-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DeXph1iObh2Wul9n/eSEBSYP4DrlAp6Fw3iMqW1rKZRHkc+/Aj4vnG8lkujWCj2O fAMYhszYWyxobXoAkqAf1g== 0000061397-00-000008.txt : 20000522 0000061397-00-000008.hdr.sgml : 20000522 ACCESSION NUMBER: 0000061397-00-000008 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIDELITY MAGELLAN FUND INC CENTRAL INDEX KEY: 0000061397 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 046049970 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-01193 FILM NUMBER: 640418 BUSINESS ADDRESS: STREET 1: 82 DEVONSHIRE ST CITY: BOSTON STATE: MA ZIP: 02109 BUSINESS PHONE: 6174391269 MAIL ADDRESS: STREET 1: 82 DEVONSHIRE STREET STREET 2: MAIL ZONE ZH-1 CITY: BOSTON STATE: MA ZIP: 02109 FORMER COMPANY: FORMER CONFORMED NAME: MAGELLAN FUND INC DATE OF NAME CHANGE: 19810804 N-30D 1 FIDELITY(REGISTERED TRADEMARK) MAGELLAN(REGISTERED TRADEMARK) FUND ANNUAL REPORT MARCH 31, 2000 (2_FIDELITY_LOGOS)(registered trademark) CONTENTS PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies. PERFORMANCE 4 How the fund has done over time. FUND TALK 6 The manager's review of fund performance, strategy and outlook. INVESTMENT CHANGES 10 A summary of major shifts in the fund's investments over the past six months. INVESTMENTS 11 A complete list of the fund's investments with their market values. FINANCIAL STATEMENTS 27 Statements of assets and liabilities, operations, and changes in net assets, as well as financial highlights. NOTES 31 Notes to the financial statements. REPORT OF INDEPENDENT 37 The auditors' opinion. ACCOUNTANTS DISTRIBUTIONS 38 PROXY VOTING RESULTS 39 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. 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, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY, AND ARE SUBJECT TO INVESTMENT RISKS, INCLUDING THE 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. PRESIDENT'S MESSAGE (PHOTO_OF_EDWARD_C_JOHNSON_3D) DEAR SHAREHOLDER: Concerned about the high valuations of technology stocks, investors poured money into so-called old economy stocks during March, sparking a rally in blue chips during which the Dow Jones Industrial Average gained 499 points in a single day. Treasuries also benefited as a haven from the technology sector, as the yield of the 10-year note - which some consider the new bellwether Treasury issue - trended downward throughout the month. While it's impossible to predict the future direction of the markets with any degree of certainty, there are certain basic principles that can help investors plan for their future needs. First, investors are encouraged to take a long-term view of their portfolios. If you can afford to leave your money invested through the inevitable up and down cycles of the financial markets, you will greatly reduce your vulnerability to any single decline. We know from experience, for example, that stock prices have gone up over longer periods of time, have significantly outperformed other types of investments and have stayed ahead of inflation. Second, you can further manage your investing risk through diversification. A stock mutual fund, for instance, is already diversified, because it invests in many different companies. You can increase your diversification further by investing in a number of different stock funds, or in such other investment categories as bonds. If you have a short investment time horizon, you might want to consider moving some of your investment into a money market fund, which seeks income and a stable share price by investing in high-quality, short-term investments. Of course, it's important to remember that an investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in these types of funds. Finally, no matter what your time horizon or portfolio diversity, it makes good sense to follow a regular investment plan, investing a certain amount of money in a fund at the same time each month or quarter and periodically reviewing your overall portfolio. By doing so, you won't get caught up in the excitement of a rapidly rising market, nor will you buy all your shares at market highs. While this strategy - known as dollar cost averaging - won't assure a profit or protect you from a loss in a declining market, it should help you lower the average cost of your purchases. Of course, you should consider your financial ability to continue your purchases through periods of low price levels before undertaking such a strategy. If you have questions, please call us at 1-800-544-6666, or visit our web site at www.fidelity.com. We are available 24 hours a day, seven days a week to provide you the information you need to make the investments that are right for you. Best regards, Edward C. Johnson 3d PERFORMANCE: THE BOTTOM LINE There are several ways to evaluate a fund's historical performance. You can look at the total percentage change in value, the average annual percentage change or the growth of a hypothetical $10,000 investment. Total return reflects the change in the value of an investment, assuming reinvestment of the fund's dividend income and capital gains (the profits earned upon the sale of securities that have grown in value). CUMULATIVE TOTAL RETURNS PERIODS ENDED MARCH 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS FIDELITY MAGELLAN 21.11% 210.04% 505.74% FIDELITY MAGELLAN (INCL. 17.48% 200.74% 487.56% 3.00% SALES CHARGE) S&P 500 (registered trademark) 17.94% 227.31% 461.98% Growth Funds Average 32.16% 213.63% 423.04% CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms over a set period - in this case, one year, five years or 10 years. For example, if you had invested $1,000 in a fund that had a 5% return over the past year, the value of your investment would be $1,050. You can compare the fund's returns to the performance of the Standard & Poor's 500SM Index - a market capitalization-weighted index of common stocks. To measure how the fund's performance stacked up against its peers, you can compare it to the growth funds average, which reflects the performance of mutual funds with similar objectives tracked by Lipper Inc. The past one year average represents a peer group of 1,238 mutual funds. These benchmarks include reinvested dividends and capital gains, if any, and exclude the effect of sales charges. Lipper has created new comparison categories that group funds according to portfolio characteristics and capitalization, as well as by capitalization only. These averages are listed on page 5 of this report.* AVERAGE ANNUAL TOTAL RETURNS PERIODS ENDED MARCH 31, 2000 PAST 1 YEAR PAST 5 YEARS PAST 10 YEARS FIDELITY MAGELLAN 21.11% 25.40% 19.74% FIDELITY MAGELLAN (INCL. 17.48% 24.63% 19.37% 3.00% SALES CHARGE) S&P 500 17.94% 26.76% 18.84% Growth Funds Average 32.16% 24.90% 17.43% AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you what would have happened if the fund had performed at a constant rate each year. (Note: Lipper calculates average annual total returns by annualizing each fund's total return, then taking an arithmetic average. This may produce a different figure than that obtained by averaging the cumulative total returns and annualizing the result.) $10,000 OVER 10 YEARS Magellan S&P 500 00021 SP001 1990/03/31 9700.00 10000.00 1990/04/30 9455.02 9750.00 1990/05/31 10295.97 10700.63 1990/06/30 10340.72 10627.86 1990/07/31 10223.68 10593.85 1990/08/31 9221.97 9636.17 1990/09/30 8636.78 9166.89 1990/10/31 8530.06 9127.47 1990/11/30 9175.50 9717.10 1990/12/31 9460.24 9988.21 1991/01/31 10121.57 10423.70 1991/02/28 11000.41 11168.99 1991/03/31 11374.05 11439.28 1991/04/30 11416.15 11466.73 1991/05/31 12067.08 11962.10 1991/06/30 11358.00 11414.23 1991/07/31 12063.47 11946.14 1991/08/31 12434.29 12229.26 1991/09/30 12387.26 12025.03 1991/10/31 12553.68 12186.17 1991/11/30 11933.23 11695.06 1991/12/31 13341.63 13032.98 1992/01/31 13347.46 12790.57 1992/02/29 13617.76 12956.84 1992/03/31 13248.29 12704.18 1992/04/30 13444.69 13077.69 1992/05/31 13573.51 13141.77 1992/06/30 13334.43 12945.96 1992/07/31 13708.64 13475.45 1992/08/31 13411.35 13199.20 1992/09/30 13565.19 13354.95 1992/10/31 13660.82 13401.69 1992/11/30 14005.93 13858.69 1992/12/31 14277.49 14029.15 1993/01/31 14653.63 14147.00 1993/02/28 14959.53 14339.40 1993/03/31 15507.88 14641.96 1993/04/30 15659.69 14287.62 1993/05/31 16276.91 14670.53 1993/06/30 16503.90 14713.07 1993/07/31 16685.96 14654.22 1993/08/31 17667.21 15209.62 1993/09/30 17858.73 15092.50 1993/10/31 17870.55 15404.92 1993/11/30 17281.80 15258.57 1993/12/31 17797.97 15443.20 1994/01/31 18501.35 15968.27 1994/02/28 18365.70 15535.53 1994/03/31 17514.11 14858.18 1994/04/30 17689.95 15048.36 1994/05/31 17486.16 15295.16 1994/06/30 16727.49 14920.43 1994/07/31 17287.34 15409.82 1994/08/31 18106.18 16041.62 1994/09/30 17635.28 15648.60 1994/10/31 18231.76 16000.69 1994/11/30 17232.40 15417.95 1994/12/31 17475.70 15646.60 1995/01/31 17297.80 16052.31 1995/02/28 18268.38 16677.87 1995/03/31 18951.19 17170.03 1995/04/30 19832.82 17675.69 1995/05/31 20387.26 18382.19 1995/06/30 21940.15 18809.21 1995/07/31 23624.42 19432.92 1995/08/31 23829.37 19481.70 1995/09/30 24265.54 20303.82 1995/10/31 23645.44 20231.34 1995/11/30 24170.95 21119.50 1995/12/31 23910.84 21526.26 1996/01/31 24255.68 22259.01 1996/02/29 24097.17 22465.35 1996/03/31 24339.11 22681.69 