-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, CQVSmI1NmSGJIQfes0zbjisGIYtrI0rXif88i5jeL6VdndgVt3LgDQ+G/1FP5Zj1 NNuXOzGVnIkZeONWVa2m8A== 0000024238-94-000001.txt : 19940214 0000024238-94-000001.hdr.sgml : 19940214 ACCESSION NUMBER: 0000024238-94-000001 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19940211 19940219 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY CONTRAFUND CENTRAL INDEX KEY: 0000024238 STANDARD INDUSTRIAL CLASSIFICATION: 0000 IRS NUMBER: 046056833 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 33 SEC FILE NUMBER: 002-25235 FILM NUMBER: 94506310 BUSINESS ADDRESS: STREET 1: FIDELITY INVESTMENTS COMPANY STREET 2: 82 DEVONSHIRE STREET MAIL ZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: (617)439-1220 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAIL ZONE ZZ2 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: FIDELITY CONTRAFUND INC DATE OF NAME CHANGE: 19850618 FORMER COMPANY: FORMER CONFORMED NAME: CONTRAFUND INC DATE OF NAME CHANGE: 19810203 485BPOS 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-1A REGISTRATION STATEMENT (No. 2-25235) UNDER THE SECURITIES ACT OF 1933 [ ] Pre-Effective Amendment No. [ ] Post-Effective Amendment No. 46 [x] and REGISTRATION STATEMENT UNDER THE INVESTMENT [x] COMPANY ACT OF 1940 Amendment No. [ ] Fidelity Contrafund (Exact Name of Registrant as Specified in Charter) 82 Devonshire Street Boston, MA 02109 (Address Of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code: (617) 570-7000 Arthur S. Loring, Esq. 82 Devonshire Street Boston, MA 02109 (Name and Address of Agent for Service) It is proposed that this filing become effective: [ ] Immediately upon filing pursuant to paragraph (b) of Rule 485 [x] On (February 19, 1994) pursuant to paragraph (b) of Rule 485 [ ] 60 days after filing pursuant to paragraph (a) of Rule 485 [ ] On ( ) pursuant to paragraph (a) of Rule 485 Registrant has filed a declaration pursuant to Rule 24f-2 under the Investment Company Act of 1940 and intends to file the notice required by such Rule before February 28, 1994. FIDELITY CONTRAFUND CROSS REFERENCE SHEET FORM N-1A ITEM NUMBER PROSPECTUS SECTION
1................................... Cover Page ... 2 Expenses a................................... b, Contents; The Fund at a Glance; Who May Want to c............................. Invest 3 Financial Highlights a................................... * b.................................. Performance c.................................. 4a Charter (i).............................. (ii)............................. The Fund at a Glance; Investment Principles; Securities & Investment Practices, Fundamental Investment Policies and Restrictions b................................ Securities & Investment Practices Who May Want to Invest; Investment Principles; c.................................... Securities & Investment Practices 5 Charter a................................... b(i)........................... Doing Business with Fidelity; Charter (ii).............................. Charter (iii)........................... Expenses; Breakdown of Expenses c, Charter; FMR and Its Affiliates; Breakdown of d............................... Expenses, Cover Page FMR and Its Affiliates e................................... Expenses f................................... FMR and its Affiliates g(i)............................... * (ii)............................... 5A................................. Performance 6 a Charter (i).............................. How to Buy Shares; How to Sell Shares; Transaction (ii)............................... Details; Exchange Restrictions * (iii).............................. * b................................. Exchange Restrictions c.................................. * d................................... Doing Business with Fidelity; How to Buy Shares; e.................................. How to Sell Shares; Investor Services Dividends, Capital Gains, and Taxes f,g................................ 7 Cover Page; Charter a................................... How to Buy Shares; Transaction Details b................................... * c.................................. How to Buy Shares d................................... e................................ * f................................ * 8................................... How to Sell Shares; Investor Services; Transaction ... Details; Exchange Restrictions 9................................... * ...
* Not Applicable FIDELITY CONTRAFUND CROSS REFERENCE SHEET (continued) FORM N-1A ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
10, 11.......................... Cover Page 12.................................. * .. 13a - Investment Policies and Limitations c............................ * d.................................. 14a - Trustees and Officers c............................ 15a, * b.............................. c.................................. Trustees and Officers 16a FMR, Portfolio Transactions i................................ ii.............................. Trustees and Officers iii............................. Management Contract Management Contract b................................. c, d............................. Contracts with Companies Affiliated with FMR e,f,g........................... * Description of the Fund h................................. i................................. Contracts with Companies Affiliated with FMR 17a - Portfolio Transactions c............................ d,e.............................. * 18a................................ Description of the Fund .. * b................................. 19a................................ Additional Purchase and Redemption Information .. Additional Purchase and Redemption Information; b.................................. Valuation of Portfolio Securities c.................................. * 20.................................. Distributions and Taxes .. 21a, Contracts with Companies Affiliated with FMR b.............................. c................................. * 22.................................. Performance .. 23.................................. Financial Statements ..
* Not Applicable Please read this prospectus before investing, and keep it on file for future reference. It contains important information, including how the fund invests and the services available to shareholders. A Statement of Additional Information dated February 19, 1994 has been filed with the Securities and Exchange Commission, and is incorporated herein by reference (is legally considered a part of this prospectus). The Statement of Additional Information is available free upon request by calling Fidelity at 1-800-544-8888. Mutual fund shares are not deposits or obligations of, or endorsed or guaranteed by, any bank, nor are they federally insured or otherwise protected by the FDIC, the Federal Reserve Board, or any other agency. Contrafund is a growth fund. It seeks to increase the value of your investment over the long term by investing in securities of companies that are undervalued or out-of-favor. FIDELITY CONTRAFUND PROSPECTUS FEBRUARY 19, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA 02109 LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. CON-pro-294 CONTENTS KEY FACTS THE FUND AT A GLANCE WHO MAY WANT TO INVEST EXPENSES AND PERFORMANCE EXPENSES The fund's sales charge (load) and its yearly operating expenses. FINANCIAL HIGHLIGHTS A summary of the fund's financial data. PERFORMANCE How the fund has done over time. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY TYPES OF ACCOUNTS Different ways to set up your account, including tax-sheltered retirement plans. HOW TO BUY SHARES Opening an account and making additional investments. HOW TO SELL SHARES Taking money out and closing your account. INVESTOR SERVICES Services to help you manage your account. DIVIDENDS, CAPITAL GAINS, AND TAXES SHAREHOLDER AND TRANSACTION DETAILS Share price ACCOUNT POLICIES calculations and the timing of purchases and redemptions. EXCHANGE RESTRICTIONS SALES CHARGE REDUCTIONS AND WAIVERS THE FUND IN DETAIL CHARTER How the fund is organized. BREAKDOWN OF EXPENSES How operating costs are calculated and what they include. 25 INVESTMENT PRINCIPLES The fund's overall approach to investing. SECURITIES AND INVESTMENT PRACTICES KEY FACTS THE FUND AT A GLANCE GOAL: Capital appreciation (increase in the value of the fund's shares). As with any mutual fund, there is no assurance that the fund will achieve its goal. STRATEGY: Invests mainly in equity securities of companies that are undervalued or out-of-favor. MANAGEMENT: Fidelity Management & Research Company (FMR) is the management arm of Fidelity Investments, which was established in 1946 and is now America's largest mutual fund manager. SIZE: As of December 31, 1993, the fund had over $ 6.2 billion in net assets. WHO MAY WANT TO INVEST The fund may be appropriate for investors who are willing to ride out stock market fluctuations in pursuit of potentially high long-term returns. The fund is designed for those who are looking for an investment approach that follows a contrarian philosophy. This approach focuses on companies that are currently out of public favor but show potential for capital appreciation. The fund does not pursue income, and is not in itself a balanced investment plan. Over time, stocks have shown greater growth potential than other types of securities. In the short-term, however, stock prices can fluctuate dramatically in response to company, market, or economic news. When you sell your fund shares, they may be worth more or less than what you paid for them. THE SPECTRUM OF FIDELITY FUNDS Broad categories of Fidelity funds are presented here in order of ascending risk. Generally, investors seeking to maximize return must assume greater risk. Contrafund is in the GROWTH category. (bullet) MONEY MARKET Seeks income and stability by investing in high-quality, short-term investments. (bullet) INCOME Seeks income by investing in bonds. (bullet) GROWTH AND INCOME Seeks long-term growth and income by investing in stocks and bonds. (arrow) GROWTH Seeks long-term growth by investing mainly in stocks. (checkmark) EXPENSES AND PERFORMANCE EXPENSES SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell shares of a fund. See pages and - for an explanation of how and when these charges apply. Lower sales charges may be available for accounts over $250,000. Maximum sales charge on purchases (as a % of offering price) 3.00% Maximum sales charge on reinvested dividends None Deferred sales charge on redemptions None Exchange fee None ANNUAL FUND OPERATING EXPENSES are paid out of the fund's assets. The fund pays a management fee that varies based on its performance. It also incurs other expenses for services such as maintaining shareholder records and furnishing shareholder statements and fund reports. The fund's expenses are factored into its share price or dividends and are not charged directly to shareholder accounts (see page ). The following are projections based on historical expenses, and are calculated as a percentage of average net assets. A portion of the brokerage commissions that the fund paid was used to reduce fund expenses. Without this reduction, the total fund operating expenses would have been 1.08 %. Management fee .69 % 12b-1 fee None Other expenses .37 % Total fund operating expenses 1.06 % EXAMPLES: Let's say, hypothetically, that the fund's annual return is 5% and that its operating expenses are exactly as just described. For every $1,000 you invested, here's how much you would pay in total expenses if you close your account after the number of years indicated: After 1 year $ 40 After 3 years $ 63 After 5 years $ 87 After 10 years $ 156 These examples illustrate the effect of expenses, but are not meant to suggest actual or expected costs or returns, all of which may vary. UNDERSTANDING EXPENSES Operating a mutual fund involves a variety of expenses for portfolio management, shareholder statements, tax reporting, and other services. As an investor, you pay some of these costs directly (for example, the fund's 3% sales charge). Others are paid from the fund's assets; the effect of these other expenses is already factored into any quoted share price or return. (checkmark) FINANCIAL HIGHLIGHTS The table that follows has been audited by Coopers & Lybrand, independent accountants. Their unqualified report is included in the fund's Annual Report. The Annual Report is incorporated by reference into (is legally a part of) the Statement of Additional Information. SELECTED PER-SHARE DATA
Year ended 1984 1985 1986 1987 1988 1989 1990 1991 1992C 1993 December 31 Net asset value, $ 12.7 $ 9.77 $ 12.1 $ 11.2 $ 10.7 $ 12.6 $ 16.7 $ 17.3 $ 25.6 $ 27.4 beginning of period 3 6 9 2 5 8 5 0 7 Income from Investment Operations Net investment .27 .43 .05 .17 .36 .63E .51 .22 .32D (.09) income Net realized and (1.25) 2.21 1.48 (.31) 1.89 4.82 .15 9.20 3.67 5.89 unrealized gain (loss) on investments Total from (.98) 2.64 1.53 (.14) 2.25 5.45 .66 9.42 3.99 5.80 investment operations Less Distributions From net (.29) (.25) (.25) -- (.32) (.25) (.09) (.11) (.20) (.11) investment income In excess of net -- -- -- -- -- -- -- -- -- (.07) investment income From net realized (1.69) -- (2.15) (.43) -- (1.07) -- (1.06) (1.92) (2.25) gain Total distributions (1.98) (.25) (2.40) (.43) (.32) (1.32) (.09) (1.17) (2.12) (2.43) Net asset value, $ 9.77 $ 12.1 $ 11.2 $ 10.7 $ 12.6 $ 16.7 $ 17.3 $ 25.6 $ 27.4 $ 30.8 end of period 6 9 2 5 8 5 0 7 4 Total returnA,B (8.27) 27.06 13.32 (1.90) 21.02 43.15 3.94 54.92 15.89 21.43 % % % % % % % % % % RATIOS AND SUPPLEMENTAL DATA Net assets, end of $ 81 $ 87 $ 84 $ 87 $ 106 $ 298 $ 332 $ 1,00 $ 1,98 $ 6,20 period (in millions) 0 6 8 Ratio of expenses .99% .95% .88% .92% .98% .95% 1.06 .89% .87% 1.06 to G % %F average net assets Ratio of expenses .99% .95% .88% .92% .98% .95% 1.06 .89% .87% 1.08 to average net G % %F assets before expense reductions Ratio of net 2.82 3.84 1.68 1.26 3.01 4.01 3.02 1.01 1.19 .46% investment income % % % % % % % % % to average net assets Portfolio turnover 234% 135% 190% 196% 250% 266% 320% 217% 297% 255% rate
A TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE. B THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN. C AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING. D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. E INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO $.20 PER SHARE. F FMR HAS DIRECTED CERTAIN PORTFOLIO TRADES TO BROKERS WHO PAID A PORTION OF THE FUND'S EXPENSES. G INCLUDES REIMBURSEMENT OF $.01 PER SHARE FROM FIDELITY SERVICE COMPANY FOR ADJUSTMENTS TO PRIOR PERIODS' FEES. IF THE REIMBURSEMENT HAD NOT EXISTED, THE ANNUALIZED RATIO OF EXPENSES TO AVERAGE NET ASSETS WOULD HAVE BEEN 1.01%. PERFORMANCE Mutual fund performance is commonly measured as TOTAL RETURN. The total returns that follow are based on historical fund results and do not reflect the effect of taxes. The fund's fiscal year runs from January 1 through December 31. The tables below show the fund's performance over past fiscal years compared to two measures: investing in a broad selection of stocks (S&P 500) and not investing at all (inflation, or CPI). To help you compare this fund to other funds, the chart on page 7 displays calendar-year performance. AVERAGE ANNUAL TOTAL RETURNS Fiscal years ended Past 1 Past 5 Past 10 December 31, 1993 year years years Contrafund 21.43% 26.53% 17.66% Contrafund (load adj.A) 17.78% 25.77% 17.30% S&P 500 10.08% 14.55% 14.94% Consumer Price Index 2.75% 3.89% 3.71% CUMULATIVE TOTAL RETURNS Fiscal years ended Past 1 Past 5 Past 10 December 31, 1993 year years years Contrafund 21.43% 224.37% 408.62% Contrafund (load adj.A) 17.78% 214.64% 393.36% S&P 500 10.08% 97.26% 302.35% Consumer Price Index 2.75% 21.00% 43.93% A LOAD-ADJUSTED RETURNS INCLUDE THE EFFECT OF PAYING THE FUND'S 3% SALES CHARGE. EXAMPLE: Let's say, hypothetically, that an investor put $10,000 in the fund on December 31, 1983. From that date through December 31, 1993, the fund's total return, including the effect of paying the 3% sales charge, was 393.36 %. That $10,000 would have grown to $ 49,336 (the initial investment plus 393.36 % of $10,000). $10,000 OVER TEN YEARS Fiscal years 1983 1988 1993 Row: 1, Col: 1, Value: 9700.01 Row: 2, Col: 1, Value: 9315.359999999999 Row: 3, Col: 1, Value: 8511.09 Row: 4, Col: 1, Value: 8484.58 Row: 5, Col: 1, Value: 8396.200000000001 Row: 6, Col: 1, Value: 7998.48 Row: 7, Col: 1, Value: 8122.21 Row: 8, Col: 1, Value: 7689.150000000001 Row: 9, Col: 1, Value: 8758.559999999999 Row: 10, Col: 1, Value: 8758.559999999999 Row: 11, Col: 1, Value: 8714.369999999999 Row: 12, Col: 1, Value: 8652.5 Row: 13, Col: 1, Value: 8897.59 Row: 14, Col: 1, Value: 9744.540000000001 Row: 15, Col: 1, Value: 9808.290000000001 Row: 16, Col: 1, Value: 9890.26 Row: 17, Col: 1, Value: 9780.969999999999 Row: 18, Col: 1, Value: 9972.220000000001 Row: 19, Col: 1, Value: 10035.97 Row: 20, Col: 1, Value: 10145.25 Row: 21, Col: 1, Value: 10336.5 Row: 22, Col: 1, Value: 9817.4 Row: 23, Col: 1, Value: 10345.61 Row: 24, Col: 1, Value: 10892.03 Row: 25, Col: 1, Value: 11305.65 Row: 26, Col: 1, Value: 11407.92 Row: 27, Col: 1, Value: 12529.4 Row: 28, Col: 1, Value: 13088.3 Row: 29, Col: 1, Value: 12844.41 Row: 30, Col: 1, Value: 13169.59 Row: 31, Col: 1, Value: 13108.62 Row: 32, Col: 1, Value: 12143.26 Row: 33, Col: 1, Value: 12935.87 Row: 34, Col: 1, Value: 12163.58 Row: 35, Col: 1, Value: 12976.52 Row: 36, Col: 1, Value: 12976.52 Row: 37, Col: 1, Value: 12811.28 Row: 38, Col: 1, Value: 14660.92 Row: 39, Col: 1, Value: 15557.31 Row: 40, Col: 1, Value: 15815.23 Row: 41, Col: 1, Value: 15850.4 Row: 42, Col: 1, Value: 15991.09 Row: 43, Col: 1, Value: 16577.27 Row: 44, Col: 1, Value: 17386.2 Row: 45, Col: 1, Value: 18019.28 Row: 46, Col: 1, Value: 17655.85 Row: 47, Col: 1, Value: 12556.05 Row: 48, Col: 1, Value: 11864.35 Row: 49, Col: 1, Value: 12567.77 Row: 50, Col: 1, Value: 13376.71 Row: 51, Col: 1, Value: 13986.34 Row: 52, Col: 1, Value: 14009.79 Row: 53, Col: 1, Value: 14291.15 Row: 54, Col: 1, Value: 14091.85 Row: 55, Col: 1, Value: 14771.82 Row: 56, Col: 1, Value: 14877.34 Row: 57, Col: 1, Value: 14549.07 Row: 58, Col: 1, Value: 15146.98 Row: 59, Col: 1, Value: 15545.59 Row: 60, Col: 1, Value: 15428.35 Row: 61, Col: 1, Value: 15209.8 Row: 62, Col: 1, Value: 16219.78 Row: 63, Col: 1, Value: 16123.59 Row: 64, Col: 1, Value: 16977.27 Row: 65, Col: 1, Value: 18071.41 Row: 66, Col: 1, Value: 19009.25 Row: 67, Col: 1, Value: 18889.01 Row: 68, Col: 1, Value: 20620.41 Row: 69, Col: 1, Value: 21209.56 Row: 70, Col: 1, Value: 21618.36 Row: 71, Col: 1, Value: 20969.09 Row: 72, Col: 1, Value: 21450.03 Row: 73, Col: 1, Value: 21773.12 Row: 74, Col: 1, Value: 20618.29 Row: 75, Col: 1, Value: 21046.49 Row: 76, Col: 1, Value: 21500.64 Row: 77, Col: 1, Value: 21280.05 Row: 78, Col: 1, Value: 23291.27 Row: 79, Col: 1, Value: 23589.71 Row: 80, Col: 1, Value: 23148.54 Row: 81, Col: 1, Value: 21344.93 Row: 82, Col: 1, Value: 20449.61 Row: 83, Col: 1, Value: 20553.41 Row: 84, Col: 1, Value: 21773.12 Row: 85, Col: 1, Value: 22630.13 Row: 86, Col: 1, Value: 24834.44 Row: 87, Col: 1, Value: 26712.68 Row: 88, Col: 1, Value: 28277.87 Row: 89, Col: 1, Value: 28434.39 Row: 90, Col: 1, Value: 30247.41 Row: 91, Col: 1, Value: 28551.78 Row: 92, Col: 1, Value: 30573.5 Row: 93, Col: 1, Value: 32112.6 Row: 94, Col: 1, Value: 32203.91 Row: 95, Col: 1, Value: 33129.98 Row: 96, Col: 1, Value: 31382.18 Row: 97, Col: 1, Value: 35058.25 Row: 98, Col: 1, Value: 36057.96 Row: 99, Col: 1, Value: 37228.09 Row: 100, Col: 1, Value: 36217.75 Row: 101, Col: 1, Value: 36610.66 Row: 102, Col: 1, Value: 37003.57 Row: 103, Col: 1, Value: 36105.49 Row: 104, Col: 1, Value: 37017.6 Row: 105, Col: 1, Value: 36330.01 Row: 106, Col: 1, Value: 36947.44 Row: 107, Col: 1, Value: 37775.36 Row: 108, Col: 1, Value: 39599.57 Row: 109, Col: 1, Value: 40630.38 Row: 110, Col: 1, Value: 41917.18 Row: 111, Col: 1, Value: 42193.71999999999 Row: 112, Col: 1, Value: 44210.06 Row: 113, Col: 1, Value: 44508.77 Row: 114, Col: 1, Value: 46271.2 Row: 115, Col: 1, Value: 46286.14 Row: 116, Col: 1, Value: 46793.96 Row: 117, Col: 1, Value: 49064.2 Row: 118, Col: 1, Value: 49168.75 Row: 119, Col: 1, Value: 49601.89 Row: 120, Col: 1, Value: 47734.91 Row: 121, Col: 1, Value: 49335.92 $ $49,336 EXPLANATION OF TERMS TOTAL RETURN is the change in value of an investment in the fund over a given period, assuming reinvestment of any dividends and capital gains. A CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that, if achieved annually, would have produced the same cumulative total return if performance had been constant over the entire period. Average annual total returns smooth out variations in performance; they are not the same as actual year-by-year results. THE S&P 500(Registered trademark) is the Standard & Poor's 500 Composite Stock Price Index, a widely recognized, unmanaged index of common stock prices. The S&P 500 figures assume reinvestment of all dividends paid by stocks included in the index. They do not, however, include any allowance for the brokerage commissions or other fees you would pay if you actually invested in those stocks. YEAR-BY-YEAR TOTAL RETURNS Calendar years 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 Contrafund -8.27% 27.06% 13.32% -1.90% 21.02% 43.15% 3.94% 54.92% 15.89% 21.43% Competitive funds average -2.03% 28.49% 14.20% 2.59% 14.33% 26.77% -4.72% 37. 08% 7.86% 10.61% Percentage (%) Row: 1, Col: 1, Value: -8.27 Row: 1, Col: 2, Value: -2.03 Row: 2, Col: 1, Value: 27.06 Row: 2, Col: 2, Value: 28.49 Row: 3, Col: 1, Value: 13.32 Row: 3, Col: 2, Value: 14.2 Row: 4, Col: 1, Value: -1.9 Row: 4, Col: 2, Value: 2.59 Row: 5, Col: 1, Value: 21.02 Row: 5, Col: 2, Value: 14.33 Row: 6, Col: 1, Value: 43.15 Row: 6, Col: 2, Value: 26.77 Row: 7, Col: 1, Value: 3.94 Row: 7, Col: 2, Value: -4.72 Row: 8, Col: 1, Value: 54.92 Row: 8, Col: 2, Value: 37.08 Row: 9, Col: 1, Value: 15.89 Row: 9, Col: 2, Value: 7.859999999999999 Row: 10, Col: 1, Value: 21.43 Row: 10, Col: 2, Value: 10.61 Contrafund Competitive funds average THE CONSUMER PRICE INDEX is a widely recognized measure of inflation calculated by the U.S. government. THE COMPETITIVE FUNDS AVERAGE is the Lipper Growth Funds Average , which currently reflects the performance of over 390 mutual funds with similar objectives. This average, which assumes reinvestment of distributions, is published by Lipper Analytical Services, Inc. Other illustrations of fund performance may show moving averages over specified periods. The fund's recent strategies, performance, and holdings are detailed twice a year in financial reports, which are sent to all shareholders. For current performance or a free annual report, call 1-800-544-8888. TOTAL RETURNS ARE BASED ON PAST RESULTS AND ARE NOT AN INDICATION OF FUTURE PERFORMANCE. YOUR ACCOUNT DOING BUSINESS WITH FIDELITY Fidelity Investments was established in 1946 to manage one of America's first mutual funds. Today, Fidelity is the largest mutual fund company in the country, and is known as an innovative provider of high-quality financial services to individuals and institutions. In addition to its mutual fund business, the company operates one of America's leading discount brokerage firms, Fidelity Brokerage Services, Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered retirement plans for individuals investing on their own or through their employer. Fidelity is committed to providing investors with practical information to make investment decisions. Based in Boston, Fidelity provides customers with complete service 24 hours a day, 365 days a year, through a network of telephone service centers around the country. To reach Fidelity for general information, call these numbers: (bullet) For mutual funds, 1-800-544-8888 (bullet) For brokerage, 1-800-544-7272 If you would prefer to speak with a representative in person, Fidelity has over 75 walk-in Investor Centers across the country. TYPES OF ACCOUNTS You may set up an account directly in the fund or, if you own or intend to purchase individual securities as part of your total investment portfolio, you may consider investing in the fund through a brokerage account. If you are investing through FBSI or another financial institution or investment professional, refer to its program materials for any special provisions regarding your investment in the fund. The different ways to set up (register) your account with Fidelity are listed at right. The account guidelines that follow may not apply to certain retirement accounts. If your employer offers the fund through a retirement program, contact your employer for more information. Otherwise, call Fidelity directly. FIDELITY FACTS Fidelity offers the broadest selection of mutual funds in the world. (bullet) Number of Fidelity mutual funds: over 200 (bullet) Assets in Fidelity mutual funds: over $ 225 billion (bullet) Number of shareholder accounts: over 15 million (bullet) Number of investment analysts and portfolio managers: over 200 (checkmark) WAYS TO SET UP YOUR ACCOUNT INDIVIDUAL OR JOINT TENANT FOR YOUR GENERAL INVESTMENT NEEDS Individual accounts are owned by one person. Joint accounts can have two or more owners (tenants). RETIREMENT TO SHELTER YOUR RETIREMENT SAVINGS FROM TAXES Retirement plans allow individuals to shelter investment income and capital gains from current taxes. In addition, contributions to these accounts may be tax deductible. Retirement accounts require special applications and typically have lower minimums. (bullet) INDIVIDUAL RETIREMENT ACCOUNTS (IRAS) allow anyone of legal age and under 70 with earned income to invest up to $2,000 per tax year. Individuals can also invest in a spouse's IRA if the spouse has earned income of less than $250. (bullet) ROLLOVER IRAS retain special tax advantages for certain distributions from employer-sponsored retirement plans. (bullet) KEOGH OR CORPORATE PROFIT SHARING AND MONEY PURCHASE PENSION PLANS allow self-employed individuals or small business owners (and their employees) to make tax-deductible contributions for themselves and any eligible employees up to $30,000 per year. (bullet) SIMPLIFIED EMPLOYEE PENSION PLANS (SEP-IRAS) provide small business owners or those with self-employed income (and their eligible employees) with many of the same advantages as a Keogh, but with fewer administrative requirements. (bullet) 403(B) CUSTODIAL ACCOUNTS are available to employees of most tax-exempt institutions, including schools, hospitals, and other charitable organizations. (bullet) 401(K) PROGRAMS allow employees of corporations of all sizes to contribute a percentage of their wages on a tax-deferred basis. These accounts need to be established by the trustee of the plan. GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA) TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS These custodial accounts provide a way to give money to a child and obtain tax benefits. An individual can give up to $10,000 a year per child without paying federal gift tax. Depending on state laws, you can set up a custodial account under the Uniform Gifts to Minors Act (UGMA) or the Uniform Transfers to Minors Act (UTMA). TRUST FOR MONEY BEING INVESTED BY A TRUST The trust must be established before an account can be opened. BUSINESS OR ORGANIZATION FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER GROUPS Requires a special application. HOW TO BUY SHARES ONCE EACH BUSINESS DAY, TWO SHARE PRICES ARE CALCULATED FOR THE FUND: the offering price and the net asset value (NAV). The offering price includes the 3% sales charge, which you pay when you buy shares, unless you qualify for a reduction or waiver as described on page . When you buy shares at the offering price, Fidelity deducts 3% and invests the rest at the NAV. Shares are purchased at the next share price calculated after your investment is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. IF YOU ARE NEW TO FIDELITY, complete and sign an account application and mail it along with your check. You may also open your account in person or by wire as described on page . If there is no application accompanying this prospectus, call 1-800-544-8888. IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can: (bullet) Mail in an application with a check, or (bullet) Open your account by exchanging from another Fidelity fund. IF YOU ARE INVESTING THROUGH A TAX-SHELTERED RETIREMENT PLAN, such as an IRA, for the first time, you will need a special application. Retirement investing also involves its own investment procedures. Call 1-800-544-8888 for more information and a retirement application. If you buy shares by check or Fidelity Money Line(Registered trademark), and then sell those shares by any method other than by exchange to another Fidelity fund, the payment may be delayed for up to seven business days to ensure that your previous investment has cleared. MINIMUM INVESTMENTS TO OPEN AN ACCOUNT $2,500 For Fidelity retirement accounts $500 TO ADD TO AN ACCOUNT $250 For Fidelity retirement accounts $250 Through automatic investment plans $100 MINIMUM BALANCE $1,000 For Fidelity retirement accounts $500 UNDERSTANDING SHARE PRICE Let's say you invest $2,500 at an offering price of $10. Of the $10 offering price, 3% ($.30) is the sales charge, and 97% ($9.70) represents the NAV. The value of your initial investment will be $2,425 (250 shares worth $9.70 each), and you will have paid a sales charge of $75. (checkmark) Row: 1, Col: 1, Value: 25.0 Row: 1, Col: 2, Value: 75.0 Row: 1, Col: 3, Value: 75.0 Row: 1, Col: 4, Value: 75.0 Row: 1, Col: 5, Value: 75.0 Row: 1, Col: 6, Value: 75.0 Row: 1, Col: 7, Value: 75.0 Row: 1, Col: 8, Value: 75.0 Row: 1, Col: 9, Value: 75.0 Row: 1, Col: 10, Value: 75.0 Row: 1, Col: 11, Value: 75.0 Row: 1, Col: 12, Value: 75.0 Row: 1, Col: 13, Value: 75.0 Row: 1, Col: 14, Value: 75.0 Row: 1, Col: 15, Value: 75.0 Row: 1, Col: 16, Value: 75.0 Row: 1, Col: 17, Value: 75.0 Row: 1, Col: 18, Value: 75.0 Row: 1, Col: 19, Value: 75.0 Row: 1, Col: 20, Value: 75.0 Row: 1, Col: 21, Value: 75.0 Row: 1, Col: 22, Value: 75.0 Row: 1, Col: 23, Value: 75.0 Row: 1, Col: 24, Value: 75.0 Row: 1, Col: 25, Value: 75.0 Row: 1, Col: 26, Value: 75.0 Row: 1, Col: 27, Value: 75.0 Row: 1, Col: 28, Value: 75.0 Row: 1, Col: 29, Value: 75.0 Row: 1, Col: 30, Value: 75.0 Row: 1, Col: 31, Value: 75.0 Row: 1, Col: 32, Value: 75.0 Row: 1, Col: 33, Value: 75.0 Row: 1, Col: 34, Value: 75.0 $2,500 Investment 3% sales charge = $75 Value of Investment = $2,425
TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT Phone 1-800-544-777 (phone_graphic) (bullet) Exchange from another (bullet) Exchange from another Fidelity fund account Fidelity fund account with the same with the same registration, including registration, including name, address, and name, address, and taxpayer ID number. taxpayer ID number. (bullet) Use Fidelity Money Line to transfer from your bank account. Call before your first use to verify that this service is in place on your account. Maximum Money Line: $50,000.
