Post-Effective Amendment
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 485BPOS Post-Effective Amendment 397± 1.68M
11: EX-5.B Opinion re: Legality 5± 25K
12: EX-5.C Opinion re: Legality 5± 25K
13: EX-5.D Opinion re: Legality 6± 27K
14: EX-5.E Opinion re: Legality 6± 27K
15: EX-5.F Opinion re: Legality 6± 27K
16: EX-11 Statement re: Computation of Earnings Per Share 1 10K
2: EX-24.A1 Power of Attorney 38± 164K
3: EX-24.A2 Power of Attorney 36± 153K
4: EX-24.A3 Power of Attorney 38± 167K
5: EX-24.A4 Power of Attorney 47± 191K
6: EX-24.A5 Power of Attorney 43± 178K
7: EX-24.A6 Power of Attorney 28± 117K
8: EX-24.A7 Power of Attorney 44± 180K
9: EX-24.A8 Power of Attorney 53± 229K
10: EX-24.A9 Power of Attorney 37± 163K
EX-24.A3 — Power of Attorney
EXHIBIT 24(A)(3)
(2_FIDELITY_LOGOS)FIDELITY
INSURED TAX-FREE
PORTFOLIO
ANNUAL REPORT
DECEMBER 31, 1993
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes.
PERFORMANCE 4 How the fund has done over time.
FUND TALK 7 The manager's review of fund
performance, strategy, and outlook.
INVESTMENT CHANGES 10 A summary of major shifts in the
fund's investments over the last six
months.
INVESTMENTS 11 A complete list of the fund's
investments with their market value.
FINANCIAL STATEMENTS 26 Statements of assets and liabilities,
operations, and changes in net
assets, as well as financial
highlights.
NOTES 30 Footnotes to the financial
statements.
REPORT OF INDEPENDENT 33 The auditor's opinion.
ACCOUNTANTS
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. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS
CORPORATION IS A
BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED
BY THE
FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
Once the new year begins, many people start reviewing their finances and
calculating their tax bills. No one wants to pay more taxes than they have
to. But a recent survey of 500 U.S. households, conducted by Fidelity and
Yankelovich Partners, showed that few people have taken steps to reduce
their taxes under the new legislation. Many were not even aware that the
new tax laws were retroactive to January 1993.
Whether or not you're someone whose tax bill will increase as a result of
these changes, it may make sense to consider ways to keep more of what you
earn.
First, if your employer offers a 401(k) or 403(b) retirement savings plan,
consider enrolling. These plans are set up so you can make regular
contributions -
before taxes - to a retirement savings plan. They offer a disciplined
savings strategy, the ability to accumulate earnings tax-deferred, and
immediate tax savings. For example, if you earn $40,000 a year and
contribute 7% of your salary to your 401(k) plan, your annual contribution
is $2,800. That reduces your taxable income to $37,200 and, if you're in
the
28% tax bracket, saves you $784 in federal taxes. In addition, you pay no
taxes on any earnings until withdrawal.
It may be a good idea to contact your benefits office as soon as possible
to find out when you can enroll or increase your contribution. Most
employers allow employees to make changes only a few times each year.
Second, consider an IRA. Many people are eligible to make an IRA
contribution (up to $2,000) that is fully tax deductible. That includes
people who are not covered by company pension plans, or those within
certain income brackets. Even if you don't qualify for a fully deductible
contribution, any IRA earnings will grow tax-deferred until withdrawal.
Third, consider adding to your tax-free investments, either municipal bonds
or municipal bond funds. Often these can provide higher after-tax yields
than comparable taxable investments. For example, if you're in the new 36%
federal income tax bracket and invest $10,000 in a taxable investment
yielding 7%, you'll pay $252 in federal taxes and receive $448 in income.
That same $10,000 invested in a tax-free bond fund yielding 5.5% would
allow you to keep $550 in income.
These are three investment strategies that could help lower your tax bill
in 1994. If you're interested in learning more, please call us at
1-800-544-8888 or visit a Fidelity Investor Center.
Wishing you a prosperous new year,
Edward C. Johnson 3d, Chairman
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. Each figure
includes changes in a fund's share price, plus reinvestment of any
dividends (or income) and capital gains (the profits the fund earns when it
sells bonds that have grown in value). You can also look at the fund's
income.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Insured Tax-Free 13.85% 60.65% 113.18%
Lehman Brothers Municipal Bond Index 12.29% 62.86% n/a
Average Insured Municipal Bond Fund 11.93% 57.10% n/a
Consumer Price Index 2.75% 21.00% 34.13%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, one year, five years, or since the fund
started on November 13, 1985. For example, if you had invested $1,000 in a
fund that had a 5% return over the past year, you would have $1,050. You
can compare these figures to the performance of the Lehman Brothers
Municipal Bond Index - a broad gauge of the municipal bond market which
includes both insured and uninsured bonds. To measure how the fund stacked
up against its peers, you can look at the average insured municipal bond
fund, which reflects the perform- ance of 39 insured municipal bond funds
tracked by Lipper Analytical Services. Both benchmarks include reinvested
dividends and capital gains, if any. Comparing the fund's performance to
the consumer price index helps show how your fund did compared to
inflation. (The periods covered by the CPI numbers are the closest
available match to those covered by the fund.)
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 LIFE OF
YEAR YEARS FUND
Insured Tax-Free 13.85% 9.94% 9.75%
Lehman Brothers Municipal Bond Index 12.29% 10.25% n/a
Average Insured Municipal Bond Fund 11.93% 9.44% n/a
Consumer Price Index 2.75% 3.89% 3.66%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Insured Tax Free (013) Lehman Bros. Muni Bond Index
11/30/85 10000.00 10000.00
12/31/85 10295.36 10087.90
01/31/86 10885.74 10682.08
02/28/86 11306.78 11105.62
03/31/86 11410.97 11109.18
04/30/86 11321.24 11117.62
05/31/86 11127.05 10936.62
06/30/86 11220.70 11040.96
07/31/86 11219.99 11107.98
08/31/86 11777.10 11605.28
09/30/86 11745.09 11634.41
10/31/86 12006.08 11835.34
11/30/86 12205.07 12069.80
12/31/86 12182.75 12036.48
01/31/87 12482.28 12398.90
02/28/87 12577.71 12459.90
03/31/87 12446.26 12327.83
04/30/87 11631.11 11709.22
05/31/87 11511.52 11651.14
06/30/87 11686.57 11993.22
07/31/87 11795.85 12115.55
08/31/87 11863.24 12142.81
09/30/87 11201.36 11695.10
10/31/87 11429.84 11736.50
11/30/87 11710.99 12042.94
12/31/87 11927.47 12217.69
01/31/88 12503.15 12652.88
02/29/88 12606.82 12786.62
03/31/88 12236.22 12637.66
04/30/88 12306.70 12733.70
05/31/88 12340.72 12696.90
06/30/88 12550.66 12882.66
07/31/88 12620.07 12966.65
08/31/88 12666.36 12978.07
09/30/88 12903.74 13212.97
10/31/88 13239.60 13446.18
11/30/88 13030.50 13323.01
12/31/88 13261.98 13459.30
01/31/89 13470.40 13737.64
02/28/89 13321.11 13580.90
03/31/89 13321.24 13548.44
04/30/89 13683.55 13870.08
05/31/89 13947.50 14158.16
06/30/89 14136.33 14350.43
07/31/89 14251.73 14545.74
08/31/89 14110.93 14403.33
09/30/89 14061.96 14360.12
10/31/89 14214.19 14535.32
11/30/89 14447.03 14789.69
12/31/89 14515.15 14910.96
01/31/90 14420.23 14840.88
02/28/90 14564.00 14972.96
03/31/90 14579.17 14977.46
04/30/90 14388.74 14869.62
05/31/90 14749.81 15193.78
06/30/90 14870.12 15327.48
07/31/90 15099.44 15552.79
08/31/90 14853.20 15327.28
09/30/90 14922.26 15336.48
10/31/90 15142.32 15614.07
11/30/90 15501.27 15927.91
12/31/90 15542.75 15997.99
01/31/91 15764.85 16212.36
02/28/91 15874.01 16353.41
03/31/91 15829.02 16359.95
04/30/91 16009.80 16577.54
05/31/91 16177.76 16725.08
06/30/91 16134.70 16708.36
07/31/91 16364.83 16912.20
08/31/91 16552.61 17135.44
09/30/91 16771.33 17358.20
10/31/91 16918.67 17514.42
11/30/91 16943.74 17563.46
12/31/91 17341.78 17941.08
01/31/92 17353.04 17982.34
02/29/92 17361.26 17987.74
03/31/92 17316.35 17994.93
04/30/92 17463.85 18155.09
05/31/92 17691.94 18369.32
06/30/92 17976.24 18677.92
07/31/92 18539.98 19238.26
08/31/92 18290.38 19049.72
09/30/92 18393.37 19173.55
10/31/92 17969.70 18985.65
11/30/92 18495.19 19325.49
12/31/92 18713.82 19522.61
01/31/93 18949.87 19749.07
02/28/93 19866.98 20463.99
03/31/93 19603.79 20247.07
04/30/93 19820.07 20451.57
05/31/93 19897.60 20566.09
06/30/93 20263.73 20909.55
07/31/93 20256.30 20936.73
08/31/93 20760.06 21372.21
09/30/93 21012.79 21615.86
10/31/93 20986.46 21656.93
11/30/93 20738.53 21466.35
12/31/93 21304.80 21919.29
$10,000 OVER LIFE OF FUND: Let's say you invested $10,000 in Fidelity
Insured Tax-Free Portfolio on November 30, 1985, shortly after the fund
started. As the chart shows, by December 31, 1993, the value of your
investment would have grown to $21,305 - a 113.05% increase on your initial
investment. For comparison, look at how the Lehman Brothers Municipal Bond
Index did over the same period. With dividends reinvested, the same $10,000
would have grown to $21,919 - a 119.19% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. Bond prices, for
example, move in the
opposite direction of interest
rates. In turn, the share price,
return, and yield of a fund
that invests in bonds 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.
