Fidelity Magellan Fund – ‘N-30D’ for 3/31/98

As of:  Wednesday, 5/20/98   ·   For:  3/31/98   ·   Accession #:  61397-98-3   ·   File #:  811-01193

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

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Annual or Semi-Annual Report Mailed to                44±   186K 
                          Shareholders                                           


(2_FIDELITY_LOGOS)FIDELITY                                                      

MAGELLAN(REGISTERED TRADEMARK)                                                  
FUND                                                                            
ANNUAL REPORT                                                                   
MARCH 31, 1998                                                                  
CONTENTS                                                                        

PRESIDENT'S MESSAGE     3   NED JOHNSON ON INVESTING STRATEGIES.                

PERFORMANCE             4   HOW THE FUND HAS DONE OVER TIME.                    

FUND TALK               6   THE MANAGER'S REVIEW OF FUND                        
          PERFORMANCE, STRATEGY AND OUTLOOK.

INVESTMENT CHANGES      10  A SUMMARY OF MAJOR SHIFTS IN THE FUND'S             
             INVESTMENTS OVER THE PAST SIX MONTHS.

INVESTMENTS             11  A COMPLETE LIST OF THE FUND'S INVESTMENTS           
 WITH THEIR MARKET VALUES.

FINANCIAL STATEMENTS    30  STATEMENTS OF ASSETS AND LIABILITIES,               
              OPERATIONS, AND CHANGES IN NET ASSETS,
        AS WELL AS FINANCIAL HIGHLIGHTS.

NOTES                   34  NOTES TO THE FINANCIAL STATEMENTS.                  

REPORT OF INDEPENDENT   40  THE AUDITORS' OPINION.                              
ACCOUNTANTS                                                                     

DISTRIBUTIONS           41                                                      

THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE                   
SUBMITTED FOR THE GENERAL INFORMATION                                           
OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR              
DISTRIBUTION TO PROSPECTIVE INVESTORS                                           
IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS.          
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED            
BY, ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC,             
THE                                                                             
FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO                   
INVESTMENT RISKS, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL AMOUNTS              
INVESTED.                                                                       
NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK.               
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND                
EXPENSES, CALL 1-800-544-8888 FOR A                                             
FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY.             
To reduce expenses and demonstrate respect for our environment, we              
have initiated a project through which we will begin eliminating                
duplicate copies of most financial reports and prospectuses to most             
households, even if they have more than one account in the fund. If             
additional copies of financial reports, prospectuses or historical              
account information are needed, please call 1-800-544-6666.                     
PRESIDENT'S MESSAGE                                                             

(photo_of_Edward_C_Johnson_3d)                                                  
DEAR SHAREHOLDER:                                                               
In the first quarter of 1998, the U.S. stock and bond markets                   
responded differently to lingering uncertainty over the direction of            
the U.S. and global economies. On the one hand, the U.S. stock market           
soared to record heights as corporate earnings proved to be stronger            
than expected and investors shrugged off concerns about the effects of          
economic difficulties in Asia. On the other hand, two factors tempered          
returns in the bond market. First, interest-rate levels were generally          
positive, but were low enough to encourage a flood of new issuance              
that dampened performance. Second, there were concerns that continued           
economic strength might lead to eventual inflation, even though                 
inflation indicators remained benign during the quarter.                        
While it's impossible to predict the future direction of the markets            
with any degree of certainty, there are certain basic principles that           
can help investors plan for their future needs.                                 
First, investors are encouraged to take a long-term view of their               
portfolios. If you can afford to leave your money invested through the          
inevitable up and down cycles of the financial markets, you will                
greatly reduce your vulnerability to any single decline. We know from           
experience, for example, that stock prices have gone up over longer             
periods of time, have significantly outperformed other types of                 
investments and have stayed ahead of inflation.                                 
Second, you can further manage your investing risk through                      
diversification. A stock mutual fund, for instance, is already                  
diversified, because it invests in many different companies. You can            
increase your diversification further by investing in a number of               
different stock funds, or in such other investment categories as                
bonds. If you have a short investment time horizon, you might want to           
consider moving some of your investment into a money market fund,               
which seeks income and a stable share price by investing in                     
high-quality, short-term investments. Of course, it's important to              
remember that there is no assurance that a money market fund will               
achieve its goal of maintaining a stable net asset value of $1.00 per           
share, and that these types of funds are neither insured nor                    
guaranteed by any agency of the U.S. government.                                
Finally, no matter what your time horizon or portfolio diversity, it            
makes good sense to follow a regular investment plan, investing a               
certain amount of money in a fund at the same time each month or                
quarter and periodically reviewing your overall portfolio. By doing             
so, you won't get caught up in the excitement of a rapidly rising               
market, nor will you buy all your shares at market highs. While this            
strategy - known as dollar cost averaging - won't assure a profit or            
protect you from a loss in a declining market, it should help you               
lower the average cost of your purchases.                                       
If you have questions, please call us at 1-800-544-8888. We are                 
available 24 hours a day, seven days a week to provide you the                  
information you need to make the investments that are right for you.            
Best regards,                                                                   
Edward C. Johnson 3d                                                            
PERFORMANCE: THE BOTTOM LINE                                                    

There are several ways to evaluate a fund's historical performance.             
You can look at the total percentage change in value, the average               
annual percentage change or the growth of a hypothetical $10,000                
investment. Total return reflects the change in the value of an                 
investment, assuming reinvestment of the fund's dividend income and             
capital gains (the profits earned upon the sale of securities that              
have grown in value).                                                           
CUMULATIVE TOTAL RETURNS                                                        
PERIODS ENDED MARCH 31, 1998                  PAST 1  PAST 5   PAST 10          
                                  YEAR    YEARS    YEARS

FIDELITY MAGELLAN                             45.41%  149.00%  485.58%          

FIDELITY MAGELLAN (INCL. 3.00% SALES CHARGE)  41.05%  141.53%  468.02%          

S&P 500 (REGISTERED TRADEMARK)                48.00%  174.71%  466.82%          

GROWTH FUNDS AVERAGE                          42.90%  137.63%  376.43%          

CUMULATIVE TOTAL RETURNS show the fund's performance in percentage              
terms over a set period - in this case, one year, five years or 10              
years. For example, if you had invested $1,000 in a fund that had a 5%          
return over the past year, the value of your investment would be                
$1,050. You can compare the fund's returns to the performance of the            
Standard & Poor's 500 Index - a widely recognized, unmanaged index of           
common stocks. To measure how the fund's performance stacked up                 
against its peers, you can compare it to the growth funds average,              
which reflects the performance of mutual funds with similar objectives          
tracked by Lipper Analytical Services, Inc. The past one year average           
represents a peer group of 858 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 MARCH 31, 1998                  PAST 1  PAST 5  PAST 10           
                                 YEAR    YEARS   YEARS

FIDELITY MAGELLAN                             45.41%  20.02%  19.33%            

FIDELITY MAGELLAN (INCL. 3.00% SALES CHARGE)  41.05%  19.29%  18.97%            

S&P 500                                       48.00%  22.40%  18.94%            

GROWTH FUNDS AVERAGE                          42.90%  18.54%  16.42%            

AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and              
show you what would have happened if the fund had performed at a                
constant rate each year. (Note: Lipper calculates average annual total          
returns by annualizing each fund's total return, then taking an                 
arithmetic average. This may produce a slightly different figure than           
that obtained by averaging the cumulative total returns and                     
annualizing the result.)                                                        
$10,000 OVER 10 YEARS                                                           
Magellan                    S&P 500                   
00021                       SP001                     
1988/03/31       9700.00                    10000.00                        
1988/04/30       9873.76                    10111.00                        
1988/05/31       9847.37                    10198.97                        
1988/06/30      10520.43                    10667.10                        
1988/07/31      10452.24                    10626.56                        
1988/08/31      10120.11                    10265.26                        
1988/09/30      10544.63                    10702.56                        
1988/10/31      10764.58                    11000.09                        
1988/11/30      10619.41                    10842.79                        
1988/12/31      10828.07                    11032.54                        
1989/01/31      11706.51                    11840.12                        
1989/02/28      11516.03                    11545.30                        
1989/03/31      11858.89                    11814.31                        
1989/04/30      12454.97                    12427.47                        
1989/05/31      13112.55                    12930.78                        
1989/06/30      12998.79                    12857.08                        
1989/07/31      14090.93                    14018.07                        
1989/08/31      14459.53                    14292.83                        
1989/09/30      14709.81                    14234.22                        
1989/10/31      14247.93                    13903.99                        
1989/11/30      14482.28                    14187.63                        
1989/12/31      14572.90                    14528.14                        
1990/01/31      13633.02                    13553.30                        
1990/02/28      13913.04                    13728.13                        
1990/03/31      14268.53                    14091.93                        
1990/04/30      13908.17                    13739.63                        
1990/05/31      15145.20                    15079.25                        
1990/06/30      15211.03                    14976.71                        
1990/07/31      15038.86                    14928.78                        
1990/08/31      13565.36                    13579.22                        
1990/09/30      12704.55                    12917.91                        
1990/10/31      12547.58                    12862.36                        
1990/11/30      13497.00                    13693.27                        
1990/12/31      13915.86                    14075.32                        
1991/01/31      14888.65                    14689.00                        
1991/02/28      16181.41                    15739.26                        
1991/03/31      16731.02                    16120.15                        
1991/04/30      16792.95                    16158.84                        
1991/05/31      17750.47                    16856.90                        
1991/06/30      16707.42                    16084.86                        
1991/07/31      17745.15                    16834.41                        
1991/08/31      18290.62                    17233.39                        
1991/09/30      18221.44                    16945.59                        
1991/10/31      18466.24                    17172.66                        
1991/11/30      17553.57                    16480.60                        
1991/12/31      19625.31                    18365.98                        
1992/01/31      19633.89                    18024.38                        
1992/02/29      20031.49                    18258.69                        
1992/03/31      19488.01                    17902.65                        
1992/04/30      19776.91                    18428.99                        
1992/05/31      19966.40                    18519.29                        
1992/06/30      19614.71                    18243.35                        
1992/07/31      20165.17                    18989.50                        
1992/08/31      19727.86                    18600.22                        
1992/09/30      19954.16                    18819.70                        
1992/10/31      20094.84                    18885.57                        
1992/11/30      20602.48                    19529.57                        
1992/12/31      21001.94                    19769.78                        
1993/01/31      21555.24                    19935.85                        
1993/02/28      22005.21                    20206.98                        
1993/03/31      22811.82                    20633.34                        
1993/04/30      23035.14                    20134.02                        
1993/05/31      23943.05                    20673.61                        
1993/06/30      24276.95                    20733.56                        
1993/07/31      24544.76                    20650.63                        
1993/08/31      25988.16                    21433.29                        
1993/09/30      26269.89                    21268.25                        
1993/10/31      26287.28                    21708.50                        
1993/11/30      25421.24                    21502.27                        
1993/12/31      26180.51                    21762.45                        
1994/01/31      27215.16                    22502.37                        
1994/02/28      27015.62                    21892.56                        
1994/03/31      25762.95                    20938.04                        
1994/04/30      26021.61                    21206.05                        
1994/05/31      25721.84                    21553.83                        
1994/06/30      24605.84                    21025.76                        
1994/07/31      25429.37                    21715.41                        
1994/08/31      26633.88                    22605.74                        
1994/09/30      25941.19                    22051.90                        
1994/10/31      26818.60                    22548.06                        
1994/11/30      25348.56                    21726.86                        
1994/12/31      25706.45                    22049.07                        
1995/01/31      25444.77                    22620.81                        
1995/02/28      26872.47                    23502.34                        
1995/03/31      27876.87                    24195.89                        
1995/04/30      29173.74                    24908.46                        
1995/05/31      29989.31                    25904.05                        
1995/06/30      32273.58                    26505.80                        
1995/07/31      34751.11                    27384.74                        
1995/08/31      35052.59                    27453.47                        
1995/09/30      35694.20                    28612.01                        
1995/10/31      34782.03                    28509.86                        
1995/11/30      35555.05                    29761.45                        
1995/12/31      35172.43                    30334.65                        
1996/01/31      35679.69                    31367.24                        
1996/02/29      35446.51                    31658.02                        
1996/03/31      35802.41                    31962.88                        
1996/04/30      36031.49                    32434.02                        
1996/05/31      36194.35                    33270.49                        
1996/06/30      36160.51                    33397.25                        
1996/07/31      34478.17                    31921.76                        
1996/08/31      35348.34                    32594.99                        
1996/09/30      36764.79                    34429.44                        
1996/10/31      37634.96                    35379.00                        
1996/11/30      40071.45                    38053.30                        
1996/12/31      39282.93                    37299.46                        
1997/01/31      41007.19                    39629.93                        
1997/02/28      40456.79                    39940.63                        
1997/03/31      39063.75                    38299.47                        
1997/04/30      40807.49                    40585.95                        
1997/05/31      43718.68                    43056.82                        
1997/06/30      45528.83                    44985.77                        
1997/07/31      49349.15                    48565.29                        
1997/08/31      47153.97                    45844.66                        
1997/09/30      49929.20                    48355.57                        
1997/10/31      48229.06                    46740.49                        
1997/11/30      49169.14                    48904.11                        
1997/12/31      49728.87                    49743.80                        
1998/01/31      50266.51                    50293.96                        
1998/02/28      54076.95                    53921.16                        
1998/03/31      56801.68                    56682.47                        
IMATRL PRASUN   SHR__CHT 19980331 19980408 170348 R00000000000123               
$10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was                
invested in Fidelity Magellan Fund on March 31, 1988 and the current            
3.00% sales charge was paid. As the chart shows, by March 31, 1998,             
the value of the investment would have grown to $56,802 - a 468.02%             
increase on the initial investment. For comparison, look at how the             
S&P 500 did over the same period. With dividends and capital gains, if          
any, reinvested, the same $10,000 would have grown to $56,682 - a               
466.82% increase.                                                               
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.                                                            
(checkmark)                                                                     
FUND TALK: THE MANAGER'S OVERVIEW                                               

