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6/28/94 Fidelity Investment Trust N-30B-2 4/30/94 1:276 Fidelity Advisor S..VIII
Periodic or Interim Report Mailed to Shareholders · Rule 30b-2
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(2_FIDELITY_LOGOS)FIDELITY
INTERNATIONAL EQUITY
FUNDS
Broadly Diversified Funds
FIDELITY DIVERSIFIED INTERNATIONAL FUND
FIDELITY INTERNATIONAL GROWTH & INCOME FUND
FIDELITY OVERSEAS FUND
FIDELITY WORLDWIDE FUND
Regional/Single Country Funds
FIDELITY CANADA FUND
FIDELITY EUROPE FUND
FIDELITY EUROPE CAPITAL
APPRECIATION FUND
FIDELITY JAPAN FUND
FIDELITY PACIFIC BASIN FUND
Emerging Markets Funds
FIDELITY EMERGING MARKETS FUND
FIDELITY LATIN AMERICA FUND
FIDELITY SOUTHEAST ASIA FUND
SEMIANNUAL REPORT
APRIL 30, 1994
CONTENTS
· Download Table
PRESIDENT'S MESSAGE NED JOHNSON ON OVERSEAS INVESTING.
BROADLY DIVERSIFIED FUNDS
DIVERSIFIED INTERNATIONAL FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
INTERNATIONAL GROWTH & INCOME FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
OVERSEAS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
WORLDWIDE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
REGIONAL/SINGLE COUNTRY FUNDS
CANADA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE CAPITAL APPRECIATION FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT SUMMARY
INVESTMENTS
FINANCIAL STATEMENTS
JAPAN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
PACIFIC BASIN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EMERGING MARKETS FUNDS
EMERGING MARKETS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
102 INVESTMENTS
FINANCIAL STATEMENTS
LATIN AMERICA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
SOUTHEAST ASIA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS
UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE
FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK AND FUND SHARES ARE
NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
After posting strong gains in 1993, several foreign markets suffered
corrections shortly after the new year began. Hardest hit were markets in
the Far East - except for Japan - and Latin America. In some cases, markets
with the greatest declines in early 1994 were among the previous year's
strongest performers.
What happened? Stock prices in emerging markets such as Brazil, Malaysia
and Singapore rose dramatically in 1993. For example, the Morgan Stanley
Emerging Markets Free Index was up 73.21% for the year. Corporate earnings
in many of these countries grew quickly, as governments took positive steps
to improve their economies. The prospects of these economies clearly
captured the imagination of U.S. investors, and in 1993 alone, more than
$38 billion flowed into international equity funds. This was up from just
$7 billion in 1992.
While these markets rewarded investors in 1993, the corrections of early
1994 demonstrated that volatility is a fact of life in international
markets. Morgan Stanley Capital International showed that Turkey, for
example, declined more than 68% in U.S. dollars in the first four months of
1994 alone. In Brazil, the market soared more than 352% in local currency;
but when converted to dollars, made a dollar gain of about 11%.
How will these markets perform next month or next year? In some ways,
foreign stock prices act like the stock prices of smaller companies in the
U.S.; a change in sentiment or profit taking in relatively small markets
can lead to a quick drop in prices. Inversely, countries and regions can
come into favor so
quickly that their prices can shoot up much higher than fundamentals may
suggest. The extent of these extremes is often, but not always, tied to a
market's size and level of development; the more developed a market, the
less volatile it is likely to be, and vice versa.
In view of these factors, here are some principles you may wish to keep in
mind:
First, take a long-term approach when investing in stocks, particularly
overseas. If you can afford to leave your money invested through the
inevitable ups and downs of foreign markets, you will reduce your
vulnerability to any single decline. As you can see from the chart below, a
broad measure such as the Morgan Stanley Europe, Australia and Far East
(EAFE) Index can be more volatile from year to year than the Standard &
Poor's 500 index, which tracks the performance of U.S. stocks. Yet on a
cumulative basis, the EAFE out-performed the S&P 377.73% to 297.92% for
the 10 years ended April 30, 1994.
Second, you may want to consider certain international stocks to be
higher-risk when compared to the New York Stock Exchange Composite Index.
Remember that even within the international part of your investments you
can reduce - but not eliminate - risk by spreading your investments across
many countries or regions. Finally, keep in mind the effects of currency
fluctuations, which can have a significant impact on returns - as we saw in
the example of Brazil.
Although it's never easy to watch stock prices fall, market declines are a
normal part of investing, whether overseas or at home. After market
downturns, some investors question the wisdom of their investments. That's
why I think it is important to review these principles periodically.
To ignore the potential of international markets would be to forego the
opportunities that exist there. Before you let your imagination run too
far, remind yourself that international investing may be a bumpy ride.
Best regards,
Edward C. Johnson 3d
S&P 500 EAFE
* YEAR TO DATE THROUGH APRIL 30, 1994
Row: 1, Col: 1, Value: 22.38
Row: 1, Col: 2, Value: 23.69
Row: 2, Col: 1, Value: 6.1
Row: 2, Col: 2, Value: 7.38
Row: 3, Col: 1, Value: 31.57
Row: 3, Col: 2, Value: 56.16
Row: 4, Col: 1, Value: 18.56
Row: 4, Col: 2, Value: 69.44000000000001
Row: 5, Col: 1, Value: 5.1
Row: 5, Col: 2, Value: 24.63
Row: 6, Col: 1, Value: 16.61
Row: 6, Col: 2, Value: 28.27
Row: 7, Col: 1, Value: 31.69
Row: 7, Col: 2, Value: 10.53
Row: 8, Col: 1, Value: -3.1
Row: 8, Col: 2, Value: -23.45
Row: 9, Col: 1, Value: 30.47
Row: 9, Col: 2, Value: 12.13
Row: 10, Col: 1, Value: 7.619999999999999
Row: 10, Col: 2, Value: -12.17
Row: 11, Col: 1, Value: 10.08
Row: 11, Col: 2, Value: 32.56
Row: 12, Col: 1, Value: -2.56
Row: 12, Col: 2, Value: 7.89
%
DIVERSIFIED INTERNATIONAL
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Diversified
International has a 3% sales charge, which has been waived since the fund's
start on December 27, 1991 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
DIVERSIFIED INTERNATIONAL 7.57% 17.09% 23.21%
Morgan Stanley GDP-
weighted EAFE Index 9.19% 21.20% 37.44%
Average International Fund 6.70% 21.97% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on December 27, 1991. You can compare the fund figures to the
performance of the Morgan Stanley GDP-weighted EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East, weighted by each country's gross domestic product. You can also
compare the fund's performance to the average international fund which
reflects the performance of 170 funds with similar objectives tracked by
Lipper Analytical Services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
DIVERSIFIED INTERNATIONAL 17.09% 9.31%
Morgan Stanley GDP-
weighted EAFE Index 21.20% 14.52%
Average International Fund 21.97% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Diversified Int'l (325) MS GDP-Weighted EAFE
12/27/91 10000.00 10000.00
12/31/91 10060.00 10275.57
01/31/92 9860.00 10188.63
02/29/92 9680.00 10050.14
03/31/92 9140.00 9554.95
04/30/92 9240.00 9638.28
05/31/92 9750.00 10205.78
06/30/92 9540.00 9873.69
07/31/92 9190.00 9524.06
08/31/92 9350.00 9997.89
09/30/92 9140.00 9631.08
10/31/92 8460.00 9240.11
11/30/92 8460.00 9285.20
12/31/92 8671.06 9283.63
01/31/93 8873.42 9391.13
02/28/93 9176.95 9719.67
03/31/93 9915.56 10383.39
04/30/93 10522.64 11339.71
05/31/93 10785.70 11516.97
06/30/93 10482.17 11317.62
07/31/93 10805.94 11658.22
08/31/93 11362.42 12512.58
09/30/93 11210.66 12250.09
10/31/93 11453.49 12586.98
11/30/93 11028.53 11584.19
12/31/93 11850.64 12399.01
01/31/94 12739.44 13347.09
02/28/94 12484.04 13273.82
03/31/94 12085.61 13083.23
04/30/94 12320.58 13744.12
Let's say you invested $10,000 in Fidelity Diversified International Fund
on its start date. By April 30, 1994, it would have grown to $12,321 - a
23.21% increase on your initial investment. That compares to $10,000
invested in the Morgan Stanley GDP-weighted EAFE index, which would have
grown to $13,744 over the same period - a 37.44% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
DIVERSIFIED INTERNATIONAL
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Greg Fraser,
Portfolio Manager of Fidelity Diversified International Fund
Q. GREG, HOW DID THE FUND PERFORM?
A. The fund did moderately well compared to other international funds for
the six month period. It was up 7.57% during the six months through April
30, versus a 6.70% total return for the average international fund tracked
by Lipper Analytical Services. However, it trailed the Morgan Stanley
GDP-weighted EAFE index, a measure of stock performance in Europe,
Australia and the Far East that is adjusted to reflect the size of each
country's economy. The total return for the index was 9.19%. For the 12
months ended April 30, the fund returned 17.09%, compared to 21.20% for the
EAFE index and 21.97% for the average fund.
Q. WHY DID THE FUND TRAIL THE GDP-WEIGHTED EAFE INDEX?
A. I can answer that in two words: Italy and Japan. They were two of the
best-performing international markets, and the fund was underweighted in
both of them - as were most funds. During the period, the fund had as
little as 17% of its assets in Japanese stocks, which account for about 30%
of the GDP-EAFE index. In Italy, which accounts for 12% of the GDP-EAFE
index, the fund's holdings were around 4% of its total investments.
Q. WHY DID YOU LIMIT YOUR JAPANESE AND ITALIAN INVESTMENTS?
A. I rely partly on sophisticated computer models to evaluate data about
factors such as stock valuations - prices compared to other measures such
as earnings - and corporate earnings in different markets. Although many
stocks in Japan looked moderately cheap at the start of this period,
earnings estimates kept falling so I didn't invest heavily there. More
recently, projected earnings growth for many Japanese companies looked
better, and I gradually boosted the fund's exposure to around 28% of its
total investments. In fact, the fund's largest holdings include shares of
electronic equipment manufacturers Hitachi, Matsushita and Sony. All three
of those companies have been diligent about cutting costs, so their
earnings could be surprisingly strong over the next several years.
Meanwhile, the stocks look very inexpensive. In Italy, stock prices were
affected by psychological factors such as the country's March elections,
which don't show up in our quantitative models. Even so, our 4% stake in
Italy is fairly high compared to some other international funds. The fund's
largest holdings include Stet (Societa Finanziaria Telefonica), the holding
company for Italy's telephone operating company.
Q. AFTER JAPAN, THE FUND'S LARGEST SINGLE COUNTRY INVESTMENTS WERE IN
FRANCE AND GERMANY. WHY?
A. In France, interest rates have declined and I think the country's
economy is beginning to recover from recession. In addition, the French
government is making plans to sell off its ownership in a number of large
firms such as Credit Lyonnais, the large banking company. Such
privatization programs often tend to boost stock prices. As for Germany,
most investors are avoiding the German stock market now because wages have
increased and productivity has declined, in part due to the after-effects
of German reunification. But while that might be true for Germany as a
whole, it's not necessarily true for every German company. For example,
labor costs are a relatively small portion of expenses for chemical
companies such as Bayer AG, which is one of the fund's largest investments.
Q. YOU ALSO HELD SHARES OF DEUTSCHE BANK, THE LARGE GERMAN BANK. HOW DID
THAT STOCK PERFORM?
A. The shares declined in value after it was disclosed that the bank had
made loans to a German developer who fled the country. That's a good
example of the kinds of risks you sometimes encounter overseas. However, I
believe that the stock will be a solid performer as the German economy
emerges from its doldrums. One reason is that Deutsche Bank owns stock in
many German blue chips - for example, it has a sizable stake in
Daimler-Benz, the largest German auto company - and thus offers broad
exposure to the German economy.
Q. ANY OTHER DISAPPOINTMENTS DURING THE PERIOD?
A. The fund held shares in some firms that failed to deliver on investors'
profit expectations and their stock prices suffered. They were generally
small companies such as Culturcom Holdings, a Hong Kong publisher of comic
books; and Dreco Energy Services, a Canadian oil services company.
Q. SIX MONTHS AGO, THE FUND'S LARGEST CONCENTRATION OF INVESTMENTS APART
FROM JAPAN WAS IN GREAT BRITAIN. WHAT CHANGED?
A. The U.K. came out of its recession earlier than the rest of Europe, and
that boosted stock prices. As the market became more expensive I shifted
some of the fund's assets from the U.K. to countries with more attractive
opportunities.
Q. THE FUND'S INVESTMENT IN EMERGING MARKETS OTHER THAN HONG KONG REMAINS
UNDER 5% OF ITS TOTAL HOLDINGS. DO YOU PLAN TO INCREASE THAT INVESTMENT?
A. Yes, but I will do so in a prudent way, taking advantage of market
pullbacks to buy shares inexpensively. Although Hong Kong might be
considered a more developed market, it's worth noting that I started to add
to the fund's investments in that market as share prices declined during
the past several months.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. I have been making modest use of currency forward contracts. While that
is my only use of derivatives currently, I might use them more in the
future depending on market conditions.
Q. WHAT'S THE OUTLOOK FOR THE FUND?
A. I have become more optimistic than I was six months ago. As stock prices
in many overseas markets have retreated from their peaks, more attractively
priced opportunities have appeared. Also, overseas markets have tended to
outperform the U.S. market in three- to four-year cycles, and we are now
just entering the third year. I think there is still room for foreign
stocks to outperform U.S. stocks for the next year or two.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in countries included in the
Morgan Stanley GDP-weighted EAFE (Europe,
Australia, Far East) index, with help from
quantitative computer models
START DATE: December 27, 1991
SIZE: as of April 30, 1994, more than $333 million
MANAGER: Gregory Fraser, since December
1991; manager, Fidelity Select Defense and
Aerospace Portfolio, 1989-1990; and Fidelity
Select Environmental Services Portfolio, 1991;
joined Fidelity in 1986
(checkmark)
GREG FRASER ON THE FUND'S STRATEGY:
"Our goal is the same as most funds' goals: to find
cheap stocks of companies with strong finances and
good prospects. But I do it in a slightly different way,
using quantitative techniques. I rely on models that
analyze historical data about stock prices, interest
rates, earnings growth and inflation in each market
and then compare that data to current conditions. The
models also look at individual stocks, to find issues
that are trading at low prices relative to factors such as
their earnings and sales. And they consider the
companies' prospects for future profit growth. Finally, I
consult Fidelity's analysts, who add their judgment to
the models' conclusions. Often, the analysts can add
an element of knowledge or judgment that will
supersede the models. Based on all of that, I decide
which stocks are most attractive now."
(bullet) As of April 30, 1994, the fund's investments were
divided among stocks in more than 30 countries in
Europe, Japan, and elsewhere.
(bullet) About 28% of the fund's investments were in
Japanese stocks. European stock markets accounted
for 49.4% of the fund's investments. The fund also
held a 7.7% stake in emerging markets including
Hong Kong.
(bullet) The fund's largest industry sector was finance,
which accounted for 17.9% of its total investments on
April 30, 1994. The second-largest sector was
durables (12%).
DIVERSIFIED INTERNATIONAL
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 7.0%
Australia 4.7%
United
Kingdom 7.2%
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 7.2
Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 22.4
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 28.0
Row: 1, Col: 7, Value: 4.4
Row: 1, Col: 8, Value: 9.0
Row: 1, Col: 9, Value: 10.3
Row: 1, Col: 10, Value: 4.7
France 10.3%
Switzerland 3.7%
Germany 9.0%
Italy 4.4%
Other 22.4%
Netherlands 3.3%
Japan 28.0%
AS OF OCTOBER 31, 1993
United States 11.6%
Australia 5.0%
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 13.1
Row: 1, Col: 3, Value: 4.4
Row: 1, Col: 4, Value: 3.5
Row: 1, Col: 5, Value: 18.9
Row: 1, Col: 6, Value: 18.5
Row: 1, Col: 7, Value: 10.3
Row: 1, Col: 8, Value: 8.800000000000001
Row: 1, Col: 9, Value: 5.9
Row: 1, Col: 10, Value: 5.0
Canada 5.9%
United
Kingdom 13.1%
France 8.8%
Switzerland 4.4%
Germany 10.3%
Spain 3.5%
Japan 18.5%
Other 18.9%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 92.5 87.8
Bonds 0.5 0.6
Short-term investments 7.0 11.6
TOP TEN STOCKS
· Download Table
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Hitachi, Ltd.
(Japan, Electronics) 2.2 0.2
Matsushita Electric Industrial Co. Ltd.
(Japan, Consumer Electronics) 1.9 1.1
Deutsche Bank AG
(Germany, Banks) 1.8 1.5
Sony Corp.
(Japan, Consumer Electronics) 1.7 0.9
Stet (Societa Finanziaria Telefonica Spa) Ord. 1.5 0.5
(Italy, Telephone Services)
Bayer AG
(Germany, Chemicals & Plastics) 1.4 1.0
Royal Dutch Petroleum Co.
(Netherlands, Oil & Gas) 1.3 -
Nomura Securities Co. Ltd.
(Japan, Securities Industry) 1.3 -
Nokia AB free shares
(Finland, Communications Equipment) 1.3 0.2
SIP Spa
(Italy, Telephone Services) 1.2 0.6
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 17.9 15.2
Durables 12.0 7.2
Technology 9.2 5.4
Basic Industries 8.4 9.1
Nondurables 7.2 7.1
Industrial Machinery & Equipment 6.2 4.7
Utilities 6.1 12.7
Energy 5.4 3.8
Retail & Wholesale 4.8 5.6
Construction & Real Estate 4.6 4.4
DIVERSIFIED INTERNATIONAL
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.1%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.8%
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing Class B
shares 50,000 $ 1,518,750 05953820
Telecom Argentina Stet France 150,000 823,647 90899992
YPF Sociedad Anonima sponsored ADR
representing Class D shares 20,000 495,000 98424510
2,837,397
AUSTRALIA - 4.7%
Adelaide Brighton Cement Ord. 329,025 388,332 00699692
Advance Bank Australia Ltd. 150,000 1,040,761 00699210
Alcan Australia Ltd (b) 250,000 366,592 06099G92
Australia & New Zealand Banking
Group Ltd. (b) 658,286 2,217,805 05252810
Boral Ltd. Ord. 330,000 856,858 09950910
CSR Ltd. 400,000 1,373,376 12639610
Caltex Australia Ltd. 500,000 1,072,950 13199392
Commonwealth Bank of Australia (c) 100,000 587,977 20299492
Email Ltd. 230,285 817,026 29099292
Metal Manufactures Ltd. 400,000 1,101,564 60199B92
National Australia Bank Ltd. 300,000 2,549,328 63252510
Pioneer International Ltd. 100,000 206,006 72371110
QBE Insurance Group Ltd. Ord. 100,000 393,415 74799892
Santos Ltd. (b) 422,602 1,206,127 80302110
Weston (George) Foods Ltd. 150,000 863,725 96199F22
Westpac Banking Corp. 200,000 679,536 96121410
Westralian Sands Ltd. 145,700 416,877 96199A22
16,138,255
AUSTRIA - 0.2%
Verbund Gesellschaft 10,000 532,817 92299999
BELGIUM - 0.6%
Delhaize 13,000 520,663 24650010
Union Miniere SA (b) 20,000 1,521,704 90707392
Union Miniere SA (warrants) (b) 20,000 160,673 90707393
2,203,040
BRAZIL - 0.6%
Telebras PN (Pfd. Reg.) 60,000,000 2,163,428 95499792
CANADA - 1.4%
Abitibi-Price, Inc. 100,000 1,184,277 00368010
Canadian Pacific Ltd. Ord. 100,000 1,609,170 13644030
Dreco Energy Services Ltd. Class A (b) 20,000 185,000 26152820
FCA International Ltd. (b) 173,300 470,005 30290110
Germany Fund of Canada Trust 10,000 103,963 37390110
Intera Information Technologies Corp.
Class A (b) 24,000 112,823 45837K10
Midland Walwyn, Inc. (b) 150,000 1,193,317 59780110
4,858,555
FINLAND - 2.9%
Cultor OY, Series II Ord. (b) 30,000 795,303 23099093
Instrumentarium Class B (b) 63,000 1,681,898 45780510
Lassila & Tikahoja OY 14,000 436,483 66899D22
Metsa Serla B 20,000 840,109 59299992
Nokia AB free shares 50,000 4,293,888 65599992
Repola OY 49,100 872,653 75999A92
Tietotehdas OY B 60,000 1,041,735 93999892
9,962,069
FRANCE - 10.3%
Alcatel Alsthom CGE 12,000 1,452,810 01390492
Assurances Generales (Reg.) 8,000 767,762 04557510
Bertrand Faure SA (b) 1,075 108,108 08599392
Bon Marche (AU) SA 15,000 2,134,146 09799492
SHARES VALUE (NOTE 1)
CGIP 14,000 $ 2,956,875 12506610
Credit Commercial France Ord. (b) 277 1,248 22499398
Credit Local De France (c) 15,000 1,100,212 22699892
De Dietrich et CIE 6,000 2,969,247 24699293
Eridania Beghin SAY Group Ord. (b) 20,000 3,209,615 07720310
Essilor International SA 6,000 780,488 29728599
Eurafrance (Societe) (b) 100 36,939 29899892
Europeene de Prop (Sep) 24,455 1,638,113 29899792
Finextel 50,000 1,316,719 32299292
Generale des Eaux 32 14,614 37099210
IDIA (Inst. de Devel. des Ind. Agr.) 30,000 1,172,322 45199D22
Lafarge Coppee 25,000 2,028,102 50586310
Pechiney International 5,400 155,567 71099094
Pernod-Ricard 15,000 1,012,725 71404310
Peugeot SA Ord. (b) 10,000 1,581,831 71682510
Schneider SA (b) 20,833 1,671,648 80687410
Societe Generale Class A 20,000 2,255,214 83357799
Thomson C.S.F. 20,000 602,333 88431610
Total Compagnie Francaise des Petroles
Class B 49,228 2,862,498 20434510
UIC (Union Inds. de Credit) (b) 5,081 389,741 90299E92
Vallourec (b) 30,000 1,741,782 92017610
Zodiac SA (b) 3,193 1,256,207 96599492
35,216,866
GERMANY - 8.5%
Andrea Noris Zahn 10,000 2,318,621 03499892
Bayer AG 20,000 4,761,790 07273010
Colonia Verischerung AG 1,200 983,071 19619991
Commerzbank AG 10,000 2,170,496 20259710
Commerzbank (warrants) (b) 300 63,120 20299033
Deutsche Babcock AG 20,000 3,230,955 25159991
Deutsche Bank AG 13,000 6,140,024 25152592
Herlitz AG 4,000 1,013,301 42799392
Holsten Brauerei AG 2,666 918,755 43899D92
IKB AG (Deutsche Industriebank) 5,600 1,029,262 45999992
Karstadt AG 3,000 1,140,871 48576499
Kaufhof AG 2,000 659,008 48615210
New Germany Fund, Inc. (The) 100,000 1,250,000 64446510
Pfaff (GM) Ord (b) 8,000 1,257,557 71699592
Rosenthal AG 6,600 1,217,050 77774310
Thyssen AG Ord. 5,000 865,480 88629110
29,019,361
HONG KONG - 3.3%
Cafe de Coral Holdings Ltd. 1,000,000 618,150 12799092
Cathay Pacific Airways Ltd. 200,000 289,978 14890610
Cheung Kong Ltd. 350,000 1,653,785 16674410
Culturecom Holdings Ltd. 2,000,000 225,260 23099322
Dairy Farm International Holdings
Ltd. Ord. 550,000 804,562 23385910
Hang Lung Development Corp. 200,000 344,350 41099310
Hong Kong Electric Holdings Ord. 150,000 442,735 43858010
Hong Kong Land Holdings Ltd. 200,000 561,834 43858292
Hopewell Holdings Ltd. 1,000,000 893,240 44099999
Hutchison Whampoa Ltd. Ord. 350,000 1,438,566 44841510
Jardine Matheson & Co. Ltd. Ord. 24 157 47111510
Lai Sun Garment International Ltd. 300,000 563,130 50699093
Mandarin Oriental International Ltd. Ord. 400,000 522,996 56259499
Shun Tak Holdings Ltd. 685,244 731,841 82799192
Sime Darby Hong Kong Ltd. 200,000 321,048 82899392
Sing Tao Holdings Ltd. 250,000 343,055 82877099
Sun Hung Kai Properties Ltd. 200,500 1,206,940 86676H10
Winsor Industrial 300,000 442,737 97551099
11,404,364
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - 0.1%
Reliance Industries Ltd. GDS (c) 30,000 $ 510,000 75947093
INDONESIA - 0.1%
Bank Dagang Nas Indonesia PT 275,000 401,687 06099Q22
IRELAND - 1.0%.