(checkmark)
INCOME
YEARS ENDED DECEMBER 31, 1993 1992 1991 1990 1989
Income return 5.77% 6.13% 6.70% 6.72% 6.94%
Capital gain return 2.53% 1.00% 0% 0% 0%
Change in share price 5.55% 0.78% 4.87% 0.36% 2.51%
Total return 13.85% 7.91% 11.57% 7.08% 9.45%
Income returns, capital gain returns, and changes in share price are all
part of a bond fund's total return. An income return reflects the dividends
paid by the fund. A capital gain return reflects the amount paid by the
fund to shareholders based on the profits it has from selling bonds that
have grown in value. Both returns assume the dividends or gains are
reinvested. Changes in the fund's share price include changes in the prices
of the bonds owned by the fund.
DIVIDENDS AND YIELD
PERIODS ENDED DECEMBER 31, 1993 PAST 30 PAST 6 PAST 1
DAYS MONTHS YEAR
Dividends per share n/a 32.35(cents) 65.49(cents)
Annualized dividend rate n/a 5.52% 5.32%
Annualized yield 5.32% n/a n/a
Tax-equivalent yield 7.72% n/a n/a
Dividends per share show the income paid by the fund for a set period. If
you annualize this number, based on an average share price of $12.49 over
the past six months and $12.30 over the past year, you can compare the
fund's income over these two periods. The 30-day annualized yield is a
standard formula for all funds based on the yields of the bonds in the
fund, averaged over the past 30 days. This figure shows you the yield
characteristics of the fund's investments at the end of the period. It also
helps you compare funds from different companies on an equal basis. The
tax-equivalent yield shows what you would have to earn on a taxable
investment to equal the fund's tax-free yield, if you're in the 36% federal
tax bracket.
FUND TALK: THE MANAGER'S OVERVIEW
MARKET RECAP
Generally, interest rates fell
during the 12 months ended
December 31, 1993. As a result,
bond prices rose and most
fixed-income investors -
including those in tax-free bonds
- enjoyed attractive returns. The
period began with worries of
rising interest rates. The
economic recovery was finally
taking hold, and the spending
plans of the president-elect were
still unclear. But the bond market
signaled its approval as
President Clinton promised to
reduce the deficit and fight
inflation. The yield on the
benchmark 30-year Treasury
bond declined steadily and
reached an historic low of 5.79%
in mid-October. By year-end, mild
inflation fears, fueled by a
strengthening economy, had
pushed up the yield on the
30-year bond to 6.35%. Two
factors affected tax-free bonds
specifically: on the positive side,
higher federal taxes - discussed
all year and approved in August
- boosted demand. At the same
time, record new issuance kept
supplies high, which somewhat
dampened prices. Overall during
the period, tax-free bonds
performed well compared to other
fixed-income investments. The
Lehman Brothers Municipal Bond
Index - a broad measure of the
tax-free bond market - rose
12.29%. By comparison, the
Lehman Brothers Aggregate
Bond Index - which tracks
investment-grade taxable bonds
- rose only 9.75%, due in part to
relatively poor performance by
mortgage-backed securities.
An interview with Guy Wickwire, Portfolio Manager of Fidelity
Insured Tax-Free Portfolio
Q. GUY, HOW HAS THE FUND PERFORMED?
A. It was a good year. The fund gained 13.85% for the year ended December
31, 1993. That beat the average insured municipal bond fund, which
delivered a total return of 11.93% during the period, according to Lipper
Analytical Services.
Q. ALTHOUGH YOU JUST TOOK OVER THE FUND IN OCTOBER, CAN YOU REVIEW ITS
PERFORMANCE OVER THE PAST YEAR?
A. Sure, two factors helped the fund. First, its duration - a measure of
how its price changes with interest rates - was relatively long, ranging
from 8.5 years at the start of 1993 to around 10.4 years by year end. Since
declines in interest rates tend to boost the prices of longer duration
bonds, the fund's strategy amounted to a bet that interest rates would
fall. That's precisely what happened, which significantly helped our
performance.
Q. AND THE SECOND FACTOR?
A. A substantial stake in municipal bonds of Colorado issuers, which
amounted to 8% of the fund's investments at the start of the year. In late
1992, residents of Colorado voted to limit the amount of new municipal
issues. Many municipalities in the state rushed to issue new bonds before
the vote, and the increase in supply pushed prices down. We were able to
buy many of them for the fund at bargain prices. After the vote, the supply
of Colorado issues declined sharply and the bonds' prices rebounded. As
that occurred, we sold some of them at significant profits, trimming the
fund's stake in Colorado to around 5.6% at year-end.
Q. WHAT STATES DID YOU EMPHASIZE DURING THE YEAR?
A. During 1993 California issues increased from 6.3% to 10.2% of
investments, making this the fund's largest state concentration. California
residents pay unusually high income taxes - the state's top bracket is 11%
- which generally boosts demand for California tax-free bonds and increases
their prices. But the state has been in recession during the past several
years. That raised questions about the ability of issuers to meet their
principal and interest payments. As that happened, demand declined, so we
were able to buy California bonds cheaply. I think that as the California
economy continues to recover, the bonds could deliver significant gains.
The recent Los Angeles earthquake hasn't had any impact on the Calfornia
municipal bond markert so far. Even if there are some negative effects in
the future, the fund's stake in California bonds won't be hurt since
they're insured.
Q. HAVE YOU MADE SIGNIFICANT CHANGES IN THE FUND SINCE TAKING OVER?
A. In general, my strategy has been to continue doing the things that were
working well for the fund, such as maintaining a relatively long duration
and investing in California bonds. However, I did boost the fund's stake in
health-care bonds to 27% by the end of the year.
Q. ARE YOU CONCERNED THAT CLINTON'S PROPOSALS TO REFORM THE HEALTH-CARE
SYSTEM COULD CAUSE THOSE HEALTH-CARE BONDS' PRICES TO DECLINE?
A. No. The bonds are insured, so the impact of health-care reform won't
affect their ability to meet interest and principal payments. Moreover,
they offer very attractive yields.
Q. WHAT MADE ELECTRIC UTILITIES
ATTRACTIVE?
A. In recent years demand for electricity has been flat, so utility
companies haven't issued many new bonds. This year, however, many issuers
replaced their old electric utility bonds with new, lower-rate debt; as a
result, there were a sizable number of new issues selling at attractive
prices. We boosted the fund's stake in those bonds from 14.8% to around
20%. I think that as the supply of new electric utility bonds subsides, the
scarcity of existing bonds will make them more valuable.
Q. WHAT'S YOUR OUTLOOK FOR INTEREST RATES AND THE MUNICIPAL MARKET?
A. Barring a recession, which seems unlikely, it will be tough for interest
rates to decline much further. So it's probably unrealistic for investors
to expect continued double-digit returns in the municipal market. But that
doesn't mean municipal bonds aren't attractive. The new, higher tax rates
will increase demand for tax-free bonds. Moreover, many municipalities have
replaced old bonds with lower-yielding ones. As that surge in refundings
slows, the supply of new municipal issues is likely to decline by as much
as 50%. The combination of increased demand and lower supply should support
solid returns in the municipal market.
FUND FACTS
GOAL: to provide high current
income exempt from federal
income taxes while
preserving capital
START DATE: November 13, 1985
SIZE: as of December 31,
1993, over $448 million
MANAGER: Guy Wickwire,
since October 1993;
manager, Fidelity
Massachusetts Tax-Free
High Yield Portfolio, since
1983; Fidelity High Yield
Tax-Free Portfolio, 1981 -
1993; Fidelity Advisor High
Income Municipal Portfolio,
1987 - 1992
(checkmark)
GUY WICKWIRE ON HIS
INVESTMENT STRATEGY:
"If it becomes clear that the
economy is likely to grow at a
3% annual rate or better
during the first half of the year,
causing interest rates to rise
significantly, I'll reduce the
duration of the fund. But my
feeling is that growth will slow
to less than 3%, and there
seem to be no immediate
inflationary pressures. Until I
see evidence that suggests
my outlook is wrong, the fund
will maintain a relatively long
duration, which allows it to
pick up the extra yield on
longer-term bonds. For
example, insured municipal
bonds that mature in 25 years
recently yielded roughly
5.40%, versus 4.40% for
ten-year bonds."
(bullet) The fund's duration as of
December 31 was 10.4 years.
That means that if interest
rates rose one percentage
point, the fund's share price
would decline around 10.4%.
But if interest rates declined
one percentage point, the
fund's share price would rise
roughly 10.4%.
DISTRIBUTION
The Board of Trustees of
Fidelity Insured Tax-Free
Portfolio voted to pay on
February 7, 1994, to
shareholders of record at the
opening o f business on
February 4, 1994, a
distribution of $.12 derived
from capital gains realized
from sales of portfolio
securities.