MARKET RECAP                                                                    
While the U.S. stock market's                                                   
resolve was tested repeatedly                                                   
during the 12-month period that                                                 
ended March 31, 1998, a strong                                                  
domestic economy helped stocks                                                  
post impressive gains. At the                                                   
beginning of the period, stocks                                                 
of larger companies were still                                                  
responsible for much of the                                                     
market's advance. The Standard &                                                
Poor's 500 Index - a measure of                                                 
the U.S. stock market - returned                                                
48.00% during this time. In August                                              
and September, stocks of smaller                                                
companies joined in the fun.                                                    
The Russell 2000 Index had a                                                    
12-month return of 42.01% as of                                                 
March 31. A solid U.S. economy                                                  
played a key role in stock                                                      
performance, as low inflation, low                                              
interest rates and moderate growth                                              
formed a favorable backdrop. But                                                
while the U.S. economy was                                                      
chugging along nicely, economies                                                
elsewhere were in trouble. After                                                
several small Southeast Asian                                                   
countries devalued their currencies                                             
in June 1997, a full-fledged                                                    
economic crisis took hold there in                                              
late October. Markets around the                                                
world reacted negatively,                                                       
particularly in the U.S. where the                                              
Dow Jones Industrial Average fell                                               
550-plus points in one trading                                                  
session. Concerns over a potential                                              
slowdown in U.S. corporate                                                      
earnings sent investors on a "flight                                            
to quality," as many sought shelter                                             
in stocks of companies with                                                     
minimal international exposure.                                                 
The vibrant U.S. economy,                                                       
however, acted as a linchpin                                                    
throughout this volatility. Toward                                              
the end of 1997 and early 1998,                                                 
investors had regained their                                                    
attraction to stocks and the Dow                                                
was approaching the 9000-point                                                  
barrier.                                                                        
An interview with Robert Stansky, Portfolio Manager of Fidelity                 
Magellan Fund                                                                   
Q. BOB, HOW HAS THE FUND PERFORMED?                                             
A. During the 12 months that ended March 31, 1998, the fund had a               
total return of 45.41%. That beat the Lipper growth funds average,              
which was 42.90%. Thus, the fund's performance relative to its peers            
improved over the past year compared to the prior year.                         
Q. ALTHOUGH THE FUND HAD A STRONG YEAR OVERALL, THE FINANCIAL AND               
ECONOMIC CRISIS IN ASIA PROMPTED A DOWNTURN IN THE U.S. STOCK MARKET            
DURING THE FOURTH QUARTER OF 1997. HOW WAS THE FUND AFFECTED?                   
A. Investors' worries that the Asian situation would negatively affect          
corporate earnings caused the prices of a number of the fund's stock            
holdings to fall during the fourth quarter. In fact, almost all of the          
fund's negative total return for the quarter occurred during a                  
relatively brief period from early November - shortly after word of             
Asia's troubles became widespread - through the second week in                  
December. The fund's two largest sectors were among those hardest hit.          
Technology stocks - which represented 15.3% of the fund at the end of           
the period - suffered losses. The expectations for revenue growth               
among many tech companies are tied in part to Asia, which prompted              
concerns about future earnings growth. In addition, financial stocks -          
especially those with overseas exposure - pulled back. Finally, a               
broad "flight to quality" occurred in the fourth quarter as investors           
shifted to those stocks they deemed "safe havens," such as utilities.           
Magellan's underweighting in these defensive stocks relative to the             
broad market is a key reason the fund had difficulty keeping up with            
market averages during the fourth quarter.                                      
Q. HOW DID YOU RESPOND?                                                         
A. As the Asian crisis unfolded, it was obvious that one direct result          
would be pockets of earnings weakness over the near term, particularly          
among companies with direct Asian exposure. Therefore, I did trim and           
add to some positions where I saw fit, but I didn't make any dramatic           
changes to the fund in the fourth quarter. Taking a longer-term view,           
I've been looking closely at companies that are attempting to                   
capitalize on the Asian downdraft by making acquisitions in Asia that           
may enhance future earnings growth. And I've increased positions in             
some companies that already have made such acquisitions. In addition,           
prior to the Asian crisis, I already had established positions in U.S.          
companies that mainly do business domestically and whose stocks                 
appeared attractively priced. Two examples, Wal-Mart and Home Depot,            
posted strong earnings gains in recent months.                                  
Q. IN FACT, STOCK PRICES OVERALL, AND THE FUND IN PARTICULAR, BOUNCED           
BACK STRONGLY IN THE FIRST QUARTER OF 1998. WHAT CONTRIBUTED TO THE             
REBOUND?                                                                        
A. Quite simply, earnings growth came in at least as strong, and in             
some cases stronger, than most people expected. There was a belief              
that many companies could manage through the Asian crisis due mainly            
to the continued strength of the U.S. economy and, in particular, the           
recent strength of the European economy. Several of the fund's top              
holdings such as General Electric and Microsoft justified that belief,          
reporting solid profit growth; their stock prices jumped accordingly.           
Also, there was a noticeable trend toward rising price-to-earnings              
(P/E) ratios in a number of stocks. The P/E ratio, or multiple, is the          
price of a stock divided by its earnings per share. This calculation            
is important because it gives investors an idea of how much they're             
paying for a company's earning power. The higher the multiple, the              
more investors are paying. Recently, investors were willing to pay              
higher multiples for at least two reasons. First, they expected                 
greater earnings growth in the future and, second, they believed                
companies could sustain that growth for longer periods.                         
Q. CAN YOU GIVE US SOME EXAMPLES?                                               
A. Rising earnings growth expectations occurred in areas of the market          
where the outlook was favorable and investor confidence was strong.             
For example, the prices of pharmaceutical stocks such as                        
Schering-Plough and Pfizer rose sharply. These companies either met or          
exceeded earnings estimates, but investors also rewarded their stocks           
with higher multiples due to the expectation that the pipeline of new           
drugs will be very productive over the next few years. At the end of            
the period, health stocks made up 11.7% of the fund, up from 9.2% six           
months earlier. The outlook was also bright in parts of the                     
telecommunications industry, which positively affected stocks such as           
Lucent Technologies in the same way.                                            
Q. BOB, AS YOU REVIEW THE PAST YEAR, WHAT WERE SOME OF THE                      
DISAPPOINTMENTS?                                                                
A. As is typical, those stocks that didn't do well were the ones whose          
profits - for a variety of reasons - were not as strong as I had                
projected. Technology companies Compaq and Oracle suffered recently             
from internal operational difficulties and looming concerns about the           
impact of the Asian crisis. However, earnings disappointments were not          
limited to tech companies. Over the past year, holdings such as Oxford          
Health Plans, Nike and Waste Management negatively affected the fund's          
returns due to lower-than-expected profits.                                     
Q. BOB, THE FUND'S TURNOVER RATE - A MEASURE OF HOW FREQUENTLY STOCKS           
IN THE FUND ARE REPLACED - HAS FALLEN SIGNIFICANTLY SINCE YOU TOOK              
OVER MAGELLAN IN JUNE 1996. IT APPEARS THUS FAR THAT YOU'VE ADOPTED A           
STEADY APPROACH TO MANAGING THE FUND . . .                                      
A. I think two factors were at work here. First, I do try to take a             
relatively long-term approach to investing. I look for stocks that are          
selling at attractive valuations that I believe will experience strong          
earnings growth over the next 12 to 24 months. Once I make that                 
commitment, I try to have the patience to weather short-term bumps in           
the road if I still believe in the long-term picture. Second, since             
I've taken over the fund, stock prices have mostly risen due to solid           
earnings growth. And many of the stronger performers - such as General          
Electric - have continued to do well. In order to replace a stock like          
that, I have to come up with a better idea. In a rising market, there           
aren't many opportunities to buy great stocks at cheap valuations. An           
increase in volatility in the market going forward - meaning wider              
swings in stock prices - might well lead me to make more frequent               
changes to the fund's holdings as I try to take advantage of the price          
dips.                                                                           
Q. WHAT'S YOUR OUTLOOK FOR THE REST OF THE YEAR?                                
A. Because multiples have already risen so substantially, I believe             
that any appreciation in stock prices through the rest of the year              
should be more closely tied to earnings growth. That makes it more              
important than ever that I get the earnings right. I'll do that by              
focusing both on companies whose multiples have risen but still have            
potential for strong earnings growth, and on more value-oriented                
companies that may be experiencing a positive turnaround. To the                
extent that I can correctly forecast earnings through the rest of the           
year - and more importantly over the next 12 to 24 months - the fund            
should do well relative to its peers and the broad market.                      
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.                                                 

BOB STANSKY ON THE EFFECTS OF                                                   
THE FUND'S RECENT PARTIAL                                                       
CLOSING:                                                                        
"It's been six months since we                                                  
limited new purchases of Magellan                                               
Fund, and thus far I would say the                                              
partial closing has been a success.                                             
We limited new purchases of the                                                 
fund essentially to existing                                                    
shareholders last fall because we                                               
were concerned that the fund's                                                  
improving performance could                                                     
result in accelerating investor                                                 
inflows, which likely would have                                                
made it more difficult for me to                                                
manage the fund. Since we took                                                  
this action, cash flows have been                                               
steady and predictable. That has                                                
indeed made it easier for me to                                                 
remain fully invested in the                                                    
market. Bottom line: I think we                                                 
made the right decision for                                                     
shareholders of the fund."                                                      
FUND FACTS                                                                      
GOAL: to increase the value                                                     
of the fund's shares over the                                                   
long term by investing mainly                                                   
in equity securities with                                                       
growth potential                                                                
FUND NUMBER: 021                                                                
TRADING SYMBOL: FMAGX                                                           
START DATE: May 2, 1963                                                         
SIZE: as of March 31, 1998,                                                     
more than $71.9 billion                                                         
MANAGER: Robert Stansky,                                                        
since June 1996; manager,                                                       
Fidelity Growth Company                                                         
Fund and Fidelity Advisor                                                       
Equity Growth, 1987-1996;                                                       
Fidelity Emerging Growth                                                        
Fund 1990-1991; Fidelity                                                        
Select Defense & Aerospace                                                      
Portfolio 1984-1985; joined                                                     
Fidelity in 1983                                                                
(checkmark)                                                                     
INVESTMENT CHANGES                                                              

