Fidelity Puritan Trust – ‘N-30D’ for 1/31/99

As of:  Tuesday, 3/23/99   ·   For:  1/31/99   ·   Accession #:  35341-99-5   ·   File #:  811-00649

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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               295±   882K 
                          Shareholders                                           

Document Table of Contents

FIDELITY                                                                        
BALANCED                                                                        
FUND                                                                            

SEMIANNUAL REPORT                                                               
JANUARY 31, 1999                                                                

(fidelity_logo_graphic)(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 managers' review of fund                          
performance, strategy and   
outlook.                    

INVESTMENT CHANGES    9   A summary of major shifts in                          
the fund's investments over 
the past six months.        

INVESTMENTS           10  A complete list of the fund's                         
investments with their      
market values.              

FINANCIAL STATEMENTS  30  Statements of assets and                              
liabilities, operations, and
changes in net assets,  as  
 well as financial highlights.

NOTES                 34  Notes to the financial                                
statements.                 

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

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

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

This report is printed on recycled paper using soy-based inks.                  

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

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

After the first month of 1999, U.S. stock markets seem to have                  
maintained their momentum from 1998, as the S&P 500, the Dow and                
NASDAQ all reached record highs in January. The technology sector, and          
Internet stocks in particular, were the main contributors. In the bond          
markets, domestic securities continued to trade at historically low             
yields, while positive economic news helped credit-sensitive sectors            
outperform Treasury bonds.                                                      

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 an investment in a money market fund is not insured or            
guaranteed by the Federal Deposit Insurance Corporation or any other            
government agency. Although money market funds seek to preserve the             
value of your investment at $1.00 per share, it is possible to lose             
money by investing in these types of funds.                                     

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. Of course, you should                 
consider your financial ability to continue your purchases through              
periods of low price levels before undertaking such a strategy.                 

If you have questions, please call us at 1-800-544-8888, or visit our           
web site at www.fidelity.com. 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).                                                           

                                                        [Enlarge/Download Table]

                                                                                        
CUMULATIVE TOTAL RETURNS                                                                

PERIODS ENDED JANUARY 31, 1999   PAST 6 MONTHS  PAST 1 YEAR  PAST 5 YEARS  PAST 10 YEARS

FIDELITY BALANCED                11.83%         22.60%       77.28%        242.39%      

Fidelity Balanced Composite      11.55%         22.91%       122.69%       308.14%      

 S&P 500 (registered trademark)  15.02%         32.49%       196.12%       462.78%      

 LB Aggregate Bond               5.10%          8.08%        41.16%        140.67%      

Balanced Funds Average           7.39%          14.62%       90.24%        231.93%      


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 Fidelity Balanced Composite Index - a hypothetical combination           
of unmanaged indices. The composite index combines the total returns            
of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate            
Bond Index. To measure how the fund's performance stacked up against            
its peers, you can compare it to the balanced funds average, which              
reflects the performance of mutual funds with similar objectives                
tracked by Lipper Inc. The past six months average represents a peer            
group of 437 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 JANUARY 31, 1999  PAST 1 YEAR  PAST 5 YEARS  PAST 10 YEARS        

FIDELITY BALANCED               22.60%       12.13%        13.10%               

Fidelity Balanced Composite     22.91%       17.36%        15.10%               

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.                                                        

$10,000 OVER 10 YEARS                                                           
Balanced                    FID Balanced Composite    
S&P 500                     LB Aggregate Bond                                   
00304                       F0021                     
SP001                       LB001                                               
1989/01/31      10000.00                    10000.00                        
10000.00                    10000.00                                      
1989/02/28       9926.67                     9821.80                        
9751.00                     9928.00                                     
1989/03/31      10036.79                     9976.00                        
9978.20                     9970.69                                     
1989/04/30      10362.06                    10370.05                        
10496.07                    10179.08                                      
1989/05/31      10594.39                    10731.14                        
10921.16                    10446.79                                      
1989/06/30      10752.62                    10824.93                        
10858.91                    10764.37                                      
1989/07/31      11176.32                    11503.65                        
11839.47                    10993.65                                      
1989/08/31      11242.23                    11570.83                        
12071.52                    10830.94                                      
1989/09/30      11251.05                    11565.97                        
12022.03                    10886.18                                      
1989/10/31      11289.19                    11518.79                        
11743.12                    11153.98                                      
1989/11/30      11460.82                    11703.55                        
11982.68                    11259.95                                      
1989/12/31      11575.88                    11884.72                        
12270.26                    11290.35                                      
1990/01/31      11148.28                    11349.67                        
11446.92                    11155.99                                      
1990/02/28      11229.73                    11452.04                        
11594.59                    11191.69                                      
1990/03/31      11321.36                    11637.34                        
11901.85                    11199.53                                      
1990/04/30      11166.55                    11419.95                        
11604.30                    11096.49                                      
1990/05/31      11538.08                    12223.23                        
12735.72                    11424.95                                      
1990/06/30      11589.40                    12252.08                        
12649.12                    11608.89                                      
1990/07/31      11620.78                    12296.18                        
12608.64                    11769.09                                      
1990/08/31      11129.17                    11563.33                        
11468.82                    11611.38                                      
1990/09/30      10947.36                    11263.84                        
10910.29                    11707.76                                      
1990/10/31      10894.32                    11292.00                        
10863.37                    11856.45                                      
1990/11/30      11276.20                    11826.79                        
11565.15                    12111.36                                      
1990/12/31      11522.04                    12098.57                        
11887.81                    12300.30                                      
1991/01/31      11998.96                    12475.08                        
12406.12                    12452.82                                      
1991/02/28      12540.92                    13052.67                        
13293.16                    12558.67                                      
1991/03/31      12780.79                    13278.22                        
13614.86                    12645.33                                      
1991/04/30      12989.41                    13354.71                        
13647.53                    12781.90                                      
1991/05/31      13406.65                    13731.84                        
14237.10                    12856.03                                      
1991/06/30      13162.89                    13351.75                        
13585.05                    12849.60                                      
1991/07/31      13507.53                    13799.30                        
14218.11                    13028.21                                      
1991/08/31      13818.82                    14114.75                        
14555.08                    13309.62                                      
1991/09/30      13936.42                    14087.93                        
14312.01                    13579.81                                      
1991/10/31      14248.17                    14263.75                        
14503.79                    13730.54                                      
1991/11/30      13994.16                    13971.34                        
13919.29                    13856.86                                      
1991/12/31      14607.81                    15096.31                        
15511.65                    14268.41                                      
1992/01/31      14607.81                    14845.71                        
15223.14                    14074.36                                      
1992/02/29      14820.72                    15000.11                        
15421.04                    14165.85                                      
1992/03/31      14726.24                    14791.01                        
15120.33                    14086.52                                      
1992/04/30      14905.83                    15094.52                        
15564.86                    14187.94                                      
1992/05/31      15181.20                    15253.01                        
15641.13                    14456.09                                      
1992/06/30      15133.59                    15200.85                        
15408.08                    14655.59                                      
1992/07/31      15497.09                    15697.91                        
16038.27                    14954.56                                      
1992/08/31      15581.91                    15568.25                        
15709.48                    15105.60                                      
1992/09/30      15689.71                    15752.58                        
15894.86                    15285.36                                      
1992/10/31      15614.52                    15701.85                        
15950.49                    15082.06                                      
1992/11/30      15652.11                    16024.37                        
16494.40                    15085.08                                      
1992/12/31      15768.48                    16244.54                        
16697.28                    15324.93                                      
1993/01/31      16114.90                    16451.18                        
16837.54                    15619.17                                      
1993/02/28      16551.13                    16700.58                        
17066.53                    15892.51                                      
1993/03/31      17078.95                    16940.06                        
17426.63                    15959.25                                      
1993/04/30      17624.02                    16741.52                        
17004.91                    16070.97                                      
1993/05/31      17909.54                    17019.43                        
17460.64                    16091.86                                      
1993/06/30      17923.66                    17172.27                        
17511.28                    16383.12                                      
1993/07/31      18159.84                    17170.21                        
17441.23                    16476.51                                      
1993/08/31      18750.30                    17680.85                        
18102.25                    16764.85                                      
1993/09/30      18569.74                    17618.26                        
17962.87                    16810.11                                      
1993/10/31      18720.94                    17863.15                        
18334.70                    16872.31                                      
1993/11/30      18391.05                    17700.60                        
18160.52                    16728.89                                      
1993/12/31      18808.23                    17867.34                        
18380.26                    16819.23                                      
1994/01/31      19313.90                    18328.31                        
19005.19                    17046.29                                      
1994/02/28      18976.79                    17902.73                        
18490.15                    16749.68                                      
1994/03/31      18197.91                    17257.52                        
17683.98                    16335.97                                      
1994/04/30      18041.89                    17334.83                        
17910.33                    16205.28                                      
1994/05/31      18070.26                    17504.71                        
18204.06                    16203.66                                      
1994/06/30      17883.86                    17231.99                        
17758.06                    16168.01                                      
1994/07/31      18226.68                    17708.28                        
18340.53                    16489.75                                      
1994/08/31      18398.09                    18152.40                        
19092.49                    16509.54                                      
1994/09/30      18268.73                    17778.83                        
18624.72                    16266.85                                      
1994/10/31      18052.96                    18012.44                        
19043.78                    16252.21                                      
1994/11/30      17794.03                    17602.98                        
18350.20                    16216.46                                      
1994/12/31      17808.73                    17808.20                        
18622.34                    16328.35                                      
1995/01/31      17808.73                    18226.30                        
19105.22                    16651.65                                      
1995/02/28      18199.97                    18825.98                        
19849.75                    17047.96                                      
1995/03/31      18506.08                    19205.25                        
20435.51                    17151.95                                      
1995/04/30      18696.26                    19652.16                        
21037.34                    17392.08                                      
1995/05/31      19047.36                    20427.67                        
21878.20                    18065.15                                      
1995/06/30      19255.25                    20772.04                        
22386.43                    18197.03                                      
1995/07/31      19536.46                    21167.04                        
23128.76                    18157.00                                      
1995/08/31      19580.86                    21301.37                        
23186.82                    18376.70                                      
1995/09/30      19757.62                    21923.37                        
24165.30                    18554.95                                      
1995/10/31      19578.01                    21990.41                        
24079.03                    18796.16                                      
1995/11/30      20131.82                    22701.58                        
25136.10                    19078.11                                      
1995/12/31      20462.79                    23091.04                        
25620.22                    19345.20                                      
1996/01/31      20644.41                    23623.62                        
26492.33                    19472.88                                      
1996/02/29      20266.03                    23590.59                        
26737.92                    19134.05                                      
1996/03/31      20102.70                    23660.84                        
26995.40                    19000.11                                      
1996/04/30      20163.94                    23817.10                        
27393.32                    18893.71                                      
1996/05/31      20301.74                    24166.59                        
28099.79                    18855.92                                      
1996/06/30      20455.89                    24351.37                        
28206.85                    19108.59                                      
1996/07/31      19975.85                    23732.16                        
26960.67                    19160.19                                      
1996/08/31      20208.13                    24016.33                        
27529.27                    19127.61                                      
1996/09/30      20865.14                    24994.47                        
29078.62                    19460.44                                      
1996/10/31      21538.71                    25630.03                        
29880.61                    19892.46                                      
1996/11/30      22588.24                    26967.76                        
32139.28                    20232.62                                      
1996/12/31      22373.68                    26546.90                        
31502.60                    20044.45                                      
1997/01/31      23009.29                    27575.01                        
33470.89                    20106.59                                      
1997/02/28      23247.65                    27732.30                        
33733.30                    20156.86                                      
1997/03/31      22649.83                    26925.46                        
32347.20                    19933.12                                      
1997/04/30      23211.66                    28051.48                        
34278.32                    20232.11                                      
1997/05/31      24367.43                    29182.74                        
36365.19                    20424.32                                      
1997/06/30      25207.37                    30106.08                        
37994.35                    20667.37                                      
1997/07/31      26731.16                    31868.55                        
41017.56                    21225.39                                      
1997/08/31      25936.84                    30689.03                        
38719.76                    21044.97                                      
1997/09/30      27177.61                    31879.21                        
40840.44                    21356.44                                      
1997/10/31      26628.22                    31425.25                        
39476.37                    21666.11                                      
1997/11/30      27108.93                    32355.88                        
41303.73                    21765.77                                      
1997/12/31      27619.69                    32819.93                        
42012.91                    21985.60                                      
1998/01/31      27927.18                    33205.76                        
42477.58                    22267.02                                      
1998/02/28      29048.60                    34632.01                        
45541.06                    22249.21                                      
1998/03/31      30105.11                    35743.22                        
47873.22                    22324.85                                      
1998/04/30      30305.81                    36033.31                        
48354.82                    22440.94                                      
1998/05/31      30232.82                    35798.59                        
47523.60                    22654.13                                      
1998/06/30      30800.81                    36792.79                        
49454.01                    22846.69                                      
1998/07/31      30617.04                    36588.59                        
48927.32                    22894.67                                      
1998/08/31      27860.40                    33653.16                        
41853.41                    23267.85                                      
1998/09/30      29454.41                    35261.64                        
44534.54                    23812.32                                      
1998/10/31      30759.48                    36907.80                        
48156.98                    23686.12                                      
1998/11/30      31924.00                    38334.14                        
51075.78                    23821.13                                      
1998/12/31      33203.72                    39705.43                        
54018.76                    23892.59                                      
1999/01/29      34238.80                    40814.48                        
56277.83                    24067.00                                      
IMATRL PRASUN   SHR__CHT 19990131 19990303 083214 R00000000000123               

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was                
invested in Fidelity Balanced Fund on January 31, 1989. As the chart            
shows, by January 31, 1999, the value of the investment would have              
grown to $34,239 - a 242.39% increase on the initial investment. For            
comparison, look at how both the Standard & Poor's 500 Index, a market          
capitalization-weighted index of common stocks, and the Lehman                  
Brothers Aggregate Bond Index, a market value-weighted index of                 
investment-grade fixed-rate debt issues, including government,                  
corporate, asset-backed, and mortgage-backed securities, with                   
maturities of one year or more, did over the same period. With                  
dividends and capital gains, if any, reinvested, the Standard & Poor's          
Index would have grown to $56,278 - a 462.78% increase. If $10,000 was          
invested in the Lehman Brothers Aggregate Bond Index, it would have             
grown to $24,067 - a 140.67% increase. You can also look at how the             
Fidelity Balanced Composite index did over the same period. The                 
composite index combines the total returns of the Standard & Poor's             
500 index (60%) and the Lehman Brothers Aggregate Bond Index (40%).             
With dividends and interest, if any, reinvested, the same $10,000               
would have grown to $40,814 - a 308.14% 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 MANAGERS' OVERVIEW                                               

MARKET RECAP                                                                    

Extreme volatility was no stranger                                              
to the U.S. stock and bond markets                                              
during the six-month period ending                                              
January 31, 1999. In contrast, the                                              
U.S. economy was relatively tranquil,                                           
as the trend of low inflation, low                                              
unemployment and low interest                                                   
rates continued. The international                                              
scene was another story. Economic                                               
uncertainty abroad, particularly in                                             
Asia and Russia, plagued the U.S.                                               
stock markets. Then, when Russia                                                
announced a one-two punch of                                                    
loan defaults and currency                                                      
devaluation, equity investors'                                                  
confidence hit the mat. Investors                                               
fled the equity markets in droves,                                              
searching for safer, less volatile                                              
havens - particularly U.S.                                                      
Treasuries. After the near-collapse of                                          
a major U.S. hedge fund, the U.S.                                               
Federal Reserve Board waded in                                                  
with three cuts in key interest rates,                                          
which boosted equity market                                                     
confidence and restored some                                                    
measure of liquidity to the                                                     
fixed-income markets. Despite some                                              
instances of profit-taking in                                                   
technology issues and concerns                                                  
over Brazil's currency devaluation                                              
in the first month of 1999, the                                                 
Standard and Poor's 500 Index,                                                  
Dow Jones Industrial Average and                                                
NASDAQ all reached record highs                                                 
in January. Overall, the S&P 500(registered trademark)                          
index- a popular measure of U.S.                                                
stock market performance -                                                      
returned 15.02% for the six-month                                               
period. Meanwhile, the Lehman                                                   
Brothers Aggregate Bond Index -                                                 
a broad measure of the U.S.                                                     
taxable investment-grade bond                                                   
market - returned 5.10%.                                                        

(photograph of Kevin Grant)                                                     
(photograph of Stephen DuFour)                                                  

An interview with Stephen DuFour (right), Lead Portfolio Manager                
of Fidelity Balanced Fund, and                                                  
Kevin Grant, Co-Manager for                                                     
fixed-income investments                                                        

Q. HOW DID THE FUND PERFORM, STEVE?                                             

S.D. The fund did well. For the six and 12 months that ended January            
31, 1999, the fund returned 11.83% and 22.60%, respectively. Since the          
fund is made up of stocks and bonds, its performance typically falls            
between that of its two benchmark indexes, the Standard & Poor's 500            
Index and the Lehman Brothers Aggregate Bond Index. That held true              
once again, as the returns for the S&P 500 over the same six- and               
12-month periods were 15.02% and 32.49%, respectively, while the                
Lehman Brothers index returned 5.10% and 8.08%, respectively.                   
Furthermore, the fund's performance compared favorably to that of its           
peers in the balanced funds average monitored by Lipper Inc. For the            
six- and 12-month periods in question, the Lipper average returned              
7.39% and 14.62%, respectively.                                                 

Q. WHY DID THE FUND OUTPERFORM THE LIPPER AVERAGE BY SUCH A WIDE                
MARGIN?                                                                         

S.D. There were several contributing factors. The fund's allocations            
to financial services stocks helped, both by underweighting them                
relative to our peers during the third-quarter downturn in stocks and           
by overweighting them during the recovery that followed in the fourth           
quarter. In addition, a number of the fund's media and technology               
holdings performed exceedingly well during the period. On the                   
fixed-income side, the fund was helped by overweighting high-grade              
corporate securities relative to its peers, and by avoiding the issues          
of companies with exposure to emerging markets.                                 

Q. WHICH STOCKS PERFORMED WELL DURING THE PERIOD, AND WHICH FAILED TO           
MEET YOUR EXPECTATIONS?                                                         

S.D. Time Warner was one of the fund's strongest performers. The                
company benefited from its strong position as a likely beneficiary of           
the ongoing shift to cable as the platform of choice for video, data            
and voice communications. Recent accomplishments for Time Warner                
include a lucrative deal to sell telephone rights on its cable network          
to AT&T. Another holding that did well was Unisys, which continued to           
prosper under its new CEO, Larry Weinbach. Weinbach has successfully            
focused the company's efforts on providing high-end computer services.          
Chase Manhattan also performed well. The stock had been beaten down             
during the third-quarter market decline, as investors avoided the               
shares of large money-center banks because of their international               
exposure. However, Chase Manhattan's risk control procedures helped             
the company to post higher fourth-quarter earnings, thereby surpassing          
investors' expectations. On the negative side, Banc One underperformed          
when the revenue growth and cost savings investors expected from the            
company's merger with First Chicago failed to materialize. As of the            
end of the period, the fund no longer owned Banc One shares.                    

Q. TURNING TO YOU, KEVIN, HOW DID THE FUND'S BOND HOLDINGS FARE DURING          
THE PERIOD?                                                                     

K.G. Russia's actions forced some funds to liquidate large positions            
in corporate and mortgage securities, while investors flocked to U.S.           
Treasury securities because of their reputation for safety. As a                
result, the spread - that is, the difference in yield - between                 
Treasuries and other fixed-income securities widened dramatically, as           
Treasury bond yields dropped to levels not seen in more than 30 years.          
While some of the fund's holdings were hurt by this turn of events, it          
also presented an opportunity to upgrade holdings in the corporate and          
mortgage-backed sectors. When the fixed-income markets settled down in          
the second half of the period, many of those purchases did quite well,          
handily outperforming Treasuries. Barring further negative surprises            
from the emerging markets, spreads for corporate and mortgage issues            
could continue to narrow during the rest of 1999, which would be good           
news for the fund's investors.                                                  

Q. WHAT'S YOUR OUTLOOK, STEVE?                                                  

S.D. In spite of sluggish economies in many parts of the world, growth          
in the United States continues to chug along at a healthy pace. Even            
parts of Asia are showing some signs of recovery. As a result, many             
economists speculate that the next move by the Fed will be to raise             
interest rates as a means of heading off inflationary pressures.                
Regardless of how the economic scenario unfolds, however, the fund              
will continue its disciplined search for stocks that represent good             
value in the marketplace.                                                       

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

(checkmark)FUND FACTS                                                           

GOAL: high income with                                                          
preservation of capital by                                                      
investing in a broadly                                                          
diversified portfolio of                                                        
high-yielding equity and debt                                                   
securities                                                                      

FUND NUMBER: 304                                                                

TRADING SYMBOL: FBALX                                                           

START DATE: November 6, 1986                                                    

SIZE: as of January 31,                                                         
1999, more than $5.4                                                            
billion                                                                         

MANAGERS: Stephen DuFour,                                                       
since 1997; manager,                                                            
Fidelity Convertible Securities                                                 
Fund, January 1997-July                                                         
1997; various Fidelity Select                                                   
Portfolios, 1993-1997;                                                          
joined Fidelity in 1992;                                                        
Kevin Grant, since 1997;                                                        
joined Fidelity in 1993                                                         

STEVE DUFOUR ON HIS                                                             
APPROACH TO BUYING                                                              
UNDERVALUED STOCKS:                                                             

"I look for stocks that investors                                               
have abandoned for the wrong                                                    
reasons. Sometimes a stock                                                      
declines because of a general                                                   
market panic like the one that                                                  
occurred last fall. Times like that                                             
are great for a value investor like                                             
me. When indiscriminate selling                                                 
takes good stocks down with bad                                                 
ones, I'm waiting with open arms                                                
to scoop up the bargains.                                                       

"At other times, I find value when                                              
the basic business prospects for                                                
an industry improve and market                                                  
participants fail to notice. For                                                
example, I believe the energy                                                   
sector offers good value now.                                                   
Many world economies are                                                        
strengthening, indicating the                                                   
likelihood of higher demand for                                                 
energy products in the near                                                     
future. Furthermore, production                                                 
is dropping as marginal producers                                               
cut back or go out of business                                                  
because of weak prices. More                                                    
demand and less supply should                                                   
lead to stronger energy prices and                                              
higher profits for many companies                                               
in the energy sector.                                                           

"Often the value catalyst is                                                    
company-specific. A new CEO, an                                                 
exciting product or technology in                                               
the pipeline - there are many                                                   
factors to consider. Nevertheless,                                              
all of the fund's equity holdings                                               
share one common characteristic:                                                
a mismatch between the current                                                  
public perception of their                                                      
prospects and the more favorable                                                
prospects I see based on my                                                     
analysis of the companies, their                                                
industries and, to some extent,                                                 
general market conditions."                                                     

INVESTMENT CHANGES                                                              

                                                                [Download Table]

                                                                                   
TOP FIVE STOCKS AS OF JANUARY                                                      
31, 1999                                                                           

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

Time Warner, Inc.               4.3                      2.2                       

Chase Manhattan Corp.           3.6                      1.2                       

MCI WorldCom, Inc.              3.4                      2.5                       

Unisys Corp.                    3.1                      2.8                       

Fannie Mae                      2.7                      2.1                       

TOP FIVE BOND ISSUERS AS OF                                                        
JANUARY 31, 1999                                                                   

(WITH MATURITIES MORE THAN     % OF FUND'S INVESTMENTS  % OF FUND'S INVESTMENTS IN 
ONE YEAR)                                               THESE BOND ISSUERS 6 MONTHS
                                                        AGO                        

Fannie Mae                      10.4                     11.6                      

U.S. Treasury Obligations       4.0                      6.4                       

Government National Mortgage    2.3                      2.8                       
Association                                                                        

MCI WorldCom, Inc.              0.6                      0.6                       

TCI Communications, Inc.        0.6                      0.7                       

TOP FIVE MARKET SECTORS AS OF                                                      
JANUARY 31, 1999                                                                   

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

FINANCE                         20.9                     24.8                      

UTILITIES                       10.1                     9.9                       

MEDIA & LEISURE                 9.7                      6.3                       

TECHNOLOGY                      9.0                      6.8                       

ENERGY                          5.0                      5.6                       


ASSET ALLOCATION (% OF FUND'S                                                   
INVESTMENTS)                                                                    

AS OF JANUARY 31, 1999 *                                                        
Stocks  64.2%                                                                   
Bonds 33.5%                                                                     
Convertible                                                                     
securities 0.3%                                                                 
Short-term                                                                      
investments 2.0%                                                                
*FOREIGN                                                                        
INVESTMENTS 3.8%                                                                
Row: 1, Col: 1, Value: 63.4                                                     
Row: 1, Col: 2, Value: 33.5                                                     
Row: 1, Col: 3, Value: 0.3                                                      
Row: 1, Col: 4, Value: 2.0                                                      

AS OF JULY 31, 1998 **                                                          
Stocks  54.4%                                                                   
Bonds 39.8%                                                                     
Convertible                                                                     
securities 0.9%                                                                 
Short-term                                                                      
investments 4.9%                                                                
**FOREIGN                                                                       
INVESTMENTS 4.0%                                                                
Row: 1, Col: 1, Value: 53.4                                                     
Row: 1, Col: 2, Value: 39.8                                                     
Row: 1, Col: 3, Value: 1.9                                                      
Row: 1, Col: 4, Value: 4.9                                                      

INVESTMENTS JANUARY 31, 1999 (UNAUDITED)                                        

Showing Percentage of Total Value of Investment in Securities                   

                                                                [Download Table]

                                                                              
COMMON STOCKS - 64.2%                                                         

                                 SHARES                  VALUE (NOTE 1) (000S)

AEROSPACE & DEFENSE - 0.7%                                                    

AEROSPACE & DEFENSE - 0.5%                                                    

Textron, Inc.                     364,700                $ 27,147             

DEFENSE ELECTRONICS - 0.2%                                                    

Raytheon Co. Class B              189,000                 10,572              

TOTAL AEROSPACE & DEFENSE                                 37,719              

BASIC INDUSTRIES - 1.6%                                                       

CHEMICALS & PLASTICS - 0.7%                                                   

Crompton & Knowles Corp.          619,200                 11,300              

du Pont (E.I.) de Nemours &       332,000                 16,994              
Co.                                                                           

Ferro Corp.                       34,400                  753                 

Great Lakes Chemical Corp.        91,300                  3,458               

Praxair, Inc.                     181,400                 5,861               

                                                          38,366              

IRON & STEEL - 0.2%                                                           

Nucor Corp.                       198,400                 9,722               

METALS & MINING - 0.5%                                                        

Alcoa, Inc.                       323,600                 27,061              

PAPER & FOREST PRODUCTS - 0.2%                                                

Fort James Corp.                  383,300                 13,751              

TOTAL BASIC INDUSTRIES                                    88,900              

CONSTRUCTION & REAL ESTATE -                                                  
0.4%                                                                          

BUILDING MATERIALS - 0.4%                                                     

Owens-Corning                     455,600                 16,288              

Sherwin-Williams Co.              134,800                 3,454               

                                                          19,742              

DURABLES - 4.2%                                                               

AUTOS, TIRES, & ACCESSORIES -                                                 
3.3%                                                                          

Danaher Corp.                     96,000                  5,136               

Eaton Corp.                       254,900                 17,747              

Federal-Mogul Corp.               42,500                  2,518               

Ford Motor Co.                    624,600                 38,374              

General Motors Corp.              189,900                 17,044              

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

DURABLES - CONTINUED                                                          

AUTOS, TIRES, & ACCESSORIES -                                                 
CONTINUED                                                                     

Lear Corp. (a)                    103,900                $ 4,091              

Navistar International Corp.      2,909,000               99,088              
(a)                                                                           

                                                          183,998             

CONSUMER DURABLES - 0.2%                                                      

Minnesota Mining &                118,100                 9,168               
Manufacturing Co.                                                             

TEXTILES & APPAREL - 0.7%                                                     

Jones Apparel Group, Inc. (a)     94,800                  2,963               

Nautica Enterprises, Inc. (a)     165,300                 2,603               

NIKE, Inc. Class B                385,100                 17,618              

Polo Ralph Lauren Corp. Class     189,200                 4,706               
A (a)                                                                         

Shaw Industries, Inc.             238,900                 5,062               

Unifi, Inc.                       339,300                 5,662               

                                                          38,614              

TOTAL DURABLES                                            231,780             

ENERGY - 4.7%                                                                 

ENERGY SERVICES - 0.8%                                                        

Halliburton Co.                   552,800                 16,411              

Schlumberger Ltd.                 562,200                 26,775              

                                                          43,186              

OIL & GAS - 3.9%                                                              

Anadarko Petroleum Corp.          306,500                 8,295               

BP Amoco PLC sponsored ADR        365,638                 29,662              

Exxon Corp.                       1,207,700               85,067              

Mobil Corp.                       539,900                 47,342              

Tosco Corp.                       665,300                 14,470              

Weatherford International,        1,556,800               27,439              
Inc. (a)                                                                      

                                                          212,275             

TOTAL ENERGY                                              255,461             

FINANCE - 15.4%                                                               

BANKS - 5.6%                                                                  

Bank of New York Co., Inc.        1,012,600               35,947              

BankAmerica Corp.                 1,004,100               67,149              

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                           

BANKS - CONTINUED                                                             

Chase Manhattan Corp.             2,546,500              $ 195,921            

Mellon Bank Corp.                 104,000                 6,968               

                                                          305,985             

CREDIT & OTHER FINANCE - 2.6%                                                 

Associates First Capital          455,000                 18,456              
Corp. Class A                                                                 

Citigroup, Inc.                   1,156,200               64,819              

Equitable Companies (The),        334,900                 23,359              
Inc.                                                                          

Fleet Financial Group, Inc.       322,000                 14,269              

Household International, Inc.     309,200                 13,585              

MBNA Corp.                        370,900                 10,362              

                                                          144,850             

FEDERAL SPONSORED CREDIT - 3.6%                                               

Fannie Mae                        2,052,500               149,576             

Freddie Mac                       746,500                 46,283              

                                                          195,859             

INSURANCE - 2.0%                                                              

Allmerica Financial Corp.         543,000                 29,288              

Ambac Financial Group, Inc.       30,000                  1,794               

American Bankers Insurance        134,400                 6,182               
Group, Inc.                                                                   

American International Group,     379,950                 39,111              
Inc.                                                                          

Hartford Financial Services       642,600                 33,375              
Group, Inc.                                                                   

                                                          109,750             

SAVINGS & LOANS - 0.0%                                                        

Washington Mutual, Inc.           23,600                  991                 

SECURITIES INDUSTRY - 1.6%                                                    

Dain Rauscher Corp.               14,200                  438                 

Franklin Resources, Inc.          141,800                 4,750               

Lehman Brothers Holdings,         402,500                 22,012              
Inc.                                                                          

Merrill Lynch & Co., Inc.         195,000                 14,820              

Morgan Stanley, Dean Witter &     290,900                 25,254              
Co.                                                                           

Price (T. Rowe) Associates,       330,100                 12,069              
Inc.                                                                          

Schwab (Charles) Corp.            89,250                  6,275               

                                                          85,618              

TOTAL FINANCE                                             843,053             

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

HEALTH - 4.5%                                                                 

DRUGS & PHARMACEUTICALS - 3.7%                                                

Biomatrix, Inc. (a)               280,700                $ 16,947             

Bristol-Myers Squibb Co.          151,200                 19,382              

Lilly (Eli) & Co.                 455,700                 42,693              

Merck & Co., Inc.                 156,000                 22,893              

Millennium Pharmaceuticals,       23,600                  896                 
Inc. (a)                                                                      

Pharmacia & Upjohn, Inc.          318,100                 18,291              

Schering-Plough Corp.             227,000                 12,372              

Warner-Lambert Co.                981,200                 70,830              

                                                          204,304             

MEDICAL EQUIPMENT & SUPPLIES                                                  
- 0.8%                                                                        

Baxter International, Inc.        85,000                  6,030               

Becton, Dickinson & Co.           317,300                 11,343              

Boston Scientific Corp. (a)       123,300                 3,013               

Guidant Corp.                     104,000                 6,130               

Medtronic, Inc.                   80,400                  6,407               

Millipore Corp.                   362,100                 11,067              

                                                          43,990              

TOTAL HEALTH                                              248,294             

INDUSTRIAL MACHINERY &                                                        
EQUIPMENT - 1.2%                                                              

ELECTRICAL EQUIPMENT - 0.9%                                                   

Anixter International, Inc.       216,400                 3,503               
(a)                                                                           

General Electric Co.              306,200                 32,113              

Honeywell, Inc.                   165,400                 10,782              

                                                          46,398              

INDUSTRIAL MACHINERY &                                                        
EQUIPMENT - 0.3%                                                              

Caterpillar, Inc.                 108,700                 4,708               

Ingersoll-Rand Co.                275,500                 13,086              

                                                          17,794              

TOTAL INDUSTRIAL MACHINERY &                              64,192              
EQUIPMENT                                                                     

MEDIA & LEISURE - 8.0%                                                        

BROADCASTING - 6.8%                                                           

CBS Corp.                         660,500                 22,457              

Infinity Broadcasting Corp.       82,300                  2,279               
Class A (a)                                                                   

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

MEDIA & LEISURE - CONTINUED                                                   

BROADCASTING - CONTINUED                                                      

MediaOne Group, Inc.              2,003,000              $ 112,293            

Time Warner, Inc.                 3,723,659               232,729             

                                                          369,758             

ENTERTAINMENT - 0.1%                                                          

News Corp. Ltd. ADR               174,900                 5,160               

LODGING & GAMING - 0.1%                                                       

Promus Hotel Corp. (a)            97,700                  2,919               

PUBLISHING - 1.0%                                                             

Belo (A.H.) Corp. Class A         295,400                 5,557               

Gannet, Inc.                      123,000                 8,095               

Meredith Corp.                    888,800                 33,108              

Washington Post Co. Class B       17,700                  10,071              

                                                          56,831              

RESTAURANTS - 0.0%                                                            

Marriott International, Inc.      50,000                  1,756               
Class A                                                                       

TOTAL MEDIA & LEISURE                                     436,424             

NONDURABLES - 1.7%                                                            

BEVERAGES - 0.3%                                                              

PepsiCo, Inc.                     283,500                 11,074              

Seagram Co. Ltd.                  114,800                 5,470               

                                                          16,544              

FOODS - 0.4%                                                                  

Nabisco Holdings Corp. Class A    36,900                  1,552               

Quaker Oats Co.                   369,700                 20,565              

                                                          22,117              

HOUSEHOLD PRODUCTS - 0.4%                                                     

Gillette Co.                      122,200                 7,179               

Procter & Gamble Co.              151,100                 13,731              

                                                          20,910              

TOBACCO - 0.6%                                                                

Philip Morris Companies, Inc.     703,200                 33,050              

TOTAL NONDURABLES                                         92,621              

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

PRECIOUS METALS - 0.0%                                                        

Newmont Mining Corp.              142,400                $ 2,519              

RETAIL & WHOLESALE - 1.6%                                                     

APPAREL STORES - 0.2%                                                         

TJX Companies, Inc.               331,100                 9,788               

GENERAL MERCHANDISE STORES -                                                  
1.3%                                                                          

Consolidated Stores Corp. (a)     836,600                 13,961              

Dayton Hudson Corp.               376,300                 23,989              

Dollar General Corp.              699,500                 17,444              

Nordstrom, Inc.                   415,800                 17,308              

                                                          72,702              

GROCERY STORES - 0.1%                                                         

Great Atlantic & Pacific Tea,     94,500                  3,154               
Inc.                                                                          

TOTAL RETAIL & WHOLESALE                                  85,644              

SERVICES - 1.0%                                                               

ADVERTISING - 1.0%                                                            

Interpublic Group of              275,400                 21,791              
Companies, Inc.                                                               

Omnicom Group, Inc.               527,300                 33,747              

                                                          55,538              

TECHNOLOGY - 8.6%                                                             

COMMUNICATIONS EQUIPMENT - 0.6%                                               

ADC Telecommunications, Inc.      658,500                 26,217              
(a)                                                                           

Northern Telecom Ltd.             94,800                  6,003               

                                                          32,220              

COMPUTER SERVICES & SOFTWARE                                                  
- 0.7%                                                                        

BMC Software, Inc.                44,000                  2,054               

Electronic Data Systems Corp.     118,100                 6,193               

Equifax, Inc.                     94,500                  3,739               

J.D. Edwards & Co. (a)            23,600                  479                 

Marketwatch.Com, Inc. (a)         1,100                   76                  

Microsoft Corp. (a)               151,300                 26,478              

                                                          39,019              

COMPUTERS & OFFICE EQUIPMENT                                                  
- 4.2%                                                                        

Bell & Howell Co. (a)             47,400                  1,801               

Compaq Computer Corp.             536,700                 25,560              

Data General Corp. (a)            198,800                 3,889               

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

TECHNOLOGY - CONTINUED                                                        

COMPUTERS & OFFICE EQUIPMENT                                                  
- CONTINUED                                                                   

EMC Corp. (a)                     56,700                 $ 6,173              

Seagate Technology, Inc. (a)      73,600                  2,995               

Unisys Corp. (a)                  5,144,700               170,418             

Xerox Corp.                       146,500                 18,166              

                                                          229,002             

ELECTRONIC INSTRUMENTS - 1.0%                                                 

Applied Materials, Inc. (a)       397,000                 25,085              

KLA-Tencor Corp. (a)              98,100                  5,665               

Teradyne, Inc. (a)                363,900                 23,972              

                                                          54,722              

ELECTRONICS - 2.1%                                                            

Intel Corp.                       141,900                 19,999              

Micron Technology, Inc. (a)       423,500                 33,086              

Sterling Commerce, Inc. (a)       23,600                  1,013               

Texas Instruments, Inc.           446,600                 44,158              

Thomas & Betts Corp.              324,300                 14,330              

Vishay Intertechnology, Inc.      195,900                 2,559               

                                                          115,145             

TOTAL TECHNOLOGY                                          470,108             

TRANSPORTATION - 2.6%                                                         

AIR TRANSPORTATION - 0.5%                                                     

Continental Airlines, Inc.        786,700                 26,846              
Class B (a)                                                                   

RAILROADS - 1.8%                                                              

Burlington Northern Santa Fe      1,535,400               53,163              
Corp.                                                                         

Canadian Pacific Ltd.             47,300                  978                 

Kansas City Southern              118,300                 5,619               
Industries, Inc.                                                              

Union Pacific Corp.               687,500                 35,363              

                                                          95,123              

TRUCKING & FREIGHT - 0.3%                                                     

CNF Transportation, Inc.          400,000                 17,750              

TOTAL TRANSPORTATION                                      139,719             

COMMON STOCKS - CONTINUED                                                     

                                 SHARES                  VALUE (NOTE 1) (000S)

UTILITIES - 8.0%                                                              

CELLULAR - 0.2%                                                               

SkyTel Communications, Inc.       146,200                $ 3,856              
(a)                                                                           

Sprint Corp. Series 1 (PCS        101,350                 3,231               
Group) (a)                                                                    

Teleglobe, Inc.                   167,600                 6,543               

                                                          13,630              

ELECTRIC UTILITY - 0.6%                                                       

Duke Energy Corp.                 150,977                 9,332               

PG&E Corp.                        684,868                 21,873              

                                                          31,205              

GAS - 0.1%                                                                    

Enron Corp.                       102,200                 6,745               

TELEPHONE SERVICES - 7.1%                                                     

AT&T Corp.                        627,900                 56,982              

BellSouth Corp.                   768,900                 34,312              

GTE Corp.                         242,900                 16,396              

MCI WorldCom, Inc. (a)            2,348,947               187,329             

Qwest Communications              330,700                 19,821              
International, Inc. (a)                                                       

SBC Communications, Inc.          923,600                 49,874              

Sprint Corp. (FON Group)          251,100                 21,061              

                                                          385,775             

TOTAL UTILITIES                                           437,355             

TOTAL COMMON STOCKS                                       3,509,069           
(Cost $2,536,383)                                                             

CONVERTIBLE PREFERRED STOCKS                                                  
- 0.3%                                                                        

FINANCE - 0.2%                                                                

CREDIT & OTHER FINANCE - 0.2%                                                 

Union Pacific Capital Trust:                                                  

$3.125 TIDES (d)                  200,000                 10,000              

$3.125                            50,000                  2,500               

                                                          12,500              

CONVERTIBLE PREFERRED STOCKS                                                  
- CONTINUED                                                                   

                                 SHARES                  VALUE (NOTE 1) (000S)

INDUSTRIAL MACHINERY &                                                        
EQUIPMENT - 0.1%                                                              

Ingersoll Rand Co./Ingersoll      103,800                $ 2,556              
Rand Finance $1.68 Income                                                     
PRIDES                                                                        

TOTAL CONVERTIBLE PREFERRED                                15,056             
STOCKS                                                                        
(Cost $13,551)                                                                


                                                        [Enlarge/Download Table]

                                                                                     
NONCONVERTIBLE BONDS - 13.4%                                                         

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)                       

AEROSPACE & DEFENSE - 0.2%                                                           

DEFENSE ELECTRONICS - 0.2%                                                           

Raytheon Co. 6.45% 8/15/02       Baa1  $ 13,000                  13,384              

BASIC INDUSTRIES - 0.2%                                                              

CHEMICALS & PLASTICS - 0.2%                                                          

Praxair, Inc. 6.15% 4/15/03      A3     10,925                   10,987              

CONSTRUCTION & REAL ESTATE -                                                         
0.4%                                                                                 

REAL ESTATE INVESTMENT TRUSTS                                                        
- 0.4%                                                                               

CenterPoint Properties Trust     Baa2   2,600                    2,510               
6.75% 4/1/05                                                                         

EOP Operating LP:                                                                    

6.625% 2/15/05                   Baa1   2,500                    2,502               

6.75% 2/15/08                    Baa1   4,590                    4,604               

7.25% 2/15/18                    Baa1   15,000                   14,530              

                                                                 24,146              

DURABLES - 0.4%                                                                      

TEXTILES & APPAREL - 0.4%                                                            

Levi Strauss & Co. 7% 11/1/06    Baa3   14,500                   13,558              
(d)                                                                                  

Unifi, Inc. 6.5% 2/1/08          A3     8,670                    8,531               

                                                                 22,089              

ENERGY - 0.3%                                                                        

ENERGY SERVICES - 0.1%                                                               

Baker Hughes, Inc. 6.875%        A2     5,340                    5,422               
1/15/29 (d)                                                                          

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

ENERGY - CONTINUED                                                                   

OIL & GAS - 0.2%                                                                     

Petro-Canada, Inc. 7% 11/15/28   A3    $ 5,030                  $ 5,031              

Petroleum Geo-Services ASA       Baa3   8,750                    8,047               
yankee 7.125% 3/30/28                                                                

                                                                 13,078              

TOTAL ENERGY                                                     18,500              

FINANCE - 5.3%                                                                       

BANKS - 2.3%                                                                         

ABN-Amro Bank NV, Chicago        A1     6,750                    6,935               
6.625% 10/31/01                                                                      

Banco Latinoamericano            Baa2   2,300                    2,276               
Exportaciones SA euro 6.9%                                                           
12/4/99 (d)                                                                          

Bank of New York                 A1     10,000                   10,904              
Institutional Capital Trust                                                          
A 7.78% 12/1/26 (d)                                                                  

BankAmerica Corp. 10% 2/1/03     Aa3    850                      984                 

BankBoston NA 6.375% 3/25/08     A2     5,000                    5,037               

BanPonce Corp.:                                                                      

5.75% 3/1/99                     A3     1,620                    1,621               

6.378% 4/8/99                    A3     2,980                    2,985               

BanPonce Financial Corp.:                                                            

6.69% 9/21/00                    A3     500                      505                 

6.75% 8/9/01                     A3     770                      777                 

6.88% 6/16/00                    A3     2,500                    2,535               

Barclays Bank PLC yankee:                                                            

5.875% 7/15/00                   A1     11,000                   11,031              

5.95% 7/15/01                    A1     12,450                   12,528              

Capital One Bank:                                                                    

6.375% 2/15/03                   Baa3   5,300                    5,232               

7.2% 7/19/99                     Baa3   18,000                   18,047              

Chase Manhattan Corp. 5.5%       Aa3    2,400                    2,409               
2/15/01                                                                              

Korea Development Bank:                                                              

6.625% 11/21/03                  Ba2    3,070                    2,911               

7.125% 9/17/01                   Ba2    2,170                    2,127               

MBNA Corp.:                                                                          

6.34% 6/2/03                     Baa2   1,800                    1,765               

6.875% 11/15/02                  Baa2   8,350                    8,400               

NationsBank NA 5.92% 6/8/01      Aa2    6,500                    6,582               

NB Capital Trust IV 8.25%        Aa2    6,630                    7,618               
4/15/27                                                                              

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                                  

BANKS - CONTINUED                                                                    

Providian National Bank 6.25%    Baa3  $ 3,250                  $ 3,272              
5/7/01                                                                               

Union Planters National Bank     A3     4,000                    4,080               
6.81% 8/20/01                                                                        

Zions Bancorp 8.625% 10/15/02    Baa1   6,000                    6,566               

                                                                 127,127             

CREDIT & OTHER FINANCE - 2.4%                                                        

Associates Corp. of North                                                            
America:                                                                             

6% 4/15/03                       Aa3    5,550                    5,648               

6% 7/15/05                       Aa3    20,000                   20,368              

AT&T Capital Corp.:                                                                  

6.41% 8/13/99                    Baa3   7,500                    7,525               

7.5% 11/15/00                    Baa3   8,350                    8,473               

BankBoston Capital Trust II      A2     3,250                    3,389               
7.75% 12/15/26                                                                       

BanPonce Trust I 8.327% 2/1/27   A3     7,150                    6,883               

Chase Capital I 7.67% 12/1/26    Aa3    7,635                    8,273               

ERP Operating LP 6.55%           A3     2,000                    2,014               
11/15/01                                                                             

Finova Capital Corp. 6.12%       Baa1   5,000                    5,001               
5/28/02                                                                              

First Security Capital I         A3     4,690                    5,179               
8.41% 12/15/26                                                                       

First Union Institutional        BBB+   2,650                    2,991               
Capital I 8.04% 12/1/26                                                              

Fleet Capital Trust II 7.92%     A2     1,300                    1,440               
12/11/26                                                                             

Ford Motor Credit Co. 6.2%       A1     20,000                   20,309              
3/12/01                                                                              

General Electric Capital         Aaa    7,000                    7,020               
Corp. 6.94% 4/13/09 (c)                                                              

Household Finance Corp. 6%       A2     15,000                   15,077              
5/8/00                                                                               

KeyCorp Institutional Capital    A1     4,000                    4,413               
A 7.826% 12/1/26                                                                     

Money Store, Inc. 7.3% 12/1/02   A2     3,850                    4,073               

Sprint Capital Corp. 5.7%        Baa1   4,070                    4,087               
11/15/03                                                                             

                                                                 132,163             

INSURANCE - 0.3%                                                                     

Executive Risk Capital Trust     Baa3   10,000                   9,786               
8.675% 2/1/27                                                                        

SunAmerica, Inc. 6.2% 10/31/99   Aaa    5,500                    5,539               

                                                                 15,325              

SAVINGS & LOANS - 0.2%                                                               

Great Western Finance Trust      A3     8,000                    8,724               
II 8.206% 2/1/27                                                                     

Long Island Savings Bank FSB     Baa3   3,750                    3,753               
6.2% 4/2/01                                                                          

                                                                 12,477              

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                                  

SECURITIES INDUSTRY - 0.1%                                                           

Amvescap PLC yankee 6.375%       A3    $ 3,600                  $ 3,670              
5/15/03                                                                              

TOTAL FINANCE                                                    290,762             

INDUSTRIAL MACHINERY &                                                               
EQUIPMENT - 0.5%                                                                     

INDUSTRIAL MACHINERY &                                                               
EQUIPMENT - 0.3%                                                                     

Tyco International Group SA      Baa1   16,000                   16,232              
yankee 6.125% 6/15/01                                                                

POLLUTION CONTROL - 0.2%                                                             

WMX Technologies, Inc.:                                                              

6.25% 4/1/99                     Baa3   8,500                    8,510               

8.25% 11/15/99                   Baa3   1,920                    1,960               

                                                                 10,470              

TOTAL INDUSTRIAL MACHINERY &                                     26,702              
EQUIPMENT                                                                            

MEDIA & LEISURE - 1.7%                                                               

BROADCASTING - 1.4%                                                                  

Clear Channel Communications,                                                        
Inc.:                                                                                

6.875% 6/15/18                   Baa3   10,000                   9,989               

7.25% 10/15/27                   Baa3   5,000                    5,163               

Continental Cablevision, Inc.:                                                       

8.3% 5/15/06                     Baa3   500                      561                 

9% 9/1/08                        Baa3   4,040                    4,840               

TCI Communications, Inc.:                                                            

8.25% 1/15/03                    Baa3   4,120                    4,531               

 8.75% 8/1/15                    Baa3   14,710                   18,678              

9.8% 2/1/12                      Baa3   6,290                    8,457               

Time Warner, Inc.:                                                                   

6.625% 5/15/29                   Baa3   6,500                    6,620               

6.85% 1/15/26                    Baa3   10,000                   10,368              

6.875% 6/15/18                   Baa3   4,770                    5,042               

                                                                 74,249              

PUBLISHING - 0.3%                                                                    

News America Holdings, Inc.      Baa3   13,000                   14,623              
8% 10/17/16                                                                          

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED)            PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)
(G)                                                                                  

MEDIA & LEISURE - CONTINUED                                                          

PUBLISHING - CONTINUED                                                               

News America, Inc.:                                                                  

6.625% 1/9/08                    Baa3  $ 950                    $ 993                

7.25% 5/18/18                    Baa3   2,000                    2,101               

                                                                 17,717              

RESTAURANTS - 0.0%                                                                   

Darden Restaurants, Inc.         Baa1   105                      104                 
6.375% 2/1/06                                                                        

TOTAL MEDIA & LEISURE                                            92,070              

NONDURABLES - 0.5%                                                                   

BEVERAGES - 0.2%                                                                     

Seagram Co. Ltd. yankee          Baa3   950                      914                 
6.875% 9/1/23                                                                        

Seagram J E & Sons, Inc.:                                                            

6.625% 12/15/05                  Baa3   6,000                    6,114               

7.6% 12/15/28                    Baa3   5,000                    5,327               

                                                                 12,355              

FOODS - 0.1%                                                                         

ConAgra, Inc. 7.125% 10/1/26     Baa1   5,000                    5,353               

TOBACCO - 0.2%                                                                       

Philip Morris Companies, Inc.    A2     8,980                    9,585               
6.95% 6/1/06                                                                         

TOTAL NONDURABLES                                                27,293              

RETAIL & WHOLESALE - 0.7%                                                            

DRUG STORES - 0.2%                                                                   

Rite Aid Corp. 6% 12/15/05 (d)   Baa1   8,000                    8,071               

GENERAL MERCHANDISE STORES -                                                         
0.2%                                                                                 

Dayton Hudson Corp. 6.4%         A3     1,000                    1,036               
2/15/03                                                                              

Federated Department Stores,                                                         
Inc.:                                                                                

6.79% 7/15/27                    Baa2   6,000                    6,218               

8.5% 6/15/03                     Baa2   4,000                    4,427               

                                                                 11,681              

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

RETAIL & WHOLESALE - CONTINUED                                                       

GROCERY STORES - 0.3%                                                                

American Stores Co. 7.5%         Baa2  $ 7,000                  $ 7,874              
5/1/37                                                                               

Kroger Co. 6% 7/1/00             Baa3   8,050                    8,098               

                                                                 15,972              

TOTAL RETAIL & WHOLESALE                                         35,724              

TECHNOLOGY - 0.4%                                                                    

COMPUTERS & OFFICE EQUIPMENT                                                         
- 0.4%                                                                               

Comdisco, Inc.:                                                                      

6.375% 11/30/01                  Baa1   12,000                   12,110              

9.3% 6/27/00                     Baa2   3,750                    3,949               

9.45% 6/8/00                     Baa2   6,000                    6,319               

                                                                 22,378              

TRANSPORTATION - 0.7%                                                                

AIR TRANSPORTATION - 0.2%                                                            

Delta Air Lines, Inc.:                                                               

equipment trust certificate      Baa1   782                      851                 
8.54% 1/2/07                                                                         

