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- 5511

Variable Insurance Products Fund II
(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:	December 31
Date of reporting period:	June 30, 2004

Item 1. Reports to Stockholders

Fidelity® Variable Insurance Products
Service Class 2R

Contrafund^® Portfolio

Equity-Income Portfolio

Growth Portfolio

Semiannual Report

June 30, 2004(2_fidelity_logos) (Registered_Trademark)

Contents

Contrafund Portfolio	3 4 12	Investment Summary- Investments Financial Statements
Equity-Income Portfolio	16 17 22	Investment Summary Investments Financial Statements
Growth Portfolio	26 27 32	Investment Summary Investments Financial Statements
Notes	36	Notes to the Financial Statements

For a free copy of the fund's proxy voting guidelines, call 1-800-221-5207, or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

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 funds. This report is not
authorized for distribution to prospective investors in the funds 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 funds nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Fidelity Variable Insurance Products: Contrafund Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Avon Products, Inc.	3.3
3M Co.	3.2
Berkshire Hathaway, Inc. Class A	2.8
EnCana Corp.	1.9
Yahoo!, Inc.	1.8
	13.0
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Health Care	15.6
Information Technology	13.1
Consumer Discretionary	13.0
Financials	12.5
Industrials	10.7

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks and Equity Futures	89.7%
	Bonds	1.1%
	Short-Term Investments and Net Other Assets	9.2%

* Foreign investments 21.5%

Semiannual Report

Fidelity Variable Insurance Products: Contrafund Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 88.7%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 12.9%
Auto Components - 0.2%
Gentex Corp.	590,400		$ 23,427,072
Automobiles - 0.5%
Harley-Davidson, Inc.	83,900		5,196,766
Toyota Motor Corp.	1,257,800		51,330,819
			56,527,585
Hotels, Restaurants & Leisure - 2.6%
Ameristar Casinos, Inc.	18,600		624,588
Boyd Gaming Corp.	265,700		7,059,649
Buffalo Wild Wings, Inc.	70,400		1,946,560
Friendly Ice Cream Corp. (a)	204,600		2,690,490
Gaylord Entertainment Co. (a)	52,827		1,658,240
GTECH Holdings Corp.	202,600		9,382,406
Hilton Group PLC	1,522,398		7,644,789
International Game Technology	505,550		19,514,230
Kerzner International Ltd. (a)	130,800		6,220,848
Krispy Kreme Doughnuts, Inc. (a)	975,000		18,612,750
Lakes Entertainment, Inc. (a)	209,600		2,429,264
Life Time Fitness, Inc.	111,600		2,343,600
McDonald's Corp.	198,800		5,168,800
Outback Steakhouse, Inc.	266,700		11,030,712
P.F. Chang's China Bistro, Inc. (a)	300,600		12,369,690
Panera Bread Co. Class A (a)	809,596		29,048,304
Penn National Gaming, Inc. (a)	78,803		2,616,260
Pinnacle Entertainment, Inc. (a)	44,800		564,928
Rank Group PLC	403,940		2,204,785
Red Robin Gourmet Burgers, Inc. (a)	221,787		6,070,310
Ryan's Restaurant Group, Inc. (a)	282,750		4,467,450
Shuffle Master, Inc. (a)	257,634		9,354,691
Stanley Leisure PLC	651,898		4,966,640
Starbucks Corp. (a)	1,233,800		53,645,624
Station Casinos, Inc.	632,300		30,603,320
The Cheesecake Factory, Inc. (a)	374,424		14,898,331
William Hill PLC	3,106,053		31,307,387
Wynn Resorts Ltd. (a)	77,042		2,976,132
			301,420,778
Household Durables - 1.3%
Blyth, Inc.	69,000		2,379,810
D.R. Horton, Inc.	1,277,477		36,280,347
Fortune Brands, Inc.	331,400		24,997,502
Harman International Industries, Inc.	641,600		58,385,600
Leggett & Platt, Inc.	90,100		2,406,571
LG Electronics, Inc.	115,080		5,462,438
Pulte Homes, Inc.	190,300		9,901,309
Sharp Corp.	316,000		5,121,726
			144,935,303
Internet & Catalog Retail - 1.7%
Blue Nile, Inc.	83,416		3,137,276
	Shares		Value (Note 1)
eBay, Inc. (a)	1,394,000		$ 128,178,300
InterActiveCorp (a)	1,957,867		59,010,111
			190,325,687
Leisure Equipment & Products - 0.0%
RC2 Corp. (a)	58,813		2,087,862
Media - 1.9%
Citadel Broadcasting Corp.	100,500		1,464,285
E.W. Scripps Co. Class A	250,900		26,344,500
Fox Entertainment Group, Inc. Class A (a)	1,208,600		32,269,620
Getty Images, Inc. (a)	169,100		10,146,000
McGraw-Hill Companies, Inc.	70,100		5,367,557
Meredith Corp.	58,000		3,187,680
News Corp. Ltd. ADR	384,000		13,601,280
Pixar (a)	579,317		40,268,325
SBS Broadcasting SA (a)	220,700		6,777,697
Sogecable SA (a)	111,700		4,516,002
The DIRECTV Group, Inc. (a)	738,300		12,624,930
Univision Communications, Inc. Class A (a)	183,000		5,843,190
Viacom, Inc. Class B (non-vtg.)	238,236		8,509,790
Vivendi Universal SA sponsored ADR (a)	188,400		5,256,360
Washington Post Co. Class B	29,200		27,156,292
XM Satellite Radio Holdings, Inc. Class A (a)	406,620		11,096,660
			214,430,168
Multiline Retail - 0.4%
99 Cents Only Stores (a)	1,384,466		21,113,107
JCPenney Co., Inc.	382,600		14,446,976
Neiman Marcus Group, Inc. Class A	120,900		6,728,085
			42,288,168
Specialty Retail - 3.4%
AC Moore Arts & Crafts, Inc. (a)	197,700		5,438,727
Advance Auto Parts, Inc. (a)	736,300		32,529,734
AnnTaylor Stores Corp. (a)	1,460,850		42,335,433
Bed Bath & Beyond, Inc. (a)	1,352,200		51,992,090
Best Buy Co., Inc.	117,600		5,967,024
Cabela's, Inc. Class A	59,600		1,606,220
Chico's FAS, Inc. (a)	938,800		42,396,208
Claire's Stores, Inc.	108,800		2,360,960
Dick's Sporting Goods, Inc. (a)	199,300		6,646,655
Guitar Center, Inc. (a)	78,400		3,486,448
Halfords Group PLC	943,366		4,634,172
Hot Topic, Inc. (a)	112,400		2,303,076
Lowe's Companies, Inc.	230,400		12,107,520
Pacific Sunwear of California, Inc. (a)	1,301,072		25,461,979
PETCO Animal Supplies, Inc. (a)	612,200		19,718,962
PETsMART, Inc.	921,800		29,912,410
Regis Corp.	107,500		4,793,425
Signet Group PLC	2,348,926		4,893,313
Staples, Inc.	593,000		17,380,830
The Pep Boys - Manny, Moe & Jack	909,200		23,048,220
TJX Companies, Inc.	1,188,100		28,680,734
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Specialty Retail - continued
United Auto Group, Inc.	52,600		$ 1,612,190
Urban Outfitters, Inc. (a)	305,600		18,614,096
			387,920,426
Textiles Apparel & Luxury Goods - 0.9%
Brown Shoe Co., Inc.	56,100		2,296,173
Burberry Ltd.	2,831,173		21,054,860
Carter's, Inc.	76,000		2,212,360
Coach, Inc. (a)	1,204,324		54,423,402
Delta Woodside Industries, Inc. (a)	22,175		24,836
Fossil, Inc. (a)	222,500		6,063,125
NIKE, Inc. Class B	57,600		4,363,200
Puma AG	31,241		7,958,265
Quiksilver, Inc. (a)	86,200		2,052,422
			100,448,643
TOTAL CONSUMER DISCRETIONARY			1,463,811,692
CONSUMER STAPLES - 8.6%
Beverages - 0.5%
Anheuser-Busch Companies, Inc.	212,800		11,491,200
Coca-Cola Hellenic Bottling Co. SA (Bearer)	310,870		7,279,431
Cott Corp. (a)	445,200		14,451,728
Cott Corp. (a)(c)	220,500		7,144,200
PepsiCo, Inc.	205,910		11,094,431
The Coca-Cola Co.	86,900		4,386,712
			55,847,702
Food & Staples Retailing - 1.7%
Smart & Final, Inc. (a)	31,000		372,620
Sysco Corp.	2,436,600		87,400,842
Tesco PLC	2,292,590		11,105,656
The Pantry, Inc. (a)	202,900		4,423,220
United Natural Foods, Inc. (a)	321,452		9,293,177
Wal-Mart Stores, Inc.	131,400		6,932,664
Walgreen Co.	67,000		2,426,070
Whole Foods Market, Inc.	416,407		39,746,048
William Morrison Supermarkets PLC	7,616,950		32,116,561
			193,816,858
Food Products - 0.7%
Dean Foods Co. (a)	215,500		8,040,305
Hershey Foods Corp.	421,000		19,479,670
Kellogg Co.	459,600		19,234,260
People's Food Holdings Ltd.	877,000		576,873
Saputo, Inc.	129,990		3,111,613
Smithfield Foods, Inc. (a)	250,500		7,364,700
SunOpta, Inc. (a)	715,100		6,132,951
Wm. Wrigley Jr. Co.	271,500		17,118,075
			81,058,447
	Shares		Value (Note 1)
Household Products - 1.5%
Colgate-Palmolive Co.	3,018,600		$ 176,437,170
Personal Products - 4.2%
Avon Products, Inc.	7,950,256		366,824,807
Gillette Co.	2,486,900		105,444,560
NBTY, Inc. (a)	20,700		608,373
			472,877,740
TOTAL CONSUMER STAPLES			980,037,917
ENERGY - 6.9%
Energy Equipment & Services - 0.8%
BJ Services Co. (a)	156,400		7,169,376
Carbo Ceramics, Inc.	113,000		7,712,250
Schlumberger Ltd. (NY Shares)	732,800		46,540,128
Smith International, Inc. (a)	456,575		25,458,622
			86,880,376
Oil & Gas - 6.1%
Apache Corp.	576,680		25,114,414
Blackrock Ventures, Inc. (a)	869,100		4,912,673
BP PLC sponsored ADR	883,632		47,336,166
Burlington Resources, Inc.	782,980		28,328,216
Cabot Oil & Gas Corp. Class A	93,900		3,971,970
Canadian Natural Resources Ltd.	43,400		1,303,074
Chesapeake Energy Corp.	495,300		7,290,816
China Petroleum & Chemical Corp. sponsored ADR	516,640		19,089,848
Comstock Resources, Inc. (a)	89,600		1,743,616
ConocoPhillips	44,900		3,425,421
Denbury Resources, Inc. (a)	134,400		2,815,680
Devon Energy Corp.	33,600		2,217,600
EnCana Corp.	5,005,892		216,237,722
Encore Acquisition Co. (a)	236,000		6,584,400
ENI Spa sponsored ADR	66,200		6,642,508
EOG Resources, Inc.	142,500		8,508,675
Evergreen Resources, Inc. (a)	129,500		5,231,800
Exxon Mobil Corp.	759,900		33,747,159
Houston Exploration Co. (a)	314,500		16,303,680
Magnum Hunter Resources, Inc. (a)	125,600		1,303,728
Murphy Oil Corp.	900,500		66,366,850
Newfield Exploration Co. (a)	119,900		6,683,226
Noble Energy, Inc.	88,300		4,503,300
Occidental Petroleum Corp.	174,300		8,437,863
Patina Oil & Gas Corp.	218,600		6,529,582
PetroChina Co. Ltd. sponsored ADR	124,600		5,768,980
PetroKazakhstan, Inc. Class A	137,860		3,744,409
Pioneer Natural Resources Co.	491,400		17,238,312
Pogo Producing Co.	13,200		652,080
Premcor, Inc. (a)	1,449,600		54,360,000
Prima Energy Corp. (a)	31,600		1,250,412
Quicksilver Resources, Inc. (a)	185,000		12,407,950
Talisman Energy, Inc.	250,110		5,456,332
Common Stocks - continued
	Shares		Value (Note 1)
ENERGY - continued
Oil & Gas - continued
Total SA sponsored ADR	335,100		$ 32,196,408
Tsakos Energy Navigation Ltd.	67,400		2,288,904
Valero Energy Corp.	64,600		4,764,896
Vintage Petroleum, Inc.	23,800		403,886
XTO Energy, Inc.	658,825		19,626,397
			694,788,953
TOTAL ENERGY			781,669,329
FINANCIALS - 12.3%
Capital Markets - 0.3%
Goldman Sachs Group, Inc.	47,200		4,444,352
Lehman Brothers Holdings, Inc.	192,700		14,500,675
Merrill Lynch & Co., Inc.	377,500		20,377,450
			39,322,477
Commercial Banks - 1.4%
Bank of Ireland	1,140,160		15,240,309
Bank One Corp.	439,600		22,419,600
Banknorth Group, Inc.	166,400		5,404,672
Commerce Bancorp, Inc., New Jersey	302,817		16,657,963
East West Bancorp, Inc.	69,600		2,136,720
Fifth Third Bancorp	127,064		6,833,502
M&T Bank Corp.	292,900		25,570,170
PrivateBancorp, Inc.	26,204		719,562
Royal Bank of Scotland Group PLC	687,021		19,849,460
SouthTrust Corp.	540,300		20,969,043
UCBH Holdings, Inc.	165,930		6,557,554
Wells Fargo & Co.	78,800		4,509,724
Westcorp	165,720		7,531,974
Wintrust Financial Corp.	54,500		2,752,795
			157,153,048
Consumer Finance - 1.0%
MBNA Corp.	697,800		17,996,262
SLM Corp.	2,259,400		91,392,730
			109,388,992
Diversified Financial Services - 0.6%
Brascan Corp. Class A (ltd. vtg.)	198,000		5,554,509
CapitalSource, Inc.	44,400		1,085,580
Citigroup, Inc.	228,200		10,611,300
Moody's Corp.	719,200		46,503,472
			63,754,861
Insurance - 7.5%
ACE Ltd.	409,200		17,300,976
AFLAC, Inc.	583,100		23,796,311
Allstate Corp.	542,900		25,271,995
AMBAC Financial Group, Inc.	27,600		2,026,944
American International Group, Inc.	1,855,814		132,282,422
Arch Capital Group Ltd. (a)	31,600		1,260,208
Assurant, Inc.	344,200		9,079,996
Axis Capital Holdings Ltd.	43,600		1,220,800
	Shares		Value (Note 1)
Berkshire Hathaway, Inc. Class A (a)	3,639		$ 323,689,050
Brit Insurance Holdings PLC (a)	3,985,600		6,018,663
Brown & Brown, Inc.	44,600		1,922,260
Cincinnati Financial Corp.	3,255		141,658
Endurance Specialty Holdings Ltd.	538,000		18,722,400
Everest Re Group Ltd.	804,180		64,623,905
Great-West Lifeco, Inc.	67,000		2,421,021
HCC Insurance Holdings, Inc.	503,800		16,831,958
Infinity Property & Casualty Corp.	55,800		1,841,400
IPC Holdings Ltd.	160,300		5,919,879
Markel Corp. (a)	28,950		8,033,625
Mercury General Corp.	116,400		5,779,260
MetLife, Inc.	147,200		5,277,120
Montpelier Re Holdings Ltd.	1,449,200		50,649,540
PartnerRe Ltd.	368,300		20,893,659
Penn-America Group, Inc.	25,900		362,600
Progressive Corp.	90,800		7,745,240
RenaissanceRe Holdings Ltd.	683,965		36,899,912
StanCorp Financial Group, Inc.	66,800		4,475,600
UICI (a)	56,300		1,340,503
USI Holdings Corp. (a)	933,687		14,752,255
W.R. Berkley Corp.	300,950		12,925,803
White Mountains Insurance Group Ltd.	12,300		6,273,000
Willis Group Holdings Ltd.	771,400		28,888,930
			858,668,893
Real Estate - 0.1%
CBL & Associates Properties, Inc.	108,200		5,951,000
Simon Property Group, Inc.	40,200		2,067,084
The Rouse Co.	44,720		2,124,200
			10,142,284
Thrifts & Mortgage Finance - 1.4%
Countrywide Financial Corp.	207,860		14,602,165
Doral Financial Corp.	355,075		12,250,088
Golden West Financial Corp., Delaware	1,028,800		109,412,880
New York Community Bancorp, Inc.	917,090		18,002,477
W Holding Co., Inc.	155,389		2,668,029
			156,935,639
TOTAL FINANCIALS			1,395,366,194
HEALTH CARE - 15.6%
Biotechnology - 2.9%
Affymetrix, Inc. (a)	38,200		1,250,286
Biogen Idec, Inc. (a)	471,400		29,816,050
Celgene Corp. (a)	5,100		292,026
ConjuChem, Inc. (a)	539,930		5,181,126
Dyax Corp. (a)	177,600		2,086,800
Gen-Probe, Inc. (a)	405,100		19,169,332
Genentech, Inc. (a)	3,626,900		203,831,780
Gilead Sciences, Inc. (a)	83,200		5,574,400
IDEXX Laboratories, Inc. (a)	275,470		17,338,082
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Biotechnology - continued
Invitrogen Corp. (a)	23,800		$ 1,713,362
Keryx Biopharmaceuticals, Inc. (a)	44,600		564,636
Ligand Pharmaceuticals, Inc. Class B (a)	124,100		2,156,858
Martek Biosciences (a)	221,700		12,452,889
Millennium Pharmaceuticals, Inc. (a)	692,900		9,562,020
ONYX Pharmaceuticals, Inc. (a)	73,000		3,092,280
Pharmion Corp.	168,900		8,262,588
Seattle Genetics, Inc. (a)	712,300		5,007,469
			327,351,984
Health Care Equipment & Supplies - 6.2%
Advanced Medical Optics, Inc. (a)	186,900		7,956,333
Advanced Neuromodulation Systems, Inc. (a)	383,050		12,564,040
Alcon, Inc.	1,126,000		88,559,900
American Medical Systems Holdings, Inc. (a)	169,300		5,705,410
Animas Corp.	3,000		55,950
Apogent Technologies, Inc. (a)	298,600		9,555,200
Becton, Dickinson & Co.	90,800		4,703,440
Bio-Rad Laboratories, Inc. Class A (a)	216,600		12,749,076
Biomet, Inc.	157,150		6,983,746
Boston Scientific Corp. (a)	856,100		36,641,080
C.R. Bard, Inc.	289,800		16,417,170
Cooper Companies, Inc.	146,060		9,226,610
Cytyc Corp. (a)	112,200		2,846,514
DENTSPLY International, Inc.	1,640,962		85,494,120
Epix Medical, Inc. (a)	218,800		4,616,680
Fisher Scientific International, Inc. (a)	183,031		10,570,040
Given Imaging Ltd. (a)	130,400		4,617,464
INAMED Corp. (a)	18,500		1,162,725
Integra LifeSciences Holdings Corp. (a)	262,200		9,247,794
Kensey Nash Corp. (a)	67,300		2,321,850
Kinetic Concepts, Inc.	46,600		2,325,340
Kyphon, Inc. (a)	68,400		1,927,512
Medtronic, Inc.	256,040		12,474,269
Nobel Biocare Holding AG (Switzerland)	33,299		5,223,791
Phonak Holding AG	82,475		2,571,155
ResMed, Inc. (a)	88,600		4,515,056
Smith & Nephew PLC	10,563,461		116,768,497
St. Jude Medical, Inc. (a)	367,576		27,807,124
Stryker Corp.	937,400		51,557,000
Synthes, Inc.	158,918		18,157,151
Varian Medical Systems, Inc. (a)	3,500		277,725
Zimmer Holdings, Inc. (a)	1,470,171		129,669,082
			705,268,844
Health Care Providers & Services - 3.3%
Aetna, Inc.	833,700		70,864,500
Anthem, Inc. (a)	79,500		7,120,020
Caremark Rx, Inc. (a)	916,964		30,204,794
DaVita, Inc. (a)	49,800		1,535,334
	Shares		Value (Note 1)
eResearchTechnology, Inc. (a)	256,024		$ 7,168,672
Health Management Associates, Inc. Class A	257,790		5,779,652
ICON PLC sponsored ADR (a)	20,300		892,997
Inveresk Research Group, Inc. (a)	340,500		10,501,020
Molina Healthcare, Inc.	11,000		419,980
Omnicare, Inc.	119,700		5,124,357
Patterson Dental Co. (a)	1,763,102		134,859,672
PDI, Inc. (a)	9,500		288,135
Pediatrix Medical Group, Inc. (a)	61,500		4,295,775
ProxyMed, Inc. (a)	8,100		136,566
UnitedHealth Group, Inc.	1,375,410		85,619,273
VCA Antech, Inc. (a)	4,500		201,690
WebMD Corp. (a)	119,300		1,111,876
WellPoint Health Networks, Inc. (a)	81,400		9,117,614
			375,241,927
Pharmaceuticals - 3.2%
Altana AG	166,463		10,035,193
AstraZeneca PLC sponsored ADR	738,800		33,718,832
Atherogenics, Inc. (a)	312,300		5,943,069
Cypress Bioscience, Inc. (a)	304,500		4,180,785
Elan Corp. PLC sponsored ADR (a)	779,900		19,294,726
Endo Pharmaceuticals Holdings, Inc. (a)	5,400		126,630
Eon Labs, Inc. (a)	84,200		3,446,306
IVAX Corp. (a)	215,700		5,174,643
Johnson & Johnson	616,250		34,325,125
Kos Pharmaceuticals, Inc. (a)	211,300		6,966,561
Merck & Co., Inc.	38,200		1,814,500
MGI Pharma, Inc. (a)	116,600		3,149,366
Nektar Therapeutics (a)	61,600		1,229,536
Novartis AG sponsored ADR	681,400		30,322,300
Novo Nordisk AS Series B	1,186,974		61,259,530
Pfizer, Inc.	452,265		15,503,644
Roche Holding AG (participation certificate)	601,598		59,707,181
Schering-Plough Corp.	1,055,200		19,500,096
Teva Pharmaceutical Industries Ltd. sponsored ADR	739,600		49,767,684
			365,465,707
TOTAL HEALTH CARE			1,773,328,462
INDUSTRIALS - 10.7%
Aerospace & Defense - 1.1%
Bombardier, Inc. Class B (sub. vtg.)	1,207,400		3,638,765
Lockheed Martin Corp.	2,108,535		109,812,503
Precision Castparts Corp.	185,986		10,171,574
			123,622,842
Air Freight & Logistics - 0.9%
C.H. Robinson Worldwide, Inc.	1,116,680		51,188,611
Dynamex, Inc. (a)	58,200		809,562
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Air Freight & Logistics - continued
Expeditors International of Washington, Inc.	48,900		$ 2,416,149
United Parcel Service, Inc. Class B	625,600		47,026,352
			101,440,674
Airlines - 1.0%
ExpressJet Holdings, Inc. Class A (a)	131,021		1,590,595
JetBlue Airways Corp. (a)	1,366,154		40,137,605
Ryanair Holdings PLC sponsored ADR (a)	2,032,657		66,630,496
Southwest Airlines Co.	404,000		6,775,080
			115,133,776
Building Products - 0.1%
Lennox International, Inc.	212,500		3,846,250
Masco Corp.	252,800		7,882,304
			11,728,554
Commercial Services & Supplies - 1.4%
Apollo Group, Inc. Class A (a)	589,072		52,009,167
Aramark Corp. Class B	1,062,550		30,558,938
Copart, Inc. (a)	112,100		2,993,070
Corporate Executive Board Co.	4,100		236,939
Education Management Corp. (a)	377,200		12,394,792
H&R Block, Inc.	188,900		9,006,752
R.R. Donnelley & Sons Co.	212,400		7,013,448
Resources Connection, Inc. (a)	125,900		4,923,949
Robert Half International, Inc.	228,500		6,802,445
Strayer Education, Inc.	256,899		28,662,221
Universal Technical Institute, Inc.	78,600		3,141,642
			157,743,363
Construction & Engineering - 0.1%
Jacobs Engineering Group, Inc. (a)	305,720		12,039,254
Perini Corp. (a)	305,400		3,258,618
			15,297,872
Electrical Equipment - 0.4%
Cooper Industries Ltd. Class A	430,900		25,599,769
Roper Industries, Inc.	210,100		11,954,690
Ultralife Batteries, Inc. (a)	275,400		5,331,744
			42,886,203
Industrial Conglomerates - 3.4%
3M Co.	4,028,520		362,607,085
Carlisle Companies, Inc.	21,900		1,363,275
Hutchison Whampoa Ltd.	1,004,000		6,854,407
Tyco International Ltd.	526,300		17,441,582
			388,266,349
Machinery - 2.0%
Briggs & Stratton Corp.	102,500		9,055,875
Danaher Corp.	2,509,260		130,105,131
Deere & Co.	92,400		6,480,936
IDEX Corp.	124,500		4,276,575
Illinois Tool Works, Inc.	62,300		5,973,947
	Shares		Value (Note 1)
Ingersoll-Rand Co. Ltd. Class A	78,500		$ 5,362,335
Joy Global, Inc.	367,000		10,987,980
Oshkosh Truck Co.	78,000		4,470,180
PACCAR, Inc.	795,044		46,104,602
Volvo AB ADR	143,100		5,010,074
			227,827,635
Road & Rail - 0.2%
Dollar Thrifty Automotive Group, Inc. (a)	3,600		98,784
Heartland Express, Inc.	327,346		8,956,187
Knight Transportation, Inc. (a)	139,810		4,016,741
Landstar System, Inc. (a)	278,412		14,719,642
			27,791,354
Trading Companies & Distributors - 0.1%
Fastenal Co.	107,512		6,109,907
TOTAL INDUSTRIALS			1,217,848,529
INFORMATION TECHNOLOGY - 13.1%
Communications Equipment - 2.5%
Comverse Technology, Inc. (a)	112,300		2,239,262
Ditech Communications Corp. (a)	159,900		3,732,066
Harris Corp.	459,000		23,294,250
Juniper Networks, Inc. (a)	649,005		15,946,053
Motorola, Inc.	1,917,100		34,987,075
Plantronics, Inc. (a)	67,300		2,833,330
QUALCOMM, Inc.	1,184,200		86,422,916
Research in Motion Ltd. (a)	695,800		47,598,583
Scientific-Atlanta, Inc.	523,700		18,067,650
Telefonaktiebolaget LM Ericsson ADR (a)	1,485,409		44,443,437
			279,564,622
Computers & Peripherals - 0.4%
Apple Computer, Inc. (a)	310,200		10,093,908
Dell, Inc. (a)	838,600		30,038,652
PalmOne, Inc. (a)	98,700		3,431,799
Seagate Technology	21,964		316,941
Synaptics, Inc. (a)	347,569		6,655,946
			50,537,246
Electronic Equipment & Instruments - 0.9%
Amphenol Corp. Class A (a)	348,600		11,615,352
AU Optronics Corp. sponsored ADR	24,445		399,431
FARO Technologies, Inc. (a)	65,532		1,682,206
Flir Systems, Inc. (a)	817,300		44,869,770
Mettler-Toledo International, Inc. (a)	15,300		751,842
Molex, Inc.	44,700		1,433,976
National Instruments Corp.	216,457		6,634,407
Symbol Technologies, Inc.	738,700		10,888,438
Thermo Electron Corp. (a)	142,000		4,365,080
Waters Corp. (a)	401,100		19,164,558
			101,805,060
Internet Software & Services - 2.2%
Akamai Technologies, Inc. (a)	1,238,283		22,227,180
Blue Coat Systems, Inc. (a)	25,044		838,724
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Internet Software & Services - continued
iVillage, Inc. (a)	111,100		$ 705,485
Lastminute.com PLC (a)	828,199		2,719,820
Open Text Corp. (a)	218,700		7,000,892
Sina Corp. (a)	185,400		6,116,346
Websense, Inc. (a)	101,442		3,776,686
Yahoo!, Inc. (a)	5,671,396		206,041,817
			249,426,950
IT Services - 1.8%
Accenture Ltd. Class A (a)	67,400		1,852,152
Alliance Data Systems Corp. (a)	722,000		30,504,500
Anteon International Corp. (a)	786,600		25,658,892
Cognizant Technology Solutions Corp. Class A (a)	1,508,896		38,341,047
CSG Systems International, Inc. (a)	85,800		1,776,060
First Data Corp.	646,600		28,786,632
Infosys Technologies Ltd. sponsored ADR	400,000		37,108,000
Iron Mountain, Inc. (a)	271,200		13,088,112
SRA International, Inc. Class A (a)	392,900		16,627,528
The BISYS Group, Inc. (a)	623,100		8,760,786
			202,503,709
Office Electronics - 0.1%
Canon, Inc.	88,500		4,725,900
Zebra Technologies Corp. Class A (a)	96,780		8,419,860
			13,145,760
Semiconductors & Semiconductor Equipment - 4.0%
Analog Devices, Inc.	1,662,500		78,270,500
ATI Technologies, Inc. (a)	215,500		4,064,757
Cree, Inc. (a)	122,200		2,844,816
Intel Corp.	100,300		2,768,280
International Rectifier Corp. (a)	969,100		40,140,122
Linear Technology Corp.	252,500		9,966,175
Marvell Technology Group Ltd. (a)	3,421,200		91,346,040
Microchip Technology, Inc.	67,300		2,122,642
National Semiconductor Corp. (a)	379,200		8,338,608
Pixelworks, Inc. (a)	89,600		1,372,672
Samsung Electronics Co. Ltd.	351,340		145,161,726
Sigmatel, Inc.	171,988		4,997,971
Silicon Laboratories, Inc. (a)	1,287,646		59,682,392
Tundra Semiconductor Corp. Ltd. (a)(c)	35,300		602,050
			451,678,751
Software - 1.2%
Adobe Systems, Inc.	442,289		20,566,439
Altiris, Inc. (a)	761,839		21,034,375
Autodesk, Inc.	356,500		15,261,765
Electronic Arts, Inc. (a)	107,900		5,885,945
FileNET Corp. (a)	132,468		4,182,015
Kronos, Inc. (a)	235,692		9,710,510
Macrovision Corp. (a)	32,400		810,972
Magma Design Automation, Inc. (a)	123,011		2,365,502
Merge Technologies, Inc. (a)	350,000		5,120,500
	Shares		Value (Note 1)
Microsoft Corp.	184,600		$ 5,272,176
Quality Systems, Inc. (a)	26,391		1,295,534
Red Hat, Inc. (a)	228,067		5,238,699
SAP AG sponsored ADR	56,100		2,345,541
Sonic Solutions, Inc. (a)	561,999		11,942,479
Symantec Corp. (a)	639,303		27,988,685
Ultimate Software Group, Inc. (a)	3,225		32,573
			139,053,710
TOTAL INFORMATION TECHNOLOGY			1,487,715,808
MATERIALS - 4.6%
Chemicals - 0.8%
Ecolab, Inc.	1,673,700		53,056,290
Methanex Corp.	378,200		5,018,472
Potash Corp. of Saskatchewan	204,700		19,704,236
Sinopec Shanghai Petrochemical Co. Ltd. sponsored ADR	134,500		4,464,055
The Scotts Co. Class A (a)	94,000		6,004,720
Valspar Corp.	58,400		2,942,776
			91,190,549
Construction Materials - 0.1%
Eagle Materials, Inc.	101,700		7,222,734
Containers & Packaging - 0.0%
Ball Corp.	84,152		6,063,152
Peak International Ltd. (a)	200,000		1,000,000
			7,063,152
Metals & Mining - 3.6%
Aber Diamond Corp. (a)	389,750		11,585,267
Anglo American PLC ADR	916,572		19,128,858
Apex Silver Mines Ltd. (a)	550,100		9,379,205
Companhia Vale do Rio Doce sponsored ADR	142,200		6,761,610
Compania de Minas Buenaventura SA sponsored ADR	1,374,300		30,372,030
First Quantum Minerals Ltd. (a)	279,500		2,964,934
Freeport-McMoRan Copper & Gold, Inc. Class B	1,584,234		52,517,357
Gabriel Resources Ltd. (a)	2,171,800		2,100,324
Glamis Gold Ltd. (a)	1,630,200		28,658,962
Goldcorp, Inc.	4,126,566		48,167,503
International Steel Group, Inc. (a)	156,100		4,643,975
IPSCO, Inc.	221,200		4,988,152
Ivanhoe Mines Ltd. (a)	734,200		3,962,996
Ivanhoe Mines Ltd. warrants 12/19/05 (a)	198,450		148,774
Newcrest Mining Ltd.	769,500		7,411,463
Newmont Mining Corp.	2,600,351		100,789,605
Novagold Resources, Inc. (a)	778,300		3,600,053
Nucor Corp.	155,800		11,959,208
Peabody Energy Corp.	44,900		2,513,951
POSCO sponsored ADR	67,200		2,251,872
Common Stocks - continued
	Shares		Value (Note 1)
MATERIALS - continued
Metals & Mining - continued
Rio Tinto PLC (Reg.)	2,299,187		$ 56,358,821
SouthernEra Resources Ltd. (a)	558,200		1,527,423
			411,792,343
Paper & Forest Products - 0.1%
Sappi Ltd.	584,877		9,002,495
TOTAL MATERIALS			526,271,273
TELECOMMUNICATION SERVICES - 3.8%
Diversified Telecommunication Services - 0.1%
PT Indosat Tbk	3,790,000		1,622,846
PT Indosat Tbk sponsored ADR	126,600		2,683,920
PT Telkomunikasi Indonesia Tbk sponsored ADR	54,600		849,030
			5,155,796
Wireless Telecommunication Services - 3.7%
America Movil SA de CV sponsored ADR	1,606,100		58,413,857
KDDI Corp.	1,548		8,982,298
mmO2 PLC (a)	2,313,919		3,904,723
Mobile TeleSystems OJSC sponsored ADR	107,500		13,115,000
MTN Group Ltd. (a)	447,300		2,072,011
Nextel Communications, Inc. Class A (a)	5,373,200		143,249,512
Nextel Partners, Inc. Class A (a)	2,217,700		35,305,784
NII Holdings, Inc. (a)	886,253		29,857,864
Telesystem International Wireless, Inc. (a)	1,197,700		11,789,340
Vimpel Communications sponsored ADR (a)	561,300		54,137,385
Vodafone Group PLC sponsored ADR	2,508,500		55,437,850
Western Wireless Corp. Class A (a)	299,500		8,658,545
			424,924,169
TOTAL TELECOMMUNICATION SERVICES			430,079,965
UTILITIES - 0.2%
Electric Utilities - 0.2%
Entergy Corp.	44,800		2,509,248
Exelon Corp.	78,500		2,613,265
PG&E Corp. (a)	326,800		9,130,792
			14,253,305
	Shares		Value (Note 1)
Multi-Utilities & Unregulated Power - 0.0%
AES Corp. (a)	224,800		$ 2,232,264
TOTAL UTILITIES			16,485,569
TOTAL COMMON STOCKS (Cost $7,082,774,748)		10,072,614,738
Convertible Preferred Stocks - 0.3%
FINANCIALS - 0.2%
Diversified Financial Services - 0.2%
Xerox Capital Trust II 7.50% (c)	199,600		16,250,434
UTILITIES - 0.1%
Electric Utilities - 0.1%
TXU Corp. 8.75%	342,400		16,221,200
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $25,156,569)		32,471,634

Convertible Bonds - 0.2%
	Principal Amount
CONSUMER DISCRETIONARY - 0.1%
Leisure Equipment & Products - 0.1%
Eastman Kodak Co. 3.375% 10/15/33	$ 8,080,000		8,913,533
FINANCIALS - 0.0%
Diversified Financial Services - 0.0%
Tyco International Group SA yankee 3.125% 1/15/23	3,140,000		5,077,694
INFORMATION TECHNOLOGY - 0.0%
Software - 0.0%
Red Hat, Inc. 0.5% 1/15/24 (c)	2,890,000		3,262,232
TELECOMMUNICATION SERVICES - 0.1%
Wireless Telecommunication Services - 0.1%
Nextel Communications, Inc. 5.25% 1/15/10	9,860,000		9,564,200
UTILITIES - 0.0%
Multi-Utilities & Unregulated Power - 0.0%
AES Corp. 4.5% 8/15/05	2,280,000		2,258,842
TOTAL CONVERTIBLE BONDS (Cost $24,942,361)		29,076,501
U.S. Treasury Obligations - 0.9%
U.S. Treasury Bills, yield at date of purchase 1.03% to 1.25% 8/5/04 to 9/9/04 (d)	4,450,000		4,443,066
U.S. Treasury Notes:
4.25% 8/15/13	45,275,000		44,196,187
U.S. Treasury Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Treasury Notes: - continued
4.25% 11/15/13	$ 44,850,000		$ 43,653,402
4.75% 5/15/14	11,100,000		11,215,773
TOTAL U.S. TREASURY OBLIGATIONS (Cost $103,084,440)		103,508,428

Money Market Funds - 11.1%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	1,084,006,645		1,084,006,645
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	174,634,350		174,634,350
TOTAL MONEY MARKET FUNDS (Cost $1,258,640,995)		1,258,640,995
TOTAL INVESTMENT PORTFOLIO - 101.2% (Cost $8,494,599,113)			11,496,312,296
NET OTHER ASSETS - (1.2)%			(138,669,954)
NET ASSETS - 100%		$ 11,357,642,342

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/(Depreciation)
Purchased
Equity Index Contracts
290 S&P 500 Index Contracts	Sept. 2004	$ 82,679,000	$ 509,261

The face value of futures purchased as a percentage of net assets - 0.7%

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $27,258,916 or 0.2% of net assets.

(d) 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 $4,443,066.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $3,388,126,570 and $3,703,885,524, respectively, of which long-term U.S. government and government agency obligations aggregated $94,595,435 and $0, 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 $186,808 for the period.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	78.5%
United Kingdom	4.2%
Canada	3.8%
Bermuda	3.4%
Switzerland	1.7%
Korea (South)	1.4%
Others (individually less than 1%)	7.0%
	100.0%

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $1,251,202,000 of which $587,643,000 and $663,559,000 will expire on December 31, 2009 and 2010, respectively.

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

Contrafund Portfolio

Fidelity Variable Insurance Products: Contrafund Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $171,231,021) (cost $8,494,599,113) - See accompanying schedule		$ 11,496,312,296
Foreign currency held at value (cost $2,384,676)		2,374,071
Receivable for investments sold		110,123,678
Receivable for fund shares sold		6,516,476
Dividends receivable		6,453,628
Interest receivable		2,421,925
Receivable for daily variation on futures contracts		327,320
Prepaid expenses		21,567
Other affiliated receivables		10,079
Other receivables		663,045
Total assets		11,625,224,085
Liabilities
Payable to custodian bank	$ 6,650,608
Payable for investments purchased	74,208,981
Payable for fund shares redeemed	5,346,533
Accrued management fee	5,331,005
Distribution fees payable	399,193
Other affiliated payables	807,147
Other payables and accrued expenses	203,926
Collateral on securities loaned, at value	174,634,350
Total liabilities		267,581,743
Net Assets		$ 11,357,642,342
Net Assets consist of:
Paid in capital		$ 9,290,135,986
Undistributed net investment income		9,942,995
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(944,694,491)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		3,002,257,852
Net Assets		$ 11,357,642,342
Initial Class: Net Asset Value, offering price and redemption price per share ($8,252,118,332 ÷ 336,708,072 shares)		$ 24.51
Service Class: Net Asset Value, offering price and redemption price per share ($1,876,991,551 ÷ 76,796,299 shares)		$ 24.44
Service Class 2: Net Asset Value, offering price and redemption price per share ($1,223,702,743 ÷ 50,377,642 shares)		$ 24.29
Service Class 2R: Net Asset Value, offering price and redemption price per share ($4,829,716 ÷ 199,254 shares)		$ 24.24

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 44,902,493
Interest		4,989,511
Security lending		915,268
Total income		50,807,272
Expenses
Management fee	$ 30,992,384
Transfer agent fees	3,565,511
Distribution fees	2,216,864
Accounting and security lending fees	720,177
Non-interested trustees' compensation	25,194
Appreciation in deferred trustee compensation account	5,580
Custodian fees and expenses	399,749
Registration fees	18,266
Audit	47,825
Legal	9,583
Miscellaneous	257,075
Total expenses before reductions	38,258,208
Expense reductions	(1,235,006)	37,023,202
Net investment income (loss)		13,784,070
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	327,273,824
Foreign currency transactions	65,660
Futures contracts	3,772,229
Total net realized gain (loss)		331,111,713
Change in net unrealized appreciation (depreciation) on: Investment securities	312,539,377
Assets and liabilities in foreign currencies	(419,241)
Futures contracts	(229,874)
Total change in net unrealized appreciation (depreciation)		311,890,262
Net gain (loss)		643,001,975
Net increase (decrease) in net assets resulting from operations		$ 656,786,045

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

Semiannual Report

Fidelity Variable Insurance Products: Contrafund Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 13,784,070	$ 25,801,059
Net realized gain (loss)	331,111,713	98,601,973
Change in net unrealized appreciation (depreciation)	311,890,262	2,069,862,306
Net increase (decrease) in net assets resulting from operations	656,786,045	2,194,265,338
Distributions to shareholders from net investment income	(33,283,266)	(35,507,037)
Share transactions - net increase (decrease)	460,202,304	535,497,703
Redemption fees	269	3,718
Total increase (decrease) in net assets	1,083,705,352	2,694,259,722
Net Assets
Beginning of period	10,273,936,990	7,579,677,268
End of period (including undistributed net investment income of $9,942,995 and undistributed net investment income of $23,673,410, respectively)	$ 11,357,642,342	$ 10,273,936,990

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	20,375,470	7,094,717	13,297,245	106,622
Reinvested	1,123,479	189,967	89,389	356
Redeemed	(16,161,030)	(4,007,536)	(2,714,165)	(25,836)
Net increase (decrease)	5,337,919	3,277,148	10,672,469	81,142
Dollars Sold	$ 483,651,274	$ 168,039,230	$ 313,208,333	$ 2,505,134
Reinvested	26,671,383	4,498,414	2,105,112	8,357
Redeemed	(382,126,790)	(94,109,992)	(63,640,792)	(607,359)
Net increase (decrease)	$ 128,195,867	$ 78,427,652	$ 251,672,653	$ 1,906,132
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	43,575,507	16,391,007	21,425,743	119,703
Reinvested	1,718,846	269,021	92,062	161
Redeemed	(43,003,502)	(8,751,544)	(6,273,261)	(46,848)
Net increase (decrease)	2,290,851	7,908,484	15,244,544	73,016
Dollars Sold	$ 877,441,120	$ 326,586,457	$ 422,566,799	$ 2,529,458
Reinvested	29,357,892	4,584,117	1,562,295	2,733
Redeemed	(837,322,380)	(169,383,155)	(121,521,459)	(906,174)
Net increase (decrease)	$ 69,476,632	$ 161,787,419	$ 302,607,635	$ 1,626,017
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 26,671,383	$ 4,498,414	$ 2,105,112	$ 8,357
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 29,357,892	$ 4,584,117	$ 1,562,295	$ 2,733

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

Contrafund Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.13	$ 18.10	$ 20.13	$ 23.75	$ 29.15	$ 24.44
Income from Investment Operations
Net investment income (loss) E	.04	.07	.10	.16	.17	.12
Net realized and unrealized gain (loss)	1.42	5.05	(1.97)	(3.01)	(1.84)	5.59
Total from investment operations	1.46	5.12	(1.87)	(2.85)	(1.67)	5.71
Distributions from net investment income	(.08)	(.09)	(.16)	(.17)	(.11)	(.12)
Distributions from net realized gain	-	-	-	(.60)	(3.62)	(.88)
Total distributions	(.08)	(.09)	(.16)	(.77)	(3.73)	(1.00)
Redemption fees added to paid in capital E, G	-	-	-	-	-	-
Net asset value, end of period	$ 24.51	$ 23.13	$ 18.10	$ 20.13	$ 23.75	$ 29.15
Total Return B, C, D	6.32%	28.46%	(9.35)%	(12.28)%	(6.58)%	24.25%
Ratios to Average Net Assets F
Expenses before expense reductions	.67% A	.67%	.68%	.68%	.66%	.67%
Expenses net of voluntary waivers, if any	.67% A	.67%	.68%	.68%	.66%	.67%
Expenses net of all reductions	.65% A	.65%	.64%	.64%	.63%	.65%
Net investment income (loss)	.30% A	.34%	.50%	.77%	.69%	.48%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,252,118	$ 7,665,424	$ 5,956,028	$ 6,972,615	$ 8,516,464	$ 9,005,129
Portfolio turnover rate	67% A	66%	84%	140%	177%	172%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.06	$ 18.04	$ 20.06	$ 23.67	$ 29.10	$ 24.42
Income from Investment Operations
Net investment income (loss) E	.02	.05	.08	.14	.15	.10
Net realized and unrealized gain (loss)	1.42	5.04	(1.96)	(3.00)	(1.85)	5.58
Total from investment operations	1.44	5.09	(1.88)	(2.86)	(1.70)	5.68
Distributions from net investment income	(.06)	(.07)	(.14)	(.15)	(.11)	(.12)
Distributions from net realized gain	-	-	-	(.60)	(3.62)	(.88)
Total distributions	(.06)	(.07)	(.14)	(.75)	(3.73)	(1.00)
Redemption fees added to paid in capital E, G	-	-	-	-	-	-
Net asset value, end of period	$ 24.44	$ 23.06	$ 18.04	$ 20.06	$ 23.67	$ 29.10
Total Return B, C, D	6.25%	28.35%	(9.42)%	(12.36)%	(6.71)%	24.15%
Ratios to Average Net Assets F
Expenses before expense reductions	.77% A	.77%	.78%	.78%	.76%	.78%
Expenses net of voluntary waivers, if any	.77% A	.77%	.78%	.78%	.76%	.78%
Expenses net of all reductions	.75% A	.75%	.74%	.74%	.74%	.75%
Net investment income (loss)	.20% A	.24%	.39%	.67%	.59%	.37%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,876,992	$ 1,695,467	$ 1,183,683	$ 1,201,105	$ 1,245,222	$ 775,216
Portfolio turnover rate	67% A	66%	84%	140%	177%	172%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.93	$ 17.95	$ 20.00	$ 23.64	$ 28.20
Income from Investment Operations
Net investment income (loss) E	.01	.02	.05	.10	.10
Net realized and unrealized gain (loss)	1.40	5.02	(1.96)	(2.98)	(.93)
Total from investment operations	1.41	5.04	(1.91)	(2.88)	(.83)
Distributions from net investment income	(.05)	(.06)	(.14)	(.16)	(.11)
Distributions from net realized gain	-	-	-	(.60)	(3.62)
Total distributions	(.05)	(.06)	(.14)	(.76)	(3.73)
Redemption fees added to paid in capital E, H	-	-	-	-	-
Net asset value, end of period	$ 24.29	$ 22.93	$ 17.95	$ 20.00	$ 23.64
Total Return B, C, D	6.16%	28.20%	(9.60)%	(12.47)%	(3.86)%
Ratios to Average Net Assets G
Expenses before expense reductions	.92% A	.93%	.93%	.94%	.92% A
Expenses net of voluntary waivers, if any	.92% A	.93%	.93%	.94%	.92% A
Expenses net of all reductions	.90% A	.90%	.90%	.90%	.90% A
Net investment income (loss)	.04% A	.09%	.24%	.52%	.43% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,223,703	$ 910,341	$ 439,157	$ 231,686	$ 81,950
Portfolio turnover rate	67% A	66%	84%	140%	177%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^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. ^H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.90	$ 17.95	$ 20.49
Income from Investment Operations
Net investment income (loss) E	.01	.02	.03
Net realized and unrealized gain (loss)	1.40	5.01	(2.57)
Total from investment operations	1.41	5.03	(2.54)
Distributions from net investment income	(.07)	(.08)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 24.24	$ 22.90	$ 17.95
Total Return B, C, D	6.17%	28.18%	(12.40)%
Ratios to Average Net Assets G
Expenses before expense reductions	.92% A	.93%	.96% A
Expenses net of voluntary waivers, if any	.92% A	.93%	.96% A
Expenses net of all reductions	.90% A	.90%	.92% A
Net investment income (loss)	.05% A	.08%	.23% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 4,830	$ 2,705	$ 810
Portfolio turnover rate	67% A	66%	84%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. ^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. ^H Amount represents less than $.01 per share.