INVESTMENT CHANGES
TOP FIVE STATES AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
California 10.2 7.2
Illinois 6.7 7.0
Colorado 5.6 6.3
Pennsylvania 5.5 3.3
Texas 5.5 4.8
TOP FIVE SECTORS AS OF DECEMBER 31, 1993
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Health Care 27.2 20.3
Electric Revenue 20.5 25.1
General Obligation 9.6 11.1
Water & Sewer 8.9 4.5
Lease Revenue 8.4 5.3
AVERAGE YEARS TO MATURITY AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 20.49 20.23
AVERAGE YEARS TO MATURITY SHOWS THE AVERAGE TIME UNTIL THE PRINCIPAL OF THE
BONDS IN THE FUND IS EXPECTED TO BE REPAID, WEIGHTED BY DOLLAR AMOUNT.
DURATION AS OF DECEMBER 31, 1993
6 MONTHS AGO
Years 10.4 9.2
DURATION SHOWS HOW MUCH A BOND'S PRICE FLUCTUATES WITH CHANGES IN INTEREST
RATES. IF RATES RISE 1%, FOR EXAMPLE, THE SHARE PRICE OF A FUND WITH A
FIVE-YEAR DURATION WILL FALL 5%.
QUALITY DIVERSIFICATION AS OF DECEMBER 31, 1993
(MOODY'S RATINGS)
Aaa 88.8%
Aa, A 10.2
Baa 0.7
Ba or B 0.0
Non-rated 0.3
Row: 1, Col: 1, Value: 1.0
Row: 1, Col: 2, Value: 0.0
Row: 1, Col: 3, Value: 1.0
Row: 1, Col: 4, Value: 10.2
Row: 1, Col: 5, Value: 88.8
THIS CHART EXCLUDES SHORT-TERM INVESTMENTS. WHERE MOODY'S RATINGS ARE NOT
AVAILABLE, WE HAVE USED S&P RATINGS.
INVESTMENTS DECEMBER 31, 1993
Showing Percentage of Total Value of Investments
MUNICIPAL BONDS - 100.0%
PRINCIPAL VALUE (NOTE 1)
AMOUNT
ARIZONA - 3.6%
Arizona Univ. Ctfs. of Prtns. Rfdg. West Campus Proj.
5.20% 7/15/08, (MBIA Insured) $ 2,000,000 $ 1,987,500 040660bh
Mesa Rfdg. 5% 7/1/03, (MBIA Insured) 2,000,000 2,040,000 590485LN
Pima County Ind. Dev. Auth. Health Care Corp.
Rev. (Cardondelet Health Care Corp.):
5.25% 7/1/11,(MBIA Insured) 1,000,000 1,005,000 721902CN
(St. Joseph & St. Mary's Hosp.) 8% 7/1/13, (MBIA Insured) 1,875,000
2,179,688 721902AQ
Pima County Ind. Dev. Auth. Ind. Rev. Rfdg. (Lease Oblig.)
(Irvington Proj. Tucson Elec. Pwr. Co.) Series A,
7.25% 7/15/10, (FSA Insured) 8,000,000 9,050,000 721774DA
16,262,188
ARKANSAS - 0.7%
Arkansas Dev. Fin. Auth. Wtr. Rev. Rfdg.
Revolving Loan Fund Series B, 5% 6/1/15,
(MBIA Insured) 1,000,000 970,000 041086FK
North Little Rock Elec. Rev. Rfdg. Series A,
6.50% 7/1/15, (MBIA Insured) 1,000,000 1,190,000 660546DX
Pulaski County Spl. School Dist. Rfdg. 5.25% 2/1/13,
(FSA Insured) 1,000,000 996,250 745400SN
3,156,250
CALIFORNIA - 10.2%
Alameda County Ctfs. of Prtn. Rfdg. (Santa Rita Jail Proj.)
5.375% 6/1/09, (MBIA Insured) 1,000,000 1,011,250 010891KG
Anaheim Ctfs. of Prtn. Rfdg. (Anaheim Mem.
Hosp. Assoc.) 5% 5/15/13, (AMBAC Insured) 3,330,000 3,175,988 032540LL
California Poll. Cont. Fing. Solid Waste Disp. Rev.
(North County Recylcing Ctr.) Series A,
6.75% 7/1/11, LOC Union Bank of Switzerland 1,850,000 2,053,500
130536BQ
California Pub. Wrks. Board Lease Rev.:
Rfdg. (Dept. Corrections St. Prisons) Series A,
5% 12/1/19, (AMBAC Insured) 2,500,000 2,415,625 13068GPA
Unltd. Tax (Secretary of State) Series A, 6.50%
12/1/08, (AMBAC Insured) 1,000,000 1,153,750 13068GKS
(Dept. of Corrections State Prison) Series A, 5.25%
12/105, (AMBAC Insured) 2,000,000 2,090,000
Desert Hosp. Rev. Ctfs. of Prtn. RIB (Desert Hosp. Corp.)
Series 1992, 9.659% 7/28/20,
(Cap. Guaranty Insured) (d)(f) 1,500,000 1,798,125 25041MAZ
East Bay Muni. Util. Dist. Wtr. Sys. Rev. Rfdg. 5%
6/1/14, (MBIA Insured) 1,200,000 1,159,500 271014GG
Fresno Swr. Rev. Series A-1, 5.25% 9/1/19
(AMBAC Insured) 2,500,000 2,471,875 358229CM
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
CALIFORNIA - CONTINUED
Los Angeles County Cap. Asset Leasing Corp.
Leasehold Rev. 4.05% 12/1/10, (AMBAC Insured) $ 1,500,000 $ 1,586,250
544900CF
Palm Desert Fing. Auth. Tax Allocation RIB
9.905% 4/1/22, (MBIA Insured) (d)(f) 1,500,000 1,764,375 696617BG
Pleasant Hill Jt. Pwrs. Fin. Auth. Lease Rev. Cap.
Impt. Prog. Series A, 5% 12/1/12, (MBIA Insured) 1,490,000 1,435,988
72833EAT
Redding Ca. Redev. Agcy. Tax Alloc. Nts. Rfdg.
Canby Hilltop Cypress D, 5% 9/1/11, (CAPG Insured) 2,000,000 1,932,500
757295CM
Riverside County Trans. Commission Sales Tax Rev.
Series A, 5.75% 6/1/09, (AMBAC Insured) 1,000,000 1,056,250 769125BC
Sacramento City Fing. Auth. Lease Rev. Rfdg. Series A,
5.375% 11/1/14, (AMBAC Insured) 4,000,000 4,040,000 785846BL
Sacramento City Fing. Auth. (Cap. Appreciation)
(Tax Allocation Proj.) Series B, 0% 11/1/07,
(MBIA Insured) 1,810,000 891,425 785849BH
Sacramento Muni. Util. Dist. Elec. Rev. 5.25%
11/15/12, (FGIC Insured) 500,000 499,375 7860042B
San Jose Redev. Agcy. Tax Alloc. Merged Area Redev. Proj.:
6% 8/1/15, (MBIA Insured) 2,000,000 2,187,500 798147LE
5% 8/1/20, (MBIA Insured) 4,000,000 3,830,000 798147KW
Sulphur Springs Unified School Dist. Series A, 0%
9/1/11, (MBIA Insured) 3,000,000 1,155,000 865480FB
Univ. Calif. Ctfs. or Prtn. Rfdg. UCLA Ctr. Chiller,
5.40% 11/1/11 5,000,000 4,968,750 914106NM
West & Ctrl. Basin Fing. Auth. Rev. (West Basin Ref.
Proj.) Series A, 5% 8/1/13, (AMBAC Insured) 4,000,000 3,885,000
95122EAU
46,562,026
COLORADO - 5.6%
Adams County School Dist. #12 Unltd. Tax Rfdg. (Thorton):
6.20% 12/15/09, (FGIC Insured) 1,440,000 1,575,000 005644A2
6.20% 12/15/10, (FGIC Insured) 3,650,000 3,978,500 005644A3
Adams County Single Family Mtg. Rev. Rfdg.
Series A-2, 8.70% 6/1/12, (FSA Insured) 5,000,000 5,631,250 005706JS
Colorado Colleges Board Trustees Auxiliary Facs.
Sys. Rev. (Western College Proj.) Series A,
6.625% 5/1/15, (Connie Lee Insured) 1,000,000 1,103,750 196722AL
Colorado Health Facs. Auth. Rev. (PSL Health Sys. Proj.)
Series A:
7.25% 2/15/16, (FSA Insured) 2,000,000 2,320,000 196473C2
6.25% 2/15/21, (FSA Insured) 4,000,000 4,285,000 196473C4
Colorado Postsecondary Edl. Facs. Auth. Rev.
(Denver Univ.) 6.25% 3/1/18, (Connie Lee Insured) 1,000,000 1,066,250
196547DF
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
COLORADO - CONTINUED
Colorado Univ. Hosp. Auth. Hosp. Rev. Series A:
6.25% 11/15/12, (AMBAC Insured) $ 1,000,000 $ 1,095,000 914173AL
6.40% 11/15/22, (AMBAC Insured) 1,385,000 1,526,963 914173AM
Jefferson County School Dist. #R-001,
6% 12/15/12, (AMBAC Insured) 1,000,000 1,075,000 472736XB
Jefferson County Single Family Mtg. Rev.
Series 1991 A, 8.875% 10/1/13, (MBIA Insured) 235,000 255,563 472744BW
Thornton City Gen. Oblig. Wtr. Rfdg. (Cap. Appreciation)
Series 1991, 0% 12/1/12, (FGIC Insured) 4,770,000 1,764,900 885273KX
25,677,176
CONNECTICUT - 0.8%
Bridgeport Gen. Oblig. 8.75% 8/15/04, (FGIC Insured) 510,000 666,825
108151PM
Connecticut Health & Edl. Facs. Auth. Rev.