9.875% 5/15/00                   Baa3   2,000                    2,089               

9.875% 4/30/08                   Baa1   4,677                    5,350               

                                                                 8,290               

RAILROADS - 0.5%                                                                     

Burlington Northern Santa Fe                                                         
Corp.:                                                                               

6.53% 7/15/37                    Baa2   12,000                   12,459              

6.875% 12/1/27                   Baa2   5,000                    5,314               

Norfolk Southern Corp. 7.05%     Baa1   8,820                    9,688               
5/1/37                                                                               

                                                                 27,461              

TOTAL TRANSPORTATION                                             35,751              

UTILITIES - 2.1%                                                                     

CELLULAR - 0.2%                                                                      

Cable & Wireless                 Baa1   9,150                    9,302               
Communications PLC 6.375%                                                            
3/6/03                                                                               

ELECTRIC UTILITY - 1.1%                                                              

Avon Energy Partners Holdings:                                                       

6.46% 3/4/08 (d)                 Baa2   6,800                    6,893               

7.05% 12/11/07 (d)               Baa2   20,000                   20,923              

NONCONVERTIBLE BONDS -                                                               
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

UTILITIES - CONTINUED                                                                

ELECTRIC UTILITY - CONTINUED                                                         

DR Investments UK PLC yankee     A2    $ 7,500                  $ 7,793              
7.1% 5/15/02 (d)                                                                     

Israel Electric Corp. Ltd.:                                                          

yankee 7.25% 12/15/06 (d)        A3     3,000                    3,018               

7.75% 12/15/27 (d)               A3     12,795                   11,783              

Texas Utilities Co. 6.375%       Baa3   8,055                    8,229               
1/1/08                                                                               

                                                                 58,639              

GAS - 0.2%                                                                           

Southwest Gas Corp. 9.75%        Baa2   8,700                    9,704               
6/15/02                                                                              

TELEPHONE SERVICES - 0.6%                                                            

MCI WorldCom, Inc.:                                                                  

6.4% 8/15/05                     Baa2   14,300                   14,831              

7.75% 4/1/07                     Baa2   7,870                    8,935               

8.875% 1/15/06                   Baa2   9,592                    10,444              

                                                                 34,210              

TOTAL UTILITIES                                                  111,855             

TOTAL NONCONVERTIBLE BONDS                                       731,641             
(Cost $716,859)                                                                      

U.S. GOVERNMENT AND                                                                  
GOVERNMENT AGENCY                                                                    
OBLIGATIONS - 5.2%                                                                   

U.S. GOVERNMENT AGENCY                                                               
OBLIGATIONS - 1.2%                                                                   

Fannie Mae:                                                                          

5.75% 6/15/05                    Aaa    10,100                   10,471              

6.15% 12/10/07                   Aaa    2,000                    2,107               

7.49% 3/2/05                     Aaa    11,000                   12,298              

Federal Agricultural Mortgage                                                        
Corp.:                                                                               

7.01% 2/10/05                    Aaa    1,530                    1,672               

7.04% 8/10/05                    Aaa    2,400                    2,643               

Federal Home Loan Bank:                                                              

7.36% 7/1/04                     Aaa    2,990                    3,294               

7.46% 9/9/04                     Aaa    1,540                    1,708               

7.87% 10/20/04                   Aaa    6,400                    7,235               

Financing Corp. Coupon Strip     Aaa    4,574                    3,547               
0% 3/26/04                                                                           

Freddie Mac 8.115% 1/31/05       Aaa    4,750                    5,455               

U.S. GOVERNMENT AND                                                                  
GOVERNMENT AGENCY                                                                    
OBLIGATIONS - CONTINUED                                                              

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

U.S. GOVERNMENT AGENCY                                                               
OBLIGATIONS - CONTINUED                                                              

Government Trust Certificates    Aaa   $ 1,524                  $ 1,605              
(assets of Trust guaranteed                                                          
by U.S. Government through                                                           
Defense Security Assistance                                                          
Agency): Class T-3, 9.625%                                                           
5/15/02                                                                              

 Class 1-C, 9.25% 11/15/01       Aaa    5,515                    5,853               

Guaranteed Export Trust          Aaa    226                      225                 
Certificates (assets of                                                              
Trust guaranteed by U.S.                                                             
Government through                                                                   
Export-Import Bank) Series                                                           
1994 C, 6.61% 9/15/99                                                                

Private Export Funding Corp.     Aaa    1,326                    1,378               
secured 6.86% 4/30/04                                                                

U.S. Department of Housing       Aaa    6,270                    7,018               
and Urban Development                                                                
government guaranteed                                                                
participation certificates                                                           
Series 1995 A, 8.27% 8/1/03                                                          

                                                                 66,509              

U.S. TREASURY OBLIGATIONS -                                                          
4.0%                                                                                 

U.S. Treasury Bond:                                                                  

7.625% 2/15/25                   Aaa    17,575                   23,246              

8.75% 5/15/17                    Aaa    1,740                    2,432               

8.875% 8/15/17                   Aaa    22,365                   31,643              

9% 11/15/18                      Aaa    6,940                    10,022              

U.S. Treasury Notes:                                                                 

7% 7/15/06                       Aaa    88,625                   100,922             

7.5% 11/15/01                    Aaa    45,660                   49,027              

                                                                 217,292             

TOTAL U.S. GOVERNMENT AND                                        283,801             
GOVERNMENT  AGENCY OBLIGATIONS                                                       
(Cost $275,259)                                                                      

U.S. GOVERNMENT AGENCY -                                                             
MORTGAGE SECURITIES - 12.2%                                                          

FANNIE MAE - 9.9%                                                                    

5.5% 11/1/08 to 1/1/14           Aaa    16,637                   16,486              

6% 1/1/12 to 1/1/29              Aaa    55,954                   55,359              

U.S. GOVERNMENT AGENCY -                                                             
MORTGAGE SECURITIES -                                                                
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

FANNIE MAE - CONTINUED                                                               

6% 1/1/14 to 2/1/14 (e)          Aaa   $ 47,200                 $ 47,407             

6.5% 7/1/08 to 12/1/28           Aaa    321,164                  324,093             

7% 12/1/08 to 2/1/29             Aaa    85,540                   87,413              

7% 3/1/26 (e)                    Aaa    26                       26                  

7.5% 6/1/07 to 6/1/28            Aaa    1,942                    2,001               

8% 9/1/17 to 12/1/27             Aaa    5,702                    5,921               

                                                                 538,706             

FREDDIE MAC - 0.0%                                                                   

7% 8/1/99 to 7/1/01              Aaa    1,525                    1,532               

GOVERNMENT NATIONAL MORTGAGE                                                         
ASSOCIATION - 2.3%                                                                   

7% 10/15/27 to 12/15/28          Aaa    90,745                   92,957              

7.5% 1/15/26 to 8/15/28          Aaa    29,853                   30,847              

8% 1/15/17 to 8/15/25            Aaa    1,072                    1,117               

9% 11/15/14 to 1/15/23           Aaa    925                      993                 

9.5% 6/15/09 to 3/15/23          Aaa    2,161                    2,316               

                                                                 128,230             

TOTAL U.S. GOVERNMENT AGENCY                                     668,468             
- MORTGAGE SECURITIES                                                                
(Cost $660,345)                                                                      

ASSET-BACKED SECURITIES - 1.0%                                                       

Capital Equipment Receivables    Baa2   4,680                    4,683               
Trust 6.48% 10/15/06                                                                 

Chevy Chase Auto Receivables     Aaa    3,015                    3,032               
Trust 5.91% 12/15/04                                                                 

Contimortgage Home Equity        Aaa    15,000                   15,009              
Loan Trust 6.26% 7/15/12                                                             

Ford Credit Auto Owner Trust:                                                        

6.2% 12/15/02                    Baa3   3,850                    3,865               

6.4% 5/15/02                     A1     4,250                    4,300               

6.4% 12/15/02                    Baa3   2,360                    2,369               

Green Tree Financial Corp.       Aaa    767                      768                 
6.1% 4/15/27                                                                         

ASSET-BACKED SECURITIES -                                                            
CONTINUED                                                                            

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

Key Auto Finance Trust:                                                              

6.3% 10/15/03                    A2    $ 4,448                  $ 4,453              

6.65% 10/15/03                   Baa3   1,305                    1,319               

KeyCorp Auto Grantor Trust       A3     93                       93                  
5.8% 7/15/00                                                                         

MBNA Master Credit Card Trust    Aaa    15,000                   15,756              
II 6.55% 1/15/07                                                                     

Premier Auto Trust 6% 5/6/00     Aaa    556                      556                 

UFSB Grantor Trust 8.2%          Baa2   154                      154                 
1/10/01                                                                              

Union Acceptance Corp. 7.075%    Baa2   423                      424                 
7/10/02                                                                              

TOTAL ASSET-BACKED SECURITIES                                    56,781              
(Cost $55,791)                                                                       

COMMERCIAL MORTGAGE                                                                  
SECURITIES - 1.2%                                                                    

CS First Boston Mortgage                                                             
Securities Corp.:                                                                    

Series 1997 C2 Class D, 7.27%    Baa2   5,790                    5,493               
1/17/35                                                                              

Series 1998 FLI Class E,         Baa2   12,180                   11,849              
6.4788% 1/10/13 (d)(f)                                                               

Equitable Life Assurance                                                             
Society of the United States                                                         
(The):                                                                               

Series 174 Class B1, 7.33%       Aa2    4,000                    4,257               
5/15/06 (d)                                                                          

Series 1996 1 Class C1, 7.52%    A2     4,000                    4,243               
5/15/06 (d)                                                                          

GS Mortgage Securities Corp.     Baa3   5,000                    4,561               
II Series 1998 GLII Class E,                                                         
6.9697% 4/13/31 (d)(f)                                                               

Morgan Stanley Capital I,                                                            
Inc. Series 1998 CF1:                                                                

Class D, 7.35% 1/15/12           Baa2   5,605                    5,412               

Class E, 7.35% 12/15/12          Baa3   1,934                    1,704               

Nomura Asset Securities Corp.    Baa2   20,000                   18,244              
Series 1998-D6 Class A-4,                                                            
7.5718% 3/17/28 (f)                                                                  

Thirteen Affiliates of           Aaa    8,000                    8,346               
General Growth Properties,                                                           
Inc. sequential pay Series A                                                         
2, 6.602% 12/15/10 (d)                                                               

Wells Fargo Capital Markets      Aaa    2,590                    2,616               
Apartment Financing Trust                                                            
Series APT Class 1, 6.56%                                                            
12/29/05 (d)                                                                         

TOTAL COMMERCIAL MORTGAGE                                        66,725              
SECURITIES                                                                           
(Cost $68,504)                                                                       

FOREIGN GOVERNMENT AND                                                               
GOVERNMENT AGENCY                                                                    
OBLIGATIONS (H) - 0.3%                                                               

MOODY'S RATINGS (UNAUDITED) (G)        PRINCIPAL AMOUNT (000S)  VALUE (NOTE 1) (000S)

Korean Republic:                                                                     

global bond 8.75% 4/15/03        Ba1   $ 4,200                  $ 4,386              

8.875% 4/15/08                   Ba1    9,220                    10,015              

Quebec Province yankee:                                                              

7.125% 2/9/24                    A2     680                      747                 

7.5% 7/15/23                     A2     2,880                    3,297               

TOTAL FOREIGN GOVERNMENT AND                                     18,445              
GOVERNMENT  AGENCY OBLIGATIONS                                                       
(Cost $18,150)                                                                       

SUPRANATIONAL OBLIGATIONS -                                                          
0.1%                                                                                 

Inter American Development       Aaa    3,000                    3,168               
Bank yankee 6.29% 7/16/27                                                            
(Cost $2,981)                                                                        

CERTIFICATES OF DEPOSIT - 0.1%                                                       

Canadian Imperial Bank of                 4,500                   4,560              
Commerce, New York yankee                                                            
6.2% 8/1/00 (Cost $4,507)                                                            

CASH EQUIVALENTS - 2.0%                                                              

                                        MATURITY AMOUNT (000S)                       

Investments in repurchase               $ 3,626                   3,625              
agreements (U.S. Treasury                                                            
obligations), in a joint                                                             
trading account at 4.25%,                                                            
dated 1/29/99 due 2/1/99                                                             

                                        SHARES                                       

Taxable Central Cash Fund (b)           105,467,502               105,468            

TOTAL CASH EQUIVALENTS                                            109,093            
(Cost $109,093)                                                                      

TOTAL INVESTMENT IN                                             $ 5,466,807          
SECURITIES - 100%                                                                    
(Cost $4,461,423)                                                                    


SECURITY TYPE ABBREVIATIONS                                                     
PRIDES - Preferred Redeemable                                                   
Increased Dividend                                            
Equity Securities                                             

TIDES - Term Income Deferred                                                    
Equity Securities                                               

LEGEND                                                                          

(a) Non-income producing                                                        

(b) At period end, the seven-day yield on the Taxable Central Cash              
Fund was 4.81%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          

(c) Debt obligation initially issued at one coupon which converts to a          
higher coupon at a specified date. The rate shown is the rate at                
period end.                                                                     

(d) Security exempt from registration under Rule 144A of the                    
Securities Act of 1933.  These securities may be resold in                      
transactions exempt from registration, normally to qualified                    
institutional buyers. At the period end, the value of these securities          
amounted to $136,513,000 or 2.5% of net assets.                                 

(e) Security purchased on a delayed delivery or when-issued basis (see          
Note 2 of Notes to Financial Statements).                                       

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

(g) Standard & Poor's credit ratings are used in the absence of a               
rating by Moody's Investors Services, Inc.                                      

(h) For foreign government obligations not individually rated by S&P            
or Moody's, the ratings listed have been assigned by FMR, the fund's            
investment adviser, based principally on S&P and Moody's ratings of             
the sovereign credit of the issuing government.                                 

OTHER INFORMATION                                                               

The composition of long-term debt holdings as a percentage of total             
value of investments in securities, is as follows (ratings are                  
unaudited):                                                                     

MOODY'S RATINGS       S&P RATINGS                                             
Aaa, Aa, A 23.5%       AAA, AA, A 23.0%                                         
Baa         9.5%       BBB         9.5%                                         
Ba          0.4%       BB          0.0%                                         
B           0.0%       B           0.0%                                         
Caa         0.0%       CCC         0.0%                                         
Ca, C       0.0%       CC, C       0.0%                                         
D           0.0%                  
INCOME TAX INFORMATION                                                          

At January 31, 1999, the aggregate cost of investment securities for            
income tax purposes was $4,461,860,000. Net unrealized appreciation             
aggregated $1,004,947,000, of which $1,051,046,000 related to                   
appreciated investment securities and $46,099,000 related to                    
depreciated investment securities.                                              

FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             
AMOUNTS IN THOUSANDS (EXCEPT                                                    
PER-SHARE AMOUNT)                        JANUARY                                
                      31, 1999 (UNAUDITED)

ASSETS                                                                          

Investment in securities, at             $ 5,466,807                            
value (including repurchase                                                     
agreements of $3,625) (cost                                                     
$4,461,423) -  See                                                              
accompanying schedule                                                           

Receivable for investments                91,649                                
sold                                                                            

Receivable for fund shares                9,035                                 
sold                                                                            

Dividends receivable                      3,347                                 

Interest receivable                       21,172                                

Other receivables                         464                                   

TOTAL ASSETS                             5,592,474                            

LIABILITIES                                                                     

Payable for investments        $ 56,196                                         
purchased Regular delivery                                                      

Delayed delivery               47,357                                         

Payable for fund shares         19,312                                          
redeemed                                                                        

Accrued management fee          1,941                                           

Other payables and accrued      1,100                                           
expenses                                                                        

Collateral on securities        22,477                                          
loaned, at value                                                                

TOTAL LIABILITIES                        148,383                              

NET ASSETS                               $ 5,444,091                            

Net Assets consist of:                                                          

Paid in capital                          $ 4,347,567                            

Undistributed net investment              11,345                                
income                                                                          

Accumulated undistributed net             79,782                                
realized gain (loss) on                                                         
investments and foreign                                                         
currency transactions                                                           

Net unrealized appreciation               1,005,397                             
(depreciation) on                                                               
investments and assets and                                                      
liabilities in foreign                                                          
currencies                                                                      

NET ASSETS, for 322,724                  $ 5,444,091                            
shares outstanding                                                              

NET ASSET VALUE, offering                 $16.87                                
price and redemption price                                                      
per share ($5,444,091                                                           
(divided by) 322,724 shares)                                                    

STATEMENT OF OPERATIONS                                                         
AMOUNTS IN THOUSANDS                       SIX                                  
                              MONTHS ENDED JANUARY 31,
                      1999 (UNAUDITED)

INVESTMENT INCOME                          $ 16,782                             
Dividends                                                                       

Interest (including income on               66,189                              
securities loaned of $286)                                                      

TOTAL INCOME                               82,971                             

EXPENSES                                                                        

Management fee                   $ 10,854                                       

Transfer agent fees               5,517                                         

Accounting and security           424                                           
lending fees                                                                    

Non-interested trustees'          15                                            
compensation                                                                    

Custodian fees and expenses       77                                            

Registration fees                 41                                            

Audit                             42                                            

Legal                             16                                            

Miscellaneous                     16                                            

Total expenses before            17,002                                       
reductions                                                                      

Expense reductions               (1,009)   15,993                             

NET INVESTMENT INCOME                       66,978                              

REALIZED AND UNREALIZED GAIN                                                    
(LOSS)                                                                          
Net realized gain (loss) on:                                                    

Investment securities            102,533                                      

Foreign currency transactions    122       102,655                            

Change in net unrealized                                                        
appreciation (depreciation)                                                     
on:                                                                             

Investment securities            401,335                                      

Assets and liabilities in        10        401,345                            
foreign currencies                                                              

NET GAIN (LOSS)                             504,000                             

NET INCREASE (DECREASE) IN                 $ 570,978                            
NET ASSETS RESULTING  FROM                                                      
OPERATIONS                                                                      

                                                        [Enlarge/Download Table]

                                                                                       
STATEMENT OF CHANGES IN NET ASSETS                                                     
AMOUNTS IN THOUSANDS             SIX MONTHS ENDED JANUARY 31,  YEAR ENDED JULY 31, 1998
                                 1999 (UNAUDITED)                                      

INCREASE (DECREASE) IN NET                                                             
ASSETS                                                                                 

Operations Net investment        $ 66,978                      $ 134,510               
income                                                                                 

 Net realized gain (loss)         102,655                       589,388                

 Change in net unrealized         401,345                       (108,105)              
appreciation (depreciation)                                                            

 NET INCREASE (DECREASE) IN       570,978                       615,793                
NET ASSETS RESULTING  FROM                                                             
OPERATIONS                                                                             

Distributions to shareholders     (61,566)                      (143,536)              
From net investment income                                                             

 From net realized gain           (376,204)                     (378,462)              

 TOTAL DISTRIBUTIONS              (437,770)                     (521,998)              

Share transactions Net            601,427                       1,387,837              
proceeds from sales of shares                                                          

 Reinvestment of distributions    428,387                       512,005                

 Cost of shares redeemed          (681,614)                     (1,204,221)            

 NET INCREASE (DECREASE) IN       348,200                       695,621                
NET ASSETS RESULTING  FROM                                                             
SHARE TRANSACTIONS                                                                     

  TOTAL INCREASE (DECREASE)       481,408                       789,416                
IN NET ASSETS                                                                          

NET ASSETS                                                                             

 Beginning of period              4,962,683                     4,173,267              

 End of period (including        $ 5,444,091                   $ 4,962,683             
undistributed net investment                                                           
income of $11,345 and                                                                  
$5,932, respectively)                                                                  

OTHER INFORMATION                                                                      
Shares                                                                                 

 Sold                             38,334                        86,120                 

 Issued in reinvestment of        30,096                        33,230                 
distributions                                                                          

 Redeemed                         (43,504)                      (74,686)               

 Net increase (decrease)          24,926                        44,664                 


                                                        [Enlarge/Download Table]

                                                                                                                      
FINANCIAL HIGHLIGHTS                                                                                                  
                               SIX MONTHS ENDED JANUARY 31,  YEARS ENDED JULY 31,                                     
                               1999                                                                                   

                               (UNAUDITED)                   1998                  1997     1996     1995     1994    

SELECTED PER-SHARE DATA                                                                                               

Net asset value, beginning of  $ 16.66                       $ 16.49               $ 12.90  $ 13.20  $ 12.76  $ 13.84 
period                                                                                                                

Income from  Investment                                                                                               
Operations                                                                                                            

 Net investment income          .21 D                         .48 D                 .51 D    .57      .62      .25    

 Net realized and               1.47                          1.67                  3.73     (.27)    .27      (.17)  
unrealized gain   (loss)                                                                                              

 Total from investment          1.68                          2.15                  4.24     .30      .89      .08    
operations                                                                                                            

Less Distributions                                                                                                    

 From net investment   income   (.20)                         (.52)                 (.65)    (.60)    (.45)    (.25)  

 From net realized   gain       (1.27)                        (1.46)                -        -        -        (.50)  

 In excess of   net realized    -                             -                     -        -        -        (.41)  
gain                                                                                                                  

 Total distributions            (1.47)                        (1.98)                (.65)    (.60)    (.45)    (1.16) 

Net asset value,  end of       $ 16.87                       $ 16.66               $ 16.49  $ 12.90  $ 13.20  $ 12.76 
period                                                                                                                

TOTAL RETURN B, C               11.83%                        14.54%                33.82%   2.25%    7.19%    .37%   

RATIOS AND SUPPLEMENTAL DATA                                                                                          

Net assets, end of period (in  $ 5,444                       $ 4,963               $ 4,173  $ 4,022  $ 5,070  $ 5,390 
millions)                                                                                                             

Ratio of expenses to average    .69% A                        .70%                  .75%     .82%     .91%     1.02%  
net assets                                                                                                            

Ratio of expenses to average    .65% A, E                     .67% E                .74% E   .79% E   .90% E   1.01% E
net assets after expense                                                                                              
reductions                                                                                                            

Ratio of net investment         2.72% A                       2.97%                 3.58%    4.12%    5.33%    4.09%  
income to average  net assets                                                                                         

Portfolio turnover rate         170% A                        135%                  70%      247%     269%     157%   


A ANNUALIZED                                                                    
B TOTAL RETURNS FOR PEIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.            
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT              
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 6 OF NOTES TO                   
FINANCIAL STATEMENTS).                                                          
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 6 OF NOTES TO FINANCIAL STATEMENTS).                                  

NOTES TO FINANCIAL STATEMENTS                                                   
For the period ended January 31, 1999 (Unaudited)                               

1. SIGNIFICANT ACCOUNTING POLICIES.                                             

Fidelity Balanced Fund (the fund) is a fund of Fidelity Puritan Trust           
(the trust) and is authorized to issue an unlimited number of shares.           
The trust is registered under the Investment Company Act of 1940, as            
amended, as an open-end management investment company organized as a            
Massachusetts business trust. 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. Equity securities for which quotations are readily          
available are valued at the last sale price, or if no sale price, at            
the closing bid price. Debt securities for which quotations are                 
readily available are valued by a pricing service at their market               
values as determined by their most recent bid prices in the principal           
market (sales prices if the principal market is an exchange) in which           
such securities are normally traded. Securities (including restricted           
securities) for which market quotations are not readily available are           
valued at their fair value as determined in good faith under                    
consistently applied procedures under the general supervision of the            
Board of Trustees. 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             
and settlement date 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 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              

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED                                  

INVESTMENT INCOME - CONTINUED                                                   

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, which includes accretion of               
original issue discount, is accrued as earned. Investment income is             
recorded net of foreign taxes withheld where recovery of such taxes is          
uncertain.                                                                      

EXPENSES. Most expenses of the trust can be directly attributed to a            
fund. Expenses which cannot be directly attributed are apportioned              
among the funds in the trust.                                                   

DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the          
Plan) non-interested Trustees must defer receipt of a portion of, and           
may elect to defer receipt of an additional portion of, their annual            
compensation. Deferred amounts are treated as though equivalent dollar          
amounts had been invested in shares of the fund or are invested in a            
cross-section of other Fidelity funds. 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 paydown gains/losses on certain securities, options              
transactions, foreign currency transactions, market discount,                   
non-taxable dividends and losses deferred due to wash sales and                 
options. 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 contractual currency exchange rates established at             
the time of each trade.                                                         

JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the             
Securities                                                                      

2. OPERATING POLICIES - CONTINUED                                               

JOINT TRADING ACCOUNT - CONTINUED                                               

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.                    

DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell                    
securities on a delayed delivery basis. Payment and delivery may take           
place a month or more after the date of the transaction. The price of           
the underlying securities and the date when the securities will be              
delivered and paid for are fixed at the time the transaction is                 
negotiated. The market values of the securities purchased or sold on a          
delayed delivery basis are identified as such in the fund's schedule            
of investments. The fund may receive compensation for interest forgone          
in the purchase of a delayed delivery 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 or if the counterparty does not perform under             
the contract.                                                                   

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 sale at an acceptable price may be difficult.           
At the end of the period, the fund had no investments in restricted             
securities (excluding 144A issues).                                             

3. PURCHASES AND SALES OF INVESTMENTS.                                          

Purchases and sales of securities, other than short-term securities,            
aggregated $4,169,231,000 and $4,061,021,000, respectively, of which            
U.S. government and government agency obligations aggregated                    
$1,027,862,000 and $1,169,913,000, respectively.                                

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.                                 

MANAGEMENT FEE. As the fund's investment adviser, FMR receives a                
monthly 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 .15%. 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. For the period, the management           
fee was equivalent to an annualized rate of .44% of average net                 
assets.                                                                         

TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an                   
affiliate of FMR, is the fund's transfer, dividend disbursing and               
shareholder servicing agent. FSC receives account fees and asset-based          
fees that vary according to account size and type of account. FSC pays          
for typesetting, printing and mailing of all shareholder reports,               
except proxy statements. For the period, the transfer agent fees were           
equivalent to an annualized rate of .22% of average net assets.                 

ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's                  
accounting records and administers the security lending program. The            
security lending fee is based on the number and duration of lending             
transactions. The accounting 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 $819,000 for the                
period.                                                                         

5. SECURITY LENDING.                                                            

The fund loaned securities to certain brokers who paid the fund                 
negotiated lenders' fees. These fees are included in interest income.           
The fund receives U.S. Treasury obligations and/or cash as collateral           
against the loaned securities, in an amount at least equal to 102% of           
the market value of the loaned securities at the inception of each              
loan. This collateral must be maintained at not less than 100% of the           
market value of the loaned securities during the period of the loan.            
The market value of the loaned securities is determined at the close            
of business of the fund and any additional required collateral is               
delivered to the fund on the next business day. At period end, the              
value of the securities loaned amounted to $21,451,000. The fund                
received cash collateral of $22,477,000.                                        

6. 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 $782,000 under this arrangement.                                

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 $1,000 and $226,000, respectively, under these                       
arrangements.                                                                   

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.                                                                       

(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE                                           
WWW.FIDELITY.COM                                                                

If you are not currently on the Internet, call EarthLink Sprint at              
1-800-288-2967, and be sure to ask for registration number SMD004 to            
receive a special Fidelity package that includes 30 days of free                
Internet access. EarthLink is North America's #1 independent Internet           
access provider.                                                                

(COMPUTER_GRAPHIC)                                                              
FIDELITY ON-LINE XPRESS+(registered trademark)                                  

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.                                                                  

INVESTMENT ADVISER                                                              
Fidelity Management & Research Company                                          
Boston, MA                                                                      

INVESTMENT SUB-ADVISERS                                                         
Fidelity Investments                                                            
Money Management, Inc. (FIMM),                                                
Merrimack, NH                                                                 
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                                          
Stephen M. DuFour, Vice President                                               
Kevin E. Grant, Vice President                                                  
Richard A. Spillane, Jr., Vice President                                        
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
Matthew N. Karstetter, Deputy 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                                                                  
William O. McCoy *                                                              
Marvin L. Mann *                                                                
Gerald C. McDonough *                                                           
Robert C. Pozen                                                                 
Thomas R. Williams *                                                            

ADVISORY BOARD                                                                  
J. Gary Burkhead                                                                

* INDEPENDENT TRUSTEES                                                          

BAL-SANN-0399  72335                                                            
1.471161.101                                                                    

GENERAL DISTRIBUTOR                                                             
Fidelity Distributors Corporation                                               
Boston, MA                                                                      

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

CUSTODIAN                                                                       
Brown Brothers Harriman & Co.                                                   
Boston, MA                                                                      

FIDELITY'S GROWTH AND INCOME FUNDS                                              
Balanced Fund                                                                   
Convertible Securities Fund                                                     
Equity-Income Fund                                                              
Equity-Income II Fund                                                           
Fidelity (registered trademark) Fund                                            
Global Balanced Fund                                                            
Growth & Income Portfolio                                                       
Growth & Income II Portfolio                                                    
Puritan(registered trademark) Fund                                              
Real Estate Investment Portfolio                                                
Utilities 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)                                                
(registered trademark)                                                          
TouchTone Xpress(registered trademark)  1-800-544-5555                          
AUTOMATED LINE FOR QUICKEST SERVICE                                           

(fidelity_logo_graphic)(registered trademark)                                   
Corporate Headquarters                                                          
www.fidelity.com                                                                

FIDELITY                                                                        
GLOBAL BALANCED                                                                 
FUND                                                                            

SEMIANNUAL REPORT                                                               
JANUARY 31, 1999                                                                

(fidelity_logo_graphic)(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    9   A summary of major shifts in                          
the fund's investments over 
the past six months.        

INVESTMENTS           10  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.                 

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

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

This report is printed on recycled paper using soy-based inks.                  

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE                   
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.          
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE                   
INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE            
PROSPECTUS.                                                                     
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED            
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,             
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO                   
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT                   
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:                                                               

After the first month of 1999, U.S. stock markets seem to have                  
maintained their momentum from 1998, as the S&P 500, the Dow and                
NASDAQ all reached record highs in January. The technology sector, and          
Internet stocks in particular, were the main contributors. In the bond          
markets, domestic securities continued to trade at historically low             
yields, while positive economic news helped credit-sensitive sectors            
outperform Treasury bonds.                                                      

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 an investment in a money market fund is not insured or            
guaranteed by the Federal Deposit Insurance Corporation or any other            
government agency. Although money market funds seek to preserve the             
value of your investment at $1.00 per share, it is possible to lose             
money by investing in these types of funds.                                     

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. Of course, you should                 
consider your financial ability to continue your purchases through              
periods of low price levels before undertaking such a strategy.                 

If you have questions, please call us at 1-800-544-8888, or visit our           
web site at www.fidelity.com. 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).                                                           

                                                        [Enlarge/Download Table]

                                                                                      
CUMULATIVE TOTAL RETURNS                                                              

PERIODS ENDED JANUARY 31, 1999  PAST 6 MONTHS  PAST 1 YEAR  PAST 5 YEARS  LIFE OF FUND

FIDELITY GLOBAL BALANCED        5.68%          17.56%       36.93%        97.41%      

MSCI World                      9.11%          23.62%       98.64%        157.99%     

SB World Govt Bond              11.00%         13.15%       43.40%        n/a         

Global Flexible Portfolio       3.39%          11.29%       57.10%        n/a         
Funds Average                                                                         


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 since the fund started on February 1, 1993. 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 Morgan Stanley Capital             
International World Index - a market capitalization-weighted index              
that is designed to represent the performance of developed stock                
markets throughout the world. As of January 31, 1999, the index                 
included over 1500 equity securities of companies domiciled in 22               
countries. You can also compare the fund's returns to the performance           
of the Salomon Brothers World Government Bond Index - a market                  
value-weighted index of debt issues traded in 14 world government bond          
markets. To measure how the fund's performance stacked up against its           
peers, you can compare it to the global flexible portfolio funds                
average, which reflects the performance of mutual funds with similar            
objectives tracked by Lipper Inc. The past six months average                   
represents a peer group of 93 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 JANUARY 31, 1999    PAST 1 YEAR  PAST 5 YEARS  LIFE OF FUND       

FIDELITY GLOBAL BALANCED          17.56%       6.49%         12.00%             

MSCI World                        23.62%       14.71%        17.11%             

SB World Govt Bond                13.15%       7.48%         n/a                

Global Flexible Portfolio         11.29%       9.37%         n/a                
Funds Average                                                                   

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 different figure than that               
obtained by averaging the cumulative total returns and annualizing the          
result.)                                                                        

$10,000 OVER LIFE OF FUND                                                       
Fidelity Global Balanced     MSCI World               
SB World Govt Bond                                                              
00334                       MS004                     
SB006         1993/02/28    10000.00                    10000.00                
10000.00                                                
1993/03/31    10639.77                    10576.83                      
10153.51                                                                    
1993/04/30    11203.78                    11064.11                      
10368.08                                                                    
1993/05/31    11423.65                    11316.16                      
10472.05                                                                    
1993/06/30    11299.46                    11218.32                      
10449.72                                                                    
1993/07/31    11501.06                    11446.52                      
10479.38                                                                    
1993/08/31    12163.48                    11968.39                      
10794.43                                                                    
1993/09/30    12102.98                    11744.40                      
10922.48                                                                    
1993/10/31    12649.13                    12065.21                      
10903.98                                                                    
1993/11/30    12502.84                    11379.87                      
10825.83                                                                    
1993/12/31    13096.97                    11933.93                      
10917.94                                                                    
1994/01/31    13743.86                    12718.26                      
11005.86                                                                    
1994/02/28    13246.25                    12550.86                      
10933.99                                                                    
1994/03/31    12368.06                    12006.96                      
10918.29                                                                    
1994/04/30    12198.22                    12375.31                      
10930.85                                                                    
1994/05/31    12398.03                    12404.35                      
10834.90                                                                    
1994/06/30    11806.56                    12367.06                      
10991.21                                                                    
1994/07/31    12027.25                    12599.35                      
11078.78                                                                    
1994/08/31    12278.02                    12975.91                      
11040.40                                                                    
1994/09/30    12247.93                    12632.10                      
11120.30                                                                    
1994/10/31    12087.43                    12988.52                      
11298.58                                                                    
1994/11/30    11746.38                    12422.32                      
11143.33                                                                    
1994/12/31    11595.91                    12539.70                      
11174.03                                                                    
1995/01/31    11284.95                    12348.47                      
11408.49                                                                    
1995/02/28    11405.32                    12525.49                      
11700.51                                                                    
1995/03/31    11726.32                    13126.17                      
12395.51                                                                    
1995/04/30    11906.88                    13580.59                      
12625.08                                                                    
1995/05/31    11916.91                    13693.69                      
12980.25                                                                    
1995/06/30    11947.00                    13686.40                      
13056.66                                                                    
1995/07/31    12438.52                    14368.10                      
13087.36                                                                    
1995/08/31    12358.27                    14044.91                      
12637.64                                                                    
1995/09/30    12538.83                    14450.95                      
12919.89                                                                    
1995/10/31    12418.46                    14220.32                      
13016.19                                                                    
1995/11/30    12649.17                    14710.97                      
13163.42                                                                    
1995/12/31    12930.36                    15137.97                      
13301.24                                                                    
1996/01/31    12940.43                    15408.69                      
13136.91                                                                    
1996/02/29    12728.95                    15499.36                      
13069.92                                                                    
1996/03/31    12799.44                    15754.07                      
13051.78                                                                    
1996/04/30    13161.98                    16121.28                      
12999.79                                                                    
1996/05/31    13182.12                    16131.99                      
13002.58                                                                    
1996/06/30    13282.82                    16210.32                      
13104.81                                                                    
1996/07/31    13000.85                    15634.18                      
13356.01                                                                    
1996/08/31    13031.06                    15810.64                      
13408.00                                                                    
1996/09/30    13330.51                    16426.40                      
13462.42                                                                    
1996/10/31    13392.46                    16537.82                      
13714.33                                                                    
1996/11/30    13991.35                    17461.31                      
13895.05                                                                    
1996/12/31    13932.06                    17178.39                      
13782.71                                                                    
1997/01/31    13900.78                    17382.20                      
13414.28                                                                    
1997/02/28    14046.77                    17578.87                      
13314.14                                                                    
1997/03/31    13994.63                    17227.87                      
13212.62                                                                    
1997/04/30    14140.63                    17787.72                      
13098.18                                                                    
1997/05/31    14901.89                    18882.39                      
13452.66                                                                    
1997/06/30    15538.01                    19820.92                      
13613.15                                                                    
1997/07/31    16111.56                    20730.57                      
13507.08                                                                    
1997/08/31    15298.16                    19340.53                      
13499.06                                                                    
1997/09/30    16099.75                    20387.98                      
13786.55                                                                    
1997/10/31    15482.98                    19311.64                      
14072.64                                                                    
1997/11/30    15525.52                    19650.09                      
13856.67                                                                    
1997/12/31    15675.93                    19886.29                      
13814.81                                                                    
1998/01/31    16008.10                    20437.18                      
13949.13                                                                    
1998/02/28    16715.28                    21816.33                      
14062.52                                                                    
1998/03/31    17176.02                    22734.20                      
13923.31                                                                    
1998/04/30    17497.47                    22952.95                      
14145.91                                                                    
1998/05/31    17390.32                    22661.87                      
14179.05                                                                    
1998/06/30    17604.62                    23196.25                      
14199.99                                                                    
1998/07/31    17808.20                    23155.59                      
14218.83                                                                    
1998/08/31    15879.52                    20064.26                      
14606.10                                                                    
1998/09/30    16298.56                    20415.67                      
15382.74                                                                    
1998/10/31    17111.86                    22257.74                      
15838.39                                                                    
1998/11/30    17773.35                    23577.90                      
15614.75                                                                    
1998/12/31    18458.88                    24726.22                      
15929.10                                                                    
1999/01/31    18818.89                    25264.05                      
15782.92                                                                    

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was            
invested in Fidelity Global Balanced Fund on February 28, 1993,                 
shortly after the fund started. As the chart shows, by January 31,              
1999, the value of the investment would have grown to $18,819 - an              
88.19% increase on the initial investment. For comparison, look at how          
both the Morgan Stanley Capital International World Index and Salomon           
Brothers World Government Bond Index did over the same period. With             
dividends and capital gains, if any, reinvested, the same $10,000               
investment in the Morgan Stanley Capital International World Index              
would have grown to $25,264 - a 152.64% increase. If $10,000 was put            
in the Salomon Brothers World Government Bond Index, it would have              
grown to $15,783 - a 57.83% increase.                                           

(checkmark)UNDERSTANDING                                                        
PERFORMANCE                                                                     

Many markets around the globe                                                   
offer the potential for significant                                             
growth over time; however,                                                      
investing in foreign markets                                                    
means assuming greater risks                                                    
than investing in the United                                                    
States. Factors like changes in                                                 
a country's financial markets,                                                  
its local political and economic                                                
climate, and the fluctuating                                                    
value of its currency create                                                    
these risks. For these reasons                                                  
an international fund's                                                         
performance may be more                                                         
volatile than a fund that invests                                               
exclusively in the United States.                                               

FUND TALK: THE MANAGER'S OVERVIEW                                               

MARKET RECAP                                                                    

A continuation of currency and                                                  
economic upheaval highlighted                                                   
the global stock and bond markets                                               
during the six-months ending                                                    
January 31, 1999. The ongoing                                                   
Asian crisis and August's political                                             
and economic woes in Russia                                                     
spilled over into markets worldwide,                                            
creating a mass flight to safety.                                               
During the especially turbulent                                                 
late summer and early fall,                                                     
investors moved assets from stocks                                              
and riskier bond markets into safer                                             
havens, helping the performance                                                 
of U.S. and developed bond markets.                                             
The Lehman Brothers Aggregate                                                   
Bond Index returned 5.10% and the                                               
Salomon Brothers World                                                          
Government Bond Index returned                                                  
11.00% during the period. After the                                             
near-collapse of a major hedge fund                                             
early in the fall, the U.S. Federal                                             
Reserve Board initiated three key                                               
interest-rate cuts, which helped                                                
boost equity market confidence                                                  
worldwide. When all was said and                                                
done, many developed-market                                                     
countries managed to post positive                                              
overall returns. For the period, the                                            
Morgan Stanley Capital                                                          
International EAFE Index - a                                                    
measure of over 1,000 securities                                                
listed on the stock exchanges of                                                
Europe, Australiasia and the Far                                                
East - returned 2.29%, while the                                                
U.S. stock markets, as measured by                                              
the Standard & Poor's 500 Index,                                                
returned 15.02%. Emerging-market                                                
regions were the period's                                                       
hardest-hit players, as witnessed                                               
by the Morgan Stanley Emerging                                                  
Market Free Index return of                                                     
-12.25%.                                                                        

(photographo of Rick Mace)                                                      

An interview with Rick Mace, Portfolio Manager of Fidelity Global               
Balanced Fund                                                                   

Q. HOW DID THE FUND PERFORM, RICK?                                              

A. For the six months that ended January 31, 1999, the fund returned            
5.68%. The fund compares its performance to three measures: a bond              
index, an equity index and a peer group of competitor funds. The fund           
lagged its bond-related benchmark - the Salomon Brothers World                  
Government Bond Index, which returned 11.00% and the equity-related             
benchmark - the Morgan Stanley Capital International (MSCI) World               
Index, which returned 9.11%. During the same period, the fund outpaced          
the 3.39% return for the global flexible portfolio funds average,               
tracked by Lipper Inc. For the 12 months that ended January 31, 1999,           
the fund returned 17.56%. This performance beat the 13.15% return for           
the Salomon Brothers Index, and the global flexible portfolio funds             
average, tracked by Lipper Inc., which returned 11.29%. The fund                
trailed the MSCI World index, which returned 23.62% during the same             
12-month period.                                                                

Q. WHY DID THE FUND UNDERPERFORM THE MSCI WORLD INDEX?                          

A. A major reason was the fund's exposure to investments in                     
emerging-market countries as well as companies whose businesses were            
negatively affected by emerging-market disruptions. This was an                 
important factor, even though the fund's average exposure to emerging           
markets totaled less than 3% of its investments. A number of the                
fund's commodity and banking-related positions performed poorly as              
declining demand led to lower energy and commodity prices, while banks          
reported an increase in problematic loans stemming from stagnant                
economic growth in the world's emerging markets. Among the energy and           
commodity-related holdings that hurt fund performance were                      
USX-Marathon Group, Cooper Cameron and Weatherford International in             
the U.S., as well as Brazil-based Petrobras. Banking positions that             
were negatively affected included Citigroup and BankAmerica Corp. in            
the U.S., Argentina's Bansud and Swiss-based UBS.                               

Q. WHY DID THE FUND'S BOND COMPONENT UNDERPERFORM ITS BENCHMARK INDEX           
DURING THE SIX-MONTH PERIOD?                                                    

A. Unlike the index, I avoided Japanese bonds because they appeared             
unattractive on a yield basis and I wanted to avoid the currency risk.          
Conversely, I overweighted the U.S. bond component to insulate the              
portfolio from the currency impact of a strengthening dollar. This              
strategy served the fund well until the last quarter when Japanese              
bonds rallied on a strengthening yen. This turnaround in Japanese               
bonds caused the fund to lag the index, which is heavily weighted in            
Japanese bonds.                                                                 

Q. WHAT FACTORS HELPED THE FUND OUTPERFORM THE LIPPER PEER GROUP?               

A. The fund's holdings in telephone utilities provided a solid                  
contribution to total return. These stocks benefited from the                   
privatization of state-owned businesses and industry deregulation,              
which opened up new opportunities for expansion into new markets.               
These developments spawned a rash of consolidation activity as                  
companies sought to gain a foothold in these markets and protect their          
competitive positions closer to home. U.S. telephone companies were             
among the fund's top performers, including MCI WorldCom and AT&T. I             
also found a number of telecommunications companies in Europe and               
Japan that I felt were attractively valued, particularly among                  
cellular providers. These included United Kingdom-based Vodafone,               
Japan's NTT Mobile Communication Network, Germany's Mannesmann and              
Spain's Telefonica.                                                             

Q. DID ANY OTHER SECTORS HELP THE FUND?                                         

A. The health care sector contributed positively, particularly those            
pharmaceutical and biotech companies that have deep product lines of            
successful new drugs. An example would be Eli Lilly, which has been             
able to keep generic drug companies at bay by developing a new version          
of its highly successful anti-depressant, Prozac. Biotechnology                 
company Amgen scored impressive gains after an arbitration panel gave           
the company all rights to Epogen, a popular anemia drug. Other notable          
contributors were Merck and Swiss companies Novartis and Roche                  
Holding.                                                                        

Q. WHAT'S YOUR OUTLOOK, RICK?                                                   

A. I'm optimistic that Europe's economies will continue to improve. As          
the past six months have proved, however, corporate earnings must be            
watched carefully and a determination must be made as to whether those          
earnings support prevailing valuations. As far as the situation in              
Japan goes, I'll continue to look for glimmers of economic                      
improvement. Towards the end of the period, we began to see Japanese            
companies adopt a more shareholder-friendly focus. Lastly, emerging             
markets still appear to be in turmoil at this point. Continuing                 
economic and currency concerns, combined with social unrest, provide a          
less than promising outlook for a fast recuperation.                            