Bank of Ireland U.S. Holdings, Inc. 150,000 616,864 06278793
Crean (James) Ltd. Ord. 100,000 421,130 22699D25
Elan PLC ADR 12,400 407,650 28413120
IAWS Group PLC A (U.K. Reg.) 300,000 400,620 45399H23
Independent News 192,496 963,972 45399E92
Waterford Foods PLC Class A 300,000 464,355 94199392
3,274,591
ISRAEL - 0.3%
ECI Telecom Ltd. 50,000 1,031,250 26825810
ITALY - 3.6%
Fiat Spa 700,000 3,045,924 31562110
SIP Spa 1,376,010 4,117,462 78401792
Stet (Societa Finanziaria Telefonica
Spa) Ord. 1,300,000 5,041,855 85982510
12,205,241
JAPAN - 28.0%
Aichi Machine Industries 100,000 644,145 02299192
Aisin Seiki Co. Ltd. 50,000 595,883 00999999
Akita Bank 100,000 718,999 00999692
Aoyama Trading Co. Ord. 16,000 740,668 03799092
Aplus Co. Ltd. 150,000 812,568 03899A92
Bandai Co. Ltd. (warrants #3) 400 730,000 06099193
Canon, Inc. 100,000 1,625,135 13780199
Dai-Tokyo Fire & Marine Insurance Ord. 150,000 1,152,369 23399210
Daidoh Ltd. 150,000 1,366,591 56299292
Daiwa Securities 200,000 3,132,080 23499010
Ezaki Glicko Co. 75,000 805,180 30199492
Fuji Oil Co. Ltd. 150,000 1,375,455 35999310
Fuji Photo Film Co. Ltd. 50,000 1,078,499 35958610
Futaba Corp. 50,000 1,974,786 36399292
Hanshin Department Store 242,000 1,906,824 41199292
Hisamitsu Pharmaceutical Co. 70,000 675,662 46699092
Hitachi Ltd. 800,000 7,564,264 43357810
Honda Motor Co. Ltd. 100,000 1,654,683 43812810
House Food Industrial 55,000 1,159,263 44144610
Izumiya Co. Ltd. 100,000 1,881,217 46599310
Kao Corporation 250,000 3,028,662 48599210
Kasumi Stores 80,000 776,126 48599310
Kirin Brewery Co. Ltd. 200,000 2,403,230 49712510
Konica Corp. 109,000 719,295 50046M10
Matsushita Electric Industrial Co. Ltd. 400,000 6,579,336 57687910
Matsuya Denki Co. Ltd. 60,000 596,868 57699890
Mitsubishi Heavy Industry 200,000 1,329,656 60699310
Nakayama Steel Works Ltd. 100,000 633,310 62999310
Nippon Trust Bank Ltd. Ord. 150,000 749,040 66799892
Nissei Sangyo 100,000 1,408,451 66699592
Nomura Securities Co. Ltd. 200,000 4,353,394 65536130
Ohbayashi Corp. 200,000 1,359,204 67090410
Omron Corp. 100,000 1,585,738 68215110
Pokka Corp. 50,000 822,417 73299999
RICOH Co. Ltd. Ord. 200,000 1,701,960 76565999
Renown Look, Inc. 70,000 758,397 75999J22
Royal Co. Ltd. 165,000 2,437,703 77999110
Sekisui Chemical 200,000 2,048,656 81699210
Sekisui House Ltd. 150,000 1,876,293 81607810
Shintokogio Ltd. 80,000 619,324 97199392
Sony Corp. 100,000 5,673,200 83569999
TDK Corp. 75,000 3,383,236 87235110
SHARES VALUE (NOTE 1)
Takasago Thermal Engineering Co. 40,000 $ 618,536 87699892
Takeda Chemical Industries Ltd. 300,000 3,545,751 87405810
Takuma Co. Ltd. 70,000 1,041,071 87406099
Toenec Corporation. 55,000 666,306 96599592
Tokyo Style Co. Ltd. 150,000 2,733,183 88999410
Toshiba Corp. 250,000 1,895,992 89149310
Toyoda Boshoku Corp. 150,000 723,924 89799B92
Toyota Motor Corporation 200,000 3,920,024 89399999
Yamaha Motor Co. Ltd. 100,000 886,438 98456092
Yamatake Honeywell Co. Ltd. 130,000 2,074,264 98491099
Zenitaka Corp. 150,000 1,032,699 64099292
95,575,955
KOREA (SOUTH) - 0.6%
Samsung Electronics Co. Ltd.:
GDR representing common (b) (c) 1,516 69,357 79605060
GDS (c). 30,000 1,920,000 79605020
1,989,357
LUXEMBOURG - 0.7%
Minorco SA ADR 120,000 2,385,000 60434020
MEXICO - 0.8%
Banacci SA de CV Class C 40,000 271,363 06399893
Cemex SA, Series B 50,000 1,084,226 15299293
Groupo Televisa GDS (c) 10,000 528,125 40049J20
Grupo Carso SA de CV Class A-1 50,000 498,468 40099594
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 20,000 492,500 40048610
2,874,682
NETHERLANDS - 3.3%
Akzo NV Ord. 7,000 843,469 01019910
Borsumij Wehry NV 5,100 448,327 09985610
International Nederlanden Groep CVA 15,000 626,986 46099892
MacIntosh Confectionary Works 12,600 415,362 58199292
Philips Electronics 55,000 1,608,672 71833799
Pirelli Tyre Holdings NV Ord. 38,700 385,645 72499092
Royal Dutch Petroleum Co. 40,000 4,360,000 78025770
Telegraaf CVA 15,000 1,325,074 87940410
Twentsche Kabel Holding NV 10,000 1,104,228 91030099
Volmac Software Groep NV 27,700 337,204 92899292
11,454,967
NETHERLANDS ANTILLES - 0.1%
Intrum Justitia NV (Reg.) 160,000 262,224 46299292
NEW ZEALAND - 0.8%
Brierley Investments Ltd. 2,578,459 1,950,321 10901410
Fletcher Challenge Ltd. (Reg.) 350,000 681,044 33999592
Wrightson Ltd. 100,000 59,472 98299322
2,690,837
NORWAY - 2.2%
Bergesen Group Class A 50,000 1,109,390 08399010
Bonheur AS 14,000 275,464 09799399
Color Lines 130,815 529,386 19699492
Ganger Rolf 14,000 271,556 36472010
Helikopter Services 15,000 192,573 42499192
Norsk Hydro AS ADR (b) 15,000 508,125 65653160
Orkla AS Class B (non-vtg.) 20,000 633,538 39299192
Saga Petroleum AS B 100,000 1,102,413 84099794
Smedvig Tankships Ltd. Ord. (c) 40,000 365,000 83169E20
Unitor AS 60,500 1,207,282 91699392
Wilrig AS 310,800 1,236,070 97199092
7,430,797
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PANAMA - 0.1%
Banco Latino Americano de Exportaciones
SA Class E 10,000 $ 380,000 06199A92
PHILIPPINES - 0.3%
First Philippine Fund 50,000 893,750 33610010
PORTUGAL - 0.1%
Banco Portuguese Invest. SA:
(Reg.) 10,500 208,581 05999G93
(New) 1,400 27,811 05999G95
236,392
SINGAPORE - 0.2%
Hour Glass Ltd. 732,500 819,697 44199E22
SOUTH AFRICA - 0.2%
Rustenberg Platinum Holding Ltd. ADR 35,000 621,250 78307820
SPAIN - 2.7%
Argentaria Corp. Bancaria de ESP 4,200 182,507 21991392
Banco de Andalucia (Reg.) 2,000 226,555 08599193
Banco Popular Espanol 2,500 290,808 05999110
Corporacion Bancaria de Espana SA
sponsored ADR 60,000 1,305,000 21991310
Electric Zaragosa 7,500 207,242 29599192
Electricas Reunidas Zaragoza (New) 1,875 50,877 29599194
Growth Fund of Spain, Inc. 150,000 1,518,750 39987710
Hidro Cantabrico 40,000 1,244,940 42899999
Iberdrola SA 26,000 186,756 45499892
Repsol SA sponsored ADR 73,900 2,438,700 76026T20
Telefonica de Espana SA sponsored ADR 35,000 1,426,250 87938220
9,078,385
SWEDEN - 0.6%
Astra A Free 20,500 425,227 04632292
Frontline 114,000 306,809 35999F22
Mo Och Domsjoe (Modo) AB 20,000 787,701 61399792
SKF AB Ord. 5,300 109,241 78437530
Svenska Handelsbanken 30,000 464,744 86959991
2,093,722
SWITZERLAND - 3.7%
Also Holding AG (Reg.) 6,000 1,069,023 02199F93
Bank of International Settlements 100 762,570 06299B22
Bucher Holding AG (Bearer) 400 1,356,947 08699292
Ciba-Geigy AG (Reg.) 320 190,885 17199492
Ciba Geigy Corp. (warrants) (b) 120 855 17199494
George Fischer AG (Bearer) (b) 700 743,328 33771110
Industrieholding Cham AG (Reg.) 1,200 966,397 85599922
Nestle SA (Reg.) 1,000 835,976 64106992
Oerlikon-Buhrle Holding Ltd. (Reg.) (b) 10,000 1,069,023 67199092
Pelikan Holdings AG 5,000 447,208 70599A22
Prodega AG (Bearer). 1,000 1,211,560 74599992
Roche Holdings Ltd. Part. Cert. 200 957,845 77157092
Sandoz PC 100 264,405 80005220
Sulzer Gebrueder PC 1,000 709,831 86557799
Swiss Reinsurance Corp.:
(Reg.) (b) 1,100 468,802 87099393
A (warrants) (b) 1,000 3,385 87099D22
B (warrants) (b) 1,000 3,920 87099399
Winterthur Schweiz (Bearer) (b) 1,000 484,624 97629993
Zurich Versicherungs (Bearer) 1,000 930,050 99499592
12,476,634
THAILAND - 0.1%
Thai Euro Fund IDR 10 270,000
UNITED KINGDOM - 7.2%
Allied Lyons PLC (b) 90,000 801,696 01925510
Amstrad 600,000 291,360 03299110
SHARES VALUE (NOTE 1)
Associated British Foods Ltd. Ord. (b). 150,000 $ 1,358,922 04551910
B.A.T. Industries PLC Ord. . 90,000 640,537 05527010
British Petroleum PLC:
ADR 20,000 1,400,000 11088940
Ord. 3 18 11088910
British Telecommunications PLC Ord. 100,000 559,958 11102110
Cater Allen Holdings PLC 200,000 1,714,776 14899192
Cattles Holdings 333,917 749,944 14999B22
Clinton Cards PLC 100,000 235,213 18799292
East Midland Electricity PLC 70,000 590,080 27365394
Finlay (James) PLC 200,000 242,800 31799F92
Guinness PLC Ord. 100,000 727,641 40203310
Imperial Chemical Industries Ord. 110,000 1,370,455 45270440
Invesco Mim PLC 500,000 1,244,350 46199C92
Lilley PLC 300,000 17,073 53299692
Lloyds Chemists PLC 122,352 616,422 54099092
London & Manchester Group PLC 200,000 1,083,496 54190099
London International Group 300,000 478,014 54183310
Lonrho Ltd. Ord. 155,067 331,794 54337410
Manweb PLC 80,000 805,489 56508495
Northern Electricity PLC 50,000 469,666 68499B92
Norweb PLC 50,000 481,047 66934493
Peninsular & Oriental Steam
Navigation Co. 100,000 1,077,425 70719030
Royale Insurance Co. Ltd. 305,084 1,217,599 78074910
Scottish Metro Property PLC 100,000 147,198 80999292
Seeboard PLC 90,000 421,334 81570594
SmithKline Beecham PLC ADR 50,000 1,362,500 83237840
South Wales Electricity PLC 45,000 435,674 84060794
Standard Chartered Bank 45,461 689,871 85256810
Tesco PLC Ord. 44,939 143,209 88157510
Vodafone Group PLC 81,648 673,401 92857T92
Vsel Consortium PLC 40,000 603,965 91828599
Watmoughs (Holdings) PLC 230,000 1,588,065 95599492
24,570,992
TOTAL COMMON STOCKS
(Cost $283,063,996) 307,863,562
NONCONVERTIBLE PREFERRED STOCKS - 2.4%
AUSTRIA - 0.3%
Creditanstaldt Bank 17,000 999,441 22539210
BELGIUM - 0.2%
Cockerill Sambre SA 100,000 560,011 19199392
CANADA - 0.6%
Trilon Financial Corp. Class 1, Series A 192,200 2,154,552 89590330
GERMANY - 0.5%
Hornback Holdings AG 500 498,791 44050799
Wella AG 2,000 1,076,179 94599999
1,574,970
ITALY - 0.8%
Fiat Spa Privilege 1,000,000 2,784,210 31562120
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $6,262,232) 8,073,184
CORPORATE BONDS - 0.5%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
CONVERTIBLE BONDS - 0.4%
CANADA - 0.4%
Brascan Ltd. 7%, 10/15/02 - CAD 2,000,000 $ 1,403,052 105502AA
NONCONVERTIBLE BONDS - 0.1%
CANADA - 0.1%
Stelco, Inc. 10 7/8%, 9/15/94 - CAD 500,000 361,612 8585258Y
TOTAL CORPORATE BONDS
(Cost $1,606,578) 1,764,664
REPURCHASE AGREEMENTS - 7.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56%
dated 4/29/94 due 5/2/94 $ 24,076,141 24,069,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $315,001,806) $ 341,770,410
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
28,861,200 DEM 5/13/94 $ 17,437,090 $ 157,004
(Payable amount $17,280,086)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.1%
CONTRACTS TO SELL
28,861,200 DEM 5/13/94 $ 17,437,091 $ (880,643)
2,678,400,000 JPY 7/11/94 26,490,223 (661,872)
TOTAL CONTRACTS TO SELL
(Receivable amount $42,384,799) $ 43,927,314 $ (1,542,515)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES -- 12.9%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
DEM - German Deutsche mark
JPY - Japanese yen
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. 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 $5,573,171 or 1.7% of net
assets.
4. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $196,010,859 and $125,285,532, respectively.
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 $7,120 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $3,190,000. The weighted average interest rate was
4.19%. Interest expense includes $1,113 paid under the bank borrowing
program (see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $315,011,018. Net unrealized appreciation aggregated
$26,759,392, of which $37,571,590 related to appreciated investment
securities and $10,812,198 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.2%
Basic Industries 8.4
Conglomerates 0.4
Construction & Real Estate 4.6
Durables 12.0
Energy 5.4
Finance 17.9
Health 3.7
Industrial Machinery & Equipment 6.2
Media & Leisure 2.7
Nondurables 7.2
Repurchase Agreements 7.0
Retail & Wholesale 4.8
Services 1.2
Technology 9.2
Transportation 2.0
Utilities 6.1
100.0%
DIVERSIFIED INTERNATIONAL
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
· Download Table
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements
of $24,069,000) (cost $315,001,806)$ 341,770,410
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value
(cost $17,280,086) (Note 2)
Short foreign currency contracts
$ (43,927,314
(Note 2))
Contracts held, at value
Receivable for contracts held
42,384,799 (1,542,515)
Cash
525
Receivable for investments sold
2,494,040
Receivable for fund shares sold
2,779,003
Dividends receivable
992,722
Interest receivable
20,671
Other receivables
14,259
TOTAL ASSETS
363,966,205
LIABILITIES
Payable for foreign currency contracts held (Note 2)
17,280,086
Payable for investments purchased
11,476,381
Payable for fund shares redeemed
1,057,187
Accrued management fee
188,610
Other payables and accrued expenses
220,826
TOTAL LIABILITIES
30,223,090
NET ASSETS
$ 333,743,115
Net Assets consist of (Note 1):
Paid in capital
$ 297,582,542
Undistributed net investment income
100,732
Accumulated undistributed net realized gain (loss) on investments
10,676,748
Net unrealized appreciation (depreciation) on:
Investment securities
26,768,604
Foreign currency contracts
(1,385,511)
NET ASSETS, for 27,683,717 shares outstanding
$ 333,743,115
NET ASSET VALUE, offering price and redemption price per share
($333,743,115 (divided by) 27,683,717 shares) (Note 4)
STATEMENT OF OPERATIONS
· Enlarge/Download Table
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 2,318,427
Dividends
Interest 589,910
2,908,337
Less foreign taxes withheld (Note 1) (383,419
)
TOTAL INCOME 2,524,918
EXPENSES
Management fee (Note 4) $ 1,096,161
Basic fee
Performance adjustment (39,158
)
Transfer agent fees (Note 4) 558,328
Accounting fees and expenses 86,359
(Note 4)
Non-interested trustees' compensation 835
Custodian fees and expenses 126,385
Registration fees 59,597
Audit 14,062
Legal 1,857
Interest (Note 5) 1,113
Miscellaneous 1,135
TOTAL EXPENSES 1,906,674
NET INVESTMENT INCOME 618,244
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 10,988,477
Foreign currency contracts (384,348 10,604,129
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 6,387,312
Foreign currency contracts (1,385,511 5,001,801
)
NET GAIN (LOSS) 15,605,930
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 16,224,174
OTHER INFORMATION $86,301
Accounting fees paid to FSC
(Note 4)
STATEMENT OF CHANGES IN NET ASSETS
· Download Table
INCREASE (DECREASE) IN NET ASSETS
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations
$ 618,244 $ 998,691
Net investment income
Net realized gain (loss) on investments
10,604,129 2,534,162
Change in net unrealized appreciation (depreciation) on investments
5,001,801 24,127,201
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
16,224,174 27,660,054
Distributions to shareholders
(212,611 (425,331
From net investment income
) )
From net realized gain
(2,126,206 -
)
TOTAL DISTRIBUTIONS
(2,338,817 (425,331
) )
Share transactions
289,940,150 368,965,606
Net proceeds from sales of shares
Reinvestment of distributions
2,282,423 411,649
Cost of shares redeemed
(227,393,669 (178,021,677
) )
Net increase (decrease) in net assets resulting from share transactions
64,828,904 191,355,578
TOTAL INCREASE (DECREASE) IN NET ASSETS
78,714,261 218,590,301
NET ASSETS
Beginning of period
255,028,854 36,438,553
End of period (including undistributed net investment income of
$100,732 and $893,244, respectively) $ 333,743,115 $ 255,028,854
OTHER INFORMATION
Shares
Sold
24,297,825 35,207,206
Issued in reinvestment of distributions
201,262 48,543
Redeemed(19,352,953 (17,022,973
) )
Net increase (decrease)
5,146,134 18,232,776
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
· Download Table
SIX MONTHS YEAR ENDED DECEMBER 27, 1991
ENDED APRIL 30, OCTOBER 31, (COMMENCEMENT
1994 1993 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 11.32 $ 8.46 $ 10.00
Income from Investment Operations
Net investment income
.03 .07 .07
Net realized and unrealized gain (loss) on investments
.82 2.89 (1.61)
Total from investment operations
.85 2.96 (1.54)
Less Distributions
From net investment income
(.01) (.10) -
From net realized gain
(.10) - -
Total distributions
(.11) (.10) -
Net asset value, end of period
$ 12.06 $ 11.32 $ 8.46
TOTAL RETURN (dagger)(diamond)
7.57% 35.38% (15.40)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 333,743 $ 255,029 $ 36,439
Ratio of expenses to average net assets
1.36%* 1.47% 2.00%*
Ratio of expenses to average net assets before expense reductions
1.36%* 1.47% 2.34%*
Ratio of net investment income to average net assets
.44%* .84% 1.38%*
Portfolio turnover rate
99%* 56% 56%*
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(diamond)THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
INTERNATIONAL GROWTH & INCOME
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). International
Growth & Income had a 2% sales charge, which was waived through May 31,
1994. The sales charge was eliminated effective June 1, 1994.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTHS YEAR YEARS FUND
INTERNATIONAL GROWTH &
INCOME 1.63% 13.91% 53.91% 94.84%
INTERNATIONAL GROWTH &
INCOME (INCL. 2% SALES
CHARGE) -0.40% 11.63% 50.83% 90.95%
Morgan Stanley EAFE
Index 5.57% 16.64% 17.76% 91.02%
JP Morgan Global Bond
Index -0.43% 4.35% 61.25% 91.97%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 31, 1986. You can compare the fund's
figures to the performance of the Morgan Stanley EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East. You can also compare the fund's performance to the JP Morgan Global
Traded Government Bond Index - a broad measure of bond performance in
developed countries, including the United States. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
INTERNATIONAL GROWTH &
INCOME 13.91% 9.01% 9.52%
INTERNATIONAL GROWTH &
INCOME (INCL. 2% SALES
CHARGE) 11.63% 8.57% 9.22%
Morgan Stanley EAFE Index 16.64% 3.32% 9.22%
JP Morgan Global Bond
Index 4.35% 10.03% 9.30%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Int'l Growth & Income (305) MS EAFE JP MORGAN GLOBAL
BOND
12/31/86 9800.00 10000.00 10000.00
01/31/87 10456.60 11091.44 10257.00
02/28/87 10917.20 11423.38 10377.01
03/31/87 11387.60 12359.45 10565.87
04/30/87 11828.60 13667.22 10575.38
05/31/87 11907.00 13667.17 10475.97
06/30/87 12024.45 13231.74 10430.92
07/31/87 12525.06 13208.62 10305.75
08/31/87 12868.62 14199.03 10418.08
09/30/87 12976.78 13975.49 10164.92
10/31/87 10259.33 11956.28 10730.09
11/30/87 9993.50 12135.62 11008.00
12/31/87 10616.00 12495.97 11382.28
01/31/88 10240.74 12719.07 11440.33
02/29/88 10704.88 13566.88 11545.58
03/31/88 11169.02 14401.06 11636.79
04/30/88 11465.28 14610.33 11582.09
05/31/88 11317.15 14141.98 11457.01
06/30/88 11188.77 13769.22 11355.04
07/31/88 11188.77 14201.21 11266.47
08/31/88 10635.75 13277.87 11186.48
09/30/88 11020.89 13858.05 11465.02
10/31/88 11662.79 15043.77 11916.74
11/30/88 11870.17 15939.87 12021.61
12/31/88 11843.61 16028.75 11949.48
01/31/89 12064.61 16310.76 11831.18
02/28/89 12104.79 16394.60 11812.25
03/31/89 12104.79 16072.84 11711.85
04/30/89 12406.16 16221.91 11905.09
05/31/89 12054.56 15339.38 11776.52
06/30/89 12094.75 15081.17 12043.84
07/31/89 13239.93 16974.95 12523.19
08/31/89 13059.11 16211.52 12152.50
09/30/89 13581.48 16949.99 12344.51
10/31/89 12928.52 16268.98 12503.76
11/30/89 13410.70 17086.82 12615.04
12/31/89 14108.24 17717.27 12762.64
01/31/90 13864.30 17058.04 12572.47
02/28/90 13376.40 15867.48 12436.69
03/31/90 13366.24 14214.47 12360.83
04/30/90 13335.75 14101.66 12312.62
05/31/90 14199.72 15710.68 12706.62
06/30/90 14646.96 15572.31 12936.61
07/31/90 15327.98 15791.65 13316.95
08/31/90 14016.76 14258.15 13213.08
09/30/90 12664.89 12271.07 13337.28
10/31/90 13935.45 14183.13 13864.10
11/30/90 13620.35 13346.50 14108.11
12/31/90 13652.87 13562.71 14264.71
01/31/91 14135.97 14001.39 14588.52
02/28/91 14934.14 15502.33 14603.11
03/31/91 14398.53 14571.68 14147.49
04/30/91 14619.08 14714.78 14318.68
05/31/91 14598.07 14868.32 14331.56
06/30/91 13894.42 13775.78 14139.52
07/31/91 14377.53 14452.61 14437.86
08/31/91 14325.01 14159.11 14738.17
09/30/91 14787.11 14957.10 15276.12
10/31/91 14692.59 15169.13 15427.35
11/30/91 14283.01 14460.97 15678.81
12/31/91 14750.27 15207.78 16470.59
01/31/92 14729.00 14882.94 16147.77
02/29/92 14750.27 14350.25 16100.94
03/31/92 14271.71 13402.90 15952.81
04/30/92 14899.16 13466.61 16085.22
05/31/92 15569.14 14368.01 16542.04
06/30/92 15420.26 13686.50 16993.64
07/31/92 14920.43 13336.22 17367.50
08/31/92 15186.29 14172.68 17829.48
09/30/92 14931.06 13892.81 17811.65
10/31/92 14133.46 13164.07 17366.36
11/30/92 14101.56 13287.94 17058.97
12/31/92 14257.48 13356.67 17221.03
01/31/93 14388.19 13355.03 17513.79
02/28/93 14780.29 13758.44 17795.76
03/31/93 15880.38 14957.71 18069.82
04/30/93 16762.62 16377.23 18398.69
05/31/93 17154.73 16723.11 18516.44
06/30/93 16926.00 16462.20 18531.25
07/31/93 17492.38 17038.46 18538.66
08/31/93 18407.29 17958.25 19087.41
09/30/93 18287.48 17554.02 19289.73
10/31/93 18788.51 18094.99 19280.09
11/30/93 18145.89 16513.30 19139.34
12/31/93 19259.02 17705.68 19334.57
01/31/94 20267.46 19202.61 19516.31
02/28/94 19905.74 19149.42 19301.63
03/31/94 18842.49 18324.63 19212.84
04/30/94 19094.60 19102.13 19197.47
Let's say you invested $10,000 in Fidelity International Growth &
Income Fund on its start date and paid the 2% sales charge. By April 30,
1994, it would have grown to $19,095 - a 90.95% increase on your initial
investment. That compares to $10,000 invested in the Morgan Stanley EAFE
index, which would have grown to $19,102 over the same period - an 91.02%
increase. If you had put $10,000 in the J.P. Morgan Global Bond index, it
would have grown to $19,197 - a 91.97% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
INTERNATIONAL GROWTH & INCOME
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace,
Portfolio Manager of Fidelity International Growth &
Income Fund
Q. RICK, HOW DID THE FUND DO?
A. The fund had a total return of 1.63% for the six months ended April 30,
1994. Because no index tracks the performance of both international stocks
and bonds (the fund must keep at least 25% in fixed-income investments),
the best available way to evaluate performance is to look at two indices.
During the same six-month period, the EAFE index - a broad measure of the
performance of stocks (only) in Europe, Australia and the Far East - was up
5.57%. The total return of the JP Morgan Global Traded Government Bond
Index was -0.43%. For the 12 months ended April 30, the fund returned
13.91%, the EAFE index rose 16.64%, and the global bond index was up 4.35%.
Because the fund invests in both stocks and bonds, its performance most
often should fall between those of the two indices. Comparing the fund's
returns to those of its peers is even more difficult. Lipper Analytical
Services - which tracks mutual fund performance - doesn't have a category
that compares the returns of funds that share the same investing objectives
as International Growth & Income.
Q. FROM THOSE NUMBERS, IT APPEARS AS IF FOREIGN BONDS HAVE UNDERPERFORMED
FOREIGN STOCKS OVER THE PAST SIX MONTHS . . .
A. That's true. Shortly after I took over the fund in January, I increased
the fund's bond investments in a variety of markets - including Argentina,
France and Italy - for two reasons. First, one of my priorities going
forward is to increase the fund's yield; I would like to boost the "income"
half of the fund's title. Second, stock valuations - prices relative to
other measures such as earnings - in many of the world markets were very
high. I felt bonds offered better value at the time. Turned out, I was a
couple of months too early. In early February, the Federal Reserve Board
raised U.S. short-term interest rates for the first time in five years.
This triggered a sharp sell-off in bond markets around the world. Even
though underlying economic conditions still appeared favorable for bond
investors in emerging markets such as Argentina, these markets were hit the
hardest.
Q. NOW THAT BOND PRICES HAVE FALLEN, ARE YOU FINDING BETTER VALUE?
A. Definitely, which is why I've continued to increase the fund's stake in
bonds. They made up 29.3% of the fund at the end of April compared to 8.7%
on October 31. Bond yields have risen so dramatically in Argentina that
"spreads," or the differences in yield between Argentine and U.S. bonds of
comparable maturities, are near historic highs. Plus, the country appears
to be politically stable, and inflation is low. Though bond prices in
France haven't fallen as far, they too offer good value. It's like going
into a store one day and finding an item that you know is worth a dollar,
on sale for 80 cents. If you go into the store the next day and that same
item is selling for 60 cents, it's an even better deal, and you might as
well buy even more.
Q. THE FUND'S INVESTMENT IN JAPAN HAS INCREASED FROM 14.9% AT THE END OF
OCTOBER TO 37.5% ON APRIL 30. WHY?
A. I began increasing the fund's stake in Japanese stocks right off the bat
in January. Japan's market fell last fall amid political and economic
turmoil. As a result, stocks there offer some of the most attractive
valuations in the world. But not just any Japanese stocks. I began
targeting some of Japan's biggest exporters: auto makers Honda, Nissan and
Toyota; and electronics and entertainment companies such as Hitachi,
Matsushita, Sony and TDK. What these companies have in common is effective
cost cutting, little or no debt, and very low stock valuations. The bet on
their future performance centers around continued cost-cutting and
movements in the value of the yen.
Q. WHICH AFFECTS THE PRICE OF JAPANESE EXPORTS . . .
A. Exactly. In 1993 and so far this year, a strengthening yen has made
Japan's exports more expensive - therefore less attractive - in other
countries. That, in turn, made Japanese companies less competitive. But the
yen has been especially strong, which means it should soon begin moving
back toward a fairer value. And because they've effectively cut costs,
these companies should see a healthy boost in earnings when the yen begins
to weaken. The prices of some of these stocks have already risen since the
beginning of the year, and I like their future prospects.
Q. WHERE ELSE DID YOU FIND OPPORTUNITIES ON THE STOCK SIDE?
A. As some European economies have begun to recover, cyclical stocks -
those that tend to rise and fall in step with the economy - have performed
well. Chemical companies, in particular, are beginning to gain the ability
to raise prices while sustaining earnings growth. Examples include DSM and
Akzo Nobel in the Netherlands, and Bayer and Hoechst in Germany. In
addition, German tire maker Continental and auto maker BMW, as well as
Italian auto maker Fiat, have seen an improvement in business.
Q. SINCE TAKING OVER THE FUND, YOU'VE INCREASED THE AMOUNT OF THE FUND'S
INVESTMENTS THAT ARE HEDGED WITH FOREIGN CURRENCY CONTRACTS. WHY?
A. I hedged the fund's increasing investment in Japanese stocks because I
was concerned that potential gains in these stocks might, in part, be
negated by the effects of a falling yen. In addition, a substantial portion
of the hedging was tied to the fund's growing investment in foreign bonds.
Hedging is designed to reduce currency risk, or the risk that the fund's
investments will be worth less because of movements in the currency of the
country where the investment is made. For instance, if I'm buying French
bonds, I'll pay for the purchase in French francs. Then, to hedge the
investment, I'll enter into a forward currency contract that converts my
French investment into U.S. dollars. Often, the higher yields available
from these hedged investments offset the cost of the hedging (the currency
contracts). However, if the dollar moves the wrong way, that hedging cost
can decrease the fund's short-term returns.
Q. IS THAT WHAT HAPPENED RECENTLY?
A. Yes. I expected the dollar to strengthen as U.S. interest rates went up.
But as rates went up, the rest of the world pushed up rates too, which
weakened the dollar in foreign markets. However, I still had roughly 40% of
the fund's foreign investments hedged at the end of April. I believe
changing dynamics between the dollar and other world currencies should make
hedging more worthwhile in the months ahead.
Q. SPEAKING OF THE FUTURE, WHAT'S YOUR VIEW OF THE NEXT SIX MONTHS?
A. I remain very positive on the fund's bond investments and on its sizable
stake in Japan. Even though many of the fund's Japanese stocks have risen
already, I believe their best days lie ahead. I'm not too optimistic about
other world stock markets in general, because they're still expensive. Yet
I'm very optimistic about the stocks that the fund owns within these
markets. That said, within a six-month period, plenty of unknowns can alter
the best laid plan. But I believe the fund is well positioned for long-term
growth, and hopefully an increase in income.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing in stocks and bonds,
mainly in Europe, the Far East and Pacific
Basin
START DATE: December 31, 1986
SIZE: as of April 30, 1994, more than $1.4 billion
MANAGER: Richard Mace, since January 1994;
co-manager, Fidelity Global Balanced Fund,
February 1993-December 1993; Fidelity
Select Chemicals and Industrial Materials
Portfolios, January 1992-August 1992;
Fidelity Select Transportation Portfolio, June
1989-December 1991; joined Fidelity in 1987
(checkmark)
RICK MACE ON THE FUND'S SHIFTING STRATEGY:
"One of my keys to stock selection is valuation -- a
stock's price relative to other measures such as
earnings. Shortly after taking over the fund in
January, I sold nearly all of its investment in
emerging markets such as Hong Kong, Malaysia
and Singapore. Why? Because stock valuations
were extremely high by historic standards and
relative to other companies with similar prospects
elsewhere in the world. Many of the companies in
these markets are among the fastest growing in the
world. In 1993, however, stock prices in emerging
markets rose much faster than company earnings.
And in fact, most of these markets suffered steep
corrections early in 1994. I'll continue to keep my
eye on these markets, and if valuations become
attractive again, I'll be tempted to move back in.
"By the end of 1993, Japanese stock prices, on the
other hand, had fallen by more than 50% since 1990.
In January 1994, the Japanese market appeared to
be one of the most attractively valued in the world. In
particular, the stocks of many of the larger
brand-name exporters were trading at their lowest
level of valuation in 10 years. I still feel that a
weakening yen would bode very well for the
earnings of these exporters; many have effectively
cut costs and restructured their operations. So
valuation played a major role in my decision to
reduce the fund's investments in emerging markets,
and increase its stake in Japan from about 15% six
months ago to roughly 38% on April 30."
(bullet) In addition to major exporters, the fund's stake in
Japan includes three of the countries largest
brokerage companies: Daiwa, Nikko and Nomura.
Trading volumes on Japan's stock exchanges are
down nearly 80% from their peak levels several
years ago. These brokerage firms offer attractive
stock valuations, coupled with the potential for
earnings growth should trading volume rise in
Japan.
(bullet) The fund invests in several types of derivative
instruments. In a broad sense, derivatives are
financial arrangements whose prices are derived from
other securities, currencies or indices. The fund has
the flexibility to use derivatives when they can add
value. For example, the fund has used forward
currency contracts and, to a lesser extent, currency
options to hedge against currency volatility, and has
used futures on the Nikkei Average to gain exposure
to the Japanese stock market. The fund also has an
investment in indexed securities, or structured
notes, linked mainly to foreign interest rates or
foreign stock markets. These indexed securities are
like customized bonds, and allow the manager to
design investments that target the specific
combination of market and currency exposure he
believes the fund needs.