(St. Raphael Hosp.) Series H, 5.25% 7/1/12
(AMBAC Insured) 3,035,000 3,080,525 207742S6
3,747,350
DELAWARE - 0.4%
Delaware Health Facs. Auth. Rev. Rfdg. (Kent Gen.
Hosp. Proj.) 5.25% 7/1/13, (MBIA Insured) 2,000,000 1,957,500 246388GZ
DISTRICT OF COLUMBIA - 1.6%
District of Columbia Series B, 6.30% 6/1/12,
(MBIA Insured) 5,695,000 6,150,600 254760YC
Washington D.C. Metro Area Trans. Auth.
Gross Rev. Rfdg. 5.25% 7/1/14 (FGIC Insured) 1,300,000 1,300,000
938782BH
7,450,600
FLORIDA - 1.3%
Dade County Wtr. & Swr. Sys. Rev. Rfdg.
5% 10/1/13, (FGIC Insured) 2,000,000 1,942,500 233620CJ
Hillsboro County Aviation Auth. Rev. Rfdg.
(Tampa Intl. Arpt.) Series B, 5.60% 10/1/19
(FGIC Insured) 2,000,000 2,050,000 432308LJ
Kissimmee Util. Auth. Elec. Sys. Rev. Rfdg. & Impt.
5.25% 10/1/18, (FGIC Insured) 2,000,000 1,987,500 497850DA
5,980,000
GEORGIA - 3.4%
Dalton-Whitfield Cnty. Hosp. Auth. Rev. Rfdg.
Antic Nts. 5.25% 7/1/13, (MBIA Insured) 1,000,000 996,250 235640FC
Fayette County Wtr. Rev. Rfdg. Series A,
6.20% 10/1/20, (FGIC Insured) 1,915,000 2,075,381 312245FH
Floyd County Hosp. Auth. Rev. Antic Ctfs. Floyd
Med. Ctr. Proj. 5.20% 7/1/11, (FGIC Insured) 1,500,000 1,481,250
343575DX
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
GEORGIA - CONTINUED
Medical Ctr. Hosp. Auth. Rev. Antic Ctfs. Columbia
Reg. Healthcare Sys. 5% 8/1/18, (MBIA Insured) $ 1,500,000 $ 1,432,500
584521BG
Muni. Elec. Auth. Spl. Oblig.:
Rfdg. Second Crossover Series, 7.80% 1/1/20,
(AMBAC Insured) 1,500,000 1,715,625 625919AY
Fifth Crossover Series Proj. #1, 6.40% 1/1/13,
(AMBAC Insured) 4,550,000 5,204,063 625919DA
Fouth Crossover Series Proj. #1, 6.50% 1/1/20 2,250,000 2,607,188
625919CL
15,512,257
HAWAII - 0.4%
Hawaii County Rfdg. & Impt. Series A,
5.60% 5/1/12, (FGIC Insured) 1,000,000 1,061,250 419722QC
Honolulu City & County Multi-Family Rev.
(Hale Pauahi) Series A, 8.70% 12/1/28,
(FHA Guaranteed) (MBIA Insured) 725,000 750,375 438697AW
1,811,625
IDAHO - 1.2%
Canyon County School Dist. # 139 Class A, 5% 8/1/13 1,290,000 1,246,463
138843EQ
Idaho Health Facs. Auth. Health Care Corp.
Rev. St. Joes Reg. Med. Ctr. 5.25% 7/1/13,
(MBIA Insured) 1,000,000 1,000,000 451293AQ
Idaho Health Facs. Auth. Rev. Rfdg,
(IHC Hosps., Inc.) 8.70% 2/15/21 (d)(f) 2,500,000 3,031,250 451295KE
5,277,713
ILLINOIS - 6.7%
Chicago FGIC Rfdg. Series B, 5.125% 1/1/15
(AMBAC Insured) 2,250,000 2,190,938 1674833X
Chicago Motor Fuel Tax Rev. Rfdg. Series A,
5.375% 1/1/14, (AMBAC Insured) 2,000,000 2,005,000 16756KBF
Chicago O'Hare Int'l. Arpt. Rev. Rfdg.:
Series A, 5% 1/1/12 1,840,000 1,784,800 167592LP
2nd Lien Series C-1, 5.0% 1/1/18, (MBIA Insured) 2,000,000 1,897,500
167592KR
Chicago Single Family Mtg. Rev. (Cap. Appreciation)
Series A, 0% 12/1/16, (FGIC Insured) 53,580,000 6,161,700 167685EF
Chicago Residential Mtg. Rev. Rfdg.
(Cap. Appreciation) Series B, 0% 10/1/09,
(MBIA Insured) 9,000,000 3,116,250 16768RAB
Chicago Wastewtr. Transmission Rev. Rfdg.
5.375% 1/1/13, (FGIC Insured) 2,000,000 2,012,500 167727EP
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
ILLINOIS - CONTINUED
Illinois Health Facs. Auth. Rev.:
Rfdg. (Sherman Hosp. Proj.) 6.75% 8/1/11,
(MBIA Insured) $ 1,750,000 $ 1,942,500
( 45201HV6Childrens Mem. Hosp.) 6.25% 8/15/13,
(MBIA Insured) 2,000,000 2,200,000 45200KH3
(Rush Presbyterian - St. Luke's) 5.25% 11/15/20
(MBIA Insured) 2,000,000 1,922,500 45200KN4
(Swedish American Hosp.) 5.375% 11/15/13,
(AMBAC Insured) 3,000,000 2,988,750 45200KL7
Metropolitan Pier & Exposition Auth. Dedicated
Tax Rev. (McCormick Place Expansion Proj.)
Series A, 0% 6/15/09, (FGIC Insured) 6,000,000 2,580,000 592247CQ
30,802,438
INDIANA - 2.0%
Indiana Health Facs. Fing. Auth. Hosp. Rev. Rfdg.
(Columbus Gen'l. Hosp.) 7% 8/15/15,
(Cap. Guaranty Insured) 2,000,000 2,387,500 454797SM
Indiana Hsg. Fin. Auth. Single Family Mtg. Rev.
Series 1984 A, 11.25% 1/1/14 685,000 702,125 455052EA
Jasper County Poll. Cont. Rev. Rfdg. (Northern Indiana Pub.
Svc.) 7.10% 7/1/17, (MBIA Insured) 2,000,000 2,310,000 471373AW
Marion County Gen. Oblig. 3.20% 12/30/94 3,600,000 3,613,500 569016HX
9,013,125
KANSAS - 1.5%
Labette County Mtg. Loan Rev. Series A,
6.25% 5/1/12, (GNMA Coll.) 2,065,000 2,250,850 50539EBD
Reno County Mtg. Rev. Rfdg. (Single Family)
Series B, 8.70% 9/1/11 1,045,000 1,142,969 759753BY
Wichita Hosp. Rev. RIB Series II-A, 10.111% 10/1/17,
(MBIA Insured) (d)(f) 3,000,000 3,510,000 967250NS
6,903,819
KENTUCKY - 3.8%
Hardin Hospital Rev. 5.20% 10/1/14 (AMBAC Insured) 1,890,000 1,842,750
411854CZ
Jefferson County Health Facs. Rev. (Jewish Hosp. Healthcare
Svcs., Inc.) 6.55% 5/1/22, (AMBAC Insured) 2,500,000 2,765,625
472902DJ
Jefferson County Hosp. Rev. 9.664% 10/1/08,
(MBIA Insured) (d)(f) 2,000,000 2,400,000 473033CC
Kentucky Dev. Fin. Auth. Hosp. Rev. (St. Luke's
Hosp., Inc.) Series A, 7% 10/1/21, (MBIA Insured) 3,000,000 3,435,000
491265HM
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
KENTUCKY - CONTINUED
Kentucky Tpk. Auth. Econ. Dev. Rev. Rfdg.:
(Cap. Appreciation) 0% 1/1/04, (FGIC Insured) $ 2,000,000 $ 1,225,000
491552FP
(Revitalization Proj.)
5.50% 7/1/07, (AMBAC Insured) 3,000,000 3,161,250 491552GK
5.50% 7/1/11, (AMBAC Insured) 2,500,000 2,553,125 491552GS
17,382,750
LOUISIANA - 2.3%
Calcasieu Parish Pub. Trust Auth. Mtg. Rev. Rfdg.
Series A, 7.75% 6/1/12 1,645,000 1,723,138
East Baton Rouge Parish Sales & Use Tax Series ST-A
4.80% 2/1/12, (FGIC Insured) 1,000,000 955,000 270848ER
Jefferson Parish Hospital Svc. Dist. #1 Hosp. Rev.
5.25% 1/1/19, (FGIC Insured) 1,500,000 1,445,625 474682DD
Louisiana Gen. Oblig. Rfdg. Series A,
5.625% 8/1/07, (MBIA Insured) 2,500,000 2,656,250 546415DJ
New Orleans Gen. Oblig. Rfdg. (Cap. Appreciation):
0% 9/1/09, (AMBAC Insured) 3,000,000 1,293,750 647634XU
0% 9/1/10, (AMBAC Insured) 1,775,000 721,094 647634XV
0% 9/1/11, (AMBAC Insured) 1,220,000 469,700 647634XW
New Orleans Pub. Impt. Unltd. Tax
7% 9/1/19, (FGIC Insured) 1,000,000 1,155,000 647634A7
10,419,557
MARYLAND - 1.2%
Baltimore Rfdg. Cons. Pub. Impt. Series D,
5.40% 10/15/12, (AMBAC Insured) 2,000,000 2,040,000 059185Q7
Maryland Health & Higher Edl. Facs. Auth. Rev.:
Rfdg. (Francis Scott Key Medical Ctr.)
