N-CSRS 1 main.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811- 2105

Fidelity Fixed-Income Trust
 (Exact name of registrant as specified in charter)

82 Devonshire St., Boston, Massachusetts 02109
 (Address of principal executive offices) (Zip code)

Eric D. Roiter, Secretary

82 Devonshire St.

Boston, Massachusetts 02109
(Name and address of agent for service)

Registrant's telephone number, including area code: 617-563-7000

Date of fiscal year end:

April 30

Date of reporting period:

October 31, 2003

Item 1. Reports to Stockholders

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor

Investment Grade Bond

Fund - Class A, Class T, Class B
and Class C

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Class A, Class T, Class B, and Class C are classes of Fidelity® Investment Grade
Bond Fund

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

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

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)

As of October 31, 2003

As of April 30, 2003

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

AAA 7.3%

AAA 6.4%

AA 3.5%

AA 2.7%

A 13.7%

A 14.0%

BBB 16.3%

BBB 14.0%

BB and Below 1.8%

BB and Below 1.8%

Not Rated 0.7%

Not Rated 0.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%



We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. Securities rated BB or below were rated investment grade at the time of acquisition.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

6.1

4.7

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

4.6

3.6

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003*

As of April 30, 2003**

Corporate Bonds 27.3%

Corporate Bonds 26.6%

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

Asset-Backed
Securities 10.0%

Asset-Backed
Securities 8.2%

CMOs and Other Mortgage Related Securities 4.2%

CMOs and Other Mortgage Related Securities 3.1%

Municipal Bonds 0.7%

Municipal Bonds 0.0%

Other Investments 1.1%

Other Investments 1.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%

* Foreign investments

7.3%

** Foreign investments

6.0%

* Futures and Swaps

0.2%

** Futures and Swaps

(0.4)%



(dagger) Short-term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 26.5%

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER DISCRETIONARY - 3.6%

Auto Components - 0.6%

DaimlerChrysler NA Holding Corp.:

3.4% 12/15/04

$ 12,700

$ 12,778

4.05% 6/4/08

3,815

3,688

4.75% 1/15/08

15,985

15,972

32,438

Media - 3.0%

AOL Time Warner, Inc.:

6.875% 5/1/12

6,060

6,710

7.625% 4/15/31

14,695

16,420

British Sky Broadcasting Group PLC (BSkyB) yankee 8.2% 7/15/09

11,200

13,049

Clear Channel Communications, Inc. 5.75% 1/15/13

2,600

2,692

Comcast Cable Communications, Inc. 6.875% 6/15/09

6,275

7,018

Comcast Corp. 7.05% 3/15/33

15,000

15,981

Continental Cablevision, Inc.:

8.3% 5/15/06

7,190

8,052

9% 9/1/08

1,500

1,801

Cox Communications, Inc.:

4.625% 6/1/13

9,110

8,666

7.125% 10/1/12

11,035

12,525

7.75% 8/15/06

2,500

2,822

7.75% 11/1/10

9,500

11,171

Liberty Media Corp. 5.7% 5/15/13

7,600

7,430

News America Holdings, Inc.:

7.75% 1/20/24

10,850

12,432

7.75% 12/1/45

4,000

4,587

8% 10/17/16

1,000

1,209

News America, Inc. 6.55% 3/15/33

3,500

3,575

TCI Communications, Inc. 9.8% 2/1/12

8,000

10,392

Walt Disney Co. 5.375% 6/1/07

16,550

17,675

164,207

TOTAL CONSUMER DISCRETIONARY

196,645

CONSUMER STAPLES - 0.4%

Food Products - 0.1%

Kraft Foods, Inc. 5.25% 6/1/07

4,120

4,372

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER STAPLES - continued

Tobacco - 0.3%

Altria Group, Inc. 7% 11/4/13

$ 9,985

$ 9,982

Philip Morris Companies, Inc. 7% 7/15/05

4,900

5,134

15,116

TOTAL CONSUMER STAPLES

19,488

ENERGY - 0.4%

Energy Equipment & Services - 0.1%

Weatherford International Ltd. 4.95% 10/15/13

5,200

5,100

Oil & Gas - 0.3%

Duke Energy Field Services LLC 7.875% 8/16/10

8,000

9,348

Louis Dreyfus Natural Gas Corp. 6.875% 12/1/07

4,700

5,213

14,561

TOTAL ENERGY

19,661

FINANCIALS - 13.1%

Capital Markets - 1.9%

Amvescap PLC:

5.9% 1/15/07

1,350

1,455

yankee 6.6% 5/15/05

12,290

13,073

Bank of New York Co., Inc.:

3.4% 3/15/13 (d)

5,100

4,989

4.25% 9/4/12 (d)

5,730

5,832

Credit Suisse First Boston (USA), Inc.:

5.875% 8/1/06

5,900

6,374

6.5% 1/15/12

1,975

2,181

Goldman Sachs Group, Inc.:

5.7% 9/1/12

6,615

6,915

6.6% 1/15/12

12,750

14,142

J.P. Morgan Chase & Co. 5.35% 3/1/07

6,300

6,763

Lehman Brothers Holdings, Inc.:

4% 1/22/08

6,100

6,189

7.75% 1/15/05

4,310

4,643

Merita Bank Ltd. yankee 6.5% 1/15/06

4,000

4,325

Merrill Lynch & Co., Inc. 4% 11/15/07

7,640

7,810

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Capital Markets - continued

Morgan Stanley:

5.3% 3/1/13

$ 10,000

$ 10,149

6.6% 4/1/12

6,970

7,761

102,601

Commercial Banks - 0.9%

Bank of America Corp. 6.25% 4/15/12

8,960

9,831

Corporacion Andina de Fomento 5.2% 5/21/13

3,910

3,827

Fleet Financial Group, Inc. 7.125% 4/15/06

2,800

3,090

FleetBoston Financial Corp. 7.25% 9/15/05

5,845

6,386

Korea Development Bank:

5.75% 9/10/13

14,350

14,681

7.375% 9/17/04

3,985

4,174

Popular North America, Inc. 6.125% 10/15/06

5,270

5,734

Wells Fargo Bank NA, San Francisco 7.55% 6/21/10

2,900

3,427

51,150

Consumer Finance - 3.7%

American General Finance Corp.:

2.75% 6/15/08

430

411

4.5% 11/15/07

13,100

13,577

5.875% 7/14/06

15,885

17,154

Capital One Bank:

4.875% 5/15/08

8,240

8,450

6.5% 6/13/13

8,775

9,045

6.65% 3/15/04

900

915

Ford Motor Credit Co.:

5.8% 1/12/09

2,315

2,255

6.5% 1/25/07

11,890

12,268

7.375% 10/28/09

23,350

24,152

General Electric Capital Corp.:

3.5% 8/15/07

5,000

5,044

6% 6/15/12

4,600

4,950

6.125% 2/22/11

21,400

23,357

General Motors Acceptance Corp.:

6.125% 2/1/07

840

882

6.125% 8/28/07

840

885

6.38% 1/30/04

6,410

6,484

6.875% 9/15/11

11,205

11,559

6.875% 8/28/12

7,250

7,432

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Consumer Finance - continued

Household Finance Corp.:

6.375% 10/15/11

$ 20,020

$ 21,879

6.375% 11/27/12

6,035

6,572

6.75% 5/15/11

9,235

10,335

7% 5/15/12

4,480

5,088

MBNA Corp. 7.5% 3/15/12

7,730

8,817

201,511

Diversified Financial Services - 3.9%

Ameritech Capital Funding Corp. euro 6.25% 5/18/09

4,185

4,544

ASIF Global Financing XVIII 3.85% 11/26/07 (a)

185

187

Cadbury Schweppes U.S. Finance LLC:

3.875% 10/1/08 (a)

6,685

6,633

5.125% 10/1/13 (a)

4,725

4,745

CIT Group, Inc. 7.75% 4/2/12

4,425

5,164

Citigroup, Inc. 7.25% 10/1/10

9,900

11,518

Delta Air Lines, Inc. pass thru trust certificates 7.57% 11/18/10

1,105

1,137

Deutsche Telekom International Finance BV:

5.25% 7/22/13

6,280

6,241

8.25% 6/15/05

2,035

2,223

8.5% 6/15/10

14,665

17,649

8.75% 6/15/30

8,045

10,121

Devon Financing Corp. U.L.C. 7.875% 9/30/31

8,200

9,703

Newcourt Credit Group, Inc. yankee 6.875% 2/16/05

4,330

4,594

NiSource Finance Corp. 7.875% 11/15/10

12,580

14,885

Pemex Project Funding Master Trust:

6.125% 8/15/08

9,000

9,459

7.375% 12/15/14

27,060

28,413

Petronas Capital Ltd. 7% 5/22/12 (a)

26,925

29,979

Sprint Capital Corp.:

6.125% 11/15/08

7,800

8,215

7.125% 1/30/06

4,800

5,190

Verizon Global Funding Corp.:

6.125% 6/15/07

6,375

6,968

7.25% 12/1/10

11,000

12,563

7.375% 9/1/12

11,020

12,638

Verizon Wireless Capital LLC 5.375% 12/15/06

60

64

212,833

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Insurance - 0.6%

Aegon NV 4.75% 6/1/13

$ 13,000

$ 12,559

Hartford Financial Services Group, Inc.:

2.375% 6/1/06

2,780

2,750

4.625% 7/15/13 (a)

2,800

2,669

Prudential Financial, Inc. 3.75% 5/1/08

6,245

6,226

Travelers Property Casualty Corp.:

5% 3/15/13

3,170

3,144

6.375% 3/15/33

4,075

4,233

31,581

Real Estate - 1.2%

Boston Properties, Inc. 6.25% 1/15/13

10,300

10,965

Camden Property Trust:

5.875% 6/1/07

3,920

4,210

5.875% 11/30/12

6,435

6,713

CarrAmerica Realty Corp. 5.25% 11/30/07

7,035

7,270

CenterPoint Properties Trust:

5.75% 8/15/09

5,030

5,364

6.75% 4/1/05

2,490

2,632

Dominion Resources, Inc. 6.75% 12/15/32

1,000

1,066

EOP Operating LP:

6.5% 1/15/04

4,070

4,108

7.75% 11/15/07

2,425

2,778

Gables Realty LP:

5.75% 7/15/07

8,040

8,505

6.8% 3/15/05

1,120

1,180

ProLogis 6.7% 4/15/04

1,715

1,758

Regency Centers LP 6.75% 1/15/12

7,380

8,084

Vornado Realty Trust 5.625% 6/15/07

4,475

4,727

69,360

Thrifts & Mortgage Finance - 0.9%

Countrywide Home Loans, Inc.:

3.25% 5/21/08

1,370

1,335

5.5% 8/1/06

19,295

20,584

5.625% 5/15/07

5,500

5,893

H.F. Ahmanson & Co. 7.875% 9/1/04

2,600

2,720

Washington Mutual Bank 6.875% 6/15/11

4,900

5,497

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Thrifts & Mortgage Finance - continued

Washington Mutual, Inc.:

4.375% 1/15/08

$ 6,300

$ 6,451

5.625% 1/15/07

7,910

8,521

51,001

TOTAL FINANCIALS

720,037

INDUSTRIALS - 1.8%

Aerospace & Defense - 0.5%

Bombardier, Inc. 6.75% 5/1/12 (a)

3,235

3,437

Raytheon Co.:

5.5% 11/15/12

13,415

13,510

5.7% 11/1/03

4,800

4,800

6.75% 8/15/07

4,770

5,227

26,974

Commercial Services & Supplies - 0.1%

Boise Cascade Office Products Corp. 7.05% 5/15/05

7,455

7,734

Industrial Conglomerates - 0.6%

Textron Financial Corp. 2.75% 6/1/06

4,795

4,764

Tyco International Group SA yankee:

5.875% 11/1/04

3,000

3,094

6.375% 10/15/11

4,000

4,160

6.75% 2/15/11

20,675

21,993

34,011

Road & Rail - 0.5%

CSX Corp.:

6.75% 3/15/11

9,000

10,041

7.95% 5/1/27

4,000

4,815

Norfolk Southern Corp. 7.25% 2/15/31

9,800

11,070

25,926

Transportation Infrastructure - 0.1%

Korea Highway Corp. 4.9% 7/1/13 (a)

6,230

5,965

TOTAL INDUSTRIALS

100,610

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

INFORMATION TECHNOLOGY - 0.6%

Communications Equipment - 0.4%

Motorola, Inc.:

6.75% 2/1/06

$ 3,000

$ 3,231

7.625% 11/15/10

6,000

6,753

8% 11/1/11

13,535

15,669

25,653

IT Services - 0.2%

Electronic Data Systems Corp. 6% 8/1/13 (a)

9,760

9,242

TOTAL INFORMATION TECHNOLOGY

34,895

MATERIALS - 0.6%

Containers & Packaging - 0.1%

Sealed Air Corp.:

5.625% 7/15/13 (a)

1,945

1,960

6.875% 7/15/33 (a)

4,070

4,193

6,153

Metals & Mining - 0.2%

Corporacion Nacional del Cobre (Codelco) 6.375% 11/30/12 (a)

3,460

3,707

Falconbridge Ltd. yankee 7.35% 6/5/12

3,095

3,484

7,191

Paper & Forest Products - 0.3%

Boise Cascade Corp. 7.5% 2/1/08

3,650

3,887

International Paper Co. 5.85% 10/30/12

6,370

6,618

Weyerhaeuser Co.:

5.25% 12/15/09

3,465

3,573

6.125% 3/15/07

2,735

2,958

17,036

TOTAL MATERIALS

30,380

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.8%

AT&T Broadband Corp. 8.375% 3/15/13

5,200

6,286

AT&T Corp.:

7% 11/15/06

4,925

5,454

7.8% 11/15/11

7,190

8,148

8.5% 11/15/31

20,295

23,014

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

TELECOMMUNICATION SERVICES - continued

Diversified Telecommunication Services - continued

British Telecommunications PLC:

8.375% 12/15/10

$ 9,744

$ 11,767

8.875% 12/15/30

3,450

4,442

Citizens Communications Co. 8.5% 5/15/06

3,240

3,660

France Telecom SA 9% 3/1/11

23,400

28,230

Koninklijke KPN NV yankee 8% 10/1/10

17,000

20,261

Telecom Italia Capital 4% 11/15/08 (a)

12,400

12,385

TELUS Corp. yankee:

7.5% 6/1/07

16,590

18,424

8% 6/1/11

8,000

9,197

151,268

Wireless Telecommunication Services - 0.9%

AT&T Wireless Services, Inc.:

7.875% 3/1/11

1,375

1,571

8.75% 3/1/31

13,360

16,066

Cingular Wireless LLC:

5.625% 12/15/06

10,000

10,783

7.125% 12/15/31

20,488

22,700

51,120

TOTAL TELECOMMUNICATION SERVICES

202,388

UTILITIES - 2.3%

Electric Utilities - 1.6%

Dominion Resources, Inc.:

6.25% 6/30/12

3,570

3,867

8.125% 6/15/10

6,245

7,467

DTE Energy Co. 7.05% 6/1/11

5,030

5,680

Duke Capital Corp. 6.75% 2/15/32

5,365

5,263

FirstEnergy Corp.:

5.5% 11/15/06

4,260

4,477

6.45% 11/15/11

8,970

9,528

FPL Group Capital, Inc.:

3.25% 4/11/06

3,355

3,394

6.125% 5/15/07

4,520

4,940

Illinois Power Co. 7.5% 6/15/09

5,000

5,425

MidAmerican Energy Holdings, Inc.:

4.625% 10/1/07

3,965

4,056

5.875% 10/1/12

2,650

2,742

Oncor Electric Delivery Co. 6.375% 5/1/12

10,150

11,120

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

UTILITIES - continued

Electric Utilities - continued

Public Service Co. of Colorado:

4.875% 3/1/13

$ 7,500

$ 7,436

7.875% 10/1/12

5,630

6,802

Southwestern Public Service Co. 5.125% 11/1/06

5,000

5,311

TECO Energy, Inc. 7% 5/1/12

325

321

87,829

Gas Utilities - 0.3%

Consolidated Natural Gas Co. 6.85% 4/15/11

1,535

1,727

Ras Laffan Liquid Natural Gas Co. Ltd. yankee 8.294% 3/15/14 (a)

6,400

7,424

Texas Eastern Transmission Corp.:

5.25% 7/15/07

2,040

2,159

7.3% 12/1/10

4,480

5,085

16,395

Multi-Utilities & Unregulated Power - 0.4%

Constellation Energy Group, Inc.:

6.35% 4/1/07

6,915

7,538

7% 4/1/12

4,485

5,084

Williams Companies, Inc.:

7.125% 9/1/11

9,690

9,932

7.5% 1/15/31

1,270

1,194

23,748

TOTAL UTILITIES

127,972

TOTAL NONCONVERTIBLE BONDS

(Cost $1,366,990)

1,452,076

U.S. Government and Government Agency Obligations - 16.1%

U.S. Government Agency Obligations - 5.8%

Fannie Mae:

4.625% 10/15/13

50,000

49,300

5% 5/14/07

24,000

24,474

5.5% 7/18/12

34,500

35,162

6.125% 3/15/12

22,972

25,466

6.25% 2/1/11

10,185

11,140

6.25% 7/19/11

55,500

57,187

6.25% 3/22/12

19,683

20,566

6.625% 11/15/10

7,810

8,923

U.S. Government and Government Agency Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency Obligations - continued

Financing Corp. - coupon STRIPS 0% 3/7/05

$ 11,375

$ 11,111

Freddie Mac:

4.875% 11/15/13

25,110

25,176

5.25% 11/5/12

5,610

5,623

5.875% 3/21/11

34,670

37,075

6% 5/25/12

7,900

8,054

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS

319,257

U.S. Treasury Obligations - 10.3%

U.S. Treasury Bonds:

6.125% 11/15/27

22,900

25,599

6.125% 8/15/29

212,031

238,046

6.375% 8/15/27

9,680

11,147

8% 11/15/21

66,000

88,453

9.875% 11/15/15

6,825

10,136

11.25% 2/15/15

21,590

34,471

U.S. Treasury Notes:

2.375% 8/15/06

2,680

2,688

4% 11/15/12

106,995

105,378

6.5% 2/15/10

40,000

46,402

TOTAL U.S. TREASURY OBLIGATIONS

562,320

TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $880,284)

881,577

U.S. Government Agency - Mortgage Securities - 39.2%

Fannie Mae - 36.5%

4% 11/1/18 (b)

34,683

33,675

4.5% 11/1/18 to 11/1/33 (b)

202,960

199,551

5% 12/1/17 to 1/1/18

5,542

5,631

5% 11/1/18 to 11/13/33 (b)

479,858

479,293

5.5% 2/1/11 to 4/1/18

40,101

41,333

5.5% 11/1/13 to 11/13/33 (b)

190,092

191,756

6% 1/1/13 to 6/1/33

23,284

24,056

6.5% 3/1/06 to 4/1/33

384,208

400,955

6.5% 11/1/18 to 11/1/33 (b)

123,754

129,725

U.S. Government Agency - Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Fannie Mae - continued

7% 7/1/22 to 8/1/33 (b)

$ 457,030

$ 481,333

7.5% 6/1/25 to 8/1/29

9,281

9,909

9.5% 1/1/17 to 2/1/25

667

744

12.5% 1/1/15 to 7/1/15

12

13

TOTAL FANNIE MAE

1,997,974

Freddie Mac - 0.0%

8.5% 9/1/22 to 9/1/27

1,257

1,364

Government National Mortgage Association - 2.7%

5.5% 12/15/32 to 8/15/33

19,760

20,032

6% 10/15/08 to 6/15/33

25,833

26,740

6.5% 3/15/26 to 2/15/33

9,754

10,219

7% 8/15/23 to 12/15/32

80,343

85,145

7.5% 10/15/05 to 8/15/28

4,127

4,426

8% 9/15/24 to 5/15/32

1,011

1,093

8.5% 1/15/31

66

72

9% 4/15/23

8

8

TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

147,735

TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES

(Cost $2,142,506)

2,147,073

Asset-Backed Securities - 5.5%

ACE Securities Corp. Series 2003-FM1 Class M2, 2.97% 11/25/32 (d)

3,646

3,646

American Express Credit Account Master Trust
Series 1999-2 Class B, 6.1% 12/15/06

4,600

4,716

Asset Backed Securities Corp. Home Equity Loan Trust:

Series 2003-HE2 Class A2, 1.5% 4/15/33 (d)

11,031

11,013

Series 2003-HE7 Class A3, 1.53% 12/15/33 (b)(d)

12,815

12,815

Capital One Master Trust Series 2001-3A Class A, 5.45% 3/16/09

3,830

4,059

Capital One Multi-Asset Execution Trust:

Series 2002-B1 Class B1, 1.8% 7/15/08 (d)

8,570

8,595

Series 2003-2B Class B2, 3.5% 2/17/09

7,080

7,124

Series 2003-A1 Class A1, 1.51% 1/15/09 (d)

34,225

34,459

Series 2003-A4 Class A4, 3.65% 7/15/11

4,159

4,151

Series 2003-B1 Class B1, 2.29% 2/17/09 (d)

13,465

13,616

Series 2003-B4 Class B4, 1.92% 7/15/11 (d)

6,635

6,635

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CDC Mortgage Capital Trust Series 2003-HE2:

Class M1, 1.92% 10/25/33 (d)

$ 1,295

$ 1,297

Class M2, 3.02% 10/25/33 (d)

3,150

3,167

Chase Manhattan Auto Owner Trust Series 2001-A
Class CTFS, 5.06% 2/15/08

1,222

1,254

Fieldstone Mortgage Investment Corp. Series 2003-1:

Class M1, 1.8% 11/25/33 (d)

1,400

1,400

Class M2, 2.87% 11/25/33 (d)

700

700

Ford Credit Auto Owner Trust:

Series 2001-B Class B, 5.71% 9/15/05

2,495

2,559

Series 2001-C Class B, 5.54% 12/15/05

4,400

4,509

Home Equity Asset Trust:

Series 2003-2:

Class A2, 1.5% 8/25/33 (d)

2,149

2,150

Class M1, 2% 8/25/33 (d)

2,915

2,930

Series 2003-4:

Class M1, 1.92% 10/25/33 (d)

4,025

4,015

Class M2, 3.02% 10/25/33 (d)

4,765

4,765

Series 2003-5N Class A, 7.5% 1/27/34 (a)

925

921

Home Equity Asset Trust NIMS Trust:

Series 2002-4N Class A, 8% 5/27/33 (a)

2,390

2,343

Series 2003-2N Class A, 8% 9/27/33 (a)

2,911

2,850

Honda Auto Receivables Owner Trust Series 2001-2 Class A4, 5.09% 10/18/06

4,900

4,993

Household Home Equity Loan Trust Series 2002-2
Class A, 1.42% 4/20/32 (d)

8,910

8,908

JCPenney Master Credit Card Trust Series E Class A, 5.5% 6/15/07

18,000

18,029

Long Beach Mortgage Loan Trust Series 2003-3
Class M2, 2.97% 7/25/33 (d)

4,800

4,806

MBNA Credit Card Master Note Trust:

Series 2001-B2 Class B2, 1.48% 1/15/09 (d)

33,400

33,511

Series 2003-B3 Class B3, 1.495% 1/18/11 (d)

1,130

1,130

Series 2003-B5 Class B5, 1.49% 2/15/11 (d)

7,235

7,239

Morgan Stanley ABS Capital I, Inc.:

Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (a)

1,247

1,247

Series 2003-HE1 Class M2, 3.02% 5/25/33 (d)

5,560

5,616

Series 2003-NC8 Class M1, 1.82% 9/25/33 (d)

2,600

2,600

Morgan Stanley Dean Witter Capital I Trust:

Series 2001-NC4 Class M1, 2.12% 1/25/32 (d)

5,135

5,181

Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (a)

2,885

2,886

Series 2002-OP1N Class NOTE, 9.5% 9/25/32 (a)

514

514

Series 2003-NC2 Class M2, 3.12% 2/25/33 (d)

2,855

2,881

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Morgan Stanley Dean Witter Capital I, Inc.:

Series 2002-AM3N Class NOTE, 9.5% 2/25/33 (a)

$ 2,122

$ 2,124

Series 2003-NC2N Class NOTE, 9.5% 12/25/32 (a)

2,583

2,582

New Century Home Equity Loan Trust Series 2003-2 Class A2, 1.55% 1/25/33 (d)

9,791

9,819

Nissan Auto Lease Trust Series 2003-A Class A3B, 2.57% 6/15/09

10,500

10,504

Sears Credit Account Master Trust II:

Series 2000-1 Class B, 7.5% 11/15/07

3,950

3,958

Series 2000-2 Class A, 6.75% 9/16/09

7,720

8,364

Series 2002-4 Class A, 1.25% 8/18/09 (d)

10,400

10,389

Superior Wholesale Inventory Financing Trust VII
Series 2003-A8 Class CTFS, 1.57% 3/15/11 (a)(d)

9,340

9,340

TOTAL ASSET-BACKED SECURITIES

(Cost $300,113)

302,310

Collateralized Mortgage Obligations - 1.7%

Private Sponsor - 0.8%

Residential Asset Mortgage Products, Inc. Series 2003-SL1 Class 3A1, 7.125% 5/25/31 (b)

11,500

11,858

Residential Finance LP/Residential Finance Development Corp. floater:

Series 2003-B:

Class B3, 2.67% 7/10/35 (a)(d)

9,155

9,192

Class B4, 2.87% 7/10/35 (a)(d)

6,966

6,992

Class B5, 3.47% 7/10/35 (a)(d)

6,568

6,592

Class B6, 3.97% 7/10/35 (a)(d)

2,985

3,000

Series 2003-CB1:

Class B3, 2.57% 6/10/35 (a)(d)

3,193

3,201

Class B4, 2.77% 6/10/35 (a)(d)

2,857

2,864

Class B5, 3.37% 6/10/35 (a)(d)

1,951

1,956

Class B6, 3.87% 6/10/35 (a)(d)

1,159

1,162

TOTAL PRIVATE SPONSOR

46,817

U.S. Government Agency - 0.9%

Fannie Mae planned amortization class Series 1994-81 Class PJ, 8% 7/25/23

12,210

12,564

Fannie Mae guaranteed REMIC pass thru certificates planned amortization class Series 2001-53 Class OH, 6.5% 6/25/30

1,726

1,761

Collateralized Mortgage Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency - continued

Freddie Mac planned amortization class Series 2355 Class CD, 6.5% 6/15/30

$ 1,956

$ 1,986

Freddie Mac Multi-class participation certificates guaranteed planned amortization class Series 1669 Class H, 6.5% 7/15/23

10,122

10,725

Ginnie Mae guaranteed Multi-family pass thru securities sequential pay Series 2002-35 Class C, 5.86% 10/16/23 (d)

1,490

1,604

Ginnie Mae guaranteed REMIC pass thru securities sequential pay:

Series 2003-22 Class B, 3.963% 5/16/32

7,715

7,485

Series 2003-59 Class D, 3.654% 10/16/27

11,780

11,019

TOTAL U.S. GOVERNMENT AGENCY

47,144

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost $94,213)

93,961

Commercial Mortgage Securities - 2.4%

Bear Stearns Commercial Mortgage Securities, Inc. floater Series 2003-BA1A Class A1, 1.4% 4/14/15 (a)(d)

13,865

13,865

Chase Commercial Mortgage Securities Corp.
Series 2001-245 Class A2, 6.275% 2/12/16 (a)(d)

3,810

4,139

COMM floater:

Series 2001-FL5A Class A2, 1.67% 11/15/13 (a)(d)

4,508

4,509

Series 2002-FL7 Class A2, 1.47% 11/15/14 (a)(d)

7,270

7,268

Commercial Resecuritization Trust sequential pay
Series 1999-ABC1 Class A, 6.74% 1/27/09 (a)

4,893

5,169

CS First Boston Mortgage Securities Corp.:

sequential pay Series 2000-C1 Class A2, 7.545% 4/14/62

3,700

4,306

Series 1997-C2 Class D, 7.27% 1/17/35

2,775

3,067

Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31

2,320

2,357

DLJ Commercial Mortgage Corp. sequential pay
Series 2000-CF1 Class A1B, 7.62% 6/10/33

10,000

11,673

Equitable Life Assurance Society of the United States Series 174:

Class B1, 7.33% 5/15/06 (a)

3,400

3,756

Class C1, 7.52% 5/15/06 (a)

3,500

3,874

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Ginnie Mae guaranteed REMIC pass thru securities:

sequential pay:

Series 2002-83 Class B, 4.6951% 12/16/24

$ 4,590

$ 4,685

Series 2003-36 Class C, 4.254% 2/16/31

6,373

6,245

Series 2003-47 Class C, 4.227% 10/16/27

11,493

11,396

Series 2003-59 Class XA, 0.3% 6/16/34 (c)(d)

59,190

4,543

Series 2003-47 Class XA, 0.2917% 6/16/43 (c)(d)

36,216

2,142

Series 2003-64 Class XA, 0.5018% 8/16/43 (c)(d)

36,049

2,211

GS Mortgage Securities Corp. II:

Series 1998-GLII Class E, 7.1905% 4/13/31 (d)

1,220

1,215

Series 2003-C1 Class A2A, 3.59% 1/10/40

5,945

5,937

Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A Class C, 4.13% 11/20/37 (a)

11,400

10,009

Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A2, 6.602% 11/15/07 (a)

9,000

9,906

Trizechahn Office Properties Trust Series 2001-TZHA Class E3, 7.253% 3/15/13 (a)

6,100

6,381

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $125,607)

128,653

Municipal Securities - 0.7%

Illinois Gen. Oblig.:

3.3% 6/1/10

1,285

1,229

3.55% 6/1/11

1,030

983

3.75% 6/1/12

3,345

3,178

5.1% 6/1/33

20,765

18,777

Oregon Gen. Oblig. 5.892% 6/1/27

10,945

11,082

TOTAL MUNICIPAL SECURITIES

(Cost $37,360)

35,249

Foreign Government and Government Agency Obligations - 1.0%

Principal
Amount (000s)

Value (Note 1)
(000s)

Bahamian Republic 6.625% 5/15/33 (a)

$ 3,835

$ 3,875

Chilean Republic:

5.5% 1/15/13

6,375

6,524

7.125% 1/11/12

5,695

6,464

State of Israel 4.625% 6/15/13

2,565

2,408

United Mexican States:

4.625% 10/8/08

13,935

13,970

6.375% 1/16/13

9,460

9,734

7.5% 1/14/12

9,800

10,927

TOTAL FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $51,740)

53,902

Supranational Obligations - 0.1%

Corporacion Andina de Fomento 6.875% 3/15/12
(Cost $4,378)

4,425

4,868

Fixed-Income Funds - 11.3%

Shares

Fidelity Ultra-Short Central Fund (e)
(Cost $621,000)

6,234,498

620,146

Cash Equivalents - 14.3%

Maturity
Amount (000s)

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $783,909)

$ 783,979

783,909

TOTAL INVESTMENT PORTFOLIO - 118.8%

(Cost $6,408,100)

6,503,724

NET OTHER ASSETS - (18.8)%

(1,028,721)

NET ASSETS - 100%

$ 5,475,003

Swap Agreements

Expiration
Date

Notional
Amount
(000s)

Unrealized
Appreciation/
(Depreciation)
(000s)

Credit Default Swap

Receive from Morgan Stanley, Inc., upon default of Vornado Realty Trust, par value of the notional amount of Vornado Realty Trust 5.625% 6/15/07, and pay quarterly notional amount multiplied by 1.37%

June 2007

$ 4,475

$ (93)

Receive quarterly notional amount multiplied by .62% and pay Goldman Sachs upon default of SLM Corp., par value of the notional amount of SLM Corp. 1.1106% 7/25/35

August 2007

1,885

17

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

8,000

318

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

5,000

199

TOTAL CREDIT DEFAULT SWAP

19,360

441

Interest Rate Swap

Receive quarterly a fixed rate equal to 2.5664% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.

March 2006

9,000

31

$ 28,360

$ 472

Legend

(a) 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 $225,043,000 or 4.1% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

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

(e) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $9,308,588,000 and $8,937,561,000, respectively, of which long-term U.S. government and government agency obligations aggregated $8,579,663,000 and $8,582,778,000, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $783,909) (cost $6,408,100) - See accompanying schedule

$ 6,503,724

Cash

238

Receivable for investments sold
Regular delivery

8,600

Delayed delivery

4,340

Receivable for fund shares sold

6,788

Interest receivable

48,507

Unrealized gain on swap agreements

472

Prepaid expenses

28

Other receivables

4

Total assets

6,572,701

Liabilities

Payable for investments purchased
Regular delivery

$ 27,599

Delayed delivery

1,062,342

Payable for fund shares redeemed

4,433

Distributions payable

411

Accrued management fee

1,926

Distribution fees payable

15

Other payables and accrued expenses

972

Total liabilities

1,097,698

Net Assets

$ 5,475,003

Net Assets consist of:

Paid in capital

$ 5,350,768

Undistributed net investment income

3,408

Accumulated undistributed net realized gain (loss) on investments

24,731

Net unrealized appreciation (depreciation) on investments

96,096

Net Assets

$ 5,475,003

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share
($6,260 ÷ 831 shares)

$ 7.53

Maximum offering price per share (100/95.25 of $7.53)

$ 7.91

Class T:
Net Asset Value and redemption price per share ($15,106 ÷ 2,006 shares)

$ 7.53

Maximum offering price per share (100/96.50 of $7.53)

$ 7.80

Class B:
Net Asset Value and offering price per share
($8,888 ÷ 1,180 shares) A

$ 7.53

Class C:
Net Asset Value and offering price per share
($5,578 ÷ 741 shares) A

$ 7.53

Investment Grade Bond:
Net Asset Value, offering price and redemption price per share ($5,438,919 ÷ 722,509 shares)

$ 7.53

Institutional Class:
Net Asset Value, offering price and redemption price per share ($252.3 ÷ 33.5 shares)

$ 7.53

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 97,162

Security lending

261

Total income

97,423

Expenses

Management fee

$ 11,531

Transfer agent fees

4,752

Distribution fees

86

Accounting and security lending fees

345

Non-interested trustees' compensation

11

Appreciation in deferred trustees' compensation account

1

Custodian fees and expenses

132

Registration fees

87

Audit

39

Legal

21

Miscellaneous

7

Total expenses before reductions

17,012

Expense reductions

(65)

16,947

Net investment income (loss)

80,476

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

27,638

Change in net unrealized appreciation (depreciation) on:

Investment securities

(78,998)

Swap agreements

362

Total change in net unrealized appreciation (depreciation)

(78,636)

Net gain (loss)

(50,998)

Net increase (decrease) in net assets resulting from operations

$ 29,478

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands

Six months ended
October 31, 2003
(Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 80,476

$ 177,829

Net realized gain (loss)

27,638

151,806

Change in net unrealized appreciation (depreciation)

(78,636)

143,315

Net increase (decrease) in net assets resulting
from operations

29,478

472,950

Distributions to shareholders from net investment income

(84,031)

(172,052)

Distributions to shareholders from net realized gain

(70,219)

(73,736)

Total distributions

(154,250)

(245,788)

Share transactions - net increase (decrease)

293,917

1,022,853

Total increase (decrease) in net assets

169,145

1,250,015

Net Assets

Beginning of period

5,305,858

4,055,843

End of period (including undistributed net investment income of $3,408 and undistributed net investment income of $6,963, respectively)

$ 5,475,003

$ 5,305,858

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.107

.186

Net realized and unrealized gain (loss)

(.066)

.326

Total from investment operations

.041

.512

Distributions from net investment income

(.111)

(.172)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.211)

(.292)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.52%

6.98%

Ratios to Average Net Assets G

Expenses before expense reductions

.81% A

.79% A

Expenses net of voluntary waivers, if any

.81% A

.79% A

Expenses net of all reductions

.81% A

.79% A

Net investment income (loss)

2.79% A

3.73% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 6,260

$ 8,085

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.101

.180

Net realized and unrealized gain (loss)

(.064)

.324

Total from investment operations

.037

.504

Distributions from net investment income

(.107)

(.164)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.207)

(.284)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.46%

6.87%

Ratios to Average Net Assets G

Expenses before expense reductions

.95% A

.97% A

Expenses net of voluntary waivers, if any

.95% A

.95% A

Expenses net of all reductions

.95% A

.95% A

Net investment income (loss)

2.66% A

3.57% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 15,106

$ 10,403

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.077

.147

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.012

.469

Distributions from net investment income

(.082)

(.129)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.182)

(.249)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.13%

6.39%

Ratios to Average Net Assets G

Expenses before expense reductions

1.60% A

1.60% A

Expenses net of voluntary waivers, if any

1.60% A

1.60% A

Expenses net of all reductions

1.60% A

1.60% A

Net investment income (loss)

2.01% A

2.92% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 8,888

$ 7,721

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.075

.145

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.010

.467

Distributions from net investment income

(.080)

(.127)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.180)

(.247)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.11%

6.35%

Ratios to Average Net Assets G

Expenses before expense reductions

1.63% A

1.64% A

Expenses net of voluntary waivers, if any

1.63% A

1.64% A

Expenses net of all reductions

1.63% A

1.64% A

Net investment income (loss)

1.98% A

2.88% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 5,578

$ 5,543

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Investment Grade Bond

Six months ended October 31, 2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

$ 7.30

Income from Investment Operations

Net investment income (loss) D

.114

.290

.379 F

.445

.433

.423

Net realized and unrealized gain (loss)

(.065)

.483

.158 F

.324

(.388)

(.022)

Total from investment operations

.049

.773

.537

.769

.045

.401

Distributions from net investment income

(.119)

(.283)

(.377)

(.449)

(.435)

(.410)

Distributions from net realized gain

(.100)

(.120)

(.010)

-

-

(.041)

Total distributions

(.219)

(.403)

(.387)

(.449)

(.435)

(.451)

Net asset value,
end of period

$ 7.53

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

Total Return B, C

.62%

10.82%

7.61%

11.51%

.71%

5.58%

Ratios to Average Net Assets E

Expenses before expense reductions

.63% A

.66%

.66%

.65%

.70%

.71%

Expenses net of voluntary waivers, if any

.62% A

.66%

.66%

.65%

.70%

.71%

Expenses net of all reductions

.62% A

.66%

.66%

.64%

.69%

.70%

Net investment income (loss)

2.98% A

3.86%

5.18% F

6.31%

6.21%

5.77%

Supplemental Data

Net assets, end of period (in millions)

$ 5,439

$ 5,274

$ 4,056

$ 2,976

$ 2,130

$ 2,303

Portfolio turnover rate

299% A

276%

230%

226%

115%

167%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

F Effective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 E

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) D

.117

.202

Net realized and unrealized gain (loss)

(.066)

.321

Total from investment operations

.051

.523

Distributions from net investment income

(.121)

(.183)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.221)

(.303)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C

.65%

7.14%

Ratios to Average Net Assets F

Expenses before expense reductions

.56% A

.56% A

Expenses net of voluntary waivers, if any

.56% A

.56% A

Expenses net of all reductions

.56% A

.56% A

Net investment income (loss)

3.04% A

3.96% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 252

$ 275

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity Investment Grade Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Investment Grade Bond and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 127,664

|

Unrealized depreciation

(24,106)

Net unrealized appreciation (depreciation)

$ 103,558

Cost for federal income tax purposes

$ 6,400,166

Semiannual Report

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The net receivable or payable is accrued daily and is included in interest income in the accompanying Statement of Operations. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact the fund.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Swap Agreements - continued

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums paid to or by the fund are accrued daily and included in interest income in the accompanying Statement of Operations.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

Semiannual Report

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 5

$ -

Class T

0%

.25%

15

-

Class B

.65%

.25%

39

29

Class C

.75%

.25%

27

21

$ 86

$ 50

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

4. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 6

Class T

3

Class B*

12

Class C*

12

$ 33

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the
sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Investment Grade Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Investment Grade Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets*

Class A

$ 6

.21

Class T

15

.25

Class B

11

.25

Class C

5

.18

Investment Grade Bond

4,714

.18

Institutional Class

1

.11

$ 4,752

* Annualized

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

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.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $4,252 for the period.

5. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.

6. Expense Reductions.

FMR voluntarily agreed to reimburse a portion of Investment Grade Bond's operating expenses. During the period, this reimbursement reduced the class' expenses by $40.

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $1. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Investment Grade Bond

$ 24

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Other Information.