TOP TEN STOCKS AS OF MARCH 31, 1998                                             
                   % OF FUND'S   % OF FUND'S INVESTMENTS
           INVESTMENTS   IN THESE STOCKS
                      6 MONTHS AGO

GENERAL ELECTRIC CO.           3.5           3.0                                

MICROSOFT CORP.                2.2           1.3                                

MERCK & CO., INC.              1.7           1.2                                

CITICORP                       1.5           1.4                                

CENDANT CORP.                  1.4           1.2                                

WAL-MART STORES, INC.          1.4           1.0                                

HOME DEPOT, INC.               1.4           1.1                                

BRISTOL-MYERS SQUIBB CO.       1.3           1.1                                

CISCO SYSTEMS, INC.            1.1           0.6                                

PHILIP MORRIS COMPANIES, INC.  1.1           1.3                                

TOP FIVE MARKET SECTORS AS OF MARCH 31, 1998                                    
                         % OF FUND'S   % OF FUND'S INVESTMENTS
                         INVESTMENTS   IN THESE MARKET SECTORS
                            6 MONTHS AGO

TECHNOLOGY                        15.3          16.8                            

FINANCE                           13.1          12.3                            

HEALTH                            11.7          9.2                             

RETAIL & WHOLESALE                8.6           7.2                             

INDUSTRIAL MACHINERY & EQUIPMENT  8.1           8.2                             

ASSET ALLOCATION (% OF FUND'S INVESTMENTS)                                      
AS OF MARCH 31, 1998 * AS OF SEPTEMBER 30, 1997 **                              
ROW: 1, COL: 1, VALUE: 96.2                                                     
ROW: 1, COL: 2, VALUE: 3.8                                                      
STOCKS 95.9%                                                                    
SHORT-TERM                                                                      
INVESTMENTS 4.1%                                                                
FOREIGN                                                                         
INVESTMENTS 8.2%                                                                
STOCKS  96.2%                                                                   
SHORT-TERM                                                                      
INVESTMENTS 3.8%                                                                
FOREIGN                                                                         
INVESTMENTS 8.6%                                                                
ROW: 1, COL: 1, VALUE: 95.90000000000001                                        
ROW: 1, COL: 2, VALUE: 4.1                                                      
*                                                                               
**                                                                              
INVESTMENTS MARCH 31, 1998                                                      
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES                   