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: high current income                                                       
with regard for both                                                            
preservation of capital and                                                     
potential for growth of                                                         
capital by investing in a                                                       
broadly diversified portfolio                                                   
of high-yielding equity and                                                     
debt securities                                                                 

FUND NUMBER: 334                                                                

TRADING SYMBOL: FGBLX                                                           

START DATE: February 1, 1993                                                    

SIZE: as of January 31,                                                         
1999, more than $97 million                                                     

MANAGER: Richard Mace,                                                          
since 1996; manager,                                                            
Fidelity International Value                                                    
Fund, since 1994; manager,                                                      
Fidelity Overseas Fund, since                                                   
1996; Group Leader, Fidelity                                                    
International funds; joined                                                     
Fidelity in 1987                                                                

RICK MACE DISCUSSES                                                             
THE IMPACT OF THE EURO:                                                         

"On January 1, 1999, 11 countries                                               
of the European Union -                                                         
including Germany, France, Italy,                                               
Spain, the Netherlands, Belgium,                                                
Austria, Finland, Portugal, Ireland                                             
and Luxembourg - officially                                                     
adopted the euro as their                                                       
currency. The introduction of the                                               
euro could have the effect of                                                   
reducing the cost of doing business                                             
throughout Europe. This could                                                   
make Europe a more attractive                                                   
place to do business. In turn, it                                               
could heighten interest among                                                   
multinational corporations                                                      
around the world in both owning                                                 
more European businesses and                                                    
expanding their operations in the                                               
region. In addition, the launch of                                              
the euro should serve to improve                                                
the efficiency of those businesses                                              
operating in Europe.                                                            

"In terms of the impact the euro                                                
will have on the way I manage the                                               
fund, it will be minimal. My                                                    
stock-selection process is built on                                             
the foundation of individual                                                    
stock analysis and that has never                                               
wavered. At the same time, we                                                   
may see more investment                                                         
opportunities throughout Europe,                                                
as companies could forego the                                                   
traditional bank route and go to                                                
the capital markets to raise money                                              
for improvements."                                                              

INVESTMENT CHANGES                                                              

                                                                [Download Table]

                                                                                    
TOP FIVE STOCKS AS OF JANUARY                                                       
31, 1999                                                                            

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

MCI WorldCom, Inc. (United      1.8                      1.4                        
States of America)                                                                  

Microsoft Corp. (United         1.4                      1.1                        
States of America)                                                                  

General Electric Co. (United    1.2                      1.1                        
States of America)                                                                  

Wal-Mart Stores, Inc. (United   1.2                      1.1                        
States of America)                                                                  

AT&T Corp. (United States of    1.0                      0.8                        
America)                                                                            

TOP FIVE BOND ISSUERS AS OF                                                         
JANUARY 31, 1999                                                                    

(WITH MATURITIES MORE THAN     % OF FUND'S INVESTMENTS  % OF FUND'S INVESTMENTS IN  
ONE YEAR)                                               THESE BOND ISSUERS 6 MONTHS 
                                                        AGO                         

U.S. Treasury Obligations       11.4                     9.1                        

Federal Home Loan Bank          4.8                      4.8                        

Treuhandanstalt                 3.2                      3.0                        

French Government               2.3                      1.3                        

United Kingdom, Great Britain   2.0                      1.8                        
&  Northern Ireland                                                                 

TOP FIVE COUNTRIES AS OF                                                            
JANUARY 31, 1999                                                                    

(EXCLUDING CASH EQUIVALENTS)   % OF FUND'S INVESTMENTS  % OF FUND'S INVESTMENTS IN  
                                                        THESE COUNTRIES 6 MONTHS AGO

United States of America        46.1                     44.1                       

Japan                           8.3                      7.7                        

United Kingdom                  8.1                      5.8                        

Germany                         8.0                      5.6                        

France                          6.4                      5.9                        


TOP COUNTRIES ARE BASED UPON LOCATION OF ISSUER OF EACH SECURITY,               
INCLUDING WHERE THE FUND IS EXPOSED TO POTENTIAL POLITICAL AND CREDIT           
RISKS. PERCENTAGES ARE ADJUSTED FOR THE EFFECT OF OPEN FUTURES                  
CONTRACTS, IF APPLICABLE.                                                       
ASSET ALLOCATION (% OF FUND'S                                                   
INVESTMENTS)                                                                    

AS OF JANUARY 31, 1999*                                                         

Stocks and                                                                      
equity futures 62.1%                                                            
Bonds 30.3%                                                                     
Convertible                                                                     
securities 0.4%                                                                 
Short-term                                                                      
investments 7.2%                                                                
*FOREIGN                                                                        
INVESTMENTS 45.1%                                                               
Row: 1, Col: 1, Value: 62.1                                                     
Row: 1, Col: 2, Value: 30.3                                                     
Row: 1, Col: 3, Value: 0.4                                                      
Row: 1, Col: 4, Value: 7.2                                                      

AS OF JULY 31, 1998**                                                           
Stocks and                                                                      
equity futures 64.4%                                                            
Bonds 23.5%                                                                     
Convertible                                                                     
securities 0.3%                                                                 
Short-term                                                                      
investments 11.8%                                                               
**FOREIGN                                                                       
INVESTMENTS 44.3%                                                               
Row: 1, Col: 1, Value: 64.4                                                     
Row: 1, Col: 2, Value: 23.5                                                     
Row: 1, Col: 3, Value: 0.3                                                      
Row: 1, Col: 4, Value: 11.8                                                     

INVESTMENTS JANUARY 31, 1999 (UNAUDITED)                                        

Showing Percentage of Total Value of Investment in Securities                   

COMMON STOCKS - 57.8%                                                           

                          SHARES                    VALUE (NOTE 1)

ARGENTINA - 0.1%                                                                

Bansud SA Class B (a)             2,500                    $ 5,752              

Importadora y Exportadorade       800                       5,442               
de la Patagonia SA                                                              

Inversiones y Representacions     200                       4,600               
SA sponsored GDR                                                                

Perez Companc SA Class B          1,240                     5,055               

Telefonica de Argentina SA        600                       14,813              
sponsored ADR                                                                   

YPF Sociedad Anonima              1,025                     32,672              
sponsored ADR representing                                                      
Class D shares                                                                  

                                              68,334

AUSTRALIA - 1.0%                                                                

Amcor Ltd.                        4,000                     18,840              

AMP Ltd.                          5,500                     66,738              

Australia & New Zealand           9,838                     64,910              
Banking Group Ltd.                                                              

Australian Gas Light Co.          5,715                     40,167              

Brambles Industries Ltd.          1,600                     43,623              

Broken Hill Proprietary Co.       10,512                    77,401              
Ltd. (The)                                                                      

Cable & Wireless Optus Ltd.       15,100                    35,884              
(a)                                                                             

Coles Myer Ltd.                   3,900                     21,437              

Fosters Brewing Group Ltd.        8,600                     25,316              

Goodman Fielder Ltd.              24,000                    23,298              

Harvey Norman Holdings Ltd.       4,800                     42,360              

Lend Lease Corp. Ltd.             2,900                     38,491              

Mirvac Ltd. warrants 6/30/01      1,255                     245                 
(a)                                                                             

National Australia Bank Ltd.      6,600                     111,035             

News Corp. Ltd.                   15,777                    114,567             

Smith (Howard) Ltd.               2,200                     15,185              

Telstra Corp. Ltd.                24,800                    135,066             

Westfield Holdings Ltd.           7,800                     45,234              

WMC Ltd.                          7,900                     24,351              

Woodside Petroleum Ltd.           4,700                     21,301              

                                               965,449

BELGIUM - 0.2%                                                                  

Electrabel SA                     400                       174,936             

BRAZIL - 0.2%                                                                   

Centrais Electricas               2,841,000                 35,700              
Brasileiras SA                                                                  

Companhia de Electricidade do     27,000,000                2,849               
Estado do Rio de Janeiro                                                        
(CERJ)                                                                          

Companhia de Tecidos Norte de     46,000                    3,309               
Minas                                                                           

Compania Cervejaria Brahma PN     26,000                    8,791               
(Pfd. Reg.) (a)                                                                 

Compania Energertica Minas        764,478                   9,496               
Gerais                                                                          

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

BRAZIL - CONTINUED                                                              

Embratel Participacoes SA         2,780,000                $ 30,667             

Perdigao SA (a)                   9,970,000                 7,268               

Petrobras PN (Pfd. Reg.)          43,000                    2,764               

Tele Centro Sul Participacoes     2,366,000                 15,660              
SA (a)                                                                          

Tele Norte Leste                  500                       4,969               
Participacoes SA ADR (a)                                                        

Tele Sudeste Celular              650,000                   1,855               
Participacoes SA (a)                                                            

Telesp Participacoes SA (a)       2,166,500                 37,407              

Votorantim Celulose e Papel       350,000                   3,861               
SA (Pfd. Reg.)                                                                  

                                               164,596

CANADA - 1.5%                                                                   

Alberta Energy Co. Ltd.           600                       12,705              

Bank of Montreal                  1,400                     61,838              

Bank of Nova Scotia               2,700                     58,066              

Barrick Gold Corp.                2,200                     41,563              

BCE, Inc.                         4,000                     179,460             

Biochem Pharma, Inc.              800                       23,002              

Bombardier, Inc. Class B          4,900                     72,955              

Bro-X Minerals Ltd. (a)           600                       -                   

Canadian National Railway Co.     500                       26,502              

Canadian Natural Resources        600                       9,330               
Ltd. (a)                                                                        

Canadian Tire Corp. Ltd.          500                       13,731              
Series A                                                                        

Celestica, Inc. (sub-vtg.) (a)    900                       30,433              

CGI Group, Inc. Class A (sub.     2,300                     53,649              
vtg.) (a)                                                                       

Edperbrascan Corp. Class A        600                       7,941               
(ltd. vtg.)                                                                     

Enbridge, Inc.                    600                       27,296              

Euro-Nevada Mining Corp. Ltd.     700                       11,071              

Great-West Lifeco, Inc.           900                       15,782              

High Liner Foods, Inc. (a)        100                       648                 

Imasco Ltd.                       2,700                     61,640              

Imperial Oil Ltd.                 900                       13,668              

Investors Group, Inc.             900                       14,829              

JDS Fitel, Inc. (a)               700                       31,220              

Loblaw Companies Ltd.             1,100                     28,024              

Magna International, Inc.         200                       11,944              
Class A                                                                         

Metro Richelieu, Inc. Class A     500                       6,915               

National Bank of Canada           1,000                     15,517              

Newbridge Networks Corp. (a)      800                       28,216              

Northern Telecom Ltd.             2,400                     151,985             

Placer Dome, Inc.                 1,300                     14,710              

Potash Corp. of Saskatchewan      200                       12,110              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

CANADA - CONTINUED                                                              

Power Corp. of Canada             1,300                    $ 28,689             

Renaissance Energy Ltd. (a)       800                       8,920               

Rogers Communications, Inc.       2,200                     30,936              
Class B (non-vtg.) (a)                                                          

Royal Bank of Canada              1,100                     56,849              

Seagram Co. Ltd.                  2,100                     100,053             

Shaw Communications, Inc.         1,000                     28,487              
Class B                                                                         

Sportscene Restaurants, Inc.      9,300                     40,617              
Class A                                                                         

Suncor Energy, Inc.               500                       13,450              

Teleglobe, Inc.                   1,100                     42,946              

Toronto Dominion Bank             1,800                     75,040              

Videotron Group Ltd. (sub.        900                       13,728              
vtg.)                                                                           

Westcoast Energy, Inc.            700                       14,058              

                                                 1,490,523

CHILE - 0.1%                                                                    

Compania Cervecerias Unidas       200                       3,600               
SA sponsored ADR                                                                

Compania de                       600                       12,225              
Telecomunicaciones de Chile                                                     
SA sponsored ADR                                                                

Embotelladora Andina              1,100                     15,400              
sponsored ADR Class A                                                           

Enersis SA sponsored ADR          500                       13,563              

Santa Isabel SA sponsored ADR     1,000                     5,500               

Supermercados Unimarc SA          1,400                     4,550               
sponsored ADR                                                                   

Vina Concha Stet y Toro SA        100                       2,438               
sponsored ADR                                                                   

                                              57,276

FINLAND - 0.9%                                                                  

Merita Ltd. Series A              10,400                    66,748              

OY Nokia AB Series A              3,100                     446,400             

Sampo Insurance Co. Ltd.          2,200                     93,216              

Teito Corp. Class B               5,400                     231,625             

                                               837,989

FRANCE - 3.1%                                                                   

Alcatel Alsthom Compagnie         900                       103,500             
Generale d'Electricite SA                                                       
(RFD)                                                                           

Atos SA (a)(d)                    300                       75,654              

Axa SA                            1,600                     232,279             

Banque Nationale de Paris         2,800                     254,294             

Cap Gemini SA                     600                       118,457             

Castorama Dubois                  580                       131,770             
Investissements SA                                                              

Club Mediterranee SA (a)          300                       29,989              

Elf Aquitaine                     1,500                     163,875             

France Telecom SA                 2,972                     279,874             

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

FRANCE - CONTINUED                                                              

Groupe Danone                     625                      $ 175,362            

L'Oreal SA                        228                       164,722             

Peugeot SA                        60                        10,196              

Pinault Printemps SA              400                       73,201              

Promodes                          264                       182,034             

Rhone-Poulenc SA Class A          2,800                     144,725             

Sanofi SA                         700                       137,564             

Societe Generale, France          200                       35,896              
Class A                                                                         

Suez Lyonnaise des Eaux           1,000                     206,061             

Synthelabo                        300                       76,336              

Total SA Class B                  82                        8,395               

Vivendi SA                        1,400                     409,351             

                                                 3,013,535

GERMANY - 2.5%                                                                  

Allianz AG (Reg.)                 875                       323,036             

BASF AG                           2,500                     91,018              

Bayer AG                          2,000                     76,608              

Bayerische Hypo-und               1,900                     123,822             
Vereinsbank AG                                                                  

BHF Bank AG                       100                       3,686               

DaimlerChrysler AG (Reg.)         3,613                     374,171             

Deutsche Lufthansa AG (Reg.)      4,400                     93,016              

Deutsche Telekom AG               9,100                     415,450             

Dresdner Bank AG                  1,700                     68,555              

Hoechst AG                        1,600                     69,793              

Mannesmann AG                     1,900                     271,946             

Munich Reinsurance AG (RFD)       300                       72,519              
(a)                                                                             

Munich Reinsurance AG (Reg.)      300                       74,632              

Schering AG                       400                       53,685              

Siemens AG                        2,200                     156,193             

Viag AG                           205                       111,312             

                                                 2,379,442

HONG KONG - 0.7%                                                                

Cheung Kong Holdings Ltd.         18,000                    124,855             

China Telecom (Hong Kong)         24,000                    42,900              
Ltd.                                                                            

CLP Holdings Ltd.                 3,500                     15,899              

Dairy Farm International          25,000                    26,000              
Holdings Ltd.                                                                   

Hang Seng Bank Ltd.               4,500                     37,602              

Hong Kong & China Gas Co.         26,560                    30,848              
Ltd.                                                                            

Hong Kong Telecommunications      31,447                    51,691              
Ltd.                                                                            

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

HONG KONG - CONTINUED                                                           

Hutchison Whampoa Ltd.            22,000                   $ 156,149            

Johnson Electric Holdings         14,000                    34,237              
Ltd.                                                                            

Li & Fung Ltd.                    12,000                    23,229              

Sun Hung Kai Properties Ltd.      15,000                    98,722              

Swire Pacific Ltd. Class A        4,500                     19,222              

Wing Hang Bank Ltd.               8,000                     16,260              

                                               677,614

IRELAND - 0.4%                                                                  

Allied Irish Banks PLC            8,600                     166,985             

Bank of Ireland, Inc.             5,300                     118,608             

CRH PLC                           3,677                     60,147              

Irish Life PLC                    172                       1,690               

                                               347,430

ITALY - 1.0%                                                                    

Assicurazioni Generali Spa        5,900                     249,922             

Banca Commerciale Italiana Spa    6,300                     39,826              

Banca di Roma (a)                 28,200                    41,548              

Eni Spa sponsored ADR             41,100                    243,662             

Fiat Spa                          29,300                    93,227              

San Paolo-IMI Spa                 8,700                     140,533             

Unicredito Italiano Spa           22,500                    121,072             

                                               929,790

JAPAN - 8.0%                                                                    

Acom Co. Ltd.                     2,300                     137,897             

Advantest Corp.                   1,600                     130,012             

Aeon Credit Service Ltd.          2,000                     136,574             

Aiful Corp.                       600                       39,684              

Alps Electric Co. Ltd.            5,000                     92,982              

Asahi Breweries Ltd.              5,000                     67,342              

Bank of Tokyo-Mitsubishi Ltd.     13,000                    154,321             

Banyu Pharmaceutical Co. Ltd.     12,000                    208,727             

Benesse Corp.                     2,000                     122,831             

Bridgestone Corp.                 1,980                     43,709              

Canon, Inc.                       3,000                     64,500              

Citizen Watch Co. Ltd.            6,000                     39,839              

DDI Corp.                         50                        191,977             

Don Quijote Co. Ltd.              400                       52,568              

Fuji Bank Ltd.                    8,000                     33,602              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

JAPAN - CONTINUED                                                               

Fuji Coca-Cola Bottling Co.       4,000                    $ 44,666             
Ltd.                                                                            

Fuji Heavy Industries Ltd.        15,000                    84,264              

Fuji Photo Film Co. Ltd.          7,000                     257,945             

Fuji Soft ABC, Inc. (a)           500                       25,769              

Fujitsu Ltd.                      7,000                     91,574              

Fujitsu Support & Service,        1,000                     73,183              
Inc.                                                                            

Furukawa Electric Co. Ltd. (a)    22,000                    94,485              

Hirose Electric Co. Ltd.          1,000                     67,772              

Hitachi Information Systems       14,000                    151,520             

Honda Motor Co. Ltd.              7,000                     260,313             

Hoya Corp.                        3,000                     153,324             

Ito En Ltd.                       3,000                     145,851             

Ito-Yokado Co. Ltd.               1,000                     62,790              

Japan Tobacco, Inc.               10                        97,062              

Kao Corp.                         5,000                     100,928             

Kawasumi Laboratories, Inc.       8,000                     133,310             

Kokusai Securities Co. Ltd.       5,000                     43,034              

Konami Co. Ltd.                   3,000                     92,510              

Marui Co. Ltd.                    4,000                     71,637              

Matsushita Communication          4,000                     183,130             
Industrial Co. Ltd.                                                             

Matsushita Electric               10,000                    170,000             
Industrial Co. Ltd.                                                             

Meiwa Estate Co. Ltd.             2,000                     36,076              

Mikasa Coca Cola Bottling Co.     5,000                     39,942              

Minebea Co. Ltd.                  15,000                    166,080             

Minolta Co. Ltd.                  26,000                    139,581             

Mitsubishi Trust & Banking        10,000                    80,914              
Corp.                                                                           

Mitsui Mining & Smelting Co.      7,000                     34,633              
Ltd.                                                                            

Mori Seiki Co. Ltd.               3,000                     30,639              

NEC Corp.                         8,000                     81,842              

Nichicon Corp.                    8,000                     92,080              

Nintendo Co. Ltd.                 500                       46,384              

Nippon System Development Co.     2,200                     80,502              

Nippon Telegraph & Telephone      23                        185,312             
Corp.                                                                           

Nomura Securities Co. Ltd.        5,000                     43,549              

NTT Mobile Communication          7                         294,623             
Network, Inc. (d)                                                               

Omron Corp.                       7,000                     76,361              

Otsuka Kagu Ltd.                  600                       48,291              

Paris Miki, Inc.                  3,000                     67,901              

Riso Kagaku Corp.                 800                       32,297              

Rohm Co. Ltd.                     1,000                     94,056              

Ryohin Keikaku Co. Ltd.           400                       52,053              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

JAPAN - CONTINUED                                                               

Sanwa Bank Ltd.                   9,000                    $ 86,351             

Sanyo Coca-Cola Bottling Co.      3,000                     55,145              
Ltd.                                                                            

Senshukai Co. Ltd.                6,000                     47,672              

Sharp Corp.                       12,000                    122,350             

Shikoku Coca-Cola Bottling        3,000                     41,745              
Co. Ltd.                                                                        

Shin-Etsu Chemical Co. Ltd.       4,000                     97,234              

Shohkoh Fund & Co. Ltd.           400                       141,900             

Softbank Corp.                    600                       43,962              

Sony Corp.                        2,400                     175,350             

Takeda Chemical Industries        5,000                     178,234             
Ltd.                                                                            

Takefuji Corp.                    3,400                     233,053             

TDK Corp.                         1,000                     82,116              

Terumo Corp.                      6,000                     128,844             

THK Co. Ltd.                      10,000                    146,023             

Tokyo Seimitsu Co. Ltd.           1,000                     42,604              

Toyota Motor Corp.                3,000                     78,852              

Unified-Charm Corp.               3,000                     137,090             

Watami Food Service Co. Ltd.      3,000                     108,229             

World Co. Ltd.                    2,000                     90,191              

Yonekyu Corp.                     4,000                     64,628              

                                                 7,746,321

LUXEMBOURG - 0.0%                                                               

Quilmes Industrial SA             600                       4,800               
sponsored ADR                                                                   

MEXICO - 0.4%                                                                   

Alfa SA de CV                     1,000                     2,380               

Apasco SA de CV                   2,000                     7,227               

BANACCI SA de CV Class B (a)      20,000                    22,301              

Cemex SA Series B                 4,000                     10,619              

Cifra SA de CV Series C (a)       35,000                    38,820              

El Puerto de Liverpool SA         11,000                    14,039              
Class C                                                                         

Fomento Economico Mexicano SA     800                       17,700              
de CV sponsored ADR                                                             

Grupo Carso SA de CV Class A-1    5,000                     14,135              

Grupo Financiero Bancomer SA      111,000                   22,375              
de CV Class B                                                                   

Grupo Financiero Inbursa SA       2,000                     3,921               
Class B                                                                         

Grupo Industrial Maseca SA de     800                       9,750               
CV sponsored ADR                                                                

Grupo Modelo SA de CV Class C     5,000                     11,062              

Grupo Televisa SA de CV           1,200                     30,750              
sponsored ADR (a)                                                               

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

MEXICO - CONTINUED                                                              

Kimberly-Clark de Mexico SA       6,000                    $ 17,168             
de CV Class A                                                                   

Telefonos de Mexico SA            2,300                     117,588             
sponsored ADR representing                                                      
Class L shares                                                                  

                                               339,835

NETHERLANDS - 1.8%                                                              

Aegon NV                          2,200                     241,662             

Akzo Nobel NV                     2,600                     103,962             

Fortis Amev NV                    4,200                     171,517             

ING Groep NV                      4,209                     245,276             

Koninklijke Ahold NV              6,652                     258,427             

Koninklijke KPN NV                1,400                     77,529              

Philips Electronics NV            2,200                     160,187             
(Bearer)                                                                        

Samas Groep NV                    3,500                     46,915              

TNT Post Group NV                 1,600                     55,525              

Unilever NV                       3,400                     259,928             

Vedior NV                         1,800                     34,147              

Vnu NV                            2,000                     81,788              

                                                 1,736,863

NETHERLANDS ANTILLES - 0.1%                                                     

Schlumberger Ltd.                 1,800                     85,725              

NEW ZEALAND - 0.1%                                                              

Telecom Corp. of New Zealand      11,000                    53,178              
Ltd.                                                                            

PANAMA - 0.0%                                                                   

Panamerican Beverages, Inc.       900                       13,725              
Class A                                                                         

PERU - 0.0%                                                                     

Cementos Lima S.A.                300                       3,750               

Telefonica del Peru SA ADR        800                       9,500               

                                              13,250

PORTUGAL - 0.2%                                                                 

Banco Pinto & Sotto Mayor SA      3,840                     83,969              

Electricidade de Portugal SA      5,600                     136,768             

                                               220,737

RUSSIA - 0.0%                                                                   

Vimpel Communications             400                       5,775               
sponsored ADR (a)                                                               

SINGAPORE - 0.3%                                                                

Datacraft Asia Ltd.               13,000                    25,610              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

SINGAPORE - CONTINUED                                                           

Elec & Eltek International        3,400                    $ 19,720             
Co. Ltd.                                                                        

Oversea-Chinese Banking Corp.     5,000                     34,279              
(For. Reg.)                                                                     

Overseas Union Bank Ltd.          5,000                     18,617              

Singapore Airlines Ltd. (For.     3,000                     20,390              
Reg.)                                                                           

Singapore Press Holdings Ltd.     6,000                     68,085              

Singapore Telecommunications      25,000                    35,018              
Ltd.                                                                            

United Overseas Bank Ltd.         7,000                     41,785              
(For. Reg.)                                                                     

Venture Manufacturing             5,000                     21,720              
Singapore Ltd.                                                                  

                                               285,224

SPAIN - 0.5%                                                                    

Banco Bilbao Vizcaya SA (Reg.)    7,100                     106,300             

Banco Santander SA                3,944                     76,163              

Endesa SA                         3,900                     108,230             

Iberdrola SA                      5,900                     102,877             

Telefonica SA                     2,900                     132,594             

                                               526,164

SWEDEN - 0.5%                                                                   

Astra AB Class A                  7,400                     161,875             

Ericsson (L.M.) Telefon AB        7,900                     219,719             
Class B                                                                         

Svenska Handelsbanken             2,500                     99,283              

Volvo AB Class B                  1,900                     51,300              

                                               532,177

SWITZERLAND - 2.0%                                                              

Credit Suisse Group (Reg.)        700                       111,802             

Julius Baer Holding AG            23                        78,265              

Lindt & Spruengli AG              23                        60,548              

Nestle SA (Reg.)                  135                       247,580             

Novartis AG (Reg.)                232                       435,471             

Roche Holding AG                  31                        405,081             
participation certificates                                                      

Swisscom AG (a)                   250                       109,364             

UBS AG (a)                        746                       241,989             

Zurich Allied AG (Reg.) (a)       355                       262,675             

                                                 1,952,775

UNITED KINGDOM - 6.1%                                                           

3I Group PLC                      6,700                     69,236              

Abbey National, PLC               2,300                     45,075              

Allied Domecq PLC                 9,300                     71,772              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

UNITED KINGDOM - CONTINUED                                                      

Bank of Scotland                  5,800                    $ 73,583             

BG PLC                            20,500                    126,835             

Boots Co. PLC                     1,000                     14,530              

BP Amoco PLC                      31,005                    419,216             

BP Amoco PLC sponsored ADR        4,631                     375,690             

British Aerospace PLC             9,467                     71,814              

British American Tobacco PLC      9,300                     96,333              

British Telecommunications PLC    28,400                    442,685             

Cadbury Schweppes PLC             6,400                     102,153             

Diageo PLC                        8,800                     98,539              

Dixons Group PLC                  4,900                     81,920              

GKN PLC Class L                   6,500                     80,218              

Glaxo Wellcome PLC                15,300                    519,243             

Halifax PLC                       3,800                     45,459              

HSBC Holdings PLC                 2,800                     71,000              

HSBC Holdings PLC Ord.            3,600                     98,454              

Kingfisher PLC                    10,800                    110,272             

Lloyds TSB Group PLC              29,229                    380,923             

Next PLC                          10,700                    114,445             

Orange PLC (a)                    6,900                     102,186             

Pearson PLC                       5,600                     124,123             

Prudential Corp. PLC              12,600                    194,582             

Rentokil Initial PLC              21,200                    156,632             

Reuters Group PLC                 4,800                     73,060              

Saatchi & Saatchi PLC             40,400                    101,047             

Sainsbury (J.) PLC                8,100                     57,313              

Scottish & Southern Energy PLC    6,600                     63,098              

Shell Transport & Trading Co.     60,600                    308,047             
PLC (Reg.)                                                                      

Smith (W H) Group                 4,500                     43,984              

SmithKline Beecham PLC            18,034                    244,587             

Somerfield PLC                    8,700                     56,691              

Tarmac PLC                        52,600                    91,747              

Vodafone Group PLC                24,300                    474,458             

Wickes PLC                        17,800                    67,074              

Yorkshire Water PLC               7,800                     63,918              

Zeneca Group PLC                  2,900                     133,137             

                                                 5,865,079

UNITED STATES OF AMERICA -                                                      
26.1%                                                                           

Abercrombie & Fitch Co. Class     1,650                     126,225             
A (a)                                                                           

AES Corp. (a)                     1,000                     33,688              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

UNITED STATES OF AMERICA -                                                      
CONTINUED                                                                       

AFLAC, Inc.                       5,000                    $ 214,375            

Alcoa, Inc.                       3,607                     301,635             

Amazon.com, Inc. (a)              500                       58,469              

Amerada Hess Corp.                1,000                     47,500              

America Online, Inc.              1,500                     263,531             

American Express Co.              2,000                     205,750             

American International Group,     5,200                     535,275             
Inc.                                                                            

Amgen, Inc. (a)                   2,000                     255,625             

Applied Materials, Inc. (a)       1,000                     63,188              

Associates First Capital          6,048                     245,322             
Corp. Class A                                                                   

AT&T Corp.                        11,000                    998,250             

AutoZone, Inc. (a)                1,000                     33,875              

Avon Products, Inc.               7,000                     258,563             

Baker Hughes, Inc.                4,400                     74,250              

Bank of New York Co., Inc.        13,200                    468,600             

Bank One Corp.                    2,650                     138,794             

Baxter International, Inc.        2,000                     141,875             

Becton, Dickinson & Co.           2,000                     71,500              

Bed Bath & Beyond, Inc. (a)       3,000                     96,000              

Bell Atlantic Corp.               3,500                     210,000             

Black & Decker Corp.              2,000                     106,000             

BMC Software, Inc.                1,000                     46,688              

Burlington Resources, Inc.        2,500                     75,625              

Cardinal Health, Inc.             1,500                     110,906             

CBS Corp.                         5,000                     170,000             

Centex Corp.                      2,000                     86,375              

Chancellor Media Corp. (a)        1,000                     57,500              

Chase Manhattan Corp.             2,000                     153,875             

Chevron Corp.                     1,500                     112,125             

Cisco Systems, Inc. (a)           3,000                     334,687             

Citigroup, Inc.                   6,250                     350,391             

Clear Channel Communications,     1,000                     61,875              
Inc. (a)                                                                        

Clorox Co.                        1,000                     125,125             

Comcast Corp. Class A             2,000                     135,969             
(special)                                                                       

Compaq Computer Corp.             4,000                     190,500             

Cooper Cameron Corp. (a)          2,500                     58,438              

Corn Products International,      2,000                     53,125              
Inc.                                                                            

Crescent Real Estate Equities     1,000                     21,188              
Co.                                                                             

CVS Corp.                         1,000                     54,750              

Dell Computer Corp. (a)           6,000                     600,000             

DST Systems, Inc. (a)             1,000                     61,938              

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

UNITED STATES OF AMERICA -                                                      
CONTINUED                                                                       

du Pont (E.I.) de Nemours &       2,100                    $ 107,494            
Co.                                                                             

Duke Energy Corp.                 2,500                     154,531             

EMC Corp. (a)                     2,000                     217,750             

Exxon Corp.                       1,000                     70,438              

Fannie Mae                        1,000                     72,875              

Fleet Financial Group, Inc.       3,000                     132,938             

Ford Motor Co.                    3,000                     184,313             

Forest Laboratories, Inc. (a)     2,000                     92,375              

Freddie Mac                       5,000                     310,000             

Gap, Inc.                         2,000                     128,375             

General Electric Co.              11,000                    1,153,625           

General Motors Corp. Class H      2,000                     98,500              
(a)                                                                             

Gillette Co.                      7,400                     434,750             

GTE Corp.                         2,000                     135,000             

Guidant Corp.                     4,000                     235,750             

Halliburton Co.                   5,400                     160,313             

Hartford Financial Services       1,000                     51,938              
Group, Inc.                                                                     

Home Depot, Inc.                  4,500                     271,688             

Household International, Inc.     4,293                     188,624             

Intel Corp.                       4,000                     563,750             

International Business            3,200                     586,400             
Machines Corp.                                                                  

Interpublic Group of              3,000                     237,375             
Companies, Inc.                                                                 

Johnson & Johnson                 4,500                     382,500             

KLA-Tencor Corp. (a)              2,500                     144,375             

Leggett & Platt, Inc.             6,200                     126,325             

Lennar Corp.                      1,000                     27,375              

Lilly (Eli) & Co.                 5,000                     468,438             

Liz Claiborne, Inc.               1,500                     57,375              

Lowe's Companies, Inc.            1,000                     58,313              

Lucent Technologies, Inc.         3,000                     337,688             

Masco Corp.                       4,000                     129,250             

MCI WorldCom, Inc. (a)            21,304                    1,698,994           

MediaOne Group, Inc.              2,000                     112,125             

Medtronic, Inc.                   4,651                     370,627             

Merck & Co., Inc.                 3,500                     513,625             

Merrill Lynch & Co., Inc.         800                       60,800              

Microsoft Corp. (a)               7,500                     1,312,500           

Morgan Stanley, Dean Witter &     1,000                     86,813              
Co.                                                                             

Nabisco Holdings Corp. Class A    500                       21,031              

National Mercantile Bancorp       2,403                     0                   
warrants 6/2/99 (a)                                                             

Newell Co.                        4,000                     166,250             

COMMON STOCKS - CONTINUED                                                       

                          SHARES                    VALUE (NOTE 1)

UNITED STATES OF AMERICA -                                                      
CONTINUED                                                                       

Nielsen Media Research, Inc.      3,000                    $ 56,625             
(a)                                                                             

Noble Affiliates, Inc.            500                       9,844               

Omnicom Group, Inc.               3,000                     192,000             

Oracle Corp. (a)                  3,000                     166,125             

Owens-Illinois, Inc. (a)          1,000                     29,250              

PepsiCo, Inc.                     4,000                     156,250             

PG&E Corp.                        2,000                     63,875              

Philip Morris Companies, Inc.     6,000                     282,000             

Phillips Petroleum Co.            1,000                     38,625              

Procter & Gamble Co.              4,000                     363,500             

Qwest Communications              2,000                     119,875             
International, Inc. (a)                                                         

Rite Aid Corp.                    2,000                     98,250              

Safeskin Corp. (a)                2,000                     46,750              

Schering-Plough Corp.             5,800                     316,100             

Seagate Technology, Inc. (a)      3,000                     122,063             

Seagull Energy Corp. (a)          1,000                     4,813               

Sealed Air Corp. (a)              2,000                     106,125             

Siebel Systems, Inc. (a)          4,000                     175,000             

Sonic Automotive, Inc. (a)        4,000                     68,000              

Steris Corp. (a)                  2,000                     60,250              

Tel-Save.com, Inc. (a)            5,000                     63,438              

Tele-Communications, Inc.         1,000                     68,563              
(TCI Group) Series A (a)                                                        

Textron, Inc.                     2,500                     186,094             

Time Warner, Inc.                 300                       18,750              

Tosco Corp.                       1,200                     26,100              

Tyco International Ltd.           1,500                     115,594             

U.S. Bancorp                      6,000                     202,125             

Union Pacific Resources           1,000                     8,063               
Group, Inc.                                                                     

Unisys Corp. (a)                  6,300                     208,688             

USX-Marathon Group                6,500                     147,875             

Viacom, Inc. Class B              1,000                     85,000              
(non-vtg.) (a)                                                                  

Wal-Mart Stores, Inc.             13,000                    1,118,000           

Warner-Lambert Co.                3,500                     252,656             

Washington Mutual, Inc.           5,080                     213,360             

Waters Corp. (a)                  2,500                     227,500             

Wells Fargo & Co.                 9,000                     314,438             

                                                  25,204,140

TOTAL COMMON STOCKS                            55,692,682                       
(Cost $43,647,127)                                                              

PREFERRED STOCKS - 1.2%                                                         

                          SHARES                    VALUE (NOTE 1)

CONVERTIBLE PREFERRED STOCKS                                                    
- 0.2%                                                                          

AUSTRALIA - 0.1%                                                                

WBK Trust $3.135 STRYPES          1,700                    $ 55,250             

JAPAN - 0.1%                                                                    

AJL PEPS Trust $1.44              15,000                    104,063             

TOTAL CONVERTIBLE PREFERRED                                 159,313             
STOCKS                                                                          

NONCONVERTIBLE PREFERRED                                                        
STOCKS - 1.0%                                                                   

GERMANY - 0.3%                                                                  

Dyckerhoff AG                     190                       46,619              

Porsche AG (non-vtg.)             29                        69,015              

SAP AG (Systeme Anwendungen       350                       139,074             
Produkte)                                                                       

Wella AG                          64                        44,347              

                                               299,055

ITALY - 0.7%                                                                    

Telecom Italia Mobile Spa         35,600                    148,455             

Telecom Italia Spa Risp           77,100                    524,352             

                                               672,807

TOTAL NONCONVERTIBLE                                        971,862             
PREFERRED STOCKS                                                                

TOTAL PREFERRED STOCKS                                      1,131,175           
(Cost $1,206,117)                                                               

                                                                [Download Table]

                                                                                
CONVERTIBLE BONDS - 0.2%                                                        

MOODY'S RATINGS (UNAUDITED)               PRINCIPAL AMOUNT (C)                  

JAPAN - 0.2%                                                                    

MBL International Finance of    A2        $ 240,000                247,200      
Bermuda Trust 3% 11/30/02                                                       
(Cost $277,225)                                                                 

GOVERNMENT OBLIGATIONS -                                                        
30.8% (F)                                                                       

FRANCE - 2.3%                                                                   

French Government OAT 5.5%      Aaa  EUR   1,800,000               2,265,539    
4/25/04                                                                         

GOVERNMENT OBLIGATIONS -                                                        
CONTINUED                                                                       

MOODY'S RATINGS (UNAUDITED)               PRINCIPAL AMOUNT (C)    VALUE (NOTE 1)

GERMANY - 4.1%                                                                  

German Federal Republic         Aaa  EUR   625,000                $ 859,062     
7.375% 1/3/05                                                                   

Treuhandanstalt 6.625% 7/9/03   Aaa  EUR   2,377,507               3,075,035    

                                                                   3,934,097    

ITALY - 1.6%                                                                    

Italian Republic 10.5% 9/1/05   Aa3  EUR   361,519                 575,304      

Italian Republic 6.75% 2/1/07   Aa3  EUR   700,000                 956,106      

                                                                   1,531,410    

SPAIN - 1.2%                                                                    

Spanish Kingdom 4.5% 7/30/04    Aa2  EUR   1,000,000               1,177,526    

SWEDEN - 0.8%                                                                   

Swedish Kingdom 10.25% 5/5/03   Aa1  SEK   5,000,000               810,731      

UNITED KINGDOM - 2.0%                                                           

United Kingdom, Great Britain   Aaa  GBP   900,000                 1,899,022    
& Northern Ireland 9.5%                                                         
4/18/05                                                                         

UNITED STATES OF AMERICA -                                                      
18.8%                                                                           

Fannie Mae 5.43% 1/27/00        Aaa        1,950,000               1,958,229    

Federal Home Loan Bank:                                                         

5.53% 2/3/00                    Aaa        1,625,000               1,633,385    

5.67% 1/14/00                   Aaa        2,985,000               3,003,656    

U.S. Treasury Bills, yield at   -          500,000                 496,003      
date of purchase 4.29%                                                          
4/8/99 (e)                                                                      

U.S. Treasury Bond:                                                             

stripped principal 0% 8/15/20   Aaa        5,010,000               1,536,066    

7.125% 2/15/23                  Aaa        1,350,000               1,672,529    

8.125% 8/15/19                  Aaa        1,300,000               1,744,236    

12.75% 11/15/10 (callable) (e)  Aaa        880,000                 1,272,973    

13.875% 5/15/11 (callable)      Aaa        980,000                 1,510,582    

U.S. Treasury Notes:                                                            

6.5% 10/15/06                   Aaa        1,900,000               2,108,696    

7% 7/15/06                      Aaa        425,000                 483,969      

7.875% 8/15/01                  Aaa        640,000                 688,902      

                                                                   18,109,226   

TOTAL GOVERNMENT OBLIGATIONS                                       29,727,551   
(Cost $28,930,136)                                                              

CASH EQUIVALENTS - 10.0%                                                        

                                            SHARES              VALUE (NOTE 1)  

Taxable Central Cash Fund (b)               9,626,324           $ 9,626,324     
(Cost $9,626,324)                                                               

TOTAL INVESTMENT IN                                             $ 96,424,932    
SECURITIES - 100%                                                               
(Cost $83,686,929)                                                              

                                                        [Enlarge/Download Table]

                                                                                                        
FUTURES CONTRACTS                                                                                       

                                EXPIRATION DATE  UNDERLYING FACE AMOUNT AT VALUE  UNREALIZED GAIN/(LOSS)

PURCHASED                                                                                               

21 CAC 40 Index Contracts       Apr 1999         $ 981,864                        $ 55,959              
(France)                                                                                                

7 DAX 30 Index Contracts        Mar 1999          1,002,176                        51,142               
(Germany)                                                                                               

3 Russell 2000 Index Contracts  Mar 1999          613,068                          27,432               

3 S&P 400 Midcap Index          Mar 1999          544,293                          22,707               
Contracts                                                                                               

                                                  3,141,401                        157,240              

THE FACE VALUE OF FUTURES                                                                               
PURCHASED AS A PERCENTAGE OF                                                                            
TOTAL INVESTMENT IN                                                                                     
SECURITIES - 3.3%.                                                                                      


SECURITY TYPE ABBREVIATIONS                                                     

PEPS                         -   Participating Equity                           
          Preferred Shares/Premium
            Exchangeable Participating
Shares        

STRYPES                      -   Structured Yield Product                       
                Exchangeable for  Common Stock

CURRENCY ABBREVIATIONS                                                          

EUR                          -   European Monetary Unit                         

GBP                          -   British pound                                  

SEK                          -   Swedish krona                                  

LEGEND                                                                          
(a) Non-income producing                                                        

(b) At period end, the seven-day yield on the Taxable Central Cash              
Fund was 4.81%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          

(c) Principal amount is stated in United States dollars unless                  
otherwise noted.                                                                

(d) Security exempt from registration under Rule 144A of the                    
Securities Act of 1933.  These securities may be resold in                      
transactions exempt from registration, normally to qualified                    
institutional buyers. At the period end, the value of these securities          
amounted to $370,277 or 0.4% of net assets.                                     

(e) Security or a portion of the security was pledged to cover margin           
requirements for futures contracts. At the period end, the value of             
securities pledged amounted to $343,057.                                        

(f) For foreign government obligations not individually rated by S&P            
or Moody's, the ratings listed have been assigned by FMR, the fund's            
investment adviser, based principally on S&P and Moody's ratings of             
the sovereign credit of the issuing government.                                 

OTHER INFORMATION                                                               

The composition of long-term debt holdings as a percentage of total             
value of investments in securities, is as follows (ratings are                  
unaudited):                                                                     

MOODY'S RATINGS          S&P RATINGS                                            

Aaa, Aa, A 30.5%         AAA, AA, A 30.5%                                       
Baa         0.0%         BBB         0.0%                                       
Ba          0.0%         BB          0.0%                                       
B           0.0%         B           0.0%                                       
Caa         0.0%         CCC         0.0%                                       
Ca, C       0.0%         CC, C       0.0%                                       
D           0.0%              

For some foreign government obligations, FMR has assigned the ratings           
for the sovereign credit of the issuing government.                             

MARKET SECTOR DIVERSIFICATION (UNAUDITED)                                       

As a Percentage of Total Value of Investment in Securities                      

Basic Industries              1.2%                                              

Cash Equivalents             10.0                                               

Durables                      2.7                                               

Energy                        2.6                                               

Finance                      11.5                                               

Government Obligations       30.8                                               

Health                        6.4                                               

Industrial Machinery &        2.8                                               
Equipment                                                                       

Media & Leisure               1.8                                               

Nondurables                   4.3                                               

Retail & Wholesale            4.4                                               

Services                      1.3                                               

Technology                    9.1                                               

Utilities                     9.5                                               

Others (Individually less     1.6                                               
than 1%)                                                                        

100.0%                  

INCOME TAX INFORMATION                                                          

At January 31, 1999, the aggregate cost of investment securities for            
income tax purposes was $83,721,952. Net unrealized appreciation                
aggregated $12,702,980, of which $14,811,486 related to appreciated             
investment securities and $2,108,506 related to depreciated investment          
securities.                                                                     

At July 31, 1998, the fund had a capital loss carryforward of                   
approximately $6,552,000 which will expire on July 31, 2004.                    

FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             
  JANUARY 31, 1999 (UNAUDITED)

ASSETS                                                                          

Investment in securities, at               $ 96,424,932                         
value (cost $83,686,929) -                                                      
See accompanying schedule                                                       

Foreign currency held at                    4,081                               
value (cost $3,682)                                                             

Receivable for investments                  1,779,461                           
sold                                                                            

Receivable for fund shares                  576,527                             
sold                                                                            

Dividends receivable                        62,781                              

Interest receivable                         626,260                             

Receivable for daily                        16,619                              
variation on futures                                                            
contracts                                                                       

TOTAL ASSETS                               99,490,661                         

LIABILITIES                                                                     

Payable to custodian bank      $ 16,478                                         

Payable for investments         1,489,886                                       
purchased                                                                       

Payable for fund shares         228,748                                         
redeemed                                                                        

Accrued management fee          58,902                                          

Other payables and accrued      131,490                                         
expenses                                                                        

TOTAL LIABILITIES                          1,925,504                          

NET ASSETS                                 $ 97,565,157                         

Net Assets consist of:                                                          

Paid in capital                            $ 90,819,850                         

Distributions in excess of                  (104,662)                           
net investment income                                                           

Accumulated undistributed net               (6,039,909)                         
realized gain (loss) on                                                         
investments and foreign                                                         
currency transactions                                                           

Net unrealized appreciation                 12,889,878                          
(depreciation) on                                                               
investments and assets and                                                      
liabilities in foreign                                                          
currencies                                                                      

NET ASSETS, for 5,656,892                  $ 97,565,157                         
shares outstanding                                                              

NET ASSET VALUE, offering                   $17.25                              
price and redemption price                                                      
per share ($97,565,157                                                          
(divided by) 5,656,892                                                          
shares)                                                                         

STATEMENT OF OPERATIONS                                                         
                          SIX MONTHS ENDED
                     JANUARY 31,
                          1999 (UNAUDITED)

INVESTMENT INCOME                            $ 282,204                          
Dividends                                                                       

Interest                                      1,049,845                         

                     1,332,049

Less foreign taxes withheld                   (15,589)                          

TOTAL INCOME                                 1,316,460                        

EXPENSES                                                                        

Management fee                   $ 334,165                                      

Transfer agent fees               121,011                                       

Accounting fees and expenses      33,172                                        

Non-interested trustees'          998                                           
compensation                                                                    

Custodian fees and expenses       49,857                                        

Registration fees                 20,695                                        

Audit                             31,020                                        

Legal                             150                                           

Miscellaneous                     1,684                                         

Total expenses before            592,752                                      
reductions                                                                      

Expense reductions               (3,959)     588,793                          

NET INVESTMENT INCOME                         727,667                           

REALIZED AND UNREALIZED GAIN                                                    
(LOSS)                                                                          
Net realized gain (loss) on:                                                    

Investment securities            116,799                                      

Foreign currency transactions    (49,357)                                     

Futures contracts                575,697     643,139                          

Change in net unrealized                                                        
appreciation (depreciation)                                                     
on:                                                                             

Investment securities            3,519,350                                    

Assets and liabilities in        1,711                                        
foreign currencies                                                              

Futures contracts                100,473     3,621,534                        

NET GAIN (LOSS)                               4,264,673                         

NET INCREASE (DECREASE) IN                   $ 4,992,340                        
NET ASSETS RESULTING  FROM                                                      
OPERATIONS                                                                      

                                                        [Enlarge/Download Table]

                                                                                       
STATEMENT OF CHANGES IN NET ASSETS                                                     
                                 SIX MONTHS ENDED JANUARY 31,  YEAR ENDED JULY 31, 1998
                                 1999 (UNAUDITED)                                      

INCREASE (DECREASE) IN NET                                                             
ASSETS                                                                                 

Operations Net investment        $ 727,667                     $ 1,467,414             
income                                                                                 

 Net realized gain (loss)         643,139                       6,633,711              

 Change in net unrealized         3,621,534                     (725,159)              
appreciation (depreciation)                                                            

 NET INCREASE (DECREASE) IN       4,992,340                     7,375,966              
NET ASSETS RESULTING  FROM                                                             
OPERATIONS                                                                             

Distributions to shareholders     (1,574,612)                   (1,895,825)            
from net investment income                                                             

Share transactions Net            24,733,367                    66,298,210             
proceeds from sales of shares                                                          

 Reinvestment of distributions    1,484,276                     1,827,302              

 Cost of shares redeemed          (27,030,727)                  (53,263,687)           

 NET INCREASE (DECREASE) IN       (813,084)                     14,861,825             
NET ASSETS RESULTING  FROM                                                             
SHARE TRANSACTIONS                                                                     

  TOTAL INCREASE (DECREASE)       2,604,644                     20,341,966             
IN NET ASSETS                                                                          

NET ASSETS                                                                             

 Beginning of period              94,960,513                    74,618,547             

 End of period (including        $ 97,565,157                  $ 94,960,513            
under (over) distribution                                                              
of net investment income of                                                            
$(104,662) and  $742,283,                                                              
respectively)                                                                          

OTHER INFORMATION                                                                      
Shares                                                                                 

 Sold                             1,534,051                     4,236,702              

 Issued in reinvestment of        95,920                        124,912                
distributions                                                                          

 Redeemed                         (1,688,350)                   (3,475,772)            

 Net increase (decrease)          (58,379)                      885,842                


                                                        [Enlarge/Download Table]

                                                                                                                
FINANCIAL HIGHLIGHTS                                                                                            
                               SIX MONTHS ENDED                                                                 
                               JANUARY 31,       YEARS ENDED JULY 31,                                           
                               1999                                                                             

                               (UNAUDITED)       1998                  1997      1996      1995       1994      

SELECTED PER-SHARE DATA                                                                                         

Net asset value, beginning of  $ 16.62           $ 15.45               $ 12.91   $ 12.40   $ 11.99    $ 11.98   
period                                                                                                          

Income from Investment                                                                                          
Operations                                                                                                      

 Net investment income          .13 D                .30 D                 .31 D     .31       .28        .32 D 

 Net realized and               .78                  1.27                  2.68      .25       .13        .25   
unrealized gain (loss)                                                                                          

 Total from investment          .91                  1.57                  2.99      .56       .41        .57   
operations                                                                                                      

Less Distributions                                                                                              

 From net investment   income   (.28)                (.40)                 (.45)     (.05)     -          (.15) 

 From net realized gain         -                    -                     -         -         -          (.11) 

 In excess of net   realized    -                    -                     -         -         -          (.20) 
gain                                                                                                            

 Return of capital              -                    -                     -         -         -          (.10) 

 Total distributions            (.28)                (.40)                 (.45)     (.05)     -          (.56) 

Net asset value, end   of      $ 17.25            $ 16.62               $ 15.45   $ 12.91   $ 12.40    $ 11.99  
period                                                                                                          

TOTAL RETURN B, C               5.68%               10.53%                23.93%    4.52%     3.42%      4.58%  

RATIOS AND SUPPLEMENTAL DATA                                                                                    

Net assets, end of period      $ 97,565           $ 94,961              $ 74,619  $ 87,785  $ 148,831  $ 313,246
(000 omitted)                                                                                                   

Ratio of expenses to average    1.32% A             1.39%                 1.51%     1.39%     1.34%      1.68%  
net assets                                                                                                      

Ratio of expenses to average    1.31% A, E          1.37% E               1.49% E   1.36% E   1.33% E    1.67% E
net assets after expense                                                                                        
reductions                                                                                                      

Ratio of net investment         1.62% A             1.95%                 2.28%     2.94%     4.68%      2.56%  
income to average  net assets                                                                                   

Portfolio turnover rate         103% A              81%                   57%       189%      242%       226%   


A ANNUALIZED                                                                    
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.           
C 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).                                                          
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 January 31, 1999 (Unaudited)                               

1. SIGNIFICANT ACCOUNTING POLICIES.                                             

Fidelity Global Balanced Fund (the fund) is a fund of Fidelity Puritan          
Trust (the trust) and is authorized to issue an unlimited number of             
shares. The trust is registered under the Investment Company Act of             
1940, as amended, as an open-end management investment company                  
organized as a Massachusetts business trust. 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. Equity securities for which quotations are readily          
available are valued at the last sale price, or if no sale price, at            
the closing bid price. Debt securities for which quotations are                 
readily available are valued by a pricing service at their market               
values as determined by their most recent bid prices in the principal           
market (sales prices if the principal market is an exchange) in which           
such securities are normally traded. Securities (including restricted           
securities) for which market quotations are not readily available are           
valued at their fair value as determined in good faith under                    
consistently applied procedures under the general supervision of the            
Board of Trustees. 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             
and settlement date 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           
U.S. federal income taxes to the extent that it distributes                     
substantially all of its taxable income for its fiscal year. The fund           
may be subject to foreign taxes on income and gains on investments              
which are accrued based upon the fund's understanding of the tax rules          
and regulations that exist in the markets in which it invests. The              
fund accrues such taxes as applicable.                                          

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED                                  

INCOME TAXES - CONTINUED                                                        

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, which includes accretion of               
original issue discount, is accrued as earned. Investment income is             
recorded net of foreign taxes withheld where recovery of such taxes is          
uncertain.                                                                      

EXPENSES. Most expenses of the trust can be directly attributed to a            
fund. Expenses which cannot be directly attributed are apportioned              
among the funds in the trust.                                                   

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 futures transactions, foreign currency transactions,             
passive foreign investment companies (PFIC), non-taxable dividends,             
capital loss carryforwards, and losses deferred due to wash sales.              

Permanent book and tax basis differences relating to shareholder                
distributions will result in reclassifications to paid in capital.              
Distributions in excess of net investment income and accumulated                
undistributed net realized gain (loss) on investments and foreign               
currency transactions may include temporary book and tax basis                  
differences that 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 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                                   

2. OPERATING POLICIES - CONTINUED                                               

JOINT TRADING ACCOUNT - CONTINUED                                               

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.                    

FUTURES CONTRACTS. The fund may use futures contracts to manage its             
exposure to the stock market. Buying futures tends to increase the              
fund's exposure to the underlying instrument, while selling futures             
tends to decrease the fund's exposure to the underlying instrument or           
hedge other fund investments. Futures contracts involve, to varying             
degrees, risk of loss in excess of the futures variation margin                 
reflected in the Statement of Assets and Liabilities. The underlying            
face amount at value of any open futures contracts at period end is             
shown in the schedule of investments under the caption "Futures                 
Contracts." This amount reflects each contract's exposure to the                
underlying instrument at period end. Losses may arise from changes in           
the value of the underlying instruments or if the counterparties do             
not perform under the contracts' terms. Gains (losses) are realized             
upon the expiration or closing of the futures contracts. Futures                
contracts are valued at the settlement price established each day by            
the board of trade or exchange on which they are traded.                        

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 sale at an acceptable price may be difficult.           
At the end of the period, the fund had no investments in restricted             
securities (excluding 144A issues).                                             

3. PURCHASES AND SALES OF INVESTMENTS.                                          

Purchases and sales of securities, other than short-term securities,            
aggregated $41,929,527 and $41,082,501, respectively, of which U.S.             
government and government agency obligations aggregated $1,984,435 and          
$0, respectively.                                                               

The market value of futures contracts opened and closed during the              
period amounted to $12,275,752 and $11,899,281, respectively.                   

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.                                 

MANAGEMENT FEE. As the fund's investment adviser, FMR receives a                
monthly 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 .45%. 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. For the period, the management           
fee was equivalent to an annualized rate of .74% of average net assets          
.                                                                             
SUB-ADVISER FEE. FMR, on behalf of the fund, entered into sub-advisory          
agreements with Fidelity Management & Research (U.K.) Inc., Fidelity            
Management & Research (Far East) Inc., Fidelity International                   
Investment Advisors (FIIA), and Fidelity Investments Japan Limited              
(FIJ). In addition, FIIA entered into a sub-advisory agreement with             
its subsidiary, Fidelity International Investment Advisors (U.K.)               
Limited (FIIA(U.K.)L). Under the sub-advisory arrangements, FMR may             
receive investment advice and research services and may grant the               
sub-advisers investment management authority to buy and sell                    
securities. FMR pays its sub-advisers either a portion of its                   
management fee or a fee based on costs incurred for these services.             
FIIA pays FIIA(U.K.)L a fee based on costs incurred for either                  
service.                                                                        

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 .27% 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 $2,194 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 $3,720 under this arrangement.                                  

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 $96 and $143, respectively, under these arrangements.                