5% 7/1/13 (FGIC Insured) 1,500,000 1,458,750 574216CW
(Frederick Mem. Hosp.) 5.25% 7/1/13, (FGIC Insured) 2,000,000
2,017,500 574216KD
5,516,250
MASSACHUSETTS - 3.6%
Holyoke Gen. Oblig. Ltd. Tax 8.15% 6/15/06,
(MBIA Insured) 2,205,000 2,786,569 436704YC
Massachusetts Health & Ed. Facs. Auth. Rev.:
Rfdg. (Massachusetts Gen. Hosp.) Series F,
6.25% 7/1/12, (AMBAC Insured) 2,000,000 2,232,500 575851PX
(Blood Institute) Series A, 6.50% 2/1/22 1,300,000 1,405,625 575851KH
(Falmouth Hosp.) Series C, 5.625% 7/1/11,
(MBIA Insured) 1,500,000 1,533,750 575851UT
(Lahey Clinic Med. Ctr.) Series B, 5.625%
7/1/15, (MBIA Insured) 3,050,000 3,095,750 575851XR
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
MASSACHUSETTS - CONTINUED
Massachusetts Hsg. Fin. Agcy. (Hsg. Proj.)
Series A, 6.15% 10/1/15, (AMBAC Insured) $ 1,270,000 $ 1,309,688
575852VS
Massachusetts Hsg. Fin. Agcy. Multi-Family Hsg.
Rev. Series A, 8.875% 7/1/18, (MBIA Insured) 2,000,000 2,122,500
575854PW
Massachusetts Muni. Wholesale Elec. Co. Pwr.
Supply Sys. Rev. (Reg. Inflos) Series A,
7.72% 7/1/18 (d)(f) 2,000,000 1,970,000 575765MV
16,456,382
MICHIGAN - 2.2%
Central Michigan Univ. Rev. Rfdg.
(Cap. Appreciation) 6% 10/1/13, (MBIA Insured) 1,000,000 1,060,000
154123QQ
Detroit Dis. Aid. 5.20% 5/1/07 (AMBAC Insured) 2,000,000 2,002,500
251093JS
Detroit Wtr. Supply Sys. Rev. Rfdg.
6.50% 7/1/15, (FGIC Insured) 1,000,000 1,158,750 251255TP
Jackson County Hosp. Fin. Auth. Hosp. Rev.
Rfdg. (WA Foote Mem. Hosp.) Series A, 4.75%
6/1/15, (FGIC Insured) 2,000,000 1,842,500 467148BK
Michigan Hosp. Fin. Auth. Rev. Rfdg. (Sisters of
Mercy Health Corp.) 5.375% 8/15/14,
(MBIA Insured) 2,000,000 2,015,000 59465CX2
Wayne Charter County Arpt. Rev. Rfdg. Sub. Lien
Detroit Metro C, 5.25% 12/1/13 (MBIA Insured) 2,000,000 1,987,500
944314DZ
10,066,250
MINNESOTA - 3.2%
Minneapolis & St. Paul Hsg. & Redev. Auth.
Healthcare Sys. Rev. (Healthspan Health Sys. Corp.)
(Health One Sys.) Series A, 4.75% 11/15/18
(AMBAC Insured) 4,000,000 3,695,000 603695DF
Minneapolis Health Care Fac. Rev. Rfdg.
Fairview Hosp. & Healthcare Series A:
5.30%11/15/08, (MBIA Insured) 1,000,000 1,006,250 603908FA
5.25%11/15/19, (MBIA Insured) 1,750,000 1,734,688 603908FC
Northern Muni. Pwr. Agcy. Elec. Sys. Rev. Rfdg.
Series A, 0% 1/1/11, (AMBAC Insured) 3,140,000 1,271,700 665444CB
St. Cloud Hosp. Facs. Auth. Rev. Rfdg.
Benedictine Sisters, Series C:
5.25% 10/1/13, (AMBAC Insured) 2,700,000 2,693,250 789162CD
5.30% 10/1/20, (AMBAC Insured) 2,000,000 1,980,000 789162CE
St. Louis Park Hosp. Facs. Auth. Rev.
(Healthsystem Obligated A) 5.20% 7/1/23,
(AMBAC Insured) 2,500,000 2,437,500 791748CQ
14,818,388
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
MISSISSIPPI - 0.4%
Mississippi Hosp. Equip. & Facs. Auth. Rev.
(Singing River Hosp. Sys. Proj.), 5.50% 3/1/13 $ 2,000,000 $ 2,020,000
605360HB
MISSOURI - 3.9%
Kansas City Ind. Dev. Auth. Hosp. Rev.
(Research Health Svcs. Sys.) 9.375% 4/15/14,
(MBIA Insured) 900,000 988,875 484901AU
Kansas City School Dist. Bldg. Corp. Inds.
Leasehold Rev. Elementary School Proj., Series D,
5% 2/1/14 (FGIC Insured) 3,875,000 3,739,375 485085ER
Missouri Health & Edl. Facs. Auth Health Facs. Rev.:
(Barnes Jewish/Christian):
Rfdg. 5.15% 5/15/10 500,000 493,750 60635RJD
5.20% 5/15/11 500,000 493,750 60635RJE
5.25% 5/15/12 2,390,000 2,360,125 60635RJF
(SSM Health Care) Series AA, 6.25% 6/1/07,
(MBIA Insured) 1,000,000 1,112,500 60635RCM
Sikest Elec. Rev. Rfdg. 6.25% 6/1/22, (MBIA Insured) 8,000,000
8,650,000 826775DB
17,838,375
MONTANA - 1.3%
Montana Univ. Rev. Rfdg. Higher Ed., Series A,
5.05% 11/15/16, (MBIA Insured) 1,500,000 1,462,500 612136Y4
Silver Bow Wtr. Inc., Wtr. Sys. Rev. (Butte Silver
Bow Proj.) 5.25% 11/1/14, (FGIC Insured) 1,750,000 1,745,625 827429BJ
Univ. of Montana Revs. Rfdg. Higher Edl., Series A,
4.50% 11/15/15, (MBIA Insured) 3,000,000 2,707,500 914505G7
5,915,625
NEVADA - 0.4%
Las Vegas-Clark County Library Dist. Lt. Tax Series A,
6.90% 6/1/11, (FGIC Insured) 1,300,000 1,460,875 517667CF
NEW JERSEY - 0.2%
Warren County Poll. Cont. Fing. Auth. Rev.
(Resource Recovery) 6.55% 12/1/06, (MBIA Insured) 1,000,000 1,141,250
935110CD
NEW MEXICO - 2.6%
Farmington Poll. Cont. Rev. Rfdg. (Southern
California Edison) 5.875% 6/1/23, (MBIA Insured) 2,500,000 2,615,625
311450CS
Farmington Util. Sys. Rev.:
Rfdg. 5.75% 5/15/13, (FGIC Insured) 4,000,000 4,150,000 311457CH
9.625% 5/15/05, (FGIC Insured) 675,000 772,875 311457AV
New Mexico Mtg. Fin. Auth. Series A2, 6.85% 7/1/12 4,000,000 4,300,000
647198VA
11,838,500
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
NEW YORK - 2.2%
New York State Dorm. Auth. Rev. Rfdg.
(State Univ. Edl. Facs.) Series A, 5.25%
5/15/15, (AMBAC Insured) $ 2,500,000 $ 2,531,250 649834DR
New York State Local Govt. Assistance Corp. Rfdg.
Series C, 5.50% 4/1/17 1,000,000 1,026,250
New York State Med. Care Facs. Fin. Agcy. Rev.
(Hosp. & Nursing Home) Series B, 8.10% 2/15/22,
(FHA Guaranteed) 2,250,000 2,573,438 649881B7
New York State Twy Auth. Gen. Rev., Series B,
5% 1/1/20, (MBIA Insured) 2,000,000 1,932,500 650009EX
New York State Urban Dev. Corp. Rev:.
5.10% 1/1/09, (AMBAC Insured) 1,000,000 992,500 650033C7
5% 1/1/17, (AMBAC Insured) 1,000,000 953,750 650033C9
10,009,688
NORTH CAROLINA - 4.4%
Charlotte Ctfs. of Prtn. Rfdg. Convention Fac. Proj., Series C:
5.25% 12/1/20, (AMBAC Insured) 2,000,000 1,975,000 161037CK
5% 12/1/21(AMBAC Insured) 1,600,000 1,540,000 161037CX
Fayetteville Public Works Commn. Rev. Rfdg.
4.75% 3/1/14, (FGIC Insured) 2,000,000 1,905,000 312805BV
North Carolina Eastern Muni. Pwr. Agcy. Pwr. Sys. Rev. Rfdg.:
6% 1/1/18, (AMBAC Insured) 5,250,000 5,755,313 658196QD
Series B, 5.50% 1/1/21, (FGIC Insured) 2,500,000 2,493,750 658196QG
North Carolina Med. Care Commn. Hosp. Rev.
Rfdg. Wesley Long Comnty. Hosp. 5.25%
11/1/17, (AMBAC Insured) 2,000,000 1,980,000 6582026R
North Carolina Muni. Pwr. Agcy. #1 Catawba Elec.
Rev. Rfdg. 6% 11/1/11, (MBIA Insured) 4,000,000 4,410,000 658203QS
20,059,063
NORTH DAKOTA - 1.1%
Mercer County Poll. Cont. Rev. Rfdg.