COMMON STOCKS - 96.2%                                                           
                                    SHARES    VALUE (NOTE 1)
                                      (000S)
AEROSPACE & DEFENSE - 1.9%                                                      
AEROSPACE & DEFENSE - 1.6%                                                      
AlliedSignal, Inc.                         7,958,800 $ 334,270                  
Boeing Co.                                 4,808,600  250,648                   
Gulfstream Aerospace Corp. (a)               938,000  40,686                    
Lockheed Martin Corp.                        518,300  58,309                    
Textron, Inc.                              1,211,400  93,278                    
United Technologies Corp.                  4,021,900  371,272                   
                                     1,148,463
DEFENSE ELECTRONICS - 0.2%                                                      
Raytheon Co.:                                                                   
Class A                                     514,245  29,248                   
Class B                                   2,056,700  120,060                  
149,308                                                                     
SHIP BUILDING & REPAIR - 0.1%                                                   
General Dynamics Corp.                       501,900  43,226                    
Halter Marine Group, Inc. (a)(c)           1,534,725  24,364                    
67,590                                                                      
TOTAL AEROSPACE & DEFENSE                              1,365,361                
BASIC INDUSTRIES - 2.6%                                                         
CHEMICALS & PLASTICS - 1.4%                                                     
Air Products & Chemicals, Inc.               471,500  39,076                    
AKZO Nobel NV  85,000  17,285                                                   
Atlantis Group, Inc. (Trivest/Winston)                                          
(a)(g)                                        77,269  1,700                     
du Pont (E.I.) de Nemours & Co.            1,683,600  114,485                   
Hanna (M.A.) Co. (c)                       2,816,425  68,826                    
Hercules, Inc.                               716,500  35,377                    
Ivex Packaging Corp.                          59,400  1,455                     
Monsanto Co.                               4,182,800  217,506                   
Morton International, Inc.                 1,833,500  60,162                    
Praxair, Inc.                              2,961,030  152,308                   
Schulman (A.), Inc.                        1,637,125  41,337                    
Sealed Air Corp. (a)                       1,426,200  93,416                    
Synetic, Inc. (a)(c)                       1,157,582  60,050                    
Trivest 1992 Special Fund Ltd.              26.6 (f)  2,966                     
W.R. Grace & Co.                             876,300  73,335                    
                                   979,284
COMMON STOCKS - CONTINUED                                                       
                                   SHARES VALUE (NOTE 1)
                                  (000S)
BASIC INDUSTRIES - CONTINUED                                                    
IRON & STEEL - 0.5%                                                             
Aeroquip Vickers, Inc. (c)                  1,441,500 $ 83,337                  
Inland Steel Industries, Inc.               1,817,200  50,200                   
Nucor Corp.                                 3,892,400  211,893                  
                                     345,430
METALS & MINING - 0.0%                                                          
Aluminum Co. of America                       250,000  17,203                   
PACKAGING & CONTAINERS - 0.0%                                                   
EarthShell Corp.                               30,000  536                      
Owens-Illinois, Inc. (a)                      742,700  32,122                   
32,658                                                                      
PAPER & FOREST PRODUCTS - 0.7%                                                  
Champion International Corp.                1,107,100  60,129                   
Fort James Corp.                              837,500  38,368                   
Kimberly-Clark Corp.                        6,089,800  305,251                  
Louisiana-Pacific Corp.                     2,032,600  47,258                   
UPM-Kymmene Corp.                           1,411,100  35,980                   
486,986                                                                     
TOTAL BASIC INDUSTRIES                                 1,861,561                
CONSTRUCTION & REAL ESTATE - 2.4%                                               
BUILDING MATERIALS - 1.5%                                                       
Centex Construction Products, Inc.            627,800  22,875                   
Lafarge Corp. (c)                           4,980,596  191,130                  
Mark IV Industries, Inc.                    2,720,412  61,889                   
Masco Corp.                                 3,037,900  180,755                  
Medusa Corp. (c)                            1,445,900  88,381                   
Owens-Corning                               1,779,100  63,936                   
Sherwin-Williams Co.                        7,836,400  278,192                  
Southdown, Inc.                             1,027,400  71,597                   
USG Corp. (a)(c)                            2,413,000  130,754                  
                                       1,089,509
CONSTRUCTION - 0.5%                                                             
Centex Corp.                                1,692,400  64,523                   
Clayton Homes, Inc.                         1,262,687  25,569                   
Lennar Corp.                                  426,900  14,701                   
COMMON STOCKS - CONTINUED                                                       
                                     SHARES VALUE (NOTE 1)
                                    (000S)
CONSTRUCTION & REAL ESTATE - CONTINUED                                          
CONSTRUCTION - CONTINUED                                                        
Morrison Knudsen Corp. warrants 3/11/03 (a)     7,002 $ 36                      
Oakwood Homes Corp. (c)                     3,719,200  136,216                  
Pulte Corp. (c)                             2,107,900  98,017                   
                                     339,062
ENGINEERING - 0.1%                                                              
Fluor Corp.                                   981,600  48,835                   
Group Maintenance America Corp.               448,100  7,590                    
                                    56,425
REAL ESTATE INVESTMENT TRUSTS - 0.3%                                            
Starwood Hotels & Resorts Trust             4,400,327  235,142                  
TOTAL CONSTRUCTION & REAL ESTATE                       1,720,138                
DURABLES - 4.8%                                                                 
AUTOS, TIRES, & ACCESSORIES - 2.2%                                              
AutoZone, Inc. (a)                          3,135,800  106,225                  
Chrysler Corp.   5,866,200  243,814                                             
Circuit City Stores, Inc. - CarMax Group (a)  321,500  3,717                    
Danaher Corp.                               1,253,500  95,188                   
Eaton Corp.                                 1,072,400  102,079                  
Ford Motor Co.                              5,942,300  385,135                  
Ford Motor Co. (h)                          1,561,700  68,812                   
General Motors Corp.                        1,859,659  125,411                  
Goodyear Tire & Rubber Co.                  1,400,000  106,050                  
Honda Motor Co. Ltd.                        2,544,000  88,640                   
Lear Corp. (a)  1,316,300  74,206                                               
Navistar International Corp. (a)              500,000  17,500                   
Pep Boys-Manny, Moe & Jack                    655,000  15,188                   
Volvo AB Class B                            5,194,434  165,054                  
                                       1,597,019
CONSUMER DURABLES - 0.3%                                                        
Minnesota Mining & Manufacturing Co.        2,779,200  253,428                  
CONSUMER ELECTRONICS - 1.3%                                                     
Black & Decker Corp. (c)                    5,419,800  287,588                  
General Motors Corp. Class H                  500,000  22,625                   
Matsushita Electric Industrial Co. Ltd.     4,492,000  69,779                   
Maytag Co.                                  3,000,000  143,438                  
COMMON STOCKS - CONTINUED                                                       
                                     SHARES VALUE (NOTE 1)
                                    (000S)
DURABLES - CONTINUED                                                            
CONSUMER ELECTRONICS - CONTINUED                                                
Newell Co.                                   1,125,900 $ 54,536                 
Philips Electronics NV (Bearer)              2,135,000  156,853                 
Sony Corp.                                   1,533,000  130,401                 
Whirlpool Corp.                              1,323,900  90,770                  
                                       955,990
HOME FURNISHINGS - 0.5%                                                         
Leggett & Platt, Inc. (c)                    6,408,350  329,630                 
Steelcase, Inc. Class A                         80,500  2,938                   
                                       332,568
TEXTILES & APPAREL - 0.5%                                                       
Intimate Brands, Inc. Class A                1,090,300  29,506                  
Liz Claiborne, Inc.                          2,547,800  127,072                 
NIKE, Inc. Class B                           2,348,500  103,921                 
Polo Ralph Lauren Corp. Class A                168,100  5,054                   
Reebok International Ltd. (a)                  407,100  12,417                  
Tommy Hilfiger (a)                           1,325,400  79,607                  
                                       357,577
TOTAL DURABLES                                          3,496,582               
ENERGY - 7.9%                                                                   
ENERGY SERVICES - 1.4%                                                          
BJ Services Co. (a)                            200,000  7,287                   
Dresser Industries, Inc.                       708,400  34,047                  
Halliburton Co.                              4,191,200  210,346                 
Noble Drilling Corp. (a)                     3,723,700  113,806                 
Schlumberger Ltd.                            5,071,300  384,151                 
Transocean Offshore, Inc.                    4,279,600  220,132                 
Weatherford Enterra, Inc. (a)                  100,000  4,244                   
Western Atlas, Inc.                            115,700  8,952                   
                                       982,965
OIL & GAS - 6.5%                                                                
Amoco Corp.                                  2,723,870  235,274                 
Anadarko Petroleum Corp. (c)                 4,217,050  290,976                 
Apache Corp.                                 3,059,715  112,445                 
British Petroleum PLC Ord.                  29,693,337  428,177                 
Burlington Resources, Inc.                   5,282,100  253,211                 
COMMON STOCKS - CONTINUED                                                       
                                     SHARES VALUE (NOTE 1)
                                    (000S)
ENERGY - CONTINUED                                                              
OIL & GAS - CONTINUED                                                           
Canadian Natural Resources Ltd. (a)(c)       6,005,800 $ 124,790                
Chevron Corp.                                2,699,200  216,779                 
Coastal Corp. (The)                          2,692,000  175,317                 
Cooper Cameron Corp. (a)                     1,671,500  100,917                 
Enron Oil & Gas Co.                          7,379,200  169,260                 
Exxon Corp.                                  7,753,800  524,351                 
Mobil Corp.                                  1,045,000  80,073                  
Noble Affiliates, Inc.                       1,141,700  47,523                  
Occidental Petroleum Corp.                   8,771,400  257,112                 
Phillips Petroleum Co.                         700,000  34,956                  
Poco Petroleums Ltd. (a)                     3,481,700  37,643                  
Pogo Producing Co.                              36,564  1,161                   
Renaissance Energy Ltd. (a)(c)               7,053,600  143,829                 
Royal Dutch Petroleum Co.                    9,800,000  556,763                 
Texaco, Inc.                                 5,552,000  334,508                 
Total SA Class B                             3,930,000  472,373                 
USX-Marathon Group                             500,000  18,813                  
Unocal Corp.                                 2,979,310  115,262                 
                                         4,731,513
TOTAL ENERGY                                            5,714,478               
FINANCE - 13.1%                                                                 
BANKS - 5.5%                                                                    
Banc One Corp.                               2,020,757  127,813                 
BANACCI SA de CV Class B (a)                 3,840,000  9,778                   
BankAmerica Corp.                            9,086,900  750,805                 
Barclays PLC Ord.                            2,200,000  65,877                  
Chase Manhattan Corp.                        3,435,000  463,296                 
Citicorp                                     7,829,800  1,111,832               
Comerica, Inc.                                 250,000  26,453                  
Credit Suisse Group (Reg.)                     839,100  167,985                 
HSBC Holdings PLC Ord.                         540,723  17,621                  
Lloyds TSB Group PLC                         3,755,453  58,363                  
Mellon Bank Corp.                            1,859,600  118,085                 
National City Corp.                            203,046  14,886                  
NationsBank Corp.                            4,151,618  302,809                 
Providian Financial Corp.                    2,251,300  129,309                 
COMMON STOCKS - CONTINUED                                                       
                                     SHARES VALUE (NOTE 1)
                                    (000S)
FINANCE - CONTINUED                                                             
BANKS - CONTINUED                                                               
Societe Generale Class A                       344,900 $ 69,093                 
Swiss Bank Corp. (Reg.)                         75,000  26,436                  
Synovus Financial Corp.                      1,139,850  42,317                  
U.S. Bancorp                                 1,387,200  173,053                 
Union Bank of Switzerland Ord. (Bearer)         17,000  27,785                  
Wells Fargo & Co.                              915,600  303,292                 
                                         4,006,888
CREDIT & OTHER FINANCE - 0.3%                                                   
Fleet Financial Group, Inc.                    661,500  56,269                  
Greenpoint Financial Corp.                   1,351,800  48,580                  
Household International, Inc.                  873,465  120,320                 
                                       225,169
FEDERAL SPONSORED CREDIT - 1.7%                                                 
Fannie Mae                                  11,848,000  749,386                 
Freddie Mac                                  9,061,600  429,860                 
SLM Holding Corp.                              481,950  21,025                  
                                         1,200,271
INSURANCE - 4.7%                                                                
AFLAC, Inc.                                  2,302,400  145,627                 
Aetna, Inc.                                    404,900  33,784                  
Allstate Corp.                               6,306,500  579,804                 
American International Group, Inc.           5,606,150  706,025                 
Chubb Corp. (The)                            1,500,000  117,562                 
General Re Corp.                             1,208,500  266,625                 
ING Groep NV sponsored ADR                     449,325  25,583                  
MBIA, Inc.                                     857,200  66,433                  
Old Republic International Corp.             1,391,800  61,674                  
Progressive Corp.                            1,624,700  218,827                 
Reliastar Financial Corp.                    1,776,559  81,833                  
SunAmerica, Inc.                             4,587,450  219,624                 
Travelers Group, Inc. (The)                 10,815,389  648,923                 
UNUM Corp.                                   4,333,400  239,150                 
                                         3,411,474
SAVINGS & LOANS - 0.3%                                                          
Ahmanson (H.F.) & Co.                          500,000  38,750                  
Charter One Financial Corp.                  1,233,543  82,570                  
Dime Bancorp., Inc.                             65,900  1,981                   
Washington Mutual, Inc.                      1,502,500  107,757                 
                                       231,058
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
FINANCE - CONTINUED                                                             
SECURITIES INDUSTRY - 0.6%                                                      
Merrill Lynch & Co., Inc.                     2,873,200 $ 238,476               
Morgan Stanley, Dean Witter, Discover and Co. 2,550,035  185,834                
Waddell & Reed Financial, Inc. Class A (a)      109,000  2,834                  
                                         427,144
TOTAL FINANCE                                            9,502,004              
HEALTH - 11.7%                                                                  
DRUGS & PHARMACEUTICALS - 8.2%                                                  
Alkermes, Inc. (a)                               74,600  1,856                  
American Home Products Corp.                  6,997,600  667,396                
Astra AB Class A Free shares                  3,247,000  66,891                 
Aviron (a)                                      374,600  8,663                  
Bristol-Myers Squibb Co.                      9,196,800  959,341                
Cellegy Pharmaceuticals, Inc. (a)               225,000  1,603                  
Elan Corp. PLC ADR (a)                        2,301,000  148,702                
Genentech, Inc. special (a)                     595,100  41,917                 
Hyseq, Inc.                                      86,300  1,079                  
Lilly (Eli) & Co.                             4,732,800  282,193                
Merck & Co., Inc.                             9,687,600  1,243,646              
Novartis AG (Reg.)                              118,100  209,146                
Pfizer, Inc.                                  7,126,700  710,443                
Rhone Poulenc SA Class A                      2,952,100  150,184                
Sankyo Co. Ltd.                               3,753,000  100,798                
Schering-Plough Corp.                         7,978,600  651,752                
SmithKline Beecham PLC ADR                      725,000  45,358                 
Takeda Chemical Industries Ltd.               4,257,000  104,755                
Trimeris, Inc.                                  184,200  1,381                  
ViroPharma, Inc. (a)                             62,800  1,319                  
Warner-Lambert Co.                            3,195,300  544,200                
Xoma, Inc. (a)                                    3,030  11                     
                                           5,942,634
MEDICAL EQUIPMENT & SUPPLIES - 1.8%                                             
Abbott Laboratories                           1,190,700  89,675                 
Baxter International, Inc.                      300,000  16,538                 
Becton, Dickinson & Co.                       1,273,100  86,650                 
Boston Scientific Corp. (a)                   2,997,900  202,358                
Guidant Corp.                                 1,840,800  135,069                
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
HEALTH - CONTINUED                                                              
MEDICAL EQUIPMENT & SUPPLIES - CONTINUED                                        
Johnson & Johnson                             6,400,000 $ 469,200               
McKesson Corp.                                1,928,000  111,342                
Medtronic, Inc.                               3,009,000  156,092                
Pall Corp.                                      500,000  10,750                 
St. Jude Medical, Inc. (a)                    1,198,900  40,088                 
                                           1,317,762
MEDICAL FACILITIES MANAGEMENT - 1.7%                                            
Carematrix Corp. (a)(c)                         899,100  27,647                 
Columbia/HCA Healthcare Corp.                10,688,653  344,709                
HEALTHSOUTH Corp. (a)                        15,333,200  430,288                
Humana, Inc. (a)                                900,000  22,331                 
Oxford Health Plans, Inc. (a)                 1,721,900  25,721                 
Tenet Healthcare Corp. (a)                    1,392,195  50,554                 
Trigon Healthcare, Inc. (a)                     110,000  3,307                  
United HealthCare Corp.                       3,725,100  241,200                
Universal Health Services, Inc. Class B (a)     788,100  45,513                 
Vencor, Inc. (a)                                     69  2                      
                                           1,191,272
TOTAL HEALTH                                             8,451,668              
HOLDING COMPANIES - 0.6%                                                        
ABB AB:                                                                         
sponsored ADR                                   45,100  6,280                 
Series A                                     1,257,500  17,977                
Cookson Group PLC                            15,655,867  60,499                 
Norfolk Southern Corp.                        9,109,100  340,453                
                                         425,209
INDUSTRIAL MACHINERY & EQUIPMENT - 8.1%                                         
ELECTRICAL EQUIPMENT - 4.8%                                                     
Alcatel Alsthom Compagnie Generale                                              
d'Electricite SA                              2,515,300  472,595                
Chicago Miniature Lamp, Inc. (a)                519,000  20,176                 
Emerson Electric Co.                          5,564,800  362,755                
General Electric Co.                         29,015,600  2,500,782              
General Instrument Corp. (a)                    266,000  5,569                  
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED                                    
ELECTRICAL EQUIPMENT - CONTINUED                                                
Honeywell, Inc.                                 179,400 $ 14,834                
Loral Space & Communications Ltd. (a)           880,200  24,591                 
Omron Corp.                                     570,000  8,358                  
Smith (A.O.) Corp. Class B (c)                  898,000  40,186                 
                                           3,449,846
INDUSTRIAL MACHINERY & EQUIPMENT - 3.2%                                         
AGCO Corp.                                      599,800  17,807                 
ASM Lithography Holding NV (a)                  200,000  18,487                 
Case Corp. (c)                                6,398,400  435,891                
Caterpillar, Inc.                             2,661,800  146,565                
Cooper Industries, Inc.                         200,000  11,887                 
Deere & Co.                                   3,490,000  216,162                
Dover Corp.                                   3,641,200  138,366                
Harnischfeger Industries, Inc.                1,839,300  62,881                 
IDEX Corp. (c)                                1,628,525  59,238                 
Illinois Tool Works, Inc.                     7,508,200  486,156                
Ingersoll-Rand Co.                              902,850  43,280                 
Tyco International Ltd.                      11,402,206  622,846                
UCAR International, Inc. (a)(c)               2,726,200  85,535                 
                                           2,345,101
POLLUTION CONTROL - 0.1%                                                        
Browning-Ferris Industries, Inc.                 47,800  1,559                  
Thermo Instrument Systems, Inc. (a)             200,000  6,625                  
USA Waste Services, Inc. (a)                  1,000,000  44,563                 
Waste Management, Inc.                          900,000  27,731                 
                                        80,478
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT                   5,875,425              
MEDIA & LEISURE - 5.2%                                                          
BROADCASTING - 2.1%                                                             
CBS Corp.                                     9,464,164  321,190                
Chancellor Media Corp. (a)                      217,600  9,982                  
Clear Channel Communications, Inc. (a)        3,175,600  311,209                
Comcast Corp. Class A special                   675,000  23,836                 
Cox Communications, Inc. Class A (a)            844,700  35,477                 
Heftel Broadcasting Corp. Class A (a)           763,800  34,180                 
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
MEDIA & LEISURE - CONTINUED                                                     
BROADCASTING - CONTINUED                                                        
Tele-Communications, Inc. (a):                                                  
(TCI Group), Series A                        1,136,201 $ 35,329               
(TCI Ventures Group), Series A                 727,598  12,778                
Time Warner, Inc.                             9,105,109  655,568                
USA Networks, Inc. (a)                        1,196,980  32,618                 
Univision Communications, Inc. Class A (a)      595,000  22,164                 
                                           1,494,331
ENTERTAINMENT - 1.2%                                                            
Disney (Walt) Co.                             4,319,000  461,053                
King World Productions, Inc.                    303,500  8,877                  
News Corp. Ltd. ADR                           2,800,000  75,425                 
Viacom, Inc. Class B (non-vtg.) (a)           6,654,400  357,674                
                                         903,029
LEISURE DURABLES & TOYS - 0.0%                                                  
Callaway Golf Co.                               400,000  11,600                 
Hasbro, Inc.                                    182,550  6,446                  
Mattel, Inc.                                    350,000  13,869                 
                                        31,915
LODGING & GAMING - 0.9%                                                         