At the end of the period, Fidelity Freedom Fund 2010 was the owner of record of approximately 17% of the total outstanding shares of the fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 37% of the total outstanding shares of the fund.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003 A

From net investment income

Class A

$ 89

$ 68

Class T

165

90

Class B

94

54

Class C

57

32

Investment Grade Bond

83,621

171,804

Institutional Class

5

4

Total

$ 84,031

$ 172,052

From net realized gain

Class A

$ 60

$ 31

Class T

142

42

Class B

111

41

Class C

79

23

Investment Grade Bond

69,823

73,597

Institutional Class

4

2

Total

$ 70,219

$ 73,736

A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

9. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Class A

Shares sold

598

1,088

$ 4,510

$ 8,282

Reinvestment of distributions

17

12

133

88

Shares redeemed

(834)

(50)

(6,422)

(383)

Net increase (decrease)

(219)

1,050

$ (1,779)

$ 7,987

Class T

Shares sold

957

1,513

$ 7,267

$ 11,450

Reinvestment of distributions

39

17

300

129

Shares redeemed

(341)

(179)

(2,575)

(1,363)

Net increase (decrease)

655

1,351

$ 4,992

$ 10,216

Class B

Shares sold

435

1,090

$ 3,318

$ 8,264

Reinvestment of distributions

23

11

176

82

Shares redeemed

(280)

(99)

(2,113)

(749)

Net increase (decrease)

178

1,002

$ 1,381

$ 7,597

Class C

Shares sold

510

851

$ 3,922

$ 6,459

Reinvestment of distributions

15

6

114

48

Shares redeemed

(504)

(137)

(3,855)

(1,038)

Net increase (decrease)

21

720

$ 181

$ 5,469

Investment Grade Bond

Shares sold

123,920

267,099

$ 941,167

$ 2,006,171

Reinvestment of distributions

19,529

31,580

149,232

237,126

Shares redeemed

(105,924)

(167,094)

(801,242)

(1,251,983)

Net increase (decrease)

37,525

131,585

$ 289,157

$ 991,314

Institutional Class

Shares sold

10

38

$ 78

$ 285

Reinvestment of distributions

1

1

5

4

Shares redeemed

(13)

(3)

(98)

(19)

Net increase (decrease)

(2)

36

$ (15)

$ 270

A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Money
Management, Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Semiannual Report

Fidelity Advisor Aggressive Growth Fund

Fidelity Advisor Asset Allocation Fund

Fidelity Advisor Balanced Fund

Fidelity Advisor Biotechnology Fund

Fidelity Advisor California Municipal Income Fund

Fidelity Advisor Consumer Industries Fund

Fidelity Advisor Cyclical Industries Fund

Fidelity Advisor Developing Communications Fund

Fidelity Advisor Diversified International Fund

Fidelity Advisor Dividend Growth Fund

Fidelity Advisor Dynamic Capital Appreciation Fund

Fidelity Advisor Electronics Fund

Fidelity Advisor Emerging Asia Fund

Fidelity Advisor Emerging Markets Income Fund

Fidelity Advisor Equity Growth Fund

Fidelity Advisor Equity Income Fund

Fidelity Advisor Equity Value Fund

Fidelity Advisor Europe Capital Appreciation Fund

Fidelity Advisor Fifty Fund

Fidelity Advisor Financial Services Fund

Fidelity Advisor Floating Rate High Income Fund

Fidelity Advisor Freedom Income FundSM

Fidelity Advisor Freedom 2010 FundSM

Fidelity Advisor Freedom 2020 FundSM

Fidelity Advisor Freedom 2030 FundSM

Fidelity Advisor Freedom 2040 FundSM

Fidelity Advisor Global Equity Fund

Fidelity Advisor Government Investment Fund

Fidelity Advisor Growth & Income Fund

Fidelity Advisor Growth Opportunities

Fidelity Advisor Health Care Fund

Fidelity Advisor High Income Advantage Fund

Fidelity Advisor High Income Fund

Fidelity Advisor Inflation-Protected Bond Fund

Fidelity Advisor Intermediate Bond Fund

Fidelity Advisor International Capital Appreciation Fund

Fidelity Advisor International Small Cap Fund

Fidelity Advisor Investment Grade Bond Fund

Fidelity Advisor Japan Fund

Fidelity Advisor Korea Fund

Fidelity Advisor Large Cap Fund

Fidelity Advisor Latin America Fund

Fidelity Advisor Leveraged Company Stock Fund

Fidelity Advisor Mid Cap Fund

Fidelity Advisor Mortgage Securities Fund

Fidelity Advisor Municipal Income Fund

Fidelity Advisor Natural Resources Fund

Fidelity Advisor New Insights Fund

Fidelity Advisor New York
Municipal Income Fund

Fidelity Advisor Overseas Fund

Fidelity Advisor Real Estate Fund

Fidelity Advisor Short Fixed-Income Fund

Fidelity Advisor Short Intermediate Municipal Income Fund

Fidelity Advisor Small Cap Fund

Fidelity Advisor Strategic Growth Fund

Fidelity Advisor Strategic Income Fund

Fidelity Advisor Tax Managed
Stock Fund

Fidelity Advisor Technology Fund

Fidelity Advisor Telecommunications & Utilities Growth Fund

Fidelity Advisor Value Leaders Fund

Fidelity Advisor Value Strategies Fund

Prime Fund

Tax-Exempt Fund

Treasury Fund

AIGB-USAN-1203
1.784859.100

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

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor

Investment Grade Bond

Fund - Institutional Class

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Institutional Class is a
class of Fidelity® Investment
Grade Bond Fund

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

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

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)

As of October 31, 2003

As of April 30, 2003

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

AAA 7.3%

AAA 6.4%

AA 3.5%

AA 2.7%

A 13.7%

A 14.0%

BBB 16.3%

BBB 14.0%

BB and Below 1.8%

BB and Below 1.8%

Not Rated 0.7%

Not Rated 0.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%



We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. Securities rated BB or below were rated investment grade at the time of acquisition.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

6.1

4.7

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

4.6

3.6

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003*

As of April 30, 2003**

Corporate Bonds 27.3%

Corporate Bonds 26.6%

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

Asset-Backed
Securities 10.0%

Asset-Backed
Securities 8.2%

CMOs and Other Mortgage Related Securities 4.2%

CMOs and Other Mortgage Related Securities 3.1%

Municipal Bonds 0.7%

Municipal Bonds 0.0%

Other Investments 1.1%

Other Investments 1.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%

* Foreign investments

7.3%

** Foreign investments

6.0%

* Futures and Swaps

0.2%

** Futures and Swaps

(0.4)%



(dagger) Short-term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 26.5%

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER DISCRETIONARY - 3.6%

Auto Components - 0.6%

DaimlerChrysler NA Holding Corp.:

3.4% 12/15/04

$ 12,700

$ 12,778

4.05% 6/4/08

3,815

3,688

4.75% 1/15/08

15,985

15,972

32,438

Media - 3.0%

AOL Time Warner, Inc.:

6.875% 5/1/12

6,060

6,710

7.625% 4/15/31

14,695

16,420

British Sky Broadcasting Group PLC (BSkyB) yankee 8.2% 7/15/09

11,200

13,049

Clear Channel Communications, Inc. 5.75% 1/15/13

2,600

2,692

Comcast Cable Communications, Inc. 6.875% 6/15/09

6,275

7,018

Comcast Corp. 7.05% 3/15/33

15,000

15,981

Continental Cablevision, Inc.:

8.3% 5/15/06

7,190

8,052

9% 9/1/08

1,500

1,801

Cox Communications, Inc.:

4.625% 6/1/13

9,110

8,666

7.125% 10/1/12

11,035

12,525

7.75% 8/15/06

2,500

2,822

7.75% 11/1/10

9,500

11,171

Liberty Media Corp. 5.7% 5/15/13

7,600

7,430

News America Holdings, Inc.:

7.75% 1/20/24

10,850

12,432

7.75% 12/1/45

4,000

4,587

8% 10/17/16

1,000

1,209

News America, Inc. 6.55% 3/15/33

3,500

3,575

TCI Communications, Inc. 9.8% 2/1/12

8,000

10,392

Walt Disney Co. 5.375% 6/1/07

16,550

17,675

164,207

TOTAL CONSUMER DISCRETIONARY

196,645

CONSUMER STAPLES - 0.4%

Food Products - 0.1%

Kraft Foods, Inc. 5.25% 6/1/07

4,120

4,372

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER STAPLES - continued

Tobacco - 0.3%

Altria Group, Inc. 7% 11/4/13

$ 9,985

$ 9,982

Philip Morris Companies, Inc. 7% 7/15/05

4,900

5,134

15,116

TOTAL CONSUMER STAPLES

19,488

ENERGY - 0.4%

Energy Equipment & Services - 0.1%

Weatherford International Ltd. 4.95% 10/15/13

5,200

5,100

Oil & Gas - 0.3%

Duke Energy Field Services LLC 7.875% 8/16/10

8,000

9,348

Louis Dreyfus Natural Gas Corp. 6.875% 12/1/07

4,700

5,213

14,561

TOTAL ENERGY

19,661

FINANCIALS - 13.1%

Capital Markets - 1.9%

Amvescap PLC:

5.9% 1/15/07

1,350

1,455

yankee 6.6% 5/15/05

12,290

13,073

Bank of New York Co., Inc.:

3.4% 3/15/13 (d)

5,100

4,989

4.25% 9/4/12 (d)

5,730

5,832

Credit Suisse First Boston (USA), Inc.:

5.875% 8/1/06

5,900

6,374

6.5% 1/15/12

1,975

2,181

Goldman Sachs Group, Inc.:

5.7% 9/1/12

6,615

6,915

6.6% 1/15/12

12,750

14,142

J.P. Morgan Chase & Co. 5.35% 3/1/07

6,300

6,763

Lehman Brothers Holdings, Inc.:

4% 1/22/08

6,100

6,189

7.75% 1/15/05

4,310

4,643

Merita Bank Ltd. yankee 6.5% 1/15/06

4,000

4,325

Merrill Lynch & Co., Inc. 4% 11/15/07

7,640

7,810

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Capital Markets - continued

Morgan Stanley:

5.3% 3/1/13

$ 10,000

$ 10,149

6.6% 4/1/12

6,970

7,761

102,601

Commercial Banks - 0.9%

Bank of America Corp. 6.25% 4/15/12

8,960

9,831

Corporacion Andina de Fomento 5.2% 5/21/13

3,910

3,827

Fleet Financial Group, Inc. 7.125% 4/15/06

2,800

3,090

FleetBoston Financial Corp. 7.25% 9/15/05

5,845

6,386

Korea Development Bank:

5.75% 9/10/13

14,350

14,681

7.375% 9/17/04

3,985

4,174

Popular North America, Inc. 6.125% 10/15/06

5,270

5,734

Wells Fargo Bank NA, San Francisco 7.55% 6/21/10

2,900

3,427

51,150

Consumer Finance - 3.7%

American General Finance Corp.:

2.75% 6/15/08

430

411

4.5% 11/15/07

13,100

13,577

5.875% 7/14/06

15,885

17,154

Capital One Bank:

4.875% 5/15/08

8,240

8,450

6.5% 6/13/13

8,775

9,045

6.65% 3/15/04

900

915

Ford Motor Credit Co.:

5.8% 1/12/09

2,315

2,255

6.5% 1/25/07

11,890

12,268

7.375% 10/28/09

23,350

24,152

General Electric Capital Corp.:

3.5% 8/15/07

5,000

5,044

6% 6/15/12

4,600

4,950

6.125% 2/22/11

21,400

23,357

General Motors Acceptance Corp.:

6.125% 2/1/07

840

882

6.125% 8/28/07

840

885

6.38% 1/30/04

6,410

6,484

6.875% 9/15/11

11,205

11,559

6.875% 8/28/12

7,250

7,432

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Consumer Finance - continued

Household Finance Corp.:

6.375% 10/15/11

$ 20,020

$ 21,879

6.375% 11/27/12

6,035

6,572

6.75% 5/15/11

9,235

10,335

7% 5/15/12

4,480

5,088

MBNA Corp. 7.5% 3/15/12

7,730

8,817

201,511

Diversified Financial Services - 3.9%

Ameritech Capital Funding Corp. euro 6.25% 5/18/09

4,185

4,544

ASIF Global Financing XVIII 3.85% 11/26/07 (a)

185

187

Cadbury Schweppes U.S. Finance LLC:

3.875% 10/1/08 (a)

6,685

6,633

5.125% 10/1/13 (a)

4,725

4,745

CIT Group, Inc. 7.75% 4/2/12

4,425

5,164

Citigroup, Inc. 7.25% 10/1/10

9,900

11,518

Delta Air Lines, Inc. pass thru trust certificates 7.57% 11/18/10

1,105

1,137

Deutsche Telekom International Finance BV:

5.25% 7/22/13

6,280

6,241

8.25% 6/15/05

2,035

2,223

8.5% 6/15/10

14,665

17,649

8.75% 6/15/30

8,045

10,121

Devon Financing Corp. U.L.C. 7.875% 9/30/31

8,200

9,703

Newcourt Credit Group, Inc. yankee 6.875% 2/16/05

4,330

4,594

NiSource Finance Corp. 7.875% 11/15/10

12,580

14,885

Pemex Project Funding Master Trust:

6.125% 8/15/08

9,000

9,459

7.375% 12/15/14

27,060

28,413

Petronas Capital Ltd. 7% 5/22/12 (a)

26,925

29,979

Sprint Capital Corp.:

6.125% 11/15/08

7,800

8,215

7.125% 1/30/06

4,800

5,190

Verizon Global Funding Corp.:

6.125% 6/15/07

6,375

6,968

7.25% 12/1/10

11,000

12,563

7.375% 9/1/12

11,020

12,638

Verizon Wireless Capital LLC 5.375% 12/15/06

60

64

212,833

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Insurance - 0.6%

Aegon NV 4.75% 6/1/13

$ 13,000

$ 12,559

Hartford Financial Services Group, Inc.:

2.375% 6/1/06

2,780

2,750

4.625% 7/15/13 (a)

2,800

2,669

Prudential Financial, Inc. 3.75% 5/1/08

6,245

6,226

Travelers Property Casualty Corp.:

5% 3/15/13

3,170

3,144

6.375% 3/15/33

4,075

4,233

31,581

Real Estate - 1.2%

Boston Properties, Inc. 6.25% 1/15/13

10,300

10,965

Camden Property Trust:

5.875% 6/1/07

3,920

4,210

5.875% 11/30/12

6,435

6,713

CarrAmerica Realty Corp. 5.25% 11/30/07

7,035

7,270

CenterPoint Properties Trust:

5.75% 8/15/09

5,030

5,364

6.75% 4/1/05

2,490

2,632

Dominion Resources, Inc. 6.75% 12/15/32

1,000

1,066

EOP Operating LP:

6.5% 1/15/04

4,070

4,108

7.75% 11/15/07

2,425

2,778

Gables Realty LP:

5.75% 7/15/07

8,040

8,505

6.8% 3/15/05

1,120

1,180

ProLogis 6.7% 4/15/04

1,715

1,758

Regency Centers LP 6.75% 1/15/12

7,380

8,084

Vornado Realty Trust 5.625% 6/15/07

4,475

4,727

69,360

Thrifts & Mortgage Finance - 0.9%

Countrywide Home Loans, Inc.:

3.25% 5/21/08

1,370

1,335

5.5% 8/1/06

19,295

20,584

5.625% 5/15/07

5,500

5,893

H.F. Ahmanson & Co. 7.875% 9/1/04

2,600

2,720

Washington Mutual Bank 6.875% 6/15/11

4,900

5,497

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Thrifts & Mortgage Finance - continued

Washington Mutual, Inc.:

4.375% 1/15/08

$ 6,300

$ 6,451

5.625% 1/15/07

7,910

8,521

51,001

TOTAL FINANCIALS

720,037

INDUSTRIALS - 1.8%

Aerospace & Defense - 0.5%

Bombardier, Inc. 6.75% 5/1/12 (a)

3,235

3,437

Raytheon Co.:

5.5% 11/15/12

13,415

13,510

5.7% 11/1/03

4,800

4,800

6.75% 8/15/07

4,770

5,227

26,974

Commercial Services & Supplies - 0.1%

Boise Cascade Office Products Corp. 7.05% 5/15/05

7,455

7,734

Industrial Conglomerates - 0.6%

Textron Financial Corp. 2.75% 6/1/06

4,795

4,764

Tyco International Group SA yankee:

5.875% 11/1/04

3,000

3,094

6.375% 10/15/11

4,000

4,160

6.75% 2/15/11

20,675

21,993

34,011

Road & Rail - 0.5%

CSX Corp.:

6.75% 3/15/11

9,000

10,041

7.95% 5/1/27

4,000

4,815

Norfolk Southern Corp. 7.25% 2/15/31

9,800

11,070

25,926

Transportation Infrastructure - 0.1%

Korea Highway Corp. 4.9% 7/1/13 (a)

6,230

5,965

TOTAL INDUSTRIALS

100,610

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

INFORMATION TECHNOLOGY - 0.6%

Communications Equipment - 0.4%

Motorola, Inc.:

6.75% 2/1/06

$ 3,000

$ 3,231

7.625% 11/15/10

6,000

6,753

8% 11/1/11

13,535

15,669

25,653

IT Services - 0.2%

Electronic Data Systems Corp. 6% 8/1/13 (a)

9,760

9,242

TOTAL INFORMATION TECHNOLOGY

34,895

MATERIALS - 0.6%

Containers & Packaging - 0.1%

Sealed Air Corp.:

5.625% 7/15/13 (a)

1,945

1,960

6.875% 7/15/33 (a)

4,070

4,193

6,153

Metals & Mining - 0.2%

Corporacion Nacional del Cobre (Codelco) 6.375% 11/30/12 (a)

3,460

3,707

Falconbridge Ltd. yankee 7.35% 6/5/12

3,095

3,484

7,191

Paper & Forest Products - 0.3%

Boise Cascade Corp. 7.5% 2/1/08

3,650

3,887

International Paper Co. 5.85% 10/30/12

6,370

6,618

Weyerhaeuser Co.:

5.25% 12/15/09

3,465

3,573

6.125% 3/15/07

2,735

2,958

17,036

TOTAL MATERIALS

30,380

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.8%

AT&T Broadband Corp. 8.375% 3/15/13

5,200

6,286

AT&T Corp.:

7% 11/15/06

4,925

5,454

7.8% 11/15/11

7,190

8,148

8.5% 11/15/31

20,295

23,014

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

TELECOMMUNICATION SERVICES - continued

Diversified Telecommunication Services - continued

British Telecommunications PLC:

8.375% 12/15/10

$ 9,744

$ 11,767

8.875% 12/15/30

3,450

4,442

Citizens Communications Co. 8.5% 5/15/06

3,240

3,660

France Telecom SA 9% 3/1/11

23,400

28,230

Koninklijke KPN NV yankee 8% 10/1/10

17,000

20,261

Telecom Italia Capital 4% 11/15/08 (a)

12,400

12,385

TELUS Corp. yankee:

7.5% 6/1/07

16,590

18,424

8% 6/1/11

8,000

9,197

151,268

Wireless Telecommunication Services - 0.9%

AT&T Wireless Services, Inc.:

7.875% 3/1/11

1,375

1,571

8.75% 3/1/31

13,360

16,066

Cingular Wireless LLC:

5.625% 12/15/06

10,000

10,783

7.125% 12/15/31

20,488

22,700

51,120

TOTAL TELECOMMUNICATION SERVICES

202,388

UTILITIES - 2.3%

Electric Utilities - 1.6%

Dominion Resources, Inc.:

6.25% 6/30/12

3,570

3,867

8.125% 6/15/10

6,245

7,467

DTE Energy Co. 7.05% 6/1/11

5,030

5,680

Duke Capital Corp. 6.75% 2/15/32

5,365

5,263

FirstEnergy Corp.:

5.5% 11/15/06

4,260

4,477

6.45% 11/15/11

8,970

9,528

FPL Group Capital, Inc.:

3.25% 4/11/06

3,355

3,394

6.125% 5/15/07

4,520

4,940

Illinois Power Co. 7.5% 6/15/09

5,000

5,425

MidAmerican Energy Holdings, Inc.:

4.625% 10/1/07

3,965

4,056

5.875% 10/1/12

2,650

2,742

Oncor Electric Delivery Co. 6.375% 5/1/12

10,150

11,120

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

UTILITIES - continued

Electric Utilities - continued

Public Service Co. of Colorado:

4.875% 3/1/13

$ 7,500

$ 7,436

7.875% 10/1/12

5,630

6,802

Southwestern Public Service Co. 5.125% 11/1/06

5,000

5,311

TECO Energy, Inc. 7% 5/1/12

325

321

87,829

Gas Utilities - 0.3%

Consolidated Natural Gas Co. 6.85% 4/15/11

1,535

1,727

Ras Laffan Liquid Natural Gas Co. Ltd. yankee 8.294% 3/15/14 (a)

6,400

7,424

Texas Eastern Transmission Corp.:

5.25% 7/15/07

2,040

2,159

7.3% 12/1/10

4,480

5,085

16,395

Multi-Utilities & Unregulated Power - 0.4%

Constellation Energy Group, Inc.:

6.35% 4/1/07

6,915

7,538

7% 4/1/12

4,485

5,084

Williams Companies, Inc.:

7.125% 9/1/11

9,690

9,932

7.5% 1/15/31

1,270

1,194

23,748

TOTAL UTILITIES

127,972

TOTAL NONCONVERTIBLE BONDS

(Cost $1,366,990)

1,452,076

U.S. Government and Government Agency Obligations - 16.1%

U.S. Government Agency Obligations - 5.8%

Fannie Mae:

4.625% 10/15/13

50,000

49,300

5% 5/14/07

24,000

24,474

5.5% 7/18/12

34,500

35,162

6.125% 3/15/12

22,972

25,466

6.25% 2/1/11

10,185

11,140

6.25% 7/19/11

55,500

57,187

6.25% 3/22/12

19,683

20,566

6.625% 11/15/10

7,810

8,923

U.S. Government and Government Agency Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency Obligations - continued

Financing Corp. - coupon STRIPS 0% 3/7/05

$ 11,375

$ 11,111

Freddie Mac:

4.875% 11/15/13

25,110

25,176

5.25% 11/5/12

5,610

5,623

5.875% 3/21/11

34,670

37,075

6% 5/25/12

7,900

8,054

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS

319,257

U.S. Treasury Obligations - 10.3%

U.S. Treasury Bonds:

6.125% 11/15/27

22,900

25,599

6.125% 8/15/29

212,031

238,046

6.375% 8/15/27

9,680

11,147

8% 11/15/21

66,000

88,453

9.875% 11/15/15

6,825

10,136

11.25% 2/15/15

21,590

34,471

U.S. Treasury Notes:

2.375% 8/15/06

2,680

2,688

4% 11/15/12

106,995

105,378

6.5% 2/15/10

40,000

46,402

TOTAL U.S. TREASURY OBLIGATIONS

562,320

TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $880,284)

881,577

U.S. Government Agency - Mortgage Securities - 39.2%

Fannie Mae - 36.5%

4% 11/1/18 (b)

34,683

33,675

4.5% 11/1/18 to 11/1/33 (b)

202,960

199,551

5% 12/1/17 to 1/1/18

5,542

5,631

5% 11/1/18 to 11/13/33 (b)

479,858

479,293

5.5% 2/1/11 to 4/1/18

40,101

41,333

5.5% 11/1/13 to 11/13/33 (b)

190,092

191,756

6% 1/1/13 to 6/1/33

23,284

24,056

6.5% 3/1/06 to 4/1/33

384,208

400,955

6.5% 11/1/18 to 11/1/33 (b)

123,754

129,725

U.S. Government Agency - Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Fannie Mae - continued

7% 7/1/22 to 8/1/33 (b)

$ 457,030

$ 481,333

7.5% 6/1/25 to 8/1/29

9,281

9,909

9.5% 1/1/17 to 2/1/25

667

744

12.5% 1/1/15 to 7/1/15

12

13

TOTAL FANNIE MAE

1,997,974

Freddie Mac - 0.0%

8.5% 9/1/22 to 9/1/27

1,257

1,364

Government National Mortgage Association - 2.7%

5.5% 12/15/32 to 8/15/33

19,760

20,032

6% 10/15/08 to 6/15/33

25,833

26,740

6.5% 3/15/26 to 2/15/33

9,754

10,219

7% 8/15/23 to 12/15/32

80,343

85,145

7.5% 10/15/05 to 8/15/28

4,127

4,426

8% 9/15/24 to 5/15/32

1,011

1,093

8.5% 1/15/31

66

72

9% 4/15/23

8

8

TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

147,735

TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES

(Cost $2,142,506)

2,147,073

Asset-Backed Securities - 5.5%

ACE Securities Corp. Series 2003-FM1 Class M2, 2.97% 11/25/32 (d)

3,646

3,646

American Express Credit Account Master Trust
Series 1999-2 Class B, 6.1% 12/15/06

4,600

4,716

Asset Backed Securities Corp. Home Equity Loan Trust:

Series 2003-HE2 Class A2, 1.5% 4/15/33 (d)

11,031

11,013

Series 2003-HE7 Class A3, 1.53% 12/15/33 (b)(d)

12,815

12,815

Capital One Master Trust Series 2001-3A Class A, 5.45% 3/16/09

3,830

4,059

Capital One Multi-Asset Execution Trust:

Series 2002-B1 Class B1, 1.8% 7/15/08 (d)

8,570

8,595

Series 2003-2B Class B2, 3.5% 2/17/09

7,080

7,124

Series 2003-A1 Class A1, 1.51% 1/15/09 (d)

34,225

34,459

Series 2003-A4 Class A4, 3.65% 7/15/11

4,159

4,151

Series 2003-B1 Class B1, 2.29% 2/17/09 (d)

13,465

13,616

Series 2003-B4 Class B4, 1.92% 7/15/11 (d)

6,635

6,635

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CDC Mortgage Capital Trust Series 2003-HE2:

Class M1, 1.92% 10/25/33 (d)

$ 1,295

$ 1,297

Class M2, 3.02% 10/25/33 (d)

3,150

3,167

Chase Manhattan Auto Owner Trust Series 2001-A
Class CTFS, 5.06% 2/15/08

1,222

1,254

Fieldstone Mortgage Investment Corp. Series 2003-1:

Class M1, 1.8% 11/25/33 (d)

1,400

1,400

Class M2, 2.87% 11/25/33 (d)

700

700

Ford Credit Auto Owner Trust:

Series 2001-B Class B, 5.71% 9/15/05

2,495

2,559

Series 2001-C Class B, 5.54% 12/15/05

4,400

4,509

Home Equity Asset Trust:

Series 2003-2:

Class A2, 1.5% 8/25/33 (d)

2,149

2,150

Class M1, 2% 8/25/33 (d)

2,915

2,930

Series 2003-4:

Class M1, 1.92% 10/25/33 (d)

4,025

4,015

Class M2, 3.02% 10/25/33 (d)

4,765

4,765

Series 2003-5N Class A, 7.5% 1/27/34 (a)

925

921

Home Equity Asset Trust NIMS Trust:

Series 2002-4N Class A, 8% 5/27/33 (a)

2,390

2,343

Series 2003-2N Class A, 8% 9/27/33 (a)

2,911

2,850

Honda Auto Receivables Owner Trust Series 2001-2 Class A4, 5.09% 10/18/06

4,900

4,993

Household Home Equity Loan Trust Series 2002-2
Class A, 1.42% 4/20/32 (d)

8,910

8,908

JCPenney Master Credit Card Trust Series E Class A, 5.5% 6/15/07

18,000

18,029

Long Beach Mortgage Loan Trust Series 2003-3
Class M2, 2.97% 7/25/33 (d)

4,800

4,806

MBNA Credit Card Master Note Trust:

Series 2001-B2 Class B2, 1.48% 1/15/09 (d)

33,400

33,511

Series 2003-B3 Class B3, 1.495% 1/18/11 (d)

1,130

1,130

Series 2003-B5 Class B5, 1.49% 2/15/11 (d)

7,235

7,239

Morgan Stanley ABS Capital I, Inc.:

Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (a)

1,247

1,247

Series 2003-HE1 Class M2, 3.02% 5/25/33 (d)

5,560

5,616

Series 2003-NC8 Class M1, 1.82% 9/25/33 (d)

2,600

2,600

Morgan Stanley Dean Witter Capital I Trust:

Series 2001-NC4 Class M1, 2.12% 1/25/32 (d)

5,135

5,181

Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (a)

2,885

2,886

Series 2002-OP1N Class NOTE, 9.5% 9/25/32 (a)

514

514

Series 2003-NC2 Class M2, 3.12% 2/25/33 (d)

2,855

2,881

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Morgan Stanley Dean Witter Capital I, Inc.:

Series 2002-AM3N Class NOTE, 9.5% 2/25/33 (a)

$ 2,122

$ 2,124

Series 2003-NC2N Class NOTE, 9.5% 12/25/32 (a)

2,583

2,582

New Century Home Equity Loan Trust Series 2003-2 Class A2, 1.55% 1/25/33 (d)

9,791

9,819

Nissan Auto Lease Trust Series 2003-A Class A3B, 2.57% 6/15/09

10,500

10,504

Sears Credit Account Master Trust II:

Series 2000-1 Class B, 7.5% 11/15/07

3,950

3,958

Series 2000-2 Class A, 6.75% 9/16/09

7,720

8,364

Series 2002-4 Class A, 1.25% 8/18/09 (d)

10,400

10,389

Superior Wholesale Inventory Financing Trust VII
Series 2003-A8 Class CTFS, 1.57% 3/15/11 (a)(d)

9,340

9,340

TOTAL ASSET-BACKED SECURITIES

(Cost $300,113)

302,310

Collateralized Mortgage Obligations - 1.7%

Private Sponsor - 0.8%

Residential Asset Mortgage Products, Inc. Series 2003-SL1 Class 3A1, 7.125% 5/25/31 (b)

11,500

11,858

Residential Finance LP/Residential Finance Development Corp. floater:

Series 2003-B:

Class B3, 2.67% 7/10/35 (a)(d)

9,155

9,192

Class B4, 2.87% 7/10/35 (a)(d)

6,966

6,992

Class B5, 3.47% 7/10/35 (a)(d)

6,568

6,592

Class B6, 3.97% 7/10/35 (a)(d)

2,985

3,000

Series 2003-CB1:

Class B3, 2.57% 6/10/35 (a)(d)

3,193

3,201

Class B4, 2.77% 6/10/35 (a)(d)

2,857

2,864

Class B5, 3.37% 6/10/35 (a)(d)

1,951

1,956

Class B6, 3.87% 6/10/35 (a)(d)

1,159

1,162

TOTAL PRIVATE SPONSOR

46,817

U.S. Government Agency - 0.9%

Fannie Mae planned amortization class Series 1994-81 Class PJ, 8% 7/25/23

12,210

12,564

Fannie Mae guaranteed REMIC pass thru certificates planned amortization class Series 2001-53 Class OH, 6.5% 6/25/30

1,726

1,761

Collateralized Mortgage Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency - continued

Freddie Mac planned amortization class Series 2355 Class CD, 6.5% 6/15/30

$ 1,956

$ 1,986

Freddie Mac Multi-class participation certificates guaranteed planned amortization class Series 1669 Class H, 6.5% 7/15/23

10,122

10,725

Ginnie Mae guaranteed Multi-family pass thru securities sequential pay Series 2002-35 Class C, 5.86% 10/16/23 (d)

1,490

1,604

Ginnie Mae guaranteed REMIC pass thru securities sequential pay:

Series 2003-22 Class B, 3.963% 5/16/32

7,715

7,485

Series 2003-59 Class D, 3.654% 10/16/27

11,780

11,019

TOTAL U.S. GOVERNMENT AGENCY

47,144

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost $94,213)

93,961

Commercial Mortgage Securities - 2.4%

Bear Stearns Commercial Mortgage Securities, Inc. floater Series 2003-BA1A Class A1, 1.4% 4/14/15 (a)(d)

13,865

13,865

Chase Commercial Mortgage Securities Corp.
Series 2001-245 Class A2, 6.275% 2/12/16 (a)(d)

3,810

4,139

COMM floater:

Series 2001-FL5A Class A2, 1.67% 11/15/13 (a)(d)

4,508

4,509

Series 2002-FL7 Class A2, 1.47% 11/15/14 (a)(d)

7,270

7,268

Commercial Resecuritization Trust sequential pay
Series 1999-ABC1 Class A, 6.74% 1/27/09 (a)

4,893

5,169

CS First Boston Mortgage Securities Corp.:

sequential pay Series 2000-C1 Class A2, 7.545% 4/14/62

3,700

4,306

Series 1997-C2 Class D, 7.27% 1/17/35

2,775

3,067

Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31

2,320

2,357

DLJ Commercial Mortgage Corp. sequential pay
Series 2000-CF1 Class A1B, 7.62% 6/10/33

10,000

11,673

Equitable Life Assurance Society of the United States Series 174:

Class B1, 7.33% 5/15/06 (a)

3,400

3,756

Class C1, 7.52% 5/15/06 (a)

3,500

3,874

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Ginnie Mae guaranteed REMIC pass thru securities:

sequential pay:

Series 2002-83 Class B, 4.6951% 12/16/24

$ 4,590

$ 4,685

Series 2003-36 Class C, 4.254% 2/16/31

6,373

6,245

Series 2003-47 Class C, 4.227% 10/16/27

11,493

11,396

Series 2003-59 Class XA, 0.3% 6/16/34 (c)(d)

59,190

4,543

Series 2003-47 Class XA, 0.2917% 6/16/43 (c)(d)

36,216

2,142

Series 2003-64 Class XA, 0.5018% 8/16/43 (c)(d)

36,049

2,211

GS Mortgage Securities Corp. II:

Series 1998-GLII Class E, 7.1905% 4/13/31 (d)

1,220

1,215

Series 2003-C1 Class A2A, 3.59% 1/10/40

5,945

5,937

Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A Class C, 4.13% 11/20/37 (a)

11,400

10,009

Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A2, 6.602% 11/15/07 (a)

9,000

9,906

Trizechahn Office Properties Trust Series 2001-TZHA Class E3, 7.253% 3/15/13 (a)

6,100

6,381

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $125,607)

128,653

Municipal Securities - 0.7%

Illinois Gen. Oblig.:

3.3% 6/1/10

1,285

1,229

3.55% 6/1/11

1,030

983

3.75% 6/1/12

3,345

3,178

5.1% 6/1/33

20,765

18,777

Oregon Gen. Oblig. 5.892% 6/1/27

10,945

11,082

TOTAL MUNICIPAL SECURITIES

(Cost $37,360)

35,249

Foreign Government and Government Agency Obligations - 1.0%

Principal
Amount (000s)

Value (Note 1)
(000s)

Bahamian Republic 6.625% 5/15/33 (a)

$ 3,835

$ 3,875

Chilean Republic:

5.5% 1/15/13

6,375

6,524

7.125% 1/11/12

5,695

6,464

State of Israel 4.625% 6/15/13

2,565

2,408

United Mexican States:

4.625% 10/8/08

13,935

13,970

6.375% 1/16/13

9,460

9,734

7.5% 1/14/12

9,800

10,927

TOTAL FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $51,740)

53,902

Supranational Obligations - 0.1%

Corporacion Andina de Fomento 6.875% 3/15/12
(Cost $4,378)

4,425

4,868

Fixed-Income Funds - 11.3%

Shares

Fidelity Ultra-Short Central Fund (e)
(Cost $621,000)

6,234,498

620,146

Cash Equivalents - 14.3%

Maturity
Amount (000s)

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $783,909)

$ 783,979

783,909

TOTAL INVESTMENT PORTFOLIO - 118.8%

(Cost $6,408,100)

6,503,724

NET OTHER ASSETS - (18.8)%

(1,028,721)

NET ASSETS - 100%

$ 5,475,003

Swap Agreements

Expiration
Date

Notional
Amount
(000s)

Unrealized
Appreciation/
(Depreciation)
(000s)

Credit Default Swap

Receive from Morgan Stanley, Inc., upon default of Vornado Realty Trust, par value of the notional amount of Vornado Realty Trust 5.625% 6/15/07, and pay quarterly notional amount multiplied by 1.37%

June 2007

$ 4,475

$ (93)

Receive quarterly notional amount multiplied by .62% and pay Goldman Sachs upon default of SLM Corp., par value of the notional amount of SLM Corp. 1.1106% 7/25/35

August 2007

1,885

17

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

8,000

318

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

5,000

199

TOTAL CREDIT DEFAULT SWAP

19,360

441

Interest Rate Swap

Receive quarterly a fixed rate equal to 2.5664% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.

March 2006

9,000

31

$ 28,360

$ 472

Legend

(a) 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 $225,043,000 or 4.1% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

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

(e) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $9,308,588,000 and $8,937,561,000, respectively, of which long-term U.S. government and government agency obligations aggregated $8,579,663,000 and $8,582,778,000, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $783,909) (cost $6,408,100) - See accompanying schedule

$ 6,503,724

Cash

238

Receivable for investments sold
Regular delivery

8,600

Delayed delivery

4,340

Receivable for fund shares sold

6,788

Interest receivable

48,507

Unrealized gain on swap agreements

472

Prepaid expenses

28

Other receivables

4

Total assets

6,572,701

Liabilities

Payable for investments purchased
Regular delivery

$ 27,599

Delayed delivery

1,062,342

Payable for fund shares redeemed

4,433

Distributions payable

411

Accrued management fee

1,926

Distribution fees payable

15

Other payables and accrued expenses

972

Total liabilities

1,097,698

Net Assets

$ 5,475,003

Net Assets consist of:

Paid in capital

$ 5,350,768

Undistributed net investment income

3,408

Accumulated undistributed net realized gain (loss) on investments

24,731

Net unrealized appreciation (depreciation) on investments

96,096

Net Assets

$ 5,475,003

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share
($6,260 ÷ 831 shares)

$ 7.53

Maximum offering price per share (100/95.25 of $7.53)

$ 7.91

Class T:
Net Asset Value and redemption price per share ($15,106 ÷ 2,006 shares)

$ 7.53

Maximum offering price per share (100/96.50 of $7.53)

$ 7.80

Class B:
Net Asset Value and offering price per share
($8,888 ÷ 1,180 shares) A

$ 7.53

Class C:
Net Asset Value and offering price per share
($5,578 ÷ 741 shares) A

$ 7.53

Investment Grade Bond:
Net Asset Value, offering price and redemption price per share ($5,438,919 ÷ 722,509 shares)

$ 7.53

Institutional Class:
Net Asset Value, offering price and redemption price per share ($252.3 ÷ 33.5 shares)

$ 7.53

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 97,162

Security lending

261

Total income

97,423

Expenses

Management fee

$ 11,531

Transfer agent fees

4,752

Distribution fees

86

Accounting and security lending fees

345

Non-interested trustees' compensation

11

Appreciation in deferred trustees' compensation account

1

Custodian fees and expenses

132

Registration fees

87

Audit

39

Legal

21

Miscellaneous

7

Total expenses before reductions

17,012

Expense reductions

(65)

16,947

Net investment income (loss)

80,476

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

27,638

Change in net unrealized appreciation (depreciation) on:

Investment securities

(78,998)

Swap agreements

362

Total change in net unrealized appreciation (depreciation)

(78,636)

Net gain (loss)

(50,998)

Net increase (decrease) in net assets resulting from operations

$ 29,478

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands

Six months ended
October 31, 2003
(Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 80,476

$ 177,829

Net realized gain (loss)

27,638

151,806

Change in net unrealized appreciation (depreciation)

(78,636)

143,315

Net increase (decrease) in net assets resulting
from operations

29,478

472,950

Distributions to shareholders from net investment income

(84,031)

(172,052)

Distributions to shareholders from net realized gain

(70,219)

(73,736)

Total distributions

(154,250)

(245,788)

Share transactions - net increase (decrease)

293,917

1,022,853

Total increase (decrease) in net assets

169,145

1,250,015

Net Assets

Beginning of period

5,305,858

4,055,843

End of period (including undistributed net investment income of $3,408 and undistributed net investment income of $6,963, respectively)

$ 5,475,003

$ 5,305,858

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.107

.186

Net realized and unrealized gain (loss)

(.066)

.326

Total from investment operations

.041

.512

Distributions from net investment income

(.111)

(.172)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.211)

(.292)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.52%

6.98%

Ratios to Average Net Assets G

Expenses before expense reductions

.81% A

.79% A

Expenses net of voluntary waivers, if any

.81% A

.79% A

Expenses net of all reductions

.81% A

.79% A

Net investment income (loss)

2.79% A

3.73% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 6,260

$ 8,085

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.101

.180

Net realized and unrealized gain (loss)

(.064)

.324

Total from investment operations

.037

.504

Distributions from net investment income

(.107)

(.164)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.207)

(.284)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.46%

6.87%

Ratios to Average Net Assets G

Expenses before expense reductions

.95% A

.97% A

Expenses net of voluntary waivers, if any

.95% A

.95% A

Expenses net of all reductions

.95% A

.95% A

Net investment income (loss)

2.66% A

3.57% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 15,106

$ 10,403

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.077

.147

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.012

.469

Distributions from net investment income

(.082)

(.129)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.182)

(.249)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.13%

6.39%

Ratios to Average Net Assets G

Expenses before expense reductions

1.60% A

1.60% A

Expenses net of voluntary waivers, if any

1.60% A

1.60% A

Expenses net of all reductions

1.60% A

1.60% A

Net investment income (loss)

2.01% A

2.92% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 8,888

$ 7,721

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.075

.145

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.010

.467

Distributions from net investment income

(.080)

(.127)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.180)

(.247)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.11%

6.35%

Ratios to Average Net Assets G

Expenses before expense reductions

1.63% A

1.64% A

Expenses net of voluntary waivers, if any

1.63% A

1.64% A

Expenses net of all reductions

1.63% A

1.64% A

Net investment income (loss)

1.98% A

2.88% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 5,578

$ 5,543

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Investment Grade Bond

Six months ended October 31, 2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

$ 7.30

Income from Investment Operations

Net investment income (loss) D

.114

.290

.379 F

.445

.433

.423

Net realized and unrealized gain (loss)

(.065)

.483

.158 F

.324

(.388)

(.022)

Total from investment operations

.049

.773

.537

.769

.045

.401

Distributions from net investment income

(.119)

(.283)

(.377)

(.449)

(.435)

(.410)

Distributions from net realized gain

(.100)

(.120)

(.010)

-

-

(.041)

Total distributions

(.219)

(.403)

(.387)

(.449)

(.435)

(.451)

Net asset value,
end of period

$ 7.53

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

Total Return B, C

.62%

10.82%

7.61%

11.51%

.71%

5.58%

Ratios to Average Net Assets E

Expenses before expense reductions

.63% A

.66%

.66%

.65%

.70%

.71%

Expenses net of voluntary waivers, if any

.62% A

.66%

.66%

.65%

.70%

.71%

Expenses net of all reductions

.62% A

.66%

.66%

.64%

.69%

.70%

Net investment income (loss)

2.98% A

3.86%

5.18% F

6.31%

6.21%

5.77%

Supplemental Data

Net assets, end of period (in millions)

$ 5,439

$ 5,274

$ 4,056

$ 2,976

$ 2,130

$ 2,303

Portfolio turnover rate

299% A

276%

230%

226%

115%

167%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

F Effective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 E

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) D

.117

.202

Net realized and unrealized gain (loss)

(.066)

.321

Total from investment operations

.051

.523

Distributions from net investment income

(.121)

(.183)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.221)

(.303)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C

.65%

7.14%

Ratios to Average Net Assets F

Expenses before expense reductions

.56% A

.56% A

Expenses net of voluntary waivers, if any

.56% A

.56% A

Expenses net of all reductions

.56% A

.56% A

Net investment income (loss)

3.04% A

3.96% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 252

$ 275

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity Investment Grade Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Investment Grade Bond and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 127,664

|

Unrealized depreciation

(24,106)

Net unrealized appreciation (depreciation)

$ 103,558

Cost for federal income tax purposes

$ 6,400,166

Semiannual Report

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The net receivable or payable is accrued daily and is included in interest income in the accompanying Statement of Operations. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact the fund.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Swap Agreements - continued

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums paid to or by the fund are accrued daily and included in interest income in the accompanying Statement of Operations.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

Semiannual Report

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 5

$ -

Class T

0%

.25%

15

-

Class B

.65%

.25%

39

29

Class C

.75%

.25%

27

21

$ 86

$ 50

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

4. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 6

Class T

3

Class B*

12

Class C*

12

$ 33

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Investment Grade Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Investment Grade Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets*

Class A

$ 6

.21

Class T

15

.25

Class B

11

.25

Class C

5

.18

Investment Grade Bond

4,714

.18

Institutional Class

1

.11

$ 4,752

* Annualized

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

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.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $4,252 for the period.

5. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.

6. Expense Reductions.

FMR voluntarily agreed to reimburse a portion of Investment Grade Bond's operating expenses. During the period, this reimbursement reduced the class' expenses by $40.

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $1. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Investment Grade Bond

$ 24

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Other Information.

At the end of the period, Fidelity Freedom Fund 2010 was the owner of record of approximately 17% of the total outstanding shares of the fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 37% of the total outstanding shares of the fund.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003 A

From net investment income

Class A

$ 89

$ 68

Class T

165

90

Class B

94

54

Class C

57

32

Investment Grade Bond

83,621

171,804

Institutional Class

5

4

Total

$ 84,031

$ 172,052

From net realized gain

Class A

$ 60

$ 31

Class T

142

42

Class B

111

41

Class C

79

23

Investment Grade Bond

69,823

73,597

Institutional Class

4

2

Total

$ 70,219

$ 73,736

A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

9. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Class A

Shares sold

598

1,088

$ 4,510

$ 8,282

Reinvestment of distributions

17

12

133

88

Shares redeemed

(834)

(50)

(6,422)

(383)

Net increase (decrease)

(219)

1,050

$ (1,779)

$ 7,987

Class T

Shares sold

957

1,513

$ 7,267

$ 11,450

Reinvestment of distributions

39

17

300

129

Shares redeemed

(341)

(179)

(2,575)

(1,363)

Net increase (decrease)

655

1,351

$ 4,992

$ 10,216

Class B

Shares sold

435

1,090

$ 3,318

$ 8,264

Reinvestment of distributions

23

11

176

82

Shares redeemed

(280)

(99)

(2,113)

(749)

Net increase (decrease)

178

1,002

$ 1,381

$ 7,597

Class C

Shares sold

510

851

$ 3,922

$ 6,459

Reinvestment of distributions

15

6

114

48

Shares redeemed

(504)

(137)

(3,855)

(1,038)

Net increase (decrease)

21

720

$ 181

$ 5,469

Investment Grade Bond

Shares sold

123,920

267,099

$ 941,167

$ 2,006,171

Reinvestment of distributions

19,529

31,580

149,232

237,126

Shares redeemed

(105,924)

(167,094)

(801,242)

(1,251,983)

Net increase (decrease)

37,525

131,585

$ 289,157

$ 991,314

Institutional Class

Shares sold

10

38

$ 78

$ 285

Reinvestment of distributions

1

1

5

4

Shares redeemed

(13)

(3)

(98)

(19)

Net increase (decrease)

(2)

36

$ (15)

$ 270

A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

Semiannual Report

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Money
Management, Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Semiannual Report

Fidelity Advisor Aggressive Growth Fund

Fidelity Advisor Asset Allocation Fund

Fidelity Advisor Balanced Fund

Fidelity Advisor Biotechnology Fund

Fidelity Advisor California Municipal Income Fund

Fidelity Advisor Consumer Industries Fund

Fidelity Advisor Cyclical Industries Fund

Fidelity Advisor Developing Communications Fund

Fidelity Advisor Diversified International Fund

Fidelity Advisor Dividend Growth Fund

Fidelity Advisor Dynamic Capital Appreciation Fund

Fidelity Advisor Electronics Fund

Fidelity Advisor Emerging Asia Fund

Fidelity Advisor Emerging Markets Income Fund

Fidelity Advisor Equity Growth Fund

Fidelity Advisor Equity Income Fund

Fidelity Advisor Equity Value Fund

Fidelity Advisor Europe Capital Appreciation Fund

Fidelity Advisor Fifty Fund

Fidelity Advisor Financial Services Fund

Fidelity Advisor Floating Rate High Income Fund

Fidelity Advisor Freedom Income FundSM

Fidelity Advisor Freedom 2010 FundSM

Fidelity Advisor Freedom 2020 FundSM

Fidelity Advisor Freedom 2030 FundSM

Fidelity Advisor Freedom 2040 FundSM

Fidelity Advisor Global Equity Fund

Fidelity Advisor Government Investment Fund

Fidelity Advisor Growth & Income Fund

Fidelity Advisor Growth Opportunities

Fidelity Advisor Health Care Fund

Fidelity Advisor High Income Advantage Fund

Fidelity Advisor High Income Fund

Fidelity Advisor Inflation-Protected Bond Fund

Fidelity Advisor Intermediate Bond Fund

Fidelity Advisor International Capital Appreciation Fund

Fidelity Advisor International Small Cap Fund

Fidelity Advisor Investment Grade Bond Fund

Fidelity Advisor Japan Fund

Fidelity Advisor Korea Fund

Fidelity Advisor Large Cap Fund

Fidelity Advisor Latin America Fund

Fidelity Advisor Leveraged Company Stock Fund

Fidelity Advisor Mid Cap Fund

Fidelity Advisor Mortgage Securities Fund

Fidelity Advisor Municipal Income Fund

Fidelity Advisor Natural Resources Fund

Fidelity Advisor New Insights Fund

Fidelity Advisor New York
Municipal Income Fund

Fidelity Advisor Overseas Fund

Fidelity Advisor Real Estate Fund

Fidelity Advisor Short Fixed-Income Fund

Fidelity Advisor Short Intermediate Municipal Income Fund

Fidelity Advisor Small Cap Fund

Fidelity Advisor Strategic Growth Fund

Fidelity Advisor Strategic Income Fund

Fidelity Advisor Tax Managed
Stock Fund

Fidelity Advisor Technology Fund

Fidelity Advisor Telecommunications & Utilities Growth Fund

Fidelity Advisor Value Leaders Fund

Fidelity Advisor Value Strategies Fund

Prime Fund

Tax-Exempt Fund

Treasury Fund

AIGBI-USAN-1203
1.784860.100

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

Fidelity®

Investment Grade Bond

Fund

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

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

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)

As of October 31, 2003

As of April 30, 2003

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

AAA 7.3%

AAA 6.4%

AA 3.5%

AA 2.7%

A 13.7%

A 14.0%

BBB 16.3%

BBB 14.0%

BB and Below 1.8%

BB and Below 1.8%

Not Rated 0.7%

Not Rated 0.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%



We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings. Securities rated BB or below were rated investment grade at the time of acquisition.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

6.1

4.7

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

4.6

3.6

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003*

As of April 30, 2003**

Corporate Bonds 27.3%

Corporate Bonds 26.6%

U.S. Government
and Government
Agency Obligations 57.8%

U.S. Government
and Government
Agency Obligations 61.0%

Asset-Backed
Securities 10.0%

Asset-Backed
Securities 8.2%

CMOs and Other Mortgage Related Securities 4.2%

CMOs and Other Mortgage Related Securities 3.1%

Municipal Bonds 0.7%

Municipal Bonds 0.0%

Other Investments 1.1%

Other Investments 1.2%

Short-Term
Investments and
Net Other Assets(dagger) (1.1)%

Short-Term
Investments and
Net Other Assets(dagger) (0.1)%

* Foreign investments

7.3%

** Foreign investments

6.0%

* Futures and Swaps

0.2%

** Futures and Swaps

(0.4)%



(dagger) Short-term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 26.5%

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER DISCRETIONARY - 3.6%

Auto Components - 0.6%

DaimlerChrysler NA Holding Corp.:

3.4% 12/15/04

$ 12,700

$ 12,778

4.05% 6/4/08

3,815

3,688

4.75% 1/15/08

15,985

15,972

32,438

Media - 3.0%

AOL Time Warner, Inc.:

6.875% 5/1/12

6,060

6,710

7.625% 4/15/31

14,695

16,420

British Sky Broadcasting Group PLC (BSkyB) yankee 8.2% 7/15/09

11,200

13,049

Clear Channel Communications, Inc. 5.75% 1/15/13

2,600

2,692

Comcast Cable Communications, Inc. 6.875% 6/15/09

6,275

7,018

Comcast Corp. 7.05% 3/15/33

15,000

15,981

Continental Cablevision, Inc.:

8.3% 5/15/06

7,190

8,052

9% 9/1/08

1,500

1,801

Cox Communications, Inc.:

4.625% 6/1/13

9,110

8,666

7.125% 10/1/12

11,035

12,525

7.75% 8/15/06

2,500

2,822

7.75% 11/1/10

9,500

11,171

Liberty Media Corp. 5.7% 5/15/13

7,600

7,430

News America Holdings, Inc.:

7.75% 1/20/24

10,850

12,432

7.75% 12/1/45

4,000

4,587

8% 10/17/16

1,000

1,209

News America, Inc. 6.55% 3/15/33

3,500

3,575

TCI Communications, Inc. 9.8% 2/1/12

8,000

10,392

Walt Disney Co. 5.375% 6/1/07

16,550

17,675

164,207

TOTAL CONSUMER DISCRETIONARY

196,645

CONSUMER STAPLES - 0.4%

Food Products - 0.1%

Kraft Foods, Inc. 5.25% 6/1/07

4,120

4,372

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER STAPLES - continued

Tobacco - 0.3%

Altria Group, Inc. 7% 11/4/13

$ 9,985

$ 9,982

Philip Morris Companies, Inc. 7% 7/15/05

4,900

5,134

15,116

TOTAL CONSUMER STAPLES

19,488

ENERGY - 0.4%

Energy Equipment & Services - 0.1%

Weatherford International Ltd. 4.95% 10/15/13

5,200

5,100

Oil & Gas - 0.3%

Duke Energy Field Services LLC 7.875% 8/16/10

8,000

9,348

Louis Dreyfus Natural Gas Corp. 6.875% 12/1/07

4,700

5,213

14,561

TOTAL ENERGY

19,661

FINANCIALS - 13.1%

Capital Markets - 1.9%

Amvescap PLC:

5.9% 1/15/07

1,350

1,455

yankee 6.6% 5/15/05

12,290

13,073

Bank of New York Co., Inc.:

3.4% 3/15/13 (d)

5,100

4,989

4.25% 9/4/12 (d)

5,730

5,832

Credit Suisse First Boston (USA), Inc.:

5.875% 8/1/06

5,900

6,374

6.5% 1/15/12

1,975

2,181

Goldman Sachs Group, Inc.:

5.7% 9/1/12

6,615

6,915

6.6% 1/15/12

12,750

14,142

J.P. Morgan Chase & Co. 5.35% 3/1/07

6,300

6,763

Lehman Brothers Holdings, Inc.:

4% 1/22/08

6,100

6,189

7.75% 1/15/05

4,310

4,643

Merita Bank Ltd. yankee 6.5% 1/15/06

4,000

4,325

Merrill Lynch & Co., Inc. 4% 11/15/07

7,640

7,810

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Capital Markets - continued

Morgan Stanley:

5.3% 3/1/13

$ 10,000

$ 10,149

6.6% 4/1/12

6,970

7,761

102,601

Commercial Banks - 0.9%

Bank of America Corp. 6.25% 4/15/12

8,960

9,831

Corporacion Andina de Fomento 5.2% 5/21/13

3,910

3,827

Fleet Financial Group, Inc. 7.125% 4/15/06

2,800

3,090

FleetBoston Financial Corp. 7.25% 9/15/05

5,845

6,386

Korea Development Bank:

5.75% 9/10/13

14,350

14,681

7.375% 9/17/04

3,985

4,174

Popular North America, Inc. 6.125% 10/15/06

5,270

5,734

Wells Fargo Bank NA, San Francisco 7.55% 6/21/10

2,900

3,427

51,150

Consumer Finance - 3.7%

American General Finance Corp.:

2.75% 6/15/08

430

411

4.5% 11/15/07

13,100

13,577

5.875% 7/14/06

15,885

17,154

Capital One Bank:

4.875% 5/15/08

8,240

8,450

6.5% 6/13/13

8,775

9,045

6.65% 3/15/04

900

915

Ford Motor Credit Co.:

5.8% 1/12/09

2,315

2,255

6.5% 1/25/07

11,890

12,268

7.375% 10/28/09

23,350

24,152

General Electric Capital Corp.:

3.5% 8/15/07

5,000

5,044

6% 6/15/12

4,600

4,950

6.125% 2/22/11

21,400

23,357

General Motors Acceptance Corp.:

6.125% 2/1/07

840

882

6.125% 8/28/07

840

885

6.38% 1/30/04

6,410

6,484

6.875% 9/15/11

11,205

11,559

6.875% 8/28/12

7,250

7,432

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Consumer Finance - continued

Household Finance Corp.:

6.375% 10/15/11

$ 20,020

$ 21,879

6.375% 11/27/12

6,035

6,572

6.75% 5/15/11

9,235

10,335

7% 5/15/12

4,480

5,088

MBNA Corp. 7.5% 3/15/12

7,730

8,817

201,511

Diversified Financial Services - 3.9%

Ameritech Capital Funding Corp. euro 6.25% 5/18/09

4,185

4,544

ASIF Global Financing XVIII 3.85% 11/26/07 (a)

185

187

Cadbury Schweppes U.S. Finance LLC:

3.875% 10/1/08 (a)

6,685

6,633

5.125% 10/1/13 (a)

4,725

4,745

CIT Group, Inc. 7.75% 4/2/12

4,425

5,164

Citigroup, Inc. 7.25% 10/1/10

9,900

11,518

Delta Air Lines, Inc. pass thru trust certificates 7.57% 11/18/10

1,105

1,137

Deutsche Telekom International Finance BV:

5.25% 7/22/13

6,280

6,241

8.25% 6/15/05

2,035

2,223

8.5% 6/15/10

14,665

17,649

8.75% 6/15/30

8,045

10,121

Devon Financing Corp. U.L.C. 7.875% 9/30/31

8,200

9,703

Newcourt Credit Group, Inc. yankee 6.875% 2/16/05

4,330

4,594

NiSource Finance Corp. 7.875% 11/15/10

12,580

14,885

Pemex Project Funding Master Trust:

6.125% 8/15/08

9,000

9,459

7.375% 12/15/14

27,060

28,413

Petronas Capital Ltd. 7% 5/22/12 (a)

26,925

29,979

Sprint Capital Corp.:

6.125% 11/15/08

7,800

8,215

7.125% 1/30/06

4,800

5,190

Verizon Global Funding Corp.:

6.125% 6/15/07

6,375

6,968

7.25% 12/1/10

11,000

12,563

7.375% 9/1/12

11,020

12,638

Verizon Wireless Capital LLC 5.375% 12/15/06

60

64

212,833

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Insurance - 0.6%

Aegon NV 4.75% 6/1/13

$ 13,000

$ 12,559

Hartford Financial Services Group, Inc.:

2.375% 6/1/06

2,780

2,750

4.625% 7/15/13 (a)

2,800

2,669

Prudential Financial, Inc. 3.75% 5/1/08

6,245

6,226

Travelers Property Casualty Corp.:

5% 3/15/13

3,170

3,144

6.375% 3/15/33

4,075

4,233

31,581

Real Estate - 1.2%

Boston Properties, Inc. 6.25% 1/15/13

10,300

10,965

Camden Property Trust:

5.875% 6/1/07

3,920

4,210

5.875% 11/30/12

6,435

6,713

CarrAmerica Realty Corp. 5.25% 11/30/07

7,035

7,270

CenterPoint Properties Trust:

5.75% 8/15/09

5,030

5,364

6.75% 4/1/05

2,490

2,632

Dominion Resources, Inc. 6.75% 12/15/32

1,000

1,066

EOP Operating LP:

6.5% 1/15/04

4,070

4,108

7.75% 11/15/07

2,425

2,778

Gables Realty LP:

5.75% 7/15/07

8,040

8,505

6.8% 3/15/05

1,120

1,180

ProLogis 6.7% 4/15/04

1,715

1,758

Regency Centers LP 6.75% 1/15/12

7,380

8,084

Vornado Realty Trust 5.625% 6/15/07

4,475

4,727

69,360

Thrifts & Mortgage Finance - 0.9%

Countrywide Home Loans, Inc.:

3.25% 5/21/08

1,370

1,335

5.5% 8/1/06

19,295

20,584

5.625% 5/15/07

5,500

5,893

H.F. Ahmanson & Co. 7.875% 9/1/04

2,600

2,720

Washington Mutual Bank 6.875% 6/15/11

4,900

5,497

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Thrifts & Mortgage Finance - continued

Washington Mutual, Inc.:

4.375% 1/15/08

$ 6,300

$ 6,451

5.625% 1/15/07

7,910

8,521

51,001

TOTAL FINANCIALS

720,037

INDUSTRIALS - 1.8%

Aerospace & Defense - 0.5%

Bombardier, Inc. 6.75% 5/1/12 (a)

3,235

3,437

Raytheon Co.:

5.5% 11/15/12

13,415

13,510

5.7% 11/1/03

4,800

4,800

6.75% 8/15/07

4,770

5,227

26,974

Commercial Services & Supplies - 0.1%

Boise Cascade Office Products Corp. 7.05% 5/15/05

7,455

7,734

Industrial Conglomerates - 0.6%

Textron Financial Corp. 2.75% 6/1/06

4,795

4,764

Tyco International Group SA yankee:

5.875% 11/1/04

3,000

3,094

6.375% 10/15/11

4,000

4,160

6.75% 2/15/11

20,675

21,993

34,011

Road & Rail - 0.5%

CSX Corp.:

6.75% 3/15/11

9,000

10,041

7.95% 5/1/27

4,000

4,815

Norfolk Southern Corp. 7.25% 2/15/31

9,800

11,070

25,926

Transportation Infrastructure - 0.1%

Korea Highway Corp. 4.9% 7/1/13 (a)

6,230

5,965

TOTAL INDUSTRIALS

100,610

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

INFORMATION TECHNOLOGY - 0.6%

Communications Equipment - 0.4%

Motorola, Inc.:

6.75% 2/1/06

$ 3,000

$ 3,231

7.625% 11/15/10

6,000

6,753

8% 11/1/11

13,535

15,669

25,653

IT Services - 0.2%

Electronic Data Systems Corp. 6% 8/1/13 (a)

9,760

9,242

TOTAL INFORMATION TECHNOLOGY

34,895

MATERIALS - 0.6%

Containers & Packaging - 0.1%

Sealed Air Corp.:

5.625% 7/15/13 (a)

1,945

1,960

6.875% 7/15/33 (a)

4,070

4,193

6,153

Metals & Mining - 0.2%

Corporacion Nacional del Cobre (Codelco) 6.375% 11/30/12 (a)

3,460

3,707

Falconbridge Ltd. yankee 7.35% 6/5/12

3,095

3,484

7,191

Paper & Forest Products - 0.3%

Boise Cascade Corp. 7.5% 2/1/08

3,650

3,887

International Paper Co. 5.85% 10/30/12

6,370

6,618

Weyerhaeuser Co.:

5.25% 12/15/09

3,465

3,573

6.125% 3/15/07

2,735

2,958

17,036

TOTAL MATERIALS

30,380

TELECOMMUNICATION SERVICES - 3.7%

Diversified Telecommunication Services - 2.8%

AT&T Broadband Corp. 8.375% 3/15/13

5,200

6,286

AT&T Corp.:

7% 11/15/06

4,925

5,454

7.8% 11/15/11

7,190

8,148

8.5% 11/15/31

20,295

23,014

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

TELECOMMUNICATION SERVICES - continued

Diversified Telecommunication Services - continued

British Telecommunications PLC:

8.375% 12/15/10

$ 9,744

$ 11,767

8.875% 12/15/30

3,450

4,442

Citizens Communications Co. 8.5% 5/15/06

3,240

3,660

France Telecom SA 9% 3/1/11

23,400

28,230

Koninklijke KPN NV yankee 8% 10/1/10

17,000

20,261

Telecom Italia Capital 4% 11/15/08 (a)

12,400

12,385

TELUS Corp. yankee:

7.5% 6/1/07

16,590

18,424

8% 6/1/11

8,000

9,197

151,268

Wireless Telecommunication Services - 0.9%

AT&T Wireless Services, Inc.:

7.875% 3/1/11

1,375

1,571

8.75% 3/1/31

13,360

16,066

Cingular Wireless LLC:

5.625% 12/15/06

10,000

10,783

7.125% 12/15/31

20,488

22,700

51,120

TOTAL TELECOMMUNICATION SERVICES

202,388

UTILITIES - 2.3%

Electric Utilities - 1.6%

Dominion Resources, Inc.:

6.25% 6/30/12

3,570

3,867

8.125% 6/15/10

6,245

7,467

DTE Energy Co. 7.05% 6/1/11

5,030

5,680

Duke Capital Corp. 6.75% 2/15/32

5,365

5,263

FirstEnergy Corp.:

5.5% 11/15/06

4,260

4,477

6.45% 11/15/11

8,970

9,528

FPL Group Capital, Inc.:

3.25% 4/11/06

3,355

3,394

6.125% 5/15/07

4,520

4,940

Illinois Power Co. 7.5% 6/15/09

5,000

5,425

MidAmerican Energy Holdings, Inc.:

4.625% 10/1/07

3,965

4,056

5.875% 10/1/12

2,650

2,742

Oncor Electric Delivery Co. 6.375% 5/1/12

10,150

11,120

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

UTILITIES - continued

Electric Utilities - continued

Public Service Co. of Colorado:

4.875% 3/1/13

$ 7,500

$ 7,436

7.875% 10/1/12

5,630

6,802

Southwestern Public Service Co. 5.125% 11/1/06

5,000

5,311

TECO Energy, Inc. 7% 5/1/12

325

321

87,829

Gas Utilities - 0.3%

Consolidated Natural Gas Co. 6.85% 4/15/11

1,535

1,727

Ras Laffan Liquid Natural Gas Co. Ltd. yankee 8.294% 3/15/14 (a)

6,400

7,424

Texas Eastern Transmission Corp.:

5.25% 7/15/07

2,040

2,159

7.3% 12/1/10

4,480

5,085

16,395

Multi-Utilities & Unregulated Power - 0.4%

Constellation Energy Group, Inc.:

6.35% 4/1/07

6,915

7,538

7% 4/1/12

4,485

5,084

Williams Companies, Inc.:

7.125% 9/1/11

9,690

9,932

7.5% 1/15/31

1,270

1,194

23,748

TOTAL UTILITIES

127,972

TOTAL NONCONVERTIBLE BONDS

(Cost $1,366,990)

1,452,076

U.S. Government and Government Agency Obligations - 16.1%

U.S. Government Agency Obligations - 5.8%

Fannie Mae:

4.625% 10/15/13

50,000

49,300

5% 5/14/07

24,000

24,474

5.5% 7/18/12

34,500

35,162

6.125% 3/15/12

22,972

25,466

6.25% 2/1/11

10,185

11,140

6.25% 7/19/11

55,500

57,187

6.25% 3/22/12

19,683

20,566

6.625% 11/15/10

7,810

8,923

U.S. Government and Government Agency Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency Obligations - continued

Financing Corp. - coupon STRIPS 0% 3/7/05

$ 11,375

$ 11,111

Freddie Mac:

4.875% 11/15/13

25,110

25,176

5.25% 11/5/12

5,610

5,623

5.875% 3/21/11

34,670

37,075

6% 5/25/12

7,900

8,054

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS

319,257

U.S. Treasury Obligations - 10.3%

U.S. Treasury Bonds:

6.125% 11/15/27

22,900

25,599

6.125% 8/15/29

212,031

238,046

6.375% 8/15/27

9,680

11,147

8% 11/15/21

66,000

88,453

9.875% 11/15/15

6,825

10,136

11.25% 2/15/15

21,590

34,471

U.S. Treasury Notes:

2.375% 8/15/06

2,680

2,688

4% 11/15/12

106,995

105,378

6.5% 2/15/10

40,000

46,402

TOTAL U.S. TREASURY OBLIGATIONS

562,320

TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $880,284)

881,577

U.S. Government Agency - Mortgage Securities - 39.2%

Fannie Mae - 36.5%

4% 11/1/18 (b)

34,683

33,675

4.5% 11/1/18 to 11/1/33 (b)

202,960

199,551

5% 12/1/17 to 1/1/18

5,542

5,631

5% 11/1/18 to 11/13/33 (b)

479,858

479,293

5.5% 2/1/11 to 4/1/18

40,101

41,333

5.5% 11/1/13 to 11/13/33 (b)

190,092

191,756

6% 1/1/13 to 6/1/33

23,284

24,056

6.5% 3/1/06 to 4/1/33

384,208

400,955

6.5% 11/1/18 to 11/1/33 (b)

123,754

129,725

U.S. Government Agency - Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Fannie Mae - continued

7% 7/1/22 to 8/1/33 (b)

$ 457,030

$ 481,333

7.5% 6/1/25 to 8/1/29

9,281

9,909

9.5% 1/1/17 to 2/1/25

667

744

12.5% 1/1/15 to 7/1/15

12

13

TOTAL FANNIE MAE

1,997,974

Freddie Mac - 0.0%

8.5% 9/1/22 to 9/1/27

1,257

1,364

Government National Mortgage Association - 2.7%

5.5% 12/15/32 to 8/15/33

19,760

20,032

6% 10/15/08 to 6/15/33

25,833

26,740

6.5% 3/15/26 to 2/15/33

9,754

10,219

7% 8/15/23 to 12/15/32

80,343

85,145

7.5% 10/15/05 to 8/15/28

4,127

4,426

8% 9/15/24 to 5/15/32

1,011

1,093

8.5% 1/15/31

66

72

9% 4/15/23

8

8

TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

147,735

TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES

(Cost $2,142,506)

2,147,073

Asset-Backed Securities - 5.5%

ACE Securities Corp. Series 2003-FM1 Class M2, 2.97% 11/25/32 (d)

3,646

3,646

American Express Credit Account Master Trust
Series 1999-2 Class B, 6.1% 12/15/06

4,600

4,716

Asset Backed Securities Corp. Home Equity Loan Trust:

Series 2003-HE2 Class A2, 1.5% 4/15/33 (d)

11,031

11,013

Series 2003-HE7 Class A3, 1.53% 12/15/33 (b)(d)

12,815

12,815

Capital One Master Trust Series 2001-3A Class A, 5.45% 3/16/09

3,830

4,059

Capital One Multi-Asset Execution Trust:

Series 2002-B1 Class B1, 1.8% 7/15/08 (d)

8,570

8,595

Series 2003-2B Class B2, 3.5% 2/17/09

7,080

7,124

Series 2003-A1 Class A1, 1.51% 1/15/09 (d)

34,225

34,459

Series 2003-A4 Class A4, 3.65% 7/15/11

4,159

4,151

Series 2003-B1 Class B1, 2.29% 2/17/09 (d)

13,465

13,616

Series 2003-B4 Class B4, 1.92% 7/15/11 (d)

6,635

6,635

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CDC Mortgage Capital Trust Series 2003-HE2:

Class M1, 1.92% 10/25/33 (d)

$ 1,295

$ 1,297

Class M2, 3.02% 10/25/33 (d)

3,150

3,167

Chase Manhattan Auto Owner Trust Series 2001-A
Class CTFS, 5.06% 2/15/08

1,222

1,254

Fieldstone Mortgage Investment Corp. Series 2003-1:

Class M1, 1.8% 11/25/33 (d)

1,400

1,400

Class M2, 2.87% 11/25/33 (d)

700

700

Ford Credit Auto Owner Trust:

Series 2001-B Class B, 5.71% 9/15/05

2,495

2,559

Series 2001-C Class B, 5.54% 12/15/05

4,400

4,509

Home Equity Asset Trust:

Series 2003-2:

Class A2, 1.5% 8/25/33 (d)

2,149

2,150

Class M1, 2% 8/25/33 (d)

2,915

2,930

Series 2003-4:

Class M1, 1.92% 10/25/33 (d)

4,025

4,015

Class M2, 3.02% 10/25/33 (d)

4,765

4,765

Series 2003-5N Class A, 7.5% 1/27/34 (a)

925

921

Home Equity Asset Trust NIMS Trust:

Series 2002-4N Class A, 8% 5/27/33 (a)

2,390

2,343

Series 2003-2N Class A, 8% 9/27/33 (a)

2,911

2,850

Honda Auto Receivables Owner Trust Series 2001-2 Class A4, 5.09% 10/18/06

4,900

4,993

Household Home Equity Loan Trust Series 2002-2
Class A, 1.42% 4/20/32 (d)

8,910

8,908

JCPenney Master Credit Card Trust Series E Class A, 5.5% 6/15/07

18,000

18,029

Long Beach Mortgage Loan Trust Series 2003-3
Class M2, 2.97% 7/25/33 (d)

4,800

4,806

MBNA Credit Card Master Note Trust:

Series 2001-B2 Class B2, 1.48% 1/15/09 (d)

33,400

33,511

Series 2003-B3 Class B3, 1.495% 1/18/11 (d)

1,130

1,130

Series 2003-B5 Class B5, 1.49% 2/15/11 (d)

7,235

7,239

Morgan Stanley ABS Capital I, Inc.:

Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (a)

1,247

1,247

Series 2003-HE1 Class M2, 3.02% 5/25/33 (d)

5,560

5,616

Series 2003-NC8 Class M1, 1.82% 9/25/33 (d)

2,600

2,600

Morgan Stanley Dean Witter Capital I Trust:

Series 2001-NC4 Class M1, 2.12% 1/25/32 (d)

5,135

5,181

Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (a)

2,885

2,886

Series 2002-OP1N Class NOTE, 9.5% 9/25/32 (a)

514

514

Series 2003-NC2 Class M2, 3.12% 2/25/33 (d)

2,855

2,881

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Morgan Stanley Dean Witter Capital I, Inc.:

Series 2002-AM3N Class NOTE, 9.5% 2/25/33 (a)

$ 2,122

$ 2,124

Series 2003-NC2N Class NOTE, 9.5% 12/25/32 (a)

2,583

2,582

New Century Home Equity Loan Trust Series 2003-2 Class A2, 1.55% 1/25/33 (d)

9,791

9,819

Nissan Auto Lease Trust Series 2003-A Class A3B, 2.57% 6/15/09

10,500

10,504

Sears Credit Account Master Trust II:

Series 2000-1 Class B, 7.5% 11/15/07

3,950

3,958

Series 2000-2 Class A, 6.75% 9/16/09

7,720

8,364

Series 2002-4 Class A, 1.25% 8/18/09 (d)

10,400

10,389

Superior Wholesale Inventory Financing Trust VII
Series 2003-A8 Class CTFS, 1.57% 3/15/11 (a)(d)

9,340

9,340

TOTAL ASSET-BACKED SECURITIES

(Cost $300,113)

302,310

Collateralized Mortgage Obligations - 1.7%

Private Sponsor - 0.8%

Residential Asset Mortgage Products, Inc. Series 2003-SL1 Class 3A1, 7.125% 5/25/31 (b)

11,500

11,858

Residential Finance LP/Residential Finance Development Corp. floater:

Series 2003-B:

Class B3, 2.67% 7/10/35 (a)(d)

9,155

9,192

Class B4, 2.87% 7/10/35 (a)(d)

6,966

6,992

Class B5, 3.47% 7/10/35 (a)(d)

6,568

6,592

Class B6, 3.97% 7/10/35 (a)(d)

2,985

3,000

Series 2003-CB1:

Class B3, 2.57% 6/10/35 (a)(d)

3,193

3,201

Class B4, 2.77% 6/10/35 (a)(d)

2,857

2,864

Class B5, 3.37% 6/10/35 (a)(d)

1,951

1,956

Class B6, 3.87% 6/10/35 (a)(d)

1,159

1,162

TOTAL PRIVATE SPONSOR

46,817

U.S. Government Agency - 0.9%

Fannie Mae planned amortization class Series 1994-81 Class PJ, 8% 7/25/23

12,210

12,564

Fannie Mae guaranteed REMIC pass thru certificates planned amortization class Series 2001-53 Class OH, 6.5% 6/25/30

1,726

1,761

Collateralized Mortgage Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency - continued

Freddie Mac planned amortization class Series 2355 Class CD, 6.5% 6/15/30

$ 1,956

$ 1,986

Freddie Mac Multi-class participation certificates guaranteed planned amortization class Series 1669 Class H, 6.5% 7/15/23

10,122

10,725

Ginnie Mae guaranteed Multi-family pass thru securities sequential pay Series 2002-35 Class C, 5.86% 10/16/23 (d)

1,490

1,604

Ginnie Mae guaranteed REMIC pass thru securities sequential pay:

Series 2003-22 Class B, 3.963% 5/16/32

7,715

7,485

Series 2003-59 Class D, 3.654% 10/16/27

11,780

11,019

TOTAL U.S. GOVERNMENT AGENCY

47,144

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost $94,213)

93,961

Commercial Mortgage Securities - 2.4%

Bear Stearns Commercial Mortgage Securities, Inc. floater Series 2003-BA1A Class A1, 1.4% 4/14/15 (a)(d)

13,865

13,865

Chase Commercial Mortgage Securities Corp.
Series 2001-245 Class A2, 6.275% 2/12/16 (a)(d)

3,810

4,139

COMM floater:

Series 2001-FL5A Class A2, 1.67% 11/15/13 (a)(d)

4,508

4,509

Series 2002-FL7 Class A2, 1.47% 11/15/14 (a)(d)

7,270

7,268

Commercial Resecuritization Trust sequential pay
Series 1999-ABC1 Class A, 6.74% 1/27/09 (a)

4,893

5,169

CS First Boston Mortgage Securities Corp.:

sequential pay Series 2000-C1 Class A2, 7.545% 4/14/62

3,700

4,306

Series 1997-C2 Class D, 7.27% 1/17/35

2,775

3,067

Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31

2,320

2,357

DLJ Commercial Mortgage Corp. sequential pay
Series 2000-CF1 Class A1B, 7.62% 6/10/33

10,000

11,673

Equitable Life Assurance Society of the United States Series 174:

Class B1, 7.33% 5/15/06 (a)

3,400

3,756

Class C1, 7.52% 5/15/06 (a)

3,500

3,874

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Ginnie Mae guaranteed REMIC pass thru securities:

sequential pay:

Series 2002-83 Class B, 4.6951% 12/16/24

$ 4,590

$ 4,685

Series 2003-36 Class C, 4.254% 2/16/31

6,373

6,245

Series 2003-47 Class C, 4.227% 10/16/27

11,493

11,396

Series 2003-59 Class XA, 0.3% 6/16/34 (c)(d)

59,190

4,543

Series 2003-47 Class XA, 0.2917% 6/16/43 (c)(d)

36,216

2,142

Series 2003-64 Class XA, 0.5018% 8/16/43 (c)(d)

36,049

2,211

GS Mortgage Securities Corp. II:

Series 1998-GLII Class E, 7.1905% 4/13/31 (d)

1,220

1,215

Series 2003-C1 Class A2A, 3.59% 1/10/40

5,945

5,937

Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A Class C, 4.13% 11/20/37 (a)

11,400

10,009

Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A2, 6.602% 11/15/07 (a)

9,000

9,906

Trizechahn Office Properties Trust Series 2001-TZHA Class E3, 7.253% 3/15/13 (a)

6,100

6,381

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $125,607)

128,653

Municipal Securities - 0.7%

Illinois Gen. Oblig.:

3.3% 6/1/10

1,285

1,229

3.55% 6/1/11

1,030

983

3.75% 6/1/12

3,345

3,178

5.1% 6/1/33

20,765

18,777

Oregon Gen. Oblig. 5.892% 6/1/27

10,945

11,082

TOTAL MUNICIPAL SECURITIES

(Cost $37,360)

35,249

Foreign Government and Government Agency Obligations - 1.0%

Principal
Amount (000s)

Value (Note 1)
(000s)

Bahamian Republic 6.625% 5/15/33 (a)

$ 3,835

$ 3,875

Chilean Republic:

5.5% 1/15/13

6,375

6,524

7.125% 1/11/12

5,695

6,464

State of Israel 4.625% 6/15/13

2,565

2,408

United Mexican States:

4.625% 10/8/08

13,935

13,970

6.375% 1/16/13

9,460

9,734

7.5% 1/14/12

9,800

10,927

TOTAL FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $51,740)

53,902

Supranational Obligations - 0.1%

Corporacion Andina de Fomento 6.875% 3/15/12
(Cost $4,378)

4,425

4,868

Fixed-Income Funds - 11.3%

Shares

Fidelity Ultra-Short Central Fund (e)
(Cost $621,000)

6,234,498

620,146

Cash Equivalents - 14.3%

Maturity
Amount (000s)

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $783,909)

$ 783,979

783,909

TOTAL INVESTMENT PORTFOLIO - 118.8%

(Cost $6,408,100)

6,503,724

NET OTHER ASSETS - (18.8)%

(1,028,721)

NET ASSETS - 100%

$ 5,475,003

Swap Agreements

Expiration
Date

Notional
Amount
(000s)

Unrealized
Appreciation/
(Depreciation)
(000s)

Credit Default Swap

Receive from Morgan Stanley, Inc., upon default of Vornado Realty Trust, par value of the notional amount of Vornado Realty Trust 5.625% 6/15/07, and pay quarterly notional amount multiplied by 1.37%

June 2007

$ 4,475

$ (93)

Receive quarterly notional amount multiplied by .62% and pay Goldman Sachs upon default of SLM Corp., par value of the notional amount of SLM Corp. 1.1106% 7/25/35

August 2007

1,885

17

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

8,000

318

Receive quarterly notional amount multiplied by 1.45% and pay Deutsche Bank upon default event of News America, Inc., par value of the notional amount of News America, Inc. 6.625% 1/9/08

April 2010

5,000

199

TOTAL CREDIT DEFAULT SWAP

19,360

441

Interest Rate Swap

Receive quarterly a fixed rate equal to 2.5664% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.