Mail (mail_graphic) (bullet) Complete and sign the (bullet) Make your check application. Make your payable to "Fidelity check payable to Contrafund . " Indicate "Fidelity Contrafund . " your fund account Mail to the address number on your check indicated on the and mail to the address application. printed on your account statement. (bullet) Exchange by mail: call 1-800-544-6666 for instructions.
In Person (hand_graphic) (bullet) Bring your application (bullet) Bring your check to a and check to a Fidelity Fidelity Investor Center. Investor Center. Call Call 1-800-544-9797 for 1-800-544-9797 for the the center nearest you. center nearest you.
Wire (wire_graphic) (bullet) Call 1-800-544-7777 to (bullet) Not available for set up your account retirement accounts. and to arrange a wire (bullet) Wire to: transaction. Not Bankers Trust available for retirement Company, accounts. Bank Routing (bullet) Wire within 24 hours to: #021001033, Bankers Trust Account #00163053. Company, Specify "Fidelity Bank Routing Contrafund" and #021001033, include your account Account #00163053. number and your Specify "Fidelity name. Contrafund" and include your new account number and your name.
Automatically (automatic_graphic) (bullet) Not available. (bullet) Use Fidelity Automatic Account Builder. Sign up for this service when opening your account, or call 1-800-544-6666 to add it.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
HOW TO SELL SHARES You can arrange to take money out of your fund account at any time by selling (redeeming) some or all of your shares. Your shares will be sold at the next share price calculated after your order is received and accepted. Share price is normally calculated at 4 p.m. Eastern time. TO SELL SHARES IN A NON-RETIREMENT ACCOUNT, you may use any of the methods described on these two pages. TO SELL SHARES IN A FIDELITY RETIREMENT ACCOUNT, your request must be made in writing, except for exchanges to other Fidelity funds, which can be requested by phone or in writing. Call 1-800-544-6666 for a retirement distribution form. IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $1,000 worth of shares in the account to keep it open ($500 for retirement accounts). TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign up for these services in advance. CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to protect you and Fidelity from fraud. Your request must be made in writing and include a signature guarantee if any of the following situations apply: (bullet) You wish to redeem more than $100,000 worth of shares, (bullet) Your account registration has changed within the last 30 days, (bullet) The check is being mailed to a different address than the one on your account (record address), (bullet) The check is being made payable to someone other than the account owner, or (bullet) The redemption proceeds are being transferred to a Fidelity account with a different registration. You should be able to obtain a signature guarantee from a bank, broker (including Fidelity Investor Centers), dealer, credit union (if authorized under state law), securities exchange or association, clearing agency, or savings association. A notary public cannot provide a signature guarantee. SELLING SHARES IN WRITING Write a "letter of instruction" with: (bullet) Your name, (bullet) The fund's name, (bullet) Your fund account number, (bullet) The dollar amount or number of shares to be redeemed, and (bullet) Any other applicable requirements listed in the table at right. Unless otherwise instructed, Fidelity will send a check to the record address. Deliver your letter to a Fidelity Investor Center, or mail it to: Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 ACCOUNT TYPE SPECIAL REQUIREMENTS
Phone 1-800-544-777 (phone_graphic) All account types (bullet) Maximum check request: except retirement $100,000. (bullet) For Money Line transfers to All account types your bank account; minimum: $10 ; maximum: $100,000. (bullet) You may exchange to other Fidelity funds if both accounts are registered with the same name(s), address, and taxpayer ID number. Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (bullet) The letter of instruction must Tenant, be signed by all persons Sole Proprietorship required to sign for , UGMA, UTMA transactions, exactly as their Retirement account names appear on the account. (bullet) The account owner should Trust complete a retirement distribution form. Call 1-800-544-6666 to request one. Business or (bullet) The trustee must sign the Organization letter indicating capacity as trustee. If the trustee's name is not in the account registration, provide a copy of the trust document certified within the last 60 days. Executor, (bullet) At least one person Administrator, authorized by corporate Conservator, resolution to act on the Guardian account must sign the letter. (bullet) Include a corporate resolution with corporate seal or a signature guarantee. (bullet) Call 1-800-544-6666 for instructions. Wire (wire_graphic) All account types (bullet) You must sign up for the wire except retirement feature before using it. To verify that it is in place, call 1-800-544-6666. Minimum wire: $5,000. (bullet) Your wire redemption request must be received by Fidelity before 4 p.m. Eastern time for money to be wired on the next business day.
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
INVESTOR SERVICES Fidelity provides a variety of services to help you manage your account. INFORMATION SERVICES FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days a year. Whenever you call, you can speak with someone equipped to provide the information or service you need. STATEMENTS AND REPORTS that Fidelity sends to you include the following: (bullet) Confirmation statements (after every transaction, except reinvestments, that affects your account balance or your account registration) (bullet) Account statements (quarterly) (bullet) Financial reports (every six months) 24-HOUR SERVICE ACCOUNT ASSISTANCE 1-800-544-6666 ACCOUNT BALANCES 1-800-544-7544 ACCOUNT TRANSACTIONS 1-800-544-7777 PRODUCT INFORMATION 1-800-544-8888 QUOTES 1-800-544-8544 RETIREMENT ACCOUNT ASSISTANCE 1-800-544-4774 AUTOMATED SERVICE (checkmark) To reduce expenses, only one copy of most financial reports will be mailed to your household, even if you have more than one account in the fund. Call 1-800-544-6666 if you need copies of financial reports or historical account information. TRANSACTION SERVICES EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other Fidelity funds by telephone or in writing. The shares you exchange will carry credit for any sales charge you previously paid in connection with their purchase. Note that exchanges out of the fund are limited to four per calendar year, and that they may have tax consequences for you. For complete policies and restrictions governing exchanges, including circumstances under which a shareholder's exchange privilege may be suspended or revoked, see page . SYSTEMATIC WITHDRAWAL PLANS let you set up monthly or quarterly redemptions from your account. Because of the fund's sales charge, you may not want to set up a systematic withdrawal plan during a period when you are buying shares on a regular basis. FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by phone between your bank account and your fund account. Most transfers are complete within three business days of your call. REGULAR INVESTMENT PLANS One easy way to pursue your financial goals is to invest money regularly. Fidelity offers convenient services that let you transfer money into your fund account, or between fund accounts, automatically. While regular investment plans do not guarantee a profit and will not protect you against loss in a declining market, they can be an excellent way to invest for retirement, a home, educational expenses, and other long-term financial goals. Certain restrictions apply for retirement accounts. Call 1-800-544-6666 for more information. REGULAR INVESTMENT PLANS FIDELITY AUTOMATIC ACCOUNT BUILDERSM TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly or (bullet) For a new account, complete the quarterly appropriate section on the fund application. (bullet) For existing accounts, call 1-800-544-6666 for an application. (bullet) To change the amount or frequency of your investment, call 1-800-544-6666 at least three business days prior to your next scheduled investment date.
DIRECT DEPOSIT TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Every pay (bullet) Check the appropriate box on the fund period application, or call 1-800-544-6666 for an authorization form. (bullet) Changes require a new authorization form.
FIDELITY AUTOMATIC EXCHANGE SERVICE TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING $100 Monthly, (bullet) To establish, call 1-800-544-6666 after bimonthly, both accounts are opened. quarterly, or (bullet) To change the amount or frequency of annually your investment, call 1-800-544-6666.
A BECAUSE ITS SHARE PRICE FLUCTUATES, THE FUND MAY NOT BE AN APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK. DIVIDENDS, CAPITAL GAINS, AND TAXES The fund distributes substantially all of its net income and capital gains to shareholders each year. Normally, dividends and capital gains are distributed in February and December. DISTRIBUTION OPTIONS When you open an account, specify on your application how you want to receive your distributions. If the option you prefer is not listed on the application, call 1-800-544-6666 for instructions. The fund offers four options: 1. REINVESTMENT OPTION. Your dividend and capital gain distributions will be automatically reinvested in additional shares of the fund. If you do not indicate a choice on your application, you will be assigned this option. 2. INCOME-EARNED OPTION. Your capital gain distributions will be automatically reinvested, but you will be sent a check for each dividend distribution. 3. CASH OPTION. You will be sent a check for your dividend and capital gain distributions. 4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and capital gain distributions will be automatically invested in another identically registered Fidelity fund. FOR RETIREMENT ACCOUNTS, all distributions are automatically reinvested. When you are over 59 years old, you can receive distributions in cash. SHARES PURCHASED THROUGH REINVESTMENT of dividend and capital gain distributions are not subject to the fund's 3% sales charge. Likewise, if you direct distributions to a fund with a 3% sales charge, you will not pay a sales charge on those purchases. When the fund deducts a distribution from its NAV, the reinvestment price is the fund's NAV at the close of business that day. Cash distribution checks will be mailed within seven days , or longer for a December ex-dividend date. UNDERSTANDING DISTRIBUTIONS As a fund shareholder, you are entitled to your share of the fund's net income and gains on its investments. The fund passes its earnings along to its investors as DISTRIBUTIONS. The fund earns dividends from stocks and interest from bond, money market, and other investments. These are passed along as DIVIDEND DISTRIBUTIONS. The fund realizes capital gains whenever it sells securities for a higher price than it paid for them. These are passed along as CAPITAL GAIN DISTRIBUTIONS. (checkmark) TAXES As with any investment, you should consider how your investment in the fund will be taxed. If your account is not a tax-deferred retirement account, you should be aware of these tax implications. TAXES ON DISTRIBUTIONS. Distributions are subject to federal income tax, and may also be subject to state or local taxes. If you live outside the United States, your distributions could also be taxed by the country in which you reside. Your distributions are taxable when they are paid, whether you take them in cash or reinvest them. However, distributions declared in December and paid in January are taxable as if they were paid on December 31. For federal tax purposes, the fund's income and short-term capital gain distributions are taxed as dividends; long-term capital gain distributions are taxed as long-term capital gains. Every January, Fidelity will send you and the IRS a statement showing the taxable distributions paid to you in the previous year. TAXES ON TRANSACTIONS. Your redemptions - including exchanges to other Fidelity funds - are subject to capital gains tax. A capital gain or loss is the difference between the cost of your shares and the price you receive when you sell them. Whenever you sell shares of the fund, Fidelity will send you a confirmation statement showing how many shares you sold and at what price. You will also receive a consolidated transaction statement every January. However, it is up to you or your tax preparer to determine whether this sale resulted in a capital gain and, if so, the amount of tax to be paid. Be sure to keep your regular account statements; the information they contain will be essential in calculating the amount of your capital gains. "BUYING A DIVIDEND." If you buy shares just before the fund deducts a distribution from its NAV, you will pay the full price for the shares and then receive a portion of the price back in the form of a taxable distribution. There are tax requirements that all funds must follow in order to avoid federal taxation. In its effort to adhere to these requirements, the fund may have to limit its investment activity in some types of instruments. SHAREHOLDER AND ACCOUNT POLICIES TRANSACTION DETAILS THE FUND IS OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE) is open. Fidelity normally calculates the fund's net asset value and offering price as of the close of business of the NYSE, normally 4 p.m. Eastern time. THE FUND'S NAV is the value of a single share. The NAV is computed by adding the value of the fund's investments, cash, and other assets, subtracting its liabilities, and then dividing the result by the number of shares outstanding. The fund's assets are valued primarily on the basis of market quotations. If quotations are not readily available, assets are valued by a method that the Board of Trustees believes accurately reflects fair value. Foreign securities are valued on the basis of quotations from the primary market in which they are traded, and are translated from the local currency into U.S. dollars using current exchange rates. THE OFFERING PRICE (price to buy one share) is the fund's NAV plus a sales charge. The sales charge is 3% of the offering price, or 3.09% of the net amount invested. The REDEMPTION PRICE (price to sell one share) is the fund's NAV. WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that your Social Security or taxpayer identification number is correct and that you are not subject to 31% backup withholding for failing to report income to the IRS. If you violate IRS regulations, the IRS can require the fund to withhold 31% of your taxable distributions and redemptions. YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will not be responsible for any losses resulting from unauthorized transactions if it follows reasonable procedures designed to verify the identity of the caller. Fidelity will request personalized security codes or other information, and may also record calls. You should verify the accuracy of your confirmation statements immediately after you receive them. If you do not want the ability to redeem and exchange by telephone, call Fidelity for instructions. IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods of unusual market activity), consider placing your order by mail or by visiting a Fidelity Investor Center. THE FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period of time. The fund also reserves the right to reject any specific purchase order, including certain purchases by exchange. See "Exchange Restrictions" on page . Purchase orders may be refused if, in FMR's opinion, they are of a size that would disrupt management of the fund. WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the next offering price calculated after your order is received and accepted. Note the following: (bullet) All of your purchases must be made in U.S. dollars and checks must be drawn on U.S. banks. (bullet) Fidelity does not accept cash. (bullet) When making a purchase with more than one check, each check must have a value of at least $50. (bullet) The fund reserves the right to limit the number of checks processed at one time. (bullet) If your check does not clear, your purchase will be cancelled and you could be liable for any losses or fees the fund or its transfer agent has incurred. TO AVOID THE COLLECTION PERIOD associated with check and Money Line purchases, consider buying shares by bank wire, U.S. Postal money order, U.S. Treasury check, Federal Reserve check, or direct deposit instead. YOU MAY BUY SHARES OF THE FUND (AT THE OFFERING PRICE) OR SELL THEM THROUGH A BROKER, who may charge you a fee for this service. If you invest through a broker or other institution, read its program materials for any additional service features or fees that may apply. CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with Fidelity Distributors Corporation (FDC) may enter confirmed purchase orders on behalf of customers by phone, with payment to follow no later than the time when the fund is priced on the following business day. If payment is not received by that time, the financial institution could be held liable for resulting fees or losses. WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the next NAV calculated after your request is received and accepted. Note the following: (bullet) Normally, redemption proceeds will be mailed to you on the next business day, but if making immediate payment could adversely affect the fund, it may take up to seven days to pay you. (bullet) Fidelity Money Line redemptions generally will be credited to your bank account on the second or third business day after your phone call. (bullet) The fund may hold payment on redemptions until it is reasonably satisfied that investments made by check or Fidelity Money Line have been collected, which can take up to seven business days. (bullet) Redemptions may be suspended or payment dates postponed when the NYSE is closed (other than weekends or holidays), when trading on the NYSE is restricted, or as permitted by the SEC. TO SELL CERTIFICATE SHARES, call 1-800-544-6666 for instructions. The fund no longer issues certificate shares. IF YOUR ACCOUNT BALANCE FALLS BELOW $1,000, you will be given 30 days' notice to reestablish the minimum balance. If you do not increase your balance, Fidelity reserves the right to close your account and send the proceeds to you. Your shares will be redeemed at the NAV on the day your account is closed. FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing historical account documents, that are beyond the normal scope of its services. FDC collects the proceeds from the fund's 3% sales charge and may pay a portion of them to securities dealers who have sold the fund's shares, or to others, including banks and other financial institutions (qualified recipients), under special arrangements in connection with FDC's sales activities. The sales charge paid to qualified recipients is 2.75% of the fund's offering price. FDC may, at its own expense, provide promotional incentives to qualified recipients who support the sale of shares of the fund without reimbursement from the fund. In some instances, these incentives may be offered only to certain institutions whose representatives provide services in connection with the sale or expected sale of significant amounts of shares. EXCHANGE RESTRICTIONS As a shareholder, you have the privilege of exchanging shares of the fund for shares of other Fidelity funds. However, you should note the following: (bullet) The fund you are exchanging into must be registered for sale in your state. (bullet) You may only exchange between accounts that are registered in the same name, address, and taxpayer identification number. (bullet) Before exchanging into a fund, read its prospectus. (bullet) If you exchange into a fund with a sales charge, you pay the percentage-point difference between that fund's sales charge and any sales charge you have previously paid in connection with the shares you are exchanging. For example, if you had already paid a sales charge of 2% on your shares and you exchange them into a fund with a 3% sales charge, you would pay an additional 1% sales charge. (bullet) Exchanges may have tax consequences for you. (bullet) Because excessive trading can hurt fund performance and shareholders, the fund reserves the right to temporarily or permanently terminate the exchange privilege of any investor who makes more than four exchanges out of the fund per calendar year. Accounts under common ownership or control, including accounts with the same taxpayer identification number, will be counted together for purposes of the four exchange limit. (bullet) The exchange limit may be modified for accounts in certain institutional retirement plans to conform to plan exchange limits and Department of Labor regulations. See your plan materials for further information. (bullet) The fund reserves the right to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest the money effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. (bullet) Your exchanges may be restricted or refused if the fund receives or anticipates simultaneous orders affecting significant portions of the fund's assets. In particular, a pattern of exchanges that coincide with a "market timing" strategy may be disruptive to the fund. Although the fund will attempt to give you prior notice whenever it is reasonably able to do so, it may impose these restrictions at any time. The fund reserves the right to terminate or modify the exchange privilege in the future. OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose administrative fees of up to $7.50 and redemption fees of up to 1.50% on exchanges. Check each fund's prospectus for details. SALES CHARGE REDUCTIONS AND WAIVERS REDUCTIONS. The fund's sales charge may be reduced if you invest directly with Fidelity or through prototype or prototype-like retirement plans sponsored by FMR or FMR Corp. The amount you invest, plus the value of your account, must fall within the ranges shown below. However, purchases made with assistance or intervention from a financial intermediary are not eligible. Call Fidelity to see if your purchase qualifies. Ranges Sales charge Net amount invested $0 - 249,999 3% 3.09% $250,000 - 499,999 2% 2.04% $500,000 - 999,999 1% 1.01% $1,000,000 or more none none The sales charge will also be reduced by the percentage of any sales charge you previously paid on investments in other Fidelity funds (not including Fidelity's Foreign Currency Funds). Similarly, your shares carry credit for any sales charge you would have paid if the reductions in the table above had not existed. These sales charge credits only apply to purchases made in one of the ways listed below, and only if you continuously owned Fidelity fund shares or a Fidelity brokerage core account, or participated in The CORPORATEplan for Retirement Program. 1. By exchange from another Fidelity fund. 2. With proceeds of a transaction within a Fidelity brokerage core account, including any free credit balance, core money market fund, or margin availability, to the extent such proceeds were derived from redemption proceeds from another Fidelity fund. 3. With redemption proceeds from one of Fidelity's Foreign Currency Funds, if the Foreign Currency Fund shares were originally purchased with redemption proceeds from a Fidelity fund. 4. Through the Directed Dividends Option (see page ). 5. By participants in The CORPORATEplan for Retirement Program when shares are purchased through plan-qualified loan repayments, and for exchanges into and out of the Managed Income Portfolio. WAIVERS. The fund's sales charge will not apply: 1. If you buy shares as part of an employee benefit plan having more than 200 eligible employees or a minimum of $3 million in plan assets invested in Fidelity mutual funds. Plan sponsors are encouraged to notify Fidelity when they first satisfy either of these requirements. 2. To shares in a Fidelity Rollover IRA account purchased with the proceeds of a distribution from an employee benefit plan, provided that at the time of the distribution, the employer or its affiliate maintained a plan that both qualified for waiver (1) above and had at least some of its assets invested in Fidelity-managed products. 3. If you are a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more. 4. If you purchase shares for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code). 5. If you are an investor participating in the Fidelity Trust Portfolios program. 6. To shares purchased through Portfolio Advisory Services. 7. If you are a current or former trustee or officer of a Fidelity fund or a current or retired officer, director, or full-time employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity trustee or employee, a Fidelity trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity trustee or employee. 8. If you are a bank trust officer, registered representative, or other employee of a qualified recipient, as defined on page . 9. To contributions and exchanges to a prototype or prototype-like retirement plan sponsored by FMR Corp. or FMR and which is marketed and distributed directly to plan sponsors or participants without any assistance or intervention from any intermediary distribution channel. 10. If you are a registered investment adviser (RIA) purchasing for your discretionary accounts, provided you execute a Fidelity RIA load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased directly from Fidelity, without a broker, and is unavailable if the RIA is part of an organization principally engaged in the brokerage business. 11. If you are a trust institution or bank trust department purchasing for your non-discretionary, non-retirement fiduciary accounts, provided you execute a Fidelity Trust load waiver agreement which specifies certain aggregate minimum and operating provisions. This waiver is available only for shares purchased either directly from Fidelity or through a bank-affiliated broker, and is available, if the trust department or institution is part of an organization not principally engaged in banking or trust activities. These waivers must be qualified through FDC in advance. More detailed information about waivers (1), (2), (5), and ( 9 ) is contained in the Statement of Additional Information. A representative of your plan or organization should call Fidelity for more information. THE FUND IN DETAIL CHARTER CONTRAFUND IS A MUTUAL FUND: an investment that pools shareholders' money and invests it toward a specified goal. In technical terms, the fund is currently an open-end, diversified management investment company organized as a Massachusetts business trust on December 31, 1984. THE FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for protecting the interests of shareholders. The trustees are experienced executives who meet throughout the year to oversee the fund's activities, review contractual arrangements with companies that provide services to the fund, and review performance. The majority of trustees are not otherwise affiliated with Fidelity. THE FUND MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These meetings may be called to elect or remove trustees, change fundamental policies, approve a management contract, or for other purposes. Shareholders not attending these meetings are encouraged to vote by proxy. Fidelity will mail proxy materials in advance, including a voting card and information about the proposals to be voted on. You are entitled to one vote for each share you own. FMR AND ITS AFFILIATES The fund is managed by FMR, which chooses the fund's investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far East) assist FMR with foreign investments. William Danoff is vice president and manager of Contrafund, which he has managed since October 1990. Previously, he manged Select Retailing and assisted on Magellan. Mr. Danoff joined Fidelity in 1986 as an equity analyst. FDC distributes and markets Fidelity's funds and services. Fidelity Service Co. (FSC) performs transfer agent servicing functions for the fund. FMR Corp. is the parent company of these organizations. Through ownership of voting common stock, Edward C. Johnson 3d (President and a trustee of the trust), Johnson family members, and various trusts for the benefit of the Johnson family form a controlling group with respect to FMR Corp. A broker-dealer may use a portion of the commissions paid by the fund to reduce custodian or transfer agent fees. FMR may use its broker-dealer affiliates and other firms that sell fund shares to carry out the fund's transactions, provided that the fund receives brokerage services and commission rates comparable to those of other broker-dealers. BREAKDOWN OF EXPENSES Like all mutual funds, the fund pays fees related to its daily operations. Expenses paid out of the fund's assets are reflected in its share price or dividends; they are neither billed directly to shareholders nor deducted from shareholder accounts. The fund pays a MANAGEMENT FEE to FMR for managing its investments and business affairs. FMR in turn pays fees to affiliates who provide assistance with these services. The fund also pays OTHER EXPENSES, which are explained on page . FMR may, from time to time, agree to reimburse the fund for management fees and other expenses above a specified limit. FMR retains the ability to be repaid by the fund if expenses fall below the specified limit prior to the end of the fiscal year. Reimbursement arrangements, which may be terminated at any time without notice, can decrease the fund's expenses and boost its performance. MANAGEMENT FEE The management fee is calculated and paid to FMR every month. The amount of the fee is determined by taking a BASIC FEE and then applying a PERFORMANCE ADJUSTMENT. The performance adjustment either increases or decreases the management fee, depending on how well the fund has performed relative to the S&P 500. Manage = Ba +/- Performa ment sic nce fee fee adjustme nt THE BASIC FEE RATE (calculated monthly) is calculated by adding a group fee rate to an individual fund fee rate, and multiplying the result by the fund's average net assets. The group fee rate is based on the average net assets of all the mutual funds advised by FMR. This rate cannot rise above .52%, and it drops as total assets under management increase. For December 1993, the group fee rate was .3243 %. The individual fund fee rate is .30%. The basic fee rate for fiscal 1993 was .6243 %. THE PERFORMANCE ADJUSTMENT RATE is calculated monthly by comparing the fund's performance to that of the S&P 500 over the most recent 36-month period. The difference is translated into a dollar amount that is added to or subtracted from the basic fee. The maximum annualized performance adjustment rate is ".20%. UNDERSTANDING THE MANAGEMENT FEE The basic fee FMR receives is designed to be responsive to changes in FMR's total assets under management. Building this variable into the fee calculation assures shareholders that they will pay a lower rate as FMR's assets under management increase. Another variable, the performance adjustment, rewards FMR when the fund outperforms the S&P 500 (an established index of stock market performance) and reduces FMR's fee when the fund underperforms this index. (checkmark) FMR HAS SUB-ADVISORY AGREEMENTS with FMR U.K. and FMR Far East. These sub-advisers provide FMR with investment research and advice on companies based outside the United States. Under the sub-advisory agreements, FMR pays FMR U.K. and FMR Far East fees equal to 110% and 105%, respectively, of the costs of providing these services. OTHER EXPENSES While the management fee is a significant component of the fund's annual operating costs, the fund has other expenses as well. The fund contracts with FSC to perform many transaction and accounting functions. These services include processing shareholder transactions, valuing the fund's investments, and handling securities loans. In fiscal 1993, the fund paid FSC fees equal to .33 % of its average net assets. The fund also pays other expenses, such as legal, audit, and custodian fees; proxy solicitation costs; and the compensation of trustees who are not affiliated with Fidelity. The fund's portfolio turnover rate for fiscal 1993 was 255 %. This rate varies from year to year. High turnover rates increase transaction costs and may increase taxable capital gains. FMR considers these effects when evaluating the anticipated benefits of short-term investing. INVESTMENT PRINCIPLES THE FUND SEEKS CAPITAL APPRECIATION by investing in companies that FMR believes to be undervalued due to an overly pessimistic appraisal by the public. In pursuit of the fund's goal, FMR looks for companies with the following characteristics: (bullet) unpopular, but improvements seem possible due to developments such as a change in management, a new product line, or an improved balance sheet, (bullet) recently popular, but temporarily out of favor due to short-term or one-time factors, or (bullet) undervalued compared to other companies in the same industry . This strategy can lead to investments in domestic or foreign companies, many of which may not be well known. The stocks of small companies often involve more risk than those of larger companies. The fund usually invests primarily in common stock and securities convertible into common stock, but it has the flexibility to invest in any type of security that may produce capital appreciation. THE FUND WILL SPREAD INVESTMENT RISK by limiting its holdings in any one company or industry. FMR may use various investment techniques to hedge the fund's risks, but there is no guarantee that these strategies will work as FMR intends. When you sell your shares, they may be worth more or less than what you paid for them. FMR normally invests the fund's assets according to its investment strategy. When FMR considers it appropriate for defensive purposes , however, it may temporarily invest substantially in investment-grade, fixed-income obligations of all types and U.S. government obligations. SECURITIES AND INVESTMENT PRACTICES The following pages contain more detailed information about types of instruments in which the fund may invest, and strategies FMR may employ in pursuit of the fund's investment objective. A summary of risks and restrictions associated with these instrument types and investment practices is included as well. Policies and limitations are considered at the time of purchase; the sale of instruments is not required in the event of a subsequent change in circumstances. FMR may not buy all of these instruments or use all of these techniques to the full extent permitted unless it believes that doing so will help the fund achieve its goal. As a shareholder, you will receive financial reports every six months detailing fund holdings and describing recent investment activities. EQUITY SECURITIES may include common stocks, preferred stocks, convertible securities, and warrants. Common stocks, the most familiar type, represent an equity (ownership) interest in a corporation. This ownership interest often gives the fund the right to vote on measures affecting the company's organization and operations. Although common stocks have a history of long-term growth in value, their prices tend to fluctuate in the short term, particularly those of smaller companies. RESTRICTIONS: With respect to 75% of total assets, the fund may not own more than 10% of the outstanding voting securities of a single issuer. DEBT SECURITIES. Bonds and other debt instruments are used by issuers to borrow money from investors. The issuer pays the investor a fixed or variable rate of interest, and must repay the amount borrowed at maturity. Some debt securities, such as zero coupon bonds, do not pay current interest, but are purchased at a discount from their face values. Debt securities, loans, and other direct debt have varying degrees of quality and varying levels of sensitivity to changes in interest rates. Longer-term bonds are generally more sensitive to interest rate changes than short-term bonds. RESTRICTIONS: The fund does not currently intend to invest more than 5% of its assets in lower-quality debt securities sometimes called "junk bonds" (those rated below Baa by Moody's Investors Service, Inc. or BBB by Standard & Poor's Corporation, and unrated securities judged by FMR to be of equivalent quality). FOREIGN SECURITIES and foreign currencies may involve additional risks. These include currency fluctuations, risks relating to political or economic conditions in the foreign country, and the potentially less stringent investor protection and disclosure standards of foreign markets. In addition to the political and economic factors that can affect foreign securities, a governmental issuer may be unwilling to repay principal and interest when due, and may require that the conditions for payment be renegotiated. These factors could make foreign investments, especially those in developing countries, more volatile. ADJUSTING INVESTMENT EXPOSURE. The fund can use various techniques to increase or decrease its exposure to changing security prices, interest rates, currency exchange rates, commodity prices, or other factors that affect security values. These techniques may involve derivative transactions such as buying and selling options and futures contracts, entering into currency exchange contracts or swap agreements, and purchasing indexed securities. FMR can use these practices to adjust the risk and return characteristics of the fund's portfolio of investments. If FMR judges market conditions incorrectly or employs a strategy that does not correlate well with the fund's investments, these techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These techniques may increase the volatility of the fund and may involve a small investment of cash relative to the magnitude of the risk assumed. In addition, these techniques could result in a loss if the counterparty to the transaction does not perform as promised. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund buys a security at one price and simultaneously agrees to sell it back at a higher price. Delays or losses could result if the other party to the agreement defaults or becomes insolvent. ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by FMR, under the supervision of the Board of Trustees, to be illiquid, which means that they may be difficult to sell promptly at an acceptable price. The sale of other securities may be subject to legal restrictions. Difficulty in selling securities may result in a loss or may be costly to the fund. RESTRICTIONS: The fund may not purchase a security if, as a result, more than 10% of its assets would be invested in illiquid securities. DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the risks of investing. This may include limiting the amount of money invested in any one issuer or, on a broader scale, in any one industry. RESTRICTIONS: With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer. The fund may not invest more than 25% of its total assets in any one industry. These limitations do not apply to U.S. government securities. BORROWING. The fund may borrow from banks or from other funds advised by FMR, or through reverse repurchase agreements. If the fund borrows money, its share price may be subject to greater fluctuation until the borrowing is paid off. If the fund makes additional investments while borrowings are outstanding, this may be considered a form of leverage. RESTRICTIONS: The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. LENDING. Lending securities to broker-dealers and institutions, including FBSI, an affiliate of FMR, is a means of earning income. This practice could result in a loss or a delay in recovering the fund's securities. The fund may also lend money to other funds advised by FMR. RESTRICTIONS: Loans, in the aggregate, may not exceed 33% of the fund's total assets. FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS Some of the policies and restrictions discussed on the preceding pages are fundamental, that is, subject to change only by shareholder approval. The following paragraph restates all those that are fundamental. All policies stated throughout this prospectus, other than those identified in the following paragraph, can be changed without shareholder approval. The fund seeks capital appreciation by investing in securities of companies believed by FMR to be undervalued due to an overly pessimistic appraisal by the public of their future outlook. FMR will study the outlook for individual companies and industries and their relative market positions, and will invest in the securities of companies (1) which have been unpopular for some time but where recent developments bring hope of improved operating results; (2) which have enjoyed recent market popularity but which appear to have temporarily fallen out of favor for reasons that are considered non-recurring or short term; or (3) which appear undervalued in relation to popular securities of other companies in the same industry. The fund will remain substantially fully invested in common stocks, preferred stocks, bonds, securities with warrants attached, and other certificates of indebtedness. The fund will usually be primarily invested in common stocks and securities convertible into common stocks. However, if FMR believes that market conditions warrant a more conservative approach, the fund may make substantial investments in investment-grade fixed-income obligations of all types and U.S. government obligations. With respect to 75% of total assets, the fund may not invest more than 5% of its total assets in any one issuer and may not own more than 10% of the outstanding voting securities of a single issuer. The fund may not invest more than 25% of its total assets in any one industry. The fund may borrow only for temporary or emergency purposes, but not in an amount exceeding 33% of its total assets. Loans, in the aggregate, may not exceed 33% of the fund's total assets. This prospectus is printed on recycled paper using soy-based inks. FIDELITY CONTRAFUND STATEMENT OF ADDITIONAL INFORMATION FEBRUARY 19, 1994 This Statement is not a prospectus but should be read in conjunction with the fund's current Prospectus (dated February 19, 1994). Please retain this document for future reference. The Annual Report for the fiscal year ended December 31, 1993 is incorporated herein by reference. To obtain an additional copy of the Prospectus or the Annual Report, please call Fidelity Distributors Corporation at 1-800-544-8888. TABLE OF CONTENTS PAGE Investment Policies and Limitations Portfolio Transactions Valuation of Portfolio Securities Performance Additional Purchase and Redemption Information Distributions and Taxes FMR Trustees and Officers Management Contract Contracts With Companies Affiliated With FMR Description of the Fund Financial Statements INVESTMENT ADVISER Fidelity Management & Research Company (FMR) INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. (FMR U.K.) Fidelity Management & Research (Far East) Inc. (FMR Far East) DISTRIBUTOR Fidelity Distributors Corporation (FDC) TRANSFER AGENT Fidelity Service Co. (FSC) CON-ptb-294 INVESTMENT POLICIES AND LIMITATIONS The following policies and limitations supplement those set forth in the Prospectus. Unless otherwise noted, whenever an investment policy or limitation states a maximum percentage of the fund's assets that may be invested in any security or other asset, or sets forth a policy regarding quality standards, such standard or percentage limitation will be determined immediately after and as a result of the fund's acquisition of such security or other asset. Accordingly, any subsequent change in values, net assets, or other circumstances will not be considered when determining whether the investment complies with the fund's investment policies and limitations. The fund's fundamental investment policies and limitations cannot be changed without approval by a "majority of the outstanding voting securities" (as defined in the Investment Company Act of 1940) of the fund. THE FOLLOWING ARE THE FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT: (1) with respect to 75% of the fund's total assets, purchase the securities of any issuer (other than securities issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result thereof, (a) more than 5% of the fund's total assets would be invested in the securities of such issuer, or (b) the fund would hold more than 10% of the voting securities of such issuer; (2) issue senior securities, except as permitted under the Investment Company Act of 1940; (3) borrow money, except that the fund may borrow money for temporary or emergency purposes (not for leveraging or investment) in an amount not exceeding 33 1/3% of the value of its total assets (including the amount borrowed) less liabilities (other than borrowings). Any borrowings that come to exceed 33 1/3% of the value of the fund's total assets by reason of a decline in net assets will be reduced within three days (exclusive of Sundays and holidays) to the extent necessary to comply with the 33 1/3% limitation; (4) underwrite securities issued by others except to the extent that the fund may be considered an underwriter within the meaning of the Securities Act of 1933 in the disposition of restricted securities; (5) purchase the securities of any issuer (other than obligations issued or guaranteed by the U.S. government or any of its agencies or instrumentalities) if, as a result, more than 25% of the fund's total assets would be invested in the securities of companies whose principal business activities are in the same industry; (6) purchase or sell real estate unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from investing in securities or other instruments backed by real estate or securities of companies engaged in the real estate business); (7) purchase or sell physical commodities unless acquired as a result of ownership of securities or other instruments (but this shall not prevent the fund from purchasing or selling options and futures contracts or from investing in securities or other instruments backed by physical commodities); or (8) lend any security or make any other loan if, as a result, more than 33 1/3% of its total assets would be lent to other parties, but this limitation does not apply to purchases of debt securities or to repurchase agreements. THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED WITHOUT SHAREHOLDER APPROVAL. (i) The fund does not currently intend to sell securities short, unless it owns or has the right to obtain securities equivalent in kind and amount to the securities sold short, and provided that transactions in futures contracts and options are not deemed to cons t itute selling securities short. (ii) The fund does not currently intend to purchase securities on margin, except that the fund may obtain such short-term credits as are necessary for the clearance of transactions, and provided that margin payments in connection with futures contracts and options on futures contracts shall not constitute p u rchasing securities on margin. (iii) The fund may borrow money only (a) from a bank or from a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) by engaging in reverse repurchase agreements with any party (reverse repurchase agreements are treated as borrowings for purposes of fundamental investment limitation (3)). The fund will not purchase any security while borrowings representing more than 5% of its total assets are outstanding. The fund will not borrow from other funds advised by FMR or its affiliates if total outstanding borrowings immediately after such borrowing would exceed 15% of the fund's total assets. (iv) The fund does not currently intend to purchase any security if, as a result, more than 10% of its net assets would be invested in securities that are deemed to be illiquid because they are subject to legal or contractual restrictions on resale or because they cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. (v) The fund does not currently intend to lend assets other than securities to other parties, except by (a) lending money (up to 5% of the fund's net assets) to a registered investment company or portfolio for which FMR or an affiliate serves as investment adviser or (b) acquiring loans, loan participations, or other forms of direct debt instruments and, in connection therewith, assuming any associated unfunded commitments of the sellers. (This limitation does not apply to purchases of debt securities or to repurchase agreements.) (vi) The fund does not currently intend to (a) purchase securities of other investment companies, except in the open market where no commission except the ordinary broker's commission is paid, or (b) purchase or retain securities issued by other open-end investment companies. Limitations (a) and (b) do not apply to securities received as dividends, through offers of exchange, or as a result of a reorganization, consolidation, or merger. (vii) The fund does not currently intend to purchase the securities of any issuer (other than securities issued or guaranteed by domestic or foreign governments or political subdivisions thereof) if, as a result, more than 5% of its total assets would be invested in the securities of business enterprises that, including predecessors, have a record of less than three years of continuous operation. (viii) The fund does not currently intend to purchase warrants, valued at the lower of cost or market, in excess of 5% of the fund's net assets. Included in that amount, but not to exceed 2% of the fund's net assets, may be warrants that are not listed on the New York Stock Exchange or the American Stock Exchange. Warrants acquired by the fund in units or attached to securities are not subject to these restrictions. (ix) The fund does not currently intend to invest in oil, gas, or other mineral exploration or development programs or leases. (x) The fund does not currently intend to purchase the securities of any issuer if those officers and Trustees of the fund and those officers and directors of FMR who individually own more than 1/2 of 1% of the securities of such issuer together own more than 5% of such issuer's securities. For the fund's limitations on futures and options transactions, see the section entitled "Limitations on Futures and Options Transactions" on page . AFFILIATED BANK TRANSACTIONS. The fund may engage in transactions with banks that are, or may be considered to be, "affiliated persons" of the fund under the Investment Company Act of 1940. Such transactions may be entered into only pursuant to procedures established and periodically reviewed by the Board of Trustees. These transactions may include repurchase agreements with custodian banks; purchases, as principal, of short-term obligations of, and repurchase agreements with, the 50 largest U.S. banks (measured by deposits); transactions in municipal securities; and transactions in U.S. government securities with affiliated banks that are primary dealers in these securities. FUND'S RIGHTS AS A SHAREHOLDER. The fund does not intend to direct or administer the day-to-day operations of any company. The fund, however, may exercise its rights as a shareholder and may communicate its views on important matters of policy to management, the Board of Directors, and shareholders of a company when FMR determines that such matters could have a significant effect on the value of the fund's investment in the company. The activities that the fund may engage in, either individually or in conjunction with others, may include, among others, supporting or opposing proposed changes in a company's corporate structure or business activities; seeking changes in a company's directors or management; seeking changes in company's direction or policies; seeking the sale or reorganization of the company or a portion of its assets; or supporting or opposing third party takeover efforts. This area of corporate activity is increasingly prone to litigation and it is possible that the fund could be involved in lawsuits related to such activities. FMR will monitor such activities with a view to mitigating, to the extent possible, the risk of litigation against the fund and the risk of actual liability if the fund is involved in litigation. No guarantee can be made, however, that litigation against the fund will not be undertaken or liabilities incurred. ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in the ordinary course of business at approximately the prices at which they are valued. Under the supervision of the Board of Trustees, FMR determines the liquidity of the fund's investments and, through reports from FMR, the Board monitors investments in illiquid instruments. In determining the liquidity of the fund's investments, FMR may consider various factors, including (1) the frequency of trades and quotations, (2) the number of dealers and prospective purchasers in the marketplace, (3) dealer undertakings to make a market, (4) the nature of the security (including any demand or tender features) and (5) the nature of the marketplace for trades (including the ability to assign or offset the fund's rights and obligations relating to the investment). Investments currently considered by the fund to be illiquid include repurchase agreements not entitling the holder to payment of principal and interest within seven days, over-the-counter options, and non-government stripped fixed-rate mortgage backed securities. Also, FMR may determine some restricted securities, government stripped fixed-rate mortgage-backed securities, loans and other direct debt instruments, and swap agreements to be illiquid. However, with respect to over-the-counter options the fund writes, all or a portion of the value of the underlying instrument may be illiquid depending on the assets held to cover the option and the nature and terms of any agreement the fund may have to close out the option before expiration. In the absence of market quotations, illiquid investments are priced at fair value as determined in good faith by a committee appointed by the Board of Trustees. If through a change in values, net assets, or other circumstances, the fund were in a position where more than 10% of its net assets were invested in illiquid securities, it would seek to take appropriate steps to protect liquidity. RESTRICTED SECURITIES generally can be sold in privately negotiated transactions, pursuant to an exemption from registration under the Securities Act of 1933, or in a registered public offering. Where registration is required, the fund may be obligated to pay all or part of the registration expense and a considerable period may elapse between the time it decides to seek registration and the time the fund may be permitted to sell a security under an effective registration statement. If, during such a period, adverse market conditions were to develop, the fund might obtain a less favorable price than prevailed when it decided to seek registration of the security. REPURCHASE AGREEMENTS. In a repurchase agreement, the fund purchases a security and simultaneously commits to resell that security to the seller at an agreed upon price on an agreed upon date within a number of days from the date of purchase. The resale price reflects the purchase price plus an agreed upon incremental amount which is unrelated to the coupon rate or maturity of the purchased security. A repurchase agreement involves the obligation of the seller to pay the agreed upon price, which obligation is in effect secured by the value (at least equal to the amount of the agreed upon resale price and marked to market daily) of the underlying security. The fund may engage in a repurchase agreement with respect to any security in which it is authorized to invest. While it does not presently appear possible to eliminate all risks from these transactions (particularly the possibility of a decline in the market value of the underlying securities, as well as delays and costs to the fund in connection with bankruptcy proceedings), it is the fund's current policy to limit repurchase agreement transactions to parties whose creditworthiness has been reviewed and found satisfactory by FMR. REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund sells a portfolio instrument to another party, such as a bank or broker-dealer, in return for cash and agrees to repurchase the instrument at a particular price and time. While a reverse repurchase agreement is outstanding, the fund will maintain appropriate liquid assets in a segregated custodial account to cover its obligation under the agreement. The fund will enter into reverse repurchase agreements only with parties whose creditworthiness has been found satisfactory by FMR. Such transactions may increase fluctuations in the market value of the fund's assets and may be viewed as a form of leverage. INTERFUND BORROWING PROGRAM. The fund has received permission form the SEC to lend money to and borrow money form other funds advised by FMR or its affiliates. Interfund loans and borrowings normally will extend overnight, but can have a maximum duration of seven days. Loans may be called on one day's notice. The fund will lend through the program only when the returns are higher than those available at the same time from other short-term instruments (such as repurchase agreements), and will borrow through the program only when the costs are equal to or lower than the cost of bank loans. The fund may have to borrow from a bank at a higher interest rate if an interfund loan is called or not renewed. Any delay in repayment to a lending fund could result in a lost investment opportunity or additional borrowing costs. SECURITIES LENDING. The fund may lend securities to parties such as broker-dealers or institutional investors, including Fidelity Brokerage Services, Inc. (FBSI). FBSI is a member of the New York Stock Exchange and a subsidiary of FMR Corp. Securities lending allows the fund to retain ownership of the securities loaned and, at the same time, to earn additional income. Since there may be delays in the recovery of loaned securities, or even a loss of rights in collateral supplied should the borrower fail financially, loans will be made only to parties deemed by FMR to be of good standing. Furthermore, they will only be made if, in FMR's judgment, the consideration to be earned from such loans would justify the risk. FMR understands that it is the current view of the SEC Staff that the fund may engage in loan transactions only under the following conditions: (1) the fund must receive 100% collateral in the form of cash or cash equivalents (e.g., U.S. Treasury bills or notes) from the borrower; (2) the borrower must increase the collateral whenever the market value of the securities loaned (determined on a daily basis) rises above the value of the collateral; (3) after giving notice, the fund must be able to terminate the loan at any time; (4) the fund must receive reasonable interest on the loan or a flat fee from the borrower, as well as amounts equivalent to any dividends, interest, or other distributions on the securities loaned and to any increase in market value; (5) the fund may pay only reasonable custodian fees in connection with the loan; and (6) the Board of Trustees must be able to vote proxies on the securities loaned, either by terminating the loan or by entering into an alternative arrangement with the borrower. Cash received through loan transactions may be invested in any security in which the fund is authorized to invest. Investing this cash subjects that investment, as well as the security loaned, to market forces (i.e., capital appreciation or depreciation). LOWER-RATED DEBT SECURITIES. The fund may purchase lower-rated debt securities (those rated Ba or lower by Moody's Investor Services, Inc. or BB or lower by Standard & Poor's Corporation) that have poor protection with respect to the payment of interest and repayment of principal, or may be in default. These securities are often considered to be speculative and involve greater risk of loss or price changes due to changes in the issuer's capacity to pay. The market prices of lower-rated debt securities may fluctuate more than those of higher-rated debt securities and may decline significantly in periods of general economic difficulty, which may follow periods of rising interest rates. While the market for high-yield corporate debt securities has been in existence for many years and has weathered previous economic downturns, the 1980s brought a dramatic increase in the use of such securities to fund highly leveraged corporate acquisitions and restructurings. Past experience may not provide an accurate indication of future performance of the high-yield bond market, especially during periods of economic recession. In fact, from 1989 to 1991, the percentage of lower-rated debt securities that defaulted rose significantly above prior levels, although the default rate decreased in 1992. The market for lower-rated debt securities may be thinner and less active than that for higher-rated debt securities, which can adversely affect the prices at which the former are sold. If market quotations are not available, lower-rated debt securities will be valued in accordance with procedures established by the Board of Trustees, including the use of outside pricing services. Judgment plays a greater role in valuing high yield corporate debt securities than is the case for securities for which more external sources for quotations and last-sale information are available. Adverse publicity and changing investor perceptions may affect the ability of outside pricing services to value lower-rated debt securities and the fund's ability to s e ll these securities. Since the risk of default is higher for lower-rated debt securities, FMR's research and credit analysis are an especially important part of managing securities of this type held by the fund. In considering investments for the fund, FMR will attempt to identify those issuers of high-yielding debt securities whose financial condition is adequate to meet future obligations, has improved, or is expected to improve in the future. FMR's analysis focuses on relative values based on such factors as interest or dividend coverage, asset coverage, earnings prospects, and the experience and managerial strength of the issuer. The fund may choose, at its expense or in conjunction with others, to pursue litigation or otherwise exercise its rights as a security holder to seek to protect the interests of security holders if it determines this to be in the best interest of the fund's shareholders. LOANS AND OTHER DIRECT DEBT INSTRUMENTS are interests in amounts owed by a corporate, governmental, or other borrower to another party. They may represent amounts owed to lenders or lending syndicates (loans and loan participations), to suppliers of goods or services (trade claims or other receivables), or to other parties. Direct debt instruments involve a risk of loss in case of default or insolvency of the borrower and may offer less legal protection to the fund in the event of fraud or misrepresentation. In addition, loan participations involve a risk of insolvency of the lending bank or other intermediary. Direct debt instruments may also include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. SWAP AGREEMENTS. Swap agreements can be individually negotiated and structured to include exposure to a variety of different types of investments or market factors. Depending on their structure, swap agreements may increase or decrease the fund's exposure to long- or short-term interest rates (in the U.S. or abroad), foreign currency values, mortgage securities, corporate borrowing rates, or other factors such as security prices or inflation rates. Swap agreements can take many different forms and are known by a variety of names. The fund is not limited to any particular form of swap agreement if FMR determines it is consistent with the fund's investment objective and policies. In a typical cap or floor agreement, one party agrees to make payments only under specified circumstances, usually in return for payment of a fee by the other party. For example, the buyer of an interest rate cap obtains the right to receive payments to the extent that a specified interest rate exceeds an agreed-upon level, while the seller of an interest rate floor is obligated to make payments to the extent that a specified interest rate falls below an agreed-upon level. An interest rate collar combines elements of buying a cap and selling a floor. Swap agreements will tend to shift the fund's investment exposure from one type of investment to another. For example, if the fund agreed to exchange payments in dollars for payments in foreign currency, the swap agreement would tend to decrease the fund's exposure to U.S. interest rates and increase its exposure to foreign currency and interest rates. Caps and floors have an effect similar to buying or writing options. Depending on how they are used, swap agreements may increase or decrease the overall volatility of the fund's investments and its share price. The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, or other factors that determine the amounts of payments due to and from the fund. If a swap agreement calls for payments by the fund, the fund must be prepared to make such payments when due. In addition, if the counterparty's creditworthiness declined, the value of a swap agreement would be likely to decline, potentially resulting in losses. The fund expects to be able to eliminate its exposure under swap agreements either by assignment or other disposition, or by entering into an offsetting swap agreement with the same party or a similarly creditworthy party. The fund will maintain appropriate liquid assets in a segregated custodial account to cover its current obligations under swap agreements. If the fund enters into a swap agreement on a net basis, it will segregate assets with a daily value at least equal to the excess, if any, of the fund's accrued obligations under the swap agreement over the accrued amount the fund is entitled to receive under the agreement. If the fund enters into a swap agreement on other than a net basis, it will segregate assets with a value equal to the full amount of the fund's accrued obligations under the agreement. INDEXED SECURITIES. The fund may purchase securities whose prices are indexed to the prices of other securities, securities indices, currencies, precious metals or other commodities, or other financial indicators. Indexed securities typically, but not always, are debt securities or deposits whose value at maturity or coupon rate is determined by reference to a specific instrument or statistic. Gold-indexed securities, for example, typically provide for a maturity value that depends on the price of gold, resulting in a security whose price tends to rise and fall together with gold prices. Currency-indexed securities typically are short-term to intermediate-term debt securities whose maturity values or interest rates are determined by reference to the values of one or more specified foreign currencies, and may offer higher yields than U.S. dollar-denominated securities of equivalent issuers. Currency-indexed securities may be positively or negatively indexed; that is, their maturity value may increase when the specified currency value increases, resulting in a security that performs similarly to a foreign-denominated instrument, or their maturity value may decline when foreign currencies increase, resulting in a security whose price characteristics are similar to a put on the underlying currency. Currency-indexed securities may also have prices that depend on the values of a number of different foreign currencies relative to each other. The performance of indexed securities depends to a great extent on the performance of the security, currency, or other instrument to which they are indexed, and may also be influenced by interest rate changes in the U.S. and abroad. At the same time, indexed securities are subject to the credit risks associated with the issuer of the security, and their values may decline substantially if the issuer's creditworthiness deteriorates. Recent issuers of indexed securities have included banks, corporations, and certain U.S. government agencies. Indexed securities may be more volatile than the underlying instruments. FOREIGN INVESTMENTS. Foreign investments can involve significant risks in addition to the risks inherent in U.S. investments. The value of securities denominated in or indexed to foreign currencies, and of dividends and interest from such securities, can change significantly when foreign currencies strengthen or weaken relative to the U.S. dollar. Foreign securities markets generally have less trading volume and less liquidity than U.S. markets, and prices on some foreign markets can be highly volatile. Many foreign countries lack uniform accounting and disclosure standards comparable to those applicable to U.S. companies, and it may be more difficult to obtain reliable information regarding an issuer's financial condition and operations. In addition, the costs of foreign investing, including withholding taxes, brokerage commissions, and custodial costs, are generally higher than for U.S. investments . Foreign markets may offer less protection to investors than U.S. markets. Foreign issuers, brokers, and securities markets may be subject to less government supervision. Foreign security trading practices, including those involving the release of assets in advance of payment, may involve increased risks in the event of a failed trade or the insolvency of a broker-dealer, and may involve substantial delays. It may also be difficult to enforce legal rights in foreign countries. Investing abroad also involves different political and economic risks. Foreign investments may be affected by actions of foreign governments adverse to the interests of U.S. investors, including the possibility of expropriation or nationalization of assets, confiscatory taxation, restrictions on U.S. investment or on the ability to repatriate assets or convert currency into U.S. dollars, or other government intervention. There may be a greater possibility of default by foreign governments or foreign government-sponsored enterprises. Investments in foreign countries also involve a risk of local political, economic, or social instability, military action or unrest, or adverse diplomatic developments. There is no assurance that FMR will be able to anticipate these potential events or counter their effects. The considerations noted above generally are intensified for investments in developing countries. Developing countries may have relatively unstable governments, economies based on only a few industries, and securities markets that trade a small number of securities. The fund may invest in foreign securities that impose restrictions on transfer within the U.S. or to U.S. persons. Although securities subject to such transfer restrictions may be marketable abroad, they may be less liquid than foreign securities of the same class that are not subject to such restrictions. American Depositary Receipts and European Depositary Receipts (ADRs and EDRs), are certificates evidencing ownership of shares of a foreign-based issuer held in trust by a bank or similar financial institution. Designed for use in the U.S. and European securities markets, respectively, ADRs and EDRs are alternatives to the purchase of the underlying securities in their national markets and currencies. FOREIGN CURRENCY TRANSACTIONS. The fund may hold foreign currency deposits from time to time, and may convert dollars and foreign currencies in the foreign exchange markets. Currency conversion involves dealer spreads and other costs, although commissions usually are not charged. Currencies may be exchanged on a spot (i.e., cash) basis, or by entering into forward contracts to purchase or sell foreign currencies at a future date and price. Forward contracts generally are traded in an interbank market conducted directly between currency traders (usually large commercial banks) and their customers. The parties to a forward contract may agree to offset or terminate the contract before its maturity, or may hold the contract to maturity and complete the contemplated currency exchange. The fund may use currency forward contracts to manage currency risks and to facilitate transactions in foreign securities. The following discussion summarizes the principal currency management strategies involving forward contracts that could be used by the fund. In connection with purchases and sales of securities denominated in foreign currencies, the fund may enter into currency forward contracts to fix a definite price for the purchase or sale in advance of the trade's settlement date. This technique is sometimes referred to as a "settlement hedge" or "transaction hedge." FMR expects to enter into settlement hedges in the normal course of managing the fund's foreign investments. The fund could also enter into forward contracts to purchase or sell a foreign currency in anticipation of future purchases or sales of securities denominated in foreign currency, even if the specific investments have not yet been selected by FMR. The fund may also use forward contracts to hedge against a decline in the value of existing investments denominated in a foreign currency. For example, if the fund owned securities denominated in pounds sterling, it could enter into a forward contract to sell pounds sterling in return for U.S. dollars to hedge against possible declines in the pound's value. Such a hedge, sometimes referred to as a "position hedge," would tend to offset both positive and negative currency fluctuations, but would not offset changes in security values caused by other factors. The fund could also hedge the position by selling another currency expected to perform similarly to the pound sterling - for example, by entering into a forward contract to sell Deutschemarks or European Currency Units in return for U.S. dollars. This type of hedge, sometimes referred to as a "proxy hedge," could offer advantages in terms of cost, yield, or efficiency, but generally would not hedge currency exposure as effectively as a simple hedge into U.S. dollars. Proxy hedges may result in losses if the currency used to hedge does not perform similarly to the currency in which the hedged securities are denominated. Under certain conditions, SEC guidelines require mutual funds to set aside appropriate liquid assets in a segregated custodial account to cover currency forward contracts. As required by SEC guidelines, the fund will segregate assets to cover currency forward contracts, if any, whose purpose is essentially speculative. The fund will not segregate assets to cover forward contracts entered into for hedging purposes, including settlement hedges, position hedges, and proxy hedges. Successful use of forward currency contracts will depend on FMR's skill in analyzing and predicting currency values. Forward contracts may substantially change the fund's investment exposure to changes in currency exchange rates, and could result in losses to the fund if currencies do not perform as FMR anticipates. For example, if a currency's value rose at a time when FMR had hedged the fund by selling that currency in exchange for dollars, the fund would be unable to participate in the currency's appreciation. If FMR hedges currency exposure through proxy hedges, the fund could realize currency losses from the hedge and the security position at the same time if the two currencies do not move in tandem. Similarly, if FMR increases the fund's exposure to a foreign currency, and that currency's value declines, the fund will realize a loss. There is no assurance that FMR's use of forward currency contracts will be advantageous to the fund or that it will hedge at an appropriate time. The policies described in this section are non-fundamental policies of the fund. SHORT SALES "AGAINST THE BOX". If the fund enters into a short sale against the box, it will be required to set aside securities equivalent in kind and amount to the securities sold short (or securities convertible or exchangeable into such securities) and will be required to hold such securities while the short sale is outstanding. The fund will insur e transaction costs including interest expense, in connection with opening, maintaining, and closing short sales against the box. LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund has filed a notice of eligibility for exclusion from the definition of the term "commodity pool operator" with the Commodity Futures Trading Commission (CFTC) and the National Futures Association, which regulate trading in the futures markets. The fund intends to comply with Section 4.5 of the regulations under the Commodity Exchange Act, which limits the extent to which the fund can commit assets to initial margin deposits and option premiums. In addition, the fund will not: (a) sell futures contracts, purchase put options, or write call options if, as a result, more than 25% of the fund's total assets would be hedged with futures and options under normal conditions; (b) purchase futures contracts or write put options if, as a result, the fund's total obligations upon settlement or exercise of purchased futures contracts and written put options would exceed 25% of its total assets; or (c) purchase call options if, as a result, the current value of option premiums for call options purchased by the fund would exceed 5% of the fund's total assets. These limitations do not apply to options attached to or acquired or traded together with their underlying securities, and do not apply to securities that incorporate features similar to options. The above limitations on the fund's investments in futures contracts and options, and the fund's policies regarding futures contracts and options discussed elsewhere in this Statement of Additional Information, are not fundamental policies and may be changed as regulatory agencies permit. FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to purchase a specified underlying instrument at a specified future date. When the fund sells a futures contract, it agrees to sell the underlying instrument at a specified future date. The price at which the purchase and sale will take place is fixed when the fund enters into the contract. Some currently available futures contracts are based on specific securities, such as U.S. Treasury bonds or notes, and some are based on indices of securities prices, such as the Standard & Poor's 500 Composite Stock Price Index (S&P 500(Registered trademark)). Futures can be held until their delivery dates, or can be closed out before then if a liquid secondary market is available. The value of a futures contract tends to increase and decrease in tandem with the value of its underlying instrument. Therefore, purchasing futures contracts will tend to increase the fund's exposure to positive and negative price fluctuations in the underlying instrument, much as if it had purchased the underlying instrument directly. When the fund sells a futures contract, by contrast, the value of its futures position will tend to move in a direction contrary to the market. Selling futures contracts, therefore, will tend to offset both positive and negative market price changes, much as if the underlying instrument had been sold. FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is not required to deliver or pay for the underlying instrument unless the contract is held until the delivery date. However, both the purchaser and seller are required to deposit "initial margin" with a futures broker, known as a futures commission merchant (FCM), when the contract is entered into. Initial margin deposits are typically equal to a percentage of the contract's value. If the value of either party's position declines, that party will be required to make additional "variation margin" payments to settle the change in value on a daily basis. The party that has a gain may be entitled to receive all or a portion of this amount. Initial and variation margin payments do not constitute purchasing securities on margin for purposes of the fund's investment limitations. In the event of the bankruptcy of an FCM that holds margin on behalf of the fund, the fund may be entitled to return of margin owed to it only in proportion to the amount received by the FCM's other customers, potentially resulting in losses to the fund. PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund obtains the right (but not the obligation) to sell the option's underlying instrument at a fixed strike price. In return for this right, the fund pays the current market price for the option (known as the option premium). Options have various types of underlying instruments, including specific securities, indices of securities prices, and futures contracts. The fund may terminate its position in a put option it has purchased by allowing it to expire or by exercising the option. If the option is allowed to expire, the fund will lose the entire premium it paid. If the fund exercises the option, it completes the sale of the underlying instrument at the strike price. The fund may also terminate a put option position by closing it out in the secondary market at its current price, if a liquid secondary market exists. The buyer of a typical put option can expect to realize a gain if security prices fall substantially. However, if the underlying instrument's price does not fall enough to offset the cost of purchasing the option, a put buyer can expect to suffer a loss (limited to the amount of the premium paid, plus related transaction costs). The features of call options are essentially the same as those of put options, except that the purchaser of a call option obtains the right to purchase, rather than sell, the underlying instrument at the option's strike price. A call buyer typically attempts to participate in potential price increases of the underlying instrument with risk limited to the cost of the option if security prices fall. At the same time, the buyer can expect to suffer a loss if security prices do not rise sufficiently to offset the cost of the option. WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes the opposite side of the transaction from the option's purchaser. In return for receipt of the premium, the fund assumes the obligation to pay the strike price for the option's underlying instrument if the other party to the option chooses to exercise it. When writing an option on a futures contract the fund will be required to make margin payments to an FCM as described above for futures contracts. The fund may seek to terminate its position in a put option it writes before exercise by closing out the option in the secondary market at its current price. If the secondary market is not liquid for a put option the fund has written, however, the fund must continue to be prepared to pay the strike price while the option is outstanding, regardless of price changes, and must continue to set aside assets to cover its position. If security prices rise, a put writer would generally expect to profit, although its gain would be limited to the amount of the premium it received. If security prices remain the same over time, it is likely that the writer will also profit, because it should be able to close out the option at a lower price. If security prices fall, the put writer would expect to suffer a loss. This loss should be less than the loss from purchasing the underlying instrument directly, however, because the premium received for writing the option should mitigate the effects of the decline. Writing a call option obligates the fund to sell or deliver the option's underlying instrument, in return for the strike price, upon exercise of the option. The characteristics of writing call options are similar to those of writing put options, except that writing calls generally is a profitable strategy if prices remain the same or fall. Through receipt of the option premium, a call writer mitigates the effects of a price decline. At the same time, because a call writer must be prepared to deliver the underlying instrument in return for the strike price, even if its current value is greater, a call writer gives up some ability to participate in security price increases. COMBINED POSITIONS. The fund may purchase and write options in combination with each other, or in combination with futures or forward contracts, to adjust the risk and return characteristics of the overall position. For example, the fund may purchase a put option and write a call option on the same underlying instrument, in order to construct a combined position whose risk and return characteristics are similar to selling a futures contract. Another possible combined position would involve writing a call option at one strike price and buying a call option at a lower price, in order to reduce the risk of the written call option in the event of a substantial price increase. Because combined options positions involve multiple trades, they result in higher transaction costs and may be more difficult to open and close out. CORRELATION OF PRICE CHANGES. Because there are a limited number of types of exchange-traded options and futures contracts, it is likely that the standardized contracts available will not match the fund's current or anticipated investments exactly. The fund may invest in options and futures contracts based on securities with different issuers, maturities, or other characteristics from the securities in which it typically invests, which involves a risk that the options or futures position will not track the performance of the fund's other investments. Options and futures prices can also diverge from the prices of their underlying instruments, even if the underlying instruments match the fund's investments well. Options and futures prices are affected by such factors as current and anticipated short-term interest rates, changes in volatility of the underlying instrument, and the time remaining until expiration of the contract, which may not affect security prices the same way. Imperfect correlation may also result from differing levels of demand in the options and futures markets and the securities markets, from structural differences in how options and futures and securities are traded, or from imposition of daily price fluctuation limits or trading halts. The fund may purchase or sell options and futures contracts with a greater or lesser value than the securities it wishes to hedge or intends to purchase in order to attempt to compensate for differences in volatility between the contract and the securities, although this may not be successful in all cases. If price changes in the fund's options or futures positions are poorly correlated with its other investments, the positions may fail to produce anticipated gains or result in losses that are not offset by gains in other investments. LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid secondary market will exist for any particular options or futures contract at any particular time. Options may have relatively low trading volume and liquidity if their strike prices are not close to the underlying instrument's current price. In addition, exchanges may establish daily price fluctuation limits for options and futures contracts, and may halt trading if a contract's price moves upward or downward more than the limit in a given day. On volatile trading days when the price fluctuation limit is reached or a trading halt is imposed, it may be impossible for the fund to enter into new positions or close out existing positions. If the secondary market for a contract is not liquid because of price fluctuation limits or otherwise, it could prevent prompt liquidation of unfavorable positions, and potentially could require the fund to continue to hold a position until delivery or expiration regardless of changes in its value. As a result, the fund's access to other assets held to cover its options or futures positions could also be impaired. OTC OPTIONS. Unlike exchange-traded options, which are standardized with respect to the underlying instrument, expiration date, contract size, and strike price, the terms of over-the-counter options (options not traded on exchanges) generally are established through negotiation with the other party to the option contract. While this type of arrangement allows the fund greater flexibility to tailor an option to its needs, OTC options generally involve greater credit risk than exchange-traded options, which are guaranteed by the clearing organization of the exchanges where they are traded. OPTIONS AND FUTURES RELATING TO FOREIGN CURRENCIES. Currency futures contracts are similar to forward currency exchange contracts, except that they are traded on exchanges (and have margin requirements) and are standardized as to contract size and delivery date. Most currency futures contracts call for payment or delivery in U.S. dollars. The underlying instrument of a currency option may be a foreign currency, which generally is purchased or delivered in exchange for U.S. dollars, or may be a futures contract. The purchaser of a currency call obtains the right to purchase the underlying currency, and the purchaser of a currency put obtains the right to sell the underlying currency. The uses and risks of currency options and futures are similar to options and futures relating to securities or indices, as discussed above. The fund may purchase and sell currency futures and may purchase and write currency options to increase or decrease its exposure to different foreign currencies. The fund may also purchase and write currency options in conjunction with each other or with currency futures or forward contracts. Currency futures and options values can be expected to correlate with exchange rates, but may not reflect other factors that affect the value of the fund's investments. A currency hedge, for example, should protect a Yen-denominated security from a decline in the Yen, but will not protect the fund against a price decline resulting from deterioration in the issuer's creditworthiness. Because the value of the fund's foreign-denominated investments changes in response to many factors other than exchange rates, it may not be possible to match the amount of currency options and futures to the value of the fund's investments exactly over time. ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with guidelines established by the Securities and Exchange Commission with respect to coverage of options and futures strategies by mutual funds, and if the guidelines so require will set aside appropriate liquid assets in a segregated custodial account in the amount prescribed. Securities held in a segregated account cannot be sold while the futures or option strategy is outstanding, unless they are replaced with other suitable assets. As a result, there is a possibility that segregation of a large percentage of the fund's assets could impede portfolio management or the fund's ability to meet redemption requests or other current obligations. PORTFOLIO TRANSACTIONS All orders for the purchase or sale of portfolio securities are placed on behalf of the fund by FMR pursuant to authority contained in the management contract. FMR is also responsible for the placement of transaction orders for other investment companies and accounts for which it or its affiliates act as investment adviser. In selecting broker-dealers, subject to applicable limitations of the federal securities laws, FMR considers various relevant factors, including, but not limited to, the size and type of the transaction; the nature and character of the markets for the security to be purchased or sold; the execution efficiency, settlement capability, and financial condition of the broker-dealer firm; the broker-dealer's execution services rendered on a continuing basis; the reasonableness of any commissions; and arrangements for payment of fund expenses. Commissions for foreign investments traded on foreign exchanges generally will be higher than for U.S. investments and may not be subject to negotiation. The fund may execute portfolio transactions with broker-dealers who provide research and execution services to the fund or other accounts over which FMR or its affiliates exercise investment discretion. Such services may include advice concerning the value of securities; the advisability of investing in, purchasing or selling securities; the availability of securities or the purchasers or sellers of securities; furnishing analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy, and performance of accounts; and effecting securities transactions and performing functions incidental thereto (such as clearance and settlement). The selection of such broker-dealers generally is made by FMR (to the extent possible consistent with execution considerations) in accordance with a ranking of broker-dealers determined periodically by FMR's investment staff based upon the quality of research and execution services provided. The receipt of research from broker-dealers that execute transactions on behalf of the fund may be useful to FMR in rendering investment management services to the fund or its other clients, and conversely, such research provided by broker-dealers who have executed transaction orders on behalf of other FMR clients may be useful to FMR in carrying out its obligations to the fund. The receipt of such research has not reduced FMR's normal independent research activities; however, it enables FMR to avoid the additional expenses that could be incurred if FMR tried to develop comparable information through its own efforts. Subject to applicable limitations of the federal securities laws, broker-dealers may receive commissions for agency transactions that are in excess of the amount of commissions charged by other broker-dealers in recognition of their research and execution services. In order to cause the fund to pay such higher commissions, FMR must determine in good faith that such commissions are reasonable in relation to the value of the brokerage and research services provided by such executing broker-dealers, viewed in terms of a particular transaction or FMR's overall responsibilities to the fund and its other clients. In reaching this determination, FMR will not attempt to place a specific dollar value on the brokerage and research services provided or to determine what portion of the compensation should be related to those services. FMR is authorized to use research services provided by and to place portfolio transactions with brokerage firms that have provided assistance in the distribution of shares of the fund or shares of other Fidelity funds to the extent permitted by law. FMR may use research services provided by and place agency transactions with Fidelity Brokerage Services, Inc. (FBSI) and Fidelity Brokerage Services, Ltd. (FBSL), subsidiaries of FMR Corp., if the commissions are fair, reasonable, and comparable to commissions charged by non-affiliated, qualified brokerage firms for similar services. Prior to September 4, 1992, FBSL operated under the name Fidelity Portfolio Services, Ltd. (FPSL) as a wholly owned subsidiary of Fidelity International Limited (FIL). Edward C. Johnson 3d is Chairman of FIL. Mr. Johnson 3d, Johnson family members, and various trusts for the benefit of the Johnson family, own directly or indirectly more than 25% of the voting common stock of FIL. FMR may allocate brokerage transactions to broker-dealers who have entered into arrangements with FMR under which the broker-dealer allocates a portion of the commissions paid by the fund toward payment of the fund's expenses, such as transfer agent fees of FSC or custodian fees. The transaction quality must, however, be comparable to those of other qualified broker-dealers. Section 11(a) of the Securities Exchange Act of 1934 prohibits members of national securities exchanges from executing exchange transactions for accounts which they or their affiliates manage, except in accordance with regulations of the SEC. Pursuant to such regulations, the Board of Trustees has approved a written agreement that permits FBSI to effect portfolio transactions on national securities exchanges and to retain compensation in connection with such transactions. The Trustees periodically review FMR's performance of its responsibilities in connection with the placement of portfolio transactions on behalf of the fund and review the commissions paid by the fund over representative periods of time to determine if they are reasonable in relation to the benefits to the fund. For the fiscal years ended December 31, 1993 and 1992, the fund's portfolio turnover rate amounted to 255 % and 297%, respectively. For fiscal 1993, 1992, and 1991, the fund paid brokerage commissions of $20,497,000, $7,811,003, and $3,615,997, respectively. During fiscal 1993, approximately $ 12,665,000 or 61.8 % of these commissions were paid to brokerage firms which provided research services, although the providing of such services was not necessarily a factor in the placement of all of this business with such firms. The fund pays both commissions and spreads in connection with the placement of portfolio transactions; FBSI is paid on a commission basis. During fiscal 1993, 1992, and 1991, the fund paid brokerage commissions of $ 6,592,000 , $2,363,561, and $1,170,899, respectively, to FBSI. During fiscal 1993, this amounted to 32.2 % of the aggregate brokerage commissions paid by the fund for transactions involving 45.8% of the aggregate dollar amount of transactions in which the fund paid brokerage commissions. The difference in the percentage of the brokerage commissions paid to and the percentage of the dollar amount of transactions effected through FBSI is a result of the lower commission rates charged by FBSI. During fiscal 1993, 1992, and 1991, the fund paid FBSL brokerage commissions of $0, $4,231, and $240, respectively. From time to time the Trustees will review whether the recapture for the benefit of the fund of some portion of the brokerage commissions or similar fees paid by the fund on portfolio transactions is legally permissible and advisable. The fund seeks to recapture soliciting broker-dealer fees on the tender of portfolio securities, but at present no other recapture arrangements are in effect. The Trustees intend to continue to review whether recapture opportunities are available and are legally permissible and, if so, to determine in the exercise of their business judgment, whether it would be advisable for the fund to seek such recapture. Although the Trustees and officers of the fund are substantially the same as those of other funds managed by FMR, investment decisions for the fund are made independently from those of other funds managed by FMR or accounts managed by FMR affiliates. It sometimes happens that the same security is held in the portfolio of more than one of these funds or accounts. Simultaneous transactions are inevitable when several funds are managed by the same investment adviser, particularly when the same security is suitable for the investment objective of more than one fund. When two or more funds are simultaneously engaged in the purchase or sale of the same security, the prices and amounts are allocated in accordance with a formula considered by the officers of the funds involved to be equitable to each fund. In some cases this system could have a detrimental effect on the price or value of the security as far as the fund is concerned. In other cases, however, the ability of the fund to participate in volume transactions will produce better executions and prices for the fund. It is the current opinion of the Trustees that the desirability of retaining FMR as investment adviser to the fund outweighs any disadvantages that may be said to exist from exposure to simultaneous transactions. VALUATION OF PORTFOLIO SECURITIES Portfolio securities are valued by various methods depending on the primary market or exchange on which they trade. Equity securities for which the primary market is the U.S. are valued at last sale price or, if no sale has occurred, at the closing bid price. Equity securities for which the primary market is outside the U.S. are valued using the official closing price or the last sale price in the principal market where they are traded. If the last sale price (on the local exchange) is unavailable, the last evaluated quote or last bid price is normally used. Short-term securities are valued either at amortized cost or at original cost plus accrued interest, both of which approximate current value. Fixed-income securities are valued primarily by a pricing service that uses a vendor security valuation matrix which incorporates both dealer-supplied valuations and electronic data processing techniques. This twofold approach is believed to more accurately reflect fair value because it takes into account appropriate factors such as institutional trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data, without exclusive reliance upon quoted, exchange, or over-the - counter prices. Use of pricing services has been approved by the Board of Trustees. Securities and other assets for which there is no readily available market are valued in good faith by a committee appointed by the Board of Trustees. The procedures set forth above need not be used to determine the value of the securities owned by the fund if, in the opinion of a committee appointed by the Board of Trustees, some other method (e.g., closing over-the-counter bid prices in the case of debt instruments traded on an exchange) would more accurately reflect the fair market value of such securities. Generally, the valuation of foreign and domestic equity securities, as well as corporate bonds, U.S. government securities, money market instruments, and repurchase agreements, is substantially completed each day at the close of the NYSE. The values of any such securities held by the fund are determined as of such time for the purpose of computing the fund's net asset value. Foreign security prices are furnished by independent brokers or quotation services which express the value of securities in their local currency. FSC gathers all exchange rates daily at the close of the NYSE using the last quoted price on the local currency and then translates the value of foreign securities from their local currency into U.S. dollars. Any changes in the value of forward contracts due to exchange rate fluctuations and days to maturity are included in the calculation of net asset value. If an extraordinary event that is expected to materially affect the value of a portfolio security occurs after the close of an exchange on which that security is traded, then the security will be valued as determined in good faith by a committee appointed by the Board of Trustees. PERFORMANCE The fund may quote its performance in various ways. All performance information supplied by the fund in advertising is historical and is not intended to indicate future returns. The fund's share price and total returns fluctuate in response to market conditions and other factors, and the value of fund shares, when redeemed, may be more or less than their original cost. TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all aspects of the fund's return, including the effect of reinvesting dividends and capital gain distributions, and any change in the fund's NAV over the period. Average annual returns are calculated by determining the growth or decline in value of a hypothetical historical investment in the fund over a stated period, and then calculating the annually compounded percentage rate that would have produced the same result if the rate of growth or decline in value had been constant over the period. For example, a cumulative return of 100% over ten years would produce an average annual return of 7.18%, which is the steady annual rate of return that would equal 100% growth on a compounded basis in ten years. While average annual returns are a convenient means of comparing investment alternatives, investors should realize that the fund's performance is not constant over time, but changes from year to year, and that average annual returns represent averaged figures as opposed to the actual year-to-year performance of the fund. In addition to average annual returns, the fund may quote unaveraged or cumulative total returns reflecting the simple change in value of an investment over a stated period. Average annual and cumulative total returns may be quoted as a percentage or as a dollar amount, and may be calculated for a single investment, a series of investments, or a series of redemptions, over any time period. Total returns may be broken down into their components of income and capital (including capital gains and changes in share price) in order to illustrate the relationship of these factors and their contributions to total return. An example of this type of illustration is given on page 11 . Total returns and other performance information may be quoted numerically or in a table, graph, or similar illustration. NET ASSET VALUE. Charts and graphs using the fund's net asset values, adjusted net asset values, and benchmark indices may be used to exhibit performance. An adjusted NAV includes any distributions paid by the fund and reflects all elements of its return. Unless otherwise indicated, the fund's adjusted NAVs are not adjusted for sales charges, if any. MOVING AVERAGES. The f und may illustrate performance using moving averages. A long-term moving average is the average of each week's adjusted closing NAV for a specified period. A short-term moving average is the average of each day's adjusted closing NAV for a specified period. Moving Average Activity Indicators combine adjusted closing NAVs from the last business day of each week with moving averages for a specified period to produce indicators showing when an NAV has crossed, stayed above, or stayed below its moving average. On December 31, 1993, the 13-week and 39-week long-term moving averages were 30.57 and 29.57 , respectively. HISTORICAL FUND RESULTS. The following table shows the income and capital elements of the fund's total return for the period December 31, 1983 to December 31, 1993 . The table compares the fund's return to the record of the S&P 500, the Dow Jones Industrial Average (DJIA), and the cost of living (measured by the Consumer Price Index, or CPI) over the same period. The S&P 500 and DJIA comparisons are provided to show how the fund's total return compared to the record of a broad average of common stock prices and a narrower set of stocks of major industrial companies, respectively, over the same period. The fund has the ability to invest in securities not included in either index, and its investment portfolio may or may not be similar in composition to the indices. The S&P 500 and DJIA are based on the prices of unmanaged groups of stocks, and unlike the fund's returns, their returns do not include the effect of paying brokerage commissions and other costs of investing. During the period from December 31, 1983 through December 31, 1993, a hypothetical $10,000 investment in Fidelity Contrafund would have grown to $ 49,336 , assuming all distributions were reinvested and including the effect of the fund 3% sales charge . This was a period of widely fluctuating stock prices and should not be considered representative of the dividend income or capital gain or loss that could be realized from an investment in the fund today. FIDELITY CONTRAFUND INDICES
Value of Value of Value of Initial Reinvested Reinvested Years Ended $10,000 Income Capital Gain Total Cost of December 31 Investment Distributions Distributions Value S&P DJIA Living 500
1993 $ 23,499 $ 4,585 $ 21,251 $ 49,336 $40,235 $ 42,918 $14,393 1992 20, 932 3,839 15,860 40,630 36,551 36,670 14,008 1991 19,507 3,314 12,238 35,058 33,955 34,176 13,613 1990 13,220 2,140 7,270 22,630 26,023 27,486 13,208 1989 12,786 1,956 7,031 21,773 26,860 27,634 12,448 1988 9,639 1,246 4,324 15,210 20,397 20,973 11,895 1987 8,168 735 3,665 12,568 17,492 18,092 11,392 1986 8,603 774 3,435 12,811 16,617 17,160 10,908 1985 9,266 559 1,481 11,306 14,002 13,508 10,790 1984 7,445 263 1,190 8,898 10,627 10,114 10,395
Explanatory Notes: With an initial investment of $10,000 made on December 31, 1983, the net amount invested in fund shares was $9,700 ( assuming the fund's 3% sales charge had been in effect at that time). The cost of the initial investment ($10,000), together with the aggregate cost of reinvested dividends and capital gain distributions for the period covered (their cash value at the time they were reinvested), amounted to $ 24,789 . If distributions had not been reinvested, the amount of distributions earned from the fund over time would have been smaller, and the cash payments for the period would have amounted to $ 1,478 for income dividends and $ 8,054 for capital gain distributions. Tax consequences of different investments have not been factored into the above figures. The fund's performance may be compared to the performance of other mutual funds in general, or to the performance of particular types of mutual funds. These comparisons may be expressed as mutual fund rankings prepared by Lipper Analytical Services, Inc. (Lipper), an independent service located in Summit, New Jersey that monitors the performance of mutual funds. Lipper generally ranks funds on the basis of total return, assuming reinvestment of distributions, but does not take sales charges or redemption fees into consideration, and is prepared without regard to tax consequences. In addition to the mutual fund rankings, the fund's performance may be compared to mutual fund performance indices prepared by Lipper. From time to time, the fund's performance may also be compared to other mutual funds tracked by financial or business publications and periodicals. For example, the fund may quote Morningstar, Inc. in its advertising materials. Morningstar, Inc. is a mutual fund rating service that rates mutual funds on the basis of risk-adjusted performance. Rankings that compare the performance of Fidelity funds to one another in appropriate categories over specific periods of time may also be quoted in advertising. Fidelity may provide information designed to help individuals understand their investment goals and explore various financial strategies. For example, Fidelity's FundMatchsm Program includes a workbook describing general principles of investing, such as asset allocation, diversification, risk tolerance, and goal setting; a questionnaire designed to help create a personal financial profile; and an action plan offering investment alternatives. Materials may also include discussions of Fidelity's three asset allocation funds and other Fidelity funds, products, and services. Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical returns of the capital markets in the United States, including common stocks, small capitalization stocks, long-term corporate bonds, intermediate-term government bonds, long-term government bonds, Treasury bills, the U.S. rate of inflation (based on the CPI), and combinations of various capital markets. The performance of these capital markets is based on the returns of different indices. Fidelity funds may use the performance of these capital markets in order to demonstrate general risk-versus-reward investment scenarios. Performance comparisons may also include the value of a hypothetical investment in any of these capital markets. The risks associated with the security types in any capital market may or may not correspond directly to those of the funds. Ibbotson calculates total returns in the same method as the funds. The funds may also compare performance to that of other compilations or indices that may be developed and made available in the future. In advertising materials, Fidelity may reference or discuss its products and services, which may include: other Fidelity funds; retirement investing; brokerage products and services; the effects of periodic investment plans and dollar cost averaging; saving for college; charitable giving; and the Fidelity credit card. In addition, Fidelity may quote financial or business publications and periodicals, including model portfolios or allocations, as they relate to fund management, investment philosophy, and investment techniques. Fidelity may also reprint, and use as advertising and sales literature, articles from Fidelity Focus, a quarterly magazine provided free of charge to Fidelity fund shareholders. The fund may present its fund number, Quotron(REGISTERED TRADEMARK) number, and CUSIP number, and discuss or quote its current portfolio manager. VOLATILITY. The fund may quote various measures of volatility and benchmark correlation in advertising. In addition, the fund may compare these measures to those of other funds. Measures of volatility seek to compare the fund's historical share price fluctuations or total returns to those of a benchmark. Measures of benchmark correlation indicate how valid a comparative benchmark may be. All measures of volatility and correlation are calculated using averages of historical data. MOMENTUM INDICATORS indicate the fund's price movements over specific periods of time. Each point on the momentum indicator represents the fund's percentage change in price movements over that period. The fund may advertise examples of the effects of periodic investment plans, including the principle of dollar cost averaging. In such a program, an investor invests a fixed dollar amount in a fund at periodic intervals, thereby purchasing fewer shares when prices are high and more shares when prices are low. While such a strategy does not assure a profit or guard against loss in a declining market, the investor's average cost per share can be lower than if fixed numbers of shares are purchased at the same intervals. In evaluating such a plan, investors should consider their ability to continue purchasing shares during periods of low price levels. The fund may be available for purchase through retirement plans or other programs offering deferral of, or exemption from, income taxes, which may produce superior after-tax returns over time. For example, a $1,000 investment earning a taxable return of 10% annually would have an after-tax value of $1,949 after ten years, assuming tax was deducted from the return each year at a 31% rate. An equivalent tax-deferred investment would have an after-tax value of $2,100 after ten years, assuming tax was deducted at a 31% rate from the tax-deferred earnings at the end of the ten-year period. As of December 31, 1993, FMR managed approximately $130 billion in equity fund assets as defined and tracked by Lipper. This figure represents the largest amount of equity fund assets under management by a mutual fund investment advisor in the United States, making FMR America's leading equity (stock) fund manager. From time to time, the fund may use this information in its advertising and sales literature. ADDITIONAL PURCHASE AND REDEMPTION INFORMATION As provided for in Rule 22d-1 under the Investment Company Act of 1940 (the 1940 Act), FDC exercises its right to waive the fund's 3% sales charge or shares acquired through reinvestment of dividends and capital gain distributions or in connection with the fund's merger with or acquisition of any investment company or trust. In addition, the fund's sales charge will not apply (1) if you buy shares as part of an employee benefit plan (including the Fidelity-sponsored 403(b) and corporate IRA programs but otherwise as defined in the Employee Retirement Income Security Act) maintained by a U.S. employer and having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a U.S. employer that is a member of a parent-subsidiary group of corporations (within the meaning of Section 1563(a)(1) of the Internal Revenue Code, with "50%" substituted for "80%") any member of which maintains an employee benefit plan having more than 200 eligible employees, or a minimum of $3,000,000 in plan assets invested in Fidelity mutual funds, or as part of an employee benefit plan maintained by a non-U.S. employer having 200 or more eligible employees, or a minimum of $3,000,000 in assets invested in Fidelity mutual funds, the assets of which are held in a bona fide trust for the exclusive benefit of employees participating therein; (2) to shares purchased by an insurance company separate account used to fund annuity contracts purchased by employee benefit plans (including 403(b) programs, but otherwise as defined in the Employee Retirement Income Security Act), which, in the aggregate, have either more than 200 eligible employees or a minimum of $3,000,000 in assets invested in Fidelity funds; (3) to shares in a Fidelity IRA account purchased (including purchases by exchange) with the proceeds of a distribution from an employee benefit plan provided that: (i) at the time of the distribution, the employer, or an affiliate (as described in exemption (1) above) of such employer, maintained at least one employee benefit plan that qualified for exemption (1) and that had at least some portion of its assets invested in one or more mutual funds advised by FMR, or in one or more accounts or pools advised by Fidelity Management Trust Company; and (ii) the distribution is transferred from the plan to a Fidelity Rollover IRA account within 60 days from the date of the distribution; (4) if you are a charitable organization (as defined in Section 501(c)(3) of the Internal Revenue Code) investing $100,000 or more; (5) if you purchase shares for a charitable remainder trust or life income pool established for the benefit of a charitable organization (as defined by Section 501(c)(3) of the Internal Revenue Code); (6) if you are an investor participating in the Fidelity Trust Portfolios program (these investors must make initial investments of $100,000 or more in the Trust Portfolios funds and must, during the initial six-month period, reach and maintain an aggregate balance of at least $500,000 in all accounts and subaccounts purchased through the Trust Portfolios program); (7) to shares purchased through Portfolio Advisory Services; (8) if you are a current or former Trustee or officer of a Fidelity fund or a current or retired officer, director, or full-time employee of FMR Corp. or its direct or indirect subsidiaries (a Fidelity Trustee or employee), the spouse of a Fidelity Trustee or employee, a Fidelity Trustee or employee acting as custodian for a minor child, or a person acting as trustee of a trust for the sole benefit of the minor child of a Fidelity Trustee or employee; (9) if you are a bank trust officer, registered representative, or other employee of a Qualified Recipient. Qualified Recipients are securities dealers or other entities, including banks and other financial institutions, who have sold the fund's shares under special arrangements in connection with FDC's sales activities; or (10) to shares purchased by contributions and exchanges to the following prototype or prototype-like retirement plans sponsored by FMR Corp. or FMR and that are marketed and distributed directly to plan sponsors or participants without any intervention or assistance from any intermediary distribution channel: The Fidelity IRA, the Fidelity Rollover IRA, The Fidelity SEP-IRA and SARSEP, The Fidelity Retirement Plan, Fidelity Defined Benefit Plan, The Fidelity Group IRA, The Fidelity 403(b) Program, The Fidelity Investments 401(a) Prototype Plan for Tax-Exempt Employers, and The CORPORATEplan for Retirement (Profit Sharing and Money Purchase Plan). FDC has chosen to waive the fund's sales charge in these instances because of efficiencies involved in sales of shares to these investors. The fund's sales charge may be reduced to reflect sales charges previously paid, or that would have been paid absent a reduction as noted in the prospectus, in connection with investments in other Fidelity funds. This includes reductions for investments in prototype-like retirement plans sponsored by FMR or FMR Corp., which are listed above. The fund is open for business and its net asset value per share (NAV) is calculated each day the New York Stock Exchange (NYSE) is open for trading. The NYSE has designated the following holiday closings for 1994: Washington's Birthday (observed), Good Friday, Memorial Day (observed), Independence Day, Labor Day, Thanksgiving Day, and Christmas Day (observed). Although FMR expects the same holiday schedule, with the addition of New Year's Day, to be observed in the future, the NYSE may modify its holiday schedule at any time. FSC normally determines the fund's NAV as of the close of the NYSE (normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier if trading on the NYSE is restricted or as permitted by the SEC. To the extent that portfolio securities are traded in other markets on days when the NYSE is closed, the fund's NAV may be affected on days when investors do not have access to the fund to purchase or redeem shares. If the Trustees determine that existing conditions make cash payments undesirable, redemption payments may be made in whole or in part in securities or other property, valued for this purpose as they are valued in computing the fund's NAV. Shareholders receiving securities or other property on redemption may realize a gain or loss for tax purposes, and will incur any costs of sale, as well as the associated inconveniences. Pursuant to Rule 11a-3 under the 1940 Act, the fund is required to give shareholders at least 60 days' notice prior to terminating or modifying its exchange privilege. Under the Rule, the 60-day notification requirement may be waived if (i) the only effect of a modification would be to reduce or eliminate an administrative fee, redemption fee, or deferred sales charge ordinarily payable at the time of an exchange, or (ii) the fund suspends the redemption of the shares to be exchanged as permitted under the 1940 Act or the rules and regulations thereunder, or the fund to be acquired suspends the sale of its shares because it is unable to invest amounts effectively in accordance with its investment objective and policies. In the Prospectus, the fund has notified shareholders that it reserves the right at any time, without prior notice, to refuse exchange purchases by any person or group if, in FMR's judgment, the fund would be unable to invest effectively in accordance with its investment objective and policies, or would otherwise potentially be adversely affected. DISTRIBUTIONS AND TAXES DISTRIBUTIONS. If you request to have distributions mailed to you and the U.S. Postal Service cannot deliver your checks, or if your checks remain uncashed for six months, Fidelity may reinvest your distributions at the then-current NAV. All subsequent distributions will then be reinvested until you provide Fidelity with alternate instructions. DIVIDENDS. A portion of the fund's income may qualify for the dividends-received deduction available to corporate shareholders to the extent that the fund's income is derived from qualifying dividends. Because the fund may earn other types of income, such as interest, income from securities loans, non-qualifying dividends, and short-term capital gains, the percentage of dividends from the fund that qualifies for the deduction generally will be less than 100%. The fund will notify corporate shareholders annually of the percentage of fund dividends