INTERNATIONAL GROWTH & INCOME
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Argentina 6.7%
Row: 1, Col: 1, Value: 21.1
Row: 1, Col: 2, Value: 2.3
Row: 1, Col: 3, Value: 14.5
Row: 1, Col: 4, Value: 3.9
Row: 1, Col: 5, Value: 27.1
Row: 1, Col: 6, Value: 5.2
Row: 1, Col: 7, Value: 5.5
Row: 1, Col: 8, Value: 5.3
Row: 1, Col: 9, Value: 3.1
Row: 1, Col: 10, Value: 5.3
Row: 1, Col: 11, Value: 6.7
Canada 5.3%
United States 10.7%
Denmark 3.1%
France 5.3%
Sweden 2.3%
Germany 5.5%
Italy 5.2%
Other 14.5%
Netherlands 3.9%
Japan 37.5%
AS OF OCTOBER 31, 1993
Denmark 2.3%
Row: 1, Col: 1, Value: 22.0
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 3.5
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 14.8
Row: 1, Col: 7, Value: 4.9
Row: 1, Col: 8, Value: 14.9
Row: 1, Col: 9, Value: 2.9
Row: 1, Col: 10, Value: 7.4
Row: 1, Col: 11, Value: 7.5
Row: 1, Col: 12, Value: 2.3
France 7.5%
United States 22.0%
Germany 7.4%
Italy 2.9%
United
Kingdom
7.5%
Japan 14.9%
Switzerland 7.4%
Sweden 3.5%
Netherlands 4.9%
Spain 4.9%
Other 14.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and equity futures 60.5 69.5
Bonds 29.3 8.7
Short-term and other investments 10.2 21.8
TOP TEN STOCKS
· Enlarge/Download Table
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Suzuki Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.7 0.3
Hitachi Ltd.
(Japan, Electronics) 1.2 0.4
Veba Vereinigte Elektrizetaets & Bergwerks AG Ord.
(Germany, Electric Utilities)
1.2 1.0
Honda Motor Co. Ltd.
(Japan, Autos, Tires, & Accessories) 1.2 -
Daiwa Securities
(Japan, Securities Industry) 1.1 -
Matsushita Electric Industrial Co. Ltd. (Japan, Consumer Electronics)
1.1 -
Schlumberger Ltd.
(Netherlands, Energy Services) 1.1 -
Nomura Securities Co. Ltd.
(Japan, Securities Industry) 1.0 0.4
British Petroleum PLC Ord.
(United Kingdom, Oil & Gas) 1.0 0.5
Toyota Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.0 0.4
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Durables 14.9 2.3
Finance 10.2 32.7
Technology 8.4 3.0
Basic Industries 6.6 3.6
Energy 4.1 2.5
Utilities 3.7 7.8
Industrial Machinery & Equipment 2.7 2.3
Retail & Wholesale 2.6 5.1
Construction & Real Estate 1.9 5.4
Nondurables 1.2 1.3
INTERNATIONAL GROWTH & INCOME
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 49.4%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.3%
Goodman Fielder Ltd. Ord. 4,500,000 $ 4,892,670 38238210
AUSTRIA - 0.2%
Mayr Melnhof Karton AG (d) 50,000 3,193,458 57847192
BELGIUM - 0.2%
Tessenderlo Chemie NV 8,900 2,648,615 88161299
BERMUDA - 0.4%
ACE Ltd. 200,000 5,700,000 00499G92
CANADA - 2.6%
Alcan Aluminum Ltd. 491,000 10,297,969 01371610
American Barrick Resources Corp. 53,000 1,221,794 02451E10
Canadian Pacific Ltd. Ord. 244,700 3,937,639 13644030
Cominco Fertilizer Ltd. 139,000 2,613,727 20043C10
Inco Ltd. 20,000 484,559 45325840
Methanex Corp. 450,400 4,845,376 59151K10
Midland Walwyn, Inc. (b) 500,000 3,977,725 59780110
Noranda, Inc. 154,000 2,686,953 65542210
QUNO Corp. 47,200 810,733 74726H10
Sherritt Gordon Mines Ltd. (b) 792,200 6,732,013 82428010
37,608,488
CHINA (PEOPLES REPUBLIC) - 0.1%
Yizheng Chemical Fibre Co.
Class H (d) 2,598,000 807,173 99599E22
DENMARK - 0.7%
Den Danske Bank Group AS (b) 49,900 2,764,415 24820692
FLS Industries (Smidth) Class B 24,800 2,066,587 35599092
Unidanmark AS Class A 150,000 5,300,721 92399792
10,131,723
FINLAND - 0.6%
Kone Corp. Class B Ord. 11,000 1,277,339 50400092
Outokumpu OY Class A 215,800 3,472,815 69099992
Repola OY 178,700 3,176,030 75999A92
7,926,184
FRANCE - 0.6%
Alcatel Alsthom CGE 38,000 4,600,566 01390492
Unibail (b) 18,550 1,672,057 90499592
UFB Locabail SA 33,400 2,526,546 90599B92
8,799,169
HONG KONG - 0.2%
Sun Hung Kai & Co. Ltd. 3,678,000 1,999,765 86690810
Sun Hung Kai Properties Ltd. 187,000 1,125,675 86676H10
3,125,440
GERMANY - 5.5%
Bayer AG 32,600 7,761,717 07273010
Bayerische Motor Werke (BMW) (b) 22,500 12,256,650 05528310
Continental Gummi-Werke AG (b) 65,600 11,493,882 21199010
Deutsche Bank AG 26,000 12,280,048 25152592
Douglas Holdings AG 15,500 5,585,248 25950099
Hoechst AG Ord. 22,500 4,958,434 43439010
Karstadt AG 5,000 1,901,451 48576499
Kaufhof AG 17,700 5,832,225 48615210
Veba Vereinigte Elektrizetaets &
Bergwerks AG Ord. 55,400 17,212,854 92239110
79,282,509
INDIA - 0.0%
ITC Ltd. GDS (1 share &
1/3 warrant) (b)(d) 39,000 721,500 45031810
IRELAND - 0.1%
Smurfit (Jeff) Group PLC 241,300 1,171,753 84699793
SHARES VALUE (NOTE 1)
ITALY - 0.9%
Fiat Spa 1,515,000 $ 6,592,250 31562110
SIP Spa 2,310,000 6,912,259 78401792
13,504,509
JAPAN - 22.9%
Aiwa Co. Ltd. 169,000 4,327,786 00959999
Aoyama Trading Co. Ord. 119,000 5,508,717 03799092
Bridgestone Corp. 311,000 4,655,965 10844110
Canon, Inc. 706,000 11,473,453 13780199
Casio Computer Co. Ltd.:
Ord. 832,000 10,325,228 14761893
(warrants) (b) 800 380,000 14761896
Daiwa Securities 1,009,000 15,801,344 23499010
Fujitsu Ltd. (b) 926,000 9,302,865 35959010
Hitachi Ltd. 1,848,000 17,473,450 43357810
Hitachi Ltd. ADR 77,000 7,305,375 43357850
Hitachi Maxell Ltd. 575,000 11,609,871 43358990
Honda Motor Co. Ltd. 1,000,000 16,546,830 43812810
Honda Motor Co. Ltd. ADR 130,000 4,290,000 43812830
Kamei Corp. 205,000 2,645,031 48399792
Kaneshita Construction Co. Ltd.
Ord. (b) 137,000 2,374,865 49099592
Kenwood Corp. 263,000 2,276,933 49178692
Kokusai Securities 382,000 7,374,372 50299092
Komori Corp. 154,000 4,156,013 50046299
Kyocera Corporation 30,000 1,891,067 50155610
Marui Co. Ltd. 392,000 6,486,357 60444310
Matsushita Electric Industrial Co. Ltd. 946,000 15,560,130 57687910
Matsushita Electric Works Ltd. 530,000 6,003,151 57688110
Matsuzakaya Co. Ltd. 8,800 125,677 57699492
Nikko Securities 496,000 5,960,010 65399010
Nishimatsu Construction 185,000 2,113,662 65299C22
Nissan Motor Co. Ltd. Ord. 1,138,000 9,639,315 65474491
Nisshinbo Industries 385,000 4,057,423 65411310
Nitto Denko Corp. 370,000 5,357,038 65480230
Nomura Securities Co. Ltd. 662,000 14,409,734 65536130
Sekisui Chemical 774,000 7,928,299 81699210
Shinetsu Chemical 105,000 2,161,430 82499210
Sony Corp. 240,500 13,644,046 83569999
Sony Corp. ADR 36,100 2,017,088 83569930
Suzuki Motor Corp. 1,813,000 24,106,663 86958592
TDK Corp. 277,000 12,495,420 87235110
Taiyo Yuden Co. Ltd. 407,000 4,449,621 87404799
Tokyo Style Co. Ltd. 231,000 4,209,102 88999410
Toshiba Corp. 861,000 6,529,798 89149310
Toyobo Co. 1,575,000 6,996,213 90899392
Toyota Motor Corp. 716,000 14,033,686 89399999
Toyota Motor Corp. ADR 175,000 6,803,125 89233130
Uny Co. Ltd. 351,000 5,047,376 91529010
Yurtec Corp. (b) 154,000 3,837,486 97299492
Zexel Corp. 643,000 3,964,526 99099392
327,655,541
KOREA (SOUTH) - 0.2%
Asia Motors Co., Inc. 61,200 992,596 04499B22
Korea Electric Power Corp. 35,000 1,213,321 50099B92
2,205,917
MALAYSIA - 0.0%
Tenega Nasional BHD 3,000 16,693 92099992
MEXICO - 0.6%
Grupo Financiero Bancomer SA de
CV sponsored ADR, Series C (d) 182,000 4,481,750 40048610
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 75,000 4,415,625 87940378
8,897,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - 3.9%
Akzo Nobel NV Ord. 83,300 $ 10,037,280 01019910
DSM NV 119,400 8,901,136 23332H92
International Nederlanden Groep CVA 90,000 3,761,917 46099892
KBB NV Ord. 71,600 4,099,694 48130092
KLM Royal Dutch Airlines Ord. (b) 110,000 3,169,944 48251620
Pirelli Tyre Holdings NV Ord. (b) 938,900 9,356,129 72499092
Schlumberger Ltd. 279,200 15,356,000 80685710
Twentsche Kabel Holding NV 15,000 1,656,343 91030099
56,338,443
NEW ZEALAND - 0.4%
Brierley Investments Ltd. 7,147,211 5,406,079 10901410
NORWAY - 1.9%
Bergesen Group Class B 50,000 1,109,390 08399011
Norsk Hydro AS:
ADR (b) 47,300 1,602,288 65653160
Ord. 249,600 8,463,851 65653150
Olav Thon Eiendomsselskp Ord. 106,700 1,548,514 67941099
Orkla AS Class A Free shares 330,400 10,834,903 39299193
Saga Petroleum AS B Free shares 278,000 3,064,708 84099794
26,623,654
SINGAPORE - 0.0%
Kim Eng Holdings Ltd. 310,000 550,259 49499D92
SOUTH AFRICA - 0.7%
Anglo American Corp. of South
Africa Ltd.:
ADR 3,200 157,600 03486130
(Reg.) (b) 30,700 1,559,892 03486110
Buffelsfontein Gold Mining Co. Ltd.:
ADR 76,300 758,231 11987120
Ord. 11,500 106,919 11987110
De Beers Consolidated Mines Ltd. ADR 25,600 608,000 24025330
Driefontein Consolidated Ltd.:
ADR 42,500 488,750 26202640
Ord. 75,500 889,675 26202630
Free State Consolidated Gold Mines Ltd.:
ADR 148,382 1,984,609 35614220
Ord. 25,578 352,562 35614210
Vaal Reefs Exploration & Mining Co.
Ltd.:
ADR 60,000 521,250 91850640
(Reg.) (b) 9,400 845,492 91850610
Western Deep Levels Ltd.:
ADR 18,300 683,963 95807720
Ord. 14,700 572,108 95807710
9,529,051
SPAIN - 1.5%
Argentaria Corp. Bancaria de Esp 264,000 11,471,867 21991392
FEC SA (Fuerzas Electricas Cataluna)
Class E 750,000 5,565,457 35899E22
Union Electrica Fenosa 800,000 4,005,200 90659510
21,042,524
SWEDEN - 2.3%
Aktiebolaget Electrolux 247,000 13,165,379 01019810
Avest Sheffield AB Ord. Free shares (b) 835,000 5,481,090 05399892
Frontline (b) 760,000 2,045,396 35999F22
SKF AB Ord. (b) 387,200 7,980,781 78437530
Scribona AB B Free shares (b) 68,500 449,646 81199B92
Skandinaviska Enskilda Banken Class A
Free shares (b) 300,000 2,067,717 88099222
Trelleborg AB Class B Free shares (b) 100,000 1,378,477 89491010
32,568,486
SHARES VALUE (NOTE 1)
SWITZERLAND - 0.1%
Globus Magazine Part. Cert. 3,175 $ 2,115,686 37957792
UNITED KINGDOM - 1.4%
British Petroleum PLC:
ADR 76,500 5,355,000 11088940
Ord. 2,404,500 14,084,479 11088910
19,439,479
UNITED STATES OF AMERICA - 1.1%
Amerada Hess Corp. 118,700 5,964,675 02355110
American Cyanamid Co. 120,700 5,672,900 02532110
American President Companies Ltd. 43,100 878,163 02910310
Imo Industries, Inc. 19,200 201,600 45254010
Kerr-McGee Corp. 61,000 2,729,750 49238610
15,447,088
TOTAL COMMON STOCKS
(Cost $657,726,276) 707,349,466
PREFERRED STOCKS - 0.7%
CONVERTIBLE PREFERRED STOCKS - 0.1%
AUSTRALIA - 0.0%
TNT Ltd. 8% 309,600 504,920 93599293
UNITED STATES OF AMERICA - 0.1%
Unocal Corp. $3.50 (d) 28,800 1,548,000 91528920
TOTAL CONVERTIBLE PREFERRED STOCKS 2,052,920
NONCONVERTIBLE PREFERRED STOCKS - 0.6%
AUSTRIA - 0.0%
Maculan Holding Ord. 9,000 866,882 55699594
ITALY - 0.5%
Fiat Spa D Risp Ord. 2,609,600 6,944,772 31599C95
KOREA (SOUTH) - 0.1%
Daewoo Heavy Industries Ltd. 74,827 935,685 23999494
TOTAL NONCONVERTIBLE PREFERRED STOCKS 8,747,339
TOTAL PREFERRED STOCKS
(Cost $9,095,382) 10,800,259
CORPORATE BONDS - 5.7%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 5.1%
ITALY - 0.9%
Softe SA euro 4 1/4%,
7/30/98 (c) - ITL 15,865,000 12,706,200 84499DAA
JAPAN (C) - 4.2%
Bridgestone Corp.:
3.70%, 12/31/98 - JPY 166,000 2,084,611 1084419A
3 4/5%, 12/31/99 - JPY 170,000 2,134,843 1084419C
Canon, Inc. 1.30%,
12/19/08 - JPY 1,569,000 17,617,046 1378019A
Matsushita Electric Industrial
Co. Ltd. 3.30%,
5/20/94 Aa2 JPY 1,113,000 10,962,271 5768799B
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CONVERTIBLE BONDS - CONTINUED
JAPAN - CONTINUED
Matsushita Electric Works Co.
Ltd. 2.70%, 5/31/02 - JPY 1,079,000 $ 12,859,198 5768819A
Nippondenso Co. Ltd. 1 3/5%,
12/20/02 - JPY 813,000 9,769,171 6546379D
Nishimatsu Construction
3.90%, 3/31/99 - JPY 264,000 3,081,250 65299CAA
Shin-Etsu Chemical Co. Ltd.
1.30%, 3/31/99 A2 JPY 181,000 2,089,355 824992AA
60,597,745
TOTAL CONVERTIBLE BONDS 73,303,945
NONCONVERTIBLE BONDS - 0.6%
CZECH REPUBLIC - 0.0%
Komercni Banka 0%,
5/3/98 (e)(g) - CSK 30,000,000 998,637 50499CAB
MEXICO - 0.6%
Bancomext:
euro:
8%, 4/14/00 Ba2 $ 1,000,000 907,500 0596129A
8%, 8/5/03 Ba2 1,500,000 1,276,875 0596129C
8%, 8/5/03 (d) Ba2 1,500,000 1,276,875 059612AD
Cemex SA notes 8 7/8%,
6/10/98 (d) Ba2 3,000,000 2,932,500 151290AG
Empaques Ponderosa SA
euro 8 3/4%, 12/6/96 - 530,000 514,100 2915789B
Empresas La Moderna SA
10 1/4%, 11/12/97 (d) - 1,000,000 1,030,000 292449AA
7,937,850
TOTAL NONCONVERTIBLE BONDS 8,936,487
TOTAL CORPORATE BONDS
(Cost $80,922,246) 82,240,432
GOVERNMENT OBLIGATIONS (H) - 23.6%
ARGENTINA - 6.7%
Argentina Republic (e):
BOCON:
0%, 4/1/01 - ARP 6,451,666 3,900,737 039995AH
0%, 4/1/01 B1 47,897,433 33,509,523 039995AF
0%, 9/1/02 - ARP 2,886,328 1,432,776 039995AJ
0%, 9/1/02 - 7,382,760 4,669,153 039995AM
0%, 4/1/07 - ARP 14,347,455 6,089,518 039995AW
Brady euro 4 1/2%,
3/31/23 B1 28,000,000 14,805,000 039995AD
euro 5%, 3/31/05 - 43,500,000 31,700,625 039995AU
Province of Chaco 11 7/8%,
9/10/97 (g) - 300,000 297,750 74399JAA
96,405,082
BRAZIL - 0.7%
Brazil Federative Republic IDU
euro 4.3125%, 1/1/01 (e) - 12,870,000 9,346,837 1057569E
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CANADA - 2.7%
Canadian Government:
6 1/2%, 6/1/04 Aaa CAD 17,000,000 $ 10,856,295 135087VD
9 1/2%, 6/1/10 Aaa CAD 17,000,000 13,416,808 135087RS
Province of Ontario 7 3/4%,
12/8/03 Aa2 CAD 20,000,000 13,483,474 6832349H
37,756,577
CZECH REPUBLIC - 0.1%
Czech Republic 14%, 7/8/96 - CSK 30,000,000 1,089,699 23299BAB
DENMARK (C) - 2.4%
Danish Government Bullet:
8%, 5/15/03 Aa1 DKK 104,300 16,959,368 249998AG
7%, 2/15/04 Aa1 DKK 116,250 17,679,009 249998AV
34,638,377
FINLAND - 0.7%
Finnish Government 9 1/2%,
3/15/04 Aa2 FIM 52,000,000 10,361,265 3178739V
FRANCE (C) - 4.7%
French Government:
OAT:
8 1/2%, 11/25/02 Aaa FRF 10,500 2,067,339 3517779U
8 1/2%, 4/25/03 Aaa FRF 50,000 9,840,050 351996AQ
8 1/2%, 4/25/23 Aaa FRF 25,000 5,001,325 351996AC
Strips 4/25/23 Aaa FRF 1,327,500 27,239,769
8 1/2%, 12/26/12 Aaa FRF 120,000 23,567,340 3517779J
67,715,823
ITALY (C) - 2.9%
Italian Government:
euro 5 1/8%, 7/29/03 A1 ITL 500,000 5,111,800 46599BAY
11%, 6/1/03 Aa3 ITL 48,980,000 33,006,983 46599BAD
10%, 8/1/03 Aa3 ITL 4,700,000 3,046,070 46599BAW
41,164,853
MEXICO - 0.4%
Mexican Government Brady
6.63%, 12/31/19 Ba2 FRF 54,750,000 5,951,090 597998VQ
NEW ZEALAND - 1.7%
Government of New Zealand
8%, 4/15/04 Aa3 NZD 40,900,000 24,804,408 6501629K
UNITED STATES OF AMERICA - 0.6%
U.S. Treasury Bills 0%,
5/5/94 Aaa $ 6,500,000 6,498,015 912794K4
U.S. Treasury Notes 9 1/4%,
1/15/96 Aaa 2,000,000 2,116,560 912827XB
8,614,575
TOTAL GOVERNMENT OBLIGATIONS
(Cost $358,671,315) 337,848,586
INDEXED SECURITIES - 2.3%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
UNITED STATES OF AMERICA - 2.3%
Bankers Trust Company:
0%, 9/16/94 (indexed to value
of 2.5-year United Kingdom
securities, multipled 8,
min. 92.43% of par) (e) $ 3,747,000 $ 3,503,070 06699DAU
4%, 9/29/94 (indexed to value
of 2.5-year United Kingdom
securities, multipled 8,
min. 92.4% of par) (e) 1,650,000 1,550,010 06699DBD
0%, 12/23/94 (coupon
inversely indexed to CAD
Banker's Acceptance rate
and principal indexed to
value of 1-year Canadian
securities, both multiplied
by 13) (f) 2,000,000 1,077,200 0669919R
4.81%, 12/29/94 (coupon
inversely indexed to
HELIBOR and principal
indexed to value of
2-year Finnish securities,
both multiplied by 8) (f) 2,000,000 1,427,600 0669919S
0%, 1/26/95 (coupon
inversely indexed to STIBOR
and principal indexed
to value of 2-year Swedish
securities, both multiplied
by 9) (f) 2,000,000 1,086,800 0669919Y
0%, 1/31/95 (coupon
inversely indexed to
STIBOR and principal
indexed to value
of 2-year Swedish
securities, both multiplied
by 9) (f) 1,200,000 683,400 06699DAC
0%, 2/22/99 (indexed to
Japanese stock index
minus S&P 500, multiplied
by 1.226%) 3,000,000 2,780,700 06699DAL
Bayerische Landesbank cert.
of dep.:
4.9525%, 12/22/94
(coupon inversely indexed
to HELIBOR and principal
indexed to value of 2-year
Finnish securities, both
multiplied by 8) (f) 5,000,000 3,635,000 072999AP
0%, 1/25/95 (inversely
indexed to 2-year SEK
LIBOR, multiplied by 9) 1,000,000 553,300 072999AR
22.31%, 3/22/95 (coupon
inversely indexed to
HELIBOR and principal
indexed to value of 3-year
Finnish securities, both
multiplied by 7) (f) 1,000,000 962,500 072999AX
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
Citibank Nassau:
4%, 9/29/94 (indexed to
value of 2.5-year British
securities, multiplied by 8,
min. 92.11% of par) (e) $ 4,650,000 $ 4,316,595 223991CP
0%, 12/23/94 (coupon
inversely indexed to
STIBOR and principal
indexed to value of 2-year
Swedish securities, both
multiplied by 9) (f) 5,000,000 3,050,500 223991BM
0%, 12/29/94 (coupon
inversely indexed to CAD
Banker's Acceptance rate
and principal indexed
to value of 1-year
Canadian securities, both
multiplied by 13) (f) 750,000 395,475 223991BP
0%, 1/18/95 (coupon
inversely indexed to
STIBOR and principal
indexed to 2-year Swedish
securities, both multiplied
by 9) (f) 1,000,000 564,700 223991BQ
ITT Corp. 3.66%, 6/27/94
(inversely indexed to 1-year
SEK swap rate, multiplied
by 10) 5,000,000 4,800,500 4506799M
Merrill Lynch & Co. Inc. Japan
Index equity participation
securities 0%, 1/31/00 2,730,000 2,648,100 590188FE
TOTAL INDEXED SECURITIES
(Cost $41,727,000) 33,035,450
CERTIFICATES OF DEPOSIT - 0.1%
MALAYSIA - 0.1%
Public Bank Malaysia 6 1/2%,
9/14/94 (Cost $741,636) MYR 2,000,000 746,414
COMMERCIAL PAPER - 1.2%
INDONESIA - 0.6%
Indonesian Bank (SBI) (c):
0%, 5/13/94 IDR 3,500,000 $ 1,616,320 06099MAF
0%, 1/6/95 IDR 6,000,000 2,573,574 06099MAD
0%, 1/13/95 IDR 9,000,000 3,852,000 06099MAE
8,041,894
MALAYSIA - 0.6%
Bank Negara Malaysia 0%,
9/7/94 MYR 25,000,000 9,137,285 06399DAP
TOTAL COMMERCIAL PAPER
(Cost $17,359,013) 17,179,179
REPURCHASE AGREEMENTS - 17.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 243,592,244 $243,520,000
PURCHASED OPTIONS - 0.0%
EXPIRATION
DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
Put Option on JPY July 94/109.50 $ 26,962,474 $ 72,481 73499342
Put Option on JPY Aug. 94/103.71 19,407,958 283,033
TOTAL PURCHASED OPTIONS
(Cost $1,237,289) 355,514
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,411,000,157) $ 1,433,075,300
WRITTEN OPTIONS
EXPIRATION DATE/ UNDERLYING FACE UNREALIZED
STRIKE PRICE AMOUNT AT VALUE GAIN/(LOSS)
Call Option on JPY July 94/106.50 $ 26,223,776 $ (918,783)
Call Option on JPY Aug. 94/102.50 19,181,523 (95,038)
TOTAL WRITTEN OPTIONS
(Premium Received $1,186,602) $ 45,405,299 $ (1,013,821)
THE FACE VALUE OF WRITTEN CALL OPTIONS AS A PERCENTAGE OF TOTAL INVESTMENT
IN SECURITIES - 3.2%
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
1,490 Nikkei Stock Average
Contracts June 1994 $ 149,517,850 $ (3,497,850)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 10.4%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
57,984,888 ATS 5/10/94 $ 4,988,861 $ 191,051
15,081,500 CHF 5/2/94 10,748,163 134,116
436,080,216 ESP 5/3/94 15,907,790 382,616
29,798,500 FRF 5/2/94 5,265,683 62,068
4,674,834 GBP 5/16/94 to
6/29/94 7,084,232 111,253
14,046,900 NLG 5/10/94 to
6/6/94 25,863,551 585,669
40,902,500 SEK 5/5/94 5,366,536 184,544
TOTAL CONTRACTS TO BUY
(Payable amount $73,573,499) $ 75,224,816 $ 1,651,317
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.2%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
86,437,500 ATS 5/10/94 $ 7,436,846 $ (317,972)
911,402,478 BEF 5/4/94 to
6/30/94 26,691,766 (1,043,721)
34,189,203 CAD 5/18/94 to
6/29/94 24,654,156 109,783
30,163,000 CHF 5/2/94 to
8/2/94 21,511,130 (517,935)
62,747,600 DEM 5/11/94 to
7/18/94 37,910,257 (2,135,257)
40,175,400 DKK 7/7/94 6,176,175 (176,175)
2,142,588,492 ESP 5/3/94 15,907,791 (902,583)
483,259,930 FRF 5/2/94 to
8/8/94 85,201,080 (1,885,885)
4,674,834 GBP 5/16/94 to
6/29/94 7,084,232 (125,729)
32,855,839,375 JPY 5/31/94 to
7/25/94 324,297,021 (14,144,997)
138,720,515 NLG 5/10/94 to
6/13/94 74,640,877 (2,304,895)
40,902,500 SEK 5/5/94 5,366,536 (247,645)
TOTAL CONTRACTS TO SELL
(Receivable amount $613,184,856) $ 636,877,867 $ (23,693,011)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 44.4%
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
ATS - Austrian schilling
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
CSK - Czech koruna
DKK - Danish krone
NLG - Dutch guilder
FIM - Finnish markka
FRF - French franc
DEM - German Deutsche mark
IDR - Indonesian rupiah
ITL - Italian lira
JPY - Japanese yen
MYR - Malaysian ringgit
NZD - New Zealand dollar
SEK - Swedish krona
CHF - Swiss franc
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Principal amount in thousands
4. 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 $15,991,256 or 1.1% of net
assets.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
7. 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
Province of Chaco 11 7/8%,
9/10/97 3/9/94 $ 308,208
Komercni Banka 0%, 5/3/98 3/3/94 $ 1,006,711
8. Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR,
the fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 14.9% AAA, AA, A 15.1%
Baa 0.0% BBB 0.0%
Ba 0.9% BB 2.8%
B 4.1% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 3.6%. FMR has determined that unrated
debt securities that are lower quality account for 0.4% of the total value
of investment in securities.
At the end of the period, restricted securities (excluding 144A issues)
amounted to $1,296,387 or 0.1% of net assets.
Purchases and sales of securities, other than short-term securities,
aggregated $1,176,229,208 and $856,869,097, respectively.
The market value of futures contracts opened and closed amounted to
$289,800,600 and $140,282,750, respectively.