1996/04/30 24494.85 23016.02 1996/05/31 24605.55 23609.60 1996/06/30 24582.55 23699.56 1996/07/31 23438.87 22652.51 1996/08/31 24030.43 23130.25 1996/09/30 24993.35 24432.02 1996/10/31 25584.91 25105.86 1996/11/30 27241.28 27003.61 1996/12/31 26705.23 26468.67 1997/01/31 27877.41 28122.43 1997/02/28 27503.24 28342.91 1997/03/31 26556.22 27178.30 1997/04/30 27741.65 28800.84 1997/05/31 29720.73 30554.24 1997/06/30 30951.30 31923.07 1997/07/31 33548.43 34463.19 1997/08/31 32056.10 32532.56 1997/09/30 33942.75 34314.37 1997/10/31 32786.97 33168.27 1997/11/30 33426.05 34703.63 1997/12/31 33806.56 35299.49 1998/01/31 34172.06 35689.90 1998/02/28 36762.46 38263.86 1998/03/31 38614.78 40223.35 1998/04/30 39058.34 40628.00 1998/05/31 38286.57 39929.60 1998/06/30 39917.80 41551.54 1998/07/31 39619.23 41109.02 1998/08/31 33483.91 35165.48 1998/09/30 35508.38 37418.18 1998/10/31 38242.88 40461.77 1998/11/30 41210.41 42914.16 1998/12/31 45174.40 45386.87 1999/01/31 47544.92 47284.95 1999/02/28 46026.89 45815.34 1999/03/31 48513.31 47648.41 1999/04/30 49672.40 49493.83 1999/05/31 48244.38 48325.28 1999/06/30 51388.60 51007.33 1999/07/31 49658.09 49414.89 1999/08/31 49044.29 49170.28 1999/09/30 48319.61 47822.52 1999/10/31 51222.28 50848.73 1999/11/30 52271.67 51882.49 1999/12/31 56037.17 54938.37 2000/01/31 53342.56 52178.26 2000/02/29 53875.74 51190.53 2000/03/31 58756.39 56198.50 IMATRL PRASUN SHR__CHT 20000331 20000424 113439 R00000000000123 $10,000 OVER 10 YEARS: Let's say hypothetically that $10,000 was invested in Fidelity Magellan Fund on March 31, 1990, and the current 3.00% sales charge was paid. As the chart shows, by March 31, 2000, the value of the investment would have grown to $58,756 - a 487.56% increase on the initial investment. For comparison, look at how the Standard & Poor's 500 Index did over the same period. With dividends and capital gains, if any, reinvested, the same $10,000 would have grown to $56,198 - a 461.98% increase. (checkmark)UNDERSTANDING PERFORMANCE How a fund did yesterday is no guarantee of how it will do tomorrow. The stock market, for example, has a history of long-term growth and short-term volatility. In turn, the share price and return of a fund that invests in stocks will vary. That means if you sell your shares during a market downturn, you might lose money. But if you can ride out the market's ups and downs, you may have a gain. * THE LIPPER LARGE CAP CORE FUNDS AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR PORTFOLIO CHARACTERISTICS AND CAPITALIZATION. THE LIPPER LARGE CAP SUPERGROUP AVERAGE REFLECTS THE PERFORMANCE (EXCLUDING SALES CHARGES) OF MUTUAL FUNDS WITH SIMILAR CAPITALIZATION. AS OF MARCH 31, 2000, THE ONE YEAR, FIVE YEAR, AND 10 YEAR CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS FOR THE LARGE CAP CORE FUNDS AVERAGE ARE 21.70%, 199.85%, 393.33%, AND 21.70%, 24.42%, 17.13%, RESPECTIVELY; AND THE ONE YEAR, FIVE YEAR AND 10 YEAR CUMULATIVE AND AVERAGE ANNUAL TOTAL RETURNS FOR THE LARGE CAP SUPERGROUP AVERAGE ARE 24.31%, 214.69%, 427.31%, AND 24.31%, 25.21%, 17.70%, RESPECTIVELY. FUND TALK: THE MANAGER'S OVERVIEW MARKET RECAP Despite a number of milestones in the U.S. stock market during the 12-month period ending March 31, 2000, the overriding theme was volatility. The period's top-performing equity index - the tech-heavy NASDAQ Index - returned 86.25% as investors flocked to stocks of companies involved in the Internet, wireless communications and biotechnology. The profitable ride in many new economy stocks became a rocky one toward the end of the period, however, as the NASDAQ topped the 5000 mark in March before shedding much of 2000's year-to-date gains by the month's end. Conversely, the blue-chip's benchmark - the Dow Jones Industrial Average - performed modestly for most of the period, but surged higher late in the first quarter amidst a flight to quality, ending with a 13.29% return. The Dow gyrated in a range of about 2000 points toward the end of the period after passing the 11,000 level for the first time in November. Meanwhile, the Standard & Poor's 500SM Index - an index of 500 commonly held large-cap stocks - returned 17.94%. The period also was characterized by the Federal Reserve Board's concern that the growth of the U. S. economy was excessive and might spark inflation. As a result, the Fed raised key short-term interest rates on five occasions. Following the Fed's latest rate hike in March, investors began fleeing new economy stocks for the safety of old economy stocks. (photograph of Robert Stansky) An interview with Robert Stansky, Portfolio Manager of Fidelity Magellan Fund Q. BOB, HOW DID THE FUND PERFORM? A. The fund had a strong past 12 months relative to its benchmark index, but somewhat less so relative to its peers. Magellan had a total return of 21.11% during the 12 months that ended March 31, 2000. That topped the total return of the Standard & Poor's 500 Index, which was 17.94% during the same period. However, the fund trailed the average return of its growth funds peer group, as tracked by Lipper Inc., which was 32.16%. Q. WHY DID THE FUND BEAT ITS BENCHMARK, YET TRAIL ITS PEER GROUP AVERAGE? A. I'm sure many shareholders are aware of the fact that, over the past six months, we experienced an unprecedented run-up in the shares of technology stocks. At the end of September, I mentioned that I was concerned about the high valuations - or stock prices relative to earnings - of many of these stocks. As a result, the fund maintained a weighting in technology that was pretty close to that of the S&P 500 during the period as valuations continued to rise. Other growth funds that were more aggressive in the tech sector, and willing to take on more risk, tended to post outsized returns during this unusual period. Magellan Fund did top the S&P 500, however, by virtue of strong stock selection in technology and other sectors. Q. LET'S START WITH TECHNOLOGY. WHAT FUELED THE SPECTACULAR RISE IN STOCK PRICES? A. Several factors were at play in this sector, which comprises several industries. The first was the huge, ongoing build-out of communications systems worldwide - wireless, fiber optics and broadband, for example - and the Internet. We've seen a real shift in focus within the technology sector from personal computing to personal communications. We've also seen an incredible wave of capital spending by new and old companies, funded both by venture capital and money raised in the equity markets. I mentioned six months ago that I had some concerns about Y2K. However, once Y2K came and went with few disruptions, expectations quickly rose that companies would resume the capital spending that had been put on hold until after New Year's. A continued strong U.S. economy and some improving international economies lent support. And the continued strength of technology stocks fueled investors to plow increasing amounts of cash into the sector, which helped keep the momentum going. Q. HOW DID YOU PLAY THE SECTOR? A. Many of the top contributors to the fund's performance in terms of technology stocks were names that shareholders likely would recognize from the past. What they all have in common is they provided solutions in one form or another for companies participating in this communications and Internet build-out. They include companies such as Texas Instruments, which not only produces semiconductors, but also digital signal processors that are used in cellular phones; Cisco Systems, which manufactures products that link computer networks, but also has quickly moved into telecommunications networking; Oracle, which develops database software that supports personal computers and other appliances that access programs from the Web; and Intel, the leading microprocessor manufacturer, which also is pushing into networking services and communications infrastructure products. Q. DID THE FUND INVEST IN SOME OF THE MORE SPECULATIVE TECHNOLOGY COMPANIES THAT PRODUCED HUGE GAINS? A. Yes. Although they made up a relatively small portion of the fund, the rapid stock gains of a number of newer companies had a positive impact on the fund's performance. Because some of these companies are in the early stages of profitability, I focused on those companies with products that I believed had significant growth prospects. For example, Juniper Networks sells a very fast router. Redback Networks helps companies deploy high-speed broadband access to the Internet and corporate networks. And Sycamore Networks develops software-based optical networking products. These types of companies were at the heart of the communications expansion, and among the hottest stocks in the market over the past 12 months. Some of these investments were similar to ones I made in newer companies in late 1998, when many Internet-related stocks were rising. As I did then, I recently had to rely somewhat on a sense of market psychology when choosing these companies as they're only starting to show quarterly earnings. I had to evaluate how the market might reward those with the brightest potential long into the future. Q. NEAR THE END OF THE PERIOD, THE TECH SECTOR HIT A ROUGH PATCH AND GAVE BACK SOME OF ITS GAINS. WHAT HAPPENED? A. Very simply, valuations got too high and investors took profits. You have to bear