that qualifies for the dividends-received deduction. A portion of the fund's dividends derived from certain U.S. government obligations may be exempt from state and local taxation. Gains (losses) attributable to foreign currency fluctuations are generally taxable as ordinary income, and therefore will increase (decrease) dividend distributions. The fund will send each shareholder a notice in January describing the tax status of dividends and capital gain distributions for the prior year. CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the fund on the sale of securities and distributed to shareholders are federally taxable as long-term capital gains regardless of the length of time shareholders have held their shares. If a shareholder receives a long-term capital gain distribution on shares of the fund and such shares are held six months or less and are sold at a loss, the portion of the loss equal to the amount of the long-term capital gain distribution will be considered a long-term loss for tax purposes. Short-term capital gains distributed by the fund are taxable to shareholders as dividends, not as capital gains. Distributions from short-term capital gains do not qualify for the dividends-received deduction. FOREIGN TAXES. Foreign governments may withhold taxes on dividends and interest paid with respect to foreign securities. Because the fund does not currently anticipate that securities of foreign issuers will constitute more than 50% of its total assets at the end of its fiscal year, shareholders should not expect to claim a foreign tax credit or deduction on their federal income tax returns with respect to foreign taxes withheld. TAX STATUS OF THE FUND. The fund has qualified and intends to continue to qualify each year as a "regulated investment company" for tax purposes so that it will not be liable for federal tax on income and capital gains distributed to shareholders. In order to qualify as a regulated investment company and avoid being subject to federal income or excise taxes at the fund level, the fund intends to distribute substantially all of its net investment income and net realized capital gains within each calendar year as well as on a fiscal year basis. The fund intends to comply with other tax rules applicable to regulated investment companies, including a requirement that capital gains from the sale of securities held less than three months constitute less than 30% of the fund's gross income for each fiscal year. Gains from some forward currency contracts, futures contracts, and options are included in this 30% calculation, which may limit the fund's investments in such instruments. If the fund purchases shares in certain foreign investment entities, defined as passive foreign investment companies (PFICs) in the Internal Revenue Code, it may be subject to U.S. federal income tax on a portion of any excess distribution or gain from the disposition of such shares. Interest charges may also be imposed on the fund with respect to deferred taxes arising from such distributions or gains. OTHER TAX INFORMATION. The information above is only a summary of some of the tax consequences generally affecting the fund and its shareholders, and no attempt has been made to discuss individual tax consequences. In addition to federal income taxes, shareholders may be subject to state and local taxes on distributions received from the fund. Investors should consult their tax advisers to determine whether the fund is suitable to their particular tax situation. FMR FMR is a wholly owned subsidiary of FMR Corp., a parent company organized in 1972. At present, the principal operating activities of FMR Corp. are those conducted by three of its divisions as follows: FSC, which is the transfer and shareholder servicing agent for certain of the funds advised by FMR; Fidelity Investments Institutional Operations Company, which performs shareholder servicing functions for certain institutional customers; and Fidelity Investments Retail Marketing Company, which provides marketing services to various companies within the Fidelity organization. Several affiliates of FMR are also engaged in the investment advisory business. Fidelity Management Trust Company provides trustee, investment advisory, and administrative services to retirement plans and corporate employee benefit accounts. FMR U.K. and FMR Far East, both wholly owned subsidiaries of FMR formed in 1986, supply investment research, and may supply portfolio management services, to FMR in connection with certain funds advised by FMR. Analysts employed by FMR, FMR U.K., and FMR Far East research and visit thousands of domestic and foreign companies each year. FMR Texas Inc., a wholly owned subsidiary of FMR formed in 1989, supplies portfolio management and research services in connection with certain money market funds advised by FMR. TRUSTEES AND OFFICERS The Trustees and executive officers of the trust are listed below. Except as indicated, each individual has held the office shown or other offices in the same company for the last five years. All persons named as Trustees also serve in similar capacities for other funds advised by FMR. Unless otherwise noted, the business address of each Trustee and officer is 82 Devonshire Street, Boston, Massachusetts 02109, which is also the address of FMR. Those Trustees who are "interested persons" (as defined in the 1940 Act) by virtue of their affiliation with either the Trust or FMR are indicated by an asterisk (*). *EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive Officer and a Director of FMR Corp.; a Director and Chairman of the Board and of the Executive Committee of FMR; Chairman and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. *J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR; and President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc. , and Fidelity Management & Research (Far East) Inc. RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is President of Greenhill Petroleum Corporation (petroleum exploration and production, 1990). Prior to his retirement in March 1990, Mr. Cox was President and Chief Operating Officer of Union Pacific Resources Company (exploration and production). He is a Director of Bonneville Pacific Corporation (independent power, 1989) and CH2M Hill Companies (engineering). In addition, he served on the Board of Directors of the Norton Company (manufacturer of industrial devices, 1983-1990) and continues to serve on the Board of Directors of the Texas State Chamber of Commerce, and is a member of advisory boards of Texas A&M University and the University of Texas at Austin. PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton , NY, Trustee (1992). Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice President of Corporate Affairs of Avon Products, Inc. She is currently a Director of BellSouth Corporation (telecommunications), Eaton Corporation (manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990), and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and Nabisco Brands, Inc. In addition, she serves as a Director of the New York City Chapter of the National Multiple Sclerosis Society, and is a member of the Advisory Council of the International Executive Service Corps. and the President's Advisory Council of The University of Vermont School of Business Administration (1988). RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a Director of the Norton Company (manufacturer of industrial devices). He is currently a Director of Mechanics Bank and a Trustee of College of the Holy Cross and Old Sturbridge Village, Inc. E. BRADLEY JONES, 3 881-2 Lander Road, Chagrin Falls , OH, Trustee (1990). Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive Officer of LTV Steel Company. Prior to May 1990, he was Director of National City Corporation (a bank holding company) and National City Bank of Cleveland. He is a Director of TRW Inc. (original equipment and replacement products), Cleveland-Cliffs Inc . (mining), NACCO Industries, Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham Steel Corporation (1988), Hyster-Yale Materials Handling, Inc. (1989), and RPM, Inc. (manufacturer of chemical products, 1990). In addition, he serves as a Trustee of First Union Real Estate Investments; Chairman of the Board of Trustees and a member of the Executive Committee of the Cleveland Clinic Foundation, a Trustee and a member of the Executive Committee of University School (Cleveland), and a Trustee of Cleveland Clinic Florida. DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT, Trustee, is a Professor at Columbia University Graduate School of Business and a financial consultant. Prior to 1987, he was Chairman of the Financial Accounting Standards Board. Mr. Kirk is a Director of General Re Corporation (reinsurance) and Valuation Research Corp. (appraisals and valuations, 1993). In addition, he serves as Vice Chairman of the Board of Directors of the National Arts Stabilization Fund and Vice Chairman of the Board of Trustees of the Greenwich Hospital Association (1989). *PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to his retirement on May 31, 1990, he was a Director of FMR (1989) and Executive Vice President of FMR (a position he held until March 31, 1991); Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and Managing Director of FMR Corp. Mr. Lynch was also Vice President of Fidelity Investments Corporate Services (1991-1992). He is a Director of W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation (engineering and construction, 1988). In addition, he serves as a Trustee of Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield (1989) and Society for the Preservation of New England Antiquities, and as an Overseer of the Museum of Fine Arts of Boston (1990). GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is Chairman of G.M. Management Group (strategic advisory services). Prior to his retirement in July 1988, he was Chairman and Chief Executive Officer of Leaseway Transportation Corp. (physical distribution services). Mr. McDonough is a Director of ACME-Cleveland Corp. (metal working, telecommunications and electronic products), Brush-Wellman Inc. (metal refining), York International Corp. (air conditioning and refrigeration, 1989), Commercial Intertech Corp. (water treatment equipment, 1992) , and Associated Estates Realty Corporation (a real estate investment trust, 1993) . EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee (1988). Prior to his retirement in 1985, Mr. Malone was Chairman, General Electric Investment Corporation and a Vice President of General Electric Company. He is a Director of Allegheny Power Systems, Inc. (electric utility), General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). He is also a Trustee of Rensselaer Polytechnic Institute and of Corporate Property Investors and a member of the Advisory Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership Funds. MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993) is Chairman of the Board, President, and Chief Executive Officer of Lexmark International, Inc. (office machines, 1991). Prior to 1991, he held the positions of Vice President of International Business Machines Corporation ("IBM") and President and General Manager of various IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna Company (chemicals, 1993) and Infomart (marketing services, 1991), a Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of the Tri-State United Way (1993) and is a member of the University of Alabama President's Cabinet (1990). THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA, Trustee (1988), is President of The Wales Group, Inc. (management and financial advisory services). Prior to retiring in 1987, Mr. Williams served as Chairman of the Board of First Wachovia Corporation (bank holding company), and Chairman and Chief Executive Officer of The First National Bank of Atlanta and First Atlanta Corporation (bank holding company). He is currently a Director of BellSouth Corporation (telecommunications), ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc. (computer software, 1988), Georgia Power Company (electric utility), Gerber Alley & Associates, Inc. (computer software), National Life Insurance Company of Vermont, American Software, Inc. (1989), and AppleSouth, Inc. (restaurants, 1992). GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the Fidelity funds, Mr. French was Senior Vice President, Fund Accounting - Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund Accounting - Fidelity Accounting & Custody Services Co. (1990); and Senior Vice President, Chief Financial and Operations Officer - Huntington Advisers, Inc. (1985-1990). ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of FDC. ROBERT H. MORRISON, Manager, Security Transactions, is an employee of FMR. WILL DANOFF, Vice President of the fund (1992), is an employee of FMR. Under a retirement program that became effective on November 1, 1989, Trustees, upon reaching age 72, become eligible to participate in a defined benefit retirement program under which they receive payments during their lifetime from the fund based on their basic trustee fees and length of service. Currently, Messrs. Robert L. Johnson, William R. Spaulding, Bertram H. Witham, and David L. Yunich participate in the program. As of December 31, 1993, the Trustees and officers of the fund owned in the aggregate, less than 1 % of the fund's total outstanding shares. MANAGEMENT CONTRACT The fund employs FMR to furnish investment advisory and other services. Under its management contract with the fund, FMR acts as investment adviser and, subject to the supervision of the Board of Trustees, directs the investments of the fund in accordance with its investment objective, policies, and limitations. FMR also provides the fund with all necessary office facilities and personnel for servicing the fund's investments, and compensates all officers of the fund, all Trustees who are "interested persons" of the fund or of FMR, and all personnel of the fund or FMR performing services relating to research, statistical, and investment activities. In addition, FMR or its affiliates, subject to the supervision of the Board of Trustees, provide the management and administrative services necessary for the operation of the fund. These services include providing facilities for maintaining the fund's organization; supervising relations with custodians, transfer and pricing agents, accountants, underwriters, and other persons dealing with the fund; preparing all general shareholder communications and conducting shareholder relations; maintaining the fund's records and the registration of the fund's shares under federal and state law; developing management and shareholder services for the fund; and furnishing reports, evaluations, and analyses on a variety of subjects to the Board of Trustees. In addition to the management fee payable to FMR and the fees payable to FSC, the fund pays all of its expenses, without limitation, that are not assumed by those parties. The fund pays for typesetting, printing, and mailing proxy material to shareholders, legal expenses, and the fees of the custodian, auditor, and non-interested Trustees. Although the fund's management contract provides that the fund will pay for typesetting, printing, and mailing of prospectuses, statements of additional information, notices, and reports to existing shareholders, the fund has entered into a revised transfer agent agreement with FSC, pursuant to which FSC bears the cost of providing these services to existing shareholders. Other expenses paid by the fund include interest, taxes, brokerage commissions, the fund's proportionate share of insurance premiums and Investment Company Institute dues, and the costs of registering shares under federal and state securities laws. The fund is also liable for such nonrecurring expenses as may arise, including costs of any litigation to which the fund may be a party and any obligation it may have to indemnify the fund's officers and Trustees with respect to litigation. FMR is the fund's manager pursuant to a management contract dated January 1, 1993 which was approved by shareholders on December 16, 1992. For the services of FMR under the contract, the fund pays FMR a monthly management fee composed of the sum of two elements: a basic fee and a performance adjustment based on a comparison of the fund's performance to that of the Standard & Poor's Composite Stock Price Index (S&P 500). COMPUTING THE BASIC FEE. The fund's basic fee rate is composed of two elements: a group fee rate and an individual fund fee rate. The group fee rate is based on the monthly average net assets of all of the registered investment companies with which FMR has management contracts and is calculated on a cumulative basis pursuant to the graduated fee rate schedule shown to the left of the following chart. On the right of the chart, the effective fee rate schedule shows the results of cumulatively applying the annualized rates at varying asset levels. For example, the effective annual fee rate at $233 billion of group assets - their approximate level for December 1993 - was .3243 %, which is the weighted average of the respective fee rates for each level of group net assets up to $233 billion. GROUP FEE RATE SCHEDULE* EFFECTIVE ANNUAL FEE RATES Average Group Annualized Group Net Effective Annual Assets Rate Assets Fee Rate 0 - $ 3 billion .520% $0.5 billion .5200% 3 - 6 .490 25 .4238 6 - 9 .460 50 .3823 9 - 12 .430 75 .3626 12 - 15 .400 100 .3512 15 - 18 .385 125 .3430 18 - 21 .370 150 .3371 21 - 24 .360 175 .3325 24 - 30 .350 200 .3284 30 - 36 .345 225 .3253 36 - 42 .340 250 .3223 42 - 48 .335 275 .3198 48 - 66 .325 300 .3175 66 - 84 .320 325 .3153 84 - 102 .315 350 .3133 102 - 138 .310 138 - 174 .305 174 - 228 .300 228 - 282 .295 282 - 336 .290 Over 336 .285 * The rates shown for average group assets in excess of $174 billion were adopted by FMR on a voluntary basis on Nov e mber 1, 1993 pending shareholder approval of a new management contract reflecting the extended schedule. The extended schedule provides for lower management fees as total assets under management increase. The individual fund fee rate is .30%. Based on the average net assets of funds advised by FMR for December 1993, the annual management fee rate would be calculated as follows:
Group Fee Rate Individual Fund Fee Rate Management Fee Rate .3243 % + .30% = .6243 %
One twelfth (1/12) of this annual management fee rate is then applied to the fund's average net assets for the current month, giving a dollar amount which is the fee for that month. The schedule shown above (minus the breakpoints added November 1, 1993) was voluntarily adopted by FMR on January 1, 1992 until shareholders could meet to approve the current contract . P rior to January 1, 1992, the fund's group fee rate was based on a sche d ule with breakpoints ending at .310% for average group assets in excess of $102 billion. Prior to January 1, 1993, the date of the current management contract, the individual fund fee rate was .09%. COMPUTING THE PERFORMANCE ADJUSTMENT. The basic fee is subject to upward or downward adjustment, depending upon whether, and to what extent, the fund's investment performance for the performance period exceeds, or is exceeded by the record of the S&P 500 over the same period. The performance period consists of the most recent month plus the previous 35 months . Each percentage point of difference (up to a maximum difference of + 10) is multiplied by a performance adjustment of .02%. Thus, the maximum annualized adjustment rate is + .20%. This performance comparison is made at the end of each month. One twelfth of this rate is then applied to the fund's average net assets for the entire performance period, giving a dollar amount which is added to (or subtracted from) the basic fee. The fund's performance is calculated based on change in net asset value. For purposes of calculating the performance adjustment, any dividends or capital gain distributions paid by the fund are treated as if reinvested in fund shares at the net asset value as of the record date for payment. The record of the S&P 500 is based on change in value and is adjusted for any cash distributions from the companies whose securities comp ri se the S&P 500. Because the adjustment to the basic fee is based on the fund's performance compared to the investment record of the S&P 500, the controlling factor is not whether the fund's performance is up or down per se, but whether it is up or down more or less than the record of the S&P 500. Moreover, the comparative investment performance of the fund is based solely on the relevant performance period without regard to the cumulative performance over a longer or shorter period of time. During the fiscal years ended December 31, 1993, 1992, and 1991, FMR received the payments shown in the following table for its services as investment adviser to the fund. These fees include both the basic fee and the performance adjustment. If FMR had not voluntarily adopted the extended group fee rate schedule, these fees would have been higher.
Fiscal Year Management Fee Paid to Management Fee as a % of Performance Adjustment FMR Average Net Assets to Basic Fee 1993 $28,495,000 .69 % $2,669,000 1992 6,863,675 .51% 1,182,937 1991 3,424,099 . 52% 595,207
To comply with the California Code of Regulations, FMR will reimburse the fund if and to the extent that the fund's aggregate annual operating expenses exceed specified percentages of its average net assets. The applicable percentages are 2 1/2% of the first $30 million, 2% of the next $70 million, and 1 1/2% of average net assets in excess of $100 million. When calculating the fund's expenses for purposes of this regulation, the fund may exclude interest, taxes, brokerage commissions, and extraordinary expenses, as well as a portion of its custodian fees attributable to investments in foreign securities. SUB-ADVISERS. On November 1, 1989 FMR entered into sub-advisory agreements with FMR U.K. and FMR Far East pursuant to which FMR U.K. and FMR Far East supply FMR with investment research and recommendations concerning foreign securities for the benefit of the fund. The sub-advisory agreements provide that FMR will pay fees to FMR U.K. and FMR Far East equal to 110% and 105%, respectively, of FMR U.K.'s and FMR Far East's costs incurred in connection with each agreement, said costs to be determined in relation to the assets of the fund that benefit from the services of the sub-advisers. The fees paid to FMR U.K. and FMR Far East under the sub-advisory agreements for fiscal 1993, 1992, and 1991 are indicated in the table below. Fiscal Year FMR UK FMR Far East 1993 $93,009 $139,014 1992 9,915 8,357 1991 3,000 2,900 CONTRACTS WITH COMPANIES AFFILIATED WITH FMR FSC is transfer, dividend disbursing, and shareholders' servicing agent for the fund. Under the f und's contract with FSC, the fund pays an annual fee of $26.03 per basic retail account with a balance of $5,000 or more, $15.31 per basic retail account with a balance of less than $5,000 , and a supplemental activity charge of $6.11 for monetary transactions. These fees and charges are subject to annual cost escalation based on changes in postal rates and changes in wage and price levels as measured by the National Consumer Price Index for Urban Areas. With respect to certain institutional client master accounts, the fund pays FSC a per account fee of $95, and monetary transaction charges of $20 and $17.50, depending on the nature of services provided. With respect to certain broker-dealer master accounts, the fund pays FSC a per-account fee of $30, and a charge of $6 for monetary transactions. Fees for certain institutional retirement plan accounts are based on the net asset of all such accounts in the fund. Under the contract, FSC pays out-of-pocket expenses associated with providing transfer agent services. In addition, FSC bears the expense of typesetting, printing, and mailing prospectuses, statements of additional information, and all other reports, notices, and statements to shareholders, with the exception of proxy statements. Transfer agent fees, including reimbursement for out-of-pocket expenses, paid to FSC for the fiscal years ended December 31, 1993, 1992, and 1991 were $11,969,000, $3,715,409, and $1,644,370, respectively. If a portion of the fund's brokerage commissions had not resulted in payment of certain of these fees, the fund would have paid transfer agent fees of $12,923,000, $3,715,409, and $1,644,370 , respectively. The fund's contract with FSC also provides that FSC will perform the calculations necessary to determine the fund's net asset value per share and dividends, and maintain the fund's accounting records. Prior to July 1, 1991, the annual fee for these pricing and bookkeeping services was based on two schedules, one pertaining to the fund's average net assets, and one pertaining to the type and number of transactions the fund made. The fee rates in effect as of July 1, 1991 are based on the fund's average net assets, specifically, .06% for the first $500 million of average net assets and .03% for average net assets in excess of $500 million. The fee is limited to a minimum of $45,000 and a maximum of $750,000 per year. FSC also receives fees for administering the fund's securities lending program. Securities lending fees are based on the number and duration of individual securities loans. Securities lending fees for fiscal 1993, 1992, and 1991 amounted to approximately $27,000, $1,550, and $13,840, respectively. Pricing and bookkeeping fees, including related out-of-pocket expenses, paid to FSC for fiscal 1993, 1992, and 1991 were $802,000, $571,715, and $334,273 , respectively. The fund has a distribution agreement with FDC, a Massachusetts corporation organized on July 18, 1960. FDC is a broker-dealer registered under the Securities Exchange Act of 1934 and is a member of the National Association of Securities Dealers, Inc. The distribution agreement calls for FDC to use all reasonable efforts, consistent with its other business, to secure purchasers for shares of the fund, which are continuously offered . Promotional and administrative expenses in connection with the offer and sale of shares are paid by FDC . Sales charge revenue paid to FDC for fiscal 1993, 1992, and 1991 amounted to $32,505,000, $11,185,497, and $6,997,432, respectively. DESCRIPTION OF THE FUND FUND ORGANIZATION. Fidelity Contrafund is an open-end management investment company originally organized as a Massachusetts corporation on June 3, 1963. On October 7, 1980, the fund's name was changed from Contrafund, Inc. to Fidelity Contrafund, Inc. On December 31, 1984, the fund was reorganized as a Massachusetts business trust, at which time its name was change to Fidelity Contrafund. In the event that FMR ceases to be the investment adviser to the trust or a fund, the right of the trust or fund to use the identifying name "Fidelity" may be withdrawn. The fund's Declaration of Trust permits the trustees to create additional funds. SHAREHOLDER AND TRUSTEE LIABILITY. The fund is an entity of the type commonly known as a "Massachusetts business trust." Under Massachusetts law, shareholders of such a fund may, under certain circumstances, be held personally liable for the obligations of the fund. The Declaration of Trust provides that the fund shall not have any claim against shareholders, except for the payment of the purchase price of shares, and requires that each agreement, obligation, or instrument entered into or executed by the fund or the Trustees include a provision limiting the obligations created thereby to the fund and its assets. The Declaration of Trust provides for indemnification out of the fund's property of any shareholder held personally liable for the obligations of the fund. The Declaration of Trust also provides that the fund shall, upon request, assume the defense of any claim made against any shareholder for any act or obligation of the fund and satisfy any judgment thereon. Thus, the risk of a shareholder incurring financial loss on account of shareholder liability is limited to circumstances in which the fund itself would be unable to meet its obligations. FMR believes that, in view of the above, the risk of personal liability to shareholders is remote. The Declaration of Trust further provides that the Trustees, if they have exercised reasonable care, will not be liable for any neglect or wrongdoing, but nothing in the Declaration of Trust protects a Trustee against any liability to which they would otherwise be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of the duties involved in the conduct of their office. VOTING RIGHTS. The fund's capital consists of shares of beneficial interest. The shares have no preemptive or conversion rights; the voting and dividend rights, the right of redemption, and the privilege of exchange are described in the Prospectus. Shares are fully paid and nonassessable, except as set forth under the heading "Shareholder and Trustee Liability" above. Shareholders representing 10% or more of the fund may, as set forth in the Declaration of Trust, call meetings of the fund for any purpose including the purpose of voting on removal of one or more Trustees. The fund may be terminated upon the sale of its assets to another open-end management investment company, or upon liquidation and distribution of its assets, if approved by vote of the holders of a majority of the outstanding shares of the fund. If not so terminated, the fund will continue indefinitely. CUSTODIAN. B r own Brothers Harriman & Co., 40 Water Street, Boston, Massachusetts is custodian of the assets of the fund. The custodian is responsible for the safekeeping of the fund's assets and the appointment of sub-custodian banks and clearing agencies. The custodian takes no part in determining the investment policies of the fund, or in deciding which securities are purchased or sold by the fund. The fund may, however, invest in obligations of the custodian and may purchase securities from or sell securities to the custodian. FMR, its officers and directors, its affiliated companies, and the fund's Trustees may from time to time have transactions with various banks, including banks serving as custodians for certain of the funds advised by FMR. The Boston branch of the fund's custodian leases its office space from an affiliate of FMR at a lease payment which, when entered into, was consistent with prevailing market rates. Transactions that have occurred to date include mortgages and personal and general business loans. In the judgment of FMR, the terms and conditions of those transactions were not influenced by existing or potential custodial or other fund relationships. AUDITOR. Coopers & Lybrand, One Post Office Square, Boston, Massachusetts, serves as the fund's independent accountant. The auditor examines financial statements for the fund and provides other audit, tax, and related services. FINANCIAL STATEMENTS The fund's Annual Report for the fiscal year ended December 31, 1993 is a separate report supplied with this Statement of Additional Information and is incorporated herein by reference. PART C - OTHER INFORMATION Item 24. Financial Statements and Exhibits (a) Financial statements for Fidelity Contrafund for the fiscal year ended December 31, 1993 are incorporated by reference into the fund's Statement of Additional Information and are filed herein as Exhibit 24(a). (b) Exhibits: 1. (a) Declaration of Trust dated October 1, 1984 is incorporated herein by reference to Exhibit 1(a) to Post-Effective Amendment No. 26. (b) Supplement to the Declaration of Trust dated February 1, 1985 is incorporated herein by reference to Exhibit 1(b) to Post-Effective Amendment No. 34. (c) Supplement to the Declaration of Trust dated October 30, 1986 is incorporated herein by reference to Exhibit 1(b) to Post-Effective Amendment No. 34. (d) Supplement to the Declaration of Trust is incorporated herein by reference to Exhibit 1(c) to Post-Effective Amendment No. 38. 2. (a) Bylaws of the Trust are incorporated herein by reference to Exhibit 2(a) to Post-Effective Amendment No. 27. (b) Supplement to the Bylaws of the Fund is incorporated herein by reference to Exhibit 2(b) of Post-Effective Amendment No. 39. 3. Not applicable. 4. Not applicable. 5. (a) Management Contract dated January 1, 1993 between Fidelity Contrafund and Fidelity Management & Research Company is filed herein by reference to Exhibit 5(a) to Post-Effective Amendment No. 44. (b) Sub-Advisory Agreement dated November 1, 1989 between Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research Company on behalf of Fidelity Contrafund is incorporated herein by reference to Exhibit 5(c) to Post-Effective Amendment No. 39. (c) Sub-Advisory Agreement dated November 1, 1989 between Fidelity Management & Research (Far East) Inc. and Fidelity Management & Research Company on behalf of Fidelity Contrafund is incorporated herein by reference to Exhibit 5(d) to Post-Effective Amendment No. 39. 6. (a) General Distribution Agreement dated April 1, 1987 between Fidelity Contrafund and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6 to Post-Effective Amendment No. 35. (b) Amendment to General Distribution Agreement dated January 1, 1988 between Fidelity Contrafund and Fidelity Distributors Corporation is incorporated herein by reference to Exhibit 6(b) to Post-Effective Amendment No. 37. 7. Retirement Plan for Non-Interested Person Trustees, Directors or General Partners, effective November 1, 1989, is incorporated herein by reference to Exhibit 7 to Post-Effective Amendment No. 42. 8. (a) Custodian Agreement dated July 18, 1991 between Fidelity Contrafund and Brown Brothers Harriman & Co. is incorporated herein by reference to Exhibit 8(a) to Post-Effective Amendment No. 42. 9. (a) Master Service Agreement dated December 31, 1985 between Fidelity Contrafund, FMR Corp., and Fidelity Service Co. is incorporated by reference to Exhibit 9(b) to Post-Effective Amendment No. 31. (b) Amended Master Service Agreement dated June 1, 1989 between Fidelity Contrafund, FMR Corp., and Fidelity Service Co. is incorporated herein by reference to Exhibit 9(b) to Post-Effective Amendment No. 38. (c) Schedules A (transfer, dividend disbursing and shareholders' service); B (pricing and bookkeeping); and C (securities lending transactions) to the Amended Service Agreement dated June 1, 1989 for Fidelity Contrafund are incorporated herein by reference to Exhibit 9(c) to Post-Effective Amendment No. 38. 10. Not applicable. 11. Consent of Coopers & Lybrand is filed herein as Exhibit 11. 12. Not applicable. 13. Not applicable. 14. (a) Fidelity Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(a) to Post-Effective Amendment No. 40. (b) Fidelity 403(b)(7) Custodial Account Agreement, as currently in effect, is incorporated herein by reference to Exhibit 14(b) to Post-Effective Amendment No. 40. (c) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as currently in effect, is incorporated herein by reference to Exhibit 14(c) to Post-Effective Amendment No. 40. (d) Fidelity Defined Benefit Pension Plan and Trust, as currently in effect, is incorporated herein by reference to Exhibit 14(d) to Post-Effective Amendment No. 40. (e) Fidelity 401(a) Prototype Plan for Tax-Exempt Employers, as currently in effect, is incorporated herein by reference to Exhibit 14(e) to Post-Effective Amendment No. 40. (f) Fidelity Master Plan for Savings and Investments, as currently in effect, is incorporated herein by reference to Exhibit 14(f) to Post-Effective Amendment No. 40. (g) Fidelity Group Individual Retirement Account Custodial Agreement and Disclosure Statement, as currently in effect, is incorporated herein by reference to Exhibit 14(g) to Post-Effective Amendment No. 40. 15. Not applicable. 16. A schedule for computation of performance quotation for Fidelity Contrafund is incorporated herein by reference to Exhibit 16 to Post-Effective Amendment No. 37. Item 25. Persons Controlled by or under Common Control with Registrant The Board of Trustees of the Registrant is the same as the board of other funds advised by FMR, each of which has Fidelity Management & Research Company as its investment adviser. In addition, the officers of these funds are substantially identical. Nonetheless, the Registrant takes the position that it is not under common control with these other funds since the power residing in the respective boards and officers arises as the result of an official position with the respective funds. Item 26. Number of Holders of Securities December 31, 1993 Title of Class: Shares of Beneficial Interest Name of Series Number of Record Holders Fidelity Contrafund 626,065 Item 27. Indemnification Article XI, Section 2 of the Declaration of Trust sets forth the reasonable and fair means for determining whether indemnification shall be provided to any past or present Trustee or officer. It states that the Registrant shall indemnify any present or past Trustee, or officer to the fullest extent permitted by law against liability and all expenses reasonably incurred by him in connection with any claim, action suit or proceeding in which he is involved by virtue of his service as a trustee, an officer, or both. Additionally, amounts paid or incurred in settlement of such matters are covered by this indemnification. Indemnification will not be provided in certain circumstances, however. These include instances of willful misfeasance, bad faith, gross negligence, and reckless disregard of the duties involved in the conduct of the particular office involved. Item 28. Business and Other Connections of Investment Adviser (1) FIDELITY MANAGEMENT & RESEARCH COMPANY FMR serves as investment adviser to a number of other investment companies. The directors and officers of the Adviser have held, during the past two fiscal years, the following positions of a substantial nature.
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President and Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.; President and Trustee of funds advised by FMR; J. Gary Burkhead President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc. and Fidelity Management & Research (Far East) Inc.; Senior Vice President and Trustee of funds advised by FMR. Robert Beckwitt Vice President of FMR (1991) and of funds advised by FMR. Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR; Corporate Preferred Group Leader. Penelope Dobkin Vice President of FMR (1990) and of a fund advised by FMR. Charles F. Dornbush Senior Vice President of FMR (1991); Chief Financial Officer of the Fidelity funds; Treasurer of FMR Texas Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity Management & Research (Far East) Inc. Robert K. Duby Vice President of FMR. Margaret L. Eagle Vice President of FMR and of funds advised by FMR. Kathryn L. Eklund Vice President of FMR (1991). Richard B. Fentin Vice President of FMR and of a fund advised by FMR. Daniel R. Frank Vice President of FMR and of funds advised by FMR. Gary L. French Vice President of FMR (1991) and Treasurer of the funds advised by FMR (1991). Prior to assuming the position as Treasurer he was Senior Vice President, Fund Accounting - Fidelity Accounting & Custody Services Co. (1991) (Vice President, 1990-1991); and Senior Vice President, Chief Financial and Operations Officer - Huntington Advisers, Inc. (1985-1990). Michael S. Gray Vice President of FMR and of funds advised by FMR. Barry A. Greenfield Vice President of FMR and of funds advised by FMR. William J. Hayes Senior Vice President of FMR (1989); Income/Growth Group Leader (1990) and International Group Leader (1990). Robert Haber Vice President of FMR (1991) and of funds advised by FMR. Daniel Harmetz Vice President of FMR (1991) and of a fund advised by FMR. Ellen S. Heller Vice President of FMR (1991). Robert F. Hill Vice President of FMR (1989); and Director of Technical Research. Robert A. Lawrence Vice President of FMR (1991); and High Income Group Leader. Alan Leifer Vice President of FMR and of a fund advised by FMR. Bradford E. Lewis Vice President of FMR (1991) and of funds advised by FMR. Robert H. Morrison Vice President of FMR and Director of Equity Trading. David Murphy Vice President of FMR (1991) and of funds advised by FMR. Jacques Perold Vice President of FMR (1991). Anne Punzak Vice President of FMR (1990) and of funds advised by FMR. Richard A. Spillane Vice President of FMR (1990) and of funds advised by FMR; and Director of Equity Research (1989). Robert E. Stansky Vice President of FMR (1990) and of funds advised by FMR. Thomas Steffanci Vice President of FMR (1990); and Fixed-Income Division Head. Gary L. Swayze Vice President of FMR and of funds advised by FMR; and Tax-Free Fixed-Income Group Leader. Beth F. Terrana Vice President of FMR and of funds advised by FMR. George A. Vanderheiden Senior Vice President of FMR; Vice President of funds advised by FMR; and Growth Group Leader (1990). Jeffrey Vinik Vice President of FMR (1991) and of a fund advised by FMR. Guy E. Wickwire Vice President of FMR and of funds advised by FMR. Arthur S. Loring Vice President, Clerk and General Counsel of FMR; Vice President, Legal of FMR Corp.; and Secretary of funds advised by FMR.