The following is a summary of the fund's written options activity:
AGGREGATE
NUMBER OF FACE VALUE
CONTRACTS OF CONTRACTS
Call Option on JPY:
Outstanding at November 1, 1993 - -
Contracts opened 2 $ 46,419,120
Contracts closed - -
Outstanding at April 30, 1994 2 $ 46,419,120
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 $9,815 for the period.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $14,177,000 and $14,177,000, respectively. The
weighted average interest rate was 3 7/8%. Interest expense includes $1,526
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,411,041,681. Net unrealized appreciation aggregated
$22,033,619, of which $98,921,557 related to appreciated investment
securities and $76,887,938 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 6.6%
Conglomerates 0.4
Construction & Real Estate 1.9
Durables 14.9
Energy 4.1
Finance 10.2
Government Obligations 24.1
Health 0.4
Industrial Machinery & Equipment 2.7
Nondurables 1.2
Precious Metals 0.5
Repurchase Agreements 17.0
Retail & Wholesale 2.6
Services 0.5
Technology 8.4
Transportation 0.8
Utilities 3.7
100.0%
INTERNATIONAL GROWTH & INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
· Download Table
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements
of $243,520,000) (cost $1,411,000,157)
$ 1,433,075,300
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost $73,573,499)
75,224,816
(Note 2)
Short foreign currency contracts (Note 2)
$ (636,877,867
Contracts held, at value)
Receivable for contracts held
613,184,856 (23,693,011)
Cash
255,588
Receivable for investments sold
16,987,725
Receivable for fund shares sold
4,850,441
Dividends receivable
1,900,643
Interest receivable
9,131,479
Receivable for daily variation on futures contracts
149,000
TOTAL ASSETS
1,517,881,981
LIABILITIES
Payable for foreign currency contracts held (Note 2)
73,573,499
Payable for investments purchased
34,906,042
Net payable for closed foreign currency contracts
54,654
Payable for fund shares redeemed
3,902,049
Accrued management fee
890,336
Written options, at value (premium received $1,186,602)
2,200,423
Other payables and accrued expenses
839,353
TOTAL LIABILITIES
116,366,356
NET ASSETS
$ 1,401,515,625
Net Assets consist of (Note 1):
Paid in capital
$ 1,328,901,985
Undistributed net investment income
5,829,438
Accumulated undistributed net realized gain (loss) on investments
71,262,424
Net unrealized appreciation (depreciation) on:
Investment securities
22,075,143
Foreign currency contracts
(22,041,694)
Futures contracts
(3,497,850)
Written options
(1,013,821)
NET ASSETS, for 80,470,637 shares outstanding
$ 1,401,515,625
NET ASSET VALUE offering price and redemption price per share
($1,401,515,625 (divided by) 80,470,637 shares) (Note 4)
STATEMENT OF OPERATIONS
· Enlarge/Download Table
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 5,305,663
Dividends
Interest 12,468,044
17,773,707
Less foreign taxes withheld (Note 1) (771,552
)
TOTAL INCOME 17,002,155
EXPENSES
Management fee (Note 4) $ 4,730,611
Transfer agent fees (Note 4) 2,023,176
Accounting fees and expenses 261,998
(Note 4)
Non-interested trustees' compensation 3,450
Custodian fees and expenses 486,697
Registration fees 56,570
Audit 22,120
Legal 6,610
Interest (Note 5) 1,526
Miscellaneous 3,589
TOTAL EXPENSES 7,596,347
NET INVESTMENT INCOME 9,405,808
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 67,735,791
Foreign currency contracts (4,728,562
)
Futures contracts 8,479,350 71,486,579
Change in net unrealized appreciation (depreciation) on:
Investment securities (48,663,759
)
Foreign currency contracts (23,468,383
)
Futures contracts (3,497,850
)
Written options (1,013,821 (76,643,813
) )
NET GAIN (LOSS) (5,157,234
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,248,574
OTHER INFORMATION
Deferred sales charges withheld by $4,893
FDC (Note 4)
Accounting fees paid to FSC $258,637
(Note 4)
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
· Download Table
Operations
$ 9,405,808 $ 2,629,481
Net investment income
Net realized gain (loss) on investments
71,486,579 1,087,001
Change in net unrealized appreciation (depreciation) on investments
(76,643,813) 73,793,319
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
4,248,574 77,509,801
Distributions to shareholders
(3,499,228) (1,389,982)
From net investment income
From net realized gain
(1,269,232) (29,697)
In excess of net realized gain
(1,646,787) -
TOTAL DISTRIBUTIONS
(6,415,247) (1,419,679)
Share transactions
825,452,361 1,037,700,151
Net proceeds from sales of shares
Reinvestment of distributions
6,281,537 1,310,736
Cost of shares redeemed
(430,898,657) (172,260,456)
Net increase (decrease) in net assets resulting from
share transactions
400,835,241 866,750,431
TOTAL INCREASE (DECREASE) IN NET ASSETS
398,668,568 942,840,553
NET ASSETS
Beginning of period
1,002,847,057 60,006,504
End of period (including undistributed net investment income of
$5,829,438 and $3,611,891, respectively)
$ 1,401,515,625 $ 1,002,847,057
OTHER INFORMATION
Shares
Sold
46,666,227 64,336,913
Issued in reinvestment of distributions
363,935 99,073
Redeemed
(24,692,694) (10,819,492)
Net increase (decrease)
22,337,468 53,616,494
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
· Enlarge/Download Table
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81
Income from Investment Operations
Net investment income
.13 .14** .31 .30(sub section) .25 .30
Net realized and unrealized gain (loss) on investments
.15# 4.14 (.84) .41 .75 .96
Total from investment operations
.28 4.28 (.53) .71 1.00 1.26
Less Distributions
From net investment income
(.06) (.31) (.16) (.38) (.16) (.13)
From net realized gain
(.02) (.01)(s diamond) (.01)(s diamond)(.05)(s diamond) - (.07)(s diamond)
In excess of net realized gain
(.03) - - - - -
Total distributions
(.11) (.32) (.17) (.43) (.16) (.20)
Net asset value, end of period
$ 17.42 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87
TOTAL RETURN (dagger)(diamond)
1.63% 32.94% (3.81)% 5.43% 7.79% 10.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)
$ 1,401,516 $ 1,002,847 $ 60,007 $ 49,738 $ 35,380 $ 26,333
Ratio of expenses to average net assets
1.26%* 1.52% 1.62% 1.89% 1.98% 1.92%
Ratio of expenses to average net assets before expense
1.26%* 1.52% 1.62% 1.89% 1.98% 2.16%
reductions
Ratio of net investment income to average net assets
1.56%* .87% 2.78% 2.86% 2.31% 1.98%
Portfolio turnover rate
184%* 24% 76% 117% 102% 147%
* ANNUALIZED
(sub section) INCLUDES $.02 PER SHARE FROM RECOVERY OF FOREIGN TAXES
PREVIOUSLY WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
** NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
# THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD ENDED DUE TO
THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
(diamond)THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
OVERSEAS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Overseas has a
3% sales charge, which, beginning May 31, 1994, has been waived through
June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTH YEAR YEARS FUND
S
OVERSEAS 8.27% 23.19% 47.56% 518.83%
OVERSEAS
(INCL. 3% SALES CHARGE) 5.02% 19.49% 43.13% 500.27%
Morgan Stanley EAFE
Index 5.57% 16.64% 17.76% 413.88%
Average International
Fund 6.70% 21.97% 51.95% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 4, 1984. You can compare the fund's
figures to the performance of the Morgan Stanley EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East. You can also compare the fund's performance to the average
international fund which reflects the performance of 170 funds with similar
objectives tracked by Lipper Analytical Services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
OVERSEAS 23.19% 8.09% 21.37%
OVERSEAS
(INCL. 3% SALES CHARGE) 19.49% 7.44% 20.98%
Morgan Stanley EAFE Index 16.64% 3.32% 19.00%
Average International Fund 21.97% 8.50% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Overseas (094) MS EAFE
12/04/84 9700.00 10000.00
12/31/84 9981.30 10193.53
01/31/85 10689.40 10422.65
02/28/85 10640.90 10361.03
03/31/85 11067.70 11164.76
04/30/85 11504.20 11126.55
05/31/85 12464.50 11599.34
06/30/85 12697.30 11897.35
07/31/85 13473.30 12511.82
08/31/85 14055.30 12913.71
09/30/85 14559.70 13669.40
10/31/85 15442.40 14599.44
11/30/85 16548.20 15198.76
12/31/85 17833.85 15918.65
01/31/86 18371.30 16317.71
02/28/86 21078.14 18125.28
03/31/86 24703.54 20674.06
04/30/86 25465.75 22027.83
05/31/86 24654.68 21048.78
06/30/86 26579.76 22481.82
07/31/86 29579.75 23869.90
08/31/86 31543.92 26221.76
09/30/86 30078.12 25952.02
10/31/86 26296.37 24218.32
11/30/86 28758.91 25614.83
12/31/86 30183.41 26972.00
01/31/87 34828.46 29838.08
02/28/87 35945.95 30731.05
03/31/87 40010.55 33249.27
04/30/87 43001.48 36767.40
05/31/87 42837.14 36767.26
06/30/87 39824.30 35595.88
07/31/87 40415.91 35533.69
08/31/87 43779.34 38198.08
09/30/87 43242.50 37596.71
10/31/87 33853.39 32164.65
11/30/87 33579.50 32647.11
12/31/87 35727.39 33616.52
01/31/88 34338.32 34216.71
02/29/88 35428.67 36497.48
03/31/88 37579.48 38741.56
04/30/88 38565.27 39304.55
05/31/88 37788.59 38044.60
06/30/88 36713.18 37041.81
07/31/88 36235.22 38203.95
08/31/88 35144.88 35719.99
09/30/88 36459.26 37280.76
10/31/88 37788.59 40470.59
11/30/88 38774.38 42881.27
12/31/88 38677.38 43120.36
01/31/89 39151.29 43879.03
02/28/89 40175.55 44104.58
03/31/89 39823.94 43238.97
04/30/89 40680.04 43639.99
05/31/89 38723.24 41265.84
06/30/89 37591.96 40571.18
07/31/89 41322.11 45665.83
08/31/89 40359.00 43612.06
09/30/89 42514.54 45598.67
10/31/89 40206.13 43766.63
11/30/89 42483.96 45966.76
12/31/89 45226.82 47662.81
01/31/90 44200.40 45889.35
02/28/90 43286.24 42686.52
03/31/90 44713.61 38239.61
04/30/90 44601.34 37936.14
05/31/90 47632.50 42264.70
06/30/90 48482.51 41892.44
07/31/90 50872.16 42482.52
08/31/90 45242.86 38357.11
09/30/90 40223.00 33011.49
10/31/90 44056.06 38155.31
11/30/90 42596.61 35904.60
12/31/90 42240.75 36486.24
01/31/91 43177.92 37666.39
02/28/91 44745.54 41704.18
03/31/91 43280.15 39200.58
04/30/91 43893.57 39585.54
05/31/91 43978.77 39998.59
06/30/91 41218.38 37059.46
07/31/91 43467.59 38880.26
08/31/91 43791.34 38090.68
09/30/91 45716.79 40237.43
10/31/91 45870.15 40807.83
11/30/91 44217.32 38902.74
12/31/91 45879.11 40911.80
01/31/92 46405.83 40037.93
02/29/92 45443.20 38604.89
03/31/92 44498.74 36056.33
04/30/92 47204.99 36227.73
05/31/92 49239.22 38652.66
06/30/92 48076.80 36819.27
07/31/92 45025.46 35876.95
08/31/92 44644.04 38127.18
09/30/92 42791.44 37374.28
10/31/92 39885.40 35413.83
11/30/92 39685.61 35747.08
12/31/92 40623.32 35931.97
01/31/93 41807.32 35927.55
02/28/93 42664.70 37012.81
03/31/93 45563.45 40239.06
04/30/93 48727.57 44057.85
05/31/93 49850.33 44988.34
06/30/93 48666.33 44286.43
07/31/93 50891.43 45836.67
08/31/93 53769.76 48311.07
09/30/93 53300.25 47223.62
10/31/93 55443.69 48678.94
11/30/93 52912.39 44423.89
12/31/93 56894.62 47631.62
01/31/94 60939.26 51658.65
02/28/94 59798.47 51515.57
03/31/94 58076.90 49296.72
04/30/94 60026.62 51388.34
Let's say you invested $10,000 in Fidelity Overseas Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$60,027 - a 500.27% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley EAFE index, which would have grown
to $51,388 over the same period - a 413.88% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
OVERSEAS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Hickling,
Portfolio Manager of Overseas
Q. JOHN, HOW DID THE FUND PERFORM?
A. Quite well. For the six months and year ended April 30, 1994, the fund
had total returns of 8.27% and 23.19%, respectively. It outperformed the
EAFE index - a broad measure of stocks in Europe, Australia and the Far
East - which returned 5.57% and 16.64% over the same periods. The fund also
beat the average international fund, which had a return of 6.70% for the
past six months and 21.97% for the past year, according to Lipper
Analytical Services.
Q. WHY DID THE FUND OUTPERFORM THE INDEX?
A. There were two primary reasons. First, when Japanese stocks began
turning in solid results in 1994, I didn't rush in and buy stocks
indiscriminately as some investors did. I chose my stocks carefully,
focusing on auto, electronics and consumer electronics companies, which all
turned in strong performances. At the end of the period, Japanese companies
made up over 20% of the fund. The second reason the fund beat the index is
that it had substantially more money invested in Italy than the index did.
Over the period, Italy was one of the top-performing markets in the world
for several reasons. First, its economy started to recover a bit, and,
along with this, many Italian companies, such as Fiat, took steps to
significantly cut costs. In addition, interest rates came down and the
country's currency was devalued. As a result of this devaluation, Italy's
exports became less expensive in other countries, and thus, more
competitive. Finally, a new group of conservative politicians with a
pro-business agenda came into power.
Q. WHAT DO YOU THINK IS BEHIND THE TURNAROUND IN JAPAN?
A. A couple of things. First, the economy, which had been depressed,
started to pick up. In addition, many Japanese companies were well placed
to profit from the improving economy because they had taken significant
steps to reduce their costs over the past few years. I should note that
Japanese companies have been able to avoid cutting costs the American way -
through factory closings and layoffs - because in Japan most workers' jobs
have built-in wage flexibility. This means an employee's pay is based
largely on overtime and bonuses, both of which tend to drop off when the
economy falls. As a result, Japanese companies can trim expenses without
reducing head count. Japan's economy also experienced a boost from tax
cuts, an increase in the government's investment spending, dropping oil
prices (an important factor because Japan imports all of its oil), and low
interest rates. Keeping all these factors in mind, I think if the yen stops
strengthening, many Japanese companies could show a substantial profit.
Q. TOYOTA IS ONE OF YOUR TOP STOCKS. IS IT A GOOD EXAMPLE OF A JAPANESE
COMPANY THAT'S BEEN CUTTING COSTS?
A. Absolutely. I was more impressed with Toyota than any other Japanese
company in terms of its cost-cutting measures. It took a number of steps
that helped it effectively reduce production costs. For example, the
company stopped making extras like rear view mirrors in a lot of colors and
styles -something that was considered to be high status in the `80s, but
that made cars more expensive to produce. Instead it started focusing on
keeping production simple and costs down, what Toyota calls "value
engineering." In fact, the company has been so successful in reducing
expenses that it projects the cost of developing its next automobile will
be about 4% of the cost of developing the Lexus, the company's luxury car
introduced in 1989.
Q. ARE JAPANESE COMPANIES TAKING OTHER STEPS TO IMPROVE PRODUCTIVITY?
A. Yes, I believe they are. A number of Japanese companies are moving their
operations overseas, to less expensive locations, such as Malaysia and the
United States. Then they're importing the goods they produce back to Japan.
This makes a lot of sense because it's more expensive to buy or make a
product in Japan than just about anywhere else in the world. Japanese
companies also are importing more goods from other countries. For instance,
car companies are asking themselves, why should we buy steel in Japan and
pay 50% more for it than Ford pays for its steel? As a case in point, Mazda
just announced it was testing steel in Korea, which many market watchers
see as an indication that the car maker plans to buy steel from Korea.
Q. LET'S SWITCH THE FOCUS TO EUROPE. ON THE WHOLE, HOW DID IT LOOK?
A. Europe's economy is several years behind the United States'. The United
States went into recession before Europe did, and while it started coming
out of recession early in 1993, Europe is just beginning to emerge. Over
the past six months, Europe turned in a good performance because many
companies there have implemented strict cost-cutting measures. Going
forward, I believe many companies could see significant increases in
productivity and profits as long as the European economic outlook doesn't
worsen.
Q. WHAT EUROPEAN INDUSTRIES LOOKED GOOD?
A. Over the past year as European economies began to improve, there was a
major shift out of banks and insurance companies and into cyclicals, such
as chemical and automobile companies. Financial stocks fell out of favor
after their stock prices rose dramatically and many investors sold them to
take profits. Cyclicals are stocks that tend to perform well when the
economy does well, or poorly when the economy is weak. Some cyclicals that
turned in good results were the Swiss chemical and pharmaceutical company
Ciba-Geigy; German chemical companies Bayer and Hoechst; and the French
auto maker Peugeot.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. I currently am using forward contracts to
hedge a portion of the fund against currency volatility, and also have a
small position in indexed securities linked to European bond markets.
Q. IN HINDSIGHT, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS?
A. Yes. I was a bit too cautious with my investments in Southeast Asia. I
sold my stocks in some Asian markets, such as Singapore and Malaysia, too
soon, probably about two months before they hit their peak. I should note,
however, that as a result, the fund was out of those markets before they
began falling dramatically in 1994. I also regret not dropping the fund's
European financial stocks, such as National Westminster Bank, earlier
because their prices dropped very quickly.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT GOING FORWARD?
A. In general, I expect 1994 to be a fine year. If the Japanese economy
improves, even slightly, and the yen stays where it is, many companies will
profit from their cost-cutting efforts. I have similar expectations for
Europe. Given the measures many European companies have taken to reduce
expenses and an expected moderate economic environment, I think European
companies may become increasingly profitable.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in stocks in
Europe, the Far East, and the Pacific Basin
START DATE: December 4, 1984
SIZE: as of April 30, more than $1.9 billion
MANAGER: John Hickling, since January 1993;
manager Advisor Overseas, since February
1993; VIP: Overseas, since January 1993;
Fidelity Japan Fund, since May 1993; previously
managed Fidelity Europe, International Growth
and Income, International Opportunities (now
Emerging Markets), and Pacific Basin funds.
(checkmark)
JOHN HICKLING ON PICKING STOCKS:
"I tend to be a bottom up investor. That means I
usually invest in specific companies I expect to
perform well, instead of certain countries or regions
that look good. To make sound decisions about
companies, I try to visit as many of them as I can.
And if I can't go there, a lot of companies'
representatives visit us in the United States. In
addition to me, Fidelity has about 50 analysts
traveling around the globe and meeting with
companies.
"When I visit a country, I try to meet with at least four
companies a day. At the end of the week, I come
away with a great idea of what's happening in the
country. You become totally immersed in the
companies you visit and get a great overview of the
country's economic outlook. That's because you're
talking to the guys on the front line of the economy -
the people who make the decisions about a
company's inventory, production, purchasing and
costs - not an economics professor in an ivory
tower.
"In Japan, company meetings may be even more
important because there isn't as much written
information - or formal disclosure - as you have
access to in most western companies. Much like
other Asian countries, Japan is very much what I call
a `relationship market,' and it also is a much more
formal society. You can't just walk into a company
cold and expect to get information. On the other
hand, if you've been meeting with a company for
years, Japanese business people tend to speak with
you freely. That's why it's important that Fidelity has
an established presence in Japan."
(bullet) The fund's holdings in cash and short-term
investments are up substantially from six months
ago as the fund shifted to cash as a defensive
measure.
(bullet) The fund was big on oil companies, such as
French companies Elf Aquitaine and Total, which
were inexpensive on a cash flow basis but had high
yields. Cash flow is the amount of money a company
has left over after capital expenditures and taxes.
British Petroleum in the U.K. and Petrofina in
Belgium also turned in solid performances.
OVERSEAS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Australia 2.0%
United States 16.4%
Row: 1, Col: 1, Value: 16.4
Row: 1, Col: 2, Value: 8.800000000000001
Row: 1, Col: 3, Value: 5.7
Row: 1, Col: 4, Value: 3.7
Row: 1, Col: 5, Value: 4.7
Row: 1, Col: 6, Value: 13.5
Row: 1, Col: 7, Value: 5.1
Row: 1, Col: 8, Value: 20.5
Row: 1, Col: 9, Value: 5.4
Row: 1, Col: 10, Value: 7.3
Row: 1, Col: 11, Value: 6.9
Row: 1, Col: 12, Value: 2.0
France 6.9%
Germany 7.3%
United
Kingdom 8.8%
Italy 5.4%
Switzerland 5.7%
Japan 20.5%
Sweden 3.7%
Spain 4.7%
Other 13.5%
Netherlands 5.1%
AS OF OCTOBER 31, 1993
United States 9.5%
Australia 3.1%
Row: 1, Col: 1, Value: 9.5
Row: 1, Col: 2, Value: 12.9
Row: 1, Col: 3, Value: 8.6
Row: 1, Col: 4, Value: 2.7
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 16.6
Row: 1, Col: 7, Value: 5.4
Row: 1, Col: 8, Value: 18.1
Row: 1, Col: 9, Value: 4.9
Row: 1, Col: 10, Value: 8.0
Row: 1, Col: 11, Value: 5.3
Row: 1, Col: 12, Value: 3.1
France 5.3%
United
Kingdom 12.9%
Germany 8.0%
Italy 4.9%
Switzerland 8.6%
Japan 18.1%
Sweden 2.7%
Spain 4.9%
Netherlands 5.4%
Other 16.6%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 81.6 87.6
Bonds 2.0 2.9
Short-term and other investments 16.4 9.5
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stet (Societa Finanziaria Telefonica Spa)
(Italy, Telephone Services)
1.8 1.9
Bayer AG
(Germany, Chemicals & Plastics) 1.2 1.0
Hitachi Ltd.
(Japan, Electronics) 1.2 1.1
Hoechst AG Ord.
(Germany, Chemicals & Plastics) 1.1 0.3
Ciba-Geigy AG (Reg.)
(Switzerland, Chemicals & Plastics) 1.1 0.2
Toshiba Corp.
(Japan, Electrical Equipment) 1.0 0.1
Toyota Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.0 0.8
Peugeot SA Ord.
(France, Autos, Tires, & Accessories) 1.0 -
Holderbank Financiere AG PC (Bearer)
(Switzerland, Banks)
1.0 0.6
Telefonica de Espana SA Ord.
(Spain, Telephone Services) 1.0 1.0
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 17.5 38.8
Durables 12.6 5.8
Basic Industries 11.4 5.4
Utilities 7.8 10.4
Technology 7.6 5.6
Construction & Real Estate 4.4 4.9
Industrial Machinery & Equipment 3.8 3.1
Energy 3.6 2.7
Transportation 3.0 1.7
Services 2.4 2.8
OVERSEAS
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 76.8%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
YPF Sociedad Anonima sponsored ADR
representing Class D shares 83,500 $ 2,066,625 98424510
AUSTRALIA - 2.0%
Ampolex Ltd. Ord. 1,631,500 5,134,853 03212792
Brambles Industries 404,000 4,167,111 10599010
FAI Insurance Ltd. Ord. 3,866,800 2,655,293 30239330
Hazelton Airlines Ltd. 721,400 1,444,849 42199522
Lend Lease Corp. Ltd. 190,000 2,321,291 52599292
Pioneer International Ltd. 966,700 1,991,460 72371110
TNT Ltd. (b) 3,141,200 4,808,360 93599292
Westpac Banking Corp. 4,924,181 16,730,791 96121410
39,254,008
AUSTRIA - 0.6%
Austrian Airlines/Oster Luftve 4,400 753,691 05299A22
Mayr Melnhof Karton AG (c) 33,000 2,107,682 57847192
OEMV AG 48,800 4,099,746 67399592
Steyr Daimler Puch AG 83,500 1,746,546 86099322
Verbund Gesellschaft 46,000 2,450,958 92299999
11,158,623
BELGIUM - 1.1%
Delhaize 137,700 5,515,025 24650010
Petrofina SA 9,200 2,879,510 71648510
Solvay 27,505 13,386,979 83425810
21,781,514
BERMUDA - 0.2%
Consolidated Electric Power Asia Ltd.
sponsored ADR (c) 67,400 968,875 20855210
Jardine Strategic Holdings Ord. 894,500 3,277,063 47199020
4,245,938
BRAZIL - 0.7%
Coteminas PN 4,900,000 1,328,390 22199692
Telebras PN (Pfd. Reg.) 344,286,800 12,413,994 95499792
13,742,384
CANADA - 0.6%
Abitibi-Price, Inc. 274,700 3,253,209 00368010
Noranda, Inc. 460,700 8,038,178 65542210
11,291,387
FINLAND - 0.8%
Amer Group Ltd. Class A 221,900 5,716,883 02351210
Huhtamaki Ord. 83,900 3,336,295 44499392
Kansallis-Osake-Pankki 322,600 728,740 48199210
Outokumpu OY Class A (b) 270,100 4,346,652 69099992
Repola OY 65,200 1,158,798 75999A92
Unitas Bank Ltd. B Free shares 109,200 291,529 90499123
15,578,897
FRANCE - 6.5%
Accor SA 63,700 8,286,179 00439991
Assurances Generales (Reg.) 32,400 3,109,438 04557510
BNP Ord. 221,520 10,390,845 05599996
Bail Investissement (b) 7,900 1,354,365 05699092
Club Mediterranee 3,700 280,937
Credit Lyonnais CI 31,900 3,117,833 22799392
Elf Aquitaine 207,400 15,197,604 28627199
Financiere Bank de Suez Cie 105,900 6,118,542 31799110
GAN (Groupe des Assur. Natl.) 89,900 6,975,274 36599792
Klepierre SA (b) 3,600 402,121 49899822
Lafarge Coppee 187,400 15,202,651 50586310
Paribas SA (Cie Financiere) Class A (b) 57,600 4,415,186 73999192
SHARES VALUE (NOTE 1)
Pechiney SA CIP 32,150 $ 2,284,252 70599310
Peugeot SA Ord. (b) 124,400 19,677,978 71682510
Plastic Omnium Cie 28,850 3,803,835 72799622
Rhone Poulenc SA Class A 292,750 8,014,667 76242695
Salomon SA 3,600 1,342,524 93099292
Skis Rossignol SA 710 253,482 83099C22
Sophia SA 12,375 1,058,590 84199C22
Total Compagnie Francaise des Petroles
Class B 175,700 10,216,561 20434510
Unibail 47,340 4,267,126 90499592
Vallourec 51,500 2,990,059 92017610
128,760,049
GERMANY - 6.6%
Allianz Versich Holdings Ord.
(Reg.) (b) 3,350 5,241,717 01882495
BASF AG 26,900 5,355,605 05526230
Bayer AG 97,700 23,261,342 07273010
Bayerische Motor Werke (BMW) (b) 19,500 10,622,430 05528310
Computer AG (b) 8,600 3,847,642 20599492
Continental Gummi-Werke AG (b) 65,000 11,388,755 21199010
Deutsche Bank AG 33,300 15,727,908 25152592
Hoechst AG Ord. 101,300 22,323,972 43439010
Kolbenschmidt AG 9,300 1,326,965 50799792
Sixt AG Ord. (b) 6,035 1,988,558 83002199
Thyssen AG Ord. 87,400 15,128,549 88629110
Veba Vereinigte Elektrizetaets &
Bergwerks AG Ord. 42,430 13,183,057 92239110
129,396,500
GHANA - 0.1%
Ashanti Goldfields GDR (c) 49,000 1,078,000
HONG KONG - 0.5%
Dairy Farm International Holdings Ltd.
Ord. 1,196,000 1,749,557 23385910
Dickson Concept 3,952,000 2,660,368 25399210
Hong Kong Land Holdings Ltd. 1,311,000 3,682,822 43858292
Jardine Matheson & Co. Ltd. Ord. 316,000 2,065,841 47111510
10,158,588
INDIA - 0.0%
ITC Ltd. GDS (warrants) (b)(c) 19,000 142,500 45031811
INDONESIA - 0.6%
Astra International (For. Reg.) 110,000 836,527 04699894
Bank International Indonesia Ord. (b) 1,556,300 4,510,422 06199B92
Jakarta International Hotels &
Development Ord. 3,017,400 4,337,482 47399693
Sampoerna, Hanjaya Mandala 400,000 3,060,468 82299892
12,744,899
IRELAND - 0.4%
Bank of Ireland U.S. Holdings, Inc. 727,000 2,989,737 06278793
Fyffes PLC 1,306,100 1,922,553 34999G22
Independent 381,750 1,911,709 45399E92
Smurfit (Jeff) Group PLC 356,100 1,729,222 84699793
8,553,221
ITALY - 2.0%
Alitalia (Linee Aeree Italy) Class A 3,333,000 3,110,789 01608910
Assicurazioni Generali Spa 478,200 13,962,474 04542910
Montedison Spa Ord. 6,337,300 6,314,422 61237610
SAI (Soc. Assicur Industriale) 355,000 5,160,255 78399110
SIP Spa 3,031,600 9,071,517 78401792
Safilo (Sta Azionaria Fab) Spa 371,800 2,203,986 78499999
39,823,443
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - 20.5%
ADO Electronic Industrial Co. 76,000 $ 2,537,575 00699992
Advantest Corp. 143,000 4,859,156 00799010
Alpine Electronics, Inc. (warrant #1) 150 367,500 02099193
Alps Electric Co. Ltd. 271,000 3,790,209 02199292
Amadasonoike Co. Ltd. 219,000 1,660,889 02499492
Aoyama Trading Co. Ord. 105,000 4,860,633 03799092
Asahi Glass (warrants) (b) 200 200,000 04339392
Autobacs Seven Co. Ltd. 34,700 4,443,022 05299392
Bridgestone Corp. 441,000 6,602,189 10844110
Canon, Inc. 984,000 15,991,328 13780199
Canon, Inc. (warrants) (b) 150 150,000 13800695
Casio Computer Co. Ltd. Ord. 224,000 2,779,869 14761893
Chudenko Corporation 43,000 1,655,964 17123410
Cosmo Oil Company Ltd. 306,000 2,519,610 22199092
Daiwa House Industry Co. Ltd. 72,000 1,085,000 23406299
Daiwa House Industry Co. Ltd.