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

Contrafund Portfolio

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Bank of America Corp.	3.0
Exxon Mobil Corp.	2.9
Citigroup, Inc.	2.7
American International Group, Inc.	2.6
Fannie Mae	1.9
	13.1
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	30.2
Industrials	12.6
Consumer Discretionary	10.9
Energy	10.9
Health Care	8.0

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	99.2%
	Bonds	0.6%
	Short-Term Investments and Net Other Assets	0.2%
* Foreign investments		12.0%

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 97.9%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 10.3%
Auto Components - 0.1%
TRW Automotive Holdings Corp.	611,370		$ 11,524,325
Automobiles - 0.5%
DaimlerChrysler AG	385,800		18,159,606
Toyota Motor Corp. ADR	475,900		38,842,958
			57,002,564
Hotels, Restaurants & Leisure - 1.3%
Caesars Entertainment, Inc. (a)	2,730,500		40,957,500
McDonald's Corp.	2,561,300		66,593,800
MGM MIRAGE (a)	446,670		20,966,690
Six Flags, Inc. (a)	1,408,356		10,224,665
			138,742,655
Household Durables - 1.0%
LG Electronics, Inc.	237,410		11,269,009
Maytag Corp.	687,020		16,838,860
Newell Rubbermaid, Inc.	1,763,100		41,432,850
Sony Corp. sponsored ADR	587,200		22,342,960
Whirlpool Corp.	128,200		8,794,520
			100,678,199
Media - 5.3%
Clear Channel Communications, Inc.	2,650,100		97,921,195
Comcast Corp. Class A (a)	2,852,091		79,944,111
Liberty Media Corp. Class A (a)	3,755,576		33,762,628
Liberty Media International, Inc. Class A (a)	187,778		6,966,564
The Reader's Digest Association, Inc. (non-vtg.)	1,243,903		19,890,009
Time Warner, Inc. (a)	7,114,850		125,079,063
Viacom, Inc. Class B (non-vtg.)	3,377,818		120,655,659
Vivendi Universal SA sponsored ADR (a)	1,039,500		29,002,050
Walt Disney Co.	1,993,500		50,814,315
			564,035,594
Multiline Retail - 0.3%
Big Lots, Inc. (a)	1,141,556		16,506,903
Sears, Roebuck & Co.	452,700		17,093,952
			33,600,855
Specialty Retail - 1.6%
Abercrombie & Fitch Co. Class A	979,400		37,951,750
American Eagle Outfitters, Inc. (a)	626,000		18,097,660
Gap, Inc.	1,541,200		37,374,100
Limited Brands, Inc.	2,197,300		41,089,510
Office Depot, Inc. (a)	813,000		14,560,830
Toys 'R' Us, Inc. (a)	1,295,900		20,643,687
			169,717,537
Textiles Apparel & Luxury Goods - 0.2%
Liz Claiborne, Inc.	632,940		22,773,181
TOTAL CONSUMER DISCRETIONARY			1,098,074,910
	Shares		Value (Note 1)
CONSUMER STAPLES - 6.1%
Beverages - 0.4%
Anheuser-Busch Companies, Inc.	844,800		$ 45,619,200
Food & Staples Retailing - 0.7%
Albertsons, Inc.	442,100		11,733,334
CVS Corp.	1,469,900		61,765,198
			73,498,532
Food Products - 1.2%
Campbell Soup Co.	612,900		16,474,752
Fresh Del Monte Produce, Inc.	242,988		6,140,307
H.J. Heinz Co.	281,120		11,019,904
Hormel Foods Corp.	186,000		5,784,600
Interstate Bakeries Corp.	563,995		6,119,346
Kellogg Co.	194,900		8,156,565
Kraft Foods, Inc. Class A	943,100		29,877,408
Unilever PLC sponsored ADR	1,307,000		51,979,390
			135,552,272
Household Products - 2.1%
Colgate-Palmolive Co.	1,705,300		99,674,785
Kimberly-Clark Corp.	1,273,400		83,891,592
Procter & Gamble Co.	710,400		38,674,176
			222,240,553
Personal Products - 0.9%
Gillette Co.	2,332,620		98,903,088
Tobacco - 0.8%
Altria Group, Inc.	1,562,800		78,218,140
Loews Corp. - Carolina Group	171,550		4,211,553
			82,429,693
TOTAL CONSUMER STAPLES			658,243,338
ENERGY - 10.9%
Energy Equipment & Services - 2.5%
Baker Hughes, Inc.	1,538,300		57,916,995
BJ Services Co. (a)	570,145		26,135,447
Halliburton Co.	583,400		17,653,684
Noble Corp. (a)	930,100		35,241,489
Schlumberger Ltd. (NY Shares)	1,996,600		126,804,066
			263,751,681
Oil & Gas - 8.4%
Apache Corp.	647,780		28,210,819
BP PLC sponsored ADR	2,491,842		133,487,976
ChevronTexaco Corp.	1,270,071		119,526,382
Exxon Mobil Corp.	7,103,336		315,459,152
Royal Dutch Petroleum Co. (NY Shares)	1,143,000		59,058,810
Common Stocks - continued
	Shares		Value (Note 1)
ENERGY - continued
Oil & Gas - continued
Total SA:
Series B	391,400		$ 75,211,424
sponsored ADR	1,697,996		163,143,456
YUKOS Corp. sponsored ADR	248,400		7,899,120
			901,997,139
TOTAL ENERGY			1,165,748,820
FINANCIALS - 29.5%
Capital Markets - 6.0%
Bank of New York Co., Inc.	3,223,100		95,016,988
Charles Schwab Corp.	6,391,400		61,421,354
Credit Suisse Group sponsored ADR	735,200		26,327,512
J.P. Morgan Chase & Co.	3,654,550		141,686,904
Janus Capital Group, Inc.	2,332,400		38,461,276
LaBranche & Co., Inc.	517,900		4,360,718
Mellon Financial Corp.	1,716,500		50,344,945
Merrill Lynch & Co., Inc.	1,674,300		90,378,714
Morgan Stanley	2,066,900		109,070,313
Nomura Holdings, Inc.	1,853,000		27,702,350
			644,771,074
Commercial Banks - 8.6%
Bank of America Corp.	3,827,984		323,923,982
Bank One Corp.	2,714,138		138,421,038
Banknorth Group, Inc.	339,400		11,023,712
Comerica, Inc.	730,200		40,073,376
Huntington Bancshares, Inc.	387,200		8,866,880
Lloyds TSB Group PLC	2,282,400		17,928,844
PNC Financial Services Group, Inc.	226,500		12,022,620
Royal Bank of Scotland Group PLC	325,447		9,402,838
State Bank of India	463,175		4,544,908
Sumitomo Mitsui Financial Group, Inc.	5,917		41,156,180
U.S. Bancorp, Delaware	2,754,538		75,915,067
Wachovia Corp.	2,359,675		105,005,538
Wells Fargo & Co.	2,243,800		128,412,674
			916,697,657
Consumer Finance - 1.2%
American Express Co.	1,687,496		86,703,544
MBNA Corp.	1,456,400		37,560,556
			124,264,100
Diversified Financial Services - 3.1%
CIT Group, Inc.	1,191,400		45,618,706
Citigroup, Inc.	6,273,619		291,723,284
			337,341,990
Insurance - 7.7%
ACE Ltd.	2,113,415		89,355,186
Allianz AG sponsored ADR	567,200		6,210,840
Allstate Corp.	2,488,000		115,816,400
American International Group, Inc.	3,964,650		282,600,252
	Shares		Value (Note 1)
Assurant, Inc.	274,700		$ 7,246,586
Conseco, Inc. (a)	672,100		13,374,790
Fondiaria-Sai Spa	541,144		12,088,179
Genworth Financial, Inc. Class A	1,295,800		29,738,610
Hartford Financial Services Group, Inc.	1,334,400		91,726,656
Marsh & McLennan Companies, Inc.	368,000		16,699,840
Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)	123,914		13,465,283
Old Republic International Corp.	530,996		12,595,225
St. Paul Travelers Companies, Inc.	2,029,026		82,256,714
The Chubb Corp.	634,000		43,226,120
UnumProvident Corp.	680,100		10,813,590
			827,214,271
Real Estate - 0.1%
CarrAmerica Realty Corp.	193,740		5,856,760
Thrifts & Mortgage Finance - 2.8%
Fannie Mae	2,926,100		208,806,496
Freddie Mac	717,900		45,443,070
Housing Development Finance Corp. Ltd.	1,133,500		12,748,947
MGIC Investment Corp.	218,200		16,552,652
Sovereign Bancorp, Inc.	864,250		19,099,925
			302,651,090
TOTAL FINANCIALS			3,158,796,942
HEALTH CARE - 7.9%
Health Care Equipment & Supplies - 1.1%
Baxter International, Inc.	3,196,100		110,297,411
Hospira, Inc. (a)	85,700		2,365,320
			112,662,731
Health Care Providers & Services - 1.2%
Cardinal Health, Inc.	463,900		32,496,195
Community Health Systems, Inc. (a)	254,100		6,802,257
HCA, Inc.	204,800		8,517,632
IMS Health, Inc.	102,999		2,414,297
McKesson Corp.	1,062,800		36,485,924
Tenet Healthcare Corp. (a)	2,188,900		29,353,149
UnitedHealth Group, Inc.	247,800		15,425,550
Wellcare Group, Inc.	6,800		115,600
			131,610,604
Pharmaceuticals - 5.6%
Abbott Laboratories	857,000		34,931,320
Bristol-Myers Squibb Co.	2,517,500		61,678,750
GlaxoSmithKline PLC sponsored ADR	467,000		19,361,820
Johnson & Johnson	2,187,200		121,827,040
Merck & Co., Inc.	2,851,900		135,465,250
Pfizer, Inc.	2,939,200		100,755,776
Roche Holding AG (participation certificate)	53,880		5,347,463
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Pharmaceuticals - continued
Schering-Plough Corp.	3,803,630		$ 70,291,082
Wyeth	1,436,600		51,947,456
			601,605,957
TOTAL HEALTH CARE			845,879,292
INDUSTRIALS - 12.6%
Aerospace & Defense - 4.0%
Bombardier, Inc. Class B (sub. vtg.)	4,147,900		12,500,606
EADS NV	1,540,015		42,973,268
Honeywell International, Inc.	3,094,325		113,345,125
Lockheed Martin Corp.	1,439,400		74,963,952
Northrop Grumman Corp.	903,000		48,491,100
Raytheon Co.	1,286,678		46,024,472
The Boeing Co.	997,800		50,977,602
United Technologies Corp.	379,520		34,718,490
			423,994,615
Air Freight & Logistics - 0.1%
Ryder System, Inc.	204,900		8,210,343
Airlines - 0.2%
Southwest Airlines Co.	968,800		16,246,776
Building Products - 0.0%
Masco Corp.	162,300		5,060,514
Commercial Services & Supplies - 0.6%
Viad Corp.	1,061,700		28,676,517
Waste Management, Inc.	1,286,100		39,418,965
			68,095,482
Construction & Engineering - 0.2%
Fluor Corp.	368,900		17,585,463
Electrical Equipment - 0.3%
Emerson Electric Co.	550,200		34,965,210
Industrial Conglomerates - 3.5%
3M Co.	342,400		30,819,424
General Electric Co.	3,503,340		113,508,216
Hutchison Whampoa Ltd.	2,602,000		17,764,109
Siemens AG sponsored ADR	248,700		18,035,724
Textron, Inc.	879,800		52,216,130
Tyco International Ltd.	4,230,746		140,206,922
			372,550,525
Machinery - 2.8%
Caterpillar, Inc.	575,500		45,717,720
Deere & Co.	394,050		27,638,667
Dover Corp.	410,600		17,286,260
Eaton Corp.	497,400		32,201,676
Illinois Tool Works, Inc.	210,000		20,136,900
Ingersoll-Rand Co. Ltd. Class A	1,114,344		76,120,839
Navistar International Corp. (a)	373,600		14,480,736
Parker Hannifin Corp.	289,700		17,225,562
	Shares		Value (Note 1)
SPX Corp.	851,600		$ 39,548,304
Timken Co.	452,600		11,989,374
			302,346,038
Road & Rail - 0.9%
Burlington Northern Santa Fe Corp.	1,504,600		52,766,322
Union Pacific Corp.	807,900		48,029,655
			100,795,977
TOTAL INDUSTRIALS			1,349,850,943
INFORMATION TECHNOLOGY - 6.3%
Communications Equipment - 0.7%
Lucent Technologies, Inc. (a)	4,816,600		18,206,748
Motorola, Inc.	2,422,900		44,217,925
Nokia Corp. sponsored ADR	1,077,800		15,671,212
			78,095,885
Computers & Peripherals - 1.7%
Hewlett-Packard Co.	4,681,211		98,773,552
International Business Machines Corp.	640,900		56,495,335
Storage Technology Corp. (a)	380,210		11,026,090
Sun Microsystems, Inc. (a)	3,998,675		17,354,250
			183,649,227
Electronic Equipment & Instruments - 1.2%
Arrow Electronics, Inc. (a)	729,200		19,557,144
Avnet, Inc. (a)	1,328,830		30,164,441
PerkinElmer, Inc.	591,300		11,849,652
Solectron Corp. (a)	5,152,100		33,334,087
Thermo Electron Corp. (a)	1,155,100		35,507,774
			130,413,098
IT Services - 0.2%
Ceridian Corp. (a)	780,800		17,568,000
Office Electronics - 0.3%
Xerox Corp. (a)	1,881,900		27,287,550
Semiconductors & Semiconductor Equipment - 1.2%
Intel Corp.	2,085,300		57,554,280
Micron Technology, Inc. (a)	1,866,200		28,571,522
Rohm Co. Ltd.	148,300		18,010,104
Samsung Electronics Co. Ltd.	65,630		27,116,081
			131,251,987
Software - 1.0%
Microsoft Corp.	3,821,200		109,133,472
TOTAL INFORMATION TECHNOLOGY			677,399,219
MATERIALS - 6.8%
Chemicals - 2.8%
Arch Chemicals, Inc.	475,400		13,701,028
Dow Chemical Co.	2,294,100		93,369,870
Eastman Chemical Co.	476,800		22,042,464
Ferro Corp.	519,200		13,852,256
Great Lakes Chemical Corp.	650,500		17,602,530
Common Stocks - continued
	Shares		Value (Note 1)
MATERIALS - continued
Chemicals - continued
Hercules Trust II unit	15,700		$ 12,497,985
Lyondell Chemical Co.	1,389,900		24,170,361
Millennium Chemicals, Inc.	929,150		16,092,878
Olin Corp.	828,000		14,589,360
PolyOne Corp. (a)	1,239,100		9,218,904
PPG Industries, Inc.	390,300		24,389,847
Praxair, Inc.	1,023,124		40,832,879
			302,360,362
Containers & Packaging - 0.5%
Smurfit-Stone Container Corp. (a)	2,375,253		47,386,297
Metals & Mining - 2.0%
Alcan, Inc.	955,100		39,524,342
Alcoa, Inc.	2,921,916		96,510,885
Freeport-McMoRan Copper & Gold, Inc. Class B	820,704		27,206,338
Phelps Dodge Corp.	702,200		54,427,522
			217,669,087
Paper & Forest Products - 1.5%
Bowater, Inc.	391,300		16,274,167
Georgia-Pacific Corp.	1,562,701		57,788,683
International Paper Co.	645,400		28,849,380
Weyerhaeuser Co.	876,100		55,299,432
			158,211,662
TOTAL MATERIALS			725,627,408
TELECOMMUNICATION SERVICES - 4.5%
Diversified Telecommunication Services - 4.3%
BellSouth Corp.	5,200,199		136,349,218
Qwest Communications International, Inc. (a)	2,296,400		8,244,076
SBC Communications, Inc.	6,680,993		162,014,080
Verizon Communications, Inc.	4,242,902		153,550,623
			460,157,997
Wireless Telecommunication Services - 0.2%
KDDI Corp.	3,028		17,570,024
TOTAL TELECOMMUNICATION SERVICES			477,728,021
UTILITIES - 3.0%
Electric Utilities - 1.8%
Entergy Corp.	796,700		44,623,167
FirstEnergy Corp.	1,127,400		42,176,034
PG&E Corp. (a)	403,800		11,282,172
TXU Corp.	1,234,820		50,022,558
Wisconsin Energy Corp.	1,293,700		42,187,557
			190,291,488
Gas Utilities - 0.1%
NiSource, Inc.	568,729		11,727,192
	Shares		Value (Note 1)
Multi-Utilities & Unregulated Power - 1.1%
Dominion Resources, Inc.	1,174,600		$ 74,093,768
Public Service Enterprise Group, Inc.	594,000		23,777,820
SCANA Corp.	617,300		22,451,201
			120,322,789
TOTAL UTILITIES			322,341,469
TOTAL COMMON STOCKS (Cost $8,302,170,555)		10,479,690,362
Convertible Preferred Stocks - 1.3%
CONSUMER DISCRETIONARY - 0.2%
Automobiles - 0.1%
General Motors Corp.:
Series B, 5.25%	412,200		10,090,656
Series C, 6.25%	253,100		7,314,590
			17,405,246
Hotels, Restaurants & Leisure - 0.1%
Six Flags, Inc. 7.25% PIERS	388,400		8,641,900
TOTAL CONSUMER DISCRETIONARY			26,047,146
FINANCIALS - 0.5%
Capital Markets - 0.0%
State Street Corp. 6.75%	24,900		5,688,305
Consumer Finance - 0.2%
Ford Motor Co. Capital Trust II 6.50%	461,500		25,206,207
Insurance - 0.3%
Conseco, Inc. Series B, 5.50%	143,400		3,857,460
The Chubb Corp.:
7.00%	167,700		4,623,992
Series B, 7.00%	120,100		3,355,594
Travelers Property Casualty Corp. 4.50%	240,200		5,670,401
XL Capital Ltd. 6.50%	401,800		10,151,879
			27,659,326
TOTAL FINANCIALS			58,553,838
HEALTH CARE - 0.1%
Health Care Equipment & Supplies - 0.1%
Baxter International, Inc. 7.00%	156,900		8,935,455
INFORMATION TECHNOLOGY - 0.4%
Communications Equipment - 0.2%
Motorola, Inc. 7.00%	399,700		19,685,225
Office Electronics - 0.2%
Xerox Corp. Series C, 6.25%	145,650		19,166,666
TOTAL INFORMATION TECHNOLOGY			38,851,891
Convertible Preferred Stocks - continued
	Shares		Value (Note 1)
UTILITIES - 0.1%
Electric Utilities - 0.1%
TXU Corp. 8.75%	226,400		$ 10,725,700
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $137,257,376)		143,114,030
Corporate Bonds - 0.6%
	Principal Amount
Convertible Bonds - 0.6%
CONSUMER DISCRETIONARY - 0.4%
Hotels, Restaurants & Leisure - 0.1%
Royal Caribbean Cruises Ltd. liquid yield option note 0% 2/2/21	$ 11,239,000		6,019,946
Media - 0.2%
Liberty Media Corp.3.5% 1/15/31 (c)	11,400,000		10,274,250
News America, Inc. liquid yield option note 0% 2/28/21 (c)	22,670,000		12,936,182
			23,210,432
Specialty Retail - 0.1%
Gap, Inc. 5.75% 3/15/09	8,590,000		13,341,129
TOTAL CONSUMER DISCRETIONARY			42,571,507
FINANCIALS - 0.2%
Diversified Financial Services - 0.1%
Navistar Financial Corp. 4.75% 4/1/09 (c)	2,760,000		2,688,985
Tyco International Group SA yankee 3.125% 1/15/23	5,220,000		8,441,262
			11,130,247
Insurance - 0.1%
Loews Corp. 3.125% 9/15/07	5,340,000		5,099,700
TOTAL FINANCIALS			16,229,947
INFORMATION TECHNOLOGY - 0.0%
Electronic Equipment & Instruments - 0.0%
Celestica, Inc. liquid yield option note 0% 8/1/20	620,000		343,325
TOTAL CONVERTIBLE BONDS			59,144,779
Nonconvertible Bonds - 0.0%
CONSUMER DISCRETIONARY - 0.0%
Media - 0.0%
XM Satellite Radio, Inc. 12% 6/15/10	60,000		67,800
TOTAL CORPORATE BONDS (Cost $57,411,759)		59,212,579
Money Market Funds - 0.7%
	Shares		Value (Note 1)
Fidelity Cash Central Fund, 1.16% (b)	33,635,088		$ 33,635,088
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	44,428,150		44,428,150
TOTAL MONEY MARKET FUNDS (Cost $78,063,238)		78,063,238

TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $8,574,902,928)		10,760,080,209
NET OTHER ASSETS - (0.5)%		(57,548,792)
NET ASSETS - 100%	$ 10,702,531,417
Security Type Abbreviations
PIERS	-	Preferred Income Equity Redeemable Securities

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $25,899,417 or 0.2% of net assets.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,242,086,579 and $1,084,758,593, 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 $74,321 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $6,828,300. The weighted average interest rate was 1.15%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	88.0%
France	2.5%
United Kingdom	2.2%
Japan	1.6%
Netherlands Antilles	1.2%
Netherlands	1.0%
Others (individually less than 1%)	3.5%
	100.0%

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

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $42,097,513) (cost $8,574,902,928) - See accompanying schedule		$ 10,760,080,209
Receivable for investments sold		16,571,487
Receivable for fund shares sold		3,272,928
Dividends receivable		13,561,803
Interest receivable		530,313
Prepaid expenses		21,868
Other affiliated receivables		39,347
Other receivables		242,788
Total assets		10,794,320,743
Liabilities
Payable for investments purchased	$ 24,444,091
Payable for fund shares redeemed	16,701,391
Accrued management fee	4,192,686
Distribution fees payable	326,420
Other affiliated payables	902,491
Other payables and accrued expenses	794,097
Collateral on securities loaned, at value	44,428,150
Total liabilities		91,789,326
Net Assets		$ 10,702,531,417
Net Assets consist of:
Paid in capital		$ 8,265,840,765
Undistributed net investment income		77,069,325
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		175,028,199
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		2,184,593,128
Net Assets		$ 10,702,531,417
Initial Class: Net Asset Value, offering price and redemption price per share ($8,427,364,611 ÷ 357,918,433 shares)		$ 23.55
Service Class: Net Asset Value, offering price and redemption price per share ($1,110,886,939 ÷ 47,322,784 shares)		$ 23.47
Service Class 2: Net Asset Value, offering price and redemption price per share ($1,160,353,958 ÷ 49,773,902 shares)		$ 23.31
Service Class 2R: Net Asset Value, offering price and redemption price per share ($3,925,909 ÷ 168,876 shares)		$ 23.25

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 110,438,341
Interest		3,627,276
Security lending		670,300
Total income		114,735,917
Expenses
Management fee	$ 25,151,080
Transfer agent fees	3,482,831
Distribution fees	1,850,821
Accounting and security lending fees	701,194
Non-interested trustees' compensation	25,250
Appreciation in deferred trustee compensation account	26,206
Custodian fees and expenses	148,965
Registration fees	8,658
Audit	56,934
Legal	7,489
Interest	2,179
Miscellaneous	244,234
Total expenses before reductions	31,705,841
Expense reductions	(368,136)	31,337,705
Net investment income (loss)		83,398,212
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	188,227,588
Foreign currency transactions	7,952
Total net realized gain (loss)		188,235,540
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $917,197)	86,942,512
Assets and liabilities in foreign currencies	(27,406)
Total change in net unrealized appreciation (depreciation)		86,915,106
Net gain (loss)		275,150,646
Net increase (decrease) in net assets resulting from operations		$ 358,548,858

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

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 83,398,212	$ 156,056,293
Net realized gain (loss)	188,235,540	162,136,844
Change in net unrealized appreciation (depreciation)	86,915,106	2,060,660,428
Net increase (decrease) in net assets resulting from operations	358,548,858	2,378,853,565
Distributions to shareholders from net investment income	(160,632,605)	(152,426,442)
Distributions to shareholders from net realized gain	(38,902,738)	-
Total distributions	(199,535,343)	(152,426,442)
Share transactions - net increase (decrease)	150,501,277	95,024,961
Redemption fees	5	6,803
Total increase (decrease) in net assets	309,514,797	2,321,458,887
Net Assets
Beginning of period	10,393,016,620	8,071,557,733
End of period (including undistributed net investment income of $77,069,325 and undistributed net investment income of $153,745,641, respectively)	$ 10,702,531,417	$ 10,393,016,620

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	12,567,990	2,602,046	11,373,695	94,079
Reinvested	6,898,356	858,454	759,147	2,031
Redeemed	(24,003,533)	(2,508,390)	(2,287,876)	(9,756)
Net increase (decrease)	(4,537,187)	952,110	9,844,966	86,354
Dollars Sold	$ 293,008,871	$ 60,477,287	$ 262,015,556	$ 2,159,963
Reinvested	161,766,458	20,079,239	17,642,584	47,062
Redeemed	(556,202,619)	(57,804,072)	(52,465,395)	(223,657)
Net increase (decrease)	$ (101,427,290)	$ 22,752,454	$ 227,192,745	$ 1,983,368
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	32,080,268	11,240,469	21,169,436	138,968
Reinvested	7,869,268	847,723	452,997	1,082
Redeemed	(57,207,152)	(8,346,250)	(4,117,145)	(83,694)
Net increase (decrease)	(17,257,616)	3,741,942	17,505,288	56,356
Dollars Sold	$ 628,858,276	$ 219,068,172	$ 416,030,936	$ 2,784,343
Reinvested	130,865,933	14,063,717	7,478,977	17,815
Redeemed	(1,083,344,265)	(159,436,339)	(79,803,985)	(1,558,619)
Net increase (decrease)	$ (323,620,056)	$ 73,695,550	$ 343,705,928	$ 1,243,539
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 130,573,823	$ 16,025,683	$ 13,995,319	$ 37,780
From net realized gain	31,192,635	4,053,555	3,647,265	9,283
Total	$ 161,766,458	$ 20,079,238	$ 17,642,584	$ 47,063
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 130,865,933	$ 14,063,717	$ 7,478,977	$ 17,815
From net realized gain	-	-	-	-
Total	$ 130,865,933	$ 14,063,717	$ 7,478,977	$ 17,815

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

Equity-Income Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.18	$ 18.16	$ 22.75	$ 25.52	$ 25.71	$ 25.42
Income from Investment Operations
Net investment income (loss) E	.19	.36	.34	.34	.40	.41
Net realized and unrealized gain (loss)	.63	5.01	(4.08)	(1.51)	1.46	1.10
Total from investment operations	.82	5.37	(3.74)	(1.17)	1.86	1.51
Distributions from net investment income	(.36)	(.35)	(.36)	(.42)	(.44)	(.38)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)	(.84)
Total distributions	(.45)	(.35)	(.85)	(1.60)	(2.05)	(1.22)
Redemption fees added to paid in capital	E,G	- E,G	- E,G	-	-	-
Net asset value, end of period	$ 23.55	$ 23.18	$ 18.16	$ 22.75	$ 25.52	$ 25.71
Total Return B, C, D	3.53%	30.33%	(16.95)%	(4.96)%	8.42%	6.33%
Ratios to Average Net Assets F
Expenses before expense reductions	.56% A	.57%	.57%	.58%	.56%	.57%
Expenses net of voluntary waivers, if any	.56% A	.57%	.57%	.58%	.56%	.57%
Expenses net of all reductions	.56% A	.56%	.56%	.57%	.55%	.56%
Net investment income (loss)	1.61% A	1.83%	1.70%	1.47%	1.68%	1.57%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,427,365	$ 8,402,963	$ 6,895,940	$ 9,256,205	$ 9,969,086	$ 11,014,291
Portfolio turnover rate	21% A	26%	25%	24%	22%	27%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

^G Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.11	$ 18.10	$ 22.67	$ 25.45	$ 25.66	$ 25.39
Income from Investment Operations
Net investment income (loss) E	.17	.34	.32	.31	.37	.38
Net realized and unrealized gain (loss)	.62	5.00	(4.06)	(1.51)	1.46	1.11
Total from investment operations	.79	5.34	(3.74)	(1.20)	1.83	1.49
Distributions from net investment income	(.34)	(.33)	(.34)	(.40)	(.43)	(.38)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)	(.84)
Total distributions	(.43)	(.33)	(.83)	(1.58)	(2.04)	(1.22)
Redemption fees added to paid in capital	- E,G	- E,G	- E,G	-	-	-
Net asset value, end of period	$ 23.47	$ 23.11	$ 18.10	$ 22.67	$ 25.45	$ 25.66
Total Return B, C, D	3.41%	30.22%	(17.00)%	(5.09)%	8.30%	6.25%
Ratios to Average Net Assets F
Expenses before expense reductions	.66% A	.67%	.67%	.68%	.66%	.67%
Expenses net of voluntary waivers, if any	.66% A	.67%	.67%	.68%	.66%	.67%
Expenses net of all reductions	.66% A	.66%	.66%	.67%	.65%	.66%
Net investment income (loss)	1.51% A	1.73%	1.60%	1.37%	1.58%	1.47%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,110,887	$ 1,071,483	$ 771,516	$ 836,017	$ 634,897	$ 437,332
Portfolio turnover rate	21% A	26%	25%	24%	22%	27%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

^G Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.96	$ 18.00	$ 22.59	$ 25.41	$ 25.18
Income from Investment Operations
Net investment income (loss) E	.16	.31	.28	.27	.32
Net realized and unrealized gain (loss)	.61	4.97	(4.04)	(1.50)	1.95
Total from investment operations	.77	5.28	(3.76)	(1.23)	2.27
Distributions from net investment income	(.33)	(.32)	(.34)	(.41)	(.43)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)
Total distributions	(.42)	(.32)	(.83)	(1.59)	(2.04)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-
Net asset value, end of period	$ 23.31	$ 22.96	$ 18.00	$ 22.59	$ 25.41
Total Return B, C, D	3.34%	30.03%	(17.15)%	(5.23)%	10.19%
Ratios to Average Net Assets G
Expenses before expense reductions	.82% A	.82%	.83%	.84%	.83% A
Expenses net of voluntary waivers, if any	.82% A	.82%	.83%	.84%	.83% A
Expenses net of all reductions	.81% A	.81%	.82%	.83%	.82% A
Net investment income (loss)	1.36% A	1.58%	1.44%	1.21%	1.41% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,160,354	$ 916,679	$ 403,632	$ 226,078	$ 39,911
Portfolio turnover rate	21% A	26%	25%	24%	22%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

^H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.91	$ 17.99	$ 21.82
Income from Investment Operations
Net investment income (loss) E	.16	.31	.18
Net realized and unrealized gain (loss)	.62	4.96	(4.01)
Total from investment operations	.78	5.27	(3.83)
Distributions from net investment income	(.35)	(.35)	-
Distributions from net realized gain	(.09)	-	-
Total distributions	(.44)	(.35)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 23.25	$ 22.91	$ 17.99
Total Return B, C, D	3.39%	30.05%	(17.55)%
Ratios to Average Net Assets G
Expenses before expense reductions	.82% A	.82%	.85% A
Expenses net of voluntary waivers, if any	.82% A	.82%	.85% A
Expenses net of all reductions	.81% A	.81%	.84% A
Net investment income (loss)	1.36% A	1.57%	1.45% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 3,926	$ 1,891	$ 471
Portfolio turnover rate	21% A	26%	25%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

^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.

^H Amount represents less than $.01 per share.

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

Equity-Income Portfolio

Fidelity Variable Insurance Products: Growth Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Pfizer, Inc.	4.7
Microsoft Corp.	2.8
Cisco Systems, Inc.	2.8
Intel Corp.	2.1
Dell, Inc.	2.0
	14.4
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Information Technology	38.3
Health Care	20.2
Consumer Discretionary	11.3
Financials	9.9
Industrials	7.7

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	98.2%
	Short-Term Investments and Net Other Assets	1.8%
* Foreign investments		11.2%

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.2%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 11.3%
Hotels, Restaurants & Leisure - 1.0%
Hilton Group PLC	1,860,741		$ 9,343,793
McDonald's Corp.	1,433,200		37,263,200
Rank Group PLC	2,796,306		15,262,797
Starbucks Corp. (a)	868,700		37,771,076
			99,640,866
Internet & Catalog Retail - 1.1%
eBay, Inc. (a)	798,200		73,394,490
InterActiveCorp (a)	1,520,784		45,836,430
			119,230,920
Media - 4.0%
E.W. Scripps Co. Class A	419,700		44,068,500
Fox Entertainment Group, Inc. Class A (a)	1,889,900		50,460,330
Lamar Advertising Co. Class A (a)	1,208,100		52,371,135
News Corp. Ltd.:
ADR	574,500		20,348,790
sponsored ADR	328,861		10,812,950
Pixar (a)	447,812		31,127,412
SBS Broadcasting SA (a)	195,400		6,000,734
Time Warner, Inc. (a)	2,191,500		38,526,570
Univision Communications, Inc. Class A (a)	1,734,200		55,373,006
Viacom, Inc. Class B (non-vtg.)	1,419,530		50,705,612
Walt Disney Co.	2,173,400		55,399,966
			415,195,005
Multiline Retail - 0.7%
Nordstrom, Inc.	841,300		35,847,793
Saks, Inc.	2,452,800		36,792,000
			72,639,793
Specialty Retail - 4.2%
Aeropostale, Inc. (a)	366,600		9,865,206
Best Buy Co., Inc.	1,757,600		89,180,624
Circuit City Stores, Inc.	3,081,400		39,904,130
Foot Locker, Inc.	471,480		11,475,823
Gap, Inc.	3,182,700		77,180,475
Home Depot, Inc.	4,477,800		157,618,560
Staples, Inc.	1,547,900		45,368,949
Weight Watchers International, Inc. (a)	353,900		13,851,646
			444,445,413
Textiles Apparel & Luxury Goods - 0.3%
NIKE, Inc. Class B	457,400		34,648,050
TOTAL CONSUMER DISCRETIONARY			1,185,800,047
CONSUMER STAPLES - 4.9%
Beverages - 1.8%
PepsiCo, Inc.	2,905,600		156,553,728
The Coca-Cola Co.	728,600		36,779,728
			193,333,456
	Shares		Value (Note 1)
Food & Staples Retailing - 1.2%
Wal-Mart Stores, Inc.	1,768,400		$ 93,300,784
Walgreen Co.	883,400		31,987,914
			125,288,698
Food Products - 0.2%
Bunge Ltd.	266,500		10,377,510
Smithfield Foods, Inc. (a)	324,200		9,531,480
			19,908,990
Household Products - 1.1%
Colgate-Palmolive Co.	857,600		50,126,720
Procter & Gamble Co.	1,210,120		65,878,933
			116,005,653
Personal Products - 0.6%
Gillette Co.	1,436,300		60,899,120
TOTAL CONSUMER STAPLES			515,435,917
ENERGY - 5.0%
Energy Equipment & Services - 4.8%
Baker Hughes, Inc.	1,913,570		72,045,911
BJ Services Co. (a)	332,860		15,258,302
Cooper Cameron Corp. (a)	568,800		27,700,560
ENSCO International, Inc.	743,600		21,638,760
Global Industries Ltd. (a)	773,065		4,421,932
Grant Prideco, Inc. (a)	526,300		9,715,498
Halliburton Co.	2,923,200		88,456,032
National-Oilwell, Inc. (a)	1,114,600		35,098,754
Rowan Companies, Inc. (a)	1,159,408		28,208,397
Schlumberger Ltd. (NY Shares)	1,274,500		80,943,495
Smith International, Inc. (a)	452,400		25,225,824
Transocean, Inc. (a)	986,600		28,552,204
Varco International, Inc. (a)	1,266,100		27,714,929
Weatherford International Ltd. (a)	756,940		34,047,161
			499,027,759
Oil & Gas - 0.2%
YUKOS Corp. sponsored ADR	673,181		21,407,156
TOTAL ENERGY			520,434,915
FINANCIALS - 9.9%
Capital Markets - 1.6%
Ameritrade Holding Corp. (a)	1,361,800		15,456,430
E*TRADE Financial Corp. (a)	2,973,100		33,150,065
Goldman Sachs Group, Inc.	507,400		47,776,784
Merrill Lynch & Co., Inc.	427,600		23,081,848
Morgan Stanley	438,700		23,150,199
Nomura Holdings, Inc.	1,782,000		26,640,900
			169,256,226
Commercial Banks - 1.6%
Bank of America Corp.	602,700		51,000,474
Bank One Corp.	1,003,990		51,203,490
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Commercial Banks - continued
Fifth Third Bancorp	500,400		$ 26,911,512
UCBH Holdings, Inc.	965,900		38,172,368
			167,287,844
Consumer Finance - 2.8%
American Express Co.	2,607,600		133,978,488
Capital One Financial Corp.	720,900		49,295,142
MBNA Corp.	2,807,930		72,416,515
Providian Financial Corp.	1,455,100		21,346,317
SLM Corp.	396,600		16,042,470
			293,078,932
Diversified Financial Services - 0.5%
Citigroup, Inc.	1,076,010		50,034,465
Insurance - 2.6%
ACE Ltd.	639,100		27,021,148
AFLAC, Inc.	1,507,720		61,530,053
American International Group, Inc.	2,282,066		162,665,664
XL Capital Ltd. Class A	212,500		16,035,250
			267,252,115
Thrifts & Mortgage Finance - 0.8%
Fannie Mae	802,900		57,294,944
Freddie Mac	325,800		20,623,140
New York Community Bancorp, Inc.	447,500		8,784,425
			86,702,509
TOTAL FINANCIALS			1,033,612,091
HEALTH CARE - 20.2%
Biotechnology - 3.8%
Biogen Idec, Inc. (a)	490,000		30,992,500
Cephalon, Inc. (a)	558,300		30,148,200
CSL Ltd.	935,032		14,573,956
Digene Corp. (a)	30,126		1,100,503
Eyetech Pharmaceuticals, Inc.	480,500		20,623,060
Genentech, Inc. (a)	1,481,700		83,271,540
Genzyme Corp. - General Division (a)	780,500		36,941,065
IDEXX Laboratories, Inc. (a)	212,400		13,368,456
ImClone Systems, Inc. (a)	284,300		24,390,097
Ligand Pharmaceuticals, Inc. Class B (a)	834,100		14,496,658
MedImmune, Inc. (a)	453,100		10,602,540
Millennium Pharmaceuticals, Inc. (a)	2,560,956		35,341,193
ONYX Pharmaceuticals, Inc. (a)	469,300		19,879,548
OSI Pharmaceuticals, Inc. (a)	202,000		14,228,880
Pharmion Corp.	264,100		12,919,772
QLT, Inc. (a)	393,000		7,837,019
Tanox, Inc. (a)	1,042,600		19,882,382
Telik, Inc. (a)	459,400		10,965,878
			401,563,247
	Shares		Value (Note 1)
Health Care Equipment & Supplies - 4.1%
Alcon, Inc.	711,200		$ 55,935,880
Bausch & Lomb, Inc.	95,900		6,240,213
Baxter International, Inc.	1,865,800		64,388,758
Becton, Dickinson & Co.	1,028,300		53,265,940
C.R. Bard, Inc.	366,400		20,756,560
Dade Behring Holdings, Inc. (a)	465,600		22,125,312
Medtronic, Inc.	2,403,100		117,079,032
Respironics, Inc. (a)	234,300		13,765,125
St. Jude Medical, Inc. (a)	1,004,000		75,952,600
			429,509,420
Health Care Providers & Services - 0.3%
UnitedHealth Group, Inc.	489,400		30,465,150
Wellcare Group, Inc.	6,600		112,200
			30,577,350
Pharmaceuticals - 12.0%
Abbott Laboratories	2,135,200		87,030,752
Allergan, Inc.	522,800		46,801,056
Barr Pharmaceuticals, Inc. (a)	1,791,425		60,371,023
Elan Corp. PLC sponsored ADR (a)	1,140,500		28,215,970
Eli Lilly & Co.	894,970		62,567,353
Johnson & Johnson	3,319,520		184,897,264
Merck & Co., Inc.	1,083,060		51,445,350
Pfizer, Inc.	14,561,625		499,172,501
Roche Holding AG (participation certificate)	307,139		30,482,821
Schering-Plough Corp.	6,156,400		113,770,272
Wyeth	2,659,600		96,171,136
			1,260,925,498
TOTAL HEALTH CARE			2,122,575,515
INDUSTRIALS - 7.7%
Aerospace & Defense - 3.2%
Bombardier, Inc. Class B (sub. vtg.)	8,244,400		24,846,306
EADS NV	1,697,000		47,353,848
Embraer - Empresa Brasileira de Aeronautica SA sponsored ADR	1,183,210		33,827,974
General Dynamics Corp.	353,400		35,092,620
Goodrich Corp.	1,143,580		36,971,941
Honeywell International, Inc.	310,300		11,366,289
Lockheed Martin Corp.	538,720		28,056,538
Precision Castparts Corp.	789,700		43,188,693
The Boeing Co.	1,557,100		79,552,239
			340,256,448
Airlines - 0.3%
Ryanair Holdings PLC sponsored ADR (a)	1,010,800		33,134,024
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Commercial Services & Supplies - 0.9%
Herman Miller, Inc.	429,700		$ 12,435,518
Monster Worldwide, Inc. (a)	1,162,441		29,897,983
Robert Half International, Inc.	1,633,600		48,632,272
			90,965,773
Industrial Conglomerates - 3.1%
3M Co.	1,328,500		119,578,285
General Electric Co.	3,224,740		104,481,576
Siemens AG sponsored ADR	428,300		31,060,316
Tyco International Ltd.	2,128,800		70,548,432
			325,668,609
Machinery - 0.2%
Joy Global, Inc.	533,951		15,986,493
TOTAL INDUSTRIALS			806,011,347
INFORMATION TECHNOLOGY - 38.3%
Communications Equipment - 10.4%
3Com Corp. (a)	4,796,500		29,978,125
Alcatel SA sponsored ADR (a)	1,100,700		17,049,843
Alvarion Ltd. (a)	1,201,200		15,951,936
Andrew Corp. (a)	606,000		12,126,060
Avaya, Inc. (a)	3,371,000		53,228,090
Brocade Communications Systems, Inc. (a)	6,965,100		41,651,298
Cisco Systems, Inc. (a)	12,312,120		291,797,244
Corning, Inc. (a)	9,000		117,540
Extreme Networks, Inc. (a)	2,039,100		11,255,832
F5 Networks, Inc. (a)	368,600		9,760,528
Foundry Networks, Inc. (a)	2,192,300		30,845,661
Harris Corp.	1,347,000		68,360,250
Juniper Networks, Inc. (a)	1,895,600		46,574,892
Motorola, Inc.	5,330,150		97,275,238
Nortel Networks Corp. (a)	14,059,900		70,158,996
QUALCOMM, Inc.	2,215,300		161,672,594
Research in Motion Ltd. (a)	165,600		11,328,435
Scientific-Atlanta, Inc.	1,706,000		58,857,000
Telefonaktiebolaget LM Ericsson ADR (a)	2,283,100		68,310,352
			1,096,299,914
Computers & Peripherals - 5.8%
Dell, Inc. (a)	5,963,300		213,605,406
Diebold, Inc.	330,200		17,457,674
EMC Corp. (a)	4,726,000		53,876,400
International Business Machines Corp.	1,774,670		156,437,161
Lexmark International, Inc. Class A (a)	419,400		40,484,682
Network Appliance, Inc. (a)	2,476,590		53,320,983
Quanta Computer, Inc.	15,455,000		32,917,263
Sun Microsystems, Inc. (a)	6,269,600		27,210,064
UNOVA, Inc. (a)	520,800		10,546,200
			605,855,833
	Shares		Value (Note 1)
Electronic Equipment & Instruments - 3.2%
Agilent Technologies, Inc. (a)	739,860		$ 21,663,101
Amphenol Corp. Class A (a)	1,322,582		44,068,432
Arrow Electronics, Inc. (a)	426,700		11,444,094
Flextronics International Ltd. (a)	2,676,600		42,691,770
Hon Hai Precision Industries Co. Ltd.	5,599,000		20,848,228
Mettler-Toledo International, Inc. (a)	334,300		16,427,502
Molex, Inc.	549,900		17,640,792
National Instruments Corp.	1,569,629		48,109,129
Solectron Corp. (a)	4,272,300		27,641,781
Thermo Electron Corp. (a)	860,500		26,451,770
Waters Corp. (a)	1,341,100		64,077,758
			341,064,357
Internet Software & Services - 1.2%
EarthLink, Inc. (a)	2,092,088		21,653,111
Openwave Systems, Inc. (a)	1,729,373		21,963,037
Yahoo!, Inc. (a)	2,269,132		82,437,566
			126,053,714
IT Services - 1.2%
BearingPoint, Inc. (a)	3,072,021		27,248,826
First Data Corp.	2,131,600		94,898,832
			122,147,658
Office Electronics - 0.1%
Zebra Technologies Corp. Class A (a)	77,900		6,777,300
Semiconductors & Semiconductor Equipment - 10.6%
Agere Systems, Inc.:
Class A (a)	8,448,145		19,430,734
Class B (a)	6,893,509		14,821,044
Altera Corp. (a)	2,455,100		54,552,322
Analog Devices, Inc.	1,283,900		60,446,012
Applied Materials, Inc. (a)	1,496,300		29,357,406
ASML Holding NV (NY Shares) (a)	3,950,276		67,589,222
Broadcom Corp. Class A (a)	1,346,500		62,975,805
Chartered Semiconductor Manufacturing Ltd. ADR (a)	2,578,700		20,990,618
Integrated Circuit Systems, Inc. (a)	1,552,759		42,172,934
Intel Corp.	7,910,600		218,332,560
Intersil Corp. Class A	2,090,936		45,289,674
KLA-Tencor Corp. (a)	915,200		45,192,576
Lam Research Corp. (a)	1,927,000		51,643,600
LSI Logic Corp. (a)	2,990,500		22,787,610
MediaTek, Inc.	2,249,000		17,954,483
Microchip Technology, Inc.	672,900		21,223,266
PMC-Sierra, Inc. (a)	2,517,900		36,131,865
Samsung Electronics Co. Ltd.	110,380		45,605,258
Semiconductor Manufacturing International Corp. sponsored ADR	1,458,540		15,650,134
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR	5,511,173		45,797,848
Teradyne, Inc. (a)	2,474,900		56,180,230
Texas Instruments, Inc.	485,550		11,740,599
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Semiconductors & Semiconductor Equipment - continued
Tokyo Electron Ltd.	578,300		$ 32,910,653
United Microelectronics Corp. sponsored ADR (a)	6,438,062		27,748,047
Xilinx, Inc.	1,274,300		42,446,933
			1,108,971,433
Software - 5.8%
Adobe Systems, Inc.	431,267		20,053,916
Cadence Design Systems, Inc. (a)	2,863,000		41,885,690
Compuware Corp. (a)	2,052,637		13,547,404
Electronic Arts, Inc. (a)	236,931		12,924,586
Microsoft Corp.	10,273,350		293,406,876
Novell, Inc. (a)	1,917,000		16,083,630
Oracle Corp. (a)	2,329,891		27,795,600
SAP AG sponsored ADR	1,256,600		52,538,446
Symantec Corp. (a)	353,688		15,484,461
Synopsys, Inc. (a)	1,512,293		42,994,490
Take-Two Interactive Software, Inc. (a)	1,109,100		33,982,824
VERITAS Software Corp. (a)	1,243,667		34,449,576
			605,147,499
TOTAL INFORMATION TECHNOLOGY			4,012,317,708
MATERIALS - 0.6%
Containers & Packaging - 0.2%
Owens-Illinois, Inc. (a)	1,034,200		17,333,192
Smurfit-Stone Container Corp. (a)	540,449		10,781,958
			28,115,150
Metals & Mining - 0.4%
Arch Coal, Inc.	374,500		13,702,955
CONSOL Energy, Inc.	197,500		7,110,000
Massey Energy Co.	676,800		19,092,528
			39,905,483
TOTAL MATERIALS			68,020,633
TELECOMMUNICATION SERVICES - 0.3%
Wireless Telecommunication Services - 0.3%
Nextel Communications, Inc. Class A (a)	1,332,500		35,524,450
TOTAL COMMON STOCKS (Cost $8,135,114,138)		10,299,732,623
Preferred Stocks - 0.0%
	Shares		Value (Note 1)
Convertible Preferred Stocks - 0.0%
INFORMATION TECHNOLOGY - 0.0%
Communications Equipment - 0.0%
Chorum Technologies, Inc. Series E (a)(d)	88,646		$ 37,231
Nonconvertible Preferred Stocks - 0.0%
HEALTH CARE - 0.0%
Biotechnology - 0.0%
Geneprot, Inc. Series A (d)	826,000		2,891,000
TOTAL PREFERRED STOCKS (Cost $5,910,390)		2,928,231
Convertible Bonds - 0.0%
	Principal Amount
INFORMATION TECHNOLOGY - 0.0%
Semiconductors & Semiconductor Equipment - 0.0%
Micron Technology, Inc. 2.5% 2/1/10 (c)	$ 1,523,000		2,156,431
TOTAL CONVERTIBLE BONDS (Cost $1,523,000)		2,156,431
Money Market Funds - 2.3%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	210,501,797		210,501,797
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	26,582,300		26,582,300
TOTAL MONEY MARKET FUNDS (Cost $237,084,097)		237,084,097

TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $8,379,631,625)		10,541,901,382
NET OTHER ASSETS - (0.5)%		(55,225,922)
NET ASSETS - 100%	$ 10,486,675,460

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $2,156,431 or 0.0% of net assets.