March 2006

9,000

31

$ 28,360

$ 472

Legend

(a) 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 $225,043,000 or 4.1% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

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

(e) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $9,308,588,000 and $8,937,561,000, respectively, of which long-term U.S. government and government agency obligations aggregated $8,579,663,000 and $8,582,778,000, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $783,909) (cost $6,408,100) - See accompanying schedule

$ 6,503,724

Cash

238

Receivable for investments sold
Regular delivery

8,600

Delayed delivery

4,340

Receivable for fund shares sold

6,788

Interest receivable

48,507

Unrealized gain on swap agreements

472

Prepaid expenses

28

Other receivables

4

Total assets

6,572,701

Liabilities

Payable for investments purchased
Regular delivery

$ 27,599

Delayed delivery

1,062,342

Payable for fund shares redeemed

4,433

Distributions payable

411

Accrued management fee

1,926

Distribution fees payable

15

Other payables and accrued expenses

972

Total liabilities

1,097,698

Net Assets

$ 5,475,003

Net Assets consist of:

Paid in capital

$ 5,350,768

Undistributed net investment income

3,408

Accumulated undistributed net realized gain (loss) on investments

24,731

Net unrealized appreciation (depreciation) on investments

96,096

Net Assets

$ 5,475,003

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

Amounts in thousands (except per-share amounts)

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price
Class A:
Net Asset Value and redemption price per share
($6,260 ÷ 831 shares)

$ 7.53

Maximum offering price per share (100/95.25 of $7.53)

$ 7.91

Class T:
Net Asset Value and redemption price per share ($15,106 ÷ 2,006 shares)

$ 7.53

Maximum offering price per share (100/96.50 of $7.53)

$ 7.80

Class B:
Net Asset Value and offering price per share
($8,888 ÷ 1,180 shares) A

$ 7.53

Class C:
Net Asset Value and offering price per share
($5,578 ÷ 741 shares) A

$ 7.53

Investment Grade Bond:
Net Asset Value, offering price and redemption price per share ($5,438,919 ÷ 722,509 shares)

$ 7.53

Institutional Class:
Net Asset Value, offering price and redemption price per share ($252.3 ÷ 33.5 shares)

$ 7.53

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 97,162

Security lending

261

Total income

97,423

Expenses

Management fee

$ 11,531

Transfer agent fees

4,752

Distribution fees

86

Accounting and security lending fees

345

Non-interested trustees' compensation

11

Appreciation in deferred trustees' compensation account

1

Custodian fees and expenses

132

Registration fees

87

Audit

39

Legal

21

Miscellaneous

7

Total expenses before reductions

17,012

Expense reductions

(65)

16,947

Net investment income (loss)

80,476

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

27,638

Change in net unrealized appreciation (depreciation) on:

Investment securities

(78,998)

Swap agreements

362

Total change in net unrealized appreciation (depreciation)

(78,636)

Net gain (loss)

(50,998)

Net increase (decrease) in net assets resulting from operations

$ 29,478

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Amounts in thousands

Six months ended
October 31, 2003
(Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 80,476

$ 177,829

Net realized gain (loss)

27,638

151,806

Change in net unrealized appreciation (depreciation)

(78,636)

143,315

Net increase (decrease) in net assets resulting
from operations

29,478

472,950

Distributions to shareholders from net investment income

(84,031)

(172,052)

Distributions to shareholders from net realized gain

(70,219)

(73,736)

Total distributions

(154,250)

(245,788)

Share transactions - net increase (decrease)

293,917

1,022,853

Total increase (decrease) in net assets

169,145

1,250,015

Net Assets

Beginning of period

5,305,858

4,055,843

End of period (including undistributed net investment income of $3,408 and undistributed net investment income of $6,963, respectively)

$ 5,475,003

$ 5,305,858

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.107

.186

Net realized and unrealized gain (loss)

(.066)

.326

Total from investment operations

.041

.512

Distributions from net investment income

(.111)

(.172)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.211)

(.292)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.52%

6.98%

Ratios to Average Net Assets G

Expenses before expense reductions

.81% A

.79% A

Expenses net of voluntary waivers, if any

.81% A

.79% A

Expenses net of all reductions

.81% A

.79% A

Net investment income (loss)

2.79% A

3.73% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 6,260

$ 8,085

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.101

.180

Net realized and unrealized gain (loss)

(.064)

.324

Total from investment operations

.037

.504

Distributions from net investment income

(.107)

(.164)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.207)

(.284)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.46%

6.87%

Ratios to Average Net Assets G

Expenses before expense reductions

.95% A

.97% A

Expenses net of voluntary waivers, if any

.95% A

.95% A

Expenses net of all reductions

.95% A

.95% A

Net investment income (loss)

2.66% A

3.57% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 15,106

$ 10,403

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.077

.147

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.012

.469

Distributions from net investment income

(.082)

(.129)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.182)

(.249)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.13%

6.39%

Ratios to Average Net Assets G

Expenses before expense reductions

1.60% A

1.60% A

Expenses net of voluntary waivers, if any

1.60% A

1.60% A

Expenses net of all reductions

1.60% A

1.60% A

Net investment income (loss)

2.01% A

2.92% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 8,888

$ 7,721

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 F

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) E

.075

.145

Net realized and unrealized gain (loss)

(.065)

.322

Total from investment operations

.010

.467

Distributions from net investment income

(.080)

(.127)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.180)

(.247)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C, D

.11%

6.35%

Ratios to Average Net Assets G

Expenses before expense reductions

1.63% A

1.64% A

Expenses net of voluntary waivers, if any

1.63% A

1.64% A

Expenses net of all reductions

1.63% A

1.64% A

Net investment income (loss)

1.98% A

2.88% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 5,578

$ 5,543

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Investment Grade Bond

Six months ended October 31, 2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

$ 7.30

Income from Investment Operations

Net investment income (loss) D

.114

.290

.379 F

.445

.433

.423

Net realized and unrealized gain (loss)

(.065)

.483

.158 F

.324

(.388)

(.022)

Total from investment operations

.049

.773

.537

.769

.045

.401

Distributions from net investment income

(.119)

(.283)

(.377)

(.449)

(.435)

(.410)

Distributions from net realized gain

(.100)

(.120)

(.010)

-

-

(.041)

Total distributions

(.219)

(.403)

(.387)

(.449)

(.435)

(.451)

Net asset value,
end of period

$ 7.53

$ 7.70

$ 7.33

$ 7.18

$ 6.86

$ 7.25

Total Return B, C

.62%

10.82%

7.61%

11.51%

.71%

5.58%

Ratios to Average Net Assets E

Expenses before expense reductions

.63% A

.66%

.66%

.65%

.70%

.71%

Expenses net of voluntary waivers, if any

.62% A

.66%

.66%

.65%

.70%

.71%

Expenses net of all reductions

.62% A

.66%

.66%

.64%

.69%

.70%

Net investment income (loss)

2.98% A

3.86%

5.18% F

6.31%

6.21%

5.77%

Supplemental Data

Net assets, end of period (in millions)

$ 5,439

$ 5,274

$ 4,056

$ 2,976

$ 2,130

$ 2,303

Portfolio turnover rate

299% A

276%

230%

226%

115%

167%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

F Effective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended October 31, 2003

Year ended
April 30,

(Unaudited)

2003 E

Selected Per-Share Data

Net asset value, beginning of period

$ 7.70

$ 7.48

Income from Investment Operations

Net investment income (loss) D

.117

.202

Net realized and unrealized gain (loss)

(.066)

.321

Total from investment operations

.051

.523

Distributions from net investment income

(.121)

(.183)

Distributions from net realized gain

(.100)

(.120)

Total distributions

(.221)

(.303)

Net asset value, end of period

$ 7.53

$ 7.70

Total Return B, C

.65%

7.14%

Ratios to Average Net Assets F

Expenses before expense reductions

.56% A

.56% A

Expenses net of voluntary waivers, if any

.56% A

.56% A

Expenses net of all reductions

.56% A

.56% A

Net investment income (loss)

3.04% A

3.96% A

Supplemental Data

Net assets, end of period (000 omitted)

$ 252

$ 275

Portfolio turnover rate

299% A

276%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity Investment Grade Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Investment Grade Bond and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 127,664

|

Unrealized depreciation

(24,106)

Net unrealized appreciation (depreciation)

$ 103,558

Cost for federal income tax purposes

$ 6,400,166

Semiannual Report

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The net receivable or payable is accrued daily and is included in interest income in the accompanying Statement of Operations. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact the fund.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Swap Agreements - continued

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums paid to or by the fund are accrued daily and included in interest income in the accompanying Statement of Operations.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

Semiannual Report

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 5

$ -

Class T

0%

.25%

15

-

Class B

.65%

.25%

39

29

Class C

.75%

.25%

27

21

$ 86

$ 50

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

4. Fees and Other Transactions with Affiliates - continued

Sales Load - continued

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 6

Class T

3

Class B*

12

Class C*

12

$ 33

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Investment Grade Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Investment Grade Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets*

Class A

$ 6

.21

Class T

15

.25

Class B

11

.25

Class C

5

.18

Investment Grade Bond

4,714

.18

Institutional Class

1

.11

$ 4,752

* Annualized

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

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.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $4,252 for the period.

5. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.

6. Expense Reductions.

FMR voluntarily agreed to reimburse a portion of Investment Grade Bond's operating expenses. During the period, this reimbursement reduced the class' expenses by $40.

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $1. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Investment Grade Bond

$ 24

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

7. Other Information.

At the end of the period, Fidelity Freedom Fund 2010 was the owner of record of approximately 17% of the total outstanding shares of the fund. The Fidelity Freedom Funds were the owners of record, in the aggregate, of approximately 37% of the total outstanding shares of the fund.

8. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003 A

From net investment income

Class A

$ 89

$ 68

Class T

165

90

Class B

94

54

Class C

57

32

Investment Grade Bond

83,621

171,804

Institutional Class

5

4

Total

$ 84,031

$ 172,052

From net realized gain

Class A

$ 60

$ 31

Class T

142

42

Class B

111

41

Class C

79

23

Investment Grade Bond

69,823

73,597

Institutional Class

4

2

Total

$ 70,219

$ 73,736

A Distributions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

9. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Six months ended October 31,
2003

Year ended
April 30,
2003 A

Class A

Shares sold

598

1,088

$ 4,510

$ 8,282

Reinvestment of distributions

17

12

133

88

Shares redeemed

(834)

(50)

(6,422)

(383)

Net increase (decrease)

(219)

1,050

$ (1,779)

$ 7,987

Class T

Shares sold

957

1,513

$ 7,267

$ 11,450

Reinvestment of distributions

39

17

300

129

Shares redeemed

(341)

(179)

(2,575)

(1,363)

Net increase (decrease)

655

1,351

$ 4,992

$ 10,216

Class B

Shares sold

435

1,090

$ 3,318

$ 8,264

Reinvestment of distributions

23

11

176

82

Shares redeemed

(280)

(99)

(2,113)

(749)

Net increase (decrease)

178

1,002

$ 1,381

$ 7,597

Class C

Shares sold

510

851

$ 3,922

$ 6,459

Reinvestment of distributions

15

6

114

48

Shares redeemed

(504)

(137)

(3,855)

(1,038)

Net increase (decrease)

21

720

$ 181

$ 5,469

Investment Grade Bond

Shares sold

123,920

267,099

$ 941,167

$ 2,006,171

Reinvestment of distributions

19,529

31,580

149,232

237,126

Shares redeemed

(105,924)

(167,094)

(801,242)

(1,251,983)

Net increase (decrease)

37,525

131,585

$ 289,157

$ 991,314

Institutional Class

Shares sold

10

38

$ 78

$ 285

Reinvestment of distributions

1

1

5

4

Shares redeemed

(13)

(3)

(98)

(19)

Net increase (decrease)

(2)

36

$ (15)

$ 270

A Share transactions for Class A, Class T, Class B, Class C and Institutional Class are for the period August 27, 2002 (commencement of sale of shares) to April 30, 2003.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1   For mutual fund and brokerage trading.

2   For quotes.*

3   For account balances and holdings.

4   To review orders and mutual
fund activity.

5   To change your PIN.

*0   To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* 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.

Semiannual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Semiannual Report

To Visit Fidelity

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

Arizona

7001 West Ray Road
Chandler, AZ

7373 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

527 North Brand Boulevard
Glendale, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

10100 Santa Monica Blvd.
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

1760 Challenge Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

8 Montgomery Street
San Francisco, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6300 Canoga Avenue
Woodland Hills, CA

Colorado

1625 Broadway
Denver, CO

9185 East Westview Road
Littleton, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

222 Delaware Avenue
Wilmington, DE

Florida

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

1907 West State Road 434
Longwood, FL

8880 Tamiami Trail, North
Naples, FL

3501 PGA Boulevard
West Palm Beach, FL

8065 Beneva Road
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

1415 West 22nd Street
Oak Brook, IL

1700 East Golf Road
Schaumburg, IL

3232 Lake Avenue
Wilmette, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7401 Wisconsin Avenue
Bethesda, MD

One W. Pennsylvania Ave.
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

405 Cochituate Road
Framingham, MA

416 Belmont Street
Worcester, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Semiannual Report

Michigan

280 Old N. Woodward Ave.
Birmingham, MI

43420 Grand River Avenue
Novi, MI

29155 Northwestern Hwy.
Southfield, MI

Minnesota

7600 France Avenue South
Edina, MN

Missouri

8885 Ladue Road
Ladue, MO

New Jersey

150 Essex Street
Millburn, NJ

56 South Street
Morristown, NJ

501 Route 17, South
Paramus, NJ

3518 Route 1 North
Princeton, NJ

New York

1055 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

North Carolina

4611 Sharon Road
Charlotte, NC

Ohio

3805 Edwards Road
Cincinnati, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

16850 SW 72nd Avenue
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

47 Providence Place
Providence, RI

Tennessee

6150 Poplar Avenue
Memphis, TN

Texas

10000 Research Boulevard
Austin, TX

4017 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

400 East Las Colinas Blvd.
Irving, TX

14100 San Pedro
San Antonio, TX

19740 IH 45 North
Spring, TX

6005 West Park Boulevard
Plano, TX 75093

Utah

215 South State Street
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

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

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

595 North Barker Road
Brookfield, WI

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments
Japan Limited

Fidelity Investments Money
Management, Inc.

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

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)

Fidelity Automated Service
Telephone (FAST®) (automated graphic)    1-800-544-5555

(automated graphic)    Automated line for quickest service

IGB-USAN-1203
1.784858.100

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

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor

Inflation-Protected Bond

Fund - Class A, Class T, Class B
and Class C

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Class A, Class T, Class B, and Class C are classes of Fidelity ® Inflation-Protected Bond Fund

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

Distributions

<Click Here>

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Coupon Distribution as of October 31, 2003

% of fund's
investments

% of fund's investments
6 months ago

Less than 1.99%

0.1

0.3

1 - 1.99%

18.7

5.4

2 - 2.99%

0.9

0.6

3 - 3.99%

75.3

74.1

4% and over

0.8

16.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments. The coupon rates on inflation-protected bonds tend to be lower than their nominal bond counterparts since inflation-protected bonds get adjusted for actual inflation, while nominal bond coupon rates include a component for expected inflation. Please refer to the fund's prospectus for more information.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

10.6

10.9

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

5.6

5.8

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003 *

As of April 30, 2003 **

Corporate Bonds 0.7%

Corporate Bonds 1.0%

U.S. Government
and U.S. Government
Agency Obligations 96.6%

U.S. Government
and Government
Agency Obligations 100.4%

Asset-Backed
Securities 3.9%

Asset-Backed
Securities 3.9%

CMOs and Other
Mortgage Related
Securities 1.3%

CMOs and Other
Mortgage Related
Securities 1.3%

Short-Term
Investments and
Net Other Assets*** (2.5)%

Short-Term
Investments and
Net Other Assets*** (6.6)%



* Foreign investments

0.1%

** Foreign investments

0.2%

* Futures and Swaps

(0.1)%

** Futures and Swaps

(0.5)%

* Inflation Protected

95.6%

** Inflation Protected

99.1%

*** Short-Term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

U.S. Treasury Inflation Protected Obligations - 95.6%

Principal
Amount

Value
(Note 1)

U.S. Treasury Inflation-Indexed Bonds:

3.625% 4/15/28

$ 139,568,760

$ 168,965,436

3.875% 4/15/29

14,034,750

17,775,888

U.S. Treasury Inflation-Indexed Notes:

1.875% 7/15/13

112,255,149

111,939,429

3.375% 1/15/12

20,062,157

22,532,526

3.5% 1/15/11 (a)

239,850,244

269,985,929

3.875% 1/15/09

119,524,914

135,212,555

TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS

(Cost $704,989,533)

726,411,763

Fixed-Income Funds - 9.9%

Shares

Fidelity Ultra-Short Central Fund (b)
(Cost $75,000,007)

755,882

75,187,583

Cash Equivalents - 2.1%

Maturity
Amount

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $15,673,000)

$ 15,674,398

15,673,000

TOTAL INVESTMENT PORTFOLIO - 107.6%

(Cost $795,662,540)

817,272,346

NET OTHER ASSETS - (7.6)%

(57,571,504)

NET ASSETS - 100%

$ 759,700,842

Legend

(a) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(b) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $756,983,413 and $635,770,336, respectively, of which long-term U.S. government and government agency obligations aggregated $741,983,437 and $635,770,336, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $15,673,000) (cost $795,662,540) - See accompanying schedule

$ 817,272,346

Cash

150

Receivable for fund shares sold

3,704,278

Interest receivable

5,117,613

Prepaid expenses

3,378

Receivable from investment adviser for expense reductions

91,052

Total assets

826,188,817

Liabilities

Payable for investments purchased on a delayed delivery basis

$ 65,249,139

Payable for fund shares redeemed

747,031

Distributions payable

46,360

Accrued management fee

253,530

Distribution fees payable

49,451

Other payables and accrued expenses

142,464

Total liabilities

66,487,975

Net Assets

$ 759,700,842

Net Assets consist of:

Paid in capital

$ 730,199,989

Undistributed net investment income

9,608,167

Accumulated undistributed net realized gain (loss) on investments

(1,717,120)

Net unrealized appreciation (depreciation) on investments

21,609,806

Net Assets

$ 759,700,842

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price

Class A:
Net Asset Value and redemption price per share ($16,701,623 ÷ 1,512,598 shares)

$ 11.04

Maximum offering price per share (100/95.25 of $11.04)

$ 11.59

Class T:
Net Asset Value and redemption price per share ($24,130,136 ÷ 2,184,628 shares)

$ 11.05

Maximum offering price per share (100/96.50 of $11.05)

$ 11.45

Class B:
Net Asset Value and offering price per share ($29,114,667 ÷ 2,636,539 shares) A

$ 11.04

Class C:
Net Asset Value and offering price per share ($27,248,317 ÷ 2,469,544 shares) A

$ 11.03

Fidelity Inflation-Protected Bond Fund:
Net Asset Value, offering price and redemption price per share ($658,232,186 ÷ 59,510,594 shares)

$ 11.06

Institutional Class:
Net Asset Value, offering price and redemption price per share ($4,273,913 ÷ 387,072 shares)

$ 11.04

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 11,050,573

Expenses

Management fee

$ 1,404,555

Transfer agent fees

532,433

Distribution fees

266,000

Accounting fees and expenses

84,319

Non-interested trustees' compensation

1,331

Custodian fees and expenses

5,670

Registration fees

122,436

Audit

24,121

Legal

6,893

Miscellaneous

169

Total expenses before reductions

2,447,927

Expense reductions

(534,297)

1,913,630

Net investment income (loss)

9,136,943

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

4,723,787

Change in net unrealized appreciation (depreciation) on investment securities

14,213,495

Net gain (loss)

18,937,282

Net increase (decrease) in net assets resulting from operations

$ 28,074,225

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
October 31, 2003
(Unaudited)

June 26, 2002
(commencement of
operations) to
April 30, 2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 9,136,943

$ 13,861,602

Net realized gain (loss)

4,723,787

2,554,891

Change in net unrealized appreciation
(depreciation)

14,213,495

7,396,311

Net increase (decrease) in net assets resulting
from operations

28,074,225

23,812,804

Distributions to shareholders from net investment income

(4,970,609)

(6,402,651)

Distributions to shareholders from net realized gain

(7,712,010)

(2,017,381)

Total distributions

(12,682,619)

(8,420,032)

Share transactions - net increase (decrease)

138,363,853

590,552,611

Total increase (decrease) in net assets

153,755,459

605,945,383

Net Assets

Beginning of period

605,945,383

-

End of period (including undistributed net investment income of $9,608,167 and undistributed net investment income of $5,441,833,
respectively)

$ 759,700,842

$ 605,945,383

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.147

.236

Net realized and unrealized gain (loss)

.332

.080

Total from investment operations

.479

.316

Distributions from net investment income

(.079)

(.106)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.209)

(.156)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.45%

3.02%

Ratios to Average Net AssetsG

Expenses before expense reductions

.81%A

.86%A

Expenses net of voluntary waivers, if any

.65%A

.65%A

Expenses net of all reductions

.65%A

.65%A

Net investment income (loss)

2.70%A

3.89%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 16,702

$ 10,403

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.141

.229

Net realized and unrealized gain (loss)

.343

.081

Total from investment operations

.484

.310

Distributions from net investment income

(.074)

(.100)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.204)

(.150)

Net asset value, end of period

$ 11.05

$ 10.77

Total ReturnB,C,D

4.50%

2.96%

Ratios to Average Net AssetsG

Expenses before expense reductions

.94%A

.99%A

Expenses net of voluntary waivers, if any

.75%A

.75%A

Expenses net of all reductions

.75%A

.75%A

Net investment income (loss)

2.60%A

3.79%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 24,130

$ 11,274

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.106

.190

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.438

.272

Distributions from net investment income

(.038)

(.062)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.168)

(.112)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.06%

2.60%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.59%A

1.65%A

Expenses net of voluntary waivers, if any

1.40%A

1.40%A

Expenses net of all reductions

1.40%A

1.40%A

Net investment income (loss)

1.95%A

3.14%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 29,115

$ 21,426

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.76

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.101

.184

Net realized and unrealized gain (loss)

.331

.072

Total from investment operations

.432

.256

Distributions from net investment income

(.032)

(.056)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.162)

(.106)

Net asset value, end of period

$ 11.03

$ 10.76

Total ReturnB,C,D

4.01%

2.44%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.67%A

1.73%A

Expenses net of voluntary waivers, if any

1.50%A

1.50%A

Expenses net of all reductions

1.50%A

1.50%A

Net investment income (loss)

1.85%A

3.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 27,248

$ 19,936

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Fidelity Inflation-Protected Bond Fund

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.79

$ 10.00

Income from Investment Operations

Net investment income (loss)D

.156

.358

Net realized and unrealized gain (loss)

.331

.653

Total from investment operations

.487

1.011

Distributions from net investment income

(.087)

(.171)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.221)

Net asset value, end of period

$ 11.06

$ 10.79

Total ReturnB,C

4.53%

10.19%

Ratios to Average Net AssetsF

Expenses before expense reductions

.66%A

.69%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.86%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 658,232

$ 540,338

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period June 26, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)D

.155

.243

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.487

.325

Distributions from net investment income

(.087)

(.115)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.165)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C

4.54%

3.10%

Ratios to Average Net AssetsF

Expenses before expense reductions

.73%A

.73%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.85%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 4,274

$ 2,569

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period October 2, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

1. Significant Accounting Policies.

Fidelity Inflation-Protected Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Fidelity Inflation-Protected Bond Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. Interest is accrued based on the principal value which is adjusted for inflation. Any increase in the principal amount of an inflation- indexed bond is recorded as interest income, even though the principal is not received until maturity.

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

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to short-term capital gains and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 22,035,662

Unrealized depreciation

(639,366)

Net unrealized appreciation (depreciation)

$ 21,396,296

Cost for federal income tax purposes

$ 795,876,050

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund

Semiannual Report

2. Operating Policies - continued

Repurchase Agreements - continued

may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee.

The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 11,100

$ 377

Class T

0%

.25%

20,580

5,018

Class B

.65%

.25%

115,430

83,366

Class C

.75%

.25%

118,890

105,933

$ 266,000

$ 194,694

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 17,818

Class T

11,217

Class B*

31,551

Class C*

7,570

$ 68,156

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Fidelity Inflation-Protected Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Fidelity Inflation-Protected Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets

Class A

$ 11,042

.16*

Class T

15,372

.19*

Class B

24,841

.19*

Class C

20,990

.17*

Fidelity Inflation-Protected Bond Fund

456,450

.16*

Institutional Class

3,738

.23*

$ 532,433

*Annualized

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $450,554 for the period.

5. Expense Reductions.

FMR agreed to reimburse the classes of the fund to the extent operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.

Expense
Limitations

Reimbursement
from adviser

Class A

.65%

$ 11,220

Class T

.75%

15,076

Class B

1.40%

23,964

Class C

1.50%

19,441

Fidelity Inflation-Protected Bond Fund

.50%

460,341

Institutional Class

.50%

3,704

$ 533,746

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

5. Expense Reductions - continued

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $335. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Fidelity Inflation-Protected Bond Fund

$ 216

6. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003A

From net investment income

Class A

$ 101,836

$ 46,907

Class T

110,677

45,306

Class B

88,501

60,203

Class C

70,077

45,995

Fidelity Inflation-Protected Bond Fund

4,573,618

6,193,637B

Institutional Class

25,900

10,603

Total

$ 4,970,609

$ 6,402,651

From net realized gain

Class A

$ 157,071

$ 12,116

Class T

159,105

13,741

Class B

282,180

33,853

Class C

266,211

28,127

Fidelity Inflation-Protected Bond Fund

6,812,902

1,926,751B

Institutional Class

34,541

2,793

Total

$ 7,712,010

$ 2,017,381

A Distributions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation-Protected Bond Fund.

B Distributions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

7. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Class A

Shares sold

905,410

1,072,706

$ 9,896,902

$ 11,432,858

Reinvestment of distributions

19,183

4,107

212,143

43,816

Shares redeemed

(377,842)

(110,966)

(4,141,501)

(1,193,897)

Net increase (decrease)

546,751

965,847

$ 5,967,544

$ 10,282,777

Class T

Shares sold

1,488,538

1,120,751

$ 16,129,153

$ 11,982,464

Reinvestment of distributions

22,802

5,323

252,186

56,681

Shares redeemed

(373,211)

(79,575)

(4,051,736)

(851,751)

Net increase (decrease)

1,138,129

1,046,499

$ 12,329,603

$ 11,187,394

Class B

Shares sold

945,419

2,141,844

$ 10,339,461

$ 22,782,830

Reinvestment of distributions

28,792

7,607

319,457

80,459

Shares redeemed

(326,807)

(160,316)

(3,560,599)

(1,725,079)

Net increase (decrease)

647,404

1,989,135

$ 7,098,319

$ 21,138,210

Class C

Shares sold

1,102,657

2,051,407

$ 12,043,687

$ 21,839,640

Reinvestment of distributions

25,510

5,786

282,961

61,058

Shares redeemed

(510,930)

(204,886)

(5,513,412)

(2,206,619)

Net increase (decrease)

617,237

1,852,307

$ 6,813,236

$ 19,694,079

Fidelity Inflation-Protected Bond Fund

Shares sold

29,309,427

88,169,742B

$ 320,289,394

$ 927,212,422B

Reinvestment of distributions

976,858

727,548B

10,820,176

7,693,138B

Shares redeemed

(20,866,413)

(38,806,568)B

(226,583,231)

(409,211,357)B

Net increase (decrease)

9,419,872

50,090,722

$ 104,526,339

$ 525,694,203

Institutional Class

Shares sold

196,485

240,262

$ 2,142,814

$ 2,574,979

Reinvestment of distributions

4,709

1,033

52,030

11,007

Shares redeemed

(52,625)

(2,792)

(566,032)

(30,038)

Net increase (decrease)

148,569

238,503

$ 1,628,812

$ 2,555,948

A Share transactions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation Protected Bond Fund.

B Share transactions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

Distributions

The Board of Trustees of Fidelity Inflation-Protected Bond Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities:

Pay Date

Record Date

Capital Gains

Class A

12/15/03

12/12/03

$.131

Class T

12/15/03

12/12/03

$.131

Class B

12/15/03

12/12/03

$.131

Class C

12/15/03

12/12/03

$.131

The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.

Semiannual Report

Semiannual Report

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Money
Management, Inc.

Fidelity Investments Japan Limited

Fidelity International
Investment Advisors

Fidelity International
Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

Semiannual Report

Fidelity Advisor Aggressive Growth Fund

Fidelity Advisor Asset Allocation Fund

Fidelity Advisor Balanced Fund

Fidelity Advisor Biotechnology Fund

Fidelity Advisor California Municipal Income Fund

Fidelity Advisor Consumer Industries Fund

Fidelity Advisor Cyclical Industries Fund

Fidelity Advisor Developing Communications Fund

Fidelity Advisor Diversified International Fund

Fidelity Advisor Dividend Growth Fund

Fidelity Advisor Dynamic Capital Appreciation Fund

Fidelity Advisor Electronics Fund

Fidelity Advisor Emerging Asia Fund

Fidelity Advisor Emerging Markets Income Fund

Fidelity Advisor Equity Growth Fund

Fidelity Advisor Equity Income Fund

Fidelity Advisor Equity Value Fund

Fidelity Advisor Europe Capital Appreciation Fund

Fidelity Advisor Fifty Fund

Fidelity Advisor Financial Services Fund

Fidelity Advisor Floating Rate High Income Fund

Fidelity Advisor Freedom Income FundSM

Fidelity Advisor Freedom 2010 FundSM

Fidelity Advisor Freedom 2020 FundSM

Fidelity Advisor Freedom 2030 FundSM

Fidelity Advisor Freedom 2040 FundSM

Fidelity Advisor Global Equity Fund

Fidelity Advisor Government Investment Fund

Fidelity Advisor Growth & Income Fund

Fidelity Advisor Growth Opportunities

Fidelity Advisor Health Care Fund

Fidelity Advisor High Income Advantage Fund

Fidelity Advisor High Income Fund

Fidelity Advisor Inflation-Protected Bond Fund

Fidelity Advisor Intermediate Bond Fund

Fidelity Advisor International Capital Appreciation Fund

Fidelity Advisor International Small Cap Fund

Fidelity Advisor Investment Grade Bond Fund

Fidelity Advisor Japan Fund

Fidelity Advisor Korea Fund

Fidelity Advisor Large Cap Fund

Fidelity Advisor Latin America Fund

Fidelity Advisor Leveraged Company Stock Fund

Fidelity Advisor Mid Cap Fund

Fidelity Advisor Mortgage Securities Fund

Fidelity Advisor Municipal Income Fund

Fidelity Advisor Natural Resources Fund

Fidelity Advisor New Insights Fund

Fidelity Advisor New York Municipal Income Fund

Fidelity Advisor Overseas Fund

Fidelity Advisor Real Estate Fund

Fidelity Advisor Short
Fixed-Income Fund

Fidelity Advisor Short Intermediate Municipal Income Fund

Fidelity Advisor Small Cap Fund

Fidelity Advisor Strategic Growth Fund

Fidelity Advisor Strategic Income Fund

Fidelity Advisor Tax Managed
Stock Fund

Fidelity Advisor Technology Fund

Fidelity Advisor Telecommunications & Utilities Growth Fund

Fidelity Advisor Value Leaders Fund

Fidelity Advisor Value Strategies Fund

Prime Fund

Tax-Exempt Fund

Treasury Fund

AIFB-USAN-1203
1.784855.100

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

(Fidelity Investment logo)(registered trademark)
Fidelity Advisor

Inflation-Protected Bond

Fund - Institutional Class

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Institutional Class is a class of Fidelity® Inflation-Protected Bond Fund

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Summary

<Click Here>

A summary of the fund's investments.

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

Distributions

<Click Here>

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity Advisor fund, including charges and expenses, contact your investment professional for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Coupon Distribution as of October 31, 2003

% of fund's
investments

% of fund's investments
6 months ago

Less than 1.99%

0.1

0.3

1 - 1.99%

18.7

5.4

2 - 2.99%

0.9

0.6

3 - 3.99%

75.3

74.1

4% and over

0.8

16.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments. The coupon rates on inflation-protected bonds tend to be lower than their nominal bond counterparts since inflation-protected bonds get adjusted for actual inflation, while nominal bond coupon rates include a component for expected inflation. Please refer to the fund's prospectus for more information.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

10.6

10.9

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

5.6

5.8

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003 *

As of April 30, 2003 **

Corporate Bonds 0.7%

Corporate Bonds 1.0%

U.S. Government
and U.S. Government
Agency Obligations 96.6%

U.S. Government
and Government
Agency Obligations 100.4%

Asset-Backed
Securities 3.9%

Asset-Backed
Securities 3.9%

CMOs and Other
Mortgage Related
Securities 1.3%

CMOs and Other
Mortgage Related
Securities 1.3%

Short-Term
Investments and
Net Other Assets*** (2.5)%

Short-Term
Investments and
Net Other Assets*** (6.6)%



* Foreign investments

0.1%

** Foreign investments

0.2%

* Futures and Swaps

(0.1)%

** Futures and Swaps

(0.5)%

* Inflation Protected

95.6%

** Inflation Protected

99.1%

*** Short-Term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

U.S. Treasury Inflation Protected Obligations - 95.6%

Principal
Amount

Value
(Note 1)

U.S. Treasury Inflation-Indexed Bonds:

3.625% 4/15/28

$ 139,568,760

$ 168,965,436

3.875% 4/15/29

14,034,750

17,775,888

U.S. Treasury Inflation-Indexed Notes:

1.875% 7/15/13

112,255,149

111,939,429

3.375% 1/15/12

20,062,157

22,532,526

3.5% 1/15/11 (a)

239,850,244

269,985,929

3.875% 1/15/09

119,524,914

135,212,555

TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS

(Cost $704,989,533)

726,411,763

Fixed-Income Funds - 9.9%

Shares

Fidelity Ultra-Short Central Fund (b)
(Cost $75,000,007)

755,882

75,187,583

Cash Equivalents - 2.1%

Maturity
Amount

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $15,673,000)

$ 15,674,398

15,673,000

TOTAL INVESTMENT PORTFOLIO - 107.6%

(Cost $795,662,540)

817,272,346

NET OTHER ASSETS - (7.6)%

(57,571,504)

NET ASSETS - 100%

$ 759,700,842

Legend

(a) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(b) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $756,983,413 and $635,770,336, respectively, of which long-term U.S. government and government agency obligations aggregated $741,983,437 and $635,770,336, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $15,673,000) (cost $795,662,540) - See accompanying schedule

$ 817,272,346

Cash

150

Receivable for fund shares sold

3,704,278

Interest receivable

5,117,613

Prepaid expenses

3,378

Receivable from investment adviser for expense reductions

91,052

Total assets

826,188,817

Liabilities

Payable for investments purchased on a delayed delivery basis

$ 65,249,139

Payable for fund shares redeemed

747,031

Distributions payable

46,360

Accrued management fee

253,530

Distribution fees payable

49,451

Other payables and accrued expenses

142,464

Total liabilities

66,487,975

Net Assets

$ 759,700,842

Net Assets consist of:

Paid in capital

$ 730,199,989

Undistributed net investment income

9,608,167

Accumulated undistributed net realized gain (loss) on investments

(1,717,120)

Net unrealized appreciation (depreciation) on investments

21,609,806

Net Assets

$ 759,700,842

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price

Class A:
Net Asset Value and redemption price per share ($16,701,623 ÷ 1,512,598 shares)

$ 11.04

Maximum offering price per share (100/95.25 of $11.04)

$ 11.59

Class T:
Net Asset Value and redemption price per share ($24,130,136 ÷ 2,184,628 shares)

$ 11.05

Maximum offering price per share (100/96.50 of $11.05)

$ 11.45

Class B:
Net Asset Value and offering price per share ($29,114,667 ÷ 2,636,539 shares) A

$ 11.04

Class C:
Net Asset Value and offering price per share ($27,248,317 ÷ 2,469,544 shares) A

$ 11.03

Fidelity Inflation-Protected Bond Fund:
Net Asset Value, offering price and redemption price per share ($658,232,186 ÷ 59,510,594 shares)

$ 11.06

Institutional Class:
Net Asset Value, offering price and redemption price per share ($4,273,913 ÷ 387,072 shares)

$ 11.04

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 11,050,573

Expenses

Management fee

$ 1,404,555

Transfer agent fees

532,433

Distribution fees

266,000

Accounting fees and expenses

84,319

Non-interested trustees' compensation

1,331

Custodian fees and expenses

5,670

Registration fees

122,436

Audit

24,121

Legal

6,893

Miscellaneous

169

Total expenses before reductions

2,447,927

Expense reductions

(534,297)

1,913,630

Net investment income (loss)

9,136,943

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

4,723,787

Change in net unrealized appreciation (depreciation) on investment securities

14,213,495

Net gain (loss)

18,937,282

Net increase (decrease) in net assets resulting from operations

$ 28,074,225

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
October 31, 2003
(Unaudited)

June 26, 2002
(commencement of
operations) to
April 30, 2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 9,136,943

$ 13,861,602

Net realized gain (loss)

4,723,787

2,554,891

Change in net unrealized appreciation
(depreciation)

14,213,495

7,396,311

Net increase (decrease) in net assets resulting
from operations

28,074,225

23,812,804

Distributions to shareholders from net investment income

(4,970,609)

(6,402,651)

Distributions to shareholders from net realized gain

(7,712,010)

(2,017,381)

Total distributions

(12,682,619)

(8,420,032)

Share transactions - net increase (decrease)

138,363,853

590,552,611

Total increase (decrease) in net assets

153,755,459

605,945,383

Net Assets

Beginning of period

605,945,383

-

End of period (including undistributed net investment income of $9,608,167 and undistributed net investment income of $5,441,833,
respectively)

$ 759,700,842

$ 605,945,383

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.147

.236

Net realized and unrealized gain (loss)

.332

.080

Total from investment operations

.479

.316

Distributions from net investment income

(.079)

(.106)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.209)

(.156)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.45%

3.02%

Ratios to Average Net AssetsG

Expenses before expense reductions

.81%A

.86%A

Expenses net of voluntary waivers, if any

.65%A

.65%A

Expenses net of all reductions

.65%A

.65%A

Net investment income (loss)

2.70%A

3.89%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 16,702

$ 10,403

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.141

.229

Net realized and unrealized gain (loss)

.343

.081

Total from investment operations

.484

.310

Distributions from net investment income

(.074)

(.100)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.204)

(.150)

Net asset value, end of period

$ 11.05

$ 10.77

Total ReturnB,C,D

4.50%

2.96%

Ratios to Average Net AssetsG

Expenses before expense reductions

.94%A

.99%A

Expenses net of voluntary waivers, if any

.75%A

.75%A

Expenses net of all reductions

.75%A

.75%A

Net investment income (loss)

2.60%A

3.79%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 24,130

$ 11,274

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.106

.190

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.438

.272

Distributions from net investment income

(.038)

(.062)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.168)

(.112)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.06%

2.60%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.59%A

1.65%A

Expenses net of voluntary waivers, if any

1.40%A

1.40%A

Expenses net of all reductions

1.40%A

1.40%A

Net investment income (loss)

1.95%A

3.14%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 29,115

$ 21,426

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.76

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.101

.184

Net realized and unrealized gain (loss)

.331

.072

Total from investment operations

.432

.256

Distributions from net investment income

(.032)

(.056)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.162)

(.106)

Net asset value, end of period

$ 11.03

$ 10.76

Total ReturnB,C,D

4.01%

2.44%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.67%A

1.73%A

Expenses net of voluntary waivers, if any

1.50%A

1.50%A

Expenses net of all reductions

1.50%A

1.50%A

Net investment income (loss)

1.85%A

3.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 27,248

$ 19,936

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Fidelity Inflation-Protected Bond Fund

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.79

$ 10.00

Income from Investment Operations

Net investment income (loss)D

.156

.358

Net realized and unrealized gain (loss)

.331

.653

Total from investment operations

.487

1.011

Distributions from net investment income

(.087)

(.171)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.221)

Net asset value, end of period

$ 11.06

$ 10.79

Total ReturnB,C

4.53%

10.19%

Ratios to Average Net AssetsF

Expenses before expense reductions

.66%A

.69%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.86%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 658,232

$ 540,338

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period June 26, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)D

.155

.243

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.487

.325

Distributions from net investment income

(.087)

(.115)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.165)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C

4.54%

3.10%

Ratios to Average Net AssetsF

Expenses before expense reductions

.73%A

.73%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.85%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 4,274

$ 2,569

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period October 2, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

1. Significant Accounting Policies.

Fidelity Inflation-Protected Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Fidelity Inflation-Protected Bond Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. Interest is accrued based on the principal value which is adjusted for inflation. Any increase in the principal amount of an inflation- indexed bond is recorded as interest income, even though the principal is not received until maturity.

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

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to short-term capital gains and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 22,035,662

Unrealized depreciation

(639,366)

Net unrealized appreciation (depreciation)

$ 21,396,296

Cost for federal income tax purposes

$ 795,876,050

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund

Semiannual Report

2. Operating Policies - continued

Repurchase Agreements - continued

may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee.

The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 11,100

$ 377

Class T

0%

.25%

20,580

5,018

Class B

.65%

.25%

115,430

83,366

Class C

.75%

.25%

118,890

105,933

$ 266,000

$ 194,694

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 17,818

Class T

11,217

Class B*

31,551

Class C*

7,570

$ 68,156

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Fidelity Inflation-Protected Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Fidelity Inflation-Protected Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets

Class A

$ 11,042

.16*

Class T

15,372

.19*

Class B

24,841

.19*

Class C

20,990

.17*

Fidelity Inflation-Protected Bond Fund

456,450

.16*

Institutional Class

3,738

.23*

$ 532,433

*Annualized

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $450,554 for the period.