(warrants) (b) 75 75,000 23406297
East Japan Railway Ord. (b) 1,100 5,222,102 27399722
Fujitsu Ltd. (b) 1,274,000 12,798,973 35959010
Futaba Industrial Co. Ltd. (b) 123,000 2,301,783 38299192
Hanshin Department Store 88,000 693,391 41199292
Hitachi Ltd. 2,409,000 22,777,890 43357810
Hitachi Maxell Ltd. 514,000 10,378,215 43358990
Honda Motor Co. Ltd. 622,000 10,292,128 43812810
Ishihara Sangyo Kaisha Ltd. 657,000 2,763,112 46427899
Izumi Co. Ord. 86,000 2,066,779 46399292
Japan Airlines Co. Ltd. 623,000 4,356,645 47103420
Joshin Denki Co. Ltd. Ord. 178,000 2,822,614 48199999
Kawasaki Steel Corp. 1,058,000 3,866,027 48636810
Komatsu Ltd. Ord. 693,000 6,197,617 50045899
Kyocera Corporation 26,000 1,638,925 50155610
Marubeni Corp. (b) 662,000 3,384,005 57381010
Marukyo Corp. 55,000 1,950,162 57899792
Matsushita Electric Industrial Co. Ltd. 779,000 12,813,257 57687910
Minebea Co. 924,000 6,188,518 60299392
Mitsubishi Heavy Industry 583,000 3,875,947 60699310
Mitsubishi Petro Chemical 464,000 3,107,654 60690910
Mitsubishi Trust & Banking 682,000 10,075,841 60699410
Mitsui Petrochemical Industries, Inc. (b) 385,000 3,090,464 60691110
Mitsui Trust and Banking 206,000 2,231,853 60684699
Murata Manufacturing Co. Ord. 403,000 17,464,791 62699110
NGK Spark Plug Co. (warrants) (b) 150 465,000 64499922
Nichido Fire & Marine Insurance Co. 710,000 5,860,141 65399920
Nikko Securities 269,000 3,232,344 65399010
Nippon Sheet Glass (warrants) (b) 350 153,125 65461393
Nippon Shinpan Ltd. 226,000 2,136,905 65461710
Nippon Telegraph & Telephone Ord. (b) 600 5,212,253 65462492
Nissan Motor Co. Ltd. Ord. 824,000 6,979,610 65474491
Nomura Securities Co. Ltd. 702,000 15,280,413 65536130
Oji Paper Ltd. (b) 359,000 3,429,825 67811810
Orix Corp. 441,000 16,809,513 68616710
Pioneer Electronic Corp. 134,000 3,444,696 72365710
Rohm Co. Ltd. 245,000 9,700,581 77536110
Sanwa Bank 183,000 3,965,330 80399410
Sharp Corp. 246,000 4,022,063 81989991
Sharp Corp. (warrants #1) (b) 900 522,752 81989994
Sony Corp. 278,700 15,811,208 83569999
Sumitomo Realty & Development Co. Ltd. 479,000 3,113,759 86562310
Sumitomo Rubber Industries 187,000 1,823,401 86699892
Sumitomo Trust & Banking Co. 414,000 5,708,658 86599310
Suzuki Motor Corp. 443,000 5,890,376 86958592
TDK Corp. 397,000 17,908,599 87235110
Tokio Marine & Fire Insurance Co. Ltd.
(The) 675,000 8,642,767 88909099
Tokyo Electron Ltd. 75,000 2,385,994 89499999
SHARES VALUE (NOTE 1)
Tokyo Electron Ltd. (warrant #2) (b) 500 $ 262,500 89499922
Tokyo Style Co. Ltd. 659,000 12,007,784 88999410
Toppan Printing (warrants) (b) 200 90,000 89074792
Toshiba Corp. 2,649,000 20,089,937 89149310
Toyobo Co. 713,000 3,167,175 90899392
Toyota Motor Corp. 1,007,000 19,737,321 89399999
Yamaha Motor Co. Ltd. (b) 22,000 195,016 98456092
403,985,683
KOREA (SOUTH) - 0.7%
Cho Hing Bank Co. Ltd. 79,000 821,592 17099E22
Korea Electric Power Corp. 285,000 9,879,901 50099B92
Korea First Securities Co. (b) 5,100 104,816 50099K22
Kyungki Bank Ltd. (b) 135,000 1,462,486 61999922
Seoul Securities Co. (b) 120,870 2,124,989 83599P22
14,393,784
LUXEMBOURG - 0.3%
Arbed SA 35,100 5,042,734 03899030
MALAYSIA - 0.6%
Ekran BHD Ord. (b) 313,000 2,653,335 28299792
KL Industries Holdings BHD 570,000 898,274 49799B92
Magnum Corp. BHD 960,000 2,258,573 55999392
Resorts World BHD 497,000 2,784,000 76199592
Telekom Malaysia BHD 324,000 2,419,898 94099892
Time Engineering BHD (b) 317,000 1,000,319 93099592
12,014,399
MEXICO - 1.0%
Grupo Dina (Consorcio G) ADR (b) 117,200 1,508,950 21030610
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 189,800 4,673,825 40048610
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 230,400 13,564,800 87940378
19,747,575
NETHERLANDS - 5.1%
Akzo Nobel NV Ord. 135,400 16,315,099 01019910
DSM NV 122,400 9,124,783 23332H92
Fokker Aircraft Ord. 79,500 710,854 34419010
Frans Maas Groep NV (Koninklj) 90,600 2,464,476 35399322
Hoogovens en Staalfabrieken (b) 128,800 5,009,082 43888410
International Nederlanden Groep CVA 223,000 9,321,195 46099892
KBB (Kon Bijenkorf Beheer) NV:
Ord. 56,700 3,246,544 48130092
(right) 56,700 24,433 48130095
KLM Royal Dutch Airlines Ord. (b) 145,100 4,181,444 48251620
Oce Van Der Grinten NV 288,500 12,680,637 67462710
Philips Electronics (b) 623,300 18,230,646 71833799
Pirelli Tyre Holdings NV Ord. (b) 1,788,000 17,817,402 72499092
Wereldhave NV 33,600 1,994,463 95199E22
101,121,058
NEW ZEALAND - 0.2%.
Fletcher Challenge Ltd. (Reg.) (b) 1,665,500 3,240,797 33999592
NORWAY - 1.8%
Bergesen Group:
Class A 168,800 3,745,301 08399010
Class B 347,200 7,703,604 08399011
Christiania Bank Free shares Ord. (b) 1,760,000 3,548,934 17100792
Den Norske Bank Class A
Free shares (b) 1,267,700 3,423,056 25299792
Norsk Hydro AS ADR (b) 66,200 2,242,525 65653160
Norske Skogindustrier AS:
A Free shares (b) 127,200 3,017,541 66499594
(rights) (b) 127,200 33,726 66499596
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NORWAY - CONTINUED
Olav Thon Eiendomsselskp Ord. 81,300 $ 1,179,889 67941099
Orkla AS Class B (non-vtg.) 152,400 4,827,563 39299192
Unitor AS 286,300 5,713,137 91699392
35,435,276
SINGAPORE - 0.7%
Neptune Orient Lines Ltd. (b) 9,003,000 13,143,480 64099610
Van Der Horst Ltd. 244,000 1,161,233 92099C22
14,304,713
SPAIN - 4.7%
Acerinox SA (Reg.) 35,775 3,744,251 00499192
Argentaria Corp. Bancaria de Esp 108,600 4,719,109 21991392
Banco Bilbao Vizcaya SA Ord. (Reg.) 472,900 11,293,396 05945891
Banco Intercontinental Espanol 100,750 8,980,501 24699592
Corporacion Mapfre International Reas
(Reg.) (b) 188,250 7,984,456 16899192
Empresa Nacional de Celulosa SA 92,300 1,600,896 29299N22
FOCSA (Fomento Construciones
Contrata) 43,975 4,883,389 34418599
FOCSA (Fomento Construciones
Contrata) (c) 16,000 1,776,787 34418593
Iberdrola SA 729,500 5,239,940 45499892
Repsol SA:
Ord. (b) 359,700 11,996,678 76026T10
sponsored ADR 46,600 1,537,800 76026T20
Telefonica de Espana SA Ord. 1,422,400 19,335,138 87938210
Union Electrica Fenosa 1,513,200 7,575,836 90659510
Uralita SA (b) 238,450 2,479,704 91799310
Vallehermoso SA 25,583 494,082 91899224
93,641,963
SWEDEN - 3.7%
ASG AB Class B Free Shares Ord. 84,200 1,437,030 16599C22
Aktiebolaget Electrolux 251,700 13,415,894 01019810
Frontline (b) 453,000 1,219,163 35999F22
ICB Shipping Class B (b) 108,333 1,308,456 44999B92
Investor AB B Free shares 114,700 2,815,888 46199A92
Marieberg Tidnings A Free shares (b) 84,000 2,216,592 56799392
SKF AB Ord. (b) 660,600 13,615,970 78437530
Scribona AB B Free shares 17,900 117,499 81199B92
Skandia Forsikring (rights) 114,600 130,893 83055592
Skandia International Holding Co. AB
ADR 114,600 2,061,178 83055510
Skandinaviska Enskilda Banken Class A
Free shares 1,178,600 8,123,371 88099222
Skanska Class B (b) 487,200 12,024,734 93899392
Volvo Aktiebolaget Class B 160,700 15,000,157 92885630
73,486,825
SWITZERLAND - 5.7%
Adia SA (Bearer) 46,800 8,138,260 00699793
Alusuisse Lonza (Reg.) 33,611 16,288,693 02239994
Baloise Holding (Reg.) (b) 6,700 12,271,674 05899195
C.S. Holdings (Reg.) (b) 135,600 11,548,445 17599795
Ciba-Geigy AG:
(Reg.) 36,665 21,871,222 17199492
(warrants) (b) 1,480 10,548 17199494
Fischer (Georg) AG (Reg.) 23,300 4,616,328 33771192
Globus Magazine Part. Cert. 9,400 6,263,764 37957792
Holderbank Financiere AG PC (Bearer) 28,325 19,379,254 43479593
Surveillance, Societe Generale (Bearer) (b) 1,690 2,541,353 86901193
Swiss Bank Corp. (Bearer) (b) 31,050 8,674,482 87083610
Von Roll AG (Reg.) 17,350 1,854,755 94599094
113,458,778
SHARES VALUE (NOTE 1)
THAILAND - 0.2%
Phatra Thanakit (For. Reg.) 11,300 $ 384,146 71799593
Ruam Pattana Fund II (For. Reg.) 2,683,000 1,571,648 76999523
Ruang Khao Unit Trust (For. Reg.) (b) 2,633,900 1,647,504 77399393
3,603,298
UNITED KINGDOM - 8.8%
Avon Rubber 147,800 1,356,934 05399010
BET Public Ltd. Co. Ord. 4,570,000 8,599,369 05538H10
Barclays PLC Ord. 1,396,700 10,809,410 06738E10
Bass PLC Ord. 753,400 6,505,293 06990492
British Petroleum PLC Ord. 1,296,300 7,593,142 11088910
British Steel PLC Ord. 6,075,300 14,059,399 11101510
British Vita Ord. 1,115,900 5,198,677 11199192
English China Clay PLC 1,248,800 9,153,117 29321792
Forte PLC (b) 1,521,100 5,470,606 34999592
General Electric PLC Ord. 1,165,100 5,357,165 36963940
Great Universal Stores PLC Ord. Class A 658,400 5,994,732 39133420
Ladbroke Group PLC Ord. 4,086,800 11,504,179 50572799
Lloyds Abbey Life 589,200 3,384,212 53801099
London International Group 783,900 1,249,051 54183310
Midlands Electricity PLC 856,200 7,405,916 59780293
National Westminster Bank PLC Ord. 918,080 6,290,234 63853930
North West Water Ord. 721,600 5,288,989 67299195
RTZ Corp. PLC Ord. (b) 273,400 3,509,923 74974K50
Rolls Royce Ltd. Ord. 1,600,399 4,942,208 77577910
Royale Insurance Co. Ltd. 825,500 3,294,595 78074910
Sainsbury J. PLC Ord. 501,200 2,829,324 78710310
Sedgwick Group 307,400 918,966 81482610
Shanks & McEwan Group PLC 704,200 1,143,431 81999294
Taylor Woodrow PLC 1,177,500 2,644,547 87667410
Trafalgar House PLC Ord. 1,020,900 1,626,682 89270710
Vickers PLC Ord. units 5,188,775 15,747,932 92549310
Vodafone Group PLC 490,000 4,041,329 92857T92
Whitbread Class A 1,346,600 11,116,452 96341499
Willis Coroon PLC Ord. (b) 1,760,900 6,145,866 97062410
173,181,680
TOTAL COMMON STOCKS
(Cost $1,237,442,272) . . . . . . . . . . . . . . . . . . . .
1,516,435,139
NONCONVERTIBLE PREFERRED STOCKS - 4.8%
AUSTRIA - 0.6%
Creditanstaldt Bank (b) 160,500 9,435,895 22539210
Maculan Holding Ord. 18,300 1,762,660 55699594
11,198,555
GERMANY - 0.7%
Boss (Hugo) AG 4,250 2,703,144 44451094
FAG Kugelfischer Georg Schaef 35,200 5,022,491 50105492
Porsche AG Ord. 10,300 5,436,457 73380110
13,162,092
ITALY - 3.4%
Banco Ambro Veneto N/C Risp 2,320,900 4,873,844 06399592
Fiat Spa Priv. cumulative 5,409,600 15,061,462 31562120
Gilardini Risp Spa 460,400 926,187 40099392
SAI (Sta. Assicur. Industriale) N/C Risp 1,190,200 9,217,016 78399192
SIP (Societa Ital. Per L'Eser) Spa Di Risp
N/C Ord. 350,000 866,323 78401796
Stet (Societa Finanziaria
Telefonica Spa) 10,868,400 35,571,730 85982592
Unicem Di Risp 368,900 1,884,367 91199792
68,400,929
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 0.1%.
Korea First Securities Co. (b) 67,462 $ 1,261,205 50099K23
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $58,784,694) 94,022,781
CORPORATE BONDS - 0.1%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 0.1%
GRAND CAYMAN - 0.1%
Bangkok Land euro 4 1/2%,
10/13/03 (c) - $ 600,000 531,000 06099LAA
CTII Overseas Finance Ltd. euro
4 1/4%, 11/18/98 (c) - 605,000 490,050 126995AA
Peregrine Investment Financial
Cayman Ltd. 4 1/2%,
12/1/00 (c) - 1,200,000 954,000 693393AA
TOTAL CORPORATE BONDS
(Cost $2,405,000) 1,975,050
GOVERNMENT OBLIGATIONS (F) - 1.9%
ARGENTINA - 0.5%
Argentina Republic BOCON
4%, 4/1/01 (d) B1 14,720,251 10,298,435 039995AF
BRAZIL - 0.5%
Brazil Federative Republic IDU
euro 4.3125%, 1/1/01 (d) B2 13,315,500 9,670,382 1057569E
DENMARK - 0.5%
Danish Government Bullet 7%,
12/15/04 Aa1 DKK 62,500,000 9,504,845 249998AV
FRANCE - 0.4%
French Government Strips
0%, 4/25/23 Aaa FRF 420,000,000 8,618,232 351996BL
TOTAL GOVERNMENT OBLIGATIONS
(Cost $40,691,887) 38,091,894
INDEXED SECURITIES - 0.6%
UNITED STATES OF AMERICA - 0.6%
Bankers Trust Company 0%,
1/31/95 (coupon inversely
indexed to STIBOR and
principal indexed to value of
2-year Swedish securities,
both multiplied by 9) (e) 1,000,000 569,500 06699DAC
Bayerische Landesbank cert. of
dep. 6.2675%, 1/27/95
(coupon inversely indexed
to HELIBOR and principal
indexed to value of 2-year
Finnish securities, both
multiplied by 8) (e) 8,300,000 5,121,100 072999AU
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
Citibank Nassau:
0%, 1/31/95 (coupon
inversely indexed to STIBOR
and principal indexed to
2-year Swedish securities,
both multiplied by 9) (e) $ 700,000 $ 412,860 223991BT
4 5/8%, 7/30/96 (inversely
indexed to 1-year SEK
swap rate, multiplied
by 10) (d) 1,125,000 883,462 223991AH
ITT Corp. 3.66%, 6/27/94
(inversely indexed to 1-year
SEK swap rate, multiplied
by 10) 5,000,000 4,800,500 4506799M
TOTAL INDEXED SECURITIES
(Cost $16,125,000) 11,787,422
REPURCHASE AGREEMENTS - 15.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 311,756,460 311,664,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,667,112,853) . . . . . . . . . . . . . . . . . . . .
$1,973,976,286
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
1,172,422,435 BEF 5/4/94 $ 34,366,702 $ 661,874
75,419,000 CHF 5/9/94 53,748,628 965,621
79,820,931 DKK 5/16/94 12,304,070 281,759
3,956,826,000 ESP 5/3/94 29,377,717 625,057
59,195,000 FIM 5/5/94 11,049,038 457,129
73,880,000 NOK 5/2/94 10,308,574 221,328
90,507,500 SEK 5/5/94 11,874,866 459,043
TOTAL CONTRACTS TO BUY
(Payable amount $159,357,784) $ 163,029,595 $ 3,671,811
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 8.3%
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
1,172,422,435 BEF 5/4/94 $ 34,366,702 $ (1,797,150)
75,419,000 CHF 5/9/94 53,748,628 (1,847,202)
79,820,931 DKK 5/16/94 12,304,070 (540,441)
3,956,826,000 ESP 5/3/94 29,377,717 (1,591,505)
59,195,000 FIM 5/5/94 11,049,038 (377,504)
425,178,909 FRF 5/16/94 75,076,044 (2,941,532)
5,889,637,000 JPY 7/6/94 58,230,216 (1,230,216)
21,434,577 NLG 6/13/94 11,529,049 (113,226)
73,880,000 NOK 5/2/94 10,308,574 (433,549)
90,507,500 SEK 5/5/94 11,874,866 (547,978)
TOTAL CONTRACTS TO SELL
(Receivable amount $296,444,601) $ 307,864,904 $ (11,420,303)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 15.6%
CURRENCY ABBREVIATIONS
BEF - Belgian franc
DKK - Danish krone
NLG - Dutch guilder
FIM - Finnish markka
FRF - French franc
JPY - Japanese yen
NOK - Norwegian krone
ESP - Spanish peseta
SEK - Swedish krona
CHF - Swiss franc
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. 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 $12,722,719 or 0.6% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
6. For some foreign government obligations have not been rated by S&P
or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings
of the sovereign credit of the issuing government.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $650,869,056 and $496,426,949, respectively.
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 $3,822 for the period.
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,667,315,363. Net unrealized appreciation aggregated
$306,660,923, of which $342,407,559 related to appreciated investment
securities and $35,746,636 related to depreciated investment securities.
At October 31, 1993, the fund had a capital loss carryforward of
approximately $46,417,000 which will expire on October 31, 2001.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.3%
Basic Industries 11.4
Conglomerates 0.2
Construction & Real Estate 4.4
Durables 12.6
Energy 3.6
Finance 17.5
Government Obligations 1.9
Health 1.6
Industrial Machinery & Equipment 3.8
Media & Leisure 2.1
Nondurables 1.9
Precious Metals 0.1
Repurchase Agreements 15.8
Retail & Wholesale 2.0
Services 2.4
Technology 7.6
Transportation 3.0
Utilities 7.8
100.0%
OVERSEAS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
· Download Table
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value
(including repurchase agreements of $311,664,000) (cost $1,667,112,853)
$ 1,973,976,286
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost $159,357,784)
(Note 2)163,029,595
Short foreign currency contracts
$ (307,864,904
(Note 2))
Contracts held, at value
Receivable for contracts held
296,444,601 (11,420,303)
Cash
121,399
Receivable for investments sold
12,880,917
Receivable for fund shares sold
10,546,710
Dividends receivable
5,220,075
Interest receivable
916,851
Other receivables
15,417
TOTAL ASSETS
2,155,286,947
LIABILITIES
Payable for foreign currency contracts held (Note 2)
159,357,784
Payable for investments purchased
28,615,163
Payable for fund shares redeemed
2,940,025
Accrued management fee
1,328,718
Other payables and accrued expenses
1,308,601
TOTAL LIABILITIES
193,550,291
NET ASSETS
1,961,736,656
Net Assets consist of (Note 1)
Paid in capital
1,647,091,794
Distributions in excess of net investment income
(14,895,486)
Accumulated undistributed net realized gain (loss) on investments
30,425,407
Net unrealized appreciation (depreciation) on:
Investment securities
306,863,433
Foreign currency contracts
(7,748,492)
NET ASSETS, for 67,780,950 shares outstanding
1,961,736,656
NET ASSET VALUE and redemption price per share ($1,961,736,656
(divided by) 67,780,950 shares) (Note 4) $28.94
Maximum offering price per share (100/97.00 of $28.94) (Note 4)
$29.84
STATEMENT OF OPERATIONS
· Enlarge/Download Table
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 11,298,515
Dividends
Interest 5,135,710
16,434,225
Less foreign taxes withheld (Note 1) (911,587
)
TOTAL INCOME 15,522,638
EXPENSES
Management fee (Note 4) $ 6,432,030
Basic fee
Performance adjustment 264,345
Transfer agent fees (Note 4) 2,608,135
Accounting fees and expenses 330,062
(Note 4)
Non-interested trustees' compensation 4,909
Custodian fees and expenses 736,020
Registration fees 99,284
Audit 42,759
Legal 11,508
Miscellaneous 8,439
TOTAL EXPENSES 10,537,491
NET INVESTMENT INCOME 4,985,147
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 78,583,929
Foreign currency contracts (1,547,765 77,036,164
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 58,545,163
Foreign currency contracts (11,307,078 47,238,085
)
NET GAIN (LOSS) 124,274,249
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 129,259,396
OTHER INFORMATION $997,546
Sales charges paid to FDC (Note 4)
Accounting fees paid to $330,034
FSC (Note 4)
STATEMENT OF CHANGES IN NET ASSETS
· Download Table
INCREASE (DECREASE) IN NET ASSETS
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations
$ 4,985,147 $ 10,233,528
Net investment income
Net realized gain (loss) on investments
77,036,164 (49,776,636)
Change in net unrealized appreciation (depreciation) on investments
47,238,085 370,524,952
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
129,259,396 330,981,844
Distributions to shareholders
(13,783,657) (11,187,669)
From net investment income
In excess of net investment income
(9,769,269) -
From net realized gain
- (75,938,524)
TOTAL DISTRIBUTIONS
(23,552,926) (87,126,193)
Share transactions
865,135,868 854,803,474
Net proceeds from sales of shares
Reinvestment of distributions
22,885,934 84,813,750
Cost of shares redeemed
(522,657,933) (494,651,306)
Net increase (decrease) in net assets resulting
from share transactions
365,363,869 444,965,918
TOTAL INCREASE (DECREASE) IN NET ASSETS
471,070,339 688,821,569
NET ASSETS
Beginning of period
1,490,666,317 801,844,748
End of period (including under (over) distribution
of net investment income of $(14,895,486) and
$ 1,961,736,656 $ 1,490,666,317
$7,779,873, respectively)
OTHER INFORMATION
Shares
Sold
30,931,925 35,327,981
Issued in reinvestment of distributions
855,350 4,255,602
Redeemed
(18,895,005) (21,200,545)
Net increase (decrease)
12,892,270 18,383,038
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THE FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
· Download Table
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30 $ 25.30
Income from Investment Operations
Net investment income
.14 .27 .46 .54(sub section) .35 .30
Net realized and unrealized gain (loss) on investments
2.07 7.40 (3.82) .45 2.16 1.28
Total from investment operations
2.21 7.67 (3.36) .99 2.51 1.58
Less Distributions
From net investment income
(.25) (.37) (.44) (.46) (.21) (.24)
In excess of net investment income
(.18) - - -
From net realized gain
- (2.10) (1.16) (1.08) (1.13) (.34)
Total distributions
(.43) (2.47) (1.60) (1.54) (1.34) (.58)
Net asset value, end of period
$ 28.94 $ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30
TOTAL RETURN (dagger)
8.27% 39.01% (13.05)% 4.12% 9.58% 6.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)
$ 1,961,737 $ 1,490,666 $ 801,845 $ 969,436 $ 1,011,152 $ 876,567
Ratio of expenses to average net assets
1.28%* 1.27% 1.52% 1.53% 1.26% 1.06%
Ratio of net investment income to average net assets
.61%* 1.00% 1.78% 2.19% 1.34% 1.06%
Portfolio turnover rate
67%* 64% 122% 132% 96% 100%
* ANNUALIZED
(tri) AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE
OF EQUALIZATION ACCOUNTING.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(sub section) INCLUDES $.08 PER SHARE FROM RECOVERY OF FOREIGN
TAXES PREVIOUSLY WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON
FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
WORLDWIDE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Worldwide has a
3% sales charge, which has been waived through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
WORLDWIDE 9.40% 25.19% 46.26%
WORLDWIDE
(INCL. 3% SALES CHARGE) 6.11% 21.44% 41.87%
Morgan Stanley World Index 2.57% 11.85% 27.20%
Average Global Fund 3.70% 18.64% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on May 30, 1990. You can compare the fund's figures to the
performance of the Morgan Stanley World index, a broad measure of the
performance of stocks across the world, weighted by each country's market
capitalization (or the total value of its outstanding shares). You can also
compare the fund's performance to the average global fund, which reflects
the performance of 99 funds with similar objectives tracked by Lipper
Analytical Services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
WORLDWIDE 25.19% 10.18%
WORLDWIDE
(INCL. 3% SALES CHARGE) 21.44% 9.32%
Morgan Stanley World Index 11.85% 6.33%
Average Global Fund 18.64% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Worldwide (318) MS World Index
05/30/90 9700.00 10000.00
05/31/90 9729.10 10038.61
06/30/90 9981.30 9964.14
07/31/90 10252.90 10051.93
08/31/90 9098.60 9108.00
09/30/90 8196.50 8144.51
10/31/90 8681.50 8901.68
11/30/90 8681.50 8752.34
12/31/90 8631.28 8932.45
01/31/91 8875.93 9255.96
02/28/91 9365.23 10109.62
03/31/91 9042.29 9808.57
04/30/91 9130.37 9882.21
05/31/91 9198.87 10103.10
06/30/91 8543.20 9476.34
07/31/91 9071.65 9920.84
08/31/91 9208.65 9886.25
09/30/91 9365.23 10142.44
10/31/91 9404.37 10303.82
11/30/91 8905.29 9851.69
12/31/91 9311.08 10565.69
01/31/92 9410.03 10366.97
02/29/92 9696.98 10184.99
03/31/92 9469.40 9702.08
04/30/92 9884.99 9834.16
05/31/92 10300.57 10222.20
06/30/92 9944.35 9876.60
07/31/92 9845.41 9898.58
08/31/92 9706.88 10136.03
09/30/92 9706.88 10039.86
10/31/92 9528.77 9764.70
11/30/92 9677.19 9936.32
12/31/92 9889.02 10013.50
01/31/93 10214.25 10043.98
02/28/93 10458.17 10278.91
03/31/93 11057.81 10871.83
04/30/93 11332.22 11372.70
05/31/93 11687.94 11631.78
06/30/93 11565.98 11531.21
07/31/93 11820.07 11765.78
08/31/93 12562.00 12302.20
09/30/93 12429.87 12071.96
10/31/93 12968.54 12401.72
11/30/93 12734.78 11697.27
12/31/93 13503.03 12266.78
01/31/94 14466.79 13072.98
02/28/94 14249.17 12900.91
03/31/94 13710.29 12341.84
04/30/94 14186.99 12720.47
Let's say you invested $10,000 in Fidelity Worldwide Fund on its start date
and paid a 3% sales charge. By April 30, 1994, it would have grown to
$14,187 - a 41.87% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley World index, which would have grown
to $12,720 over the same period - a 27.20% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
WORLDWIDE
FUND TALK: THE MANAGER'S OVERVIEW
Interview with Penny Dobkin,
Manager of Fidelity Worldwide Fund
Q. PENNY, HOW DID THE FUND PERFORM?
A. Better than its peers. For the six months ended April 30, 1994, Fidelity
Worldwide's total return was 9.40%, compared to 3.70% for the average
global fund, according to Lipper Analytical Services. Over the past 12
months the fund also enjoyed superior performance: 25.19%, compared to the
group average of 18.64%.
Q. WHY DID FIDELITY WORLDWIDE DO SO MUCH BETTER THAN MOST OTHER GLOBAL
FUNDS?
A. Ordinarily the answer to a question like that would begin with a rundown
of the fund's most successful investments. The fund did make profitable
choices, and I'll gladly describe some of them later. But in recent months
- particularly since the Federal Reserve raised interest rates on February
4 - the key to achieving above-average performance has been avoiding the
problem countries. Among the biggest losers lately have been Hong Kong and
Malaysia. Last October, when both markets were in the midst of dramatic
run-ups, I regretted having reduced the fund's stake in those countries to
3% of assets. Since then, however, the fund's limited exposure has been a
definite advantage.
Q. YOU'VE GENERALLY AVOIDED MAKING LARGE INVESTMENTS IN EMERGING MARKETS
ALL OVER THE WORLD, NOT JUST IN SOUTHEAST ASIA. WHY?
A. I certainly haven't skipped them entirely. Six months ago, about 15% of
the fund's investments were in developing countries. At the end of April,
the total was about 11%. Most of the investments were spread among
developing countries in Asia and Latin America. Only Mexico, with 4.6% of
the fund's investments, represented a sizable position all by itself. (Most
of the fund's Mexican investments, I should point out, were not winners
during the period, due to the uprising in Chiapas and the political turmoil
that followed.) But I don't want to give the impression that I'm forever
biased against emerging markets. I have been skeptical about earnings
estimates for many companies in emerging markets and believed that
investors were paying too high a price for low-confidence forecasts.
However, emerging markets have lost so much ground these last few months,
it may soon be time to consider increasing the fund's positions.