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.                                                                       

(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE                                           
WWW.FIDELITY.COM                                                                

If you are not currently on the Internet, call EarthLink Sprint at              
1-800-288-2967, and be sure to ask for registration number SMD004 to            
receive a special Fidelity package that includes 30 days of free                
Internet access. EarthLink is North America's #1 independent Internet           
access provider.                                                                

(COMPUTER_GRAPHIC)                                                              
FIDELITY ON-LINE XPRESS+(registered trademark)                                  

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                                                        

TO VISIT FIDELITY                                                               

For directions and hours,                                                       
please call 1-800-544-9797.                                                     

ARIZONA                                                                         

7373 N. Scottsdale Road                                                         
Scottsdale, AZ                                                                  

CALIFORNIA                                                                      

815 East Birch Street                                                           
Brea, CA                                                                        

851 East Hamilton Avenue                                                        
Campbell, CA                                                                    

527 North Brand Boulevard                                                       
Glendale, CA                                                                    

19200 Von Karman Avenue                                                         
Irvine, CA                                                                      

10100 Santa Monica Blvd.                                                        
Los Angeles, CA                                                                 

251 University Avenue                                                           
Palo Alto, CA                                                                   

1760 Challenge Way                                                              
Sacramento, CA                                                                  

7676 Hazard Center Drive                                                        
San Diego, CA                                                                   

455 Market Street                                                               
San Francisco, CA                                                               

950 Northgate Drive                                                             
San Rafael, CA                                                                  

1400 Civic Drive                                                                
Walnut Creek, CA                                                                

6300 Canoga Avenue                                                              
Woodland Hills, CA                                                              

COLORADO                                                                        

1625 Broadway                                                                   
Denver, CO                                                                      

CONNECTICUT                                                                     

48 West Putnam Avenue                                                           
Greenwich, CT                                                                   

265 Church Street                                                               
New Haven, CT                                                                   

300 Atlantic Street                                                             
Stamford, CT                                                                    

29 South Main Street                                                            
West Hartford, CT                                                               

DELAWARE                                                                        

222 Delaware Avenue                                                             
Wilmington, DE                                                                  

FLORIDA                                                                         

4400 N. Federal Highway                                                         
Boca Raton, FL                                                                  

90 Alhambra Plaza                                                               
Coral Gables, FL                                                                

4090 N. Ocean Boulevard                                                         
Ft. Lauderdale, FL                                                              

1907 West State Road 434                                                        
Longwood, FL                                                                    

8880 Tamiami Trail, North                                                       
Naples, FL                                                                      

2401 PGA Boulevard                                                              
Palm Beach Gardens, FL                                                          

8065 Beneva Road                                                                
Sarasota, FL                                                                    

1502 N. Westshore Blvd.                                                         
Tampa, FL                                                                       

GEORGIA                                                                         

3445 Peachtree Road, N.E.                                                       
Atlanta, GA                                                                     

1000 Abernathy Road                                                             
Atlanta, GA                                                                     

ILLINOIS                                                                        

One North Franklin Street                                                       
Chicago, IL                                                                     

1415 West 22nd Street                                                           
Oak Brook, IL                                                                   

1700 East Golf Road                                                             
Schaumburg, IL                                                                  

3232 Lake Avenue                                                                
Wilmette, IL                                                                    

INDIANA                                                                         

4729 East 82nd Street                                                           
Indianapolis, IN                                                                

MAINE                                                                           

3 Canal Plaza                                                                   
Portland, ME                                                                    

MARYLAND                                                                        

7401 Wisconsin Avenue                                                           
Bethesda, MD                                                                    

1 West Pennsylvania Ave.                                                        
Towson, MD                                                                      

MASSACHUSETTS                                                                   

470 Boylston Street                                                             
Boston, MA                                                                      

155 Congress Street                                                             
Boston, MA                                                                      

25 State Street                                                                 
Boston, MA                                                                      

300 Granite Street                                                              
Braintree, MA                                                                   

44 Mall Road                                                                    
Burlington, MA                                                                  

416 Belmont Street                                                              
Worcester, MA                                                                   

MICHIGAN                                                                        

280 North Woodward Ave.                                                         
Birmingham, MI                                                                  

29155 Northwestern Hwy.                                                         
Southfield, MI                                                                  

MINNESOTA                                                                       

7600 France Avenue South                                                        
Edina, MN                                                                       

MISSOURI                                                                        

700 West 47th Street                                                            
Kansas City, MO                                                                 

8885 Ladue Road                                                                 
Ladue, MO                                                                       

200 North Broadway                                                              
St. Louis, MO                                                                   

NEW JERSEY                                                                      

150 Essex Street                                                                
Millburn, NJ                                                                    

56 South Street                                                                 
Morristown, NJ                                                                  

501 Route 17, South                                                             
Paramus, NJ                                                                     

NEW YORK                                                                        

1055 Franklin Avenue                                                            
Garden City, NY                                                                 

999 Walt Whitman Road                                                           
Melville, L.I., NY                                                              

1271 Avenue of the Americas                                                     
New York, NY                                                                    

71 Broadway                                                                     
New York, NY                                                                    

350 Park Avenue                                                                 
New York, NY                                                                    

NORTH CAROLINA                                                                  

4611 Sharon Road                                                                
Charlotte, NC                                                                   

OHIO                                                                            

600 Vine Street                                                                 
Cincinnati, OH                                                                  

28699 Chagrin Boulevard                                                         
Woodmere Village, OH                                                            

OREGON                                                                          

16850 SW 72 Avenue                                                              
Tigard, OR                                                                      

PENNSYLVANIA                                                                    

1735 Market Street                                                              
Philadelphia, PA                                                                

439 Fifth Avenue                                                                
Pittsburgh, PA                                                                  

TENNESSEE                                                                       

6150 Poplar Road                                                                
Memphis, TN                                                                     

TEXAS                                                                           

10000 Research Boulevard                                                        
Austin, TX                                                                      

4017 Northwest Parkway                                                          
Dallas, TX                                                                      

1155 Dairy Ashford Street                                                       
Houston, TX                                                                     

2701 Drexel Drive                                                               
Houston, TX                                                                     

400 East Las Colinas Blvd.                                                      
Irving, TX                                                                      

14100 San Pedro                                                                 
San Antonio, TX                                                                 

19740 IH 45 North                                                               
Spring, TX                                                                      

UTAH                                                                            

215 South State Street                                                          
Salt Lake City, UT                                                              

VIRGINIA                                                                        

8180 Greensboro Drive                                                           
McLean, VA                                                                      

WASHINGTON                                                                      

411 108th Avenue, N.E.                                                          
Bellevue, WA                                                                    

511 Pine Street                                                                 
Seattle, WA                                                                     

WASHINGTON, DC                                                                  

1900 K Street, N.W.                                                             
Washington, DC                                                                  

WISCONSIN                                                                       

595 North Barker Road                                                           
Brookfield, WI                                                                  

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                                                   
Fidelity International Investment Advisors, Pembroke, Bermuda                   
Fidelity International Investment Advisors (U.K.) Limited                       
Kent, England                                                                   
Fidelity Investments Japan Ltd.                                                 
Tokyo, Japan                                                                    

OFFICERS                                                                        
Edward C. Johnson 3d, President                                                 
Robert C. Pozen, Senior Vice President                                          
Richard R. Mace, Jr., Vice President                                            
Richard A. Spillane, Jr., Vice President                                        
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
Matthew N. Karstetter, Deputy 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                                                                

* INDEPENDENT TRUSTEES                                                          

GBL-SANN-0399  72370                                                            
1.700152.101                                                                    

GENERAL DISTRIBUTOR                                                             
Fidelity Distributors Corporation                                               
Boston, MA                                                                      

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

CUSTODIAN                                                                       
Brown Brothers Harriman & Co.                                                   
Boston, MA                                                                      

FIDELITY'S GROWTH AND INCOME FUNDS                                              
Balanced Fund                                                                   
Convertible Securities Fund                                                     
Equity-Income Fund                                                              
Equity-Income II Fund                                                           
Fidelity(registered trademark) Fund                                             
Global Balanced Fund                                                            
Growth & Income Portfolio                                                       
Growth & Income II Portfolio                                                    
Puritan(registered trademark) Fund                                              
Real Estate Investment Portfolio                                                
Utilities 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)  1-800-544-5555                         

AUTOMATED LINE FOR QUICKEST SERVICE                                           

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

FIDELITY                                                                        
LOW-PRICED STOCK                                                                
FUND                                                                            

SEMIANNUAL REPORT                                                               
JANUARY 31, 1999                                                                

(fidelity_logo_graphic)(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    9   A summary of major shifts in                          
the fund's investments over 
the past six months.        

INVESTMENTS           10  A complete list of the fund's                         
investments with their      
market values.              

FINANCIAL STATEMENTS  44  Statements of assets and                              
liabilities, operations, and
changes in net assets,  as  
 well as financial highlights.

NOTES                 48  Notes to the financial                                
statements.                 

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

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

This report is printed on recycled paper using soy-based inks.                  

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE                   
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.          
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE                   
INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE            
PROSPECTUS.                                                                     
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED            
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,             
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO                   
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT                   
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:                                                               

After the first month of 1999, U.S. stock markets seem to have                  
maintained their momentum from 1998, as the S&P 500, the Dow and                
NASDAQ all reached record highs in January. The technology sector, and          
Internet stocks in particular, were the main contributors. In the bond          
markets, domestic securities continued to trade at historically low             
yields, while positive economic news helped credit-sensitive sectors            
outperform Treasury bonds.                                                      

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 an investment in a money market fund is not insured or            
guaranteed by the Federal Deposit Insurance Corporation or any other            
government agency. Although money market funds seek to preserve the             
value of your investment at $1.00 per share, it is possible to lose             
money by investing in these types of funds.                                     

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. Of course, you should                 
consider your financial ability to continue your purchases through              
periods of low price levels before undertaking such a strategy.                 

If you have questions, please call us at 1-800-544-8888, or visit our           
web site at www.fidelity.com. 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).                                                           

                                                        [Enlarge/Download Table]

                                                                                      
CUMULATIVE TOTAL RETURNS                                                              

PERIODS ENDED JANUARY 31, 1999  PAST 6 MONTHS  PAST 1 YEAR  PAST 5 YEARS  LIFE OF FUND

FIDELITY LOW-PRICED STOCK       -3.33%         -0.52%       99.13%        369.37%     

FIDELITY LOW-PRICED STOCK       -6.23%         -3.50%       93.16%        355.29%     
(INCL. 3.00% SALES CHARGE)                                                            

Russell 2000 (registered        2.40%          0.33%        72.12%        198.06%     
trademark)                                                                            

Small Cap Funds Average         1.30%          1.76%        81.32%        n/a         


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 since the fund started on December 27, 1989. 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 Russell 2000 Index - a             
market capitalization-weighted index of 2,000 small company stocks. To          
measure how the fund's performance stacked up against its peers, you            
can compare it to the small cap funds average, which reflects the               
performance of mutual funds with similar objectives tracked by Lipper           
Inc. The past six months average represents a peer group of 713 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 JANUARY 31, 1999    PAST 1 YEAR  PAST 5 YEARS  LIFE OF FUND       

FIDELITY LOW-PRICED STOCK         -0.52%       14.77%        18.52%             

FIDELITY LOW-PRICED STOCK         -3.50%       14.07%        18.12%             
(INCL. 3.00% SALES CHARGE)                                                      

Russell 2000                      0.33%        11.47%        12.75%             

Small Cap Funds Average           1.76%        12.37%        n/a                

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 different figure than that               
obtained by averaging the cumulative total returns and annualizing the          
result.)                                                                        

$10,000 OVER LIFE OF FUND                                                       
Low-Priced Stock            Russell 2000              
00316                       RS002                     
1989/12/27       9700.00                    10000.00                        
1989/12/31       9593.30                    10142.97                        
1990/01/31       9535.10                     9256.82                        
1990/02/28       9719.40                     9544.23                        
1990/03/31       9816.40                     9915.46                        
1990/04/30       9447.80                     9591.71                        
1990/05/31      10194.70                    10270.61                        
1990/06/30      10476.00                    10291.43                        
1990/07/31      10417.80                     9838.77                        
1990/08/31       9379.90                     8528.44                        
1990/09/30       8968.27                     7773.76                        
1990/10/31       8816.43                     7299.19                        
1990/11/30       9292.18                     7855.75                        
1990/12/31       9585.72                     8167.44                        
1991/01/31      10466.35                     8906.05                        
1991/02/28      11397.59                     9899.21                        
1991/03/31      12156.76                    10596.00                        
1991/04/30      12622.38                    10569.34                        
1991/05/31      12814.70                    11073.13                        
1991/06/30      12045.42                    10427.83                        
1991/07/31      12784.34                    10793.76                        
1991/08/31      13138.61                    11193.28                        
1991/09/30      13192.71                    11280.93                        
1991/10/31      13653.40                    11579.29                        
1991/11/30      13098.47                    11043.73                        
1991/12/31      14019.94                    11928.06                        
1992/01/31      15233.92                    12894.55                        
1992/02/29      16211.56                    13270.70                        
1992/03/31      15674.40                    12821.51                        
1992/04/30      15824.80                    12372.32                        
1992/05/31      15932.23                    12536.84                        
1992/06/30      15545.48                    11943.94                        
1992/07/31      16050.41                    12359.54                        
1992/08/31      16007.44                    12010.77                        
1992/09/30      16137.72                    12287.78                        
1992/10/31      16406.50                    12678.35                        
1992/11/30      17515.20                    13648.50                        
1992/12/31      18079.01                    14123.98                        
1993/01/31      18543.44                    14602.03                        
1993/02/28      18384.85                    14264.77                        
1993/03/31      18939.91                    14727.65                        
1993/04/30      18758.67                    14323.38                        
1993/05/31      19155.14                    14957.18                        
1993/06/30      19223.10                    15050.49                        
1993/07/31      19472.31                    15258.29                        
1993/08/31      20163.30                    15917.47                        
1993/09/30      20327.14                    16366.66                        
1993/10/31      21075.97                    16787.91                        
1993/11/30      20713.64                    16235.37                        
1993/12/31      21733.10                    16790.47                        
1994/01/31      22863.72                    17316.90                        
1994/02/28      22851.16                    17254.27                        
1994/03/31      21846.16                    16343.28                        
1994/04/30      22034.60                    16440.43                        
1994/05/31      21959.22                    16255.82                        
1994/06/30      21645.16                    15703.83                        
1994/07/31      22135.10                    15961.84                        
1994/08/31      22964.22                    16851.27                        
1994/09/30      23073.27                    16794.85                        
1994/10/31      23252.45                    16728.57                        
1994/11/30      22632.20                    16052.95                        
1994/12/31      22778.19                    16484.25                        
1995/01/31      22763.95                    16276.27                        
1995/02/28      23418.83                    16953.35                        
1995/03/31      23575.43                    17245.32                        
1995/04/30      24344.19                    17628.78                        
1995/05/31      24842.46                    17931.89                        
1995/06/30      25796.30                    18862.12                        
1995/07/31      27405.01                    19948.62                        
1995/08/31      27661.27                    20361.30                        
1995/09/30      28155.35                    20724.91                        
1995/10/31      27354.31                    19798.05                        
1995/11/30      28066.35                    20629.85                        
1995/12/31      28448.62                    21174.16                        
1996/01/31      28756.17                    21151.47                        
1996/02/29      29678.83                    21810.65                        
1996/03/31      30170.91                    22254.62                        
1996/04/30      31431.88                    23444.61                        
1996/05/31      32385.29                    24368.50                        
1996/06/30      31770.18                    23367.84                        
1996/07/31      30555.35                    21326.81                        
1996/08/31      31724.05                    22565.05                        
1996/09/30      32717.98                    23446.88                        
1996/10/31      33317.40                    23085.51                        
1996/11/30      35082.34                    24036.74                        
1996/12/31      36098.62                    24666.68                        
1997/01/31      36504.41                    25159.64                        
1997/02/28      36927.11                    24549.60                        
1997/03/31      36250.79                    23391.20                        
1997/04/30      36200.07                    23456.40                        
1997/05/31      38922.26                    26065.92                        
1997/06/30      40494.70                    27182.99                        
1997/07/31      42608.21                    28447.87                        
1997/08/31      42963.28                    29098.79                        
1997/09/30      45766.34                    31228.66                        
1997/10/31      45019.86                    29856.82                        
1997/11/30      45233.14                    29663.71                        
1997/12/31      45748.92                    30182.91                        
1998/01/31      45767.12                    29706.57                        
1998/02/28      48279.40                    31903.16                        
1998/03/31      50063.48                    33218.93                        
1998/04/30      50773.47                    33402.75                        
1998/05/31      49608.36                    31603.78                        
1998/06/30      49371.69                    31670.26                        
1998/07/31      47096.08                    29106.43                        
1998/08/31      39686.69                    23454.55                        
1998/09/30      41093.86                    25290.05                        
1998/10/31      42727.25                    26321.47                        
1998/11/30      44480.17                    27700.52                        
1998/12/31      45991.83                    29414.67                        
1999/01/29      45528.89                    29805.56                        
IMATRL PRASUN   SHR__CHT 19990131 19990212 142747 R00000000000113               

$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was            
invested in Fidelity Low-Priced Stock Fund on December 27, 1989, when           
the fund started, and the current 3.00% sales charge was paid. As the           
chart shows, by January 31, 1999, the value of the investment would             
have grown to $45,529 - a 355.29% increase on the initial investment.           
For comparison, look at how the Russell 2000 Index did over the same            
period. With dividends and capital gains, if any, reinvested, the same          
$10,000 would have grown to $29,806 - a 198.06% 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                                                                    

The first month of 1999 proved to                                               
be a continuation of 1998's strong                                              
U.S. stock market performance.                                                  
For the six-month period ending                                                 
January 31, 1999, the Standard                                                  
and Poor's 500 Index - a popular                                                
performance measure of U.S. stock                                               
markets - returned 15.02%. In                                                   
the early stages of the six-month                                               
period, U.S. equity markets were                                                
staggering toward a deep abyss,                                                 
one they would fall into on the news                                            
of Russia's currency devaluation                                                
and loan defaults. Faced with                                                   
global economic chaos, investors                                                
began fleeing the equity markets                                                
in droves, searching for safer, less                                            
volatile havens - particularly U.S.                                             
Treasuries. To address the lack of                                              
confidence in domestic and global                                               
equity markets, the U.S. Federal                                                
Reserve Board intervened with three                                             
separate 0.25% interest-rate cuts in                                            
the late fall. Those cuts, combined                                             
with skyrocketing Internet and                                                  
technology advances, helped stocks                                              
to quickly ascend to - and even                                                 
surpass - their former lofty levels.                                            
At the end of 1998, the S&P 500(registered trademark)                           
recorded its unprecedented                                                      
fourth-straight year of returns                                                 
exceeding 20%. Despite some                                                     
instances of profit-taking in                                                   
technology issues and concerns                                                  
over Brazil's currency devaluation                                              
in the first month of 1999, the                                                 
S&P 500 index, Dow Jones                                                        
Industrial Average and NASDAQ                                                   
all reached record highs in                                                     
January.                                                                        

(photograph of Joel Tillinghast)                                                

An interview with Joel Tillinghast, Portfolio Manager of Fidelity               
Low-Priced Stock Fund                                                           

Q. HOW DID THE FUND PERFORM, JOEL?                                              

A. For the six months that ended January 31, 1999, the fund returned            
-3.33%. The Russell 2000 Index returned 2.40% during that time, while           
the small cap funds average, as tracked by Lipper Inc., returned                
1.30%. For the 12 months that ended January 31, 1999, the fund                  
returned -0.52%, while the Russell 2000 and Lipper group returned               
0.33% and 1.76%, respectively.                                                  

Q. WHAT FACTORS CONTRIBUTED TO THE FUND'S PERFORMANCE?                          

A. The market has been extremely divided over the past year. Large-cap          
stocks in general surged, as did technology stocks, particularly those          
that were Internet-related. Most other stocks, meanwhile, languished,           
with more than half of the publicly traded stocks losing value over             
the last six months and year. Since the fund invests primarily in               
smaller companies, these trends obviously hampered performance.                 
Looking further, we also saw some narrowness within the small-cap               
universe, as technology companies - and again those involved in the             
Internet - accounted for most of the group's gains. The fund had                
minimal holdings in Internet companies, and was underweighted in                
technology stocks relative to the Russell 2000. These factors combined          
to detract from performance.                                                    

Q. WHY DID YOU CHOOSE TO UNDERWEIGHT TECHNOLOGY STOCKS?                         

A. Several factors, especially high valuations, kept me away. Most of           
the companies within the fund's portfolio are currently profitable,             
but most Internet companies were losing money during the period. On             
average, the stocks in the fund have low price-to-earnings ratios, but          
many technology stocks trade at high ratios. When the fund does pay up          
for a faster-growing company, it's usually because the company has a            
business model with recurring revenue and a leading market position             
within its industry. A good example is Kronos, a leader in electronic           
time and attendance systems. By contrast, the Internet and many other           
areas of technology are changing so rapidly that they haven't shown             
that their business models will work, and it isn't clear who will               
emerge as leaders in their categories. Also, the Internet is likely to          
be used by almost all businesses, so I felt it was better to                    
participate through companies with existing distribution ability and            
brands. Intimate Brands, for example, which owns women's apparel                
company Victoria's Secret, extended its sales reach to the Internet             
during the period.                                                              

Q. CAN YOU POINT TO ANY AREAS OF THE MARKET WHERE YOU DID FIND                  
OPPORTUNITIES?                                                                  

A. Domestic consumer sectors were attractive, with strong consumer              
spending and moderate stock valuations. I added to the fund's                   
positions in several homebuilding companies, most notably Clayton               
Homes and Oakwood Homes. Retail-related investments such as AutoZone            
and BJ's Wholesale Club also performed well. Other consumer companies           
that did well included Fossil, a watch designer, and Kenneth Cole, a            
shoe company. Media companies, especially cable TV companies, also              
turned in generally positive results. Strong subscriber growth and              
solid revenues - combined with the promising fusion of cable TV and             
the Internet - helped steer Texas-based TCA Cable and Canadian-based            
Cogeco and Moffat to solid gains.                                               

Q. FINANCE STOCKS ACCOUNTED FOR JUST OVER 16% OF THE FUND'S TOTAL               
INVESTMENTS AT THE END OF THE PERIOD. CAN YOU GIVE US A REPORT CARD ON          
THESE STOCKS?                                                                   

A. I'd have to give them a below-average grade. Banks and other                 
lending institutions went through a difficult performance stretch, due          
mainly to increased concerns about credit quality and derivatives.              
Some names that detracted from the fund's performance during the                
period included insurer MMI Companies and Sweden-based Nordbanken.              
Another factor that may have hurt finance stocks was that the level of          
merger and acquisition activity within the sector tailed off some               
during the period.                                                              

Q. WHAT'S YOUR OUTLOOK?                                                         

A. I'll continue to look for companies that I feel can offer steady             
earnings growth in a flat-profit environment. In the short term, stock          
prices don't always move with earnings. Since small company stock               
prices have not risen as much as earnings, I think they are overdue to          
catch up - particularly since large company stock prices have risen             
faster than their earnings for four consecutive years.                          

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: capital appreciation by                                                   
investing mainly in low-priced                                                  
common stocks ($35 or less                                                      
at time of purchase)                                                            

FUND NUMBER: 316                                                                

TRADING SYMBOL: FLPSX                                                           

START DATE: December 27,                                                        
1989                                                                            

SIZE: as of January 31,                                                         
1999, more than $8.6                                                            
billion                                                                         

MANAGER: Joel Tillinghast,                                                      
since 1989; analyst for                                                         
natural gas, personal care                                                      
products, appliance and                                                         
tobacco industries,                                                             
1986-1989; joined Fidelity                                                      
in 1986                                                                         

JOEL TILLINGHAST TALKS ABOUT                                                    
MAINTAINING HIS INVESTMENT                                                      
DISCIPLINE THROUGH BUMPY                                                        
SMALL-CAP MARKETS:                                                              

"One of the biggest challenges I face                                           
when small-cap stocks are                                                       
struggling is to resist the                                                     
temptation to chase whatever                                                    
stocks have gone up. During the                                                 
period, for example, Internet                                                   
stocks rose dramatically in value                                               
despite the fact that many of them                                              
have never earned a profit. Also,                                               
while every stock has some degree                                               
of future uncertainty, the future                                               
for Internet stocks, in my view, is                                             
impossible to forecast. Thus, I was                                             
faced with a decision. I could                                                  
change my stripes and invest in                                                 
stocks that had appreciated in value                                            
for reasons unclear to me, or I could                                           
stick with names that I did know,                                               
even though they weren't rising in                                              
value. My experience has taught                                                 
me that the latter philosophy                                                   
usually works out best in the long                                              
run.                                                                            

"Instead of jumping on the Internet                                             
bandwagon, I chose to focus on                                                  
companies that I felt could steadily                                            
grow their earnings through difficult                                           
market phases. Until small-caps                                                 
bounce back, this seemed to be a                                                
logical approach. What will it take                                             
for small-caps to rebound?                                                      
Credit-wary investors are currently                                             
attracted to big stocks because of                                              
their favorable liquidity                                                       
characteristics. If banks show a                                                
willingness to lend to smaller, riskier                                         
credits, that would benefit                                                     
small-cap companies."                                                           

INVESTMENT CHANGES                                                              

                                                                [Download Table]

                                                                                    
TOP TEN STOCKS AS OF JANUARY                                                        
31, 1999                                                                            

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

Gallaher Group PLC sponsored      1.5                      1.2                      
ADR                                                                                 

USEC, Inc.                        1.5                      1.1                      

Hyder PLC                         1.2                      1.1                      

AutoZone, Inc.                    1.1                      0.6                      

King World Productions, Inc.      1.1                      1.0                      

Biomet, Inc.                      1.0                      0.8                      

Reynolds & Reynolds Co. Class A   1.0                      0.7                      

BJ's Wholesale Club, Inc.         0.9                      0.5                      

First BanCorp P R                 0.9                      0.8                      

Viad Corp.                        0.9                      0.8                      

TOP FIVE MARKET SECTORS AS OF                                                       
JANUARY 31, 1999                                                                    

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

FINANCE                           16.3                     16.9                     

TECHNOLOGY                        11.9                     10.3                     

HEALTH                            8.0                      6.4                      

RETAIL & WHOLESALE                7.9                      6.5                      

MEDIA & LEISURE                   7.3                      5.8                      


ASSET ALLOCATION (% OF FUND'S                                                   
INVESTMENTS)                                                                    

AS OF JANUARY 31, 1999 *                                                        
Stocks 94.2%                                                                    
Short-term                                                                      
investments 5.8%                                                                
*FOREIGN                                                                        
INVESTMENTS 22.8%                                                               
Row: 1, Col: 1, Value: 94.2                                                     
Row: 1, Col: 2, Value: 5.8                                                      

AS OF JULY 31, 1998 **                                                          
Stocks 89.2%                                                                    
Short-term                                                                      
investments 10.8%                                                               
**FOREIGN                                                                       
INVESTMENTS 25.6%                                                               
Row: 1, Col: 1, Value: 89.2                                                     
Row: 1, Col: 2, Value: 10.8                                                     

INVESTMENTS JANUARY 31, 1999 (UNAUDITED)                                        

Showing Percentage of Total Value of Investment in Securities                   

                                                                [Download Table]

                                                                               
COMMON STOCKS - 94.2%                                                          

                                 SHARES                   VALUE (NOTE 1) (000S)

AEROSPACE & DEFENSE - 0.4%                                                     

AEROSPACE & DEFENSE - 0.1%                                                     

Allied Research Corp. (a)(d)      473,000                 $ 3,370              

Primex Technologies, Inc.         137,400                  6,114               

                                                           9,484               

DEFENSE ELECTRONICS - 0.3%                                                     

Ducommun, Inc. (a)(d)             1,095,500                15,611              

Flir Systems, Inc. (a)            300,000                  6,563               

                                                           22,174              

SHIP BUILDING & REPAIR - 0.0%                                                  

Vosper Thornycroft Holdings       50,000                   594                 
PLC                                                                            

TOTAL AEROSPACE & DEFENSE                                  32,252              

BASIC INDUSTRIES - 4.8%                                                        

CHEMICALS & PLASTICS - 2.9%                                                    

Aronkasei Co. Ltd.                650,000                  1,457               

CFC International, Inc. (a)       118,500                  1,274               

Cytec Industries, Inc. (a)        545,000                  12,092              

European Colour PLC               1,000,000                946                 

Foamex International, Inc.        152,500                  1,773               

International Specialty           1,640,000                16,503              
Products, Inc. (a)                                                             

Ivex Packaging Corp. (a)          15,000                   331                 

Low & Bonar PLC                   100,000                  321                 

McKechnie PLC                     200,000                  1,287               

Nihon Kagaku Sangyo Co. Ltd.      200,000                  472                 

Nippon Chemical Industrial        300,000                  866                 
Co. Ltd.                                                                       

Octel Corp. (a)(d)                1,472,000                19,596              

OM Group, Inc.                    215,000                  6,773               

Quixote Corp. (d)                 576,700                  6,920               

Solutia, Inc.                     1,460,000                27,923              

Spartech Corp.                    953,000                  22,753              

Tokyo Printing Ink                375,000                  709                 
Manufacturing Co. Ltd.                                                         

USEC, Inc. (d)                    8,645,000                125,353             

Wardle Storeys PLC                250,000                  1,473               

                                                           248,822             

IRON & STEEL - 0.3%                                                            

Beltecno Corp. (a)                100,000                  219                 

Bunka Shutter Co. Ltd.            150,000                  366                 

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

BASIC INDUSTRIES - CONTINUED                                                   

IRON & STEEL - CONTINUED                                                       

Chubu Steel Plate Co. Ltd. (a)    1,000,000               $ 1,374              

Cold Metal Products, Inc.         353,200                  1,104               
(a)(d)                                                                         

Fansteel, Inc. (a)(d)             800,000                  4,600               

Harris Steel Group, Inc.          200,000                  1,886               
Class A                                                                        

Hawk Corp. Class A (a)            119,500                  963                 

Japan Steel Tower Co. Ltd.        500,000                  898                 

Nittetsu Steel Drum Co. Ltd.      100,000                  266                 

Richardsons Westgarth PLC (d)     3,632,300                2,032               

Roanoke Electric Steel Corp.      370,500                  5,604               

Samuel Manu-Tech, Inc.            350,000                  1,992               

Takigami Steel Construction       300,000                  886                 
Co. Ltd.                                                                       

                                                           22,190              

METALS & MINING - 0.8%                                                         

Acier Leroux, Inc.:                                                            

Class B (sub-vtg.) (a)            125,000                  430                 

Class B (a)                       200,000                  688                 

AFC Cable Systems, Inc. (a)(d)    879,000                  30,985              

Brush Wellman, Inc.               32,300                   485                 

Cable Design Technology Corp.     810,000                  15,491              
(a)                                                                            

Chase Industries, Inc. (a)(d)     796,400                  8,462               

Draka Holding NV                  25,000                   630                 

Fimalac SA (Finance Marc de       50,000                   5,680               
Lacharriere)                                                                   

Johnson Matthey PLC               300,000                  2,073               

Major Drilling Group              75,000                   261                 
International, Inc. (a)                                                        

Metaleurop SA warrants 2/4/00     315,190                  90                  
(a)                                                                            

Nagahori Corp.                    200,000                  344                 

PK Cables OY                      100,000                  2,523               

Special Metals Corp. (a)          481,500                  2,949               

Toami Corp. (d)                   350,000                  1,684               

                                                           72,775              

PACKAGING & CONTAINERS - 0.3%                                                  

Boxmore International PLC         440,000                  1,122               

Owens-Illinois, Inc. (a)          550,000                  16,088              

Silgan Holdings, Inc. (a)         350,600                  8,195               

Tupperware Corp.                  25,000                   514                 

                                                           25,919              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

BASIC INDUSTRIES - CONTINUED                                                   

PAPER & FOREST PRODUCTS - 0.5%                                                 

ABT Building Products Corp.       472,000                 $ 6,992              
(a)                                                                            

Clondalkin Group Ltd. unit        1,000,000                6,134               

CVG (Crown Van Gelder)            300,000                  4,754               

Mercer International, Inc.        227,200                  1,619               
(SBI)                                                                          

Metsa-Serla Ltd. Class B Free     3,000,000                20,720              
Shares                                                                         

Rolland, Inc.                     325,000                  1,323               

Uehara Sei Shoji Co. Ltd.         1,000,000                2,388               

                                                           43,930              

TOTAL BASIC INDUSTRIES                                     413,636             

CONSTRUCTION & REAL ESTATE -                                                   
6.4%                                                                           

BUILDING MATERIALS - 1.0%                                                      

American Precision                60,000                   566                 
Industries, Inc. (a)                                                           

American Woodmark Corp.           184,000                  6,969               

Asahi Concrete Works Co. Ltd.     900,000                  2,474               
(d)                                                                            

Barnett, Inc. (a)                 472,500                  6,261               

Baynes (Charles) PLC              1,000,000                971                 

Brampton Brick Ltd. Class A       375,000                  918                 
(a)                                                                            

Devcon International Corp. (a)    217,700                  558                 

Domco, Inc.                       725,000                  4,798               

Drew Industries, Inc. (a)(d)      1,137,500                14,361              

Engineered Support Systems,       305,750                  4,873               
Inc. (d)                                                                       

Florida Rock Industries, Inc.     54,200                   1,568               

Giant Cement Holding, Inc.        587,100                  10,568              
(a)(d)                                                                         

Heywood Williams Group PLC        350,000                  1,238               

Hibiya Engineering Ltd.           1,500,000                5,540               

Kaynar Technologies, Inc. (a)     197,200                  5,300               

Komai Tekko, Inc.                 125,000                  241                 

Kondotec, Inc.                    275,000                  1,328               

Kyushu Fujisash Co. Ltd.          100,000                  181                 

Matsuo Bridge Co. Ltd.            500,000                  902                 

Nichiha Corp.                     300,000                  2,912               

Patrick Industries, Inc. (d)      593,000                  8,747               

Polynorm NV                       19,950                   1,388               

Polypipe PLC                      2,200,000                4,598               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

CONSTRUCTION & REAL ESTATE -                                                   
CONTINUED                                                                      

BUILDING MATERIALS - CONTINUED                                                 

Raytech Corp. (a)(d)              328,800                 $ 986                

Westburne, Inc.                   100,000                  930                 

                                                           89,176              

CONSTRUCTION - 4.4%                                                            

Amec PLC                          2,000,000                5,381               

American Buildings Co. (a)        131,700                  3,144               

American Homestar Corp. (a)       405,200                  5,268               

Aoki Marine Co. Ltd.              200,000                  326                 

Barratt Developments PLC          600,000                  2,068               

Beazer Homes USA, Inc. (a)(d)     427,900                  11,553              

Bovis Homes Group PLC             400,000                  1,376               

Bryant Group PLC                  200,000                  309                 

Cavalier Homes, Inc.              508,300                  5,083               

Clayton Homes, Inc.               4,423,358                60,821              

Crossman Communities, Inc.        1,147,600                30,698              
(a)(d)                                                                         

D.R. Horton, Inc.                 700,000                  14,788              

Dominion Homes, Inc. (a)(d)       532,500                  5,858               

Engle Homes, Inc. (d)             998,000                  13,785              

Fortress Group, Inc.              173,700                  380                 

Henry Boot & Sons PLC             200,000                  586                 

Jacobs Engineering Group,         1,100,000                46,131              
Inc. (a)                                                                       

Kaneshita Construction Co.        400,000                  1,931               
Ltd.                                                                           

M/I Schottenstein Homes, Inc.     880,000                  17,710              
(d)                                                                            

Matsui Construction Co. Ltd.      400,000                  962                 

Meritage Corp. (a)                260,000                  3,851               

Monaco Coach Corp. (a)            500,000                  14,500              

NCI Building Systems, Inc. (a)    187,500                  5,016               

Oakwood Homes Corp. (d)           3,177,000                60,959              

Oriole Homes Corp. Class B        276,800                  588                 
(a)(d)                                                                         

Persimmon PLC                     200,000                  599                 

Redrow Group PLC Class L          1,100,000                3,204               

Robertson Ceco Corp. (a)(d)       1,017,600                8,204               

Southern Energy Homes, Inc.       1,426,000                9,091               
(a)(d)                                                                         

Swan Hill Group PLC               2,100,000                1,348               

Takada Kiko Co. Ltd.              700,000                  2,646               

Tay Homes PLC (d)                 2,900,000                5,893               

Technip SA (a)(e)                 50,000                   4,430               

U.S. Home Corp. (a)               615,045                  21,834              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

CONSTRUCTION & REAL ESTATE -                                                   
CONTINUED                                                                      

CONSTRUCTION - CONTINUED                                                       

Willbros Group, Inc. (a)          323,800                 $ 1,599              

Wimpey George PLC                 1,000,000                1,670               

Writer Corp. (a)                  82,000                   154                 

Yokogawa Bridge Corp.             1,000,000                2,800               

Yokogawa Construction Co.         250,000                  754                 
Ltd.                                                                           

                                                           377,298             

ENGINEERING - 0.6%                                                             

Ataka Construction &              50,000                   198                 
Engineering Co. Ltd.                                                           

Dai-Dan Co. Ltd.                  300,000                  2,043               

Hoan Kogyo Co. Ltd.               500,000                  1,203               

Japan Engineering Consultants     300,000                  644                 

Kawasaki Setsubi Kogyo Co.        200,000                  584                 
Ltd.                                                                           

Metalrax Group PLC Class L        2,000,000                2,814               

MYR Group, Inc. (d)               500,000                  5,750               

NFO Worldwide, Inc. (a)           250,000                  3,047               

Ohba Co. Ltd.                     125,000                  458                 

Sanshin Corp.                     250,000                  462                 

Sanyo Engineering &               800,000                  2,756               
Construction, Inc.                                                             

Stantec, Inc. (a)                 275,000                  1,984               

Taihei Dengyo Kaisha Ltd.         200,000                  670                 

URS Corp. (a)(d)                  1,244,000                27,135              

                                                           49,748              

REAL ESTATE - 0.1%                                                             

Chuo Warehouse Co. Ltd.           200,000                  945                 

Echelon International Corp.       46,000                   995                 
(a)                                                                            

FRM Nexus, Inc. (a)(d)            156,649                  294                 

Kennedy-Wilson, Inc. (a)(d)       390,000                  4,071               

Meiwa Estate Co. Ltd.             50,000                   902                 

Nagawa Co. Ltd. (d)               850,000                  2,774               

                                                           9,981               

REAL ESTATE INVESTMENT TRUSTS                                                  
- 0.3%                                                                         

AMRESCO Capital Trust, Inc.       525,000                  5,053               
(d)                                                                            

Banyan Strategic Realty Trust     919,250                  4,366               
(SBI) (d)                                                                      

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

CONSTRUCTION & REAL ESTATE -                                                   
CONTINUED                                                                      

REAL ESTATE INVESTMENT TRUSTS                                                  
- CONTINUED                                                                    

Meditrust Corp. unit              250,000                 $ 3,922              

Redwood Trust, Inc. (d)           1,021,719                15,198              

                                                           28,539              

TOTAL CONSTRUCTION & REAL                                  554,742             
ESTATE                                                                         

DURABLES - 7.2%                                                                

AUTOS, TIRES, & ACCESSORIES -                                                  
3.3%                                                                           

Autocam Corp. (d)                 469,902                  6,579               

AutoZone, Inc. (a)                2,850,000                96,544              

Cook (D.C.) Holdings PLC (d)      2,300,000                833                 

Dagenham Motors Group PLC         250,000                  646                 
Class L                                                                        

Dixon Motors PLC                  200,000                  329                 

Durakon Industries, Inc.          651,800                  8,310               
(a)(d)                                                                         

European Motor Holdings PLC       200,000                  216                 

FCC Co. Ltd.                      50,000                   558                 

Federal Screw Works (d)           108,800                  5,603               

Fuji Heavy Industries Ltd.        100,000                  562                 

Hahn Automotive Warehouse,        150,000                  309                 
Inc. (a)                                                                       

Keiiyu Co. Ltd.                   150,000                  722                 

Koito Industries Ltd.             1,044,000                3,273               

Kwik-Fit Holdings PLC Class L     250,000                  1,691               

Mercury Air Group, Inc. (a)(d)    651,240                  5,129               

Meritor Automotive, Inc.          1,135,000                19,792              

Monro Muffler Brake, Inc. (d)     600,000                  4,800               

Murakami Corp. (d)                700,000                  2,297               

Nissin Shoji Co. Ltd.             200,000                  893                 

Owari Precise Products Co.        173,000                  334                 
Ltd.                                                                           

Peugeot SA                        122,000                  20,732              

Piolax, Inc.                      525,000                  3,608               

Quicks Group PLC (d)              3,800,000                5,628               

Rocla OYJ                         50,000                   341                 

Sanderson Bramal Motor Group      550,000                  1,358               
PLC                                                                            

Strattec Security Corp. (a)(d)    450,600                  14,476              

Superior Industries               85,000                   2,332               
International, Inc.                                                            

Sylea SA                          18,000                   1,022               

Tachi-S Co. Ltd.                  750,000                  2,828               

TBC Corp. (a)(d)                  1,792,200                11,873              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

DURABLES - CONTINUED                                                           

AUTOS, TIRES, & ACCESSORIES -                                                  
CONTINUED                                                                      

Tochigi Fuji Industrial Co.       600,000                 $ 1,227              
Ltd.                                                                           

Transpro, Inc. (d)                660,925                  4,131               

Travel Ports of America           201,011                  704                 

Uni-Select, Inc. (d)              650,000                  14,624              

World Fuel Services Corp. (d)     1,249,906                14,061              

Wynn's International, Inc. (d)    1,774,000                33,373              

                                                           291,738             

CONSUMER DURABLES - 0.5%                                                       

Asko OY Class A                   800,000                  11,905              

Beijer (G&L) AG Series B          125,000                  1,874               

Libbey, Inc.                      760,000                  19,048              

Mikasa, Inc.                      442,100                  5,029               

Portmeirion Potteries             125,000                  267                 
Holdings PLC                                                                   

Sankyo Co. Ltd. (Gunma)           100,000                  1,675               

                                                           39,798              

CONSUMER ELECTRONICS - 0.8%                                                    

Boston Acoustics, Inc.            31,000                   729                 

Fantom Technologies, Inc.         120,000                  1,429               

Fossil, Inc. (a)(d)               1,475,000                43,743              

Haw Par Brothers                  500,000                  591                 
International Ltd.                                                             

Koss Corp. (a)(d)                 210,000                  2,389               

Movado Group, Inc. (d)            782,512                  19,905              

Tulikivi OY Series A              35,000                   716                 

                                                           69,502              

HOME FURNISHINGS - 1.1%                                                        

Airsprung Furniture Group PLC     975,000                  1,444               

Beter Bed Holding NV              131,666                  4,652               

BMTC Group, Inc. Class A          400,000                  5,691               
(sub-vtg.) (d)                                                                 

Bush Industries, Inc. Class       999,800                  12,747              
A. (d)                                                                         

Chromcraft Revington, Inc.        559,800                  9,027               
(a)(d)                                                                         

Dorel Industries, Inc.:                                                        

Class A (multi-vtg.) (a)(e)       200,000                  3,097               

Class B (a)                       600,000                  9,271               

Ladd Furniture, Inc.              309,100                  7,032               

Martela OY Class A                15,000                   392                 

Meadowcraft, Inc. (a)             218,900                  2,353               

Nakayamafuku Co. Ltd.             54,800                   144                 

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

DURABLES - CONTINUED                                                           

HOME FURNISHINGS - CONTINUED                                                   

Nippon Filing Co. Ltd.            100,000                 $ 381                

Rosebys PLC                       500,000                  617                 

Samas Groep NV                    100,000                  1,340               

Shelby Williams Industries,       428,900                  5,683               
Inc.                                                                           

Silentnight Holdings PLC          150,000                  444                 

Stanley Furniture Co., Inc.       645,400                  14,199              
(a)(d)                                                                         

Tosco Co. Ltd.                    452,000                  1,378               

Winsloew Furniture, Inc.          574,200                  16,293              
(a)(d)                                                                         

                                                           96,185              

TEXTILES & APPAREL - 1.5%                                                      

Berisford (S.W.) PLC              1,450,000                4,092               

Chemfab Corp. (a)                 79,100                   1,355               

Concord Fabrics, Inc.:                                                         

Class A (a)(d)                    169,600                  1,049               

Class B (a)(d)                    122,700                  736                 

Conso Products Co. (a)(d)         748,050                  5,984               

Decorator Industries, Inc. (d)    377,915                  3,000               

Dewhirst (IJ) Group PLC           5,264,000                5,890               

Dyersburg Corp. (d)               700,100                  2,100               

Fila Holding Spa sponsored ADR    379,500                  3,748               

Fruit of the Loom, Inc. Class     200,000                  2,900               
A (a)                                                                          

Galey & Lord, Inc. (a)            50,000                   275                 

Hampshire Group Ltd. (a)(d)       335,800                  3,820               

Happy Kids, Inc.                  200,000                  2,450               

Impact 21 Co. Ltd.                50,000                   502                 

Interface, Inc. Class A           75,000                   773                 

Jeans Mate Corp.                  25,000                   483                 

JLM Couture, Inc. (a)(d)          181,500                  499                 

Lassila & Tikahoja OY             150,000                  3,493               

Nautica Enterprises, Inc.         3,600,000                56,700              
(a)(d)                                                                         

Novel Denim Holdings Ltd. (a)     200,000                  4,075               

PCA Corp.                         10,000                   130                 

Polo Ralph Lauren Corp. Class     240,000                  5,970               
A (a)                                                                          

St. John Knits, Inc.              155,000                  4,108               

Supreme International Corp.       452,900                  7,246               
(a)(d)                                                                         

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

DURABLES - CONTINUED                                                           

TEXTILES & APPAREL - CONTINUED                                                 

Tandy Brands Accessories,         561,200                 $ 9,049              
Inc. (a)(d)                                                                    

Worldtex, Inc. (a)(d)             940,000                  2,938               

                                                           133,365             

TOTAL DURABLES                                             630,588             

ENERGY - 1.8%                                                                  

COAL - 0.0%                                                                    

RJB Mining PLC                    1,250,000                1,275               

ENERGY SERVICES - 1.0%                                                         

AKITA Drilling Ltd. Class A       863,500                  4,143               
(non-vtg.)                                                                     

Alpine Oil Services Corp. (a)     600,000                  357                 

Australian Oil & Gas Corp.        4,090,167                4,357               
Ltd. (d)                                                                       

Aztec Manufacturing Co. (d)       423,900                  3,815               

Brovig Offshore ASA (a)           33,600                   147                 

Carbo Ceramics, Inc.              657,800                  10,525              

Computalog Ltd. (a)               431,400                  1,613               

Dawson Geophysical Co. (a)        205,100                  1,359               

IHC Caland NV                     10,000                   421                 

Input/Output, Inc. (a)            300,000                  1,913               

Lufkin Industries, Inc.           155,000                  2,887               

Offshore Logistics, Inc. (a)      55,000                   536                 

Pe Ben Oilfield Services Ltd.     300,000                  596                 
(a)(d)                                                                         

Petroleum Helicopters, Inc.       211,200                  3,379               

Petroleum Helicopters, Inc.       300,000                  4,800               
(non-vtg.)                                                                     

Pool Energy Services Co. (a)      225,000                  2,700               

Powell Industries, Inc. (a)(d)    1,027,500                11,046              

RPC Energy Services, Inc. (d)     2,867,500                19,356              

Seitel, Inc. (a)                  428,900                  5,495               

Superior Energy Services,         1,612,200                4,031               
Inc. (a)(d)                                                                    

                                                           83,476              

OIL & GAS - 0.8%                                                               

Adams Resources & Energy,         421,300                  2,633               
Inc. (d)                                                                       

Cabot Oil & Gas Corp. Class A     100,000                  1,313               

Castle Energy Corp. (d)           408,750                  6,642               

Columbus Energy Corp. (a)(d)      323,500                  2,123               

Conoco, Inc. Class A (a)          100,000                  1,994               

Crown Central Petroleum Corp.     440,000                  3,493               
Class A (a)(d)                                                                 

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

ENERGY - CONTINUED                                                             

OIL & GAS - CONTINUED                                                          

Elf Gabon                         10,000                  $ 1,017              

ENEX Resources Corp. (a)(d)       144,300                  649                 

Fletcher Challenge Ltd.           900,000                  1,748               
(Energy Division)                                                              

Foremost Industries, Inc.         447,500                  814                 
(a)(d)                                                                         

Hallwood Consolidated             241,550                  3,110               
Resources Corp. (a)(d)                                                         

Hokuriku Gas Co.                  1,350,000                3,131               

Holly Corp. (d)                   440,100                  6,822               

Markwest Hydrocarbon, Inc. (a)    399,700                  2,998               

Maynard Oil Co. (a)(d)            298,800                  2,316               

Novus Petroleum Ltd.              1,750,542                1,715               

Penn West Petroleum Ltd. (a)      350,000                  3,659               

Petrofina SA warrants 8/5/03      197,200                  1,639               
(a)                                                                            

Petroleum Development Corp.       1,551,000                4,944               
(a)(d)                                                                         

Premier Oil PLC                   20,500,000               4,048               

Santa Fe Energy Resources,        250,000                  1,453               
Inc. (a)                                                                       

Swift Energy Co. (a)(d)           1,644,700                10,074              

Torch Energy Royalty Trust        300,000                  1,406               

Veritas DGC, Inc. (a)             75,000                   933                 

                                                           70,674              

TOTAL ENERGY                                               155,425             

FINANCE - 16.3%                                                                

BANKS - 5.4%                                                                   

Banco Santander Puerto Rico       100,000                  2,106               
(a)                                                                            

Bank of The Ozarks, Inc.          98,000                   2,279               

Bergensbanken ASA (d)             1,200,000                10,603              

Canadian Western Bank (d)         900,000                  13,460              

Cathay Bancorp, Inc.              218,000                  8,148               

Den Norske Bank ASA (e)           900,000                  3,838               

Den Norske Bank ASA Class A       3,100,000                13,221              
Free shares                                                                    

Finansbanken ASA (Reg.) (a)       250,000                  1,295               

First BanCorp P R (d)             2,867,800                77,431              

Fokus Bank AS (Reg.)              1,707,563                17,242              

GBC Bancorp (d)                   840,000                  18,690              

Gronlandsbanken AS                20,000                   581                 

Hanmi Bank (a)                    152,590                  2,213               

Jyske Bank AS (Reg.)              250,000                  21,962              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                            

BANKS - CONTINUED                                                              

Laurentian Bank                   888,500                 $ 15,904             

Midtbank AS (a)                   10,050                   338                 

National Bank of Canada           3,825,000                59,354              

Nordbanken Holding AB             10,000,000               69,178              

Nordlandsbanken AS (d)            321,700                  8,121               

Nordvestbank (Reg.)               4,500                    423                 

Okobank Class A                   279,000                  5,071               

Ringkjobing Bank (d)              15,865                   2,981               

SouthTrust Corp.                  1,000,000                37,125              

Spar Nord Bankaktieselskab        30,035                   1,367               

Sparebanken More                  39,084                   846                 

Sparebanken NOR primary           1,000,000                19,664              
shares certificates                                                            

Sparebanken Nord-Norge            100,000                  2,152               

Sparebanken Rana                  37,550                   688                 
Grunnfondsbevis (d)                                                            

Sparebanken Rogaland capital      25,000                   681                 
certificates                                                                   

Sterling Bancorp                  372,500                  8,381               

Svenska Handelsbanken             350,000                  13,900              

Sydbank AS                        338,500                  15,256              

T R Financial Corp.               370,300                  14,002              

Wing Hang Bank Ltd.               200,000                  407                 

                                                           468,908             

CREDIT & OTHER FINANCE - 1.2%                                                  

Aiful Corp.                       75,000                   4,960               

Amagerbanken AS                   34,850                   1,438               

Amtsspar Fyn Holding AS           45,000                   2,326               

Compagnie Financiere de           50,000                   3,698               
Credit Industriel et                                                           
Commercial  et de l' Union                                                     
Europeene                                                                      

Compagnie Financiere de           11,110                   1,022               
Credit Industriel et                                                           
Commercial  et de l' Union                                                     
Europeene (New)                                                                

Credia Co. Ltd.                   372,800                  5,348               

Doral Financial Corp.             2,000,000                40,063              

FIH AS Class B                    750,000                  17,188              

Firstcity Financial Corp. (a)     265,000                  3,876               

Home Capital Group Class B        150,000                  342                 
(sub-vtg.) (a)                                                                 

JCG Holdings Ltd.                 12,900,000               3,454               

Life Financial Corp. (a)          284,200                  1,421               

Nissin Co. Ltd.                   150,000                  3,118               

Paragon Group of Companies PLC    2,000,625                6,156               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                            

CREDIT & OTHER FINANCE -                                                       
CONTINUED                                                                      

Resource Bancshares Mortgage      110,000                 $ 1,636              
Group, Inc.                                                                    

Surrey Metro Savings Credit       565,000                  5,272               
Union (non-vtg.)                                                               

Triad Guaranty, Inc. (a)          72,600                   1,488               

WSFS Financial Corp.              263,000                  4,340               

                                                           107,146             

INSURANCE - 8.5%                                                               

Amerin Corp. (a)                  632,500                  14,706              

Amerus Life Holdings, Inc.        1,000,000                19,688              

Blanch E.W. Holdings, Inc.        525,000                  29,761              

Capital Re Corp.                  630,000                  11,458              

CMAC Investments Corp.            50,000                   2,194               

Commerce Group, Inc.              1,230,000                35,670              

Cotton State Life & Health        429,700                  5,506               
Insurance Co. (d)                                                              

Desjardins-Laurentian Finance     482,500                  5,587               
Corp. Class A (sub-vtg.) (d)                                                   

Enhance Financial Services        125,000                  3,125               
Group, Inc.                                                                    

Erie Indemnity Co. Class A        250,000                  7,625               

Fairfax Financial Holdings        1,117,900                279                 
rights 12/31/07 (a)                                                            

Farm Family Holdings, Inc.        525,300                  17,072              
(a)(d)                                                                         

Financial Industries Corp. (a)    191,700                  3,163               

Fishers International PLC         300,000                  188                 

FPIC Insurance Group, Inc. (a)    175,000                  8,411               

Fremont General Corp.             1,950,000                44,119              

HCC Insurance Holdings, Inc.      1,241,800                24,137              

Healthcare Recoveries, Inc.       725,000                  11,600              
(a)(d)                                                                         

Hogg Robinson PLC                 50,000                   162                 

Independence Holding Co.          146,000                  1,862               

Independent Insurance PLC         1,150,000                4,825               

Intercontinental Life Corp.       433,900                  8,298               
(d)                                                                            

Investors Title Co.               128,500                  2,731               

IPC Holdings Ltd. (d)             2,500,000                55,156              

Lambert Fenchurch Group PLC       1,000,000                1,333               

Lasalle Re Holdings Ltd. (d)      1,502,700                27,800              

Life USA Holding, Inc. (d)        1,952,500                22,576              

Medical Assurance, Inc.           153,100                  4,670               

MMI Companies, Inc. (d)           1,395,000                23,715              

Mobile America Corp.              142,300                  587                 

National Western Life             170,000                  20,995              
Insurance Co. Class A (a)(d)                                                   

Nymagic, Inc.                     203,900                  3,556               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                            

INSURANCE - CONTINUED                                                          

PAULA Financial (d)               309,300                 $ 2,861              

Penn-America Group, Inc.          341,250                  3,626               

Philadelphia Consolidated         962,500                  23,190              
Holding Corp. (a)(d)                                                           

PMI Group, Inc.                   264,500                  11,340              

Poe & Brown, Inc.                 104,900                  3,717               

Professionals Insurance Co.       251,450                  7,496               
Management Group (a)                                                           