in mind that, as the prices of these stocks were rising, there was not a commensurate rise in the companies' near-term business prospects. So, as we say, the stocks got ahead of themselves. Even considering the recent pullback in tech stocks, I'm still concerned about their high valuations. While I do believe that this sector offers the greatest potential for growth in the marketplace over the next three to five years, we have to expect volatility and further downdrafts along the way. Of course, that can provide the fund buying opportunities in those companies that I believe are best positioned for strong earnings growth. Q. YOU MENTIONED THAT STOCK SELECTION WITHIN OTHER SECTORS HELPED THE FUND'S PERFORMANCE. WHERE WERE THE WINNERS AND LOSERS? A. Because no other sector of the market performed anywhere near as well as technology over the past 12 months, you had to be selective. Most other sectors were a mixed bag. Underweighting consumer nondurable stocks relative to the S&P 500 helped the fund. Even so, Procter & Gamble, for example, fell significantly after reporting disappointing earnings amid a slow rate of improvement in worldwide demand for consumer products. Several stocks in the retail sector worked quite well, boosted by a continued strong U.S. economy. They included Home Depot, which also capitalized on diminished competition in its marketplace. In the media and leisure sector, Time Warner benefited from its announced merger with America Online. In finance, U.S. regional banks were hurt by rising interest rates, but those firms with direct exposure to the rising equity market through activities such as investment banking and underwriting did better. Citigroup is an example of the latter and made a significant contribution to the fund's returns. Q. BOB, WHAT'S YOUR OUTLOOK THROUGH THE REST OF THE YEAR? A. I remain concerned about stock valuations, and not just in technology. For example, many cyclical stocks - which tend to rise and fall with economic cycles - were rather expensive relative to historical measures at the end of the period and some financial services companies were not as cheap as they had been. Also, Y2K came and went without any ill effects and companies may build up inventories once again, but I believe strong growth in the U.S. economy is long in the tooth. At some point, that growth will slow, which could slow the communications and Internet expansion. I'll certainly look for buying opportunities as one sector or another languishes; that's proven successful in the past. As I like to say, I'll take what the market gives me. As always, I'll try to find investments that offer the dual qualities of strong earnings prospects and the opportunity for higher valuations. After all, as we've seen with the recent drop in technology stocks, some of the old rules of investing still apply. THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER AND DO NOT NECESSARILY REPRESENT THE VIEWS OF FIDELITY OR ANY OTHER PERSON IN THE FIDELITY ORGANIZATION. ANY SUCH VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED UPON MARKET OR OTHER CONDITIONS AND FIDELITY DISCLAIMS ANY RESPONSIBILITY TO UPDATE SUCH VIEWS. THESE VIEWS MAY NOT BE RELIED ON AS INVESTMENT ADVICE AND, BECAUSE INVESTMENT DECISIONS FOR A FIDELITY FUND ARE BASED ON NUMEROUS FACTORS, MAY NOT BE RELIED ON AS AN INDICATION OF TRADING INTENT ON BEHALF OF ANY FIDELITY FUND. (checkmark)FUND FACTS GOAL: to increase the value of the fund's shares over the long term by investing mainly in equity securities FUND NUMBER: 021 TRADING SYMBOL: FMAGX START DATE: May 2, 1963 SIZE: as of March 31, 2000, more than $109 billion MANAGER: Robert Stansky, since 1996; manager, Fidelity Growth Company Fund and Fidelity Advisor Equity Growth, 1987-1996; Fidelity Emerging Growth Fund 1990-1991; Fidelity Select Defense & Aerospace Portfolio 1984- 1985; joined Fidelity in 1983 BOB STANSKY ON INVESTING IN THE NEW ECONOMY: "Over the past 12 months, we've experienced what I would consider to be a once-in-a-generation event involving the so-called new economy stocks. We saw a phase of euphoria for raising capital through the stock market, and companies have been coming public much earlier in their life cycles than in recent years. Importantly, when valuing some of these companies, investors have `allowed' them significantly expanded time horizons between when they go public and how soon they'll become profitable. To my recollection, never before have the stocks of so many companies that aren't making money done so well. "While I do believe there is a lot of potential in investing in the build-out of communications systems and infrastructure and the Internet over the next several years, I would expect the market to approach these opportunities more rationally going forward. In fact, we already saw some signs of a less-forgiving investing environment around high-tech companies near the end of the period. While it would be fun to step forward 20 years and see how this all shakes out, for now I have to keep one eye on the rapid changes occurring in the marketplace, and another eye on how these changes line up with historical valuations." INVESTMENT CHANGES
TOP TEN STOCKS AS OF MARCH 31, 2000 % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6 MONTHS AGO General Electric Co. 4.7 4.7 Microsoft Corp. 4.1 4.6 Cisco Systems, Inc. 3.7 2.0 Home Depot, Inc. 2.9 2.6 Intel Corp. 2.8 1.5 Texas Instruments, Inc. 2.5 1.5 Citigroup, Inc. 2.4 2.1 Exxon Mobil Corp. 2.1 2.0 Time Warner, Inc. 2.0 1.3 Tyco International Ltd. 1.9 1.9 29.1 24.2 TOP FIVE MARKET SECTORS AS OF MARCH 31, 2000 % OF FUND'S NET ASSETS % OF FUND'S NET ASSETS 6 MONTHS AGO Technology 35.2 22.1 Finance 11.8 12.1 Retail & Wholesale 9.6 9.4 Health 7.9 9.2 Media & Leisure 7.6 6.5
ASSET ALLOCATION (% OF FUND'S NET ASSETS) AS OF MARCH 31, 2000 * AS OF SEPTEMBER 30, 1999** Stocks 98.4% Stocks 92.4% Short-Term Investments and Short-Term Investments and Net Other Assets 1.6% Net Other Assets 7.6% * FOREIGN INVESTMENTS 5.4% ** FOREIGN INVESTMENTS 4.1% Row: 1, Col: 1, Value: 98.40000000000001 Row: 1, Col: 1, Value: 92.40000000000001 Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 2, Value: 0.0 Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 3, Value: 0.0 Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 4, Value: 0.0 Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 5, Value: 0.0 Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 6, Value: 0.0 Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 7, Value: 0.0 Row: 1, Col: 8, Value: 1.6 Row: 1, Col: 8, Value: 7.6
INVESTMENTS MARCH 31, 2000 Showing Percentage of Net Assets
COMMON STOCKS - 98.4% SHARES VALUE (NOTE 1) (000S) AEROSPACE & DEFENSE - 1.1% AEROSPACE & DEFENSE - 1.0% Boeing Co. 2,908,600 $ 110,345 Honeywell International, Inc. 9,576,937 504,585 Textron, Inc. 1,911,400 116,356 United Technologies Corp. 4,631,600 292,659 1,023,945 DEFENSE ELECTRONICS - 0.0% Raytheon Co. Class B 777,080 13,793 SHIP BUILDING & REPAIR - 0.1% General Dynamics Corp. 2,041,800 101,580 TOTAL AEROSPACE & DEFENSE 1,139,318 BASIC INDUSTRIES - 1.0% CHEMICALS & PLASTICS - 0.5% E.I. du Pont de Nemours and 4,110,575 217,347 Co. Monsanto Co. 4,682,800 241,164 Praxair, Inc. 568,900 23,680 Trivest 1992 Special Fund Ltd. 26.6 (e) 2,516 484,707 IRON & STEEL - 0.1% Nucor Corp. 2,492,400 124,620 METALS & MINING - 0.2% Alcoa, Inc. 3,140,000 220,585 PACKAGING & CONTAINERS - 0.2% Corning, Inc. 1,100,000 213,400 Owens-Illinois, Inc. (a) 742,700 12,533 225,933 PAPER & FOREST PRODUCTS - 0.0% Kimberly-Clark Corp. 200,000 11,200 Louisiana-Pacific Corp. 1,932,600 26,815 38,015 TOTAL BASIC INDUSTRIES 1,093,860 CONSTRUCTION & REAL ESTATE - 0.6% BUILDING MATERIALS - 0.4% Lafarge Corp. (c) 4,516,810 107,274 Masco Corp. 8,565,200 175,587 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) CONSTRUCTION & REAL ESTATE - CONTINUED BUILDING MATERIALS - CONTINUED Southdown, Inc. 500,000 $ 29,500 USG Corp. 1,500,000 62,906 375,267 CONSTRUCTION - 0.0% Centex Corp. 600,000 14,288 Pulte Corp. 306,200 6,392 20,680 REAL ESTATE INVESTMENT TRUSTS - - 0.2% Equity Office Properties Trust 1,986,400 49,908 Equity Residential Properties 1,271,500 51,098 Trust (SBI) Host Marriott Corp. (c) 11,500,000 102,063 Public Storage, Inc. 1,136,300 23,862 226,931 TOTAL CONSTRUCTION & REAL 622,878 ESTATE DURABLES - 1.8% AUTOS, TIRES, & ACCESSORIES - 1.1% AutoNation, Inc. (a) 11,567,927 91,820 AutoZone, Inc. (a) 2,435,800 67,593 Danaher Corp. 2,356,349 120,174 Ford Motor Co. 12,073,100 554,608 General Motors Corp. 4,847,600 401,442 1,235,637 CONSUMER ELECTRONICS - 0.1% Black & Decker Corp. 3,958,500 148,691 HOME FURNISHINGS - 0.3% Leggett & Platt, Inc. (c) 12,516,700 269,109 TEXTILES & APPAREL - 0.3% Liz Claiborne, Inc. 2,547,800 116,721 NIKE, Inc. Class B 3,398,500 134,666 Polo Ralph Lauren Corp. Class 2,333,700 43,611 A (a)(c) Shaw Industries, Inc. 100,000 1,519 Warnaco Group, Inc. Class A 300,000 3,544 300,061 TOTAL DURABLES 1,953,498 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) ENERGY - 6.1% ENERGY SERVICES - 0.9% Baker Hughes, Inc. 3,000,000 $ 90,750 Halliburton Co. 7,099,600 291,084 Schlumberger Ltd. 7,296,300 558,167 Transocean Sedco Forex, Inc. 1,412,563 72,482 1,012,483 OIL & GAS - 5.2% Anadarko Petroleum Corp. (c) 6,410,000 