Q. WHERE HAVE YOU FOUND THE MOST WINNERS DURING THE PAST SIX MONTHS?
A. In Europe. European investments as a percentage of the fund's total
investments rose from 40% last October to 44% at the end of April. That
represents a larger slice of the fund by far than any other region. The
increase may not seem like much in percentage terms, but the fund's assets
have grown during the same period by more than 80%. I've been buying
heavily in Europe as cash has come into the fund.
Q. IS THERE A THEME BEHIND THE FUND'S EUROPEAN INVESTMENTS?
A. Yes, small company stocks. Small company stocks under-performed large
company stocks in Europe from 1989 through the middle of 1993, but since
then the trend has reversed. The fund has had success with consumer stocks
like Escada, an apparel company, and Marieberg, a Swedish newspaper
publisher. But the cyclical stocks are more exciting, since their
performance mirrors the performance of the economy. The ones I've bought
recently aren't well known, but they have helped the fund significantly:
companies like Munksjo, a Swedish paper and packaging concern; Von Moos, a
Swiss steel producer; and Bremer Vulkan, a German shipbuilder. What have
been difficult for the fund in Europe are interest-rate sensitive stocks,
particularly the Spanish banks. I still think they have good earnings
growth prospects as the Spanish economy improves, since they have not yet
benefited from lower loan losses. The important thing to remember about
small company stocks in Europe is that many of them are still cheap.
They've been outperforming for less than a year, and these cycles tend to
run a long time.
Q. WHILE MOST WORLD MARKETS ARE DOWN SINCE THE BEGINNING OF THE YEAR,
JAPAN'S NIKKEI AVERAGE IS UP THROUGH APRIL. WERE JAPANESE STOCKS A FACTOR
IN THE FUND'S SUCCESS?
A. Not really. Japanese stocks were only about 14% of the fund at the end
of April, or less than half Japan's overall weighting in the global market.
Many of the big winners in Japan were exporters. But apart from the auto
sector, I generally avoided the export stocks. My focus was on domestic
sectors like department stores, which also did well. If I missed a
short-term opportunity on the export side, it's because I have a hard time
believing the yen will depreciate enough to allow exporters to greatly
improve earnings this year.
Q. WHAT ABOUT THE FUND'S U.S. INVESTMENTS?
A. At the end of April, U.S. investments, other than short-term
investments, totaled about 15%, down slightly from 18% last October. I've
been playing the consumer theme here also, with investments in department
stores like Dayton Hudson and apparel companies like Liz Claiborne. I still
own some oil stocks, including Kerr-McGee and Amerada Hess; and lately I've
added a couple of cheap drug stocks with strong product lines, notably
Schering-Plough and Pfizer. But my largest U.S. stock is IBM. The company's
continuing cost-cutting effort is far more meaningful than the market has
wanted to believe. IBM is a huge stock that's currently underweighted in
the portfolios of most institutional investors. Once the institutions run
out of reasons not to like IBM anymore, they'll have to start buying again.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. About 2% of the fund was hedged against
currency risks using derivatives, in this case currency forward contracts,
at the end of the period.
Q. WHAT'S THE OUTLOOK FOR THE FUND?
A. I don't think it's as positive as it was six months ago. Back then, I
often found that after visiting a company, the first thing I wanted to do
was find a phone and put in a buy order. That doesn't happen as much
anymore. Increasingly, I'm coming up with earnings projections that suggest
stocks are already selling at reasonable prices, with limited upside
potential. There are exceptions, of course - notably, the small company
stocks in Europe I spoke of earlier. But large stocks in Europe look
expensive to me, and I wouldn't be surprised to see them do nothing for the
remainder of the year. If there's one place I'd be most likely to increase
the fund's stake in the months ahead, it's the United States. It could be a
fourth-quarter story rather than a summer story but suddenly the United
States looks like one of the cheaper markets in the world. Whatever
happens, though, no one should expect the fund to deliver another year of
better than 20% returns.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in common stocks from
around the world
START DATE: May 30, 1990
SIZE: as of April 30, 1994, more than $526 million
MANAGER: Penelope Dobkin, since May 1990;
manager, Fidelity Europe Fund, 1986-1990;
Fidelity United Kingdom Fund, 1987-1989;
Fidelity Select Financial Services Portfolio,
1983-1986; analyst, banking and real estate;
joined Fidelity in 1980
(checkmark)
PENNY DOBKIN ON RECENT SHIFTS IN WORLD MARKETS:
"There were at least four significant developments
during the past six months, all of which have
contributed to a high level of uncertainty in world
markets. One, interest rates rose around the world,
with long rates rising more sharply than short rates
in most countries. Two, after a year of stunning
gains, many emerging markets around the world
stalled in January, and fell sharply along with other
world markets following the February decision by
the Federal Reserve to raise U.S. interest rates.
Third, the dollar weakened in relation to most major
currencies, defying the consensus view of most
analysts that it would strengthen. And finally, political
turmoil in Mexico led to a dramatic sell-off of
Mexican stocks and bonds, spoiling the mood of
euphoria that accompanied passage of the North
American Free Trade Agreement last fall. As a
result, so far in 1994, performance has been as
much a function of the investments you avoided as
the investments you made."
(bullet) European investments totalled 44% of the fund at
the end of April. Sweden and Germany led all other
countries in Europe, accounting for 7.6% and 7.6%
of the fund, respectively. Other European countries
with at least 3% of the fund's investments were the
Netherlands (5.3%), France (4.3%), Switzerland
(3.9%) and the United Kingdom (3.5%).
(bullet) Investments in most European countries rose or
remained stable over the past six months. The
exception was the U.K., where the fund sold
property stocks at a profit. The fund still owns
property stocks in France, but so far their
performance has been disappointing.
(bullet) Mexico led all other emerging markets in the fund,
with 4.6% of investments at the end of April, followed
by Argentina (1.7%), Hong Kong (0.8%), Singapore
(0.7%) and India (0.7%).
(bullet) Short-term investments as a percentage of the
fund's total investments were 16% at the end of
April. That was up slightly from 14% last October,
but still within the fund's neutral range.
WORLDWIDE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
France 4.3%
Row: 1, Col: 1, Value: 30.8
Row: 1, Col: 2, Value: 3.5
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 7.6
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 6, Value: 15.1
Row: 1, Col: 7, Value: 5.3
Row: 1, Col: 8, Value: 4.6
Row: 1, Col: 9, Value: 14.3
Row: 1, Col: 10, Value: 7.6
Row: 1, Col: 11, Value: 4.3
Germany 7.6%
United States 30.8%
Japan 14.3%
Mexico 4.6%
United
Kingdom 3.5%
Netherlands 5.3%
Switzerland 3.9%
Sweden 7.6%
Other 15.1%
Spain 3.0%
AS OF OCTOBER 31, 1993
Finland 2.2%
Row: 1, Col: 1, Value: 32.5
Row: 1, Col: 2, Value: 5.9
Row: 1, Col: 3, Value: 4.4
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 10.1
Row: 1, Col: 7, Value: 2.6
Row: 1, Col: 8, Value: 6.8
Row: 1, Col: 9, Value: 7.4
Row: 1, Col: 10, Value: 11.4
Row: 1, Col: 11, Value: 2.4
Row: 1, Col: 12, Value: 4.8
Row: 1, Col: 13, Value: 2.2
Row: 1, Col: 14, Value: 2.2
France 2.2%
Germany 4.8%
United States 32.5%
Hong Kong 2.4%
Japan 11.4%
Mexico 7.4%
United
Kingdom 5.9%
Netherlands 6.8%
Switzerland 4.4%
Norway 2.6%
Sweden 4.0%
Other 10.1%
Spain 3.3%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 80.1 80.4
Bonds 3.8 5.6
Short-term investments 16.1 14.0
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Grupo Tribasa SA de CV
sponsored ADR 1.5 2.0
(Mexico, Construction)
Bremer Vulkan AG
(Germany, Ship Building & Repair) 1.2 -
Escada AG (non-vtg.)
(Germany, Textiles & Apparel) 1.0 -
Munksjo AB
(Sweden, Paper & Forest Products) 1.0 -
Bail Investissement
(France, Real Estate) 0.9 0.4
Fidis Spa Ord.
(Italy, Credit & Other Finance) 0.9 -
Marieberg Tidnings A
(Sweden, Publishing) 0.8 1.1
Rottneros Bruk AB Free shares
(Sweden, Paper & Forest Products) 0.8 -
Unidanmark AS Class A
(Demark, Banks) 0.8 -
Von Moos Holdings AG Ord.
(Switzerland, Iron & Steel) 0.8 -
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 18.9 17.9
Construction & Real Estate 12.5 11.8
Basic Industries 10.2 9.4
Retail & Wholesale 8.6 7.7
Durables 8.5 7.6
Energy 3.7 4.5
Media & Leisure 3.1 3.8
Technology 3.1 2.1
Industrial Machinery & Equipment 3.0 3.8
Transportation 2.1 2.7
WORLDWIDE
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 75.8%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
Cinba SA Ord. 131,159 $ 420,550 17899B92
AUSTRALIA - 0.2%
Fosters Brewing Group Ltd. 1,212,500 1,066,782 35025810
BELGIUM - 0.5%
GB-INNO-BM SA GIB 50,000 2,301,614 36149699
DENMARK - 0.8%
Burmeister & Wain Holdings AS,
Series B (New) 3,120 209,436 12299296
Unidanmark AS Class A 115,000 4,063,830 92399792
4,273,266
FINLAND - 1.6%
Enso Gutzeit OY R Free shares 195,000 1,397,941 29357810
Kansallis-Osake-Pankki 585,000 1,321,492 48199210
Kone Corp. Class B Ord. 13,000 1,509,582 50400092
Repola OY 87,600 1,556,912 75999A92
Unitas Bank Ltd. 90499122:
A Free shares 270,000 766,179
B Free shares 591,700 1,579,650 90499123
8,131,756
FRANCE - 4.3%
Bail Investissement (b) 27,300 4,680,276 05699092
Coflexip sponsored ADR 108,000 2,443,500 19238410
Immeubles de France, Ste Des (b) 37,655 3,760,176 44999C22
Klepierre SA (b) 34,400 3,842,489 49899822
Pechiney SA CIP 27,000 1,918,346 70599310
UFB Locabail SA 34,000 2,571,933 90499592
Unibail (b) 28,000 2,523,860 90599B92
21,740,580
GERMANY - 4.1%
Bayer AG 7,200 1,714,244 07273010
Bremer Vulkan AG 98,000 5,925,030 10689999
Commerzbank (Rfd) 250 52,600 20299033
Commerzbank AG 2,509 544,577 20259710
Deutsche Babcock AG 5,500 888,513 25159991
Deutsche Bank AG (warrants) (b) 9,500 1,404,897 25152596
Felten & Guilleaume Enrg. AG (b) 1,900 416,415 31499292
Herlitz AG 2,800 709,311 42799392
Hoesch AG 3,100 412,334 43438199
Karstadt AG DM 50 3,000 1,140,871 48576499
Linotype-Hell AG (Bearer) (b) 6,400 1,509,069 53599092
Mannesmann AG (Rfd.) 912 256,948 56311595
Mannesmann AG Ord. 7,300 2,085,399 56377510
Rheinhold & Mahla AG 6,200 1,450,665 76299692
Sixt AG 16,000 1,033,132 83002195
Sixt AG Ord. (b) 748 246,469 83002199
Thyssen AG Ord. 4,200 727,001 88629110
20,517,475
HONG KONG - 0.8%
First Pacific Co. Ltd. 2,428,000 1,092,260 33699192
Fortei Holdings Ltd. 7,012,000 1,397,912 34999D22
Kong Wah Holdings Ltd. (b) 2,520,000 544,799 50599B92
Kumagai Gumi (b) 922,000 978,731 50099210
4,013,702
INDIA - 0.7%
Arvind Mills Ltd. units (c) 210,800 1,159,400 04334810
Indian Aluminum Ltd. GDR (c) 273,700 2,189,600 45410110
3,349,000
INDONESIA - 0.6%
Astra International (For. Reg.) 11,000 83,653 04699894
Bank Dagang Nas Indonesia PT 45,500 66,461 06099Q22
SHARES VALUE (NOTE 1)
Barito Pacific Timber (For. Reg.) (b) 171,000 $ 681,927 06799F23
Dharmala International Land 975,000 1,695,427 25399592
Pan Brothers Textile PT 900,000 573,840 69799492
3,101,308
IRELAND - 0.1%
Aran Energy (b) 1,536,000 675,963 03899999
ITALY - 2.7%
Cementerie di Sardegna Spa 538,000 2,663,321 15199F22
Cogefar-Impresit Cost Gen Spa 1,300,000 2,106,923 19199092
Consorzio di Credit Oper. Pubbl.
(Cogefar) (warrants) 1,300,000 1,459,263 21099922
Fidis Spa Ord. 1,100,000 4,550,601 31650010
Fila Holding Spa sponsored ADR (b) 153,000 2,122,875 31685010
Istituto Mobiliare Italiano 24,000 199,026 45777M92
Simint Ord. (b) 465,600 518,827 83799492
13,620,836
JAPAN - 14.3%
Akita Bank 132,000 949,079 00999692
Aomori Bank Ltd. 260,000 1,633,804 02399592
Bandai Co. Ltd. 46,800 2,060,436 06099192
Bank of the Ryukyus 17,000 971,141 83499192
Bridgestone Corp. 155,000 2,320,497 10844110
Charle Co. Ltd. 55,000 1,327,194 15999392
Daiichi Corp. Ord. 122,000 3,136,216 23599B92
Daito Trust Construction 76,000 2,021,078 24999492
Daiwa Securities 96,000 1,503,398 23499010
Fuji Distribution Co. 182,600 1,501,733 36299992
Fukushima Bank Ltd. 287,000 1,580,153 36099A92
Hankyu Department Stores, Inc. 167,000 2,171,180 41099192
Hanshin Department Store 403,000 3,175,414 41199292
Higo Bank Ltd. Ord. 178,000 1,362,218 43299192
Hyogo Bank Ltd. 392,000 1,304,995 44999292
Iwate Bank 32,000 1,733,478 45699392
Joyfull Co. Ltd. (b) 39,000 852,753 49499F22
Kanamoto Co. Ltd. 51,000 1,537,083 48399B22
Kaneshita Construction Co. Ltd. Ord. (b) 145,000 2,513,543 49099592
Kanto Auto Works Co. Ltd., Yokosuka 202,000 1,378,765 48599092
Keio Teito Electric Railway (b) 234,000 1,288,348 48766710
Kenwood Corp. 99,000 857,096 49178692
Koa Fire & Marine Insurance Co. Ltd. 167,000 1,157,963 49999010
Kumagai Gumi Co. Ltd. (warrants) 7,600 570,000 50125193
Matsuya Co. Ltd. 181,000 1,167,685 57699E22
Mazda Motor Corp. (b) 255,000 1,326,110 57878592
Michinoku Bank 195,000 1,569,142 59499392
Mitsubishi Motors Corp. (b) 198,000 1,751,247 60899692
Mitsubishi Trust & Banking 105,000 1,551,266 60699410
Namura Shipbuilding (b) 90,000 640,894 62999892
Nichii Co. Ltd. 66,000 1,001,083 65299110
Nomura Securities Co. Ltd. 117,000 2,546,735 65536130
Onward Kashiyama Co. Ltd.
(warrants) (b) 850 977,500 48551393
Shimzu Bank Ltd. 29,000 2,230,769 82499592
Sogo Co. Ltd. 387,000 2,515,709 83599K22
Sony Corp. ADR 21,000 1,173,375 83569930
Sumitomo Marine and Fire 220,000 2,136,512 94599392
Sumitomo Trust & Banking Co. 134,000 1,847,730 86599310
Tachi-S Co. Ltd. 120,000 1,157,096 88099392
Tobu Railway Co. Ltd. (warrants) (b) 500 175,000 88739192
Toho Bank Ord. 195,000 1,402,048 91799192
Tokio Marine & Fire Insurance Co. Ltd.
(The) 110,000 1,408,451 88909099
Tokyo Nissan Auto Sales Co. Ltd. 262,000 2,528,908 88998599
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Tokyu Department Stores Co. Ltd. 364,000 $ 2,384,124 88914593
Toyoda Auto Loom Works Ltd. 130,000 2,240,718 89200910
72,639,667
LUXEMBOURG - 0.4%
Scandinavian Broadcasting Corp. (b) 71,000 1,828,250 80699E92
MEXICO - 3.7%
Banacci SA de CV:
Class B (b) 245,000 1,500,765 06399896
Class C 55,000 373,124 06399893
Class L (b) 92,000 624,134 06399895
Cemex SA, Series B 90,000 1,951,608 15299293
Grupo Carso SA de CV Class A-1 (b) 315,000 3,140,352 40099594
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 89,000 2,191,625 40048610
Grupo Tribasa SA de CV
sponsored AD R (b) 300,042 7,351,029 40049F10
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 29,000 1,707,375 87940378
18,840,012
NETHERLANDS - 5.3%
Akzo NV Ord. 10,400 1,253,154 01019910
Bam Groep NV 18,600 1,152,168 05999892
CVG (Crown Van Gelder) 26,000 2,247,778 12699292
Draka Holding NV 48,700 1,114,867 26199B22
Econosto NV 170,000 2,215,998 27903299
Geveke Trade 88,200 1,724,568 37431310
Heidemij NV (b) 100,400 1,066,750 42099522
Hoogovens en Staalfabrieken (b) 49,300 1,917,296 43888410
KBB (Kon Bijenkorf Beheer) NV:
Ord. 13,800 790,164 48130092
(rights) 13,800 5,947 48130095
Kempen & Company NV 269,000 1,999,568 48899D22
MacIntosh Confectionary Works (b) 62,000 2,043,846 58199292
Philips Electronics (b) 29,400 859,909 71833799
Pirelli Tyre Holdings NV Ord. (b) 171,500 1,708,996 72499092
Samas-Groep NV 57,250 1,788,580 79499110
Telegraaf 23,700 2,093,617 87940410
Volker Stevin NV 42,600 2,111,069 92868894
Wereldhave NV 8,800 522,359 95199E22
26,616,634
NORWAY - 2.3%
Bolig Og Naerings Banken 113,000 2,317,997 09799F22
Color Lines 312,600 1,265,039 19699492
Den Norske Bank Class A Free shares (b) 674,700 1,821,832 25299792
Mosvold Shipping AS B 221,700 1,299,368 62099294
Petroleum Geo Services AS (b) 53,000 739,593 71699E92
Smedvig AS 92,200 1,055,023 79799892
Smedvig AS (rights) 92,200 3,217 79799895
Sparebanken Norway Prime share
cert. (b) 75,000 1,412,902 84699E22
Vital Forsikring Free shares 186,500 1,899,848 93999692
11,814,819
PORTUGAL - 0.5%
Engil Soc. de Const. 21,000 307,934 29299192
Engil Soc. de Const. (New) 12,600 184,760 29299197
Mundicenter Soc Imobil SA 72,000 2,073,465 62699592
2,566,159
SINGAPORE - 0.7%
Jurong Cement (b) 1,110,000 3,355,197 48299792
SHARES VALUE (NOTE 1)
SOUTH AFRICA - 0.4%
Anglo American Corp. of South
Africa Ltd.:
ADR 10,000 $ 492,500 03486110
(Reg.) (b) 30,000 1,524,324 03486130
2,016,824
SPAIN - 2.9%
Banco Bilbao Vizcaya SA Ord. (Reg.) 154,600 3,692,026 05945891
Banco Central SA (Reg.) 101,000 2,205,682 05947010
Banco de Santander Ord. (Reg.) 8,000 351,792 05957410
Banco de Valencia SA (Reg.) 210,000 2,573,817
Banco Pastor SA (b) 80,475 3,777,917 05999792
Conservera Campo Frio 34,000 1,742,618 20899292
Hisalba (b) 15,000 268,524 46199592
14,612,376
SWEDEN - 7.4%
ASG AB Class B Free shares Ord. 79,700 1,360,229 16599C22
Arjo AB (c) 168,000 2,668,732 04069792
Avest Sheffield AB Ord. Free shares (b) 430,000 2,822,597 05399892
Catena AB Class A Free shares 140,000 1,157,920 14999G22
Celsius Industrier AB Class B 85,000 2,265,298 15199D22
Enator Information System AB B Free
shares (b) 312,600 1,723,648 29299H22
Foreningsbanken AB Ord. Class A (b) 683,000 1,416,733 34599E22
Hennes & Mauritz AB B Free shares 27,900 1,384,543 42599110
Hoganas AB Class B Free shares (c) 70,000 946,555 43899M22
Marieberg Tidnings A (b) 160,000 4,222,080 56799392
Munksjo AB 628,000 4,864,318 62599922
NCC AB B Free shares 479,000 3,835,976 63399192
Rottneros Bruk AB Free shares 4,000,000 4,201,080 77899522
Scribona AB B Free shares (b) 66,100 433,892 81199B92
Skanska Class B (b) 40,000 987,252 93899392
Trelleborg AB Class C Free shares 156,000 2,293,787 89491092
Trustor AB B Free shares 185,500 1,120,242 89899D22
37,704,882
SWITZERLAND - 3.9%
Bucher Holding AG (Bearer) 350 1,187,329 08699292
CS Holdings (Bearer) (b) 2,830 1,218,202 17599792
Globus Magazine Part. Cert. 1,800 1,199,444 37957792
Industrieholding Cham AG (Reg.) 1,500 1,207,996 85599922
Jelmoli Grand Magasins SA (Reg.) 15,000 1,662,331 47469993
Jelmoli Grands Magasins SA 1,150 686,812 47469910
Merkur Holdings AG Ord. (Reg.) 6,000 1,492,356 59099393
Reisebuero Kuoni Part. Cert. 1,400 2,195,061 75999592
SMH (Schweiz Gesel UHR) (Bearer) 3,500 2,120,229 80899294
Swiss Bank Corp. (Reg.) 10,936 1,519,809 87083694
Swiss Reinsurance Corp.:
(Reg.) (b) 1,500 639,276 87099393
A (warrants) (b) 1,500 5,078 87099D22
B (warrants) (b) 1,500 5,880 87099399
Von Moos Holdings AG Ord 33,500 4,034,850 94099293
Winterthur Schweiz (Reg.) 1,750 808,182 97629994
19,982,835
THAILAND - 0.2%
Eastern Wire Co. Ltd. (For. Reg.) 325,000 884,133 27799423
UNITED KINGDOM - 3.3%
Brown & Jackson PLC 19,000,000 1,513,730 11599092
Guinness PLC Ord. 160,000 1,164,226 40203310
Hammerson Property Investment &
Development Corp. PLC Ord. 194,333 1,172,228 40831510
Hanson Trust PLC Ord. 190,000 787,128 41135210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Hartstone Group PLC Ord. (b) 829,200 $ 578,823 41722610
Imperial Chemical Industries PLC:
ADR (New) 15,000 746,250 45270450
Ord. 50,000 622,934 45270440
Ladbroke Group PLC Ord. 570,000 1,604,527 50572799
Royale Insurance Co. Ltd. 350,000 1,396,860 78074910
Sedgwick Group 240,000 717,475 81482610
Shanks & McEwan Group PLC 1,400,000 2,273,222 81999294
Trafalgar House PLC Ord. 925,000 1,473,876 89270710
Wates City of London Property (b) 1,574,999 1,912,049 94299092
Wellcome PLC sponsored ADR 90,000 720,000 94947820
16,683,328
UNITED STATES OF AMERICA - 13.9%
AMR Corp. (b) 25,000 1,515,625 00176510
Allstate Corp. 56,700 1,353,713 02000210
Alumax, Inc. (b) 13,300 317,538 02219710
Amerada Hess Corp. 42,700 2,145,675 02355110
American Eagle Outfitters, Inc. 1,000 15,625 02553D10
American Ecology Corp. 25,400 266,700 02553310
American Stores Co. 68,800 1,720,000 03009610
Astec Industries, Inc. (b) 67,000 1,005,000 04622410
BJ Services Co. (b) 19,300 354,638 05548210
Baker (J.), Inc. 51,000 1,083,750 05723210
Bank of Boston Corp. 32,551 838,188 06071610
Bruno's, Inc. 150,000 1,143,750 11688110
Burlington Industries, Inc. 41,000 625,250 12169310
Cliffs Drilling Co. (b) 18,000 229,500 18682C10
Cobra Industries, Inc. (b) 71,000 426,000 19104E10
Cyprus Amax Minerals Co. 13,300 374,063 23280910
Dayton Hudson Corp. 32,900 2,599,100 23975310
Deposit Guaranty Corp. 25,000 706,250 24955510
Dresser Industries, Inc. 48,000 1,092,000 26159710
Eastman Kodak Co. 42,000 1,743,000 27746110
Enterra Corp. (b) 25,600 515,200 29380510
Exxon Corp. 15,000 943,125 30229010
GEON Co. 28,000 773,500 37246W10
Georgia Gulf Corp. (b) 23,800 687,225 37320020
Global Marine, Inc. (New) (b) 285,000 1,140,000 37935240
Global Ocean Carriers Ltd. (b) 26,200 88,425 37935710
Grace (W.R.) & Co. 10,900 444,175 38388310
Great Atlantic & Pacific Tea Co., Inc. 13,300 332,500 39006410
Halliburton Co. 14,000 414,750 40621610
Harveys Casino Resorts 24,500 410,375 41782610
Helmerich & Payne, Inc. 32,000 836,000 42345210
International Business Machines Corp. 63,700 3,646,825 45920010
Kentucky Electric Steel, Inc. (b) 28,600 293,150 49127B10
Kerr-McGee Corp. 54,600 2,443,350 49238610
Kroger Co. (The) (b) 70,000 1,592,500 50104410
Lafarge Corp. 36,200 819,025 50586210
Liz Claiborne, Inc. 90,000 2,250,000 53932010
Medusa Corp. 47,400 1,179,075 58507230
Mellon Bank Corp. 21,589 1,203,587 58550910
Micropolis Corp. (b) 54,050 391,863 59490710
Mobil Corp. 8,000 626,000 60705910
OM Group, Inc. (b) 70,000 1,400,000 67087210
Oryx Energy Co. 22,200 374,625 68763F10
Pfizer, Inc. 31,000 1,829,000 71708110
Philip Morris Companies, Inc. 26,000 1,417,000 71815410
RJR Nabisco Holdings Corp. (b) 228,700 1,457,963 74960K10
Reynolds Metals Co. 28,200 1,184,400 76176310
Rite Aid Corporation 55,000 1,058,750 76775410
Ross Stores, Inc. (b) 62,900 1,061,438 77829610
SHARES VALUE (NOTE 1)
Santa Fe Pacific Corp. 44,000 $ 979,000 80218310
Schering-Plough Corp. 39,000 2,379,000 80660510
Sears, Roebuck & Co. 33,000 1,551,000 81238710
Serv-Tech, Inc. (b) 18,200 177,450 81753910
Shawmut National Corp. 55,000 1,230,625 82048410
Standard Pacific Corp. 65,000 593,125 85375C10
Stop & Shop Companies, Inc. (b) 27,700 740,975 86209910
Supervalu, Inc. 17,000 554,625 86853610
Tech Data Corp. (b) 20,000 357,500 87823710
Texaco, Inc. 10,300 663,063 88169410
Textron, Inc. 19,000 1,002,250 88320310
Tidewater, Inc. 17,000 357,000 88642310
Tuboscope Vetco Corp. (b) 151,000 868,250 89860010
UAL Corp. (b) 8,000 1,033,000 90254910
UDC Homes, Inc. 60,200 413,875 90264610
Union Planters Corp. 62,407 1,653,786 90806810
Unisys Corp. (b) 70,000 761,250 90921410
United States Banknote Corp. (b) 125,000 437,500 91162310
Vons Companies, Inc. (b) 39,300 717,225 92886910
Weatherford International, Inc. (b) 42,500 456,875 94707610
Western Co. of North America (b) 55,000 701,250 95804340
Westpoint Stevens, Inc. Class A (b) 60,400 973,950 96123810
Whitney Holding Corp. 27,000 621,000 96661210
Wolverine Tube, Inc. (b) 36,000 828,000 97809310
70,420,765
VENEZUELA - 0.1%
CA Venepal GDR Class A ADR (b) (c) 134,502 437,132 12477610
TOTAL COMMON STOCKS
(Cost $350,845,237) 383,615,845
PREFERRED STOCKS - 4.3%
CONVERTIBLE PREFERRED STOCKS - 0.9%
UNITED KINGDOM - 0.1%
Trafalgar House PLC Ord. 6% 200,000 411,242 89270797
UNITED STATES OF AMERICA - 0.8%
Chiles Offshore Corp. $1.50 (b) 13,000 295,750 16888720
Consolidated Freightways, Inc., Series C,
$1.54 67,300 1,514,250 20923720
Kaiser Aluminum Corp. $0.96 (b) 19,000 178,125 48300740
Reynolds Metals Co. $3.31 21,500 991,688 76176350
Unisys Corp., Series A, $3.75 (b) 26,600 1,060,675 90921420
4,040,488
TOTAL CONVERTIBLE PREFERRED STOCKS 4,451,730
NONCONVERTIBLE PREFERRED STOCKS - 3.4%
GERMANY - 3.4%
Bayerische Motor Werke (BMW) AG 4,000 1,596,131 05528393
Escada AG (non-vtg.) 22,000 5,160,822 29605192
FAG Kugelfischer Georg Schaef 16,000 2,282,950 50105492
Herlitz AG 15,000 3,400,846 42799393
Kaufhof AG 5,800 1,465,780 48615294
Moebel Walther AG 3,600 1,469,166 61099B22
Schwabengarage AG 7,900 1,838,875 80899392
17,214,570
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
PORTUGAL - 0.0%
Engil Soc. de Const. 10,000 $ 128,122 29299194
Engil Soc. de Const. (New) 6,000 76,873 29299198
204,995
TOTAL NONCONVERTIBLE PREFERRED STOCKS 17,419,565
TOTAL PREFERRED STOCKS
(Cost $18,001,868) 21,871,295
CORPORATE BONDS - 1.1%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 1.0%
DENMARK - 0.1%
Burmeister & Wain Holdings
AS 7%, 10/4/98 - DKK 3,160,000 726,577 122992AA
GERMANY - 0.1%
Commerzbank AG 7%,
12/31/00 - DEM 500,000 471,584 202990MS
GRAND CAYMAN - 0.5%
Filinvest (Cayman Island) Ltd.