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.) FMR U.K. provides investment advisory services to Fidelity Management & Research Company and Fidelity Management Trust Company. The directors and officers of the Sub-Adviser have held the following positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the Executive Committee of FMR; Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc. (1989), and Fidelity Management & Research (Far East) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President and Director of FMR U.K.; President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc. (1989) and Fidelity Management & Research (Far East) Inc.; Senior Vice President and Trustee of funds advised by FMR. Richard C. Habermann Senior Vice President of FMR U.K. (1991); Senior Vice President of Fidelity Management & Research (Far East) Inc. (1991); Director of Worldwide Research of FMR (1989). Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management & Research (Far East) Inc.; Treasurer of FMR Texas Inc. (1989); Senior Vice President and Chief Financial Officer of the Fidelity funds. David Weinstein Clerk of FMR U.K. (1989); Clerk of Fidelity Management & Research (Far East) Inc. (1989); Secretary of FMR Texas Inc. (1989).
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East) FMR Far East provides investment advisory services to Fidelity Management & Research Company and Fidelity Management Trust Company. The directors and officers of the Sub-Adviser have held the following positions of a substantial nature during the past two fiscal years.
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the Executive Committee of FMR; Chief Executive Officer of FMR Corp.; Chairman of the Board and a Director of FMR, FMR Corp., FMR Texas Inc. (1989) and Fidelity Management & Research (U.K.) Inc.; President and Trustee of funds advised by FMR. J. Gary Burkhead President and Director of FMR Far East; President of FMR; Managing Director of FMR Corp.; President and a Director of FMR Texas Inc. (1989) and Fidelity Management & Research (U.K.) Inc.; Senior Vice President and Trustee of funds advised by FMR. Richard C. Habermann Senior Vice President of FMR Far East (1991); Senior Vice President of Fidelity Management & Research (U.K.) Inc. (1991); Director of Worldwide Research of FMR (1989). William R. Ebsworth Vice President of FMR Far East. Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity Management & Research (U.K.) Inc.; Treasurer of FMR Texas Inc. (1989); Senior Vice President and Chief Financial Officer of the Fidelity funds. David C. Weinstein Clerk of FMR Far East (1989); Clerk of Fidelity Management & Research (U.K.) Inc. (1989); Secretary of FMR Texas Inc. (1989).
Item 29. Principal Underwriters (a) Fidelity Distributors Corporation (FDC) acts as distributor for most funds advised by FMR and the following other funds: CrestFunds, Inc. The Freedom Fund ARK Funds (b) Name and Principal Positions and Offices Positions and Offices Business Address* With Underwriter With Registrant Edward C. Johnson 3d Director Trustee, President Nita B. Kincaid Director None W. Humphrey Bogart Director None Kurt A. Lange President None Thomas W. Littauer Senior Vice President None William J. Kearns Senior Vice President None Harry Anderson Treasurer None Arthur S. Loring Vice President and Clerk Secretary * 82 Devonshire Street, Boston, MA (c) Not applicable. Item 30. Location of Accounts and Records All accounts, books, and other documents required to be maintained by Section 31a of the 1940 Act and the Rules promulgated thereunder are maintained by Fidelity Management & Research Company or Fidelity Service Co., 82 Devonshire Street, Boston, MA 02109, or by the fund's custodian, Brown Brothers Harriman & Co., 40 Water Street, Boston, MA. Item 31. Management Services Not applicable. Item 32. Undertakings The Registrant undertakes, provided the information required by Item 5A is contained in the annual report, to furnish each person to whom a prospectus has been delivered, upon their request and without charge, a copy of the Registrant's latest annual report to shareholders. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all of the requirements for the effectiveness of this Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment No. 46 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, and Massachusetts, on the 11th day of February 1994. FIDELITY CONTRAFUND By /s/Edward C. Johnson 3d (dagger) Edward C. Johnson 3d, President Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated. (Signature) (Title) (Date)
/s/Edward C. Johnson 3d(dagger) President and Trustee February 11, 1994 Edward C. Johnson 3d (Principal Executive Officer)
/s/Gary L. French Treasurer February 11, 1994 Gary L. French /s/J. Gary Burkhead Trustee February 11, 1994 J. Gary Burkhead /s/Ralph F. Cox * Trustee February 11, 1994 Ralph F. Cox /s/Phyllis Burke Davis * Trustee February 11, 1994 Phyllis Burke Davis /s/Richard J. Flynn * Trustee February 11, 1994 Richard J. Flynn /s/E. Bradley Jones * Trustee February 11, 1994 E. Bradley Jones /s/Donald J. Kirk * Trustee February 11, 1994 Donald J. Kirk /s/Peter S. Lynch * Trustee February 11, 1994 Peter S. Lynch /s/Edward H. Malone * Trustee February 11, 1994 Edward H. Malone /s/Marvin L. Mann_____* Trustee February 11, 1994 Marvin L. Mann /s/Gerald C. McDonough* Trustee February 11, 1994 Gerald C. McDonough /s/Thomas R. Williams * Trustee February 11, 1994 Thomas R. Williams (dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of attorney dated October 20, 1993 and filed herewith. * Signature affixed by Robert C. Hacker pursuant to a power of attorney dated October 20, 1993 and filed herewith. POWER OF ATTORNEY I, the undersigned Director, Trustee or General Partner, as the case may be, of the following investment companies:
Fidelity Advisor Series I Fidelity Investment Trust Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust Fidelity Advisor Series IV Fidelity School Street Trust Fidelity Advisor Series VI Fidelity Select Portfolios Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P. Fidelity Beacon Street Trust Fidelity Trend Fund Fidelity Capital Trust Fidelity Union Street Trust Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Contrafund Fidelity U.S. Investments-Government Securities Fidelity Deutsche Mark Performance Fund, L.P. Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P. Fidelity Devonshire Trust Spartan U.S. Treasury Money Market Fidelity Financial Trust Fund Fidelity Fixed-Income Trust Variable Insurance Products Fund Fidelity Government Securities Fund Variable Insurance Products Fund II Fidelity Hastings Street Trust Fidelity Institutional Trust
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as a Board Member (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each of them singly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacity, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS my hand on the date set forth below. /s/Phyllis Burke Davis October 20, 1993 Phyllis Burke Davis POWER OF ATTORNEY I, the undersigned Director, Trustee or General Partner, as the case may be, of the following investment cmpanies:
Fidelity Advisor Series I Fidelity Investment Trust Fidelity Advisor Series III Fidelity Special Situations Fund Fidelity Advisor Series IV Fidelity Sterling Performance Portfolio, L.P. Fidelity Advisor Series VI Fidelity Trend Fund Fidelity Advisor Series VII Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Advisor Series VIII Fidelity U.S. Investments-Government Securities Fidelity Contrafund Fund, L.P. Fidelity Deutsche Mark Performance Fidelity Yen Performance Portfolio, L.P. Portfolio, L.P. Spartan U.S. Treasury Money Market Fidelity Fixed-Income Trust Fund Fidelity Government Securities Fund Variable Insurance Products Fund Fidelity Hastings Street Trust Variable Insurance Products Fund II Fidelity Institutional Trust
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as a Board Member (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each of them singly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacity, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS my hand on the date set forth below. /s/Marvin L. Mann October 20, 1993 Marvin L. Mann POWER OF ATTORNEY I, the undersigned Director, Trustee or General Partner, as the case may be, of the following investment cmpanies:
Fidelity Advisor Series I Fidelity Magellan Fund Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust Fidelity Advisor Series IV Fidelity Money Market Trust Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust Fidelity Advisor Series VIII Fidelity New York Municipal Trust Fidelity California Municipal Trust Fidelity Puritan Trust Fidelity Capital Trust Fidelity School Street Trust Fidelity Charles Street Trust Fidelity Select Portfolios Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P. Fidelity Congress Street Fund Fidelity Summer Street Trust Fidelity Contrafund Fidelity Trend Fund Fidelity Deutsche Mark Performance Fidelity Union Street Trust Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities Fidelity Financial Trust Fund, L.P. Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P. Fidelity Government Securities Fund Spartan U.S. Treasury Money Market Fidelity Hastings Street Trust Fund Fidelity Income Fund Variable Insurance Products Fund Fidelity Institutional Trust Variable Insurance Products Fund II Fidelity Investment Trust
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as a Board Member (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each of them singly, my true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for me and in my name in the appropriate capacity, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS my hand on the date set forth below. /s/Ralph F. Cox October 20, 1993 Ralph F. Cox POWER OF ATTORNEY I, the undersigned President and Director, Trustee or General Partner, as the case may be, of the following investment companies:
Fidelity Advisor Series I Fidelity Institutional Trust Fidelity Advisor Series II Fidelity Investment Trust Fidelity Advisor Series III Fidelity Magellan Fund Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust Fidelity Advisor Series V Fidelity Money Market Trust Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust Fidelity Advisor Series VII Fidelity Municipal Trust Fidelity Advisor Series VIII Fidelity New York Municipal Trust Fidelity California Municipal Trust Fidelity Puritan Trust Fidelity Capital Trust Fidelity School Street Trust Fidelity Charles Street Trust Fidelity Securities Fund Fidelity Commonwealth Trust Fidelity Select Portfolios Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P. Fidelity Contrafund Fidelity Summer Street Trust Fidelity Corporate Trust Fidelity Trend Fund Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities Fidelity Deutsche Mark Performance Fund, L.P. Portfolio, L.P. Fidelity Union Street Trust Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P. Fidelity Exchange Fund Spartan U.S. Treasury Money Market Fidelity Financial Trust Fund Fidelity Fixed-Income Trust Variable Insurance Products Fund Fidelity Government Securities Fund Variable Insurance Products Fund II Fidelity Hastings Street Trust Fidelity Income Fund
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individual serves as President and Board Member (collectively, the "Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true and lawful attorney-in-fact, with full power of substitution, and with full power to sign for me and in my name in the appropriate capacity, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in my name and behalf in connection therewith as said attorney-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission. I hereby ratify and confirm all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS my hand on the date set forth below. /s/Edward C. Johnson 3d October 20, 1993 Edward C. Johnson 3d POWER OF ATTORNEY We, the undersigned Directors, Trustees or General Partners, as the case may be, of the following investment companies:
Fidelity Advisor Series I Fidelity Institutional Trust Fidelity Advisor Series II Fidelity Investment Trust Fidelity Advisor Series III Fidelity Magellan Fund Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust Fidelity Advisor Series V Fidelity Money Market Trust Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust Fidelity Advisor Series VII Fidelity Municipal Trust Fidelity Advisor Series VIII Fidelity New York Municipal Trust Fidelity California Municipal Trust Fidelity Puritan Trust Fidelity Capital Trust Fidelity School Street Trust Fidelity Charles Street Trust Fidelity Securities Fund Fidelity Commonwealth Trust Fidelity Select Portfolios Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P. Fidelity Contrafund Fidelity Summer Street Trust Fidelity Corporate Trust Fidelity Trend Fund Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P. Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities Fidelity Deutsche Mark Performance Fund, L.P. Portfolio, L.P. Fidelity Union Street Trust Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P. Fidelity Exchange Fund Spartan U.S. Treasury Money Market Fidelity Financial Trust Fund Fidelity Fixed-Income Trust Variable Insurance Products Fund Fidelity Government Securities Fund Variable Insurance Products Fund II Fidelity Hastings Street Trust Fidelity Income Fund
plus any other investment company for which Fidelity Management & Research Company acts as investment adviser and for which the undersigned individuals serve as Board Members (collectively, the "Funds"), hereby severally constitute and appoint Arthur J. Brown, Arthur C. Delibert, Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A. Xupolos, each of them singly, our true and lawful attorneys-in-fact, with full power of substitution, and with full power to each of them, to sign for us and in our names in the appropriate capacities, all Pre-Effective Amendments to any Registration Statements of the Funds, any and all subsequent Post-Effective Amendments to said Registration Statements, any Registration Statements on Form N-14, and any supplements or other instruments in connection therewith, and generally to do all such things in our names and behalf in connection therewith as said attorneys-in-fact deem necessary or appropriate, to comply with the provisions of the Securities Act of 1933 and Investment Company Act of 1940, and all related requirements of the Securities and Exchange Commission, hereby ratifying and confirming all that said attorneys-in-fact or their substitutes may do or cause to be done by virtue hereof. WITNESS our hands on this twentieth day of October, 1993. /s/Edward C. Johnson 3d /s/Peter S. Lynch Edward C. Johnson 3d Peter S. Lynch /s/J. Gary Burkhead /s/Edward H. Malone J. Gary Burkhead Edward H. Malone /s/Richard J. Flynn /s/Gerald C. McDonough Richard J. Flynn Gerald C. McDonough /s/E. Bradley Jones /s/Thomas R. Williams E. Bradley Jones Thomas R. Williams /s/Donald J. Kirk Donald J. Kirk EX-24.A 2 FIDELITY (Registered trademark) CONTRAFUND ANNUAL REPORT DECEMBER 31, 1993 CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on minimizing taxes. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy, and outlook. INVESTMENT CHANGES 9 A summary of major shifts in the fund's investments over the last six months. INVESTMENTS 10 A complete list of the fund's investments with their market value. FINANCIAL STATEMENTS 35 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 39 Footnotes to the financial statements. REPORT OF INDEPENDENT 44 The auditor's opinion. ACCOUNTANTS THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE FUND NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK, AND FUND SHARES ARE NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC. PRESIDENT'S MESSAGE DEAR SHAREHOLDER: Once the new year begins, many people start reviewing their finances and calculating their tax bills. No one wants to pay more taxes than they have to. But a recent survey of 500 U.S. households, conducted by Fidelity and Yankelovich Partners, showed that few people have taken steps to reduce their taxes under the new legislation. Many were not even aware that the new tax laws were retroactive to January 1993. Whether or not you're someone whose tax bill will increase as a result of these changes, it may make sense to consider ways to keep more of what you earn. First, if your employer offers a 401(k) or 403(b) retirement savings plan, consider enrolling. These plans are set up so you can make regular contributions - before taxes - to a retirement savings plan. They offer a disciplined savings strategy, the ability to accumulate earnings tax-deferred, and immediate tax savings. For example, if you earn $40,000 a year and contribute 7% of your salary to your 401(k) plan, your annual contribution is $2,800. That reduces your taxable income to $37,200 and, if you're in the 28% tax bracket, saves you $784 in federal taxes. In addition, you pay no taxes on any earnings until withdrawal. It may be a good idea to contact your benefits office as soon as possible to find out when you can enroll or increase your contribution. Most employers allow employees to make changes only a few times each year. Second, consider an IRA. Many people are eligible to make an IRA contribution (up to $2,000) that is fully tax deductible. That includes people who are not covered by company pension plans, or those within certain income brackets. Even if you don't qualify for a fully deductible contribution, any IRA earnings will grow tax-deferred until withdrawal. Third, consider adding to your tax-free investments, either municipal bonds or municipal bond funds. Often these can provide higher after-tax yields than comparable taxable investments. For example, if you're in the new 36% federal income tax bracket and invest $10,000 in a taxable investment yielding 7%, you'll pay $252 in federal taxes and receive $448 in income. That same $10,000 invested in a tax-free bond fund yielding 5.5% would allow you to keep $550 in income. These are three investment strategies that could help lower your tax bill in 1994. If you're interested in learning more, please call us at 1-800-544-8888 or visit a Fidelity Investor Center. Wishing you a prosperous new year, Edward C. Johnson 3d, Chairman PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage of 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 (or income) and capital gains (the profits the fund earns when it sells stocks that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Contrafund 21.43% 224.37% 408.62% Contrafund (incl. 3% sales charge) 17.78% 214.64% 393.36% S&P 500(Registered trademark) 10.08% 97.26% 302.35% Average Growth Fund 10.61% 99.76% 234.70% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, one, five, or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, you would have $1,050. You can compare these figures to the performance of the Standard & Poor's 500 Composite Stock Price Index - a common proxy for the U.S. stock market. You can also compare them to the average growth fund, which reflects the performance of over 488 growth funds tracked by Lipper Analytical Services. Both benchmarks include reinvested dividends and capital gains, if any. AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED DECEMBER 31, 1993 PAST 1 PAST 5 PAST 10 YEAR YEARS YEARS Contrafund 21.43% 26.53% 17.66% Contrafund (incl. 3% sales charge) 17.78% 25.77% 17.30% S&P 500(Registered trademark) 10.08% 14.55% 14.94% Average Growth Fund 10.61% 14.51% 12.38% 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 10 YEARS Contrafund (022) S&P 500 12/31/83 9700.01 10000.00 01/31/84 9315.36 9944.00 02/29/84 8511.09 9593.97 03/31/84 8484.58 9759.95 04/30/84 8396.20 9852.67 05/31/84 7998.48 9306.83 06/30/84 8122.21 9508.79 07/31/84 7689.15 9390.88 08/31/84 8758.56 10428.57 09/30/84 8758.56 10430.66 10/31/84 8714.37 10471.34 11/30/84 8652.50 10354.06 12/31/84 8897.59 10627.40 01/31/85 9744.54 11455.28 02/28/85 9808.29 11596.18 03/31/85 9890.26 11604.30 04/30/85 9780.97 11593.85 05/31/85 9972.22 12263.98 06/30/85 10035.97 12456.52 07/31/85 10145.25 12437.84 08/31/85 10336.50 12332.11 09/30/85 9817.40 11946.12 10/31/85 10345.61 12498.03 11/30/85 10892.03 13355.39 12/31/85 11305.65 14001.80 01/31/86 11407.92 14080.21 02/28/86 12529.40 15133.40 03/31/86 13088.30 15977.85 04/30/86 12844.41 15797.30 05/31/86 13169.59 16637.72 06/30/86 13108.62 16918.89 07/31/86 12143.26 15973.13 08/31/86 12935.87 17158.33 09/30/86 12163.58 15739.34 10/31/86 12976.52 16647.50 11/30/86 12976.52 17052.03 12/31/86 12811.28 16617.21 01/31/87 14660.92 18855.54 02/28/87 15557.31 19600.34 03/31/87 15815.23 20166.79 04/30/87 15850.40 19987.30 05/31/87 15991.09 20161.19 06/30/87 16577.27 21179.33 07/31/87 17386.20 22253.12 08/31/87 18019.28 23083.17 09/30/87 17655.85 22577.65 10/31/87 12556.05 17714.42 11/30/87 11864.35 16254.75 12/31/87 12567.77 17491.74 01/31/88 13376.71 18228.14 02/29/88 13986.34 19077.57 03/31/88 14009.79 18488.08 04/30/88 14291.15 18693.29 05/31/88 14091.85 18855.92 06/30/88 14771.82 19721.41 07/31/88 14877.34 19646.47 08/31/88 14549.07 18978.49 09/30/88 15146.98 19786.97 10/31/88 15545.59 20337.05 11/30/88 15428.35 20046.23 12/31/88 15209.80 20397.04 01/31/89 16219.78 21890.10 02/28/89 16123.59 21345.04 03/31/89 16977.27 21842.38 04/30/89 18071.41 22976.00 05/31/89 19009.25 23906.53 06/30/89 18889.01 23770.26 07/31/89 20620.41 25916.71 08/31/89 21209.56 26424.68 09/30/89 21618.36 26316.34 10/31/89 20969.09 25705.80 11/30/89 21450.03 26230.20 12/31/89 21773.12 26859.73 01/31/90 20618.29 25057.44 02/28/90 21046.49 25380.68 03/31/90 21500.64 26053.27 04/30/90 21280.05 25401.94 05/31/90 23291.27 27878.62 06/30/90 23589.71 27689.05 07/31/90 23148.54 27600.44 08/31/90 21344.93 25105.36 09/30/90 20449.61 23882.73 10/31/90 20553.41 23780.04 11/30/90 21773.12 25316.23 12/31/90 22630.13 26022.55 01/31/91 24834.44 27157.13 02/28/91 26712.68 29098.87 03/31/91 28277.87 29803.06 04/30/91 28434.39 29874.59 05/31/91 30247.41 31165.17 06/30/91 28551.78 29737.81 07/31/91 30573.50 31123.59 08/31/91 32112.60 31861.22 09/30/91 32203.91 31329.13 10/31/91 33129.98 31748.94 11/30/91 31382.18 30469.46 12/31/91 35058.25 33955.17 01/31/92 36057.96 33323.60 02/29/92 37228.09 33756.81 03/31/92 36217.75 33098.55 04/30/92 36610.66 34071.65 05/31/92 37003.57 34238.60 06/30/92 36105.49 33728.44 07/31/92 37017.60 35107.94 08/31/92 36330.01 34388.23 09/30/92 36947.44 34794.01 10/31/92 37775.36 34915.79 11/30/92 39599.57 36106.41 12/31/92 40630.38 36550.52 01/31/93 41917.18 36857.55 02/28/93 42193.72 37358.81 03/31/93 44210.06 38147.08 04/30/93 44508.77 37223.92 05/31/93 46271.20 38221.52 06/30/93 46286.14 38332.36 07/31/93 46793.96 38179.04 08/31/93 49064.20 39626.02 09/30/93 49168.75 39320.90 10/31/93 49601.89 40134.84 11/30/93 47734.91 39753.56 12/31/93 49335.92 40234.58 $10,000 OVER 10 YEARS: Let's say you invested $10,000 in Fidelity Contrafund on December 31, 1983, and paid a 3% sales charge. As the chart shows, by December 31, 1993, the value of your investment would have grown to $49,336 - a 393.36% increase on your initial investment. For comparison, look at how the S&P 500 did over the same period. With dividends reinvested, the same $10,000 investment would have grown to $40,235 - a 302.35% increase. UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of growth in the long run and volatility in the short run. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. (checkmark) DISTRIBUTIONS The Board of Trustees of Fidelity <FUND> voted to pay on February 7, 1994, to shareholders of record at the opening of business on February 4, 1994, a distribution of $___ derived from capital gains realized from sales of portfolio securities. INVESTMENT CHANGES TOP TEN STOCKS AS OF DECEMBER 31, 1993 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE STOCKS 6 MONTHS AGO International Business Machines Corp. 1.8 - Citicorp 1.0 .5 British Petroleum PLC ADR 1.0 .4 United Technologies Corp. 1.0 - Philip Morris Companies, Inc. .9 - Anadarko Petroleum Corp. .9 .3 Lotus Development Corp. .9 .5 Columbia Healthcare Corp. .8 - Ford Motor Co. .8 .3 Caterpillar, Inc. .8 .5 TOP FIVE INDUSTRIES AS OF DECEMBER 31, 1993 % OF FUND'S % OF FUND'S INVESTMENTS INVESTMENTS IN THESE INDUSTRIES 6 MONTHS AGO Technology 11.1 16.2 Energy 10.0 16.3 Media & Leisure 8.4 6.8 Health 7.2 1.8 Basic Industries 5.6 2.4 ASSET ALLOCATION AS OF DECEMBER 31, 1993 * AS OF JUNE 30, 1993 * Row: 1, Col: 1, Value: 19.1 Row: 1, Col: 2, Value: 1.5 Row: 1, Col: 3, Value: 40.1 Row: 1, Col: 4, Value: 40.0 Row: 1, Col: 1, Value: 15.9 Row: 1, Col: 2, Value: 1.5 Row: 1, Col: 3, Value: 40.0 Row: 1, Col: 4, Value: 43.3 Stocks 80.1% Bonds 0.8% Short-term and other investments 19.1% Stocks 83.3% Bonds 0.8% Short-term and other investments 15.9% * FOREIGN INVESTMENTS 18.2% * FOREIGN INVESTMENTS 13.5% INVESTMENTS DECEMBER 31, 1993 Showing Percentage of Total Value of Investment in Securities COMMON STOCKS - 79.3% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 1.4% AEROSPACE & DEFENSE - 0.5% Alliant Techsystems, Inc. (a) 172,800 $ 5,119 01880410 Greenwich Air Services, Inc. (a) 1,000 8 39678110 Martin Marietta Corp. 115,000 5,118 57290010 McDonnell Douglas Corp. 18,500 1,980 58016910 Precision Castparts Corp. 32,300 937 74018910 Sturm Ruger & Co., Inc. 638,900 15,892 86415910 Thiokol Corp. 102,500 2,716 88410310 31,770 DEFENSE ELECTRONICS - 0.9% ESCO Electronics Corp. (trust receipt) (a)(e) 604,600 7,784 26903020 E-Systems, Inc. 12,600 547 26915730 Flir Systems, Inc. (a) 154,100 1,503 30244510 Loral Corp. 1,075,000 40,581 54385910 Tech-Sym Corp. (a) 242,600 5,186 87830810 Tracor, Inc. (a) 10,000 90 89234920 Trimble Navigation Ltd. (a) 12,200 108 89623910 55,799 TOTAL AEROSPACE & DEFENSE 87,569 BASIC INDUSTRIES - 5.6% CHEMICALS & PLASTICS - 1.8% Akzo NV Ord. 137,700 13,303 01019910 Cabot Corp. 206,000 11,098 12705510 Cambrex Corp. 370,200 7,404 13201110 Foamex International, Inc. (a) 355,000 6,035 34412310 GEON 223,300 5,275 37246W10 Georgia Gulf Corp. (a) 182,400 4,081 37320020 Hanna (M.A.) Co. 184,400 6,016 41052210 IMC Fertilizer Group, Inc. 30,585 1,388 44966910 Monsanto Co. 285,200 20,927 61166210 Sealed Air Corp. (a) 20,000 633 81211510 Terra Industries, Inc. (a) 458,800 3,498 88091510 Union Carbide Corp. 1,285,000 28,752 90558110 Vigoro Corp. 200,600 6,068 92675410 114,478 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED IRON & STEEL - 0.9% Allegheny Ludlum Industries, Inc. 210,900 $ 5,035 01690010 Geneva Steel Class A (a) 97,100 1,651 37225210 Inland Steel Industries, Inc. (a) 255,400 8,460 45747210 Iscor Ltd. (a) 604,100 346 46499C22 LTV Corp. 492,100 7,935 50192110 Mueller Industries, Inc. (a) 350,800 12,453 62475610 Nucor Corp. 310,000 16,430 67034610 52,310 METALS & MINING - 0.4% Alcan Aluminium Ltd. 220,000 4,619 01371610 Inco Ltd. 100,000 2,686 45325840 Noranda, Inc. 235,000 4,600 65542210 Phelps Dodge Corp. 50,000 2,437 71726510 Wolverine Tube, Inc. (a) 381,000 7,525 97809310 21,867 PAPER & FOREST PRODUCTS - 2.5% Abitibi-Price Inc. 100,000 1,182 00368010 Domain Industries Ltd, Class B (non-vtg.) Series 2 300,000 4,227 25703930 Domtar Inc. (a) 1,311,100 8,307 25756110 Fletcher Challenge Canada Ltd. Class A 232,307 3,625 33932D10 Georgia-Pacific Corp. 250,000 17,187 37329810 IP Timberlands, Ltd. Class A 8,600 229 44984210 International Forest Products Class A (a) 600,400 9,766 45953E10 International Paper Co. 300,000 20,325 46014610 Longview Fibre Co. 454,300 10,279 54321310 Louisiana-Pacific Corp. 301,900 12,453 54634710 Metsa Serla B 246,000 9,889 59299992 Noranda Forest, Inc. 160,000 1,453 65542L10 Plum Creek Timber Co. LP (depositary unit) 83,900 2,192 72923710 Pope & Talbot, Inc. 97,300 2,797 73282710 Repola OY 723,200 11,242 75999A92 Riverside Forest Products 90,000 1,958 76890410 St. Joe Paper Co. 4,600 233 79016110 Scott Paper Co. 45,000 1,851 80987710 Slocan Forest Products Ltd. 353,800 8,934 83158C10 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) BASIC INDUSTRIES - CONTINUED PAPER & FOREST PRODUCTS - CONTINUED Temple-Inland, Inc. 327,500 $ 16,498 87986810 Timberwest Forest Ltd. (a)(f) 200,000 2,572 88690820 Union Camp Corp. 206,000 9,811 90553010 Willamette Industries, Inc. 26,700 1,322 96913310 158,332 TOTAL BASIC INDUSTRIES 346,987 CONGLOMERATES - 2.0% CONGLOMERATES - 2.0% Alexander & Baldwin, Inc. 10,000 268 01448210 Allied-Signal, Inc. 108,100 8,540 01951210 Canadian Pacific Ltd. Ord. 1,074,000 17,571 13644030 ITT Corp. 254,000 23,177 45067910 Litton Industries, Inc. (a) 100,000 6,438 53802110 Textron, Inc. 110,000 6,408 88320310 United Technologies Corp. 1,000,000 62,000 91301710 124,402 CONSTRUCTION & REAL ESTATE - 3.0% BUILDING MATERIALS - 0.9% Armstrong World Industries, Inc. 672,300 35,800 04247610 Lafarge Corp. 323,800 7,407 50586210 Lilly Industrial Coatings, Inc. Class A 175,400 4,210 53249110 Medusa Corp. 16,900 547 58507230 Southdown, Inc. (a) 99,600 2,440 84129710 Tecumseh Products Co. Class A 183,500 8,487 87889520 USG Corp. (a) 10,000 292 90329340 59,183 CONSTRUCTION - 1.5% Butler Manufacturing Co. (Del) (a) 15,300 415 12365510 Centex Corp. 145,100 6,094 15231210 Clayton Homes, Inc. (a) 165,875 4,022 18419010 Continental Homes Holding Corp. (e) 400,600 9,214 21148C10 Kaufman & Broad Home Corp. (a) 260,000 6,175 48616810 Oakwood Homes Corp. 395,100 10,668 67409810 Pulte Corp. 173,800 6,300 74586710 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONSTRUCTION & REAL ESTATE - CONTINUED CONSTRUCTION - CONTINUED Redman Industries (a) (e) 376,700 $ 7,628 75764210 Schuler Homes, Inc. (a) 856,100 23,971 80818810 Southern Energy Homes, Inc. (a) 166,000 3,133 84281410 Standard Pacific Corp. 434,300 4,832 85375C10 Toll Brothers, Inc. (a) 463,600 7,939 88947810 90,391 ENGINEERING - 0.2% CBI Industries, Inc. 215,300 6,540 12480010 Corrpro Companies, Inc. (a) 12,000 232 22031710 Insituform Mid-America, Inc. Class A 160,000 2,240 45766H10 Rust International, Inc. (a) 10,000 228 78307510 SNC Group, Inc. Class A 95,000 1,348 78460T10 10,588 REAL ESTATE - 0.0% Hovnanian Enterprises, Inc. Class A (a) 133,900 2,025 44248720 REAL ESTATE INVESTMENT TRUSTS - 0.4% Equity Residential Property Trust, shares beneficial interest 85,000 2,709 29476L10 Manufactured Home Community 122,800 5,281 56468210 McArthur/Glen Realty Corp. (a) 85,800 2,091 57918810 Nationwide Health Properties, Inc 22,900 813 63862010 Simon Properties Group, Inc. (a) 539,000 12,195 82880510 23,089 TOTAL CONSTRUCTION & REAL ESTATE 185,276 DURABLES - 5.3% AUTOS, TIRES, & ACCESSORIES - 3.2% Chrysler Corp. 650,100 34,618 17119610 Custom Chrome, Inc. (a) 116,900 2,601 23190510 Echlin, Inc. 80,000 2,660 27874910 Federal-Mogul Corp. 380,000 11,020 31354910 Ford Motor Co. 795,200 51,290 34537010 General Motors Corp. 685,000 37,589 37044210 Goodyear Tire & Rubber Co. 900,000 41,175 38255010 Jason, Inc. (a) 95,000 1,259 47117110 Smith (A.O.) Corp. Class B 96,900 3,464 83186520 Spartan Motors, Inc. 88,050 1,497 84681910 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) DURABLES - CONTINUED AUTOS, TIRES, & ACCESSORIES - CONTINUED Titan Wheel International, Inc. (a) 76,800 $ 1,958 88832810 Wabash National Corp. 266,600 9,065 92956610 198,196 CONSUMER ELECTRONICS - 0.3% Aktiebolaget Electrolux 346,000 11,778 01019810 Fedders USA Inc. (a) 223,600 1,425 31313510 Harman International Industries, Inc. (a) 163,000 4,686 41308610 Whirlpool Corp. 71,500 4,755 96332010 22,644 HOME FURNISHINGS - 0.4% Ethan Allen Interiors, Inc. (a) 119,900 3,747 29760210 Haverty Furniture Companies, Inc.