247,987 Apache Corp. 2,959,715 147,246 BP Amoco PLC 24,753,870 218,917 BP Amoco PLC sponsored ADR 6,368,842 337,947 Burlington Resources, Inc. 2,952,525 109,243 Chevron Corp. 5,962,100 551,122 Conoco, Inc. Class B 8,092,088 207,360 Cooper Cameron Corp. (a) 1,671,500 111,782 Exxon Mobil Corp. 28,751,268 2,237,208 Occidental Petroleum Corp. 4,321,400 89,669 Royal Dutch Petroleum Co. (NY 7,932,700 456,626 Shares) Shell Transport & Trading Co. 13,327,100 108,977 PLC (Reg.) Sunoco, Inc. 100,000 2,738 Texaco, Inc. 6,352,000 340,626 The Coastal Corp. 4,384,000 201,664 Total Fina SA Class B 1,896,611 279,276 USX - Marathon Group 550,000 14,334 5,662,722 TOTAL ENERGY 6,675,205 FINANCE - 11.8% BANKS - 3.5% Bank of America Corp. 13,902,754 729,026 Bank of New York Co., Inc. 1,454,400 60,449 Capital One Financial Corp. 400,000 19,175 Chase Manhattan Corp. 15,186,200 1,324,047 Comerica, Inc. 2,321,000 97,192 FleetBoston Financial Corp. 10,210,083 372,668 Mellon Financial Corp. 800,000 23,600 Synovus Finanical Corp. 1,709,775 32,272 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED BANKS - CONTINUED U.S. Bancorp 6,611,600 $ 144,629 Wells Fargo & Co. 24,255,000 992,939 3,795,997 CREDIT & OTHER FINANCE - 3.5% American Express Co. 2,951,500 439,589 Associates First Capital 14,830,774 317,935 Corp. Class A Citigroup, Inc. 44,134,833 2,617,747 Concord EFS, Inc. (a) 1,500,000 34,406 Household International, Inc. 3,820,395 142,548 MBNA Corp. 1,800,000 45,900 Providian Financial Corp. 2,800,000 242,550 3,840,675 FEDERAL SPONSORED CREDIT - 1.4% Fannie Mae 16,281,100 918,865 Freddie Mac 12,911,600 570,531 SLM Holding Corp. 481,950 16,055 1,505,451 INSURANCE - 2.2% AFLAC, Inc. 4,454,800 202,972 American General Corp. 200,000 11,225 American International Group, 14,315,980 1,567,600 Inc. Berkshire Hathaway, Inc. 757 43,300 Class A (a) Hartford Financial Services 800,000 42,200 Group, Inc. John Hancock Financial 5,000,000 90,313 Services, Inc. Marsh & McLennan Companies, 2,448,200 270,067 Inc. The Chubb Corp. 1,000,000 67,563 UnumProvident Corp. 3,333,400 56,668 2,351,908 SAVINGS & LOANS - 0.0% Charter One Financial, Inc. 2,719,962 57,119 SECURITIES INDUSTRY - 1.2% Charles Schwab Corp. 2,350,000 133,509 Daiwa Securities Co. Ltd. 3,571,000 67,059 Goldman Sachs Group, Inc. 450,000 47,306 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) FINANCE - CONTINUED SECURITIES INDUSTRY - CONTINUED Morgan Stanley Dean Witter & 11,366,270 $ 927,061 Co. Nomura Securities Co. Ltd. 2,582,000 84,162 1,259,097 TOTAL FINANCE 12,810,247 HEALTH - 7.9% DRUGS & PHARMACEUTICALS - 5.9% American Home Products Corp. 13,495,200 723,680 Biogen, Inc. (a) 610,000 42,624 Bristol-Myers Squibb Co. 15,266,900 881,663 Elan Corp. PLC sponsored ADR 3,802,000 180,595 (a) Eli Lilly & Co. 17,488,500 1,101,776 Genentech, Inc. 2,306,875 350,645 Medarex, Inc. (a) 109,300 5,492 Merck & Co., Inc. 17,268,700 1,072,818 PE Corp. - Celera Genomics 229,600 21,023 Group (a) Pfizer, Inc. 5,309,200 194,118 Schering-Plough Corp. 20,587,700 756,598 Symyx Technologies, Inc. 38,500 1,660 Warner-Lambert Co. 11,834,100 1,153,825 XOMA Ltd. (a)(d) 3,030 19 6,486,536 MEDICAL EQUIPMENT & SUPPLIES - - 1.6% Abbott Laboratories 12,896,500 453,796 Baxter International, Inc. 300,000 18,806 Becton, Dickinson & Co. 1,419,500 37,351 Boston Scientific Corp. (a) 8,062,000 171,821 Cardinal Health, Inc. 8,297,114 380,630 Guidant Corp. (a) 800,000 47,050 Johnson & Johnson 6,100,100 427,388 Medtronic, Inc. 4,418,000 227,251 Selfcare, Inc. (a) 721,600 4,916 1,769,009 MEDICAL FACILITIES MANAGEMENT - - 0.4% Express Scripts, Inc. Class A 1,000,000 42,000 (a) HEALTHSOUTH Corp. (a) 12,352,200 68,709 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) HEALTH - CONTINUED MEDICAL FACILITIES MANAGEMENT - - CONTINUED United HealthCare Corp. 3,394,100 $ 202,373 Wellpoint Health Networks, 1,200,000 83,850 Inc. (a) 396,932 TOTAL HEALTH 8,652,477 INDUSTRIAL MACHINERY & EQUIPMENT - 5.1% ELECTRICAL EQUIPMENT - 4.8% Emerson Electric Co. 2,732,400 144,476 General Electric Co. 32,784,800 5,087,775 SLI, Inc. 519,000 8,823 Telaxis Communications Corp. 10,300 619 5,241,693 INDUSTRIAL MACHINERY & EQUIPMENT - 0.3% Caterpillar, Inc. 550,000 21,691 Deere & Co. 1,160,000 44,080 Illinois Tool Works, Inc. 3,760,000 207,740 Ingersoll-Rand Co. 1,352,850 59,864 333,375 POLLUTION CONTROL - 0.0% Republic Services, Inc. Class 3,200,000 35,000 A (a) TOTAL INDUSTRIAL MACHINERY & 5,610,068 EQUIPMENT MEDIA & LEISURE - 7.6% BROADCASTING - 4.7% CBS Corp. (a) 15,454,476 875,110 Charter Communications, Inc. 1,700,000 24,358 Clear Channel Communications, 8,500,000 587,031 Inc. (a) Comcast Corp. Class A 2,750,000 119,281 (special) Cox Communications, Inc. 2,589,400 125,586 Class A (a) EchoStar Communications Corp. 2,400,000 189,600 Class A (a) Grupo Televisa SA de CV 400,000 27,200 sponsored ADR (a) Hispanic Broadcasting Corp. 663,800 75,175 (a) Infinity Broadcasting Corp. 11,930,796 386,260 Class A (a) Mediacom Communications Corp. 188,000 2,620 MediaOne Group, Inc. (a) 3,950,000 319,950 Time Warner, Inc. 22,317,903 2,231,790 UnitedGlobalCom, Inc. (a) 1,100,000 82,569 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) MEDIA & LEISURE - CONTINUED BROADCASTING - CONTINUED Univision Communications, 595,000 $ 67,235 Inc. Class A (a) USA Networks, Inc. (a) 1,389,600 31,353 Wireless Facilities, Inc. 43,700 4,599 5,149,717 ENTERTAINMENT - 1.7% Alliance Gaming Corp. (a)(f) 5,072 12 Fox Entertainment Group, Inc. 1,988,000 59,516 Class A (a) News Corp. Ltd. sponsored ADR 3,700,000 208,125 Park Place Entertainment 3,729,200 43,119 Corp. (a) SFX Entertainment, Inc. Class 961,500 39,241 A (a) Viacom, Inc. Class B 18,408,800 971,064 (non-vtg.) (a) Walt Disney Co. 13,357,000 552,646 1,873,723 LODGING & GAMING - 0.1% Extended Stay America, Inc. 5,859,603 43,947 (a)(c) Marriott International, Inc. 855,000 26,933 Class A Starwood Hotels & Resorts 2,199,327 57,732 Worldwide, Inc. unit 128,612 PUBLISHING - 0.5% Gannett Co., Inc. 3,210,400 225,932 Harcourt General, Inc. 1,248,900 46,522 McGraw-Hill Companies, Inc. 1,926,000 87,633 Times Mirror Co. Class A 597,300 55,512 Tribune Co. 1,346,200 49,220 464,819 RESTAURANTS - 0.6% McDonald's Corp. 15,694,800 589,536 Tricon Global Restaurants, 1,200,000 37,275 Inc. (a) 626,811 TOTAL MEDIA & LEISURE 8,243,682 NONDURABLES - 2.3% BEVERAGES - 0.9% Anheuser-Busch Companies, 1,591,600 99,077 Inc. Coca-Cola Enterprises, Inc. 400,000 8,625 PepsiCo, Inc. 13,424,300 463,977 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) NONDURABLES - CONTINUED BEVERAGES - CONTINUED Seagram Co. Ltd. 3,800,000 $ 225,774 The Coca-Cola Co. 4,166,800 195,579 993,032 FOODS - 0.1% Bestfoods 1,000,000 46,813 General Mills, Inc. 400,000 14,475 61,288 HOUSEHOLD PRODUCTS - 0.8% Avon Products, Inc. 2,546,000 73,993 Clorox Co. 2,405,696 78,185 Estee Lauder Companies, Inc. 35,500 1,777 Gillette Co. 8,685,800 327,346 Procter & Gamble Co. 6,847,300 385,161 866,462 TOBACCO - 0.5% Philip Morris Companies, Inc. 24,663,400 521,014 TOTAL NONDURABLES 2,441,796 RETAIL & WHOLESALE - 9.6% APPAREL STORES - 1.2% Abercrombie & Fitch Co. Class 600,000 9,600 A (a) AnnTaylor Stores Corp. (a) 200,000 4,600 Gap, Inc. 15,429,300 768,572 The Limited, Inc. 9,582,900 403,680 TJX Companies, Inc. 6,096,800 135,273 Too, Inc. (a) 1,000,000 31,563 1,353,288 DRUG STORES - 0.3% CVS Corp. 9,931,786 373,063 Walgreen Co. 200,000 5,150 378,213 GENERAL MERCHANDISE STORES - 2.8% Consolidated Stores Corp. (a) 2,191,168 24,925 Costco Wholesale Corp. (a) 3,211,000 168,778 Federated Department Stores, 3,415,700 142,605 Inc. (a) Kohls Corp. (a) 300,000 30,750 Neiman Marcus Group, Inc. (a) 668,700 18,598 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) RETAIL & WHOLESALE - CONTINUED GENERAL MERCHANDISE STORES - CONTINUED Target Corp. 14,094,300 $ 1,053,549 Wal-Mart Stores, Inc. 28,345,000 1,573,148 3,012,353 GROCERY STORES - 0.6% Kroger Co. (a) 3,810,000 66,913 Safeway, Inc. (a) 11,754,400 531,887 598,800 RETAIL & WHOLESALE, MISCELLANEOUS - 4.7% Bed Bath & Beyond, Inc. (a) 600,000 23,625 Best Buy Co., Inc. (a) 2,800,000 240,800 Circuit City Stores, Inc. - 1,940,000 118,098 Circuit City Group Home Depot, Inc. 49,507,275 3,193,219 Intimate Brands, Inc. Class A 1,444,815 59,237 Lowe's Companies, Inc. 14,547,000 849,181 Office Depot, Inc. (a) 12,066,600 139,520 Staples, Inc. (a) 21,800,000 436,000 Tandy Corp. 895,200 45,431 Williams-Sonoma, Inc. (a) 762,500 23,638 5,128,749 TOTAL RETAIL & WHOLESALE 10,471,403 SERVICES - 1.2% ADVERTISING - 0.8% DoubleClick, Inc. (a) 1,765,000 165,248 Internet Capital Group, Inc. 285,000 25,739 Omnicom Group, Inc. 7,451,576 696,257 ValueClick, Inc. 37,700 789 888,033 SERVICES - 0.4% Cendant Corp. (a) 15,787,000 292,060 Expedia, Inc. Class A 152,300 3,236 FreeMarkets, Inc. 109,200 13,213 Gartner Group, Inc. Class B 319,400 4,252 (a) COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) SERVICES - CONTINUED SERVICES - CONTINUED H&R Block, Inc. 1,026,900 $ 45,954 Manpower, Inc. 2,905,900 103,159 461,874 TOTAL SERVICES 1,349,907 TECHNOLOGY - 35.2% COMMUNICATIONS EQUIPMENT - 7.6% 3Com Corp. (a) 500,000 27,813 ADC Telecommunications, Inc. 1,000,000 53,875 (a) Avanex Corp. 37,700 5,721 Cisco Systems, Inc. (a) 52,800,000 4,082,100 Comverse Technology, Inc. (a) 1,325,000 250,425 Digital