(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,928,231 or 0.0% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Chorum Technologies, Inc. Series E	9/19/00	$ 1,528,257
Geneprot, Inc. Series A	7/7/00	$ 4,543,000

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $4,018,145,049 and $4,440,163,364, 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 $414,823 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which the loans were outstanding amounted to $21,844,594. The weighted average interest rate was 1.13%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	88.8%
Taiwan	1.4%
Netherlands	1.1%
Canada	1.1%
Others (individually less than 1%)	7.6%
	100.0%

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $4,332,499,000 of which $2,090,079,000, $2,197,712,000 and $44,708,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $25,868,492) (cost $8,379,631,625) - See accompanying schedule		$ 10,541,901,382
Receivable for investments sold		52,553,169
Receivable for fund shares sold		2,747,696
Dividends receivable		4,338,062
Interest receivable		110,885
Prepaid expenses		23,151
Other affiliated receivables		40,355
Other receivables		867,622
Total assets		10,602,582,322
Liabilities
Payable for investments purchased	$ 76,888,817
Payable for fund shares redeemed	5,937,759
Accrued management fee	4,964,012
Distribution fees payable	265,808
Other affiliated payables	888,829
Other payables and accrued expenses	379,337
Collateral on securities loaned, at value	26,582,300
Total liabilities		115,906,862
Net Assets		$ 10,486,675,460
Net Assets consist of:
Paid in capital		$ 12,150,294,964
Undistributed net investment income		4,018,820
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(3,829,834,877)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		2,162,196,553
Net Assets		$ 10,486,675,460
Initial Class: Net Asset Value, offering price and redemption price per share ($8,339,175,590 ÷ 265,368,515 shares)		$ 31.42
Service Class: Net Asset Value, offering price and redemption price per share ($1,396,905,855 ÷ 44,615,705 shares)		$ 31.31
Service Class 2: Net Asset Value, offering price and redemption price per share ($748,179,671 ÷ 24,060,808 shares)		$ 31.10
Service Class 2R: Net Asset Value, offering price and redemption price per share ($2,414,344 ÷ 77,879 shares)		$ 31.00

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 36,456,917
Special Dividends		4,905,600
Interest		214,993
Security lending		390,677
Total income		41,968,187
Expenses
Management fee	$ 30,698,594
Transfer agent fees	3,488,361
Distribution fees	1,567,522
Accounting and security lending fees	705,285
Non-interested trustees' compensation	25,526
Appreciation in deferred trustee compensation account	23,050
Custodian fees and expenses	165,961
Audit	54,087
Legal	12,613
Interest	21,958
Miscellaneous	263,364
Total expenses before reductions	37,026,321
Expense reductions	(1,714,681)	35,311,640
Net investment income (loss)		6,656,547
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	555,640,981
Foreign currency transactions	30,470
Total net realized gain (loss)		555,671,451
Change in net unrealized appreciation (depreciation) on: Investment securities	(412,522,781)
Assets and liabilities in foreign currencies	(70,917)
Total change in net unrealized appreciation (depreciation)		(412,593,698)
Net gain (loss)		143,077,753
Net increase (decrease) in net assets resulting from operations		$ 149,734,300

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 6,656,547	$ 23,031,175
Net realized gain (loss)	555,671,451	49,130,228
Change in net unrealized appreciation (depreciation)	(412,593,698)	2,530,101,870
Net increase (decrease) in net assets resulting from operations	149,734,300	2,602,263,273
Distributions to shareholders from net investment income	(25,185,765)	(23,104,405)
Share transactions - net increase (decrease)	(244,847,476)	(285,825,613)
Redemption fees	5	2,361
Total increase (decrease) in net assets	(120,298,936)	2,293,335,616
Net Assets
Beginning of period	10,606,974,396	8,313,638,780
End of period (including undistributed net investment income of $4,018,820 and undistributed net investment income of $22,711,797, respectively)	$ 10,486,675,460	$ 10,606,974,396

Other Information:
Share Transactions		Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	7,073,494	2,484,479	6,020,770	41,408
Reinvested	677,303	70,256	26,349	100
Redeemed	(19,234,101)	(3,263,099)	(1,836,810)	(8,300)
Net increase (decrease)	(11,483,304)	(708,364)	4,210,309	33,208
Dollars Sold	$ 224,136,194	$ 78,535,528	$ 188,061,083	$ 1,293,724
Reinvested	22,052,984	2,279,802	849,771	3,208
Redeemed	(602,494,862)	(102,210,060)	(57,101,879)	(252,969)
Net increase (decrease)	$ (356,305,684)	$ (21,394,730)	$ 131,808,975	$ 1,043,963
Share Transactions		Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	23,586,131	8,385,408	13,542,393	50,235
Reinvested	941,499	102,591	14,708	31
Redeemed	(47,048,733)	(8,519,590)	(3,984,642)	(14,664)
Net increase (decrease)	(22,521,103)	(31,591)	9,572,459	35,602
Dollars Sold	$ 625,883,728	$ 221,233,256	$ 361,842,888	$ 1,388,031
Reinvested	20,552,932	2,232,378	318,424	671
Redeemed	(1,198,774,049)	(217,996,235)	(102,097,753)	(409,884)
Net increase (decrease)	$ (552,337,389)	$ 5,469,399	$ 260,063,559	$ 978,818
Distributions		Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 22,052,984	$ 2,279,802	$ 849,771	$ 3,208
		Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 20,552,932	$ 2,232,378	$ 318,424	$ 671

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

Growth Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 31.04	$ 23.44	$ 33.61	$ 43.66	$ 54.93	$ 44.87
Income from Investment Operations
Net investment income (loss) E	.02 F	.07	.07	.07	.03	.07
Net realized and unrealized gain (loss)	.44	7.60	(10.17)	(7.27)	(5.27)	15.10
Total from investment operations	.46	7.67	(10.10)	(7.20)	(5.24)	15.17
Distributions from net investment income	(.08)	(.07)	(.07)	(.03)	(.06)	(.08)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)	(5.03)
Total distributions	(.08)	(.07)	(.07)	(2.85)	(6.03)	(5.11)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-	-
Net asset value, end of period	$ 31.42	$ 31.04	$ 23.44	$ 33.61	$ 43.66	$ 54.93
Total Return B, C, D	1.47%	32.85%	(30.10)%	(17.67)%	(10.96)%	37.44%
Ratios to Average Net Assets G
Expenses before expense reductions	.66% A	.67%	.67%	.68%	.65%	.66%
Expenses net of voluntary waivers, if any	.66% A	.67%	.67%	.68%	.65%	.66%
Expenses net of all reductions	.63% A	.64%	.61%	.65%	.64%	.65%
Net investment income (loss)	.15% A	.28%	.25%	.19%	.07%	.14%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,339,176	$ 8,594,509	$ 7,016,147	$ 11,458,659	$ 15,517,271	$ 17,142,411
Portfolio turnover rate	76% A	61%	90%	105%	103%	84%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^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. 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.

^H Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 30.92	$ 23.34	$ 33.48	$ 43.51	$ 54.80	$ 44.82
Income from Investment Operations
Net investment income (loss) E	.01 F	.05	.04	.03	(.02)	.02
Net realized and unrealized gain (loss)	.43	7.58	(10.14)	(7.24)	(5.25)	15.07
Total from investment operations	.44	7.63	(10.10)	(7.21)	(5.27)	15.09
Distributions from net investment income	(.05)	(.05)	(.04)	-	(.05)	(.08)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)	(5.03)
Total distributions	(.05)	(.05)	(.04)	(2.82)	(6.02)	(5.11)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-	-
Net asset value, end of period	$ 31.31	$ 30.92	$ 23.34	$ 33.48	$ 43.51	$ 54.80
Total Return B, C, D	1.42%	32.78%	(30.20)%	(17.74)%	(11.05)%	37.29%
Ratios to Average Net Assets G
Expenses before expense reductions	.77% A	.77%	.77%	.78%	.76%	.77%
Expenses net of voluntary waivers, if any	.77% A	.77%	.77%	.78%	.76%	.77%
Expenses net of all reductions	.73% A	.74%	.71%	.75%	.74%	.75%
Net investment income (loss)	.05% A	.18%	.15%	.09%	(.04)%	.04%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,396,906	$ 1,401,298	$ 1,058,738	$ 1,655,758	$ 1,847,051	$ 916,330
Portfolio turnover rate	76% A	61%	90%	105%	103%	84%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^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. 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.

^H Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 G
Selected Per-Share Data
Net asset value, beginning of period	$ 30.72	$ 23.21	$ 33.34	$ 43.43	$ 53.40
Income from Investment Operations
Net investment income (loss) E	(.02) F	.01	- I	(.02)	(.09)
Net realized and unrealized gain (loss)	.44	7.53	(10.09)	(7.22)	(3.86)
Total from investment operations	.42	7.54	(10.09)	(7.24)	(3.95)
Distributions from net investment income	(.04)	(.03)	(.04)	(.03)	(.05)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)
Total distributions	(.04)	(.03)	(.04)	(2.85)	(6.02)
Redemption fees added to paid in capital	- E,I	- E,I	- E,I	-	-
Net asset value, end of period	$ 31.10	$ 30.72	$ 23.21	$ 33.34	$ 43.43
Total Return B, C, D	1.36%	32.54%	(30.30)%	(17.87)%	(8.88)%
Ratios to Average Net Assets H
Expenses before expense reductions	.92% A	.92%	.93%	.93%	.91% A
Expenses net of voluntary waivers, if any	.92% A	.92%	.93%	.93%	.91% A
Expenses net of all reductions	.89% A	.89%	.87%	.90%	.90% A
Net investment income (loss)	(.10)% A	.02%	(.01)%	(.06)%	(.19)% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 748,180	$ 609,798	$ 238,543	$ 191,475	$ 57,095
Portfolio turnover rate	76% A	61%	90%	105%	103%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^G For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^H 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.

^I Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 G
Selected Per-Share Data
Net asset value, beginning of period	$ 30.65	$ 23.20	$ 31.05
Income from Investment Operations
Net investment income (loss) E	(.02) F	.01	(.01)
Net realized and unrealized gain (loss)	.43	7.51	(7.84)
Total from investment operations	.41	7.52	(7.85)
Distributions from net investment income	(.06)	(.07)	-
Redemption fees added to paid in capital E,I	-	-	-
Net asset value, end of period	$ 31.00	$ 30.65	$ 23.20
Total Return B, C, D	1.33%	32.54%	(25.28)%
Ratios to Average Net Assets H
Expenses before expense reductions	.92% A	.92%	.96% A
Expenses net of voluntary waivers, if any	.92% A	.92%	.96% A
Expenses net of all reductions	.88% A	.90%	.90% A
Net investment income (loss)	(.10)% A	.02%	(.03)% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 2,414	$ 1,369	$ 210
Portfolio turnover rate	76% A	61%	90%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^G For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

^H 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.

^I Amount represents less than $.01 per share.

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

Growth Portfolio

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Equity-Income Portfolio and Growth Portfolio (the funds) are funds of Variable Insurance Products Fund. Contrafund Portfolio (the fund) is a fund of Variable Insurance Products Fund II. The Variable Insurance Products Fund and Variable Insurance Products Fund II (the trusts) (referred to in this report as Fidelity Variable Insurance Products) are registered under the Investment Company Act of 1940, as amended (the 1940 Act), as open-end management investment companies organized as Massachusetts business trusts. Each fund is authorized to issue an unlimited number of shares. Shares of each fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. Each fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. 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 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 funds:

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. Equity securities, including restricted 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. Debt securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. 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.

Foreign Currency. Certain funds may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

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 funds are 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost and/or as a realized gain. The funds estimate the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Large, non-recurring dividends recognized by the funds are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends to net investment income per share is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.

Expenses. Most expenses of each 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 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

1. Significant Accounting Policies - continued

Income Tax Information and Distributions to Shareholders. Each year, each 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.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, foreign currency transactions, passive foreign investment companies (PFIC), prior period premium and discount on debt securities, market discount, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each fund:

	Cost for Federal Income Tax Purposes	Unrealized Appreciation	Unrealized Depreciation	Net Unrealized Appreciation/ (Depreciation)
Contrafund	$ 8,512,255,064	$ 3,109,225,863	$ (125,168,631)	$ 2,984,057,232
Equity-Income	$ 8,584,905,505	$ 2,704,753,289	$ (529,578,585)	$ 2,175,174,704
Growth	$ 8,407,236,379	$ 2,397,984,284	$ (263,319,281)	$ 2,134,665,003

Trading (Redemption) Fees. Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the applicable fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the funds 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. Certain funds 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).

Futures Contracts. Certain funds may use futures contracts to manage their exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a 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 each applicable fund's Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in each applicable fund's 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 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. Certain funds 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 each applicable 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 each applicable fund's Schedule of Investments.

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the funds with investment management related services for which the funds pay a monthly management fee. The management fee is the sum of an individual fund fee rate and a group fee rate. The individual fund fee rate is applied to each fund's

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Management Fee - continued

average net assets. 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, each fund's annualized management fee rate expressed as a percentage of each fund's average net assets was as follows:

	Individual Rate	Group Rate	Total
Contrafund	.30%	.28%	.58%
Equity-Income	.20%	.28%	.48%
Growth	.30%	.28%	.58%

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Funds have adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2 and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

	Service Class	Service Class 2	Service Class 2R
Contrafund	$ 893,431	$ 1,319,171	$ 4,262
Equity-Income	$ 549,203	$ 1,298,023	$ 3,595
Growth	$ 709,744	$ 855,290	$ 2,488

Transfer Agent Fees. Fidelity Investment Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Contrafund
Initial Class	$ 2,609,330
Service Class	592,177
Service Class 2	362,841
Service Class 2R	1,163
Equity-Income	$ 3,565,511
Initial Class	$ 2,767,209
Service Class	360,175
Service Class 2	354,461
Service Class 2R	986
Growth	$ 3,482,831
Initial Class	$ 2,789,501
Service Class	465,988
Service Class 2	232,191
Service Class 2R	681
	$ 3,488,361

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains each fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Central Funds. The funds 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 funds are recorded as income in the accompanying financial statements. Distributions from the Central Funds are noted in the table below:

	Income Distributions
Contrafund	$ 3,912,051
Equity-Income	$ 493,725
Growth	$ 193,333

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Brokerage Commissions. Certain funds placed a portion of their 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 each applicable fund's Schedule of Investments.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the funds, 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 each applicable fund's participation in the program is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

5. Committed Line of Credit.

Certain funds participate with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

Certain funds lend portfolio securities from time to time in order to earn additional income. Each applicable 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 funds and any additional required collateral is delivered to the funds 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. The value of loaned securities and cash collateral at period end are disclosed on each applicable fund's Statement of Assets and Liabilities.

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of certain funds provided services to these funds in addition to trade execution. These services included payments of expenses on behalf of each applicable fund. In addition, through arrangements with each applicable fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. All of the applicable expense reductions are noted in the table below.

	Brokerage Service Arrangement	Custody Expense Reduction
Contrafund	$ 1,187,540	$ 47,466
Equity-Income	$ 367,594	$ 542
Growth	$ 1,714,681	$ -

8. Other Information.

At the end of the period, FMR or its affiliates and certain unaffiliated shareholders each were owners of record of more than 10% of the outstanding shares of the following funds:

	Affiliated %	Number of Unaffiliated Shareholders	Unaffiliated Shareholders %
Contrafund	14%	2	32%
Equity-Income	11%	2	35%
Growth	12%	2	36%

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.

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

Fidelity Management & Research (Far East) Inc.
Contrafund Portfolio

Fidelity Investments Japan Limited
Contrafund Portfolio

Fidelity International Investment Advisors
Contrafund Portfolio

Fidelity International Investment Advisors
(U.K.) Limited
Contrafund Portfolio

General Distributor

Fidelity Distributors Corporation
Boston, MA

Transfer and Shareholder Servicing Agent

Fidelity Investments Institutional Operations Company, Inc.
Boston, MA

Custodian

JPMorgan Chase Bank, New York, NY
Equity-Income Portfolio

Brown Brothers Harriman & Co., Boston, MA
Contrafund Portfolio

Mellon Bank, N.A., Pittsburgh, PA
Growth Portfolio

VIP2R-SANN-0804
1.774934.102

Fidelity® Variable Insurance Products

Asset Manager ^SM Portfolio

Contrafund® Portfolio

Equity-Income Portfolio

Growth Portfolio

High Income Portfolio

Index 500 Portfolio

Overseas Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Asset Manager Portfolio	3	Investment Summary
	4	Investments
	22	Financial Statements
Contrafund Portfolio	26	Investment Summary
	27	Investments
	35	Financial Statements
Equity-Income Portfolio	39	Investment Summary
	40	Investments
	45	Financial Statements
Growth Portfolio	49	Investment Summary
	50	Investments
	55	Financial Statements
High Income Portfolio	59	Investment Summary
	60	Investments
	68	Financial Statements
Index 500 Portfolio	73	Investment Summary
	74	Investments
	82	Financial Statements
Overseas Portfolio	86	Investment Summary
	87	Investments
	91	Financial Statements
Notes to Financial Statements	96	Notes to the Financial Statements

For a free copy of the fund's proxy voting guidelines call 877-208-0098 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

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 funds. This report is not
authorized for distribution to prospective investors in the funds 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 funds nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Fidelity Variable Insurance Products: Asset Manager Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Cardinal Health, Inc.	3.4
American International Group, Inc.	3.0
Microsoft Corp.	2.7
Fannie Mae	2.3
Pfizer, Inc.	2.3
	13.7
Top Five Bond Issuers as of June 30, 2004
(with maturities greater than one year)	% of fund's net assets
Fannie Mae	8.3
U.S. Treasury Obligations	4.6
Freddie Mac	1.1
Government National Mortgage Association	0.6
Thirteen Affiliates of General Growth Properties, Inc.	0.5
	15.1

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stock Class and Equity Futures	55.4%
	Bond Class	31.2%
	Short-Term Class	13.4%

* Foreign
investments 7.3%

Asset allocations in the pie chart reflect the categorization of assets as defined in the fund's prospectus in effect of the time period indicated above. Financial Statement categorizations conform to accounting standards and will differ from the pie chart. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.

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

Semiannual Report

Fidelity Variable Insurance Products: Asset Manager Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 52.6%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 5.9%
Auto Components - 0.0%
Aisin Seiki Co. Ltd.	22,900		$ 484,450
Bridgestone Corp.	29,000		552,820
Exide Technologies warrants 3/18/06 (a)	16		0
NOK Corp.	9,200		346,477
			1,383,747
Automobiles - 0.2%
Fiat Spa (a)	89,500		752,727
Honda Motor Co. Ltd.	17,600		856,064
Kia Motors Corp.	22,630		193,467
Toyota Motor Corp.	62,600		2,554,706
			4,356,964
Distributors - 0.0%
Sixt AG	15,300		252,841
Hotels, Restaurants & Leisure - 0.3%
H.I.S. Co. Ltd.	14,700		453,824
Hilton Group PLC	233,900		1,174,539
McDonald's Corp.	214,100		5,566,600
William Hill PLC	43,100		434,425
			7,629,388
Household Durables - 0.1%
Casio Computer Co. Ltd.	17,000		261,151
HTL International Holdings Ltd.	177,000		106,124
Koninklijke Philips Electronics NV	4,200		114,240
Koninklijke Philips Electronics NV (NY Shares)	7,200		195,840
Matsushita Electric Industrial Co. Ltd.	30,000		430,800
Merry Electronics Co. Ltd.	158,000		362,407
Rinnai Corp.	7,200		222,281
SEB SA	6,340		757,762
Sony Corp.	10,600		403,330
Sumitomo Forestry Co. Ltd.	29,000		338,164
Techtronic Industries Co. Ltd.	237,000		378,298
			3,570,397
Internet & Catalog Retail - 0.0%
N Brown Group PLC	175,800		339,042
Leisure Equipment & Products - 0.0%
Asia Optical Co., Inc.	15,000		91,153
Fuji Photo Film Co. Ltd.	7,000		222,616
			313,769
Media - 2.7%
Asahi Broadcasting Corp.	940		63,022
British Sky Broadcasting Group PLC (BSkyB)	56,500		639,392
Cheil Communications, Inc.	750		101,992
Clear Channel Communications, Inc.	1,567,168		57,906,858
Dentsu, Inc.	84		219,491
ITV PLC	383,471		805,829
Maiden Group PLC	55,800		222,842
	Shares		Value (Note 1)
McGraw-Hill Companies, Inc.	9,500		$ 727,415
Media Capital SGPS SA	13,700		71,847
Mediaset Spa	39,200		447,964
Modern Times Group AB (MTG) (B Shares) (a)	29,750		578,070
News Corp. Ltd.	81,135		718,450
News Corp. Ltd. sponsored ADR	243,400		8,002,992
NRJ Group	25,500		559,796
PT Multimedia SGPS SA	23,500		515,891
Publishing & Broadcasting Ltd.	37,449		336,348
Reuters Group PLC	55,500		374,119
Television Broadcasts Ltd.	44,000		188,415
Time Warner, Inc. (a)	264,600		4,651,668
Tv Asahi Corp.	144		275,843
Vivendi Universal SA (a)	14,200		396,180
Wolters Kluwer NV (Certificaten Van Aandelen)	52,600		957,132
			78,761,556
Multiline Retail - 0.1%
Barneys, Inc. warrants 4/1/08 (a)	1,130		39,550
Don Quijote Co. Ltd.	7,100		458,194
Hankyu Department Stores, Inc.	16,000		141,641
Kohl's Corp. (a)	29,700		1,255,716
Marks & Spencer Group PLC	55,940		369,197
Next PLC	16,900		437,542
Ryohin Keikaku Co. Ltd.	9,400		492,117
Shinsegae Co. Ltd.	1,080		260,061
Woolworths Group PLC	408,100		341,549
			3,795,567
Specialty Retail - 2.4%
Dixons Group PLC	474,000		1,425,109
Esprit Holdings Ltd.	125,000		559,309
Fast Retailing Co. Ltd.	6,400		525,500
Giordano International Ltd.	660,000		416,741
Home Depot, Inc.	1,725,600		60,741,120
Nishimatsuya Chain Co. Ltd.	10,700		443,762
Office Depot, Inc. (a)	35,600		637,596
Otsuka Kagu Ltd.	7,300		231,478
Pal Co. Ltd.	5,300		196,644
Staples, Inc.	90,200		2,643,762
Toys R Us Japan Ltd.	10,000		246,421
USS Co. Ltd.	5,700		497,705
Wyevale Garden Centres PLC	35,200		224,791
			68,789,938
Textiles Apparel & Luxury Goods - 0.1%
Adidas-Salomon AG	4,100		490,685
Arena Brands Holding Corp. Class B (k)	8,445		102,016
Billabong International Ltd.	37,700		217,654
Bulgari Spa	38,800		393,233
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Textiles Apparel & Luxury Goods - continued
Puma AG	1,900		$ 484,002
Ted Baker PLC	97,600		739,593
			2,427,183
TOTAL CONSUMER DISCRETIONARY			171,620,392
CONSUMER STAPLES - 4.5%
Beverages - 0.7%
Fosters Group Ltd.	71,000		234,232
Lion Nathan Ltd.	38,300		181,499
PepsiCo, Inc.	137,700		7,419,276
Pernod-Ricard	7,600		974,168
Southcorp Ltd.	52,300		114,783
The Coca-Cola Co.	201,700		10,181,816
			19,105,774
Food & Staples Retailing - 2.3%
Aeon Co. Ltd.	4,800		195,500
C&S Co. Ltd.	11,800		316,563
Casino Guichard Perrachon et Compagnie	5,100		461,210
CVS Corp.	744,100		31,267,082
Ito Yokado Ltd.	15,000		651,388
Lawson, Inc.	7,900		330,576
Safeway, Inc. (a)	572,100		14,497,014
Wal-Mart Stores, Inc.	335,000		17,674,600
			65,393,933
Food Products - 0.0%
People's Food Holdings Ltd.	276,000		181,547
Unilever PLC	116,800		1,161,284
			1,342,831
Household Products - 0.2%
Kao Corp.	6,000		146,737
Kimberly-Clark Corp.	21,500		1,416,420
Procter & Gamble Co.	59,200		3,222,848
Reckitt Benckiser PLC	24,000		681,620
			5,467,625
Personal Products - 0.6%
Alberto-Culver Co.	310,250		15,555,935
Amorepacific Corp.	1,590		293,348
Estee Lauder Companies, Inc. Class A	23,400		1,141,452
Hengan International Group Co. Ltd.	164,000		105,131
Kose Corp.	5,500		214,805
L'Oreal SA	12,400		992,828
			18,303,499
Tobacco - 0.7%
Altria Group, Inc.	382,100		19,124,105
TOTAL CONSUMER STAPLES			128,737,767
	Shares		Value (Note 1)
ENERGY - 2.7%
Energy Equipment & Services - 1.6%
Diamond Offshore Drilling, Inc.	434,800		$ 10,361,284
ENSCO International, Inc.	319,200		9,288,720
GlobalSantaFe Corp.	440,900		11,683,850
Nabors Industries Ltd. (a)	60,300		2,726,766
Transocean, Inc. (a)	389,000		11,257,660
			45,318,280
Oil & Gas - 1.1%
BP PLC sponsored ADR	14,600		782,122
ChevronTexaco Corp.	144,700		13,617,717
China Petroleum & Chemical Corp. (H Shares)	222,000		82,029
CNOOC Ltd. sponsored ADR	5,600		239,400
ConocoPhillips	117,252		8,945,155
ENI Spa	36,000		722,448
Exxon Mobil Corp.	106,000		4,707,460
Nippon Oil Corp.	46,000		293,864
Repsol YPF SA	40,000		874,400
Royal Dutch Petroleum Co. (Hague Registry)	29,700		1,534,599
Shell Transport & Trading Co. PLC ADR	32,600		1,457,220
			33,256,414
TOTAL ENERGY			78,574,694
FINANCIALS - 13.8%
Capital Markets - 1.7%
3i Group PLC	49,800		554,962
Bear Stearns Companies, Inc.	11,300		952,703
D. Carnegie & Co. AB	29,400		279,765
DAB Bank AG (a)	100,842		730,542
Greenhill & Co., Inc.	700		14,637
JAFCO Co. Ltd.	4,100		317,586
Lehman Brothers Holdings, Inc.	12,600		948,150
Macquarie Bank Ltd.	6,000		142,083
Merrill Lynch & Co., Inc.	255,600		13,797,288
Mitsubishi Securities Co. Ltd.	29,000		386,435
Morgan Stanley	597,800		31,545,906
Nikko Cordial Corp.	20,000		98,382
Nomura Holdings, Inc.	18,000		269,100
			50,037,539
Commercial Banks - 2.3%
Australia & New Zealand Banking Group Ltd.	56,800		725,723
Banca Intesa Spa	90,720		355,270
Banca Nazionale del Lavoro (BNL) (a)	144,218		336,122
Banco Espanol de Credito SA (Reg.)	25,500		303,534
Bank of America Corp.	422,906		35,786,279
Bank One Corp.	327,900		16,722,900
Chinatrust Financial Holding Co.	184,000		205,541
Commonwealth Bank of Australia	6,700		152,571
Fukuoka City Bank Ltd.	62,000		201,210
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Commercial Banks - continued
Hana Bank	10,140		$ 214,306
Mitsubishi Tokyo Financial Group, Inc. (MTFG)	93		871,410
Mizuho Financial Group, Inc.	209		962,018
National Australia Bank Ltd.	16,600		346,143
Nishi-Nippon Bank Ltd.	28,000		130,705
SouthTrust Corp.	37,700		1,463,137
St. George Bank Ltd.	8,700		133,901
Sumitomo Mitsui Financial Group, Inc.	152		1,057,248
Synovus Financial Corp.	146,900		3,719,508
Taishin Financial Holdings Co. Ltd.	548,000		452,178
UFJ Holdings, Inc. (a)	107		479,582
Wachovia Corp.	37,800		1,682,100
Westpac Banking Corp.	16,500		202,975
			66,504,361
Consumer Finance - 0.2%
Aeon Credit Service Ltd.	7,800		528,029
Aiful Corp.	2,600		275,378
Cattles PLC	61,500		354,701
MBNA Corp.	135,900		3,504,861
ORIX Corp.	3,800		441,698
SFCG Co. Ltd.	2,300		468,386
STB Leasing Co. Ltd.	6,200		146,727
			5,719,780
Diversified Financial Services - 1.9%
Citigroup, Inc.	1,083,400		50,378,100
Deutsche Boerse AG	33,594		1,711,369
Fubon Financial Holding Co. Ltd.	260,000		226,929
Hong Kong Exchanges & Clearing Ltd.	74,000		151,799
ING Groep NV (Certificaten Van Aandelen)	39,200		929,040
OMHEX AB (a)	22,000		264,247
			53,661,484
Insurance - 4.8%
AFLAC, Inc.	30,200		1,232,462
Allianz AG (Reg.)	10,100		1,096,668
AMBAC Financial Group, Inc.	98,200		7,211,808
American International Group, Inc.	1,211,700		86,369,976
Assurances Generales France SA (Bearer)	5,300		322,742
CNP Assurances	8,100		471,118
Corporacion Mapfre SA (Reg.)	22,100		271,418
Great Eastern Holdings Ltd.	16,000		109,902
Hartford Financial Services Group, Inc.	232,000		15,947,680
MBIA, Inc.	92,700		5,295,024
MetLife, Inc.	301,000		10,790,850
Millea Holdings, Inc.	42		632,698
PartnerRe Ltd.	39,300		2,229,489
Promina Group Ltd.	85,837		239,983
Prudential PLC	84,300		727,766
	Shares		Value (Note 1)
QBE Insurance Group Ltd.	28,865		$ 258,242
Skandia Foersaekrings AB	198,300		823,413
St. Paul Travelers Companies, Inc.	89,691		3,636,073
			137,667,312
Real Estate - 0.0%
Mitsubishi Estate Co. Ltd.	19,000		239,224
Sumitomo Realty & Development Co. Ltd.	19,000		238,870
Sun Hung Kai Properties Ltd.	24,000		196,928
Westfield Holdings Ltd.	21,700		233,575
			908,597
Thrifts & Mortgage Finance - 2.9%
Fannie Mae	928,500		66,257,760
Golden West Financial Corp., Delaware	2,500		265,875
Greenpoint Financial Corp.	47,200		1,873,840
MGIC Investment Corp.	126,600		9,603,876
New York Community Bancorp, Inc.	287,700		5,647,551
Sovereign Bancorp, Inc.	18,600		411,060
			84,059,962
TOTAL FINANCIALS			398,559,035
HEALTH CARE - 10.1%
Biotechnology - 0.1%
Actelion Ltd. (Reg.) (a)	388		44,719
Celltech Group PLC (a)	69,400		693,202
CSL Ltd.	32,373		504,585
Global Bio-Chem Technology Group Co. Ltd.	202,000		146,324
Global Bio-Chem Technology Group Co. Ltd. warrants 5/31/07 (a)	25,250		1,651
			1,390,481
Health Care Equipment & Supplies - 0.3%
Axis Shield PLC (a)	61,000		196,996
Baxter International, Inc.	188,900		6,518,939
Coloplast AS Series B	8,900		841,248
Corin Group PLC	32,600		184,165
Phonak Holding AG	16,741		521,900
Synthes, Inc.	3,200		365,616
			8,628,864
Health Care Providers & Services - 3.5%
Alfresa Holdings Corp.	5,700		322,263
Cardinal Health, Inc.	1,411,300		98,861,542
DCA Group Ltd.	63,115		115,138
Fountain View, Inc. (k)	1,139		19,090
Fresenius Medical Care AG	8,900		662,012
Henry Schein, Inc. (a)	27,057		1,708,379
Service Corp. International (SCI) (a)	99,729		735,003
Wellcare Group, Inc.	1,100		18,700
			102,442,127
Pharmaceuticals - 6.2%
Barr Pharmaceuticals, Inc. (a)	20,900		704,330
Chugai Pharmaceutical Co. Ltd.	22,400		356,602
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Pharmaceuticals - continued
GlaxoSmithKline PLC sponsored ADR	25,900		$ 1,073,814
Johnson & Johnson	591,700		32,957,690
Merck & Co., Inc.	404,400		19,209,000
Novartis AG sponsored ADR	27,100		1,205,950
Novo Nordisk AS Series B	19,100		985,748
Pfizer, Inc.	1,892,000		64,857,760
Recordati Spa	45,653		866,356
Roche Holding AG (participation certificate)	20,435		2,028,126
Schering-Plough Corp.	452,700		8,365,896
Shire Pharmaceuticals Group PLC (a)	152,000		1,354,827
SkyePharma PLC (a)	159,800		186,074
Takeda Chemical Industries Ltd.	8,000		356,334
Tong Ren Tang Technologies Co. Ltd. (H Shares)	65,000		138,754
Warner Chilcott PLC	82,000		1,036,876
Wyeth	1,194,200		43,182,272
Yamanouchi Pharmaceutical Co. Ltd.	17,400		593,810
			179,460,219
TOTAL HEALTH CARE			291,921,691
INDUSTRIALS - 3.8%
Aerospace & Defense - 0.3%
Lockheed Martin Corp.	44,500		2,317,560
United Technologies Corp.	64,800		5,927,904
			8,245,464
Air Freight & Logistics - 0.0%
Yamato Transport Co. Ltd.	31,000		513,402
Commercial Services & Supplies - 0.3%
Aramark Corp. Class B	68,100		1,958,556
ChoicePoint, Inc. (a)	91,233		4,165,699
Diamond Lease Co. Ltd.	6,900		289,373
Riso Kyoiku Co. Ltd.	207		375,350
Sumisho Lease Co. Ltd.	7,800		310,435
Teraoka Seisakusho Co. Ltd.	1,000		10,694
			7,110,107
Construction & Engineering - 0.0%
United Group Ltd.	64,100		228,494
Electrical Equipment - 0.0%
Grupo Auxiliar Metalurgico SA (Gamesa)	25,586		377,889
Industrial Conglomerates - 2.7%
General Electric Co.	1,615,400		52,338,960
Hutchison Whampoa Ltd.	20,000		136,542
LG Corp.	10,030		147,692
Siemens AG (Reg.)	11,400		826,728
Tyco International Ltd.	723,100		23,963,534
			77,413,456
	Shares		Value (Note 1)
Machinery - 0.3%
Ingersoll-Rand Co. Ltd. Class A	131,300		$ 8,969,103
Nihon Trim Co. Ltd.	2,150		185,732
Sulzer AG (Reg.)	970		276,389
			9,431,224
Road & Rail - 0.2%
ComfortDelgro Corp. Ltd.	154,000		110,263
CSX Corp.	71,300		2,336,501
East Japan Railway Co.	95		540,638
Hamakyorex Co. Ltd.	4,100		148,308
Union Pacific Corp.	24,200		1,438,690
			4,574,400
Trading Companies & Distributors - 0.0%
Hagemeyer NV (a)	169,600		359,909
Mitsui & Co. Ltd.	31,000		235,513
Sumitomo Corp.	26,000		191,483
			786,905
Transportation Infrastructure - 0.0%
China Merchants Holdings International Co. Ltd.	84,000		113,080
TOTAL INDUSTRIALS			108,794,421
INFORMATION TECHNOLOGY - 7.0%
Communications Equipment - 1.0%
Alcatel SA sponsored ADR (a)	38,200		591,718
Cisco Systems, Inc. (a)	504,800		11,963,760
Comverse Technology, Inc. (a)	212,400		4,235,256
Motorola, Inc.	515,700		9,411,525
TANDBERG Television ASA (a)	194,400		1,402,881
Telefonaktiebolaget LM Ericsson (B Shares) (a)	184,800		552,922
			28,158,062
Computers & Peripherals - 1.1%
Dell, Inc. (a)	513,300		18,386,406
Diebold, Inc.	33,700		1,781,719
Fujitsu Ltd.	64,000		457,655
Hewlett-Packard Co.	440,200		9,288,220
High Tech Computer Corp.	25,000		109,473
Sun Microsystems, Inc. (a)	342,600		1,486,884
			31,510,357
Electronic Equipment & Instruments - 0.6%
AU Optronics Corp.	5,800		8,811
Flextronics International Ltd. (a)	226,100		3,606,295
Hon Hai Precision Industries Co. Ltd.	87,000		323,950
Hoya Corp.	4,900		520,348
Interflex Co. Ltd.	5,576		140,306
Jabil Circuit, Inc. (a)	109,300		2,752,174
Kingboard Chemical Holdings Ltd.	60,000		104,233
Kyocera Corp.	3,500		300,300
Nidec Corp.	3,500		363,866
Nippon Chemi-con Corp.	34,000		178,000
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Electronic Equipment & Instruments - continued
Sanmina-SCI Corp. (a)	239,000		$ 2,174,900
Solectron Corp. (a)	817,100		5,286,637
TDK Corp. sponsored ADR	2,500		191,375
Thermo Electron Corp. (a)	42,700		1,312,598
			17,263,793
Internet Software & Services - 0.0%
Easynet Group PLC (a)	278,900		578,471
Freenet.de AG (a)	3,200		275,142
Lastminute.com PLC (a)	67,700		222,328
T-Online International AG (a)	29,600		338,259
Tiscali Spa (a)	43,800		197,435
			1,611,635
IT Services - 0.5%
Affiliated Computer Services, Inc. Class A (a)	104,100		5,511,054
First Data Corp.	235,100		10,466,652
Hitachi Information Systems Co. Ltd.	3,400		105,282
Nomura Research Institute Ltd.	3,300		356,883
			16,439,871
Office Electronics - 0.1%
Canon, Inc.	23,000		1,228,200
Konica Minolta Holdings, Inc.	21,000		294,087
Ricoh Co. Ltd.	25,000		539,337
			2,061,624
Semiconductors & Semiconductor Equipment - 0.7%
ASML Holding NV (NY Shares) (a)	29,100		497,901
Intel Corp.	307,900		8,498,040
KLA-Tencor Corp. (a)	14,000		691,320
Lam Research Corp. (a)	70,400		1,886,720
Linear Technology Corp.	21,100		832,817
Micronas Semiconductor Holding AG (a)	5,177		235,977
Novellus Systems, Inc. (a)	15,500		487,320
Rohm Co. Ltd.	1,300		157,877
Samsung Electronics Co. Ltd.	2,330		962,677
Sanken Electric Co. Ltd.	11,000		145,658
Shinko Electric Industries Co.Ltd.	7,800		273,444
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR	283,619		2,356,874
United Microelectronics Corp. sponsored ADR (a)	487,445		2,100,888
Xilinx, Inc.	14,400		479,664
			19,607,177
Software - 3.0%
BEA Systems, Inc. (a)	257,800		2,119,116
Comptel Oyj	88,900		213,592
F-Secure Oyj (a)	197,200		358,353
Microsoft Corp.	2,743,692		78,359,844
NDS Group PLC sponsored ADR (a)	13,600		342,992
Nintendo Co. Ltd.	1,500		176,447
	Shares		Value (Note 1)
SAP AG	2,900		$ 484,996
VERITAS Software Corp. (a)	158,300		4,384,910
			86,440,250
TOTAL INFORMATION TECHNOLOGY			203,092,769
MATERIALS - 0.5%
Chemicals - 0.2%
Dow Chemical Co.	161,090		6,556,363
Okamoto Glass Co. Ltd.	3,100		46,123
Toray Industries, Inc.	55,000		262,880
			6,865,366
Construction Materials - 0.0%
Sumitomo Osaka Cement Co. Ltd.	94,000		262,229
Containers & Packaging - 0.0%
Fuji Seal, Inc.	5,800		247,016
Rengo Co. Ltd.	56,000		296,821
			543,837
Metals & Mining - 0.2%
Alcan, Inc.	99,700		4,125,827
BHP Billiton Ltd.	63,000		551,880
			4,677,707
Paper & Forest Products - 0.1%
Bowater, Inc.	27,700		1,152,043
International Paper Co.	21,600		965,520
			2,117,563
TOTAL MATERIALS			14,466,702
TELECOMMUNICATION SERVICES - 3.8%
Diversified Telecommunication Services - 3.4%
BellSouth Corp.	392,400		10,288,728
BT Group PLC	237,800		870,348
China Telecom Corp. Ltd. sponsored ADR	6,300		222,327
Completel Europe NV (a)	21,013		589,431
Deutsche Telekom AG (Reg.) (a)	36,400		644,644
France Telecom SA	16,952		445,499
France Telecom SA sponsored ADR	11,500		302,220
Koninklijke KPN NV	81,400		621,464
Nippon Telegraph & Telephone Corp.	111		595,848
Ono Finance PLC rights 5/31/09 (a)(f)	1,740		17
Portugal Telecom SGPS SA sponsored ADR	16,000		173,440
Qwest Communications International, Inc. (a)	2,217,700		7,961,543
SBC Communications, Inc.	2,167,600		52,564,300
Singapore Telecommunications Ltd.	130,000		170,266
Song Networks Holding AB (a)	98,800		696,904
TDC AS	11,700		381,117
Tele2 AB (B Shares)	8,000		351,354
Common Stocks - continued
	Shares		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Telecom Corp. of New Zealand Ltd.	60,700		$ 226,108
Verizon Communications, Inc.	598,600		21,663,334
			98,768,892
Wireless Telecommunication Services - 0.4%
Far EasTone Telecommunications Co. Ltd.	26,000		23,855
Far EasTone Telecommunications Co. Ltd. ADR (a)(f)	8,100		113,400
KDDI Corp.	106		615,067
Millicom International Cellular SA unit (a)	11,100		244,490
Nextel Communications, Inc. Class A (a)	241,400		6,435,724
Vodafone Group PLC	1,080,500		2,387,905
Vodafone Group PLC sponsored ADR	14,700		324,870
			10,145,311
TOTAL TELECOMMUNICATION SERVICES			108,914,203
UTILITIES - 0.5%
Electric Utilities - 0.4%
Entergy Corp.	37,800		2,117,178
FirstEnergy Corp.	156,000		5,835,960
PG&E Corp. (a)	159,200		4,448,048
Tokyo Electric Power Co.	10,300		237,052
			12,638,238
Gas Utilities - 0.0%
NiSource, Inc.	44,900		925,838
Multi-Utilities & Unregulated Power - 0.1%
Public Service Enterprise Group, Inc.	18,800		752,564
RWE AG	11,500		542,082
			1,294,646
TOTAL UTILITIES			14,858,722
TOTAL COMMON STOCKS (Cost $1,353,619,232)		1,519,540,396
Preferred Stocks - 0.1%
Convertible Preferred Stocks - 0.1%
CONSUMER DISCRETIONARY - 0.0%
Media - 0.0%
ITV PLC (a)	24,735		27,902
MATERIALS - 0.1%
Paper & Forest Products - 0.1%
International Paper Capital Trust 2.625%	32,500		1,637,188
	Shares		Value (Note 1)
TELECOMMUNICATION SERVICES - 0.0%
Diversified Telecommunication Services - 0.0%
Cincinnati Bell, Inc. Series B, 6.75%	7,700		$ 323,246
TOTAL CONVERTIBLE PREFERRED STOCKS			1,988,336
Nonconvertible Preferred Stocks - 0.0%
CONSUMER DISCRETIONARY - 0.0%
Automobiles - 0.0%
Porsche AG (non-vtg.)	1,000		670,841
Household Durables - 0.0%
LG Electronics, Inc.	1,100		30,489
TOTAL CONSUMER DISCRETIONARY			701,330
HEALTH CARE - 0.0%
Health Care Equipment & Supplies - 0.0%
Fresenius AG	4,500		342,354
Health Care Providers & Services - 0.0%
Fresenius Medical Care AG	5,800		311,171
TOTAL HEALTH CARE			653,525
INFORMATION TECHNOLOGY - 0.0%
Semiconductors & Semiconductor Equipment - 0.0%
Samsung Electronics Co. Ltd.	690		181,091
TOTAL NONCONVERTIBLE PREFERRED STOCKS			1,535,946
TOTAL PREFERRED STOCKS (Cost $3,328,945)		3,524,282

Corporate Bonds - 13.0%
	Principal Amount
Convertible Bonds - 0.3%
CONSUMER DISCRETIONARY - 0.1%
Specialty Retail - 0.1%
Gap, Inc. 5.75% 3/15/09 (f)	$ 1,214,000	1,887,867
FINANCIALS - 0.2%
Diversified Financial Services - 0.2%
Tyco International Group SA yankee 3.125% 1/15/23	4,620,000	7,471,002
INFORMATION TECHNOLOGY - 0.0%
Communications Equipment - 0.0%
CIENA Corp. 3.75% 2/1/08	660,000	570,900
TOTAL CONVERTIBLE BONDS		9,929,769
Corporate Bonds - continued
	Principal Amount	Value (Note 1)
Nonconvertible Bonds - 12.7%
CONSUMER DISCRETIONARY - 2.0%
Auto Components - 0.2%
DaimlerChrysler NA Holding Corp. 7.2% 9/1/09	$ 1,250,000	$ 1,360,693
Dana Corp.:
9% 8/15/11	570,000	666,900
10.125% 3/15/10	1,300,000	1,472,250
Delco Remy International, Inc. 9.375% 4/15/12 (f)	505,000	492,375
Stoneridge, Inc. 11.5% 5/1/12	45,000	52,425
Visteon Corp.:
7% 3/10/14	1,580,000	1,522,725
8.25% 8/1/10	455,000	485,713
		6,053,081
Automobiles - 0.2%
Case New Holland, Inc. 9.25% 8/1/11 (f)	430,000	453,650
General Motors Corp.:
7.2% 1/15/11	2,300,000	2,409,929
8.25% 7/15/23	2,320,000	2,429,622
8.375% 7/15/33	1,010,000	1,069,077
		6,362,278
Distributors - 0.0%
Adesa, Inc. 7.625% 6/15/12	320,000	321,600
Hotels, Restaurants & Leisure - 0.4%
Argosy Gaming Co. 7% 1/15/14 (f)	380,000	368,600
Friendly Ice Cream Corp. 8.375% 6/15/12 (f)	160,000	156,000
Gaylord Entertainment Co. 8% 11/15/13	340,000	345,100
Host Marriott LP 7.125% 11/1/13	270,000	264,600
Mandalay Resort Group 6.5% 7/31/09	1,270,000	1,295,400
MGM MIRAGE:
5.875% 2/27/14 (f)	940,000	853,050
9.75% 6/1/07	90,000	98,550
Morton's Restaurant Group, Inc. 7.5% 7/1/10	250,000	232,500
Penn National Gaming, Inc. 6.875% 12/1/11 (f)	1,230,000	1,193,100
Six Flags, Inc.:
8.875% 2/1/10	260,000	258,700
9.625% 6/1/14 (f)	1,765,000	1,756,175
9.75% 4/15/13	155,000	155,775
Starwood Hotels & Resorts Worldwide, Inc. 7.375% 5/1/07	1,540,000	1,617,000
Station Casinos, Inc. 6% 4/1/12	590,000	569,350
Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11	1,015,000	1,083,513
Vail Resorts, Inc. 6.75% 2/15/14	380,000	358,625
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (f)	320,000	339,200

	Principal Amount	Value (Note 1)
Wheeling Island Gaming, Inc. 10.125% 12/15/09	$ 705,000	$ 747,300
		11,692,538
Household Durables - 0.1%
Standard Pacific Corp. 9.25% 4/15/12	725,000	786,625
WCI Communities, Inc. 7.875% 10/1/13	400,000	405,000
		1,191,625
Leisure Equipment & Products - 0.1%
K2, Inc. 7.375% 7/1/14 (f)	240,000	244,200
The Hockey Co. 11.25% 4/15/09	1,565,000	1,831,050
True Temper Sports, Inc. 8.375% 9/15/11	460,000	460,000
		2,535,250
Media - 0.9%
Advanstar Communications, Inc. 10.75% 8/15/10	420,000	463,050
AOL Time Warner, Inc.:
7.625% 4/15/31	1,000,000	1,082,141
7.7% 5/1/32	1,500,000	1,638,630
Cablevision Systems Corp.:
5.66% 4/1/09 (f)(i)	930,000	950,925
8% 4/15/12 (f)	1,250,000	1,234,375
Charter Communications Operating LLC/Charter Communications Operating Capital Corp. 8% 4/30/12 (f)	760,000	733,400
Cox Communications, Inc. 7.125% 10/1/12	1,565,000	1,715,163
CSC Holdings, Inc.:
7.625% 4/1/11	2,320,000	2,354,800
7.625% 7/15/18	700,000	654,500
Dex Media, Inc. 8% 11/15/13 (f)	1,225,000	1,160,688
EchoStar DBS Corp. 10.375% 10/1/07	660,000	704,880
Houghton Mifflin Co. 9.875% 2/1/13	755,000	756,888
Kabel Deutschland Gmbh 10.625% 7/1/14 (f)	710,000	729,525
LBI Media Holdings, Inc. 0% 10/15/13 (d)	1,030,000	731,300
Liberty Media Corp. 8.25% 2/1/30	3,000,000	3,418,062
News America Holdings, Inc. 7.75% 12/1/45	1,500,000	1,710,179
Nextmedia Operating, Inc. 10.75% 7/1/11	600,000	670,500
PRIMEDIA, Inc. 7.625% 4/1/08	2,640,000	2,613,600
Radio One, Inc. 8.875% 7/1/11	1,430,000	1,558,700
Telewest PLC 11% 10/1/07 (c)	1,825,000	1,085,875
Videotron LTEE 6.875% 1/15/14	280,000	268,800
		26,235,981
Specialty Retail - 0.1%
Asbury Automotive Group, Inc. 8% 3/15/14	1,360,000	1,298,800
Boise Cascade Corp. 6.5% 11/1/10	380,000	387,600
CSK Automotive, Inc. 7% 1/15/14	180,000	171,900
Corporate Bonds - continued
	Principal Amount	Value (Note 1)