Protective Life Corp.             1,700,002                58,756              

PXRE Corp. (d)                    725,063                  14,818              

RenaissanceRe Holdings Ltd.       648,300                  21,718              

SCPIE Holding, Inc. (d)           628,700                  18,665              

Stirling Cooke Brown Holdings     413,500                  6,409               
Ltd.                                                                           

Symons International Group,       317,900                  2,861               
Inc. (a)                                                                       

Terra Nova (Bermuda) Holdings     1,781,400                43,088              
Ltd. Class A (d)                                                               

UICI (a)(d)                       2,850,000                61,453              

Unico American Corp. (d)          351,500                  4,130               

Union Assurances Federales SA     300,088                  37,838              

                                                           744,521             

SAVINGS & LOANS - 0.8%                                                         

CNY Financial Corp. (a)           130,000                  1,414               

Crazy Woman Creek Bancorp,        30,000                   379                 
Inc.                                                                           

Home Port Bancorp, Inc.           90,700                   2,165               

Independence Federal Savings      119,000                  1,696               
Bank (d)                                                                       

Iroquois Bancorp, Inc.            109,400                  2,407               

PBOC Holdings, Inc. (a)           106,900                  1,122               

Peoples Bancorp, Inc.             175,000                  1,794               

Ringerikes Sparebank              6,200                    156                 

Seacoast Financial Services       419,500                  4,562               
Corp. (a)                                                                      

UCBH Holdings, Inc. (a)           337,500                  4,598               

Washington Federal, Inc.          2,000,000                51,375              

                                                           71,668              

SECURITIES INDUSTRY - 0.4%                                                     

Connor Clark Ltd. Class A         575,000                  2,435               
(non-vtg.)                                                                     

Daiko Shoken Business Co.         100,000                  360                 

Globaly Corp.                     467,000                  3,285               

JWGenesis Financial Corp. (a)     264,934                  1,855               

London Pacific Group Ltd.         3,217,330                10,324              

Man (E D & F) Group PLC           900,000                  4,665               

MFC Bancorp Ltd.                  559,500                  4,336               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                            

SECURITIES INDUSTRY - CONTINUED                                                

Nac Co. Ltd.                      110,000                 $ 364                

Norvestia OY AB Class B           240,000                  3,762               

                                                           31,386              

TOTAL FINANCE                                              1,423,629           

HEALTH - 8.0%                                                                  

DRUGS & PHARMACEUTICALS - 0.8%                                                 

Apothekers Cooperatie OPG         13,350                   324                 

Fuji Pharmaceutical Co. Ltd.      150,000                  549                 

Herbalife International, Inc.:                                                 

Class A (d)                       1,037,500                15,757              

Class B (non-vtg.)                2,010,500                24,503              

Hoshi Ito Co. Ltd.                200,000                  789                 

Medco Research, Inc. (a)          346,800                  8,952               

Nature's Sunshine Products,       1,032,500                13,745              
Inc. (d)                                                                       

Riken Vitamin Oil Co. Ltd.        748,000                  6,142               

Seikagaku Corp.                   50,000                   391                 

Twinlab Corp. (a)                 10,000                   125                 

                                                           71,277              

MEDICAL EQUIPMENT & SUPPLIES                                                   
- 4.2%                                                                         

ADAC Laboratories (a)(d)          1,360,000                30,005              

AVECOR Cardiovascular, Inc.       47,200                   584                 
(a)                                                                            

Ballard Medical Products (d)      2,900,500                70,156              

Biomet, Inc.                      2,400,000                87,900              

Dentsply International, Inc.      802,600                  22,072              

Dianon Systems, Inc. (a)          44,500                   370                 

Elscint Ltd. (a)(d)               1,360,200                15,727              

EMPI, Inc. (a)                    20,000                   495                 

ESC Medical Systems Ltd.          2,208,300                13,802              
(a)(d)                                                                         

Exactech, Inc. (a)                61,500                   677                 

Getz Brothers Co. Ltd., Japan     100,000                  352                 

HPSC, Inc. (a)(d)                 252,000                  2,237               

ICU Medical, Inc. (a)(d)          560,000                  11,060              

Lunar Corp. (a)                   63,800                   552                 

Medstone International, Inc.      561,200                  4,349               
(a)(d)                                                                         

Nitinol Medical Technologies,     300,000                  1,688               
Inc. (a)                                                                       

Ocular Sciences, Inc. (a)         510,000                  11,794              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

HEALTH - CONTINUED                                                             

MEDICAL EQUIPMENT & SUPPLIES                                                   
- CONTINUED                                                                    

OEC Medical Systems, Inc. (d)     1,274,000               $ 35,831             

Orthofix International NV         947,700                  14,837              
(a)(d)                                                                         

Respironics, Inc. (a)(d)          2,065,000                31,749              

Utah Medical Products, Inc.       838,000                  5,395               
(a)(d)                                                                         

                                                           361,632             

MEDICAL FACILITIES MANAGEMENT                                                  
- 3.0%                                                                         

Chronimed, Inc. (a)               445,000                  4,728               

Clinic Holdings Ltd.              422,282                  66                  

Community Hospitals Group PLC     325,000                  2,604               

Compdent Corp. (a)(d)             1,011,300                13,147              

Corvel Corp. (a)(d)               245,500                  8,961               

Cryolife, Inc. (a)(d)             714,100                  8,569               

First Commonwealth, Inc. (d)      227,000                  2,639               

Health Management Associates,     10,000                   126                 
Inc. Class A (a)                                                               

HEALTHSOUTH Corp. (a)             2,000,000                27,125              

Quest Diagnostics, Inc. (a)(d)    2,034,000                38,519              

Quorum Health Group, Inc. (a)     2,750,000                23,375              

Ramsay Health Care Ltd.           1,000,000                1,166               

RehabCare Group, Inc. (a)(d)      565,000                  11,512              

Res-Care, Inc. (a)(d)             1,375,000                30,766              

Safeguard Health Enterprises,     462,700                  1,475               
Inc. (a)(d)                                                                    

Syncor International Corp. (a)    283,000                  8,313               

Total Renal Care Holdings,        150,000                  3,497               
Inc. (a)                                                                       

United Wisconsin Services,        625,500                  5,395               
Inc.                                                                           

Universal Health Services,        1,500,000                67,125              
Inc. Class B (a)                                                               

                                                           259,108             

TOTAL HEALTH                                               692,017             

HOLDING COMPANIES - 0.4%                                                       

DCC PLC (Ireland)                 600,000                  5,384               

DCC PLC (United Kingdom)          2,600,000                22,889              

Fonciere Financiere et Part SA    25,000                   1,647               

Hunting Group PLC                 1,450,000                2,362               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

HOLDING COMPANIES - CONTINUED                                                  

Perry Group (d)                   1,500,000               $ 3,196              

Siparex (Societe de               69,718                   1,901               
Particiations dans les                                                         
Enterprises Regionales en                                                      
Expansion)                                                                     

                                                           37,379              

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 4.3%                                                               

ELECTRICAL EQUIPMENT - 1.6%                                                    

Aichi Electric Co. Ltd. (a)       1,000,000                1,804               

American Power Conversion         975,000                  49,847              
Corp. (a)                                                                      

Astronics Corp. (a)               224,450                  2,553               

Bairnco Corp. (d)                 900,900                  5,856               

Blick PLC Class L                 1,350,000                8,530               

BMC Industries, Inc.              509,200                  2,769               

C&D Technologies, Inc.            338,500                  8,082               

Chase Corp. (d)                   311,600                  3,700               

Chloride Group PLC                600,000                  573                 

Cobra Electronics Corp. (a)(d)    500,000                  2,125               

Denyo Co. Ltd.                    300,000                  1,572               

Emcee Broadcast Products,         170,000                  250                 
Inc. (a)                                                                       

Genlyte Group, Inc. (a)           545,000                  9,776               

Hughes Supply, Inc.               790,000                  20,046              

Inaba Denkisangyo Co. Ltd.        700,000                  5,923               

Norbain PLC                       100,000                  378                 

NovAtel, Inc. (a)                 273,500                  581                 

QPL International Holdings        1,000,000                28                  
Ltd.                                                                           

Twentsche Kabel Holding NV        20,004                   511                 

Vertex Communications Corp.       511,000                  8,943               
(a)(d)                                                                         

Volex Group PLC                   25,000                   160                 

Woodhead Industries, Inc.         37,500                   415                 

Yaesu Musen Co. Ltd.              75,000                   476                 

Yurtec Corp.                      1,150,000                6,766               

                                                           141,664             

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 2.7%                                                               

AGCO Corp.                        600,000                  4,425               

Amadasonoike Co. Ltd.             190,000                  483                 

AVTEAM, Inc. Class A (a)          66,200                   314                 

Baldwin Technology Co., Inc.      354,600                  2,017               
Class A (a)                                                                    

Chart Industries, Inc.            1,149,100                9,049               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - CONTINUED                                                          

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - CONTINUED                                                          

CompX International, Inc. (a)     208,900                 $ 4,008              

Control Devices, Inc.             350,000                  5,294               

CPAC, Inc. (d)                    695,000                  3,301               

DT Industries, Inc.               74,000                   999                 

Fuji Oozx, Inc. (a)               200,000                  283                 

Fuji Technica, Inc.               25,000                   136                 

Fukushima Industries Corp.        25,000                   150                 

Gardner Denver Machinery,         1,015,000                12,561              
Inc. (a)(d)                                                                    

Gehl Co. (a)(d)                   636,700                  10,665              

Hardinge, Inc.                    311,600                  5,005               

IDEX Corp. (d)                    2,365,000                53,952              

Kaydon Corp.                      950,000                  31,884              

KCI (Konecranes International)    50,000                   1,647               

KCI (Konecranes                   100,000                  3,294               
International) (e)                                                             

Linx Printing Technology          150,000                  370                 

Mark IV Industries, Inc.          695,400                  10,431              

Mars Engineering Corp.            50,200                   373                 

New Holland NV                    1,303,700                14,178              

Oilgear Co.                       46,800                   603                 

P & F Industries, Inc. Class      274,500                  2,694               
A (a)(d)                                                                       

Powerscreen International PLC     3,352,900                6,952               

Rauma OY                          79,600                   859                 

Rotork PLC                        300,000                  1,777               

Sansei Transport                  750,000                  2,867               

Shin Nippon Machinery Co.         500,000                  790                 
Ltd.                                                                           

Specialty Equipment               945,400                  26,530              
Companies, Inc. (a)                                                            

Speizman Industries, Inc.         226,000                  1,059               
(a)(d)                                                                         

Strongco, Inc. (a)                13,500                   57                  

TB Wood's Corp. (d)               372,200                  4,420               

Trident International, Inc.       56,000                   921                 
(a)                                                                            

Twin Disc, Inc. (d)               268,400                  5,200               

Wakita & Co. Ltd.                 750,000                  2,641               

                                                           232,189             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - CONTINUED                                                          

POLLUTION CONTROL - 0.0%                                                       

NSC Corp. (a)(d)                  550,400                 $ 464                

Weston (Roy F.), Inc. Class A     183,800                  460                 
(a)                                                                            

                                                           924                 

TOTAL INDUSTRIAL MACHINERY &                               374,777             
EQUIPMENT                                                                      

MEDIA & LEISURE - 7.3%                                                         

BROADCASTING - 2.1%                                                            

CanWest Global Communications     1,325,006                20,999              
Corp. (sub-vtg.)                                                               

Capital Radio PLC                 850,000                  9,763               

Cogeco Cable, Inc. (d)            1,000,000                16,709              

Cogeco, Inc. (sub. vtg.) (d)      1,391,500                24,999              

Davel Communications Group,       270,435                  3,668               
Inc. (a)                                                                       

Matav-Cable System Media Ltd.     276,500                  6,256               
sponsored ADR                                                                  

Moffat Communications Ltd. (d)    1,208,700                20,316              

Moviefone, Inc. Class A (a)       75,200                   1,880               

Nielsen Media Research, Inc.      1,204,999                22,744              
(a)                                                                            

P4 Radio Hele Norge ASA           700,000                  2,883               

Prime Television Ltd.             1,519,128                1,915               

Radio Pacific Ltd. (a)            300,000                  720                 

Radiomutuel, Inc. Class A (a)     350,000                  3,416               

Regional Cablesystems, Inc.       50,000                   410                 
(a)                                                                            

Scottish Media Group PLC          575,000                  7,267               

Scottish Radio Holdings PLC       498,800                  4,654               

Southern Cross Broadcasting       821,951                  4,005               
Australia Ltd.                                                                 

Spice Entertainment               550,000                  3,506               
Companies, Inc. (a)                                                            

TCA Cable TV, Inc.                330,800                  12,756              

TVA Group, Inc. Class B (a)       1,075,000                12,769              

                                                           181,635             

ENTERTAINMENT - 1.2%                                                           

Airtours PLC                      300,000                  1,794               

Alliance Atlantis                 221,500                  3,928               
Communications Corp. (a)                                                       

Alliance Atlantis                 100,000                  1,773               
Communications Corp. (a)(e)                                                    

European Leisure PLC              547,000                  675                 

King World Productions, Inc.      3,440,000                94,170              
(a)                                                                            

Lakes Gaming, Inc. (a)            271,900                  2,634               

Scientific Games Holdings         173,100                  2,986               
Corp. (a)                                                                      

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

MEDIA & LEISURE - CONTINUED                                                    

ENTERTAINMENT - CONTINUED                                                      

Shingakukai Co.                   125,000                 $ 344                

Television & Media Services       1,750,000                1,655               
Ltd.                                                                           

                                                           109,959             

LEISURE DURABLES & TOYS - 0.0%                                                 

Hamleys PLC                       150,000                  306                 

National R.V. Holdings, Inc.      10,000                   260                 
(a)                                                                            

PlayCore, Inc. (a)                245,515                  1,105               

                                                           1,671               

LODGING & GAMING - 0.2%                                                        

Choice Hotels International,      185,100                  2,372               
Inc. (a)                                                                       

Choice Hotels Skandanavia ASA     150,000                  231                 
(a)                                                                            

Hanover International PLC         416,500                  672                 

Lodgian, Inc. (a)                 125,000                  563                 

Riviera Holdings Corp. rights     90,900                   80                  
12/31/99 (a)                                                                   

Ryan Hotels PLC (d)               3,900,979                4,012               

ShoLodge, Inc. (a)                280,500                  1,928               

Sun International Hotels Ltd.     106,000                  4,525               
(a)                                                                            

                                                           14,383              

PUBLISHING - 1.7%                                                              

A-Pressen ASA Series A            122,222                  1,949               

Adscene Group PLC Class L         500,000                  1,193               

Bemrose Corp. PLC                 325,000                  1,529               

Fine Art Developments PLC         1,400,000                2,004               
Class L                                                                        

Independent Newspapers PLC        350,000                  1,325               

Johnston Press PLC                1,950,000                7,541               

Journal Register Co. (a)          947,700                  14,452              

Kauppakaari OY                    125,000                  2,016               

Newsquest PLC                     150,000                  733                 

Pulitzer Publishing Co.           100,000                  7,969               

R.H. Donnelley Corp.              1,306,700                21,316              

Reader's Digest Association,      275,000                  7,906               
Inc. Class A (non-vtg.)                                                        

Roto Smeets de Boer NV (a)        175,000                  6,550               

Schibsted AS Series B             200,000                  2,923               

Southnews PLC                     100,000                  650                 

Sterling Publishing Group PLC     400,000                  115                 

Talentum OY Class B (d)           1,075,000                17,096              

VLT AB Class B                    111,600                  1,015               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

MEDIA & LEISURE - CONTINUED                                                    

PUBLISHING - CONTINUED                                                         

Wegener Arcade NV                 50,000                  $ 747                

WSOY (Werner Soderstrom           675,000                  49,035              
Osakeyhtio) Class B (d)                                                        

                                                           148,064             

RESTAURANTS - 2.1%                                                             

Applebee's International,         2,078,300                45,463              
Inc. (d)                                                                       

ARK Restaurants Corp. (a)(d)      270,000                  2,734               

Benihana, Inc. (a)(d)             341,400                  4,417               

Benihana, Inc. Class A (a)(d)     266,800                  3,193               

Break for the Border Group PLC    759,700                  500                 

Consolidated Products, Inc.       1,275,000                22,313              
(a)                                                                            

Elxsi Corp. (a)(d)                286,000                  2,860               

Flanigans Enterprises, Inc.       90,700                   771                 
(d)                                                                            

IHOP Corp. (a)(d)                 759,200                  32,646              

Logan's Roadhouse, Inc. (a)(d)    380,000                  9,025               

Mikes Restaurants, Inc. (a)(d)    272,500                  361                 

Morton's Restaurant Group,        350,000                  6,366               
Inc. (a)(d)                                                                    

Restaurant Brands NZ Ltd.         1,000,000                766                 

Sonic Corp. (a)(d)                1,935,000                48,859              

                                                           180,274             

TOTAL MEDIA & LEISURE                                      635,986             

NONDURABLES - 4.5%                                                             

AGRICULTURE - 0.3%                                                             

Fresh Del Monte Produce Inc.      224,800                  4,370               
(a)                                                                            

IAWS Group PLC                    1,600,000                6,725               

IAWS Group PLC Class A (UK        500,000                  2,098               
Reg.)                                                                          

Nutreco Holding NV                90,000                   3,691               

Sylvan, Inc. (a)(d)               594,000                  8,316               

                                                           25,200              

BEVERAGES - 0.1%                                                               

National Beverage Corp. (a)       303,300                  2,673               

Shikoku Coca-Cola Bottling        91,500                   1,273               
Co. Ltd.                                                                       

Todhunter International, Inc.     226,400                  1,783               
(a)                                                                            

                                                           5,729               

FOODS - 0.7%                                                                   

Agribrands International,         300,000                  10,088              
Inc.                                                                           

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

NONDURABLES - CONTINUED                                                        

FOODS - CONTINUED                                                              

Benson's Crisps PLC               1,750,000               $ 1,238              

Cagle's, Inc.                     96,700                   1,970               

Corn Products International,      455,000                  12,086              
Inc.                                                                           

Greggs PLC                        70,000                   2,787               

Hazlewood Foods PLC               50,000                   95                  

Laennen Tehtaat OY                50,000                   585                 

Matthews (Bernard) PLC            600,000                  1,195               

Perkins Foods PLC                 2,000,320                4,213               

Raisio Group PLC                  500,000                  3,908               

Riviana Foods, Inc. (d)           814,000                  18,519              

Robert Wiseman Dairies PLC        400,000                  1,264               

Shoei Foods Corp.                 200,000                  670                 

Super Coffeemix Manufacturing     1,250,000                266                 
Ltd.                                                                           

Tokatsu Foods Co.                 34,000                   67                  

Worthington Foods, Inc.           10,000                   112                 

                                                           59,063              

HOUSEHOLD PRODUCTS - 1.5%                                                      

Alberto-Culver Co. Class A        1,000,000                23,500              

American Safety Razor Co.         1,065,400                11,719              
(a)(d)                                                                         

Comany, Inc.                      100,000                  515                 

Del Laboratories, Inc. (d)        476,066                  11,783              

DSG International Ltd. (a)(d)     662,000                  2,152               

Helen of Troy Corp. (a)(d)        2,705,000                43,280              

House of Rose Co. Ltd.            50,000                   245                 

IWP International PLC (Dublin     525,000                  1,014               
Reg.)                                                                          

IWP International PLC (United     800,000                  1,580               
Kingdom Reg.)                                                                  

Jean Philippe Fragrances,         100,000                  669                 
Inc. (a)                                                                       

Luxottica Group Spa sponsored     75,000                   797                 
ADR                                                                            

Mayborn Group PLC                 100,000                  95                  

Oriflame International SA         450,000                  1,385               

Paterson Zochonis PLC:                                                         

Class A (non-vtg.)                50,000                   243                 

Class L                           25,000                   139                 

Premark International, Inc.       730,000                  25,003              

Stephan Co. (d)                   413,200                  4,416               

Swallowfield PLC Class L          100,000                  87                  

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

NONDURABLES - CONTINUED                                                        

HOUSEHOLD PRODUCTS - CONTINUED                                                 

Yule Catto & Co. PLC              675,443                 $ 2,945              

Zotefoams PLC Class L             96,700                   137                 

                                                           131,704             

TOBACCO - 1.9%                                                                 

Gallaher Group PLC                3,475,000                24,588              

Gallaher Group PLC sponsored      4,900,000                136,246             
ADR                                                                            

Standard Commercial Corp. (d)     1,248,900                9,757               

                                                           170,591             

TOTAL NONDURABLES                                          392,287             

PRECIOUS METALS - 0.5%                                                         

De Beers Consolidated Mines       1,300,000                18,525              
Ltd. ADR                                                                       

Great Central Mines Ltd.          1,000,000                901                 

Industrias Penoles SA             4,700,000                14,326              

Normandy Mt. Leyshon Ltd.         1,000,000                1,311               

Normandy NFM Ltd.                 125,000                  268                 

Orogen Minerals Ltd. GDR          265,000                  2,584               
(a)(e)                                                                         

Richmont Mines, Inc. (a)(d)       800,000                  2,012               

Ross Mining NL                    1,522,747                873                 

Sons of Gwalia NL                 1,585,954                4,640               

                                                           45,440              

RETAIL & WHOLESALE - 7.9%                                                      

APPAREL STORES - 2.9%                                                          

Baker (J.), Inc.                  449,900                  2,671               

Charle Co. Ltd.                   71,000                   610                 

Chateau Stores of Canada Ltd.     192,900                  1,142               
Class A (d)                                                                    

Chicos Fas, Inc. (a)              400,000                  12,200              

Claire's Stores, Inc. (d)         2,875,100                56,783              

Dress Barn, Inc. (a)              500,000                  8,031               

Footstar, Inc. (a)(d)             1,500,004                37,969              

Goldlion Holdings Ltd.            1,500,000                84                  

Gymboree Corp. (a)                1,100,000                8,663               

Intimate Brands, Inc. Class A     1,019,200                40,641              

Kenneth Cole Productions,         704,000                  15,928              
Inc. Class A (a)(d)                                                            

New Look Group PLC (a)(e)         1,000,000                2,180               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

RETAIL & WHOLESALE - CONTINUED                                                 

APPAREL STORES - CONTINUED                                                     

Noda Corp.                        100,000                 $ 362                

PrimeSource Corp.                 224,500                  1,487               

Ross Stores, Inc.                 1,335,000                52,733              

S & K Famous Brands, Inc.         475,000                  4,750               
(a)(d)                                                                         

San Francisco Boutiques, Inc.     215,000                  861                 
Class B (sub-vtg.) (a)(d)                                                      

Shirmax Fashions Ltd. (a)         450,000                  1,146               

United Retail Group, Inc. (a)     370,000                  3,677               

                                                           251,918             

APPLIANCE STORES - 0.0%                                                        

Hirsch International Corp.        655,000                  2,538               
Class A (a)(d)                                                                 

DRUG STORES - 0.5%                                                             

Jean Coutu Group, Inc. Class      1,800,000                40,200              
A (d)                                                                          

GENERAL MERCHANDISE STORES -                                                   
1.3%                                                                           

Arnotts PLC                       100,387                  804                 

BJ's Wholesale Club, Inc. (a)     1,750,000                77,875              

Daiwa Co. Ltd.                    300,000                  750                 

Jo-Ann Stores, Inc.:                                                           

 Class A (a)(d)                   543,650                  8,291               

 Class B (non-vtg.) (a)           1,090,900                13,773              

Shopko Stores, Inc. (a)           225,500                  7,160               

Stein Mart, Inc. (a)              905,900                  6,511               

                                                           115,164             

GROCERY STORES - 1.4%                                                          

Carr-Gottstein Foods Co.          414,000                  4,683               
(a)(d)                                                                         

Eagle Food Centers, Inc. (a)      42,500                   149                 

Food Lion, Inc. Class A           3,400,000                33,150              

Hemkopskedjan AB Series B         25,000                   247                 

Iceland Group PLC                 4,750,000                19,306              

Metro Richelieu, Inc. Class A     3,229,700                44,667              
(d)                                                                            

Schultz Sav-O Stores, Inc. (d)    372,100                  6,140               

Somerfield PLC                    1,700,000                11,078              

Suprema Specialties, Inc. (a)     212,000                  1,219               

Western Beef, Inc. (a)(d)         423,400                  3,070               

Whittard of Chelsea PLC           431,950                  469                 

                                                           124,178             

RETAIL & WHOLESALE,                                                            
MISCELLANEOUS - 1.8%                                                           

Advanced Marketing Services,      144,200                  3,461               
Inc.                                                                           

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

RETAIL & WHOLESALE - CONTINUED                                                 

RETAIL & WHOLESALE,                                                            
MISCELLANEOUS - CONTINUED                                                      

Blair Corp. (d)                   890,500                 $ 18,645             

Brookstone, Inc. (a)(d)           744,600                  10,657              

Brylane, Inc. (a)                 200,000                  4,613               

Cameron Ashley Building           425,600                  5,692               
Products, Inc. (a)                                                             

Cole National Corp. Class A       1,065,000                17,706              
(a)(d)                                                                         

Daisytek International Corp.      820,000                  16,195              
(a)                                                                            

Elcom International, Inc. (a)     600,000                  1,050               

Farepak PLC                       1,000,000                3,785               

Finish Line, Inc. Class A         1,891,700                17,380              
(a)(d)                                                                         

Finlay Enterprises, Inc.          582,700                  6,410               
(a)(d)                                                                         

Friedmans, Inc. Class A (a)(d)    1,343,700                16,376              

Grafton Group PLC                 100,000                  1,818               

Heiton Holdings PLC               250,000                  540                 

Homebase, Inc. (a)(d)             1,980,000                13,241              

Partridge Fine Arts PLC           150,000                  148                 

PC Connection, Inc.               50,000                   984                 

Piercing Pagoda, Inc. (a)(d)      910,000                  8,873               

Rex Stores Corp. (a)(d)           571,400                  7,178               

Sound Advice, Inc. (a)(d)         230,300                  1,008               

Sound Advice, Inc. warrants       11,205                   0                   
6/14/99 (a)                                                                    

Sportsmans Guide, Inc. (a)        175,000                  1,214               

                                                           156,974             

TRADING COMPANIES - 0.0%                                                       

Mitani Sangyo Co. Ltd.            100,000                  378                 

TOTAL RETAIL & WHOLESALE                                   691,350             

SERVICES - 4.8%                                                                

ADVERTISING - 0.4%                                                             

ADVO, Inc. (a)                    191,400                  4,833               

Grey Advertising, Inc.            12,000                   4,200               

InfoUSA, Inc.:                                                                 

Class A (a)(d)                    1,915,600                11,015              

Class B (a)(d)                    1,985,000                11,538              

Saatchi & Saatchi PLC             150,000                  375                 

TMP Worldwide, Inc.               109,717                  5,879               

                                                           37,840              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

SERVICES - CONTINUED                                                           

EDUCATIONAL SERVICES - 0.1%                                                    

Childrens Comprehensive           122,500                 $ 1,638              
Services, Inc. (a)                                                             

Concorde Career Colleges,         250,000                  125                 
Inc. (a)                                                                       

Coutts Consulting Group PLC       550,000                  181                 
Class L                                                                        

Institution of General            300,000                  977                 
Education                                                                      

Quest Education Corp. (a)(d)      709,700                  7,940               

Up, Inc.                          400,000                  1,099               

                                                           11,960              

LEASING & RENTAL - 0.2%                                                        

Aaron Rents, Inc. Class B         421,700                  5,851               

Cort Business Services Corp.      397,200                  7,448               
(a)                                                                            

Gowrings PLC                      200,000                  306                 

Nishio Rent All Co. Ltd.          500,000                  3,127               

Rainbow Rentals, Inc. (a)         32,700                   327                 

Rakentajain Konevuokraamo OY      75,000                   818                 
Class B                                                                        

                                                           17,877              

PRINTING - 1.2%                                                                

Adare Printing Group PLC          415,000                  3,300               
(Ireland)                                                                      

Adare Printing Group PLC          660,004                  5,539               
(United Kingdom)                                                               

Pubco Corp. (a)(d)                319,500                  3,035               

Reynolds & Reynolds Co. Class     4,385,000                87,700              
A (d)                                                                          

Wyndeham Press Group PLC          550,000                  2,199               

                                                           101,773             

SERVICES - 2.9%                                                                

Aktiv Kapital ASA                 200,000                  797                 

American Oncology Resources,      500,000                  6,844               
Inc. (a)                                                                       

Asi Solutions, Inc. (a)           7,500                    74                  

BA Merchant Services, Inc.        1,626,700                32,737              
Class A (a)(d)                                                                 

Barbers Hairstyling for Men,      124,575                  1,588               
Inc. (a)                                                                       

Caldwell Partners                 525,000                  2,397               
International, Inc. Class A                                                    
(non-vtg.)                                                                     

Candle Australia Ltd.             52,660                   80                  

Chodai Co. Ltd.                   200,000                  816                 

Compass International             228,600                  1,686               
Services Corp.                                                                 

Corporate Services Group PLC      500,000                  1,127               

Craig (Jenny), Inc. (a)           995,000                  6,032               

Day Runner, Inc. (a)              492,000                  6,642               

Diversified Corporate             257,200                  1,447               
Resources, Inc. (a)(d)                                                         

Dun & Bradstreet Corp.            1,150,000                35,075              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

SERVICES - CONTINUED                                                           

SERVICES - CONTINUED                                                           

Embrex, Inc. (a)                  108,000                 $ 567                

Eurocamp PLC                      275,000                  986                 

Exponent, Inc. (a)                202,200                  1,238               

Eyeful Home Technology, Inc.      250,000                  1,288               

Fugro NV                          157,600                  3,124               

Go-Ahead Group (The) PLC          300,000                  3,569               

Halma PLC                         1,440,000                3,009               

Horizon Health Corp. (a)(d)       604,300                  4,022               

ICTS International NV (a)         35,000                   193                 

Lai Worldwide, Inc. (a)(d)        682,000                  4,177               

Norrell Corp.                     317,800                  5,482               

Pittston Co. (Brinks Group)       2,300,000                66,413              
(d)                                                                            

Programming & Systems, Inc.       313,300                  0                   
(a)(d)                                                                         

Proudfoot PLC                     250,000                  72                  

Right Management Consultants,     673,000                  10,389              
Inc. (a)(d)                                                                    

Seattle FilmWorks, Inc. (a)(d)    1,635,000                6,336               

SOS Staffing Services, Inc.       314,000                  3,356               
(a)                                                                            

Sterile Recoveries, Inc. (a)      71,100                   773                 

Tanabe Management Consulting      200,000                  502                 
Co.                                                                            

Thomas Group (a)                  160,900                  1,599               

TT Group PLC                      2,400,000                6,358               

Unifirst Corp.                    365,000                  8,532               

Wesco, Inc.                       200,000                  521                 

Winston Resources, Inc. (a)(d)    288,900                  921                 

Zebra Technologies Corp. (a)      650,000                  19,622              

                                                           250,391             

TOTAL SERVICES                                             419,841             

TECHNOLOGY - 11.9%                                                             

COMMUNICATIONS EQUIPMENT - 0.7%                                                

Andrew Corp. (a)                  1,545,000                28,003              

Aspect Telecommunications         720,600                  6,485               
Corp. (a)                                                                      

Dialogic Corp. (a)                290,000                  7,395               

KTK Telecommunications            100,000                  464                 
Engineering Co. Ltd.                                                           

Kyosan Electric Manufacturing     500,000                  1,069               
Co. Ltd.                                                                       

Lo Jack Corp. (a)                 124,700                  1,422               

Norstan, Inc. (a)                 299,000                  3,700               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

TECHNOLOGY - CONTINUED                                                         

COMMUNICATIONS EQUIPMENT -                                                     
CONTINUED                                                                      

Plantronics, Inc. (a)             82,900                  $ 6,689              

Tollgrade Communications,         499,000                  8,982               
Inc. (a)(d)                                                                    

                                                           64,209              

COMPUTER SERVICES & SOFTWARE                                                   
- 6.3%                                                                         

4Front Software                   40,000                   400                 
International, Inc. (a)                                                        

Affiliated Computer Services,     1,100,000                53,075              
Inc. Class A (a)                                                               

Aladdin Knowledge Systems         575,000                  6,900               
Ltd. (a)(d)                                                                    

Analysts International Corp.      178,000                  2,403               

Atlantic Data Services, Inc.      40,000                   450                 
(a)                                                                            

BancTec, Inc. (a)(d)              1,750,100                22,751              

Black Box Corp. (a)(d)            1,428,800                52,419              

Boole & Babbage, Inc. (d)         1,515,055                46,683              

CI Technologies Group Ltd.        1,000,000                2,967               

CompuCom Systems, Inc. (a)        100,000                  400                 

Computer Learning Centers,        1,741,700                8,981               
Inc. (a)(d)                                                                    

Computer Management Sciences,     20,000                   311                 
Inc. (a)                                                                       

Condor Technology Solutions,      75,000                   755                 
Inc. (a)                                                                       

Cotelligent, Inc. (a)             93,500                   1,958               

Daitec Co. Ltd.                   375,200                  5,318               

Data Research Associates,         200,000                  2,788               
Inc.                                                                           

ECI Telecom Ltd.                  950,000                  41,206              

Edusoft Ltd. (d)                  472,000                  3,658               

Equitrac Corp. (a)(d)             353,000                  6,884               

Fair, Isaac & Co., Inc.           600,000                  30,300              

FDP Corp. (d)                     574,300                  8,758               

Forsoft Ltd. (a)                  10,000                   107                 

GSE Systems, Inc. (a)             197,000                  591                 

Inacom Corp. (a)                  650,000                  8,491               

Industri-Matematik                256,800                  1,140               
International Corp. (a)                                                        

Infinium Software, Inc. (a)       180,000                  968                 

Informa Group PLC                 2,739,000                13,656              

JDA Software Group, Inc.          1,750,000                12,688              
(a)(d)                                                                         

Kewill Systems PLC                200,000                  4,772               

Mapics, Inc. (a)                  400,000                  4,300               

Melita International Corp.        825,000                  16,500              
(a)(d)                                                                         

MMT Computing PLC                 35,000                   340                 

MPSI Systems, Inc. (a)            115,000                  273                 

Mysoftware Co. (a)(d)             250,000                  3,344               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

TECHNOLOGY - CONTINUED                                                         

COMPUTER SERVICES & SOFTWARE                                                   
- CONTINUED                                                                    

New Dimension Software Ltd.       295,000                 $ 14,234             
(a)                                                                            

Ontrack Data International,       217,000                  1,248               
Inc. (a)                                                                       

Orbotech Ltd. (a)                 90,000                   3,763               

Orcad, Inc. (a)(d)                468,700                  3,398               

Parity PLC                        25,000                   244                 

Phoenix Technologies Ltd.         1,329,637                11,634              
(a)(d)                                                                         

Platinum Software Corp. (a)       79,400                   859                 

Project Software &                477,000                  12,104              
Development, Inc. (a)                                                          

Prophet 21, Inc. (a)              13,500                   174                 

Rainbow Technologies, Inc.        672,150                  14,283              
(a)(d)                                                                         

Remedy Corp. (a)(d)               1,725,000                38,381              

Sapiens International Corp.       216,900                  1,925               
NV (a)                                                                         

SPSS, Inc. (a)(d)                 864,200                  17,392              

STB Systems, Inc. (a)             45,000                   338                 

Symantec Corp. (a)                2,150,000                43,941              

Systems & Computer Technology     100,000                  1,000               
Corp. (a)                                                                      

Tecnomatix Technologies Ltd.      100,000                  1,475               
(a)                                                                            

Unigraphics Solutions, Inc.       560,000                  10,395              
Class A (a)(d)                                                                 

Viasoft, Inc. (a)                 350,000                  2,122               

                                                           545,445             

COMPUTERS & OFFICE EQUIPMENT                                                   
- 1.8%                                                                         

Adaptec, Inc. (a)                 1,000,000                23,125              

Advanced Digital Information      949,300                  17,562              
Corp. (a)(d)                                                                   

Amplicon, Inc.                    522,000                  7,895               

Ciprico, Inc. (a)                 50,000                   494                 

Creative Technology Ltd. (a)      350,000                  5,206               

Cybex Corp. (d)                   700,000                  20,825              

Equinox Systems, Inc. (a)(d)      295,100                  3,836               

Kronos, Inc. (a)(d)               708,800                  33,491              

Maezawa Kasei Industries Co.      200,000                  1,890               
Ltd.                                                                           

Microtouch Systems, Inc. (a)      20,000                   313                 

Nam Tai Electronics, Inc.         389,000                  4,401               

Nam Tai Electronics, Inc.         140,000                  162                 
warrants 11/24/00 (a)                                                          

Pomeroy Computer Resources,       610,000                  12,963              
Inc. (a)(d)                                                                    

Quantum Corp. (a)                 800,000                  19,150              

Scan-Optics, Inc. (a)(d)          437,000                  1,912               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

TECHNOLOGY - CONTINUED                                                         

COMPUTERS & OFFICE EQUIPMENT                                                   
- CONTINUED                                                                    

SED International Holdings,       960,000                 $ 4,500              
Inc. (a)(d)                                                                    

Tech Data Corp. (a)               10,000                   314                 

                                                           158,039             

ELECTRONIC INSTRUMENTS - 0.6%                                                  

BTU International, Inc. (a)(d)    364,800                  1,322               

Cohu, Inc.                        160,000                  5,220               

DSP Technology, Inc. (a)(d)       224,100                  1,555               

Hurco Companies, Inc. (a)(d)      379,028                  1,623               

Intest Corp. (a)(d)               465,000                  3,023               

Mesa Laboratories, Inc. (a)       135,400                  609                 

Modern Controls, Inc.             12,500                   56                  

Nanometrics, Inc. (a)(d)          853,500                  6,988               

Reliability, Inc. (a)(d)          577,500                  2,851               

Sanderson Electronics PLC         1,600,000                4,081               

SBS Technologies, Inc. (a)        287,100                  6,532               

Silicon Valley Group, Inc. (a)    25,000                   411                 

Tech-Sym Corp. (a)(d)             404,200                  10,585              

Toko Seiko Co. Ltd.               300,000                  502                 

Wireless Telecom Group, Inc.      1,755,700                3,731               
(d)                                                                            

X-Rite, Inc.                      275,000                  2,269               

                                                           51,358              

ELECTRONICS - 2.5%                                                             

Align-Rite International,         448,000                  6,048               
Inc. (a)(d)                                                                    

Apollo Electronics Co. Ltd.       50,000                   279                 

ASM Pacific Technology Ltd.       3,456,000                1,606               

Bergman & Beving AB Class B       600,000                  7,802               

Daidensha Co. Ltd.                100,000                  463                 

Dallas Semiconductor Corp. (d)    2,000,000                73,375              

Del Global Technologies Corp      259,800                  2,663               
(a)                                                                            

Diodes, Inc. (a)(d)               504,000                  2,835               

General Semiconductor, Inc.       3,028,450                24,985              
(a)(d)                                                                         

Griffon Corp. (a)(d)              2,672,300                28,226              

Kingboard Chemical Holdings       3,740,000                531                 
Ltd.                                                                           

Methode Electronics, Inc.         1,400,000                17,500              
Class A                                                                        

Micro Linear Corp. (a)(d)         1,182,800                5,766               

Microsemi Corp. (a)(d)            1,161,700                14,812              

Nichicon Corp.                    50,000                   576                 

NU Horizons Electronics Corp.     434,500                  2,281               
(a)                                                                            

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

TECHNOLOGY - CONTINUED                                                         

ELECTRONICS - CONTINUED                                                        

Optek Technology, Inc. (a)        50,000                  $ 856                

Percon Acquisition, Inc. (a)      44,000                   352                 

Pericom Semiconductor Corp.       100,000                  1,119               
(a)                                                                            

Roxboro Group PLC                 400,000                  1,665               

Sedgemoor PLC                     1,100,000                652                 

Siliconix, Inc. (a)               294,500                  6,553               

Stoneridge, Inc. (a)              380,000                  6,935               

Supertex, Inc. (a)                110,000                  1,382               

Taitron Components, Inc.          577,400                  1,010               
Class A (a)(d)                                                                 

Techtronic Industries Co.         1,500,000                256                 

Tower Semiconductor Ltd. (a)      580,000                  4,133               

Varitronix International Ltd.     1,750,000                3,071               

Video Display Corp. (a)(d)        289,100                  1,988               

Wong's International Holdings     10,000,000               1,136               
Ltd.                                                                           

Wong's International Holdings     1,000,000                3                   
Ltd. warrants 5/31/00 (a)                                                      

                                                           220,859             

TOTAL TECHNOLOGY                                           1,039,910           

TRANSPORTATION - 4.7%                                                          

AIR TRANSPORTATION - 2.5%                                                      

Alpha Airports Group PLC          700,000                  461                 

America West Holding Corp.        500,000                  10,750              
Class B (a)                                                                    

ASA Holdings, Inc. (d)            1,570,000                49,063              

Comair Holdings, Inc.             1,500,000                55,031              

Midwest Express Holdings,         930,000                  27,086              
Inc. (a)(d)                                                                    

Transat AT, Inc. (a)              165,000                  666                 

Viad Corp.                        2,614,000                74,989              

                                                           218,046             

RAILROADS - 0.3%                                                               

Canadian National Railway Co.     500,000                  26,502              

SHIPPING - 0.0%                                                                

Isewan Terminal Service Co.       1,000,000                1,847               
Ltd.                                                                           

Meiko Transportation Co. Ltd.     200,000                  696                 

Ocean Wilsons Holdings Ltd.       600,000                  760                 

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

TRANSPORTATION - CONTINUED                                                     

SHIPPING - CONTINUED                                                           

Tokyo Kisen Co. Ltd.              400,000                 $ 1,134              

Ugland International Holdings     500,000                  551                 
PLC                                                                            

                                                           4,988               

TRUCKING & FREIGHT - 1.9%                                                      

Air Express International         1,590,000                30,011              
Corp.                                                                          

Arnold Industries, Inc. (d)       1,597,100                24,156              

Baltrans Holdings Ltd.            1,400,000                101                 

Boyd Brothers Transportation,     172,500                  1,251               
Inc. (a)                                                                       

Cannon Express, Inc. Class A      319,200                  1,716               
(a)(d)                                                                         

Circle International Group,       358,100                  6,155               
Inc.                                                                           

Daiwa Logistics Co. Ltd.          300,000                  1,281               

Eagle USA Airfreight, Inc. (a)    80,000                   2,305               

Goodfellow, Inc. (d)              325,000                  1,763               

Hub Group, Inc. Class A (a)       135,000                  2,700               

Japan Logistic Systems Corp.      100,000                  255                 

Landstar System, Inc. (a)         95,000                   3,966               

Mark VII, Inc. (a)(d)             502,000                  8,534               

Marten Transport Ltd. (a)(d)      444,000                  6,327               

Old Dominion Freight Lines,       529,500                  5,825               
Inc. (a)(d)                                                                    

P.A.M. Transportation             76,500                   708                 
Services, Inc. (a)                                                             

Pittston Co. (Burlington          1,600,000                18,300              
Group) (d)                                                                     

Sakai Moving Service Co. Ltd.     100,000                  861                 

Trancom Co. Ltd.                  250,000                  792                 

USFreightways Corp.               1,210,000                42,199              

XTRA Corp.                        73,400                   3,060               

                                                           162,266             

TOTAL TRANSPORTATION                                       411,802             

UTILITIES - 3.0%                                                               

CELLULAR - 0.3%                                                                

Century Telephone                 350,000                  23,800              
Enterprises, Inc.                                                              

NTT Mobile Communication          107                      4,504               
Network, Inc. (e)                                                              

Smartone Telecommunications       300,000                  894                 
Holdings Ltd.                                                                  

                                                           29,198              

ELECTRIC UTILITY - 0.2%                                                        

Avista Corp.                      394,200                  7,293               

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

UTILITIES - CONTINUED                                                          

ELECTRIC UTILITY - CONTINUED                                                   

Bangor Hydro-Electric Co. (a)     367,400                 $ 4,776              

CMP Group, Inc.                   160,200                  2,884               

Maine Public Service Co.          80,600                   1,249               

                                                           16,202              

GAS - 0.4%                                                                     

Aquila Gas Pipeline Corp.         871,400                  7,625               

Atrion Corp. (a)                  61,500                   461                 

Bay State Gas Co.                 168,100                  6,650               

MCN Energy Group, Inc.            109,600                  1,945               

Midcoast Energy Resources,        246,950                  5,587               
Inc.                                                                           

Otaki Gas Co. Ltd.                330,000                  969                 

Southwestern Energy Co. (d)       1,500,000                10,500              

                                                           33,737              

TELEPHONE SERVICES - 0.1%                                                      

Atlantic Tele-Network, Inc.       490,920                  4,296               
(d)                                                                            

WATER - 2.0%                                                                   

Brockhampton Holdings PLC         4,700,000                6,960               
Class A (non-vtg.)                                                             

Hyder PLC (d)                     7,860,000                106,314             

Yorkshire Water PLC               7,475,000                61,255              

                                                           174,529             

TOTAL UTILITIES                                            257,962             

TOTAL COMMON STOCKS                                        8,209,023           
(Cost $7,038,974)                                                              

CONVERTIBLE PREFERRED STOCKS                                                   
- 0.0%                                                                         

ENERGY - 0.0%                                                                  

OIL & GAS - 0.0%                                                               

Goodrich Petrolem Corp.           73,800                   424                 
Series A, $0.80 (Cost $804)                                                    


                                                        [Enlarge/Download Table]

                                                                                     
CONVERTIBLE BONDS - 0.0%                                                             

MOODY'S RATINGS (UNAUDITED) (B)       PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

DURABLES - 0.0%                                                                      

AUTOS, TIRES, & ACCESSORIES -                                                        
0.0%                                                                                 

Mercury Air Group, Inc. 7.75%    B-   $ 500                     $ 540                
2/1/06                                                                               

TECHNOLOGY - 0.0%                                                                    

COMMUNICATIONS EQUIPMENT - 0.0%                                                      

Aspect Telecommunications        -     10,000                    1,900               
Corp. 0% 8/10/18 (e)                                                                 

Trans Lux Corp. 7.5% 12/1/06     -     535                       482                 

                                                                 2,382               

TOTAL CONVERTIBLE BONDS                                          2,922               
(Cost $3,075)                                                                        

CASH EQUIVALENTS - 5.8%                                                              

                                     MATURITY AMOUNT (000S)                          

Investments in repurchase            $ 4,409                     4,407               
agreements (U.S. Treasury                                                            
obligations), in a joint                                                             
trading account at 4.25%,                                                            
dated 1/29/99 due 2/1/99                                                             

                                      SHARES                                         

Taxable Central Cash Fund (c)         500,324,640                500,325             

TOTAL CASH EQUIVALENTS                                           504,732             
(Cost $504,732)                                                                      

TOTAL INVESTMENT IN                                            $ 8,717,101           
SECURITIES - 100%                                                                    
(Cost $7,547,585)                                                                    

LEGEND                                                                          
(a) Non-income producing                                                        

(b) Standard & Poor's credit ratings are used in the absence of a               
rating by Moody's Investors Service, Inc.                                       

(c) At period end, the seven-day yield on the Taxable Central Cash              
Fund was 4.81%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          

(d) Affiliated company (see Note 6 of Notes to Financial Statements).           

(e) Security exempt from registration under Rule 144A of the                    
Securities Act of 1933.  These securities may be resold in                      
transactions exempt from registration, normally to qualified                    
institutional buyers. At the period end, the value of these securities          
amounted to $27,600,000 or 0.3% of net assets.                                  