Island, Inc. 496,000 30,225 Lucent Technologies, Inc. 23,220,198 1,410,627 Next Level Communications, 52,300 5,688 Inc. Nokia AB sponsored ADR 5,322,800 1,156,378 Nortel Networks Corp. 5,100,000 640,865 Sycamore Networks, Inc. 2,439,400 314,683 Telefonaktiebolaget LM 2,100,000 197,006 Ericsson sponsored ADR Tellabs, Inc. (a) 1,400,000 88,178 8,263,584 COMPUTER SERVICES & SOFTWARE - - 10.1% Adobe Systems, Inc. 200,000 22,263 Aether Systems, Inc. 329,900 59,877 Akamai Technologies, Inc. 571,900 91,969 America Online, Inc. (a) 15,860,000 1,066,585 Ariba, Inc. 400,000 83,850 At Home Corp. Series A (a) 3,890,422 128,141 Automatic Data Processing, 2,400,000 115,800 Inc. BEA Systems, Inc. (a) 1,500,000 110,063 BMC Software, Inc. (a) 2,817,700 139,124 BroadVision, Inc. (a) 403,800 18,121 Ceridian Corp. (a) 2,601,400 49,914 Citrix Systems, Inc. (a) 720,280 47,719 CMGI, Inc. (a) 400,000 45,325 Computer Associates 3,152,800 186,606 International, Inc. Computer Sciences Corp. (a) 653,200 51,684 Compuware Corp. (a) 4,150,000 87,409 Covad Communications Group, 1,519,800 110,186 Inc. (a) COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTER SERVICES & SOFTWARE - - CONTINUED Digex, Inc. Class A 906,900 $ 100,609 EarthLink, Inc. (a) 161,500 3,139 Electronic Data Systems Corp. 950,000 60,978 Equant NV (Reg.) (a) 1,000,000 85,063 Equifax, Inc. 870,170 21,972 Exodus Communications, Inc. 400,000 56,200 (a) First Data Corp. 4,674,000 206,825 Galileo International, Inc. 700,000 16,844 Healtheon/Web Maryland Corp. 1,000,000 23,000 (a) Infonet Services Corp. Class B 445,600 10,082 InfoSpace.com, Inc. (a) 100,000 14,544 InterVU, Inc. (a) 300,000 27,000 Intuit, Inc. (a) 1,000,000 54,375 Keane, Inc. (a) 600,000 15,150 Lycos, Inc. (a)(c) 5,698,400 400,313 Metasolv Software, Inc. 79,200 4,678 Microsoft Corp. (a) 41,845,400 4,446,074 NBC Internet, Inc. Class A (a) 780,600 33,615 New Era of Networks, Inc. (a) 200,000 7,850 Oracle Corp. (a) 16,800,000 1,311,450 Parametric Technology Corp. 3,705,000 78,037 (a) Phone.com, Inc. 1,100,000 179,438 Priceline.com, Inc. 1,038,000 83,040 Redback Networks, Inc. 1,751,800 525,431 Sabre Holdings Corp. Class A 995,886 36,786 Siebel Systems, Inc. (a) 1,400,000 167,213 Software.com, Inc. 210,000 27,064 TIBCO Software, Inc. 136,800 11,149 Usinternetworking, Inc. 97,700 3,786 VERITAS Software Corp. (a) 1,175,000 153,925 Viant Corp. 100,000 3,350 Yahoo!, Inc. (a) 2,800,000 479,850 11,063,466 COMPUTERS & OFFICE EQUIPMENT - - 6.1% Adaptec, Inc. (a) 200,000 7,725 Alteon Websystems, Inc. 300,000 24,600 Ampex Corp. Class A (a) 16,505 52 Ancor Communications, Inc. (a) 200,000 8,225 Apple Computer, Inc. (a) 500,000 67,906 ArrowPoint Communication, 37,600 4,455 Inc. COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED COMPUTERS & OFFICE EQUIPMENT - - CONTINUED Brocade Communications 700,000 $ 125,519 Systems, Inc. Compaq Computer Corp. 9,700,000 258,263 Dell Computer Corp. (a) 10,176,800 548,911 EMC Corp. (a) 11,120,964 1,390,121 Emulex Corp. (a) 100,000 10,913 Hewlett-Packard Co. 4,262,000 564,981 International Business 11,706,800 1,381,402 Machines Corp. Juniper Networks, Inc. 3,104,500 818,230 Lexmark International Group, 200,000 21,150 Inc. Class A (a) Network Appliance, Inc. (a) 340,000 28,135 Oak Technology, Inc. (a) 350,000 6,738 Pitney Bowes, Inc. 5,208,400 232,750 Sun Microsystems, Inc. (a) 11,900,000 1,115,067 Tech Data Corp. (a) 788,800 25,932 6,641,075 ELECTRONIC INSTRUMENTS - 0.3% Applied Materials, Inc. (a) 1,300,000 122,525 DBT Online, Inc. (a) 1,000,000 18,563 Kulicke & Soffa Industries, 200,000 12,813 Inc. (a) Thermo Electron Corp. (a) 2,871,500 58,507 Waters Corp. (a) 1,208,100 115,072 327,480 ELECTRONICS - 11.1% Altera Corp. (a) 200,000 17,850 Analog Devices, Inc. (a) 2,707,732 218,142 Broadcom Corp. Class A (a) 700,000 170,013 Conexant Systems, Inc. (a) 500,000 35,500 Flextronics International 2,000,000 140,875 Ltd. (a) Inktomi Corp. (a) 3,521,400 686,673 Intel Corp. 22,797,600 3,007,858 Intersil Holding Corp. 637,500 32,951 JDS Uniphase Corp. (a) 3,720,000 448,493 Linear Technology Corp. 7,053,200 387,926 LSI Logic Corp. (a) 600,000 43,575 Maxim Integrated Products, 3,178,400 225,865 Inc. (a) Micron Technology, Inc. (a) 1,817,000 228,942 Motorola, Inc. 8,216,200 1,169,781 PMC-Sierra, Inc. (a) 1,400,000 285,163 QLogic Corp. (a) 200,000 27,100 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) TECHNOLOGY - CONTINUED ELECTRONICS - CONTINUED Solectron Corp. (a) 2,460,400 $ 98,570 Texas Instruments, Inc. 17,117,600 2,738,816 Tyco International Ltd. 42,427,412 2,116,067 Vitesse Semiconductor Corp. 400,000 38,500 (a) 12,118,660 TOTAL TECHNOLOGY 38,414,265 TRANSPORTATION - 0.1% AIR TRANSPORTATION - 0.0% AMR Corp. 1,378,100 43,927 Southwest Airlines Co. 200,000 4,163 48,090 TRUCKING & FREIGHT - 0.1% CNF Transportation, Inc. 592,000 16,428 Swift Transportation Co., 3,319,875 68,057 Inc. (a)(c) 84,485 TOTAL TRANSPORTATION 132,575 UTILITIES - 7.0% CELLULAR - 1.4% ALLTEL Corp. 264,300 16,667 China Telecom (Hong Kong) 350,000 62,038 Ltd. sponsored ADR (a) Nextel Communications, Inc. 2,550,000 378,038 Class A (a) Nextel Partners, Inc. 146,500 4,249 QUALCOMM, Inc. (a) 1,265,700 188,985 Sprint Corp. - PCS Group 3,600,000 235,125 Series 1 (a) TeleCorp PCS, Inc. 19,400 1,004 Vodafone AirTouch PLC 34,388,154 191,069 Vodafone AirTouch PLC 7,464,500 414,746 sponsored ADR VoiceStream Wireless Corp. (a) 446,987 57,578 1,549,499 ELECTRIC UTILITY - 0.0% Montana Power Co. 200,000 12,800 GAS - 0.4% Enron Corp. 5,808,700 434,926 TELEPHONE SERVICES - 5.2% Allegiance Telecom, Inc. (a) 600,000 48,375 COMMON STOCKS - CONTINUED SHARES VALUE (NOTE 1) (000S) UTILITIES - CONTINUED TELEPHONE SERVICES - CONTINUED Allied Riser Communications 155,900 $ 5,418 Corp. AT&T Corp. 27,952,851 1,572,348 Bell Atlantic Corp. 8,579,100 524,397 BellSouth Corp. 12,157,400 571,398 Carrier1 International SA ADR 331,100 6,415 GTE Corp. 7,503,200 532,727 iBasis, Inc. 134,200 5,511 Illuminet Holdings, Inc. 117,400 5,780 Intermedia Communications, 541,000 26,137 Inc. (a) ITXC Corp. 100,000 4,706 Level 3 Communications, Inc. 1,000,000 105,750 (a) MCI WorldCom, Inc. (a) 23,045,024 1,044,228 McLeodUSA, Inc. Class A (a) 400,000 33,925 Metromedia Fiber Network, 1,056,800 102,245 Inc. Class A (a) NEXTLINK Communications, Inc. 300,000 37,106 Class A (a) Qwest Communications 3,777,400 183,204 International, Inc. (a) SBC Communications, Inc. 15,747,214 661,383 Sprint Corp. - FON Group 2,964,400 186,757 Williams Communications 311,400 16,134 Group, Inc. 5,673,944 TOTAL UTILITIES 7,671,169 TOTAL COMMON STOCKS 107,282,348 (Cost $56,991,559) PREFERRED STOCKS - 0.0% CONVERTIBLE PREFERRED STOCKS - - 0.0% BASIC INDUSTRIES - 0.0% CHEMICALS & PLASTICS - 0.0% Sealed Air Corp. Series A, 416,242 21,619 $2.00 NONCONVERTIBLE PREFERRED STOCKS - 0.0% TECHNOLOGY - 0.0% COMPUTERS & OFFICE EQUIPMENT - - 0.0% Ampex Corp. 8% non-cumulative 1,201 1,874 TOTAL PREFERRED STOCKS 23,493 (Cost $20,487)
U.S. TREASURY OBLIGATIONS - 0.1% MOODY'S RATINGS (UNAUDITED) PRINCIPAL AMOUNT (000S) VALUE (NOTE 1) (000S) U.S. Treasury Bills, yield at - $ 80,000 $ 79,519 date of purchase 5.64% 5/11/00 (Cost $79,494) COMMERCIAL MORTGAGE SECURITIES - 0.0% Bardell Associates Note Trust - 3,927 4,172 12.5%, 11/1/08 (f) (Cost $3,992)
CASH EQUIVALENTS - 1.9% MATURITY AMOUNT (000S) Investments in repurchase agreements (U.S. Treasury Obligations), in a joint trading account at: 6%, dated 3/31/00 due 4/3/00 $ 3,877 3,875 6.11%, dated 3/31/00 due 30,898 30,882 4/3/00 SHARES Taxable Central Cash Fund, 2,079,157,726 2,079,158 5.85% (b) TOTAL CASH EQUIVALENTS 2,113,915 (Cost $2,113,915) TOTAL INVESTMENT PORTFOLIO - 109,503,447 100.4% (Cost $59,209,447) NET OTHER ASSETS - (0.4)% (408,499) NET ASSETS - 100% $ 109,094,948
LEGEND (a) Non-income producing (b) The rate quoted is the annualized seven-day yield of the fund at period end. (c) Affiliated company (d) 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 $19,000 or 0.0% of net assets. (e) Share amount represents number of units held. (f) 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) Alliance Gaming Corp. 7/28/98 $ - Bardell Associates Note 4/19/94 $ 3,992 Trust 12.5%, 11/1/08 INCOME TAX INFORMATION At March 31, 2000, the aggregate cost of investment securities for income tax purposes was $59,438,243,000. Net unrealized appreciation aggre- gated $50,065,204,000, of which $53,297,313,000 related to appreciated investment securities and $3,232,109,000 related to depreciated investment securities. The fund hereby designates approxi- mately $7,127,117,000 as a capital gain dividend for the purpose of the dividend paid deduction. FINANCIAL STATEMENTS STATEMENT OF ASSETS AND LIABILITIES AMOUNTS IN THOUSANDS (EXCEPT PER-SHARE AMOUNTS) MARCH 31, 2000 ASSETS Investment in securities, at $ 109,503,447 value (including repurchase agreements of $34,757) (cost $59,209,447) - See accompanying schedule Cash 1 Receivable for investments 405,729 sold Receivable for fund shares 195,579 sold Dividends receivable 76,084 Interest receivable 7,915 Other receivables 6,157 TOTAL ASSETS 110,194,912 LIABILITIES Payable for investments $ 271,477 purchased Payable for fund shares 200,605 redeemed Accrued management fee 63,438 Other payables and accrued 20,420 expenses Collateral on securities 