CONSUMER DISCRETIONARY - continued

Specialty Retail - continued
General Nutrition Centers, Inc. 8.5% 12/1/10 (f)	$ 230,000		$ 239,200
Hollywood Entertainment Corp. 9.625% 3/15/11	460,000		529,000
Sonic Automotive, Inc. 8.625% 8/15/13	730,000		757,375
			3,383,875
TOTAL CONSUMER DISCRETIONARY			57,776,228
CONSUMER STAPLES - 0.5%
Food & Staples Retailing - 0.2%
Kroger Co. 6.8% 4/1/11	2,230,000		2,429,975
NeighborCare, Inc. 6.875% 11/15/13 (f)	790,000		837,400
Rite Aid Corp. 6.875% 8/15/13	490,000		453,250
Safeway, Inc. 6.5% 3/1/11	1,220,000		1,292,666
Stater Brothers Holdings, Inc.:
5.06% 6/15/10 (f)(i)	580,000		589,425
8.125% 6/15/12 (f)	470,000		474,113
			6,076,829
Food Products - 0.2%
Central Garden & Pet Co. 9.125% 2/1/13	170,000		184,450
Corn Products International, Inc. 8.25% 7/15/07	2,090,000		2,278,100
Dean Foods Co. 8.15% 8/1/07	1,730,000		1,851,100
Hines Nurseries, Inc. 10.25% 10/1/11	190,000		205,200
Pierre Foods, Inc. 9.875% 7/15/12 (f)	250,000		253,438
United Agriculture Products, Inc. 8.25% 12/15/11 (f)	260,000		282,100
			5,054,388
Household Products - 0.0%
JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)	480,000		369,600
Tobacco - 0.1%
Altria Group, Inc. 7% 11/4/13	1,185,000		1,206,713
Philip Morris Companies, Inc. 7.75% 1/15/27	1,500,000		1,533,696
			2,740,409
TOTAL CONSUMER STAPLES			14,241,226
ENERGY - 1.2%
Energy Equipment & Services - 0.2%
Grant Prideco, Inc. 9.625% 12/1/07	770,000		847,000
Hanover Compressor Co.:
8.625% 12/15/10	220,000		228,250
9% 6/1/14	390,000		404,625
Key Energy Services, Inc. 8.375% 3/1/08	1,460,000		1,511,100
Kinder Morgan, Inc. 6.5% 9/1/12	1,165,000		1,234,333
Pride International, Inc. 7.375% 7/15/14 (f)	380,000		384,275
	Principal Amount		Value (Note 1)
Seabulk International, Inc. 9.5% 8/15/13	$ 730,000		$ 748,250
SESI LLC 8.875% 5/15/11	120,000		129,300
			5,487,133
Oil & Gas - 1.0%
Amerada Hess Corp.:
6.65% 8/15/11	180,000		190,477
7.125% 3/15/33	460,000		458,538
7.375% 10/1/09	405,000		441,050
Chesapeake Energy Corp. 7.5% 6/15/14 (f)	460,000		473,800
El Paso Corp. 7.875% 6/15/12	2,110,000		1,896,363
El Paso Energy Corp.:
6.95% 12/15/07	810,000		779,625
7.375% 12/15/12	524,000		455,225
Empresa Nacional de Petroleo 6.75% 11/15/12 (f)	940,000		1,008,887
EXCO Resources, Inc. 7.25% 1/15/11	250,000		253,125
Forest Oil Corp. 8% 12/15/11	1,030,000		1,096,950
General Maritime Corp. 10% 3/15/13	1,085,000		1,201,638
GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12	241,000		279,560
KCS Energy, Inc. 7.125% 4/1/12 (f)	390,000		390,000
Plains Exploration & Production Co. 7.125% 6/15/14 (f)	360,000		366,300
Plains Exploration & Production Co. LP Series B, 8.75% 7/1/12	1,055,000		1,134,125
Range Resources Corp.:
7.375% 7/15/13	865,000		860,675
7.375% 7/15/13 (f)	240,000		238,800
Ras Laffan Liquid Natural Gas Co. Ltd. yankee 8.294% 3/15/14 (f)	1,680,000		1,881,600
Teekay Shipping Corp. 8.875% 7/15/11	2,320,000		2,552,000
The Coastal Corp.:
6.5% 5/15/06	475,000		467,281
6.5% 6/1/08	785,000		706,500
7.5% 8/15/06	2,480,000		2,455,200
7.625% 9/1/08	605,000		561,138
7.75% 6/15/10	1,450,000		1,308,625
9.625% 5/15/12	1,730,000		1,643,500
Vintage Petroleum, Inc. 8.25% 5/1/12	1,015,000		1,110,156
Williams Companies, Inc.:
7.125% 9/1/11	830,000		842,450
7.5% 1/15/31	635,000		574,675
7.625% 7/15/19	1,000,000		960,000
8.625% 6/1/10	1,030,000		1,129,138
			27,717,401
TOTAL ENERGY			33,204,534
FINANCIALS - 3.9%
Capital Markets - 0.6%
Amvescap PLC 5.9% 1/15/07	1,015,000		1,071,925
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Capital Markets - continued
BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (f)	$ 1,210,000		$ 1,255,375
Credit Suisse First Boston (USA), Inc. 6.5% 1/15/12	1,520,000		1,633,375
Equinox Holdings Ltd. 9% 12/15/09 (f)	110,000		108,900
Goldman Sachs Group, Inc. 6.6% 1/15/12	4,075,000		4,385,063
J.P. Morgan Chase & Co.:
4.875% 3/15/14	1,085,000		1,022,216
6.75% 2/1/11	1,500,000		1,634,858
Merrill Lynch & Co., Inc. 4.125% 1/15/09	2,500,000		2,465,913
Morgan Stanley:
4.75% 4/1/14	3,000,000		2,767,863
6.6% 4/1/12	1,750,000		1,883,987
			18,229,475
Commercial Banks - 0.4%
Bank of America Corp.:
6.25% 4/15/12	620,000		661,394
7.4% 1/15/11	1,500,000		1,699,977
Bank One NA, Chicago 3.7% 1/15/08	2,020,000		2,006,801
Export-Import Bank of Korea:
4.125% 2/10/09 (f)	335,000		324,970
5.25% 2/10/14 (f)	1,315,000		1,260,688
Fleet Financial Group, Inc. 7.125% 4/15/06	1,190,000		1,276,312
Korea Development Bank 3.875% 3/2/09	2,000,000		1,914,758
Wachovia Corp. 4.875% 2/15/14	580,000		554,020
			9,698,920
Consumer Finance - 0.4%
Capital One Bank 4.875% 5/15/08	2,070,000		2,092,259
Ford Motor Credit Co.:
7.375% 10/28/09	140,000		149,412
7.375% 2/1/11	1,000,000		1,054,767
7.875% 6/15/10	2,500,000		2,720,158
General Motors Acceptance Corp. 6.875% 9/15/11	1,240,000		1,271,368
Household Finance Corp.:
6.375% 10/15/11	1,120,000		1,195,496
7% 5/15/12	180,000		198,834
Household International, Inc. 8.875% 2/15/08	1,225,000		1,333,975
MBNA America Bank NA 6.625% 6/15/12	1,565,000		1,677,786
MBNA Corp. 7.5% 3/15/12	535,000		606,550
			12,300,605
Diversified Financial Services - 2.1%
Ahold Finance USA, Inc. 8.25% 7/15/10	1,325,000		1,391,250
American Airlines, Inc. pass thru trust certificates:
6.817% 5/23/11	1,125,000		1,001,250
	Principal Amount		Value (Note 1)
6.977% 11/23/22	$ 95,822		$ 84,324
7.377% 5/23/19	961,885		673,320
7.379% 5/23/16	581,927		407,349
7.8% 4/1/08	460,000		418,600
8.608% 10/1/12	850,000		782,000
10.18% 1/2/13	375,000		273,750
Bellsouth Capital Funding Corp. 7.875% 2/15/30	765,000		886,366
Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (f)	885,000		849,600
Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.:
0% 5/15/11 (d)	1,130,000		723,200
8.625% 4/1/09	1,475,000		1,172,625
9.625% 11/15/09	385,000		311,850
10% 5/15/11	1,000,000		792,500
Citigroup, Inc. 7.25% 10/1/10	2,500,000		2,815,513
Continental Airlines, Inc. pass thru trust certificates:
6.795% 2/2/20	747,827		598,262
6.9% 7/2/18	1,324,188		1,032,866
7.373% 12/15/15	1,140,403		900,918
7.568% 12/1/06	425,000		314,500
7.73% 9/15/12	173,174		129,881
8.312% 10/2/12	714,250		528,545
8.388% 5/1/22	280,558		213,224
8.499% 11/1/12	334,296		254,065
Couche Tard U.S. LP /Couche Tard Financing Corp. 7.5% 12/15/13	615,000		615,000
Delta Air Lines, Inc. pass thru trust certificates:
7.299% 9/18/06	170,000		103,700
7.57% 11/18/10	605,000		561,464
7.711% 9/18/11	85,000		53,550
7.779% 11/18/05	345,000		213,900
7.779% 1/2/12	847,363		457,576
7.92% 5/18/12	1,615,000		1,057,416
10.06% 1/2/16	410,000		205,000
Deutsche Telekom International Finance BV 8.75% 6/15/30	1,500,000		1,825,704
Dex Media West LLC/Dex Media West Finance Co. 9.875% 8/15/13	460,000		509,450
El Paso Energy Partners LP/El Paso Energy Partners Finance Corp. 8.5% 6/1/11	891,000		957,825
EnCana Holdings Finance Corp. 5.8% 5/1/14	525,000		534,110
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11	715,000		791,863
Goldman Sachs Capital I 6.345% 2/15/34	1,705,000		1,601,119
Huntsman Advanced Materials LLC:
10% 7/15/08 (f)(i)	650,000		674,375
11% 7/15/10 (f)	520,000		577,200
Hutchison Whampoa International 03/13 Ltd. 6.5% 2/13/13 (f)	390,000		390,297
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Diversified Financial Services - continued
Hutchison Whampoa International Ltd.:
6.25% 1/24/14 (f)	$ 800,000		$ 775,578
7.45% 11/24/33 (f)	600,000		574,250
Inmarsat Finance PLC 7.625% 6/30/12 (f)	620,000		599,850
Ispat Inland ULC 9.75% 4/1/14 (f)	625,000		643,750
Mizuho Financial Group Cayman Ltd. 5.79% 4/15/14 (f)	930,000		914,179
National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11	815,000		851,675
Nexstar Finance, Inc. 7% 1/15/14	500,000		470,000
NiSource Finance Corp. 7.875% 11/15/10	2,115,000		2,424,621
Northwest Airlines, Inc. pass thru trust certificates:
6.81% 2/1/20	496,978		430,890
7.248% 7/2/14	721,710		512,414
7.626% 4/1/10	874,370		682,008
7.691% 4/1/17	71,418		54,277
7.95% 9/1/16	54,045		41,615
8.304% 9/1/10	516,037		405,089
Pemex Project Funding Master Trust:
6.125% 8/15/08	2,770,000		2,832,325
7.875% 2/1/09 (i)	3,000,000		3,262,500
Petronas Capital Ltd. 7% 5/22/12 (f)	1,365,000		1,488,264
Rabobank Capital Funding Trust II 5.26% 12/31/49 (f)(i)	2,075,000		2,007,942
Ship Finance International Ltd. 8.5% 12/15/13 (f)	3,070,000		2,962,550
Sprint Capital Corp. 6.875% 11/15/28	2,495,000		2,398,311
Suburban Propane Partners LP/Suburban Energy Finance Corp. 6.875% 12/15/13	240,000		233,400
Telecom Italia Capital 5.25% 11/15/13 (f)	1,700,000		1,645,338
Tyco International Group SA yankee 6.75% 2/15/11	1,000,000		1,086,581
UGS Corp. 10% 6/1/12 (f)	770,000		816,200
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10	800,000		926,000
Verizon Global Funding Corp.:
7.25% 12/1/10	2,075,000		2,319,798
7.75% 12/1/30	720,000		808,690
WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (f)	220,000		228,800
			60,082,202
Insurance - 0.0%
Principal Life Global Funding I 6.25% 2/15/12 (f)	850,000		907,837
	Principal Amount		Value (Note 1)
Real Estate - 0.2%
EOP Operating LP:
4.75% 3/15/14	$ 1,040,000		$ 958,173
7.75% 11/15/07	1,000,000		1,109,777
8.1% 8/1/10	1,000,000		1,143,619
Regency Centers LP 6.75% 1/15/12	1,990,000		2,162,642
Senior Housing Properties Trust 8.625% 1/15/12	770,000		835,450
			6,209,661
Thrifts & Mortgage Finance - 0.2%
Countrywide Home Loans, Inc. 4% 3/22/11	1,630,000		1,520,301
Independence Community Bank Corp. 3.75% 4/1/14 (i)	550,000		523,321
Washington Mutual, Inc.:
4.375% 1/15/08	770,000		774,897
4.625% 4/1/14	2,000,000		1,824,066
			4,642,585
TOTAL FINANCIALS			112,071,285
HEALTH CARE - 0.3%
Health Care Equipment & Supplies - 0.0%
Medical Device Manufacturing, Inc. 10% 7/15/12 (f)	340,000		346,800
Health Care Providers & Services - 0.3%
AmeriPath, Inc. 10.5% 4/1/13	2,130,000		2,156,625
Concentra Operating Corp. 9.125% 6/1/12 (f)	140,000		146,300
Fountain View, Inc. 9.25% 8/19/08 (e)	3,012,954		3,012,954
Genesis HealthCare Corp. 8% 10/15/13 (f)	180,000		184,950
IASIS Healthcare LLC/IASIS Capital Corp. 8.75% 6/15/14 (f)	1,210,000		1,234,200
Mariner Health Care, Inc. 8.25% 12/15/13 (f)	390,000		393,900
National Nephrology Associates, Inc. 9% 11/1/11 (f)	250,000		286,250
Psychiatric Solutions, Inc. 10.625% 6/15/13	500,000		570,000
Quintiles Transnational Corp. 10% 10/1/13	160,000		159,200
Tenet Healthcare Corp.:
6.375% 12/1/11	600,000		516,000
7.375% 2/1/13	1,150,000		1,046,500
			9,706,879
TOTAL HEALTH CARE			10,053,679
INDUSTRIALS - 0.7%
Aerospace & Defense - 0.3%
BE Aerospace, Inc.:
8% 3/1/08	365,000		340,363
8.875% 5/1/11	690,000		643,425
9.5% 11/1/08	1,560,000		1,513,200
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
INDUSTRIALS - continued
Aerospace & Defense - continued
Bombardier, Inc.:
6.3% 5/1/14 (f)	$ 1,230,000		$ 1,044,698
7.45% 5/1/34 (f)	420,000		345,829
Raytheon Co. 8.3% 3/1/10	2,450,000		2,873,857
Vought Aircraft Industries, Inc. 8% 7/15/11 (f)	600,000		570,000
			7,331,372
Airlines - 0.1%
Delta Air Lines, Inc.:
equipment trust certificates 8.54% 1/2/07	155,185		113,285
7.9% 12/15/09	155,000		77,500
8.3% 12/15/29	2,305,000		945,050
NWA Trust 10.23% 6/21/14	357,385		314,499
			1,450,334
Building Products - 0.0%
Mueller Group, Inc. 5.9188% 11/1/11 (f)(i)	770,000		789,250
Commercial Services & Supplies - 0.1%
Allied Waste North America, Inc.:
5.75% 2/15/11 (f)	390,000		369,525
7.625% 1/1/06	2,620,000		2,744,450
American Color Graphics, Inc. 10% 6/15/10	220,000		196,900
			3,310,875
Construction & Engineering - 0.0%
Great Lakes Dredge & Dock Corp. 7.75% 12/15/13	250,000		213,750
Machinery - 0.1%
Cummins, Inc. 9.5% 12/1/10 (i)	450,000		510,750
Dresser, Inc. 9.375% 4/15/11	200,000		214,000
Invensys PLC 9.875% 3/15/11 (f)	890,000		890,000
Terex Corp. 7.375% 1/15/14	830,000		813,400
			2,428,150
Marine - 0.0%
Horizon Lines LLC 9% 11/1/12 (f)	210,000		213,937
OMI Corp. 7.625% 12/1/13	330,000		323,400
			537,337
Road & Rail - 0.1%
Kansas City Southern Railway Co. 9.5% 10/1/08	180,000		193,500
TFM SA de CV yankee 11.75% 6/15/09	2,610,000		2,557,800
			2,751,300
TOTAL INDUSTRIALS			18,812,368
INFORMATION TECHNOLOGY - 0.5%
Communications Equipment - 0.2%
L-3 Communications Corp. 6.125% 1/15/14	640,000		614,400
Marconi Corp. PLC 8% 4/30/08 (f)	434,103		468,831
	Principal Amount		Value (Note 1)
Motorola, Inc. 6.5% 11/15/28	$ 3,875,000		$ 3,753,255
Nortel Networks Corp. 6.125% 2/15/06	770,000		771,925
			5,608,411
Electronic Equipment & Instruments - 0.1%
Celestica, Inc. 7.875% 7/1/11	1,900,000		1,928,500
Flextronics International Ltd. 6.5% 5/15/13	230,000		223,675
Sanmina-SCI Corp. 10.375% 1/15/10	550,000		632,500
			2,784,675
IT Services - 0.0%
Iron Mountain, Inc. 6.625% 1/1/16	810,000		733,050
Office Electronics - 0.1%
Xerox Corp.:
7.125% 6/15/10	1,075,000		1,101,875
7.625% 6/15/13	1,190,000		1,219,750
			2,321,625
Semiconductors & Semiconductor Equipment - 0.1%
Amkor Technology, Inc.:
7.125% 3/15/11 (f)	430,000		400,975
7.75% 5/15/13	170,000		160,225
9.25% 2/15/08	110,000		115,225
Semiconductor Note Partners Trust 0% 8/4/11 (f)	1,000,000		1,430,000
Viasystems, Inc. 10.5% 1/15/11 (f)	900,000		949,500
			3,055,925
TOTAL INFORMATION TECHNOLOGY			14,503,686
MATERIALS - 0.9%
Chemicals - 0.2%
America Rock Salt Co. LLC 9.5% 3/15/14 (f)	380,000		389,500
Berry Plastics Corp. 10.75% 7/15/12	560,000		618,800
Compass Minerals Group, Inc. 10% 8/15/11	1,350,000		1,498,500
Equistar Chemicals LP/Equistar Funding Corp. 10.625% 5/1/11	1,135,000		1,259,850
Geon Co. 6.875% 12/15/05	130,000		131,950
Huntsman ICI Holdings LLC 0% 12/31/09	505,000		244,925
Lyondell Chemical Co.:
9.625% 5/1/07	230,000		239,200
9.875% 5/1/07	865,000		903,925
Nalco Co. 7.75% 11/15/11 (f)	470,000		489,975
PolyOne Corp.:
8.875% 5/1/12	430,000		419,250
10.625% 5/15/10	320,000		337,600
The Scotts Co. 6.625% 11/15/13	480,000		480,000
			7,013,475
Construction Materials - 0.0%
U.S. Concrete, Inc. 8.375% 4/1/14 (f)	460,000		458,850
Containers & Packaging - 0.2%
BWAY Corp. 10% 10/15/10	350,000		371,000
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
MATERIALS - continued
Containers & Packaging - continued
Crown European Holdings SA 10.875% 3/1/13	$ 550,000		$ 629,750
Owens-Brockway Glass Container, Inc. 8.875% 2/15/09	2,500,000		2,687,500
Owens-Illinois, Inc.:
7.15% 5/15/05	510,000		524,663
7.35% 5/15/08	330,000		329,175
7.8% 5/15/18	140,000		126,350
8.1% 5/15/07	630,000		648,900
Sealed Air Corp.:
5.625% 7/15/13 (f)	245,000		242,015
6.875% 7/15/33 (f)	510,000		514,803
Tekni-Plex, Inc. 8.75% 11/15/13 (f)	615,000		590,400
			6,664,556
Metals & Mining - 0.2%
Allegheny Technologies, Inc. 8.375% 12/15/11	305,000		306,525
California Steel Industries, Inc. 6.125% 3/15/14	495,000		459,113
Compass Minerals International, Inc. 0% 12/15/12 (d)	1,000,000		790,000
CSN Islands VIII Corp. 9.75% 12/16/13 (f)	870,000		783,000
International Steel Group, Inc. 6.5% 4/15/14 (f)	1,300,000		1,215,500
Steel Dynamics, Inc. 9.5% 3/15/09	195,000		215,475
Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (f)	620,000		635,500
			4,405,113
Paper & Forest Products - 0.3%
Georgia-Pacific Corp.:
8% 1/15/24 (f)	810,000		812,025
9.5% 12/1/11	1,655,000		1,936,350
International Paper Co.:
4.25% 1/15/09	245,000		240,842
5.5% 1/15/14	615,000		602,066
Norske Skog Canada Ltd.:
7.375% 3/1/14	330,000		318,450
8.625% 6/15/11	710,000		752,600
Solo Cup Co. 8.5% 2/15/14 (f)	320,000		297,600
Stone Container Corp.:
8.375% 7/1/12	510,000		532,950
9.75% 2/1/11	1,270,000		1,397,000
Weyerhaeuser Co. 6.75% 3/15/12	1,250,000		1,353,690
			8,243,573
TOTAL MATERIALS			26,785,567
TELECOMMUNICATION SERVICES - 1.1%
Diversified Telecommunication Services - 0.6%
AT&T Broadband Corp. 8.375% 3/15/13	500,000		586,973
BellSouth Corp. 6.55% 6/15/34	1,235,000		1,231,074
British Telecommunications PLC 8.875% 12/15/30	1,500,000		1,850,531
	Principal Amount		Value (Note 1)
France Telecom SA:
8.75% 3/1/11	$ 300,000		$ 347,646
9.5% 3/1/31	2,000,000		2,510,040
NTL Cable PLC 8.75% 4/15/14 (f)	1,115,000		1,145,663
Primus Telecommunications Group, Inc. 8% 1/15/14	535,000		460,100
Qwest Communications International, Inc.:
7.25% 2/15/11 (f)	155,000		144,150
7.5% 2/15/14 (f)	1,095,000		996,450
Qwest Corp. 9.125% 3/15/12 (f)	1,015,000		1,096,200
Qwest Services Corp. 13.5% 12/15/10 (f)	1,460,000		1,693,600
Telecomunicaciones de Puerto Rico, Inc. 6.65% 5/15/06	500,000		528,219
Telefonica Europe BV 7.75% 9/15/10	1,500,000		1,715,631
Triton PCS, Inc.:
8.75% 11/15/11	1,375,000		1,134,375
9.375% 2/1/11	400,000		342,000
			15,782,652
Wireless Telecommunication Services - 0.5%
America Movil SA de CV:
4.125% 3/1/09 (f)	650,000		610,499
5.5% 3/1/14 (f)	585,000		538,895
American Cellular Corp. 10% 8/1/11	390,000		339,300
American Tower Corp. 9.375% 2/1/09	1,175,000		1,257,250
AT&T Wireless Services, Inc.:
7.875% 3/1/11	400,000		454,985
8.75% 3/1/31	1,700,000		2,072,587
Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (f)	750,000		695,625
Crown Castle International Corp.:
Series B, 7.5% 12/1/13	810,000		801,900
7.5% 12/1/13	540,000		534,600
10.75% 8/1/11	325,000		363,188
DirecTV Holdings LLC/DirecTV Financing, Inc. 8.375% 3/15/13	550,000		609,125
Millicom International Cellular SA 10% 12/1/13 (f)	820,000		828,200
Nextel Communications, Inc.:
7.375% 8/1/15	2,050,000		2,060,250
9.5% 2/1/11	315,000		352,013
Nextel Partners, Inc. 8.125% 7/1/11	690,000		700,350
Rogers Wireless, Inc.:
6.375% 3/1/14	765,000		701,888
9.625% 5/1/11	1,650,000		1,839,750
Western Wireless Corp. 9.25% 7/15/13	980,000		1,004,500
			15,764,905
TOTAL TELECOMMUNICATION SERVICES			31,547,557
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
UTILITIES - 1.6%
Electric Utilities - 0.9%
Allegheny Energy Supply Co. LLC 8.25% 4/15/12 (f)	$ 655,000		$ 641,900
Cleveland Electric Illuminating Co. 5.65% 12/15/13 (f)	540,000		525,480
CMS Energy Corp.:
7.625% 11/15/04	1,220,000		1,236,775
7.75% 8/1/10 (f)	1,690,000		1,685,775
8.5% 4/15/11	815,000		835,375
8.9% 7/15/08	1,395,000		1,466,494
9.875% 10/15/07	1,730,000		1,866,238
DTE Energy Co. 7.05% 6/1/11	650,000		704,577
Duke Capital Corp.:
4.37% 3/1/09	3,175,000		3,084,976
6.75% 2/15/32	100,000		95,939
Exelon Corp. 6.75% 5/1/11	1,500,000		1,631,286
FirstEnergy Corp. 6.45% 11/15/11	950,000		984,921
Illinois Power Co.:
7.5% 6/15/09	1,915,000		2,092,138
11.5% 12/15/10	1,060,000		1,253,450
MidAmerican Energy Holdings, Inc. 5.875% 10/1/12	1,500,000		1,523,112
Nevada Power Co. 10.875% 10/15/09	305,000		345,413
Pacific Gas & Electric Co.:
4.2% 3/1/11	230,000		219,006
4.8% 3/1/14	305,000		289,000
Progress Energy, Inc.:
6.85% 4/15/12	1,805,000		1,950,521
7.1% 3/1/11	940,000		1,030,043
Sierra Pacific Power Co. 6.25% 4/15/12 (f)	240,000		225,000
Southern California Edison Co.:
5% 1/15/14	70,000		68,103
7.625% 1/15/10	1,472,000		1,661,005
TECO Energy, Inc. 6.125% 5/1/07	600,000		600,000
			26,016,527
Gas Utilities - 0.2%
ANR Pipeline, Inc. 8.875% 3/15/10	450,000		489,375
Dynegy Holdings, Inc. 10.125% 7/15/13 (f)	620,000		669,600
Northwest Pipeline Corp. 8.125% 3/1/10	420,000		455,700
Sonat, Inc.:
6.75% 10/1/07	285,000		270,394
7.625% 7/15/11	155,000		137,563
Southern Natural Gas Co. 8.875% 3/15/10	530,000		576,375
Transcontinental Gas Pipe Line Corp.:
6.125% 1/15/05	650,000		653,250
6.25% 1/15/08	1,335,000		1,355,025
			4,607,282
	Principal Amount		Value (Note 1)
Multi-Utilities & Unregulated Power - 0.5%
AES Corp.:
8.75% 6/15/08	$ 53,000		$ 55,120
8.75% 5/15/13 (f)	2,145,000		2,295,150
8.875% 2/15/11	308,000		319,935
9.375% 9/15/10	1,024,000		1,093,120
9.5% 6/1/09	2,092,000		2,235,825
Calpine Corp. 6.89% 7/15/07 (f)(i)	1,320,025		1,178,122
Calpine Generating Co. LLC 7% 4/1/10 (f)(i)	380,000		366,700
Constellation Energy Group, Inc. 7% 4/1/12	2,250,000		2,450,176
Dominion Resources, Inc.:
6.25% 6/30/12	1,000,000		1,048,121
8.125% 6/15/10	2,515,000		2,902,315
NRG Energy, Inc. 8% 12/15/13 (f)	1,080,000		1,088,100
Reliant Energy, Inc. 9.25% 7/15/10	595,000		636,650
Western Resources, Inc. 7.125% 8/1/09	315,000		337,444
			16,006,778
TOTAL UTILITIES			46,630,587
TOTAL NONCONVERTIBLE BONDS			365,626,717
TOTAL CORPORATE BONDS (Cost $361,281,566)		375,556,486
U.S. Government and Government Agency Obligations - 6.4%
U.S. Government Agency Obligations - 1.6%
Fannie Mae:
3.25% 2/15/09	2,545,000		2,451,988
5.25% 8/1/12	960,000		959,400
5.5% 3/15/11	2,780,000		2,907,719
6.25% 2/1/11	3,220,000		3,457,124
Farm Credit Systems Financial Assistance Corp. 8.8% 6/10/05	2,000,000		2,122,628
Freddie Mac:
3.625% 9/15/08	2,661,000		2,623,182
4% 6/12/13	11,318,000		10,330,923
4.5% 1/15/14	10,000,000		9,503,650
5.875% 3/21/11	7,760,000		8,156,559
U.S. Department of Housing and Urban Development Government guaranteed participation certificates Series 1996-A, 7.63% 8/1/14	2,825,000		2,974,488
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			45,487,661
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Treasury Obligations - 4.8%
U.S. Treasury Bills, yield at date of purchase 1.03% to 1.25% 8/19/04 to 9/9/04 (h)	$ 4,900,000		$ 4,888,383
U.S. Treasury Bonds:
5.375% 2/15/31	1,300,000		1,311,122
6.25% 5/15/30	9,610,000		10,759,817
8% 11/15/21	5,500,000		7,208,867
U.S. Treasury Notes:
1.625% 2/28/06	18,335,000		18,066,429
3.125% 5/15/07	22,390,000		22,390,000
6.5% 2/15/10	50,505,000		56,908,882
7% 7/15/06	17,000,000		18,419,109
TOTAL U.S. TREASURY OBLIGATIONS			139,952,609
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $187,272,847)		185,440,270
U.S. Government Agency - Mortgage Securities - 8.3%
Fannie Mae - 7.7%
4.5% 7/1/19 (g)	20,000,000		19,531,250
4.5% 7/1/19 (g)	2,150,000		2,099,609
4.5% 8/1/33 to 10/1/33	19,315,878		18,091,031
5% 2/1/18	17,062,096		17,134,139
5% 7/1/34 (g)	15,000,000		14,479,688
5.5% 10/1/18 to 12/1/33	25,140,084		25,302,029
5.5% 7/1/34 (g)	52,357,646		52,079,496
6% 6/1/13 to 1/1/34	28,965,943		30,065,535
6.5% 1/1/13 to 9/1/32	25,595,935		26,793,793
6.5% 7/1/19 (g)	2,316,968		2,444,401
7% 8/1/13 to 2/1/32	8,668,080		9,193,845
7.5% 7/1/16 to 11/1/31	3,447,527		3,700,461
8% 1/1/30 to 6/1/30	415,999		452,317
TOTAL FANNIE MAE			221,367,594
Freddie Mac - 0.0%
7.5% 5/1/17 to 11/1/31	1,211,632		1,306,945
8% 7/1/17 to 5/1/27	86,222		94,301
TOTAL FREDDIE MAC			1,401,246
Government National Mortgage Association - 0.6%
6% 12/15/08 to 6/15/09	606,571		636,916
6.5% 6/15/08 to 8/15/27	7,321,059		7,722,394
7% 7/15/28 to 7/15/32	4,827,873		5,134,095
7% 7/1/34 (g)	9,342		9,908
7.5% 9/15/22 to 8/15/28	2,394,209		2,588,009
	Principal Amount		Value (Note 1)
8% 5/15/25 to 1/15/31	$ 666,770		$ 731,010
8.5% 12/15/16 to 12/15/30	419,509		460,299
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			17,282,631
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $236,685,343)		240,051,471
Asset-Backed Securities - 0.7%
ACE Securities Corp. Series 2004-HE1:
Class M1, 1.8% 2/25/34 (i)	250,000		250,021
Class M2, 2.4% 2/25/34 (i)	300,000		300,059
Ameriquest Mortgage Securities, Inc. Series 2004-R2:
Class M1, 1.73% 4/25/34 (i)	145,000		144,994
Class M2, 1.78% 4/25/34 (i)	125,000		124,994
Amortizing Residential Collateral Trust Series 2003-BC1 Class M2, 2.4% 1/25/32 (i)	305,000		305,620
Argent Securities, Inc. Series 2004-W5 Class M1, 1.9% 4/25/34 (i)	475,000		475,584
Asset Backed Securities Corp. Home Equity Loan Trust Series 2004-HE3:
Class M1, 1.6713% 6/25/34 (i)	175,000		175,042
Class M2, 2.2513% 6/25/34 (i)	400,000		397,808
Capital One Master Trust Series 2001-7A Class A, 3.85% 8/15/07	810,000		815,199
Capital One Multi-Asset Execution Trust Series 2003-B4 Class B4, 2.0388% 7/15/11 (i)	780,000		794,775
CDC Mortgage Capital Trust Series 2004-HE2 Class M2, 2.5% 7/26/34 (i)	265,000		264,338
Citibank Credit Card Issuance Trust:
Series 2002-B1 Class B1, 1.9% 6/25/09 (i)	1,080,000		1,083,807
Series 2002-C1 Class C1, 2.17% 2/9/09 (i)	1,750,000		1,775,699
Countrywide Home Loans, Inc.:
Series 2004-2 Class M1, 1.8% 5/25/34 (i)	625,000		624,972
Series 2004-3 Class M1, 1.8% 6/25/34 (i)	175,000		175,179
Series 2004-4:
Class A, 1.67% 8/25/34 (i)	611,469		610,405
Class M1, 1.78% 7/25/34 (i)	450,000		448,875
Class M2, 1.83% 6/25/34 (i)	525,000		523,359
Discover Card Master Trust I Series 2003-4 Class B1, 1.5688% 5/16/11 (i)	1,015,000		1,018,544
First Franklin Mortgage Loan Trust Series 2004-FF2:
Class M3, 1.85% 3/25/34 (i)	50,000		49,998
Class M4, 2.2% 3/25/34 (i)	25,000		24,999
Class M6, 2.55% 3/25/34 (i)	50,000		49,797
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Ford Credit Auto Owner Trust Series 2001-B Class B, 5.71% 9/15/05	$ 1,055,000		$ 1,056,800
Fremont Home Loan Trust Series 2004-A:
Class M1, 1.85% 1/25/34 (i)	550,000		549,976
Class M2, 2.45% 1/25/34 (i)	625,000		624,972
GSAMP Trust Series 2004-FM2:
Class M1, 1.8% 1/25/34 (i)	500,000		499,978
Class M2, 2.4% 1/25/34 (i)	200,000		199,991
Class M3, 2.6% 1/25/34 (i)	200,000		199,991
Home Equity Asset Trust Series 2002-4 Class M2, 3.35% 3/25/33 (i)	225,000		228,525
Household Private Label Credit Card Master Note Trust I Series 2002-1 Class A, 5.5% 1/18/11	5,000,000		5,241,307
Long Beach Mortgage Loan Trust Series 2004-2:
Class M1, 1.83% 6/25/34 (i)	500,000		500,031
Class M2, 2.38% 6/25/34 (i)	325,000		324,996
Meritage Mortgage Loan Trust Series 2004-1:
Class M1, 1.8% 7/25/34 (i)	250,000		249,989
Class M2, 1.85% 7/25/34 (i)	50,000		49,998
Class M3, 2.25% 7/25/34 (i)	100,000		99,995
Class M4, 2.4% 7/25/34 (i)	75,000		74,997
Morgan Stanley ABS Capital I, Inc.:
Series 2003-HE1 Class M2, 3.2% 5/25/33 (i)	175,000		178,341
Series 2003-NC5 Class M2, 3.3% 4/25/33 (i)	325,000		332,030
Morgan Stanley Dean Witter Capital I Trust Series 2003-NC1 Class M1, 2.35% 11/25/32 (i)	305,000		308,701
Structured Asset Securities Corp. Series 2004-GEL1 Class A, 1.66% 2/25/34 (i)	237,065		237,054
TOTAL ASSET-BACKED SECURITIES (Cost $21,118,779)		21,391,740
Collateralized Mortgage Obligations - 0.3%
Private Sponsor - 0.0%
CS First Boston Mortgage Securities Corp. floater:
Series 2004-AR3 Class 6A2, 1.67% 3/25/34 (i)	605,410		606,689
Series 2004-AR5 Class 11A2, 1.67% 6/25/34 (i)	732,105		729,909
Master Alternative Loan Trust Series 2004-3 Class 3A1, 6% 4/25/34	237,405		242,515
Residential Asset Mortgage Products, Inc. sequential payer Series 2004-SL2 Class A1, 6.5% 11/25/16	325,000		336,883
TOTAL PRIVATE SPONSOR			1,915,996
	Principal Amount		Value (Note 1)
U.S. Government Agency - 0.3%
Fannie Mae:
planned amortization class:
Series 1999-54 Class PH, 6.5% 11/18/29	$ 3,300,000		$ 3,473,762
Series 1999-57 Class PH, 6.5% 12/25/29	2,600,000		2,697,326
sequential pay Series 1999-10 Class MZ, 6.5% 9/17/38	1,540,195		1,608,120
TOTAL U.S. GOVERNMENT AGENCY			7,779,208
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $8,886,798)		9,695,204
Commercial Mortgage Securities - 1.5%
Bayview Commercial Asset Trust floater Series 2004-1:
Class A, 1.66% 4/25/34 (f)(i)	883,552		882,999
Class B, 3.2% 4/25/34 (f)(i)	98,172		98,111
Class M1, 1.86% 4/25/34 (f)(i)	98,172		98,111
Class M2, 2.5% 4/25/34 (f)(i)	98,172		98,111
Berkeley Federal Bank & Trust FSB Series 1994-1 Class B, 0.8831% 8/1/24 (f)(i)	404,319		347,714
CBM Funding Corp. sequential pay Series 1996-1:
Class A3PI, 7.08% 11/1/07	2,008,020		2,126,793
Class B, 7.48% 2/1/08	2,320,000		2,538,899
COMM:
floater:
Series 2002-FL7 Class D, 1.8088% 11/15/14 (f)(i)	295,000		294,918
Series 2003-FL9 Class B, 1.7388% 11/15/15 (f)(i)	575,000		575,531
Series 2004-LBN2 Class X2, 1.1206% 3/10/39 (f)(i)(j)	2,035,000		96,120
CS First Boston Mortgage Securities Corp.:
sequential pay:
Series 1999-C1 Class A2, 7.29% 9/15/41	1,500,000		1,675,495
Series 2004-C1 Class A3, 4.321% 1/15/37	615,000		591,613
Series 1998-C1 Class D, 7.17% 5/17/40	580,000		623,553
Series 2004-C1 Class ASP, 1.2151% 1/15/37 (f)(i)(j)	9,980,000		443,249
Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31	4,350,000		4,683,896
Equitable Life Assurance Society of the United States Series 174:
Class B1, 7.33% 5/15/06 (f)	3,500,000		3,735,392
Class C1, 7.52% 5/15/06 (f)	2,300,000		2,457,891
Class D1, 7.77% 5/15/06 (f)	2,200,000		2,341,628
Commercial Mortgage Securities - continued
	Principal Amount		Value (Note 1)
FMAC Loan Receivables Trust weighted average coupon Series 1997-A Class E, 0% 4/15/19 (c)(f)(i)	$ 427,595		$ 0
GAFCO Franchisee Loan Trust Series 1998-1 Class D, 13.5% 6/1/16 (f)(i)	1,300,000		889,070
GS Mortgage Securities Corp. II:
sequential pay Series 2001-LIBA Class A2, 6.615% 2/14/16 (f)	465,000		500,675
Series 1998-GLII Class E, 6.9702% 4/13/31 (i)	1,205,000		1,259,347
Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A:
Class B, 4.13% 11/20/37 (f)	1,050,000		970,095
Class C, 4.13% 11/20/37 (f)	1,050,000		925,785
LTC Commercial Mortgage pass thru certificates sequential pay Series 1998-1 Class A, 6.029% 5/28/30 (f)	1,520,262		1,527,864
Morgan Stanley Capital I, Inc. sequential pay Series 2004-HQ3 Class A2, 4.05% 1/13/41	630,000		610,095
Thirteen Affiliates of General Growth Properties, Inc.:
sequential pay Series 1 Class A2, 6.602% 11/15/07 (f)	4,200,000		4,481,678
Series 1:
Class D2, 6.992% 11/15/07 (f)	4,120,000		4,447,068
Class E2, 7.224% 11/15/07 (f)	2,450,000		2,631,077
Wachovia Bank Commercial Mortgage Trust sequential pay Series 2003-C6 Class A2, 4.498% 8/15/35	1,015,000		1,011,575
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $41,533,516)		42,964,353
Foreign Government and Government Agency Obligations - 0.2%
Chilean Republic:
6.875% 4/28/09	1,630,000		1,790,392
7.125% 1/11/12	650,000		723,938
South African Republic 6.5% 6/2/14	610,000		610,000
State of Israel 4.625% 6/15/13	230,000		213,038
United Mexican States 7.5% 4/8/33	2,350,000		2,285,375
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $5,329,449)		5,622,743
Floating Rate Loans - 0.1%
	Principal Amount		Value (Note 1)
TELECOMMUNICATION SERVICES - 0.1%
Diversified Telecommunication Services - 0.1%
Qwest Corp. Tranche A term loan 6.5% 6/30/07 (i)	$ 1,800,000		$ 1,872,000
TOTAL FLOATING RATE LOANS (Cost $1,808,526)		1,872,000

Fixed-Income Funds - 0.9%
	Shares
Fidelity Ultra-Short Central Fund (Cost $25,999,998)	261,254		$ 26,015,673
Money Market Funds - 18.0%
Fidelity Cash Central Fund, 1.16% (b)	393,590,575		393,590,575
Fidelity Money Market Central Fund, 1.28% (b)	123,860,162		123,860,162
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	2,724,211		2,724,211
TOTAL MONEY MARKET FUNDS (Cost $520,174,948)		520,174,948
Cash Equivalents - 0.1%
	Maturity Amount
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.3%, dated 6/30/04 due 7/1/04) (Cost $3,899,000)	$ 3,899,141		3,899,000
TOTAL INVESTMENT PORTFOLIO - 102.2% (Cost $2,770,938,947)			2,955,748,566
NET OTHER ASSETS - (2.2)%			(65,005,178)
NET ASSETS - 100%		$ 2,890,743,388

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Purchased
Equity Index Contracts
270 S&P 500 Index Contracts	Sept. 2004	$ 76,977,000	$ 508,005

The face value of futures purchased as a percentage of net assets - 2.7%

Swap Agreements
	Expiration Date	Notional Amount	Value
Credit Default Swap
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	800,000	(5,066)
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	300,000	(1,900)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon default event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27	March 2009	600,000	(1,738)
Receive quarterly notional amount multiplied by .62% and pay Lehman Brothers, Inc. upon default event of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11	June 2009	1,000,000	1,788
TOTAL CREDIT DEFAULT SWAP		2,700,000	(6,916)
	Expiration Date	Notional Amount	Value
Interest Rate Swap
Receive quarterly a fixed rate equal to 2.865% and pay quarterly a floating rate based on 3-month LIBOR with Citibank	August 2007	$ 3,110,000	$ (66,148)
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	8,085,000	(55,955)
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	6,850,000	(37,701)
TOTAL INTEREST RATE SWAP		18,045,000	(159,804)
Total Return Swap
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 65 basis points with Lehman Brothers, Inc.	Oct. 2004	2,500,000	7,953
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 70 basis points with Bank of America	Dec. 2004	2,500,000	28,113

Swap Agreements - continued

	Expiration Date	Notional Amount	Value
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	July 2004	$ 2,500,000	$ 28,055
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	Nov. 2004	2,500,000	(1,229)
TOTAL RETURN SWAP		10,000,000	62,892
		$ 30,745,000	$ (103,828)

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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 $99,854,138 or 3.5% of net assets.

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

(h) 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 $4,688,706.

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

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

(k) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $121,105 or 0.0% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Arena Brands Holding Corp. Class B	6/18/97	$ 341,094
Fountain View, Inc.	8/19/03 - 1/22/04	$ 11

Other Information

The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited):

U.S. Government and U.S. Government Agency Obligations	15.0%
AAA,AA,A	3.6%
BBB	5.3%
BB	1.9%
B	3.6%
CCC,CC,C	1.3%
Not Rated	0.2%
Equities	55.4%
Short-Term Investments and Net Other Assets	13.7%
	100.0%

We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. Percentages are adjusted for the effect of futures contracts, if applicable. This information is based on the combined investments of the fund and its pro-rata share of the investments of Fidelity's fixed income central fund.

The fund invested in loans and loan participations trade claims or other receivables. At period end the value of these investments amounted to $1,872,000 or 0.1% of net assets.

Purchases and sales of securities, other than short-term securities, aggregated $1,038,270,741 and $1,064,199,992, respectively, of which long-term U.S. government and government agency obligations aggregated $406,890,689 and $403,879,642, 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 $7,946 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $242,725,000 of which $168,073,000, $33,903,000 and $40,749,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Asset Manager Portfolio

Fidelity Variable Insurance Products: Asset Manager Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $2,577,614 and repurchase agreements of $3,899,000)(cost $2,770,938,947) - See accompanying schedule		$ 2,955,748,566
Cash		199
Foreign currency held at value (cost $966,771)		957,972
Receivable for investments sold		25,491,068
Receivable for swap agreements		1,966
Receivable for fund shares sold		369,260
Dividends receivable		1,518,933
Interest receivable		11,986,225
Receivable for daily variation on futures contracts		310,500
Prepaid expenses		7,179
Other affiliated receivables		17,889
Other receivables		39,403
Total assets		2,996,449,160
Liabilities
Payable for investments purchased Regular delivery	$ 10,343,703
Delayed delivery	89,810,358
Payable for fund shares redeemed	1,016,187
Swap agreements, at value	103,828
Accrued management fee	1,261,336
Distribution fees payable	8,268
Other affiliated payables	335,541
Other payables and accrued expenses	102,340
Collateral on securities loaned, at value	2,724,211
Total liabilities		105,705,772
Net Assets		$ 2,890,743,388
Net Assets consist of:
Paid in capital		$ 2,886,484,051
Undistributed net investment income		36,218,749
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(217,160,158)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		185,200,746
Net Assets		$ 2,890,743,388
Initial Class: Net Asset Value, offering price and redemption price per share ($2,831,541,989 ÷ 198,578,327 shares)		$ 14.26
Service Class: Net Asset Value, offering price and redemption price per share ($32,671,145 ÷ 2,305,466 shares)		$ 14.17
Service Class 2: Net Asset Value, offering price and redemption price per share ($26,530,254 ÷ 1,883,603 shares)		$ 14.08

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 12,103,679
Interest		31,673,595
Security lending		22,273
Total income		43,799,547
Expenses
Management fee	$ 7,894,045
Transfer agent fees	995,628
Distribution fees	47,520
Accounting and security lending fees	605,377
Non-interested trustees' compensation	7,266
Appreciation in deferred trustee compensation account	6,996
Custodian fees and expenses	120,651
Audit	32,848
Legal	2,390
Miscellaneous	74,188
Total expenses before reductions	9,786,909
Expense reductions	(124,434)	9,662,475
Net investment income (loss)		34,137,072
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	36,636,529
Foreign currency transactions	(156,594)
Futures contracts	4,309,814
Swap agreements	142,441
Total net realized gain (loss)		40,932,190
Change in net unrealized appreciation (depreciation) on: Investment securities	(33,476,881)
Assets and liabilities in foreign currencies	(10,269)
Futures contracts	(2,273,661)
Swap agreements	(349,960)
Delayed delivery commitments	(1,380)
Total change in net unrealized appreciation (depreciation)		(36,112,151)
Net gain (loss)		4,820,039
Net increase (decrease) in net assets resulting from operations		$ 38,957,111

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

Asset Manager Portfolio

Fund Name
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 34,137,072	$ 78,176,621
Net realized gain (loss)	40,932,190	(40,714,310)
Change in net unrealized appreciation (depreciation)	(36,112,151)	441,444,012
Net increase (decrease) in net assets resulting from operations	38,957,111	478,906,323
Distributions to shareholders from net investment income	(81,683,788)	(104,597,799)
Share transactions - net increase (decrease)	(132,909,862)	(134,932,020)
Total increase (decrease) in net assets	(175,636,539)	239,376,504
Net Assets
Beginning of period	3,066,379,927	2,827,003,423
End of period (including undistributed net investment income of $36,218,749 and undistributed net investment income of $85,502,782, respectively)	$ 2,890,743,388	$ 3,066,379,927

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	6,501,687	555,387	414,883
Reinvested	5,552,577	60,513	40,552
Redeemed	(21,821,095)	(543,602)	(145,041)
Net increase (decrease)	(9,766,831)	72,298	310,394
Dollars Sold	$ 93,317,565	$ 7,965,544	$ 5,838,716
Reinvested	80,234,728	869,573	579,487
Redeemed	(312,011,062)	(7,660,141)	(2,044,272)
Net increase (decrease)	$ (138,458,769)	$ 1,174,976	$ 4,373,931
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	11,779,012	428,403	476,542
Reinvested	8,641,306	77,907	49,303
Redeemed	(30,580,450)	(301,785)	(252,268)
Net increase (decrease)	(10,160,132)	204,525	273,577
Dollars Sold	$ 156,744,839	$ 5,650,188	$ 6,262,526
Reinvested	103,090,780	924,752	582,265
Redeemed	(400,951,959)	(3,964,032)	(3,271,379)
Net increase (decrease)	$ (141,116,340)	$ 2,610,908	$ 3,573,412
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 80,234,728	$ 869,573	$ 579,487
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 103,090,780	$ 924,754	$ 582,265

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

Semiannual Report

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 14.46	$ 12.75	$ 14.51	$ 16.01	$ 18.67	$ 18.16
Income from Investment Operations
Net investment income (loss) E	.16	.36	.46	.51	.62	.59
Net realized and unrealized gain (loss)	.03	1.83	(1.69)	(1.13)	(1.30)	1.28
Total from investment operations	.19	2.19	(1.23)	(.62)	(.68)	1.87
Distributions from net investment income	(.39)	(.48)	(.53)	(.64)	(.60)	(.60)
Distributions from net realized gain	-	-	-	(.24)	(1.38)	(.76)
Total distributions	(.39)	(.48)	(.53)	(.88)	(1.98)	(1.36)
Net asset value, end of period	$ 14.26	$ 14.46	$ 12.75	$ 14.51	$ 16.01	$ 18.67
Total ReturnB,C,D	1.28%	17.97%	(8.73)%	(4.15)%	(3.87)%	11.09%
Ratios to Average Net AssetsF
Expenses before expense reductions	.65%A	.63%	.63%	.64%	.61%	.63%
Expenses net of voluntary waivers, if any	.65%A	.63%	.63%	.64%	.61%	.63%
Expenses net of all reductions	.64%A	.62%	.61%	.63%	.61%	.62%
Net investment income (loss)	2.28%A	2.71%	3.49%	3.53%	3.73%	3.36%
Supplemental Data
Net assets, end of period (000 omitted)	$ 2,831,542	$ 3,011,837	$ 2,784,945	$ 3,547,730	$ 4,128,169	$ 4,936,926
Portfolio turnover rate	83%A	82%	140%	108%	76%	94%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 14.37	$ 12.66	$ 14.41	$ 15.91	$ 18.59	$ 18.10
Income from Investment Operations
Net investment income (loss)E	.15	.34	.44	.49	.60	.56
Net realized and unrealized gain (loss)	.03	1.83	(1.68)	(1.12)	(1.31)	1.29
Total from investment operations	.18	2.17	(1.24)	(.63)	(.71)	1.85
Distributions from net investment income	(.38)	(.46)	(.51)	(.63)	(.59)	(.60)
Distributions from net realized gain	-	-	-	(.24)	(1.38)	(.76)
Total distributions	(.38)	(.46)	(.51)	(.87)	(1.97)	(1.36)
Net asset value, end of period	$ 14.17	$ 14.37	$ 12.66	$ 14.41	$ 15.91	$ 18.59
Total ReturnB,C,D	1.22%	17.91%	(8.85)%	(4.24)%	(4.06)%	11.01%
Ratios to Average Net AssetsF
Expenses before expense reductions	.76%A	.74%	.74%	.74%	.72%	.74%
Expenses net of voluntary waivers, if any	.76%A	.74%	.74%	.74%	.72%	.74%
Expenses net of all reductions	.75%A	.73%	.72%	.73%	.71%	.73%
Net investment income (loss)	2.16%A	2.59%	3.38%	3.43%	3.62%	3.25%
Supplemental Data
Net assets, end of period (000 omitted)	$ 32,671	$ 32,087	$ 25,692	$ 31,324	$ 30,583	$ 23,677
Portfolio turnover rate	83%A	82%	140%	108%	76%	94%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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

Asset Manager Portfolio
Financial Statements - continued

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 14.27	$ 12.59	$ 14.36	$ 15.89	$ 18.17
Income from Investment Operations
Net investment income (loss)E	.14	.32	.41	.46	.53
Net realized and unrealized gain (loss)	.03	1.81	(1.67)	(1.11)	(.84)
Total from investment operations	.17	2.13	(1.26)	(.65)	(.31)
Distributions from net investment income	(.36)	(.45)	(.51)	(.64)	(.59)
Distributions from net realized gain	-	-	-	(.24)	(1.38)
Total distributions	(.36)	(.45)	(.51)	(.88)	(1.97)
Net asset value, end of period	$ 14.08	$ 14.27	$ 12.59	$ 14.36	$ 15.89
Total ReturnB,C,D	1.15%	17.66%	(9.03)%	(4.38)%	(1.97)%
Ratios to Average Net AssetsG
Expenses before expense reductions	.92%A	.91%	.90%	.90%	.88%A
Expenses net of voluntary waivers, if any	.92%A	.91%	.90%	.90%	.88%A
Expenses net of all reductions	.91%A	.89%	.88%	.89%	.88%A
Net investment income (loss)	2.00%A	2.43%	3.22%	3.27%	3.46%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 26,530	$ 22,456	$ 16,367	$ 11,993	$ 4,785
Portfolio turnover rate	83%A	82%	140%	108%	76%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^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.