5. Expense Reductions.

FMR agreed to reimburse the classes of the fund to the extent operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.

Expense
Limitations

Reimbursement
from adviser

Class A

.65%

$ 11,220

Class T

.75%

15,076

Class B

1.40%

23,964

Class C

1.50%

19,441

Fidelity Inflation-Protected Bond Fund

.50%

460,341

Institutional Class

.50%

3,704

$ 533,746

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

5. Expense Reductions - continued

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $335. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Fidelity Inflation-Protected Bond Fund

$ 216

6. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003A

From net investment income

Class A

$ 101,836

$ 46,907

Class T

110,677

45,306

Class B

88,501

60,203

Class C

70,077

45,995

Fidelity Inflation-Protected Bond Fund

4,573,618

6,193,637B

Institutional Class

25,900

10,603

Total

$ 4,970,609

$ 6,402,651

From net realized gain

Class A

$ 157,071

$ 12,116

Class T

159,105

13,741

Class B

282,180

33,853

Class C

266,211

28,127

Fidelity Inflation-Protected Bond Fund

6,812,902

1,926,751B

Institutional Class

34,541

2,793

Total

$ 7,712,010

$ 2,017,381

A Distributions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation-Protected Bond Fund.

B Distributions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

7. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Class A

Shares sold

905,410

1,072,706

$ 9,896,902

$ 11,432,858

Reinvestment of distributions

19,183

4,107

212,143

43,816

Shares redeemed

(377,842)

(110,966)

(4,141,501)

(1,193,897)

Net increase (decrease)

546,751

965,847

$ 5,967,544

$ 10,282,777

Class T

Shares sold

1,488,538

1,120,751

$ 16,129,153

$ 11,982,464

Reinvestment of distributions

22,802

5,323

252,186

56,681

Shares redeemed

(373,211)

(79,575)

(4,051,736)

(851,751)

Net increase (decrease)

1,138,129

1,046,499

$ 12,329,603

$ 11,187,394

Class B

Shares sold

945,419

2,141,844

$ 10,339,461

$ 22,782,830

Reinvestment of distributions

28,792

7,607

319,457

80,459

Shares redeemed

(326,807)

(160,316)

(3,560,599)

(1,725,079)

Net increase (decrease)

647,404

1,989,135

$ 7,098,319

$ 21,138,210

Class C

Shares sold

1,102,657

2,051,407

$ 12,043,687

$ 21,839,640

Reinvestment of distributions

25,510

5,786

282,961

61,058

Shares redeemed

(510,930)

(204,886)

(5,513,412)

(2,206,619)

Net increase (decrease)

617,237

1,852,307

$ 6,813,236

$ 19,694,079

Fidelity Inflation-Protected Bond Fund

Shares sold

29,309,427

88,169,742B

$ 320,289,394

$ 927,212,422B

Reinvestment of distributions

976,858

727,548B

10,820,176

7,693,138B

Shares redeemed

(20,866,413)

(38,806,568)B

(226,583,231)

(409,211,357)B

Net increase (decrease)

9,419,872

50,090,722

$ 104,526,339

$ 525,694,203

Institutional Class

Shares sold

196,485

240,262

$ 2,142,814

$ 2,574,979

Reinvestment of distributions

4,709

1,033

52,030

11,007

Shares redeemed

(52,625)

(2,792)

(566,032)

(30,038)

Net increase (decrease)

148,569

238,503

$ 1,628,812

$ 2,555,948

A Share transactions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation Protected Bond Fund.

B Share transactions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

Distributions

The Board of Trustees of Fidelity Inflation-Protected Bond Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities:

Pay Date

Record Date

Capital Gains

Institutional Class

12/15/03

12/12/03

$.131

The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.

Semiannual Report

Semiannual Report

Semiannual Report

Semiannual Report

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Advisers

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Money
Management, Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors
(U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

Semiannual Report

Fidelity Advisor Aggressive Growth Fund

Fidelity Advisor Asset Allocation Fund

Fidelity Advisor Balanced Fund

Fidelity Advisor Biotechnology Fund

Fidelity Advisor California Municipal Income Fund

Fidelity Advisor Consumer Industries Fund

Fidelity Advisor Cyclical Industries Fund

Fidelity Advisor Developing Communications Fund

Fidelity Advisor Diversified International Fund

Fidelity Advisor Dividend Growth Fund

Fidelity Advisor Dynamic Capital Appreciation Fund

Fidelity Advisor Electronics Fund

Fidelity Advisor Emerging Asia Fund

Fidelity Advisor Emerging Markets Income Fund

Fidelity Advisor Equity Growth Fund

Fidelity Advisor Equity Income Fund

Fidelity Advisor Equity Value Fund

Fidelity Advisor Europe Capital Appreciation Fund

Fidelity Advisor Fifty Fund

Fidelity Advisor Financial Services Fund

Fidelity Advisor Floating Rate High Income Fund

Fidelity Advisor Freedom Income FundSM

Fidelity Advisor Freedom 2010 FundSM

Fidelity Advisor Freedom 2020 FundSM

Fidelity Advisor Freedom 2030 FundSM

Fidelity Advisor Freedom 2040 FundSM

Fidelity Advisor Global Equity Fund

Fidelity Advisor Government Investment Fund

Fidelity Advisor Growth & Income Fund

Fidelity Advisor Growth Opportunities

Fidelity Advisor Health Care Fund

Fidelity Advisor High Income Advantage Fund

Fidelity Advisor High Income Fund

Fidelity Advisor Inflation-Protected Bond Fund

Fidelity Advisor Intermediate Bond Fund

Fidelity Advisor International Capital Appreciation Fund

Fidelity Advisor International Small Cap Fund

Fidelity Advisor Investment Grade Bond Fund

Fidelity Advisor Japan Fund

Fidelity Advisor Korea Fund

Fidelity Advisor Large Cap Fund

Fidelity Advisor Latin America Fund

Fidelity Advisor Leveraged Company Stock Fund

Fidelity Advisor Mid Cap Fund

Fidelity Advisor Mortgage Securities Fund

Fidelity Advisor Municipal Income Fund

Fidelity Advisor Natural Resources Fund

Fidelity Advisor New Insights Fund

Fidelity Advisor New York Municipal Income Fund

Fidelity Advisor Overseas Fund

Fidelity Advisor Real Estate Fund

Fidelity Advisor Short
Fixed-Income Fund

Fidelity Advisor Short Intermediate Municipal Income Fund

Fidelity Advisor Small Cap Fund

Fidelity Advisor Strategic Growth Fund

Fidelity Advisor Strategic Income Fund

Fidelity Advisor Tax Managed
Stock Fund

Fidelity Advisor Technology Fund

Fidelity Advisor Telecommunications & Utilities Growth Fund

Fidelity Advisor Value Leaders Fund

Fidelity Advisor Value Strategies Fund

Prime Fund

Tax-Exempt Fund

Treasury Fund

AIFBI-USAN-1203
1.784856.100

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

Fidelity®

Inflation-Protected Bond

Fund

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

Distributions

<Click Here>

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Coupon Distribution as of October 31, 2003

% of fund's
investments

% of fund's investments
6 months ago

Less than 1.99%

0.1

0.3

1 - 1.99%

18.7

5.4

2 - 2.99%

0.9

0.6

3 - 3.99%

75.3

74.1

4% and over

0.8

16.9

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments. The coupon rates on inflation-protected bonds tend to be lower than their nominal bond counterparts since inflation-protected bonds get adjusted for actual inflation, while nominal bond coupon rates include a component for expected inflation. Please refer to the fund's prospectus for more information.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

10.6

10.9

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

5.6

5.8

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003 *

As of April 30, 2003 **

Corporate Bonds 0.7%

Corporate Bonds 1.0%

U.S. Government
and U.S. Government
Agency Obligations 96.6%

U.S. Government
and Government
Agency Obligations 100.4%

Asset-Backed
Securities 3.9%

Asset-Backed
Securities 3.9%

CMOs and Other
Mortgage Related
Securities 1.3%

CMOs and Other
Mortgage Related
Securities 1.3%

Short-Term
Investments and
Net Other Assets*** (2.5)%

Short-Term
Investments and
Net Other Assets*** (6.6)%



* Foreign investments

0.1%

** Foreign investments

0.2%

* Futures and Swaps

(0.1)%

** Futures and Swaps

(0.5)%

* Inflation Protected

95.6%

** Inflation Protected

99.1%

*** Short-Term Investments and Net Other Assets are not included in the pie chart.

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

U.S. Treasury Inflation Protected Obligations - 95.6%

Principal
Amount

Value
(Note 1)

U.S. Treasury Inflation-Indexed Bonds:

3.625% 4/15/28

$ 139,568,760

$ 168,965,436

3.875% 4/15/29

14,034,750

17,775,888

U.S. Treasury Inflation-Indexed Notes:

1.875% 7/15/13

112,255,149

111,939,429

3.375% 1/15/12

20,062,157

22,532,526

3.5% 1/15/11 (a)

239,850,244

269,985,929

3.875% 1/15/09

119,524,914

135,212,555

TOTAL U.S. TREASURY INFLATION PROTECTED OBLIGATIONS

(Cost $704,989,533)

726,411,763

Fixed-Income Funds - 9.9%

Shares

Fidelity Ultra-Short Central Fund (b)
(Cost $75,000,007)

755,882

75,187,583

Cash Equivalents - 2.1%

Maturity
Amount

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $15,673,000)

$ 15,674,398

15,673,000

TOTAL INVESTMENT PORTFOLIO - 107.6%

(Cost $795,662,540)

817,272,346

NET OTHER ASSETS - (7.6)%

(57,571,504)

NET ASSETS - 100%

$ 759,700,842

Legend

(a) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(b) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $756,983,413 and $635,770,336, respectively, of which long-term U.S. government and government agency obligations aggregated $741,983,437 and $635,770,336, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $15,673,000) (cost $795,662,540) - See accompanying schedule

$ 817,272,346

Cash

150

Receivable for fund shares sold

3,704,278

Interest receivable

5,117,613

Prepaid expenses

3,378

Receivable from investment adviser for expense reductions

91,052

Total assets

826,188,817

Liabilities

Payable for investments purchased on a delayed delivery basis

$ 65,249,139

Payable for fund shares redeemed

747,031

Distributions payable

46,360

Accrued management fee

253,530

Distribution fees payable

49,451

Other payables and accrued expenses

142,464

Total liabilities

66,487,975

Net Assets

$ 759,700,842

Net Assets consist of:

Paid in capital

$ 730,199,989

Undistributed net investment income

9,608,167

Accumulated undistributed net realized gain (loss) on investments

(1,717,120)

Net unrealized appreciation (depreciation) on investments

21,609,806

Net Assets

$ 759,700,842

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Assets and Liabilities - continued

October 31, 2003 (Unaudited)

Calculation of Maximum Offering Price

Class A:
Net Asset Value and redemption price per share ($16,701,623 ÷ 1,512,598 shares)

$ 11.04

Maximum offering price per share (100/95.25 of $11.04)

$ 11.59

Class T:
Net Asset Value and redemption price per share ($24,130,136 ÷ 2,184,628 shares)

$ 11.05

Maximum offering price per share (100/96.50 of $11.05)

$ 11.45

Class B:
Net Asset Value and offering price per share ($29,114,667 ÷ 2,636,539 shares) A

$ 11.04

Class C:
Net Asset Value and offering price per share ($27,248,317 ÷ 2,469,544 shares) A

$ 11.03

Fidelity Inflation-Protected Bond Fund:
Net Asset Value, offering price and redemption price per share ($658,232,186 ÷ 59,510,594 shares)

$ 11.06

Institutional Class:
Net Asset Value, offering price and redemption price per share ($4,273,913 ÷ 387,072 shares)

$ 11.04

A Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Operations

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 11,050,573

Expenses

Management fee

$ 1,404,555

Transfer agent fees

532,433

Distribution fees

266,000

Accounting fees and expenses

84,319

Non-interested trustees' compensation

1,331

Custodian fees and expenses

5,670

Registration fees

122,436

Audit

24,121

Legal

6,893

Miscellaneous

169

Total expenses before reductions

2,447,927

Expense reductions

(534,297)

1,913,630

Net investment income (loss)

9,136,943

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

4,723,787

Change in net unrealized appreciation (depreciation) on investment securities

14,213,495

Net gain (loss)

18,937,282

Net increase (decrease) in net assets resulting from operations

$ 28,074,225

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Changes in Net Assets

Six months ended
October 31, 2003
(Unaudited)

June 26, 2002
(commencement of
operations) to
April 30, 2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 9,136,943

$ 13,861,602

Net realized gain (loss)

4,723,787

2,554,891

Change in net unrealized appreciation
(depreciation)

14,213,495

7,396,311

Net increase (decrease) in net assets resulting
from operations

28,074,225

23,812,804

Distributions to shareholders from net investment income

(4,970,609)

(6,402,651)

Distributions to shareholders from net realized gain

(7,712,010)

(2,017,381)

Total distributions

(12,682,619)

(8,420,032)

Share transactions - net increase (decrease)

138,363,853

590,552,611

Total increase (decrease) in net assets

153,755,459

605,945,383

Net Assets

Beginning of period

605,945,383

-

End of period (including undistributed net investment income of $9,608,167 and undistributed net investment income of $5,441,833,
respectively)

$ 759,700,842

$ 605,945,383

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class A

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.147

.236

Net realized and unrealized gain (loss)

.332

.080

Total from investment operations

.479

.316

Distributions from net investment income

(.079)

(.106)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.209)

(.156)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.45%

3.02%

Ratios to Average Net AssetsG

Expenses before expense reductions

.81%A

.86%A

Expenses net of voluntary waivers, if any

.65%A

.65%A

Expenses net of all reductions

.65%A

.65%A

Net investment income (loss)

2.70%A

3.89%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 16,702

$ 10,403

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class T

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.141

.229

Net realized and unrealized gain (loss)

.343

.081

Total from investment operations

.484

.310

Distributions from net investment income

(.074)

(.100)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.204)

(.150)

Net asset value, end of period

$ 11.05

$ 10.77

Total ReturnB,C,D

4.50%

2.96%

Ratios to Average Net AssetsG

Expenses before expense reductions

.94%A

.99%A

Expenses net of voluntary waivers, if any

.75%A

.75%A

Expenses net of all reductions

.75%A

.75%A

Net investment income (loss)

2.60%A

3.79%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 24,130

$ 11,274

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the sales charges.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class B

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.106

.190

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.438

.272

Distributions from net investment income

(.038)

(.062)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.168)

(.112)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C,D

4.06%

2.60%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.59%A

1.65%A

Expenses net of voluntary waivers, if any

1.40%A

1.40%A

Expenses net of all reductions

1.40%A

1.40%A

Net investment income (loss)

1.95%A

3.14%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 29,115

$ 21,426

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Class C

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003F

Selected Per-Share Data

Net asset value, beginning of period

$ 10.76

$ 10.61

Income from Investment Operations

Net investment income (loss)E

.101

.184

Net realized and unrealized gain (loss)

.331

.072

Total from investment operations

.432

.256

Distributions from net investment income

(.032)

(.056)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.162)

(.106)

Net asset value, end of period

$ 11.03

$ 10.76

Total ReturnB,C,D

4.01%

2.44%

Ratios to Average Net AssetsG

Expenses before expense reductions

1.67%A

1.73%A

Expenses net of voluntary waivers, if any

1.50%A

1.50%A

Expenses net of all reductions

1.50%A

1.50%A

Net investment income (loss)

1.85%A

3.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 27,248

$ 19,936

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Total returns do not include the effect of the contingent deferred sales charge.

E Calculated based on average shares outstanding during the period.

F For the period October 2, 2002 (commencement of operations) to April 30, 2003.

G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Fidelity Inflation-Protected Bond Fund

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.79

$ 10.00

Income from Investment Operations

Net investment income (loss)D

.156

.358

Net realized and unrealized gain (loss)

.331

.653

Total from investment operations

.487

1.011

Distributions from net investment income

(.087)

(.171)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.221)

Net asset value, end of period

$ 11.06

$ 10.79

Total ReturnB,C

4.53%

10.19%

Ratios to Average Net AssetsF

Expenses before expense reductions

.66%A

.69%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.86%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 658,232

$ 540,338

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period June 26, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights - Institutional Class

Six months ended
October 31, 2003

Year ended
April 30,

(Unaudited)

2003E

Selected Per-Share Data

Net asset value, beginning of period

$ 10.77

$ 10.61

Income from Investment Operations

Net investment income (loss)D

.155

.243

Net realized and unrealized gain (loss)

.332

.082

Total from investment operations

.487

.325

Distributions from net investment income

(.087)

(.115)

Distributions from net realized gain

(.130)

(.050)

Total distributions

(.217)

(.165)

Net asset value, end of period

$ 11.04

$ 10.77

Total ReturnB,C

4.54%

3.10%

Ratios to Average Net AssetsF

Expenses before expense reductions

.73%A

.73%A

Expenses net of voluntary waivers, if any

.50%A

.50%A

Expenses net of all reductions

.50%A

.50%A

Net investment income (loss)

2.85%A

4.04%A

Supplemental Data

Net assets, end of period (000 omitted)

$ 4,274

$ 2,569

Portfolio turnover rate

182%A

211%A

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E For the period October 2, 2002 (commencement of operations) to April 30, 2003.

F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

1. Significant Accounting Policies.

Fidelity Inflation-Protected Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust.

The fund offers Class A, Class T, Class B, Class C, Fidelity Inflation-Protected Bond Fund, and Institutional Class shares, each of which has equal rights as to assets and voting privileges. Each class has exclusive voting rights with respect to matters that affect that class. Class B shares will automatically convert to Class A shares after a holding period of seven years from the initial date of purchase. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to transfer agent and distribution and service plan fees incurred. Certain expense reductions also differ by class.

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation. Interest is accrued based on the principal value which is adjusted for inflation. Any increase in the principal amount of an inflation- indexed bond is recorded as interest income, even though the principal is not received until maturity.

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

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Income dividends and capital gain distributions are declared separately for each class. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to short-term capital gains and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 22,035,662

Unrealized depreciation

(639,366)

Net unrealized appreciation (depreciation)

$ 21,396,296

Cost for federal income tax purposes

$ 795,876,050

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund

Semiannual Report

2. Operating Policies - continued

Repurchase Agreements - continued

may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee.

The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate Distribution and Service Plans for each class of shares. Certain classes pay Fidelity Distributors Corporation (FDC), an affiliate of FMR, separate Distribution and Service Fees, each of which is based on an annual percentage of each class' average net assets. In addition, FDC may pay financial intermediaries for selling shares of the fund and providing shareholder support services. For the period, the Distribution and Service Fee rates and the total amounts paid to and retained by FDC were as follows:

Distribution
Fee

Service
Fee

Paid to
FDC

Retained
by FDC

Class A

0%

.15%

$ 11,100

$ 377

Class T

0%

.25%

20,580

5,018

Class B

.65%

.25%

115,430

83,366

Class C

.75%

.25%

118,890

105,933

$ 266,000

$ 194,694

Sales Load. FDC receives a front-end sales charge of up to 4.75% for selling Class A shares, and 3.50% for selling Class T shares of the fund. FDC receives the proceeds of contingent deferred sales charges levied on Class A, Class T, Class B, and Class C redemptions. These charges depend on the holding period. The deferred sales charges range from 5% to 1% for Class B, 1% for Class C, and .25% for certain purchases of Class A and Class T shares.

For the period, sales charge amounts retained by FDC were as follows:

Retained
by FDC

Class A

$ 17,818

Class T

11,217

Class B*

31,551

Class C*

7,570

$ 68,156

* When Class B and Class C shares are initially sold, FDC pays commissions from its own resources to financial intermediaries through which the sales are made.

Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the transfer, dividend disbursing and shareholder servicing agent (collectively referred to as the transfer agent) for each class of the fund, except for Fidelity Inflation-Protected Bond. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the transfer agent for Fidelity Inflation-Protected Bond shares. FIIOC and FSC receive account fees and asset-based fees that vary according to the account size and type

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees - continued

of account of the shareholders of the respective classes of the fund. FIIOC and FSC pay for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the following amounts were paid to FIIOC or FSC:

Amount

% of
Average
Net Assets

Class A

$ 11,042

.16*

Class T

15,372

.19*

Class B

24,841

.19*

Class C

20,990

.17*

Fidelity Inflation-Protected Bond Fund

456,450

.16*

Institutional Class

3,738

.23*

$ 532,433

*Annualized

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $450,554 for the period.

5. Expense Reductions.

FMR agreed to reimburse the classes of the fund to the extent operating expenses exceeded certain levels of average net assets as noted in the table below. Some expenses, for example interest expense, are excluded from this reimbursement.

Expense
Limitations

Reimbursement
from adviser

Class A

.65%

$ 11,220

Class T

.75%

15,076

Class B

1.40%

23,964

Class C

1.50%

19,441

Fidelity Inflation-Protected Bond Fund

.50%

460,341

Institutional Class

.50%

3,704

$ 533,746

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

5. Expense Reductions - continued

In addition, through arrangements with the fund's custodian and each class' transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $335. During the period, credits reduced each class' transfer agent expense as noted in the table below.

Transfer Agent
expense reduction

|

Fidelity Inflation-Protected Bond Fund

$ 216

6. Distributions to Shareholders.

Distributions to shareholders of each class were as follows:

Six months ended
October 31,
2003

Year ended
April 30,
2003A

From net investment income

Class A

$ 101,836

$ 46,907

Class T

110,677

45,306

Class B

88,501

60,203

Class C

70,077

45,995

Fidelity Inflation-Protected Bond Fund

4,573,618

6,193,637B

Institutional Class

25,900

10,603

Total

$ 4,970,609

$ 6,402,651

From net realized gain

Class A

$ 157,071

$ 12,116

Class T

159,105

13,741

Class B

282,180

33,853

Class C

266,211

28,127

Fidelity Inflation-Protected Bond Fund

6,812,902

1,926,751B

Institutional Class

34,541

2,793

Total

$ 7,712,010

$ 2,017,381

A Distributions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation-Protected Bond Fund.

B Distributions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

7. Share Transactions.

Transactions for each class of shares were as follows:

Shares

Dollars

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Six months ended
October 31,
2003

Year ended
April 30,
2003A

Class A

Shares sold

905,410

1,072,706

$ 9,896,902

$ 11,432,858

Reinvestment of distributions

19,183

4,107

212,143

43,816

Shares redeemed

(377,842)

(110,966)

(4,141,501)

(1,193,897)

Net increase (decrease)

546,751

965,847

$ 5,967,544

$ 10,282,777

Class T

Shares sold

1,488,538

1,120,751

$ 16,129,153

$ 11,982,464

Reinvestment of distributions

22,802

5,323

252,186

56,681

Shares redeemed

(373,211)

(79,575)

(4,051,736)

(851,751)

Net increase (decrease)

1,138,129

1,046,499

$ 12,329,603

$ 11,187,394

Class B

Shares sold

945,419

2,141,844

$ 10,339,461

$ 22,782,830

Reinvestment of distributions

28,792

7,607

319,457

80,459

Shares redeemed

(326,807)

(160,316)

(3,560,599)

(1,725,079)

Net increase (decrease)

647,404

1,989,135

$ 7,098,319

$ 21,138,210

Class C

Shares sold

1,102,657

2,051,407

$ 12,043,687

$ 21,839,640

Reinvestment of distributions

25,510

5,786

282,961

61,058

Shares redeemed

(510,930)

(204,886)

(5,513,412)

(2,206,619)

Net increase (decrease)

617,237

1,852,307

$ 6,813,236

$ 19,694,079

Fidelity Inflation-Protected Bond Fund

Shares sold

29,309,427

88,169,742B

$ 320,289,394

$ 927,212,422B

Reinvestment of distributions

976,858

727,548B

10,820,176

7,693,138B

Shares redeemed

(20,866,413)

(38,806,568)B

(226,583,231)

(409,211,357)B

Net increase (decrease)

9,419,872

50,090,722

$ 104,526,339

$ 525,694,203

Institutional Class

Shares sold

196,485

240,262

$ 2,142,814

$ 2,574,979

Reinvestment of distributions

4,709

1,033

52,030

11,007

Shares redeemed

(52,625)

(2,792)

(566,032)

(30,038)

Net increase (decrease)

148,569

238,503

$ 1,628,812

$ 2,555,948

A Share transactions are for the period October 2, 2002 (commencement of sale of shares) to April 30, 2003, except for Fidelity Inflation Protected Bond Fund.

B Share transactions are for the period June 26, 2002(commencement of operations) to April 30, 2003.

Semiannual Report

Distributions

The Board of Trustees of Fidelity Inflation-Protected Bond Fund voted to pay to shareholders of record at the opening of business on record date, the following distributions per share derived from capital gains realized from sales of portfolio securities:

Pay Date

Record Date

Capital Gains

Fidelity Inflation-Protected Bond

12/15/03

12/12/03

$.131

The fund will notify shareholders in January 2004 of amounts for use in preparing 2003 income tax returns.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1   For mutual fund and brokerage trading.

2   For quotes.*

3   For account balances and holdings.

4   To review orders and mutual
fund activity.

5   To change your PIN.

*0   To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* 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.

Semiannual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Semiannual Report

To Visit Fidelity

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

Arizona

7001 West Ray Road
Chandler, AZ

7373 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

527 North Brand Boulevard
Glendale, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

10100 Santa Monica Blvd.
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

1760 Challenge Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

8 Montgomery Street
San Francisco, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6300 Canoga Avenue
Woodland Hills, CA

Colorado

1625 Broadway
Denver, CO

9185 East Westview Road
Littleton, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

222 Delaware Avenue
Wilmington, DE

Florida

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

1907 West State Road 434
Longwood, FL

8880 Tamiami Trail, North
Naples, FL

3501 PGA Boulevard
West Palm Beach, FL

8065 Beneva Road
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

1415 West 22nd Street
Oak Brook, IL

1700 East Golf Road
Schaumburg, IL

3232 Lake Avenue
Wilmette, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7401 Wisconsin Avenue
Bethesda, MD

One W. Pennsylvania Ave.
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

405 Cochituate Road
Framingham, MA

416 Belmont Street
Worcester, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Semiannual Report

Michigan

280 Old N. Woodward Ave.
Birmingham, MI

43420 Grand River Avenue
Novi, MI

29155 Northwestern Hwy.
Southfield, MI

Minnesota

7600 France Avenue South
Edina, MN

Missouri

8885 Ladue Road
Ladue, MO

New Jersey

150 Essex Street
Millburn, NJ

56 South Street
Morristown, NJ

501 Route 17, South
Paramus, NJ

3518 Route 1 North
Princeton, NJ

New York

1055 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

North Carolina

4611 Sharon Road
Charlotte, NC

Ohio

3805 Edwards Road
Cincinnati, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

16850 SW 72nd Avenue
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

47 Providence Place
Providence, RI

Tennessee

6150 Poplar Avenue
Memphis, TN

Texas

10000 Research Boulevard
Austin, TX

4017 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

400 East Las Colinas Blvd.
Irving, TX

14100 San Pedro
San Antonio, TX

19740 IH 45 North
Spring, TX

6005 West Park Boulevard
Plano, TX 75093

Utah

215 South State Street
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

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

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

595 North Barker Road
Brookfield, WI

Semiannual Report

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research
Company
Boston, MA

Investment Sub-Advisers

Fidelity Management & Research
(U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Japan Limited

Fidelity Investments Money
Management, Inc.

Fidelity International
Investment Advisors

Fidelity International
Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

Citibank, N.A.

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

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)

Fidelity Automated Service
Telephone (FAST®) (automated graphic)    1-800-544-5555

(automated graphic)    Automated line for quickest service

IFB-USAN-1203
1.784854.100

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

Spartan®

Government Income

Fund

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Coupon Distribution as of October 31, 2003

% of fund's
investments

% of fund's investments
6 months ago

Less than 2%

1.7

6.3

2 - 2.99%

6.2

0.0

3 - 3.99%

15.7

3.4

4 - 4.99%

2.7

0.8

5 - 5.99%

24.0

12.5

6 - 6.99%

21.9

37.7

7 - 7.99%

5.7

7.4

8 - 8.99%

8.2

11.6

9 - 9.99%

0.3

1.4

10 - 10.99%

0.0

0.0

11 - 11.99%

7.3

10.1

12% and over

0.8

0.6

Coupon distribution shows the range of stated interest rates on the fund's investments, excluding short-term investments.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

7.6

8.2

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

5.2

5.0

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003*

As of April 30, 2003**

Mortgage Securities 7.1%

Mortgage Securities 10.7%

CMOs and Other Mortgage Related Securities 11.9%

CMOs and Other Mortgage Related Securities 16.6%

U.S. Treasury
Obligations 38.7%

U.S. Treasury
Obligations 42.2%

U.S. Government
Agency Obligations 39.5%

U.S. Government
Agency Obligations 24.8%

Short-Term
Investments and
Net Other Assets 2.8%

Short-Term
Investments and
Net Other Assets 5.7%

* Futures and Swaps

5.1%

** Futures and Swaps

1.8%



Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

U.S. Government and Government Agency Obligations - 78.2%

Principal
Amount

Value
(Note 1)

U.S. Government Agency Obligations - 39.5%

Fannie Mae:

6% 5/15/08

$ 4,000,000

$ 4,429,048

6.25% 2/1/11

5,870,000

6,420,354

Farm Credit Systems Financial Assistance Corp. 8.8% 6/10/05

1,860,000

2,061,791

Federal Farm Credit Bank 6.05% 1/3/06

3,425,000

3,702,024

Federal Home Loan Bank 3.625% 11/14/08

42,930,000

42,908,020

Freddie Mac:

1.5% 8/15/05

16,045,000

15,901,798

2.875% 9/15/05

24,800,000

25,170,090

2.875% 11/3/06

34,500,000

34,426,688

3.625% 9/15/08

31,415,000

31,515,874

4.5% 7/15/13

8,900,000

8,705,072

5.5% 9/15/11

470,000

502,072

5.875% 3/21/11

16,720,000

17,880,050

Government Loan Trusts (assets of Trust guaranteed by U.S. Government through Agency for International Development) Series 1-B, 8.5% 4/1/06

2,797,174

3,061,283

Guaranteed Export Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-
Import Bank):

Series 1993-C, 5.2% 10/15/04

26,844

27,637

Series 1993-D, 5.23% 5/15/05

597,223

610,051

Series 1994-A, 7.12% 4/15/06

3,779,967

4,033,753

Series 1995-A, 6.28% 6/15/04

1,657,648

1,689,756

Series 1996-A, 6.55% 6/15/04

879,359

894,124

Guaranteed Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-
Import Bank):

Series 1994-A, 7.39% 6/26/06

15,250,000

16,381,397

Series 1994-B, 7.5% 1/26/06

88,526

95,245

Overseas Private Investment Corp. U.S. Government guaranteed participation certificates:

Series 1996-A1, 6.726% 9/15/10

1,217,391

1,340,031

Series 2000-016, 6.07% 12/15/14

7,000,000

7,603,750

6.77% 11/15/13

2,601,923

2,878,377

6.99% 5/21/16

4,998,000

5,672,430

Private Export Funding Corp. secured:

5.34% 3/15/06

8,660,000

9,263,178

5.66% 9/15/11 (a)

4,230,000

4,536,675

5.8% 2/1/04

682,500

690,137

6.86% 4/30/04

1,256,267

1,289,558

U.S. Government and Government Agency Obligations - continued

Principal
Amount

Value
(Note 1)

U.S. Government Agency Obligations - continued

Private Export Funding Corp. secured: - continued

7.17% 5/15/07

$ 4,400,000

$ 5,028,725

Small Business Administration guaranteed development participation certificates:

Series 2002-20K Class 1, 5.08% 11/1/22

9,804,039

9,877,506

5.136% 8/10/13

5,000,000

5,183,000

State of Israel (guaranteed by U.S. Government through Agency for International Development):

5.5% 9/18/23

32,000,000

32,132,448

5.89% 8/15/05

11,100,000

11,756,221

6.6% 2/15/08

27,980,000

30,319,744

6.8% 2/15/12

7,000,000

7,804,188

U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1999-A:

5.75% 8/1/06

4,100,000

4,450,989

5.96% 8/1/09

6,650,000

7,094,287

U.S. Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) 8.17% 1/15/07

296,042

325,954

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS

367,663,325

U.S. Treasury Inflation Protected Obligations - 8.2%

U.S. Treasury Inflation-Indexed Bonds 3.625% 4/15/28

62,845,884

76,082,802

U.S. Treasury Obligations - 30.5%

U.S. Treasury Bonds:

8% 11/15/21

52,000,000

69,690,140

11.25% 2/15/15

43,440,000

69,358,085

13.25% 5/15/14

5,000,000

7,478,125

U.S. Treasury Notes:

5% 2/15/11

10,000,000

10,705,080

5.625% 5/15/08

57,000,000

63,094,098

5.75% 8/15/10

40,000,000

44,743,760

6.5% 10/15/06

16,500,000

18,434,889

TOTAL U.S. TREASURY OBLIGATIONS

283,504,177

TOTAL U.S. GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $721,422,156)

727,250,304

U.S. Government Agency - Mortgage Securities - 7.1%

Principal
Amount

Value
(Note 1)

Fannie Mae - 4.1%

4% 11/1/18 (b)

$ 13,933,309

$ 13,528,372

4.5% 6/1/33 (c)

3,973,593

3,789,814

6% 9/1/17

12,508,688

13,010,244

6.5% 2/1/10 to 11/1/32

1,735,686

1,803,956

7% 11/1/06 to 6/1/32

4,460,495

4,707,185

7.5% 2/1/28 to 7/1/28

30,260

32,298

8.5% 7/1/31

887,343

954,233

9.5% 11/1/06 to 11/15/09

321,578

348,649

11% 8/1/10

76,480

85,527

11.25% 5/1/14

23,127

26,291

11.5% 6/15/19

151,054

171,581

12.5% 3/1/16

13,992

16,126

38,474,276

Freddie Mac - 1.3%

5% 11/1/33 (b)

3,000,000

2,952,188

6% 2/1/29 to 5/1/29

2,792,530

2,869,983

6.775% 11/15/03

1,499,176

1,496,958

7.5% 6/1/07 to 7/1/16

2,155,465

2,294,297

8.5% 7/1/22 to 9/1/29

641,980

698,182

9% 8/1/08 to 4/1/20

162,946

179,987

9.5% 6/1/09 to 8/1/21

1,139,673

1,258,694

10% 7/1/09 to 8/1/21

218,354

241,200

12% 12/1/11 to 12/1/15

27,810

31,737

12.25% 4/1/11 to 9/1/13

27,246

30,594

12.5% 2/1/14 to 6/1/19

125,369

142,658

13% 8/1/10 to 6/1/15

43,043

49,614

12,246,092

Government National Mortgage Association - 1.7%

6% 5/15/33

12,576,884

12,995,177

6.5% 3/15/28 to 6/20/32

594,778

622,406

7.5% 8/15/06 to 6/15/07

510,368

538,233

8% 12/15/23

1,080,894

1,178,979

10.5% 4/15/14 to 1/15/18

174,200

196,423

13.5% 7/15/11

12,986

15,132

15,546,350

TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES

(Cost $65,506,257)

66,266,718

Collateralized Mortgage Obligations - 11.9%

Principal
Amount

Value
(Note 1)

U.S. Government Agency - 11.9%

Fannie Mae:

planned amortization class:

Series 1991-170 Class E, 8% 12/25/06

$ 514,559

$ 542,941

Series 1993-155 Class J, 7% 12/25/22

7,872,583

7,998,910

Series 1993-160 Class PK, 6.5% 11/25/22

10,379,738

10,618,162

Series 1993-240 Class PD, 6.25% 12/25/13

9,230,000

9,996,065

Series 1994-27 Class PJ, 6.5% 6/25/23

3,000,000

3,166,178

Series 2003-28 Class KQ, 5% 4/25/23

2,520,494

2,535,130

Fannie Mae guaranteed REMIC pass thru certificates planned amortization class:

Series 2001-30 Class PL, 7% 2/25/31

9,000,000

9,352,607

Series 2002-25 Class PD, 6.5% 4/25/31

12,196,000

12,830,997

Freddie Mac planned amortization class Series 2351 Class PX, 6.5% 7/15/30

8,899,101

9,062,864

Freddie Mac Multi-class participation certificates guaranteed:

planned amortization class:

Series 1141 Class G, 9% 9/15/21

1,096,864

1,113,348

Series 1727 Class H, 6.5% 8/15/23

5,200,000

5,490,817

Series 2295 Class PE, 6.5% 2/15/30

5,452,298

5,543,097

sequential pay:

Series 2303 Class VT, 6% 2/15/12

1,884,256

1,909,221

Series 2448:

Class VH, 6.5% 5/15/18

7,165,000

7,580,101

Class XB, 6.5% 10/15/29

7,710,000

7,882,281

Series 2473 Class JB, 5.5% 2/15/29

1,215,000

1,232,301

target amortization class Series 2156 Class TC, 6.25% 5/15/29

8,000,000

8,312,638

Ginnie Mae guaranteed REMIC pass thru securities:

sequential pay Series 2000-12 Class B, 7.5% 12/16/28

3,784,815

3,851,561

Series 2001-53 Class TA, 6% 12/20/30

1,503,452

1,537,813

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost $109,435,029)

110,557,032

Cash Equivalents - 5.6%

Maturity
Amount

Value
(Note 1)

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $52,065,000)

$ 52,069,643

$ 52,065,000

TOTAL INVESTMENT PORTFOLIO - 102.8%

(Cost $948,428,442)

956,139,054

NET OTHER ASSETS - (2.8)%

(25,736,026)

NET ASSETS - 100%

$ 930,403,028

Swap Agreements

Expiration
Date

Notional
Amount

Unrealized
Appreciation/
(Depreciation)

Interest Rate Swap

Receive quarterly a fixed rate equal to 2.3192% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.

April 2006

$ 5,400,000

$ (21,750)

Receive quarterly a fixed rate equal to 2.6165% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.

Oct. 2006

42,000,000

(168,055)

$ 47,400,000

$ (189,805)

Legend

(a) 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 $4,536,675 or 0.5% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) A portion of the security is subject to a forward commitment to sell.

Other Information

Purchases and sales of long-term U.S. government and government agency obligations aggregated $1,006,327,807 and $1,192,439,633, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $52,065,000) (cost $ 948,428,442) - See accompanying schedule

$ 956,139,054

Commitment to sell securities on a delayed delivery basis

$ (3,786,089)

Receivable for securities sold on a delayed delivery basis

3,754,425

(31,664)

Receivable for investments sold, regular delivery

16,880,275

Cash

398

Receivable for fund shares sold

1,147,238

Interest receivable

9,568,578

Receivable from investment adviser for expense reductions

72,545

Total assets

983,776,424

Liabilities

Payable for investments purchased
Regular delivery

34,491,030

Delayed delivery

16,481,003

Payable for fund shares redeemed

1,529,163

Distributions payable

204,770

Unrealized loss on swap agreements

189,805

Accrued management fee

474,488

Other payables and accrued expenses

3,137

Total liabilities

53,373,396

Net Assets

$ 930,403,028

Net Assets consist of:

Paid in capital

$ 928,446,509

Undistributed net investment income

650,394

Accumulated undistributed net realized gain (loss) on investments

(6,183,018)

Net unrealized appreciation (depreciation) on investments

7,489,143

Net Assets, for 84,910,582 shares outstanding

$ 930,403,028

Net Asset Value, offering price and redemption price per share ($930,403,028 ÷ 84,910,582 shares)

$ 10.96

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 21,049,050

Security lending

68,843

Total income

21,117,893

Expenses

Management fee

$ 3,215,860

Non-interested trustees' compensation

2,462

Total expenses before reductions

3,218,322

Expense reductions

(523,690)

2,694,632

Net investment income (loss)

18,423,261

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities

(5,078,397)

Swap agreements

164,779

Total net realized gain (loss)

(4,913,618)

Change in net unrealized appreciation (depreciation) on:

Investment securities

(15,411,056)

Swap agreements

(313,279)

Delayed delivery commitments

(31,664)

Total change in net unrealized appreciation (depreciation)

(15,755,999)

Net gain (loss)

(20,669,617)

Net increase (decrease) in net assets resulting from operations

$ (2,246,356)

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Six months ended
October 31, 2003
(Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 18,423,261

$ 45,744,544

Net realized gain (loss)

(4,913,618)

43,852,620

Change in net unrealized appreciation (depreciation)

(15,755,999)

10,433,321

Net increase (decrease) in net assets resulting
from operations

(2,246,356)

100,030,485

Distributions to shareholders from net investment income

(17,942,414)

(45,107,382)

Distributions to shareholders from net realized gain

(12,417,631)

(4,231,499)

Total distributions

(30,360,045)

(49,338,881)

Share transactions
Net proceeds from sales of shares

172,695,502

923,246,297

Reinvestment of distributions

28,091,000

45,609,509

Cost of shares redeemed

(416,711,423)

(688,267,177)

Net increase (decrease) in net assets resulting from share transactions

(215,924,921)

280,588,629

Total increase (decrease) in net assets

(248,531,322)

331,280,233

Net Assets

Beginning of period

1,178,934,350

847,654,117

End of period (including undistributed net investment income of $650,394 and undistributed net investment income of $169,547, respectively)

$ 930,403,028

$ 1,178,934,350

Other Information

Shares

Sold

15,477,729

82,902,812

Issued in reinvestment of distributions

2,503,264

4,096,579

Redeemed

(37,697,090)

(61,931,842)

Net increase (decrease)

(19,716,097)

25,067,549

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

Six months ended
October 31, 2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 11.27

$ 10.65

$ 10.42

$ 9.94

$ 10.46

$ 10.45

Income from Investment Operations

Net investment income (loss) D

.192

.469

.535 F

.639

.628

.629

Net realized and unrealized gain (loss)

(.196)

.658

.237 F

.492

(.509)

(.003)

Total from investment operations

(.004)

1.127

.772

1.131

.119

.626

Distributions from net investment income

(.186)

(.467)

(.542)

(.651)

(.639)

(.616)

Distributions from net realized gain

(.120)

(.040)

-

-

-

-

Total distributions

(.306)

(.507)

(.542)

(.651)

(.639)

(.616)

Net asset value, end of period

$ 10.96

$ 11.27

$ 10.65

$ 10.42

$ 9.94

$ 10.46

Total Return B, C

(.07)%

10.75%

7.53%

11.66%

1.25%

6.04%

Ratios to Average Net Assets E

Expenses before expense reductions

.60% A

.60%

.60%

.60%

.60%

.60%

Expenses net of voluntary waivers, if any

.50% A

.50%

.50%

.50%

.50%

.51%

Expenses net of all reductions

.50% A

.50%

.50%

.49%

.50%

.51%

Net investment income (loss)

3.41% A

4.23%

5.07% F

6.23%

6.23%

5.94%

Supplemental Data

Net assets,
end of period
(000 omitted)

$ 930,403

$ 1,178,934

$ 847,654

$ 785,753

$ 616,650

$ 743,772

Portfolio turnover rate

203% A

238%

299%

182%

118%

218%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.