(e) 530,300 9,081 41959610 Haverty Furniture Companies, Inc. Class A 52,350 877 41959620 Miller (Herman), Inc. 60,100 1,841 60054410 Rhodes, Inc. (a) 449,000 7,521 76235P10 Rowe Furniture Corp. 16,200 344 77952810 23,411 TEXTILES & APPAREL - 1.4% Donnkenny, Inc. (Del.) (a) (e) 328,300 6,149 25800610 Forstmann & Co., Inc. (a) (e) 281,400 3,236 34659270 Haggar Corp. 20,000 510 40517310 Kellwood Co. 224,800 9,020 48804410 Mohawk Industries, Inc. (a) 201,400 6,898 60819010 Nantucket Industries, Inc. (a)(e) 165,000 1,072 63018310 Nine West Group, Inc. (a) 958,500 28,276 65440D10 Orbit Instrument Corp. (a) 306,100 1,416 68555910 Oshkosh B'Gosh, Inc. Class A 113,400 2,211 68822220 Stride Rite Corp. 814,000 13,329 86331410 Tandy Brands Accessories, Inc. (a) 172,300 3,403 87537810 Unifi, Inc. 309,100 8,307 90467710 Vista Resources, Inc. (a) 113,000 2,444 92838410 Westpoint Stevens, Inc. Class A (a) 10,000 188 96123810 86,459 TOTAL DURABLES 330,710 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - 10.0% ENERGY SERVICES - 2.0% Chiles Offshore Corp. (a) 1,234,000 $ 6,170 16888710 Energy Service, Inc. (a) 7,516,900 24,430 29271910 Global Marine, Inc. (a) 4,420,700 18,235 37935240 Halliburton Co. 200,000 6,375 40621610 Marine Drilling Companies, Inc. (a) 1,248,800 7,180 56824020 Nabors Industries, Inc. (a) 894,700 7,046 62956810 Nowsco Well Service Ltd. 361,000 5,189 67012210 Offshore Logistics, Inc. (a) 430,000 5,912 67625510 Offshore Pipelines, Inc. (a)(e) 631,100 9,940 67626910 Rowan Companies, Inc. (a) 165,900 1,493 77938210 Schlumberger Ltd. 200,000 11,825 80685710 Smith International, Inc. (a) 547,300 4,789 83211010 Tuboscope Vetco Corp. (a) 469,200 2,874 89860010 Weatherford International, Inc. (a) 787,500 8,367 94707610 Wheatley TXT Corp. 60,000 683 96271810 120,508 OIL & GAS - 8.0% Amerada Hess Corp. 390,900 17,639 02355110 Anadarko Petroleum Corp. 1,211,400 54,967 03251110 Anderson Exploration Ltd. (a) 101,000 2,207 03390110 Apache Corp. 13,000 304 03741110 Ashland Oil, Inc. 135,900 4,638 04454010 Beau Canada Exp. 1,946,300 3,461 07428010 Benton Oil & Gas Co. (a) 455,000 2,275 08328810 Blue Range Resource Corp. Class A (a) 290,500 2,143 09579K10 British Borneo Petroleum 240,800 697 11099D22 British Petroleum PLC ADR 985,900 63,098 11088940 Brown Tom, Inc. (a) (e) 883,300 9,937 11566020 Burlington Resources, Inc. 680,000 28,815 12201410 Cabot Oil & Gas Corp. Class A 307,800 6,502 12709710 Cabre Exploration Ltd. (a) 76,600 797 12690610 Canadian Natural Resources Ltd. (a) 2,446,300 33,315 13638510 Chauvco Resources Ltd. Class A (a) 500,000 6,526 16260010 Clyde Petroleum (a) 5,100,000 3,465 18958499 DEKALB Energy Corp. Class B (a) 102,500 1,409 24487410 Encal Energy Ltd. (a) 535,000 1,842 29250D10 Enron Oil & Gas Co. 155,300 6,057 29356210 Excel Energy, Inc. (a) 76,600 319 30065410 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - CONTINUED OIL & GAS - CONTINUED Grad & Walker Energy Corp.(e) 636,100 $ 6,016 38391010 HS Resources, Inc. (a)(e) 623,000 13,083 40429710 Horsham Corp. 1,024,000 15,010 44090710 Intensity Resources Ltd. (a) 988,700 2,020 45816E10 Inverness Petroleum Ltd. (a) 986,000 7,273 46190810 Jordan Petroleum Ltd. Class A (a) 472,800 3,219 48076110 Kerr-McGee Corp. 124,900 5,636 49238610 Louis Dreyfus Natural Gas Corp. (a) 192,900 3,086 54601110 Louisiana Land & Exploration Co. 39,800 1,597 54626810 Mitchell Energy & Development Corp. Class A 57,700 1,255 60659220 Murphy Oil Corp. 726,500 29,060 62671710 Newfield Exploration Co. (a) 70,600 1,244 65129010 Noble Affiliates, Inc. 667,300 17,683 65489410 Norsk Hydro AS ADR (a) 113,600 3,181 65653160 Northrock Resources Ltd. (a) 518,300 2,990 66679810 Northstar Energy Corp. (a) 378,000 7,436 66703R10 Nuevo Energy Corporation (a) 116,800 2,278 67050910 Paramount Resources Ltd. (a) 142,000 2,108 69932010 Parker & Parsley Petroleum Co. 380,500 9,417 70101810 Petromet Resources Ltd. Ord. (a) 668,600 3,162 71673110 Phillips Petroleum Co. 525,000 15,225 71850710 Pinnacle Resources Ltd. (a) 350,000 4,766 72348R10 Poco Petroleums Ltd. (a) 291,700 1,959 73036110 Renaissance Energy Ltd. (a) 936,600 20,018 75966610 Rio Alto Exploration Ltd. (a) 1,738,300 10,850 76689210 Sceptre Resources Ltd. 479,600 4,626 80621470 Snyder Oil Corp. 115,600 2,052 83348210 Summit Resources Ltd. 322,000 2,101 86624610 Sun Company, Inc. 49,200 1,445 86676210 Tarragon Oil & Gas Ltd. (a) 515,000 6,721 87629E20 Tri Link Resources Ltd. Class A (a) 85,000 900 89557D10 United Meridian Corp. (a) 85,300 1,162 91086510 Unocal Corp. 1,250,000 34,844 91528910 Vintage Petroleum, Inc. 390,900 7,085 92746010 500,921 TOTAL ENERGY 621,429 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - 2.9% BANKS - 2.2% Allied Irish Bank 3,500,000 $ 15,043 01908810 Bank International Indonesia Ord. (a) 1,000,000 4,902 06199B92 Bank of New York Co., Inc. 31,000 1,767 06405710 Bank South Corp. 268,300 4,091 06506810 Citicorp (a) 1,755,000 64,496 17303410 Dresdner Bank AG Ord. 40,000 10,655 26156110 HUBCO, Inc. 155,940 3,508 40438210 Integra Financial Corp. 247,900 10,660 45810410 Liberty Bancorporation, Inc. 12,100 339 53017510 National Westminster Bank PLC Ord. 900,000 8,242 63853930 North Fork Bancorporation, Inc. (a) 116,800 1,504 65942410 Shawmut National Corp. 102,000 2,218 82048410 Signet Banking Corp. 1,031 36 82668110 Westpac Banking Corp. 3,274,200 10,294 96121410 137,755 CLOSED END INVESTMENT COMPANY - 0.3% Free State Consolidated Gold Mines Ltd. ADR 276,800 4,706 35614220 Korea Fund, Inc. (a) 50,000 1,200 50063410 Orange Free State Investments Ltd. ADR 228,400 10,050 68486520 15,956 CREDIT & OTHER FINANCE - 0.3% Argentaria Corp. Bancaria de Esp. (a) 327,525 13,819 21991392 Gencor Ltd. (Reg.) (a) 1,700,000 3,428 36868193 Mercer International, Inc. SBI (a) 185,000 2,613 58805610 Mercury Finance Co. 13,800 264 58939510 20,124 SAVINGS & LOANS - 0.1% Crossland Federal Savings Bank, Brooklyn, NY (a) 200,000 5,600 22764B10 Progressive Bancorporation Inc. 21,200 350 74331310 Standard Federal Bank 100,000 3,000 85338910 8,950 TOTAL FINANCE 182,785 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - 7.2% DRUGS & PHARMACEUTICALS - 3.5% Astra A Free 1,000,000 $ 22,772 04632292 COR Therapeutics, Inc. (a) 235,400 3,560 21775310 Cellpro, Inc. (a) 453,900 15,773 15115610 Celtrix Laboratories, Inc. (a) 245,000 2,695 15118610 Chiron Corp. (a) 285,000 23,940 17004010 Cocensys, Inc. (a) 36,500 146 19126310 Collagen Corp. (a) 25,000 694 19419410 Cytotheraputics, Inc. (a) 196,300 2,405 23292310 Elan PLC ADR (a) 676,700 28,675 28413120 Genentech, Inc. (a) 346,200 17,483 36871020 Genetics Institute, Inc. (depositary share) 30,700 1,481 37185530 Magainin Pharmaceuticals, Inc. (a) 247,000 3,396 55903610 Merck & Co., Inc. 1,107,468 38,069 58933110 Nature's Bounty, Inc. (a)(e) 10,000 208 63901730 Perspective Biosystems, Inc. (a) 109,800 3,157 71527110 Pfizer, Inc. 547,900 37,805 71708110 Protein Design Labs, Inc. (a) 169,700 4,115 74369L10 Repligen Corp. (a) 150,000 1,031 75991610 Rexall Sundown, Inc. (a) 20,000 300 76164810 Schering-Plough Corp. 130,000 8,905 80660510 Sciclone Pharmaceuticals, Inc. (a) 107,600 2,475 80862K10 219,085 MEDICAL EQUIPMENT & SUPPLIES - 1.2% Cardinal Distribution, Inc. 432,300 20,534 14148710 Cordis Corp. (a) 173,300 8,557 21852510 FoxMeyer Corp. 225,600 2,566 35165410 Herbalife International, Inc. 10,000 177 42690810 Kendall International, Inc. (a) 40,000 1,840 48875110 Kirschner Medical Corp. (a) 30,000 195 49766010 Maxxim Medical, Inc. (a) 48,900 984 57777G10 McKesson Corp. 40,200 2,171 58155610 Medtronic, Inc. 310,000 25,459 58505510 Owens & Minor, Inc. 35,300 812 69073010 Patterson Dental Co. (a) 176,200 5,727 70341210 Sybron Corp. (a) 75,300 2,410 87114F10 Thermedics, Inc. (a) 55,750 843 88390110 72,275 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - CONTINUED MEDICAL FACILITIES MANAGEMENT - 2.5% Abbey Healthcare Group, Inc. (a) 173,200 $ 4,806 00278610 America Medical Holdings, Inc. (a) 20,000 383 02742810 Columbia Healthcare Corp. 1,584,965 52,700 19767910 HEALTHSOUTH Rehabilitation Corp. (a) 505,700 12,769 42192410 Health Management Associates, Inc. Class A (a) 940,450 27,508 42193310 Homecare Management, Inc. (a) 320,000 4,360 43738620 Lincare Holdings, Inc. (a) 200,300 4,982 53279110 Multicare Companies, Inc. (a) 80,800 1,475 62543V10 Rehabcare Corp. (a)(e) 227,000 2,554 75914810 U.S. Healthcare, Inc. 571,700 32,944 91191010 United HealthCare Corp. 200,000 15,175 91058110 Universal Health Services, Inc. Class B (a) 3,500 72 91390310 159,728 TOTAL HEALTH 451,088 INDUSTRIAL MACHINERY & EQUIPMENT - 2.3% ELECTRICAL EQUIPMENT - 0.7% BMC Industries, Inc. (a) 127,400 2,691 05560710 California Microwave Corp. (a) 1,400 34 13044210 General Electric Co. 125,000 13,109 36960410 Itel Corp. (a) 77,500 2,170 46564210 Philips NV (a) 775,000 15,985 71833750 Roper Industries, Inc. 195,600 6,357 77669610 Willcox & Gibbs, Inc. (a) 360,300 2,792 96920710 Yurtec Corp. (a) 16,650 381 97299492 43,519 INDUSTRIAL MACHINERY & EQUIPMENT - 1.2% Astec Industries, Inc. (a) 419,100 6,444 04622410 Bearings, Inc. 400 11 07400520 CMI Corp. Oklahoma Class A 785,300 5,399 12576130 Caterpillar, Inc. 550,000 48,950 14912310 Dover Corp. 36,000 2,187 26000310 FSI International, Inc. (a) 10,000 120 30263310 Indresco, Inc. (a) 304,000 4,712 45590510 JLG Industries, Inc. 15,000 371 46621010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED INDUSTRIAL MACHINERY & EQUIPMENT - CONTINUED Park-Ohio Industries, Inc. (a) 343,200 $ 4,419 70067710 Regal-Beloit Corp. 80,500 2,123 75875010 TRINOVA Corp. 42,600 1,337 89667810 76,073 POLLUTION CONTROL - 0.4% Allied Waste Industries, Inc. (a) 20,000 105 01958930 Envirotest Systems Corp. (a) 12,000 258 29409W10 Harding Associates, Inc. (a) 38,800 349 41226410 OHM Corp.(a) 1,353,500 15,734 67083910 Sanifill, Inc. (a) 127,400 2,771 80101810 TRC Companies, Inc. (a) 20,000 215 87262510 United Waste Systems, Inc. (a) 347,400 5,385 91317410 24,817 TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 144,409 MEDIA & LEISURE - 8.4% BROADCASTING - 3.7% Adelphia Communications Class A (a) 32,000 600 00684810 BET Holdings, Inc. Class A (a) 20,000 395 08658510 Broadcasting Partners, Inc. Class A (a)(e) 439,200 6,917 11131910 CBS, Inc. 60,000 17,310 12484510 Capital Cities/ABC, Inc. 60,000 37,170 13985910 Clear Channel Communications, Inc. (a) 464,000 21,344 18450210 Comcast Corp. Class A (special) 339,800 12,233 20030020 EZ Communications, Inc. (a) 294,200 4,634 26928810 Heritage Media Corp. Class A (a) 762,800 15,161 42724120 Home Shopping Network, Inc. 1,796,500 26,723 43735110 Infinity Broadcasting Corp. (a) 210,842 6,378 45662610 Jacor Communications, Inc. Class A 603,000 8,668 46985840 Liberty Media Corp. Class A (a) 125,000 3,640 53071530 Saga Communications, Inc. Class A (a) (e) 327,800 5,614 78659810 Scandinavian Broadcasting Corp. (a) 40,000 840 80699E92 TCA Cable TV, Inc. 60,000 1,710 87224110 Tele-Communications, Inc. Class A (a) 883,900 26,738 87924010 Time Warner, Inc. 775,944 34,335 88731510 230,410 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED ENTERTAINMENT - 0.5% Cedar Fair LP (depositary units) 60,500 $ 2,125 15018510 Disney (Walt) Co. 10,000 426 25468710 Players International, Inc. (a) 332,900 8,239 72790310 PolyGram N.V. ADR 315,000 12,403 73173310 Royal Caribbean Cruises Ltd. 440,000 11,770 78015392 34,963 LEISURE DURABLES & TOYS - 0.7% ARCTCO, Inc. 525,200 12,605 03966510 Authentic Fitness Corp. (a) 12,100 340 05266110 Fleetwood Enterprises, Inc. 160,300 3,807 33909910 Hasbro, Inc. 270,000 9,788 41805610 Mattel, Inc. 440,175 12,160 57708110 Thor Industries, Inc. 106,100 2,732 88516010 41,432 LODGING & GAMING - 2.4% Autotote Corp. Class A (a) 10,000 220 05332310 Genting BHD (ML EX) 677,000 9,424 37245210 Grand Palais Enterprises, Inc. (a)(g) 398,400 6,597 38699522 Hilton Hotels Corp. 221,400 13,450 43284810 Hong Kong & Shanghai Hotels 9,000,000 17,354 71899292 Hospitality Franchise Systems, Inc. (a) 785,300 41,719 44091210 La Quinta Motor Inns, Inc. 464,250 16,365 50419510 Lottery Enterprises, Inc. (a) 25,000 413 54569410 Marriott International, Inc. 400,000 11,600 57190010 Mirage Resorts, Inc. (a) 483,350 11,540 60462E10 Station Casinos, Inc. (a) 212,500 4,197 85768910 WMS Industries, Inc. (a) 518,900 14,918 92929710 147,797 PUBLISHING - 0.7% American Greetings Corp. Class A 95,200 3,237 02637510 Belo (A.H.) Corp. Class A 111,700 5,920 08055510 Enquirer/Star Group, Inc. Class A 283,400 5,385 29355410 Gannett Co., Inc. 250,000 14,313 36473010 Harte Hanks Communications, Inc. (a) 40,000 780 41619610 MaClean Hunter Ltd. 463,300 4,425 55474980 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED PUBLISHING - CONTINUED Meredith Corp. 263,600 $ 10,544 58943310 Park Communications, Inc. (a) 90,000 1,890 70025210 Score Board, Inc. (a) 25,000 459 80917320 46,953 RESTAURANTS - 0.4% Consolidated Products, Inc. (a) 224,030 2,240 20979810 Ground Round Restaurants, Inc. (a) (e) 755,200 5,947 39942710 IHOP Corp. (a) 309,500 8,976 44962310 McDonald's Corp. 50,000 2,850 58013510 Quantum Restaurant Group, Inc. (a) 153,100 1,875 74763T10 Shoney's, Inc. (a) 110,000 2,544 82503910 Uno Restaurant Corp. (a) 27,700 270 91490010 24,702 TOTAL MEDIA & LEISURE 526,257 NONDURABLES - 3.7% AGRICULTURE - 0.1% Pioneer Hi-Bred International, Inc. 119,700 4,668 72368610 BEVERAGES - 0.6% Canadaigua Wine Co. Class A (a) 406,900 12,817 13721920 Coca-Cola Bottling Co. Consolidated 10,100 369 19109810 Dr. Pepper/Seven-Up Companies, Inc. (a) 1,110,000 26,640 25613130 39,826 FOODS - 0.6% CPC International, Inc. 295,700 14,083 12614910 Chock Full-O-Nuts Corp. 498,000 3,984 17026810 Dean Foods Co. 137,800 4,496 24236110 IBP, Inc. 529,600 13,703 44922310 Michael Foods, Inc. 20,000 160 59407410 Pet, Inc. 125,400 2,195 71582510 38,621 HOUSEHOLD PRODUCTS - 1.3% DEP Corp. Class A (a) 406,000 2,132 23320220 Gillette Company 750,800 44,766 37576610 Paragon Trade Brands, Inc. (a) 332,600 9,812 69912K10 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) NONDURABLES - CONTINUED HOUSEHOLD PRODUCTS - CONTINUED Premark International, Inc. 160,000 $ 12,840 74045910 Safeskin Corp. 431,900 6,910 78645410 Stanhome, Inc. 202,100 6,846 85442510 83,306 TOBACCO - 1.1% Philip Morris Companies, Inc. 1,000,000 55,750 71815410 RJR Nabisco Holdings Corp. (a) 1,782,700 11,365 74960K10 67,115 TOTAL NONDURABLES 233,536 PRECIOUS METALS - 3.4% PRECIOUS METALS - 3.4% Agnico Eagle Mines Ltd. 167,900 2,191 00847410 American Barrick Resources Corp. 830,000 23,627 02451E10 Anglo American Corp. South Africa: (Reg.) 57,600 2,947 03486110 ADR (a) 159,400 8,349 03486130 Cambior Inc. 791,400 11,975 13201L10 Euro-Nevada Mining Corp. 511,500 18,237 29870P10 Franco Nevada Mining Corp. 276,000 19,002 35186010 Golden Star Resources, Ltd. Canada (a) 362,200 4,864 38119T10 Homestake Mining Co. 1,500,000 33,000 43761410 Newmont Mining Corp. 365,000 21,033 65163910 Placer Dome Inc. 1,015,000 25,245 72590610 St. Helena Gold Mines Ltd. Ord. 11,300 116 78967010 TVX Gold, Inc. (a) 400,000 2,648 87308K10 Vaal Reefs Exploration & Mining Co. Ltd. ADR 29,200 296 91850640 Western Deep Levels Ltd. ADR 380,000 18,430 95807720 Western Mining Corp. Holdings Ltd 3,000,000 14,342 95869410 Zapopan NL (a) 4,298,500 8,698 98999293 215,000 RETAIL & WHOLESALE - 3.6% APPAREL STORES - 0.8% AnnTaylor Stores Corp. (a) 414,800 10,266 03611510 Filene's Basement Corp. (a) 337,200 3,667 31686610 Gap, Inc. 650,000 25,594 36476010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED APPAREL STORES - CONTINUED Merry-Go-Round Enterprises, Inc. 650,000 $ 2,194 59043610 Petrie Stores Corp. 138,500 4,034 71643410 Sportmart, Inc. (a) 35,000 621 84892210 Talbots, Inc. 1,000 26 87416110 United States Shoe Corp. 280,000 4,200 91260510 50,602 APPLIANCE STORES - 0.2% Cellstar Corp. (a) 674,500 11,298 15092510 GENERAL MERCHANDISE STORES - 0.9% Hills Stores Co. (a) 8,000 163 43169210 Hudsons Bay Co. Ord. 284,500 8,502 44420410 Kohls Corp. (a) 600 30 50025510 Neiman-Marcus Group, Inc. 397,800 7,459 64020410 Penney (J.C.) Co., Inc. 300,000 15,712 70816010 Price/Costco, Inc. 1,050,000 20,213 74143W10 Value City Department Stores, Inc. (a) 68,700 1,005 92038710 53,084 GROCERY STORES - 0.4% Food Lion, Inc. Class A 201,600 1,310 34477520 Ingles Markets, Inc. Class A 87,900 967 45703010 Pick N Pay Stores Ltd. (a) 998,000 3,024 72199422 Richfood Holdings, Inc. Class A 767,000 13,423 76340810 Ruddick Corp. 20,000 463 78125810 Rykoff-Sexton, Inc. 236,300 5,169 78375910 24,356 RETAIL & WHOLESALE, MISC - 1.3% Amway Asia Pacific Ltd. (a) 10,500 374 03299H22 50-Off Stores, Inc. (a) 477,000 3,279 31681110 Fabri-Centers of America, Inc. (a) 174,200 3,266 30284610 Fingerhut Companies, Inc. 45,500 1,280 31786710 Friedmans, Inc. Class A (a) 125,000 1,719 35843810 Futures Shops Ltd. 97,000 2,275 36091310 Good Guys, Inc. (a) 89,300 1,161 38209110 Lowe's Companies, Inc. 410,000 24,293 54866110 Luria (L.) & Son, Inc. (a) 251,900 3,778 55048410 Musicland Stores Corp. 515,000 10,686 62758B10 Office Depot, Inc. (a) 225,000 7,566 67622010 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED RETAIL & WHOLESALE, MISC - CONTINUED Toys "R" Us, Inc. (a) 500,000 $ 20,437 89233510 Wickes Lumber Co. (a) 150,000 2,681 96744610 82,795 TOTAL RETAIL & WHOLESALE 222,135 SERVICES - 2.1% ADVERTISING - 0.2% Foote Cone & Belding Communications, Inc. 13,300 639 34487210 Regal Communication Corp. (a) (e) 1,837,900 7,696 75875630 8,335 LEASING & RENTAL - 0.0% Agency Rent-A-Car, Inc. (a) 167,500 2,198 00845010 PRINTING - 0.4% Cadmus Communications Corp. 140,700 1,970 12758710 Cryk, Inc. (a) 50,000 1,150 23281710 Moore Corporation Ltd. 660,000 12,733 61578510 Reynolds & Reynolds Co. Class A 160,600 7,327 76169510 Valassis Communications, Inc. 69,400 928 91886610 Wallace Computer Services, Inc. 68,600 2,324 93227010 26,432 SERVICES - 1.5% Barefoot, Inc. (a) 225,700 7,787 06751210 Block (H&R), Inc. 60,000 2,445 09367110 CDI Corp. (a) 254,200 3,177 12507110 Catalina Marketing Corp. (a) 6,500 325 14886710 Ecolab, Inc. 164,600 7,407 27886510 Fair Issac & Company, Inc. 70,000 1,575 30325010 Franklin Quest Co. (a) 175,400 6,183 35459610 Medaphis Corp. 350,200 11,557 58402810 Michael Anthony Jewelers, Inc. (a)(e) 500,000 4,187 59406010 Oroamerica, Inc. (a) 82,700 1,241 68702710 Pittston Company Services Group 1,084,100 31,303 72570110 Robert Half International, Inc. (a) 428,700 11,253 77032310 Service Corp. International 110,000 2,888 81756510 91,328 TOTAL SERVICES 128,293 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - 11.0% COMMUNICATIONS EQUIPMENT - 1.3% Cisco Systems, Inc. (a) 224,300 $ 14,495 17275R10 DSC Communications Corp. (a) 30,000 1,845 23331110 Harmon Industries, Inc. (a)(e) 150,500 3,461 41313610 Inter-Tel, Inc. (a) 766,900 6,710 45837210 Lo Jack Corp. (a) 120,000 825 53945110 MB Communications, Inc. (a) (e) 1,024,600 21,773 55262M10 Porta Systems Corp. (e) 433,200 4,278 73564710 3Com Corp. (a) 337,800 15,877 88553510 VMX, Inc. (a) 1,123,000 4,352 91827610 Wellfleet Communications, Inc. (a) 140,000 9,030 94949710 82,646 COMPUTER SERVICES & SOFTWARE - 2.7% ASK Computer Systems, Inc. (a) 25,000 328 00190310 Adobe Systems, Inc. 202,300 4,501 00724F10 BancTec, Inc. (a) 153,500 3,722 05978410 Computer Associates International, Inc. 239,600 9,584 20491210 CompuCom Systems, Inc. (a) 339,500 1,379 20478010 Electronic Arts (a) 30,000 900 28551210 Electronic Information Systems, Inc. (a) 277,800 3,681 28573810 Equifax Inc. 640,000 17,520 29442910 Government Technology Services, Inc. (a) 50,300 641 38375010 HBO & Co. 1,000 46 40410010 Intelligent Electronics, Inc. 62,200 1,703 45815710 KnowledgeWare, Inc. (a) 400,000 6,150 49924510 Lotus Development Corp. (a) 988,000 54,340 54570010 Micrografx, Inc. (a) 150,000 1,359 59507710 Microsoft Corp. (a) 316,700 25,534 59491810 Payco American Corp. (a) 27,500 289 70432710 SafeCard Services, Inc. 733,500 13,845 78642110 State of The Art, Inc. (a) 426,400 3,145 85730710 Sterling Software, Inc. (a) 68,800 1,952 85954710 Stratacom, Inc. (a) 457,500 7,663 86268310 Symantec Corp. (a) 35,000 639 87150310 Systems & Computer Technology Corp. 40,000 720 87187310 VMark Software, Inc. (a)(e) 455,600 6,492 92856110 Warner Insurance Services, Inc. (e) 440,950 2,205 93446710 168,338 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - 5.7% ADAPTEC, Inc. (a) 105,000 $ 4,174 00651F10 AST Research, Inc. (a) 850,000 19,338 00190710 Amdahl Corp. 1,509,600 9,058 02390510 Compaq Computer Corp. (a) 525,000 38,850 20449310 Creative Technologies, Corp. (a) 193,900 6,156 22599992 Dell Computer Corporation (a) 733,200 16,589 24702510 Diebold, Inc. 337,300 20,322 25365110 Digital Biometrics, Inc. (a) 206,200 2,681 25383310 Exabyte (a) 325,900 5,744 30061510 Hewlett-Packard Co. 325,700 25,730 42823610 Hutchinson Technology, Inc. (a) 15,500 453 44840710 International Business Machines Corp. 2,016,500 113,932 45920010 Itron, Inc. (a) 50,000 900 46574110 Media Vision Technology, Inc. 485,900 21,258 58445H10 Merisel, Inc. (a) 261,400 4,803 58984910 Micropolis Corp. (a) 612,300 4,286 59490710 Miltope Group, Inc. (a)(e) 384,700 1,587 60219110 NAI Technologies, Inc. (a) 260,000 1,690 62872H10 Norand Corp. (a) 12,500 341 65542110 Photonics Corp. (a) (e) 222,500 1,391 71937W10 Quantum Corp. (a) 337,000 4,760 74790610 Seagate Technology (a) 6,700 159 81180410 Sequent Computer Systems, Inc. (a) 500,000 7,625 81733810 Sun Microsystems, Inc. (a) 216,700 6,311 86681010 Symbol Technologies, Inc. (a) 290,000 5,256 87150810 Syquest Technology, Inc. (a) (e) 610,800 6,261 87166010 Tech Data Corp. (a) 110,000 3,960 87823710 Xerox Corp. 250,000 22,344 98412110 Xylogics, Inc. (a) (e) 70,000 1,155 98415210 357,114 ELECTRONIC INSTRUMENTS - 0.0% Fisher Scientific International, Inc. 50,000 1,769 33803210 ELECTRONICS - 1.3% Analog Devices, Inc. (a) 20,000 493 03265410 Dovatron International, Inc. (a)(e) 414,300 11,393 25985910 Intel Corp. 225,000 13,950 45814010 International Rectifier Corp. (a) 368,400 5,158 46025410 LSI Logic Corp. (a) 301,200 4,819 50216110 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED ELECTRONICS - CONTINUED Linear Technology Corp. 109,800 $ 4,255 53567810 Maxim Integrated Products, Inc. (a) 54,900 2,628 57772K10 Motorola, Inc. 110,000 10,161 62007610 Photronics, Inc. (a) 47,500 760 71940510 Samsung Electronics Co. Ltd. GDR (a)(f) 6,574 222 79605030 Sanmina Corp. (a) 369,600 9,887 80090710 Solectron Corp. (a) 50,000 1,419 83418210 Storage Technology Corp. (a) 55,000 1,739 86211120 Texas Instruments, Inc. 174,400 11,074 88250810 77,958 TOTAL TECHNOLOGY 687,825 TRANSPORTATION - 4.3% AIR TRANSPORTATION - 1.0% AMR Corp. (a) 245,000 16,415 00176510 Comair Holdings, Inc. 123,300 2,820 19978910 Mesa Airlines, Inc. (a) 50,000 888 59048110 Southwest Airlines Co. 20,000 750 84474110 UAL Corp. (a) 273,100 39,873 90254910 60,746 RAILROADS - 2.2% Burlington Northern, Inc. 425,000 24,597 12189710 CSX Corp. 413,200 33,469 12640810 Chicago & North Western Holdings Corp. (a) 170,000 4,250 16715510 Conrail, Inc. 344,100 23,012 20836810 Illinois Central Corp., Series A 186,500 6,690 45184110 Santa Fe Pacific Corp. 1,507,300 33,537 80218310 Southern Pacific Rail Corp. (a) 120,000 2,370 84358410 Trinity Industries, Inc. 89,850 3,875 89652210 Wisconsin Central Transportation Corp. (a) 153,100 9,148 97659210 140,948 TRUCKING & FREIGHT - 1.1% Airborne Freight Corp. 104,000 3,653 00926610 American Freightways Corp. (a) 22,500 444 02629V10 Consolidated Freightways, Inc. (a) 1,077,300 25,451 20923710 Federal Express Corp. (a) 445,000 31,539 31330910 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TRANSPORTATION - CONTINUED TRUCKING & FREIGHT - CONTINUED Frozen Food Express Industries, Inc. 41,333 $ 754 35936010 Harper Group 57,500 1,035 41345910 Landstar System, Inc. (a) 187,100 4,140 51509810 Swift Transportation Co., Inc. (a) 22,500 484 87075610 TNT Freightways Corp. 31,950 863 87259J10 Werner Enterprises, Inc. 31,100 949 95075510 69,312 TOTAL TRANSPORTATION 271,006 UTILITIES - 3.1% CELLULAR - 0.7% BCE Mobile Communications, Inc. 200,000 6,261 05534G10 Cellular, Inc. (a) 10,000 175 15116310 LIN Broadcasting Corp. (a) 31,300 3,459 53276310 Metrocall, Inc. (a) 30,700 537 59164710 Rogers Cantel Mobile Communications, Inc. Class B (non-vtg.) (a) 438,000 11,764 77510210 Rogers Communications, Inc. Class B (a) 204,100 3,378 77510920 Vodafone Group PLC 2,450,000 21,477 92857T92 47,051 ELECTRIC UTILITY - 1.6% Baltimore Gas & Electric Co. 50,000 1,269 05916510 Central & South West Corp. 278,900 8,437 15235710 DPL, Inc. 32,400 668 23329310 DQE, Inc. 91,200 3,146 23329J10 