a wide range of                    
information, including daily financial news, fund performance,                  
interactive planning tools and news about Fidelity products and                 
services.                                                                       

(PC_GRAPHIC)FIDELITY'S WEB SITE                                                 
WWW.FIDELITY.COM                                                                
If you are not currently on the Internet, call Fidelity at                      
1-800-544-7272 and we'll send you an America Online CD or disk with up          
to 50 free hours of Web access.                                                 

(PC_GRAPHIC)                                                                    
FIDELITY ON-LINE XPRESS+ TM                                                     
Fidelity On-line Xpress+ software for Windows combines comprehensive            
portfolio management capabilities, securities trading and access to             
research and analysis tools . . . all on your desktop. Call Fidelity            
at 1-800-544-7272 or visit our Web site for more information on how to          
manage your investments via your PC.                                            

* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD            
AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE            
WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU            
SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL            
BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY           
MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL          
RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE,                      
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY             
SALES CHARGES.                                                                  

TO WRITE FIDELITY                                                               

If more than one address is listed, please locate the address that is           
closest to you. We'll give your correspondence immediate attention and          
send you written confirmation upon completion of your request.                  

(LETTER_GRAPHIC)MAKING CHANGES                                                  
TO YOUR ACCOUNT                                                                 
(such as changing name, address, bank, etc.)                                    
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0002                                                       

(LETTER_GRAPHIC)FOR NON-RETIREMENT                                              
ACCOUNTS                                                                        

BUYING SHARES                                                                   
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0003                                                       
OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
2300 Litton Lane - KH1A                                                         
Hebron, KY 41048                                                                

SELLING SHARES                                                                  
Fidelity Investments                                                            
P.O. Box 660602                                                                 
Dallas, TX 75266-0602                                                           

OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
Attn: Redemptions - CP6I                                                        
400 East Las Colinas Blvd.                                                      
Irving, TX 75309-5517                                                           

GENERAL CORRESPONDENCE                                                          
Fidelity Investments                                                            
P.O. Box 500                                                                    
Merrimack, NH 03054-0500                                                        

(LETTER_GRAPHIC)FOR RETIREMENT                                                  
ACCOUNTS                                                                        

BUYING SHARES                                                                   
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0003                                                       

SELLING SHARES                                                                  
Fidelity Investments                                                            
P.O. Box 660602                                                                 
Dallas, TX 75266-0602                                                           

OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
Attn: Redemptions - CP6R                                                        
400 East Las Colinas Blvd.                                                      
Irving, TX 75309-5517                                                           

GENERAL CORRESPONDENCE                                                          
Fidelity Investments                                                            
P.O. Box 500                                                                    
Merrimack, NH 03054-0500                                                        

INVESTMENT ADVISER                                                              
Fidelity Management & Research Company                                          
Boston, MA                                                                      

INVESTMENT SUB-ADVISERS                                                         
Fidelity Management & Research                                                  
(U.K.) Inc., London, England                                                  
Fidelity Management & Research                                                  
(Far East) Inc., Tokyo, Japan                                                 

OFFICERS                                                                        
Edward C. Johnson 3d, President                                                 
Robert C. Pozen, Senior Vice President                                          
Abigail Johnson, Vice President                                                 
Robert Stansky, Vice President                                                  
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
John H. Costello, Assistant Treasurer                                           
Leonard M. Rush, Assistant Treasurer                                            

BOARD OF TRUSTEES                                                               
Ralph F. Cox *                                                                  
Phyllis Burke Davis *                                                           
Robert M. Gates *                                                               
Edward C. Johnson 3d                                                            
E. Bradley Jones *                                                              
Donald J. Kirk *                                                                
Peter S. Lynch                                                                  
Marvin L. Mann *                                                                
William O. McCoy *                                                              
Gerald C. McDonough *                                                           
Robert C. Pozen                                                                 
Thomas R. Williams *                                                            

ADVISORY BOARD                                                                  
J. Gary Burkhead                                                                

GENERAL DISTRIBUTOR                                                             
Fidelity Distributors Corporation                                               
Boston, MA                                                                      

TRANSFER AND SHAREHOLDER                                                        
SERVICING AGENT                                                                 
Fidelity Service Company, Inc.                                                  
Boston, MA                                                                      

CUSTODIAN                                                                       
State Street Bank and Trust Company                                             
North Quincy, MA                                                                

FIDELITY'S GROWTH FUNDS                                                         
Blue Chip Growth Fund                                                           
Capital Appreciation Fund                                                       
Contrafund                                                                      
Contrafund II                                                                   
Disciplined Equity Fund                                                         
Dividend Growth Fund                                                            
Emerging Growth Fund                                                            
Export and Multinational Fund                                                   
Fidelity Fifty SM                                                               
Growth Company Fund                                                             
Large Cap Stock Fund                                                            
Low-Priced Stock Fund                                                           
Magellan(registered trademark) Fund                                             
Mid-Cap Stock Fund                                                              
New Millennium(registered trademark) Fund                                       
OTC Portfolio                                                                   
Retirement Growth Fund                                                          
Small Cap Selector                                                              
Small Cap Stock Fund                                                            
Stock Selector                                                                  
TechnoQuant SM Growth Fund                                                      
Trend Fund                                                                      
Value Fund                                                                      

THE FIDELITY TELEPHONE CONNECTION                                               
MUTUAL FUND 24-HOUR SERVICE                                                     
Exchanges/Redemptions  1-800-544-7777                                           
Account Assistance     1-800-544-6666                                           
Product Information    1-800-544-8888                                           
Retirement Accounts    1-800-544-4774                                           
(8 a.m. - 9 p.m.)                                                             
TDD Service            1-800-544-0118                                           
for the deaf and hearing impaired                                             
(9 a.m. - 9 p.m. Eastern time)                                                
TouchTone Xpress                                                                
(registered trademark)                                                          
(automated graphic)    1-800-544-5555                                           
* INDEPENDENT TRUSTEES                                                          
(automated graphic) AUTOMATED LINE FOR QUICKEST SERVICE                         

MAG-SANN-1198    64331                                                          
1.537468.101                                                                    

(FIDELITY LOGO GRAPHIC)(REGISTERED TRADEMARK)                                   
Corporate Headquarters                                                          
82 Devonshire St., Boston, MA 02109                                             
www.fidelity.com                                                                

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30D’ Filing		Date		Other Filings
Filed on:		11/23/98
		10/28/98
For Period End:		9/30/98		13F-E,  NSAR-A
		3/31/98		13F-E,  24F-2NT,  N-30D,  NSAR-B
		9/30/97		13F-E,  N-30D,  NSAR-A
				List all Filings