F Effective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

1. Significant Accounting Policies.

Spartan Government Income Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

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

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders - continued

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount, capital loss carryforwards and losses deferred due to wash sales and excise tax regulations.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 13,224,292

|

Unrealized depreciation

(6,182,122)

Net unrealized appreciation (depreciation)

$ 7,042,170

Cost for federal income tax purposes

$ 949,096,884

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of

Semiannual Report

2. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The net receivable or payable is accrued daily and is included in interest income in the accompanying Statement of Operations. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact the fund.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

2. Operating Policies - continued

Financing Transactions - continued

transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee that is based on an annual rate of .60% of the fund's average net assets. FMR pays all other expenses, except the compensation of the non-interested Trustees and certain exceptions such as interest expense. The management fee paid to FMR by the fund is reduced by an amount equal to the fees and expenses paid by the fund to the non-interested Trustees.

5. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.

Semiannual Report

6. Expense Reductions.

FMR agreed to reimburse the fund to the extent operating expenses exceeded .50% of average net assets. Some expenses, for example interest expense, are excluded from this reimbursement. During the period, this reimbursement reduced the fund's expenses by $520,117.

In addition, through arrangements with the fund's custodian and transfer agent, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's expenses by $3,573.

7. Other Information.

At the end of the period, one unaffiliated shareholder was the owner of record of 26% of the total outstanding shares of the fund.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1   For mutual fund and brokerage trading.

2   For quotes.*

3   For account balances and holdings.

4   To review orders and mutual
fund activity.

5   To change your PIN.

*0   To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* 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.

Semiannual Report

To Visit Fidelity

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

Arizona

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Chandler, AZ

7373 N. Scottsdale Road
Scottsdale, AZ

California

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Brea, CA

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Boston, MA

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Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

405 Cochituate Road
Framingham, MA

416 Belmont Street
Worcester, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Semiannual Report

Michigan

280 Old N. Woodward Ave.
Birmingham, MI

43420 Grand River Avenue
Novi, MI

29155 Northwestern Hwy.
Southfield, MI

Minnesota

7600 France Avenue South
Edina, MN

Missouri

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Ladue, MO

New Jersey

150 Essex Street
Millburn, NJ

56 South Street
Morristown, NJ

501 Route 17, South
Paramus, NJ

3518 Route 1 North
Princeton, NJ

New York

1055 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

North Carolina

4611 Sharon Road
Charlotte, NC

Ohio

3805 Edwards Road
Cincinnati, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

16850 SW 72nd Avenue
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

47 Providence Place
Providence, RI

Tennessee

6150 Poplar Avenue
Memphis, TN

Texas

10000 Research Boulevard
Austin, TX

4017 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

400 East Las Colinas Blvd.
Irving, TX

14100 San Pedro
San Antonio, TX

19740 IH 45 North
Spring, TX

6005 West Park Boulevard
Plano, TX 75093

Utah

215 South State Street
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

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

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

595 North Barker Road
Brookfield, WI

Semiannual Report

Investment Adviser

Fidelity Management & Research Company

Boston, MA

Investment Sub-Adviser

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Management, Inc.

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Fidelity International Investment Advisors
(U.K.) Limited

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Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

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High Income

Inflation-Protected Bond

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Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

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Mutual Fund 24-Hour Service

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www.fidelity.com

Fidelity®

High Income

Fund

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

<Click Here>

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

Notes

<Click Here>

Notes to the financial statements.

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

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

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

(Recycle graphic)   This report is printed on recycled paper using soy-based inks.

This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Top Five Holdings as of October 31, 2003

(by issuer, excluding cash equivalents)

% of fund's
net assets

% of fund's net assets
6 months ago

AES Corp.

3.7

2.7

CMS Energy Corp.

2.4

3.6

Qwest Corp.

2.4

1.1

Nextel Communications, Inc.

2.3

2.2

Tyco International Group SA

2.1

3.1

12.9

Top Five Market Sectors as of October 31, 2003

% of fund's
net assets

% of fund's net assets
6 months ago

Telecommunications

12.4

10.8

Electric Utilities

11.9

12.1

Energy

10.1

11.3

Cable TV

7.8

6.8

Capital Goods

4.4

5.4

Quality Diversification (% of fund's net assets)

As of October 31, 2003

As of April 30, 2003

AAA,AA,A 0.0%

AAA, AA, A 0.0%

BBB 1.4%

BBB 1.7%

BB 24.1%

BB 27.1%

B 43.3%

B 43.8%

CCC,CC,C 12.2%

CCC,CC,C 13.3%

D 0.0%

D 0.3%

Not Rated 7.2%

Not Rated 4.6%

Equities 2.9%

Equities 2.8%

Short-Term
Investments and
Net Other Assets 8.9%

Short-Term
Investments and
Net Other Assets 6.4%



We have used ratings from Moody's ® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ® ratings.

Asset Allocation (% of fund's net assets)

As of October 31, 2003*

As of April 30, 2003**

Nonconvertible
Bonds 79.0%

Nonconvertible
Bonds 78.7%

Convertible Bonds, Preferred Stocks 2.4%

Convertible Bonds, Preferred Stocks 3.7%

Common Stocks 1.3%

Common Stocks 1.3%

Other Investments 8.4%

Other Investments 9.9%

Short-Term
Investments and
Net Other Assets 8.9%

Short-Term
Investments and
Net Other Assets 6.4%

* Foreign investments

8.2%

** Foreign investments

7.7%



Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 79.8%

Principal Amount (000s)

Value (Note 1) (000s)

Convertible Bonds - 0.8%

Capital Goods - 0.4%

Tyco International Group SA:

2.75% 1/15/18 (f)

$ 2,635

$ 2,994

3.125% 1/15/23 (f)

8,100

9,204

12,198

Technology - 0.2%

Celestica, Inc. liquid yield option note 0% 8/1/20

5,000

2,650

Solectron Corp. liquid yield option note 0% 11/20/20

5,000

2,881

5,531

Telecommunications - 0.2%

NII Holdings, Inc. 3.5% 9/15/33 (f)

5,000

6,200

TOTAL CONVERTIBLE BONDS

23,929

Nonconvertible Bonds - 79.0%

Aerospace - 1.5%

BE Aerospace, Inc.:

8% 3/1/08

7,160

6,444

8.5% 10/1/10 (f)

850

888

8.875% 5/1/11

10,700

9,523

9.5% 11/1/08

4,740

4,456

DRS Technologies, Inc. 6.875% 11/1/13 (f)

2,170

2,181

Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09

13,455

14,599

Vought Aircraft Industries, Inc. 8% 7/15/11 (f)

3,000

3,023

41,114

Air Transportation - 4.1%

American Airlines, Inc. pass thru trust certificates:

6.817% 5/23/11

9,570

8,469

6.977% 11/23/22

833

738

7.377% 5/23/19

6,093

4,326

7.379% 5/23/16

3,970

2,699

7.8% 4/1/08

1,690

1,453

8.608% 10/1/12

7,395

6,508

10.18% 1/2/13

4,239

3,094

AMR Corp. 10.2% 3/15/20

5,300

3,935

Continental Airlines, Inc. pass thru trust certificates:

6.541% 9/15/09

695

563

6.545% 2/2/19

5,364

5,337

6.748% 9/15/18

495

396

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Air Transportation - continued

Continental Airlines, Inc. pass thru trust certificates: - continued

6.795% 8/2/18

$ 2,161

$ 1,815

6.8% 7/2/07

470

437

6.9% 1/2/17

1,122

909

6.9% 1/2/18

1,264

1,251

6.954% 2/2/11

3,244

2,725

7.256% 9/15/21

401

409

7.373% 12/15/15

5,000

4,200

7.568% 12/1/06

3,690

2,989

7.73% 9/15/12

87

71

8.307% 4/2/18

354

304

8.312% 10/2/12

4,183

3,514

8.321% 11/1/06

2,305

2,155

8.388% 5/1/22

8,927

7,141

Delta Air Lines, Inc.:

equipment trust certificates 8.54% 1/2/07

650

559

7.9% 12/15/09

3,885

3,186

8.3% 12/15/29

1,080

718

Delta Air Lines, Inc. pass thru trust certificates:

7.299% 9/18/06

6,425

5,783

7.57% 11/18/10

4,000

4,117

7.711% 9/18/11

5,354

4,685

7.779% 11/18/05

1,410

1,297

7.779% 1/2/12

22,126

18,917

7.92% 5/18/12

1,915

1,693

Northwest Airlines, Inc.:

7.875% 3/15/08

400

327

8.875% 6/1/06

545

466

9.875% 3/15/07

3,000

2,700

Northwest Airlines, Inc. pass thru trust certificates 7.691% 4/1/17

1,312

1,062

U.S. Airways pass thru trust certificates 6.85% 7/30/19

2,195

2,063

113,011

Auto Parts Distribution - 0.1%

Keystone Automotive Operations, Inc. 9.75% 11/1/13 (f)

1,610

1,699

Automotive - 1.2%

Cummins, Inc. 9.5% 12/1/10 (f)

2,910

3,347

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Automotive - continued

Dana Corp.:

6.5% 3/1/09

$ 6,832

$ 6,764

10.125% 3/15/10

5,590

6,289

Navistar International Corp. 9.375% 6/1/06

9,430

10,232

Stoneridge, Inc. 11.5% 5/1/12

4,370

5,069

31,701

Broadcasting - 0.3%

Nexstar Finance LLC/Nexstar Finance, Inc. 12% 4/1/08

3,000

3,353

Radio One, Inc. 8.875% 7/1/11

3,715

4,068

7,421

Building Materials - 1.1%

FastenTech, Inc. 11.5% 5/1/11 (f)

5,180

5,491

Koppers, Inc. 9.875% 10/15/13 (f)

2,080

2,205

Norcraft Companies LP/Norcraft Finance Corp. 9% 11/1/11 (f)

1,570

1,649

Resolution Performance Products LLC:

9.5% 4/15/10

4,550

4,732

13.5% 11/15/10

4,000

3,780

Texas Industries, Inc. 10.25% 6/15/11 (f)

10,000

11,150

29,007

Cable TV - 5.9%

Adelphia Communications Corp.:

7.875% 5/1/09 (c)

5,000

4,100

10.5% 7/15/04 (c)

4,000

3,310

Century Communications Corp. 0% 1/15/08 (c)

8,000

3,820

Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.:

0% 5/15/11 (d)

17,000

10,030

8.625% 4/1/09

2,195

1,756

9.625% 11/15/09

27,700

22,299

10% 4/1/09

3,000

2,475

10% 5/15/11

6,170

4,951

10.25% 1/15/10

1,866

1,539

11.125% 1/15/11

8,400

7,140

Comcast UK Cable Partners Ltd. yankee 11.2% 11/15/07

5,000

5,000

CSC Holdings, Inc.:

7.625% 4/1/11

14,640

14,933

9.875% 2/15/13

10,317

10,730

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Cable TV - continued

CSC Holdings, Inc.: - continued

9.875% 4/1/23

$ 3,000

$ 3,120

DirecTV Holdings LLC/DirecTV Financing, Inc. 8.375% 3/15/13

11,295

12,707

EchoStar DBS Corp.:

5.75% 10/1/08 (f)

3,000

2,985

10.375% 10/1/07

17,495

19,310

FrontierVision Holdings LP/FrontierVision Holdings Capital Corp. 11.875% 9/15/07 (c)

14,580

13,851

FrontierVision Operating Partners LP/FrontierVision Capital Corp. 11% 10/15/06 (c)

2,000

2,020

Pegasus Satellite Communications, Inc. 11.25% 1/15/10 (f)

6,350

4,858

Rogers Cable, Inc. 6.25% 6/15/13

1,230

1,205

Telewest PLC:

11% 10/1/07 (c)

11,392

6,152

yankee 9.625% 10/1/06 (c)

8,685

4,603

162,894

Capital Goods - 4.0%

Case New Holland, Inc. 9.25% 8/1/11 (f)

6,140

6,785

Dresser, Inc. 9.375% 4/15/11

3,000

3,090

Jacuzzi Brands, Inc. 9.625% 7/1/10 (f)

3,340

3,557

Kansas City Southern Railway Co. 7.5% 6/15/09

1,220

1,257

Roller Bearing Co. of America, Inc. 9.625% 6/15/07

18,237

16,960

Roller Bearing Holding, Inc. 13% 6/15/09 (f)

22,220

20,665

SPX Corp. 6.25% 6/15/11

3,000

3,015

Terex Corp.:

9.25% 7/15/11

2,000

2,190

10.375% 4/1/11

5,000

5,625

Tyco International Group SA yankee:

5.8% 8/1/06

5,090

5,319

5.875% 11/1/04

10,000

10,313

6.375% 6/15/05

11,500

12,061

6.375% 2/15/06

16,050

16,993

6.375% 10/15/11

2,000

2,080

109,910

Chemicals - 2.0%

Avecia Group PLC 11% 7/1/09

3,930

3,616

Equistar Chemicals LP/Equistar Funding Corp. 10.625% 5/1/11 (f)

11,615

12,080

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Chemicals - continued

Geo Specialty Chemicals, Inc. 10.125% 8/1/08

$ 1,044

$ 418

Huntsman Advanced Materials LLC 11% 7/15/10 (f)

2,860

3,075

Lyondell Chemical Co.:

9.625% 5/1/07

1,875

1,894

9.875% 5/1/07

10,475

10,632

11.125% 7/15/12

255

265

Millennium America, Inc. 9.25% 6/15/08

1,000

1,055

Nalco Co.:

7.75% 11/15/11 (f)

4,140

4,306

8.875% 11/15/13 (f)

4,220

4,384

Phibro Animal Health Corp. 13% 12/1/07 unit (f)

2,420

2,505

PolyOne Corp.:

8.875% 5/1/12

5,000

4,125

10.625% 5/15/10

8,110

7,421

55,776

Consumer Products - 0.9%

Central Garden & Pet Co. 9.125% 2/1/13

4,450

4,895

Revlon Consumer Products Corp.:

8.125% 2/1/06

1,000

670

9% 11/1/06

6,000

4,020

12% 12/1/05

11,050

10,940

The Scotts Co. 6.625% 11/15/13 (f)

4,080

4,121

24,646

Containers - 1.4%

Anchor Glass Container Corp. 11% 2/15/13

3,900

4,446

BWAY Corp. 10% 10/15/10 (f)

1,590

1,693

Owens-Brockway Glass Container, Inc.:

7.75% 5/15/11

3,750

3,919

8.25% 5/15/13

5,000

5,200

8.75% 11/15/12

3,000

3,278

8.875% 2/15/09

4,000

4,320

Owens-Illinois, Inc.:

7.15% 5/15/05

11,478

11,765

7.35% 5/15/08

2,020

1,980

7.8% 5/15/18

1,070

1,006

37,607

Diversified Media - 2.4%

LBI Media Holdings, Inc. 0% 10/15/13 (d)(f)

8,870

5,499

LBI Media, Inc. 10.125% 7/15/12

13,770

15,388

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Diversified Media - continued

Nextmedia Operating, Inc. 10.75% 7/1/11

$ 4,000

$ 4,510

Videotron LTEE 6.875% 1/15/14 (f)

2,350

2,421

Vivendi Universal SA:

6.25% 7/15/08 (f)

18,000

18,900

9.25% 4/15/10 (f)

16,170

18,838

65,556

Electric Utilities - 10.5%

AES Corp.:

8.75% 6/15/08

1,628

1,673

8.75% 5/15/13 (f)

30,000

31,988

8.875% 2/15/11

906

931

9% 5/15/15 (f)

4,000

4,280

9.375% 9/15/10

11,419

12,090

9.5% 6/1/09

11,635

12,377

Allegheny Energy Supply Co. LLC 8.75% 4/15/12 (f)

13,645

12,724

Calpine Corp.:

6.9% 7/15/07 (f)(h)

20,635

19,191

8.5% 7/15/10 (f)

5,630

5,180

8.5% 2/15/11

4,000

2,860

CMS Energy Corp.:

7.625% 11/15/04

13,935

14,179

7.75% 8/1/10 (f)

25,000

25,594

8.5% 4/15/11

8,845

9,243

8.9% 7/15/08

7,570

8,100

9.875% 10/15/07

9,650

10,579

CMS Energy X-TRAS pass thru trust certificates 7% 1/15/05

4,370

4,370

Edison International 6.875% 9/15/04

6,750

6,953

Illinois Power Co.:

6.75% 3/15/05

1,750

1,846

11.5% 12/15/10

22,360

26,776

MSW Energy Holding LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10 (f)

1,150

1,231

Nevada Power Co.:

6.2% 4/15/04

1,465

1,465

9% 8/15/13 (f)

3,000

3,150

10.875% 10/15/09

4,000

4,400

PG&E Corp. 6.875% 7/15/08 (f)

3,725

3,930

Power Contract Financing LLC:

5.2% 2/1/06 (f)

3,290

3,282

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Electric Utilities - continued

Power Contract Financing LLC: - continued

6.256% 2/1/10 (f)

$ 9,500

$ 9,453

Reliant Resources, Inc.:

9.25% 7/15/10 (f)

5,840

5,256

9.5% 7/15/13 (f)

4,620

4,135

Southern California Edison Co. 8% 2/15/07

8,370

9,374

TECO Energy, Inc.:

7.5% 6/15/10

7,545

7,809

10.5% 12/1/07

4,370

4,894

Western Resources, Inc.:

7.125% 8/1/09

3,940

4,157

7.875% 5/1/07

5,800

6,438

9.75% 5/1/07

8,020

9,183

289,091

Energy - 9.9%

ANR Pipeline, Inc. 8.875% 3/15/10

2,395

2,614

BRL Universal Equipment 2001 A LP/BRL Universal Equipment Corp. 8.875% 2/15/08

5,610

6,017

Chesapeake Energy Corp. 7.5% 9/15/13 (f)

4,000

4,290

Comstock Resources, Inc. 11.25% 5/1/07

3,807

4,131

DI Industries, Inc. 8.875% 7/1/07

674

694

Dynegy Holdings, Inc.:

9.875% 7/15/10 (f)

11,090

11,894

10.125% 7/15/13 (f)

11,090

12,033

El Paso Corp. 7.875% 6/15/12

600

512

El Paso Energy Corp.:

6.95% 12/15/07

1,480

1,325

7.375% 12/15/12

4,265

3,519

El Paso Production Holding Co. 7.75% 6/1/13 (f)

6,000

5,760

Gemstone Investor Ltd./Gemstone Investor, Inc. 7.71% 10/31/04 (f)

9,000

8,955

Grant Prideco, Inc.:

9% 12/15/09

1,030

1,118

9.625% 12/1/07

2,000

2,205

GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12

11,260

13,231

Key Energy Services, Inc.:

6.375% 5/1/13

2,000

2,020

8.375% 3/1/08

2,890

3,114

Northwest Pipeline Corp. 8.125% 3/1/10

2,220

2,431

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Energy - continued

Nuevo Energy Co. 9.375% 10/1/10

$ 7,945

$ 8,660

Parker Drilling Co. 9.625% 10/1/13 (f)

3,000

3,090

Pogo Producing Co. 8.25% 4/15/11

2,000

2,200

Premcor Refining Group, Inc. 9.25% 2/1/10

5,000

5,500

Range Resources Corp. 7.375% 7/15/13

6,785

6,717

SESI LLC 8.875% 5/15/11

2,000

2,150

Sonat, Inc.:

6.625% 2/1/08

10,000

8,350

6.75% 10/1/07

520

451

6.875% 6/1/05

29,855

28,847

Southern Natural Gas Co. 8.875% 3/15/10

2,810

3,070

Teekay Shipping Corp. 8.875% 7/15/11

5,000

5,575

Tesoro Petroleum Corp.:

8% 4/15/08

1,730

1,825

9.625% 11/1/08

2,500

2,575

The Coastal Corp.:

6.2% 5/15/04

2,550

2,544

6.5% 5/15/06

17,840

15,788

6.5% 6/1/08

7,660

6,300

7.5% 8/15/06

5,650

5,149

7.625% 9/1/08

6,760

5,763

7.75% 6/15/10

9,005

7,587

10.75% 10/1/10

770

723

Tom Brown, Inc./Tom Brown Resources Funding Corp. 7.25% 9/15/13

1,530

1,591

Transcontinental Gas Pipe Line Corp. 6.125% 1/15/05

14,105

14,246

Trico Marine Services, Inc. 8.875% 5/15/12

4,315

2,956

Western Oil Sands, Inc. 8.375% 5/1/12

3,000

3,356

Westport Resources Corp.:

8.25% 11/1/11

2,000

2,205

8.25% 11/1/11 (f)

2,000

2,200

Williams Companies, Inc.:

7.125% 9/1/11

20,810

21,330

7.625% 7/15/19

3,000

2,940

8.625% 6/1/10

7,460

8,169

8.75% 3/15/32

5,000

5,225

272,945

Entertainment/Film - 0.1%

Cinemark USA, Inc. 8.5% 8/1/08

3,725

3,893

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Environmental - 1.0%

Allied Waste North America, Inc.:

7.375% 1/1/04

$ 4,570

$ 4,604

7.625% 1/1/06

16,995

17,887

8.5% 12/1/08

4,290

4,708

27,199

Food and Drug Retail - 2.1%

Ahold Finance USA, Inc.:

6.875% 5/1/29

3,000

2,640

8.25% 7/15/10

18,960

20,335

Rite Aid Corp.:

6.875% 8/15/13

4,210

3,978

7.125% 1/15/07

5,120

5,171

8.125% 5/1/10

5,000

5,350

11.25% 7/1/08

1,925

2,156

12.5% 9/15/06

8,565

9,978

The Great Atlantic & Pacific Tea Co.:

7.75% 4/15/07

1,720

1,458

9.125% 12/15/11

6,640

5,627

56,693

Food/Beverage/Tobacco - 2.0%

Chiquita Brands International, Inc. 10.56% 3/15/09

6,865

7,534

Corn Products International, Inc.:

8.25% 7/15/07

13,750

15,125

8.45% 8/15/09

7,500

8,381

Dean Foods Co. 8.15% 8/1/07

5,198

5,718

Doane Pet Care Co. 10.75% 3/1/10

4,500

4,680

Dole Food Co., Inc.:

8.625% 5/1/09

6,000

6,480

8.875% 3/15/11

2,400

2,580

Land O'Lakes, Inc. 8.75% 11/15/11

3,675

3,050

53,548

Gaming - 1.9%

Argosy Gaming Co. 10.75% 6/1/09

3,000

3,281

Herbst Gaming, Inc. 10.75% 9/1/08

1,750

1,960

Mandalay Resort Group 9.5% 8/1/08

5,385

6,206

MGM MIRAGE 9.75% 6/1/07

4,000

4,530

Mirage Resorts, Inc. 7.25% 10/15/06

11,500

12,248

Mohegan Tribal Gaming Authority 6.375% 7/15/09 (f)

4,000

4,080

Park Place Entertainment Corp. 8.125% 5/15/11

3,000

3,255

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Gaming - continued

Pinnacle Entertainment, Inc. 8.75% 10/1/13

$ 1,100

$ 1,095

Station Casinos, Inc. 8.375% 2/15/08

8,330

9,038

Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11

1,025

1,117

Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10

1,160

1,334

Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (f)

2,349

2,478

Wheeling Island Gaming, Inc. 10.125% 12/15/09

1,600

1,656

52,278

Healthcare - 3.0%

AmeriPath, Inc. 10.5% 4/1/13

4,005

4,165

AmerisourceBergen Corp. 8.125% 9/1/08

1,830

1,981

Fountain View, Inc. 9.25% 8/19/08 (e)

25,655

22,063

Genesis HealthCare Corp. 8% 10/15/13 (f)

1,500

1,534

HealthSouth Corp. 7% 6/15/08

2,000

1,730

Kinetic Concepts, Inc. 7.375% 5/15/13 (f)

2,570

2,654

National Nephrology Associates, Inc. 9% 11/1/11 (f)

2,110

2,173

Neighborcare, Inc. 6.875% 11/15/13 (f)

7,400

7,520

PacifiCare Health Systems, Inc. 10.75% 6/1/09

3,395

3,896

Psychiatric Solutions, Inc. 10.625% 6/15/13 (f)

12,100

13,280

Quintiles Transnational Corp. 10% 10/1/13 (f)

2,000

2,090

Senior Housing Properties Trust 7.875% 4/15/15

2,970

3,119

Service Corp. International (SCI) 6% 12/15/05

1,490

1,505

Tenet Healthcare Corp.:

5% 7/1/07

1,195

1,123

5.375% 11/15/06

4,715

4,562

6.375% 12/1/11

8,180

7,607

81,002

Homebuilding/Real Estate - 1.0%

Champion Home Builders Co. 11.25% 4/15/07

1,530

1,607

D.R. Horton, Inc.:

7.875% 8/15/11

2,660

2,953

8% 2/1/09

2,110

2,353

KB Home 8.625% 12/15/08

2,000

2,220

Standard Pacific Corp. 7.75% 3/15/13

4,000

4,180

Technical Olympic USA, Inc. 9% 7/1/10

5,000

5,325

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Homebuilding/Real Estate - continued

WCI Communities, Inc.:

7.875% 10/1/13 (f)

$ 3,440

$ 3,543

10.625% 2/15/11

4,440

4,928

27,109

Hotels - 0.9%

Gaylord Entertainment Co. 8% 11/15/13 (f)(g)

2,910

2,997

Hines Nurseries, Inc. 10.25% 10/1/11 (f)

1,610

1,707

Host Marriott LP:

7.125% 11/1/13 (f)(g)

3,000

3,000

8.375% 2/15/06

8,040

8,362

ITT Corp.:

6.75% 11/15/03

560

562

6.75% 11/15/05

3,600

3,744

La Quinta Properties, Inc. 8.875% 3/15/11 (f)

5,000

5,519

25,891

Leisure - 1.5%

Bally Total Fitness Holding Corp.:

9.875% 10/15/07

7,010

6,519

10.5% 7/15/11 (f)

8,000

8,240

Intrawest Corp. 7.5% 10/15/13 (f)

3,670

3,679

Premier Parks, Inc. 9.75% 6/15/07

8,280

8,384

Six Flags, Inc. 8.875% 2/1/10

3,190

3,046

Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10 (f)

9,265

10,701

40,569

Metals/Mining - 1.0%

Better Minerals & Aggregates Co. 13% 9/15/09

22,015

13,429

Compass Minerals Group, Inc. 10% 8/15/11

1,960

2,176

CONSOL Energy, Inc. 7.875% 3/1/12

3,690

3,893

IMCO Recycling, Inc. 10.375% 10/15/10 (f)

3,670

3,670

Peabody Energy Corp. 6.875% 3/15/13

4,450

4,684

27,852

Paper - 3.0%

Abitibi-Consolidated, Inc. yankee 5.25% 6/20/08

2,000

1,918

Boise Cascade Corp.:

6.5% 11/1/10

5,530

5,641

7% 11/1/13

5,530

5,654

Buckeye Cellulose Corp. 9.25% 9/15/08

3,500

3,553

Buckeye Technologies, Inc. 8.5% 10/1/13 (f)

3,680

3,901

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Paper - continued

Chesapeake Corp. 7.2% 3/15/05

$ 2,500

$ 2,500

Georgia-Pacific Corp.:

7.375% 7/15/08

2,000

2,140

8.125% 5/15/11

2,585

2,801

8.875% 2/1/10

2,000

2,280

8.875% 5/15/31

5,320

5,639

9.5% 12/1/11

25,188

28,966

Norampac, Inc. 6.75% 6/1/13 (f)

4,480

4,659

Norske Skog Canada Ltd. 8.625% 6/15/11

7,090

7,267

Stone Container Corp. 8.375% 7/1/12

5,000

5,300

82,219

Publishing/Printing - 1.8%

Advanstar Communications, Inc. 10.75% 8/15/10 (f)

3,560

3,774

American Color Graphics, Inc. 10% 6/15/10 (f)

11,920

12,993

American Media Operations, Inc. 8.875% 1/15/11

1,490

1,613

CBD Media LLC/ CBD Finance, Inc. 8.625% 6/1/11 (f)

1,280

1,373

Dex Media West LLC/Dex Media West Finance Co.:

8.5% 8/15/10 (f)

3,150

3,441

9.875% 8/15/13 (f)

3,710

4,220

PEI Holdings, Inc. 11% 3/15/10

3,000

3,390

PRIMEDIA, Inc. 7.625% 4/1/08

14,047

14,047

Sheridan Group, Inc. 10.25% 8/15/11 (f)

3,650

3,814

Sun Media Corp. Canada 7.625% 2/15/13

2,000

2,120

50,785

Railroad - 0.2%

TFM SA de CV yankee 11.75% 6/15/09

5,625

5,653

Restaurants - 0.7%

Domino's, Inc. 8.25% 7/1/11 (f)

3,350

3,530

Friendly Ice Cream Corp. 10.5% 12/1/07

7,500

7,772

NE Restaurant, Inc. 10.75% 7/15/08

5,280

4,858

Tricon Global Restaurants, Inc. 8.5% 4/15/06

4,000

4,460

20,620

Services - 0.2%

Johnsondiversey Holdings, Inc. 0% 5/15/13 (d)(f)

7,530

5,572

Shipping - 0.8%

Evergreen International Aviation, Inc. 12% 5/15/10 (f)

3,000

2,670

General Maritime Corp. 10% 3/15/13

10,230

11,458

Seabulk International, Inc. 9.5% 8/15/13 (f)

6,285

6,505

20,633

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Steels - 0.5%

AK Steel Corp. 7.75% 6/15/12

$ 4,220

$ 2,870

Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11 (f)

11,555

11,931

14,801

Super Retail - 0.5%

Barneys, Inc. 9% 4/1/08

2,000

1,800

Gap, Inc. 9.9% 12/15/05

760

847

Hollywood Entertainment Corp. 9.625% 3/15/11

3,000

3,240

Jafra Cosmetics International, Inc./Distribuidora Comercial Jafra SA de CV 10.75% 5/15/11

3,000

3,240

United Auto Group, Inc. 9.625% 3/15/12

4,150

4,607

13,734

Technology - 3.6%

Amkor Technology, Inc. 7.75% 5/15/13 (f)

2,010

2,131

Anteon Corp. 12% 5/15/09

3,772

4,130

Avaya, Inc. 11.125% 4/1/09

3,000

3,510

ChipPAC International Ltd. 12.75% 8/1/09

3,470

3,886

Marconi Corp. PLC 8% 4/30/08 (f)

3,655

3,582

Micron Technology, Inc. 6.5% 9/30/05 (i)

16,000

15,840

Nortel Networks Corp. 6.125% 2/15/06

5,000

5,113

Sanmina-SCI Corp. 10.375% 1/15/10

10,000

11,800

Telex Communications, Inc. 11.5% 10/15/08 (f)(g)

3,090

3,090

Xerox Capital (Europe) PLC 5.875% 5/15/04

3,358

3,392

Xerox Corp.:

7.125% 6/15/10

25,045

25,421

7.625% 6/15/13

12,500

12,688

Xerox Credit Corp. 6.1% 12/16/03

4,000

4,010

98,593

Telecommunications - 7.8%

ACC Escrow Corp. 10% 8/1/11 (f)

820

886

American Tower Corp. 9.375% 2/1/09

23,265

24,428

American Tower Escrow Corp. 0% 8/1/08 (d)

9,090

6,204

Cincinnati Bell, Inc. 8.375% 1/15/14 (f)(g)

3,380

3,380

Crown Castle International Corp.:

9.375% 8/1/11

2,310

2,529

10.75% 8/1/11

13,840

15,501

Dobson Communications Corp. 8.875% 10/1/13 (f)

4,980

5,042

Level 3 Financing, Inc. 10.75% 10/15/11 (f)

9,090

9,385

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Telecommunications - continued

MCI Communications Corp.:

7.125% 6/15/27 (c)

$ 2,640

$ 2,059

7.75% 3/15/24 (c)

450

369

7.75% 3/23/25 (c)

760

631

8.25% 1/20/23 (c)

1,660

1,370

Nextel Communications, Inc.:

7.375% 8/1/15

17,650

18,356

9.375% 11/15/09

17,450

19,021

9.5% 2/1/11

13,000

14,560

9.95% 2/15/08

851

896

12% 11/1/08

6,000

6,405

Nextel Partners, Inc.:

8.125% 7/1/11 (f)

6,190

6,283

11% 3/15/10

2,220

2,420

12.5% 11/15/09

1,470

1,691

NII Holdings Cayman Ltd. 0% 11/1/09 (d)

5,700

5,814

Qwest Capital Funding, Inc. 7.25% 2/15/11

9,790

9,007

Qwest Services Corp.:

13% 12/15/07 (f)

7,000

7,945

13.5% 12/15/10 (f)

9,985

11,633

Satelites Mexicanos SA de CV 5.62% 6/30/04 (f)(h)

2,864

2,467

Triton PCS, Inc. 8.75% 11/15/11

4,245

4,107

U.S. West Capital Funding, Inc.:

6.25% 7/15/05

2,410

2,386

6.375% 7/15/08

6,000

5,460

U.S. West Communications:

5.625% 11/15/08

5,000

4,900

5.65% 11/1/04

2,000

1,950

6.125% 11/15/05

6,950

7,020

7.2% 11/1/04

9,224

9,455

213,560

Corporate Bonds - continued

Principal Amount (000s)

Value (Note 1) (000s)

Nonconvertible Bonds - continued

Textiles & Apparel - 0.1%

Levi Strauss & Co.:

11.625% 1/15/08

$ 350

$ 303

12.25% 12/15/12

1,770

1,478

1,781

TOTAL NONCONVERTIBLE BONDS

2,166,363

TOTAL CORPORATE BONDS

(Cost $2,022,054)

2,190,292

Common Stocks - 1.3%

Shares

Cable TV - 0.7%

EchoStar Communications Corp. Class A (a)

200,860

7,697

NTL, Inc. (a)

182,339

11,256

Ono Finance PLC rights 5/31/09 (a)(f)

7,460

0

18,953

Containers - 0.0%

Trivest 1992 Special Fund Ltd. (i)

13,662,268

137

Diversified Financial Services - 0.0%

ECM Corp. LP (f)

5,400

464

Food and Drug Retail - 0.1%

Pathmark Stores, Inc. (a)

268,095

1,836

Healthcare - 0.0%

Fountain View, Inc. (i)

8,483

0

Homebuilding/Real Estate - 0.1%

Swerdlow Real Estate Group LLC (i)

159,600

1,566

Services - 0.1%

Spincycle LLC:

Class A

418,003

3,787

Class F

2,936

27

3,814

Super Retail - 0.0%

Barneys, Inc. warrants 4/1/08 (a)

2,000

20

Technology - 0.0%

Ampex Corp. Class A (a)

17,840

38

Telecommunications - 0.2%

American Tower Escrow Corp. warrants 8/1/08 (a)(f)

9,090

1,318

Common Stocks - continued

Shares

Value (Note 1) (000s)

Telecommunications - continued

Cincinnati Bell, Inc. (a)

125,900

$ 643

Nextel Communications, Inc. Class A (a)

179,525

4,345

6,306

Textiles & Apparel - 0.1%

Arena Brands Holding Corp. Class B

143,778

2,162

TOTAL COMMON STOCKS

(Cost $47,541)

35,296

Nonconvertible Preferred Stocks - 1.6%

Automotive - 0.0%

Cambridge Industries, Inc. (liquidation trust)

2,303,017

46

Broadcasting - 0.3%

Granite Broadcasting Corp. 12.75% pay-in-kind

12,001

8,521

Cable TV - 0.7%

CSC Holdings, Inc.:

(depositary shares) Series M, 11.125%

148,985

15,606

Series H, 11.75%

19,600

2,048

NTL Europe, Inc. Series A, 10.00%

1

0

17,654

Diversified Financial Services - 0.1%

American Annuity Group Capital Trust II 8.875%

3,870

3,847

Publishing/Printing - 0.5%

PRIMEDIA, Inc. Series D, 10.00%

144,480

14,087

TOTAL NONCONVERTIBLE PREFERRED STOCKS

(Cost $43,189)

44,155

Floating Rate Loans - 8.4%

Principal Amount (000s)

Automotive - 0.4%

TRW Automotive Holdings Corp. Tranche C term loan 4.13% 2/28/11 (h)

$ 11,000

11,165

Broadcasting - 0.2%

Nexstar Finance LLC Tranche B term loan 4.12% 12/31/10 (h)

5,100

5,119

Cable TV - 0.5%

Charter Communication Operating LLC Tranche B term loan 3.92% 3/18/08 (h)

15,370

14,908

Floating Rate Loans - continued

Principal Amount (000s)

Value (Note 1) (000s)

Chemicals - 0.4%

Huntsman Co. LLC:

Tranche A term loan 5.957% 3/31/07 (h)

$ 9,348

$ 8,203

Tranche B term loan 8.9375% 3/31/07 (h)

4,242

3,723

11,926

Electric Utilities - 1.4%

AES Corp. term loan 5.2643% 4/30/08 (h)

37,200

37,572

Calpine Corp. Tranche B1 term loan 4.6875% 7/15/07 (h)

998

1,000

38,572

Energy - 0.2%

A.T. Massey Coal Co., Inc. term loan 4.62% 1/1/07 (h)

4,988

4,988

WEG Acquisitions LP term loan 5.6101% 6/17/08 (h)

1,100

1,111

6,099

Healthcare - 0.4%

AmeriPath, Inc. term loan 5.62% 3/27/10 (h)

9,950

9,925

Hotels - 0.4%

Wyndham International, Inc. term loan:

5.875% 4/1/06 (h)

4,990

4,716

5.875% 6/30/06 (h)

7,552

6,947

11,663

Publishing/Printing - 0.2%

CBD Media, Inc. Tranche B term loan 4.38% 12/31/09 (h)

694

702

R.H. Donnelly Corp. Tranche B term loan 5.1452% 6/30/10 (h)

4,466

4,544

5,246

Services - 0.0%

Worldspan LP Tranche B term loan 4.8942% 6/30/07 (h)

600

599

Technology - 0.1%

Semiconductor Components Industries LLC:

Tranche B term loan 5.14% 8/4/06 (h)

74

74

Tranche C term loan 5.14% 8/4/07 (h)

1,786

1,790

1,864

Telecommunications - 4.2%

Crown Castle Operating Co. Tranche B term loan 4.65% 9/30/10 (h)

20,500

20,654

Nextel Finance Co.:

Tranche B term loan 4.5625% 6/30/08 (h)

12,181

12,211

Tranche C term loan 4.8125% 12/31/08 (h)

15,151

15,189

Floating Rate Loans - continued

Principal Amount (000s)

Value (Note 1) (000s)

Telecommunications - continued

Qwest Corp.:

Tranche A term loan 6.5% 6/30/07 (h)

$ 53,000

$ 54,502

Tranche B term loan 6.95% 6/30/10

10,000

10,000

SpectraSite Communications, Inc. Tranche A term loan 3.4923% 6/30/07 (h)

1,932

1,934

114,490

TOTAL FLOATING RATE LOANS

(Cost $226,339)

231,576

Money Market Funds - 8.3%

Shares

Fidelity Cash Central Fund, 1.07% (b)
(Cost $226,680)

226,680,189

226,680

Cash Equivalents - 0.1%

Maturity Amount (000s)

Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.01%, dated 10/31/03 due 11/3/03)
(Cost $2,103)

$ 2,103

2,103

TOTAL INVESTMENT PORTFOLIO - 99.5%

(Cost $2,567,906)

2,730,102

NET OTHER ASSETS - 0.5%

12,715

NET ASSETS - 100%

$ 2,742,817

Legend

(a) Non-income producing

(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(c) Non-income producing - issuer filed for bankruptcy or is in default of interest payments.