OTHER INFORMATION                                                               

Distribution of investments by country of issue, as a percentage of             
total value of investments in securities, is as follows:                        

United States of America     77.2%                                              

United Kingdom                6.6                                               

Canada                        4.6                                               

Bermuda                       1.8                                               

Israel                        1.6                                               

Finland                       1.5                                               

Sweden                        1.1                                               

(Others individually less     5.6                                               
than 1%)                                                                        

100.0%                  

INCOME TAX INFORMATION                                                          

At January 31, 1999, the aggregate cost of investment securities for            
income tax purposes was $7,548,964,000. Net unrealized appreciation             
aggregated $1,168,137,000, of which $2,116,607,000 related to                   
appreciated investment securities and $948,470,000 related to                   
depreciated investment securities.                                              

FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             
AMOUNTS IN THOUSANDS (EXCEPT                                                    
PER-SHARE AMOUNTS)                      JANUARY                                 
        31, 1999
           (UNAUDITED)

ASSETS                                                                          

Investment in securities, at            $ 8,717,101                             
value (including repurchase                                                     
agreements of $4,407) (cost                                                     
$7,547,585) -  See                                                              
accompanying schedule                                                           

Receivable for investments               19,820                                 
sold                                                                            

Receivable for fund shares               6,886                                  
sold                                                                            

Dividends receivable                     6,729                                  

Interest receivable                      2,698                                  

Redemption fees receivable               11                                     

Other receivables                        183                                    

TOTAL ASSETS                            8,753,428                             

LIABILITIES                                                                     

Payable to custodian bank      $ 1                                              

Payable for investments         34,736                                          
purchased                                                                       

Payable for fund shares         54,061                                          
redeemed                                                                        

Accrued management fee          6,036                                           

Other payables and accrued      2,187                                           
expenses                                                                        

TOTAL LIABILITIES                       97,021                                

NET ASSETS                              $ 8,656,407                             

Net Assets consist of:                                                          

Paid in capital                         $ 7,327,209                             

Distributions in excess of               (258)                                  
net investment income                                                           

Accumulated undistributed net            159,971                                
realized gain (loss) on                                                         
investments and foreign                                                         
currency transactions                                                           

Net unrealized appreciation              1,169,485                              
(depreciation) on                                                               
investments and assets and                                                      
liabilities in foreign                                                          
currencies                                                                      

NET ASSETS, for 382,621                 $ 8,656,407                             
shares outstanding                                                              

NET ASSET VALUE and                      $22.62                                 
redemption price per share                                                      
($8,656,407 (divided by)                                                        
382,621 shares)                                                                 

Maximum offering price per               $23.32                                 
share (100/97.00 of $22.62)                                                     

STATEMENT OF OPERATIONS                                                         
AMOUNTS IN THOUSANDS                         SIX                                
                      MONTHS ENDED
                     JANUARY 31,
                          1999 (UNAUDITED)

INVESTMENT INCOME                            $ 42,550                           
Dividends (including $15,663                                                    
received from  affiliated                                                       
issuers)                                                                        

Interest                                      21,531                            

TOTAL INCOME                                 64,081                           

EXPENSES                                                                        

Management fee Basic fee         $ 28,619                                       

Performance adjustment           7,395                                        

Transfer agent fees               10,051                                        

Accounting fees and expenses      423                                           

Non-interested trustees'          20                                            
compensation                                                                    

Custodian fees and expenses       553                                           

Audit                             48                                            

Legal                             31                                            

Total expenses before            47,140                                       
reductions                                                                      

Expense reductions               (505)       46,635                           

NET INVESTMENT INCOME                         17,446                            

REALIZED AND UNREALIZED GAIN                                                    
(LOSS)                                                                          
Net realized gain (loss) on:                                                    

Investment securities            243,047                                      
(including realized gain                                                        
(loss) of   $20,362 on sales                                                    
of investments in affiliated                                                    
issuers)                                                                        

Foreign currency transactions    316         243,363                          

Change in net unrealized                                                        
appreciation (depreciation)                                                     
on:                                                                             

Investment securities            (670,935)                                    

Assets and liabilities in        104         (670,831)                        
foreign currencies                                                              

NET GAIN (LOSS)                               (427,468)                         

NET INCREASE (DECREASE) IN                   $ (410,022)                        
NET ASSETS RESULTING  FROM                                                      
OPERATIONS                                                                      

                                                        [Enlarge/Download Table]

                                                                                       
STATEMENT OF CHANGES IN NET ASSETS                                                     
AMOUNTS IN THOUSANDS             SIX MONTHS ENDED JANUARY 31,  YEAR ENDED JULY 31, 1998
                                 1999 (UNAUDITED)                                      

INCREASE (DECREASE) IN NET                                                             
ASSETS                                                                                 

Operations Net investment        $ 17,446                      $ 119,579               
income                                                                                 

 Net realized gain (loss)         243,363                       974,263                

 Change in net unrealized         (670,831)                     (66,124)               
appreciation (depreciation)                                                            

 NET INCREASE (DECREASE) IN       (410,022)                     1,027,718              
NET ASSETS RESULTING  FROM                                                             
OPERATIONS                                                                             

Distributions to shareholders     (77,746)                      (106,826)              
From net investment income                                                             

 From net realized gain           (752,227)                     (591,880)              

 TOTAL DISTRIBUTIONS              (829,973)                     (698,706)              

Share transactions Net            808,830                       3,991,908              
proceeds from sales of shares                                                          

 Reinvestment of distributions    800,542                       685,260                

 Cost of shares redeemed          (2,228,837)                   (3,166,447)            

 NET INCREASE (DECREASE) IN       (619,465)                     1,510,721              
NET ASSETS RESULTING  FROM                                                             
SHARE TRANSACTIONS                                                                     

Redemption fees                   773                           2,051                  

  TOTAL INCREASE (DECREASE)       (1,858,687)                   1,841,784              
IN NET ASSETS                                                                          

NET ASSETS                                                                             

 Beginning of period              10,515,094                    8,673,310              

 End of period (including        $ 8,656,407                   $ 10,515,094            
undistributed net investment                                                           
income (loss) of $(258) and                                                            
$70,720, respectively)                                                                 

OTHER INFORMATION                                                                      
Shares                                                                                 

 Sold                             36,830                        153,618                

 Issued in reinvestment of        39,126                        27,797                 
distributions                                                                          

 Redeemed                         (99,764)                      (119,111)              

 Net increase (decrease)          (23,808)                      62,304                 


                                                        [Enlarge/Download Table]

                                                                                                                         
FINANCIAL HIGHLIGHTS                                                                                                     
                               SIX MONTHS ENDED JANUARY 31,  YEARS ENDED JULY 31,                                        
                               1999                                                                                      

                               (UNAUDITED)                   1998                  1997      1996      1995      1994    

SELECTED PER-SHARE DATA                                                                                                  

Net asset value, beginning of  $ 25.87                       $ 25.20               $ 19.87   $ 19.25   $ 17.62   $ 17.19 
period                                                                                                                   

Income from Investment                                                                                                   
Operations                                                                                                               

 Net investment income          .04 D                         .29 D                 .30 D     .26       .20       .06    

 Net realized and               (1.15)                        2.24                  6.93      1.83      3.57      2.15   
unrealized gain   (loss)                                                                                                 

 Total from investment          (1.11)                        2.53                  7.23      2.09      3.77      2.21   
operations                                                                                                               

Less Distributions                                                                                                       

 From net investment   income   (.20)                         (.28)                 (.24)     (.23)     (.09)     (.16)  

 From net realized   gain       (1.94)                        (1.58)                (1.66)    (1.24)    (2.05)    (1.62) 

 Total distributions            (2.14)                        (1.86)                (1.90)    (1.47)    (2.14)    (1.78) 

Redemption fees added to paid   -                             -                     -         -         -         -      
in capital                                                                                                               

Net asset value, end  of       $ 22.62                       $ 25.87               $ 25.20   $ 19.87   $ 19.25   $ 17.62 
period                                                                                                                   

TOTAL RETURN B, C               (3.33)%                       10.53%                39.45%    11.50%    23.81%    13.67% 

RATIOS AND SUPPLEMENTAL DATA                                                                                             

Net assets, end of period (in  $ 8,656                       $ 10,515              $ 8,673   $ 4,019   $ 2,947   $ 2,167 
millions)                                                                                                                

Ratio of expenses to average    1.06% A                       .97%                  1.02%     1.05%     1.12%     1.14%  
net assets                                                                                                               

Ratio of expenses to average    1.05% A, E                    .95% E                1.01% E   1.04% E   1.11% E   1.13% E
net assets after expense                                                                                                 
reductions                                                                                                               

Ratio of net investment         .39% A                        1.10%                 1.36%     1.46%     1.31%     .51%   
income to average  net assets                                                                                            

Portfolio turnover rate         29% A                         47%                   45%       79%       65%       54%    


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 January 31, 1999 (Unaudited)                               

1. SIGNIFICANT ACCOUNTING POLICIES.                                             

Fidelity Low -Priced Stock Fund (the fund) is a fund of Fidelity                
Puritan Trust (the trust) and is authorized to issue an unlimited               
number of shares. The trust is registered under the Investment Company          
Act of 1940, as amended (the 1940 Act), as an open-end management               
investment company organized as a Massachusetts business trust. The             
financial statements have been prepared in conformity with 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. 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 as determined in good faith under consistently applied                    
procedures under the general supervision of the Board of Trustees.              
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             
and settlement date 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           
U.S. federal income taxes to the extent that it distributes                     
substantially all of its taxable income for its fiscal year. The fund           
may be subject to foreign taxes on income and gains on investments              
which are accrued based upon the fund's understanding of the tax rules          
and regulations that exist in the markets in which it invests. The              
fund accrues such taxes as applicable. The schedule of investments              
includes information regarding income taxes under the caption "Income           
Tax Information."                                                               

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED                                  

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, which includes accretion of               
original issue discount, is accrued as earned. Investment income is             
recorded net of foreign taxes withheld where recovery of such taxes is          
uncertain.                                                                      

EXPENSES. Most expenses of the trust can be directly attributed to a            
fund. Expenses which cannot be directly attributed are apportioned              
among the funds in the trust.                                                   

DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the          
Plan) non-interested Trustees must defer receipt of a portion of, and           
may elect to defer receipt of an additional portion of, their annual            
compensation. Deferred amounts are treated as though equivalent dollar          
amounts had been invested in shares of the fund or are invested in a            
cross-section of other Fidelity funds. 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, futures transactions, passive foreign investment                  
companies (PFIC), non-taxable dividends 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.                        

SHORT-TERM TRADING (REDEMPTION) FEES. Shares held in the fund less              
than 90 days are subject to a short-term trading fee equal to 1.50% of          
the proceeds of the redeemed shares. The fee, which is retained by the          
fund, is accounted for as an addition to paid in capital.                       

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 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.                    

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 sale at an acceptable price may be difficult.           
At the end of the period, the fund had no investments in restricted             
securities (excluding 144A issues).                                             

3. PURCHASES AND SALES OF INVESTMENTS.                                          

Purchases and sales of securities, other than short-term securities,            
aggregated $1,182,091,000 and $1,974,530,000, 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 .35%. 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 .81% 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 $672,000 on sales of shares of the fund all of which           
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 .23% 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 $307,000 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 $375,000 under this arrangement.                                

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 $10,000 and $120,000, 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:                     

                                                        [Enlarge/Download Table]

                                                                                     
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES                                    

AMOUNTS IN THOUSANDS AFFILIATE   PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE   

AFC Cable Systems, Inc.          $ 1,953        $ -         $ -              $ 30,985

ADAC Laboratories                 3,565          -           -                30,005 

Adams Resources & Energy, Inc.    590            -           42               2,633  

Advanced Digital Information      -              -           -                17,562 
Corp.                                                                                

Aladdin Knowledge Systems Ltd.    724            -           -                6,900  

Alberto-Culver Co. Class A        -              2,523       -                -      

Align-Rite International,         48             -           -                6,048  
Inc.                                                                                 

Allied Research Corp.             9              -           -                3,370  

American Safety Razor Co.         386            -           -                11,719 

AMRESCO Capital Trust, Inc.       -              -           210              5,053  

Applebee's International,         4,909          -           182              45,463 
Inc.                                                                                 

ARK Restaurants Corp.             -              -           -                2,734  

Arnold Industries, Inc.           -              10,954      421              24,156 

ASA Holdings, Inc.                2,889          4,396       347              49,063 

Asahi Concrete Works Co. Ltd.     -              -           -                2,474  

Atlantic Tele-Network, Inc.       -              -           74               4,296  

Autocam Corp.                     -              1,601       32               6,579  

Australian Oil & Gas Corp,        171            -           147              4,357  
Ltd.                                                                                 

Award Software International,     756            3,265       -                -      
Inc.                                                                                 

Aztec Manufacturing Co.           -              308         -                3,815  

BA Merchant Services, Inc.        11,682         -           -                32,737 
Class A                                                                              

BMTC Group, Inc. Class A          -              -           44               5,691  
(sub-vtg.)                                                                           

BTU International, Inc.           8              -           -                1,322  

Bairnco Corp.                     -              -           90               5,856  

Ballard Medical Products          2,396          -           145              70,156 

BancTec, Inc.                     -              31          -                22,751 

Banyan Strategic Realty Trust     -              309         221              4,366  
(SBI)                                                                                

Beazer Homes USA, Inc.            485            -           -                11,553 

Benchmarq Microelectronics,       -              2,671       -                -      
Inc.                                                                                 

Benihana, Inc.                    105            406         -                4,417  

Benihana, Inc. Class A            220            -           -                3,193  

Bergensbanken ASA                 -              -           -                10,603 

Black Box Corp.                   38             -           -                52,419 

Blair Corp.                       2,580          -           265              18,645 

Boole & Babbage, Inc.             302            -           -                46,683 

Brampton Brick Ltd. Class A       -              -           -                -      

Brookstone, Inc.                  -              145         -                10,657 


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                    
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE   

Bush Industries, Inc. Class A   $ -            $ -         $ 100            $ 12,747

CPAC, Inc.                       -              73          46               3,301  

Canadian Western Bank            1,510          -           159              13,460 

Cannon Express, Inc. Class A     -              -           -                1,716  

Carr-Gottstein Foods Co.         -              -           -                4,683  

Castle Energy Corp.              -              -           123              6,642  

Chase Corp.                      101            -           87               3,700  

Chase Industries, Inc.           -              104         -                8,462  

Chateau Stores Of Canada Ltd.    -              -           11               1,142  
Class A                                                                             

Chicos Fas, Inc.                 -              848         -                -      

Chromcraft Revington, Inc.       186            -           -                9,027  

Claire's Stores, Inc.            7,896          1,121       107              56,783 

Cobra Electronics Corp.          -              209         -                2,125  

Cogeco, Inc. (sub-vtg.)          -              -           82               24,999 

Cogeco Cable, Inc.               -              -           67               16,709 

Cold Metal Products, Inc.        -              674         -                1,104  

Cole National Corp. Class A      78             -           -                17,706 

Columbus Energy Corp.            -              815         -                2,123  

Compdent Corp.                   3,331          -           -                13,147 

Computer Learning Centers,       -              -           -                8,981  
Inc.                                                                                

Concord Fabrics, Inc. Class A    -              76          -                1,049  

Concord Fabrics, Inc. Class B    -              -           -                736    

Conso Products Co.               -              -           -                5,984  

Consolidated Products, Inc.      -              2,876       -                -      

Cook (D.C.) Holdings PLC         -              -           100              833    

Corvel Corp.                     1,343          -           -                8,961  

Cotton States Life Health        320            -           33               5,506  
Insurance Co.                                                                       

Crossman Communities, Inc.       604            -           -                30,698 

Crown Central Petroleum Corp.    -              1,240       -                3,493  
Class A                                                                             

Cryolife, Inc.                   920            -           -                8,569  

Cybex  Corp.                     -              1,523       -                20,825 

DSP Technology, Inc.             -              -           -                1,555  

DSG International Ltd.           -              341         -                2,152  

Dallas Semiconductor Corp.       -              11,171      181              73,375 

Decorator Industries, Inc.       -              -           53               3,000  

Del Laboratories, Inc.           20             -           33               11,783 

Desjardins-Laurentian Finance                                                       
Corp.  Class A (sub-vtg.)        -              -           12               5,587  

Dime Financial Corp.             -              -           -                -      


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                   
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE  

Diodes, Inc.                    $ 27           $ -         $ -              $ 2,835

Diversified Corporate            -              -           -                1,447 
Resources, Inc.                                                                    

Dominion Homes, Inc.             342            -           -                5,858 

Drew Industries, Inc.            32             -           -                14,361

Ducommun, Inc.                   -              547         -                15,611

Durakon Industries, Inc.         -              -           -                8,310 

Dyersburg Corp.                  -              -           14               2,100 

Elxsi Corp.                      -              -           -                2,860 

Edusoft Ltd.                     -              -           -                3,658 

ESC Medical Systems Ltd.         3,485          -           -                13,802

Eltron International Inc.        -              -           -                -     

Emerging Communications, Inc.    -              5,653       -                -     

Elscint Ltd.                     6,128          200         -                15,727

ENEX Resources Corp.             -              -           -                649   

Engineered Support Systems,      -              402         6                4,873 
Inc.                                                                               

Engle Homes, Inc.                67             -           80               13,785

Equinox Systems, Inc.            -              201         -                3,836 

Equitrac Corp.                   77             -           -                6,884 

FRM Nexus, Inc.                  -              -           -                294   

FDP Corp.                        -              -           14               8,758 

Fansteel, Inc.                   -              506         -                4,600 

Farm Family Holdings, Inc.       -              -           -                17,072

Federal Screw Works              -              -           218              5,603 

FIH AS Class B                   -              -           -                -     

Finlay Enterprises, Inc.         608            -           -                6,410 

Finish Line, Inc. Class A        2,977          -           -                17,380

First BanCorp P R                8,788          601         391              77,431

First Central Financial Corp.    -              2,811       -                -     

First Commonwealth, Inc.         427            -           -                2,639 

Flanigans Enterprises, Inc.      -              -           18               771   

Footstar, Inc.                   -              1,620       -                37,969

Foremost Industries, Inc.        -              -           -                814   

Fossil, Inc.                     -              2,377       -                43,743

Friedmans, Inc. Class A          4,196          -           -                16,376

GBC Bancorp                      179            859         128              18,690

Gardner Denver Machinery, Inc.   236            699         -                12,561

Gehl Co.                         402            -           -                10,665

General Semiconductor, Inc.      1,249          -           -                24,985


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                    
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE   

Giant Cement Holding, Inc.      $ -            $ -         $ -              $ 10,568

Global Motorsport Group, Inc.    -              6,016       -                -      

Goodfellow, Inc.                 -              200         23               1,763  

Griffon Corp.                    168            71          -                28,226 

Gymboree Corp.                   -              1,200       -                -      

HPSC, Inc.                       -              224         -                2,237  

Hallwood Consolidated            669            -           -                3,110  
Resources Corp.                                                                     

Hampshire Group Ltd.             -              -           -                3,820  

Hardinge, Inc.                   -              564         -                -      

Healthcare Recoveries, Inc.      1,348          225         -                11,600 

Helen Of Troy Corp.              73             -           -                43,280 

Herbalife International, Inc.    -              -           156              15,757 
Class A                                                                             

Hirsch International Corp.       200            -           -                2,538  
Class A                                                                             

Holly Corp.                      303            127         139              6,822  

Homebase, Inc.                   -              163         -                13,241 

Horizon Health Corp.             1,882          -           -                4,022  

Hurco Companies, Inc.            89             -           -                1,623  

Hyder PLC                        3,896          -           -                106,314

ICU Medical, Inc.                1,994          98          -                11,060 

IHOP Corp.                       1,555          -           -                32,646 

IDEX Corp.                       21,168         4,608       669              53,952 

Independence Federal Savings     -              -           -                1,696  
Bank                                                                                

InfoUSA, Inc. Class B            1,063          104         -                11,538 

InfoUSA, Inc. Class A            975            85          -                11,015 

Intercontinental Life Corp.      -              -           -                8,298  

Intest Corp.                     395            379         -                3,023  

IPC Holdings Ltd.                2,160          -           1,581            55,156 

JDA Software Group, Inc.         5,252          299         -                12,688 

JLM Couture, Inc.                -              -           -                499    

Jean Coutu Group, Inc. Class A   -              551         104              40,200 

Jo-Ann Stores, Inc. Class A      2,146          723         -                8,291  

Kaynar Technologies, Inc.        -              3,727       -                -      

Kennedy-Wilson, Inc.             -              96          -                4,071  

Kenneth Cole Productions,        1,374          -           -                15,928 
Inc. Class A                                                                        

King World Productions, Inc.     1,556          4,946       -                -      

Koss Corp.                       -              -           -                2,389  

Kronos, Inc.                     3,656          506         -                33,491 

Lai Worldwide, Inc.              1,573          -           -                4,177  

Laboratory Specialists           -              180         -                -      
America, Inc.                                                                       

Lasalle Re Holdings Ltd.         1,091          -           1,681            27,800 

Life USA Holding, Inc.           -              896         99               22,576 


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                   
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE  

Logans Roadhouse, Inc.          $ 474          $ -         $ -              $ 9,025

M/I Schottenstein Homes, Inc.    -              -           88               17,710

MMI Companies, Inc.              -              122         224              23,715

MYR Group, Inc.                  -              512         35               5,750 

Mark VII, Inc.                   123            -           -                8,534 

Marten Transport Ltd.            -              -           -                6,327 

Martin Color-Fi, Inc.            -              1,834       -                -     

Maynard Oil Co.                  32             -           -                2,316 

Medstone International, Inc.     -              -           -                4,349 

Melita International Corp.       1,557          1,235       -                16,500

Mercury Air Group, Inc.          -              -           -                5,129 

Metro Richelieu, Inc. Class A    2,896          -           191              44,667

Micro Linear Corp.               110            -           -                5,766 

Microsemi Corp.                  2,257          -           -                14,812

Midwest Express Holdings, Inc.   2,862          644         -                27,086

Mikes Restaurants, Inc.          -              -           -                361   

Moffat Communications Ltd.       582            -           70               20,316

Monro Muffler Brake, Inc.        -              105         -                4,800 

Morton's Restaurant Group,       -              241         -                6,366 
Inc.                                                                               

Movado Group, Inc.               624            -           31               19,905

Murakami Corp.                   -              -           22               2,297 

Mysoftware Co.                   -              294         -                3,344 

NSC Corp.                        -              -           -                464   

Nanometrics, Inc.                -              64          -                6,988 

Nagawa Co., Ltd.                 -              -           -                2,774 

National Western Life                                                              
Insurance Co.  Class A           -              -           -                20,995

Natures Sunshine Products,       123            -           69               13,745
Inc.                                                                               

Nautica Enterprises, Inc.        18,303         -           -                56,700

Nordlandsbanken AS               -              -           -                8,121 

Norvestia OY Class B             -              114         -                -     

OEC Medical Systems, Inc.        -              -           -                35,831

Oakwood Homes Corp.              1,437          -           63               60,959

Octel Corp.                      -              -           -                19,596

Old Dominion Freight Lines,      114            179         -                5,825 
Inc.                                                                               

Orcad, Inc.                      -              -           -                3,398 

Oriole Homes Corp. Class B       -              -           -                588   

Orthofix International NV        928            -           -                14,837

P & F Industries, Inc. Class     680            -           -                2,694 
A                                                                                  

PXRE Corp.                       -              -           370              14,818


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                   
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE  

Patrick Industries, Inc.        $ 68           $ -         $ 47             $ 8,747

PAULA Financial                  114            -           12               2,861 

Pe Ben Oilfield Services Ltd.    -              -           -                596   

Performance Food Group Co.       -              529         -                -     

Perry Group                      -              -           -                3,196 

Petroleum Development Corp.      110            -           -                4,944 

Philadelphia Consolidated        1,560          -           -                23,190
Holding Corp.                                                                      

Phoenix Technologies Ltd.        267            -           -                11,634

Piercing Pagoda, Inc.            89             -           -                8,873 

Pittston Co. (Brinks Group)      7,463          -           53               66,413

Pittston Co. (Burlington         697            -           186              18,300
Group)                                                                             

Pomeroy Computer Resources,      526            -           -                12,963
Inc.                                                                               

Powell Industries, Inc.          -              616         -                11,046

Primesource Corp.                -              785         17               -     

Programming & Systems, Inc.      -              -           -                -     

Pubco Corp.                      -              -           -                3,035 

Quest Diagnostics, Inc.          1,353          -           -                38,519

Quest Education Corp.            1,754          -           -                7,940 

Quicks Group PLC                 -              -           -                5,628 

Quixote Corp.                    -              754         81               6,920 

RPC Energy Services, Inc.        -              356         203              19,356

Rainbow Technologies, Inc.       -              342         -                14,283

Raytech Corp.                    4              -           -                986   

Redwood Trust, Inc.              -              -           -                15,198

RehabCare Group, Inc.            -              -           -                11,512

Remedy Corp.                     2,197          -           -                38,381

Realiability, Inc.               1,114          -           -                2,851 

Res-Care, Inc.                   755            284         -                30,766

Respironics, Inc.                7,635          -           -                31,749

Rex Stores Corp.                 847            -           -                7,178 

Reynolds & Reynolds Co. Class    3,948          -           822              87,700
A                                                                                  

Richardsons Westgarth PLC        140            -           98               2,032 

Richmont Mines, Ltd.             58             -           -                2,012 

Right Management Consultants,    118            -           -                10,389
Inc.                                                                               

Ringkjobing Bank                 -              -           -                2,981 

Riviana Foods, Inc.              761            -           187              18,519

Robertson Ceco Corp.             299            -           -                8,204 

Ryan Hotels PLC                  -              799         48               4,012 

S&K Famous Brands, Inc.          -              -           -                4,750 

SCPIE Holding, Inc.              86             3,182       83               18,665

SED International Holdings,      -              780         -                4,500 
Inc.                                                                               


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                                [Download Table]

                                                                                    
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE   

SPSS, Inc.                      $ 54           $ -         $ -              $ 17,392

Safeguard Health Enterprises,    371            -           -                1,475  
Inc.                                                                                

San Francisco Boutiques, Inc.                                                       
Class B   (sub-vtg.)             -              196         -                861    

Scan-Optics, Inc.                -              576         -                1,912  

Schultz Sav-O Stores, Inc.       82             -           -                6,140  

Seattle FilmWorks, Inc.          590            -           -                6,336  

Shelby Williams Industries,      -              2,748       53               -      
Inc.                                                                                

Sonic Corp.                      -              -           -                48,859 

Sound Advice, Inc.               -              -           -                1,008  

Southern Energy Homes, Inc.      -              -           -                9,091  

Southwestern Energy Co.          74             2,827       179              10,500 

Speizman Industries, Inc.        -              -           -                1,059  

Sparebanken Rana                 133            -           -                688    
Grunnfondsbevis                                                                     

Standard Commercial Corp.        -              -           125              9,757  

Stanley Furniture Co., Inc.      434            -           -                14,199 

Stanley Technology Group, Inc.   -              163         -                -      

Steel of West Virginia, Inc.     -              3,551       -                -      

Stephan Co.                      -              -           17               4,416  

Stewart Information Services     -              3,082       -                -      
Corp.                                                                               

Strattec Security Corp.          2,329          -           -                14,476 

Summit Holdings Southeast,       -              3,262       -                -      
Inc.                                                                                

Superior Energy Services, Inc.   432            -           -                4,031  

Supreme International Corp.      218            -           -                7,246  

Swift Energy Co.                 -              -           -                10,074 

Sylvan, Inc.                     -              716         -                8,316  

TBC Corp.                        -              344         -                11,873 

TB Wood's Corp.                  -              473         70               4,420  

Taitron Components, Inc.         -              -           -                1,010  
Class A                                                                             

Talentum OY Class B              -              93          -                17,096 

Tandy Brands Accessories, Inc.   163            97          -                9,049  

Tay Homes PLC                    -              -           315              5,893  

Tech-Sym Corp.                   1,346          149         -                10,585 

Terra Nova (Bermuda) Holdings                                                       
Ltd.  Class A                    5,781          -           191              43,088 

Toami Corp.                      -              -           -                1,684  

Tollgrade Communications, Inc.   2,285          -           -                8,982  

Transpro, Inc.                   -              -           66               4,131  

Twin Disc, Inc.                  -              481         114              5,200  

UICI                             -              1,553       -                61,453 

URS Corp.                        -              107         -                27,135 


6. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   

                                                        [Enlarge/Download Table]

                                                                                       
AMOUNTS IN THOUSANDS AFFILIATE  PURCHASE COST  SALES COST  DIVIDEND INCOME  VALUE      

USEC, Inc.                      $ 4,248        $ 1,001     $ 2,358          $ 125,353  

Uni-Select, Inc.                 -              -           61               14,624    

Unico American Corp.             57             -           -                4,130     

Unigraphics Solutions, Inc.      -              196         -                10,395    
Class A                                                                                

United Dental Care, Inc.         -              8,494       -                -         

Utah Medical Products, Inc.      -              -           -                5,395     

Valley Forge Corp.               20             1,461       41               -         

Vertex Communications Corp.      18             -           -                8,943     

Video Display Corp.              -              -           -                1,988     

WSOY (Werner Soderstrom                                                                
Osakeyhtio)  Class B             -              981         -                49,035    

Western Beef, Inc.               -              -           -                3,070     

Winsloew Furniture, Inc.         -              1,349       -                16,293    

Winston Resources, Inc.          58             -           -                921       

Wireless Telecom Group, Inc.     387            -           -                3,731     

World Fuel Services Corp.        366            -           125              14,061    

Worldtex, Inc.                   -              1,992       -                2,938     

Wynns International, Inc.        -              -           213              33,373    

TOTALS                          $ 218,442      $ 139,807   $ 15,663         $ 3,761,618


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(PHONE_GRAPHIC)TOUCHTONE XPRESS                                                 
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TO VISIT FIDELITY                                                               

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ARIZONA                                                                         

7373 N. Scottsdale Road                                                         
Scottsdale, AZ                                                                  

CALIFORNIA                                                                      

815 East Birch Street                                                           
Brea, CA                                                                        

851 East Hamilton Avenue                                                        
Campbell, CA                                                                    

527 North Brand Boulevard                                                       
Glendale, CA                                                                    

19200 Von Karman Avenue                                                         
Irvine, CA                                                                      

10100 Santa Monica Blvd.                                                        
Los Angeles, CA                                                                 

251 University Avenue                                                           
Palo Alto, CA                                                                   

1760 Challenge Way                                                              
Sacramento, CA                                                                  

7676 Hazard Center Drive                                                        
San Diego, CA                                                                   

455 Market Street                                                               
San Francisco, CA                                                               

950 Northgate Drive                                                             
San Rafael, CA                                                                  

1400 Civic Drive                                                                
Walnut Creek, CA                                                                

6300 Canoga Avenue                                                              
Woodland Hills, CA                                                              

COLORADO                                                                        

1625 Broadway                                                                   
Denver, CO                                                                      

CONNECTICUT                                                                     

48 West Putnam Avenue                                                           
Greenwich, CT                                                                   

265 Church Street                                                               
New Haven, CT                                                                   

300 Atlantic Street                                                             
Stamford, CT                                                                    

29 South Main Street                                                            
West Hartford, CT                                                               

DELAWARE                                                                        

222 Delaware Avenue                                                             
Wilmington, DE                                                                  

FLORIDA                                                                         

4400 N. Federal Highway                                                         
Boca Raton, FL                                                                  

90 Alhambra Plaza                                                               
Coral Gables, FL                                                                

4090 N. Ocean Boulevard                                                         
Ft. Lauderdale, FL                                                              

1907 West State Road 434                                                        
Longwood, FL                                                                    

8880 Tamiami Trail, North                                                       
Naples, FL                                                                      

2401 PGA Boulevard                                                              
Palm Beach Gardens, FL                                                          

8065 Beneva Road                                                                
Sarasota, FL                                                                    

1502 N. Westshore Blvd.                                                         
Tampa, FL                                                                       

GEORGIA                                                                         

3445 Peachtree Road, N.E.                                                       
Atlanta, GA                                                                     

1000 Abernathy Road                                                             
Atlanta, GA                                                                     

ILLINOIS                                                                        

One North Franklin Street                                                       
Chicago, IL                                                                     

1415 West 22nd Street                                                           
Oak Brook, IL                                                                   

1700 East Golf Road                                                             
Schaumburg, IL                                                                  

3232 Lake Avenue                                                                
Wilmette, IL                                                                    

INDIANA                                                                         

4729 East 82nd Street                                                           
Indianapolis, IN                                                                

MAINE                                                                           

3 Canal Plaza                                                                   
Portland, ME                                                                    

MARYLAND                                                                        

7401 Wisconsin Avenue                                                           
Bethesda, MD                                                                    

1 West Pennsylvania Ave.                                                        
Towson, MD                                                                      

MASSACHUSETTS                                                                   

470 Boylston Street                                                             
Boston, MA                                                                      

155 Congress Street                                                             
Boston, MA                                                                      

25 State Street                                                                 
Boston, MA                                                                      

300 Granite Street                                                              
Braintree, MA                                                                   

44 Mall Road                                                                    
Burlington, MA                                                                  

416 Belmont Street                                                              
Worcester, MA                                                                   

MICHIGAN                                                                        

280 North Woodward Ave.                                                         
Birmingham, MI                                                                  

29155 Northwestern Hwy.                                                         
Southfield, MI                                                                  

MINNESOTA                                                                       

7600 France Avenue South                                                        
Edina, MN                                                                       

MISSOURI                                                                        

700 West 47th Street                                                            
Kansas City, MO                                                                 

8885 Ladue Road                                                                 
Ladue, MO                                                                       

200 North Broadway                                                              
St. Louis, MO                                                                   

NEW JERSEY                                                                      

150 Essex Street                                                                
Millburn, NJ                                                                    

56 South Street                                                                 
Morristown, NJ                                                                  

501 Route 17, South                                                             
Paramus, NJ                                                                     

NEW YORK                                                                        

1055 Franklin Avenue                                                            
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999 Walt Whitman Road                                                           
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1271 Avenue of the Americas                                                     
New York, NY                                                                    

71 Broadway                                                                     
New York, NY                                                                    

350 Park Avenue                                                                 
New York, NY                                                                    

NORTH CAROLINA                                                                  

4611 Sharon Road                                                                
Charlotte, NC                                                                   

OHIO                                                                            

600 Vine Street                                                                 
Cincinnati, OH                                                                  

28699 Chagrin Boulevard                                                         
Woodmere Village, OH                                                            

OREGON                                                                          

16850 SW 72 Avenue                                                              
Tigard, OR                                                                      

PENNSYLVANIA                                                                    

1735 Market Street                                                              
Philadelphia, PA                                                                

439 Fifth Avenue                                                                
Pittsburgh, PA                                                                  

TENNESSEE                                                                       

6150 Poplar Road                                                                
Memphis, TN                                                                     

TEXAS                                                                           

10000 Research Boulevard                                                        
Austin, TX                                                                      

4017 Northwest Parkway                                                          
Dallas, TX                                                                      

1155 Dairy Ashford Street                                                       
Houston, TX                                                                     

2701 Drexel Drive                                                               
Houston, TX                                                                     

400 East Las Colinas Blvd.                                                      
Irving, TX                                                                      

14100 San Pedro                                                                 
San Antonio, TX                                                                 

19740 IH 45 North                                                               
Spring, TX                                                                      

UTAH                                                                            

215 South State Street                                                          
Salt Lake City, UT                                                              

VIRGINIA                                                                        

8180 Greensboro Drive                                                           
McLean, VA                                                                      

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Seattle, WA                                                                     

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WISCONSIN                                                                       

595 North Barker Road                                                           
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TO WRITE FIDELITY                                                               

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Fidelity Investments                                                            
P.O. Box 770001                                                                 
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Fidelity Investments                                                            
2300 Litton Lane - KH1A                                                         
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Fidelity Investments                                                            
P.O. Box 660602                                                                 
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OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
Attn: Redemptions - CP6I                                                        
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Fidelity Investments                                                            
P.O. Box 500                                                                    
Merrimack, NH 03054-0500                                                        

(LETTER_GRAPHIC)FOR RETIREMENT                                                  
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BUYING SHARES                                                                   

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

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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-ADVISER                                                          
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 P. Johnson, Vice President                                              
Joel C. Tillinghast, Vice President                                             
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
Matthew N. Karstetter, Deputy 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                                               
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Fidelity Service Company, Inc.                                                  
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* INDEPENDENT TRUSTEES                                                          

LPS-SANN-0399  72339                                                            
1.700505.101                                                                    

CUSTODIAN                                                                       
Brown Brothers Harriman & Co.                                                   
Boston, MA                                                                      

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Corporate Headquarters                                                          
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FIDELITY                                                                        
PURITAN(REGISTERED TRADEMARK)                                                   
FUND                                                                            

SEMIANNUAL REPORT                                                               
JANUARY 31, 1999                                                                

(fidelity_logo_graphic)(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     9   A summary of major shifts in                         
 the fund's investments over
the past six months.      

INVESTMENTS            10  A complete list of the fund's                        
investments with their    
market values.            

FINANCIAL STATEMENTS   47  Statements of assets and                             
  liabilities, operations, and
changes in net assets,  as
   well as financial highlights.

NOTES                  51  Notes to the financial                               
statements.               

REPORT OF INDEPENDENT  55  The auditors' opinion.                               
ACCOUNTANTS                                                                     

Standard & Poor's, S&P and S&P 500 are registered service marks of The          
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Distributors Corporation.                                                       

Other third party marks appearing herein are the property of their              
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All other marks appearing herein are registered or unregistered                 
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This report is printed on recycled paper using soy-based inks.                  

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE                   
SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND.          
THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE                   
INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE            
PROSPECTUS.                                                                     
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED            
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FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO                   
INVESTMENT RISKS, INCLUDING POSSIBLE LOSS OF PRINCIPAL AMOUNT                   
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:                                                               

After the first month of 1999, U.S. stock markets seem to have                  
maintained their momentum from 1998, as the S&P 500, the Dow and                
NASDAQ all reached record highs in January. The technology sector, and          
Internet stocks in particular, were the main contributors. In the bond          
markets, domestic securities continued to trade at historically low             
yields, while positive economic news helped credit-sensitive sectors            
outperform Treasury bonds.                                                      

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 an investment in a money market fund is not insured or            
guaranteed by the Federal Deposit Insurance Corporation or any other            
government agency. Although money market funds seek to preserve the             
value of your investment at $1.00 per share, it is possible to lose             
money by investing in these types of funds.                                     

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. Of course, you should                 
consider your financial ability to continue your purchases through              
periods of low price levels before undertaking such a strategy.                 

If you have questions, please call us at 1-800-544-8888, or visit our           
web site at www.fidelity.com. 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).                                                           

                                                        [Enlarge/Download Table]

                                                                                        
CUMULATIVE TOTAL RETURNS                                                                

PERIODS ENDED JANUARY 31, 1999   PAST 6 MONTHS  PAST 1 YEAR  PAST 5 YEARS  PAST 10 YEARS

FIDELITY PURITAN                 6.34%          16.56%       96.09%        281.38%      

Fidelity Balanced Composite      11.55%         22.91%       122.69%       308.14%      

 S&P 500 (registered trademark)  15.02%         32.49%       196.12%       462.78%      

 LB Aggregate Bond               5.10%          8.08%        41.16%        140.67%      

Balanced Funds Average           7.39%          14.62%       90.24%        231.93%      


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 Fidelity Balanced Composite Index, a hypothetical combination            
of unmanaged indices. The composite index combines the total returns            
of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate            
Bond Index. To measure how the fund's performance stacked up against            
its peers, you can compare it to the balanced funds average, which              
reflects the performance of mutual funds with similar objectives                
tracked by Lipper Inc. The past six months average represents a peer            
group of 437 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 JANUARY 31, 1999  PAST 1 YEAR  PAST 5 YEARS  PAST 10 YEARS        

FIDELITY PURITAN                16.56%       14.42%        14.32%               

Fidelity Balanced Composite     22.91%       17.36%        15.10%               

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 different figure than that               
obtained by averaging the cumulative total returns and annualizing the          
result.)                                                                        

$10,000 OVER 10 YEARS                                                           
Puritan                     FID Balanced Composite    
S&P 500                     LB Aggregate Bond                                   
00004                       F0021                     
SP001                       LB001                                               
1989/01/31      10000.00                    10000.00                        
10000.00                    10000.00                                      
1989/02/28       9910.38                     9821.80                        
9751.00                     9928.00                                     
1989/03/31      10090.41                     9976.00                        
9978.20                     9970.69                                     
1989/04/30      10431.56                    10370.05                        
10496.07                    10179.08                                      
1989/05/31      10780.29                    10731.14                        
10921.16                    10446.79                                      
1989/06/30      10855.67                    10824.93                        
10858.91                    10764.37                                      
1989/07/31      11455.34                    11503.65                        
11839.47                    10993.65                                      
1989/08/31      11532.23                    11570.83                        
12071.52                    10830.94                                      
1989/09/30      11405.08                    11565.97                        
12022.03                    10886.18                                      
1989/10/31      11064.04                    11518.79                        
11743.12                    11153.98                                      
1989/11/30      11270.25                    11703.55                        
11982.68                    11259.95                                      
1989/12/31      11397.15                    11884.72                        
12270.26                    11290.35                                      
1990/01/31      10914.65                    11349.67                        
11446.92                    11155.99                                      
1990/02/28      11031.11                    11452.04                        
11594.59                    11191.69                                      
1990/03/31      11046.99                    11637.34                        
11901.85                    11199.53                                      
1990/04/30      10776.73                    11419.95                        
11604.30                    11096.49                                      
1990/05/31      11376.37                    12223.23                        
12735.72                    11424.95                                      
1990/06/30      11315.48                    12252.08                        
12649.12                    11608.89                                      
1990/07/31      11212.61                    12296.18                        
12608.64                    11769.09                                      
1990/08/31      10535.40                    11563.33                        
11468.82                    11611.38                                      
1990/09/30      10046.20                    11263.84                        
10910.29                    11707.76                                      
1990/10/31       9871.94                    11292.00                        
10863.37                    11856.45                                      
1990/11/30      10429.57                    11826.79                        
11565.15                    12111.36                                      
1990/12/31      10673.40                    12098.57                        
11887.81                    12300.30                                      
1991/01/31      11151.71                    12475.08                        
12406.12                    12452.82                                      
1991/02/28      11798.31                    13052.67                        
13293.16                    12558.67                                      
1991/03/31      11876.70                    13278.22                        
13614.86                    12645.33                                      
1991/04/30      11975.60                    13354.71                        
13647.53                    12781.90                                      
1991/05/31      12559.99                    13731.84                        
14237.10                    12856.03                                      
1991/06/30      12124.21                    13351.75                        
13585.05                    12849.60                                      
1991/07/31      12543.86                    13799.30                        
14218.11                    13028.21                                      
1991/08/31      12762.81                    14114.75                        
14555.08                    13309.62                                      
1991/09/30      12773.53                    14087.93                        
14312.01                    13579.81                                      
1991/10/31      12958.65                    14263.75                        
14503.79                    13730.54                                      
1991/11/30      12514.36                    13971.34                        
13919.29                    13856.86                                      
1991/12/31      13283.73                    15096.31                        
15511.65                    14268.41                                      
1992/01/31      13396.47                    14845.71                        
15223.14                    14074.36                                      
1992/02/29      13772.24                    15000.11                        
15421.04                    14165.85                                      
1992/03/31      13704.93                    14791.01                        
15120.33                    14086.52                                      
1992/04/30      14152.55                    15094.52                        
15564.86                    14187.94                                      
1992/05/31      14314.46                    15253.01                        
15641.13                    14456.09                                      
1992/06/30      14237.34                    15200.85                        
15408.08                    14655.59                                      
1992/07/31      14671.12                    15697.91                        
16038.27                    14954.56                                      
1992/08/31      14526.53                    15568.25                        
15709.48                    15105.60                                      
1992/09/30      14703.65                    15752.58                        
15894.86                    15285.36                                      
1992/10/31      14592.64                    15701.85                        
15950.49                    15082.06                                      
1992/11/30      14986.22                    16024.37                        
16494.40                    15085.08                                      
1992/12/31      15333.07                    16244.54                        
16697.28                    15324.93                                      
1993/01/31      15769.97                    16451.18                        
16837.54                    15619.17                                      
1993/02/28      16092.44                    16700.58                        
17066.53                    15892.51                                      
1993/03/31      16728.77                    16940.06                        
17426.63                    15959.25                                      
1993/04/30      17044.40                    16741.52                        
17004.91                    16070.97                                      
1993/05/31      17275.87                    17019.43                        
17460.64                    16091.86                                      
1993/06/30      17392.77                    17172.27                        
17511.28                    16383.12                                      
1993/07/31      17648.08                    17170.21                        
17441.23                    16476.51                                      
1993/08/31      18158.69                    17680.85                        
18102.25                    16764.85                                      
1993/09/30      18033.70                    17618.26                        
17962.87                    16810.11                                      
1993/10/31      18502.55                    17863.15                        
18334.70                    16872.31                                      
1993/11/30      18205.23                    17700.60                        
18160.52                    16728.89                                      
1993/12/31      18621.56                    17867.34                        
18380.26                    16819.23                                      
1994/01/31      19449.18                    18328.31                        
19005.19                    17046.29                                      
1994/02/28      19236.37                    17902.73                        
18490.15                    16749.68                                      
1994/03/31      18520.37                    17257.52                        
17683.98                    16335.97                                      
1994/04/30      18723.24                    17334.83                        
17910.33                    16205.28                                      
1994/05/31      18842.57                    17504.71                        
18204.06                    16203.66                                      
1994/06/30      18696.72                    17231.99                        
17758.06                    16168.01                                      
1994/07/31      19165.94                    17708.28                        
18340.53                    16489.75                                      
1994/08/31      19731.42                    18152.40                        
19092.49                    16509.54                                      
1994/09/30      19305.98                    17778.83                        
18624.72                    16266.85                                      
1994/10/31      19532.37                    18012.44                        
19043.78                    16252.21                                      
1994/11/30      18916.08                    17602.98                        
18350.20                    16216.46                                      
1994/12/31      18953.81                    17808.20                        
18622.34                    16328.35                                      
1995/01/31      18864.23                    18226.30                        
19105.22                    16651.65                                      
1995/02/28      19440.14                    18825.98                        
19849.75                    17047.96                                      
1995/03/31      19891.32                    19205.25                        
20435.51                    17151.95                                      
1995/04/30      20291.21                    19652.16                        
21037.34                    17392.08                                      
1995/05/31      20729.80                    20427.67                        
21878.20                    18065.15                                      
1995/06/30      20962.64                    20772.04                        
22386.43                    18197.03                                      
1995/07/31      21663.56                    21167.04                        
23128.76                    18157.00                                      
1995/08/31      21767.40                    21301.37                        
23186.82                    18376.70                                      
1995/09/30      22079.27                    21923.37                        
24165.30                    18554.95                                      
1995/10/31      21724.00                    21990.41                        
24079.03                    18796.16                                      
1995/11/30      22500.33                    22701.58                        
25136.10                    19078.11                                      
1995/12/31      23021.39                    23091.04                        
25620.22                    19345.20                                      
1996/01/31      23346.21                    23623.62                        
26492.33                    19472.88                                      
1996/02/29      23643.96                    23590.59                        
26737.92                    19134.05                                      
1996/03/31      24037.56                    23660.84                        
26995.40                    19000.11                                      
1996/04/30      24051.18                    23817.10                        
27393.32                    18893.71                                      
1996/05/31      24201.08                    24166.59                        
28099.79                    18855.92                                      
1996/06/30      24310.83                    24351.37                        
28206.85                    19108.59                                      
1996/07/31      23843.32                    23732.16                        
26960.67                    19160.19                                      
1996/08/31      24063.32                    24016.33                        
27529.27                    19127.61                                      
1996/09/30      25017.72                    24994.47                        
29078.62                    19460.44                                      
1996/10/31      25624.95                    25630.03                        
29880.61                    19892.46                                      
1996/11/30      26915.31                    26967.76                        
32139.28                    20232.62                                      
1996/12/31      26510.14                    26546.90                        
31502.60                    20044.45                                      
1997/01/31      27417.39                    27575.01                        
33470.89                    20106.59                                      
1997/02/28      27832.58                    27732.30                        
33733.30                    20156.86                                      
1997/03/31      26901.46                    26925.46                        
32347.20                    19933.12                                      
1997/04/30      28002.96                    28051.48                        
34278.32                    20232.11                                      
1997/05/31      29135.49                    29182.74                        
36365.19                    20424.32                                      
1997/06/30      30220.07                    30106.08                        
37994.35                    20667.37                                      
1997/07/31      31862.46                    31868.55                        
41017.56                    21225.39                                      
1997/08/31      30454.70                    30689.03                        
38719.76                    21044.97                                      
1997/09/30      31680.83                    31879.21                        
40840.44                    21356.44                                      
1997/10/31      31032.30                    31425.25                        
39476.37                    21666.11                                      
1997/11/30      31778.11                    32355.88                        
41303.73                    21765.77                                      
1997/12/31      32435.02                    32819.93                        
42012.91                    21985.60                                      
1998/01/31      32719.53                    33205.76                        
42477.58                    22267.02                                      
1998/02/28      33991.49                    34632.01                        
45541.06                    22249.21                                      
1998/03/31      35052.22                    35743.22                        
47873.22                    22324.85                                      
1998/04/30      35254.63                    36033.31                        
48354.82                    22440.94                                      
1998/05/31      35204.03                    35798.59                        
47523.60                    22654.13                                      
1998/06/30      35948.14                    36792.79                        
49454.01                    22846.69                                      
1998/07/31      35863.12                    36588.59                        
48927.32                    22894.67                                      
1998/08/31      32343.13                    33653.16                        
41853.41                    23267.85                                      
1998/09/30      33552.55                    35261.64                        
44534.54                    23812.32                                      
1998/10/31      35199.64                    36907.80                        
48156.98                    23686.12                                      
1998/11/30      36569.13                    38334.14                        
51075.78                    23821.13                                      
1998/12/31      37817.46                    39705.43                        
54018.76                    23892.59                                      
1999/01/29      38137.79                    40814.48                        
56277.83                    24067.00                                      
IMATRL PRASUN   SHR__CHT 19990131 19990305 093431 R00000000000123               

$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was                
invested in Fidelity Puritan Fund on January 31, 1989. As the chart             
shows, by January 31, 1999, the value of the investment would have              
grown to $38,138 - a 281.38% increase on the initial investment. For            
comparison, look at how the Standard & Poor's 500 Index, a market               
capitalization-weighted index of common stocks, and the Lehman                  
Brothers Aggregate Bond Index, a market value-weighted index of                 
investment-grade fixed-rate debt issues, including government,                  
corporate, asset-backed, and mortgage-backed securities, with                   
maturities of one year or more, did over the same period. With                  
dividends and capital gains, if  any, reinvested, the Standard &                
Poor's Index would have grown to $56,278 - a 462.78% increase. If               
$10,000 was invested in the Lehman Brothers Aggregate Bond Index, it            
would have grown to $24,067 - a 140.67% increase. You can also look at          
how the Fidelity Balanced Composite Index did over the same period.             
The composite index combines the total returns of the Standard &                
Poor's 500 Index (60%) and the Lehman Brothers Aggregate Bond Index             
(40%). With dividends and interest, if any, reinvested, the same                
$10,000 would have grown to $40,814 - a 308.14% 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                                                                    

Extreme volatility was no stranger                                              
to the U.S. stock and bond markets                                              
during the six-month period ending                                              
January 31, 1999. In contrast, the                                              
U.S. economy was relatively tranquil,                                           
as the trend of low inflation, low                                              
unemployment and low interest                                                   
rates continued. The international                                              
scene was another story. Economic                                               
uncertainty abroad, particularly in                                             
Asia and Russia, plagued the U.S.                                               
stock markets. Then, when Russia                                                
announced a one-two punch of                                                    
loan defaults and currency                                                      
devaluation, equity investors'                                                  
confidence hit the mat. Investors                                               
fled the equity markets in droves,                                              
searching for safer, less volatile                                              
havens - particularly U.S.                                                      
Treasuries. After the near-collapse of                                          
a major U.S. hedge fund, the U.S.                                               
Federal Reserve Board waded in                                                  
with three cuts in key interest rates,                                          
which boosted equity market                                                     
confidence and restored some                                                    
measure of liquidity to the                                                     
fixed-income markets. Despite some                                              
instances of profit-taking in                                                   
technology issues and concerns                                                  
over Brazil's currency devaluation                                              
in the first month of 1999, the                                                 
Standard and Poor's 500 Index,                                                  
Dow Jones Industrial Average and                                                
NASDAQ all reached record highs                                                 
in January. Overall, the S&P 500(Registered trademark)                          
index- a popular measure of U.S.                                                
stock market performance -                                                      
returned 15.02% for the six-month                                               
period. Meanwhile, the Lehman                                                   
Brothers Aggregate Bond Index -                                                 
a broad measure of the U.S.                                                     
taxable investment-grade bond                                                   
market - returned 5.10%.                                                        

(photograph of Bettina Doulton)                                                 

An interview with Bettina Doulton, Portfolio Manager of Fidelity                
Puritan Fund                                                                    

Q. HOW DID THE FUND PERFORM, BETTINA?                                           

A. For the six months that ended January 31, 1999, the fund returned            
6.34%. This lagged the 15.02% return of the Standard & Poor's 500               
Index, but topped the Lehman Brothers Aggregate Bond Index, which               
returned 5.10% during the period. Given the fund's mix of equities and          
bonds, performance typically falls between the S&P 500 and Lehman               
Brothers indexes. The fund's six-month return trailed that of the               
balanced funds average, which returned 7.39% according to Lipper Inc.           
For the 12 months that ended January 31, 1999, the fund returned                
16.56%, which exceeded the Lipper peer group's return of 14.62%. The            
S&P 500 and Lehman Brothers indexes returned 32.49% and 8.08%,                  
respectively, during the same period.                                           

Q. WHAT FACTORS CONTRIBUTED POSITIVELY TO THE FUND'S PERFORMANCE                
DURING THE PERIOD?                                                              

A. The fund benefited from its focus on industry-leading companies              
that had growing market share and improving financial returns. The              
fund's stock selection within certain sectors was also strong,                  
particularly among its media and leisure-related investments. Time              
Warner, for instance, experienced exceptional returns during the past           
six months.                                                                     

Q. WHY DID THE FUND'S PERFORMANCE LAG THAT OF ITS LIPPER PEER GROUP             
OVER THE PAST SIX MONTHS?                                                       

A. The fund lagged the Lipper group primarily because of relative               
portfolio construction. Puritan's equity sub-portfolio, managed in an           
equity income style, was at an inherent disadvantage to competitors             
who invested in growth stocks. Given Puritan's income-oriented                  
investment approach, it was difficult to own index weights in                   
low-yielding, high P/E growth stocks such as Microsoft, Dell Computer           
and Lucent Technologies. These stocks were market leaders during the            
past six and 12 months. In addition, Puritan's high-grade fixed-income          
sub-portfolio, which maintained overweightings in corporate and                 
mortgage debt, also did not measure up well against competitors'                
government bond holdings. Finally, having exposure - though it was              
relatively small - to the poorly performing high-yield market during            
the period proved to be detrimental since most of the fund's                    
competitors have minimal high-yield holdings.                                   

Q. MARKET VOLATILITY WAS QUITE HIGH DURING THE PERIOD. WHAT STRATEGIES          
DID YOU FOLLOW IN TRYING TO STEER THE FUND THROUGH THIS VOLATILITY?             

A. In fact, market volatility, as measured by intraday moves by the             
S&P 500, was at levels not experienced in more than fifteen years.              
Amidst this erratic environment, I kept Puritan's stock selection               
focused on companies that offered both fair valuations and reasonable           
dividend yields, in an effort to keep the fund's relative volatility            
consistent with the fund's balanced investment mandate. Importantly, I          
remain committed to a long-term investment discipline, with the intent          
of owning individual positions for two to three years.                          

Q. HOW DID THE BOND PORTION OF THE FUND'S PORTFOLIO PERFORM DURING THE          
PERIOD?                                                                         

A. While some of the fund's bond holdings were negatively affected by           
a massive rotation to safer U.S. Treasury securities following                  
Russia's default early in the period, the fund opportunistically                
upgraded its holdings in the corporate and mortgage-backed sectors.             
When the fixed-income market settled down in the second half of the             
period, many of those purchases did quite well, handily outperforming           
Treasuries. Barring further negative surprises from the emerging                
markets, spreads - or the difference in yield between Treasuries and            
other fixed-income securities - for corporate and mortgage issues               
could continue to narrow during the rest of 1999. This would be good            
news for the fund's investors.                                                  

Q. WHICH INDIVIDUAL STOCKS PERFORMED WELL? WHICH TURNED OUT TO BE               
DISAPPOINTING?                                                                  

A. The fund's position in AT&T - its third-largest holding at the end           
of the period - performed well as telecommunications companies                  
benefited from the demand for better voice, data and Internet-related           
services. AT&T's own restructuring and repositioning efforts also               
began to drive results. In terms of disappointments,                            
telecommunications company Alcatel declined after it failed to meet             
consensus earnings expectations. Alcatel's restructuring actions were           
not enough to overcome a more competitive marketplace and a more                
challenging global economic environment. In addition, while Philip              
Morris had a positive return for the period, the stock was somewhat of          
a disappointment as it remained under the cloud of ongoing litigation.          