3 3/4%, 2/28/04 (c) - $ 3,000,000 2,640,000 317015AA
SPAIN - 0.1%
Banco Santander euro 9%,
6/24/94 A1 ESP 50,000,000 393,685 0595749B
UNITED KINGDOM - 0.1%
Royal Insurance Holdings PLC
euro 7 1/4%, 12/12/07 - GBP 375,000 598,938 7807499B
TOTAL CONVERTIBLE BONDS 4,830,784
NONCONVERTIBLE BONDS - 0.1%
ITALY - 0.1%
Consorzio di Credit Oper.
Pubbl. 6%, 3/31/99 - ITL 1,300,000 758,328 210999AA
TOTAL CORPORATE BONDS
(Cost $5,722,555) 5,589,112
GOVERNMENT OBLIGATIONS (E) - 2.7%
ARGENTINA - 1.6%
Argentina Republic 5%,
3/31/05 (c) (d) - 187,000 136,276 039995AT
Argentina Republic:
BOCON 3 1/4%, 4/1/01 B1 1,472,024 1,029,843 039995AF
Brady:
euro 4%, 3/31/23 B1 10,000,000 5,287,500
4%, 3/31/23 (c) - 3,315,000 1,752,806 0401149Y
8,206,425
MEXICO - 0.9%
Mexican Government 10 3/5%,
10/20/94 - MXN 15,000,000 4,593,768 597998TH
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
SWEDEN - 0.2%
Swedish Government 11 1/2%,
9/1/95 Aa2 SEK 6,000,000 $ 822,409 8702009B
TOTAL GOVERNMENT OBLIGATIONS
(Cost $13,522,127) 13,622,602
REPURCHASE AGREEMENTS - 16.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 81,773,252 81,749,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $469,840,787) $ 506,447,854
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
197,712,500 ESP 5/3/94 $ 1,467,930 $ 74,607
(Payable amount $1,393,323)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.3%
CONTRACTS TO SELL
197,712,500 ESP 5/3/94 $ 1,467,930 $ (79,524)
33,265,250 NOK 6/28/94 4,633,753 (77,806)
638,700,000 JPY 7/1/94 6,312,574 (111,964)
TOTAL CONTRACTS TO SELL
(Receivable amount $12,144,963) $ 12,414,257 $ (269,294)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.5%
CURRENCY ABBREVIATIONS
DKK - Danish krone
DEM - German Deutsche mark
ESP - Spanish peseta
GBP - British pound
ITL - Italian lira
JPY - Japanese yen
MXN - Mexican peso
NOK - Norwegian krone
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. 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 $14,122,126 or 2.8% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR,
the fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
6. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $243,065,530 and $91,607,208, respectively.
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 $21,940 for the period (see Note 4 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $469,903,144. Net unrealized appreciation aggregated
$36,544,710, of which $59,459,988 related to appreciated investment
securities and $22,915,278 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.9%
Basic Industries 10.2
Conglomerates 0.4
Construction & Real Estate 12.5
Durables 8.5
Energy 3.7
Finance 18.9
Government Obligations 2.7
Health 1.5
Industrial Machinery & Equipment 3.0
Media & Leisure 3.1
Nondurables 1.5
Precious Metals 0.4
Repurchase Agreements 16.1
Retail & Wholesale 8.6
Services 1.5
Technology 3.1
Transportation 2.1
Utilities 0.3
100.0%
WORLDWIDE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
· Download Table
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of
$81,749,000) (cost $469,840,787)$ 506,447,854
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value
(cost $1,393,323) (Note 2)
1,467,930
Short foreign currency contracts
$ (12,414,257
(Note 2) )
Contracts held, at value
Receivable for contracts held
12,144,963 (269,294
)
Receivable for investments sold
8,042,635
Receivable for fund shares sold
17,009,053
Dividends receivable
893,189
Interest receivable
422,471
Other receivables
7,487
TOTAL ASSETS
534,021,325
LIABILITIES
Payable for foreign currency contracts held (Note 2)
1,393,323
Payable for investments purchased
623,007
Payable for fund shares redeemed
4,344,385
Accrued management fee
314,869
Other payables and accrued expenses
390,309
TOTAL LIABILITIES
7,065,893
NET ASSETS
$ 526,955,432
Net Assets consist of (Note 1):
Paid in capital
$ 468,911,677
Undistributed net investment income
1,291,214
Accumulated undistributed net realized gain (loss) on investments
20,340,161
Net unrealized appreciation (depreciation) on:
Investment securities
36,607,067
Foreign currency contracts
(194,687
)
NET ASSETS, for 38,489,069 shares outstanding
$ 526,955,432
NET ASSET VALUE, offering price and redemption price per share
($526,955,432 (divided by) 38,489,069 shares) (Note 4)
STATEMENT OF OPERATIONS
· Enlarge/Download Table
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 2,883,315
Dividends
Interest 1,919,073
4,802,388
Less foreign taxes withheld (Note 1) (253,778
)
TOTAL INCOME 4,548,610
EXPENSES
Management fee (Note 4) $ 1,606,216
Transfer agent fees (Note 4) 826,968
Accounting fees and expenses 125,451
(Note 4)
Non-interested trustees' compensation 1,140
Custodian fees and expenses 179,574
Registration fees 87,934
Audit 25,002
Legal 2,179
Miscellaneous 1,544
Total expenses 2,856,008
Expense reductions (Note 6) (2,558 2,853,450
)
NET INVESTMENT INCOME 1,695,160
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 20,810,808
Foreign currency contracts (146,783 20,664,025
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 9,592,747
Foreign currency contracts (373,435 9,219,312
)
NET GAIN (LOSS) 29,883,337
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 31,578,497
OTHER INFORMATION
Accounting fees paid to FSC $124,430
(Note 4)
STATEMENT OF CHANGES IN NET ASSETS
· Enlarge/Download Table
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ 1,695,160 $ 2,970,026
Net investment income
Net realized gain (loss) on investments 20,664,025 10,114,657
Change in net unrealized appreciation (depreciation) on investments 9,219,312 31,061,709
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 31,578,497 44,146,392
Distributions to shareholders: (2,354,690 (2,497,555
From net investment income )
)
From net realized gain (3,532,260 (158,811
) )
TOTAL DISTRIBUTIONS (5,886,950 (2,656,366
) )
Share transactions 490,802,662 277,973,551
Net proceeds from sales of shares
Reinvestment of distributions 5,746,754 2,587,340
Cost of shares redeemed (282,563,692 (138,399,750
) )
Net increase (decrease) in net assets resulting from share transactions 213,985,724 142,161,141
TOTAL INCREASE (DECREASE) IN NET ASSETS 239,677,271 183,651,167
NET ASSETS
Beginning of period 287,278,161 103,626,994
End of period (including undistributed net
investment income of $1,291,214 and $3,525,845, respectively) $ 526,955,432 $ 287,278,161
OTHER INFORMATION
Shares
Sold 36,618,695 23,493,059
Issued in reinvestment of distributions 451,410 270,077
Redeemed (21,102,260 (11,997,236
) )
Net increase (decrease) 15,967,845 11,765,900
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
· Enlarge/Download Table
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, MAY 30, 1990
APRIL 30, 1994 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31, 1990
SELECTED PER-SHARE DATA
1993 1992 1991
Net asset value, beginning of period
$ 12.76 $ 9.63 $ 9.61 $ 8.95 $ 10.00
Income from Investment Operations
Net investment income
.01 .11 .20 .21 .05
Net realized and unrealized gain (loss) on investments
1.17 3.28 (.08) .53 (1.10)
Total from investment operations
1.18 3.39 .12 .74 (1.05)
Less Distributions
From net investment income
(.10) (.24) (.10) (.08) -
From net realized gain
(.15) (.02)(s diamond) - - -
Total distributions
(.25) (.26) (.10) (.08) -
Net asset value, end of period
$ 13.69 $ 12.76 $ 9.63 $ 9.61 $ 8.95
TOTAL RETURN (diamond)
9.40% 36.10% 1.32% 8.33% (10.50)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 526,955 $ 287,278 $ 103,627 $ 105,029 $ 94,851
Ratio of expenses to average net assets
1.40%* 1.40% 1.51% 1.69% 2.00%*
Ratio of expenses to average net assets before expense
1.40%* 1.40% 1.51% 1.69% 2.46%*
reductions
Ratio of net investment income to average net assets
.83%* 1.99% 2.02% 2.19% 2.09%*
Portfolio turnover rate
58%* 57% 130% 129% 123%*
* ANNUALIZED
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
(diamond) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED.
CANADA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Canada Fund has
a 3% sales charge, which has been waived through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTH YEAR YEARS FUND
S
CANADA -2.25% 4.87% 51.69% 111.61%
CANADA
(INCL. 3% SALES CHARGE) -5.18% 1.73% 47.14% 105.26%
TSE 300 (Toronto Stock
Exchange 300) Index -3.10% 6.21% 19.24% 71.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on November 17, 1987. You can compare the fund's
figures to the performance of the Toronto Stock Exchange (TSE) 300 index -
a broad measure of the performance of the Canadian stock market. This index
includes reinvested dividends and capital gains, if any, and excludes the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
CANADA 4.87% 8.69% 12.31%
CANADA
(INCL. 3% SALES CHARGE) 1.73% 8.03% 11.78%
TSE 300 (Toronto Stock
Exchange 300) Index 6.21% 3.58% 8.67%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Canada (309) Toronto 300 Stock Exc.
11/17/87 9700.00 10000.00
11/30/87 9767.90 10153.53
12/31/87 10446.90 10895.36
01/31/88 10340.20 10759.36
02/29/88 11048.30 11447.90
03/31/88 11737.00 12111.13
04/30/88 12008.60 12268.35
05/31/88 11436.30 11947.11
06/30/88 12319.00 12906.84
07/31/88 12144.40 12762.32
08/31/88 11562.40 12139.94
09/30/88 11804.90 12401.15
10/31/88 12357.80 12753.48
11/30/88 12212.30 12830.11
12/31/88 12480.81 13188.28
01/31/89 13422.57 14213.27
02/28/89 13045.86 13881.50
03/31/89 13263.96 14027.96
04/30/89 13531.61 14346.43
05/31/89 13987.62 14383.31
06/30/89 14661.73 14845.75
07/31/89 15553.92 15890.01
08/31/89 15633.23 16147.42
09/30/89 15534.09 15922.92
10/31/89 15316.00 15949.98
11/30/89 15405.22 16197.04
12/31/89 15849.09 16474.68
01/31/90 14563.75 15023.40
02/28/90 14646.68 14920.74
03/31/90 14895.45 15084.12
04/30/90 14180.22 13930.65
05/31/90 15113.13 14884.87
06/30/90 15465.56 14908.13
07/31/90 15589.95 15161.03
08/31/90 14688.14 14235.18
09/30/90 14449.73 13514.44
10/31/90 14066.20 13073.85
11/30/90 14522.29 13439.96
12/31/90 14978.59 14019.82
01/31/91 15045.01 14077.13
02/28/91 16428.84 15100.37
03/31/91 17148.44 15213.01
04/30/91 17281.28 15194.26
05/31/91 18045.16 15713.88
06/30/91 18067.30 15474.06
07/31/91 18011.95 15696.55
08/31/91 17856.96 15774.78
09/30/91 17259.14 15380.42
10/31/91 18023.02 16117.15
11/30/91 17347.71 15691.20
12/31/91 17627.42 15764.11
01/31/92 17945.13 15903.64
02/29/92 18051.04 15778.39
03/31/92 17545.04 15003.00
04/30/92 17333.23 14750.06
05/31/92 17486.21 14781.51
06/30/92 17392.07 14899.21
07/31/92 17839.23 15353.94
08/31/92 17568.58 15073.09
09/30/92 16815.47 14065.44
10/31/92 16744.87 14331.45
11/30/92 16697.80 13610.56
12/31/92 17121.47 14127.27
01/31/93 17027.20 13986.24
02/28/93 18087.72 14844.82
03/31/93 19077.54 15446.95
04/30/93 19572.44 16106.36
05/31/93 19843.46 16559.37
06/30/93 20856.85 16822.63
07/31/93 20102.70 16806.78
08/31/93 20609.39 17107.05
09/30/93 19596.01 16373.43
10/31/93 20998.25 17654.85
11/30/93 20515.13 17182.05
12/31/93 21482.46 18005.65
01/31/94 22427.27 18880.15
02/28/94 21470.65 18093.83
03/31/94 20679.38 17332.87
04/30/94 20525.85 17106.99
Let's say you invested $10,000 in Fidelity Canada Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$20,526 - a 105.26% increase on your initial investment. That compares to
$10,000 invested in the Toronto Stock Exchange (TSE) 300 index, which would
have grown to $17,107 over the same period - a 71.07% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
CANADA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with George Domolky,
Portfolio Manager of Fidelity Canada Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. The fund suffered a loss of -2.25% for the six months ended April 30,
1994. But it did outperform the Toronto Stock Exchange 300 index, which
posted a bigger loss of -3.10%. For the 12 months ended April 30, the fund
underperformed the index. The fund rose 4.87%, while the index was up
6.21%.
Q. WHAT ACCOUNTED FOR THE CANADIAN MARKET'S DECLINE?
A. The past six months saw considerable fluctuations in the Canadian
market. It did very well until the end of January, based on investors'
hopes for an economic recovery. However, Canadian interest rates started to
climb in February after the Federal Reserve's actions caused U.S. interest
rates to rise. That had a negative effect on the stock market in Canada,
where the economic recovery was just beginning to get off the ground.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. I continued to favor industries that would benefit from a stronger
economy in North American as well as a global economic recovery. Those
sectors performed well early in the period and declined less than others
when stock prices declined in Canada. I also favored export-oriented
companies. They benefited from the weak Canadian dollar, which makes their
products cheaper to foreign buyers.
Q. WHICH SECTORS WERE YOUR FAVORITES?
A. One group I continued to hold was the energy sector. Canada's unique
position as a supplier of natural gas to the U.S. should continue to
benefit the fund's major holdings such as Renaissance Energy, Morrison
Petroleums and Tarragon Oil & Gas. These are companies that are
well-endowed with natural gas reserves, which are in demand as a cleaner
alternative to coal and nuclear energy. I also invested a considerable
stake in stocks of companies that produce base metals such as nickel,
aluminum and zinc. I believe their prices are expected to pick up as the
economic recovery in North America and Europe boosts industrial production.
The fund's largest positions included metals company Noranda. The fund also
held shares of Alcan Aluminum, and Cominco Co., which is involved in zinc
production. In addition, I think chemical companies will benefit from
stronger demand worldwide. That's why the fund owned shares of companies
such as NOVA Corp., Cominco Fertilizer and Dupont Canada.
Q. YOU CONTINUED TO INVEST A SIGNIFICANT STAKE IN THE FOREST PRODUCTS
INDUSTRY AS WELL. DO YOU THINK THOSE FIRMS BENEFIT FROM A GLOBAL ECONOMIC
RECOVERY?
A. Yes. Prices should rise for commodity products such as newsprint and
market pulp, which is a base material used in the paper-making process.
That will be good for commodity-oriented forest companies such as Abitibi,
a newsprint maker, and Noranda Forest. In addition, I believe that the
chronic lumber shortage in the Western world will support lumber prices.
That will continue to help companies such as Riverside Forest Products,
Domain Industries and International Forest Products.
Q. WHAT WERE THE FUND'S DISAPPOINTMENTS DURING THE PERIOD?
A. The groups which have not performed well during the past six months
include retailers such as Hudson's Bay and Sears Canada. The entry of U.S.
discount retailer Walmart into the Canadian market created a great deal of
concern about the earnings outlook for those companies, because their
competitive environment is expected to tighten significantly. That hurt the
stock prices.
Q. WHY DOES THE FUND HAVE SUCH A LARGE STAKE IN MEDIA
COMPANIES?
A. I believe that advertising revenues will grow as the Canadian economy
picks up steam, and that will help newspaper and other publishing firms. In
addition, cable and cellular companies still provide unique technologies
that will continue to be in demand. The fund's holdings included stocks of
firms such as Torstar, which publishes the Toronto STAR, and Rogers
Communications, a diversified media company listed under utilities.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DO YOU USE THEM?
A. The fund has the authority to use derivatives, but outside of currency
contracts I use to settle trades, I haven't made much use of them.
Q. WHAT'S THE OUTLOOK FOR THE CANADIAN MARKET AND THE FUND?
A. I believe the Canadian economic recovery should strengthen by the end of
this year, which I think could help support stock prices. Moreover,
Canadian stocks don't look particularly expensive, so there could be room
for some gains. The Toronto Stock Exchange 300 index, which represents the
Canadian stock market, is about at the same level as it was in 1987.
Finally, as the North American and global economic recovery continues,
Canada as a provider of base natural resources should benefit from higher
demand and better prices for Canadian products such as forest products,
base metals and natural gas. I would caution, however, that the upcoming
provincial elections in Quebec this fall will raise again the much-debated
issue of Quebec's status in the Canadian Commonwealth, which could make
some investors nervous and might not help stock prices.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in Canadian common stocks
and convertible securities
START DATE: November 17, 1987
SIZE: as of April 30, 1994, more than $172 million
MANAGER: George Domolky, since November
17, 1987; manager, Fidelity Select Food &
Agriculture Portfolio, 1985-87; assistant, Fidelity
Magellan Fund, 1983-86; joined Fidelity in 1981
(checkmark)
GEORGE DOMOLKY ON THE FUND'S STRATEGY:
"I am not an economist or a market forecaster. I am a
stock picker. That means I spend most of my energy
trying to find companies with strong finances and
good markets that can generate good cash flow and
profits over time. You don't always find those
companies by scanning financial reports. Instead,
you have to go and visit them, which is something I
do several times a month. Once I decide that a
company is solid, I consider whether the price of the
stock is attractive right now. I figure that if I buy it
cheaply enough, it will eventually rise to reflect the
value of the firm's assets and earnings potential.
Canadian stocks are not always followed as closely
as their American counterparts. That means I may
be able to find something that has been overlooked
by other investors.
"Recently, I have been investing a significant portion
of the fund's investments in stocks that I think will
benefit from stronger economic growth around the
world. Canada includes many companies that are
well-positioned to benefit from rising demand for
natural resource-based products such as timber and
natural gas. But the key to my strategy is not to
predict when that economic growth will occur.
Instead, it is finding the right companies within the
Canadian economy and buying their stocks when
they are attractively priced. "
(bullet) 24.4% of the fund's investments were
concentrated in energy, metals and mining (7.1%)
and media and leisure (8.4%).
(bullet) Many of the fund's holdings could benefit from a
stronger Canadian economy as well as increased
worldwide demand for natural resource products.
(bullet) The fund's holdings of retail and wholesale stocks
amounted to only 5.2% of its investments as of April
30. Fears of increased competition from U.S.
discounter Walmart, which entered the Canadian
market, may have dimmed prospects for those
stocks.
CANADA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 5.8%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 94.2
Canada 94.2%
AS OF OCTOBER 31, 1993
United States 8.2%
Row: 1, Col: 1, Value: 8.199999999999999
Row: 1, Col: 2, Value: 91.8
Canada 91.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 96.6 94.3
Bonds 1.8 0.9
Short-term investments 1.6 4.8
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Canadian Pacific Ltd. Ord.
(Railroads) 3.1 -
Noranda, Inc.
(Metals & Mining) 3.1 3.9
Morrison Petroleums Ltd.
(Oil & Gas) 2.7 2.0
Brascan Ltd. Ord. Class A
(Conglomerates) 2.3 -
Exco Technologies Ltd.
(Industrial Machinery & Equipment) 2.3 3.0
Renaissance Energy Ltd.
(Oil & Gas) 2.0 3.6
NOVA Corp. of Alberta Class A
(Chemicals & Plastics) 1.9 -
Alcan Aluminum Ltd.
(Metals & Mining) 1.8 -
Torstar Corp. Class B
(Publishing) 1.8 2.8
Four Seasons Hotel, Inc.
(Lodging & Gaming) 1.8 0.7
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Energy 24.4 23.9
Basic Industries 21.3 18.9
Media & Leisure 8.4 10.3
Industrial Machinery & Equipment 6.9 8.0
Precious Metals 6.4 10.0
Retail & Wholesale 5.2 4.6
Transporation 3.7 -
Durables 3.5 2.6
Utilities 3.1 4.4
Nondurables 3.1 2.4
CANADA
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.5%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 20.7%
CHEMICALS & PLASTICS - 5.6%
AT Plastics, Inc. 50,000 $ 302,849 00194710
Cominco Fertilizer Ltd. 50,000 940,189 20043C10
Dupont Canada Class A, Series 1 8,900 334,707 26590210
Intertape Polymer Group, Inc. 52,000 808,563 46091910
Maax, Inc. (b) 278,300 2,641,707 57777C10
Maax, Inc. (warrants) (b) 8,333 40,680 57777C11
NOVA Corp. of Alberta Class A 424,900 3,265,034 66977110
Tarxien Corp. 70,000 784,696 87651E20
Winpak Ltd. 30,000 515,296 97535P10
9,633,721
IRON & STEEL - 0.9%
Co-Steel, Inc. (sub.-vtg.) (b) 31,200 609,243 18975N10
Linamar Corp. 30,000 496,312 53278L10
Samuel Manu-Tech, Inc. 25,000 433,933 79606J10
Shaw Industries Ltd. Class A 6,300 54,676 82090420
1,594,164
METALS & MINING - 7.1%
Alcan Aluminium Ltd. 150,210 3,150,423 01371610
American Gem Corp. 30,000 107,398 0263E108
Cameco, Inc. 30,000 507,160 13321L10
Cominco Ltd. 123,200 1,882,259 20043510
Dia Met Minerals Ltd. (b) 28,000 559,413 25243K10
Kookaburra Resources Ltd. 150,000 234,324 50050D10
Noranda, Inc. 307,944 5,372,930 65542210
Southernera Resources Ltd. (b) 57,000 273,107 84390110
12,087,014
PAPER & FOREST PRODUCTS - 7.1%
Abitibi-Price, Inc. 175,900 2,083,143 00368010
Abitibi-Price, Inc. installment receipts (d) 9,200 49,071 00368070
Ainsworth Lumber Ltd. (b) 50,000 555,977 00891410
Avenor, Inc. 48,000 733,348 05356K10
Canfor Corp. 18,000 572,792 13790210
Domain Industries Ltd. Class B (non-vtg.),
Series 2 40,000 437,550 25703930
Donohue, Inc. Class B (b) 41,600 394,880 25804110
Fletcher Challenge Ltd.:
Class A 91,639 1,292,370 33932D10
Receipts 10,000 83,171 33932D20
International Forest Products Class A (b) 50,000 587,618 45953E10
Longview Fibre Co. 10,000 176,250 54321310
Merfin Hygenic Products Ltd. (b) 543,700 1,612,185 58950K10
Noranda Forest, Inc. (b) 177,000 1,664,135 65542L10
Norwall Group, Inc. 40,000 336,298 66920H10
Pacific Forest Products Ltd. 10,000 115,716 69428P10
Riverside Forest Products 56,100 1,024,463 76890410
Slocan Forest Products Ltd. 18,900 377,604 83158C10
12,096,571
TOTAL BASIC INDUSTRIES 35,411,470
CONGLOMERATES - 3.0%
Brascan Ltd. Class A 310,000 3,951,508 10550240
Federal Industries Ltd. Class A cv (b) 49,800 270,124 31345330
Suncor, Inc. 40,000 904,028 86722910
5,125,660
CONSTRUCTION & REAL ESTATE - 1.8%
BUILDING MATERIALS - 0.2%
Global Stone (b) 100,000 357,995 37936Q10
CONSTRUCTION - 0.6%
Firan Corp. (special warrants) (b)(c) 150,000 458,668 31809192
Royal Lepage Ltd. (b) 100,000 289,289 78033W10
Viceroy Homes Ltd. Class A 109,100 335,341 92562710
1,083,298
SHARES VALUE (NOTE 1)
ENGINEERING - 0.1%
Agra Industries Ltd. Class B (b) 20,000 $ 106,675 00848940
REAL ESTATE - 0.9%
Cambridge Shopping Centres Ltd. 105,900 1,225,428 13250910
Markborough Properties, Inc. 200,000 390,540 57052F10
1,615,968
TOTAL CONSTRUCTION & REAL ESTATE 3,163,936
DURABLES - 3.5%
AUTOS, TIRES, & ACCESSORIES - 1.8%
Hayes-Dana, Inc. 11,300 131,780 42077610
Meridian Technologies, Inc. (b) 214,600 1,493,835 58978510
Stackpole Ltd. (b) 105,000 968,214 85232N10
UAP, Inc. Class A 30,100 481,639 90255810
3,075,468
CONSUMER DURABLES - 0.4%
Unican Security Systems Ltd. Class B 45,000 691,582 90458940
HOME FURNISHINGS - 1.3%
Dorel Industries:
Class A (vtg.) (c) 105,000 816,337 25822C30
Class B (sub.-vtg.) (b)(c) 82,000 652,347 25822C20
Leons Furniture Ltd. 80,000 694,294 52668210
2,162,978
TOTAL DURABLES 5,930,028
ENERGY - 24.4%
ENERGY SERVICES - 1.8%
Akita Drilling Ltd. Class A (non-vtg.) (b) 60,700 175,598 00990510
Dreco Energy Services Ltd. Class A (b) 5,700 52,725 26152820
Enserv Corp. (b) 84,700 888,226 29357B10
Nowsco Well Service Ltd. 77,000 1,280,827 67012210
Precision Drilling Class A (b) 53,900 638,325 74022D10
3,035,701
OIL & GAS - 22.6%
Anderson Exploration Ltd. (b) 5,400 133,272 03390110
Archer Resources Ltd. (b) 59,700 825,748 03950K10
Ballistic Energy Corp. 20,000 108,483 05865K10
Battle Creek Developments Ltd. (b) 220,000 410,500 07134E10
Beau Canada Exploration 600,000 985,032 07428010
Canadian Natural Resources Ltd. (b) 67,900 1,012,828 13638510
Canadian Occidental Petroleum Ltd. 90,000 1,822,522 13642010
Chancellor Energy Resources (b) 380,000 769,508 15882910
Czar Resources Ltd. (b) 105,600 141,289 23282910
DEKALB Energy Corp. Class B (b) 79,500 1,113,000 24487410
Dorset Exploration Ltd. (b) 241,200 2,071,491 25842E10
Encal Energy Ltd. (b) 515,900 1,026,053 29250D10
Ensign Resource Service Group Ord. (b) 81,900 399,815 29357T10
Excel Energy, Inc. (warrants) (b) 25,000 3,616 30065492
Gardiner Oil & Gas, Ltd. (b) 104,400 575,721 36553R10
Grad & Walker Energy Corp. 54,400 580,314 38391010
Gulf Canada Corp. (b) 50,000 166,341 40218L30
HCO Energy Ltd. 70,000 106,314 40390410
Intensity Resources Ltd. (b) 342,900 709,261 45816E10
Inverness Petroleum Ltd. (b) 409,300 3,034,153 46190810
Jordan Petroleum Ltd. Class A (b) 3,000 21,154 48076110
Morgan Hydrocarbons, Inc. (b) 247,000 982,497 61790010
Morrison Petroleums Ltd. 566,500 4,660,403 61847310
Northridge Exploration Ltd. (b) 100,800 72,172 66667T10
Northstar Energy Corp. (b) 20,200 427,316 66703R10
Nugas Ltd. 30,000 101,974 67051K10
Pancanadian Petroleum Ltd. 24,200 774,463 69890020
Paramount Resources Ltd. (b) 86,800 1,263,362 69932010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Plastibec Ltd. (special warrants) (b) 60,000 $ 278,282 72753D92
Poco Petroleums Ltd. (b) 190,000 1,425,654 73036110
Remington Energy Ltd. 25,000 66,898 75958D10
Renaissance Energy Ltd. (b) 149,622 3,354,510 75966610
Richland Petroleum Corp. Class A 56,800 195,126 76390110
Rigel Energy Corp. (b) 73,000 1,062,505 76655L10
Rio Alto Exploration Ltd. (b) 93,300 598,855 76689210
Summit Resources Ltd. 85,600 588,125 86624610
Talisman Energy, Inc. (b) 105,000 2,420,536 87425E10
Tarragon Oil & Gas Ltd. (b) 257,000 3,020,359 87629E20
Tri Link Resources Ltd. Class A (b) 64,900 574,980 89557D10
Ulster Petroleums Ltd. (b) 50,000 159,109 90384010
Wascana Energy, Inc. 36,500 263,976 93690110
Winfield Energy Ltd. 160,000 543,864 97390510
38,851,381
TOTAL ENERGY 41,887,082
FINANCE - 2.9%
CREDIT & OTHER FINANCE - 0.9%
Power Corporation of Canada 55,000 835,322 73923910
Trimark Financial Corp. (b) 26,400 706,444 89621H10
1,541,766
INSURANCE - 0.3%
Crownx, Inc. Class A (b) 101,500 587,257 22870220
SECURITIES INDUSTRY - 1.7%
First Marathon, Inc. Class A (non-vtg.) 66,200 694,222 32076L20
Investors Group, Inc. 40,000 542,417 46152H10
Mackenzie Financial Corp. 151,000 1,051,114 55453110
Power Financial Corp. 20,000 482,751 73927C10
20/20 Financial Corp. 11,900 109,731 90136T10
2,880,235
TOTAL FINANCE 5,009,258
HEALTH - 0.6%
DRUGS & PHARMACEUTICALS - 0.4%
Allelix Biopharmaceuticals, Inc. 10,000 50,626 01749H10
Zenon Environmental, Inc. 78,200 551,421 98942B10
602,047
MEDICAL FACILITIES MANAGEMENT - 0.2%
Spectral Diagnostics, Inc. 10,000 263,976 84757410
TOTAL HEALTH 866,023
INDUSTRIAL MACHINERY & EQUIPMENT - 6.9%
ELECTRICAL EQUIPMENT - 0.1%
Noma Industries Ltd. Class A (b)(c) 26,200 111,322 65531630
INDUSTRIAL MACHINERY & EQUIPMENT - 6.8%
Champion Road Machinery Ltd. (c) 20,000 178,998 15864C92
Eagle Precision Tech. (b) 178,500 1,355,500 26990010
Enerflex Systems Ltd. 15,000 197,982 29265B10
Exco Technologies Ltd. (b) 572,800 3,935,491 30150P10
Finning Ltd. 118,300 1,946,428 31807140
Hawker Siddeley Canada, Inc.