(d) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end.

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

(f) 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 $549,173,000 or 20.0% of net assets.

(g) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

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

(i) Restricted securities - Investment in securities not registered under the Securities Act of 1933.

Additional information on each holding is as follows:

Security

Acquisition Date

Acquisition Cost (000s)

Fountain View, Inc.

8/19/03

$ 0

Micron Technology, Inc. 6.5% 9/30/05

3/3/99 - 3/25/99

$ 12,600

Swerdlow Real Estate Group LLC

1/15/99

$ 7,697

Trivest 1992 Special Fund Ltd.

7/30/92

$ -

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,242,790,000 and $1,026,761,000, respectively.

The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $1,000 for the period.

The fund invested in securities that are not registered under the Securities Act of 1933. At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $17,543,000 or 0.6% of net assets.

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $231,576,000 or 8.4% of net assets.

Income Tax Information

At April 30, 2003, the fund had a capital loss carryforward of approximately $1,104,100,000 of which $364,633,000, $461,979,000 and $277,488,000 will expire on April 30, 2009, 2010 and 2011, respectively.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $2,103) (cost $2,567,906) - See accompanying schedule

$ 2,730,102

Cash

796

Receivable for investments sold
Regular delivery

9,428

Delayed delivery

3,113

Receivable for fund shares sold

6,014

Dividends receivable

329

Interest receivable

53,857

Prepaid expenses

13

Other receivables

19

Total assets

2,803,671

Liabilities

Payable for investments purchased
Regular delivery

$ 34,996

Delayed delivery

15,380

Payable for fund shares redeemed

5,956

Distributions payable

2,784

Accrued management fee

1,292

Other payables and accrued expenses

446

Total liabilities

60,854

Net Assets

$ 2,742,817

Net Assets consist of:

Paid in capital

$ 3,568,626

Undistributed net investment income

52,972

Accumulated undistributed net realized gain (loss) on investments

(1,040,982)

Net unrealized appreciation (depreciation) on investments

162,201

Net Assets, for 310,483 shares outstanding

$ 2,742,817

Net Asset Value, offering price and redemption price per share ($2,742,817 ÷ 310,483 shares)

$ 8.83

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Investment Income

Dividends

$ 1,769

Interest

110,689

Total income

112,458

Expenses

Management fee

$ 7,300

Transfer agent fees

1,947

Accounting fees and expenses

330

Non-interested trustees' compensation

5

Custodian fees and expenses

38

Registration fees

57

Audit

42

Legal

26

Miscellaneous

4

Total expenses before reductions

9,749

Expense reductions

(4)

9,745

Net investment income (loss)

102,713

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on investment securities

64,474

Change in net unrealized appreciation (depreciation) on investment securities

54,548

Net gain (loss)

119,022

Net increase (decrease) in net assets resulting from operations

$ 221,735

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 102,713

$ 146,137

Net realized gain (loss)

64,474

(126,800)

Change in net unrealized appreciation (depreciation)

54,548

227,369

Net increase (decrease) in net assets resulting
from operations

221,735

246,706

Distributions to shareholders from net investment income

(83,725)

(134,150)

Share transactions
Net proceeds from sales of shares

604,832

1,003,481

Reinvestment of distributions

65,073

100,467

Cost of shares redeemed

(410,906)

(423,930)

Net increase (decrease) in net assets resulting from share transactions

258,999

680,018

Redemption fees

470

664

Total increase (decrease) in net assets

397,479

793,238

Net Assets

Beginning of period

2,345,338

1,552,100

End of period (including undistributed net investment income of $52,972 and undistributed net investment income of $33,984, respectively)

$ 2,742,817

$ 2,345,338

Other Information

Shares

Sold

70,666

131,032

Issued in reinvestment of distributions

7,585

13,135

Redeemed

(48,283)

(55,823)

Net increase (decrease)

29,968

88,344

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

Six months ended
October 31, 2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 8.36

$ 8.08

$ 9.25

$ 11.32

$ 13.08

$ 13.64

Income from Investment Operations

Net investment income (loss) D

.348

.674

.836 F,G

1.104

1.192

1.153

Net realized and unrealized gain (loss)

.404

.219

(1.211)F,G

(2.285)

(1.763)

(.344)

Total from investment operations

.752

.893

(.375)

(1.181)

(.571)

.809

Distributions from net investment income

(.284)

(.616)

(.802)

(.897)

(1.017)

(1.083)

Distributions from net realized gain

-

-

-

-

-

(.300)

Distributions in excess of
net realized gain

-

-

-

-

(.093)

-

Distributions from return of capital

-

-

-

-

(.088)

-

Total distributions

(.284)

(.616)

(.802)

(.897)

(1.198)

(1.383)

Redemption fees added to paid in capital D

.002

.003

.007

.008

.009

.014

Net asset value, end of period

$ 8.83

$ 8.36

$ 8.08

$ 9.25

$ 11.32

$ 13.08

Total Return B,C

9.17%

12.15%

(3.86)%

(10.77)%

(4.48)%

6.91%

Ratios to Average Net Assets E

Expenses before expense
reductions

.77% A

.79%

.76%

.74%

.75%

.80%

Expenses net of voluntary waivers, if any

.77% A

.79%

.76%

.74%

.75%

.80%

Expenses net of all reductions

.77% A

.79%

.76%

.74%

.74%

.80%

Net investment income (loss)

8.10% A

8.82%

9.90% F,G

10.68%

9.85%

9.20%

Supplemental Data

Net assets, end of period
(in millions)

$ 2,743

$ 2,345

$ 1,552

$ 2,158

$ 2,990

$ 3,374

Portfolio turnover rate

89% A

81%

69%

60%

50%

68%

AAnnualized BTotal returns for periods of less than one year are not annualized. CTotal returns would have been lower had certain expenses not been reduced during the periods shown. DCalculated based on average shares outstanding during the period. EExpense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund. FEffective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change. GAs a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the year ended April 30, 2002 have been reclassified from what was previously reported. The impact of this change was a decrease to net investment income (loss) of $0.045 per share with a corresponding increase to net realized and unrealized gain (loss) per share. The ratio of net investment income (loss) to average net assets decreased from 10.44% to 9.90%. The reclassification has no impact on the net assets of the fund.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity High Income Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method. Investment income is recorded net of foreign taxes withheld

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Investment Transactions and Income - continued

where recovery of such taxes is uncertain. Debt obligations may be placed on non-accrual status and related interest income may be reduced by ceasing current accruals and writing off interest receivables when the collection of all or a portion of interest has become doubtful based on consistently applied procedures. A debt obligation is removed from non-accrual status when the issuer resumes interest payments or when collectibility of interest is reasonably assured.

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

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to prior period premium and discount on debt securities, market discount, partnerships, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 241,475

Unrealized depreciation

(56,773)

Net unrealized appreciation (depreciation)

$ 184,702

Cost for federal income tax purposes

$ 2,545,400

Short-Term Trading (Redemption) Fees. Shares held in the fund less than 90 days are subject to a short-term trading fee equal to 1.00% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.

Semiannual Report

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. The payables and receivables associated with the purchases and sales of delayed delivery securities having the same coupon, settlement date and broker are offset. Delayed delivery or when-issued securities that have been purchased from and sold to different brokers are reflected as both payables and receivables in the fund's Statement of Assets and Liabilities under the caption "Delayed delivery." Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Loans and Other Direct Debt Instruments. The fund may invest in loans and loan participations, trade claims or other receivables. These investments may include standby financing commitments that obligate the fund to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary. Information regarding loans and other direct debt instruments is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .45% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .58% of the fund's average net assets.

Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .15% of average net assets.

Accounting Fees. FSC maintains the fund's accounting records. The fee is based on the level of average net assets for the month plus out-of-pocket expenses.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $1,045 for the period.

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.

5. Committed Line of Credit.

The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Expense Reductions.

Through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $4.

Semiannual Report

Managing Your Investments

Fidelity offers several ways to conveniently manage your personal investments via your telephone or PC. You can access your account information, conduct trades and research your investments 24 hours a day.

By Phone

Fidelity Automated Service Telephone provides a single toll-free number to access account balances, positions, quotes and trading. It's easy to navigate the service, and on your first call, the system will help you create a personal identification number (PIN) for security.

(phone_graphic)

Fidelity Automated
Service Telephone (FAST®)
1-800-544-5555

Press

1   For mutual fund and brokerage trading.

2   For quotes.*

3   For account balances and holdings.

4   To review orders and mutual
fund activity.

5   To change your PIN.

*0   To speak to a Fidelity representative.

By PC

Fidelity's web site on the Internet provides a wide range of information, including daily financial news, fund performance, interactive planning tools and news about Fidelity products and services.

(computer_graphic)

Fidelity's Web Site
www.fidelity.com

* 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.

Semiannual Report

To Write Fidelity

We'll give your correspondence immediate attention and send you written confirmation upon completion of your request.

(letter_graphic)

Making Changes
To Your Account

(such as changing name, address, bank, etc.)

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002

(letter_graphic)

For Non-Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

(letter_graphic)

For Retirement
Accounts

Buying shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003

Selling shares

Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0035

Overnight Express
Fidelity Investments
Attn: Distribution Services
100 Crosby Parkway - KC1H
Covington, KY 41015

General Correspondence

Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500

Semiannual Report

To Visit Fidelity

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

Arizona

7001 West Ray Road
Chandler, AZ

7373 N. Scottsdale Road
Scottsdale, AZ

California

815 East Birch Street
Brea, CA

1411 Chapin Avenue
Burlingame, CA

851 East Hamilton Avenue
Campbell, CA

527 North Brand Boulevard
Glendale, CA

19200 Von Karman Avenue
Irvine, CA

601 Larkspur Landing Circle
Larkspur, CA

10100 Santa Monica Blvd.
Los Angeles, CA

27101 Puerta Real
Mission Viejo, CA

73-575 El Paseo
Palm Desert, CA

251 University Avenue
Palo Alto, CA

1760 Challenge Way
Sacramento, CA

7676 Hazard Center Drive
San Diego, CA

8 Montgomery Street
San Francisco, CA

21701 Hawthorne Boulevard
Torrance, CA

2001 North Main Street
Walnut Creek, CA

6300 Canoga Avenue
Woodland Hills, CA

Colorado

1625 Broadway
Denver, CO

9185 East Westview Road
Littleton, CO

Connecticut

48 West Putnam Avenue
Greenwich, CT

265 Church Street
New Haven, CT

300 Atlantic Street
Stamford, CT

29 South Main Street
West Hartford, CT

Delaware

222 Delaware Avenue
Wilmington, DE

Florida

4400 N. Federal Highway
Boca Raton, FL

121 Alhambra Plaza
Coral Gables, FL

2948 N. Federal Highway
Ft. Lauderdale, FL

1907 West State Road 434
Longwood, FL

8880 Tamiami Trail, North
Naples, FL

3501 PGA Boulevard
West Palm Beach, FL

8065 Beneva Road
Sarasota, FL

1502 N. Westshore Blvd.
Tampa, FL

Georgia

3445 Peachtree Road, N.E.
Atlanta, GA

1000 Abernathy Road
Atlanta, GA

Illinois

One North LaSalle Street
Chicago, IL

1415 West 22nd Street
Oak Brook, IL

1700 East Golf Road
Schaumburg, IL

3232 Lake Avenue
Wilmette, IL

Indiana

4729 East 82nd Street
Indianapolis, IN

Kansas

5400 College Boulevard
Overland Park, KS

Maine

Three Canal Plaza
Portland, ME

Maryland

7401 Wisconsin Avenue
Bethesda, MD

One W. Pennsylvania Ave.
Towson, MD

Massachusetts

801 Boylston Street
Boston, MA

155 Congress Street
Boston, MA

300 Granite Street
Braintree, MA

44 Mall Road
Burlington, MA

405 Cochituate Road
Framingham, MA

416 Belmont Street
Worcester, MA

Fidelity Brokerage Services, Inc., 100 Summer St., Boston, MA 02110 Member NYSE/SIPC

Semiannual Report

Michigan

280 Old N. Woodward Ave.
Birmingham, MI

43420 Grand River Avenue
Novi, MI

29155 Northwestern Hwy.
Southfield, MI

Minnesota

7600 France Avenue South
Edina, MN

Missouri

8885 Ladue Road
Ladue, MO

New Jersey

150 Essex Street
Millburn, NJ

56 South Street
Morristown, NJ

501 Route 17, South
Paramus, NJ

3518 Route 1 North
Princeton, NJ

New York

1055 Franklin Avenue
Garden City, NY

37 West Jericho Turnpike
Huntington Station, NY

1271 Avenue of the Americas
New York, NY

61 Broadway
New York, NY

350 Park Avenue
New York, NY

North Carolina

4611 Sharon Road
Charlotte, NC

Ohio

3805 Edwards Road
Cincinnati, OH

28699 Chagrin Boulevard
Woodmere Village, OH

Oregon

16850 SW 72nd Avenue
Tigard, OR

Pennsylvania

600 West DeKalb Pike
King of Prussia, PA

1735 Market Street
Philadelphia, PA

12001 Perry Highway
Wexford, PA

Rhode Island

47 Providence Place
Providence, RI

Tennessee

6150 Poplar Avenue
Memphis, TN

Texas

10000 Research Boulevard
Austin, TX

4017 Northwest Parkway
Dallas, TX

12532 Memorial Drive
Houston, TX

2701 Drexel Drive
Houston, TX

400 East Las Colinas Blvd.
Irving, TX

14100 San Pedro
San Antonio, TX

19740 IH 45 North
Spring, TX

6005 West Park Boulevard
Plano, TX 75093

Utah

215 South State Street
Salt Lake City, UT

Virginia

1861 International Drive
McLean, VA

Washington

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

1518 6th Avenue
Seattle, WA

Washington, DC

1900 K Street, N.W.
Washington, DC

Wisconsin

595 North Barker Road
Brookfield, WI

Semiannual Report

Investment Adviser

Fidelity Management & Research Company Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Japan Limited

Fidelity International Investment Advisors

Fidelity International Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Mortgage
Securities Bond

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

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)

Fidelity Automated Service
Telephone (FAST®) (automated graphic)    1-800-544-5555

(automated graphic)    Automated line for quickest service

SPH-USAN-1203
1.784853.100

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

Fidelity®

Short-Term Bond

Fund

Semiannual Report

October 31, 2003

(2_fidelity_logos) (Registered_Trademark)

Contents

Chairman's Message

<Click Here>

Ned Johnson's message to shareholders.

Investment Changes

<Click Here>

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

Investments

<Click Here>

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

Financial Statements

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

Notes

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Notes to the financial statements.

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

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

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This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.

Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.

Neither the fund nor Fidelity Distributors Corporation is a bank.

For more information on any Fidelity fund, including charges and expenses, call 1-800-544-6666 for a free prospectus. Read it carefully before you invest or send money.

Semiannual Report

Chairman's Message

(photo_of_Edward_C_Johnson_3d)

Dear Shareholder:

Many of you have read or heard news stories recently that were critical of mutual funds and made allegations that the mutual fund industry has been less than forthright. I find these reports unsettling and not necessarily an accurate picture of the overall industry, and I would like you to know where we at Fidelity stand.

With specific regard to allegations that certain mutual fund companies were violating the Securities and Exchange Commission's forward pricing rules or were involved in so-called "market timing" activities, I want to say two things:

First, Fidelity does not have agreements that permit customers who buy fund shares after 4 p.m. to obtain the 4 p.m. price. This is not to say that someone could not deceive the company through fraudulent acts. But I underscore that we have no so-called "agreements" which would permit this illegal practice.

Second, Fidelity has been on record for years opposing predatory short-term trading which adversely affects other shareholders in a mutual fund. In fact, in the 1980s, we began charging a fee - which is returned to the fund and, therefore, to investors - to discourage this activity. What's more, several years ago we took the industry lead in developing a Fair Value Pricing Policy to prevent market timing on foreign securities in our funds. It is reasonable to assume that another structure can be developed that would alter the system to make it much more difficult for predatory traders to operate. This, however, will only be achieved through close cooperation among regulators, legislators and the industry.

Certainly no industry is perfect, and there have been instances of unethical and illegal activity from time to time within the mutual fund industry. When this occurs, confessed or convicted offenders should be dealt with appropriately. Clearly, every system can be improved. We applaud well thought out improvements by regulators, legislators and industry representatives that achieve the common goal of building and protecting the value of investors' holdings. But we remain concerned about the risk of over-regulation and the quick application of simplistic solutions to intricate problems.

For more than 57 years, Fidelity Investments has worked very hard to improve its products and service to justify your trust. When our family founded this company in 1946, we had only a few hundred customers. Many of them were family and friends. Today, we serve more than 18 million customers including individual investors and participants in retirement plans across America.

Let me close by saying that we do not take your trust in us for granted, and we realize that we must always work to improve all aspects of our service to you. In turn, we urge you to continue your active participation with your financial matters, so that your interests can be well served.

Best regards,

/s/Edward C. Johnson 3d

Edward C. Johnson 3d

Semiannual Report

Investment Changes

Quality Diversification (% of fund's net assets)

As of October 31, 2003

As of April 30, 2003

U.S. Government
and U.S.Government
Agency Obligations 26.2%

U.S. Government
and U.S.Government Agency Obligations 31.7%

AAA 24.0%

AAA 20.6%

AA 3.9%

AA 6.2%

A 16.4%

A 17.8%

BBB 16.4%

BBB 14.9%

BB and Below 2.1%

BB and Below 1.5%

Not Rated 4.4%

Not Rated 0.7%

Short-Term
Investments and
Net Other Assets 6.6%

Short-Term
Investments and
Net Other Assets 6.6%



We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. Securities rated BB or below were rated investment grade at the time of acquisition.

Average Years to Maturity as of October 31, 2003

6 months ago

Years

2.5

2.4

Average years to maturity is based on the average time remaining until principal payments are expected from each of the fund's bonds, weighted by dollar amount.

Duration as of October 31, 2003

6 months ago

Years

1.8

1.7

Duration shows how much a bond fund's price fluctuates with changes in comparable interest rates. If rates rise 1%, for example, a fund with a five-year duration is likely to lose about 5% of its value. Other factors also can influence a bond fund's performance and share price. Accordingly, a bond fund's actual performance may differ from this example.

Asset Allocation (% of fund's net assets)

As of October 31, 2003 *

As of April 30, 2003 **

Corporate Bonds 25.9%

Corporate Bonds 29.5%

U.S. Government
and U.S. Government Agency Obligations 26.2%

U.S. Government
and Government
Agency Obligations 31.7%

Asset-Backed
Securities 27.9%

Asset-Backed
Securities 21.0%

CMOs and Other Mortgage Related Securities 13.0%

CMOs and Other Mortgage Related Securities 9.8%

Other Investments 0.4%

Other Investments 1.4%

Short-Term Investments and Net Other Assets 6.6%

Short-Term Investments and Net Other Assets 6.6%

* Foreign investments

4.2%

** Foreign investments

5.1%



* Futures and Swaps

10.6%

** Futures and Swaps

7.4%

The information in the above tables is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed-income central fund.

Semiannual Report

Investments October 31, 2003 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 24.9%

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER DISCRETIONARY - 3.4%

Auto Components - 0.5%

DaimlerChrysler NA Holding Corp.:

4.05% 6/4/08

$ 3,165

$ 3,059

4.75% 1/15/08

15,135

15,123

6.9% 9/1/04

2,000

2,073

7.4% 1/20/05

2,800

2,960

7.75% 6/15/05

3,780

4,074

27,289

Media - 2.9%

AOL Time Warner, Inc.:

5.625% 5/1/05

9,700

10,180

6.15% 5/1/07

10,685

11,616

British Sky Broadcasting Group PLC (BSkyB) yankee 7.3% 10/15/06

11,690

12,947

Continental Cablevision, Inc. 8.3% 5/15/06

22,050

24,692

Cox Communications, Inc.:

6.875% 6/15/05

9,757

10,479

7.5% 8/15/04

7,200

7,493

7.75% 8/15/06

3,445

3,889

Cox Enterprises, Inc. 4.375% 5/1/08 (a)

7,020

7,098

Liberty Media Corp. 2.64% 9/17/06 (e)

13,000

13,008

News America, Inc. 6.625% 1/9/08

15,595

17,315

TCI Communications, Inc. 8% 8/1/05

14,250

15,559

Time Warner, Inc.:

7.75% 6/15/05

12,355

13,389

7.975% 8/15/04

2,997

3,125

Univision Communications, Inc. 3.875% 10/15/08

1,500

1,482

152,272

Textiles Apparel & Luxury Goods - 0.0%

Jones Apparel Group, Inc. 7.5% 6/15/04

3,200

3,299

TOTAL CONSUMER DISCRETIONARY

182,860

CONSUMER STAPLES - 1.2%

Food & Staples Retailing - 0.2%

Fred Meyer, Inc. 7.375% 3/1/05

11,150

11,910

Food Products - 0.4%

ConAgra Foods, Inc. 6% 9/15/06

4,400

4,782

Kraft Foods, Inc. 5.25% 6/1/07

17,025

18,066

22,848

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CONSUMER STAPLES - continued

Tobacco - 0.6%

Altria Group, Inc. 5.625% 11/4/08

$ 17,500

$ 17,411

Philip Morris Companies, Inc.:

6.375% 2/1/06

6,000

6,237

6.8% 12/1/03

4,680

4,692

28,340

TOTAL CONSUMER STAPLES

63,098

ENERGY - 0.9%

Energy Equipment & Services - 0.2%

Petroliam Nasional BHD (Petronas) yankee 8.875% 8/1/04 (a)

8,750

9,210

Oil & Gas - 0.7%

Canada Occidental Petroleum Ltd. yankee 7.125% 2/4/04

10,635

10,781

Duke Energy Field Services LLC 5.75% 11/15/06

7,900

8,487

Kerr-McGee Corp. 5.375% 4/15/05

8,000

8,318

Pemex Project Funding Master Trust 2.65% 1/7/05 (a)(e)

9,850

9,902

37,488

TOTAL ENERGY

46,698

FINANCIALS - 11.9%

Capital Markets - 1.6%

ABN-AMRO Bank NV, Chicago 7.25% 5/31/05

3,680

3,980

Amvescap PLC:

5.9% 1/15/07

1,120

1,207

yankee 6.6% 5/15/05

6,200

6,595

Bank of New York Co., Inc.:

3.4% 3/15/13 (e)

14,750

14,429

4.25% 9/4/12 (e)

7,460

7,592

Goldman Sachs Group LP 7.2% 11/1/06 (a)

1,500

1,691

Goldman Sachs Group, Inc. 4.125% 1/15/08

8,420

8,596

J.P. Morgan Chase & Co. 5.35% 3/1/07

11,150

11,970

Lehman Brothers Holdings, Inc.:

4% 1/22/08

4,970

5,042

6.625% 2/5/06

1,000

1,089

7.75% 1/15/05

5,000

5,386

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Capital Markets - continued

Merrill Lynch & Co., Inc.:

3.7% 4/21/08

$ 6,910

$ 6,921

6.13% 5/16/06

2,555

2,779

Morgan Stanley:

3.625% 4/1/08

425

424

5.8% 4/1/07

1,500

1,637

National Westminster Bancorp yankee 9.375% 11/15/03

3,800

3,809

NationsBank Corp. 6.875% 2/15/05

1,500

1,594

84,741

Commercial Banks - 0.8%

Bank of America Corp.:

3.875% 1/15/08

485

492

7.125% 9/15/06

8,850

9,901

Bank One Corp. 6.5% 2/1/06

4,305

4,702

Corporacion Andina de Fomento yankee 7.25% 3/1/07

4,435

4,946

First National Boston Corp. 8% 9/15/04

3,157

3,330

KeyCorp. 4.625% 5/16/05

6,110

6,364

Korea Development Bank 7.375% 9/17/04

3,140

3,289

Mellon Bank NA, Pittsburgh 6.5% 8/1/05

3,250

3,491

Popular North America, Inc. 6.125% 10/15/06

5,195

5,652

42,167

Consumer Finance - 2.8%

American General Finance Corp. 4.5% 11/15/07

5,200

5,389

Ford Motor Credit Co.:

6.5% 1/25/07

20,380

21,028

6.875% 2/1/06

20,200

21,141

7.5% 3/15/05

7,800

8,195

General Motors Acceptance Corp.:

6.125% 2/1/07

2,785

2,924

6.125% 8/28/07

11,785

12,415

6.75% 1/15/06

27,455

29,273

7.5% 7/15/05

4,290

4,593

Household Finance Corp.:

4.625% 1/15/08

4,598

4,765

5.75% 1/30/07

8,550

9,231

Household International, Inc. 8.875% 2/15/08

10,500

11,879

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Consumer Finance - continued

John Deere Capital Corp. 1.74% 9/17/04 (e)

$ 7,850

$ 7,882

Washington Mutual Finance Corp. 8.25% 6/15/05

8,500

9,313

148,028

Diversified Financial Services - 3.2%

Citigroup, Inc. 6.75% 12/1/05

20,400

22,229

Delta Air Lines, Inc. pass thru trust certificates 7.379% 5/18/10

5,469

5,577

Deutsche Telekom International Finance BV:

3.875% 7/22/08

12,270

12,232

8.25% 6/15/05

18,970

20,726

NiSource Finance Corp.:

3.2% 11/1/06

4,940

4,933

7.5% 11/15/03

13,250

13,271

Pemex Project Funding Master Trust 6.125% 8/15/08

15,990

16,805

Powergen US Funding LLC 4.5% 10/15/04

16,935

17,294

Prime Property Funding II 6.25% 5/15/07

6,000

6,476

Sprint Capital Corp.:

6% 1/15/07

11,760

12,462

7.125% 1/30/06

8,560

9,255

Verizon Global Funding Corp. 6.125% 6/15/07

25,295

27,647

168,907

Insurance - 0.5%

Allstate Corp. 7.875% 5/1/05

5,945

6,463

MetLife, Inc. 3.911% 5/15/05

14,850

15,335

Travelers Property Casualty Corp. 3.75% 3/15/08

2,830

2,822

24,620

Real Estate - 2.7%

AMB Property LP 7.2% 12/15/05

5,040

5,529

Arden Realty LP 8.875% 3/1/05

9,925

10,760

AvalonBay Communities, Inc.:

5% 8/1/07

5,260

5,512

6.58% 2/15/04

2,435

2,470

BRE Properties, Inc. 5.95% 3/15/07

3,310

3,532

Camden Property Trust:

5.875% 6/1/07

3,305

3,549

7% 4/15/04

8,400

8,579

CarrAmerica Realty Corp. 5.25% 11/30/07

10,115

10,453

CenterPoint Properties Trust:

6.75% 4/1/05

1,530

1,617

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

FINANCIALS - continued

Real Estate - continued

CenterPoint Properties Trust: - continued

7.125% 3/15/04

$ 4,700

$ 4,788

Duke Realty LP 6.875% 3/15/05

4,100

4,367

EOP Operating LP:

6.5% 1/15/04

7,500

7,570

6.625% 2/15/05

3,200

3,378

6.763% 6/15/07

3,650

4,033

7.375% 11/15/03

5,900

5,909

8.375% 3/15/06

5,700

6,396

ERP Operating LP 7.1% 6/23/04

14,853

15,341

Gables Realty LP:

5.75% 7/15/07

7,235

7,654

7.25% 2/15/06

10,600

11,473

Merry Land & Investment Co., Inc. 7.25% 6/15/05

2,400

2,584

ProLogis 6.7% 4/15/04

11,545

11,833

Vornado Realty Trust 5.625% 6/15/07

5,575

5,888

143,215

Thrifts & Mortgage Finance - 0.3%

Abbey National PLC 6.69% 10/17/05

900

979

Countrywide Home Loans, Inc.:

1.62% 6/2/06 (e)

5,250

5,264

5.5% 8/1/06

735

784

5.625% 5/15/07

3,765

4,034

Washington Mutual, Inc. 7.5% 8/15/06

5,950

6,672

17,733

TOTAL FINANCIALS

629,411

INDUSTRIALS - 1.6%

Aerospace & Defense - 0.4%

Bombardier Capital, Inc. 6.125% 6/29/06 (a)

9,500

10,070

Raytheon Co.:

4.5% 11/15/07

7,500

7,521

6.75% 8/15/07

4,100

4,492

22,083

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

INDUSTRIALS - continued

Air Freight & Logistics - 0.2%

Federal Express Corp. pass thru trust certificates 7.53% 9/23/06

$ 3,163

$ 3,389

FedEx Corp. 6.625% 2/12/04

5,350

5,423

8,812

Commercial Services & Supplies - 0.1%

Boise Cascade Office Products Corp. 7.05% 5/15/05

6,990

7,252

Industrial Conglomerates - 0.7%

Textron Financial Corp. 2.75% 6/1/06

5,130

5,097

Tyco International Group SA yankee 6.375% 6/15/05

30,650

32,144

37,241

Road & Rail - 0.2%

Union Pacific Corp. 6.34% 11/25/03

7,330

7,348

TOTAL INDUSTRIALS

82,736

INFORMATION TECHNOLOGY - 0.5%

Communications Equipment - 0.5%

Motorola, Inc. 6.75% 2/1/06

23,600

25,417

Computers & Peripherals - 0.0%

Hewlett-Packard Co. 5.5% 7/1/07

500

538

TOTAL INFORMATION TECHNOLOGY

25,955

MATERIALS - 0.7%

Containers & Packaging - 0.2%

Sealed Air Corp.:

6.95% 5/15/09 (a)

4,365

4,834

8.75% 7/1/08 (a)

3,490

4,075

8,909

Paper & Forest Products - 0.5%

Boise Cascade Corp. 7.35% 10/11/04

9,760

10,009

Weyerhaeuser Co. 5.95% 11/1/08

16,600

17,763

27,772

TOTAL MATERIALS

36,681

TELECOMMUNICATION SERVICES - 2.8%

Diversified Telecommunication Services - 2.2%

AT&T Corp. 7% 11/15/06

18,200

20,155

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

TELECOMMUNICATION SERVICES - continued

Diversified Telecommunication Services - continued

British Telecommunications PLC:

2.445% 12/15/03 (e)

$ 6,700

$ 6,708

7.875% 12/15/05

10,950

12,124

Citizens Communications Co. 8.5% 5/15/06

8,390

9,477

France Telecom SA 8.45% 3/1/06

13,300

14,895

GTE Hawaiian Telephone Co., Inc. 7.375% 9/1/06

6,150

6,877

Telecom Italia Capital 4% 11/15/08 (a)

14,250

14,233

Telecomunicaciones de Puerto Rico, Inc. 6.65% 5/15/06

5,475

5,922

Telefonica Europe BV 7.35% 9/15/05

935

1,019

TELUS Corp. yankee 7.5% 6/1/07

20,710

23,000

114,410

Wireless Telecommunication Services - 0.6%

AT&T Wireless Services, Inc. 7.5% 5/1/07

29,742

33,361

TOTAL TELECOMMUNICATION SERVICES

147,771

UTILITIES - 1.9%

Electric Utilities - 1.3%

Cleveland Electric Illuminating Co./Toledo Edison Co. 7.67% 7/1/04

8,180

8,482

Detroit Edison Co. 5.05% 10/1/05

2,940

3,092

DTE Energy Co. 6.45% 6/1/06

8,755

9,495

FirstEnergy Corp. 5.5% 11/15/06

9,855

10,356

FPL Group Capital, Inc. 3.25% 4/11/06

3,640

3,683

MidAmerican Energy Holdings, Inc. 4.625% 10/1/07

4,180

4,276

Monongahela Power Co. 5% 10/1/06

5,685

5,829

Progress Energy, Inc. 6.75% 3/1/06

13,200

14,364

Southwestern Public Service Co. 5.125% 11/1/06

3,900

4,143

Texas Utilities Electric Co. 8.25% 4/1/04

1,440

1,478

Wisconsin Electric Power Co. 7.25% 8/1/04

3,000

3,119

68,317

Gas Utilities - 0.5%

Consolidated Natural Gas Co. 7.375% 4/1/05

4,900

5,261

Kinder Morgan Energy Partners LP 5.35% 8/15/07

8,100

8,636

Texas Eastern Transmission Corp. 5.25% 7/15/07

1,835

1,942

Williams Holdings of Delaware, Inc.:

6.125% 12/1/03

9,240

9,379

6.25% 2/1/06

2,895

2,967

28,185

Nonconvertible Bonds - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

UTILITIES - continued

Multi-Utilities & Unregulated Power - 0.1%

Duke Energy Corp. 4.2% 10/1/08

$ 5,315

$ 5,309

TOTAL UTILITIES

101,811

TOTAL NONCONVERTIBLE BONDS

(Cost $1,272,154)

1,317,021

U.S. Government and Government Agency Obligations - 8.5%

U.S. Government Agency Obligations - 1.6%

Fannie Mae:

0% 3/3/04 (c)

500

498

6% 5/15/08

70,618

78,193

Freddie Mac 0% 3/4/04 (c)

2,700

2,690

Guaranteed Export Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) Series 1995-A, 6.28% 6/15/04

941

959

Private Export Funding Corp. secured 6.86% 4/30/04

169

173

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS

82,513

U.S. Treasury Obligations - 6.9%

U.S. Treasury Bonds:

10% 5/15/10

30,740

34,579

11.75% 2/15/10

30,180

34,080

12% 8/15/13 (d)

61,275

85,036

U.S. Treasury Notes:

2% 8/31/05

73,180

73,512

3.5% 11/15/06

955

986

4.375% 5/15/07

132,000

139,662

TOTAL U.S. TREASURY OBLIGATIONS

367,855

TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS

(Cost $451,545)

450,368

U.S. Government Agency - Mortgage Securities - 13.1%

Principal
Amount (000s)

Value (Note 1)
(000s)

Fannie Mae - 12.6%

5.5% 8/1/14 to 4/1/18

$ 81,280

$ 83,826

6% 7/1/11

3,015

3,146

6.5% 5/1/06 to 3/1/33

339,963

356,635

6.5% 11/1/18 to 11/1/33 (b)

81,548

85,518

7% 10/1/07 to 11/1/32

126,353

133,206

7% 11/1/18 (b)

2,230

2,369

7.5% 6/1/12 to 11/1/31

1,667

1,781

11.5% 11/1/15

462

529

TOTAL FANNIE MAE

667,010

Freddie Mac - 0.0%

8.5% 5/1/27 to 7/1/28

1,378

1,494

12% 11/1/19

90

102

TOTAL FREDDIE MAC

1,596

Government National Mortgage Association - 0.5%

7% 11/15/27 to 8/15/32

24,389

25,866

8% 3/15/27

70

75

11% 7/15/10

1

1

TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION

25,942

TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES

(Cost $692,635)

694,548

Asset-Backed Securities - 22.3%

ABSC NIMS Trust Series 2002-HE3 Class A, 7% 10/17/32 (a)

1,632

1,635

Accredited Mortgage Loan Trust Series 2003-2 Class A1, 4.23% 10/25/33

10,526

10,518

ACE Securities Corp.:

Series 2002-HE1, Class A, 1.46% 6/25/32 (e)

6,287

6,288

Series 2002-HE2 Class A2, 1.55% 8/25/32 (e)

6,303

6,312

Series 2003-HE1:

Class A2, 1.53% 11/25/33 (e)

16,200

16,200

Class M1 1.77% 11/25/33 (e)

1,965

1,965

Class M2, 2.82% 11/25/33 (e)

1,228

1,228

Series 2003-NC1 Class A2A, 1.54% 7/25/33 (e)

19,200

19,229

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

ACE Securities Corp. NIMS Trust Series 2002-HE1N Class N, 8.85% 7/25/12

$ 768

$ 767

American Express Credit Account Master Trust Series 2000-1 Class A, 7.2% 9/17/07

17,800

19,056

AmeriCredit Automobile Receivables Trust:

Series 1999-D Class A3, 7.02% 12/12/05

6,056

6,085

Series 2001-B Class A4, 5.37% 6/12/08

21,000

21,668

Series 2001-C Class A4, 5.01% 7/14/08

20,500

21,195

Series 2002-A Class A4, 4.61% 1/12/09

2,555

2,660

Series 2002-B:

Class A3, 3.78% 2/12/07

19,100

19,369

Class A4, 4.46% 4/12/09

5,275

5,432

Series 2003-AM Class A4A, 3.1% 11/6/09

4,510

4,523

Series 2003-BX:

Class A3, 2.11% 8/6/07

3,765

3,774

Class A4A, 2.72% 1/6/10

5,650

5,584

Series 2003-CF Class A4, 3.48% 5/6/10

8,465

8,540

Series 2003-DM Class A4, 2.84% 8/6/10

7,270

7,179

Ameriquest Mortgage Securities, Inc.:

Series 2002-4 Class A2, 1.56% 2/25/33 (e)

3,250

3,256

Series 2002-AR1 Class M1, 1.83% 9/25/32 (e)

6,400

6,376

Series 2003-3 Class S, 5% 9/25/05 (g)

25,417

1,337

Series 2003-7 Class M1, 1.97% 8/25/33 (e)

2,945

2,955

Amortizing Residential Collateral Trust:

Series 2002-BC3 Class A, 1.45% 6/25/32 (e)

6,968

6,962

Series 2002-BC3N Class B2, 7% 6/25/32 (a)

503

499

Series 2002-BC6 Class AIO, 6% 8/25/04 (g)

76,599

2,678

Series 2002-BC7:

Class AIO, 6% 9/25/04 (g)

53,295

2,123

Class M1, 1.92% 10/25/32 (e)

6,600

6,600

Series 2002-BC9 Class A2, 1.6% 12/25/32 (e)

4,633

4,646

AQ Finance NIMS Trust Series 2003-N1 Class NOTE, 9.37% 3/25/33 (a)

4,409

4,409

Arcadia Automobile Receivables Trust Series 1999-C Class A3, 7.2% 6/15/07

3,646

3,654

Argent Securities, Inc.:

Series 2003-W3:

Class AV1B, 1.57% 9/25/33 (e)

1,723

1,723

Class AV2, 1.52% 9/25/33 (e)

1,943

1,943

Class M2, 2.92% 9/25/33 (e)

14,400

14,400

Series 2003-W6 Class AV2, 1.49% 1/25/34 (b)(e)

17,000

17,000

Series 2003-W7:

Class A2, 1.51% 3/25/34 (b)(e)

13,100

13,100

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Argent Securities, Inc.: - continued

Series 2003-W7:

Class M1, 1.81% 3/25/34 (b)(e)

$ 11,700

$ 11,700

Asset Backed Securities Corp. Home Equity Loan Trust:

Series 2001-HE3 Class A1, 1.39% 11/15/31 (e)

4,086

4,085

Series 2002-HE3 Class 2A, 1.52% 10/15/32 (e)

2,524

2,532

Series 2003-HE2 Class A2, 1.5% 4/15/33 (e)

12,156

12,135

Series 2003-HE3 Class A2, 1.47% 6/15/33 (e)

1,943

1,939

Series 2003-HE4 Class A3, 1.34% 8/15/33 (e)

5,150

5,149

Series 2003-HE5 Class A2B, 4.5% 8/15/33

4,729

4,729

Series 2003-HE7 Class A3, 1.53% 12/15/33 (b)(e)

12,435

12,435

Associates Automobile Receivables Trust:

Series 2000-1 Class B, 7.83% 8/15/07

12,687

13,153

Series 2000-2 Class A4, 6.9% 8/15/05

4,860

4,911

Bank One Issuance Trust Series 2002-B2 Class B2, 1.46% 5/15/08 (e)

6,600

6,616

Bayview Commercial Asset Trust Series 2003-2 Class A, 1.7% 12/25/33 (a)(e)

19,255

19,255

BMW Vehicle Owner Trust Series 2002-A Class A3, 3.8% 5/25/06

6,590

6,659

Capital Auto Receivables Asset Trust:

Series 2002-4, Class CTFS, 2.62% 3/17/08

12,365

12,440

Series 2002-5 Class B, 2.8% 4/15/08

10,263

10,344

Capital One Auto Finance Trust Series 2002-A Class A4, 4.79% 1/15/09

11,800

12,294

Capital One Master Trust:

Series 1999-3 Class B, 1.6% 9/15/09 (e)

5,500

5,497

Series 2001-1 Class B, 1.63% 12/15/10 (e)

8,715

8,584

Series 2001-8A Class A, 4.6% 8/17/09

7,450

7,670

Series 2002-3A Class B, 4.55% 2/15/08

12,750

13,090

Capital One Multi-Asset Execution Trust:

Series 2002-B1 Class B1, 1.8% 7/15/08 (e)

8,935

8,962

Series 2003-B1 Class B1, 2.29% 2/17/09 (e)

20,015

20,240

CDC Mortgage Capital Trust:

Series 2001-HE1 Class A, 1.46% 1/25/32 (e)

10,298

10,270

Series 2002-HE2:

Class A, 1.41% 1/25/33 (e)

3,572

3,569

Class M1, 1.82% 1/25/33 (e)

5,000

5,004

Series 2003-HE4 Class A2, 1.35% 3/25/34 (b)(e)

23,200

23,200

Chase Credit Card Master Trust Series 2003-6 Class B, 1.47% 2/15/11 (b)(e)

9,850

9,842

Chase Manhattan Auto Owner Trust:

Series 2000-A Class CTFS, 6.48% 6/15/07

1,863

1,905

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Chase Manhattan Auto Owner Trust: - continued

Series 2001-A:

Class A3, 4.55% 8/15/05

$ 3,770

$ 3,796

Class CTFS, 5.06% 2/15/08

984

1,010

CS First Boston Mortgage Securities Corp. NIMS Trust:

Series 2001-H30N Class A, 8% 7/27/32 (a)

1,019

1,011

Series 2001-HE22N Class A, 8% 3/27/32

213

212

Series 2002-H10N Class A, 8% 11/27/32 (a)

325

320

Series 2002-H16N Class A, 8% 11/27/32 (a)

699

688

Series 2002-H1N Class A, 8% 8/27/32 (a)

376

372

Series 2002-H4N Class A, 8% 8/27/32 (a)

1,990

1,971

DaimlerChrysler Auto Trust Series 2000-C Class A4, 6.85% 11/6/05

11,460

11,716

Discover Card Master Trust I:

Series 1998-7 Class A, 5.6% 5/16/06

5,000

5,008

Series 1999-6 Class A, 6.85% 7/17/07

16,955

17,987

Series 2001-5 Class B, 5.65% 11/15/06

4,000

4,102

Fleet Credit Card Master Trust II Series 2001-C Class A, 3.86% 3/15/07

10,875

11,089

Ford Credit Auto Owner Trust:

Series 2001-B Class B, 5.71% 9/15/05

1,705

1,749

Series 2001-C Class A4, 4.83% 2/15/05

2,951

2,975

GS Mortgage Securities Corp. Series 2003-HE2 Class M1, 1.77% 8/25/33 (e)

2,985

2,966

GSAMP Trust Series 2002-NC1 Class A2, 1.44% 7/25/32 (e)

5,196

5,190

Harley-Davidson Motorcycle Trust Series 2001-2 Class A1, 3.77% 4/17/06

230

230

Home Equity Asset Trust:

Series 2002-2 Class A4, 1.47% 6/25/32 (e)

8,121

8,121

Series 2002-5 Class A3, 1.64% 5/25/33 (e)

13,372

13,419

Series 2003-3 Class A4, 1.58% 2/25/33 (e)

9,900

9,900

Series 2003-5 Class A2, 1.47% 12/25/33 (e)

15,769

15,808

Series 2003-5N Class A, 7.5% 1/27/34 (a)

925

921

Series 2003-7 Class A2, 1.5% 3/25/34 (b)(e)

18,600

18,600

Home Equity Asset Trust NIMS Trust:

Series 2002-2N Class A, 8% 1/27/33 (a)

1,089

1,079

Series 2002-3N Class A, 8% 3/25/33 (a)

2,395

2,347

Series 2002-4N Class A, 8% 5/27/33 (a)

2,335

2,288

Series 2003-2N Class A, 8% 9/27/33 (a)

3,110

3,045

Series 2003-3N Class A, 8% 9/27/33 (a)

7,359

7,212

Honda Auto Receivables Owner Trust Series 2001-2 Class A3, 4.67% 3/18/05

1,778

1,793

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Household Automotive Trust:

Series 2001-1 Class A4, 5.57% 11/19/07

$ 9,500

$ 9,862

Series 2001-2 Class A4, 5.39% 8/17/08

5,155

5,377

Series 2002-2 Class A3, 2.85% 3/19/07

16,200

16,351

Household Home Equity Loan Trust:

Series 2002-1 Class A, 1.49% 12/22/31 (e)

4,414

4,419

Series 2002-3 Class A, 1.57% 7/20/32 (e)

6,625

6,623

Series 2003-1 Class A, 1.47% 10/20/32 (e)

13,134

13,134

Household Mortgage Loan Trust Series 2003-HC2:

Class A2, 1.45% 6/20/33 (e)

10,870

10,870

Class M, 1.72% 6/20/33 (e)

8,865

8,865

Household Private Label Credit Card Master Note Trust I:

Series 2001-2 Class A, 4.95% 6/16/08

11,700

12,008

Series 2002-2 Class B, 1.67% 1/18/11 (e)

5,900

5,929

Series 2002-3 Class B, 2.37% 9/15/09 (e)

5,660

5,665

IndyMac NIMS Trust Series 2001-B Class A, 8.47% 8/25/31 (a)(e)

181

179

Isuzu Auto Owner Trust Series 2001-1 Class A3, 4.88% 11/22/04

893

897

JCPenney Master Credit Card Trust Series E Class A, 5.5% 6/15/07

7,800

7,812

Long Beach Asset Holdings Corp. NIMS Trust Series 2002-3 Class NOTE, 1.67% 8/25/09 (a)(e)

6,697

6,695

MBNA Credit Card Master Note Trust:

Series 2001-B1 Class B1, 1.495% 10/15/08 (e)

7,800

7,811

Series 2001-B2 Class B2, 1.48% 1/15/09 (e)

23,897

23,977

Series 2002-B1 Class B1, 5.15% 7/15/09

5,235

5,544

Series 2002-B2 Class B2, 1.5% 10/15/09 (e)

19,400

19,461

Series 2002-B3 Class B3, 1.52% 1/15/08 (e)

6,450

6,469

MBNA Master Credit Card Trust II:

Series 1998-E Class B, 1.48% 9/15/10 (e)

8,000

8,022

Series 1998-G Class B, 1.52% 2/17/09 (e)

9,200

9,218

Series 1999-G Class A, 6.35% 12/15/06

8,650

8,953

Series 2000-L Class B, 1.62% 4/15/10 (e)

3,350

3,370

Merrill Lynch Mortgage Investments, Inc. Series 2003-HE1 Class A1, 1.57% 7/25/34 (e)

19,600

19,600

Morgan Stanley ABS Capital I, Inc. Series 2002-NC6N Class NOTE, 9.5% 9/25/32 (a)

1,325

1,325

Morgan Stanley Dean Witter Capital I Trust:

Series 2001-NC4 Class M1, 2.12% 1/25/32 (e)

5,655

5,706

Series 2001-NC4N Class NOTE, 8.5% 1/25/32 (a)

227

227

Series 2002-AM3 Class A3, 1.61% 2/25/33 (e)

6,989

7,009

Series 2002-HE2N Class NOTE, 9.5% 8/25/32 (a)

1,476

1,476

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Morgan Stanley Dean Witter Capital I Trust: - continued

Series 2002-NC3N Class NOTE, 9.5% 8/25/32 (a)

$ 887

$ 888

Series 2002-NC5N Class NOTE, 9.5% 9/25/32 (a)

3,180

3,181

Series 2002-OP1N Class NOTE, 9.5% 9/25/32 (a)

549

550

Series 2003-NC2 Class M2, 3.12% 2/25/33 (e)

2,840

2,866

Morgan Stanley Dean Witter Capital I, Inc.:

Series 2002-AM3N Class NOTE, 9.5% 2/25/33 (a)

2,263

2,265

Series 2003-NC1N Class NOTE, 9.5% 11/25/32 (a)

10,209

10,206

Series 2003-NC2N Class NOTE, 9.5% 12/25/32 (a)

8,559

8,555

Mortgage Asset Backed Securities Trust Series 2002-NC1:

Class A2, 1.56% 10/25/32 (e)

3,099

3,102

Class M1, 1.97% 10/25/32 (e)

9,800

9,832

Class S, 6% 4/25/05 (g)

13,934

988

Navistar Financial Owner Trust Series 2000-A Class A4, 7.34% 1/15/07

1,831

1,844

Nissan Auto Lease Trust Series 2003-A Class A3A, 1.26% 6/15/09 (e)

15,600

15,600

Onyx Acceptance Owner Trust:

Series 2000-C Class A4, 7.26% 5/15/07

5,458

5,634

Series 2000-D Class A4, 6.85% 8/15/07

7,556

7,739

Series 2001-D Class A3, 3.63% 12/15/05

6,017

6,056

Series 2002-A Class A3, 3.75% 4/15/06

3,257

3,291

Series 2002-C:

Class A3, 3.29% 9/15/06

6,874

6,948

Class A4, 4.07% 4/15/09

5,740

5,934

Series 2003-D Class A3, 2.4% 12/15/07

7,710

7,717

Option One Mortgage Securities Corp. NIMS Trust:

Series 2002-2A Class CFTS, 8.83% 6/26/32 (a)

473

473

Series 2002-4 Class CTFS, 8.35% 7/25/32 (a)

682

675

PP&L Transition Bonds LLC Series 1999-1 Class A5, 6.83% 3/25/07

12,600

13,125

Providian Gateway Master Trust Series 2002-B Class A, 1.82% 6/15/09 (a)(e)

8,200

8,255

Residential Asset Mortgage Products, Inc. Series 2003-RZ2 Class A1, 3.6% 4/25/33

10,744

10,609

Salomon Brothers Mortgage Securities VII, Inc. Series 2003-UP1 Class A, 3.45% 4/25/32 (a)

8,371

8,328

Sears Credit Account Master Trust II:

Series 1996-3 Class A, 7% 7/15/08

5,888

6,009

Series 2000-1:

Class A, 7.25% 11/15/07

2,072

2,076

Class B, 7.5% 11/15/07

8,300

8,317

Asset-Backed Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Sears Credit Account Master Trust II: - continued

Series 2001-2 Class B, 1.41% 6/16/08 (e)

$ 7,000

$ 6,987

Series 2002-4 Class B, 1.545% 8/18/09 (e)

6,420

6,408

Series 2002-5 Class B, 2.37% 11/17/09 (e)

13,000

13,029

Superior Wholesale Inventory Financing Trust VII Series 2003-A8 Class CTFS, 1.57% 3/15/11 (a)(e)

11,595

11,595

Terwin Mortgage Trust Series 2003-4HE Class A1, 1.55% 9/25/34 (e)

18,500

18,500

Triad Auto Receivables Owner Trust Series 2002-A:

Class A3, 2.62% 2/12/07

15,030

15,143

Class A4, 3.24% 8/12/09

8,795

8,918

Wells Fargo Auto Trust Series 2001-A Class A3, 4.68% 2/15/05

840

843

TOTAL ASSET-BACKED SECURITIES

(Cost $1,178,651)

1,183,342

Collateralized Mortgage Obligations - 4.6%

Private Sponsor - 1.4%

Countrywide Home Loans, Inc. sequential pay:

Series 2002-25 Class 2A1, 5.5% 11/27/17

7,650

7,773

Series 2002-32 Class 2A3, 5% 1/25/18

3,320

3,349

Merrill Lynch Mortgage Investments, Inc.:

floater Series 2003-A Class 2A1, 1.51% 3/25/28 (e)

17,804

17,790

Series 2003-E Class XA1, 1% 10/25/28 (e)(g)

97,131

1,548

Residential Asset Mortgage Products, Inc. Series 2003-SL1 Class 3A1, 7.125% 5/25/31 (b)

16,840

17,365

Residential Funding Mortgage Securities I, Inc. floater Series 2002-S15 Class A3, 1.72% 9/25/32 (e)

541

541

Sequoia Mortgage Funding Trust Series 2003-A Class AX1, 0.8% 10/21/07 (a)(g)

359,095

4,094

Sequoia Mortgage Trust:

floater Series 2003-5 Class A2, 1.5313% 9/20/33 (e)

7,463

7,447

Series 2003-6 Class A2, 1.5513% 11/20/33 (e)

15,515

15,515

TOTAL PRIVATE SPONSOR

75,422

U.S. Government Agency - 3.2%

Fannie Mae:

planned amortization class:

Series 1993-206 Class KA, 6.5% 12/25/22

3,118

3,181

Series 1994-51 Class PH, 6.5% 1/25/23

1,983

2,009

Collateralized Mortgage Obligations - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

U.S. Government Agency - continued

Fannie Mae: - continued

planned amortization class:

Series 1994-63 Class PH, 7% 6/25/23

$ 6,568

$ 6,716

Series 1993-187 Class L, 6.5% 7/25/23

11,585

12,372

Fannie Mae guaranteed REMIC pass thru certificates:

planned amortization class:

Series 2001-53 Class OH, 6.5% 6/25/30

3,890

3,970

Series 2001-71 Class QD, 6% 4/25/15

14,604

14,948

Series 2001-80 Class PH, 6% 12/25/27

6,515

6,586

Series 2002-55 Class PA, 5.5% 3/25/18

3,955

3,964

Series 2003-16 Class PA, 4.5% 11/25/09

2,455

2,507

sequential pay Series 2002-28 Class VB, 6.5% 3/25/20

6,015

6,096

Series 2002-38 Class QB, 5.75% 7/25/13

8,834

8,856

Series 2003-19 Class MJ, 4.25% 5/25/30

19,773

19,810

Freddie Mac planned amortization class:

Series 1385 Class H, 6.5% 8/15/07

2,313

2,373

Series 2115 Class PC, 6% 5/15/11

268

268

Series 2162 Class TF, 6% 11/15/24

7,024

7,060

Series 2355 Class CD, 6.5% 6/15/30

2,056

2,087

Freddie Mac Multi-class participation certificates guaranteed:

planned amortization class:

Series 1215 Class H, 7.5% 3/15/07

2,975

3,084

Series 1714 Class H, 6.75% 5/15/23

5,499

5,618

Series 2134 Class PC, 5.725% 4/15/11

189

189

Series 2183 Class TG, 7% 7/15/28

1,258

1,269

Series 2322 Class HC, 6.5% 3/15/30

1,240

1,264

Series 2489 Class PD, 6% 2/15/31

12,875

13,449

sequential pay:

Series 2230 Class VB, 8% 2/15/16

2,060

2,075

Series 2447 Class LG, 5.5% 12/15/13

1,276

1,284

Series 2458 Class VK, 6.5% 3/15/13

13,610

14,282

Series 2489 Class MA, 5% 12/15/12

2,193

2,205

Series 2628 Class AZ, 4.5% 6/15/18

11,386

11,386

Ginnie Mae guaranteed REMIC pass thru securities Series 2001-53 Class TA, 6% 12/20/30

7,123

7,286

TOTAL U.S. GOVERNMENT AGENCY

166,194

TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS

(Cost $243,735)

241,616

Commercial Mortgage Securities - 9.9%

Principal
Amount (000s)

Value (Note 1)
(000s)

280 Park Avenue Trust floater Series 2001-280 Class X1, 1.0219% 2/3/11 (a)(e)(g)

$ 86,831

$ 4,620

Asset Securitization Corp.:

sequential pay Series 1995-MD4 Class A1, 7.1% 8/13/29

3,619

3,896

Series 1997-D5 Class PS1, 1.7257% 2/14/43 (e)(g)

66,443

4,386

Banc America Commercial Mortgage, Inc.:

Series 2002-2 Class XP, 1.803% 7/11/43 (a)(e)(g)

48,377

4,105

Series 2003-1 Class XP1, 1.475% 9/11/36 (a)(e)(g)

270,724

9,771

Banc America Large Loan, Inc. floater Series 2002-FL2A Class A2, 1.44% 9/8/14 (a)(e)

12,700

12,704

Bear Stearns Commercial Mortgage Securities, Inc.:

Series 2002-TOP8 Class X2, 2.3371% 8/15/38 (a)(e)(g)

55,141

5,778

Series 2003-PWR2 Class X2, 0.721% 5/11/39 (a)(e)(g)

108,249

3,552

Series 2003-T12 Class X2, 0.9251% 8/13/39 (a)(e)(g)

72,915

2,609

Chase Commercial Mortgage Securities Corp.:

floater Series 2000-FL1A Class B, 1.57% 12/12/13 (a)(e)

3,427

3,423

sequential pay:

Series 1998-1 Class A2, 6.56% 5/18/30

29,500

32,780

Series 1999-2 Class A1, 7.032% 1/15/32

4,186

4,598

Series 2000-3 Class A1, 7.093% 10/15/32

6,770

7,469

COMM floater:

Series 2000-FL3A Class C, 1.88% 11/15/12 (a)(e)

11,600

11,516

Series 2001-FL5A:

Class A2, 1.67% 11/15/13 (a)(e)

12,353

12,357

Class D, 2.37% 11/15/13 (a)(e)

9,250

9,243

Series 2002-FL6 Class G, 3.02% 6/14/14 (a)(e)

4,441

4,374

Series 2002-FL7:

Class H, 3.37% 11/15/14 (a)(e)

6,613

6,539

Class MPP, 3.52% 11/15/14 (a)(e)

5,300

5,300

Commercial Resecuritization Trust sequential pay Series 1999-ABC1 Class A, 6.74% 1/27/09 (a)

4,679

4,943

CS First Boston Mortgage Securities Corp.:

floater Series 2001-TFLA Class H230, 3.07% 9/15/11 (a)(e)

4,300

4,257

sequential pay:

Series 1997-C2 Class A2, 6.52% 1/17/35

5,327

5,594

Series 2000-C1 Class A1, 7.325% 4/14/62

4,677

5,141

Series 2000-FL1A Class A2, 1.52% 12/15/09 (a)(e)

5,123

5,124

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

CS First Boston Mortgage Securities Corp.: - continued

sequential pay:

Series 2001-CK3 Class A2, 6.04% 6/15/34

$ 6,500

$ 6,987

Series 2001-CK6 Class AX, 0.645% 9/15/18 (g)

134,960

5,428

Series 2003-C3 Class ASP, 2.1423% 5/15/38 (a)(e)(g)

136,110

11,538

Series 2003-C4 Class ASP, 0.6007% 8/15/36 (a)(e)(g)

88,340

2,216

Series 2003-TF2A:

Class A2, 1.44% 11/15/14 (b)(e)

5,300

5,300

Class C, 1.72% 11/15/14 (b)(e)

1,095

1,095

Class E, 2.17% 11/15/14 (b)(e)

875

875

Class H, 3.12% 11/15/14 (b)(e)

1,080

1,080

Class K, 4.37% 11/15/14 (a)(b)(e)

1,620

1,620

Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1:

Class A2, 6.538% 6/15/31

4,115

4,501

Class D, 7.231% 6/15/31

2,480

2,520

DLJ Commercial Mortgage Corp. sequential pay Series 2000-CF1 Class A1A, 7.45% 6/10/33

5,280

5,819

Equitable Life Assurance Society of the United States sequential pay Series 174 Class A1, 7.24% 5/15/06 (a)

5,000

5,513

First Union-Lehman Brothers Commercial Mortgage Trust sequential pay:

Series 1997-C1 Class A2, 7.3% 4/18/29

2,302

2,315

Series 1997-C2 Class A3, 6.65% 11/18/29

15,770

17,404

FMAC Loan Receivables Trust sequential pay Series 1998-CA Class A1, 5.99% 11/15/04 (a)

486

438

Franchise Loan Trust sequential pay Series 1998-I Class A1, 6.24% 7/15/04 (a)

895

805

GE Capital Commercial Mortgage Corp. Series 2001-1 Class X1, 0.791% 5/15/33 (a)(e)(g)

83,629

3,430

GGP Mall Properties Trust floater Series 2001-C1A:

Class A1, 1.72% 11/15/11 (a)(e)

5,021

5,019

Class A3 1.82% 2/15/14 (a)(e)

5,352

5,395

GMAC Commercial Mortgage Securities, Inc.:

sequential pay Series 1998-C2 Class A1, 6.15% 5/15/35

5,840

6,149

Series 2001-WTCA:

Class A1, 1.34% 9/9/15 (a)(e)

2,650

2,619

Class A2, 1.49% 9/9/15 (a)(e)

11,550

11,348

Class C, 2.22% 9/9/15 (a)(e)

12,850

12,350

Class E, 3.02% 9/9/15 (a)(e)

3,450

3,306

Class X1, 0.8% 9/1/15 (a)(g)

126,864

159

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

GMAC Commercial Mortgage Securities, Inc.: - continued

Series 2003-C2 Class X2, 0.3887% 4/10/40 (g)

$ 267,968

$ 3,396

Greenwich Capital Commercial Funding Corp.:

Series 2002-C1 Class SWDB 5.857% 11/11/19 (a)

4,000

4,019

Series 2003-C1 Class XP, 2.4429% 7/5/35 (a)(e)(g)

68,850

6,734

GS Mortgage Securities Corp. Series 2003-HE1 Class M2, 3.02% 6/20/33 (e)

9,268

9,275

GS Mortgage Securities Corp. II Series 2003-C1 Class A2A, 3.59% 1/10/40

8,695

8,683

GS Mortgage Trust II floater Series 2001-FL4A Class D, 2.03% 12/15/10 (a)(e)

1,292

1,289

Hilton Hotel Pool Trust sequential pay Series 2000-HLTA Class A1, 7.055% 10/3/15 (a)

3,566

3,886

Host Marriot Pool Trust sequential pay Series 1999-HMTA Class A, 6.98% 8/3/15 (a)

2,684

2,923

J.P. Morgan Chase Commercial Mortgage Securities Corp.:

Series 2002-C3 Class X2, 1.3645% 7/12/35 (a)(e)(g)

42,900

2,249

Series 2003-LN1 Class X2, 0.7861% 10/15/37 (a)(e)(g)

137,460

4,881

J.P. Morgan Commercial Mortgage Finance Corp. sequential pay Series 1997-C5 Class A2, 7.069% 9/15/29

4,421

4,635

Kansas Mortgage Capital LP Series 1995-1 Class E, 8.2532% 2/20/30 (a)(e)

4,519

4,513

LB-UBS Commercial Mortgage Trust:

sequential pay:

Series 2003-C3 Class A2, 3.086% 5/15/27

7,510

7,292

Series 2003-C5 Class A2, 3.478% 7/15/27

23,395

23,067

Series 2002-C4 Class XCP, 1.6957% 10/15/35 (a)(e)(g)

80,128

5,565

Series 2002-C7 Class XCP, 1.1897% 1/15/36 (a)(g)

84,649

4,029

Series 2003-C1 Class XCP, 1.6571% 12/15/36 (a)(e)(g)

36,287

2,321

Lehman Brothers Floating Rate Commercial Mortgage Trust floater:

Series 2001-LLFA:

Class A, 1.36% 8/16/13 (a)(e)

9,623

9,623

Class E, 1.75% 8/16/13 (a)(e)

3,000

3,000

Series 2002-LLFA Class A, 1.41% 6/14/17 (a)(e)

5,033

5,033

Merrill Lynch Mortgage Trust Series 2002-MW1 Class XP, 1.616% 7/12/34 (a)(e)(g)

29,392

2,054

Commercial Mortgage Securities - continued

Principal
Amount (000s)

Value (Note 1)
(000s)

Morgan Stanley Capital I, Inc.:

sequential pay Series 1999-LIFE Class A1, 6.97% 4/15/33

$ 4,627

$ 5,071

Series 1997-RR:

Class B, 7.3089% 4/30/39 (a)(e)

7,752

8,060

Class C, 7.4389% 4/30/39 (a)(e)

7,335

7,717

Series 1999-1NYP Class F, 7.2465% 5/3/30 (a)(e)

5,571

5,969

Series 2003-IQ5 Class X2, 1.13% 4/15/38 (a)(e)(g)

46,980

2,539

Morgan Stanley Dean Witter Capital I Trust:

floater Series 2002-XLF Class D, 2.02% 8/5/14 (a)(e)

12,306

12,305

Series 2003-HQ2 Class X2, 1.579% 3/12/35 (a)(e)(g)

78,410

5,562

Series 2003-TOP9 Class X2, 1.524% 11/13/36 (a)(e)(g)

51,315

3,893

Mortgage Capital Funding, Inc. sequential pay Series 1996-MC1 Class A2B, 7.9% 2/15/06

6,165

6,772

Nationslink Funding Corp. sequential pay Series 1999-2 Class A1C, 7.03% 6/20/31

5,100

5,539

Salomon Brothers Mortgage Securities VII, Inc. floater Series 2001-CDCA Class C, 1.92% 2/15/13 (a)(e)

6,000

5,914

Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A1, 6.537% 11/15/04 (a)

27,120

28,292

Trizechahn Office Properties Trust Series 2001-TZHA Class E3, 7.253% 3/15/13 (a)

8,210

8,588

TOTAL COMMERCIAL MORTGAGE SECURITIES

(Cost $522,319)

523,996

Foreign Government and Government Agency Obligations - 0.4%

Chilean Republic 5.625% 7/23/07

4,225

4,510

United Mexican States 4.625% 10/8/08

15,370

15,408

TOTAL FOREIGN GOVERNMENT AND
GOVERNMENT AGENCY OBLIGATIONS

(Cost $19,473)

19,918

Fixed-Income Funds - 14.0%

Shares

Fidelity Ultra-Short Central Fund (f)
(Cost $743,350)

7,478,791

743,915

Cash Equivalents - 6.4%

Maturity
Amount (000s)

Value (Note 1)
(000s)

Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.07%, dated 10/31/03 due 11/3/03)
(Cost $339,420)

$ 339,450

$ 339,420

TOTAL INVESTMENT PORTFOLIO - 104.1%

(Cost $5,463,282)

5,514,144

NET OTHER ASSETS - (4.1)%

(217,599)

NET ASSETS - 100%

$ 5,296,545

Futures Contracts

Expiration
Date

Underlying
Face Amount
at Value (000s)

Unrealized
Appreciation/
(Depreciation)
(000s)

Purchased

Eurodollar Contracts

398 Eurodollar 90 Day Index Contracts

June 2005

$ 394,746

$ 653

398 Eurodollar 90 Day Index Contracts

Sept. 2005

394,428

534

398 Eurodollar 90 Day Index Contracts

Dec. 2005

394,164

466

398 Eurodollar 90 Day Index Contracts

March 2006

393,925

387

398 Eurodollar 90 Day Index Contracts

June 2006

393,702

107

398 Eurodollar 90 Day Index Contracts

Sept. 2006

393,493

(331)

398 Eurodollar 90 Day Index Contracts

Dec. 2006

393,284

(394)

398 Eurodollar 90 Day Index Contracts

March 2007

393,110

192

1,614

Swap Agreements

Expiration
Date

Notional
Amount (000s)

Unrealized
Appreciation/
(Depreciation)
(000s)

Credit Default Swap

Receive from Morgan Stanley, Inc., upon default of Vornado Realty Trust, par value of the notional amount of Vornado Realty Trust 5.625% 6/15/07, and pay quarterly notional amount multiplied by 1.37%

June 2007

$ 5,575

$ (116)

Receive quarterly notional amount multiplied by .62% and pay Goldman Sachs upon default of SLM Corp., par value of the notional amount of SLM Corp. 1.1106% 7/25/35

August 2007

2,030

18

Receive quarterly notional amount multiplied by 1.12% and pay Morgan Stanley, Inc. upon default of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11

June 2006

8,000

143

TOTAL CREDIT DEFAULT SWAP

15,605

45

Interest Rate Swap

Receive quarterly a fixed rate equal to 2.3192% and pay quarterly a floating rate based on 3-month LIBOR with Lehman Brothers, Inc.

April 2006

50,000

(201)

Receive quarterly a fixed rate equal to 3.098% and pay quarterly a floating rate based on 3-month LIBOR with Morgan Stanley, Inc.

April 2007

72,410

191

Receive quarterly a fixed rate equal to 3.1422% and pay quarterly a floating rate based on 3-month LIBOR with JPMorgan Chase, Inc.

April 2007

61,650

278

TOTAL INTEREST RATE SWAP

184,060

268

$ 199,665

$ 313

Legend

(a) 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 $504,061,000 or 9.5% of net assets.

(b) Security or a portion of the security purchased on a delayed delivery or when-issued basis.

(c) Security or a portion of the security was pledged to cover margin requirements for futures contracts. At the period end, the value of securities pledged amounted to $2,695,000.

(d) Security or a portion of the security has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $250,000.

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

(f) A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(g) Security represents right to receive monthly interest payments on an underlying pool of mortgages. Principal shown is the par amount of the mortgage pool.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $3,264,972,000 and $3,439,690,000, respectively, of which long-term U.S. government and government agency obligations aggregated $1,938,769,000 and $2,313,189,000, respectively.

The fund participated in the interfund lending program as a lender. The average daily loan balance during the period for which loans were outstanding amounted to $29,346,000. The weighted average interest rate was 1.38%. Interest earned from the interfund lending program amounted to $2,000 and is included in interest income on the Statement of Operations. At period end there were no interfund loans outstanding.

Income Tax Information

At April 30, 2003, the fund had a capital loss carryforward of approximately $133,700,000 of which $99,539,000, $10,379,000, $10,467,000, $8,450,000 and $4,865,000 will expire on April 30, 2004, 2005, 2006, 2008 and 2009, respectively. Of the loss carryforwards expiring on April 30, 2004, 2005 and 2006, $13,689,000, $4,138,000 and $2,204,000, respectively, was acquired in a merger and is available to offset future capital gains of the fund to the extent provided by regulations.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements

Statement of Assets and Liabilities

Amounts in thousands (except per-share amount)

October 31, 2003 (Unaudited)

Assets

Investment in securities, at value (including repurchase agreements of $339,420) (cost $5,463,282) - See accompanying schedule

$ 5,514,144

Cash

753

Receivable for investments sold

43,179

Receivable for fund shares sold

8,164

Interest receivable

42,753

Receivable for daily variation on futures contracts

129

Unrealized gain on swap agreements

313

Prepaid expenses

30

Other receivables

8

Total assets

5,609,473

Liabilities

Payable for investments purchased
Regular delivery

$ 77,747

Delayed delivery

221,705

Payable for fund shares redeemed

9,856

Distributions payable

1,023

Accrued management fee

1,893

Other payables and accrued expenses

704

Total liabilities

312,928

Net Assets

$ 5,296,545

Net Assets consist of:

Paid in capital

$ 5,346,664

Distributions in excess of net investment income

(3,581)

Accumulated undistributed net realized gain (loss) on investments

(99,327)

Net unrealized appreciation (depreciation) on investments

52,789

Net Assets, for 588,695 shares outstanding

$ 5,296,545

Net Asset Value, offering price and redemption price per share ($5,296,545 ÷ 588,695 shares)

$ 9.00

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Statements - continued

Statement of Operations

Amounts in thousands

Six months ended October 31, 2003 (Unaudited)

Investment Income

Interest

$ 90,859

Security lending

16

Total income

90,875

Expenses

Management fee

$ 11,979

Transfer agent fees

3,180

Accounting and security lending fees

327

Non-interested trustees' compensation

12

Appreciation in deferred trustee compensation account

1

Custodian fees and expenses

99

Registration fees

93

Audit

42

Legal

11

Miscellaneous

8

Total expenses before reductions

15,752

Expense reductions

(9)

15,743

Net investment income (loss)

75,132

Realized and Unrealized Gain (Loss)

Net realized gain (loss) on:

Investment securities

39,011

Futures contracts

2,016

Swap agreements

(390)

Total net realized gain (loss)

40,637

Change in net unrealized appreciation (depreciation) on:

Investment securities

(66,772)

Futures contracts

(3,977)

Swap agreements

(1,377)

Total change in net unrealized appreciation (depreciation)

(72,126)

Net gain (loss)

(31,489)

Net increase (decrease) in net assets resulting from operations

$ 43,643

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Statement of Changes in Net Assets

Amounts in thousands

Six months ended
October 31, 2003
(Unaudited)

Year ended
April 30,
2003

Increase (Decrease) in Net Assets

Operations

Net investment income (loss)

$ 75,132

$ 183,927

Net realized gain (loss)

40,637

46,760

Change in net unrealized appreciation (depreciation)

(72,126)

101,618

Net increase (decrease) in net assets resulting
from operations

43,643

332,305

Distributions to shareholders from net investment income

(74,399)

(191,220)

Share transactions
Net proceeds from sales of shares

1,431,116

4,400,487

Reinvestment of distributions

66,549

172,509

Cost of shares redeemed

(1,865,643)

(2,303,735)

Net increase (decrease) in net assets resulting from share transactions

(367,978)

2,269,261

Total increase (decrease) in net assets

(398,734)

2,410,346

Net Assets

Beginning of period

5,695,279

3,284,933

End of period (including distributions in excess of net investment income of $3,581 and distributions in excess of net investment income of $4,314,
respectively)

$ 5,296,545

$ 5,695,279

Other Information

Shares

Sold

158,182

495,166

Issued in reinvestment of distributions

7,368

19,331

Redeemed

(206,698)

(258,777)

Net increase (decrease)

(41,148)

255,720

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Financial Highlights

Six months ended
October 31,
2003

Years ended April 30,

(Unaudited)

2003

2002

2001

2000

1999

Selected Per-Share Data

Net asset value, beginning of period

$ 9.04

$ 8.78

$ 8.70

$ 8.45

$ 8.68

$ 8.70

Income from Investment Operations

Net investment
income (loss)D

.122

.346

.427F

.533

.507

.507

Net realized and
unrealized gain (loss)

(.042)

.277

.076F

.246

(.238)

(.030)

Total from investment operations

.080

.623

.503

.779

.269

.477

Distributions from net investment income

(.120)

(.363)

(.423)

(.529)

(.499)

(.497)

Net asset value, end of period

$ 9.00

$ 9.04

$ 8.78

$ 8.70

$ 8.45

$ 8.68

Total ReturnB,C

.89%

7.23%

5.88%

9.49%

3.21%

5.62%

Ratios to Average Net AssetsE

Expenses before expense reductions

.56%A

.57%

.58%

.59%

.63%

.68%

Expenses net of voluntary waivers, if any

.56%A

.57%

.58%

.59%

.63%

.66%

Expenses net of all reductions

.56%A

.57%

.58%

.58%

.62%

.65%

Net investment
income (loss)

2.67%A

3.88%

4.86%F

6.23%

5.96%

5.83%

Supplemental Data

Net assets, end of period (in millions)

$ 5,297

$ 5,695

$ 3,285

$ 2,083

$ 1,344

$ 973

Portfolio turnover rate

121%A

80%

145%

84%

126%

133%

A Annualized

B Total returns for periods of less than one year are not annualized.

C Total returns would have been lower had certain expenses not been reduced during the periods shown.

D Calculated based on average shares outstanding during the period.

E Expense ratios reflect operating expenses of the fund. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the fund during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the fund.

F Effective May 1, 2001, the fund adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began amortizing premium and discount on all debt securities. Per share data and ratios for periods prior to adoption have not been restated to reflect this change.

See accompanying notes which are an integral part of the financial statements.

Semiannual Report

Notes to Financial Statements

For the period ended October 31, 2003 (Unaudited)

(Amounts in thousands except ratios)

1. Significant Accounting Policies.

Fidelity Short-Term Bond Fund (the fund) is a fund of Fidelity Fixed-Income Trust (the trust) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:

Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and valuation models. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.

Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities, which is accrued using the interest method.

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

Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan), non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in shares of the fund or are invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Dividends are declared daily and paid monthly from net investment income. Distributions from realized gains, if any, are recorded on the ex-dividend date.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to futures transactions, prior period premium and discount on debt securities, market discount, capital loss carryforwards, expiring capital loss carryforwards and losses deferred due to wash sales excise tax regulations .

The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:

Unrealized appreciation

$ 75,726

Unrealized depreciation

(17,284)

Net unrealized appreciation (depreciation)

$ 58,442

Cost for federal income tax purposes

$ 5,455,702

2. Operating Policies.

Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. Collateral is held in segregated accounts with custodian banks and may be obtained in the event of a default of the counterparty. Collateral is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).

Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery

Semiannual Report

2. Operating Policies - continued

Delayed Delivery Transactions and When-Issued Securities - continued

sell is outstanding, the contract is marked-to-market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.

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

Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included at the end of the fund's Schedule of Investments.

Swap Agreements. The fund may invest in swaps for the purpose of managing its exposure to interest rate, credit or market risk.

Interest rate swaps are agreements to exchange cash flows periodically based on a notional principal amount, for example, the exchange of fixed rate interest payments for floating rate interest payments. The net receivable or payable is accrued daily and is included in interest income in the accompanying Statement of Operations. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact the fund.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

2. Operating Policies - continued

Swap Agreements - continued

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a "guarantor" receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The fund may enter into credit default swaps in which the fund or its counterparty act as guarantors. By acting as the guarantor of a swap, the fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value. Premiums paid to or by the fund are accrued daily and included in interest income in the accompanying Statement of Operations.

Swaps are marked-to-market daily based on dealer-supplied valuations and changes in value are recorded as unrealized appreciation (depreciation). Gains or losses are realized upon early termination of the swap agreement. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund's custodian in compliance with swap contracts. Risks may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include changes in the returns of the underlying instruments, failure of the counterparties to perform under the contracts' terms and the possible lack of liquidity with respect to the swap agreements. Details of swap agreements open at period end are included in the fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, the fund may employ trading strategies which involve the sale and simultaneous agreement to repurchase similar securities ("mortgage dollar rolls") or the purchase and simultaneous agreement to sell similar securities ("reverse mortgage dollar rolls"). The securities traded are mortgage securities and bear the same interest rate but will be collateralized by different pools of mortgages. During the period between the sale and repurchase in a mortgage dollar roll transaction, a fund will not be entitled to receive interest and principal payments on the securities sold but will invest the proceeds of the sale in other securities which may enhance the yield and total return. In addition, the difference between the sale price and the future purchase price is recorded as an adjustment to investment income. During the period between the purchase and subsequent sale in a reverse mortgage dollar roll transaction a fund is entitled to interest and principal payments on the securities purchased. The price differential between the purchase and sale is recorded as an adjustment to investment income. Losses may arise due to changes in the value of the securities or if the counterparty does not perform under the terms of the agreement. If the counterparty files for bankruptcy or becomes insolvent, the fund's right to repurchase or sell securities may be limited.

Semiannual Report

3. Purchases and Sales of Investments.

Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee. The management fee is the sum of an individual fund fee rate that is based on an annual rate of .30% of the fund's average net assets and a group fee rate that averaged .13% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .43% of the fund's average net assets.

Transfer Agent Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annualized rate of .11% of average net assets.

Accounting and Security Lending Fees. FSC maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.

Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $4,883 for the period.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

(Amounts in thousands except ratios)

5. Security Lending.

The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. At period end there were no security loans outstanding.

6. Expense Reductions.

Through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $9.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company Boston, MA

Investment Sub-Advisers

Fidelity Management & Research (U.K.) Inc.

Fidelity Management & Research
(Far East) Inc.

Fidelity Investments Japan Limited

Fidelity Investments Money
Management, Inc.

Fidelity International
Investment Advisors

Fidelity International
Investment Advisors (U.K.) Limited

General Distributor

Fidelity Distributors Corporation

Boston, MA

Transfer and Shareholder
Servicing Agent

Fidelity Service Company, Inc.

Boston, MA

Custodian

The Bank of New York

New York, NY

Fidelity's Taxable Bond Funds

Capital & Income

Floating Rate High Income

Ginnie Mae

Government Income

High Income

Inflation-Protected Bond

Intermediate Bond

Intermediate Government Income

Investment Grade Bond

Mortgage Securities

New Markets Income

Short-Term Bond

Spartan® Government Income

Spartan Investment Grade Bond

Strategic Income

Total Bond

Ultra-Short Bond

U.S. Bond Index

The Fidelity Telephone Connection

Mutual Fund 24-Hour Service

Exchanges/Redemptions
and Account Assistance 1-800-544-6666

Product Information 1-800-544-6666

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)

Fidelity Automated Service
Telephone (FAST®) (automated graphic)    1-800-544-5555

(automated graphic)    Automated line for quickest service

STP-USAN-1203
1.784864.100

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

Item 2. Code of Ethics

Not applicable.

Item 3. Audit Committee Financial Expert

Not applicable.

Item 4. Principal Accountant Fees and Services

Not applicable.

Item 5. Audit Committee of Listed Registrants

Not applicable.

Item 6. Reserved

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Reserved

Item 9. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Fidelity Fixed-Income Trust's (the "Trust") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.

(a)(ii) There was no change in the Trust's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Trust's internal control over financial reporting.

Item 10. Exhibits

(a)

(1)

Not applicable.

(a)

(2)

Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

(b)

Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) is furnished and attached hereto as Exhibit 99.906CERT.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Fidelity Fixed-Income Trust

By:

/s/Maria Dwyer

Maria Dwyer

President and Treasurer

Date:

December 23, 2003

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:

/s/Maria Dwyer

Maria Dwyer

President and Treasurer

Date:

December 23, 2003

By:

/s/Timothy F. Hayes

Timothy F. Hayes

Chief Financial Officer

Date:

December 23, 2003