Asset Manager Portfolio

Fidelity Variable Insurance Products: Contrafund Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Avon Products, Inc.	3.3
3M Co.	3.2
Berkshire Hathaway, Inc. Class A	2.8
EnCana Corp.	1.9
Yahoo!, Inc.	1.8
	13.0
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Health Care	15.6
Information Technology	13.1
Consumer Discretionary	13.0
Financials	12.5
Industrials	10.7

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks and Equity Futures	89.7%
	Bonds	1.1%
	Short-Term Investments and Net Other Assets	9.2%

* Foreign investments 21.5%

Semiannual Report

Fidelity Variable Insurance Products: Contrafund Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 88.7%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 12.9%
Auto Components - 0.2%
Gentex Corp.	590,400		$ 23,427,072
Automobiles - 0.5%
Harley-Davidson, Inc.	83,900		5,196,766
Toyota Motor Corp.	1,257,800		51,330,819
			56,527,585
Hotels, Restaurants & Leisure - 2.6%
Ameristar Casinos, Inc.	18,600		624,588
Boyd Gaming Corp.	265,700		7,059,649
Buffalo Wild Wings, Inc.	70,400		1,946,560
Friendly Ice Cream Corp. (a)	204,600		2,690,490
Gaylord Entertainment Co. (a)	52,827		1,658,240
GTECH Holdings Corp.	202,600		9,382,406
Hilton Group PLC	1,522,398		7,644,789
International Game Technology	505,550		19,514,230
Kerzner International Ltd. (a)	130,800		6,220,848
Krispy Kreme Doughnuts, Inc. (a)	975,000		18,612,750
Lakes Entertainment, Inc. (a)	209,600		2,429,264
Life Time Fitness, Inc.	111,600		2,343,600
McDonald's Corp.	198,800		5,168,800
Outback Steakhouse, Inc.	266,700		11,030,712
P.F. Chang's China Bistro, Inc. (a)	300,600		12,369,690
Panera Bread Co. Class A (a)	809,596		29,048,304
Penn National Gaming, Inc. (a)	78,803		2,616,260
Pinnacle Entertainment, Inc. (a)	44,800		564,928
Rank Group PLC	403,940		2,204,785
Red Robin Gourmet Burgers, Inc. (a)	221,787		6,070,310
Ryan's Restaurant Group, Inc. (a)	282,750		4,467,450
Shuffle Master, Inc. (a)	257,634		9,354,691
Stanley Leisure PLC	651,898		4,966,640
Starbucks Corp. (a)	1,233,800		53,645,624
Station Casinos, Inc.	632,300		30,603,320
The Cheesecake Factory, Inc. (a)	374,424		14,898,331
William Hill PLC	3,106,053		31,307,387
Wynn Resorts Ltd. (a)	77,042		2,976,132
			301,420,778
Household Durables - 1.3%
Blyth, Inc.	69,000		2,379,810
D.R. Horton, Inc.	1,277,477		36,280,347
Fortune Brands, Inc.	331,400		24,997,502
Harman International Industries, Inc.	641,600		58,385,600
Leggett & Platt, Inc.	90,100		2,406,571
LG Electronics, Inc.	115,080		5,462,438
Pulte Homes, Inc.	190,300		9,901,309
Sharp Corp.	316,000		5,121,726
			144,935,303
Internet & Catalog Retail - 1.7%
Blue Nile, Inc.	83,416		3,137,276
	Shares		Value (Note 1)
eBay, Inc. (a)	1,394,000		$ 128,178,300
InterActiveCorp (a)	1,957,867		59,010,111
			190,325,687
Leisure Equipment & Products - 0.0%
RC2 Corp. (a)	58,813		2,087,862
Media - 1.9%
Citadel Broadcasting Corp.	100,500		1,464,285
E.W. Scripps Co. Class A	250,900		26,344,500
Fox Entertainment Group, Inc. Class A (a)	1,208,600		32,269,620
Getty Images, Inc. (a)	169,100		10,146,000
McGraw-Hill Companies, Inc.	70,100		5,367,557
Meredith Corp.	58,000		3,187,680
News Corp. Ltd. ADR	384,000		13,601,280
Pixar (a)	579,317		40,268,325
SBS Broadcasting SA (a)	220,700		6,777,697
Sogecable SA (a)	111,700		4,516,002
The DIRECTV Group, Inc. (a)	738,300		12,624,930
Univision Communications, Inc. Class A (a)	183,000		5,843,190
Viacom, Inc. Class B (non-vtg.)	238,236		8,509,790
Vivendi Universal SA sponsored ADR (a)	188,400		5,256,360
Washington Post Co. Class B	29,200		27,156,292
XM Satellite Radio Holdings, Inc. Class A (a)	406,620		11,096,660
			214,430,168
Multiline Retail - 0.4%
99 Cents Only Stores (a)	1,384,466		21,113,107
JCPenney Co., Inc.	382,600		14,446,976
Neiman Marcus Group, Inc. Class A	120,900		6,728,085
			42,288,168
Specialty Retail - 3.4%
AC Moore Arts & Crafts, Inc. (a)	197,700		5,438,727
Advance Auto Parts, Inc. (a)	736,300		32,529,734
AnnTaylor Stores Corp. (a)	1,460,850		42,335,433
Bed Bath & Beyond, Inc. (a)	1,352,200		51,992,090
Best Buy Co., Inc.	117,600		5,967,024
Cabela's, Inc. Class A	59,600		1,606,220
Chico's FAS, Inc. (a)	938,800		42,396,208
Claire's Stores, Inc.	108,800		2,360,960
Dick's Sporting Goods, Inc. (a)	199,300		6,646,655
Guitar Center, Inc. (a)	78,400		3,486,448
Halfords Group PLC	943,366		4,634,172
Hot Topic, Inc. (a)	112,400		2,303,076
Lowe's Companies, Inc.	230,400		12,107,520
Pacific Sunwear of California, Inc. (a)	1,301,072		25,461,979
PETCO Animal Supplies, Inc. (a)	612,200		19,718,962
PETsMART, Inc.	921,800		29,912,410
Regis Corp.	107,500		4,793,425
Signet Group PLC	2,348,926		4,893,313
Staples, Inc.	593,000		17,380,830
The Pep Boys - Manny, Moe & Jack	909,200		23,048,220
TJX Companies, Inc.	1,188,100		28,680,734
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Specialty Retail - continued
United Auto Group, Inc.	52,600		$ 1,612,190
Urban Outfitters, Inc. (a)	305,600		18,614,096
			387,920,426
Textiles Apparel & Luxury Goods - 0.9%
Brown Shoe Co., Inc.	56,100		2,296,173
Burberry Ltd.	2,831,173		21,054,860
Carter's, Inc.	76,000		2,212,360
Coach, Inc. (a)	1,204,324		54,423,402
Delta Woodside Industries, Inc. (a)	22,175		24,836
Fossil, Inc. (a)	222,500		6,063,125
NIKE, Inc. Class B	57,600		4,363,200
Puma AG	31,241		7,958,265
Quiksilver, Inc. (a)	86,200		2,052,422
			100,448,643
TOTAL CONSUMER DISCRETIONARY			1,463,811,692
CONSUMER STAPLES - 8.6%
Beverages - 0.5%
Anheuser-Busch Companies, Inc.	212,800		11,491,200
Coca-Cola Hellenic Bottling Co. SA (Bearer)	310,870		7,279,431
Cott Corp. (a)	445,200		14,451,728
Cott Corp. (a)(c)	220,500		7,144,200
PepsiCo, Inc.	205,910		11,094,431
The Coca-Cola Co.	86,900		4,386,712
			55,847,702
Food & Staples Retailing - 1.7%
Smart & Final, Inc. (a)	31,000		372,620
Sysco Corp.	2,436,600		87,400,842
Tesco PLC	2,292,590		11,105,656
The Pantry, Inc. (a)	202,900		4,423,220
United Natural Foods, Inc. (a)	321,452		9,293,177
Wal-Mart Stores, Inc.	131,400		6,932,664
Walgreen Co.	67,000		2,426,070
Whole Foods Market, Inc.	416,407		39,746,048
William Morrison Supermarkets PLC	7,616,950		32,116,561
			193,816,858
Food Products - 0.7%
Dean Foods Co. (a)	215,500		8,040,305
Hershey Foods Corp.	421,000		19,479,670
Kellogg Co.	459,600		19,234,260
People's Food Holdings Ltd.	877,000		576,873
Saputo, Inc.	129,990		3,111,613
Smithfield Foods, Inc. (a)	250,500		7,364,700
SunOpta, Inc. (a)	715,100		6,132,951
Wm. Wrigley Jr. Co.	271,500		17,118,075
			81,058,447
	Shares		Value (Note 1)
Household Products - 1.5%
Colgate-Palmolive Co.	3,018,600		$ 176,437,170
Personal Products - 4.2%
Avon Products, Inc.	7,950,256		366,824,807
Gillette Co.	2,486,900		105,444,560
NBTY, Inc. (a)	20,700		608,373
			472,877,740
TOTAL CONSUMER STAPLES			980,037,917
ENERGY - 6.9%
Energy Equipment & Services - 0.8%
BJ Services Co. (a)	156,400		7,169,376
Carbo Ceramics, Inc.	113,000		7,712,250
Schlumberger Ltd. (NY Shares)	732,800		46,540,128
Smith International, Inc. (a)	456,575		25,458,622
			86,880,376
Oil & Gas - 6.1%
Apache Corp.	576,680		25,114,414
Blackrock Ventures, Inc. (a)	869,100		4,912,673
BP PLC sponsored ADR	883,632		47,336,166
Burlington Resources, Inc.	782,980		28,328,216
Cabot Oil & Gas Corp. Class A	93,900		3,971,970
Canadian Natural Resources Ltd.	43,400		1,303,074
Chesapeake Energy Corp.	495,300		7,290,816
China Petroleum & Chemical Corp. sponsored ADR	516,640		19,089,848
Comstock Resources, Inc. (a)	89,600		1,743,616
ConocoPhillips	44,900		3,425,421
Denbury Resources, Inc. (a)	134,400		2,815,680
Devon Energy Corp.	33,600		2,217,600
EnCana Corp.	5,005,892		216,237,722
Encore Acquisition Co. (a)	236,000		6,584,400
ENI Spa sponsored ADR	66,200		6,642,508
EOG Resources, Inc.	142,500		8,508,675
Evergreen Resources, Inc. (a)	129,500		5,231,800
Exxon Mobil Corp.	759,900		33,747,159
Houston Exploration Co. (a)	314,500		16,303,680
Magnum Hunter Resources, Inc. (a)	125,600		1,303,728
Murphy Oil Corp.	900,500		66,366,850
Newfield Exploration Co. (a)	119,900		6,683,226
Noble Energy, Inc.	88,300		4,503,300
Occidental Petroleum Corp.	174,300		8,437,863
Patina Oil & Gas Corp.	218,600		6,529,582
PetroChina Co. Ltd. sponsored ADR	124,600		5,768,980
PetroKazakhstan, Inc. Class A	137,860		3,744,409
Pioneer Natural Resources Co.	491,400		17,238,312
Pogo Producing Co.	13,200		652,080
Premcor, Inc. (a)	1,449,600		54,360,000
Prima Energy Corp. (a)	31,600		1,250,412
Quicksilver Resources, Inc. (a)	185,000		12,407,950
Talisman Energy, Inc.	250,110		5,456,332
Common Stocks - continued
	Shares		Value (Note 1)
ENERGY - continued
Oil & Gas - continued
Total SA sponsored ADR	335,100		$ 32,196,408
Tsakos Energy Navigation Ltd.	67,400		2,288,904
Valero Energy Corp.	64,600		4,764,896
Vintage Petroleum, Inc.	23,800		403,886
XTO Energy, Inc.	658,825		19,626,397
			694,788,953
TOTAL ENERGY			781,669,329
FINANCIALS - 12.3%
Capital Markets - 0.3%
Goldman Sachs Group, Inc.	47,200		4,444,352
Lehman Brothers Holdings, Inc.	192,700		14,500,675
Merrill Lynch & Co., Inc.	377,500		20,377,450
			39,322,477
Commercial Banks - 1.4%
Bank of Ireland	1,140,160		15,240,309
Bank One Corp.	439,600		22,419,600
Banknorth Group, Inc.	166,400		5,404,672
Commerce Bancorp, Inc., New Jersey	302,817		16,657,963
East West Bancorp, Inc.	69,600		2,136,720
Fifth Third Bancorp	127,064		6,833,502
M&T Bank Corp.	292,900		25,570,170
PrivateBancorp, Inc.	26,204		719,562
Royal Bank of Scotland Group PLC	687,021		19,849,460
SouthTrust Corp.	540,300		20,969,043
UCBH Holdings, Inc.	165,930		6,557,554
Wells Fargo & Co.	78,800		4,509,724
Westcorp	165,720		7,531,974
Wintrust Financial Corp.	54,500		2,752,795
			157,153,048
Consumer Finance - 1.0%
MBNA Corp.	697,800		17,996,262
SLM Corp.	2,259,400		91,392,730
			109,388,992
Diversified Financial Services - 0.6%
Brascan Corp. Class A (ltd. vtg.)	198,000		5,554,509
CapitalSource, Inc.	44,400		1,085,580
Citigroup, Inc.	228,200		10,611,300
Moody's Corp.	719,200		46,503,472
			63,754,861
Insurance - 7.5%
ACE Ltd.	409,200		17,300,976
AFLAC, Inc.	583,100		23,796,311
Allstate Corp.	542,900		25,271,995
AMBAC Financial Group, Inc.	27,600		2,026,944
American International Group, Inc.	1,855,814		132,282,422
Arch Capital Group Ltd. (a)	31,600		1,260,208
Assurant, Inc.	344,200		9,079,996
Axis Capital Holdings Ltd.	43,600		1,220,800
	Shares		Value (Note 1)
Berkshire Hathaway, Inc. Class A (a)	3,639		$ 323,689,050
Brit Insurance Holdings PLC (a)	3,985,600		6,018,663
Brown & Brown, Inc.	44,600		1,922,260
Cincinnati Financial Corp.	3,255		141,658
Endurance Specialty Holdings Ltd.	538,000		18,722,400
Everest Re Group Ltd.	804,180		64,623,905
Great-West Lifeco, Inc.	67,000		2,421,021
HCC Insurance Holdings, Inc.	503,800		16,831,958
Infinity Property & Casualty Corp.	55,800		1,841,400
IPC Holdings Ltd.	160,300		5,919,879
Markel Corp. (a)	28,950		8,033,625
Mercury General Corp.	116,400		5,779,260
MetLife, Inc.	147,200		5,277,120
Montpelier Re Holdings Ltd.	1,449,200		50,649,540
PartnerRe Ltd.	368,300		20,893,659
Penn-America Group, Inc.	25,900		362,600
Progressive Corp.	90,800		7,745,240
RenaissanceRe Holdings Ltd.	683,965		36,899,912
StanCorp Financial Group, Inc.	66,800		4,475,600
UICI (a)	56,300		1,340,503
USI Holdings Corp. (a)	933,687		14,752,255
W.R. Berkley Corp.	300,950		12,925,803
White Mountains Insurance Group Ltd.	12,300		6,273,000
Willis Group Holdings Ltd.	771,400		28,888,930
			858,668,893
Real Estate - 0.1%
CBL & Associates Properties, Inc.	108,200		5,951,000
Simon Property Group, Inc.	40,200		2,067,084
The Rouse Co.	44,720		2,124,200
			10,142,284
Thrifts & Mortgage Finance - 1.4%
Countrywide Financial Corp.	207,860		14,602,165
Doral Financial Corp.	355,075		12,250,088
Golden West Financial Corp., Delaware	1,028,800		109,412,880
New York Community Bancorp, Inc.	917,090		18,002,477
W Holding Co., Inc.	155,389		2,668,029
			156,935,639
TOTAL FINANCIALS			1,395,366,194
HEALTH CARE - 15.6%
Biotechnology - 2.9%
Affymetrix, Inc. (a)	38,200		1,250,286
Biogen Idec, Inc. (a)	471,400		29,816,050
Celgene Corp. (a)	5,100		292,026
ConjuChem, Inc. (a)	539,930		5,181,126
Dyax Corp. (a)	177,600		2,086,800
Gen-Probe, Inc. (a)	405,100		19,169,332
Genentech, Inc. (a)	3,626,900		203,831,780
Gilead Sciences, Inc. (a)	83,200		5,574,400
IDEXX Laboratories, Inc. (a)	275,470		17,338,082
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Biotechnology - continued
Invitrogen Corp. (a)	23,800		$ 1,713,362
Keryx Biopharmaceuticals, Inc. (a)	44,600		564,636
Ligand Pharmaceuticals, Inc. Class B (a)	124,100		2,156,858
Martek Biosciences (a)	221,700		12,452,889
Millennium Pharmaceuticals, Inc. (a)	692,900		9,562,020
ONYX Pharmaceuticals, Inc. (a)	73,000		3,092,280
Pharmion Corp.	168,900		8,262,588
Seattle Genetics, Inc. (a)	712,300		5,007,469
			327,351,984
Health Care Equipment & Supplies - 6.2%
Advanced Medical Optics, Inc. (a)	186,900		7,956,333
Advanced Neuromodulation Systems, Inc. (a)	383,050		12,564,040
Alcon, Inc.	1,126,000		88,559,900
American Medical Systems Holdings, Inc. (a)	169,300		5,705,410
Animas Corp.	3,000		55,950
Apogent Technologies, Inc. (a)	298,600		9,555,200
Becton, Dickinson & Co.	90,800		4,703,440
Bio-Rad Laboratories, Inc. Class A (a)	216,600		12,749,076
Biomet, Inc.	157,150		6,983,746
Boston Scientific Corp. (a)	856,100		36,641,080
C.R. Bard, Inc.	289,800		16,417,170
Cooper Companies, Inc.	146,060		9,226,610
Cytyc Corp. (a)	112,200		2,846,514
DENTSPLY International, Inc.	1,640,962		85,494,120
Epix Medical, Inc. (a)	218,800		4,616,680
Fisher Scientific International, Inc. (a)	183,031		10,570,040
Given Imaging Ltd. (a)	130,400		4,617,464
INAMED Corp. (a)	18,500		1,162,725
Integra LifeSciences Holdings Corp. (a)	262,200		9,247,794
Kensey Nash Corp. (a)	67,300		2,321,850
Kinetic Concepts, Inc.	46,600		2,325,340
Kyphon, Inc. (a)	68,400		1,927,512
Medtronic, Inc.	256,040		12,474,269
Nobel Biocare Holding AG (Switzerland)	33,299		5,223,791
Phonak Holding AG	82,475		2,571,155
ResMed, Inc. (a)	88,600		4,515,056
Smith & Nephew PLC	10,563,461		116,768,497
St. Jude Medical, Inc. (a)	367,576		27,807,124
Stryker Corp.	937,400		51,557,000
Synthes, Inc.	158,918		18,157,151
Varian Medical Systems, Inc. (a)	3,500		277,725
Zimmer Holdings, Inc. (a)	1,470,171		129,669,082
			705,268,844
Health Care Providers & Services - 3.3%
Aetna, Inc.	833,700		70,864,500
Anthem, Inc. (a)	79,500		7,120,020
Caremark Rx, Inc. (a)	916,964		30,204,794
DaVita, Inc. (a)	49,800		1,535,334
	Shares		Value (Note 1)
eResearchTechnology, Inc. (a)	256,024		$ 7,168,672
Health Management Associates, Inc. Class A	257,790		5,779,652
ICON PLC sponsored ADR (a)	20,300		892,997
Inveresk Research Group, Inc. (a)	340,500		10,501,020
Molina Healthcare, Inc.	11,000		419,980
Omnicare, Inc.	119,700		5,124,357
Patterson Dental Co. (a)	1,763,102		134,859,672
PDI, Inc. (a)	9,500		288,135
Pediatrix Medical Group, Inc. (a)	61,500		4,295,775
ProxyMed, Inc. (a)	8,100		136,566
UnitedHealth Group, Inc.	1,375,410		85,619,273
VCA Antech, Inc. (a)	4,500		201,690
WebMD Corp. (a)	119,300		1,111,876
WellPoint Health Networks, Inc. (a)	81,400		9,117,614
			375,241,927
Pharmaceuticals - 3.2%
Altana AG	166,463		10,035,193
AstraZeneca PLC sponsored ADR	738,800		33,718,832
Atherogenics, Inc. (a)	312,300		5,943,069
Cypress Bioscience, Inc. (a)	304,500		4,180,785
Elan Corp. PLC sponsored ADR (a)	779,900		19,294,726
Endo Pharmaceuticals Holdings, Inc. (a)	5,400		126,630
Eon Labs, Inc. (a)	84,200		3,446,306
IVAX Corp. (a)	215,700		5,174,643
Johnson & Johnson	616,250		34,325,125
Kos Pharmaceuticals, Inc. (a)	211,300		6,966,561
Merck & Co., Inc.	38,200		1,814,500
MGI Pharma, Inc. (a)	116,600		3,149,366
Nektar Therapeutics (a)	61,600		1,229,536
Novartis AG sponsored ADR	681,400		30,322,300
Novo Nordisk AS Series B	1,186,974		61,259,530
Pfizer, Inc.	452,265		15,503,644
Roche Holding AG (participation certificate)	601,598		59,707,181
Schering-Plough Corp.	1,055,200		19,500,096
Teva Pharmaceutical Industries Ltd. sponsored ADR	739,600		49,767,684
			365,465,707
TOTAL HEALTH CARE			1,773,328,462
INDUSTRIALS - 10.7%
Aerospace & Defense - 1.1%
Bombardier, Inc. Class B (sub. vtg.)	1,207,400		3,638,765
Lockheed Martin Corp.	2,108,535		109,812,503
Precision Castparts Corp.	185,986		10,171,574
			123,622,842
Air Freight & Logistics - 0.9%
C.H. Robinson Worldwide, Inc.	1,116,680		51,188,611
Dynamex, Inc. (a)	58,200		809,562
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Air Freight & Logistics - continued
Expeditors International of Washington, Inc.	48,900		$ 2,416,149
United Parcel Service, Inc. Class B	625,600		47,026,352
			101,440,674
Airlines - 1.0%
ExpressJet Holdings, Inc. Class A (a)	131,021		1,590,595
JetBlue Airways Corp. (a)	1,366,154		40,137,605
Ryanair Holdings PLC sponsored ADR (a)	2,032,657		66,630,496
Southwest Airlines Co.	404,000		6,775,080
			115,133,776
Building Products - 0.1%
Lennox International, Inc.	212,500		3,846,250
Masco Corp.	252,800		7,882,304
			11,728,554
Commercial Services & Supplies - 1.4%
Apollo Group, Inc. Class A (a)	589,072		52,009,167
Aramark Corp. Class B	1,062,550		30,558,938
Copart, Inc. (a)	112,100		2,993,070
Corporate Executive Board Co.	4,100		236,939
Education Management Corp. (a)	377,200		12,394,792
H&R Block, Inc.	188,900		9,006,752
R.R. Donnelley & Sons Co.	212,400		7,013,448
Resources Connection, Inc. (a)	125,900		4,923,949
Robert Half International, Inc.	228,500		6,802,445
Strayer Education, Inc.	256,899		28,662,221
Universal Technical Institute, Inc.	78,600		3,141,642
			157,743,363
Construction & Engineering - 0.1%
Jacobs Engineering Group, Inc. (a)	305,720		12,039,254
Perini Corp. (a)	305,400		3,258,618
			15,297,872
Electrical Equipment - 0.4%
Cooper Industries Ltd. Class A	430,900		25,599,769
Roper Industries, Inc.	210,100		11,954,690
Ultralife Batteries, Inc. (a)	275,400		5,331,744
			42,886,203
Industrial Conglomerates - 3.4%
3M Co.	4,028,520		362,607,085
Carlisle Companies, Inc.	21,900		1,363,275
Hutchison Whampoa Ltd.	1,004,000		6,854,407
Tyco International Ltd.	526,300		17,441,582
			388,266,349
Machinery - 2.0%
Briggs & Stratton Corp.	102,500		9,055,875
Danaher Corp.	2,509,260		130,105,131
Deere & Co.	92,400		6,480,936
IDEX Corp.	124,500		4,276,575
Illinois Tool Works, Inc.	62,300		5,973,947
	Shares		Value (Note 1)
Ingersoll-Rand Co. Ltd. Class A	78,500		$ 5,362,335
Joy Global, Inc.	367,000		10,987,980
Oshkosh Truck Co.	78,000		4,470,180
PACCAR, Inc.	795,044		46,104,602
Volvo AB ADR	143,100		5,010,074
			227,827,635
Road & Rail - 0.2%
Dollar Thrifty Automotive Group, Inc. (a)	3,600		98,784
Heartland Express, Inc.	327,346		8,956,187
Knight Transportation, Inc. (a)	139,810		4,016,741
Landstar System, Inc. (a)	278,412		14,719,642
			27,791,354
Trading Companies & Distributors - 0.1%
Fastenal Co.	107,512		6,109,907
TOTAL INDUSTRIALS			1,217,848,529
INFORMATION TECHNOLOGY - 13.1%
Communications Equipment - 2.5%
Comverse Technology, Inc. (a)	112,300		2,239,262
Ditech Communications Corp. (a)	159,900		3,732,066
Harris Corp.	459,000		23,294,250
Juniper Networks, Inc. (a)	649,005		15,946,053
Motorola, Inc.	1,917,100		34,987,075
Plantronics, Inc. (a)	67,300		2,833,330
QUALCOMM, Inc.	1,184,200		86,422,916
Research in Motion Ltd. (a)	695,800		47,598,583
Scientific-Atlanta, Inc.	523,700		18,067,650
Telefonaktiebolaget LM Ericsson ADR (a)	1,485,409		44,443,437
			279,564,622
Computers & Peripherals - 0.4%
Apple Computer, Inc. (a)	310,200		10,093,908
Dell, Inc. (a)	838,600		30,038,652
PalmOne, Inc. (a)	98,700		3,431,799
Seagate Technology	21,964		316,941
Synaptics, Inc. (a)	347,569		6,655,946
			50,537,246
Electronic Equipment & Instruments - 0.9%
Amphenol Corp. Class A (a)	348,600		11,615,352
AU Optronics Corp. sponsored ADR	24,445		399,431
FARO Technologies, Inc. (a)	65,532		1,682,206
Flir Systems, Inc. (a)	817,300		44,869,770
Mettler-Toledo International, Inc. (a)	15,300		751,842
Molex, Inc.	44,700		1,433,976
National Instruments Corp.	216,457		6,634,407
Symbol Technologies, Inc.	738,700		10,888,438
Thermo Electron Corp. (a)	142,000		4,365,080
Waters Corp. (a)	401,100		19,164,558
			101,805,060
Internet Software & Services - 2.2%
Akamai Technologies, Inc. (a)	1,238,283		22,227,180
Blue Coat Systems, Inc. (a)	25,044		838,724
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Internet Software & Services - continued
iVillage, Inc. (a)	111,100		$ 705,485
Lastminute.com PLC (a)	828,199		2,719,820
Open Text Corp. (a)	218,700		7,000,892
Sina Corp. (a)	185,400		6,116,346
Websense, Inc. (a)	101,442		3,776,686
Yahoo!, Inc. (a)	5,671,396		206,041,817
			249,426,950
IT Services - 1.8%
Accenture Ltd. Class A (a)	67,400		1,852,152
Alliance Data Systems Corp. (a)	722,000		30,504,500
Anteon International Corp. (a)	786,600		25,658,892
Cognizant Technology Solutions Corp. Class A (a)	1,508,896		38,341,047
CSG Systems International, Inc. (a)	85,800		1,776,060
First Data Corp.	646,600		28,786,632
Infosys Technologies Ltd. sponsored ADR	400,000		37,108,000
Iron Mountain, Inc. (a)	271,200		13,088,112
SRA International, Inc. Class A (a)	392,900		16,627,528
The BISYS Group, Inc. (a)	623,100		8,760,786
			202,503,709
Office Electronics - 0.1%
Canon, Inc.	88,500		4,725,900
Zebra Technologies Corp. Class A (a)	96,780		8,419,860
			13,145,760
Semiconductors & Semiconductor Equipment - 4.0%
Analog Devices, Inc.	1,662,500		78,270,500
ATI Technologies, Inc. (a)	215,500		4,064,757
Cree, Inc. (a)	122,200		2,844,816
Intel Corp.	100,300		2,768,280
International Rectifier Corp. (a)	969,100		40,140,122
Linear Technology Corp.	252,500		9,966,175
Marvell Technology Group Ltd. (a)	3,421,200		91,346,040
Microchip Technology, Inc.	67,300		2,122,642
National Semiconductor Corp. (a)	379,200		8,338,608
Pixelworks, Inc. (a)	89,600		1,372,672
Samsung Electronics Co. Ltd.	351,340		145,161,726
Sigmatel, Inc.	171,988		4,997,971
Silicon Laboratories, Inc. (a)	1,287,646		59,682,392
Tundra Semiconductor Corp. Ltd. (a)(c)	35,300		602,050
			451,678,751
Software - 1.2%
Adobe Systems, Inc.	442,289		20,566,439
Altiris, Inc. (a)	761,839		21,034,375
Autodesk, Inc.	356,500		15,261,765
Electronic Arts, Inc. (a)	107,900		5,885,945
FileNET Corp. (a)	132,468		4,182,015
Kronos, Inc. (a)	235,692		9,710,510
Macrovision Corp. (a)	32,400		810,972
Magma Design Automation, Inc. (a)	123,011		2,365,502
Merge Technologies, Inc. (a)	350,000		5,120,500
	Shares		Value (Note 1)
Microsoft Corp.	184,600		$ 5,272,176
Quality Systems, Inc. (a)	26,391		1,295,534
Red Hat, Inc. (a)	228,067		5,238,699
SAP AG sponsored ADR	56,100		2,345,541
Sonic Solutions, Inc. (a)	561,999		11,942,479
Symantec Corp. (a)	639,303		27,988,685
Ultimate Software Group, Inc. (a)	3,225		32,573
			139,053,710
TOTAL INFORMATION TECHNOLOGY			1,487,715,808
MATERIALS - 4.6%
Chemicals - 0.8%
Ecolab, Inc.	1,673,700		53,056,290
Methanex Corp.	378,200		5,018,472
Potash Corp. of Saskatchewan	204,700		19,704,236
Sinopec Shanghai Petrochemical Co. Ltd. sponsored ADR	134,500		4,464,055
The Scotts Co. Class A (a)	94,000		6,004,720
Valspar Corp.	58,400		2,942,776
			91,190,549
Construction Materials - 0.1%
Eagle Materials, Inc.	101,700		7,222,734
Containers & Packaging - 0.0%
Ball Corp.	84,152		6,063,152
Peak International Ltd. (a)	200,000		1,000,000
			7,063,152
Metals & Mining - 3.6%
Aber Diamond Corp. (a)	389,750		11,585,267
Anglo American PLC ADR	916,572		19,128,858
Apex Silver Mines Ltd. (a)	550,100		9,379,205
Companhia Vale do Rio Doce sponsored ADR	142,200		6,761,610
Compania de Minas Buenaventura SA sponsored ADR	1,374,300		30,372,030
First Quantum Minerals Ltd. (a)	279,500		2,964,934
Freeport-McMoRan Copper & Gold, Inc. Class B	1,584,234		52,517,357
Gabriel Resources Ltd. (a)	2,171,800		2,100,324
Glamis Gold Ltd. (a)	1,630,200		28,658,962
Goldcorp, Inc.	4,126,566		48,167,503
International Steel Group, Inc. (a)	156,100		4,643,975
IPSCO, Inc.	221,200		4,988,152
Ivanhoe Mines Ltd. (a)	734,200		3,962,996
Ivanhoe Mines Ltd. warrants 12/19/05 (a)	198,450		148,774
Newcrest Mining Ltd.	769,500		7,411,463
Newmont Mining Corp.	2,600,351		100,789,605
Novagold Resources, Inc. (a)	778,300		3,600,053
Nucor Corp.	155,800		11,959,208
Peabody Energy Corp.	44,900		2,513,951
POSCO sponsored ADR	67,200		2,251,872
Common Stocks - continued
	Shares		Value (Note 1)
MATERIALS - continued
Metals & Mining - continued
Rio Tinto PLC (Reg.)	2,299,187		$ 56,358,821
SouthernEra Resources Ltd. (a)	558,200		1,527,423
			411,792,343
Paper & Forest Products - 0.1%
Sappi Ltd.	584,877		9,002,495
TOTAL MATERIALS			526,271,273
TELECOMMUNICATION SERVICES - 3.8%
Diversified Telecommunication Services - 0.1%
PT Indosat Tbk	3,790,000		1,622,846
PT Indosat Tbk sponsored ADR	126,600		2,683,920
PT Telkomunikasi Indonesia Tbk sponsored ADR	54,600		849,030
			5,155,796
Wireless Telecommunication Services - 3.7%
America Movil SA de CV sponsored ADR	1,606,100		58,413,857
KDDI Corp.	1,548		8,982,298
mmO2 PLC (a)	2,313,919		3,904,723
Mobile TeleSystems OJSC sponsored ADR	107,500		13,115,000
MTN Group Ltd. (a)	447,300		2,072,011
Nextel Communications, Inc. Class A (a)	5,373,200		143,249,512
Nextel Partners, Inc. Class A (a)	2,217,700		35,305,784
NII Holdings, Inc. (a)	886,253		29,857,864
Telesystem International Wireless, Inc. (a)	1,197,700		11,789,340
Vimpel Communications sponsored ADR (a)	561,300		54,137,385
Vodafone Group PLC sponsored ADR	2,508,500		55,437,850
Western Wireless Corp. Class A (a)	299,500		8,658,545
			424,924,169
TOTAL TELECOMMUNICATION SERVICES			430,079,965
UTILITIES - 0.2%
Electric Utilities - 0.2%
Entergy Corp.	44,800		2,509,248
Exelon Corp.	78,500		2,613,265
PG&E Corp. (a)	326,800		9,130,792
			14,253,305
	Shares		Value (Note 1)
Multi-Utilities & Unregulated Power - 0.0%
AES Corp. (a)	224,800		$ 2,232,264
TOTAL UTILITIES			16,485,569
TOTAL COMMON STOCKS (Cost $7,082,774,748)		10,072,614,738
Convertible Preferred Stocks - 0.3%
FINANCIALS - 0.2%
Diversified Financial Services - 0.2%
Xerox Capital Trust II 7.50% (c)	199,600		16,250,434
UTILITIES - 0.1%
Electric Utilities - 0.1%
TXU Corp. 8.75%	342,400		16,221,200
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $25,156,569)		32,471,634

Convertible Bonds - 0.2%
	Principal Amount
CONSUMER DISCRETIONARY - 0.1%
Leisure Equipment & Products - 0.1%
Eastman Kodak Co. 3.375% 10/15/33	$ 8,080,000		8,913,533
FINANCIALS - 0.0%
Diversified Financial Services - 0.0%
Tyco International Group SA yankee 3.125% 1/15/23	3,140,000		5,077,694
INFORMATION TECHNOLOGY - 0.0%
Software - 0.0%
Red Hat, Inc. 0.5% 1/15/24 (c)	2,890,000		3,262,232
TELECOMMUNICATION SERVICES - 0.1%
Wireless Telecommunication Services - 0.1%
Nextel Communications, Inc. 5.25% 1/15/10	9,860,000		9,564,200
UTILITIES - 0.0%
Multi-Utilities & Unregulated Power - 0.0%
AES Corp. 4.5% 8/15/05	2,280,000		2,258,842
TOTAL CONVERTIBLE BONDS (Cost $24,942,361)		29,076,501
U.S. Treasury Obligations - 0.9%
U.S. Treasury Bills, yield at date of purchase 1.03% to 1.25% 8/5/04 to 9/9/04 (d)	4,450,000		4,443,066
U.S. Treasury Notes:
4.25% 8/15/13	45,275,000		44,196,187
U.S. Treasury Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Treasury Notes: - continued
4.25% 11/15/13	$ 44,850,000		$ 43,653,402
4.75% 5/15/14	11,100,000		11,215,773
TOTAL U.S. TREASURY OBLIGATIONS (Cost $103,084,440)		103,508,428

Money Market Funds - 11.1%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	1,084,006,645		1,084,006,645
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	174,634,350		174,634,350
TOTAL MONEY MARKET FUNDS (Cost $1,258,640,995)		1,258,640,995
TOTAL INVESTMENT PORTFOLIO - 101.2% (Cost $8,494,599,113)			11,496,312,296
NET OTHER ASSETS - (1.2)%			(138,669,954)
NET ASSETS - 100%		$ 11,357,642,342

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/(Depreciation)
Purchased
Equity Index Contracts
290 S&P 500 Index Contracts	Sept. 2004	$ 82,679,000	$ 509,261

The face value of futures purchased as a percentage of net assets - 0.7%

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $27,258,916 or 0.2% of net assets.

(d) 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 $4,443,066.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $3,388,126,570 and $3,703,885,524, respectively, of which long-term U.S. government and government agency obligations aggregated $94,595,435 and $0, 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 $186,808 for the period.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	78.5%
United Kingdom	4.2%
Canada	3.8%
Bermuda	3.4%
Switzerland	1.7%
Korea (South)	1.4%
Others (individually less than 1%)	7.0%
	100.0%

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $1,251,202,000 of which $587,643,000 and $663,559,000 will expire on December 31, 2009 and 2010, respectively.

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

Contrafund Portfolio

Fidelity Variable Insurance Products: Contrafund Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $171,231,021) (cost $8,494,599,113) - See accompanying schedule		$ 11,496,312,296
Foreign currency held at value (cost $2,384,676)		2,374,071
Receivable for investments sold		110,123,678
Receivable for fund shares sold		6,516,476
Dividends receivable		6,453,628
Interest receivable		2,421,925
Receivable for daily variation on futures contracts		327,320
Prepaid expenses		21,567
Other affiliated receivables		10,079
Other receivables		663,045
Total assets		11,625,224,085
Liabilities
Payable to custodian bank	$ 6,650,608
Payable for investments purchased	74,208,981
Payable for fund shares redeemed	5,346,533
Accrued management fee	5,331,005
Distribution fees payable	399,193
Other affiliated payables	807,147
Other payables and accrued expenses	203,926
Collateral on securities loaned, at value	174,634,350
Total liabilities		267,581,743
Net Assets		$ 11,357,642,342
Net Assets consist of:
Paid in capital		$ 9,290,135,986
Undistributed net investment income		9,942,995
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(944,694,491)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		3,002,257,852
Net Assets		$ 11,357,642,342
Initial Class: Net Asset Value, offering price and redemption price per share ($8,252,118,332 ÷ 336,708,072 shares)		$ 24.51
Service Class: Net Asset Value, offering price and redemption price per share ($1,876,991,551 ÷ 76,796,299 shares)		$ 24.44
Service Class 2: Net Asset Value, offering price and redemption price per share ($1,223,702,743 ÷ 50,377,642 shares)		$ 24.29
Service Class 2R: Net Asset Value, offering price and redemption price per share ($4,829,716 ÷ 199,254 shares)		$ 24.24

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 44,902,493
Interest		4,989,511
Security lending		915,268
Total income		50,807,272
Expenses
Management fee	$ 30,992,384
Transfer agent fees	3,565,511
Distribution fees	2,216,864
Accounting and security lending fees	720,177
Non-interested trustees' compensation	25,194
Appreciation in deferred trustee compensation account	5,580
Custodian fees and expenses	399,749
Registration fees	18,266
Audit	47,825
Legal	9,583
Miscellaneous	257,075
Total expenses before reductions	38,258,208
Expense reductions	(1,235,006)	37,023,202
Net investment income (loss)		13,784,070
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	327,273,824
Foreign currency transactions	65,660
Futures contracts	3,772,229
Total net realized gain (loss)		331,111,713
Change in net unrealized appreciation (depreciation) on: Investment securities	312,539,377
Assets and liabilities in foreign currencies	(419,241)
Futures contracts	(229,874)
Total change in net unrealized appreciation (depreciation)		311,890,262
Net gain (loss)		643,001,975
Net increase (decrease) in net assets resulting from operations		$ 656,786,045

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

Semiannual Report

Fidelity Variable Insurance Products: Contrafund Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 13,784,070	$ 25,801,059
Net realized gain (loss)	331,111,713	98,601,973
Change in net unrealized appreciation (depreciation)	311,890,262	2,069,862,306
Net increase (decrease) in net assets resulting from operations	656,786,045	2,194,265,338
Distributions to shareholders from net investment income	(33,283,266)	(35,507,037)
Share transactions - net increase (decrease)	460,202,304	535,497,703
Redemption fees	269	3,718
Total increase (decrease) in net assets	1,083,705,352	2,694,259,722
Net Assets
Beginning of period	10,273,936,990	7,579,677,268
End of period (including undistributed net investment income of $9,942,995 and undistributed net investment income of $23,673,410, respectively)	$ 11,357,642,342	$ 10,273,936,990

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	20,375,470	7,094,717	13,297,245	106,622
Reinvested	1,123,479	189,967	89,389	356
Redeemed	(16,161,030)	(4,007,536)	(2,714,165)	(25,836)
Net increase (decrease)	5,337,919	3,277,148	10,672,469	81,142
Dollars Sold	$ 483,651,274	$ 168,039,230	$ 313,208,333	$ 2,505,134
Reinvested	26,671,383	4,498,414	2,105,112	8,357
Redeemed	(382,126,790)	(94,109,992)	(63,640,792)	(607,359)
Net increase (decrease)	$ 128,195,867	$ 78,427,652	$ 251,672,653	$ 1,906,132
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	43,575,507	16,391,007	21,425,743	119,703
Reinvested	1,718,846	269,021	92,062	161
Redeemed	(43,003,502)	(8,751,544)	(6,273,261)	(46,848)
Net increase (decrease)	2,290,851	7,908,484	15,244,544	73,016
Dollars Sold	$ 877,441,120	$ 326,586,457	$ 422,566,799	$ 2,529,458
Reinvested	29,357,892	4,584,117	1,562,295	2,733
Redeemed	(837,322,380)	(169,383,155)	(121,521,459)	(906,174)
Net increase (decrease)	$ 69,476,632	$ 161,787,419	$ 302,607,635	$ 1,626,017
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 26,671,383	$ 4,498,414	$ 2,105,112	$ 8,357
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 29,357,892	$ 4,584,117	$ 1,562,295	$ 2,733

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

Contrafund Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.13	$ 18.10	$ 20.13	$ 23.75	$ 29.15	$ 24.44
Income from Investment Operations
Net investment income (loss) E	.04	.07	.10	.16	.17	.12
Net realized and unrealized gain (loss)	1.42	5.05	(1.97)	(3.01)	(1.84)	5.59
Total from investment operations	1.46	5.12	(1.87)	(2.85)	(1.67)	5.71
Distributions from net investment income	(.08)	(.09)	(.16)	(.17)	(.11)	(.12)
Distributions from net realized gain	-	-	-	(.60)	(3.62)	(.88)
Total distributions	(.08)	(.09)	(.16)	(.77)	(3.73)	(1.00)
Redemption fees added to paid in capital E, G	-	-	-	-	-	-
Net asset value, end of period	$ 24.51	$ 23.13	$ 18.10	$ 20.13	$ 23.75	$ 29.15
Total Return B, C, D	6.32%	28.46%	(9.35)%	(12.28)%	(6.58)%	24.25%
Ratios to Average Net Assets F
Expenses before expense reductions	.67% A	.67%	.68%	.68%	.66%	.67%
Expenses net of voluntary waivers, if any	.67% A	.67%	.68%	.68%	.66%	.67%
Expenses net of all reductions	.65% A	.65%	.64%	.64%	.63%	.65%
Net investment income (loss)	.30% A	.34%	.50%	.77%	.69%	.48%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,252,118	$ 7,665,424	$ 5,956,028	$ 6,972,615	$ 8,516,464	$ 9,005,129
Portfolio turnover rate	67% A	66%	84%	140%	177%	172%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.06	$ 18.04	$ 20.06	$ 23.67	$ 29.10	$ 24.42
Income from Investment Operations
Net investment income (loss) E	.02	.05	.08	.14	.15	.10
Net realized and unrealized gain (loss)	1.42	5.04	(1.96)	(3.00)	(1.85)	5.58
Total from investment operations	1.44	5.09	(1.88)	(2.86)	(1.70)	5.68
Distributions from net investment income	(.06)	(.07)	(.14)	(.15)	(.11)	(.12)
Distributions from net realized gain	-	-	-	(.60)	(3.62)	(.88)
Total distributions	(.06)	(.07)	(.14)	(.75)	(3.73)	(1.00)
Redemption fees added to paid in capital E, G	-	-	-	-	-	-
Net asset value, end of period	$ 24.44	$ 23.06	$ 18.04	$ 20.06	$ 23.67	$ 29.10
Total Return B, C, D	6.25%	28.35%	(9.42)%	(12.36)%	(6.71)%	24.15%
Ratios to Average Net Assets F
Expenses before expense reductions	.77% A	.77%	.78%	.78%	.76%	.78%
Expenses net of voluntary waivers, if any	.77% A	.77%	.78%	.78%	.76%	.78%
Expenses net of all reductions	.75% A	.75%	.74%	.74%	.74%	.75%
Net investment income (loss)	.20% A	.24%	.39%	.67%	.59%	.37%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,876,992	$ 1,695,467	$ 1,183,683	$ 1,201,105	$ 1,245,222	$ 775,216
Portfolio turnover rate	67% A	66%	84%	140%	177%	172%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.93	$ 17.95	$ 20.00	$ 23.64	$ 28.20
Income from Investment Operations
Net investment income (loss) E	.01	.02	.05	.10	.10
Net realized and unrealized gain (loss)	1.40	5.02	(1.96)	(2.98)	(.93)
Total from investment operations	1.41	5.04	(1.91)	(2.88)	(.83)
Distributions from net investment income	(.05)	(.06)	(.14)	(.16)	(.11)
Distributions from net realized gain	-	-	-	(.60)	(3.62)
Total distributions	(.05)	(.06)	(.14)	(.76)	(3.73)
Redemption fees added to paid in capital E, H	-	-	-	-	-
Net asset value, end of period	$ 24.29	$ 22.93	$ 17.95	$ 20.00	$ 23.64
Total Return B, C, D	6.16%	28.20%	(9.60)%	(12.47)%	(3.86)%
Ratios to Average Net Assets G
Expenses before expense reductions	.92% A	.93%	.93%	.94%	.92% A
Expenses net of voluntary waivers, if any	.92% A	.93%	.93%	.94%	.92% A
Expenses net of all reductions	.90% A	.90%	.90%	.90%	.90% A
Net investment income (loss)	.04% A	.09%	.24%	.52%	.43% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,223,703	$ 910,341	$ 439,157	$ 231,686	$ 81,950
Portfolio turnover rate	67% A	66%	84%	140%	177%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^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. ^H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.90	$ 17.95	$ 20.49
Income from Investment Operations
Net investment income (loss) E	.01	.02	.03
Net realized and unrealized gain (loss)	1.40	5.01	(2.57)
Total from investment operations	1.41	5.03	(2.54)
Distributions from net investment income	(.07)	(.08)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 24.24	$ 22.90	$ 17.95
Total Return B, C, D	6.17%	28.18%	(12.40)%
Ratios to Average Net Assets G
Expenses before expense reductions	.92% A	.93%	.96% A
Expenses net of voluntary waivers, if any	.92% A	.93%	.96% A
Expenses net of all reductions	.90% A	.90%	.92% A
Net investment income (loss)	.05% A	.08%	.23% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 4,830	$ 2,705	$ 810
Portfolio turnover rate	67% A	66%	84%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. ^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. ^H Amount represents less than $.01 per share.