(Basin Electric Pwr.) (Antelope Valley Station)
7.20% 6/30/13, (AMBAC Insured) (b) 3,500,000 4,081,875 587850DA
North Dakota Hsg. Fin. Agcy. Single Family Mtg.
Rev. Series C, 8.75% 1/1/19 820,000 879,450 658887KE
4,961,325
OHIO - 0.4%
Cleveland Wtrwks. Rev. (First Mtg.) Series 1992 B,
6.50% 1/1/11, (AMBAC Insured) 1,000,000 1,108,750 186432RK
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
OHIO - CONTINUED
Ohio Hsg. Fin. Agcy. Single Family Mtg. Rev.:
Series 1985 B, 9% 1/15/09, (FGIC Insured) $ 550,000 $ 572,688 677377GF
Series C, 9.40% 9/15/08, (FGIC Insured) 115,000 122,331 677377HR
1,803,769
OKLAHOMA - 2.2%
Grand River Dam Auth. Rev. Rfdg. 5.75%
6/1/08, (FSA Insured) 4,250,000 4,552,813 386442PH
Oklahoma Muni. Pwr. Auth. Pwr. Supply Sys. Rev.:
Series A, 5% 1/1/15, (FGIC Insured) 1,000,000 982,500
Series B, 5.875% 1/1/15, (MBIA Insured) 2,000,000 2,175,000 67910HEN
67910HFS
Series B, 5.875% 1/1/12, (MBIA Insured) 2,000,000 2,170,000 67910HFA
9,880,313
OREGON - 0.6%
Northern Wasco Cnty. Peoples Util. Dist. or
Hydroelectric Rev. McNary Dam Fishway
5.10%12/1/12 2,250,000 2,230,313 666051AM
Oregon Hsg. Edl. & Cultural Facs. Auth.
Rev. (Lewis & Clark College Proj.) Series A,
7.125% 7/1/20, (MBIA Insured) 500,000 580,625 68608LAK
2,810,938
PENNSYLVANIA - 5.5%
Cambria County Hosp. Dev. Auth. Hosp. Rev.
Rfdg. & Impt. (Conemaugh Valley Hosp.)
Series 1992 B, 6.375% 7/1/18,
(Connie Lee Insured) 2,000,000 2,155,000 132037DZ
Harrisburg Auth. Wtr. Rev. 8.82% 7/15/15,
(FGIC Insured) (d)(f) 3,150,000 3,488,625 41473MCB
Montgomery County Higher Ed. & Health Auth.
Rev. (St. Joseph's Univ.) 6.50% 12/15/22,
(Connie Lee Insured) 3,000,000 3,311,250 613603FZ
Pennsylvania Convention Ctr. Auth. Rev.
Series A, 6.70% 9/1/16, (FGIC Insured) 2,000,000 2,405,000 708681AU
Pennsylvania Convention Ctr. Rev. Series A,
6% 9/1/19, (FGIC Insured) 1,000,000 1,111,250 708681AV
Pennsylvania Hsg. Fin. Agcy. Muni. Forwards
Rfdg. (Multi-Family Section 8) Series C,
8.10% 7/1/13, (FHA Guaranteed) 2,000,000 2,272,500 708791WD
Pennsylvania Intergovernmental Coop. Auth. Spl.
Tax Rev. Rfdg. Series A, 5% 6/15/22,
(MBIA Insured) 7,755,000 7,386,638 708840CJ
Philadelphia Wtr. & Wastewtr. Rev. Rfdg.
5% 6/15/12, (FGIC Insured) 2,000,000 1,937,500 717893BG
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
PENNSYLVANIA - CONTINUED
Pittsburgh Wtr. & Swr. Auth. Wtr. & Swr. Sys.
Rev. Rfdg., Series A, 5% 9/1/09, (FGIC Insured) $ 1,000,000 $ 987,500
725304DA
Ringold School Dist. Rfdg. 0% 12/15/15,
(MBIA Insured) 1,155,000 347,944 766809GQ
25,403,207
RHODE ISLAND - 1.5%
Rhode Island Convention Ctr. Auth Rev. Rfdg.,
Series B, 5.25% 5/15/15, (MBIA Insured) 3,000,000 2,973,750 212474CB
Rhode Island Depositors Econ. Protection Corp.
Spl. Oblig. Rfdg., Series A, 5.50% 8/1/20,
(FSA Insured) 2,500,000 2,518,750 76218KER
Rhode Island Health & Ed. Bldg. Corp. Rev.
(Higher Ed.) (Johnson & Wales Univ.)
6.25% 4/1/22, (Connie Lee Insured) 1,450,000 1,562,375 762242CC
7,054,875
SOUTH CAROLINA - 2.3%
Lexington County Health Svcs. Dist. Inc.
Hosp. Rev. 7% 10/1/08, (FSA Insured) 3,000,000 3,453,750 529050AL
North Charleston Ctfs. of Prtn.
(Coliseum Cap. Impts. Proj.) 6% 1/1/11, (FGIC Insured) 1,000,000
1,062,500 658556AU
Piedmont Muni. Pwr. Agcy. Elec. Rev. Rfdg.
6.25% 1/1/21, (FGIC Insured) 1,350,000 1,542,375 720175FR
Richland County Hosp. Facs. Rev. (Commty.
Provider Pooled Loan) Series A, 7.125%
7/1/17, (Cap. Guaranty Insured) 1,500,000 1,734,375 763634FE
Rock Hill Util. Sys. Rev. 7% 1/1/20,
(AMBAC Insured) 850,000 988,125 772249EB
South Carolina Pub. Svc. Auth. Rev.
(Santee Cooper) Series D, 6.50% 7/1/14,
(AMBAC Insured) 1,465,000 1,613,331 837147FM
10,394,456
SOUTH DAKOTA - 0.2%
South Dakota Lease Rev. (Trust Cfts.) Series A,
6.625% 9/1/12, (Cap. Guaranty Insured) 1,000,000 1,142,500 83756PCF
TENNESSEE - 2.5%
Knox County Health, Edl. & Hsg. Facs. Auth.
Sanders Alliance Hosp. Facs. Rev.,
Series C, 7.25% 1/1/10, (MBIA Insured) (d)(f) 2,500,000 3,040,625
499523MN
Knox County Health, Edl. & Hsg. Facs. Brd.
Hosp. Facs. Rev. Rfdg. Ft. Sanders Alliance,
Series C, 6.25% 1/1/13, (MBIA Insured) 1,000,000 1,111,250 499523MR
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
TENNESSEE - CONTINUED
Metro Govt. Nashville & Davidson County
Health & Edl. Facs. Brd. Rev. Adventist Health/Sunbelt:
5% 11/15/13, (CGIS Insured) $ 750,000 $ 709,688 592040U7
5.25% 11/15/23, (CGIC Insured) 1,500,000 1,445,625 592040U8
Metropolitan Gov't. Nashville & Davidson
County Wtr. & Swr. Rev. Rfdg. 0% 1/1/12,
(FGIC Insured) stepped coupon (a)(e) 5,600,000 5,229,000 592098VM
11,536,188
TEXAS - 5.5%
Austin Util. Sys. Rev. Rfdg.:
(Cap. Appreciation) 0% 11/15/10, (AMBAC Insured) 13,500,000 5,450,625
052473R6
0% 11/15/11, (AMBAC Insured) 7,000,000 2,651,250 052473R7
Brazos River Auth. Poll. Ctl. Rev. Rfdg. Coll.
Util. Elec. Co. Proj. A, 5.50% 5/1/22, (AMBAC Insured) 2,000,000
2,000,000 106213CH
Conroe Independent School Dist. Rfdg.
0% 2/1/08, (PSF Guaranteed) 1,000,000 437,500 208417SP
East Texas Criminal Justice Facs. Fing. Corp.
Mtg. Rev. (Rust Cnty. Proj.) Series B,
5.25% 5/1/14, (MBIA Insured) 1,000,000 980,000 27557PAX
Harris County Flood Cont. Dist. Rfdg.
Series B, 0% 10/1/06 2,000,000 930,000 414018J9
Harris County Health Facs. Dev. Corp. Hosp. Rev.
(St. Luke's Episcopal Hosp. Proj.)
6.75% 2/15/21 2,000,000 2,187,500 414152FZ
Houston Wtr. & Swr. Sys. Rev. Exchange
Rfdg. Jr. Lien 9.375% 12/1/13, (FGIC Insured) 30,000 33,938 442436MH
Houston Wtr. & Swr. Sys. Rev. Rfdg. (Sr. Lien)
Series C, 0% 12/1/06, (AMBAC Insured) 6,735,000 3,476,944 442436LA
Matagorda County Navigation Dist.# 1 Rev. Rfdg.
(Houston Lt. & Pwr. Proj.) Series C,
7.125% 7/1/19, (FGIC insured) 1,700,000 1,908,250 57652TAC
North Central Health Facs. Dev. Corp. Hosp. Rev.
Rfdg. (Methodist Hosp. Dallas) Series A,
9.50% 10/1/15, (MBIA Insured) 250,000 280,625 658546BT
Tarrant Cnty. Health Facs. Dev. Corp. Adventist
Health Sys./Sunbelt Inc. 5% 11/15/13,
(CGIC Insured) 1,000,000 950,000 875906FZ
Texas Pub. Fin. Auth. Bldg. Rev. Rfdg.