544,024 loaned, at value TOTAL LIABILITIES 1,099,964 NET ASSETS $ 109,094,948 Net Assets consist of: Paid in capital $ 56,424,159 Undistributed net investment 70,989 income Accumulated undistributed net 2,306,111 realized gain (loss) on investments and foreign currency transactions Net unrealized appreciation 50,293,689 (depreciation) on investments and assets and liabilities in foreign currencies NET ASSETS, for 761,533 $ 109,094,948 shares outstanding NET ASSET VALUE and $143.26 redemption price per share ($109,094,948 (divided by) 761,533 shares) Maximum offering price per $147.69 share (100/97.00 of $143.26) STATEMENT OF OPERATIONS AMOUNTS IN THOUSANDS YEAR ENDED MARCH 31, 2000 INVESTMENT INCOME $ 874,317 Dividends (including $19,374 received from affiliated issuers) Interest 295,015 Security lending 3,746 TOTAL INCOME 1,173,078 EXPENSES Management fee Basic fee $ 565,221 Performance adjustment (11,228) Transfer agent fees 167,997 Accounting and security 2,068 lending fees Non-interested trustees' 461 compensation Custodian fees and expenses 1,990 Registration fees 3,898 Audit 460 Legal 1,233 Interest 1 Reports to shareholders 2,297 Miscellaneous 137 Total expenses before 734,535 reductions Expense reductions (9,986) 724,549 NET INVESTMENT INCOME 448,529 REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) on: Investment securities 5,646,703 (including realized gain of $47,626 on sales of investments in affiliated issuers) Foreign currency transactions (848) Futures contracts (20,806) 5,625,049 Change in net unrealized appreciation (depreciation) on: Investment securities 13,131,582 Assets and liabilities in 54 13,131,636 foreign currencies NET GAIN (LOSS) 18,756,685 NET INCREASE (DECREASE) IN $ 19,205,214 NET ASSETS RESULTING FROM OPERATIONS
STATEMENT OF CHANGES IN NET ASSETS AMOUNTS IN THOUSANDS YEAR ENDED MARCH 31, 2000 YEAR ENDED MARCH 31, 1999 INCREASE (DECREASE) IN NET ASSETS Operations Net investment $ 448,529 $ 497,762 income Net realized gain (loss) 5,625,049 7,011,764 Change in net unrealized 13,131,636 10,747,841 appreciation (depreciation) NET INCREASE (DECREASE) IN 19,205,214 18,257,367 NET ASSETS RESULTING FROM OPERATIONS Distributions to shareholders (538,548) (449,343) From net investment income From net realized gain (8,240,210) (3,441,624) TOTAL DISTRIBUTIONS (8,778,758) (3,890,967) Share transactions Net 19,790,882 14,971,374 proceeds from sales of shares Reinvestment of distributions 8,608,613 3,818,924 Cost of shares redeemed (20,445,861) (14,410,125) NET INCREASE (DECREASE) IN 7,953,634 4,380,173 NET ASSETS RESULTING FROM SHARE TRANSACTIONS TOTAL INCREASE (DECREASE) 18,380,090 18,746,573 IN NET ASSETS NET ASSETS Beginning of period 90,714,858 71,968,285 End of period (including $ 109,094,948 $ 90,714,858 undistributed net investment income of $70,989 and $178,509, respectively) OTHER INFORMATION Shares Sold 151,936 132,746 Issued in reinvestment of 67,297 34,759 distributions Redeemed (156,828) (129,759) Net increase (decrease) 62,405 37,746
FINANCIAL HIGHLIGHTS YEARS ENDED MARCH 31, 2000 1999 1998 1997 1996 SELECTED PER-SHARE DATA Net asset value, beginning $ 129.75 $ 108.82 $ 80.20 $ 87.52 $ 72.44 of period Income from Investment Operations Net investment income .59 C .73 C .73 C 1.38 C .79 Net realized and unrealized 25.04 26.02 34.35 5.25 19.57 gain (loss) Total from investment 25.63 26.75 35.08 6.63 20.36 operations Less Distributions From net investment income (.73) (.67) (1.25) (1.10) (.59) From net realized gain (11.39) (5.15) (5.21) (12.85) (4.69) Total distributions (12.12) (5.82) (6.46) (13.95) (5.28) Net asset value, end of period $ 143.26 $ 129.75 $ 108.82 $ 80.20 $ 87.52 TOTAL RETURN A, B 21.11% 25.63% 45.41% 9.11% 28.43% RATIOS AND SUPPLEMENTAL DATA Net assets, end of period $ 109,095 $ 90,715 $ 71,968 $ 51,243 $ 56,179 (in millions) Ratio of expenses to average .75% .62% .62% .66% .95% net assets Ratio of expenses to average .74% D .60% D .61% D .64% D .92% D net assets after expense reductions Ratio of net investment .46% .66% .77% 1.75% .95% income to average net assets Portfolio turnover rate 28% 37% 34% 67% 155%
A THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN. B TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE. C NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD. D FMR OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S EXPENSES. NOTES TO FINANCIAL STATEMENTS For the period ended March 31, 2000 1. SIGNIFICANT ACCOUNTING POLICIES. Fidelity Magellan Fund (the fund) is registered under the Investment Company Act of 1940, as amended, as an open-end management investment company organized as a Massachusetts business trust and is authorized to issue an unlimited number of shares. Effective the close of business on September 30, 1997, the fund was closed to new accounts. The financial statements have been prepared in conformity with generally accepted accounting principles which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund: SECURITY VALUATION. Securities for which exchange quotations are readily available are valued at the last sale price, or if no sale price, at the closing bid price. Foreign securities are valued based on quotations from the principal market in which such securities are normally traded. If trading or events occurring in other markets after the close of the principal market in which foreign securities are traded, and before the close of the business of the fund, are expected to materially affect the value of those securities, then they are valued at their fair value taking this trading or these events into account. Fair value is determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Securities (including restricted securities) for which exchange quotations are not readily available (and in certain cases debt securities which trade on an exchange) are valued primarily using dealer-supplied valuations or at their fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued at amortized cost or original cost plus accrued interest, both of which approximate current value. FOREIGN CURRENCY TRANSLATION. The accounting records of the fund are maintained in U.S. dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing rates of exchange at period end. Purchases and sales of securities, income receipts and expense payments are translated into U.S. dollars at the prevailing exchange rate on the respective dates of the transactions. Net realized gains and losses on foreign currency transactions represent net gains and losses from sales and maturities of foreign currency contracts, disposition of foreign currencies, the difference between the amount of net investment income accrued and the U.S. dollar amount actually received, and gains and losses between trade and settlement date on purchases and sales of securities. The effects of changes in foreign currency exchange rates on investments in securities are included with the net realized and unrealized gain or loss on investment securities. INCOME TAXES. As a qualified regulated investment company under Subchapter M of the Internal Revenue Code, the fund is not subject to income taxes to the extent that it distributes substantially all of its taxable income for its fiscal year. 1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED INCOME TAXES - CONTINUED The schedule of investments includes information regarding income taxes under the caption "Income Tax Information." INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date, except certain dividends from foreign securities where the ex-dividend date may have passed, are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain. 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. Deferred amounts remain in the fund until distributed in accordance with the Plan. DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the ex-dividend date. Income and capital gain distributions are determined in accordance with income tax regulations which may differ from generally accepted accounting principles. These differences, which may result in distribution reclassifications, are primarily due to differing treatments for litigation proceeds, futures transactions, foreign currency transactions, partnerships, non-taxable dividends and losses deferred due to wash sales. The fund also utilized earnings and profits distributed to shareholders on redemption of shares as a part of the dividends paid deduction for income tax purposes. Permanent book and tax basis differences relating to shareholder distributions will result in reclassifications to paid in capital. Undistributed net investment income and accumulated undistributed net realized gain (loss) on investments and foreign currency transactions may include temporary book and tax basis differences which will reverse in a subsequent period. Any taxable income or gain remaining at fiscal year end is distributed in the following year. SECURITY TRANSACTIONS. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. 2. OPERATING POLICIES. FOREIGN CURRENCY CONTRACTS. The fund generally uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms. The U.S. dollar value of foreign currency contracts is determined using contractual currency exchange rates established at the time of each trade. 