Bally Gaming International, Inc. warrants                                       
7/29/98 (a)                                     225,000  141                    
Extended Stay America, Inc. (a)               4,078,503  59,903                 
Hilton Hotels Corp.                           6,829,200  217,681                
Host Marriott Corp. (a)(c)                   14,823,400  280,718                
Prime Hospitality Corp. (a)(c)                3,077,600  60,013                 
                                         618,456
PUBLISHING - 0.7%                                                               
Cognizant Corp.                               1,418,900  81,409                 
Dun & Bradstreet Corp.                          486,000  16,615                 
Gannett Co., Inc.                             1,310,400  94,185                 
Harcourt General, Inc.                          848,900  47,008                 
Houghton Mifflin Co.                            600,000  19,125                 
McGraw-Hill Companies, Inc.                     428,700  32,608                 
New York Times Co. (The) Class A                693,200  48,524                 
Times Mirror Co. Class A                        697,300  44,191                 
Tribune Co.                                     823,100  58,029                 
US WEST Media Group (a)                       1,250,000  43,438                 
                                         485,132
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
MEDIA & LEISURE - CONTINUED                                                     
RESTAURANTS - 0.3%                                                              
Host Marriott Services Corp. (a)(c)           3,132,100 $ 44,241                
McDonald's Corp.                              2,953,200  177,192                
Starbucks Corp. (a)                             300,000  13,594                 
                                         235,027
TOTAL MEDIA & LEISURE                                    3,767,890              
NONDURABLES - 4.3%                                                              
BEVERAGES - 0.8%                                                                
Coca-Cola Co. (The)                           1,750,000  135,516                
Coca-Cola Enterprises, Inc.                     200,000  7,338                  
PepsiCo, Inc.                                 9,056,800  386,612                
Seagram Co. Ltd.                                300,000  11,389                 
Stroh Brewery Co. warrants 1/1/01 (a)            21,307  76                     
                                         540,931
FOODS - 0.3%                                                                    
Bestfoods                                       400,000  46,750                 
Campbell Soup Co.                             1,460,000  82,855                 
Corn Products International, Inc. (a)           100,000  3,587                  
Heinz (H.J.) Co.                                585,800  34,196                 
Keebler Foods Co. (a)                            77,200  2,316                  
Ralston Purina Co.                              200,000  21,200                 
Sara Lee Corp.                                  500,000  30,813                 
Vlasic Foods International, Inc. (a)            156,000  4,017                  
                                         225,734
HOUSEHOLD PRODUCTS - 2.1%                                                       
Avon Products, Inc.                           1,173,000  91,494                 
Estee Lauder Companies, Inc.                    963,000  65,364                 
Gillette Co.                                  3,837,900  455,511                
Procter & Gamble Co.                          7,086,400  597,915                
Unilever:                                                                       
PLC Ord.                                    10,240,400  99,837                
NV ADR                                       3,429,700  235,363               
                                           1,545,484
TOBACCO - 1.1%                                                                  
Philip Morris Companies, Inc.                18,379,800  766,208                
RJR Nabisco Holdings Corp.                    1,063,800  33,310                 
                                         799,518
TOTAL NONDURABLES                                        3,111,667              
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
RETAIL & WHOLESALE - 8.6%                                                       
APPAREL STORES - 1.0%                                                           
AnnTaylor Stores Corp. (a)                      625,600 $ 10,283                
Columbia Sportswear Co.                          19,600  414                    
Gap, Inc.                                     9,835,600  442,602                
Lamonts Apparel, Inc. warrants 6/10/99 (a)      264,824  -                      
Limited, Inc. (The)                           4,900,400  140,580                
Ross Stores, Inc.                               822,200  36,280                 
Saks Holdings, Inc. (a)                         200,000  5,000                  
TJX Companies, Inc.                           2,498,400  113,053                
                                         748,212
APPLIANCE STORES - 0.0%                                                         
Cellstar Corp. (a)                              566,400  18,125                 
DRUG STORES - 0.6%                                                              
CVS Corp.                                     4,838,143  365,280                
Rite Aid Corp.                                1,008,200  34,531                 
Walgreen Co.                                    400,000  14,075                 
                                         413,886
GENERAL MERCHANDISE STORES - 3.1%                                               
Consolidated Stores Corp. (a)                 3,567,468  153,178                
Dayton Hudson Corp.                           6,354,700  559,214                
Federated Department Stores, Inc. (a)         4,215,700  218,426                
Ito-Yokado Co. Ltd.                           1,275,000  66,822                 
Meyer (Fred), Inc. (a)                          505,000  23,325                 
Neiman-Marcus Group, Inc. (a)                   768,700  31,565                 
Penney (J.C.) Co., Inc.                       1,600,000  121,100                
Sears, Roebuck & Co.                          1,000,000  57,438                 
Wal-Mart Stores, Inc.                        19,972,500  1,014,853              
                                           2,245,921
GROCERY STORES - 0.6%                                                           
Ahold NV                                        890,000  28,761                 
Safeway, Inc. (a)                            10,754,400  397,241                
                                         426,002
RETAIL & WHOLESALE, MISCELLANEOUS - 3.3%                                        
Barnes & Noble, Inc. (a)                      1,631,200  63,617                 
Circuit City Stores, Inc. - Circuit City Group  702,500  30,032                 
Corporate Express, Inc. (a)                     837,500  8,349                  
Home Depot, Inc.                             14,701,225  991,414                
Lowe's Companies, Inc.                        6,223,500  436,812                
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
RETAIL & WHOLESALE - CONTINUED                                                  
RETAIL & WHOLESALE, MISCELLANEOUS - CONTINUED                                   
Officemax, Inc. (a)                           2,590,750 $ 46,310                
Office Depot, Inc. (a)                        6,881,900  214,199                
Pier 1 Imports, Inc.                            600,000  16,275                 
Staples, Inc. (a)                            11,782,900  273,216                
Tandy Corp.                                   1,722,600  80,962                 
Toys "R" Us, Inc. (a)                         5,060,200  152,122                
U.S. Office Products Co. (a)                  2,100,000  39,900                 
Viking Office Products, Inc. (a)              1,562,500  36,328                 
                                           2,389,536
TOTAL RETAIL & WHOLESALE                                 6,241,682              
SERVICES - 3.3%                                                                 
ADVERTISING - 0.8%                                                              
Interpublic Group of Companies, Inc.             60,500  3,759                  
Omnicom Group, Inc. (c)                       8,501,576  400,105                
Outdoor Systems, Inc. (a)                     3,983,625  139,676                
Universal Outdoor Holdings, Inc. (a)            372,000  23,994                 
                                         567,534
LEASING & RENTAL - 0.3%                                                         
Avis Rent A Car, Inc. (a)                       154,100  4,999                  
Hertz Corp. Class A                             203,000  9,338                  
Republic Industries, Inc. (a)                 7,860,000  202,886                
Ryder Systems, Inc.                             293,400  11,149                 
                                         228,372
PRINTING - 0.0%                                                                 
Wallace Computer Services, Inc.                 674,400  23,351                 
SERVICES - 2.2%                                                                 
AccuStaff, Inc. (a)                             532,000  18,354                 
Assisted Living Concepts, Inc. (a)(c)         1,103,000  23,852                 
Cendant Corp. (a)                            25,946,559  1,028,132              
Computer Horizons Corp. (a)                     300,000  15,075                 
Manpower, Inc.                                3,255,900  131,457                
Medpartners, Inc. (a)                           500,000  5,125                  
Pittston Co. (Brinks Group)                   1,704,400  64,980                 
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                                  (000S)
SERVICES - CONTINUED                                                            
SERVICES - CONTINUED                                                            
Rentokil Initial PLC                         10,768,535 $ 65,617                
Robert Half International, Inc. (a)           3,538,950  169,870                
Service Corp. International                     500,000  21,219                 
                                           1,543,681
TOTAL SERVICES   2,362,938                                                      
TECHNOLOGY - 15.3%                                                              
COMMUNICATIONS EQUIPMENT - 2.6%                                                 
Advanced Fibre Communication, Inc. (a)          674,400  24,531                 
Ascend Communications, Inc. (a)               2,479,600  93,915                 
Cisco Systems, Inc. (a)                      11,511,800  787,119                
DSC Communications Corp. (a)                  1,062,900  19,331                 
DSP Communications, Inc. (a)                    300,000  5,119                  
Ericsson (L.M.) Telephone Co. Class B ADR       235,600  11,206                 
Lucent Technologies, Inc.                     4,523,662  578,463                
Newbridge Networks Corp. (a)                  2,116,200  56,873                 
Nokia Corp. AB:                                                                 
sponsored ADR                                1,338,500  144,474               
Series A                                       600,000  64,458                
Northern Telecom Ltd.                         1,050,000  67,855                 
3Com Corp. (a)                                  500,000  17,969                 
Xircom, Inc. (a)                                200,000  2,763                  
                                           1,874,076
COMPUTER SERVICES & SOFTWARE - 5.7%                                             
America Online, Inc. (a)                      4,765,100  325,516                
BMC Software, Inc. (a)                        2,100,000  176,006                
Ceridian Corp. (a)                            1,150,700  62,066                 
ChoicePoint, Inc. (a)                            87,017  4,737                  
Command Systems, Inc. (a)                        39,800  567                    
Computer Associates International, Inc.       5,652,900  326,455                
CompUSA, Inc. (a)                             2,085,700  54,228                 
Compuware Corp. (a)                             400,000  19,750                 
Electronic Arts, Inc. (a)                     1,511,100  70,927                 
Electronic Data Systems Corp.                   800,000  36,700                 
Electronics for Imaging, Inc. (a)             1,074,800  27,945                 
Equifax, Inc.                                   870,170  31,761                 
First Data Corp.                              4,274,000  138,905                
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
TECHNOLOGY - CONTINUED                                                          
COMPUTER SERVICES & SOFTWARE - CONTINUED                                        
HBO & Co.                                     5,970,400 $ 360,463               
Harbinger Corp. (a)                             100,000  3,775                  
ISS Group, Inc.                                  12,900  501                    
Keane, Inc. (a)                                 200,000  11,300                 
Manugistics Group, Inc. (a)                     125,000  7,008                  
Microsoft Corp. (a)                          17,597,600  1,574,985              
Oracle Corp. (a)                             16,315,600  514,961                
Parametric Technology Corp. (a)               3,405,000  113,429                
PeopleSoft, Inc. (a)                          4,200,400  221,309                
Sabre Group Holdings, Inc. Class A (a)          559,900  20,086                 
Shared Medical Systems Corp.                     80,000  6,270                  
SunGard Data Systems, Inc. (a)                  100,000  3,681                  
                                           4,113,331
COMPUTERS & OFFICE EQUIPMENT - 4.2%                                             
Adaptec, Inc. (a)                             1,915,820  37,598                 
Apple Computer, Inc. (a)                      1,000,000  27,500                 
Comdisco, Inc. (c)                            5,265,175  229,693                
Canon, Inc.                                     981,000  21,434                 
Compaq Computer Corp.                        13,265,500  343,245                
Dell Computer Corp. (a)                       6,894,200  467,082                
Diebold, Inc.                                 1,220,800  53,715                 
EMC Corp. (a)                                 9,060,482  342,599                
Fore Systems, Inc. (a)                          400,000  6,300                  
Hewlett-Packard Co.                           3,270,600  207,274                
International Business Machines Corp.         6,628,400  688,525                
Pitney Bowes, Inc.                            4,875,600  244,694                
Quantum Corp. (a)                               600,000  12,788                 
Seagate Technology (a)                        1,755,300  44,321                 
Sequent Computer Systems, Inc. (a)              447,700  8,171                  
Sun Microsystems, Inc. (a)                    3,050,000  127,242                
Tech Data Corp. (a)                             788,800  30,369                 
Wang Laboratories, Inc. (a)                     100,000  3,094                  
Xerox Corp.                                   1,200,000  127,725                
                                           3,023,369
ELECTRONIC INSTRUMENTS - 0.4%                                                   
Applied Materials, Inc. (a)                   4,036,100  142,525                
KLA-Tencor Corp. (a)                            496,100  18,976                 
Kulicke & Soffa Industries, Inc. (a)            500,000  10,875                 
COMMON STOCKS - CONTINUED                                                       
                                       SHARES VALUE (NOTE 1)
                                      (000S)
TECHNOLOGY - CONTINUED                                                          
ELECTRONIC INSTRUMENTS - CONTINUED                                              
Teradyne, Inc. (a)                            1,100,000 $ 44,069                
Thermo Electron Corp. (a)                     1,233,200  49,790                 
Waters Corp. (a)                                765,800  38,242                 
                                         304,477
ELECTRONICS - 2.2%                                                              
Advanced Micro Devices, Inc. (a)                950,000  27,609                 
Altera Corp. (a)                                400,000  15,100                 
Analog Devices, Inc. (a)                      1,453,866  48,341                 
Atmel Corp. (a)                               1,110,582  16,728                 
Brightpoint, Inc. (a)                         1,351,400  23,227                 
Galileo Technology Ltd.                           5,000  141                    
Integrated Device Technology, Inc. (a)          200,000  2,813                  
Intel Corp.                                   9,708,800  757,893                
LSI Logic Corp. (a)                             500,000  12,625                 
Lattice Semiconductor Corp. (a)                  77,100  3,966                  
Linear Technology Corp.                       1,088,300  75,093                 
Maxim Integrated Products, Inc. (a)           1,389,200  50,619                 
Microchip Technology, Inc. (a)                  100,000  2,100                  
Micron Technology, Inc. (a)                   1,000,000  29,063                 
Minebea Co. Ltd.                              2,000,000  21,196                 
Motorola, Inc.                                2,316,800  140,456                
Rohm Co. Ltd.                                   463,000  41,003                 
TDK Corp.                                       300,000  22,430                 
Texas Instruments, Inc.                       5,797,000  313,763                
VLSI Technology, Inc. (a)                       500,000  9,375                  
Xilinx, Inc. (a)                                100,000  3,744                  
                                           1,617,285
PHOTOGRAPHIC EQUIPMENT - 0.2%                                                   
Fuji Photo Film Co. Ltd.                      3,032,000  109,165                
Polaroid Corp.                                  263,000  11,572                 
                                         120,737
TOTAL TECHNOLOGY                                         11,053,275             
COMMON STOCKS - CONTINUED                                                       
SHARES VALUE (NOTE 1)                                                         
(000S)                                                                      
TRANSPORTATION - 2.1%                                                           
AIR TRANSPORTATION - 0.7%                                                       
AMR Corp. (a)                                 1,223,900 $ 175,247               
Comair Holdings, Inc.                         2,369,037  62,779                 
Delta Air Lines, Inc.                           663,300  78,435                 
Northwest Airlines Corp. Class A (a)          1,850,400  114,147                
UAL Corp. (a)                                 1,291,400  120,019                
                                         550,627
RAILROADS - 1.2%                                                                
Bombardier, Inc. Class B                      1,868,300  46,124                 
Burlington Northern Santa Fe Corp.              580,640  60,387                 
CSX Corp.                                     8,695,600  517,388                
Trinity Industries, Inc. (c)                  3,214,800  176,412                
Wisconsin Central Transportation Corp. (a)    1,543,900  43,470                 
                                         843,781
TRUCKING & FREIGHT - 0.2%                                                       
American Freightways Corp. (a)                1,054,500  11,600                 
C.H. Robinson Worldwide, Inc.                   108,600  2,824                  
CNF Transportation, Inc.                        900,000  32,344                 
Landstar System, Inc. (a)(c)                    901,200  29,064                 
Swift Transportation Co., Inc. (a)(c)         3,548,250  85,158                 
                                         160,990
TOTAL TRANSPORTATION                                     1,555,398              
UTILITIES - 4.3%                                                                
CELLULAR - 0.2%                                                                 
AirTouch Communications, Inc. (a)             1,690,000  82,704                 
Metromedia Fiber Network, Inc. Class A           82,100  2,761                  
Nextel Communications, Inc. Class A (a)         331,200  11,178                 
Teleglobe, Inc.                                 200,000  9,276                  
360 Degrees Communications Co. (a)              229,700  7,178                  
Vodafone Group PLC sponsored ADR                582,900  60,549                 
                                         173,646
ELECTRIC UTILITY - 0.3%                                                         
Compania Energertica Minas Gerais           220,000,000  10,680                 
Duke Energy Corp.                             1,382,000  82,315                 
Entergy Corp.                                 2,810,000  83,598                 
Niagara Mohawk Power Corp. (a)                1,139,000  14,807                 
PG&E Corp.                                    1,249,300  41,227                 
                                         232,627
COMMON STOCKS - CONTINUED                                                       
                                   SHARES     VALUE (NOTE 1)
                                      (000S)
UTILITIES - CONTINUED                                                           
TELEPHONE SERVICES - 3.8%                                                       
AT&T Corp.                                  10,658,900 $ 699,490                
Ameritech Corp.                              3,418,400  168,997                 
BellSouth Corp.                              4,128,700  278,945                 
Exodus Communications, Inc. (a)                 20,900  585                     
GTE Corp.                                    1,000,000  59,875                  
MCI Communications Corp.                     4,323,500  214,013                 
NEXTLINK Communications, Inc. Class A (a)       73,800  2,371                   
Qwest Communications International, Inc.       200,000  7,775                   
SBC Communications, Inc.                     7,132,800  311,168                 
Telebras sponsored ADR                         877,700  113,936                 
Telefonos de Mexico SA sponsored ADR                                            
representing Ord. Class L shares               400,000  22,550                  
Teleport Communications Group, Inc. Class A (a)1,705,600  100,204               
Telecom Italia Mobile Spa                     17,100,000  92,344                
WorldCom, Inc. (a)                            14,903,000  641,760               
                                             2,714,013
TOTAL UTILITIES                                           3,120,286             
TOTAL COMMON STOCKS                                                             
(Cost $43,204,188)                                       69,625,562             
NONCONVERTIBLE PREFERRED STOCKS - 0.0%                                          
INDUSTRIAL MACHINERY & EQUIPMENT - 0.0%                                         
ELECTRICAL EQUIPMENT - 0.0%                                                     
Ampex Corp. 8% (a)(g) (Cost $2,318)                4,415  3,432                 
NONCONVERTIBLE BONDS - 0.0%                                                     
     MOODY'S RATINGS PRINCIPAL
         (UNAUDITED)     AMOUNT (000S)
RETAIL & WHOLESALE - 0.0%                                                       
APPAREL STORES - 0.0%                                                           
Lamonts Apparel, Inc. 10 1/4%, 11/1/99                                          
pay-in-kind (b)(e) (Cost $8,515)    -          $ 8,804       308                
COMMERCIAL MORTGAGE SECURITIES - 0.0%                                           
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)                                      
(UNAUDITED) AMOUNT (000S) (000S)                                              
Bardell Associates Note Trust                                                   
12 1/2%, 11/1/08 (g) (Cost $4,453)  -          $ 4,381        $ 4,654           
CASH EQUIVALENTS - 3.8%                                                         
SHARES                                                                        
Taxable Central Cash Fund (d)                2,576,652,128  2,576,652           
MATURITY                                                                      
AMOUNT (000S)                                                                 
Investments in repurchase agreements                                            
(U.S. Treasury obligations), in a joint                                         
trading account at 5.92%, dated                                               
3/31/98 due 4/1/98                               $ 159,068    159,042         
TOTAL CASH EQUIVALENTS                                                          
(Cost $2,735,694)                                            2,735,694          
TOTAL INVESTMENT IN SECURITIES - 100%                                           
(Cost $45,955,168)                                        $ 72,369,650          
LEGEND                                                                          
(a) Non-income producing                                                        
(b) Non-income producing - issuer filed for protection under the                
Federal Bankruptcy Code or is in default of interest payment.                   
(c) Affiliated company (see Note 7 of Notes to Financial Statements).           
(d) At period end, the seven-day yield of the Taxable Central Cash              
Fund was 5.63%. The yield refers to the income earned by investing in           
the fund over the seven-day period, expressed as an annual percentage.          
(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 $308,000           
or 0% of net assets.                                                            
(f) Quantity represents number of units held.                                   
(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:                                                                     
                                     ACQUISITION ACQUISITION
SECURITY                                       DATE        COST (000S)          
Ampex Corp. 8%                                 2/16/95     $ 2,318              
Atlantis Group, Inc.                                                            
(Trivest/Winston)                             4/16/93     $ 90                
Bardell Associates                                                              
Note Trust 12 1/2%                                                            
11/1/08                                       4/19/94     $ 4,453             
(h) Security purchased on a delayed delivery or when-issued basis (see          
Note 2 of Notes to Financial Statements).                                       
INCOME TAX INFORMATION                                                          
At March 31, 1998, the aggregate cost of investment securities for              
income tax purposes was $46,028,020,000. Net unrealized appreciation            
aggregated $26,341,630,000, of which $26,804,189,000 related to                 
appreciated investment securities and $462,559,000 related to                   
depreciated investment securities.                                              
The fund hereby designates approximately $3,105,969,000 as a capital            
gain dividend for the purpose of the dividend paid deduction.                   
FINANCIAL STATEMENTS                                                            