Q. WHAT'S YOUR OUTLOOK?                                                         

A. I am fairly optimistic that the monetary policy easings by the U.S.          
Federal Reserve Bank over the past six months will be sufficient to             
sustain domestic economic growth - specifically consumer spending -             
and that related liquidity will support the financial markets. Given            
continued economic weakness in the emerging markets, I see limited              
inflation risk that would require tighter monetary policies. I fear             
that the heightened levels of market volatility will persist as                 
investors react to domestic economic news and global economic                   
developments.                                                                   

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: high income with                                                          
preservation of capital. The                                                    
fund also considers the                                                         
potential for growth of                                                         
capital.                                                                        

FUND NUMBER: 004                                                                

TRADING SYMBOL: FPURX                                                           

START DATE: April 16, 1947                                                      

SIZE: as of January 31,                                                         
1999, more than $26.0                                                           
billion                                                                         

MANAGER: Bettina Doulton,                                                       
since 1996; manager,                                                            
Fidelity Equity-Income II Fund,                                                 
since 1996; Fidelity Value                                                      
Fund, 1995-1996; Fidelity                                                       
Select Automotive Portfolio,                                                    
1993; joined Fidelity in                                                        
1986                                                                            

BETTINA DOULTON                                                                 
ON TECHNOLOGY:                                                                  

"Like the Industrial Revolution,                                                
technology - and more specifically                                              
its application - is changing the                                               
business model now. As CS First                                                 
Boston wrote recently, `. . . the                                               
economy is moving away from                                                     
industries where physical capital or                                            
resources are the foundation for                                                
competitive advantage toward                                                    
businesses where knowledge, or                                                  
intellectual capital, is the driver of                                          
advantage.' The ability to optimize                                             
technology - be it in accelerating                                              
R&D cycles, retail distribution or                                              
business-to-business applications                                               
such as payment systems or                                                      
inventory management - will be                                                  
critical to achieving success in this                                           
type of environment. The winners will                                           
be those companies that best                                                    
leverage their intellectual capital,                                            
and the associated low physical                                                 
capital investment, into higher                                                 
sustainable financial returns. The                                              
losers will be those companies                                                  
unable to adapt an existing fixed                                               
asset base to the new model. While                                              
Puritan's equity income approach to                                             
stock selection precludes                                                       
investments in the large-cap                                                    
technology trailblazers, the                                                    
industries in which the fund typically                                          
traffics will be affected, some                                                 
positively and others negatively.                                               
Within all industries, the valuation                                            
gap between those companies                                                     
improving their returns and                                                     
competitive position by optimizing                                              
technology, and those who are not,                                              
is expected to widen. I will look to                                            
invest in companies that appear to                                              
be positioning themselves to win in                                             
this new economy, and will only                                                 
invest selectively in others if                                                 
valuations are overwhelmingly                                                   
compelling."                                                                    

INVESTMENT CHANGES                                                              

                                                                [Download Table]

                                                                                   
TOP FIVE STOCKS AS OF JANUARY                                                      
31, 1999                                                                           

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

General Electric Co.            3.5                      3.0                       

Chase Manhattan Corp.           2.5                      1.8                       

AT&T Corp.                      2.1                      1.4                       

Citigroup, Inc.                 2.1                      3.6                       

American Express Co.            2.1                      1.8                       

TOP FIVE BOND ISSUERS AS OF                                                        
JANUARY 31, 1999                                                                   

(WITH MATURITIES MORE THAN     % OF FUND'S INVESTMENTS  % OF FUND'S INVESTMENTS IN 
ONE YEAR)                                               THESE BOND ISSUERS 6 MONTHS
                                                        AGO                        

Fannie Mae                      7.7                      7.3                       

U.S. Treasury                   2.8                      2.8                       

Government National Mortgage    1.6                      2.0                       
Association                                                                        

Raytheon Co.                    0.4                      0.4                       

TCI Communications, Inc.        0.4                      0.5                       

TOP FIVE MARKET SECTORS AS OF                                                      
JANUARY 31, 1999                                                                   

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

FINANCE                         19.4                     23.8                      

UTILITIES                       10.8                     8.0                       

MEDIA & LEISURE                 7.9                      5.4                       

HEALTH                          7.2                      7.8                       

NONDURABLES                     6.8                      6.4                       


ASSET ALLOCATION (% OF FUND'S                                                   
INVESTMENTS)                                                                    

AS OF JANUARY 31, 1999 *                                                        
Stocks 64.4%                                                                    
Bonds 31.9%                                                                     
Convertible                                                                     
securities 0.8%                                                                 
Short-term                                                                      
investments 2.9%                                                                
*FOREIGN                                                                        
INVESTMENTS 6.8%                                                                
Row: 1, Col: 1, Value: 64.4                                                     
Row: 1, Col: 2, Value: 31.9                                                     
Row: 1, Col: 3, Value: 0.8                                                      
Row: 1, Col: 4, Value: 2.9                                                      

AS OF JULY 31, 1998 **                                                          
Stocks 62.0%                                                                    
Bonds 34.4%                                                                     
Convertible                                                                     
securities 0.7%                                                                 
Short-term                                                                      
investments 2.9%                                                                
**FOREIGN                                                                       
INVESTMENTS 8.2%                                                                
Row: 1, Col: 1, Value: 62.0                                                     
Row: 1, Col: 2, Value: 34.4                                                     
Row: 1, Col: 3, Value: 0.7                                                      
Row: 1, Col: 4, Value: 2.9                                                      

INVESTMENTS JANUARY 31, 1999                                                    

Showing Percentage of Total Value of Investment in Securities                   

                                                                [Download Table]

                                                                               
COMMON STOCKS - 63.3%                                                          

                                 SHARES                   VALUE (NOTE 1) (000S)

AEROSPACE & DEFENSE - 1.6%                                                     

AEROSPACE & DEFENSE - 1.0%                                                     

AlliedSignal, Inc.                964,100                 $ 37,600             

Textron, Inc.                     2,322,800                172,903             

United Technologies Corp.         517,700                  61,833              

                                                           272,336             

SHIP BUILDING & REPAIR - 0.6%                                                  

General Dynamics Corp.            2,652,700                154,188             

TOTAL AEROSPACE & DEFENSE                                  426,524             

BASIC INDUSTRIES - 1.2%                                                        

CHEMICALS & PLASTICS - 0.4%                                                    

du Pont (E.I.) de Nemours &       1,179,200                60,360              
Co.                                                                            

Praxair, Inc.                     1,474,600                47,648              

                                                           108,008             

IRON & STEEL - 0.0%                                                            

Nucor Corp.                       34,900                   1,710               

METALS & MINING - 0.8%                                                         

Alcoa, Inc.                       2,454,000                205,216             

TOTAL BASIC INDUSTRIES                                     314,934             

CONSTRUCTION & REAL ESTATE -                                                   
0.6%                                                                           

BUILDING MATERIALS - 0.5%                                                      

Masco Corp.                       3,349,700                108,237             

Sherwin-Williams Co.              979,100                  25,089              

                                                           133,326             

REAL ESTATE INVESTMENT TRUSTS                                                  
- 0.1%                                                                         

Boston Properties, Inc.           199,900                  6,497               

Equity Residential Properties     353,500                  14,383              
Trust (SBI)                                                                    

Simon Property Group, Inc.        256,100                  6,739               

                                                           27,619              

TOTAL CONSTRUCTION & REAL                                  160,945             
ESTATE                                                                         

DURABLES - 1.3%                                                                

AUTOS, TIRES, & ACCESSORIES -                                                  
0.7%                                                                           

Danaher Corp.                     340,600                  18,222              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

DURABLES - CONTINUED                                                           

AUTOS, TIRES, & ACCESSORIES -                                                  
CONTINUED                                                                      

Federal-Mogul Corp.               118,900                 $ 7,045              

Ford Motor Co.                    2,546,000                156,420             

                                                           181,687             

CONSUMER DURABLES - 0.1%                                                       

Minnesota Mining &                282,600                  21,937              
Manufacturing Co.                                                              

CONSUMER ELECTRONICS - 0.5%                                                    

Black & Decker Corp.              2,283,960                121,050             

TOTAL DURABLES                                             324,674             

ENERGY - 4.1%                                                                  

ENERGY SERVICES - 0.5%                                                         

Halliburton Co.                   2,274,400                67,521              

Schlumberger Ltd.                 1,128,200                53,731              

                                                           121,252             

OIL & GAS - 3.6%                                                               

BP Amoco PLC                      9,387,071                126,922             

BP Amoco PLC sponsored ADR        3,681,082                298,628             

Burlington Resources, Inc.        551,500                  16,683              

Chevron Corp.                     359,900                  26,903              

Exxon Corp.                       3,729,600                262,704             

Royal Dutch Petroleum Co.         592,800                  23,749              
(Hague Registry)                                                               

Texaco, Inc.                      1,604,200                75,999              

Total SA:                                                                      

Class B                           165,700                  16,964              

sponsored ADR                     468,500                  23,981              

USX-Marathon Group                3,157,300                71,829              

                                                           944,362             

TOTAL ENERGY                                               1,065,614           

FINANCE - 14.6%                                                                

BANKS - 3.6%                                                                   

Bank of New York Co., Inc.        2,151,400                76,375              

Bank One Corp.                    393,500                  20,610              

Chase Manhattan Corp.             8,651,800                665,648             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

FINANCE - CONTINUED                                                            

BANKS - CONTINUED                                                              

U.S. Bancorp                      3,525,700               $ 118,772            

Wells Fargo & Co.                 1,549,300                54,129              

                                                           935,534             

CREDIT & OTHER FINANCE - 5.5%                                                  

American Express Co.              5,303,827                545,631             

Associates First Capital          6,104,610                247,618             
Corp. Class A                                                                  

Citigroup, Inc.                   9,805,749                549,735             

Household International, Inc.     2,404,601                105,652             

Olympic Financial Ltd.            361                      2                   
warrants 3/15/07 (a)                                                           

                                                           1,448,638           

FEDERAL SPONSORED CREDIT - 3.8%                                                

Fannie Mae                        6,253,650                455,735             

Freddie Mac                       8,645,100                535,996             

                                                           991,731             

INSURANCE - 1.6%                                                               

Allstate Corp.                    830,144                  31,182              

American International Group,     1,625,400                167,315             
Inc.                                                                           

Chubb Corp. (The)                 418,000                  24,558              

Hartford Financial Services       3,465,300                179,979             
Group, Inc.                                                                    

MBIA, Inc.                        80,600                   5,284               

                                                           408,318             

SECURITIES INDUSTRY - 0.1%                                                     

ECM Corp. LP (e)                  6,318                    556                 

Morgan Stanley, Dean Witter &     320,500                  27,823              
Co.                                                                            

                                                           28,379              

TOTAL FINANCE                                              3,812,600           

HEALTH - 7.0%                                                                  

DRUGS & PHARMACEUTICALS - 5.7%                                                 

American Home Products Corp.      800,100                  46,956              

Bristol-Myers Squibb Co.          2,991,300                383,447             

Lilly (Eli) & Co.                 2,979,900                279,179             

Merck & Co., Inc.                 3,513,100                515,547             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

HEALTH - CONTINUED                                                             

DRUGS & PHARMACEUTICALS -                                                      
CONTINUED                                                                      

Schering-Plough Corp.             2,991,700               $ 163,048            

Warner-Lambert Co.                1,385,900                100,045             

                                                           1,488,222           

MEDICAL EQUIPMENT & SUPPLIES                                                   
- 1.3%                                                                         

Baxter International, Inc.        1,066,300                75,641              

Becton, Dickinson & Co.           4,199,430                150,130             

Johnson & Johnson                 1,209,900                102,842             

                                                           328,613             

TOTAL HEALTH                                               1,816,835           

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 5.7%                                                               

ELECTRICAL EQUIPMENT - 4.0%                                                    

Ampex Corp. Class A (a)           110,662                  491                 

Emerson Electric Co.              1,754,700                102,102             

General Electric Co.              8,550,900                896,776             

Honeywell, Inc.                   534,000                  34,810              

                                                           1,034,179           

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 1.7%                                                               

Cooper Industries, Inc.           234,304                  9,709               

Illinois Tool Works, Inc.         938,800                  56,621              

Ingersoll-Rand Co.                791,700                  37,606              

Tyco International Ltd.           4,357,582                335,806             

                                                           439,742             

TOTAL INDUSTRIAL MACHINERY &                               1,473,921           
EQUIPMENT                                                                      

MEDIA & LEISURE - 4.0%                                                         

BROADCASTING - 2.0%                                                            

Benedek Communications Corp.      51,900                   104                 
warrants 7/1/07 (a)                                                            

CBS Corp.                         3,813,000                129,642             

Comcast Corp. Class A             924,500                  62,852              
(special)                                                                      

Cox Communications, Inc.          181,100                  13,017              
Class A (a)                                                                    

CS Wireless Systems, Inc.         911                      -                   
(a)(e)                                                                         

MediaOne Group, Inc.              788,700                  44,216              

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

MEDIA & LEISURE - CONTINUED                                                    

BROADCASTING - CONTINUED                                                       

NTL, Inc. warrants 12/31/08       16,463                  $ 247                
(a)                                                                            

Teletrac Holdings, Inc.           2,910                    1                   
warrants 8/1/07 (a)                                                            

Time Warner, Inc.                 4,464,961                279,060             

UIH Australia/Pacific, Inc.       26,110                   26                  
warrants 5/15/06 (a)                                                           

                                                           529,165             

ENTERTAINMENT - 1.0%                                                           

Alliance Gaming Corp. (a)(g)      10,652                   16                  

Cedar Fair LP (depository         300,000                  7,350               
unit)                                                                          

Disney (Walt) Co.                 1,150,000                37,950              

Fox Entertainment Group, Inc.     559,000                  15,582              
(a)                                                                            

News Corp. Ltd. ADR               1,256,000                37,052              

Viacom, Inc. Class B              1,962,500                166,813             
(non-vtg.) (a)                                                                 

                                                           264,763             

LODGING & GAMING - 0.0%                                                        

Motels of America, Inc. (a)       3,000                    63                  

PUBLISHING - 0.5%                                                              

McGraw-Hill Companies, Inc.       1,193,800                129,080             

RESTAURANTS - 0.5%                                                             

McDonald's Corp.                  1,607,100                126,660             

TOTAL MEDIA & LEISURE                                      1,049,731           

NONDURABLES - 6.2%                                                             

BEVERAGES - 0.5%                                                               

Anheuser-Busch Companies,         1,459,500                103,168             
Inc.                                                                           

Brown-Forman Corp. Class B        368,900                  26,630              

                                                           129,798             

FOODS - 1.3%                                                                   

Bestfoods                         700,000                  35,219              

ConAgra, Inc.                     1,133,700                36,845              

Dean Foods Co.                    1,149,100                44,815              

Flowers Industries, Inc.          2,521,800                60,681              

Heinz (H.J.) Co.                  1,727,500                97,280              

Nabisco Holdings Corp. Class A    278,800                  11,727              

Sara Lee Corp.                    2,056,800                52,448              

                                                           339,015             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

NONDURABLES - CONTINUED                                                        

HOUSEHOLD PRODUCTS - 2.7%                                                      

Avon Products, Inc.               3,677,200               $ 135,827            

Clorox Co.                        516,609                  64,641              

Procter & Gamble Co.              561,800                  51,054              

Renaissance Cosmetics, Inc.       10,000                   -                   
warrants 8/31/06 (a)(e)                                                        

Unilever NV (NY shares)           5,059,400                387,044             

Unilever PLC                      7,891,500                80,148              

                                                           718,714             

TOBACCO - 1.7%                                                                 

Philip Morris Companies, Inc.     9,227,040                433,671             

TOTAL NONDURABLES                                          1,621,198           

RETAIL & WHOLESALE - 3.0%                                                      

APPAREL STORES - 0.0%                                                          

Mothers Work, Inc. (a)(g)         2,416                    29                  

DRUG STORES - 0.1%                                                             

Rite Aid Corp.                    671,200                  32,973              

GENERAL MERCHANDISE STORES -                                                   
1.7%                                                                           

Dayton Hudson Corp.               2,475,400                157,807             

Nordstrom, Inc.                   1,527,300                63,574              

Saks, Inc. (a)                    1,855,060                68,289              

Wal-Mart Stores, Inc.             1,794,100                154,293             

                                                           443,963             

GROCERY STORES - 0.9%                                                          

Albertson's, Inc.                 328,400                  20,032              

American Stores Co.               439,500                  15,932              

Kroger Co. (a)                    1,000,000                63,500              

Meyer (Fred), Inc. (a)            2,251,600                140,725             

                                                           240,189             

RETAIL & WHOLESALE,                                                            
MISCELLANEOUS - 0.3%                                                           

Home Depot, Inc.                  1,202,900                72,625              

TOTAL RETAIL & WHOLESALE                                   789,779             

SERVICES - 0.6%                                                                

PRINTING - 0.4%                                                                

Donnelley (R.R.) & Sons Co.       3,030,900                114,227             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

SERVICES - CONTINUED                                                           

SERVICES - 0.2%                                                                

ServiceMaster Co.                 1,995,750               $ 38,044             

TOTAL SERVICES                                             152,271             

TECHNOLOGY - 5.2%                                                              

COMPUTER SERVICES & SOFTWARE                                                   
- 0.0%                                                                         

Concentric Network Corp.          3,530                    494                 
warrants 12/15/07 (a)(e)                                                       

COMPUTERS & OFFICE EQUIPMENT                                                   
- 4.4%                                                                         

Compaq Computer Corp.             650,000                  30,956              

International Business            1,665,700                305,240             
Machines Corp.                                                                 

Pitney Bowes, Inc.                6,730,180                463,121             

Xerox Corp.                       2,813,600                348,886             

                                                           1,148,203           

ELECTRONICS - 0.8%                                                             

Motorola, Inc.                    1,481,100                107,009             

Texas Instruments, Inc.           992,900                  98,173              

                                                           205,182             

TOTAL TECHNOLOGY                                           1,353,879           

TRANSPORTATION - 0.7%                                                          

RAILROADS - 0.7%                                                               

Burlington Northern Santa Fe      3,614,000                125,135             
Corp.                                                                          

CSX Corp.                         388,300                  15,629              

Union Pacific Corp.               807,500                  41,536              

                                                           182,300             

UTILITIES - 7.5%                                                               

CELLULAR - 0.0%                                                                

American Mobile Satellite         2,990                    7                   
Corp. warrants 4/1/08 (a)(e)                                                   

Loral Orion Network Systems,      41,555                   364                 
Inc. warrants 1/15/07 (CV                                                      
ratio .47) (a)                                                                 

Loral Orion Network Systems,      8,090                    93                  
Inc. warrants 1/15/07  (CV                                                     
ratio .6) (a)                                                                  

McCaw International Ltd.          40,960                   205                 
warrants 4/15/07 (a)(e)                                                        

Microcell Telecommunications,     110,880                  1,896               
Inc. warrants 6/1/06 (a)(e)                                                    

Orbital Imaging Corp.             1,120                    22                  
warrants 3/1/05 (a)(e)                                                         

                                                           2,587               

ELECTRIC UTILITY - 1.2%                                                        

CMS Energy Corp.                  1,616,800                69,219              

Duke Energy Corp.                 2,026,596                125,269             

COMMON STOCKS - CONTINUED                                                      

                                 SHARES                   VALUE (NOTE 1) (000S)

UTILITIES - CONTINUED                                                          

ELECTRIC UTILITY - CONTINUED                                                   

Entergy Corp.                     517,700                 $ 15,240             

FPL Group, Inc.                   482,400                  26,472              

PG&E Corp.                        1,870,400                59,736              

                                                           295,936             

GAS - 0.3%                                                                     

Enron Corp.                       1,305,900                86,189              

TELEPHONE SERVICES - 6.0%                                                      

ALLTEL Corp.                      1,758,300                113,520             

Ameritech Corp.                   1,551,600                101,048             

AT&T Corp.                        6,090,100                552,677             

BellSouth Corp.                   2,812,400                125,503             

Covad Communications Group,       12,430                   8,788               
Inc. warrants 3/15/08 (a)(e)                                                   

DTI Holdings, Inc. warrants       41,950                   2                   
3/1/08 (a)(e)                                                                  

Firstworld Communications,        6,340                    63                  
Inc. warrants 4/15/08 (a)(e)                                                   

GTE Corp.                         2,783,600                187,893             

KMC Telecom Holdings, Inc.        5,620                    14                  
warrants 4/15/08 (a)(e)                                                        

MCI WorldCom, Inc. (a)            2,300,000                183,425             

Optel Communications Corp.        1,706,343                17                  
warrants 12/29/04 (a)(g)                                                       

Pathnet, Inc. warrants            4,910                    49                  
4/15/08 (a)(e)                                                                 

Rhythms Netconnections, Inc.      56,650                   1,133               
warrants 5/15/08 (a)(e)                                                        

SBC Communications, Inc.          3,939,500                212,733             

Tele Danmark AS Class B           413,000                  55,526              

U.S. WEST, Inc.                   300,000                  18,506              

                                                           1,560,897           

TOTAL UTILITIES                                            1,945,609           

TOTAL COMMON STOCKS                           16,490,814                       
(Cost $11,242,044)                                                             

PREFERRED STOCKS - 1.6%                                                        

CONVERTIBLE PREFERRED STOCKS                                                   
- 0.5%                                                                         

FINANCE - 0.0%                                                                 

CREDIT & OTHER FINANCE - 0.0%                                                  

Federal-Mogul Financing Trust     124,500                  8,264               
$3.50                                                                          

PREFERRED STOCKS - CONTINUED                                                   

                                 SHARES                   VALUE (NOTE 1) (000S)

CONVERTIBLE PREFERRED STOCKS                                                   
- CONTINUED                                                                    

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 0.1%                                                               

ELECTRICAL EQUIPMENT - 0.1%                                                    

Ampex Corp. 8% non-cumulative     369                     $ 576                
(a)                                                                            

Loral Space & Communications      275,000                  16,638              
Ltd. Series C, $3.00 (e)                                                       

                                                           17,214              

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 0.0%                                                               

Ingersoll Rand Co./Ingersoll      30,800                   758                 
Rand Finance $1.68 Income                                                      
PRIDES                                                                         

TOTAL INDUSTRIAL MACHINERY &                               17,972              
EQUIPMENT                                                                      

MEDIA & LEISURE - 0.4%                                                         

BROADCASTING - 0.3%                                                            

MediaOne Group, Inc. $3.63        1,045,200                85,968              
PIES                                                                           

LODGING & GAMING - 0.1%                                                        

Host Marriott Financial Trust     534,900                  21,129              
$3.375 QUIPS (e)                                                               

TOTAL MEDIA & LEISURE                                      107,097             

TOTAL CONVERTIBLE PREFERRED                                133,333             
STOCKS                                                                         

NONCONVERTIBLE PREFERRED                                                       
STOCKS - 1.1%                                                                  

FINANCE - 0.1%                                                                 

CREDIT & OTHER FINANCE - 0.1%                                                  

Fresenius Medical Care            14,190                   14,463              
Capital Trust II 7.875%                                                        

INSURANCE - 0.0%                                                               

American Annuity Group            6,030                    6,229               
Capital Trust II 8.75%                                                         

TOTAL FINANCE                                              20,692              

INDUSTRIAL MACHINERY &                                                         
EQUIPMENT - 0.0%                                                               

ELECTRICAL EQUIPMENT - 0.0%                                                    

Ampex Corp. 8% non-cumulative     807                      1,259               
(a)                                                                            

MEDIA & LEISURE - 0.4%                                                         

BROADCASTING - 0.3%                                                            

Adelphia Communications Corp.     38,030                   4,411               
$13.00                                                                         

Citadel Broadcasting Co.          56,687                   6,604               
Series B, 13.25% pay-in-kind                                                   

PREFERRED STOCKS - CONTINUED                                                   

                                 SHARES                   VALUE (NOTE 1) (000S)

NONCONVERTIBLE PREFERRED                                                       
STOCKS - CONTINUED                                                             

MEDIA & LEISURE - CONTINUED                                                    

BROADCASTING - CONTINUED                                                       

CSC Holdings, Inc.:                                                            

11.125% pay-in-kind               276,649                 $ 31,953             

Series H, 11.75% pay-in-kind      143,719                  16,851              
(a)                                                                            

Granite Broadcasting Corp.        6,398                    5,854               
12.75% pay-in-kind                                                             

                                                           65,673              

PUBLISHING - 0.1%                                                              

PRIMEDIA, Inc.:                                                                

8.625%                            74,220                   7,162               

Series D, $10.00                  161,300                  16,614              

                                                           23,776              

TOTAL MEDIA & LEISURE                                      89,449              

NONDURABLES - 0.0%                                                             

HOUSEHOLD PRODUCTS - 0.0%                                                      

Renaissance Cosmetics, Inc.       12,774                   19                  
14% pay-in-kind                                                                

TECHNOLOGY - 0.1%                                                              

COMMUNICATIONS EQUIPMENT - 0.1%                                                

Intermedia Communications,        30,362                   30,666              
Inc. 13.5% pay-in-kind (a)                                                     

COMPUTER SERVICES & SOFTWARE                                                   
- 0.0%                                                                         

Concentric Network Corp.          5,369                    4,778               
13.5% pay-in-kind (a)                                                          

TOTAL TECHNOLOGY                                           35,444              

UTILITIES - 0.5%                                                               

CELLULAR - 0.2%                                                                

Nextel Communications, Inc.:                                                   

11.125% pay-in-kind               33,495                   32,155              

Series D, 13% pay-in-kind         23,023                   24,174              

                                                           56,329              

ELECTRIC UTILITY - 0.0%                                                        

Entergy Gulf States, Inc.         32,305                   3,231               
Series A, adj. rate                                                            

TELEPHONE SERVICES - 0.3%                                                      

e.spire Communications, Inc.:                                                  

$127.50 pay-in-kind               8,292                    2,736               

PREFERRED STOCKS - CONTINUED                                                   

                                 SHARES                   VALUE (NOTE 1) (000S)

NONCONVERTIBLE PREFERRED                                                       
STOCKS - CONTINUED                                                             

UTILITIES - CONTINUED                                                          

TELEPHONE SERVICES - CONTINUED                                                 

e.spire Communications, Inc.:                                                  
- continued                                                                    

14.75% pay-in-kind                2,506                   $ 1,629              

Hyperion Telecommunication,       12,174                   9,861               
Inc. 12.875% pay-in-kind                                                       

ICG Holdings, Inc.:                                                            

14% pay-in-kind (a)               145                      141                 

14.25% pay-in-kind                19,755                   19,261              

IXC Communications, Inc.          10,087                   9,709               
12.5% pay-in-kind                                                              

NEXTLINK Communications, Inc.     580,328                  28,726              
14% pay-in-kind                                                                

Viatel, Inc. 10% pay-in-kind      48                       6                   
(a)(e)                                                                         

WinStar Communications, Inc.      5,509                    4,132               
14.25% (a)                                                                     

                                                           76,201              

TOTAL UTILITIES                                            135,761             

TOTAL NONCONVERTIBLE                                       282,624             
PREFERRED STOCKS                                                               

TOTAL PREFERRED STOCKS                                     415,957             
(Cost $425,157)                                                                


                                                        [Enlarge/Download Table]

                                                                                      
CORPORATE BONDS - 16.8%                                                               

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)                        

CONVERTIBLE BONDS - 0.3%                                                              

MEDIA & LEISURE - 0.2%                                                                

PUBLISHING - 0.2%                                                                     

News America Holdings, Inc.      Baa3  $ 73,530                   46,692              
liquid yield option notes 0%                                                          
3/11/13                                                                               

RETAIL & WHOLESALE - 0.1%                                                             

DRUG STORES - 0.1%                                                                    

Rite Aid Corp. 5.25% 9/15/02     -      20,680                    30,193              

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

CONVERTIBLE BONDS - CONTINUED                                                         

UTILITIES - 0.0%                                                                      

TELEPHONE SERVICES - 0.0%                                                             

GST Telecommunications, Inc.     -     $ 40                      $ 35                 
0% 12/15/05 (c)(e)                                                                    

TOTAL CONVERTIBLE BONDS                                           76,920              

NONCONVERTIBLE BONDS - 16.5%                                                          

AEROSPACE & DEFENSE - 0.7%                                                            

AEROSPACE & DEFENSE - 0.3%                                                            

Lockheed Martin Corp. 7.2%       A3     74,700                    83,566              
5/1/36                                                                                

DEFENSE ELECTRONICS - 0.4%                                                            

Raytheon Co.:                                                                         

5.95% 3/15/01                    Baa1   24,250                    24,473              

6.3% 8/15/00                     Baa1   44,350                    44,883              

6.45% 8/15/02                    Baa1   33,950                    34,954              

                                                                  104,310             

SHIP BUILDING & REPAIR - 0.0%                                                         

Newport News Shipbuilding,       B1     2,430                     2,637               
Inc. 9.25% 12/1/06                                                                    

TOTAL AEROSPACE & DEFENSE                                         190,513             

BASIC INDUSTRIES - 0.5%                                                               

CHEMICALS & PLASTICS - 0.2%                                                           

Huntsman Corp.:                                                                       

9.5% 7/1/07 (e)                  B2     19,770                    20,091              

9.5% 7/1/07 (e)                  -      5,140                     5,224               

Koppers Industries, Inc.         B2     6,365                     6,174               
9.875% 12/1/07                                                                        

Pioneer Americas Acquisition     B2     830                       523                 
Corp. 9.25% 6/15/07                                                                   

Scotts Co. 8.625% 1/15/09 (e)    B2     6,230                     6,448               

                                                                  38,460              

IRON & STEEL - 0.0%                                                                   

GS Technologies Operating,       B2     3,620                     2,444               
Inc. 12.25% 10/1/05                                                                   

WHX Corp. 10.5% 4/15/05          B3     7,650                     6,809               

                                                                  9,253               

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

BASIC INDUSTRIES - CONTINUED                                                          

METALS & MINING - 0.1%                                                                

Doe Run Resources Corp.:                                                              

11.25% 3/15/05                   B3    $ 2,210                   $ 1,923              

11.6963% 3/15/03 (f)             B3     4,490                     3,772               

Interlake Corp. 12.125% 3/1/02   B3     9,515                     9,693               

Kaiser Aluminum & Chemical                                                            
Corp.:                                                                                

Series B 10.875% 10/15/06        B1     200                       196                 

Series D 10.875% 10/15/06        B1     2,740                     2,685               

9.875% 2/15/02                   B1     2,170                     2,165               

12.75% 2/1/03                    B2     6,430                     6,205               

Metals USA, Inc. 8.625%          B2     9,700                     9,312               
2/15/08                                                                               

                                                                  35,951              

PACKAGING & CONTAINERS - 0.0%                                                         

Gaylord Container Corp.          Caa1   2,790                     2,539               
9.375% 6/15/07                                                                        

PAPER & FOREST PRODUCTS - 0.2%                                                        

Ainsworth Lumber Co. Ltd.        B3     4,160                     4,160               
12.5% 7/15/07  pay-in-kind                                                            

APP Finance II Mauritius Ltd.    Caa    13,365                    6,148               
12% 3/15/04                                                                           

Container Corp. of America       B2     1,020                     1,066               
gtd. 9.75% 4/1/03                                                                     

Doman Industries Ltd. yankee     B1     3,680                     2,723               
8.75% 3/15/04                                                                         

Indah Kiat Finance Mauritius     Caa1   3,470                     1,735               
Ltd. 10% 7/1/07                                                                       

Mail-Well Corp. 10.5% 2/15/04    B+     1,160                     1,221               

Malette, Inc. yankee 12.25%      Ba3    8,890                     9,579               
7/15/04                                                                               

Millar Western Forest            B3     12,260                    9,869               
Products Ltd. 9.875% 5/15/08                                                          

Pindo Deli Finance Mauritius     Caa1   2,740                     1,315               
Ltd. 10.25% 10/1/02                                                                   

Repap New Brunswick, Inc.        Caa1   1,930                     1,390               
yankee 10.625% 4/15/05                                                                

Stone Container Corp.:                                                                

10.75% 10/1/02                   B1     5,340                     5,540               

12.58% 8/1/16 (f)                B2     810                       867                 

Tembec Finance Corp. yankee      Ba3    3,545                     3,722               
9.875% 9/30/05                                                                        

Tjiwi Kimia Finance Mauritius    Caa1   4,570                     2,239               
Ltd. 10% 8/1/04                                                                       

                                                                  51,574              

TOTAL BASIC INDUSTRIES                                            137,777             

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

CONSTRUCTION & REAL ESTATE -                                                          
0.3%                                                                                  

BUILDING MATERIALS - 0.0%                                                             

American Standard Cos., Inc.:                                                         

7.375% 2/1/08                    Ba3   $ 12,085                  $ 12,206             

7.625% 2/15/10                   Ba3    1,040                     1,045               

Schuff Steel Co. 10.5% 6/1/08    B3     1,530                     1,346               

                                                                  14,597              

CONSTRUCTION - 0.0%                                                                   

Great Lakes Dredge & Dock        B3     7,800                     8,073               
Corp. 11.25% 8/15/08 (e)                                                              

REAL ESTATE - 0.1%                                                                    

LNR Property Corp.:                                                                   

9.375% 3/15/08                   B1     13,585                    13,042              

10.5% 1/15/09                    B1     6,440                     6,553               

                                                                  19,595              

REAL ESTATE INVESTMENT TRUSTS                                                         
- 0.2%                                                                                

CenterPoint Properties Trust     Baa2   8,720                     8,417               
6.75% 4/1/05                                                                          

EOP Operating LP:                                                                     

6.625% 2/15/05                   Baa1   10,300                    10,307              

6.75% 2/15/08                    Baa1   17,690                    17,743              

7.25% 2/15/18                    Baa1   6,005                     5,817               

                                                                  42,284              

TOTAL CONSTRUCTION & REAL                                         84,549              
ESTATE                                                                                

DURABLES - 0.4%                                                                       

AUTOS, TIRES, & ACCESSORIES -                                                         
0.1%                                                                                  

Blue Bird Body Co. 10.75%        B2     2,300                     2,415               
11/15/06                                                                              

Federal-Mogul Corp.:                                                                  

7.5% 1/15/09 (e)                 Ba2    8,560                     8,504               

7.875% 7/1/10                    Ba2    2,030                     2,050               

                                                                  12,969              

CONSUMER DURABLES - 0.0%                                                              

Corning Consumer Products Co.    B3     6,420                     4,847               
9.625% 5/1/08                                                                         

HOME FURNISHINGS - 0.0%                                                               

Omega Cabinets Ltd. 10.5%        B3     2,440                     2,416               
6/15/07                                                                               

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

DURABLES - CONTINUED                                                                  

TEXTILES & APPAREL - 0.3%                                                             

Cluett American Corp. 10.125%    B3    $ 2,850                   $ 2,729              
5/15/08                                                                               

Levi Strauss & Co.:                                                                   

6.8% 11/1/03 (e)                 Baa3   30,210                    28,851              

7% 11/1/06 (e)                   Baa3   12,100                    11,314              

Polymer Group, Inc. 9% 7/1/07    B2     9,390                     9,413               

Synthetic Industries, Inc.       B2     5,820                     5,966               
9.25% 2/15/07                                                                         

WestPoint Stevens, Inc.          Ba3    11,350                    11,662              
7.875% 6/15/08                                                                        

Worldtex, Inc. 9.625% 12/15/07   B1     6,900                     5,831               

                                                                  75,766              

TOTAL DURABLES                                                    95,998              

ENERGY - 0.6%                                                                         

COAL - 0.1%                                                                           

P&L Coal Holdings Corp.:                                                              

8.875% 5/15/08                   Ba3    1,920                     1,985               

9.625% 5/15/08                   B2     19,330                    19,982              

                                                                  21,967              

ENERGY SERVICES - 0.2%                                                                

Baker Hughes, Inc. 6.875%        A2     18,000                    18,278              
1/15/29 (e)                                                                           

Bayard Drilling Technologies,    B2     1,820                     2,002               
Inc. 11% 6/30/05                                                                      

DI Industries, Inc. 8.875%       B1     3,275                     2,407               
7/1/07                                                                                

Grey Wolf, Inc. 8.875% 7/1/07    B1     7,680                     5,645               

Ocean Rig Norway AS 10.25%       B3     5,920                     4,677               
6/1/08                                                                                

Pool Energy Services Co.         B2     8,130                     8,374               
8.625% 4/1/08                                                                         

Pride Petroleum Services,        Ba3    4,430                     4,164               
Inc. 9.375% 5/1/07                                                                    

R&B Falcon Corp. 9.5%            Ba1    6,480                     6,464               
12/15/08 (e)                                                                          

                                                                  52,011              

OIL & GAS - 0.3%                                                                      

Belco Oil & Gas Corp. 8.875%     B1     2,820                     2,623               
9/15/07                                                                               

Canadian Forest Oil Ltd.         B2     5,000                     4,550               
8.75% 9/15/07                                                                         

Chesapeake Energy Corp.          B3     4,136                     3,061               
9.625% 5/1/05                                                                         

Cross Timbers Oil Co. 9.25%      B2     400                       378                 
4/1/07                                                                                

Flores & Rucks, Inc. 9.75%       B1     8,080                     8,221               
10/1/06                                                                               

Great Lakes Carbon Corp.         B3     7,575                     7,764               
10.25% 5/15/08 pay-in-kind                                                            

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

ENERGY - CONTINUED                                                                    

OIL & GAS - CONTINUED                                                                 

HS Resources, Inc. 9.25%         B2    $ 420                     $ 403                
11/15/06                                                                              

Hurricane Hydrocarbons Ltd.      Caa2   3,365                     1,683               
11.75% 11/1/04 (e)                                                                    

Ocean Energy, Inc. 8.375%        B1     7,130                     6,738               
7/1/08                                                                                

Petroleum Geo-Services ASA       Baa3   29,550                    27,177              
yankee 7.125% 3/30/28                                                                 

Plains Resources, Inc.:                                                               

Series B 10.25% 3/15/06          B2     5,530                     5,641               

Series D, 10.25% 3/15/06         B2     1,905                     1,943               

Seven Seas Petroleum, Inc.       Caa1   2,970                     2,020               
12.5% 5/15/05                                                                         

Vintage Petroleum, Inc. 9%       B1     730                       712                 
12/15/05                                                                              

                                                                  72,914              

TOTAL ENERGY                                                      146,892             

FINANCE - 4.7%                                                                        

BANKS - 2.2%                                                                          

ABN-Amro Bank NV, Chicago        A1     28,500                    29,283              
6.625% 10/31/01                                                                       

Banco Latinoamericano            Baa2   10,550                    10,438              
Exportaciones SA euro 6.9%                                                            
12/4/99 (e)                                                                           

Bank of New York                 A1     50,000                    54,521              
Institutional Capital Trust                                                           
A 7.78% 12/1/26 (e)                                                                   

BankAmerica Corp. 10% 2/1/03     Aa3    2,990                     3,460               

BankBoston Companies 6.625%      A3     9,640                     9,832               
2/1/04                                                                                

BankBoston NA 6.375% 3/25/08     A2     2,650                     2,670               

BanPonce Financial Corp.:                                                             

6.66% 3/26/01                    A3     10,000                    10,077              

6.75% 8/9/01                     A3     18,240                    18,414              

Barclays Bank PLC yankee:                                                             

5.875% 7/15/00                   A1     37,000                    37,105              

5.95% 7/15/01                    A1     43,800                    44,075              

Capital One Bank:                                                                     

6.375% 2/15/03                   Baa3   20,000                    19,744              

6.42% 11/12/99                   Baa3   25,000                    24,969              

7.2% 7/19/99                     Baa3   22,000                    22,058              

Capital One Financial Corp.      Ba1    20,300                    19,591              
7.125% 8/1/08                                                                         

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

FINANCE - CONTINUED                                                                   

BANKS - CONTINUED                                                                     

Chase Manhattan Corp. 5.5%       Aa3   $ 8,700                   $ 8,731              
2/15/01                                                                               

First Chicago NBD                A1     35,000                    38,042              
Institutional Capital B                                                               
7.75% 12/1/26 (e)                                                                     

First Maryland Bancorp           A3     8,345                     8,551               
10.375% 8/1/99                                                                        

First USA Bank 7.65% 8/1/03      Aa3    12,500                    13,548              

Kansallis-Osake-Pankki, New      A3     5,285                     5,941               
York 10% 5/1/02                                                                       

Korea Development Bank:                                                               

6.625% 11/21/03                  Ba2    11,260                    10,676              

7.125% 9/17/01                   Ba2    7,950                     7,793               

MBNA Corp.:                                                                           

6.34% 6/2/03                     Baa2   6,475                     6,347               

6.875% 11/15/02                  Baa2   29,550                    29,726              

Merchants National Corp.         A2     6,850                     7,058               
9.875% 10/1/99                                                                        

Midlantic Corp. 9.2% 8/1/01      A3     11,550                    12,519              

NationsBank NA 5.92% 6/8/01      Aa2    18,500                    18,733              

NB Capital Trust IV 8.25%        Aa2    11,600                    13,329              
4/15/27                                                                               

Provident Bank 6.125% 12/15/00   A3     27,500                    27,691              

Providian National Bank 6.25%    Baa3   28,000                    28,188              
5/7/01                                                                                

Summit Bancorp 8.625% 12/10/02   BBB+   6,750                     7,485               

Union Planters National Bank     A3     13,000                    13,261              
6.81% 8/20/01                                                                         

                                                                  563,856             

CREDIT & OTHER FINANCE - 2.1%                                                         

Ahmanson Capital Trust I         A3     15,500                    17,374              
8.36% 12/1/26 (e)                                                                     

AMRESCO, Inc. 9.875% 3/15/05     Caa3   2,470                     1,927               

Arcadia Financial Ltd. 11.5%     B2     4,785                     3,708               
3/15/07                                                                               

Associates Corp. of North                                                             
America:                                                                              

6% 4/15/03                       Aa3    9,550                     9,718               

6% 7/15/05                       Aa3    45,500                    46,338              

AT&T Capital Corp.:                                                                   

6.25% 5/15/01                    Baa3   40,260                    39,679              

6.41% 8/13/99                    Baa3   6,500                     6,522               

7.5% 11/15/00                    Baa3   31,960                    32,432              

BankBoston Capital Trust II      A2     37,000                    38,586              
7.75% 12/15/26                                                                        

Chase Capital I 7.67% 12/1/26    Aa3    45,040                    48,803              

ContiFinancial Corp. 8.125%      B1     1,790                     1,217               
4/1/08                                                                                

Delta Financial Corp. 9.5%       B3     842                       674                 
8/1/04                                                                                

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

FINANCE - CONTINUED                                                                   

CREDIT & OTHER FINANCE -                                                              
CONTINUED                                                                             

ERP Operating LP 6.55%           A3    $ 7,000                   $ 7,049              
11/15/01                                                                              

Finova Capital Corp. 6.27%       Baa1   2,080                     2,091               
9/29/00                                                                               

First Security Capital I         A3     22,920                    25,307              
8.41% 12/15/26                                                                        

First Union Institutional        BBB+   17,600                    19,867              
Capital I 8.04% 12/1/26                                                               

Fleet Capital Trust II 7.92%     A2     5,200                     5,760               
12/11/26                                                                              

General Electric Capital         Aaa    25,630                    25,703              
Corp. 6.94% 4/13/09 (d)                                                               

GS Escrow Corp. 7.125% 8/1/05    Ba1    36,000                    36,201              

Household Finance Corp. 6%       A2     25,000                    25,128              
5/8/00                                                                                

Imperial Credit Capital Trust    B2     3,600                     2,736               
I 10.25% 6/14/02                                                                      

Imperial Credit Industries       B2     9,577                     7,374               
9.875% 1/15/07                                                                        

KeyCorp Institutional Capital    A1     19,000                    20,961              
A 7.826% 12/1/26                                                                      

Macsaver Financial Services,     Ba1    3,260                     2,274               
Inc. 7.6% 8/1/07                                                                      

MCN Investment Corp. 5.84%       Baa3   11,820                    11,819              
2/1/99                                                                                

Money Store, Inc. 7.3% 12/1/02   A2     13,900                    14,706              

Ocwen Capital Trust 10.875%      B2     3,780                     2,948               
8/1/27                                                                                

Olympic Financial Ltd. 11.5%     B2     4,420                     3,426               
3/15/07                                                                               

PNC Institutional Capital        A2     19,000                    21,275              
Trust 8.315% 5/15/27 (e)                                                              

Sprint Capital Corp. 5.7%        Baa1   7,290                     7,320               
11/15/03                                                                              

Wells Fargo Capital C Capital    Aa3    50,000                    53,260              
Securities 7.73% 12/1/26 (e)                                                          

                                                                  542,183             

INSURANCE - 0.2%                                                                      

SunAmerica, Inc.:                                                                     

6.2% 10/31/99                    Aaa    21,500                    21,652              

6.2% 10/31/99                    Aaa    27,000                    27,191              

Willis Corroon Corp. 9%          Ba3    7,640                     7,688               
2/1/09 (e)                                                                            

                                                                  56,531              

SAVINGS & LOANS - 0.2%                                                                

Home Savings of America FSB      A3     10,500                    10,554              
6% 11/1/00                                                                            

Long Island Savings Bank FSB:                                                         

6.2% 4/2/01                      Baa3   14,750                    14,764              

7% 6/13/02                       Baa3   14,850                    15,232              

                                                                  40,550              

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

FINANCE - CONTINUED                                                                   

SECURITIES INDUSTRY - 0.0%                                                            

Amvescap PLC yankee 6.375%       A3    $ 13,050                  $ 13,302             
5/15/03                                                                               

ECM Corp. LP 14% 6/10/02 (e)     -      155                       154                 

                                                                  13,456              

TOTAL FINANCE                                                     1,216,576           

HEALTH - 0.2%                                                                         

MEDICAL EQUIPMENT & SUPPLIES                                                          
- 0.0%                                                                                

Wright Medical Technology,       Caa3   6,440                     3,574               
Inc. 11.75% 7/1/00 (f)                                                                

MEDICAL FACILITIES MANAGEMENT                                                         
- 0.2%                                                                                

Fountain View, Inc. 11.25%       Caa1   6,190                     5,323               
4/15/08                                                                               

Harborside Healthcare Corp.      B3     6,200                     2,914               
0% 8/1/08 (c)                                                                         

Mariner Post-Acute Network,      -      2,970                     2,302               
Inc. 9.5% 11/1/07                                                                     

Oxford Health Plans, Inc. 11%    Caa1   8,040                     8,161               
5/15/05 (e)                                                                           

Tenet Healthcare Corp.:                                                               

7.875% 1/15/03                   Ba1    4,230                     4,344               

8% 1/15/05                       Ba1    3,490                     3,603               

8.125% 12/1/08 (e)               Ba3    24,820                    25,503              

                                                                  52,150              

TOTAL HEALTH                                                      55,724              

INDUSTRIAL MACHINERY &                                                                
EQUIPMENT - 0.7%                                                                      

ELECTRICAL EQUIPMENT - 0.1%                                                           

Advanced Lighting                B2     5,510                     5,097               
Technologies, Inc. 8%                                                                 
3/15/08 (e)                                                                           

Motors & Gears, Inc. 10.75%      B3     14,340                    14,699              
11/15/06                                                                              

Telex Communications, Inc.       B2     5,330                     4,264               
10.5% 5/1/07                                                                          

                                                                  24,060              

INDUSTRIAL MACHINERY &                                                                
EQUIPMENT - 0.3%                                                                      

Bucyrus International, Inc.      B1     260                       224                 
9.75% 9/15/07                                                                         

Continental Global Group,        B2     1,620                     1,353               
Inc. 11% 4/1/07                                                                       

Morris Material Handling,        B2     10,580                    7,723               
Inc. 9.5% 4/1/08                                                                      

Thermadyne Holdings Corp. 0%     Caa1   11,150                    4,878               
6/1/08 (c)                                                                            

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

INDUSTRIAL MACHINERY &                                                                
EQUIPMENT - CONTINUED                                                                 

INDUSTRIAL MACHINERY &                                                                
EQUIPMENT - CONTINUED                                                                 

Thermadyne Manufacturing LLC     B3    $ 9,540                   $ 8,705              
9.875% 6/1/08                                                                         

Tyco International Group SA      Baa1   63,500                    64,421              
yankee 6.125% 6/15/01                                                                 

                                                                  87,304              

POLLUTION CONTROL - 0.3%                                                              

Allied Waste North America,                                                           
Inc.:                                                                                 

7.625% 1/1/06 (e)                Ba2    9,680                     9,922               

7.875% 1/1/09 (e)                Ba2    11,160                    11,495              

Envirosource, Inc. 9.75%         B3     5,930                     5,159               
6/15/03                                                                               

WMX Technologies, Inc.:                                                               

6.25% 10/15/00                   Baa3   11,150                    11,261              

6.25% 4/1/99                     Baa3   10,000                    10,012              

7.1% 8/1/26                      Baa3   10,860                    11,667              

7.7% 10/1/02                     Baa3   10,000                    10,617              

8.25% 11/15/99                   Baa3   7,050                     7,195               

                                                                  77,328              

TOTAL INDUSTRIAL MACHINERY &                                      188,692             
EQUIPMENT                                                                             

MEDIA & LEISURE - 2.9%                                                                

BROADCASTING - 2.1%                                                                   

ACME Television LLC/ACME         B3     7,590                     6,376               
Financial Corp. 0% 9/30/04                                                            
(c)                                                                                   

Adelphia Communications Corp.:                                                        

7.5% 1/15/04 (e)                 B1     6,230                     6,308               

7.75% 1/15/09 (e)                B1     14,690                    14,892              

9.875% 3/1/07                    B1     4,460                     4,973               

American Mobile Satellite        -      2,990                     1,495               
Corp. 12.25% 4/1/08                                                                   

Ascent Entertainment Group,      B3     15,190                    9,570               
Inc. 0% 12/15/04 (c)                                                                  

CapStar Broadcasting             B3     2,380                     2,023               
Partners, Inc. 0% 2/1/09 (c)                                                          

Chancellor Media Corp.:                                                               

8% 11/1/08 (e)                   Ba2    8,090                     8,747               

9% 10/1/08                       B1     2,280                     2,497               

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

MEDIA & LEISURE - CONTINUED                                                           

BROADCASTING - CONTINUED                                                              

Clear Channel Communications,    Baa3  $ 15,420                  $ 15,923             
Inc. 7.25% 10/15/27                                                                   

Continental Cablevision, Inc.:                                                        

8.3% 5/15/06                     Baa3   2,325                     2,608               

9% 9/1/08                        Baa3   18,140                    21,732              

EchoStar Communications Corp.    -      11,126                    12,739              
12.125% 7/1/04 pay-in-kind                                                            

EchoStar DBS Corp. 9.375%        B2     22,670                    23,237              
2/1/09 (e)                                                                            

International Cabletel, Inc.     B3     16,350                    14,061              
0% 2/1/06 (c)                                                                         

Iridium Operating LLC/Iridium                                                         
Capital Corp.:                                                                        

10.875% 7/15/05                  B3     25,670                    21,434              

11.25% 7/15/05                   B3     9,430                     7,968               

Metromedia Fiber Network,        B2     10,220                    10,757              
Inc. 10% 11/15/08 (e)                                                                 

NTL, Inc.:                                                                            

0% 4/1/08 (c)                    B3     60,265                    42,186              

10% 2/15/07                      B3     9,620                     10,342              

11.5% 10/1/08 (e)                B3     5,400                     6,143               

Olympus Communications           B1     10,275                    11,354              
LP/Olympus Capital Corp.                                                              
10.625% 11/15/06                                                                      

Orion Network Systems, Inc.      B1     36,325                    23,066              
0% 1/15/07 (c)                                                                        

Renaissance Media Group          B3     4,290                     2,992               
LLC/Renaissance Media                                                                 
Capital Corp. 0% 4/15/08 (c)                                                          

Rogers Cablesystems Ltd.         Ba3    1,360                     1,510               
yankee 10.125% 9/1/12                                                                 

Satelites Mexicanos SA de CV:                                                         

9.03% 6/30/04 (e)(f)             B1     14,423                    13,486              

10.125% 11/1/04                  B3     15,780                    12,466              

TCI Communications, Inc.:                                                             

8.25% 1/15/03                    Baa3   23,130                    25,435              

9.8% 2/1/12                      Baa3   20,180                    27,132              

 8.75% 8/1/15                    Baa3   38,398                    48,757              

Telewest Communications PLC      B1     1,210                     1,428               
11.25% 11/1/08 (e)                                                                    

Telewest PLC:                                                                         

yankee 9.625% 10/1/06            B1     1,250                     1,338               

0% 10/1/07 (c)                   B1     27,940                    24,238              

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

MEDIA & LEISURE - CONTINUED                                                           

BROADCASTING - CONTINUED                                                              

Time Warner, Inc.:                                                                    