2. OPERATING POLICIES - CONTINUED JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the Securities and Exchange Commission (the SEC), the fund, along with other affiliated entities of Fidelity Management & Research Company (FMR), may transfer uninvested cash balances into one or more joint trading accounts. These balances are invested in one or more repurchase agreements for U.S. Treasury or Federal Agency obligations. REPURCHASE AGREEMENTS. The underlying U.S. Treasury, Federal Agency, or other obligations found to be satisfactory by FMR are transferred to an account of the fund, or to the Joint Trading Account, at a bank custodian. The securities are marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest). FMR, the fund's investment adviser, is responsible for determining that the value of the underlying securities remains in accordance with the market value requirements stated above. TAXABLE CENTRAL CASH FUND. Pursuant to an Exemptive Order issued by the SEC, the fund may invest in the Taxable Central Cash Fund (the Cash Fund) managed by Fidelity Investments Money Management, Inc., an affiliate of FMR. The Cash Fund is an open-end money market fund available only to investment companies and other accounts managed by FMR and its affiliates. The Cash Fund seeks preservation of capital, liquidity, and current income. Income distributions from the Cash Fund are declared daily and paid monthly from net interest income. Income distributions earned by the fund are recorded as interest income in the accompanying financial statements. FUTURES CONTRACTS. The fund may use futures contracts to manage its exposure to the stock market. 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. Losses may arise from changes in the value of the underlying instruments or if the counterparties 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 is permitted to invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. At the end of the period, restricted securities (excluding 144A issues) amounted to $4,184,000 or 0.0% of net assets. 3. PURCHASES AND SALES OF INVESTMENTS. Purchases and sales of securities, other than short-term securities, aggregated $29,495,667,000 and $25,738,460,000, respectively. The market value of futures contracts opened and closed during the period amounted to $3,961,394,000 and $3,940,588,000, respectively. 4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES. MANAGEMENT FEE. As the fund's investment adviser, FMR receives a monthly basic fee that is calculated on the basis of a group fee rate plus a fixed individual fund fee rate applied to the average net assets of the fund. The group fee rate is the weighted average of a series of rates and is based on the monthly average net assets of all the mutual funds advised by FMR. The rates ranged from .2167% to .5200% for the period. The annual individual fund fee rate is .30%. In the event that these rates were lower than the contractual rates in effect during the period, FMR voluntarily implemented the above rates, as they resulted in the same or a lower management fee. The basic fee is subject to a performance adjustment (up to a maximum of (plus/minus).20% of the fund's average net assets over the performance period) based on the fund's investment performance as compared to the appropriate index over a specified period of time. For the period, the management fee was equivalent to an annual rate of .57% of average net assets after the performance adjustment. SALES LOAD. For the period, Fidelity Distributors Corporation (FDC), an affiliate of FMR and the general distributor of the fund, received sales charges of $11,728,000 on sales of shares of the fund of which $11,712,000 was retained. TRANSFER AGENT FEES. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, is the fund's transfer, dividend disbursing and shareholder servicing agent. FSC receives account fees and asset-based fees that vary according to account size and type of account. FSC pays for typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees were equivalent to an annual rate of .17% 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. BROKERAGE COMMISSIONS. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of FMR. The commissions paid to these affiliated firms were $1,622,000 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, the fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. At period end, the value of the securities loaned amounted to $529,666,000. The fund received cash collateral of $544,024,000 which was invested in cash equivalents. 6. BANK BORROWINGS. The fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. The average daily loan balance during the period for which the loan was outstanding amounted to $4,963,000. The weighted average interest rate was 6.10%. 7. EXPENSE REDUCTIONS. FMR has directed certain portfolio trades to brokers who paid a portion of the fund's expenses. For the period, the fund's expenses were reduced by $4,377,000 under this arrangement. 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 a portion of the fund's expenses. During the period, the fund's custodian and transfer agent fees were reduced by $13,000 and $5,596,000, respectively, under these arrangements. 8. TRANSACTIONS WITH AFFILIATED COMPANIES. An affiliated company is a company in which the fund has ownership of at least 5% of the voting securities. Transactions during the period with companies which are or were affiliates are as follows:
SUMMARY OF TRANSACTIONS WITH AFFILIATED COMPANIES AFFILIATE PURCHASE COST SALES COST DIVIDEND INCOME VALUE Anadarko Petroleum Corp. $ - $ 2,774 $ 1,287 $ 247,987 Black & Decker Corp. - 13,007 527 - Case Corp. - 5,494 - - Extended Stay America, Inc. - - - 43,947 Host Marriott Services Corp. - 5,639 - - Host Marriott Corp. - 9,682 9,876 102,063 Lafarge Corp. 2,822 1,739 2,681 107,274 Landstar System, Inc. - 1,987 - - Leggett & Platt, Inc. 3,262 1,163 4,557 269,109 Lycos, Inc. 21,740 - - 400,313 Oakwood Homes Corp. - 16,301 110 - Polo Ralph Lauren Corp. Class - - - 43,611 A Pulte Corp. - 8,976 336 - Rambus, Inc. 1,371 12,934 - - Swift Transportation Co., Inc. - 2,307 - 68,057 Synetic, Inc. - 7,096 - - TOTALS $ 29,195 $ 89,099 $ 19,374 $ 1,282,361
REPORT OF INDEPENDENT ACCOUNTANTS To the Trustees and the Shareholders of Fidelity Magellan Fund: In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Fidelity Magellan Fund at March 31, 2000, and the results of its operations, the changes in its net assets and the financial highlights for the periods indicated, in conformity with accounting principles generally accepted in the United States. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fidelity Magellan Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with auditing standards generally accepted in the United States which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at March 31, 2000 by correspondence with the custodian and brokers, provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP Boston, Massachusetts May 5, 2000 DISTRIBUTIONS The Board of Trustees of Fidelity Magellan Fund voted to pay on May 8, 2000, to shareholders of record at the opening of business on May 5, 2000, a distribution of $2.83 per share derived from capital gains realized from sales of portfolio securities and a dividend of $.07 per share from net investment income. The fund hereby designates 100% of the long-term capital gain dividends distributed during the fiscal year as 20%-rate capital gain dividends. A total of 40% of the dividends distributed during the fiscal year qualifies for the dividends-received deduction for corporate shareholders. The fund will notify shareholders in January 2001 of amounts for use in preparing 2000 income tax returns. PROXY VOTING RESULTS A special meeting of the fund's shareholders was held on April 19, 2000. The results of votes taken among shareholders on proposals before them are reported below. Each vote reported represents one dollar of net asset value held on the record date for the meeting. PROPOSAL 1 To elect as Trustees the following twelve nominees.* # OF % OF SHARES VOTED SHARES VOTED RALPH F. COX Affirmative 47,778,566,958.75 97.804 Affirmative 1,072,956,696.00 2.196 TOTAL 48,851,523,654.75 100.000 PHYLLIS BURKE DAVIS Affirmative 47,762,904,985.29 97.772 Withheld 1,088,618,669.46 2.228 TOTAL 48,851,523,654.75 100.000 ROBERT M. GATES Affirmative 47,752,919,504.85 97.751 Withheld 1,098,604,149.90 2.249 TOTAL 48,851,523,654.75 100.000 EDWARD C. JOHNSON 3D Affirmative 47,787,170,484.65 97.821 Withheld 1,064,353,170.10 2.179 TOTAL 48,851,523,654.75 100.000 DONALD J. KIRK Affirmative 47,796,061,087.46 97.839 Withheld 1,055,462,567.29 2.161 TOTAL 48,851,523,654.75 100.000 NED C. LAUTENBACH Affirmative 47,818,648,404.06 97.886 Withheld 1,032,875,250.69 2.114 TOTAL 48,851,523,654.75 100.000 # OF % OF SHARES VOTED SHARES VOTED PETER S. LYNCH Affirmative 47,822,482,277.60 97.894 Withheld 1,029,041,377.15 2.106 TOTAL 48,851,523,654.75 100.000 WILLIAM O. MCCOY Affirmative 47,794,383,910.29 97.836 Withheld 1,057,139,744.46 2.164 TOTAL 48,851,523,654.75 100.000 GERALD C. MCDONOUGH Affirmative 47,733,985,082.40 97.712 Withheld 1,117,538,572.35 2.288 TOTAL 48,851,523,654.75 100.000 MARVIN L. MANN Affirmative 47,802,567,997.59 97.853 Withheld 1,048,955,657.16 2.147 TOTAL 48,851,523,654.75 100.000 ROBERT C. POZEN Affirmative 47,809,996,145.70 97.868 Withheld 1,041,527,509.05 2.132 TOTAL 48,851,523,654.75 100.000 THOMAS R. WILLIAMS Affirmative 47,742,665,876.65 97.730 Withheld 1,108,857,778.10 2.270 TOTAL 48,851,523,654.75 100.000 PROPOSAL 2 To ratify the selection of PricewaterhouseCoopers LLP as independent accountants of the fund. # OF % OF SHARES VOTED SHARES VOTED Affirmative 46,744,569,034.06 95.687 Against 694,581,708.84 1.422 Abstain 1,412,372,911.85 2.891 TOTAL 48,851,523,654.75 100.000 PROPOSAL 3 To adopt an Amended and Restated Declaration of Trust.