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

Contrafund Portfolio

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Bank of America Corp.	3.0
Exxon Mobil Corp.	2.9
Citigroup, Inc.	2.7
American International Group, Inc.	2.6
Fannie Mae	1.9
	13.1
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	30.2
Industrials	12.6
Consumer Discretionary	10.9
Energy	10.9
Health Care	8.0

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	99.2%
	Bonds	0.6%
	Short-Term Investments and Net Other Assets	0.2%
* Foreign investments		12.0%

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 97.9%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 10.3%
Auto Components - 0.1%
TRW Automotive Holdings Corp.	611,370		$ 11,524,325
Automobiles - 0.5%
DaimlerChrysler AG	385,800		18,159,606
Toyota Motor Corp. ADR	475,900		38,842,958
			57,002,564
Hotels, Restaurants & Leisure - 1.3%
Caesars Entertainment, Inc. (a)	2,730,500		40,957,500
McDonald's Corp.	2,561,300		66,593,800
MGM MIRAGE (a)	446,670		20,966,690
Six Flags, Inc. (a)	1,408,356		10,224,665
			138,742,655
Household Durables - 1.0%
LG Electronics, Inc.	237,410		11,269,009
Maytag Corp.	687,020		16,838,860
Newell Rubbermaid, Inc.	1,763,100		41,432,850
Sony Corp. sponsored ADR	587,200		22,342,960
Whirlpool Corp.	128,200		8,794,520
			100,678,199
Media - 5.3%
Clear Channel Communications, Inc.	2,650,100		97,921,195
Comcast Corp. Class A (a)	2,852,091		79,944,111
Liberty Media Corp. Class A (a)	3,755,576		33,762,628
Liberty Media International, Inc. Class A (a)	187,778		6,966,564
The Reader's Digest Association, Inc. (non-vtg.)	1,243,903		19,890,009
Time Warner, Inc. (a)	7,114,850		125,079,063
Viacom, Inc. Class B (non-vtg.)	3,377,818		120,655,659
Vivendi Universal SA sponsored ADR (a)	1,039,500		29,002,050
Walt Disney Co.	1,993,500		50,814,315
			564,035,594
Multiline Retail - 0.3%
Big Lots, Inc. (a)	1,141,556		16,506,903
Sears, Roebuck & Co.	452,700		17,093,952
			33,600,855
Specialty Retail - 1.6%
Abercrombie & Fitch Co. Class A	979,400		37,951,750
American Eagle Outfitters, Inc. (a)	626,000		18,097,660
Gap, Inc.	1,541,200		37,374,100
Limited Brands, Inc.	2,197,300		41,089,510
Office Depot, Inc. (a)	813,000		14,560,830
Toys 'R' Us, Inc. (a)	1,295,900		20,643,687
			169,717,537
Textiles Apparel & Luxury Goods - 0.2%
Liz Claiborne, Inc.	632,940		22,773,181
TOTAL CONSUMER DISCRETIONARY			1,098,074,910
	Shares		Value (Note 1)
CONSUMER STAPLES - 6.1%
Beverages - 0.4%
Anheuser-Busch Companies, Inc.	844,800		$ 45,619,200
Food & Staples Retailing - 0.7%
Albertsons, Inc.	442,100		11,733,334
CVS Corp.	1,469,900		61,765,198
			73,498,532
Food Products - 1.2%
Campbell Soup Co.	612,900		16,474,752
Fresh Del Monte Produce, Inc.	242,988		6,140,307
H.J. Heinz Co.	281,120		11,019,904
Hormel Foods Corp.	186,000		5,784,600
Interstate Bakeries Corp.	563,995		6,119,346
Kellogg Co.	194,900		8,156,565
Kraft Foods, Inc. Class A	943,100		29,877,408
Unilever PLC sponsored ADR	1,307,000		51,979,390
			135,552,272
Household Products - 2.1%
Colgate-Palmolive Co.	1,705,300		99,674,785
Kimberly-Clark Corp.	1,273,400		83,891,592
Procter & Gamble Co.	710,400		38,674,176
			222,240,553
Personal Products - 0.9%
Gillette Co.	2,332,620		98,903,088
Tobacco - 0.8%
Altria Group, Inc.	1,562,800		78,218,140
Loews Corp. - Carolina Group	171,550		4,211,553
			82,429,693
TOTAL CONSUMER STAPLES			658,243,338
ENERGY - 10.9%
Energy Equipment & Services - 2.5%
Baker Hughes, Inc.	1,538,300		57,916,995
BJ Services Co. (a)	570,145		26,135,447
Halliburton Co.	583,400		17,653,684
Noble Corp. (a)	930,100		35,241,489
Schlumberger Ltd. (NY Shares)	1,996,600		126,804,066
			263,751,681
Oil & Gas - 8.4%
Apache Corp.	647,780		28,210,819
BP PLC sponsored ADR	2,491,842		133,487,976
ChevronTexaco Corp.	1,270,071		119,526,382
Exxon Mobil Corp.	7,103,336		315,459,152
Royal Dutch Petroleum Co. (NY Shares)	1,143,000		59,058,810
Common Stocks - continued
	Shares		Value (Note 1)
ENERGY - continued
Oil & Gas - continued
Total SA:
Series B	391,400		$ 75,211,424
sponsored ADR	1,697,996		163,143,456
YUKOS Corp. sponsored ADR	248,400		7,899,120
			901,997,139
TOTAL ENERGY			1,165,748,820
FINANCIALS - 29.5%
Capital Markets - 6.0%
Bank of New York Co., Inc.	3,223,100		95,016,988
Charles Schwab Corp.	6,391,400		61,421,354
Credit Suisse Group sponsored ADR	735,200		26,327,512
J.P. Morgan Chase & Co.	3,654,550		141,686,904
Janus Capital Group, Inc.	2,332,400		38,461,276
LaBranche & Co., Inc.	517,900		4,360,718
Mellon Financial Corp.	1,716,500		50,344,945
Merrill Lynch & Co., Inc.	1,674,300		90,378,714
Morgan Stanley	2,066,900		109,070,313
Nomura Holdings, Inc.	1,853,000		27,702,350
			644,771,074
Commercial Banks - 8.6%
Bank of America Corp.	3,827,984		323,923,982
Bank One Corp.	2,714,138		138,421,038
Banknorth Group, Inc.	339,400		11,023,712
Comerica, Inc.	730,200		40,073,376
Huntington Bancshares, Inc.	387,200		8,866,880
Lloyds TSB Group PLC	2,282,400		17,928,844
PNC Financial Services Group, Inc.	226,500		12,022,620
Royal Bank of Scotland Group PLC	325,447		9,402,838
State Bank of India	463,175		4,544,908
Sumitomo Mitsui Financial Group, Inc.	5,917		41,156,180
U.S. Bancorp, Delaware	2,754,538		75,915,067
Wachovia Corp.	2,359,675		105,005,538
Wells Fargo & Co.	2,243,800		128,412,674
			916,697,657
Consumer Finance - 1.2%
American Express Co.	1,687,496		86,703,544
MBNA Corp.	1,456,400		37,560,556
			124,264,100
Diversified Financial Services - 3.1%
CIT Group, Inc.	1,191,400		45,618,706
Citigroup, Inc.	6,273,619		291,723,284
			337,341,990
Insurance - 7.7%
ACE Ltd.	2,113,415		89,355,186
Allianz AG sponsored ADR	567,200		6,210,840
Allstate Corp.	2,488,000		115,816,400
American International Group, Inc.	3,964,650		282,600,252
	Shares		Value (Note 1)
Assurant, Inc.	274,700		$ 7,246,586
Conseco, Inc. (a)	672,100		13,374,790
Fondiaria-Sai Spa	541,144		12,088,179
Genworth Financial, Inc. Class A	1,295,800		29,738,610
Hartford Financial Services Group, Inc.	1,334,400		91,726,656
Marsh & McLennan Companies, Inc.	368,000		16,699,840
Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)	123,914		13,465,283
Old Republic International Corp.	530,996		12,595,225
St. Paul Travelers Companies, Inc.	2,029,026		82,256,714
The Chubb Corp.	634,000		43,226,120
UnumProvident Corp.	680,100		10,813,590
			827,214,271
Real Estate - 0.1%
CarrAmerica Realty Corp.	193,740		5,856,760
Thrifts & Mortgage Finance - 2.8%
Fannie Mae	2,926,100		208,806,496
Freddie Mac	717,900		45,443,070
Housing Development Finance Corp. Ltd.	1,133,500		12,748,947
MGIC Investment Corp.	218,200		16,552,652
Sovereign Bancorp, Inc.	864,250		19,099,925
			302,651,090
TOTAL FINANCIALS			3,158,796,942
HEALTH CARE - 7.9%
Health Care Equipment & Supplies - 1.1%
Baxter International, Inc.	3,196,100		110,297,411
Hospira, Inc. (a)	85,700		2,365,320
			112,662,731
Health Care Providers & Services - 1.2%
Cardinal Health, Inc.	463,900		32,496,195
Community Health Systems, Inc. (a)	254,100		6,802,257
HCA, Inc.	204,800		8,517,632
IMS Health, Inc.	102,999		2,414,297
McKesson Corp.	1,062,800		36,485,924
Tenet Healthcare Corp. (a)	2,188,900		29,353,149
UnitedHealth Group, Inc.	247,800		15,425,550
Wellcare Group, Inc.	6,800		115,600
			131,610,604
Pharmaceuticals - 5.6%
Abbott Laboratories	857,000		34,931,320
Bristol-Myers Squibb Co.	2,517,500		61,678,750
GlaxoSmithKline PLC sponsored ADR	467,000		19,361,820
Johnson & Johnson	2,187,200		121,827,040
Merck & Co., Inc.	2,851,900		135,465,250
Pfizer, Inc.	2,939,200		100,755,776
Roche Holding AG (participation certificate)	53,880		5,347,463
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Pharmaceuticals - continued
Schering-Plough Corp.	3,803,630		$ 70,291,082
Wyeth	1,436,600		51,947,456
			601,605,957
TOTAL HEALTH CARE			845,879,292
INDUSTRIALS - 12.6%
Aerospace & Defense - 4.0%
Bombardier, Inc. Class B (sub. vtg.)	4,147,900		12,500,606
EADS NV	1,540,015		42,973,268
Honeywell International, Inc.	3,094,325		113,345,125
Lockheed Martin Corp.	1,439,400		74,963,952
Northrop Grumman Corp.	903,000		48,491,100
Raytheon Co.	1,286,678		46,024,472
The Boeing Co.	997,800		50,977,602
United Technologies Corp.	379,520		34,718,490
			423,994,615
Air Freight & Logistics - 0.1%
Ryder System, Inc.	204,900		8,210,343
Airlines - 0.2%
Southwest Airlines Co.	968,800		16,246,776
Building Products - 0.0%
Masco Corp.	162,300		5,060,514
Commercial Services & Supplies - 0.6%
Viad Corp.	1,061,700		28,676,517
Waste Management, Inc.	1,286,100		39,418,965
			68,095,482
Construction & Engineering - 0.2%
Fluor Corp.	368,900		17,585,463
Electrical Equipment - 0.3%
Emerson Electric Co.	550,200		34,965,210
Industrial Conglomerates - 3.5%
3M Co.	342,400		30,819,424
General Electric Co.	3,503,340		113,508,216
Hutchison Whampoa Ltd.	2,602,000		17,764,109
Siemens AG sponsored ADR	248,700		18,035,724
Textron, Inc.	879,800		52,216,130
Tyco International Ltd.	4,230,746		140,206,922
			372,550,525
Machinery - 2.8%
Caterpillar, Inc.	575,500		45,717,720
Deere & Co.	394,050		27,638,667
Dover Corp.	410,600		17,286,260
Eaton Corp.	497,400		32,201,676
Illinois Tool Works, Inc.	210,000		20,136,900
Ingersoll-Rand Co. Ltd. Class A	1,114,344		76,120,839
Navistar International Corp. (a)	373,600		14,480,736
Parker Hannifin Corp.	289,700		17,225,562
	Shares		Value (Note 1)
SPX Corp.	851,600		$ 39,548,304
Timken Co.	452,600		11,989,374
			302,346,038
Road & Rail - 0.9%
Burlington Northern Santa Fe Corp.	1,504,600		52,766,322
Union Pacific Corp.	807,900		48,029,655
			100,795,977
TOTAL INDUSTRIALS			1,349,850,943
INFORMATION TECHNOLOGY - 6.3%
Communications Equipment - 0.7%
Lucent Technologies, Inc. (a)	4,816,600		18,206,748
Motorola, Inc.	2,422,900		44,217,925
Nokia Corp. sponsored ADR	1,077,800		15,671,212
			78,095,885
Computers & Peripherals - 1.7%
Hewlett-Packard Co.	4,681,211		98,773,552
International Business Machines Corp.	640,900		56,495,335
Storage Technology Corp. (a)	380,210		11,026,090
Sun Microsystems, Inc. (a)	3,998,675		17,354,250
			183,649,227
Electronic Equipment & Instruments - 1.2%
Arrow Electronics, Inc. (a)	729,200		19,557,144
Avnet, Inc. (a)	1,328,830		30,164,441
PerkinElmer, Inc.	591,300		11,849,652
Solectron Corp. (a)	5,152,100		33,334,087
Thermo Electron Corp. (a)	1,155,100		35,507,774
			130,413,098
IT Services - 0.2%
Ceridian Corp. (a)	780,800		17,568,000
Office Electronics - 0.3%
Xerox Corp. (a)	1,881,900		27,287,550
Semiconductors & Semiconductor Equipment - 1.2%
Intel Corp.	2,085,300		57,554,280
Micron Technology, Inc. (a)	1,866,200		28,571,522
Rohm Co. Ltd.	148,300		18,010,104
Samsung Electronics Co. Ltd.	65,630		27,116,081
			131,251,987
Software - 1.0%
Microsoft Corp.	3,821,200		109,133,472
TOTAL INFORMATION TECHNOLOGY			677,399,219
MATERIALS - 6.8%
Chemicals - 2.8%
Arch Chemicals, Inc.	475,400		13,701,028
Dow Chemical Co.	2,294,100		93,369,870
Eastman Chemical Co.	476,800		22,042,464
Ferro Corp.	519,200		13,852,256
Great Lakes Chemical Corp.	650,500		17,602,530
Common Stocks - continued
	Shares		Value (Note 1)
MATERIALS - continued
Chemicals - continued
Hercules Trust II unit	15,700		$ 12,497,985
Lyondell Chemical Co.	1,389,900		24,170,361
Millennium Chemicals, Inc.	929,150		16,092,878
Olin Corp.	828,000		14,589,360
PolyOne Corp. (a)	1,239,100		9,218,904
PPG Industries, Inc.	390,300		24,389,847
Praxair, Inc.	1,023,124		40,832,879
			302,360,362
Containers & Packaging - 0.5%
Smurfit-Stone Container Corp. (a)	2,375,253		47,386,297
Metals & Mining - 2.0%
Alcan, Inc.	955,100		39,524,342
Alcoa, Inc.	2,921,916		96,510,885
Freeport-McMoRan Copper & Gold, Inc. Class B	820,704		27,206,338
Phelps Dodge Corp.	702,200		54,427,522
			217,669,087
Paper & Forest Products - 1.5%
Bowater, Inc.	391,300		16,274,167
Georgia-Pacific Corp.	1,562,701		57,788,683
International Paper Co.	645,400		28,849,380
Weyerhaeuser Co.	876,100		55,299,432
			158,211,662
TOTAL MATERIALS			725,627,408
TELECOMMUNICATION SERVICES - 4.5%
Diversified Telecommunication Services - 4.3%
BellSouth Corp.	5,200,199		136,349,218
Qwest Communications International, Inc. (a)	2,296,400		8,244,076
SBC Communications, Inc.	6,680,993		162,014,080
Verizon Communications, Inc.	4,242,902		153,550,623
			460,157,997
Wireless Telecommunication Services - 0.2%
KDDI Corp.	3,028		17,570,024
TOTAL TELECOMMUNICATION SERVICES			477,728,021
UTILITIES - 3.0%
Electric Utilities - 1.8%
Entergy Corp.	796,700		44,623,167
FirstEnergy Corp.	1,127,400		42,176,034
PG&E Corp. (a)	403,800		11,282,172
TXU Corp.	1,234,820		50,022,558
Wisconsin Energy Corp.	1,293,700		42,187,557
			190,291,488
Gas Utilities - 0.1%
NiSource, Inc.	568,729		11,727,192
	Shares		Value (Note 1)
Multi-Utilities & Unregulated Power - 1.1%
Dominion Resources, Inc.	1,174,600		$ 74,093,768
Public Service Enterprise Group, Inc.	594,000		23,777,820
SCANA Corp.	617,300		22,451,201
			120,322,789
TOTAL UTILITIES			322,341,469
TOTAL COMMON STOCKS (Cost $8,302,170,555)		10,479,690,362
Convertible Preferred Stocks - 1.3%
CONSUMER DISCRETIONARY - 0.2%
Automobiles - 0.1%
General Motors Corp.:
Series B, 5.25%	412,200		10,090,656
Series C, 6.25%	253,100		7,314,590
			17,405,246
Hotels, Restaurants & Leisure - 0.1%
Six Flags, Inc. 7.25% PIERS	388,400		8,641,900
TOTAL CONSUMER DISCRETIONARY			26,047,146
FINANCIALS - 0.5%
Capital Markets - 0.0%
State Street Corp. 6.75%	24,900		5,688,305
Consumer Finance - 0.2%
Ford Motor Co. Capital Trust II 6.50%	461,500		25,206,207
Insurance - 0.3%
Conseco, Inc. Series B, 5.50%	143,400		3,857,460
The Chubb Corp.:
7.00%	167,700		4,623,992
Series B, 7.00%	120,100		3,355,594
Travelers Property Casualty Corp. 4.50%	240,200		5,670,401
XL Capital Ltd. 6.50%	401,800		10,151,879
			27,659,326
TOTAL FINANCIALS			58,553,838
HEALTH CARE - 0.1%
Health Care Equipment & Supplies - 0.1%
Baxter International, Inc. 7.00%	156,900		8,935,455
INFORMATION TECHNOLOGY - 0.4%
Communications Equipment - 0.2%
Motorola, Inc. 7.00%	399,700		19,685,225
Office Electronics - 0.2%
Xerox Corp. Series C, 6.25%	145,650		19,166,666
TOTAL INFORMATION TECHNOLOGY			38,851,891
Convertible Preferred Stocks - continued
	Shares		Value (Note 1)
UTILITIES - 0.1%
Electric Utilities - 0.1%
TXU Corp. 8.75%	226,400		$ 10,725,700
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $137,257,376)		143,114,030
Corporate Bonds - 0.6%
	Principal Amount
Convertible Bonds - 0.6%
CONSUMER DISCRETIONARY - 0.4%
Hotels, Restaurants & Leisure - 0.1%
Royal Caribbean Cruises Ltd. liquid yield option note 0% 2/2/21	$ 11,239,000		6,019,946
Media - 0.2%
Liberty Media Corp.3.5% 1/15/31 (c)	11,400,000		10,274,250
News America, Inc. liquid yield option note 0% 2/28/21 (c)	22,670,000		12,936,182
			23,210,432
Specialty Retail - 0.1%
Gap, Inc. 5.75% 3/15/09	8,590,000		13,341,129
TOTAL CONSUMER DISCRETIONARY			42,571,507
FINANCIALS - 0.2%
Diversified Financial Services - 0.1%
Navistar Financial Corp. 4.75% 4/1/09 (c)	2,760,000		2,688,985
Tyco International Group SA yankee 3.125% 1/15/23	5,220,000		8,441,262
			11,130,247
Insurance - 0.1%
Loews Corp. 3.125% 9/15/07	5,340,000		5,099,700
TOTAL FINANCIALS			16,229,947
INFORMATION TECHNOLOGY - 0.0%
Electronic Equipment & Instruments - 0.0%
Celestica, Inc. liquid yield option note 0% 8/1/20	620,000		343,325
TOTAL CONVERTIBLE BONDS			59,144,779
Nonconvertible Bonds - 0.0%
CONSUMER DISCRETIONARY - 0.0%
Media - 0.0%
XM Satellite Radio, Inc. 12% 6/15/10	60,000		67,800
TOTAL CORPORATE BONDS (Cost $57,411,759)		59,212,579
Money Market Funds - 0.7%
	Shares		Value (Note 1)
Fidelity Cash Central Fund, 1.16% (b)	33,635,088		$ 33,635,088
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	44,428,150		44,428,150
TOTAL MONEY MARKET FUNDS (Cost $78,063,238)		78,063,238

TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $8,574,902,928)		10,760,080,209
NET OTHER ASSETS - (0.5)%		(57,548,792)
NET ASSETS - 100%	$ 10,702,531,417
Security Type Abbreviations
PIERS	-	Preferred Income Equity Redeemable Securities

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $25,899,417 or 0.2% of net assets.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,242,086,579 and $1,084,758,593, 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 $74,321 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $6,828,300. The weighted average interest rate was 1.15%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	88.0%
France	2.5%
United Kingdom	2.2%
Japan	1.6%
Netherlands Antilles	1.2%
Netherlands	1.0%
Others (individually less than 1%)	3.5%
	100.0%

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

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $42,097,513) (cost $8,574,902,928) - See accompanying schedule		$ 10,760,080,209
Receivable for investments sold		16,571,487
Receivable for fund shares sold		3,272,928
Dividends receivable		13,561,803
Interest receivable		530,313
Prepaid expenses		21,868
Other affiliated receivables		39,347
Other receivables		242,788
Total assets		10,794,320,743
Liabilities
Payable for investments purchased	$ 24,444,091
Payable for fund shares redeemed	16,701,391
Accrued management fee	4,192,686
Distribution fees payable	326,420
Other affiliated payables	902,491
Other payables and accrued expenses	794,097
Collateral on securities loaned, at value	44,428,150
Total liabilities		91,789,326
Net Assets		$ 10,702,531,417
Net Assets consist of:
Paid in capital		$ 8,265,840,765
Undistributed net investment income		77,069,325
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		175,028,199
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		2,184,593,128
Net Assets		$ 10,702,531,417
Initial Class: Net Asset Value, offering price and redemption price per share ($8,427,364,611 ÷ 357,918,433 shares)		$ 23.55
Service Class: Net Asset Value, offering price and redemption price per share ($1,110,886,939 ÷ 47,322,784 shares)		$ 23.47
Service Class 2: Net Asset Value, offering price and redemption price per share ($1,160,353,958 ÷ 49,773,902 shares)		$ 23.31
Service Class 2R: Net Asset Value, offering price and redemption price per share ($3,925,909 ÷ 168,876 shares)		$ 23.25

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 110,438,341
Interest		3,627,276
Security lending		670,300
Total income		114,735,917
Expenses
Management fee	$ 25,151,080
Transfer agent fees	3,482,831
Distribution fees	1,850,821
Accounting and security lending fees	701,194
Non-interested trustees' compensation	25,250
Appreciation in deferred trustee compensation account	26,206
Custodian fees and expenses	148,965
Registration fees	8,658
Audit	56,934
Legal	7,489
Interest	2,179
Miscellaneous	244,234
Total expenses before reductions	31,705,841
Expense reductions	(368,136)	31,337,705
Net investment income (loss)		83,398,212
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	188,227,588
Foreign currency transactions	7,952
Total net realized gain (loss)		188,235,540
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $917,197)	86,942,512
Assets and liabilities in foreign currencies	(27,406)
Total change in net unrealized appreciation (depreciation)		86,915,106
Net gain (loss)		275,150,646
Net increase (decrease) in net assets resulting from operations		$ 358,548,858

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

Semiannual Report

Fidelity Variable Insurance Products: Equity-Income Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 83,398,212	$ 156,056,293
Net realized gain (loss)	188,235,540	162,136,844
Change in net unrealized appreciation (depreciation)	86,915,106	2,060,660,428
Net increase (decrease) in net assets resulting from operations	358,548,858	2,378,853,565
Distributions to shareholders from net investment income	(160,632,605)	(152,426,442)
Distributions to shareholders from net realized gain	(38,902,738)	-
Total distributions	(199,535,343)	(152,426,442)
Share transactions - net increase (decrease)	150,501,277	95,024,961
Redemption fees	5	6,803
Total increase (decrease) in net assets	309,514,797	2,321,458,887
Net Assets
Beginning of period	10,393,016,620	8,071,557,733
End of period (including undistributed net investment income of $77,069,325 and undistributed net investment income of $153,745,641, respectively)	$ 10,702,531,417	$ 10,393,016,620

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	12,567,990	2,602,046	11,373,695	94,079
Reinvested	6,898,356	858,454	759,147	2,031
Redeemed	(24,003,533)	(2,508,390)	(2,287,876)	(9,756)
Net increase (decrease)	(4,537,187)	952,110	9,844,966	86,354
Dollars Sold	$ 293,008,871	$ 60,477,287	$ 262,015,556	$ 2,159,963
Reinvested	161,766,458	20,079,239	17,642,584	47,062
Redeemed	(556,202,619)	(57,804,072)	(52,465,395)	(223,657)
Net increase (decrease)	$ (101,427,290)	$ 22,752,454	$ 227,192,745	$ 1,983,368
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	32,080,268	11,240,469	21,169,436	138,968
Reinvested	7,869,268	847,723	452,997	1,082
Redeemed	(57,207,152)	(8,346,250)	(4,117,145)	(83,694)
Net increase (decrease)	(17,257,616)	3,741,942	17,505,288	56,356
Dollars Sold	$ 628,858,276	$ 219,068,172	$ 416,030,936	$ 2,784,343
Reinvested	130,865,933	14,063,717	7,478,977	17,815
Redeemed	(1,083,344,265)	(159,436,339)	(79,803,985)	(1,558,619)
Net increase (decrease)	$ (323,620,056)	$ 73,695,550	$ 343,705,928	$ 1,243,539
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 130,573,823	$ 16,025,683	$ 13,995,319	$ 37,780
From net realized gain	31,192,635	4,053,555	3,647,265	9,283
Total	$ 161,766,458	$ 20,079,238	$ 17,642,584	$ 47,063
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 130,865,933	$ 14,063,717	$ 7,478,977	$ 17,815
From net realized gain	-	-	-	-
Total	$ 130,865,933	$ 14,063,717	$ 7,478,977	$ 17,815

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

Equity-Income Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.18	$ 18.16	$ 22.75	$ 25.52	$ 25.71	$ 25.42
Income from Investment Operations
Net investment income (loss) E	.19	.36	.34	.34	.40	.41
Net realized and unrealized gain (loss)	.63	5.01	(4.08)	(1.51)	1.46	1.10
Total from investment operations	.82	5.37	(3.74)	(1.17)	1.86	1.51
Distributions from net investment income	(.36)	(.35)	(.36)	(.42)	(.44)	(.38)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)	(.84)
Total distributions	(.45)	(.35)	(.85)	(1.60)	(2.05)	(1.22)
Redemption fees added to paid in capital	E,G	- E,G	- E,G	-	-	-
Net asset value, end of period	$ 23.55	$ 23.18	$ 18.16	$ 22.75	$ 25.52	$ 25.71
Total Return B, C, D	3.53%	30.33%	(16.95)%	(4.96)%	8.42%	6.33%
Ratios to Average Net Assets F
Expenses before expense reductions	.56% A	.57%	.57%	.58%	.56%	.57%
Expenses net of voluntary waivers, if any	.56% A	.57%	.57%	.58%	.56%	.57%
Expenses net of all reductions	.56% A	.56%	.56%	.57%	.55%	.56%
Net investment income (loss)	1.61% A	1.83%	1.70%	1.47%	1.68%	1.57%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,427,365	$ 8,402,963	$ 6,895,940	$ 9,256,205	$ 9,969,086	$ 11,014,291
Portfolio turnover rate	21% A	26%	25%	24%	22%	27%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

^G Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 23.11	$ 18.10	$ 22.67	$ 25.45	$ 25.66	$ 25.39
Income from Investment Operations
Net investment income (loss) E	.17	.34	.32	.31	.37	.38
Net realized and unrealized gain (loss)	.62	5.00	(4.06)	(1.51)	1.46	1.11
Total from investment operations	.79	5.34	(3.74)	(1.20)	1.83	1.49
Distributions from net investment income	(.34)	(.33)	(.34)	(.40)	(.43)	(.38)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)	(.84)
Total distributions	(.43)	(.33)	(.83)	(1.58)	(2.04)	(1.22)
Redemption fees added to paid in capital	- E,G	- E,G	- E,G	-	-	-
Net asset value, end of period	$ 23.47	$ 23.11	$ 18.10	$ 22.67	$ 25.45	$ 25.66
Total Return B, C, D	3.41%	30.22%	(17.00)%	(5.09)%	8.30%	6.25%
Ratios to Average Net Assets F
Expenses before expense reductions	.66% A	.67%	.67%	.68%	.66%	.67%
Expenses net of voluntary waivers, if any	.66% A	.67%	.67%	.68%	.66%	.67%
Expenses net of all reductions	.66% A	.66%	.66%	.67%	.65%	.66%
Net investment income (loss)	1.51% A	1.73%	1.60%	1.37%	1.58%	1.47%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,110,887	$ 1,071,483	$ 771,516	$ 836,017	$ 634,897	$ 437,332
Portfolio turnover rate	21% A	26%	25%	24%	22%	27%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

^G Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.96	$ 18.00	$ 22.59	$ 25.41	$ 25.18
Income from Investment Operations
Net investment income (loss) E	.16	.31	.28	.27	.32
Net realized and unrealized gain (loss)	.61	4.97	(4.04)	(1.50)	1.95
Total from investment operations	.77	5.28	(3.76)	(1.23)	2.27
Distributions from net investment income	(.33)	(.32)	(.34)	(.41)	(.43)
Distributions from net realized gain	(.09)	-	(.49)	(1.18)	(1.61)
Total distributions	(.42)	(.32)	(.83)	(1.59)	(2.04)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-
Net asset value, end of period	$ 23.31	$ 22.96	$ 18.00	$ 22.59	$ 25.41
Total Return B, C, D	3.34%	30.03%	(17.15)%	(5.23)%	10.19%
Ratios to Average Net Assets G
Expenses before expense reductions	.82% A	.82%	.83%	.84%	.83% A
Expenses net of voluntary waivers, if any	.82% A	.82%	.83%	.84%	.83% A
Expenses net of all reductions	.81% A	.81%	.82%	.83%	.82% A
Net investment income (loss)	1.36% A	1.58%	1.44%	1.21%	1.41% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,160,354	$ 916,679	$ 403,632	$ 226,078	$ 39,911
Portfolio turnover rate	21% A	26%	25%	24%	22%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

^H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 22.91	$ 17.99	$ 21.82
Income from Investment Operations
Net investment income (loss) E	.16	.31	.18
Net realized and unrealized gain (loss)	.62	4.96	(4.01)
Total from investment operations	.78	5.27	(3.83)
Distributions from net investment income	(.35)	(.35)	-
Distributions from net realized gain	(.09)	-	-
Total distributions	(.44)	(.35)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 23.25	$ 22.91	$ 17.99
Total Return B, C, D	3.39%	30.05%	(17.55)%
Ratios to Average Net Assets G
Expenses before expense reductions	.82% A	.82%	.85% A
Expenses net of voluntary waivers, if any	.82% A	.82%	.85% A
Expenses net of all reductions	.81% A	.81%	.84% A
Net investment income (loss)	1.36% A	1.57%	1.45% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 3,926	$ 1,891	$ 471
Portfolio turnover rate	21% A	26%	25%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

^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.

^H Amount represents less than $.01 per share.

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

Equity-Income Portfolio

Fidelity Variable Insurance Products: Growth Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Pfizer, Inc.	4.7
Microsoft Corp.	2.8
Cisco Systems, Inc.	2.8
Intel Corp.	2.1
Dell, Inc.	2.0
	14.4
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Information Technology	38.3
Health Care	20.2
Consumer Discretionary	11.3
Financials	9.9
Industrials	7.7

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	98.2%
	Short-Term Investments and Net Other Assets	1.8%
* Foreign investments		11.2%

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.2%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 11.3%
Hotels, Restaurants & Leisure - 1.0%
Hilton Group PLC	1,860,741		$ 9,343,793
McDonald's Corp.	1,433,200		37,263,200
Rank Group PLC	2,796,306		15,262,797
Starbucks Corp. (a)	868,700		37,771,076
			99,640,866
Internet & Catalog Retail - 1.1%
eBay, Inc. (a)	798,200		73,394,490
InterActiveCorp (a)	1,520,784		45,836,430
			119,230,920
Media - 4.0%
E.W. Scripps Co. Class A	419,700		44,068,500
Fox Entertainment Group, Inc. Class A (a)	1,889,900		50,460,330
Lamar Advertising Co. Class A (a)	1,208,100		52,371,135
News Corp. Ltd.:
ADR	574,500		20,348,790
sponsored ADR	328,861		10,812,950
Pixar (a)	447,812		31,127,412
SBS Broadcasting SA (a)	195,400		6,000,734
Time Warner, Inc. (a)	2,191,500		38,526,570
Univision Communications, Inc. Class A (a)	1,734,200		55,373,006
Viacom, Inc. Class B (non-vtg.)	1,419,530		50,705,612
Walt Disney Co.	2,173,400		55,399,966
			415,195,005
Multiline Retail - 0.7%
Nordstrom, Inc.	841,300		35,847,793
Saks, Inc.	2,452,800		36,792,000
			72,639,793
Specialty Retail - 4.2%
Aeropostale, Inc. (a)	366,600		9,865,206
Best Buy Co., Inc.	1,757,600		89,180,624
Circuit City Stores, Inc.	3,081,400		39,904,130
Foot Locker, Inc.	471,480		11,475,823
Gap, Inc.	3,182,700		77,180,475
Home Depot, Inc.	4,477,800		157,618,560
Staples, Inc.	1,547,900		45,368,949
Weight Watchers International, Inc. (a)	353,900		13,851,646
			444,445,413
Textiles Apparel & Luxury Goods - 0.3%
NIKE, Inc. Class B	457,400		34,648,050
TOTAL CONSUMER DISCRETIONARY			1,185,800,047
CONSUMER STAPLES - 4.9%
Beverages - 1.8%
PepsiCo, Inc.	2,905,600		156,553,728
The Coca-Cola Co.	728,600		36,779,728
			193,333,456
	Shares		Value (Note 1)
Food & Staples Retailing - 1.2%
Wal-Mart Stores, Inc.	1,768,400		$ 93,300,784
Walgreen Co.	883,400		31,987,914
			125,288,698
Food Products - 0.2%
Bunge Ltd.	266,500		10,377,510
Smithfield Foods, Inc. (a)	324,200		9,531,480
			19,908,990
Household Products - 1.1%
Colgate-Palmolive Co.	857,600		50,126,720
Procter & Gamble Co.	1,210,120		65,878,933
			116,005,653
Personal Products - 0.6%
Gillette Co.	1,436,300		60,899,120
TOTAL CONSUMER STAPLES			515,435,917
ENERGY - 5.0%
Energy Equipment & Services - 4.8%
Baker Hughes, Inc.	1,913,570		72,045,911
BJ Services Co. (a)	332,860		15,258,302
Cooper Cameron Corp. (a)	568,800		27,700,560
ENSCO International, Inc.	743,600		21,638,760
Global Industries Ltd. (a)	773,065		4,421,932
Grant Prideco, Inc. (a)	526,300		9,715,498
Halliburton Co.	2,923,200		88,456,032
National-Oilwell, Inc. (a)	1,114,600		35,098,754
Rowan Companies, Inc. (a)	1,159,408		28,208,397
Schlumberger Ltd. (NY Shares)	1,274,500		80,943,495
Smith International, Inc. (a)	452,400		25,225,824
Transocean, Inc. (a)	986,600		28,552,204
Varco International, Inc. (a)	1,266,100		27,714,929
Weatherford International Ltd. (a)	756,940		34,047,161
			499,027,759
Oil & Gas - 0.2%
YUKOS Corp. sponsored ADR	673,181		21,407,156
TOTAL ENERGY			520,434,915
FINANCIALS - 9.9%
Capital Markets - 1.6%
Ameritrade Holding Corp. (a)	1,361,800		15,456,430
E*TRADE Financial Corp. (a)	2,973,100		33,150,065
Goldman Sachs Group, Inc.	507,400		47,776,784
Merrill Lynch & Co., Inc.	427,600		23,081,848
Morgan Stanley	438,700		23,150,199
Nomura Holdings, Inc.	1,782,000		26,640,900
			169,256,226
Commercial Banks - 1.6%
Bank of America Corp.	602,700		51,000,474
Bank One Corp.	1,003,990		51,203,490
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Commercial Banks - continued
Fifth Third Bancorp	500,400		$ 26,911,512
UCBH Holdings, Inc.	965,900		38,172,368
			167,287,844
Consumer Finance - 2.8%
American Express Co.	2,607,600		133,978,488
Capital One Financial Corp.	720,900		49,295,142
MBNA Corp.	2,807,930		72,416,515
Providian Financial Corp.	1,455,100		21,346,317
SLM Corp.	396,600		16,042,470
			293,078,932
Diversified Financial Services - 0.5%
Citigroup, Inc.	1,076,010		50,034,465
Insurance - 2.6%
ACE Ltd.	639,100		27,021,148
AFLAC, Inc.	1,507,720		61,530,053
American International Group, Inc.	2,282,066		162,665,664
XL Capital Ltd. Class A	212,500		16,035,250
			267,252,115
Thrifts & Mortgage Finance - 0.8%
Fannie Mae	802,900		57,294,944
Freddie Mac	325,800		20,623,140
New York Community Bancorp, Inc.	447,500		8,784,425
			86,702,509
TOTAL FINANCIALS			1,033,612,091
HEALTH CARE - 20.2%
Biotechnology - 3.8%
Biogen Idec, Inc. (a)	490,000		30,992,500
Cephalon, Inc. (a)	558,300		30,148,200
CSL Ltd.	935,032		14,573,956
Digene Corp. (a)	30,126		1,100,503
Eyetech Pharmaceuticals, Inc.	480,500		20,623,060
Genentech, Inc. (a)	1,481,700		83,271,540
Genzyme Corp. - General Division (a)	780,500		36,941,065
IDEXX Laboratories, Inc. (a)	212,400		13,368,456
ImClone Systems, Inc. (a)	284,300		24,390,097
Ligand Pharmaceuticals, Inc. Class B (a)	834,100		14,496,658
MedImmune, Inc. (a)	453,100		10,602,540
Millennium Pharmaceuticals, Inc. (a)	2,560,956		35,341,193
ONYX Pharmaceuticals, Inc. (a)	469,300		19,879,548
OSI Pharmaceuticals, Inc. (a)	202,000		14,228,880
Pharmion Corp.	264,100		12,919,772
QLT, Inc. (a)	393,000		7,837,019
Tanox, Inc. (a)	1,042,600		19,882,382
Telik, Inc. (a)	459,400		10,965,878
			401,563,247
	Shares		Value (Note 1)
Health Care Equipment & Supplies - 4.1%
Alcon, Inc.	711,200		$ 55,935,880
Bausch & Lomb, Inc.	95,900		6,240,213
Baxter International, Inc.	1,865,800		64,388,758
Becton, Dickinson & Co.	1,028,300		53,265,940
C.R. Bard, Inc.	366,400		20,756,560
Dade Behring Holdings, Inc. (a)	465,600		22,125,312
Medtronic, Inc.	2,403,100		117,079,032
Respironics, Inc. (a)	234,300		13,765,125
St. Jude Medical, Inc. (a)	1,004,000		75,952,600
			429,509,420
Health Care Providers & Services - 0.3%
UnitedHealth Group, Inc.	489,400		30,465,150
Wellcare Group, Inc.	6,600		112,200
			30,577,350
Pharmaceuticals - 12.0%
Abbott Laboratories	2,135,200		87,030,752
Allergan, Inc.	522,800		46,801,056
Barr Pharmaceuticals, Inc. (a)	1,791,425		60,371,023
Elan Corp. PLC sponsored ADR (a)	1,140,500		28,215,970
Eli Lilly & Co.	894,970		62,567,353
Johnson & Johnson	3,319,520		184,897,264
Merck & Co., Inc.	1,083,060		51,445,350
Pfizer, Inc.	14,561,625		499,172,501
Roche Holding AG (participation certificate)	307,139		30,482,821
Schering-Plough Corp.	6,156,400		113,770,272
Wyeth	2,659,600		96,171,136
			1,260,925,498
TOTAL HEALTH CARE			2,122,575,515
INDUSTRIALS - 7.7%
Aerospace & Defense - 3.2%
Bombardier, Inc. Class B (sub. vtg.)	8,244,400		24,846,306
EADS NV	1,697,000		47,353,848
Embraer - Empresa Brasileira de Aeronautica SA sponsored ADR	1,183,210		33,827,974
General Dynamics Corp.	353,400		35,092,620
Goodrich Corp.	1,143,580		36,971,941
Honeywell International, Inc.	310,300		11,366,289
Lockheed Martin Corp.	538,720		28,056,538
Precision Castparts Corp.	789,700		43,188,693
The Boeing Co.	1,557,100		79,552,239
			340,256,448
Airlines - 0.3%
Ryanair Holdings PLC sponsored ADR (a)	1,010,800		33,134,024
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Commercial Services & Supplies - 0.9%
Herman Miller, Inc.	429,700		$ 12,435,518
Monster Worldwide, Inc. (a)	1,162,441		29,897,983
Robert Half International, Inc.	1,633,600		48,632,272
			90,965,773
Industrial Conglomerates - 3.1%
3M Co.	1,328,500		119,578,285
General Electric Co.	3,224,740		104,481,576
Siemens AG sponsored ADR	428,300		31,060,316
Tyco International Ltd.	2,128,800		70,548,432
			325,668,609
Machinery - 0.2%
Joy Global, Inc.	533,951		15,986,493
TOTAL INDUSTRIALS			806,011,347
INFORMATION TECHNOLOGY - 38.3%
Communications Equipment - 10.4%
3Com Corp. (a)	4,796,500		29,978,125
Alcatel SA sponsored ADR (a)	1,100,700		17,049,843
Alvarion Ltd. (a)	1,201,200		15,951,936
Andrew Corp. (a)	606,000		12,126,060
Avaya, Inc. (a)	3,371,000		53,228,090
Brocade Communications Systems, Inc. (a)	6,965,100		41,651,298
Cisco Systems, Inc. (a)	12,312,120		291,797,244
Corning, Inc. (a)	9,000		117,540
Extreme Networks, Inc. (a)	2,039,100		11,255,832
F5 Networks, Inc. (a)	368,600		9,760,528
Foundry Networks, Inc. (a)	2,192,300		30,845,661
Harris Corp.	1,347,000		68,360,250
Juniper Networks, Inc. (a)	1,895,600		46,574,892
Motorola, Inc.	5,330,150		97,275,238
Nortel Networks Corp. (a)	14,059,900		70,158,996
QUALCOMM, Inc.	2,215,300		161,672,594
Research in Motion Ltd. (a)	165,600		11,328,435
Scientific-Atlanta, Inc.	1,706,000		58,857,000
Telefonaktiebolaget LM Ericsson ADR (a)	2,283,100		68,310,352
			1,096,299,914
Computers & Peripherals - 5.8%
Dell, Inc. (a)	5,963,300		213,605,406
Diebold, Inc.	330,200		17,457,674
EMC Corp. (a)	4,726,000		53,876,400
International Business Machines Corp.	1,774,670		156,437,161
Lexmark International, Inc. Class A (a)	419,400		40,484,682
Network Appliance, Inc. (a)	2,476,590		53,320,983
Quanta Computer, Inc.	15,455,000		32,917,263
Sun Microsystems, Inc. (a)	6,269,600		27,210,064
UNOVA, Inc. (a)	520,800		10,546,200
			605,855,833
	Shares		Value (Note 1)
Electronic Equipment & Instruments - 3.2%
Agilent Technologies, Inc. (a)	739,860		$ 21,663,101
Amphenol Corp. Class A (a)	1,322,582		44,068,432
Arrow Electronics, Inc. (a)	426,700		11,444,094
Flextronics International Ltd. (a)	2,676,600		42,691,770
Hon Hai Precision Industries Co. Ltd.	5,599,000		20,848,228
Mettler-Toledo International, Inc. (a)	334,300		16,427,502
Molex, Inc.	549,900		17,640,792
National Instruments Corp.	1,569,629		48,109,129
Solectron Corp. (a)	4,272,300		27,641,781
Thermo Electron Corp. (a)	860,500		26,451,770
Waters Corp. (a)	1,341,100		64,077,758
			341,064,357
Internet Software & Services - 1.2%
EarthLink, Inc. (a)	2,092,088		21,653,111
Openwave Systems, Inc. (a)	1,729,373		21,963,037
Yahoo!, Inc. (a)	2,269,132		82,437,566
			126,053,714
IT Services - 1.2%
BearingPoint, Inc. (a)	3,072,021		27,248,826
First Data Corp.	2,131,600		94,898,832
			122,147,658
Office Electronics - 0.1%
Zebra Technologies Corp. Class A (a)	77,900		6,777,300
Semiconductors & Semiconductor Equipment - 10.6%
Agere Systems, Inc.:
Class A (a)	8,448,145		19,430,734
Class B (a)	6,893,509		14,821,044
Altera Corp. (a)	2,455,100		54,552,322
Analog Devices, Inc.	1,283,900		60,446,012
Applied Materials, Inc. (a)	1,496,300		29,357,406
ASML Holding NV (NY Shares) (a)	3,950,276		67,589,222
Broadcom Corp. Class A (a)	1,346,500		62,975,805
Chartered Semiconductor Manufacturing Ltd. ADR (a)	2,578,700		20,990,618
Integrated Circuit Systems, Inc. (a)	1,552,759		42,172,934
Intel Corp.	7,910,600		218,332,560
Intersil Corp. Class A	2,090,936		45,289,674
KLA-Tencor Corp. (a)	915,200		45,192,576
Lam Research Corp. (a)	1,927,000		51,643,600
LSI Logic Corp. (a)	2,990,500		22,787,610
MediaTek, Inc.	2,249,000		17,954,483
Microchip Technology, Inc.	672,900		21,223,266
PMC-Sierra, Inc. (a)	2,517,900		36,131,865
Samsung Electronics Co. Ltd.	110,380		45,605,258
Semiconductor Manufacturing International Corp. sponsored ADR	1,458,540		15,650,134
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR	5,511,173		45,797,848
Teradyne, Inc. (a)	2,474,900		56,180,230
Texas Instruments, Inc.	485,550		11,740,599
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Semiconductors & Semiconductor Equipment - continued
Tokyo Electron Ltd.	578,300		$ 32,910,653
United Microelectronics Corp. sponsored ADR (a)	6,438,062		27,748,047
Xilinx, Inc.	1,274,300		42,446,933
			1,108,971,433
Software - 5.8%
Adobe Systems, Inc.	431,267		20,053,916
Cadence Design Systems, Inc. (a)	2,863,000		41,885,690
Compuware Corp. (a)	2,052,637		13,547,404
Electronic Arts, Inc. (a)	236,931		12,924,586
Microsoft Corp.	10,273,350		293,406,876
Novell, Inc. (a)	1,917,000		16,083,630
Oracle Corp. (a)	2,329,891		27,795,600
SAP AG sponsored ADR	1,256,600		52,538,446
Symantec Corp. (a)	353,688		15,484,461
Synopsys, Inc. (a)	1,512,293		42,994,490
Take-Two Interactive Software, Inc. (a)	1,109,100		33,982,824
VERITAS Software Corp. (a)	1,243,667		34,449,576
			605,147,499
TOTAL INFORMATION TECHNOLOGY			4,012,317,708
MATERIALS - 0.6%
Containers & Packaging - 0.2%
Owens-Illinois, Inc. (a)	1,034,200		17,333,192
Smurfit-Stone Container Corp. (a)	540,449		10,781,958
			28,115,150
Metals & Mining - 0.4%
Arch Coal, Inc.	374,500		13,702,955
CONSOL Energy, Inc.	197,500		7,110,000
Massey Energy Co.	676,800		19,092,528
			39,905,483
TOTAL MATERIALS			68,020,633
TELECOMMUNICATION SERVICES - 0.3%
Wireless Telecommunication Services - 0.3%
Nextel Communications, Inc. Class A (a)	1,332,500		35,524,450
TOTAL COMMON STOCKS (Cost $8,135,114,138)		10,299,732,623
Preferred Stocks - 0.0%
	Shares		Value (Note 1)
Convertible Preferred Stocks - 0.0%
INFORMATION TECHNOLOGY - 0.0%
Communications Equipment - 0.0%
Chorum Technologies, Inc. Series E (a)(d)	88,646		$ 37,231
Nonconvertible Preferred Stocks - 0.0%
HEALTH CARE - 0.0%
Biotechnology - 0.0%
Geneprot, Inc. Series A (d)	826,000		2,891,000
TOTAL PREFERRED STOCKS (Cost $5,910,390)		2,928,231
Convertible Bonds - 0.0%
	Principal Amount
INFORMATION TECHNOLOGY - 0.0%
Semiconductors & Semiconductor Equipment - 0.0%
Micron Technology, Inc. 2.5% 2/1/10 (c)	$ 1,523,000		2,156,431
TOTAL CONVERTIBLE BONDS (Cost $1,523,000)		2,156,431
Money Market Funds - 2.3%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	210,501,797		210,501,797
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	26,582,300		26,582,300
TOTAL MONEY MARKET FUNDS (Cost $237,084,097)		237,084,097

TOTAL INVESTMENT PORTFOLIO - 100.5% (Cost $8,379,631,625)		10,541,901,382
NET OTHER ASSETS - (0.5)%		(55,225,922)
NET ASSETS - 100%	$ 10,486,675,460

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $2,156,431 or 0.0% of net assets.