STATEMENT OF ASSETS AND LIABILITIES                                             

                                                        [Enlarge/Download Table]

                                                                                       
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MARCH 31, 1998                         

ASSETS                                                                                 

INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE                   $ 72,369,650
AGREEMENTS OF $159,042) (COST $45,955,168) -                                           
SEE ACCOMPANYING SCHEDULE                                                              

CASH                                                                        1          

RECEIVABLE FOR INVESTMENTS SOLD                                             148,554    

RECEIVABLE FOR FUND SHARES SOLD                                             210,063    

DIVIDENDS RECEIVABLE                                                        69,612     

INTEREST RECEIVABLE                                                         12,240     

OTHER RECEIVABLES                                                           4,820      

 TOTAL ASSETS                                                               72,814,940 

LIABILITIES                                                                            

PAYABLE FOR INVESTMENTS PURCHASED                                                      

 REGULAR DELIVERY                                               $ 430,430              

 DELAYED DELIVERY                                                66,262                

PAYABLE FOR FUND SHARES REDEEMED                                 312,659               

ACCRUED MANAGEMENT FEE                                           25,321                

OTHER PAYABLES AND ACCRUED EXPENSES                              11,983                

 TOTAL LIABILITIES                                                          846,655    

NET ASSETS                                                                 $ 71,968,285

NET ASSETS CONSIST OF:                                                                 

PAID IN CAPITAL                                                            $ 43,487,831

UNDISTRIBUTED NET INVESTMENT INCOME                                         152,096    

ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) ON                       1,914,146  
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS                                          

NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS                   26,414,212 
AND ASSETS AND LIABILITIES IN FOREIGN CURRENCIES                                       

NET ASSETS, FOR 661,382 SHARES OUTSTANDING                                 $ 71,968,285

NET ASSET VALUE AND REDEMPTION PRICE PER SHARE                              $108.82    
($71,968,285 (DIVIDED BY) 661,382 SHARES)                                              

MAXIMUM OFFERING PRICE PER SHARE (100/97 OF $108.82)                        $112.19    


STATEMENT OF OPERATIONS                                                         

                                                        [Enlarge/Download Table]

                                                                                      
AMOUNTS IN THOUSANDS  YEAR ENDED MARCH 31, 1998                                       

INVESTMENT INCOME                                                         $ 682,850   
DIVIDENDS (INCLUDING $48,257 RECEIVED FROM                                            
AFFILIATED ISSUERS)                                                                   

INTEREST                                                                   166,871    

 TOTAL INCOME                                                              849,721    

EXPENSES                                                                              

MANAGEMENT FEE                                               $ 366,402                
BASIC FEE                                                                             

 PERFORMANCE ADJUSTMENT                                       (102,362)               

TRANSFER AGENT FEES                                           112,966                 

ACCOUNTING FEES AND EXPENSES                                  934                     

NON-INTERESTED TRUSTEES' COMPENSATION                         317                     

CUSTODIAN FEES AND EXPENSES                                   2,331                   

REGISTRATION FEES                                             1,511                   

AUDIT                                                         396                     

LEGAL                                                         488                     

INTEREST                                                      1                       

MISCELLANEOUS                                                 286                     

 TOTAL EXPENSES BEFORE REDUCTIONS                             383,270                 

 EXPENSE REDUCTIONS                                           (8,370)      374,900    

NET INVESTMENT INCOME                                                      474,821    

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

 INVESTMENT SECURITIES (INCLUDING REALIZED GAIN OF $348,641   4,386,639               
 ON SALES OF AFFILIATED ISSUERS)                                                      

 FOREIGN CURRENCY TRANSACTIONS                                (230)        4,386,409  

CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON:                              

 INVESTMENT SECURITIES                                        17,839,610              

 ASSETS AND LIABILITIES IN FOREIGN CURRENCIES                 (317)        17,839,293 

NET GAIN (LOSS)                                                            22,225,702 

NET INCREASE (DECREASE) IN NET ASSETS RESULTING                           $ 22,700,523
FROM OPERATIONS                                                                       


STATEMENT OF CHANGES IN NET ASSETS                                              

                                                                [Download Table]