* # OF % OF SHARES VOTED SHARES VOTED Affirmative 44,286,749,798.39 90.656 Against 2,436,160,884.26 4.987 Abstain 2,128,612,972.10 4.357 TOTAL 48,851,523,654.75 100.000 PROPOSAL 4 To approve an amended management contract for the fund. # OF % OF SHARES VOTED SHARES VOTED Affirmative 43,972,875,638.05 90.013 Against 2,653,284,540.29 5.432 Abstain 2,225,363,476.41 4.555 TOTAL 48,851,523,654.75 100.000 PROPOSAL 5 To approve an amended sub-advisory agreement with Fidelity Management & Research (U.K.) Inc. for the fund. # OF % OF SHARES VOTED SHARES VOTED Affirmative 44,242,186,686.46 90.565 Against 2,289,144,347.16 4.686 Abstain 2,320,192,621.13 4.749 TOTAL 48,851,523,654.75 100.000 PROPOSAL 6 To approve an amended sub-advisory agreement with Fidelity Management & Research (Far East) Inc. for the fund. # OF % OF SHARES VOTED SHARES VOTED Affirmative 44,160,792,119.39 90.398 Against 2,344,891,893.67 4.800 Abstain 2,345,839,641.69 4.802 TOTAL 48,851,523,654.75 100.000 PROPOSAL 7 To approve a Distribution and Service Plan pursuant to Rule 12b-1 for the fund. # OF % OF SHARES VOTED SHARES VOTED Affirmative 44,508,717,920.32 91.110 Against 1,881,369,236.04 3.851 Abstain 2,461,436,498.39 5.039 TOTAL 48,851,523,654.75 100.000 PROPOSAL 8 To amend the fund's fundamental limitation concerning diversification to permit increased investment in the securities of any single issuer. # OF % OF SHARES VOTED SHARES VOTED Affirmative 43,328,804,685.14 88.695 Against 3,287,061,424.32 6.729 Abstain 2,235,657,545.29 4.576 TOTAL 48,851,523,654.75 100.000 PROPOSAL 9 To amend the fund's fundamental limitation concerning diversification to exclude securities of other investment companies from the limitation. # OF % OF SHARES VOTED SHARES VOTED Affirmative 43,577,348,098.33 89.204 Against 2,889,397,470.84 5.914 Abstain 2,384,778,085.58 4.882 TOTAL 48,851,523,654.75 100.000 * DENOTES TRUST-WIDE PROPOSALS AND VOTING RESULTS. 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 (FASTSM) 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 If you are not currently on the Internet, call EarthLink Sprint at 1-800-288-2967, and be sure to ask for registration number SMD004 to receive a special Fidelity package that includes 30 days of free Internet access. EarthLink is North America's #1 independent Internet access provider. (COMPUTER_GRAPHIC) FIDELITY ON-LINE XPRESS+(registered trademark) Fidelity On-line Xpress+ software for Windows combines comprehensive portfolio management capabilities, securities trading and access to research and analysis tools . . . all on your desktop. Call Fidelity at 1-800-544-0240 or visit our web site for more information on how to manage your investments via your PC. * WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. TO WRITE FIDELITY If more than one address is listed, please locate the address that is closest to you. We'll give your correspondence immediate attention and send you written confirmation upon completion of your request. (LETTER_GRAPHIC)MAKING CHANGES TO YOUR ACCOUNT (such as changing name, address, bank, etc.) Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0002 (LETTER_GRAPHIC)FOR NON-RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 OVERNIGHT EXPRESS Fidelity Investments 2300 Litton Lane - KH1A Hebron, KY 41048 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6I 400 East Las Colinas Blvd. Irving, TX 75039-5587 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 (LETTER_GRAPHIC)FOR RETIREMENT ACCOUNTS BUYING SHARES Fidelity Investments P.O. Box 770001 Cincinnati, OH 45277-0003 SELLING SHARES Fidelity Investments P.O. Box 660602 Dallas, TX 75266-0602 OVERNIGHT EXPRESS Fidelity Investments Attn: Redemptions - CP6R 400 East Las Colinas Blvd. Irving, TX 75039-5587 GENERAL CORRESPONDENCE Fidelity Investments P.O. Box 500 Merrimack, NH 03054-0500 TO VISIT FIDELITY For directions and hours, please call 1-800-544-9797. ARIZONA 7373 N. Scottsdale Road Scottsdale, AZ CALIFORNIA 815 East Birch Street Brea, CA 851 East Hamilton Avenue Campbell, CA 527 North Brand Boulevard Glendale, CA 19200 Von Karman Avenue Irvine, CA 10100 Santa Monica Blvd. Los Angeles, CA 251 University Avenue Palo Alto, CA 1760 Challenge Way Sacramento, CA 7676 Hazard Center Drive San Diego, CA 8 Montgomery Street San Francisco, CA 950 Northgate Drive San Rafael, CA 1400 Civic Drive Walnut Creek, CA 6300 Canoga Avenue Woodland Hills, CA COLORADO 1625 Broadway Denver, CO CONNECTICUT 48 West Putnam Avenue Greenwich, CT 265 Church Street New Haven, CT 300 Atlantic Street Stamford, CT 29 South Main Street West Hartford, CT DELAWARE 222 Delaware Avenue Wilmington, DE FLORIDA 4400 N. Federal Highway Boca Raton, FL 90 Alhambra Plaza Coral Gables, FL 4090 N. Ocean Boulevard Ft. Lauderdale, FL 1907 West State Road 434 Longwood, FL 8880 Tamiami Trail, North Naples, FL 2401 PGA Boulevard Palm Beach Gardens, FL 8065 Beneva Road Sarasota, FL 1502 N. Westshore Blvd. Tampa, FL GEORGIA 3445 Peachtree Road, N.E. Atlanta, GA 1000 Abernathy Road Atlanta, GA ILLINOIS One North Franklin Street Chicago, IL 1415 West 22nd Street Oak Brook, IL 1700 East Golf Road Schaumburg, IL 3232 Lake Avenue Wilmette, IL INDIANA 4729 East 82nd Street Indianapolis, IN MAINE 3 Canal Plaza Portland, ME MARYLAND 7401 Wisconsin Avenue Bethesda, MD 1 West Pennsylvania Ave. Towson, MD MASSACHUSETTS 470 Boylston Street Boston, MA 155 Congress Street Boston, MA 25 State Street Boston, MA 300 Granite Street Braintree, MA 44 Mall Road Burlington, MA 416 Belmont Street Worcester, MA MICHIGAN 280 North Woodward Ave. Birmingham, MI 29155 Northwestern Hwy. Southfield, MI MINNESOTA 7600 France Avenue South Edina, MN MISSOURI 700 West 47th Street Kansas City, MO 8885 Ladue Road Ladue, MO 200 North Broadway St. Louis, MO NEW JERSEY 150 Essex Street Millburn, NJ 56 South Street Morristown, NJ 501 Route 17, South Paramus, NJ NEW YORK 1055 Franklin Avenue Garden City, NY 999 Walt Whitman Road Melville, L.I., NY 1271 Avenue of the Americas New York, NY 71 Broadway New York, NY 350 Park Avenue New York, NY NORTH CAROLINA 4611 Sharon Road Charlotte, NC OHIO 600 Vine Street Cincinnati, OH 28699 Chagrin Boulevard Woodmere Village, OH OREGON 16850 SW 72 Avenue Tigard, OR PENNSYLVANIA 1735 Market Street Philadelphia, PA 439 Fifth Avenue Pittsburgh, PA TENNESSEE 6150 Poplar Road Memphis, TN TEXAS 10000 Research Boulevard Austin, TX 4017 Northwest Parkway Dallas, TX 1155 Dairy Ashford Street Houston, TX 2701 Drexel Drive Houston, TX 400 East Las Colinas Blvd. Irving, TX 14100 San Pedro San Antonio, TX 19740 IH 45 North Spring, TX UTAH 215 South State Street Salt Lake City, UT VIRGINIA 1861 International Drive McLean, VA WASHINGTON 411 108th Avenue, N.E. Bellevue, WA 511 Pine Street Seattle, WA WASHINGTON, DC 1900 K Street, N.W. Washington, DC WISCONSIN 595 North Barker Road Brookfield, WI INVESTMENT ADVISER Fidelity Management & Research Company Boston, MA INVESTMENT SUB-ADVISERS Fidelity Management & Research (U.K.) Inc. Fidelity Management & Research (Far East) Inc. Fidelity Investments Japan Ltd. OFFICERS Edward C. Johnson 3d, President Robert C. Pozen, Senior Vice President Abigail P. Johnson, Vice President Robert E. Stansky, Vice President Eric D. Roiter, Secretary Robert A. Dwight, Treasurer Matthew N. Karstetter, Deputy Treasurer Maria F. Dwyer, Deputy Treasurer John H. Costello, Assistant Treasurer BOARD OF TRUSTEES Ralph F. Cox * Phyllis Burke Davis * Robert M. Gates * Edward C. Johnson 3d Donald J. Kirk * Ned C. Lautenbach * Peter S. Lynch Marvin L. Mann * William O. McCoy * Gerald C. McDonough * Robert C. Pozen Thomas R. Williams * ADVISORY BOARD J. Michael Cook GENERAL DISTRIBUTOR Fidelity Distributors Corporation Boston, MA TRANSFER AND SHAREHOLDER SERVICING AGENT Fidelity Service Company, Inc. Boston, MA * INDEPENDENT TRUSTEES MAG-ANN-0500 100666 1.702307.102 CUSTODIAN State Street Bank and Trust Company Quincy, MA FIDELITY'S GROWTH FUNDS Aggressive Growth Fund Blue Chip Growth Fund Capital Appreciation Fund ContrafundSM ContrafundSM II Disciplined Equity Fund Dividend Growth Fund Export and Multinational Fund Fidelity FiftySM Growth Company Fund Large Cap Stock Fund Low-Priced Stock Fund Magellan(registered trademark) Fund Mid-Cap Stock Fund New Millennium Fund(registered trademark) OTC Portfolio Retirement Growth Fund Small Cap Selector Small Cap Stock Fund Stock Selector Tax Managed Stock Fund TechnoQuantGrowthSM Fund Trend Fund Value Fund 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 (FASTSM) 1-800-544-5555 AUTOMATED LINE FOR QUICKEST SERVICE (2_FIDELITY_LOGOS)(registered trademark) Corporate Headquarters 82 Devonshire St., Boston, MA 02109 www.fidelity.com -----END PRIVACY-ENHANCED MESSAGE-----