(Cap. Appreciation) Series 1990, 0% 2/1/10,
(MBIA Insured) 1,250,000 523,438 88275MBP
Texas State Pub. Prop. Fin. Corp. Rev. Rfdg.
Mental Health & Retardation 5.50%
9/1/13, (CGIC Insured) 3,500,000 3,486,875 882758BX
25,296,945
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
VIRGINIA - 3.1%
Chesapeake Bay Bridge & Tunnel Commission
Dist. Rev. Rfdg. (Gen. Resolution) 5.75%
7/1/25, (MBIA Insured) $ 500,000 $ 510,625 165141AK
Chesapeake Rfdg. 5.50% 12/1/09 1,225,000 1,274,000 165321K7
Fairfax County Swr. Rev. Rfdg. 5.65%
11/15/15, (AMBAC Insured) 1,000,000 1,031,250 303867BU
Roanoke Cnty. Wtr. Sys. Rev. Rfdg.
5.125% 7/1/13, (FGIC Insured) 2,000,000 1,980,000 769839BH
Southeastern Pub. Svc. Auth. Rev. Rfdg. Sr.
Series A, 5.15% 7/1/09, (MBIA Insured) 2,000,000 2,022,500 842056ET
Stafford Cnty. Wtr. & Swr. Rev. Rfdg.
5.25% 6/1/12, (FGIC Insured) 2,000,000 2,000,000 852440AV
Upper Occoguan Swr. Auth. Regl. Swr. Rev. Rfdg.
5% 7/1/21, (FGIC Insured) 2,000,000 1,905,000 916277ED
Virginia Beach Dev. Auth. Hosp. Facs. Rev.
Virginia Beach Gen. Hosp. Proj.
6% 2/15/13, (AMBAC Insured) 1,460,000 1,584,100 927739DG
Virginia Hsg. Dev. Auth. Residential Mtg.
(Single Family Mtg.) Series 1983 B,
0% 9/1/14 1,215,000 153,394 928136FA
Virginia Trans. Board Trans. Contract Rev.
(Route 58 Corridor Dev. Proj.) Series B,
5.50% 5/15/18 1,500,000 1,520,625 928184EG
13,981,494
WASHINGTON - 2.9%
Washington Health Care Facs. Auth. Rev.:
(Empire Health Svcs. Spokane) 5.65% 11/1/05,
(MBIA Insured) 1,000,000 1,061,250 9397802W
(Swedish Hosp. Med. Ctr.) 6.30% 11/15/22,
(AMBAC Insured) 2,000,000 2,147,500 939780Y7
Washington Pub. Pwr. Supply Sys. Rev. Rfdg.:
Nuclear Proj. #1 Series B, 7.25% 7/1/12, (FGIC Insured) 1,500,000
1,717,500 939827LW
Nuclear Proj. #2:
7.97% 7/1/10, (FGIC Insured) (d)(f) 4,000,000 4,040,000 939828RS
Series A, 0% 7/1/11, (MBIA Insured) 2,365,000 889,820 939828PS
Series C, 7.375% 7/1/11, (FGIC Insured) 2,200,000 2,560,250 939828MR
Nuclear Proj. #3 Series B, 7% 7/1/05, (FGIC Insured) 750,000 855,000
939830HF
13,271,320
MUNICIPAL BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT
WISCONSIN - 0.9%
Wisconsin Health & Edl. Facs. Auth. Rev.
(Wheaton Franciscan Svcs., Inc.)
6.10% 8/15/08, (MBIA Insured) $ 2,000,000 $ 2,172,500 97710AFC
Wisconsin St. Health & Edl. Facs. Auth. Rev.
Aurora Healthcare 5.25% 8/15/12, (MBIA Insured) 2,000,000 1,947,500
97710AUJ
4,120,000
WYOMING - 0.2%
Wyoming Farm Loan Board Cap. Facs. Rev. Rfdg.
5.75% 10/1/20 1,000,000 1,046,250 983478CJ
TOTAL INVESTMENTS - 100%
(Cost $428,873,524) $ 457,760,600
LEGEND
1. Debt obligation initially issued in zero coupon form which converts to
coupon form at a specified rate and date.
2. Security purchased on a delayed delivery basis (see Note 2 of Notes to
Financial Statements).
3. Security collateralized by an amount sufficient to pay interest and
principal.
4. Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate. The price will be more
volatile than the price of a comparable fixed rate security.
5. Security pledged to cover for delayed delivery purchases. At the period
end, the value of securities pledged amounted to $5,229,000.
6. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows (ratings are unaudited):
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 97.0% AAA, AA, A 97.0%
Baa 0.7% 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%
The percentage not rated by either S&P or Moody's amounted to 0.3%.
The distribution of municipal securities by revenue source, as a percentage
of total value of investment in securities, is as follows:
Health Care 27.2%
Electric Revenue 20.5%
Others (individually less
than 10%) 52.3%
TOTAL 100.0%
INCOME TAX INFORMATION
At December 31, 1993, the aggregate cost of investment securities for
income tax purposes was $428,873,964. Net unrealized appreciation
aggregated $28,886,636, of which $29,315,230 related to appreciated
investment securities and $428,594 related to depreciated investment
securities.
The fund hereby designates $3,861,000 as a capital gain dividend for the
purpose of the dividend paid deduction.
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
[Download Table]
DECEMBER 31, 1993
ASSETS
Investment in securities, at value (cost $428,873,524) $ 457,760,600
(Notes 1 and 2) - See accompanying schedule
Interest receivable 6,183,440
TOTAL ASSETS 463,944,040
LIABILITIES
Payable to custodian bank $ 85,434
Payable for investments purchased 11,115,252
Regular delivery
Delayed delivery (Note 2) 3,542,280
Dividends payable 532,319
Accrued management fee 154,099
Other payables and accrued expenses 118,223
TOTAL LIABILITIES 15,547,607
NET ASSETS $ 448,396,433
Net Assets consist of:
Paid in capital $ 412,484,548
Accumulated undistributed net realized gain (loss) on 7,024,809
investments
Net unrealized appreciation (depreciation) on investment 28,887,076
securities
NET ASSETS, for 36,248,452 shares outstanding $ 448,396,433
NET ASSET VALUE, offering price and redemption price per $12.37
share ($448,396,433 (divided by) 36,248,452 shares)
STATEMENT OF OPERATIONS
[Download Table]
YEAR ENDED DECEMBER 31, 1993
INTEREST INCOME $ 25,241,997
EXPENSES
Management fee (Note 4) $ 1,770,056
Transfer agent, accounting and custodian fees and 665,162
expenses (Note 4)
Non-interested trustees' compensation 1,347
Registration fees 89,760
Audit 27,698
Legal 4,393
Reports to shareholders 27,965
Miscellaneous 5,604
TOTAL EXPENSES 2,591,985
NET INTEREST INCOME 22,650,012
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
(NOTES 1 AND 3)
Net realized gain (loss) on:
Investment securities 16,747,306
Futures contracts 597,749 17,345,055
Change in net unrealized appreciation (depreciation) on:
Investment securities 14,450,875
Futures contracts (53,365) 14,397,510
NET GAIN (LOSS) 31,742,565
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 54,392,577
OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
1993 1992
INCREASE (DECREASE) IN NET ASSETS
Operations $ 22,650,012 $ 19,849,649
Net interest income
Net realized gain (loss) on investments 17,345,055 6,356,679
Change in net unrealized appreciation (depreciation) 14,397,510 (103,080)
on investments
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 54,392,577 26,103,248
FROM OPERATIONS
Distributions to shareholders from: (22,650,012) (19,849,649)
Net interest income
Net realized gain (9,941,439) (3,403,031)
TOTAL DISTRIBUTIONS (32,591,451) (23,252,680)
Share transactions 322,573,485 279,489,875
Net proceeds from sales of shares
Reinvestment of distributions from: 15,998,959 14,120,077
Net interest income
Net realized gain 7,488,577 2,602,019
Cost of shares redeemed (290,587,864) (231,291,520)
Net increase (decrease) in net assets resulting from 55,473,157 64,920,451
share transactions
TOTAL INCREASE (DECREASE) IN NET ASSETS 77,274,283 67,771,019
NET ASSETS
Beginning of period 371,122,150 303,351,131
End of period $ 448,396,433 $ 371,122,150
OTHER INFORMATION
Shares
Sold 26,281,608 24,143,328
Issued in reinvestment of distributions from: 1,299,523 1,211,579
Net interest income
Net realized gain 610,814 223,349
Redeemed (23,612,917) (19,988,720)
Net increase (decrease) 4,579,028 5,589,536
FINANCIAL HIGHLIGHTS
[Enlarge/Download Table]
YEARS ENDED DECEMBER 31,
1993 1992 1991 1990 1989
SELECTED PER-SHARE DATA
Net asset value, $ 11.720 $ 11.630 $ 11.090 $ 11.050 $ 10.780
beginning of period
Income from Investment .655 .689 .702 .713 .717
Operations
Net interest income
Net realized and .930 .200 .540 .040 .270
unrealized gain
(loss)
on investments
Total from investment 1.585 .889 1.242 .753 .987
operations
Less Distributions (.655) (.689) (.702) (.713) (.717)
From net interest
income
From net realized gain (.280) (.110) - - -
on investments
Total distributions (.935) (.799) (.702) (.713) (.717)
Net asset value, end of $ 12.370 $ 11.720 $ 11.630 $ 11.090 $ 11.050
period
TOTAL RETURN 13.85% 7.91% 11.57% 7.08% 9.45%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of $ 448,396 $ 371,122 $ 303,351 $ 198,585 $ 175,301
period (000 omitted)
Ratio of expenses to .61% .63% .65% .67% .70%
average net assets
Ratio of net interest 5.31% 5.91% 6.23% 6.52% 6.57%
income to average net
assets
Portfolio turnover rate 78% 69% 62% 66% 51%
NOTES TO FINANCIAL STATEMENTS
For the period ended December 31, 1993
1. SIGNIFICANT ACCOUNTING
POLICIES.