                                                                                    
AMOUNTS IN THOUSANDS                                    YEAR ENDED     YEAR ENDED   
                                                        MARCH 31,      MARCH 31,    
                                                        1998           1997         

INCREASE (DECREASE) IN NET ASSETS                                                   

OPERATIONS                                              $ 474,821      $ 945,962    
NET INVESTMENT INCOME                                                               

 NET REALIZED GAIN (LOSS)                                4,386,409      1,163,977   

 CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION)    17,839,293     2,622,185   

 NET INCREASE (DECREASE) IN NET ASSETS RESULTING         22,700,523     4,732,124   
FROM OPERATIONS                                                                     

DISTRIBUTIONS TO SHAREHOLDERS                            (794,010)      (718,653)   
FROM NET INVESTMENT INCOME                                                          

 FROM NET REALIZED GAIN                                  (3,324,791)    (8,153,202) 

 TOTAL DISTRIBUTIONS                                     (4,118,801)    (8,871,855) 

SHARE TRANSACTIONS                                       11,459,995     9,169,545   
NET PROCEEDS FROM SALES OF SHARES                                                   

 REINVESTMENT OF DISTRIBUTIONS                           4,050,132      8,742,406   

 COST OF SHARES REDEEMED                                 (13,367,016)   (18,707,881)

 NET INCREASE (DECREASE) IN NET ASSETS RESULTING         2,143,111      (795,930)   
FROM SHARE TRANSACTIONS                                                             

  TOTAL INCREASE (DECREASE) IN NET ASSETS                20,724,833     (4,935,661) 

NET ASSETS                                                                          

 BEGINNING OF PERIOD                                     51,243,452     56,179,113  

 END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT  $ 71,968,285   $ 51,243,452 
INCOME OF $152,096 AND $544,318, RESPECTIVELY)                                      

OTHER INFORMATION                                                                   
SHARES                                                                              

 SOLD                                                    119,540        115,978     

 ISSUED IN REINVESTMENT OF DISTRIBUTIONS                 44,167         118,619     

 REDEEMED                                                (141,304)      (237,540)   

 NET INCREASE (DECREASE)                                 22,403         (2,943)     

                                                                [Download Table]

                                                                               

FINANCIAL HIGHLIGHTS                                                           
     YEARS ENDED MARCH 31,                                                     

                                    1998      1997     1996      1995      1994


                                                                [Download Table]

                                                                                   
SELECTED PER-SHARE DATA                                                            

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

INCOME FROM INVESTMENT OPERATIONS                                                  

 NET INVESTMENT INCOME              .73 C     1.38 C    .79       .27       .61    

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

 TOTAL FROM INVESTMENT OPERATIONS   35.08     6.63      20.36     5.49      8.53   

LESS DISTRIBUTIONS                                                                 

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

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

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

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

TOTAL RETURN A, B                   45.41%    9.11%     28.43%    8.21%     12.94% 

RATIOS AND SUPPLEMENTAL DATA                                                       

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

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

RATIO OF EXPENSES TO AVERAGE        .61% D    .64% D    .92% D    .96% D    .99% D 
NET ASSETS AFTER EXPENSE                                                           
REDUCTIONS                                                                         

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

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

AVERAGE COMMISSION RATE E          $ .0328   $ .0394                               


A 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).                                                          
B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE.                       
C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE          
SHARES OUTSTANDING DURING THE PERIOD.                                           
D 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).                                  
E FOR FISCAL YEARS BEGINNING ON OR AFTER SEPTEMBER 1, 1995, A FUND IS           
REQUIRED TO DISCLOSE ITS AVERAGE COMMISSION RATE PER SHARE FOR                  
SECURITY TRADES ON WHICH COMMISSIONS ARE CHARGED. THIS AMOUNT MAY VARY          
FROM PERIOD TO PERIOD AND FUND TO FUND DEPENDING ON THE MIX OF TRADES           
EXECUTED IN VARIOUS MARKETS WHERE TRADING PRACTICES AND COMMISSION              
RATE STRUCTURES MAY DIFFER.                                                     
NOTES TO FINANCIAL STATEMENTS                                                   
For the period ended March 31, 1998                                             

1. SIGNIFICANT ACCOUNTING POLICIES.                                             
Fidelity Magellan Fund(the fund) is registered under the Investment             
Company Act of 1940, as amended (the 1940 Act), as an open-end                  
management investment company organized as a Massachusetts business             
trust and is authorized to issue an unlimited number of shares.                 
Effective at the close of business on September 30, 1997, the fund was          
closed to new accounts. The financial statements have been prepared in          
conformity with generally accepted accounting principles which require          
management to make certain estimates and assumptions at the date of             
the financial statements. The following summarizes the significant              
accounting policies of the fund:                                                
SECURITY VALUATION. Securities for which exchange quotations are                
readily available are valued at the last sale price, or if no sale              
price, at the closing bid price. Foreign securities are valued based            
on quotations from the principal market in which such securities are            
normally traded. If trading or events occurring in other markets after          
the close of the principal market in which foreign securities are               
traded, and before the close of business of the fund, are expected to           
materially affect the value of those securities, then they are valued           
at their fair value taking this trading or these events into account.           
Fair value is determined in good faith under consistently applied               
procedures under the general supervision of the Board of Trustees.              
Securities (including restricted securities) for which exchange                 
quotations are not readily available (and in certain cases debt                 
securities which trade on an exchange) are valued primarily using               
dealer-supplied valuations or at their fair value. Short-term                   
securities with remaining maturities of sixty days or less for which            
quotations are not readily available are valued at amortized cost or            
original cost plus accrued interest, both of which approximate current          
value.                                                                          
FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are            
maintained in U.S. dollars. Investment securities and other assets and          
liabilities denominated in a foreign currency are translated into U.S.          
dollars at the prevailing rates of exchange at period end. Purchases            
and sales of securities, income receipts and expense payments are               
translated into U.S. dollars at the prevailing exchange rate on the             
respective dates of the transactions.                                           
Net realized gains and losses on foreign currency transactions                  
represent net gains and losses from sales and maturities of foreign             
currency contracts, disposition of foreign currencies, the difference           
between the amount of net investment income accrued and the U.S.                
dollar amount actually received, and gains and losses between trade             
date and settlement on purchases and sales of securities. The effects           
of changes in foreign currency exchange rates on investments in                 
securities are included with the net realized and unrealized gain or            
loss on investment securities.                                                  
INCOME TAXES. As a qualified regulated investment company under                 
Subchapter M of the Internal Revenue Code, the fund is not subject to           
income taxes to the extent                                                      
1. SIGNIFICANT ACCOUNTING                                                       
POLICIES - CONTINUED                                                            
INCOME TAXES - CONTINUED                                                        
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 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.                                                        
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the                
ex-dividend date.                                                               
Income and capital gain distributions are determined in accordance              
with income tax regulations which may differ from generally accepted            
accounting principles. These differences, which may result in                   
distribution reclassifications, are primarily due to differing                  
treatments for litigation proceeds, foreign currency transactions,              
partnerships, and losses deferred due to wash sales. The fund also              
utilized earnings and profits distributed to shareholders on                    
redemption of shares as a part of the dividends paid deduction for              
income tax purposes.                                                            
Permanent book and tax basis differences relating to shareholder                
distributions will result in reclassifications to paid in capital.              
Undistributed net investment income and accumulated undistributed net           
realized gain (loss) on investments and foreign currency transactions           
may include temporary book and tax basis differences which will                 
reverse in a subsequent period. Any taxable income or gain remaining            
at fiscal year end is distributed in the following year.                        
SECURITY TRANSACTIONS. Security transactions are accounted for as of            
trade date. Gains and losses on securities sold are determined on the           
basis of identified cost.                                                       
2. OPERATING POLICIES.                                                          
FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency            
contracts to facilitate transactions in foreign-denominated                     
securities. Losses may arise from changes in the value of the foreign           
currency or if the counterparties do not perform under the contracts'           
terms. The U.S. dollar value of foreign currency contracts is                   
determined using 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                                                                      
2. OPERATING POLICIES -                                                         
CONTINUED                                                                       
JOINT TRADING ACCOUNT -                                                         
CONTINUED                                                                       
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.,              
(formerly FMR Texas, Inc.) an affiliate of FMR. The Cash Fund is an             
open-end money market fund available only to investment companies and           
other accounts managed by FMR and its affiliates. The Cash Fund seeks           
preservation of capital, liquidity, and current income by investing in          
U.S. Treasury securities and repurchase agreements for these                    
securities. Income distributions from the Cash Fund are declared daily          
and paid monthly from net interest income. Income distributions earned          
by the fund are recorded as interest income in the accompanying                 
financial statements.                                                           
WHEN-ISSUED SECURITIES. The fund may  purchase or sell securities on a          
when-issued basis. Payment and delivery may  take place  a month or             
more after the date of the transaction. The price of the underlying             
securities is fixed at the time the transaction is negotiated. The              
market values of the securities purchased on a when-issued basis or             
forward commitment 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 when-issued security. With respect to purchase             
commitments, the fund identifies securities as segregated in its                
custodial records with a value at least equal to the amount of the              
commitment. The payables and receivables associated with the purchases          
and sales of when-issued securities having the same settlement date             
and broker are offset. When-issued securities that have been purchased          
from and sold to different brokers are reflected as both payables and           
receivables in the statement of assets and liabilities under the                
caption "Delayed delivery." Losses may arise due to changes in the              
market value of the underlying securities, if the counterparty does             
not perform under the contract, or if the issuer does not isssue the            
securities due to political, economic, or other factors.                        
RESTRICTED SECURITIES. The fund is permitted to invest in securities            
that are subject to legal or contractual restrictions on resale. These          
securities generally may be resold in transactions exempt from                  
2. OPERATING POLICIES -                                                         
CONTINUED                                                                       
RESTRICTED SECURITIES - CONTINUED                                               
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 $9,786,000 or 0% of net assets.                             
3. PURCHASES AND SALES OF INVESTMENTS.                                          
Purchases and sales of securities, other than short-term securities,            
aggregated $19,650,713,000 and $21,856,615,000, respectively.                   
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.                                 
MANAGEMENT FEE. As the fund's investment adviser, FMR receives a                
monthly basic fee that is calculated on the basis of a group fee rate           
plus a fixed individual fund fee rate applied to the average net                
assets of the fund. The group fee rate is the weighted average of a             
series of rates and is based on the monthly average net assets of all           
the mutual funds advised by FMR. The rates ranged from .2500% to                
.5200% for the period. The annual individual fund fee rate is .30%. In        
the event that these rates were lower than the contractual rates in             
effect during the period, FMR voluntarily implemented the above rates,          
as they resulted in the same or a lower management fee. The basic fee           
is subject to a performance adjustment (up to a maximum of                      
(plus/minus).20% of the fund's average net assets over the performance          
period) based on the fund's investment performance as compared to the           
appropriate index over a specified period of time. For the period, the          
management fee was equivalent to an annual rate of .43% 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 $10,307,000 on sales of shares of the fund of which            
$20,000 was paid to securities dealers, banks and other financial               
institutions.                                                                   
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 annual rate of .18% 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 $4,101,000 for the              
period.                                                                         
5. BANK BORROWINGS.                                                             
The fund is permitted to have bank borrowings for temporary or                  
emergency purposes to fund shareholder redemptions. The fund has                
established borrowing arrangements with certain banks. Under the most           
restrictive arrangement, the fund must pledge to the bank securities            
having a market value in excess of 220% of the total bank borrowings.           
The interest rate on the borrowings is the bank's base rate, as                 
revised from time to time. The maximum loan and the average daily loan          
balance during the period for which the loan was outstanding amounted           
to $6,176,000. The weighted average interest rate was 5.8%                      
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 $4,455,000 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 $32,000 and $3,883,000, respectively, under these                    
arrangements.                                                                   
7. TRANSACTIONS WITH AFFILIATED COMPANIES.                                      
An affiliated company is a company in which the fund has ownership of           
at least 5% of the voting securities. Transactions during the period            
with companies which are or were affiliates are as follows:                     
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES                               
AMOUNTS IN THOUSANDS             PURCHASE   SALES    DIVIDEND  VALUE            
AFFILIATE                        COST       COST     INCOME                     
AK Steel Holding Corp.           $ -       $ 35,399 $ 2,154   $ -               
Aeroquip Vickers, Inc.             49,433    94,484   1,742     83,337          
Anadarko Petroleum Corp.           -         -        1,265    290,976          
Apache Corp.                       -          1,717   -         -               
Assisted Living Concepts, Inc.     -         -        -         23,852          
Black & Decker Corp.               -         20,313   2,853    287,588          
CSX Corp.                          -        121,961   3,154     -               
Canadian Natural Resources Ltd.    -         -        -        124,790          
Carematrix Corp.                   43        -        -         27,647          
Carlisle Companies, Inc.           -          7,166   -         -               
Case Corp.                         -         10,678   1,300    435,891          
Centex Corp.                       -          1,457   -         -               
Centex Construction Products, Inc. -          4,424   136       -               
Chesapeake Energy Corp.            -         20,179   72        -               
Cincinnati Milacron, Inc.          -         37,567   629       -               
Comdisco, Inc.                     -         15,489   1,098    229,693          
Dresser Industries, Inc.           -         31,222   5,319     -               
Echlin, Inc.                       -         16,244   1,685     -               
Enron Oil & Gas Co.                -         19,080   255       -               
Global Marine, Inc.                -          8,295   -         -               
Guitar Center, Inc.                -          -       -         -               
7. TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                           
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED                   
AMOUNTS IN THOUSANDS              PURCHASE   SALES    DIVIDEND  VALUE           
AFFILIATE                         COST       COST     INCOME                    
Halter Marine Group, Inc.        $ -        $  3,375  $ -     $ 24,364          
Hanna (M.A.) Co.                   2,322        -       1,182   68,826          
Host Marriott Services Corp.       -            -       -       44,241          
Host Marriott Corp.                -           8,613    -      280,718          
IDEX Corp.                         -            -       806     59,238          
Lafarge Corp.                      2,287        -       2,171  191,130          
Landstar System, Inc.              -           5,714    -       29,064          
Leggett & Platt, Inc.              -          40,963  3,988    329,630          
Maytag Co.                         -          60,412  3,675    -                
Medusa Corp.                       -           6,389    958     88,381          
NACCO Industries, Inc. Class A     -          20,836    -      -                
Noble Affiliates, Inc.             -          65,082    467    -                
Nucor Corp.                        -          13,184    919    -                
Oakwood Homes Corp.                -            -       149    136,216          
Omnicom Group, Inc.                -            4,816  4,128   400,105          
Owens-Corning                      -            -        -     -                
Pegasus Communications Corp.                                                    
Class A                           -            1,120    -     -               
Pioneer Natural Resources Co.      -             -       -     -                
Prime Hospitality Corp.            -             -       -      60,013          
Pulte Corp.                        -            7,808   538     98,017          
Renaissance Energy Ltd.            -           54,176    -     143,829          
Revco (D.S.), Inc.                 -            2,211    -     -                
Robert Half International, Inc.    -            8,511    -     -                
Sherwin-Williams Co.               -           52,788  3,228   -                
Smith (A.O.) Corp. Class B         -            9,246   713     40,186          
Sonat, Inc.                        -           73,657  1,197   -                
Southdown, Inc.                    -            7,265   154    -                
Swift Transportation Co., Inc.     -             -       -      85,158          
Synetic, Inc.                      -             -       -      60,050          
Toll Brothers, Inc.                -           11,266    -     -                
Trinity Industries, Inc.           -            7,485  2,322   176,412          
UCAR International, Inc.           -           28,632    -      85,535          
USG Corp.                          -           11,950    -     130,754          
TOTALS                     $ 54,085      $951,174  $48,257 $ 4,035,641          
REPORT OF INDEPENDENT ACCOUNTANTS                                               