(d) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,928,231 or 0.0% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Chorum Technologies, Inc. Series E	9/19/00	$ 1,528,257
Geneprot, Inc. Series A	7/7/00	$ 4,543,000

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $4,018,145,049 and $4,440,163,364, 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 $414,823 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which the loans were outstanding amounted to $21,844,594. The weighted average interest rate was 1.13%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	88.8%
Taiwan	1.4%
Netherlands	1.1%
Canada	1.1%
Others (individually less than 1%)	7.6%
	100.0%

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $4,332,499,000 of which $2,090,079,000, $2,197,712,000 and $44,708,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $25,868,492) (cost $8,379,631,625) - See accompanying schedule		$ 10,541,901,382
Receivable for investments sold		52,553,169
Receivable for fund shares sold		2,747,696
Dividends receivable		4,338,062
Interest receivable		110,885
Prepaid expenses		23,151
Other affiliated receivables		40,355
Other receivables		867,622
Total assets		10,602,582,322
Liabilities
Payable for investments purchased	$ 76,888,817
Payable for fund shares redeemed	5,937,759
Accrued management fee	4,964,012
Distribution fees payable	265,808
Other affiliated payables	888,829
Other payables and accrued expenses	379,337
Collateral on securities loaned, at value	26,582,300
Total liabilities		115,906,862
Net Assets		$ 10,486,675,460
Net Assets consist of:
Paid in capital		$ 12,150,294,964
Undistributed net investment income		4,018,820
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(3,829,834,877)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		2,162,196,553
Net Assets		$ 10,486,675,460
Initial Class: Net Asset Value, offering price and redemption price per share ($8,339,175,590 ÷ 265,368,515 shares)		$ 31.42
Service Class: Net Asset Value, offering price and redemption price per share ($1,396,905,855 ÷ 44,615,705 shares)		$ 31.31
Service Class 2: Net Asset Value, offering price and redemption price per share ($748,179,671 ÷ 24,060,808 shares)		$ 31.10
Service Class 2R: Net Asset Value, offering price and redemption price per share ($2,414,344 ÷ 77,879 shares)		$ 31.00

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 36,456,917
Special Dividends		4,905,600
Interest		214,993
Security lending		390,677
Total income		41,968,187
Expenses
Management fee	$ 30,698,594
Transfer agent fees	3,488,361
Distribution fees	1,567,522
Accounting and security lending fees	705,285
Non-interested trustees' compensation	25,526
Appreciation in deferred trustee compensation account	23,050
Custodian fees and expenses	165,961
Audit	54,087
Legal	12,613
Interest	21,958
Miscellaneous	263,364
Total expenses before reductions	37,026,321
Expense reductions	(1,714,681)	35,311,640
Net investment income (loss)		6,656,547
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	555,640,981
Foreign currency transactions	30,470
Total net realized gain (loss)		555,671,451
Change in net unrealized appreciation (depreciation) on: Investment securities	(412,522,781)
Assets and liabilities in foreign currencies	(70,917)
Total change in net unrealized appreciation (depreciation)		(412,593,698)
Net gain (loss)		143,077,753
Net increase (decrease) in net assets resulting from operations		$ 149,734,300

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 6,656,547	$ 23,031,175
Net realized gain (loss)	555,671,451	49,130,228
Change in net unrealized appreciation (depreciation)	(412,593,698)	2,530,101,870
Net increase (decrease) in net assets resulting from operations	149,734,300	2,602,263,273
Distributions to shareholders from net investment income	(25,185,765)	(23,104,405)
Share transactions - net increase (decrease)	(244,847,476)	(285,825,613)
Redemption fees	5	2,361
Total increase (decrease) in net assets	(120,298,936)	2,293,335,616
Net Assets
Beginning of period	10,606,974,396	8,313,638,780
End of period (including undistributed net investment income of $4,018,820 and undistributed net investment income of $22,711,797, respectively)	$ 10,486,675,460	$ 10,606,974,396

Other Information:
Share Transactions		Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	7,073,494	2,484,479	6,020,770	41,408
Reinvested	677,303	70,256	26,349	100
Redeemed	(19,234,101)	(3,263,099)	(1,836,810)	(8,300)
Net increase (decrease)	(11,483,304)	(708,364)	4,210,309	33,208
Dollars Sold	$ 224,136,194	$ 78,535,528	$ 188,061,083	$ 1,293,724
Reinvested	22,052,984	2,279,802	849,771	3,208
Redeemed	(602,494,862)	(102,210,060)	(57,101,879)	(252,969)
Net increase (decrease)	$ (356,305,684)	$ (21,394,730)	$ 131,808,975	$ 1,043,963
Share Transactions		Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
Shares Sold	23,586,131	8,385,408	13,542,393	50,235
Reinvested	941,499	102,591	14,708	31
Redeemed	(47,048,733)	(8,519,590)	(3,984,642)	(14,664)
Net increase (decrease)	(22,521,103)	(31,591)	9,572,459	35,602
Dollars Sold	$ 625,883,728	$ 221,233,256	$ 361,842,888	$ 1,388,031
Reinvested	20,552,932	2,232,378	318,424	671
Redeemed	(1,198,774,049)	(217,996,235)	(102,097,753)	(409,884)
Net increase (decrease)	$ (552,337,389)	$ 5,469,399	$ 260,063,559	$ 978,818
Distributions		Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 22,052,984	$ 2,279,802	$ 849,771	$ 3,208
		Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Service Class 2R
From net investment income	$ 20,552,932	$ 2,232,378	$ 318,424	$ 671

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

Growth Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 31.04	$ 23.44	$ 33.61	$ 43.66	$ 54.93	$ 44.87
Income from Investment Operations
Net investment income (loss) E	.02 F	.07	.07	.07	.03	.07
Net realized and unrealized gain (loss)	.44	7.60	(10.17)	(7.27)	(5.27)	15.10
Total from investment operations	.46	7.67	(10.10)	(7.20)	(5.24)	15.17
Distributions from net investment income	(.08)	(.07)	(.07)	(.03)	(.06)	(.08)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)	(5.03)
Total distributions	(.08)	(.07)	(.07)	(2.85)	(6.03)	(5.11)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-	-
Net asset value, end of period	$ 31.42	$ 31.04	$ 23.44	$ 33.61	$ 43.66	$ 54.93
Total Return B, C, D	1.47%	32.85%	(30.10)%	(17.67)%	(10.96)%	37.44%
Ratios to Average Net Assets G
Expenses before expense reductions	.66% A	.67%	.67%	.68%	.65%	.66%
Expenses net of voluntary waivers, if any	.66% A	.67%	.67%	.68%	.65%	.66%
Expenses net of all reductions	.63% A	.64%	.61%	.65%	.64%	.65%
Net investment income (loss)	.15% A	.28%	.25%	.19%	.07%	.14%
Supplemental Data
Net assets, end of period (000 omitted)	$ 8,339,176	$ 8,594,509	$ 7,016,147	$ 11,458,659	$ 15,517,271	$ 17,142,411
Portfolio turnover rate	76% A	61%	90%	105%	103%	84%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^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. 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.

^H Amount represents less than $.01 per share.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 30.92	$ 23.34	$ 33.48	$ 43.51	$ 54.80	$ 44.82
Income from Investment Operations
Net investment income (loss) E	.01 F	.05	.04	.03	(.02)	.02
Net realized and unrealized gain (loss)	.43	7.58	(10.14)	(7.24)	(5.25)	15.07
Total from investment operations	.44	7.63	(10.10)	(7.21)	(5.27)	15.09
Distributions from net investment income	(.05)	(.05)	(.04)	-	(.05)	(.08)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)	(5.03)
Total distributions	(.05)	(.05)	(.04)	(2.82)	(6.02)	(5.11)
Redemption fees added to paid in capital	- E,H	- E,H	- E,H	-	-	-
Net asset value, end of period	$ 31.31	$ 30.92	$ 23.34	$ 33.48	$ 43.51	$ 54.80
Total Return B, C, D	1.42%	32.78%	(30.20)%	(17.74)%	(11.05)%	37.29%
Ratios to Average Net Assets G
Expenses before expense reductions	.77% A	.77%	.77%	.78%	.76%	.77%
Expenses net of voluntary waivers, if any	.77% A	.77%	.77%	.78%	.76%	.77%
Expenses net of all reductions	.73% A	.74%	.71%	.75%	.74%	.75%
Net investment income (loss)	.05% A	.18%	.15%	.09%	(.04)%	.04%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,396,906	$ 1,401,298	$ 1,058,738	$ 1,655,758	$ 1,847,051	$ 916,330
Portfolio turnover rate	76% A	61%	90%	105%	103%	84%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^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. 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.

^H Amount represents less than $.01 per share.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 G
Selected Per-Share Data
Net asset value, beginning of period	$ 30.72	$ 23.21	$ 33.34	$ 43.43	$ 53.40
Income from Investment Operations
Net investment income (loss) E	(.02) F	.01	- I	(.02)	(.09)
Net realized and unrealized gain (loss)	.44	7.53	(10.09)	(7.22)	(3.86)
Total from investment operations	.42	7.54	(10.09)	(7.24)	(3.95)
Distributions from net investment income	(.04)	(.03)	(.04)	(.03)	(.05)
Distributions from net realized gain	-	-	-	(2.82)	(5.97)
Total distributions	(.04)	(.03)	(.04)	(2.85)	(6.02)
Redemption fees added to paid in capital	- E,I	- E,I	- E,I	-	-
Net asset value, end of period	$ 31.10	$ 30.72	$ 23.21	$ 33.34	$ 43.43
Total Return B, C, D	1.36%	32.54%	(30.30)%	(17.87)%	(8.88)%
Ratios to Average Net Assets H
Expenses before expense reductions	.92% A	.92%	.93%	.93%	.91% A
Expenses net of voluntary waivers, if any	.92% A	.92%	.93%	.93%	.91% A
Expenses net of all reductions	.89% A	.89%	.87%	.90%	.90% A
Net investment income (loss)	(.10)% A	.02%	(.01)%	(.06)%	(.19)% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 748,180	$ 609,798	$ 238,543	$ 191,475	$ 57,095
Portfolio turnover rate	76% A	61%	90%	105%	103%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^G For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^H 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.

^I Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 G
Selected Per-Share Data
Net asset value, beginning of period	$ 30.65	$ 23.20	$ 31.05
Income from Investment Operations
Net investment income (loss) E	(.02) F	.01	(.01)
Net realized and unrealized gain (loss)	.43	7.51	(7.84)
Total from investment operations	.41	7.52	(7.85)
Distributions from net investment income	(.06)	(.07)	-
Redemption fees added to paid in capital E,I	-	-	-
Net asset value, end of period	$ 31.00	$ 30.65	$ 23.20
Total Return B, C, D	1.33%	32.54%	(25.28)%
Ratios to Average Net Assets H
Expenses before expense reductions	.92% A	.92%	.96% A
Expenses net of voluntary waivers, if any	.92% A	.92%	.96% A
Expenses net of all reductions	.88% A	.90%	.90% A
Net investment income (loss)	(.10)% A	.02%	(.03)% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 2,414	$ 1,369	$ 210
Portfolio turnover rate	76% A	61%	90%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F Investment income per share reflects a special dividend which amounted to $.01 per share.

^G For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.

^H 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.

^I Amount represents less than $.01 per share.

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

Growth Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Investment Summary

Top Five Holdings as of June 30, 2004
(by issuer, excluding cash equivalents)	% of fund's net assets
AES Corp.	2.5
American Airlines, Inc. pass thru trust certificates	1.9
The Coastal Corp.	1.7
Lyondell Chemical Co.	1.7
CMS Energy Corp.	1.5
	9.3
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Electric Utilities	8.6
Telecommunications	8.6
Chemicals	6.3
Healthcare	6.3
Energy	5.2

Quality Diversification (% of fund's net assets) as of June 30, 2004
	AAA,AA,A	0.0%
	BBB	0.2%
	BB	22.2%
	B	55.3%
	CCC,CC,C	14.3%
	Not Rated	3.6%
	Equities	0.3%
	Other Investments	0.0%
	Short-Term Investments and Net Other Assets	4.1%

We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings.

Semiannual Report

Fidelity Variable Insurance Products: High Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 92.4%
	Principal Amount		Value (Note 1)
Convertible Bonds - 0.5%
Technology - 0.5%
Amkor Technology, Inc.:
5% 3/15/07	$ 6,100,000		$ 5,673,000
5.75% 6/1/06	2,000,000		1,920,000
			7,593,000
Nonconvertible Bonds - 91.9%
Aerospace - 0.6%
BE Aerospace, Inc. 8% 3/1/08	2,415,000		2,251,988
Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09	900,000		956,250
Orbital Sciences Corp. 9% 7/15/11	3,690,000		4,040,550
Primus International, Inc. 10.5% 4/15/09 (e)	3,170,000		3,138,300
			10,387,088
Air Transportation - 4.8%
American Airlines, Inc. pass thru trust certificates:
6.817% 5/23/11	11,825,000		10,524,250
6.977% 11/23/22	563,436		495,824
7.324% 4/15/11	1,480,000		1,213,600
7.377% 5/23/19	15,000,622		10,500,435
7.379% 5/23/16	7,049,983		4,934,988
7.8% 4/1/08	2,595,000		2,361,450
8.608% 10/1/12	2,285,000		2,102,200
10.18% 1/2/13	2,190,000		1,598,700
AMR Corp. 10.2% 3/15/20	240,000		180,000
Continental Airlines, Inc.:
7.875% 7/2/18	5,820,000		5,412,600
8% 12/15/05	4,615,000		4,107,350
Continental Airlines, Inc. pass thru trust certificates:
6.541% 9/15/09	427,450		354,784
6.748% 9/15/18	371,735		297,388
6.795% 2/2/20	3,649,204		2,919,363
6.8% 7/2/07	228,071		187,019
6.9% 7/2/18	3,407,764		2,658,056
6.954% 2/2/11	652,786		496,117
7.73% 9/15/12	1,001,603		751,202
7.82% 4/15/15	1,393,143		1,058,789
8.307% 10/2/19	3,687,637		2,986,986
8.312% 10/2/12	2,567,514		1,899,960
8.321% 11/1/06	2,240,000		2,016,000
8.388% 5/1/22	192,884		146,592
Delta Air Lines, Inc.:
equipment trust certificates 8.54% 1/2/07	481,074		351,184
7.9% 12/15/09	2,635,000		1,317,500
10% 8/15/08	2,865,000		1,561,425
Delta Air Lines, Inc. pass thru trust certificates:
7.299% 9/18/06	615,000		375,150
7.379% 5/18/10	1,190,990		1,119,530
7.57% 11/18/10	1,350,000		1,252,853
7.779% 11/18/05	4,055,000		2,514,100
7.779% 1/2/12	480,033		259,218
	Principal Amount		Value (Note 1)
10.06% 1/2/16	$ 1,260,000		$ 630,000
Northwest Airlines Corp. 10% 2/1/09	11,115,000		8,336,250
Northwest Airlines, Inc. pass thru trust certificates:
7.248% 7/2/14	2,150,838		1,527,095
8.304% 9/1/10	1,613,477		1,266,579
NWA Trust 10.23% 6/21/14	1,383,538		1,217,514
			80,932,051
Automotive - 0.9%
Cummins, Inc. 5.65% 3/1/98	2,875,000		1,897,500
Delco Remy International, Inc. 9.375% 4/15/12 (e)	4,200,000		4,095,000
Navistar International Corp. 7.5% 6/15/11	1,310,000		1,342,750
Stoneridge, Inc. 11.5% 5/1/12	2,715,000		3,162,975
Visteon Corp.:
7% 3/10/14	3,000,000		2,891,250
8.25% 8/1/10	1,505,000		1,606,588
			14,996,063
Banks and Thrifts - 0.2%
Chevy Chase Bank FSB 6.875% 12/1/13	1,135,000		1,135,000
Western Financial Bank 9.625% 5/15/12	1,565,000		1,705,850
			2,840,850
Broadcasting - 1.3%
Granite Broadcasting Corp. 9.75% 12/1/10 (e)	8,775,000		8,116,875
Nexstar Finance, Inc. 7% 1/15/14	1,360,000		1,278,400
Sinclair Broadcast Group, Inc. 8% 3/15/12	3,665,000		3,747,463
Spanish Broadcasting System, Inc. 9.625% 11/1/09	2,655,000		2,801,025
XM Satellite Radio, Inc. 6.65% 5/1/09 (e)(f)	5,340,000		5,353,350
			21,297,113
Building Materials - 1.7%
FastenTech, Inc. 11.5% 5/1/11 (e)	2,000,000		2,200,000
FIMEP SA 10.5% 2/15/13	10,815,000		12,315,581
General Cable Corp. 9.5% 11/15/10	3,645,000		3,909,263
Jacuzzi Brands, Inc. 9.625% 7/1/10	3,625,000		3,878,750
Juno Lighting, Inc. 11.875% 7/1/09	1,460,000		1,547,600
Texas Industries, Inc. 10.25% 6/15/11	4,860,000		5,406,750
			29,257,944
Cable TV - 3.1%
Cablevision Systems Corp.:
5.66% 4/1/09 (e)(f)	8,870,000		9,069,575
8% 4/15/12 (e)	3,710,000		3,663,625
Charter Communications Holding II LLC/Charter Communications Holdings II Capital Corp. 10.25% 9/15/10 (e)	3,205,000		3,237,050
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
Cable TV - continued
Charter Communications Operating LLC/Charter Communications Operating Capital Corp.:
8% 4/30/12 (e)	$ 1,755,000		$ 1,693,575
8.375% 4/30/14 (e)	1,940,000		1,872,100
EchoStar DBS Corp. 5.75% 10/1/08	7,570,000		7,446,988
GCI, Inc. 7.25% 2/15/14 (e)	3,425,000		3,262,313
Insight Midwest LP/Insight Capital, Inc. 10.5% 11/1/10	1,475,000		1,611,438
Mediacom LLC/Mediacom Capital Corp.:
7.875% 2/15/11	3,110,000		2,985,600
8.5% 4/15/08	1,180,000		1,185,900
NTL Cable PLC:
6.14% 10/15/12 (e)(f)	3,010,000		3,092,775
8.75% 4/15/14 (e)	7,635,000		7,844,963
Telenet Group Holding NV 0% 6/15/14 (d)(e)	8,560,000		5,435,600
Telewest PLC 11% 10/1/07 (c)	735,000		437,325
			52,838,827
Capital Goods - 2.1%
Amsted Industries, Inc. 10.25% 10/15/11 (e)	410,000		440,750
Columbus McKinnon Corp. 10% 8/1/10	2,280,000		2,416,800
Dresser, Inc. 9.375% 4/15/11	7,700,000		8,239,000
Invensys PLC 9.875% 3/15/11 (e)	12,445,000		12,445,000
Leucadia National Corp. 7% 8/15/13	5,740,000		5,661,075
Sensus Metering Systems, Inc. 8.625% 12/15/13 (e)	3,370,000		3,235,200
SPX Corp. 7.5% 1/1/13	3,685,000		3,749,488
			36,187,313
Chemicals - 6.3%
BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (e)	10,040,000		10,416,500
Equistar Chemicals LP/Equistar Funding Corp.:
8.75% 2/15/09	3,590,000		3,742,575
10.125% 9/1/08	2,905,000		3,173,713
10.625% 5/1/11	9,495,000		10,539,450
HMP Equity Holdings Corp.:
0% 5/15/08 (e)	1,745,000		1,012,100
0% 5/15/08 unit (e)	4,800,000		3,696,000
Huntsman ICI Chemicals LLC 10.125% 7/1/09	6,405,000		6,501,075
Huntsman ICI Holdings LLC 0% 12/31/09	8,015,000		3,887,275
Huntsman International LLC 9.875% 3/1/09	4,700,000		5,029,000
Huntsman LLC:
8.8% 7/15/11 (e)(f)	5,700,000		5,757,000
11.5% 7/15/12 (e)	2,830,000		2,858,300
Lyondell Chemical Co.:
9.5% 12/15/08	12,345,000		12,869,663
9.625% 5/1/07	2,610,000		2,714,400
	Principal Amount		Value (Note 1)
9.875% 5/1/07	$ 4,770,000		$ 4,984,650
10.875% 5/1/09	6,965,000		7,261,013
Millennium America, Inc.:
9.25% 6/15/08	8,210,000		8,702,600
9.25% 6/15/08 (e)	3,645,000		3,863,700
Nalco Co. 8.875% 11/15/13 (e)	3,090,000		3,229,050
Rhodia SA:
7.625% 6/1/10 (e)	2,105,000		1,836,613
10.25% 6/1/10 (e)	4,190,000		4,231,900
			106,306,577
Consumer Products - 1.3%
Jostens Holding Corp. 0% 12/1/13 (d)	3,030,000		2,060,400
Samsonite Corp. 8.875% 6/1/11 (e)	2,785,000		2,812,850
Sealy Mattress Co. 8.25% 6/15/14 (e)	6,095,000		6,110,238
The Hockey Co. 11.25% 4/15/09	6,395,000		7,482,150
WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (e)	3,075,000		3,198,000
			21,663,638
Containers - 3.1%
Anchor Glass Container Corp. 11% 2/15/13	4,700,000		5,358,000
Berry Plastics Corp. 10.75% 7/15/12	3,700,000		4,088,500
BWAY Corp. 10% 10/15/10	6,200,000		6,572,000
Crown European Holdings SA:
9.5% 3/1/11	1,405,000		1,534,963
10.875% 3/1/13	7,905,000		9,051,225
Owens-Brockway Glass Container, Inc.:
8.25% 5/15/13	3,070,000		3,162,100
8.875% 2/15/09	3,655,000		3,929,125
Owens-Illinois, Inc.:
7.35% 5/15/08	195,000		194,513
7.5% 5/15/10	6,280,000		6,138,700
7.8% 5/15/18	575,000		518,938
8.1% 5/15/07	6,000,000		6,180,000
Pliant Corp.:
0% 6/15/09 (d)	4,335,000		3,641,400
11.125% 9/1/09	1,470,000		1,580,250
			51,949,714
Diversified Financial Services - 0.2%
E*TRADE Financial Corp. 8% 6/15/11 (e)	4,290,000		4,268,550
Diversified Media - 1.2%
Corus Entertainment, Inc. 8.75% 3/1/12	6,140,000		6,562,125
LBI Media Holdings, Inc. 0% 10/15/13 (d)	6,440,000		4,572,400
LBI Media, Inc. 10.125% 7/15/12	3,285,000		3,662,775
PEI Holdings, Inc. 11% 3/15/10	4,361,000		5,058,760
			19,856,060
Electric Utilities - 7.4%
AES Corp.:
7.75% 3/1/14	6,610,000		6,345,600
8.375% 8/15/07	6,315,000		6,378,150
8.5% 11/1/07	2,930,000		3,003,250
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
Electric Utilities - continued
AES Corp.: - continued
8.75% 6/15/08	$ 4,178,000		$ 4,345,120
8.75% 5/15/13 (e)	610,000		652,700
8.875% 2/15/11	11,741,000		12,195,964
9.375% 9/15/10	6,388,000		6,819,190
9.5% 6/1/09	1,499,000		1,602,056
AES Gener SA 7.5% 3/25/14 (e)	6,200,000		5,921,000
CMS Energy Corp.:
7.5% 1/15/09	9,190,000		9,178,513
7.75% 8/1/10 (e)	3,590,000		3,581,025
8.5% 4/15/11	3,515,000		3,602,875
8.9% 7/15/08	3,400,000		3,574,250
9.875% 10/15/07	4,305,000		4,644,019
Cogentrix Energy, Inc. 8.75% 10/15/08	5,310,000		5,548,950
Midland Funding Corp. II 11.75% 7/23/05	3,904,042		4,040,684
Midwest Generation LLC/Midwest Finance Corp. 8.75% 5/1/34 (e)	4,760,000		4,807,600
MSW Energy Holdings II LLC/MSW Finance Co. II, Inc. 7.375% 9/1/10 (e)	1,720,000		1,720,000
MSW Energy Holdings LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10	3,735,000		3,921,750
NRG Energy, Inc. 8% 12/15/13 (e)	13,700,000		13,802,750
Sierra Pacific Power Co. 6.25% 4/15/12 (e)	1,680,000		1,575,000
Sierra Pacific Resources 8.625% 3/15/14 (e)	3,915,000		3,807,338
TECO Energy, Inc.:
7% 5/1/12	2,965,000		2,842,694
7.2% 5/1/11	11,040,000		10,819,200
			124,729,678
Energy - 5.2%
ANR Pipeline, Inc. 9.625% 11/1/21	1,475,000		1,644,625
El Paso Energy Corp.:
6.75% 5/15/09	2,100,000		1,908,375
6.95% 12/15/07	3,140,000		3,022,250
El Paso Production Holding Co. 7.75% 6/1/13	2,695,000		2,492,875
Hanover Compressor Co.:
0% 3/31/07	5,595,000		4,420,050
8.625% 12/15/10	1,450,000		1,504,375
9% 6/1/14	2,540,000		2,635,250
Hilcorp Energy I LP/Hilcorp Finance Co. 10.5% 9/1/10 (e)	5,810,000		6,231,225
OAO Gazprom 9.625% 3/1/13 (e)	4,860,000		4,993,650
Pecom Energia SA 9% 5/1/09 (Reg. S)	2,320,000		2,273,600
Pride International, Inc. 7.375% 7/15/14 (e) (g)	5,920,000		5,986,600
Range Resources Corp.:
7.375% 7/15/13	6,880,000		6,845,600
	Principal Amount		Value (Note 1)
7.375% 7/15/13 (e)	$ 1,870,000		$ 1,860,650
SESI LLC 8.875% 5/15/11	740,000		797,350
Sonat, Inc.:
6.625% 2/1/08	3,000,000		2,748,750
6.75% 10/1/07	1,290,000		1,223,888
7.625% 7/15/11	6,665,000		5,915,188
Tennessee Gas Pipeline Co. 7.5% 4/1/17	1,350,000		1,299,375
The Coastal Corp.:
6.375% 2/1/09	6,055,000		5,320,831
6.5% 5/15/06	2,210,000		2,174,088
6.5% 6/1/08	8,170,000		7,353,000
7.5% 8/15/06	4,625,000		4,578,750
7.75% 6/15/10	11,464,000		10,346,260
			87,576,605
Entertainment/Film - 0.4%
Cinemark, Inc. 0% 3/15/14 (d)(e)	10,855,000		7,082,888
Environmental - 1.0%
Allied Waste North America, Inc.:
5.75% 2/15/11 (e)	5,385,000		5,102,288
6.375% 4/15/11 (e)	3,890,000		3,812,200
8.5% 12/1/08	3,690,000		4,036,122
8.875% 4/1/08	3,725,000		4,060,250
			17,010,860
Food and Drug Retail - 2.4%
Ahold Finance USA, Inc.:
6.25% 5/1/09	6,415,000		6,270,663
8.25% 7/15/10	10,670,000		11,203,500
Rite Aid Corp.:
6.875% 8/15/13	6,850,000		6,336,250
9.25% 6/1/13	7,145,000		7,537,975
9.5% 2/15/11	4,170,000		4,587,000
Stater Brothers Holdings, Inc. 8.125% 6/15/12 (e)	4,020,000		4,055,175
			39,990,563
Food/Beverage/Tobacco - 1.7%
Del Monte Corp. 9.25% 5/15/11	4,215,000		4,604,888
Doane Pet Care Co. 9.75% 5/15/07	3,466,000		3,240,710
Dole Food Co., Inc. 7.25% 6/15/10	8,125,000		7,942,188
National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11	5,655,000		5,909,475
Smithfield Foods, Inc.:
7.625% 2/15/08	1,800,000		1,872,000
7.75% 5/15/13	865,000		912,575
8% 10/15/09	680,000		727,600
Swift & Co. 10.125% 10/1/09	3,685,000		3,906,100
			29,115,536
Gaming - 1.4%
Chumash Casino & Resort Enterprise 9% 7/15/10 (e)	1,740,000		1,890,075
MTR Gaming Group, Inc. 9.75% 4/1/10	3,605,000		3,875,375
Park Place Entertainment Corp. 7.875% 3/15/10	2,165,000		2,251,600
Resorts International Hotel & Casino, Inc. 11.5% 3/15/09	1,055,000		1,181,600
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
Gaming - continued
Seneca Gaming Corp. 7.25% 5/1/12 (e)	$ 3,140,000		$ 3,136,075
Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10	2,985,000		3,447,675
Wheeling Island Gaming, Inc. 10.125% 12/15/09	6,730,000		7,133,800
			22,916,200
Healthcare - 6.3%
AmeriPath, Inc. 10.5% 4/1/13	10,195,000		10,322,438
AmerisourceBergen Corp.:
7.25% 11/15/12	5,370,000		5,477,400
8.125% 9/1/08	620,000		666,500
Biovail Corp. yankee 7.875% 4/1/10	7,010,000		6,887,325
Concentra Operating Corp.:
9.125% 6/1/12 (e)	800,000		836,000
9.5% 8/15/10	2,145,000		2,284,425
Fisher Scientific International, Inc.:
8% 9/1/13	2,870,000		3,070,900
8.125% 5/1/12	875,000		934,063
Genesis HealthCare Corp. 8% 10/15/13 (e)	5,650,000		5,805,375
HealthSouth Corp.:
8.375% 10/1/11	2,545,000		2,462,288
8.5% 2/1/08	2,545,000		2,500,463
Mariner Health Care, Inc. 8.25% 12/15/13 (e)	6,030,000		6,090,300
Omega Healthcare Investors, Inc. 7% 4/1/14 (e)	3,970,000		3,731,800
PacifiCare Health Systems, Inc. 10.75% 6/1/09	5,205,000		5,933,700
PerkinElmer, Inc. 8.875% 1/15/13	6,665,000		7,281,513
Psychiatric Solutions, Inc. 10.625% 6/15/13	6,335,000		7,221,900
Senior Housing Properties Trust:
7.875% 4/15/15	2,320,000		2,372,200
8.625% 1/15/12	7,850,000		8,517,250
Tenet Healthcare Corp.:
6.375% 12/1/11	12,225,000		10,513,500
7.375% 2/1/13	5,085,000		4,627,350
Triad Hospitals, Inc. 7% 5/15/12 (e)	3,270,000		3,286,350
UAP Holding Corp. 0% 7/15/12 (d)(e)	6,050,000		4,719,000
			105,542,040
Homebuilding/Real Estate - 3.9%
American Real Estate Partners/American Real Estate Finance Corp. 8.125% 6/1/12 (e)	8,230,000		8,394,600
Beazer Homes USA, Inc.:
6.5% 11/15/13	860,000		812,700
8.375% 4/15/12	4,080,000		4,314,600
K. Hovnanian Enterprises, Inc.:
6.5% 1/15/14	3,595,000		3,325,375
8.875% 4/1/12	3,040,000		3,222,400
KB Home:
7.75% 2/1/10	9,585,000		9,872,550
8.625% 12/15/08	1,310,000		1,401,700
	Principal Amount		Value (Note 1)
Meritage Corp. 7% 5/1/14	$ 3,370,000		$ 3,201,500
Standard Pacific Corp.:
5.125% 4/1/09	3,030,000		2,863,350
6.5% 10/1/08	2,510,000		2,522,550
6.875% 5/15/11	2,080,000		2,038,400
Technical Olympic USA, Inc.:
7.5% 3/15/11	5,110,000		4,701,200
9% 7/1/10	1,110,000		1,132,200
10.375% 7/1/12	4,125,000		4,290,000
WCI Communities, Inc. 7.875% 10/1/13	4,285,000		4,338,563
William Lyon Homes, Inc.:
7.5% 2/15/14 (e)	5,645,000		5,320,413
10.75% 4/1/13	3,515,000		3,866,500
			65,618,601
Hotels - 0.3%
Host Marriott LP 7.125% 11/1/13	5,655,000		5,541,900
Insurance - 0.6%
Crum & Forster Holdings Corp. 10.375% 6/15/13	6,290,000		6,808,925
TIG Capital Trust I 8.597% 1/15/27 (e)	4,955,000		4,063,100
			10,872,025
Leisure - 3.0%
Royal Caribbean Cruises Ltd.:
6.875% 12/1/13	2,050,000		2,024,375
8% 5/15/10	3,285,000		3,531,375
Six Flags, Inc.:
8.875% 2/1/10	11,320,000		11,263,400
9.75% 4/15/13	4,240,000		4,261,200
Speedway Motorsports, Inc.:
6.75% 6/1/13	2,475,000		2,499,750
6.75% 6/1/13 (e)	5,120,000		5,171,200
Town Sports International Holdings, Inc. 0% 2/1/14 (d)(e)	3,870,000		1,741,500
Town Sports International, Inc. 9.625% 4/15/11	8,980,000		8,710,600
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10	9,820,000		11,366,650
			50,570,050
Metals/Mining - 1.9%
Arch Western Finance LLC 6.75% 7/1/13 (e)	470,000		470,000
Compass Minerals International, Inc.:
0% 12/15/12 (d)	5,940,000		4,692,600
0% 6/1/13 (d)	9,470,000		7,291,900
CONSOL Energy, Inc. 7.875% 3/1/12	975,000		1,004,250
Freeport-McMoRan Copper & Gold, Inc. 10.125% 2/1/10	10,025,000		11,127,750
Peabody Energy Corp. 6.875% 3/15/13	3,440,000		3,483,000
Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (e)	3,130,000		3,208,250
			31,277,750
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
Paper - 3.8%
Abitibi-Consolidated, Inc.:
5.02% 6/15/11 (e)(f)	$ 2,830,000		$ 2,861,838
7.75% 6/15/11 (e)	2,830,000		2,844,150
Bowater, Inc. 4.52% 3/15/10 (f)	4,620,000		4,637,325
Buckeye Technologies, Inc. 8.5% 10/1/13	3,825,000		3,882,375
Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (e)	2,620,000		2,515,200
Georgia-Pacific Corp.:
8% 1/15/14	3,730,000		4,037,725
8.125% 5/15/11	2,070,000		2,282,175
8.875% 2/1/10	1,465,000		1,659,113
9.375% 2/1/13	2,620,000		2,993,350
Graphic Packaging International, Inc. 8.5% 8/15/11	1,205,000		1,289,350
Norske Skog Canada Ltd.:
7.375% 3/1/14	2,040,000		1,968,600
8.625% 6/15/11	10,765,000		11,410,900
Stone Container Corp.:
8.375% 7/1/12	8,805,000		9,201,225
9.75% 2/1/11	2,195,000		2,414,500
Tembec Industries, Inc.:
7.75% 3/15/12	1,095,000		1,056,675
8.5% 2/1/11	4,755,000		4,802,550
yankee 8.625% 6/30/09	4,700,000		4,758,750
			64,615,801
Publishing/Printing - 0.9%
Houghton Mifflin Co.:
8.25% 2/1/11	2,615,000		2,628,075
9.875% 2/1/13	4,835,000		4,847,088
The Reader's Digest Association, Inc. 6.5% 3/1/11	7,270,000		7,142,775
			14,617,938
Railroad - 1.7%
Kansas City Southern Railway Co.:
7.5% 6/15/09	13,155,000		13,155,000
9.5% 10/1/08	150,000		161,250
TFM SA de CV yankee 11.75% 6/15/09	14,915,000		14,616,700
			27,932,950
Restaurants - 0.2%
Friendly Ice Cream Corp. 8.375% 6/15/12 (e)	3,165,000		3,085,875
Services - 1.2%
Cornell Companies, Inc. 10.75% 7/1/12 (e)	2,880,000		2,952,000
Iron Mountain, Inc.:
6.625% 1/1/16	2,465,000		2,230,825
8.625% 4/1/13	3,035,000		3,217,100
JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)	3,210,000		2,471,700
	Principal Amount		Value (Note 1)
UGS Corp. 10% 6/1/12 (e)	$ 5,630,000		$ 5,967,800
United Rentals North America, Inc. 7.75% 11/15/13	3,980,000		3,761,100
			20,600,525
Shipping - 4.9%
CHC Helicopter Corp. 7.375% 5/1/14 (e)	2,410,000		2,349,750
General Maritime Corp. 10% 3/15/13	6,680,000		7,398,100
Horizon Lines LLC 9% 11/1/12 (e)	1,540,000		1,568,875
OMI Corp. 7.625% 12/1/13	9,225,000		9,040,500
Overseas Shipholding Group, Inc. 8.25% 3/15/13	4,745,000		5,077,150
Ship Finance International Ltd. 8.5% 12/15/13 (e)	25,180,000		24,298,678
Teekay Shipping Corp. 8.875% 7/15/11	17,723,000		19,495,300
United Rentals North America, Inc.:
6.5% 2/15/12	11,130,000		10,517,850
7% 2/15/14	2,335,000		2,083,988
			81,830,191
Steels - 2.8%
AK Steel Corp.:
7.75% 6/15/12	3,070,000		2,763,000
7.875% 2/15/09	2,600,000		2,418,000
Allegheny Technologies, Inc. 8.375% 12/15/11	6,820,000		6,854,100
CSN Islands VII Corp. 10.75% 9/12/08 (e)	5,755,000		5,970,813
CSN Islands VIII Corp. 9.75% 12/16/13 (e)	3,100,000		2,790,000
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11	10,130,000		11,218,975
International Steel Group, Inc. 6.5% 4/15/14 (e)	6,460,000		6,040,100
Ispat Inland ULC 9.75% 4/1/14 (e)	8,655,000		8,914,650
			46,969,638
Super Retail - 2.0%
Asbury Automotive Group, Inc.:
8% 3/15/14	2,910,000		2,779,050
9% 6/15/12	8,545,000		8,673,175
Barneys, Inc. 9% 4/1/08	4,290,000		4,461,600
J. Crew Intermediate LLC 0% 5/15/08 (d)	4,205,000		3,616,300
Nebraska Book Co., Inc. 8.625% 3/15/12	2,530,000		2,479,400
Sonic Automotive, Inc. 8.625% 8/15/13	3,750,000		3,890,625
Toys 'R' US, Inc. 7.875% 4/15/13	8,735,000		8,691,325
			34,591,475
Supermarkets - 0.3%
Stater Brothers Holdings, Inc. 5.06% 6/15/10 (e)(f)	5,470,000		5,558,888
Technology - 3.5%
Amkor Technology, Inc.:
7.125% 3/15/11 (e)	5,490,000		5,119,425
7.75% 5/15/13	3,385,000		3,190,363
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
Technology - continued
Celestica, Inc. 7.875% 7/1/11	$ 5,700,000		$ 5,785,500
Flextronics International Ltd. 6.5% 5/15/13	7,845,000		7,629,263
Lucent Technologies, Inc.:
5.5% 11/15/08	7,675,000		7,233,688
6.45% 3/15/29	2,935,000		2,245,275
United Agriculture Products, Inc. 8.25% 12/15/11 (e)	5,470,000		5,934,950
Viasystems, Inc. 10.5% 1/15/11 (e)	2,880,000		3,038,400
Xerox Capital Trust I 8% 2/1/27	5,940,000		5,435,100
Xerox Corp. 7.625% 6/15/13	12,590,000		12,904,750
			58,516,714
Telecommunications - 8.3%
Alaska Communications Systems Holdings, Inc. 9.375% 5/15/09	3,825,000		3,853,688
American Cellular Corp. 10% 8/1/11	5,440,000		4,732,800
Centennial Cellular Operating Co. LLC/Centennial Finance Corp. 10.75% 12/15/08	6,413,000		6,637,455
Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (e)	5,060,000		4,693,150
Cincinnati Bell, Inc. 8.375% 1/15/14	790,000		707,050
Crown Castle International Corp. 7.5% 12/1/13	3,170,000		3,138,300
Empresa Brasil de Telecomm SA 11% 12/15/08 (e)	5,405,000		5,837,400
Eschelon Operating Co. 8.375% 3/15/10	4,470,000		3,665,400
Innova S. de R.L. 9.375% 9/19/13	9,160,000		9,618,000
Millicom International Cellular SA 10% 12/1/13 (e)	13,140,000		13,271,400
Nextel Communications, Inc.:
5.95% 3/15/14	2,285,000		2,102,200
6.875% 10/31/13	13,240,000		13,041,400
Primus Telecommunications Group, Inc. 8% 1/15/14	4,605,000		3,960,300
Qwest Capital Funding, Inc. 7% 8/3/09	4,405,000		3,920,450
Qwest Corp. 9.125% 3/15/12 (e)	8,605,000		9,293,400
Qwest Services Corp.:
13.5% 12/15/10 (e)	14,550,000		16,878,000
14% 12/15/14 (e)	6,380,000		7,624,100
Rogers Wireless, Inc.:
6.375% 3/1/14	3,975,000		3,647,063
9.625% 5/1/11	7,345,000		8,189,675
Triton PCS, Inc.:
8.5% 6/1/13	835,000		789,075
8.75% 11/15/11	5,490,000		4,529,250
9.375% 2/1/11	2,310,000		1,975,050
U.S. West Capital Funding, Inc. 6.375% 7/15/08	3,985,000		3,566,575
	Principal Amount		Value (Note 1)
U.S. West Communications:
7.2% 11/10/26	$ 895,000		$ 769,700
7.5% 6/15/23	3,535,000		3,110,800
			139,551,681
TOTAL NONCONVERTIBLE BONDS			1,548,498,160
TOTAL CORPORATE BONDS (Cost $1,534,663,581)		1,556,091,160
Commercial Mortgage Securities - 0.3%
Banc of America Commercial Mortgage, Inc. Series 2003-2:
Class BWD, 6.947% 10/11/37 (e)	616,000		588,856
Class BWE, 7.226% 10/11/37 (e)	833,000		796,260
Class BWF, 7.55% 10/11/37 (e)	735,376		702,859
Class BWG, 8.155% 10/11/37 (e)	711,258		673,919
Class BWH, 9.073% 10/11/37 (e)	372,000		358,428
Class BWJ, 9.99% 10/11/37 (e)	615,000		592,206
Class BWK, 10.676% 10/11/37 (e)	479,000		459,860
Class BWL, 10.1596% 10/11/37 (e)	799,000		706,456
LB Multi-family Mortgage Trust Series 1991-4 Class A1, 6.9944% 4/25/21 (e)(f)	261,068		232,351
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $5,103,373)		5,111,195

Common Stocks - 0.1%
	Shares
Homebuilding/Real Estate - 0.1%
Swerdlow Real Estate Group LLC (a)(h)	159,600		1,462,415
Super Retail - 0.0%
Barneys, Inc. warrants 4/1/08 (a)	5,020		175,700
Textiles & Apparel - 0.0%
Arena Brands Holding Corp. Class B (h)	48,889		590,579
TOTAL COMMON STOCKS (Cost $5,402,020)		2,228,694
Nonconvertible Preferred Stocks - 0.2%
Broadcasting - 0.2%
Granite Broadcasting Corp. 12.75% pay-in-kind (a)	5,005		2,802,800
Cable TV - 0.0%
PTV, Inc. Series A, 10.00%	377		3,016
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $3,248,629)		2,805,816

Floating Rate Loans - 2.9%
	Principal Amount		Value (Note 1)
Cable TV - 0.7%
Hilton Head Communications LP Tranche B term loan 5.5% 3/31/08 (f)	$ 7,000,000		$ 6,702,500
Olympus Cable Holdings LLC Tranche A term loan 5.5% 6/30/10 (f)	5,500,000		5,307,500
			12,010,000
Electric Utilities - 1.2%
Allegheny Energy Supply Co. LLC Tranche C term loan 5.6228% 6/8/11 (f)	4,400,000		4,477,000
Astoria Energy LLC term loan:
6.8518% 4/15/12 (f)	5,200,000		5,252,000
10.3363% 4/15/12 (f)	3,340,000		3,431,850
Riverside Energy Center LLC:
Credit-Linked Deposit 6.02% 6/24/11 (f)	284,611		285,678
term loan 6.02% 6/24/11 (f)	6,415,389		6,439,447
			19,885,975
Hotels - 0.7%
Wyndham International, Inc. term loan:
5.9375% 6/30/06 (f)	10,005,783		9,880,710
6.9375% 4/1/06 (f)	2,222,659		2,217,103
			12,097,813
Telecommunications - 0.3%
Qwest Corp. Tranche B term loan 6.95% 6/30/10 (f)	4,500,000		4,443,750
TOTAL FLOATING RATE LOANS (Cost $46,428,644)		48,437,538

Money Market Funds - 2.8%
	Shares
Fidelity Cash Central Fund, 1.16% (b) (Cost $47,944,081)	47,944,081		47,944,081
Cash Equivalents - 0.9%
	Maturity Amount		Value (Note 1)
Investments in repurchase agreements (Collateralized by U.S. Treasury Obligations, in a joint trading account at 1.3%, dated 6/30/04 due 7/1/04) (Cost $15,113,000)	$ 15,113,545		$ 15,113,000
TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $1,657,903,328)			1,677,731,484
NET OTHER ASSETS - 0.4%			6,697,313
NET ASSETS - 100%		$ 1,684,428,797

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $418,863,016 or 24.9% of net assets.

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

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

(h) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $2,052,994 or 0.1% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Arena Brands Holding Corp. Class B	6/18/97	$ 1,974,627
Swerdlow Real Estate Group LLC	1/15/99	$ 7,697,348

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,236,906,557 and $1,587,548,635, respectively.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $18,879,667. The weighted average interest rate was 1.13%. Interest expense includes $7,133 paid under the interfund lending program. At period end there were no interfund loans outstanding.

The fund participated in the bank borrowing program. The average daily loan balance during the period for which loans were outstanding amounted to $5,077,500. The weighted average interest rate was 1.25%. Interest expense includes $352 paid under the bank borrowing program. At period end, there were no bank borrowings outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	83.8%
Canada	5.1%
Marshall Islands	2.1%
France	1.7%
United Kingdom	1.5%
Mexico	1.5%
Luxembourg	1.4%
Others (individually less than 1%)	2.9%
	100.0%

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $48,437,538 or 2.9% of net assets.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $1,222,565,000 of which $361,530,000, $772,554,000 and $88,481,000 will expire on December 31, 2008, 2009 and 2010, respectively.

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

High Income Portfolio

Fidelity Variable Insurance Products: High Income Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $15,113,000) (cost $1,657,903,328) - See accompanying schedule		$ 1,677,731,484
Receivable for investments sold		44,535,953
Receivable for fund shares sold		133,689
Interest receivable		29,246,187
Prepaid expenses		4,646
Other receivables		27,534
Total assets		1,751,679,493
Liabilities
Payable to custodian bank	$ 3,734
Payable for investments purchased
Regular delivery	58,328,576
Delayed delivery	5,888,861
Payable for fund shares redeemed	1,962,438
Accrued management fee	806,598
Distribution fees payable	40,451
Other affiliated payables	149,055
Other payables and accrued expenses	70,983
Total liabilities		67,250,696
Net Assets		$ 1,684,428,797
Net Assets consist of:
Paid in capital		$ 2,747,239,891
Undistributed net investment income		79,363,058
Accumulated undistributed net realized gain (loss) on investments		(1,162,002,875)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		19,828,723
Net Assets		$ 1,684,428,797
Calculation of Maximum Offering Price Initial Class: Net Asset Value, offering price and redemption price per share ($1,292,435,434 ÷ 201,076,965 shares)		$ 6.43
Service Class: Net Asset Value, offering price and redemption price per share ($327,082,698 ÷ 51,081,390 shares)		$ 6.40
Service Class 2: Net Asset Value, offering price and redemption price per share ($64,687,377 ÷ 10,190,774 shares)		$ 6.35
Initial Class R: Net Asset Value, offering price and redemption price per share ($74,448 ÷ 11,592 shares)		$ 6.42
Service Class R: Net Asset Value, offering price and redemption price per share ($74,433 ÷ 11,628 shares)		$ 6.40
Service Class 2R: Net Asset Value, offering price and redemption price per share ($74,407 ÷ 11,719 shares)		$ 6.35

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 732,961
Interest		76,126,361
Total income		76,859,322
Expenses
Management fee	$ 5,364,801
Transfer agent fees	628,211
Distribution fees	275,849
Accounting fees and expenses	353,362
Non-interested trustees' compensation	4,798
Custodian fees and expenses	32,074
Registration fees	4,070
Audit	33,201
Legal	8,989
Interest	7,485
Miscellaneous	52,357
Total expenses before reductions	6,765,197
Expense reductions	(896)	6,764,301
Net investment income (loss)		70,095,021
Realized and Unrealized Gain (Loss) Net realized gain (loss) on investment securities		62,024,615
Change in net unrealized appreciation (depreciation) on: Investment securities	(119,300,805)
Assets and liabilities in foreign currencies	60
Total change in net unrealized appreciation (depreciation)		(119,300,745)
Net gain (loss)		(57,276,130)
Net increase (decrease) in net assets resulting from operations		$ 12,818,891

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

High Income Portfolio

Fund Name
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 70,095,021	$ 147,560,195
Net realized gain (loss)	62,024,615	93,505,636
Change in net unrealized appreciation (depreciation)	(119,300,745)	182,813,372
Net increase (decrease) in net assets resulting from operations	12,818,891	423,879,203
Distributions to shareholders from net investment income	(155,517,698)	(110,937,981)
Share transactions - net increase (decrease)	(260,897,261)	336,533,161
Total increase (decrease) in net assets	(403,596,068)	649,474,383
Net Assets
Beginning of period	2,088,024,865	1,438,550,482
End of period (including undistributed net investment income of $79,363,058 and undistributed net investment income of $164,989,590, respectively)	$ 1,684,428,797	$ 2,088,024,865

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Initial Class R A	Service Class R A	Service Class 2R A
Shares Sold	27,421,158	14,128,861	5,151,567	11,592	11,628	11,719
Reinvested	18,412,464	4,720,558	928,353	-	-	-
Redeemed	(74,123,823)	(28,184,527)	(7,010,199)	-	-	-
Net increase (decrease)	(28,290,201)	(9,335,108)	(930,279)	11,592	11,628	11,719
Dollars Sold	$ 179,057,763	$ 92,291,089	$ 33,350,440	$ 75,000	$ 75,000	$ 75,000
Reinvested	119,128,639	30,447,599	5,941,460	-	-	-
Redeemed	(490,664,314)	(185,476,858)	(45,198,079)	-	-	-
Net increase (decrease)	$ (192,477,912)	$ (62,738,170)	$ (5,906,179)	$ 75,000	$ 75,000	$ 75,000
Share Transactions			Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
Shares Sold	187,111,620	59,201,139	17,709,351	-	-	-
Reinvested	15,863,052	3,574,368	424,961	-	-	-
Redeemed	(166,651,099)	(46,461,897)	(12,553,214)	-	-	-
Net increase (decrease)	36,323,573	16,313,610	5,581,098	-	-	-
Dollars Sold	$ 1,162,830,605	$ 370,826,801	$ 111,025,684	$ -	$ -	$ -
Reinvested	88,674,463	19,909,232	2,354,286	-	-	-
Redeemed	(1,045,910,689)	(293,649,573)	(79,527,648)	-	-	-
Net increase (decrease)	$ 205,594,379	$ 97,086,460	$ 33,852,322	$ -	$ -	$ -
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Initial Class R A	Service Class R A	Service Class 2R A
From net investment income	$ 119,128,639	$ 30,447,599	$ 5,941,460	$ -	$ -	$ -
			Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
From net investment income	$ 88,674,463	$ 19,909,232	$ 2,354,286	$ -	$ -	$ -

^A For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004.