(special warrants) (b) 35,700 570,291 42012892
Laperriere & Verreault, Inc. (b) 11,300 21,657 39945L20
Osmonics, Inc. 15,000 238,125 68835010
Trojan Technologies Corp. (b) 290,400 2,599,045 89692410
Valmont Industries, Inc. 48,700 754,850 92025310
11,798,367
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 11,909,689
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 8.4%
BROADCASTING - 0.8%
Chum Ltd. Class B (b) 7,000 $ 97,454 17132220
Cogeco, Inc. 40,000 339,915 19238T10
Shaw Cablesystems Ltd. Class B cv (b)(c) 44,000 815,434 82028K20
Videotron Group Ltd. 16,800 174,658 92558H10
1,427,461
ENTERTAINMENT - 1.2%
Astral Bellevue Pathe, Inc. Class A 122,000 1,510,993 04634620
Cinar Films, Inc. (b) 82,000 511,500 17190510
2,022,493
LODGING & GAMING - 1.8%
Four Seasons Hotels, Inc. 351,500 3,114,107 35100E10
PUBLISHING - 4.4%
Hollinger, Inc. (b) 30,000 339,010 43556C10
Southam, Inc. 135,100 1,856,440 84084010
Thomson Corp. 171,798 2,158,812 88490310
Toronto Sun Publishing Co. (b) 8,000 88,956 89199110
Torstar Corp. Class B 169,000 3,116,728 89147420
7,559,946
RESTAURANTS - 0.2%
Cara Operations Ltd. (b) 91,500 271,317 14075420
Spectra Group of Great Restaurants, Inc.
Class A (non-vtg.) 4,900 24,807 84756E20
296,124
TOTAL MEDIA & LEISURE 14,420,131
NONDURABLES - 3.1%
AGRICULTURE - 0.1%
Chai-Na-Ta Ginseng Products (b) 20,705 97,333 15745J10
DEKALB Genetics Corp. Class B 4,900 155,575 24487820
252,908
BEVERAGES - 0.3%
Coca Cola Beverages Canada 100,000 347,147 19108T10
Corby Distilleries Ltd. 6,000 160,555 21834310
507,702
FOODS - 2.7%
Ault Foods Ltd. 197,300 2,247,397 05150E10
Tootsie Roll Industries, Inc. 9,937 638,452 89051610
Weston George Ltd. 55,000 1,710,422 96114850
4,596,271
TOTAL NONDURABLES 5,356,881
PRECIOUS METALS - 6.2%
Aber Resources Ltd. 80,000 248,789 00291110
Agnico Eagle Mines Ltd. 66,000 721,957 00847410
American Barrick Resources Corp. 45,000 1,037,372 02451E10
Canaarc Resources Corp. 10,000 32,545 13722D10
Euro-Nevada Mining Corp. 43,000 1,166,197 29870P10
Franco Nevada Mining Corp. 35,600 1,834,454 35186010
Pegasus Gold, Inc. 50,000 818,145 70556K10
Placer Dome, Inc. 140,000 2,885,659 72590610
Prime Resources Group, Inc. (b) 50,300 327,403 74157L10
Rayrock Yellowknife Resources, Inc. (b) 46,200 639,021 75509N10
Teck Corp. Class B (sub.-vtg.) 50,000 858,827 87874220
Viceroy Resources Corp. (b) 10,000 74,130 92564C10
10,644,499
RETAIL & WHOLESALE - 5.2%
GENERAL MERCHANDISE STORES - 1.3%
Hudson's Bay Co. Ord. 46,000 952,303 44420410
Sears Canada, Inc. 200,000 1,175,236 81234D10
2,127,539
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 3.7%
Empire Ltd. Class A 19,600 $ 228,575 29184340
Loblaw Companies Ltd. 70,100 1,204,075 53948110
Oshawa Group Ltd. Class A 45,000 703,786 68820520
Stop & Shop Companies, Inc. (b) 99,800 2,669,650 86209910
Van Houtte (A.L.) (b) 175,500 1,602,436 92090410
6,408,522
RETAIL & WHOLESALE, MISCELLANEOUS - 0.2%
Forzani Group Ltd. Class A 40,000 303,754 34990710
TOTAL RETAIL & WHOLESALE 8,839,815
SERVICES - 1.5%
PRINTING - 0.7%
GTC Transcontinental Group Class A 74,900 473,982 36229K20
MDC Corp. Class A (sub.-vtg.) (b) 150,000 297,792 55267W10
Moore Corporation Ltd. 20,000 363,419 61578510
1,135,193
SERVICES - 0.8%
Arbor Memorial Services, Inc. Class B
(non-vtg.) (b) 43,300 454,075 03891620
G&K Services, Inc. Class A 67,500 961,875 36126810
1,415,950
TOTAL SERVICES 2,551,143
TECHNOLOGY - 1.5%
COMMUNICATIONS EQUIPMENT - 0.5%
Northern Telecom Ltd. 10,000 297,425 66581510
SR Telecom, Inc. 44,100 430,571 78464P10
Telular Canada, Inc. 66,000 162,291 87970B10
890,287
COMPUTER SERVICES & SOFTWARE - 0.7%
EICON Technology Corp. (b) 45,000 423,085 28248F10
Electronic Retailing Systems (b) 34,500 310,500 28582510
ISG Technologies, Inc. (b) 5,000 42,500 45021P30
Telepanel Systems, Inc. 95,000 446,590 87943U20
1,222,675
ELECTRONIC INSTRUMENTS - 0.3%
Mosaid Technologies, Inc. 69,300 488,663 61945Q10
TOTAL TECHNOLOGY 2,601,625
TRANSPORTATION - 3.7%
AIR TRANSPORTATION - 0.6%
Air Canada, Inc. (b) 225,000 1,078,054 00891110
RAILROADS - 3.1%
Canadian Pacific Ltd. Ord. 334,000 5,374,628 13644030
TOTAL TRANSPORTATION 6,452,682
UTILITIES - 3.1%
CELLULAR - 3.1%
BCE Mobile Communications, Inc. 26,900 739,278 05534G10
Call-Net Enterprises, Inc. (b) 78,000 564,114 13091010
Call-Net Enterprises (non-vtg.) Class B (b) 78,000 542,960 13091020
Rogers Cantel Mobile Communications,
Inc. Class B (non-vtg.) (b) 20,000 493,599 77510210
Rogers Communications, Inc. Class B (b) 208,600 3,017,283 77510920
5,357,234
TOTAL COMMON STOCKS
(Cost $162,291,937) 165,527,156
CONVERTIBLE PREFERRED STOCKS - 0.1%
SHARES VALUE (NOTE 1)
ENERGY - 0.0%
OIL & GAS - 0.0%
Valero Energy Corp. $3.125 2,000 $ 100,250 91913840
PRECIOUS METALS - 0.1%
Battle Gold Co. 2,000 119,000 07159330
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $200,000) 219,250
CORPORATE BONDS - 1.8%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
CONVERTIBLE BONDS - 1.7%
BASIC INDUSTRIES - 0.6%
PAPER & FOREST PRODUCTS - 0.6%
Abitibi-Price, Inc. 7.85%,
3/1/03 - CAD 1,000,000 914,877 003680AD
Avenor, Inc. 7 1/2%, 2/8/04 - CAD 147,000 129,171 05356KAA
1,044,048
CONSTRUCTION & REAL ESTATE - 1.1%
REAL ESTATE - 1.1%
Markborough Properties, Inc.
6%, 3/14/04 - CAD 2,700,000 1,816,012 57052FAA
TOTAL CONVERTIBLE BONDS 2,860,060
NONCONVERTIBLE BONDS - 0.1%
PRECIOUS METALS - 0.1%
Agnico Eagle Mines Ltd. yankee
3 1/2%, 1/27/04 B1 $ 220,000 173,800 008474AA
TOTAL CORPORATE BONDS
(Cost $3,164,689) 3,033,860
REPURCHASE AGREEMENTS - 1.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 2,743,814 2,743,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $168,399,626) $ 171,523,266
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. 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 $3,033,106 or 1.8% of net
assets.
4. Market value reflects the payment of the first installment. Additional
equal payments of CAD 46,000 are payable in January and October of 1995.
5. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $115,703,067 and $31,649,352 respectively.
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 $4,328 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $1,799,400 and $3,867,000, respectively. The
weighted average interest rate was 4.15%. Interest expense includes $1,037
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $168,969,425. Net unrealized appreciation aggregated
$2,553,841, of which $13,476,104 related to appreciated investment
securities and $10,922,263 related to depreciated investment securities.
CANADA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
· Enlarge/Download Table
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $2,743,000) (cost $168,399,626) (Notes $ 171,523,266
1 and 2) - See accompanying schedule
Cash 594
Receivable for investments sold 1,065,839
Receivable for fund shares sold 776,907
Dividends receivable 142,923
Interest receivable 29,113
Other receivables 36,832
TOTAL ASSETS 173,575,474
LIABILITIES
Payable for fund shares redeemed $ 484,691
Payable for investments purchased 712
Accrued management fee 110,474
Other payables and accrued expenses 149,669
TOTAL LIABILITIES 745,546
NET ASSETS $ 172,829,928
Net Assets consist of (Note 1):
Paid in capital $ 171,814,078
Accumulated net investment (loss) (336,797
)
Accumulated undistributed net realized gain (loss) on investments (1,770,993
)
Net unrealized appreciation (depreciation) on investment securities 3,123,640
NET ASSETS, for 9,943,673 shares outstanding $ 172,829,928
NET ASSET VALUE, offering price and redemption price per share ($172,829,928 (divided by) 9,943,673 shares)(Note 4) $17.38
STATEMENT OF OPERATIONS
· Enlarge/Download Table
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 845,922
Dividends
Interest 180,908
1,026,830
Less foreign taxes withheld (Note 1) (123,466
)
TOTAL INCOME 903,364
EXPENSES
Management fee (Note 4) $ 553,812
Basic fee
Performance adjustment 39,161
Transfer agent fees (Note 4) 540,228
Accounting fees and expenses 43,938
(Note 4)
Non-interested trustees' compensation 402
Custodian fees and expenses 19,938
Registration fees 25,265
Audit 14,666
Legal 833
Interest (Note 5) 1,037
Miscellaneous 758
TOTAL EXPENSES 1,240,038
NET INVESTMENT INCOME (LOSS) (336,674
)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) (1,128,584
Net realized gain (loss) on investment securities )
Change in net unrealized appreciation (depreciation) on investment securities (7,374,818
)
NET GAIN (LOSS) (8,503,402
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (8,840,076
)
OTHER INFORMATION
Deferred sales charges withheld by $3,432
FDC (Note 4)
Accounting fees paid to FSC $43,756
(Note 4)
STATEMENT OF CHANGES IN NET ASSETS
· Enlarge/Download Table
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ (336,674 $ (406,210
Net investment income (loss) ) )
Net realized gain (loss) on investments (1,128,584 (215,792
) )
Change in net unrealized appreciation (depreciation) on investments (7,374,818 9,798,514
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,840,076 9,176,512
)
Distributions to shareholders - (30,615
From net investment income )
In excess of net realized gain (242,990 -
)
TOTAL DISTRIBUTIONS (242,990 (30,615
) )
Share transactions 214,691,266 232,403,520
Net proceeds from sales of shares
Reinvestment of distributions 238,389 29,289
Cost of shares redeemed (128,994,157 (167,302,323
) )
Net increase (decrease) in net assets resulting from share transactions 85,935,498 65,130,486
TOTAL INCREASE (DECREASE) IN NET ASSETS 76,852,432 74,276,383
NET ASSETS
Beginning of period 95,977,496 21,701,113
End of period (including accumulated net investment (loss) of $(336,797) and $(237,885),
respectively) $ 172,829,928 $ 95,977,496
OTHER INFORMATION
Shares
Sold 11,692,592 13,751,993
Issued in reinvestment of distributions 13,408 2,020
Redeemed (7,146,795 (9,894,449
) )
Net increase (decrease) 4,559,205 3,859,564
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
· Enlarge/Download Table
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74
Income from Investment Operations
Net investment income
(.03) (.15) (.02)** .03** .05** .02**
Net realized and unrealized gain (loss) on investments
(.37) 3.76 (1.11) 3.59 (1.24) 2.96
Total from investment operations
(.40) 3.61 (1.13) 3.62 (1.19) 2.98
Less Distributions
From net investment income
- (.02) - (.06) (.01) (.12)
From net realized gain
- - (.92) (.85) (.68) (.15)(s diamond)
In excess of net realized gain
(.04) - - - - -
Total distributions
(.04) (.02) (.92) (.91) (.69) (.27)
Net asset value, end of period
$ 17.38 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45
TOTAL RETURN (dagger)(diamond)
(2.25)% 25.40% (7.09)% 28.13% (8.16)% 23.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 172,830 $ 95,977 $ 21,701 $ 23,327 $ 17,736 $ 24,331
Ratio of expenses to average net assets
1.74%* 2.00% 2.00% 2.01% 2.05% 2.06%
Ratio of expenses to average net assets before expense
1.74%* 2.00% 2.07% 2.26% 2.31% 2.87%
reductions
Ratio of net investment income to average net assets
(.47)%* (.66)% (.11)% .17% .34% .16%
Portfolio turnover rate
47%* 131% 55% 68% 164% 152%
* ANNUALIZED
** NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED USING AVERAGE SHARES OUTSTANDING.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
(diamond) THE TOTAL RETURN WOULD HAVE BEEN LOWER IF THE ADVISER HAD NOT REDUCED EXPENSES OF THE FUND
DURING THE PERIODS SHOWN.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED.
EUROPE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). The fund has a
3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTHS YEAR YEARS FUND
EUROPE 9.09% 20.90% 53.27% 124.39%
EUROPE
(INCL. 3% SALES CHARGE) 5.82% 17.27% 48.67% 117.66%
Morgan Stanley Europe
Index 7.90% 21.81% 66.54% 130.43%
Average European Region
Fund 9.07% 23.06% 47.29% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on October 1, 1986. You can compare the fund's
figures to the performance of the Morgan Stanley Europe index - a broad
measure of the performance of stocks in Europe, weighted by each country's
market capitalization (or the total value of its outstanding shares). You
can also compare the fund's performance to the average European region fund
which reflects the performance of 33 funds with similar objectives tracked
by Lipper Analytical Services. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
EUROPE 20.90% 8.92% 11.24%
EUROPE
(INCL. 3% SALES CHARGE) 17.27% 8.25% 10.80%
Morgan Stanley Europe
Index 21.81% 10.74% 11.63%
Average European Region
Fund 23.06% 7.89% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Europe (301) MS Europe Index
10/01/86 9700.00 10000.00
10/31/86 9690.30 10061.24
11/30/86 10078.30 10600.17
12/31/86 10485.70 10866.14
01/31/87 11563.06 11347.33
02/28/87 12300.92 11751.88
03/31/87 12922.28 12332.46
04/30/87 13456.26 12815.21
05/31/87 13679.56 12743.90
06/30/87 14232.95 13107.17
07/31/87 15252.37 13548.56
08/31/87 15572.75 13660.75
09/30/87 16135.86 13749.78
10/31/87 11737.82 11135.61
11/30/87 11213.55 10645.49
12/31/87 12048.50 11264.74
01/31/88 11475.68 10802.62
02/29/88 11533.94 11438.32
03/31/88 12067.91 11753.00
04/30/88 12407.72 11972.00
05/31/88 12271.80 11748.03
06/30/88 11999.95 11629.54
07/31/88 11873.74 11655.59
08/31/88 11252.38 11126.51
09/30/88 11776.65 11732.04
10/31/88 12582.48 12818.60
11/30/88 12737.81 12976.68
12/31/88 12751.83 13046.37
01/31/89 13357.17 13518.81
02/28/89 13386.94 13365.30
03/31/89 13615.18 13462.17
04/30/89 14200.67 13835.82
05/31/89 13813.65 13126.86
06/30/89 14190.75 13668.45
07/31/89 15460.97 15277.34
08/31/89 15341.89 15086.51
09/30/89 16036.54 15345.58
10/31/89 14925.09 14339.46
11/30/89 15798.37 15135.61
12/31/89 16874.84 16764.74
01/31/90 17085.65 16719.83
02/28/90 16643.95 16319.18
03/31/90 17145.88 16549.43
04/30/90 16804.57 16110.24
05/31/90 17838.54 17421.38
06/30/90 18581.39 18033.25
07/31/90 19705.71 18792.65
08/31/90 17356.69 16929.38
09/30/90 15640.09 14935.59
10/31/90 16342.79 16194.23
11/30/90 16322.71 16356.96
12/31/90 16100.11 16120.73
01/31/91 16418.62 16663.17
02/28/91 17415.24 18120.73
03/31/91 16480.27 16904.64
04/30/91 16439.17 16727.91
05/31/91 16511.09 17221.35
06/30/91 15062.39 15776.03
07/31/91 15822.70 16867.89
08/31/91 16141.21 17175.85
09/30/91 16726.85 17692.04
10/31/91 16367.25 17319.34
11/30/91 15874.07 16911.64
12/31/91 16769.90 18234.47
01/31/92 16844.24 18229.22
02/29/92 17046.03 18299.21
03/31/92 16461.90 17658.79
04/30/92 17545.20 18633.42
05/31/92 18405.47 19693.79
06/30/92 18235.54 19327.03
07/31/92 17577.06 18636.54
08/31/92 17630.16 18575.77
09/30/92 17354.03 18268.54
10/31/92 16058.32 16993.88
11/30/92 16047.70 16985.58
12/31/92 16346.72 17375.24
01/31/93 16260.11 17404.43
02/28/93 16357.54 17603.55
03/31/93 17429.28 18509.13
04/30/93 18003.04 18917.36
05/31/93 18219.55 19120.87
06/30/93 17710.75 18841.54
07/31/93 17721.57 18906.21
08/31/93 19161.38 20565.25
09/30/93 19139.73 20501.36
10/31/93 19951.65 21355.45
11/30/93 19561.93 20894.47
12/31/93 20787.26 22463.18
01/31/94 22287.60 23607.14
02/28/94 21765.74 22771.11
03/31/94 21156.91 22126.61
04/30/94 21765.74 23042.85
Let's say you invested $10,000 in Fidelity Europe Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$21,766 - a 117.66% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley Europe index, which would have grown
to $23,043 over the same period - a 130.43% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EUROPE
FUND TALK: THE MANAGER'S OVERVIEW
Interview with Sally Walden,
Portfolio Manager of Fidelity Europe Fund
Q. SALLY, HOW HAS THE FUND PERFORMED?
A. During the past six months, the fund's performance was in line with
other European funds. For the six months ended April 30, 1994, the fund's
total return was 9.09%, compared to the average European fund which
returned 9.07%, according to Lipper Analytical Services. For the same
period the Morgan Stanley Europe index returned 7.90%. During the 12 months
ended April 30, the fund returned 20.90%, compared to 23.06% for the
average fund and 21.81% for the index.
Q. THE EUROPEAN STOCK MARKETS GENERALLY OUTPACED THE U.S. MARKET DURING THE
PERIOD. WHAT TRIGGERED THE MARKETS' AND THE FUND'S GAINS?
A. While you can't tell just by looking at the numbers, most of those gains
came in late 1993 and January 1994 and were driven by falling European and
U.S. interest rates. But when U.S. interest rates began to rise in
February, European stock markets suffered a setback, as did most other
world markets. At that point, investors started to reassess whether the
relatively high prices for European stocks continued to make sense. After
Europe's strong showing in 1993, it really wasn't that surprising that
investors used higher interest rates as a reason to take a breather.
Q. DID YOU HAVE AN ALLOCATION TARGET FOR SPECIFIC COUNTRIES OR INDUSTRIES?
A. No, I focus on picking stocks, not picking the right industries or
countries to be in. I try to build the fund "brick by brick," investing in
companies with very low debt, strong management and good growth prospects.
During the period, cyclicals, which tend to rise when the economy is
improving, led the European markets and posted strong gains. While it may
have helped the fund's performance in the short-term to load up on cyclical
companies, one of my investment themes is to emphasize stocks that do well
because they're growing, not because they'll do well in a given economic
cycle. I focused instead on companies that I'm happy to own for quite a
long time. One example is the fund's largest investment - Nokia, the
Finnish cellular company, which was one of the fund's best performers
during the period. Another telecommunications company, Italy's SIP Spa,
also did well during the period. What's more, I believe it's likely that
the company will spin off its cellular activities later this year, which I
think could send the stock even higher.
Q. SIX MONTHS AGO YOU SAID YOU WOULD CONTINUE EMPHASIZING PHARMACEUTICAL
STOCKS. HOW DID THAT STRATEGY WORK OUT?
A. The fund's pharmaceuticals and drug stocks posted mixed results during
the past six months. The German company Schering did well, boosted by
higher-than expected sales of Betaseron (its drug for treating multiple
sclerosis), its aggressive cost-cutting program and its increasingly strong
sales in the United States, Southeast Asia and Latin America. The Swiss
drug company, Ares Serono, on the other hand, suffered from concerns
surrounding health care reform in Italy. But I'm still optimistic about the
company because its earnings growth is driven primarily by its fertility
treatment business. The company has 70% of the global market share of that
business, and has recently introduced a purer, more effective version of
its treatment.
Q. THE FUND HAS SIGNIFICANT INVESTMENTS IN TELEVISION AND OTHER MEDIA
STOCKS. WHAT'S THE ATTRACTION?
A. Media stocks generally are a fast-growing sector and continent-wide
deregulation of the industry continues to provide investors with plenty of
opportunities. Remember, commercial television didn't really exist in many
European countries five years ago and the industry is still in its early
stages in many countries. Advertising revenues for many media companies
have continued to climb, despite Europe's recession, and many of the fund's
investments enjoyed increased revenues. Going forward, I think companies
like Audiofina in Belgium and TF-1 in France could benefit as the economy
improves and advertising revenues improve. Scottish Television was one of
the fund's investments in this sector that didn't work out as well as I'd
hoped. In 1993, a speculative furor surrounded U.K. television stocks, and
when that bubble burst, companies like Scottish Television got caught in
the down draft. But I'm optimistic about the company because I think its
earnings will be surprisingly good in 1995.
Q. FINANCIAL STOCKS WERE AMONG THE FUND'S TOP PERFORMERS IN 1993. HOW HAVE
THEY FARED RECENTLY?
A. They haven't done nearly as well and many investors seem to believe that
interest rates have stalled, and aren't likely to fall from current
levels. There's also the fear that rates may rise from here, so many
investors abandoned financial companies altogether. But in my view, it's
like throwing the baby out with the bath water. Financial stocks are quite
cheap right now, and an economic recovery could improve their prospects as
demand for new loans increases and the quality of loans improves. For these
reasons, I still like the French financial company BNP, although it hasn't
performed that well recently. France privatized a number of financial
companies recently, and so there was a flood of new stock available in this
sector, which somewhat artificially depressed prices. However, I think it's
just a temporary technical glitch in the market, and over the long term the
company's prospects are good. Holland's International Nederlanden Groep, a
bank card insurance group, is also attractive. The demand for insurance
continues to grow and premiums are rising. Also, the company is extremely
well-managed, with significant operations in Japan and Eastern Europe, as
well as Western Europe.
Q. YOU HAVE A FAIRLY LARGE NUMBER OF INVESTMENTS IN THE FUND. WOULDN'T IT
BE SIMPLER TO HAVE FEWER STOCKS?
A. Maybe, but I think it's important to diversify the fund over a wide
range of companies in a broad list of industries. I think that helps make
the fund's returns less volatile. I also believe that in Europe there are
an enormous number of interesting ideas, and I like to have a piece of as
many I can manage.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. Like many international funds, I occasionally
use currency hedging to protect the fund from currency volatility. That's
probably the only derivative strategy I've used.
Q. WHAT'S AHEAD FOR THE FUND?
A. I'm more optimistic about European economies than I was six months ago,
since I believe we're starting to see tangible signs that things are
finally beginning to improve. Last year the European stock markets rose
mostly because of falling interest rates. During 1994 improved company
earnings will most likely be the market's key driving force. So I'll
continue to focus on good companies that have managed to survive and thrive
during the economic downturn. In my opinion, these companies are best
positioned to make the most of the upturn when it comes.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
in Western Europe
START DATE: October 1, 1986
SIZE: as of April 30, 1994, more than $484 million
MANAGER: Sally Walden, since July 1992; also
manages various funds for non-U.S. investors,
joined Fidelity in 1984
(checkmark)
SALLY WALDEN'S OUTLOOK FOR EUROPEAN ECONOMIES:
"While I had assumed that some sort of recovery would
take place in 1994, I was somewhat surprised that
things started to look better so soon. Generally,
European economies are improving although the pace
of the recovery varies from country to country. The
United Kingdom is more in line with the United States,
and the recovery there has been underway for about
18 months. In Germany, there's quite a lot of evidence
that suggests things are beginning to turn around.
German exporters are seeing high demand for their
products, despite the fairly strong currency. And in
France, industrial companies are reporting fairly strong
upticks in export orders as well, although not as
strong as in Germany. The Nordic region, too, has
seen some positive signs, largely due to the
devaluation of its currencies a year and a half ago
and a resulting export boom. There are now strong
signs that this recovery is feeding through to the
domestic economy.
"Even though most European companies don't report
quarterly earnings, the few that have are showing
promising results. To me, that indicates that things
really are improving faster than most investors initially
believed. "
(bullet) The fund's largest investment is Finnish cellular
company Nokia. The company is one of the world's
largest cellular companies, with major businesses in
Europe, Southeast Asia and the United States.
(bullet) Those European countries with the greatest
percentage of the fund's total investments at the end of
April were the United Kingdom, 24.8%, compared to
27.1% six months ago; Germany, 11.5%, compared to
11.0%; France, 11.3%, compared to 14.4%; and
Switzerland, 9.7%, compared to 8.8%.
EUROPE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 3.6%
Belgium 6.1%
Row: 1, Col: 1, Value: 6.1
Row: 1, Col: 2, Value: 6.6
Row: 1, Col: 3, Value: 11.3
Row: 1, Col: 4, Value: 11.5
Row: 1, Col: 5, Value: 9.9
Row: 1, Col: 6, Value: 5.1
Row: 1, Col: 7, Value: 4.6
Row: 1, Col: 8, Value: 6.6
Row: 1, Col: 9, Value: 6.2
Row: 1, Col: 10, Value: 9.699999999999999
Row: 1, Col: 11, Value: 24.8
Row: 1, Col: 12, Value: 3.6
Finland 6.6%
United
Kingdom 24.8%
France 11.3%
Germany 11.5%
Switzerland 9.7%
Sweden 6.2%
Italy 3.9%
Spain 6.6%
Netherlands 5.1%
Other 4.6%
AS OF OCTOBER 31, 1993
United States 2.9%
Belgium 4.8%
Row: 1, Col: 1, Value: 4.8
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 14.4
Row: 1, Col: 4, Value: 11.0
Row: 1, Col: 5, Value: 2.3
Row: 1, Col: 6, Value: 3.2
Row: 1, Col: 7, Value: 6.8
Row: 1, Col: 8, Value: 2.8
Row: 1, Col: 9, Value: 6.8
Row: 1, Col: 10, Value: 4.2
Row: 1, Col: 11, Value: 8.800000000000001
Row: 1, Col: 12, Value: 27.1
Row: 1, Col: 13, Value: 2.9
Finland 4.9%
United
Kingdom 27.1%
France 14.4%
Germany 11.0%
Switzerland 8.8%
Ireland 2.3%
Sweden 4.2%
Italy 3.2%
Spain 6.8%
Netherlands 6.8%
Other 2.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 97.3 97.6
Bonds 0.1 0.4
Short-term investments 2.6 2.0
TOP TEN STOCKS
· Enlarge/Download Table
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Nokia AB Free shares
(Finland, Communications Equipment) 2.9 2.3
Schering
(Germany, Drugs and
Pharmaceuticals) 2.2 2.6
SIP Spa
(Italy, Telephone Services) 2.2 1.3
Audiofina
(Belgium, Broadcasting) 1.8 1.3
Reisebuero Kuoni AG Part. Cert.
(Switzerland, Entertainment) 1.6 1.3
Gehe AG
(Germany, Medical Supplies and Equipment)
1.2 1.2
BBC Brown Boveri & Cie (Bearer) (Switzerland, Electrical Equipment)
1.2 1.1
VNU Ord.
(Netherlands, Publishing) 1.1 1.2
Oerlikon-Buhrle Holding Ltd. (Reg.)
(Switzerland, Aerospace & Defense) 1.1 -
ICB Shipping Class B
(Sweden, Shipping) 1.1 -
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 16.3 21.4
Media & Leisure 14.6 13.8
Health 