Fidelity Insured Tax-Free Portfolio (the fund) is a fund of Fidelity
Municipal 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 following
summarizes the significant accounting policies of the fund:
SECURITY VALUATION. Securities are valued based upon a computerized matrix
system and/or appraisals by a pricing service, both of which consider
market transactions and dealer-supplied valuations. Short-term securities
maturing within sixty days are valued either at amortized cost or original
cost plus accrued interest, both of which approximate current value.
Securities for which quotations are not readily available through the
pricing service are valued at their fair value as determined in good faith
under consistently applied procedures under the general supervision of the
Board of Trustees.
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 all of its taxable income for its fiscal
year. The schedule of investments includes information regarding income
taxes under the caption "Income Tax Information."
INTEREST INCOME. Interest income, which includes amortization of premium
and accretion of original issue discount, is accrued as earned.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
DISTRIBUTIONS TO SHAREHOLDERS.
Dividends are declared daily and paid monthly from net interest income.
Distributions to shareholders from realized capital gains on investments,
if any, 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 are primarily due to differing treatments for
futures transactions 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 reclassification 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.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January
1, 1993, the fund adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the fund changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of December 31, 1992 have been reclassified to
reflect a decrease in paid in capital of $120,531, and an increase in
accumulated net realized gain on investments of $120,531.
2. OPERATING POLICIES.
FUTURES CONTRACTS AND OPTIONS. The fund may invest in futures contracts and
write options. These investments involve, to varying degrees, elements of
market risk and risks in excess of the amount recognized in the Statement
of Assets and Liabilities. The face or contract amounts reflect the extent
of the involvement the fund has in the particular classes of instruments.
Risks may be caused by an imperfect correlation between movements in the
price of the instruments and the price of the underlying securities and
interest rates. Risks also may arise if there is an illiquid secondary
market for the instruments, or due to the inability of counterparties to
perform.
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
DELAYED DELIVERY TRANSACTIONS. The fund may purchase or sell securities on
a when-issued or forward commitment 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 fund
identifies securities as segregated in its custodial records with a value
at least equal to the amount of the purchase commitment.
3. PURCHASES AND SALES OF
INVESTMENTS.
Purchases and sales of securities, other than short-term securities,
aggregated $390,848,195 and $321,797,711, respectively.
The face value of futures contracts opened and closed amounted to
$318,757,327 and $329,692,869, respectively.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As the fund's investment adviser, Fidelity Management &
Research Company (FMR) receives a monthly fee that is calculated
4. FEES AND OTHER
TRANSACTIONS WITH AFFILIATES - CONTINUED
MANAGEMENT FEE - CONTINUED
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 ranging from .15% to .37% and is
based on the monthly average net assets of all the mutual funds advised by
FMR. The annual individual fund fee rate is .25%. For the period, the
management fee was equivalent to an annual rate of .42% of average net
assets.
The Board of Trustees approved a new group fee rate schedule with rates
ranging from.1325% to.3700%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
DISTRIBUTION AND SERVICE PLAN. Pursuant to the Distribution and Service
Plan (the Plan), and in accordance with Rule 12b-1 of the 1940 Act, FMR or
the fund's distributor, Fidelity Distributors Corporation (FDC), an
affiliate of FMR, may use their resources to pay administrative and
promotional expenses related to the sale of the fund's shares. Subject to
the approval of the Board of Trustees, the Plan also authorizes payments to
third parties that assist in the sale of the fund's shares or render
shareholder support services. FMR or FDC has informed the fund that
payments made to third parties under the Plan amounted to $21,127 for the
period.
TRANSFER AGENT AND ACCOUNTING FEES. United Missouri Bank, N.A. (the Bank)
is the custodian and transfer and shareholder servicing agent for the fund.
The Bank has entered into a sub-contract with Fidelity Service Co. (FSC),
an affiliate of FMR, under which FSC performs the activities associated
with the fund's transfer and shareholder servicing agent and accounting
functions. The fund pays transfer agent fees based on the type, size,
number of accounts and number of transactions made by shareholders. FSC
pays for typesetting, printing and mailing of all shareholder reports,
except proxy statements. The accounting fee is based on the level of
average net assets for the month plus out-of-pocket expenses. For the
period, FSC received transfer agent and accounting fees amounting to
$462,702 and $171,146 respectively.
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Municipal Trust and the Shareholders of
Fidelity Insured Tax-Free Portfolio:
We have audited the accompanying statement of assets and liabilities of
Fidelity Municipal Trust: Fidelity Insured Tax-Free Portfolio, including
the schedule of portfolio investments, as of December 31,1993, and the
related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended
and the financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of December 31, 1993 by correspondence with the
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position
of Fidelity Municipal Trust: Fidelity Insured TaxFree Portfolio as of
December 31, 1993, the results of its operations for the year then ended,
the changes in its net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND
Boston, Massachusetts
January 28, 1994
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FOR FUND INFORMATION AND QUOTES
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ACCOUNT
BALANCES 1-800-544-7544
Just make a selection from this record-
ed menu:
PRESS
For balances on funds you own.
1.
For your most recent fund activity
(purchases, redemptions, and
dividends).
2.
To change your Personal
Identification Number (PIN).
3.
To speak with a Fidelity
representative.
4.
* 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. FOR MORE
INFORMATION ON ANY
FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888
FOR A FREE
PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
TO WRITE FIDELITY
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. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 2269
Boston, MA 02107-2269
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30280
Salt Lake City, UT 84130-0280
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
851 Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
811 Wilshire Boulevard
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
1400 Civic Drive
Walnut Creek, CA
COLORADO
1625 Broadway
Denver, CO
CONNECTICUT
185 Asylum Street
Hartford, CT
265 Church Street
New Haven, CT
300 Atlantic Street
Stamford, CT
DELAWARE
222 Delaware Avenue
Wilmington, DE
FLORIDA
4400 N. Federal Highway
Boca Raton, FL
2249 Galiano Street
Coral Gables, FL
4090 N. Ocean Boulevard
Ft. Lauderdale, FL
4001 Tamiami Trail, North
Naples, FL
32 West Central Boulevard
Orlando, FL
2401 PGA Boulevard
Palm Beach Gardens, FL
8065 Beneva Road
Sarasota, FL
2000 66th Street, North
St. Petersburg, FL
GEORGIA
3525 Piedmont Road, N.E.
Atlanta, GA
1000 Abernathy Road
Atlanta, GA
HAWAII
700 Bishop Street
Honolulu, HI
ILLINOIS
215 East Erie Street
Chicago, IL
One North Franklin
Chicago, IL
540 Lake Cook Road
Deerfield, IL
1415 West 22nd Street
Oak Brook, IL
1700 East Golf Road
Schaumburg, IL
LOUISIANA
201 St. Charles Avenue
New Orleans, LA
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
1 West Pennsylvania Ave.
Towson, MD
7401 Wisconsin Avenue
Bethesda, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
21 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
101 Cambridge Street
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
26955 Northwestern Hwy.
Southfield, MI
MINNESOTA
38 South Sixth Street
Minneapolis, MN
MISSOURI
700 West 47th Street
Kansas City, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
60B South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
505 Millburn Avenue
Short Hills, NJ
NEW YORK
1050 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
10 Bank Street
White Plains, NY
NORTH CAROLINA
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
1903 East Ninth Street
Cleveland, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
121 S.W. Morrison Street
Portland, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
5100 Poplar Avenue
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
7001 Preston Road
Dallas, TX
1155 Dairy Ashford
Houston, TX
1010 Lamar Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
UTAH
175 East 400 South Street
Salt Lake City, UT
VERMONT
199 Main Street
Burlington, VT
VIRGINIA
8300 Boone Boulevard
Vienna, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
1001 Fourth Avenue
Seattle, WA
WASHINGTON, DC
1775 K Street, N.W.
Washington, DC
WISCONSIN
222 East Wisconsin Avenue
Milwaukee, WI
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
Gary L. French, Treasurer
John H. Costello, Assistant Treasurer
Arthur S. Loring, Secretary
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Richard J. Flynn *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Edward H. Malone *
Marvin L. Mann *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIAN
United Missouri Bank, N.A.
Kansas City, MO
Corporate Headquarters
82 Devonshire St., Boston, MA 02109
FIDELITY TAX-FREE BOND FUNDS
Aggressive Tax-Free
California Tax-Free High Yield
California Tax-Free Insured
High Yield Tax-Free
Insured Tax-Free
Limited Term Municipals
Massachusetts Tax-Free High Yield
Michigan Tax-Free High Yield
Minnesota Tax-Free
Municipal Bond
New York Tax-Free High Yield
New York Tax-Free Insured
Ohio Tax-Free High Yield
SpartanAggressive Municipal
Spartan California Municipal High Yield
Spartan Connecticut Municipal High Yield
Spartan Florida Municipal Income
Spartan Intermediate Municipal
Spartan Maryland Municipal Income
Spartan Municipal Income
Spartan New Jersey Municipal High Yield
Spartan New York Municipal High Yield
Spartan Pennsylvania Municipal High Yield
Spartan Short-Intermediate Municipal
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
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)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
Dates Referenced Herein and Documents Incorporated by Reference
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