Entergy Corp. 789,900 28,436 29364F10 General Public Utilities Corp. 40,000 1,235 37055010 Gulf States Utilities Corp. (a) 816,800 16,336 40255010 Houston Industries, Inc. 259,400 12,354 44216110 Idaho Power Co. 56,300 1,710 45138010 LG&E Energy Corp. 13,400 543 50191710 NIPSCO Industries, Inc. 63,000 2,071 62914010 Philadelphia Electric Co. 67,300 2,036 71753710 Pinnacle West Capital Corp. (a) 79,900 1,788 72348410 Public Service Co. of Colorado 84,600 2,718 74444810 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - CONTINUED ELECTRIC UTILITY - CONTINUED Southern Co. 179,400 $ 7,916 84258710 Texas Utilities Co. 162,900 7,045 88284810 97,708 GAS - 0.1% British Gas PLC Ord. 400,000 2,021 11090199 Equitable Resources, Inc. 95,000 3,479 29454910 Southern Union Company (a) 112,160 2,972 84403010 8,472 TELEPHONE SERVICES - 0.7% Ameritech Corp. 220,000 16,885 03095410 BCE, Inc. 80,000 2,792 05534B10 Bell Atlantic Corp. 200,000 11,800 07785310 LDDS Communications, Inc. (a) 20,000 965 50182L10 Southern New England Telecommunications Corp. 20,000 722 84348510 Southwestern Bell Corp. 55,000 2,283 84533310 Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L 105,000 7,087 87940378 42,534 TOTAL UTILITIES 195,765 TOTAL COMMON STOCKS (Cost $4,586,266) 4,954,472 PREFERRED STOCKS - 0.8% CONVERTIBLE PREFERRED STOCKS - 0.4% CONSTRUCTION & REAL ESTATE - 0.1% REAL ESTATE - 0.1% Rouse Co. Series A 100,900 5,423 77927320 TRANSPORTATION - 0.3% AIR TRANSPORTATION - 0.3% UAL, Inc. 6 1/4% (f) 175,600 19,338 90254930 PREFERRED STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONVERTIBLE PREFERRED STOCKS - CONTINUED TRANSPORTATION - CONTINUED TRUCKING & FREIGHT - 0.0% Consolidated Freightways, Inc. Series C, $1.54 30,000 $ 664 20923720 TOTAL TRANSPORTATION 20,002 TOTAL CONVERTIBLE PREFERRED STOCKS 25,425 NONCONVERTIBLE PREFERRED STOCKS - 0.4% UTILITIES - 0.4% TELEPHONE SERVICES - 0.4% SIP (Societa Ital Per L'Eser) Spa Di Risp N/C Ord. 5,657,200 10,299 78401796 Stet Societa Finanziaria Telefonica Spa 7,500,000 15,140 85982592 25,439 TOTAL PREFERRED STOCKS (Cost $50,439 ) 50,864 CORPORATE BONDS - 0.8% MOODY'S RATINGS PRINCIPAL (UNAUDITED) (C) AMOUNT (000S) CONVERTIBLE BONDS - 0.4% DURABLES - 0.1% TEXTILES & APPAREL - 0.1% Unifi, Inc. 6%, 3/15/02 Baa1 $ 6,500 7,215 904677AC HEALTH - 0.0% MEDICAL FACILITIES MANAGEMENT - 0.0% Abbey Healthcare Group, Inc. 6 1/2%, 12/1/02 (f) B2 290 409 002786AA RETAIL & WHOLESALE - 0.2% RETAIL & WHOLESALE, MISC - 0.2% Fabri-Centers of America, Inc. 6 1/4%, 3/1/02 B2 7,300 6,497 302846AB Intertan Inc. 9%, 8/30/00 - 5,270 4,226 461120AA 10,723 CORPORATE BONDS - CONTINUED MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1) (UNAUDITED) (C) AMOUNT (000S) (000S) CONVERTIBLE BONDS - CONTINUED TECHNOLOGY - 0.1% COMMUNICATIONS EQUIPMENT - 0.1% General Instrument Corp. 5%, 6/15/00 B1 $ 3,000 $ 4,020 370121AA Porta Systems Corp. euro 6%, 7/1/02 - 130 96 7356479A 4,116 TOTAL CONVERTIBLE BONDS 22,463 NONCONVERTIBLE BONDS - 0.4% FINANCE - 0.2% BANKS - 0.2% International Bank for Reconstruction & Development euro 5 1/4%, 3/20/02 - 1,200,000 12,212 4590569J MEDIA & LEISURE - 0.0% BROADCASTING - 0.0% Time Warner, Inc. 0%, 8/15/02 (d) Ba1 3,300 2,999 887315AG RETAIL & WHOLESALE - 0.2% GROCERY STORES - 0.2% Rykoff Sexton, Inc. 8 7/8%, 11/1/03 Ba2 12,000 12,300 783759AC TOTAL NONCONVERTIBLE BONDS 27,511 TOTAL CORPORATE BONDS (Cost $47,798) 49,974 U.S. TREASURY OBLIGATIONS - 8.0% U.S. Treasury Bills, yields at date of purchase 0%-3.13%, 2/24/94 (Cost $497,596) 500,000 497,720 99399H5H OTHER SECURITIES - 0.1% PURCHASED BANK DEBT - 0.1% Macy (R.H.) & Co., Inc.: (b) funded letter of credit 5/27/95 1,896 1,517 mortgage loan participation 5/27/94 2,500 1,988 556994BK revolver loan variable rate 5/27/95 605 484 556994CH OTHER SECURITIES - CONTINUED PRINCIPAL VALUE (NOTE 1) AMOUNT (000S) (000S) PURCHASED BANK DEBT - CONTINUED Macy (R.H.) & Co., Inc. (b) - continued special real estate capitalization 9/30/95 $ 287 $ 229 557991AA term loan variable rate note: 5/27/95 799 639 556994CG 5/27/96 304 243 556993BD 5/27/96 728 583 556993BE TOTAL OTHER SECURITIES (Cost $4,859) 5,683 REPURCHASE AGREEMENTS - 11.0% MATURITY AMOUNT (000S) Investments in repurchase agreements (U.S. Treasury obligations), in a joint trading account at 3.23% dated 12/31/93 due 1/3/94 $ 684,233 684,049 TOTAL INVESTMENT IN SECURITIES - 100% (Cost $5,871,007) $ 6,242,762 FORWARD FOREIGN CURRENCY CONTRACTS AMOUNTS IN THOUSANDS SETTLEMENT UNREALIZED DATE(S) VALUE GAIN/(LOSS) CONTRACTS TO BUY 3,723,846 JPY (Payable amount $34,829) 2/10/94 $ 33,344 $ (1,485) THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 0.5% CONTRACTS TO SELL 5,494,296 JPY (Receivable amount $50,782) 2/10/94 $ 49,196 $ 1,586 THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN SECURITIES - 0.8% LEGEND 1. Non-income producing 2. Non-income producing - issuer filed for protection under the Federal Bankruptcy Code or is in default of interest payment. 3. Standard & Poor's Corporation credit ratings are used in the absence of a rating by Moody's Investors Service, Inc. 4. Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. 5. Affiliated company (see Note 6 of Notes to Financial Statements). 6. 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 $22,541,000 or .4% of net assets. 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 Grand Palais Enterprises, Inc. 6/11/93 $ 6,598,000 OTHER INFORMATION Distribution of investments by country, as a percentage of total value of investment in securities, is as follows: United States 86.5% Canada 6.3 United Kingdom 1.6 Others (individually less than 1%) 5.6 TOTAL 100.0% INCOME TAX INFORMATION At December 31, 1993 the aggregate cost of investment securities for income tax purposes was $5,886,032,000. Net unrealized appreciation aggregated $356,730,000, of which $462,590,000 related to appreciated investment securities and $105,860,000 related to depreciated investment securities. The fund hereby designates $68,130,000 as a capital gain dividend for the purpose of the dividend paid deduction. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES
AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) DECEMBER 31, 1993 ASSETS Investment in securities, at value (including repurchase $ 6,242,762 agreements of $684,049) (cost $5,871,007) (Notes 1 and 2) - See accompanying schedule Long foreign currency contracts held, at value (cost 33,344 $34,829) (Note 2) Short foreign currency contracts (Note 2) $ (49,196) Contracts held, at value Receivable for contracts held 50,782 1,586 Cash 1 Receivable for investments sold 228,706 Receivable for fund shares sold 37,179 Dividends receivable 5,257 Interest receivable 752 Other receivables 173 TOTAL ASSETS 6,549,760 LIABILITIES Payable for foreign currency contracts held (Note 2) 34,829 Payable for investments purchased 168,396 Payable for fund shares redeemed 40,915 Dividends payable 7,568 Accrued management fee 3,454 Other payables and accrued expenses 3,607 Collateral on securities loaned, at value (Note 5) 83,431 TOTAL LIABILITIES 342,200 NET ASSETS $ 6,207,560 Net Assets consist of (Note1): Paid in capital $ 5,738,003 Distributions in excess of net investment income (174) Accumulated undistributed net realized gain (loss) on 97,875 investments Net unrealized appreciation (depreciation) on: Investment securities 371,755 Foreign currency contracts 101 NET ASSETS, for 201,286 shares outstanding $ 6,207,560 NET ASSET VALUE and redemption price per share $30.84 ($6,207,560 (divided by) 201,286 shares) Maximum offering price per share (100/97.00 of $30.84) $31.79
STATEMENT OF OPERATIONS
AMOUNTS IN THOUSANDS YEAR ENDED DECEMBER 31, 1993 INVESTMENT INCOME $ 41,707 Dividends (including $167 from affiliated issuers) (Note 6) Interest (including security lending fees of $62) (Note 5) 21,114 TOTAL INCOME 62,821 EXPENSES Management fee (Note 4) $ 25,826 Basic fee Performance adjustment 2,669 Transfer agent fees (Note 4) 12,923 Accounting fees and expenses (Note 4) 802 Non-interested trustees' compensation 25 Custodian fees and expenses 581 Registration fees 1,668 Audit 52 Legal 45 Miscellaneous 113 Total expenses before reductions 44,704 Expense reductions (Note 7) (954) 43,750 NET INVESTMENT INCOME 19,071 REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 3) Net realized gain (loss) on: Investment securities (including realized gain of $6,738 474,500 on sale of affiliated issuers) Foreign currency contracts 6,113 480,613 Change in net unrealized appreciation (depreciation) on: Investment securities 180,257 Foreign currency contracts 101 180,358 NET GAIN (LOSS) 660,971 NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM $ 680,042 OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS
AMOUNTS IN THOUSANDS YEARS ENDED DECEMBER 31, 1993 1992 INCREASE (DECREASE) IN NET ASSETS Operations $ 19,071 $ 15,913 Net investment income Net realized gain (loss) on investments 480,613 155,091 Change in net unrealized appreciation (depreciation) 180,358 42,217 on investments NET INCREASE (DECREASE) IN NET ASSETS RESULTING 680,042 213,221 FROM OPERATIONS Distributions to shareholders: (19,956) (13,036) From net investment income In excess of net investment income (12,201) - Net realized gain (387,128) (109,733) TOTAL DISTRIBUTIONS (419,285) (122,769) Share transactions 5,259,147 1,803,211 Net proceeds from sales of shares Reinvestment of distributions from: 31,301 12,740 Net investment income Net realized gain 379,054 108,001 Cost of shares redeemed (1,709,099) (1,028,207) Net increase (decrease) in net assets resulting from 3,960,403 895,745 share transactions TOTAL INCREASE (DECREASE) IN NET ASSETS 4,221,160 986,197 NET ASSETS Beginning of period 1,986,400 1,000,203 End of period (including under (over) distribution of $ 6,207,560 $ 1,986,400 net investment income of ($174) and $22,785, respectively) OTHER INFORMATION Shares Sold 170,736 67,906 Issued in reinvestment of distributions from: 1,036 468 Net investment income Net realized gain 12,573 4,002 Redeemed (55,382) (39,126) Net increase (decrease) 128,963 33,250
FINANCIAL HIGHLIGHTS
YEARS ENDED DECEMBER 31, 1993 1992# 1991 1990 1989 SELECTED PER-SHARE DATA Net asset value, beginning of $ 27.47 $ 25.60 $ 17.35 $ 16.78 $ 12.65 period Income from Investment Operations Net investment income (.09) .32(dagger) .22 .51 .63(double dagger) Net realized and unrealized 5.89 3.67 9.20 .15 4.82 gain (loss) on investments Total from investment 5.80 3.99 9.42 .66 5.45 operations Less Distributions From net investment income (.11) (.20) (.11) (.09) (.25) In excess of net investment (.07) - - - - income From net realized gain (2.25) (1.92) (1.06) - (1.07) Total distributions (2.43) (2.12) (1.17) (.09) (1.32) Net asset value, end of period $ 30.84 $ 27.47 $ 25.60 $ 17.35 $ 16.78 TOTAL RETURN * ** 21.43% 15.89% 54.92% 3.94% 43.15% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 6,208 $ 1,986 $ 1,000 $ 332 $ 298 (in millions) Ratio of expenses to average 1.06% .87% .89% 1.06% .95% net assets (diamond) Ratio of expenses to average 1.08% .87% .89% 1.06% .95% net assets before expense (diamond) reductions Ratio of net investment income .46% 1.19% 1.01% 3.02% 4.01% to average net assets Portfolio turnover rate 255% 297% 217% 320% 266%
* TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE. ** THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIOD SHOWN. # AS OF JANUARY 1, 1992 THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING. (dagger) NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. (double dagger) INVESTMENT INCOME PER SHARE REFLECTS A SPECIAL DIVIDEND WHICH AMOUNTED TO $.20 PER SHARE. (diamond) SEE NOTE 7 OF NOTES TO FINANCIAL STATEMENTS. NOTES TO FINANCIAL STATEMENTS For the period ended December 31, 1993 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Contrafund (the fund) is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust and is authorized to issue an unlimited number of shares. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Securities (including restricted securities) for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange), are valued primarily using dealer-supplied valuations or at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Short-term securities maturing within sixty days are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities, other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the current exchange rate. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the exchange rate on the dates of the transactions. It is not practical to identify the portion of each amount shown in the fund's Statement of Operations under the caption "Realized and Unrealized Gain (Loss) on Investments" that arises from changes in foreign currency exchange rates. Investment income includes net realized and unrealized currency gains and losses recognized between accrual and payment dates. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes all of its taxable income for its fiscal year. The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Interest income is accrued as earned. Dividend and interest income is recorded net of foreign taxes where recovery of such taxes is not assured. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences are primarily due to differing treatments for market discount, partnerships, non-taxable 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED dividends and losses deferred due to wash sales, futures and options, excise tax regulations. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS. Effective January 1, 1993, the fund adopted Statement of Position 93-2: Determination, Disclosure, and Financial Statement Presentation of Income, Capital Gain, and Return of Capital Distributions by Investment Companies. As a result, the fund changed the classification of distributions to shareholders to better disclose the differences between financial statement amounts and distributions determined in accordance with income tax regulations. Accordingly, amounts as of December 31, 1992 have been reclassified to reflect an increase in paid in capital of $88,294,000 a decrease in undistributed net investment income of $19,725,000 and a decrease in accumulated net realized gain on investments of $68,569,000. 2. OPERATING POLICIES. FORWARD FOREIGN CURRENCY CONTRACTS. The fund may enter into forward foreign currency contracts. These contracts involve market risk in excess of the amount reflected in the fund's Statement of Assets and Liabilities. The face or contract amount in U.S. dollars reflects the total exposure the fund has in that particular currency contract. The U.S. dollar value of forward foreign currency contracts is determined using forward currency exchange rates supplied by a quotation service. Losses may arise due to changes in the value of the foreign currency or if the counterparty does not perform under the contract. Purchases and sales of forward foreign currency contracts having the same settlement date and broker are offset and presented net on the Statement of Assets and Liabilities. Gain (loss) on the purchase or sale of forward foreign currency contracts having the same settlement date and broker is recognized on the date of offset, otherwise gain (loss) is recognized on settlement date. REPURCHASE AGREEMENTS. The fund, through its custodian, receives delivery of the underlying securities, whose market value is required to be at least 102% of the resale price at the time of purchase. The fund's investment adviser, Fidelity Management & Research Company (FMR), is responsible for determining that the value of these underlying securities remains at least equal to the resale price. 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other registered investment companies having management contracts with FMR, may transfer uninvested cash balances into a joint trading account. These balances are invested in one or more repurchase agreements that are collateralized by U.S. Treasury or Federal Agency obligations. RESTRICTED SECURITIES. The fund is permitted to invest in privately placed restricted securities. These securities may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. At the end of the period, restricted securities (excluding 144A issues) amounted to $6,597,000 or .1% of net assets. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $12,208,779,000 and $9,289,698,000, respectively, of which U.S. government and government agency obligations aggregated $262,056,000 and $124,000,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates ranging from .30% to .52% and is based on the monthly average net assets of all the mutual funds advised by FMR. The annual individual fund fee rate is .30%. The basic fee is subject to a performance adjustment (up to a maximum of + or - .20%) based on the fund's investment performance as compared to the appropriate index over a specified period of time. For the period, the management fee was equivalent to an annual rate of .69% of average net assets after the performance adjustment. The Board of Trustees approved a new group fee rate schedule with rates ranging from .2850% to .5200%. Effective November 1, 1993, FMR has voluntarily agreed to implement this new group fee rate schedule as it results in the same or a lower management fee. SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an affiliate of FMR and the general distributor of the fund, received sales charges of $32,505,000 on sales of shares of the fund. TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives fees based on the type, size, 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED TRANSFER AGENT FEE - CONTINUED number of accounts and the number of transactions made by shareholders. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. ACCOUNTING AND SECURITY LENDING FEES. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $6,592,000 for the period. 5. SECURITY LENDING. The fund loaned securities to certain brokers who paid the fund negotiated lenders' fees. These fees are included in interest income. The fund receives U.S. Treasury obligations and/or cash as collateral against the loaned securities, in an amount at least equal to 102% of the market value of the loaned securities at the inception of each loan. This collateral must be maintained at not less than 100% of the market value of the loaned securities during the period of the loan. At period end, the value of the securities loaned and the value of collateral amounted to $79,295,000 and $83,431,000, respectively. 6. TRANSACTIONS WITH AFFILIATED COMPANIES. An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. TRANSACTIONS WITH COMPANIES WHICH ARE OR WERE AFFILIATES ARE AS FOLLOWS: SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET COST COST INCOME VALUE AFFILIATES Action Industries, Inc. $ - $ 725 $ - $ - Broadcasting Partners, Inc. Class A (a) 3,016 - - 6,917 Brown Tom Inc. (a) 4,532 30 - 9,937 Cambrex Corp. 2,401 - 61 7,404 Centigram Communications Corp. 1,193 707 - - Continental Homes Holdings Corp. 129 - 20 9,214 Control Data Systems, Inc. 1,016 1,297 - - Donnkenny Inc. (a) 208 - - 6,624 Dovatron lnternational, Inc. 11,500 1,971 - 11,393 Electro Scientific Industries, Inc. 494 332 - - Esco Electronics Corp. 619 - - - Exide Electronics Group, Inc. 4,664 4,591 - - Forstmann & Co, Inc. (a) 14 - - 3,236 SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES - CONTINUED DOLLAR AMOUNTS IN THOUSANDS PURCHASES SALES DIVIDEND MARKET COST COST INCOME VALUE AFFILIATES Grad & Walker Energy Corp. $ 334 $ - $ - $ 6,016 Grand Palais Enterprises, Inc. - - - 6,598 Ground Round Restaurants, Inc. (a) 1,505 - - 5,947 HS Resources, Inc. (a) - - - 13,083 Haverty Furniture Companies, Inc. 1,667 - 65 9,081 Harmon Industries, Inc. (a) 705 813 - 3,462 Hyde Athletic Industries, Inc. 17 95 - - Intensity Resources Ltd. (a) 6,376 5,529 - 2,020 Inter-Tel, Inc. (a) 2,399 - - 6,710 Just Toys, Inc. 1,348 1,484 - 4,530 Mb Communications, Inc. (a) 9,469 - - 21,773 Michael Anthony Jewelers, Inc. (a) - - - 4,188 Miltope Group, Inc. (a) 441 - - 1,587 Nantucket Industries, Inc. (a) 479 761 - 1,073 Natures Bounty, Inc. (a) 719 4,557 - 208 Ohm Corp. - - - 15,734 Offshore Pipelines, Inc. (a) 1,316 83 - 9,940 Orbit International Corp. - 7 - 1,416 Photonics Corp. (a) - 135 - 1,391 Porta Systems Corp. 779 - - 96 Redman Industries (a) 165 - - 7,628 Regal Communication Corp. (a) 3,795 - - 7,696 Rehabcare Corp. (a) 1,035 - - 2,554 Saga Communications, Inc. Class A (a) 1,908 - - 5,614 Southwest Bancshares, Inc. - 586 - - Syquest Technology, Inc. (a) 835 1,142 - 6,261 TETRA Technologies, Inc. 819 1,538 - 6,796 Vmark Software, Inc. (a) - 33 - 6,492 Warner Insurance Services, Inc. 2,098 2,937 21 2,205 Xylogics, Inc. (a) 1,946 1,032 - 1,155 Younkers, Inc. 5,202 1,473 - - TOTALS $ 75,143 $ 31,858 $ 167 $ 215,979 (a) NON-INCOME PRODUCING 7. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $954,000 under this arrangement. REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and the Shareholders of Fidelity Contrafund: We have audited the accompanying statement of assets and liabilities of Fidelity Contrafund, including the schedule of portfolio investments, as of December 31, 1993, and the related statement of operations for the year then ended, the statement of changes in net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 1993 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Fidelity Contrafund as of December 31, 1993, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with generally accepted accounting principles. /s/COOPERS & LYBRAND COOPERS & LYBRAND Boston, Massachusetts February 2, 1994 TO CALL FIDELITY FOR FUND INFORMATION AND QUOTES The Fidelity Telephone Connection offers you special automated telephone services for quotes and balances. The services are easy to use, confidential and quick. All you need is a Touch Tone telephone. YOUR PERSONAL IDENTIFICATION NUMBER (PIN) The first time you call one of our automated telephone services, we'll ask you to set up your Personal Identification Number (PIN). The PIN assures that only you have automated telephone access to your account information. Please have your Customer Number (T-account #) handy when you call -- you'll need it to establish your PIN. If you would ever like to change your PIN, just choose the "Change your Personal Identification Number" option when you call. If you forget your PIN, please call a Fidelity representative at 1-800- 544-6666 for assistance. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES* 1-800-544-8544 Just make a selection from this record-ed menu: PRESS For quotes on funds you own. 1. For an individual fund quote. 2. For the ten most frequently requested Fidelity fund quotes. 3. For quotes on Fidelity Select Portfolios.(Registered trademark) 4. To change your Personal Identification Number (PIN). 5. To speak with a Fidelity representative. 6. (PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT BALANCES 1-800-544-7544 Just make a selection from this record- ed menu: PRESS For balances on funds you own. 1. For your most recent fund activity (purchases, redemptions, and dividends). 2. To change your Personal Identification Number (PIN). 3. To speak with a Fidelity representative. 4. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES, CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST OR SEND MONEY. TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 851 Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19100 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 811 Wilshire Boulevard Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 455 Market Street San Francisco, CA 1400 Civic Drive Walnut Creek, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 185 Asylum Street Hartford, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 2249 Galiano Street Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 4001 Tamiami Trail, North Naples, FL 32 West Central Boulevard Orlando, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 2000 66th Street, North St. Petersburg, FL GEORGIA 3525 Piedmont Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA HAWAII 700 Bishop Street Honolulu, HI ILLINOIS 215 East Erie Street Chicago, IL One North Franklin Chicago, IL 540 Lake Cook Road Deerfield, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL LOUISIANA 201 St. Charles Avenue New Orleans, LA MAINE 3 Canal Plaza Portland, ME MARYLAND 1 West Pennsylvania Ave. Towson, MD 7401 Wisconsin Avenue Bethesda, MD MASSACHUSETTS 470 Boylston Street Boston, MA 21 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 101 Cambridge Street Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 26955 Northwestern Hwy. Southfield, MI MINNESOTA 38 South Sixth Street Minneapolis, MN MISSOURI 700 West 47th Street Kansas City, MO 200 North Broadway St. Louis, MO NEW JERSEY 60B South Street Morristown, NJ 501 Route 17, South Paramus, NJ 505 Millburn Avenue Short Hills, NJ NEW YORK 1050 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 71 Broadway New York, NY 350 Park Avenue New York, NY 10 Bank Street White Plains, NY NORTH CAROLINA 2200 West Main Street Durham, NC OHIO 600 Vine Street Cincinnati, OH 1903 East Ninth Street Cleveland, OH 28699 Chagrin Boulevard Woodmere Village, OH OREGON 121 S.W. Morrison Street Portland, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 5100 Poplar Avenue Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 7001 Preston Road Dallas, TX 1155 Dairy Ashford Houston, TX 1010 Lamar Street Houston, TX 2701 Drexel Drive Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX UTAH 175 East 400 South Street Salt Lake City, UT VERMONT 199 Main Street Burlington, VT VIRGINIA 8300 Boone Boulevard Vienna, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 1001 Fourth Avenue Seattle, WA WASHINGTON, DC 1775 K Street, N.W. Washington, DC WISCONSIN 222 East Wisconsin Avenue Milwaukee, WI INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA OFFICERS Edward C. Johnson 3d, President J. Gary Burkhead, Senior Vice President Will Danoff, Vice President Gary L. French, Treasurer John H. Costello, Assistant Treasurer Arthur S. Loring, Secretary Robert H. Morrison, Manager, Security Transactions BOARD OF TRUSTEES J. Gary Burkhead Ralph F. Cox* Phyllis Burke Davis* Richard J. Flynn* Edward C. Johnson 3d E. Bradley Jones* Donald J. Kirk* Peter S. Lynch Edward H. Malone* Marvin L. Mann * Gerald C. McDonough* Thomas R. Williams* GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Co. Boston, MA CUSTODIAN Brown Brothers Harriman & Co. Boston, MA FIDELITY GROWTH FUNDS Blue Chip Growth Fund Capital Appreciation Fund Contrafund Disciplined Equity Fund Dividend Growth Fund Emerging Growth Fund Fidelity Fifty Fund Growth Company Fund Low-Priced Stock Fund Magellan(Registered trademark) Fund New Millennium(REGISTERED TRADEMARK) Fund OTC Portfolio Retirement Growth Fund Small Cap Stock Fund Stock Selector Trend Fund Value Fund THE FIDELITY TELEPHONE CONNECTION MUTUAL FUND 24-HOUR SERVICE Account Balances 1-800-544-7544 Exchanges/Redemptions 1-800-544-7777 Mutual Fund Quotes 1-800-544-8544 Account Assistance 1-800-544-6666 Product Information 1-800-544-8888 Retirement Accounts 1-800-544-4774 (8 a.m. - 9 p.m.) TDD Service 1-800-544-0118 for the deaf and hearing impaired (9 a.m. - 9 p.m. Eastern time) * INDEPENDENT TRUSTEES AUTOMATED LINES FOR QUICKEST SERVICE EX-11 3 Exhibit 11 EXHIBIT 11 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference into the Statement of Additional Information in Post-Effective Amendment No. 46 to the Registration Statement on Form N-1A (the "Registration Statement") of Fidelity Contrafund of our report dated February 2, 1994, relating to the financial statements and financial highlights which is incorporated by reference in said Statement of Additional Information. We further consent to the references to our Firm in the Prospectus and Statement of Additional Information under the headings "Financial Highlights" and "Auditor". /s/COOPERS & LYBRAND COOPERS & LYBRAND Boston, Massachusetts February 11, 1994 -----END PRIVACY-ENHANCED MESSAGE-----