To the Trustees and the Shareholders of Fidelity Magellan Fund:                 
We have audited the accompanying statement of assets and liabilities            
of Fidelity Magellan Fund, including the schedule of portfolio                  
investments, as of March 31, 1998, 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 March 31, 1998 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 Magellan Fund as of March 31, 1998, 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.             
/s/COOPERS & LYBRAND L.L.P.             COOPERS & LYBRAND L.L.P.                
Boston, Massachusetts                                                           
May 1, 1998                                                                     
DISTRIBUTIONS                                                                   

The Board of Trustees of Fidelity Magellan Fund voted to pay to                 
shareholders of record at the opening of business on record date, the           
following distributions derived from capital gains realized from sales          
of portfolio securities, and dividends derived from net investment              
income:                                                                         
PAY DATE                            5/5/97 12/8/97 5/4/98                       
RECORD DATE                         5/2/97 12/5/97 5/1/98                       
DIVIDENDS                           $.75   $.50    $.20                         
SHORT-TERM                                                                      
CAPITAL GAINS                          -   $.75    $.11                         
LONG-TERM                                                                       
CAPITAL GAINS                       $1.46  $3.00   $2.51                        
LONG-TERM                                                                       
CAPITAL GAIN BREAK DOWN:                                                        
28% rate                           100%   28.33%  11.83%                      
20% rate                           -      71.67%  88.17%                      
A total of 48% of the dividends distributed during the fiscal year              
qualifies for the dividends-received deduction for corporate                    
shareholders.                                                                   
The fund will notify shareholders in January 1999 of the applicable             
percentage for use in preparing 1998 income tax returns.                        
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 Xpressprovides 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.                              
SM                                                                              
(PHONE_GRAPHIC)TOUCHTONE XPRESS                                                 
1-800-544-5555                                                                  
PRESS                                                                           
For mutual fund and brokerage trading.                                        

For quotes.*                                                                  

For account balances and holdings.                                            

To review orders and mutual                                                   
fund activity.                                                                  

To change your PIN.                                                           

To speak to a Fidelity representative.                                      
0                                                                               
*                                                                               
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.                                                                       
(PHONE_GRAPHIC)FIDELITY'S WEB SITE                                              
WWW.FIDELITY.COM                                                                
If you are not currently on the Internet, call Fidelity at                      
1-800-544-7272 for significant savings on Web access from internetMCI.          
SM                                                                              
(PHONE_GRAPHIC)                                                                 
FIDELITY ON-LINE XPRESS+                                                        
TM                                                                              
Fidelity On-line Xpress+ software for Windows combines comprehensive            
portfolio management capabilities, securities trading and access to             
research and analysis tools . . . all on your desktop. Call Fidelity            
at 1-800-544-7272 or visit our Web site for more information on how to          
manage your investments via your PC.                                            
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD            
AND RETURN WILL VARY AND,                                                       
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS           
THAT YOU MAY HAVE A GAIN                                                        
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY             
MARKET FUNDS WILL BE ABLE TO                                                    
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND          
IS NOT INSURED OR                                                               
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND             
INCLUDE CHANGES IN SHARE PRICE,                                                 
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY             
SALES CHARGES.                                                                  
TO WRITE FIDELITY                                                               

If more than one address is listed, please locate the address that is           
closest to you. We'll give your correspondence immediate attention and          
send you written confirmation upon completion of your request.                  
(LETTER_GRAPHIC)MAKING CHANGES                                                  
TO YOUR ACCOUNT                                                                 
(such as changing name, address, bank, etc.)                                    
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0002                                                       
(LETTER_GRAPHIC)FOR NON-RETIREMENT                                              
ACCOUNTS                                                                        
BUYING SHARES                                                                   
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0003                                                       
OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
2300 Litton Lane - KH1A                                                         
Hebron, KY 41048                                                                
SELLING SHARES                                                                  
Fidelity Investments                                                            
P.O. Box 660602                                                                 
Dallas, TX 75266-0602                                                           
OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
Attn: Redemptions - CP6I                                                        
400 East Las Colinas Blvd.                                                      
Irving, TX 75309-5517                                                           
GENERAL CORRESPONDENCE                                                          
Fidelity Investments                                                            
P.O. Box 500                                                                    
Merrimack, NH 03054-0500                                                        
(LETTER_GRAPHIC)FOR RETIREMENT                                                  
ACCOUNTS                                                                        
BUYING SHARES                                                                   
Fidelity Investments                                                            
P.O. Box 770001                                                                 
Cincinnati, OH 45277-0003                                                       
SELLING SHARES                                                                  
Fidelity Investments                                                            
P.O. Box 660602                                                                 
Dallas, TX 75266-0602                                                           
OVERNIGHT EXPRESS                                                               
Fidelity Investments                                                            
Attn: Redemptions - CP6R                                                        
400 East Las Colinas Blvd.                                                      
Irving, TX 75309-5517                                                           
GENERAL CORRESPONDENCE                                                          
Fidelity Investments                                                            
P.O. Box 500                                                                    
Merrimack, NH 03054-0500                                                        
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                                                                    
19100 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                                                                    
4001 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                                                                     
HAWAII                                                                          
700 Bishop Street                                                               
Honolulu, HI                                                                    
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                                                                   
2200 West Main Street                                                           
Durham, 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                                                 
OFFICERS                                                                        
Edward C. Johnson 3d, President                                                 
Robert C. Pozen, Senior Vice President                                          
Abigail Johnson, Vice President                                                 
Robert Stansky, Vice President                                                  
Eric D. Roiter, Secretary                                                       
Richard A. Silver, Treasurer                                                    
John H. Costello, Assistant Treasurer                                           
Leonard M. Rush, Assistant Treasurer                                            
BOARD OF TRUSTEES                                                               
Ralph F. Cox *                                                                  
Phyllis Burke Davis *                                                           
Robert M. Gates *                                                               
Edward C. Johnson 3d                                                            
E. Bradley Jones *                                                              
Donald J. Kirk *                                                                
Peter S. Lynch                                                                  
Marvin L. Mann *                                                                
William O. McCoy *                                                              
Gerald C. McDonough *                                                           
Robert C. Pozen                                                                 
Thomas R. Williams *                                                            
ADVISORY BOARD                                                                  
J. Gary Burkhead                                                                
GENERAL DISTRIBUTOR                                                             
Fidelity Distributors Corporation                                               
Boston, MA                                                                      
TRANSFER AND SHAREHOLDER                                                        
SERVICING AGENT                                                                 
Fidelity Service Company, Inc.                                                  
Boston, MA                                                                      
CUSTODIAN                                                                       
State Street Bank and Trust Company                                             
North Quincy, MA                                                                
FIDELITY'S GROWTH FUNDS                                                         
Blue Chip Growth Fund                                                           
Capital Appreciation Fund                                                       
Contrafund                                                                      
Contrafund II                                                                   
Disciplined Equity Fund                                                         
Dividend Growth Fund                                                            
Emerging Growth Fund                                                            
Export and Multinational Fund                                                   
Fidelity Fifty                                                                  
Growth Company Fund                                                             
Large Cap Stock Fund                                                            
Low-Priced Stock Fund                                                           
Magellan(registered trademark) Fund                                             
Mid-Cap Stock Fund                                                              
New Millennium(registered trademark) Fund                                       
OTC Portfolio                                                                   
Retirement Growth Fund                                                          
Small Cap Selector                                                              
Small Cap Stock Fund                                                            
Stock Selector                                                                  
TechnoQuantGrowth Fund                                                          
SM                                                                              
Trend Fund                                                                      
Value Fund                                                                      
THE FIDELITY TELEPHONE CONNECTION                                               
MUTUAL FUND 24-HOUR SERVICE                                                     
Exchanges/Redemptions  1-800-544-7777                                           
Account Assistance 1-800-544-6666                                               
Product Information 1-800-544-8888                                              
Retirement Accounts 1-800-544-4774                                              
(8 a.m. - 9 p.m.)                                                             
TDD Service 1-800-544-0118                                                      
for the deaf and hearing impaired                                             
(9 a.m. - 9 p.m. Eastern time)                                                
(registered trademark)                                                          
TouchTone Xpress 1-800-544-5555                                                 
SM                                                                              
* INDEPENDENT TRUSTEES                                                          
AUTOMATED LINE FOR QUICKEST SERVICE                                           

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘N-30D’ Filing		Date		Other Filings
Filed on:		5/20/98
		5/1/98
For Period End:		3/31/98		13F-E,  24F-2NT,  NSAR-B
		9/30/97		13F-E,  N-30D,  NSAR-A
		9/1/95
				List all Filings