6.85% 1/15/26                    Baa3  $ 19,000                  $ 19,698             

6.875% 6/15/18                   Baa3   19,230                    20,325              

7.75% 6/15/05                    Baa3   10,000                    11,097              

8.18% 8/15/07                    Baa3   12,000                    13,938              

UIH Australia/Pacific, Inc.:                                                          

Series B 0% 5/15/06 (c)          B2     23,560                    13,783              

Series D 0% 5/15/06 (c)          B2     4,020                     2,352               

United International             B3     18,200                    12,012              
Holdings, Inc. 0% 2/15/08 (c)                                                         

                                                                  532,418             

ENTERTAINMENT - 0.3%                                                                  

AMC Entertainment, Inc. 9.5%     B3     4,930                     4,918               
3/15/09                                                                               

Carmike Cinemas, Inc. 9.375%     B2     2,980                     3,017               
2/1/09 (e)                                                                            

Cinemark USA, Inc.:                                                                   

8.5% 8/1/08                      B2     2,340                     2,299               

9.625% 8/1/08                    B2     4,860                     5,030               

Harrahs Operating Co., Inc.      Ba2    17,550                    17,726              
7.875% 12/15/05                                                                       

Paramount Communications,        Baa3   3,325                     3,479               
Inc. 7.5% 1/15/02                                                                     

Premier Parks, Inc.:                                                                  

0% 4/1/08 (c)                    B3     8,330                     5,758               

9.25% 4/1/06                     B3     560                       582                 

Viacom, Inc. 6.75% 1/15/03       Baa3   21,600                    22,370              

                                                                  65,179              

LODGING & GAMING - 0.2%                                                               

Circus Circus Enterprises,                                                            
Inc.:                                                                                 

6.45% 2/1/06                     Baa3   260                       233                 

7% 11/15/36                      Baa3   2,260                     2,060               

7.625% 7/15/13                   Ba2    3,600                     3,186               

9.25% 12/1/05                    Ba2    5,590                     5,660               

HMH Properties, Inc.:                                                                 

7.875% 8/1/05                    Ba2    9,900                     9,677               

7.875% 8/1/08                    Ba2    1,790                     1,732               

8.45% 12/1/08                    Ba2    5,630                     5,630               

KSL Recreation Group, Inc.       B3     2,710                     2,710               
10.25% 5/1/07                                                                         

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

MEDIA & LEISURE - CONTINUED                                                           

LODGING & GAMING - CONTINUED                                                          

Prime Hospitality Corp.:                                                              

9.25% 1/15/06                    Ba2   $ 430                     $ 449                

9.75% 4/1/07                     B1     2,290                     2,370               

Signature Resorts, Inc.:                                                              

9.25% 5/15/06                    B2     10,050                    9,347               

9.75% 10/1/07                    B3     13,770                    11,980              

Sun International Hotels         Ba3    3,390                     3,526               
Ltd./Sun International North                                                          
America, Inc. yankee 9%                                                               
3/15/07                                                                               

                                                                  58,560              

PUBLISHING - 0.2%                                                                     

Big Flower Press Holdings,                                                            
Inc.:                                                                                 

8.625% 12/1/08 (e)               B2     3,890                     3,978               

8.875% 7/1/07                    B2     16,230                    16,757              

News America, Inc.:                                                                   

6.625% 1/9/08                    Baa3   4,425                     4,624               

7.25% 5/18/18                    Baa3   25,700                    26,994              

                                                                  52,353              

RESTAURANTS - 0.1%                                                                    

AFC Enterprises, Inc. 10.25%     B3     7,625                     8,025               
5/15/07                                                                               

Darden Restaurants, Inc.         Baa1   220                       217                 
6.375% 2/1/06                                                                         

Dominos, Inc. 10.375% 1/15/09    B3     6,300                     6,489               
(e)                                                                                   

Host Marriott Travel Plazas,     Ba3    9,720                     10,060              
Inc. 9.5% 5/15/05                                                                     

NE Restaurant, Inc. 10.75%       B3     1,910                     1,834               
7/15/08                                                                               

SC International Services,       B2     3,710                     3,766               
Inc. Series B, 9.25% 9/1/07                                                           

                                                                  30,391              

TOTAL MEDIA & LEISURE                                             738,901             

NONDURABLES - 0.6%                                                                    

BEVERAGES - 0.2%                                                                      

Seagram Co. Ltd. yankee          Baa3   4,275                     4,111               
6.875% 9/1/23                                                                         

Seagram J E & Sons, Inc.:                                                             

6.625% 12/15/05                  Baa3   19,700                    20,074              

7.6% 12/15/28                    Baa3   20,700                    22,054              

                                                                  46,239              

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

NONDURABLES - CONTINUED                                                               

FOODS - 0.1%                                                                          

ConAgra, Inc. 7.125% 10/1/26     Baa1  $ 22,725                  $ 24,331             

Del Monte Corp. 12.25% 4/15/07   Caa1   5,260                     5,924               

International Home Foods,        B2     830                       903                 
Inc. 10.375% 11/1/06                                                                  

                                                                  31,158              

HOUSEHOLD PRODUCTS - 0.1%                                                             

AKI Holding Corp. 0% 7/1/09      Caa1   1,930                     772                 
(c)                                                                                   

AKI, Inc. 10.5% 7/1/08           B2     1,710                     1,607               

Revlon Consumer Products Corp.:                                                       

8.125% 2/1/06                    B2     7,100                     6,763               

8.625% 2/1/08                    B3     5,570                     4,943               

9% 11/1/06 (e)                   B2     4,500                     4,399               

                                                                  18,484              

TOBACCO - 0.2%                                                                        

Philip Morris Companies, Inc.:                                                        

6.95% 6/1/06                     A2     20,550                    21,933              

7% 7/15/05                       A2     27,190                    29,021              

                                                                  50,954              

TOTAL NONDURABLES                                                 146,835             

PRECIOUS METALS - 0.0%                                                                

Great Central Mines Ltd.         Ba2    8,600                     8,643               
8.875% 4/1/08                                                                         

RETAIL & WHOLESALE - 0.9%                                                             

APPAREL STORES - 0.1%                                                                 

Mothers Work, Inc. 12.625%       B3     8,300                     8,632               
8/1/05                                                                                

Specialty Retailers, Inc.:                                                            

8.5% 7/15/05                     B1     7,650                     6,713               

9% 7/15/07                       B3     11,180                    8,720               

                                                                  24,065              

DRUG STORES - 0.1%                                                                    

Rite Aid Corp. 6% 12/15/05 (e)   Baa1   23,500                    23,709              

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

RETAIL & WHOLESALE - CONTINUED                                                        

GENERAL MERCHANDISE STORES -                                                          
0.3%                                                                                  

Federated Department Stores,                                                          
Inc.:                                                                                 

6.79% 7/15/27                    Baa2  $ 11,500                  $ 11,918             

8.5% 6/15/03                     Baa2   60,285                    66,727              

                                                                  78,645              

GROCERY STORES - 0.2%                                                                 

American Stores Co. 7.5%         Baa2   14,850                    16,703              
5/1/37                                                                                

Kroger Co. 6% 7/1/00             Baa3   28,300                    28,468              

Pathmark Stores, Inc.:                                                                

9.625% 5/1/03                    Caa1   4,640                     4,710               

11.625% 6/15/02                  Caa2   700                       704                 

                                                                  50,585              

RETAIL & WHOLESALE,                                                                   
MISCELLANEOUS - 0.2%                                                                  

Amazon.com, Inc. 0% 5/1/08 (c)   Caa2   29,830                    19,166              

Finlay Enterprises, Inc. 9%      B2     420                       373                 
5/1/08                                                                                

Finlay Fine Jewelry Corp.        Ba3    1,860                     1,748               
8.375% 5/1/08                                                                         

Guitar Center, Inc. 11% 7/1/06   B1     4,367                     4,629               

HMV Media Group PLC 10.25%       B3     6,140                     6,140               
5/15/08                                                                               

J. Crew Group, Inc. 0%           Caa3   18,870                    8,963               
10/15/08 (c)                                                                          

J. Crew Operating Corp.          Caa1   9,110                     8,199               
10.375% 10/15/07                                                                      

U.S. Office Products Co.         B3     3,540                     2,637               
9.75% 6/15/08                                                                         

                                                                  51,855              

TOTAL RETAIL & WHOLESALE                                          228,859             

SERVICES - 0.2%                                                                       

LEASING & RENTAL - 0.1%                                                               

Anthony Crane Rentals            B3     4,080                     3,917               
LP/Anthony Credit Capital                                                             
Corp. 10.375% 8/1/08 (e)                                                              

AP Holdings, Inc. 0% 3/15/08     Caa2   3,800                     2,166               
(c)                                                                                   

Apcoa, Inc. 9.25% 3/15/08        Caa1   10,055                    9,502               

Hollywood Entertainment Corp.    B3     8,980                     9,205               
10.625% 8/15/04                                                                       

Renters Choice, Inc. 11%         B2     5,650                     5,862               
8/15/08 (e)                                                                           

                                                                  30,652              

PRINTING - 0.0%                                                                       

Sullivan Graphics, Inc.          Caa1   10,940                    11,159              
12.75% 8/1/05                                                                         

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

SERVICES - CONTINUED                                                                  

SERVICES - 0.1%                                                                       

Coach USA, Inc. 9.375% 7/1/07    B1    $ 400                     $ 414                

Iron Mountain, Inc. 8.75%        B3     1,730                     1,799               
9/30/09                                                                               

Medaphis Corp. 9.5% 2/15/05      Caa1   10,385                    8,100               

SITEL Corp. 9.25% 3/15/06        B2     1,010                     909                 

                                                                  11,222              

TOTAL SERVICES                                                    53,033              

TECHNOLOGY - 0.5%                                                                     

COMMUNICATIONS EQUIPMENT - 0.1%                                                       

Intermedia Communications,                                                            
Inc.:                                                                                 

8.5% 1/15/08                     B2     1,050                     1,003               

8.6% 6/1/08                      B2     5,300                     5,088               

Jordan Telecommunication                                                              
Products, Inc.:                                                                       

0% 8/1/07 (c)                    B3     7,800                     5,850               

9.875% 8/1/07                    B3     2,170                     2,127               

                                                                  14,068              

COMPUTER SERVICES & SOFTWARE                                                          
- 0.0%                                                                                

Concentric Network Corp.         -      6,440                     6,794               
12.75% 12/15/07                                                                       

DecisionOne Corp. 9.75% 8/1/07   B3     4,920                     984                 

DecisionOne Holdings Corp. 0%    Caa1   7,835                     313                 
8/1/08 unit (c)                                                                       

ICG Services, Inc. 0% 5/1/08     -      2,160                     1,161               
(c)                                                                                   

                                                                  9,252               

COMPUTERS & OFFICE EQUIPMENT                                                          
- 0.3%                                                                                

Comdisco, Inc.:                                                                       

6.1% 6/5/01                      Baa1   38,250                    38,742              

6.375% 11/30/01                  Baa1   24,500                    24,724              

9.25% 7/6/00                     Baa2   7,625                     8,032               

9.28% 6/5/00                     Baa1   2,000                     2,101               

9.3% 6/27/00                     Baa2   2,000                     2,106               

9.5% 1/28/02                     Baa2   2,580                     2,852               

                                                                  78,557              

ELECTRONIC INSTRUMENTS - 0.0%                                                         

Telecommunications Techniques    B3     10,980                    10,870              
Co. LLC 9.75% 5/15/08                                                                 

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

TECHNOLOGY - CONTINUED                                                                

ELECTRONICS - 0.1%                                                                    

Communications Instruments,      B3    $ 3,190                   $ 3,078              
Inc. 10% 9/15/04                                                                      

Fairchild Semiconductor Corp.    B2     1,260                     1,247               
10.125% 3/15/07                                                                       

Hadco Corp. 9.5% 6/15/08         B2     11,140                    11,029              

Insilco Corp. 12% 8/15/07        B3     5,660                     5,660               
unit (e)                                                                              

                                                                  21,014              

TOTAL TECHNOLOGY                                                  133,761             

TRANSPORTATION - 0.5%                                                                 

AIR TRANSPORTATION - 0.1%                                                             

Atlas Air, Inc. 9.25% 4/15/08    B3     4,180                     4,180               

Kitty Hawk, Inc. 9.95%           B1     11,190                    11,246              
11/15/04                                                                              

                                                                  15,426              

RAILROADS - 0.4%                                                                      

Burlington Northern Santa Fe                                                          
Corp.:                                                                                

6.53% 7/15/37                    Baa2   20,000                    20,764              

6.875% 12/1/27                   Baa2   12,000                    12,754              

7.29% 6/1/36                     Baa2   22,430                    25,238              

Norfolk Southern Corp. 7.05%     Baa1   39,550                    43,441              
5/1/37                                                                                

                                                                  102,197             

SHIPPING - 0.0%                                                                       

Amer Reefer Co. Ltd. 10.25%      B1     1,160                     696                 
3/1/08                                                                                

Holt Group, Inc. 9.75%           Caa1   7,245                     4,999               
1/15/06 (e)                                                                           

Hvide Marine, Inc. 8.375%        B1     600                       468                 
2/15/08                                                                               

                                                                  6,163               

TOTAL TRANSPORTATION                                              123,786             

UTILITIES - 2.8%                                                                      

CELLULAR - 0.9%                                                                       

Cable & Wireless                 Baa1   35,340                    35,925              
Communications PLC 6.375%                                                             
3/6/03                                                                                

Cellnet Data Systems, Inc. 0%    -      25,140                    7,291               
10/1/07 (c)                                                                           

Dial Call Communications,        B2     3,290                     3,306               
Inc. 10.25% 12/15/05                                                                  

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

UTILITIES - CONTINUED                                                                 

CELLULAR - CONTINUED                                                                  

Iridium LLC/Iridium Capital      B3    $ 1,600                   $ 1,448              
Corp. 13% 7/15/05                                                                     

McCaw International Ltd. 0%      Caa1   40,640                    22,352              
4/15/07 (c)                                                                           

Millicom International           Caa1   71,920                    52,142              
Cellular SA 0% 6/1/06 (c)                                                             

Nextel Communications, Inc.:                                                          

0% 8/15/04 (c)                   B2     10,530                    10,609              

0% 9/15/07 (c)                   B2     4,040                     2,757               

0% 2/15/08 (c)                   B2     42,660                    27,196              

Nextel International, Inc. 0%    Caa1   22,870                    10,520              
4/15/08 (c)                                                                           

ORBCOMM Global L.P./ORBCOMM      B3     400                       440                 
Capital Co. 14% 8/15/04                                                               

Orbital Imaging Corp. 11.625%    -      1,120                     1,154               
3/1/05                                                                                

Orion Network Systems, Inc.      B1     7,240                     7,168               
11.25% 1/15/07                                                                        

PageMart Nationwide, Inc. 0%     B3     9,015                     7,753               
2/1/05 (c)                                                                            

PageMart Wireless, Inc. 0%       Caa2   6,540                     2,681               
2/1/08 (c)                                                                            

Rogers Communications, Inc.      B2     20,060                    20,862              
8.875% 7/15/07                                                                        

Telesystem International                                                              
Wireless, Inc.:                                                                       

0% 6/30/07 (c)                   Caa1   11,050                    4,807               

0% 11/1/07 (c)                   Caa1   20,330                    7,522               

Teligent, Inc.:                                                                       

0% 3/1/08 (c)                    Caa1   15,980                    7,830               

11.5% 12/1/07                    Caa1   5,320                     5,054               

                                                                  238,817             

ELECTRIC UTILITY - 0.7%                                                               

AES Corp. 10.25% 7/15/06         Ba1    1,450                     1,541               

Avon Energy Partners Holdings:                                                        

yankee 6.73% 12/11/02 (e)        Baa2   17,000                    17,564              

6.46% 3/4/08 (e)                 Baa2   25,500                    25,850              

7.05% 12/11/07 (e)               Baa2   18,000                    18,831              

DR Investments UK PLC yankee     A2     32,000                    33,248              
7.1% 5/15/02 (e)                                                                      

Israel Electric Corp. Ltd.:                                                           

yankee 7.25% 12/15/06 (e)        A3     9,250                     9,306               

7.75% 12/15/27 (e)               A3     50,905                    46,878              

Niagara Mohawk Power Corp.       Ba2    5,945                     6,614               
7.75% 10/1/08                                                                         

Texas Utilities Co. 6.375%       Baa3   19,610                    20,033              
1/1/08                                                                                

                                                                  179,865             

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

UTILITIES - CONTINUED                                                                 

GAS - 0.2%                                                                            

Kern River Funding Corp.         A3    $ 20,000                  $ 20,664             
6.72% 9/30/01 (e)                                                                     

Southwest Gas Corp. 9.75%        Baa2   20,650                    23,033              
6/15/02                                                                               

                                                                  43,697              

TELEPHONE SERVICES - 1.0%                                                             

Allegiance Telecom, Inc.         -      1,870                     1,954               
12.875% 5/15/08                                                                       

Covad Communications Group,      -      11,510                    6,791               
Inc. 0% 3/15/08 (c)                                                                   

DTI Holdings, Inc. 0% 3/1/08     -      8,390                     2,098               
(c)                                                                                   

Firstworld Communications,       -      6,340                     2,441               
Inc. 0% 4/15/08 (c)                                                                   

GCI, Inc. 9.75% 8/1/07           B2     2,120                     2,099               

Global TeleSystems Group,        Caa2   3,740                     3,618               
Inc. 9.875% 2/15/05                                                                   

GST Network Funding, Inc. 0%     -      21,340                    9,710               
5/1/08 (c)(e)                                                                         

GST Equipment Funding, Inc.      -      3,630                     3,712               
13.25% 5/1/07                                                                         

GST Telecommunications, Inc.     -      9,605                     8,789               
12.75% 11/15/07                                                                       

Hermes Europe Railtel BV         B3     5,770                     6,116               
10.375% 1/15/09 (e)                                                                   

Hyperion Telecommunications,     B3     10,710                    8,247               
Inc. 0% 4/15/03 (c)                                                                   

ICG Holdings, Inc. 0% 9/15/05    -      8,550                     7,182               
(c)                                                                                   

ICG Services, Inc. 0% 2/15/08    -      28,040                    15,632              
(c)                                                                                   

IXC Communications, Inc. 9%      B3     13,300                    13,167              
4/15/08                                                                               

KMC Telecom Holdings, Inc. 0%    -      4,850                     2,425               
2/15/08 (c)                                                                           

Level 3 Communications, Inc.     B3     19,270                    19,077              
9.125% 5/1/08                                                                         

Logix Communications             -      9,910                     8,919               
Enterprises, Inc. 12.25%                                                              
6/15/08                                                                               

MCI WorldCom, Inc.:                                                                   

6.4% 8/15/05                     Baa2   30,620                    31,757              

7.75% 4/1/07                     Baa2   9,230                     10,479              

8.875% 1/15/06                   Baa2   28,746                    31,301              

McLeodUSA, Inc. 0% 3/1/07 (c)    B2     13,580                    10,558              

NEXTLINK Communications LLC      B3     2,990                     3,244               
12.5% 4/15/06                                                                         

NEXTLINK Communications, Inc.:                                                        

9% 3/15/08                       B3     2,020                     1,914               

9.625% 10/1/07                   B3     3,120                     3,042               

10.75% 11/15/08 (e)              B3     8,170                     8,476               

Optel Communications Corp.       -      8,600                     8,056               
15% 12/29/04 (g)                                                                      

CORPORATE BONDS - CONTINUED                                                           

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

NONCONVERTIBLE BONDS -                                                                
CONTINUED                                                                             

UTILITIES - CONTINUED                                                                 

TELEPHONE SERVICES - CONTINUED                                                        

Pathnet, Inc. 12.25% 4/15/08     -     $ 4,910                   $ 2,701              

Rhythms Netconnections, Inc.     -      15,100                    8,305               
0% 5/15/08 (c)                                                                        

WinStar Communications, Inc.:                                                         

0% 10/15/05 (c)                  Caa1   5,550                     3,913               

0% 3/15/08 (c)                   CCC    11,940                    8,239               

14.5% 10/15/05 (c)               Caa1   14,680                    16,001              

Winstar Equipment Corp. 12.5%    B3     4,950                     4,901               
3/15/04                                                                               

                                                                  274,864             

TOTAL UTILITIES                                                   737,243             

TOTAL NONCONVERTIBLE BONDS                                        4,287,782           

TOTAL CORPORATE BONDS                                             4,364,702           
(Cost $4,387,510)                                                                     

U.S. GOVERNMENT AND                                                                   
GOVERNMENT AGENCY                                                                     
OBLIGATIONS - 3.8%                                                                    

U.S. GOVERNMENT AGENCY                                                                
OBLIGATIONS - 1.0%                                                                    

Fannie Mae:                                                                           

5.75% 6/15/05                    Aaa    28,300                    29,339              

6.74% 5/13/04                    Aaa    8,500                     9,061               

6.79% 6/2/04                     Aaa    43,335                    46,572              

Federal Agricultural Mortgage                                                         
Corp.:                                                                                

7.01% 8/10/03                    Aaa    1,040                     1,119               

7.01% 8/10/04                    Aaa    1,340                     1,457               

7.04% 8/10/05                    Aaa    5,100                     5,616               

Federal Home Loan Bank:                                                               

7.56% 9/1/04                     Aaa    1,340                     1,493               

8.09% 12/28/04                   Aaa    3,500                     4,008               

8.195% 12/22/04                  Aaa    10,000                    11,502              

Freddie Mac 5.035% 4/28/03       Aaa    35,000                    34,993              

Government Loan Trusts           Aaa    9,240                     10,338              
(assets of Trust guaranteed                                                           
by U.S. Government through                                                            
Agency for International                                                              
Development) 8.5% 4/1/06                                                              

U.S. GOVERNMENT AND                                                                   
GOVERNMENT AGENCY                                                                     
OBLIGATIONS - CONTINUED                                                               

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

U.S. GOVERNMENT AGENCY                                                                
OBLIGATIONS - CONTINUED                                                               

Government Trust Certificates    Aaa   $ 12,563                  $ 13,232             
(assets of Trust guaranteed                                                           
by U.S. Government through                                                            
Defense Security Assistance                                                           
Agency):  Class T-3, 9.625%                                                           
5/15/02                                                                               

Class 1-C, 9.25% 11/15/01        Aaa    17,935                    19,036              

Class 2-E 9.4% 5/15/02           Aaa    11,532                    12,151              

Guaranteed Export Trust          Aaa    430                       428                 
Certificates (assets of                                                               
Trust guaranteed by U.S.                                                              
Government through                                                                    
Export-Import Bank) Series                                                            
1994 C, 6.61% 9/15/99                                                                 

Israel Export Trust              Aaa    3,925                     4,050               
Certificates (assets of                                                               
Trust guaranteed by U.S.                                                              
Government through                                                                    
Export-Import Bank) Series                                                            
1994 1, 6.88% 1/26/03                                                                 

Overseas Private Investment      -      30,000                    31,790              
Corp. U.S. Government                                                                 
guaranteed participation                                                              
certificate Series 1996-A1,                                                           
6.726% 9/15/10 (callable)                                                             

Private Export Funding Corp.:                                                         

secured 6.86% 4/30/04            Aaa    2,580                     2,682               

secured 7.9% 3/31/00             Aaa    12,750                    13,162              

U.S. Department of Housing       Aaa    11,375                    12,732              
and Urban Development                                                                 
government guaranteed                                                                 
participation certificates                                                            
Series 1995 A, 8.27% 8/1/03                                                           

TOTAL U.S. GOVERNMENT AGENCY                                      264,761             
OBLIGATIONS                                                                           

U.S. TREASURY OBLIGATIONS -                                                           
2.8%                                                                                  

U.S. Treasury Bond:                                                                   

6.125% 11/15/27                  Aaa    16,800                    18,905              

6.375% 8/15/27                   Aaa    8,000                     9,260               

6.875% 8/15/25                   Aaa    128,060                   156,133             

7.625% 2/15/25                   Aaa    64,935                    85,887              

8.75% 5/15/17                    Aaa    4,550                     6,359               

8.875% 8/15/17                   Aaa    61,480                    86,984              

11.625% 11/15/04                 Aaa    48,000                    64,485              

12% 5/15/05                      Aaa    63,000                    87,432              

12.375% 5/15/04                  Aaa    15,756                    21,332              

U.S. GOVERNMENT AND                                                                   
GOVERNMENT AGENCY                                                                     
OBLIGATIONS - CONTINUED                                                               

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

U.S. TREASURY OBLIGATIONS -                                                           
CONTINUED                                                                             

U.S. Treasury Notes:                                                                  

7% 7/15/06                       Aaa   $ 124,925                 $ 142,258            

7.5% 11/15/01                    Aaa    54,250                    58,251              

TOTAL U.S. TREASURY                                               737,286             
OBLIGATIONS                                                                           

TOTAL U.S. GOVERNMENT AND                                         1,002,047           
GOVERNMENT AGENCY OBLIGATIONS                                                         
(Cost $982,169)                                                                       

U.S. GOVERNMENT AGENCY -                                                              
MORTGAGE SECURITIES - 9.1%                                                            

FANNIE MAE - 7.4%                                                                     

5.5% 10/1/08 to 1/1/14           Aaa    217,021                   214,807             

6% 10/1/08 to 1/1/29             Aaa    326,939                   324,689             

6% 1/1/14 to 2/1/14 (h)          Aaa    201,500                   202,382             

6.5% 12/1/06 to 1/1/29           Aaa    1,056,894                 1,066,469           

7% 5/1/23 to 2/1/29              Aaa    109,572                   111,970             

7% 1/1/29                        Aaa    919                       939                 

7.5% 8/1/07 to 10/1/28           Aaa    3,060                     3,152               

8.5% 1/1/09 to 7/1/21            Aaa    52                        55                  

10% 8/1/17                       Aaa    69                        74                  

TOTAL FANNIE MAE                                                  1,924,537           

FREDDIE MAC - 0.1%                                                                    

5.5% 2/1/99 to 5/1/02            Aaa    29                        29                  

7% 6/1/99 to 4/1/01              Aaa    12,719                    12,782              

8% 10/1/16 to 4/1/20             Aaa    2,372                     2,493               

TOTAL FREDDIE MAC                                                 15,304              

GOVERNMENT NATIONAL MORTGAGE                                                          
ASSOCIATION - 1.6%                                                                    

6% 9/15/08 to 12/15/10           Aaa    24,027                    24,342              

6.5% 6/15/02 to 8/15/25          Aaa    22,559                    22,829              

7% 10/15/17 to 12/15/28          Aaa    89,631                    91,817              

7.5% 8/15/21 to 8/15/28          Aaa    180,337                   186,381             

8% 4/15/00 to 10/15/25           Aaa    68,106                    70,854              

8.5% 11/15/05 to 11/15/22        Aaa    4,597                     4,899               

U.S. GOVERNMENT AGENCY -                                                              
MORTGAGE SECURITIES -                                                                 
CONTINUED                                                                             

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

GOVERNMENT NATIONAL MORTGAGE                                                          
ASSOCIATION - CONTINUED                                                               

9% 3/15/10 to 5/15/22            Aaa   $ 932                     $ 1,000              

9.5% 7/15/09 to 3/15/23          Aaa    7,578                     8,118               

10% 11/15/09 to 1/15/26          Aaa    10,242                    11,095              

11% 3/15/10 to 7/20/20           Aaa    3,652                     4,019               

TOTAL GOVERNMENT NATIONAL                                         425,354             
MORTGAGE ASSOCIATION                                                                  

TOTAL U.S. GOVERNMENT AGENCY                                      2,365,195           
- MORTGAGE SECURITIES                                                                 
(Cost $2,322,838)                                                                     

ASSET-BACKED SECURITIES - 1.0%                                                        

Airplanes Pass Through Trust     Ba2    10,600                    11,077              
10.875% 3/15/19                                                                       

Arcadia Automobile               Aaa    15,835                    15,899              
Receivables Trust 6.5%                                                                
6/17/02                                                                               

Capital Equipment Receivables    Aaa    14,670                    14,676              
Trust 6.11% 7/15/99                                                                   

Chase Manhattan Grantor Trust:                                                        

6.61% 9/15/02                    Aaa    13,346                    13,496              

6.76% 9/15/02                    A3     3,495                     3,511               

Chevy Chase Auto Receivables                                                          
Trust:                                                                                

5.9% 7/15/03                     Aaa    14,524                    14,551              

5.91% 12/15/04                   Aaa    10,613                    10,675              

6.6% 12/15/02                    Aaa    5,423                     5,467               

Contimortgage Home Equity        Aaa    34,000                    34,021              
Loan Trust 6.26% 7/15/12                                                              

Ford Credit Auto Owner Trust:                                                         

6.2% 12/15/02                    Baa3   14,100                    14,154              

6.4% 5/15/02                     A1     19,240                    19,466              

6.4% 12/15/02                    Baa3   8,660                     8,695               

Ford Credit Grantor Trust        Aaa    2,673                     2,676               
5.9% 10/15/00                                                                         

Key Auto Finance Trust:                                                               

6.3% 10/15/03                    A2     17,393                    17,415              

6.65% 10/15/03                   Baa3   5,100                     5,155               

KeyCorp Auto Grantor Trust       A3     177                       177                 
5.8% 7/15/00                                                                          

MBNA Master Credit Card Trust    Aaa    34,000                    35,714              
II 6.55% 1/15/07                                                                      

ASSET-BACKED SECURITIES -                                                             
CONTINUED                                                                             

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

Sears Credit Account Master      Aaa   $ 28,383                  $ 28,490             
Trust II 6.5% 10/15/03                                                                

UFSB Grantor Trust 8.2%          Baa2   257                       257                 
1/10/01                                                                               

TOTAL ASSET-BACKED SECURITIES                                     255,572             
(Cost $252,779)                                                                       

COMMERCIAL MORTGAGE                                                                   
SECURITIES - 1.2%                                                                     

ACP Mortgage LP Series E,        BB     2,006                     1,900               
7.0802%  2/28/28 (e)(f)                                                               

Berkeley Federal Bank & Trust    -      6,080                     4,352               
FSB Series 1994 Class 1-B                                                             
7.667% 8/1/24 (e)(f)                                                                  

CBM Funding Corp.:                                                                    

sequential pay Series 1996-1     AA     298                       299                 
Class A 1, 7.55% 7/1/99                                                               

Series 1996-1B Class C, 7.86%    BBB    12,500                    12,865              
2/1/08                                                                                

CS First Boston Mortgage                                                              
Securities Corp.:                                                                     

Series 1995-WF1 Class A-2,       AAA    30,218                    30,180              
6.648% 12/21/27                                                                       

Series 1997 C2 Class D, 7.27%    Baa2   22,200                    21,062              
1/17/35                                                                               

Series 1998 FLI Class E,         Baa2   42,880                    41,714              
6.4788% 1/10/13 (e)(f)                                                                

DLJ Mortgage Acceptance Corp.    -      2,800                     2,753               
Series 1993-MF12 Class B-2,                                                           
10.1% 9/18/03 (e)                                                                     

Equitable Life Assurance         A2     6,000                     6,364               
Society of the United States                                                          
(The) Series 1996 1 Class                                                             
C1, 7.52%    5/15/06 (e)                                                              

First Chicago/Lennar Trust I:                                                         

Series 1997 CHL1 Class E,        -      2,900                     2,224               
8.1117% 4/1/39 (f)                                                                    

Series 1997-CHL1 Class D,        -      3,500                     3,001               
8.1117% 4/13/39 (f)                                                                   

General Motors Acceptance        Ba3    3,500                     2,837               
Corp. Commercial Mortgage                                                             
Securities, Inc. Series                                                               
1996-C1 Class F, 7.86%                                                                
10/15/28 (e)                                                                          

GS Mortgage Securities Corp.     Baa3   20,000                    18,243              
II Series 1998 GLII Class E,                                                          
6.9697% 4/13/31 (e)(f)                                                                

LB Multifamily Mortgage Trust    Caa1   3,000                     2,070               
Series 1991 4 Class A1,                                                               
6.9741% 4/25/21 (f)                                                                   

Morgan Stanley Capital I, Inc.:                                                       

Series 1996-MBL1 Class E,        -      3,642                     3,588               
8.1594% 5/25/21 (e)(f)                                                                

COMMERCIAL MORTGAGE                                                                   
SECURITIES - CONTINUED                                                                

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

Morgan Stanley Capital I,                                                             
Inc.: - continued                                                                     

Series 1998 CF1:                                                                      

Class D, 7.35% 1/15/12           Baa2  $ 19,733                  $ 19,055             

Class E, 7.35% 12/15/12          Baa3   6,848                     6,033               

Mortgage Capital Funding,        Ba1    4,500                     3,773               
Inc. Series 1998-MC3 Class                                                            
F, 0% 11/18/31 (e)(f)                                                                 

Nationslink Funding Corp.        BB     4,500                     3,491               
7.105% 8/20/30                                                                        

Nomura Asset Securities Corp.    Baa2   55,000                    50,170              
Series 1998-D6 Class A-4,                                                             
7.5718% 3/17/28 (f)                                                                   

Nomura Depositor Trust Series    -      3,500                     2,998               
1998-ST1A Class B1A, 7.75%                                                            
1/15/03 (e)(f)                                                                        

Penn Mutual Life Insurance       -      6,500                     4,069               
Co. (The)/Penn Insurance &                                                            
Annuity Co. Series 1996-PML                                                           
Class K, 7.9% 11/15/26 (e)                                                            

Resolution Trust Corp.:                                                               

Series 1991 M2 Class A3,         Ba3    1,268                     1,027               
7.2498% 9/25/20 (f)                                                                   

Series 1995-C2 Class D, 7%       Baa2   3,564                     3,548               
5/25/27                                                                               

Structured Asset Securities                                                           
Corp.:                                                                                

Series 1992-M1 Class C, 7.05%    B2     2,200                     2,033               
11/25/02                                                                              

Series 1993-C1 Class E, 6.6%     B      3,250                     1,463               
10/25/24 (e)                                                                          

Series 1995 C1 Class F,          -      3,000                     2,391               
7.375% 12/25/25 (e)                                                                   

Series 1995-C1 Class E,          BB     7,896                     7,444               
7.375% 9/25/24 (e)                                                                    

Series 1996 CFL Class G,         B      3,500                     3,189               
7.75% 2/25/28 (e)                                                                     

Series 1996-CFL Class E,         BB+    11,188                    10,957              
7.75% 2/25/28                                                                         

Thirteen Affiliates of           Aaa    32,000                    33,384              
General Growth Properties,                                                            
Inc. sequential pay Series A                                                          
2, 6.602% 12/15/10 (e)                                                                

Whitehall Partners Series        -      8,892                     8,864               
1995-C1 Class E, 8.01%                                                                
7/20/25 (e)                                                                           

TOTAL COMMERCIAL MORTGAGE                                         317,341             
SECURITIES                                                                            
(Cost $320,124)                                                                       

FOREIGN GOVERNMENT AND                                                                
GOVERNMENT AGENCY                                                                     
OBLIGATIONS - 0.3%                                                                    

Korean Republic:                                                                      

global bond 8.75% 4/15/03        Ba1    15,580                    16,271              

8.875% 4/15/08                   Ba1    33,220                    36,084              

Manitoba Province yankee         Aa3    5,000                     5,292               
6.75% 3/1/03                                                                          

Quebec Province:                                                                      

yankee:                                                                               

6.86% 4/15/26 (d)                A2     16,750                    18,431              

FOREIGN GOVERNMENT AND                                                                
GOVERNMENT AGENCY                                                                     
OBLIGATIONS - CONTINUED                                                               

MOODY'S RATINGS (UNAUDITED) (I)        PRINCIPAL AMOUNT (000S)   VALUE (NOTE 1) (000S)

Quebec Province yankee: -                                                             
continued                                                                             

7.125% 2/9/24                    A2    $ 2,560                   $ 2,811              

 7.5% 7/15/23                    A2     10,060                    11,517              

TOTAL FOREIGN GOVERNMENT AND                                      90,406              
GOVERNMENT AGENCY OBLIGATIONS                                                         
(Cost $87,059)                                                                        

SUPRANATIONAL OBLIGATIONS -                                                           
0.0%                                                                                  

Inter American Development       Aaa    10,850                    11,456              
Bank yankee 6.29% 7/16/27                                                             
(Cost $10,782)                                                                        

CERTIFICATES OF DEPOSIT - 0.1%                                                        

Canadian Imperial Bank of               21,000                    21,281              
Commerce,  New York yankee                                                            
6.2% 8/1/00 (Cost $21,032)                                                            

CASH EQUIVALENTS - 2.8%                                                               

                                        SHARES                                        

Taxable Central Cash Fund (b)           721,876,086               721,876             
(Cost $721,876)                                                                       

TOTAL INVESTMENT IN                                             $ 26,056,647          
SECURITIES - 100%                                                                     
(Cost $20,773,370)                                                                    

SECURITY TYPE ABBREVIATIONS                                                     
PIES   - Premium Income                                                         
Equity Securities                                             

PRIDES - Premium Redeemable                                                     
Increased Dividend                                            
Equity Securities                                             

QUIPS  - Quarterly Income                                                       
Preferred Securities                                          

LEGEND                                                                          
(a) Non-income producing                                                        

(b) At period end, the seven-day yield on the Taxable Central Cash              
Fund was 4.81%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          

(c) Debt obligation initially issued in zero coupon form which                  
converts to coupon form at a specified rate and date. The rate shown            
is the rate at period end.                                                      

(d) Debt obligation initially issued at one coupon which converts to a          
higher coupon at a specified date. The rate shown is the rate at                
period end.                                                                     

(e) Security exempt from registration under Rule 144A of the                    
Securities Act of 1933.  These securities may be resold in                      
transactions exempt from registration, normally to qualified                    
institutional buyers. At the period end, the value of these securities          
amounted to $921,894,000 or 3.5% of net assets.                                 

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

(g) 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 DATE      ACQUISITION COST (000S)        

Alliance Gaming Corp.       7/28/98               -                             

Mothers Work, Inc.          6/18/98              $ 21                           

Optel Communications Corp.  12/31/97             $ 506                          
warrants 12/29/04                                                               

Optel Communications Corp.  12/31/97 - 12/31/98  $ 8,140                        
15% 12/29/04                                                                    

(h) Security purchased on a delayed delivery or when-issued basis (see          
Note 2 of Notes to Financial Statements).                                       

(i) Standard & Poor's credit ratings are used in the absence of a               
rating by Moody's Investors Service, Inc.                                       

OTHER INFORMATION                                                               

The composition of long-term debt holdings as a percentage of total             
value of investments in securities, is as follows (ratings are                  
unaudited):                                                                     

MOODY'S RATINGS           S&P RATINGS                                         
Aaa, Aa, A 18.1%           AAA, AA, A 17.1%                                     
Baa         6.6%           BBB         7.3%                                     
Ba          1.4%           BB          1.3%                                     
B           3.9%           B           4.0%                                     
Caa         1.0%           CCC         0.8%                                     
Ca, C       0.0%           CC, C       0.0%                                     
D           0.0%          

For some foreign government obligations, FMR has assigned the ratings           
for the sovereign credit of the issuing government. The percentage not          
rated by Moody's or S&P amounted to 0.9%. FMR has determined that               
unrated debt securities that are lower quality account for 0.2% of the          
total value of investment in securities.                                        

INCOME TAX INFORMATION                                                          

At January 31, 1999, the aggregate cost of investment securities for            
income tax purposes was $20,780,651,000. Net unrealized appreciation            
aggregated $5,275,996,000, of which $5,678,588,000 related to                   
appreciated investment securities and $402,592,000 related to                   
depreciated investment securities.                                              

FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             
AMOUNTS IN THOUSANDS (EXCEPT                                                    
PER-SHARE AMOUNT)                         JANUARY                               
            31, 1999

ASSETS                                                                          

Investment in securities, at              $ 26,056,647                          
value (cost $20,773,370) -                                                      
See accompanying schedule                                                       

Cash                                       1,815                                

Receivable for investments                 199,494                              
sold                                                                            

Receivable for fund shares                 34,939                               
sold                                                                            

Dividends receivable                       22,418                               

Interest receivable                        107,358                              

Other receivables                          1,018                                

TOTAL ASSETS                              26,423,689                          

LIABILITIES                                                                     

Payable for investments        $ 134,692                                        
purchased Regular delivery                                                      

Delayed delivery               202,030                                        

Payable for fund shares         67,020                                          
redeemed                                                                        

Accrued management fee          9,346                                           

Other payables and accrued      5,104                                           
expenses                                                                        

TOTAL LIABILITIES                         418,192                             

NET ASSETS                                $ 26,005,497                          

Net Assets consist of:                                                          

Paid in capital                           $ 20,433,904                          

Undistributed net investment               69,024                               
income                                                                          

Accumulated undistributed net              219,278                              
realized gain (loss) on                                                         
investments and foreign                                                         
currency transactions                                                           

Net unrealized appreciation                5,283,291                            
(depreciation) on                                                               
investments and assets and                                                      
liabilities in foreign                                                          
currencies                                                                      

NET ASSETS, for 1,284,732                 $ 26,005,497                          
shares outstanding                                                              

NET ASSET VALUE, offering                  $20.24                               
price and redemption price                                                      
per share ($26,005,497                                                          
(divided by) 1,284,732                                                          
shares)                                                                         

STATEMENT OF OPERATIONS                                                         
AMOUNTS IN THOUSANDS                       SIX                                  
                  MONTHS ENDED
                      JANUARY 31, 1999

INVESTMENT INCOME                          $ 140,722                            
Dividends                                                                       

Interest                                    327,853                             

TOTAL INCOME                               468,575                            

EXPENSES                                                                        

Management fee                   $ 53,067                                       

Transfer agent fees               23,145                                        

Accounting fees and expenses      489                                           

Non-interested trustees'          64                                            
compensation                                                                    

Custodian fees and expenses       299                                           

Registration fees                 520                                           

Audit                             92                                            

Legal                             78                                            

Miscellaneous                     76                                            

Total expenses before            77,830                                       
reductions                                                                      

Expense reductions               (2,149)   75,681                             

NET INVESTMENT INCOME                       392,894                             

REALIZED AND UNREALIZED GAIN                                                    
(LOSS)                                                                          
Net realized gain (loss) on:                                                    

Investment securities            450,994                                      

Foreign currency transactions    (111)     450,883                            

Change in net unrealized                                                        
appreciation (depreciation)                                                     
on:                                                                             

Investment securities            657,826                                      

Assets and liabilities in        (1)       657,825                            
foreign currencies                                                              

NET GAIN (LOSS)                             1,108,708                           

NET INCREASE (DECREASE) IN                 $ 1,501,602                          
NET ASSETS RESULTING  FROM                                                      
OPERATIONS                                                                      

                                                        [Enlarge/Download Table]

                                                                                       
STATEMENT OF CHANGES IN NET ASSETS                                                     
AMOUNTS IN THOUSANDS             SIX MONTHS ENDED JANUARY 31,  YEAR ENDED JULY 31, 1998
                                 1999                                                  

INCREASE (DECREASE) IN NET                                                             
ASSETS                                                                                 

Operations Net investment        $ 392,894                     $ 798,617               
income                                                                                 

 Net realized gain (loss)         450,883                       2,253,079              

 Change in net unrealized         657,825                       (223,880)              
appreciation (depreciation)                                                            

 NET INCREASE (DECREASE) IN       1,501,602                     2,827,816              
NET ASSETS RESULTING  FROM                                                             
OPERATIONS                                                                             

Distributions to shareholders     (413,096)                     (794,054)              
From net investment income                                                             

 From net realized gain           (1,843,505)                   (1,073,230)            

 TOTAL DISTRIBUTIONS              (2,256,601)                   (1,867,284)            

Share transactions Net            2,243,972                     4,338,239              
proceeds from sales of shares                                                          

 Reinvestment of distributions    2,154,194                     1,786,916              

 Cost of shares redeemed          (2,577,920)                   (4,472,056)            

 NET INCREASE (DECREASE) IN       1,820,246                     1,653,099              
NET ASSETS RESULTING  FROM                                                             
SHARE TRANSACTIONS                                                                     

  TOTAL INCREASE (DECREASE)       1,065,247                     2,613,631              
IN NET ASSETS                                                                          

NET ASSETS                                                                             

 Beginning of period              24,940,250                    22,326,619             

 End of period (including        $ 26,005,497                  $ 24,940,250            
undistributed net investment                                                           
income of $69,024 and                                                                  
$89,226, respectively)                                                                 

OTHER INFORMATION                                                                      
Shares                                                                                 

 Sold                             115,443                       215,522                

 Issued in reinvestment of        120,613                       91,754                 
distributions                                                                          

 Redeemed                         (133,690)                     (221,223)              

 Net increase (decrease)          102,366                       86,053                 


                                                        [Enlarge/Download Table]

                                                                                                               
FINANCIAL HIGHLIGHTS                                                                                           
                               SIX MONTHS ENDED                                                                
                               JANUARY 31,       YEARS ENDED JULY 31,                                          

                               1999               1998                 1997      1996      1995      1994      

SELECTED PER-SHARE DATA                                                                                        

Net asset value, beginning of  $ 21.09            $ 20.37              $ 17.34   $ 16.69   $ 15.93   $ 16.59   
period                                                                                                         

Income from Investment                                                                                         
Operations                                                                                                     

 Net investment income            .31 D              .69 D                .66 D     .64       .42       .46    

 Net realized and                 .74                1.68                 4.57      1.00      1.53      .88    
unrealized gain    (loss)                                                                                      

 Total from investment            1.05               2.37                 5.23      1.64      1.95      1.34   
operations                                                                                                     

Less Distributions                                                                                             

 From net investment income       (.34)              (.69)                (.66)     (.55)     (.44)     (.51)  

 From net realized gain           (1.56)             (.96)                (1.54)    (.44)     (.75)     (1.49) 

 Total distributions              (1.90)             (1.65)               (2.20)    (.99)     (1.19)    (2.00) 

Net asset value, end of        $ 20.24            $ 21.09              $ 20.37   $ 17.34   $ 16.69   $ 15.93   
period                                                                                                         

TOTAL RETURN B, C                6.34%              12.56%               33.63%    10.06%    13.03%    8.60%   

RATIOS AND SUPPLEMENTAL DATA                                                                                   

Net assets,  end of period     $ 26,005           $ 24,940             $ 22,327  $ 16,699  $ 14,387  $ 10,899  
(in millions)                                                                                                  

Ratio of expenses to average    .65% A                .64%                 .67%      .74%      .77%      .80%  
net assets                                                                                                     

Ratio of expenses to average    .63% A, E             .63% E               .66% E    .72% E    .77%      .79% E
net assets after expense                                                                                       
reductions                                                                                                     

Ratio of net investment         3.26% A               3.40%                3.69%     3.44%     3.50%     4.00% 
income to average net assets                                                                                   

Portfolio turnover rate         80% A                 84%                  80%       139%      76%       74%   


A ANNUALIZED                                                                    
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.           
C 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).                                                          
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 January 31, 1999                                           

1. SIGNIFICANT ACCOUNTING POLICIES.                                             

Fidelity Puritan Fund (the fund) is a fund of Fidelity Puritan Trust            
(the trust) and is authorized to issue an unlimited number of shares.           
The trust is registered under the Investment Company Act of 1940, as            
amended (the 1940 Act), as an open-end management investment company            
organized as a Massachusetts business trust. The financial statements           
have been prepared in conformity with 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. Equity securities for which quotations are readily          
available are valued at the last sale price, or if no sale price, at            
the closing bid price. Debt securities for which quotations are                 
readily available are valued by a pricing service at their market               
values as determined by their most recent bid prices in the principal           
market (sales prices if the principal market is an exchange) in which           
such securities are normally traded. Securities (including restricted           
securities) for which market quotations are not readily available are           
valued at their fair value as determined in good faith under                    
consistently applied procedures under the general supervision of the            
Board of Trustees. 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             
and settlement date 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 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                                                                        

1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED                                  

INVESTMENT INCOME - CONTINUED                                                   

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.                                                        

EXPENSES. Most expenses of the trust can be directly attributed to a            
fund. Expenses which cannot be directly attributed are apportioned              
among the funds in the trust.                                                   

DEFERRED TRUSTEE COMPENSATION. Under a Deferred Compensation Plan (the          
Plan) non-interested Trustees must defer receipt of a portion of, and           
may elect to defer receipt of an additional portion of, their annual            
compensation. Deferred amounts are treated as though equivalent dollar          
amounts had been invested in shares of the fund or are invested in a            
cross-section of other Fidelity funds. 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, paydown gains/losses on certain             
securities, futures transactions, market discount, 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 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.          

2. OPERATING POLICIES - CONTINUED                                               

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.                    

DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell                    
securities on a delayed delivery basis. Payment and delivery may take           
place a month or more after the date of the transaction. The price of           
the underlying securities and the date when the securities will be              
delivered and paid for are fixed at the time the transaction is                 
negotiated. The market values of the securities purchased or sold on a          
delayed delivery basis are identified as such in the fund's schedule            
of investments. The fund may receive compensation for interest forgone          
in the purchase of a delayed delivery 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 or if the counterparty does not perform under             
the contract.                                                                   

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 sale at an acceptable price may be difficult.           
At the end of the period, restricted securities (excluding 144A                 
issues) amounted to $8,118,000 or 0.0% of net assets.                           

3. PURCHASES AND SALES OF INVESTMENTS.                                          

Purchases and sales of securities, other than short-term securities,            
aggregated $9,414,535,000 and $9,397,748,000, respectively, of which            
U.S. government and government agency obligations aggregated                    
$2,795,773,000 and $2,667,529,000, respectively.                                

4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.                                 

MANAGEMENT FEE. As the fund's investment adviser, FMR receives a                
monthly 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 .15%. 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. For the period, the management           
fee was equivalent to an annualized rate of .44% of average net                 
assets.                                                                         

TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an                   
affiliate of FMR, is the fund's transfer, dividend disbursing and               
shareholder servicing agent. FSC receives account fees and asset-based          
fees that vary according to account size and type of account. FSC pays          
for typesetting, printing and mailing of all shareholder reports,               
except proxy statements. For the period, the transfer agent fees were           
equivalent to an annualized rate of .19% 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 $1,003,000 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 $1,565,000 under this arrangement.                              
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 $25,000 and $559,000, respectively, under these                      
arrangements.                                                                   

REPORT OF INDEPENDENT ACCOUNTANTS                                               

To the Trustees of Fidelity Puritan Trust and the Shareholders of               
Fidelity Puritan 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 Puritan Fund (a fund of Fidelity Puritan Trust) at January             
31, 1999, 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               
Puritan 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 January           
31, 1999, by correspondence with the custodian and brokers, provide a           
reasonable basis for the opinion expressed above.                               

/s/PricewaterhouseCoopers LLP                                                   
PricewaterhouseCoopers LLP                                                      
Boston, Massachusetts                                                           
March 12, 1999                                                                  

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                                                    
Fidelity Investments Money Management, Inc. (FIMM), Merrimack, NH               

OFFICERS                                                                        
Edward C. Johnson 3d, President                                                 
Robert C. Pozen, Senior Vice President                                          
Richard A. Spillane, Jr., Vice President                                        
Bettina Doulton, Vice President                                                 
Kevin E. Grant, Vice President                                                  
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
Matthew N. Karstetter, Deputy 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                                                                

* INDEPENDENT TRUSTEES                                                          

PUR-SANN-0399  72342                                                            
1.700677.101                                                                    

GENERAL DISTRIBUTOR                                                             
Fidelity Distributors Corporation                                               
Boston, MA                                                                      

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

CUSTODIAN                                                                       
The Chase Manhattan Bank                                                        
New York, NY                                                                    

FIDELITY'S GROWTH AND INCOME FUNDS                                              
Balanced Fund                                                                   
Convertible Securities Fund                                                     
Equity-Income Fund                                                              
Equity-Income II Fund                                                           
Fidelity (registered trademark) Fund                                            
Global Balanced Fund                                                            
Growth & Income Portfolio                                                       
Growth & Income II Portfolio                                                    
Puritan(registered trademark) Fund                                              
Real Estate Investment Portfolio                                                
Utilities 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)  1-800-544-5555                         
AUTOMATED LINE FOR QUICKEST SERVICE                                           

(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
		7/31/04		24F-2NT,  N-CSR,  NSAR-B
		7/31/99		24F-2NT,  24F-2NT/A,  N-30D,  NSAR-B
Filed on:		3/23/99
		3/12/99
For Period End:		1/31/99		NSAR-A
		1/1/99
		7/31/98		24F-2NT,  N-30D,  NSAR-B
		2/28/93
		2/1/93
				List all Filings