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

Semiannual Report

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 6.95	$ 5.93	$ 6.41	$ 8.18	$ 11.32	$ 11.53
Income from Investment Operations
Net investment income (loss) E	.248	.520	.496 H	.774 G, H	1.123	1.095
Net realized and unrealized gain (loss)	(.198)	.980	(.306) H	(1.544) G, H	(3.513)	(.195)
Total from investment operations	.050	1.500	.190	(.770)	(2.390)	.900
Distributions from net investment income	(.570)	(.480)	(.670)	(1.000)	(.750)	(1.075)
Distributions from net realized gain	-	-	-	-	-	(.030)
Distributions in excess of net realized gain	-	-	-	-	-	(.005)
Total distributions	(.570)	(.480)	(.670)	(1.000)	(.750)	(1.110)
Net asset value, end of period	$ 6.43	$ 6.95	$ 5.93	$ 6.41	$ 8.18	$ 11.32
Total Return B, C, D	.67%	27.26%	3.44%	(11.73)%	(22.54)%	8.25%
Ratios to Average Net Assets F
Expenses before expense reductions	.70% A	.69%	.70%	.71%	.68%	.69%
Expenses net of voluntary waivers, if any	.70% A	.69%	.70%	.71%	.68%	.69%
Expenses net of all reductions	.70% A	.69%	.70%	.70%	.68%	.69%
Net investment income (loss)	7.59% A	8.25%	8.65% H	11.00% G, H	11.38%	9.80%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,292,436	$ 1,593,714	$ 1,145,562	$ 1,201,085	$ 1,467,250	$ 2,257,610
Portfolio turnover rate	139% A	130%	96%	138%	68%	82%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Effective January 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. ^H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.95% and 12.08% to 8.65% and 11.00%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 6.92	$ 5.91	$ 6.38	$ 8.15	$ 11.29	$ 11.52
Income from Investment Operations
Net investment income (loss) E	.244	.513	.488 H	.758 G, H	1.102	1.074
Net realized and unrealized gain (loss)	(.204)	.967	(.288) H	(1.538) G, H	(3.502)	(.194)
Total from investment operations	.040	1.480	.200	(.780)	(2.400)	.880
Distributions from net investment income	(.560)	(.470)	(.670)	(.990)	(.740)	(1.075)
Distributions from net realized gain	-	-	-	-	-	(.030)
Distributions in excess of net realized gain	-	-	-	-	-	(.005)
Total distributions	(.560)	(.470)	(.670)	(.990)	(.740)	(1.110)
Net asset value, end of period	$ 6.40	$ 6.92	$ 5.91	$ 6.38	$ 8.15	$ 11.29
Total Return B, C, D	.52%	26.97%	3.62%	(11.90)%	(22.68)%	8.08%
Ratios to Average Net Assets F
Expenses before expense reductions	.80% A	.79%	.80%	.81%	.78%	.79%
Expenses net of voluntary waivers, if any	.80% A	.79%	.80%	.81%	.78%	.79%
Expenses net of all reductions	.80% A	.79%	.80%	.81%	.78%	.79%
Net investment income (loss)	7.49% A	8.15%	8.55% H	10.90% G, H	11.28%	9.69%
Supplemental Data
Net assets, end of period (000 omitted)	$ 327,083	$ 417,928	$ 260,489	$ 234,204	$ 227,549	$ 253,972
Portfolio turnover rate	139% A	130%	96%	138%	68%	82%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Effective January 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. ^H As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.075 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.85% and 11.97% to 8.55% and 10.90%, respectively. The reclassification has no impact on the net assets of the fund.

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

High Income Portfolio

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 6.87	$ 5.87	$ 6.36	$ 8.13	$ 11.14
Income from Investment Operations
Net investment income (loss) E	.236	.501	.472 I	.716 H, I	.936
Net realized and unrealized gain (loss)	(.196)	.959	(.292) I	(1.496) H, I	(3.206)
Total from investment operations	.040	1.460	.180	(.780)	(2.270)
Distributions from net investment income	(.560)	(.460)	(.670)	(.990)	(.740)
Net asset value, end of period	$ 6.35	$ 6.87	$ 5.87	$ 6.36	$ 8.13
Total Return B, C, D	.52%	26.75%	3.30%	(11.93)%	(21.83)%
Ratios to Average Net Assets G
Expenses before expense reductions	.96% A	.95%	.97%	.98%	1.01% A
Expenses net of voluntary waivers, if any	.96% A	.95%	.97%	.98%	1.01% A
Expenses net of all reductions	.96% A	.95%	.97%	.98%	1.01% A
Net investment income (loss)	7.33% A	7.99%	8.38% I	10.73% H, I	11.04% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 64,687	$ 76,383	$ 32,499	$ 16,508	$ 4,742
Portfolio turnover rate	139% A	130%	96%	138%	68%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^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. 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. ^H Effective January 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. ^I As a result of a revision to reflect accretion of market discount using the interest method, certain amounts for the years ended December 31, 2002 and December 31, 2001 have been reclassified from what was previously reported. The impact of this change for the years ended December 31, 2002 and December 31, 2001 was a decrease to net investment income of $.017 and $.072 per share with a corresponding increase to net realized and unrealized gain (loss) per share, respectively. The ratio of net investment income to average net assets decreased from 8.68% and 11.81% to 8.38% and 10.73%, respectively. The reclassification has no impact on the net assets of the fund.

Financial Highlights - Initial Class R

	Six months ended June 30, 2004 F
	(Unaudited)
Selected Per-Share Data
Net asset value, beginning of period	$ 6.47
Income from Investment Operations
Net investment income (loss) E	.101
Net realized and unrealized gain (loss)	(.151)
Total from investment operations	(.050)
Net asset value, end of period	$ 6.42
Total Return B, C, D	.51%
Ratios to Average Net Assets G
Expenses before expense reductions	.71% A
Expenses net of voluntary waivers, if any	.71% A
Expenses net of all reductions	.71% A
Net investment income (loss)	7.58% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 75
Portfolio turnover rate	139% A

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. ^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.

High Income Portfolio

Financial Highlights - Service Class R

	Six months ended June 30, 2004 F
	(Unaudited)
Selected Per-Share Data
Net asset value, beginning of period	$ 6.45
Income from Investment Operations
Net investment income (loss) E	.100
Net realized and unrealized gain (loss)	(.150)
Total from investment operations	(.050)
Net asset value, end of period	$ 6.40
Total Return B, C, D	.52%
Ratios to Average Net Assets G
Expenses before expense reductions	.81% A
Expenses net of voluntary waivers, if any	.81% A
Expenses net of all reductions	.81% A
Net investment income (loss)	7.48% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 74
Portfolio turnover rate	139% A

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. ^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.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004 F
	(Unaudited)
Selected Per-Share Data
Net asset value, beginning of period	$ 6.40
Income from Investment Operations
Net investment income (loss) E	.097
Net realized and unrealized gain (loss)	(.147)
Total from investment operations	(.050)
Net asset value, end of period	$ 6.35
Total Return B, C, D	.52%
Ratios to Average Net Assets G
Expenses before expense reductions	.97% A
Expenses net of voluntary waivers, if any	.97% A
Expenses net of all reductions	.97% A
Net investment income (loss)	7.32% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 74
Portfolio turnover rate	139% A

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 14, 2004 (commencement of sale of shares) to June 30, 2004. ^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

Fidelity Variable Insurance Products: Index 500 Portfolio

Investment Summary

Top Ten Stocks as of June 30, 2004
	% of fund's net assets
General Electric Co.	3.2
Microsoft Corp.	2.9
Exxon Mobil Corp.	2.7
Pfizer, Inc.	2.4
Citigroup, Inc.	2.2
Wal-Mart Stores, Inc.	2.1
American International Group, Inc.	1.7
Intel Corp.	1.7
Bank of America Corp.	1.6
Johnson & Johnson	1.5
	22.0
Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	20.1
Information Technology	17.0
Health Care	13.3
Industrials	11.3
Consumer Staples	11.0
Consumer Discretionary	10.8
Energy	6.5
Telecommunication Services	3.4
Materials	2.9
Utilities	2.6

Semiannual Report

Fidelity Variable Insurance Products: Index 500 Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.9%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 10.8%
Auto Components - 0.2%
Cooper Tire & Rubber Co.	19,263		$ 443,049
Dana Corp.	38,705		758,618
Delphi Corp.	145,531		1,554,271
Goodyear Tire & Rubber Co. (a)	45,539		413,950
Johnson Controls, Inc.	49,353		2,634,463
Visteon Corp.	33,617		392,310
			6,196,661
Automobiles - 0.7%
Ford Motor Co.	475,502		7,441,606
General Motors Corp.	146,641		6,832,004
Harley-Davidson, Inc.	76,654		4,747,949
			19,021,559
Distributors - 0.1%
Genuine Parts Co.	45,305		1,797,702
Hotels, Restaurants & Leisure - 1.4%
Carnival Corp. unit	164,318		7,722,946
Darden Restaurants, Inc.	41,810		859,196
Harrah's Entertainment, Inc.	29,300		1,585,130
Hilton Hotels Corp.	99,570		1,857,976
International Game Technology	90,620		3,497,932
Marriott International, Inc. Class A	58,747		2,930,300
McDonald's Corp.	326,996		8,501,896
Starbucks Corp. (a)	102,984		4,477,744
Starwood Hotels & Resorts Worldwide, Inc. unit	53,760		2,411,136
Wendy's International, Inc.	29,627		1,032,205
Yum! Brands, Inc.	75,164		2,797,604
			37,674,065
Household Durables - 0.5%
Black & Decker Corp.	20,564		1,277,641
Centex Corp.	32,038		1,465,739
Fortune Brands, Inc.	37,983		2,865,058
KB Home	12,132		832,619
Leggett & Platt, Inc.	49,860		1,331,761
Maytag Corp.	20,498		502,406
Newell Rubbermaid, Inc.	71,370		1,677,195
Pulte Homes, Inc.	32,926		1,713,140
Snap-On, Inc.	15,099		506,571
The Stanley Works	21,208		966,661
Whirlpool Corp.	17,918		1,229,175
			14,367,966
Internet & Catalog Retail - 0.6%
eBay, Inc. (a)	170,728		15,698,440
Leisure Equipment & Products - 0.2%
Brunswick Corp.	24,600		1,003,680
Eastman Kodak Co.	74,437		2,008,310
	Shares		Value (Note 1)
Hasbro, Inc.	45,809		$ 870,371
Mattel, Inc.	109,704		2,002,098
			5,884,459
Media - 3.5%
Clear Channel Communications, Inc.	159,542		5,895,077
Comcast Corp. Class A (a)	582,400		16,324,672
Dow Jones & Co., Inc.	21,241		957,969
Gannett Co., Inc.	70,770		6,004,835
Interpublic Group of Companies, Inc. (a)	108,801		1,493,838
Knight-Ridder, Inc.	20,440		1,471,680
McGraw-Hill Companies, Inc.	49,476		3,788,377
Meredith Corp.	13,049		717,173
Omnicom Group, Inc.	49,098		3,726,047
The New York Times Co. Class A	38,618		1,726,611
Time Warner, Inc. (a)	1,184,186		20,817,990
Tribune Co.	85,102		3,875,545
Univision Communications, Inc. Class A (a)	83,997		2,682,024
Viacom, Inc. Class B (non-vtg.)	449,990		16,073,643
Walt Disney Co.	532,989		13,585,890
			99,141,371
Multiline Retail - 1.0%
Big Lots, Inc. (a)	29,919		432,629
Dillard's, Inc. Class A	21,691		483,709
Dollar General Corp.	85,628		1,674,884
Family Dollar Stores, Inc.	44,546		1,355,089
Federated Department Stores, Inc.	46,699		2,292,921
JCPenney Co., Inc.	73,273		2,766,788
Kohl's Corp. (a)	88,561		3,744,359
Nordstrom, Inc.	36,132		1,539,585
Sears, Roebuck & Co.	55,264		2,086,769
Target Corp.	237,239		10,075,540
The May Department Stores Co.	75,537		2,076,512
			28,528,785
Specialty Retail - 2.3%
AutoNation, Inc. (a)	69,441		1,187,441
AutoZone, Inc. (a)	21,593		1,729,599
Bed Bath & Beyond, Inc. (a)	78,040		3,000,638
Best Buy Co., Inc.	84,275		4,276,114
Boise Cascade Corp.	22,767		856,950
Circuit City Stores, Inc.	51,628		668,583
Gap, Inc.	233,807		5,669,820
Home Depot, Inc.	577,292		20,320,678
Limited Brands, Inc.	122,397		2,288,824
Lowe's Companies, Inc.	204,185		10,729,922
Office Depot, Inc. (a)	81,259		1,455,349
RadioShack Corp.	41,771		1,195,904
Sherwin-Williams Co.	37,191		1,545,286
Staples, Inc.	129,184		3,786,383
Tiffany & Co., Inc.	38,021		1,401,074
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Specialty Retail - continued
TJX Companies, Inc.	128,542		$ 3,103,004
Toys 'R' Us, Inc. (a)	55,569		885,214
			64,100,783
Textiles Apparel & Luxury Goods - 0.3%
Jones Apparel Group, Inc.	32,757		1,293,246
Liz Claiborne, Inc.	28,813		1,036,692
NIKE, Inc. Class B	68,564		5,193,723
Reebok International Ltd.	15,574		560,353
VF Corp.	28,535		1,389,655
			9,473,669
TOTAL CONSUMER DISCRETIONARY			301,885,460
CONSUMER STAPLES - 11.0%
Beverages - 2.7%
Adolph Coors Co. Class B	9,654		698,370
Anheuser-Busch Companies, Inc.	208,869		11,278,926
Brown-Forman Corp. Class B (non-vtg.)	31,544		1,522,629
Coca-Cola Enterprises, Inc.	122,084		3,539,215
Pepsi Bottling Group, Inc.	66,886		2,042,698
PepsiCo, Inc.	443,344		23,887,375
The Coca-Cola Co.	632,588		31,933,042
			74,902,255
Food & Staples Retailing - 3.4%
Albertsons, Inc.	95,524		2,535,207
Costco Wholesale Corp.	119,208		4,895,873
CVS Corp.	103,186		4,335,876
Kroger Co. (a)	192,849		3,509,852
Safeway, Inc. (a)	115,912		2,937,210
SUPERVALU, Inc.	35,011		1,071,687
Sysco Corp.	166,070		5,956,931
Wal-Mart Stores, Inc.	1,113,865		58,767,517
Walgreen Co.	266,098		9,635,409
Winn-Dixie Stores, Inc.	36,920		265,824
			93,911,386
Food Products - 1.2%
Archer-Daniels-Midland Co.	168,810		2,832,632
Campbell Soup Co.	106,736		2,869,064
ConAgra Foods, Inc.	137,238		3,716,405
General Mills, Inc.	98,158		4,665,450
H.J. Heinz Co.	91,446		3,584,683
Hershey Foods Corp.	67,363		3,116,886
Kellogg Co.	106,654		4,463,470
McCormick & Co., Inc. (non-vtg.)	35,713		1,214,242
Sara Lee Corp.	205,264		4,719,019
Wm. Wrigley Jr. Co.	58,332		3,677,833
			34,859,684
Household Products - 2.0%
Clorox Co.	55,097		2,963,117
Colgate-Palmolive Co.	138,193		8,077,381
	Shares		Value (Note 1)
Kimberly-Clark Corp.	130,202		$ 8,577,708
Procter & Gamble Co.	667,629		36,345,723
			55,963,929
Personal Products - 0.6%
Alberto-Culver Co.	23,498		1,178,190
Avon Products, Inc.	122,552		5,654,549
Gillette Co.	260,618		11,050,203
			17,882,942
Tobacco - 1.1%
Altria Group, Inc.	532,629		26,658,081
RJ Reynolds Tobacco Holdings, Inc.	22,143		1,496,645
UST, Inc.	42,987		1,547,532
			29,702,258
TOTAL CONSUMER STAPLES			307,222,454
ENERGY - 6.5%
Energy Equipment & Services - 0.9%
Baker Hughes, Inc.	86,510		3,257,102
BJ Services Co. (a)	41,789		1,915,608
Halliburton Co.	114,312		3,459,081
Nabors Industries Ltd. (a)	38,584		1,744,768
Noble Corp. (a)	35,018		1,326,832
Rowan Companies, Inc. (a)	27,477		668,515
Schlumberger Ltd. (NY Shares)	153,017		9,718,110
Transocean, Inc. (a)	83,319		2,411,252
			24,501,268
Oil & Gas - 5.6%
Amerada Hess Corp.	23,380		1,851,462
Anadarko Petroleum Corp.	65,416		3,833,378
Apache Corp.	84,467		3,678,538
Ashland, Inc.	18,277		965,208
Burlington Resources, Inc.	103,038		3,727,915
ChevronTexaco Corp.	277,912		26,154,298
ConocoPhillips	178,123		13,589,004
Devon Energy Corp.	62,279		4,110,414
El Paso Corp.	166,481		1,311,870
EOG Resources, Inc.	30,273		1,807,601
Exxon Mobil Corp.	1,698,564		75,433,227
Kerr-McGee Corp.	38,854		2,089,180
Kinder Morgan, Inc.	32,224		1,910,561
Marathon Oil Corp.	89,711		3,394,664
Occidental Petroleum Corp.	101,598		4,918,359
Sunoco, Inc.	19,627		1,248,670
Unocal Corp.	68,448		2,601,024
Valero Energy Corp.	33,434		2,466,092
Williams Companies, Inc.	135,007		1,606,583
			156,698,048
TOTAL ENERGY			181,199,316
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - 20.1%
Capital Markets - 3.4%
Bank of New York Co., Inc.	201,939		$ 5,953,162
Bear Stearns Companies, Inc.	27,252		2,297,616
Charles Schwab Corp.	354,469		3,406,447
E*TRADE Financial Corp. (a)	94,910		1,058,247
Federated Investors, Inc. Class B (non-vtg.)	28,076		851,826
Franklin Resources, Inc.	64,927		3,251,544
Goldman Sachs Group, Inc.	125,333		11,801,355
J.P. Morgan Chase & Co.	492,064		19,077,321
Janus Capital Group, Inc.	62,166		1,025,117
Lehman Brothers Holdings, Inc.	71,916		5,411,679
Mellon Financial Corp.	110,248		3,233,574
Merrill Lynch & Co., Inc.	249,586		13,472,652
Morgan Stanley	285,485		15,065,043
Northern Trust Corp.	57,239		2,420,065
State Street Corp.	87,244		4,278,446
T. Rowe Price Group, Inc.	32,904		1,658,362
			94,262,456
Commercial Banks - 6.2%
AmSouth Bancorp.	91,485		2,330,123
Bank of America Corp.	529,511		44,807,221
Bank One Corp.	328,332		16,744,932
BB&T Corp.	145,724		5,387,416
Charter One Financial, Inc.	58,124		2,568,500
Comerica, Inc.	44,993		2,469,216
Fifth Third Bancorp	146,183		7,861,722
First Horizon National Corp.	32,200		1,464,134
Huntington Bancshares, Inc.	59,582		1,364,428
KeyCorp	106,571		3,185,407
M&T Bank Corp.	30,785		2,687,531
Marshall & Ilsley Corp.	57,696		2,255,337
National City Corp.	175,981		6,161,095
North Fork Bancorp, Inc., New York	44,924		1,709,358
PNC Financial Services Group, Inc.	73,248		3,888,004
Regions Financial Corp.	57,004		2,083,496
SouthTrust Corp.	85,651		3,324,115
SunTrust Banks, Inc.	73,350		4,767,017
Synovus Financial Corp.	79,155		2,004,205
U.S. Bancorp, Delaware	492,253		13,566,493
Union Planters Corp.	49,352		1,471,183
Wachovia Corp.	341,464		15,195,148
Wells Fargo & Co.	438,286		25,083,108
Zions Bancorp	23,252		1,428,835
			173,808,024
Consumer Finance - 1.3%
American Express Co.	331,885		17,052,251
Capital One Financial Corp.	62,270		4,258,023
MBNA Corp.	331,833		8,557,973
	Shares		Value (Note 1)
Providian Financial Corp.	75,625		$ 1,109,419
SLM Corp.	114,004		4,611,462
			35,589,128
Diversified Financial Services - 2.4%
Citigroup, Inc.	1,343,124		62,455,266
Moody's Corp.	38,879		2,513,916
Principal Financial Group, Inc.	82,902		2,883,332
			67,852,514
Insurance - 4.6%
ACE Ltd.	73,537		3,109,144
AFLAC, Inc.	132,091		5,390,634
Allstate Corp.	182,484		8,494,630
AMBAC Financial Group, Inc.	28,154		2,067,630
American International Group, Inc.	677,402		48,285,215
Aon Corp.	81,840		2,329,985
Cincinnati Financial Corp.	43,699		1,901,780
Hartford Financial Services Group, Inc.	75,844		5,213,517
Jefferson-Pilot Corp.	36,315		1,844,802
Lincoln National Corp.	46,307		2,188,006
Loews Corp.	48,175		2,888,573
Marsh & McLennan Companies, Inc.	135,910		6,167,596
MBIA, Inc.	37,500		2,142,000
MetLife, Inc.	196,305		7,037,534
Progressive Corp.	56,464		4,816,379
Prudential Financial, Inc.	136,612		6,348,360
SAFECO Corp.	36,181		1,591,964
St. Paul Travelers Companies, Inc.	173,258		7,023,879
The Chubb Corp.	49,273		3,359,433
Torchmark Corp.	28,909		1,555,304
UnumProvident Corp.	76,952		1,223,537
XL Capital Ltd. Class A	35,873		2,706,977
			127,686,879
Real Estate - 0.4%
Apartment Investment & Management Co. Class A	24,445		760,973
Equity Office Properties Trust	104,821		2,851,131
Equity Residential (SBI)	72,769		2,163,422
Plum Creek Timber Co., Inc.	47,590		1,550,482
ProLogis	47,102		1,550,598
Simon Property Group, Inc.	54,046		2,779,045
			11,655,651
Thrifts & Mortgage Finance - 1.8%
Countrywide Financial Corp.	72,561		5,097,410
Fannie Mae	251,693		17,960,812
Freddie Mac	178,808		11,318,546
Golden West Financial Corp., Delaware	39,642		4,215,927
MGIC Investment Corp.	25,657		1,946,340
Sovereign Bancorp, Inc.	75,836		1,675,976
Washington Mutual, Inc.	224,629		8,679,665
			50,894,676
TOTAL FINANCIALS			561,749,328
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - 13.3%
Biotechnology - 1.2%
Amgen, Inc. (a)	330,270		$ 18,022,834
Biogen Idec, Inc. (a)	88,242		5,581,307
Chiron Corp. (a)	49,074		2,190,663
Genzyme Corp. - General Division (a)	58,831		2,784,471
Gilead Sciences, Inc. (a)	55,741		3,734,647
MedImmune, Inc. (a)	64,606		1,511,780
			33,825,702
Health Care Equipment & Supplies - 2.2%
Applera Corp. - Applied Biosystems Group	52,421		1,140,157
Bausch & Lomb, Inc.	13,754		894,973
Baxter International, Inc.	159,186		5,493,509
Becton, Dickinson & Co.	65,781		3,407,456
Biomet, Inc.	66,078		2,936,506
Boston Scientific Corp. (a)	216,886		9,282,721
C.R. Bard, Inc.	27,098		1,535,102
Guidant Corp.	81,463		4,552,152
Hospira, Inc. (a)	40,527		1,118,545
Medtronic, Inc.	314,830		15,338,518
Millipore Corp. (a)	12,813		722,269
St. Jude Medical, Inc. (a)	45,753		3,461,214
Stryker Corp.	103,936		5,716,480
Zimmer Holdings, Inc. (a)	63,377		5,589,851
			61,189,453
Health Care Providers & Services - 2.1%
Aetna, Inc.	39,578		3,364,130
AmerisourceBergen Corp.	29,168		1,743,663
Anthem, Inc. (a)	36,004		3,224,518
Cardinal Health, Inc.	111,781		7,830,259
Caremark Rx, Inc. (a)	118,794		3,913,074
CIGNA Corp.	36,725		2,527,047
Express Scripts, Inc. (a)	20,240		1,603,615
HCA, Inc.	126,126		5,245,580
Health Management Associates, Inc. Class A	63,126		1,415,285
Humana, Inc. (a)	41,938		708,752
IMS Health, Inc.	61,029		1,430,520
Manor Care, Inc.	23,086		754,450
McKesson Corp.	76,047		2,610,694
Medco Health Solutions, Inc. (a)	70,400		2,640,000
Quest Diagnostics, Inc.	26,872		2,282,776
Tenet Healthcare Corp. (a)	120,891		1,621,148
UnitedHealth Group, Inc.	159,941		9,956,327
WellPoint Health Networks, Inc. (a)	40,425		4,528,004
			57,399,842
Pharmaceuticals - 7.8%
Abbott Laboratories	405,075		16,510,857
Allergan, Inc.	34,114		3,053,885
Bristol-Myers Squibb Co.	504,985		12,372,133
Eli Lilly & Co.	293,348		20,507,959
	Shares		Value (Note 1)
Forest Laboratories, Inc. (a)	96,057		$ 5,439,708
Johnson & Johnson	770,998		42,944,589
King Pharmaceuticals, Inc. (a)	62,691		717,812
Merck & Co., Inc.	577,121		27,413,248
Mylan Laboratories, Inc.	69,749		1,412,417
Pfizer, Inc.	1,981,783		67,935,521
Schering-Plough Corp.	382,267		7,064,294
Watson Pharmaceuticals, Inc. (a)	28,275		760,598
Wyeth	346,331		12,523,329
			218,656,350
TOTAL HEALTH CARE			371,071,347
INDUSTRIALS - 11.3%
Aerospace & Defense - 2.0%
General Dynamics Corp.	51,698		5,133,611
Goodrich Corp.	30,544		987,488
Honeywell International, Inc.	223,044		8,170,102
Lockheed Martin Corp.	116,559		6,070,393
Northrop Grumman Corp.	93,371		5,014,023
Raytheon Co.	116,271		4,159,014
Rockwell Collins, Inc.	46,055		1,534,553
The Boeing Co.	218,976		11,187,484
United Technologies Corp.	133,483		12,211,025
			54,467,693
Air Freight & Logistics - 1.0%
FedEx Corp.	77,583		6,337,755
Ryder System, Inc.	16,989		680,749
United Parcel Service, Inc. Class B	292,744		22,005,566
			29,024,070
Airlines - 0.1%
Delta Air Lines, Inc.	32,339		230,254
Southwest Airlines Co.	205,224		3,441,606
			3,671,860
Building Products - 0.2%
American Standard Companies, Inc. (a)	55,854		2,251,475
Masco Corp.	113,763		3,547,130
			5,798,605
Commercial Services & Supplies - 1.1%
Allied Waste Industries, Inc. (a)	82,404		1,086,085
Apollo Group, Inc. Class A (a)	45,858		4,048,803
Avery Dennison Corp.	28,689		1,836,383
Cendant Corp.	264,905		6,484,874
Cintas Corp.	44,460		2,119,408
Deluxe Corp.	12,957		563,630
Equifax, Inc.	35,574		880,457
H&R Block, Inc.	45,443		2,166,722
Monster Worldwide, Inc. (a)	30,438		782,865
Pitney Bowes, Inc.	60,028		2,656,239
R.R. Donnelley & Sons Co.	56,421		1,863,021
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Commercial Services & Supplies - continued
Robert Half International, Inc.	44,566		$ 1,326,730
Waste Management, Inc.	150,774		4,621,223
			30,436,440
Construction & Engineering - 0.0%
Fluor Corp.	21,564		1,027,956
Electrical Equipment - 0.4%
American Power Conversion Corp.	51,992		1,021,643
Cooper Industries Ltd. Class A	24,025		1,427,325
Emerson Electric Co.	109,568		6,963,046
Power-One, Inc. (a)	21,736		238,661
Rockwell Automation, Inc.	48,278		1,810,908
Thomas & Betts Corp.	15,260		415,530
			11,877,113
Industrial Conglomerates - 4.5%
3M Co.	203,128		18,283,551
General Electric Co.	2,741,148		88,813,187
Textron, Inc.	35,742		2,121,288
Tyco International Ltd.	520,866		17,261,499
			126,479,525
Machinery - 1.5%
Caterpillar, Inc.	88,798		7,054,113
Crane Co.	15,464		485,415
Cummins, Inc.	11,194		699,625
Danaher Corp.	79,985		4,147,222
Deere & Co.	64,653		4,534,761
Dover Corp.	52,788		2,222,375
Eaton Corp.	39,113		2,532,176
Illinois Tool Works, Inc.	80,448		7,714,159
Ingersoll-Rand Co. Ltd. Class A	45,008		3,074,496
ITT Industries, Inc.	24,054		1,996,482
Navistar International Corp. (a)	18,132		702,796
PACCAR, Inc.	45,567		2,642,430
Pall Corp.	32,490		850,913
Parker Hannifin Corp.	31,051		1,846,292
			40,503,255
Road & Rail - 0.4%
Burlington Northern Santa Fe Corp.	96,323		3,378,048
CSX Corp.	55,756		1,827,124
Norfolk Southern Corp.	101,827		2,700,452
Union Pacific Corp.	67,301		4,001,044
			11,906,668
Trading Companies & Distributors - 0.1%
W.W. Grainger, Inc.	23,600		1,357,000
TOTAL INDUSTRIALS			316,550,185
INFORMATION TECHNOLOGY - 17.0%
Communications Equipment - 3.1%
ADC Telecommunications, Inc. (a)	210,086		596,644
	Shares		Value (Note 1)
Andrew Corp. (a)	41,724		$ 834,897
Avaya, Inc. (a)	115,236		1,819,576
CIENA Corp. (a)	147,436		548,462
Cisco Systems, Inc. (a)	1,756,077		41,619,025
Comverse Technology, Inc. (a)	50,810		1,013,151
Corning, Inc. (a)	356,385		4,654,388
JDS Uniphase Corp. (a)	374,035		1,417,593
Lucent Technologies, Inc. (a)	1,113,048		4,207,321
Motorola, Inc.	608,827		11,111,093
QLogic Corp. (a)	24,213		643,824
QUALCOMM, Inc.	210,421		15,356,525
Scientific-Atlanta, Inc.	39,780		1,372,410
Tellabs, Inc. (a)	107,989		943,824
			86,138,733
Computers & Peripherals - 3.6%
Apple Computer, Inc. (a)	98,704		3,211,828
Dell, Inc. (a)	655,263		23,471,521
EMC Corp. (a)	634,726		7,235,876
Gateway, Inc. (a)	96,717		435,227
Hewlett-Packard Co.	791,969		16,710,546
International Business Machines Corp.	437,720		38,585,018
Lexmark International, Inc. Class A (a)	33,745		3,257,405
NCR Corp. (a)	24,569		1,218,377
Network Appliance, Inc. (a)	90,256		1,943,212
Sun Microsystems, Inc. (a)	863,839		3,749,061
			99,818,071
Electronic Equipment & Instruments - 0.5%
Agilent Technologies, Inc. (a)	125,041		3,661,200
Jabil Circuit, Inc. (a)	52,131		1,312,659
Molex, Inc.	49,250		1,579,940
PerkinElmer, Inc.	33,169		664,707
Sanmina-SCI Corp. (a)	135,291		1,231,148
Solectron Corp. (a)	249,698		1,615,546
Symbol Technologies, Inc.	60,904		897,725
Tektronix, Inc.	21,981		747,794
Thermo Electron Corp. (a)	43,040		1,323,050
Waters Corp. (a)	31,041		1,483,139
			14,516,908
Internet Software & Services - 0.4%
Yahoo!, Inc. (a)	349,769		12,707,108
IT Services - 1.2%
Affiliated Computer Services, Inc. Class A (a)	35,330		1,870,370
Automatic Data Processing, Inc.	153,355		6,422,507
Computer Sciences Corp. (a)	48,717		2,261,930
Convergys Corp. (a)	37,220		573,188
Electronic Data Systems Corp.	125,802		2,409,108
First Data Corp.	226,597		10,088,098
Fiserv, Inc. (a)	50,633		1,969,117
Paychex, Inc.	98,085		3,323,120
Sabre Holdings Corp. Class A	36,113		1,000,691
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
IT Services - continued
SunGard Data Systems, Inc. (a)	75,348		$ 1,959,048
Unisys Corp. (a)	86,568		1,201,564
			33,078,741
Office Electronics - 0.1%
Xerox Corp. (a)	207,837		3,013,637
Semiconductors & Semiconductor Equipment - 3.6%
Advanced Micro Devices, Inc. (a)	91,832		1,460,129
Altera Corp. (a)	97,224		2,160,317
Analog Devices, Inc.	97,617		4,595,808
Applied Materials, Inc. (a)	437,837		8,590,362
Applied Micro Circuits Corp. (a)	80,965		430,734
Broadcom Corp. Class A (a)	81,577		3,815,356
Intel Corp.	1,679,852		46,363,915
KLA-Tencor Corp. (a)	51,054		2,521,047
Linear Technology Corp.	80,361		3,171,849
LSI Logic Corp. (a)	99,240		756,209
Maxim Integrated Products, Inc.	83,691		4,387,082
Micron Technology, Inc. (a)	158,567		2,427,661
National Semiconductor Corp. (a)	93,178		2,048,984
Novellus Systems, Inc. (a)	38,401		1,207,327
NVIDIA Corp. (a)	43,095		883,448
PMC-Sierra, Inc. (a)	45,869		658,220
Teradyne, Inc. (a)	50,379		1,143,603
Texas Instruments, Inc.	449,597		10,871,255
Xilinx, Inc.	90,150		3,002,897
			100,496,203
Software - 4.5%
Adobe Systems, Inc.	62,005		2,883,233
Autodesk, Inc.	29,478		1,261,953
BMC Software, Inc. (a)	57,869		1,070,577
Citrix Systems, Inc. (a)	44,206		900,034
Computer Associates International, Inc.	151,884		4,261,865
Compuware Corp. (a)	100,298		661,967
Electronic Arts, Inc. (a)	78,615		4,288,448
Intuit, Inc. (a)	49,749		1,919,316
Mercury Interactive Corp. (a)	23,946		1,193,229
Microsoft Corp.	2,803,570		80,069,959
Novell, Inc. (a)	100,428		842,591
Oracle Corp. (a)	1,349,229		16,096,302
Parametric Technology Corp. (a)	69,623		348,115
PeopleSoft, Inc. (a)	94,765		1,753,153
Siebel Systems, Inc. (a)	130,529		1,394,050
Symantec Corp. (a)	80,989		3,545,698
VERITAS Software Corp. (a)	112,157		3,106,749
			125,597,239
TOTAL INFORMATION TECHNOLOGY			475,366,640
	Shares		Value (Note 1)
MATERIALS - 2.9%
Chemicals - 1.5%
Air Products & Chemicals, Inc.	59,031		$ 3,096,176
Dow Chemical Co.	243,141		9,895,839
E.I. du Pont de Nemours & Co.	259,783		11,539,561
Eastman Chemical Co.	20,110		929,685
Ecolab, Inc.	66,736		2,115,531
Engelhard Corp.	32,275		1,042,805
Great Lakes Chemical Corp.	13,180		356,651
Hercules, Inc. (a)	28,559		348,134
International Flavors & Fragrances, Inc.	24,507		916,562
Monsanto Co.	68,976		2,655,576
PPG Industries, Inc.	44,561		2,784,617
Praxair, Inc.	84,401		3,368,444
Rohm & Haas Co.	58,209		2,420,330
Sigma Aldrich Corp.	17,956		1,070,357
			42,540,268
Construction Materials - 0.0%
Vulcan Materials Co.	26,519		1,260,978
Containers & Packaging - 0.2%
Ball Corp.	14,638		1,054,668
Bemis Co., Inc.	27,770		784,503
Pactiv Corp. (a)	39,784		992,213
Sealed Air Corp. (a)	21,901		1,166,666
Temple-Inland, Inc.	14,376		995,538
			4,993,588
Metals & Mining - 0.7%
Alcoa, Inc.	225,801		7,458,207
Allegheny Technologies, Inc.	21,109		381,017
Freeport-McMoRan Copper & Gold, Inc. Class B	45,983		1,524,336
Newmont Mining Corp.	115,069		4,460,074
Nucor Corp.	20,500		1,573,580
Phelps Dodge Corp.	24,283		1,882,175
United States Steel Corp.	29,426		1,033,441
Worthington Industries, Inc.	22,520		462,336
			18,775,166
Paper & Forest Products - 0.5%
Georgia-Pacific Corp.	66,216		2,448,668
International Paper Co.	126,088		5,636,134
Louisiana-Pacific Corp.	28,258		668,302
MeadWestvaco Corp.	52,342		1,538,331
Weyerhaeuser Co.	62,631		3,953,269
			14,244,704
TOTAL MATERIALS			81,814,704
TELECOMMUNICATION SERVICES - 3.4%
Diversified Telecommunication Services - 2.8%
ALLTEL Corp.	80,038		4,051,524
AT&T Corp.	206,191		3,016,574
BellSouth Corp.	476,414		12,491,575
Common Stocks - continued
	Shares		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
CenturyTel, Inc.	36,067		$ 1,083,453
Citizens Communications Co. (a)	74,654		903,313
Qwest Communications International, Inc. (a)	463,425		1,663,696
SBC Communications, Inc.	860,152		20,858,686
Sprint Corp. - FON Group	370,439		6,519,726
Verizon Communications, Inc.	719,498		26,038,633
			76,627,180
Wireless Telecommunication Services - 0.6%
AT&T Wireless Services, Inc. (a)	708,343		10,143,472
Nextel Communications, Inc. Class A (a)	288,236		7,684,372
			17,827,844
TOTAL TELECOMMUNICATION SERVICES			94,455,024
UTILITIES - 2.6%
Electric Utilities - 1.8%
Allegheny Energy, Inc. (a)	32,976		508,160
Ameren Corp.	47,436		2,037,851
American Electric Power Co., Inc.	102,756		3,288,192
CenterPoint Energy, Inc.	79,783		917,505
Cinergy Corp.	46,723		1,775,474
CMS Energy Corp. (a)	42,476		387,806
Consolidated Edison, Inc.	62,577		2,488,062
DTE Energy Co.	45,046		1,826,165
Edison International	84,619		2,163,708
Entergy Corp.	59,806		3,349,734
Exelon Corp.	171,667		5,714,794
FirstEnergy Corp.	85,664		3,204,690
FPL Group, Inc.	47,999		3,069,536
PG&E Corp. (a)	108,832		3,040,766
Pinnacle West Capital Corp.	23,728		958,374
PPL Corp.	46,183		2,119,800
Progress Energy, Inc.	64,041		2,821,006
Southern Co.	191,532		5,583,158
TECO Energy, Inc.	48,924		586,599
TXU Corp.	84,109		3,407,256
Xcel Energy, Inc.	103,703		1,732,877
			50,981,513
Gas Utilities - 0.1%
KeySpan Corp.	41,598		1,526,647
Nicor, Inc.	11,443		388,719
NiSource, Inc.	68,411		1,410,635
Peoples Energy Corp.	9,750		410,963
			3,736,964
Multi-Utilities & Unregulated Power - 0.7%
AES Corp. (a)	165,484		1,643,256
Calpine Corp. (a)	108,054		466,793
	Shares		Value (Note 1)
Constellation Energy Group, Inc.	43,760		$ 1,658,504
Dominion Resources, Inc.	84,806		5,349,562
Duke Energy Corp.	237,611		4,821,127
Dynegy, Inc. Class A (a)	98,423		419,282
Public Service Enterprise Group, Inc.	61,450		2,459,844
Sempra Energy	59,672		2,054,507
			18,872,875
TOTAL UTILITIES			73,591,352
TOTAL COMMON STOCKS (Cost $1,861,802,072)		2,764,905,810

U.S. Treasury Obligations - 0.2%
	Principal Amount
U.S. Treasury Bills, yield at date of purchase 0.9% to 1.02% 7/8/04 (c) (Cost $4,499,049)	$ 4,500,000	4,499,127

Money Market Funds - 3.3%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	18,827,556		18,827,556
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	73,984,998		73,984,998
TOTAL MONEY MARKET FUNDS (Cost $92,812,554)			92,812,554
TOTAL INVESTMENT PORTFOLIO - 102.4% (Cost $1,959,113,675)			2,862,217,491
NET OTHER ASSETS - (2.4)%			(67,919,837)
NET ASSETS - 100%		$ 2,794,297,654

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/ (Depreciation)
Purchased
Equity Index Contracts
59 S&P 500 E-Mini Index Contracts	Sept. 2004	$ 3,364,180	$ 40,445
60 S&P 500 Index Contracts	Sept. 2004	17,106,000	105,888
		$ 20,470,180	$ 146,333

The face value of futures purchased as a percentage of net assets - 0.7%

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) 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 $2,499,515.

Other Information

Purchases and sales of securities, other than short-term securities and in-kind transactions, aggregated $77,428,223 and $126,272,940, respectively.

Securities delivered on an in-kind basis aggregated $353,017,055.

Realized gain/loss of $31,110,779, which is included in the accompanying Statement of Operations, is related to securities sold on an in-kind basis and is not taxable to the fund. This will result in a reclassification to paid-in capital.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $3,355,333. The weighted average interest rate was 1.13%. At period end there were no interfund loans outstanding.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $212,374,000 of which $12,929,000, $42,621,000, $122,807,000 and $34,017,000 will expire on December 31, 2008, 2009, 2010 and 2011, respectively.

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

Index 500 Portfolio

Fidelity Variable Insurance Products: Index 500 Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $71,631,606) (cost $1,959,113,675) - See accompanying schedule		$ 2,862,217,491
Receivable for investments sold		984,467
Receivable for fund shares sold		9,680,730
Dividends receivable		3,411,209
Interest receivable		24,956
Receivable for daily variation on futures contracts		109,314
Prepaid expenses		6,953
Receivable from investment adviser for expense reductions		133,603
Other affiliated receivables		3,432
Other receivables		27,818
Total assets		2,876,599,973
Liabilities
Payable for investments purchased	$ 6,901,452
Payable for fund shares redeemed	475,542
Accrued management fee	617,672
Distribution fees payable	17,970
Other affiliated payables	239,656
Other payables and accrued expenses	65,029
Collateral on securities loaned, at value	73,984,998
Total liabilities		82,302,319
Net Assets		$ 2,794,297,654
Net Assets consist of:
Paid in capital		$ 2,048,896,894
Undistributed net investment income		20,559,867
Accumulated undistributed net realized gain (loss) on investments		(178,409,256)
Net unrealized appreciation (depreciation) on investments		903,250,149
Net Assets		$ 2,794,297,654
Initial Class: Net Asset Value, offering price and redemption price per share ($2,693,333,793 ÷ 20,932,906 shares)		$ 128.67
Service Class: Net Asset Value, offering price and redemption price per share ($18,376,255 ÷ 143,113 shares)		$ 128.40
Service Class 2: Net Asset Value, offering price and redemption price per share ($82,587,606 ÷ 645,978 shares)		$ 127.85

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 24,954,273
Interest		147,341
Security lending		47,946
Total income		25,149,560
Expenses
Management fee	$ 3,761,768
Transfer agent fees	1,018,246
Distribution fees	99,607
Accounting and security lending fees	395,780
Non-interested trustees' compensation	7,455
Appreciation in deferred trustee compensation account	1,597
Custodian fees and expenses	32,717
Audit	26,678
Legal	2,218
Interest	631
Miscellaneous	64,753
Total expenses before reductions	5,411,450
Expense reductions	(918,014)	4,493,436
Net investment income (loss)		20,656,124
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	33,343,744
Futures contracts	1,683,633
Total net realized gain (loss)		35,027,377
Change in net unrealized appreciation (depreciation) on: Investment securities	43,390,453
Futures contracts	(569,006)
Total change in net unrealized appreciation (depreciation)		42,821,447
Net gain (loss)		77,848,824
Net increase (decrease) in net assets resulting from operations		$ 98,504,948

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

Semiannual Report

Fund Name
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 20,656,124	$ 40,789,727
Net realized gain (loss)	35,027,377	(34,078,673)
Change in net unrealized appreciation (depreciation)	42,821,447	686,179,235
Net increase (decrease) in net assets resulting from operations	98,504,948	692,890,289
Distributions to shareholders from net investment income	(40,638,037)	(39,819,617)
Share transactions - net increase (decrease)	(375,358,200)	(77,062,400)
Total increase (decrease) in net assets	(317,491,289)	576,008,272
Net Assets
Beginning of period	3,111,788,943	2,535,780,671
End of period (including undistributed net investment income of $20,559,867 and undistributed net investment income of $40,612,689, respectively)	$ 2,794,297,654	$ 3,111,788,943

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	1,186,045	27,944	289,797
Reinvested	308,386	1,581	6,195
Redeemed	(4,596,119)	(8,800)	(167,466)
Net increase (decrease)	(3,101,688)	20,725	128,526
Dollars Sold	$ 151,266,847	$ 3,541,858	$ 36,679,498
Reinvested	39,642,996	202,925	792,116
Redeemed	(585,274,591)	(1,115,068)	(21,094,781)
Net increase (decrease)	$ (394,364,748)	$ 2,629,715	$ 16,376,833
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	3,347,458	58,155	492,355
Reinvested	423,444	1,303	4,503
Redeemed	(4,729,004)	(12,207)	(291,962)
Net increase (decrease)	(958,102)	47,251	204,896
Dollars Sold	$ 362,063,909	$ 6,250,927	$ 52,922,248
Reinvested	39,282,873	120,726	415,977
Redeemed	(506,013,307)	(1,274,037)	(30,831,716)
Net increase (decrease)	$ (104,666,525)	$ 5,097,616	$ 22,506,509
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 39,642,996	$ 202,925	$ 792,116
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 39,282,914	$ 120,726	$ 415,977

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

Index 500 Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 126.13	$ 99.92	$ 130.08	$ 149.53	$ 167.41	$ 141.24
Income from Investment Operations
Net investment income (loss) E	.84	1.63	1.51	1.48	1.51	1.64
Net realized and unrealized gain (loss)	3.35	26.18	(30.18)	(19.34)	(16.99)	26.88
Total from investment operations	4.19	27.81	(28.67)	(17.86)	(15.48)	28.52
Distributions from net investment income	(1.65)	(1.60)	(1.49)	(1.59)	(1.67)	(1.40)
Distributions from net realized gain	-	-	-	-	(.73)	(.95)
Total distributions	(1.65)	(1.60)	(1.49)	(1.59)	(2.40)	(2.35)
Net asset value, end of period	$ 128.67	$ 126.13	$ 99.92	$ 130.08	$ 149.53	$ 167.41
Total Return B, C, D	3.32%	28.41%	(22.25)%	(12.09)%	(9.30)%	20.52%
Ratios to Average Net Assets F
Expenses before expense reductions	.34% A	.34%	.33%	.35%	.33%	.34%
Expenses net of voluntary waivers, if any	.28% A	.28%	.28%	.28%	.28%	.28%
Expenses net of all reductions	.28% A	.28%	.28%	.28%	.28%	.28%
Net investment income (loss)	1.33% A	1.50%	1.34%	1.09%	.94%	1.09%
Supplemental Data
Net assets, end of period (000 omitted)	$ 2,693,334	$ 3,031,540	$ 2,497,252	$ 3,475,357	$ 4,148,728	$ 5,538,735
Portfolio turnover rate	5% A	6%	7%	9%	10%	8%
A Annualized B Total returns for periods of less than one year are not annualized. C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. D Total returns would have been lower had certain expenses not been reduced during the periods shown. E Calculated based on average shares outstanding during the period. 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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 125.86	$ 99.74	$ 129.94	$ 149.46	$ 166.69
Income from Investment Operations
Net investment income (loss) E	.78	1.54	1.34	1.24	.65
Net realized and unrealized gain (loss)	3.33	26.11	(30.07)	(19.23)	(17.88)
Total from investment operations	4.11	27.65	(28.73)	(17.99)	(17.23)
Distributions from net investment income	(1.57)	(1.53)	(1.47)	(1.53)	-
Net asset value, end of period	$ 128.40	$ 125.86	$ 99.74	$ 129.94	$ 149.46
Total Return B, C, D	3.27%	28.27%	(22.32)%	(12.18)%	(10.34)%
Ratios to Average Net Assets G
Expenses before expense reductions	.46% A	.46%	.47%	.56%	.43% A
Expenses net of voluntary waivers, if any	.38% A	.38%	.38%	.38%	.38% A
Expenses net of all reductions	.38% A	.38%	.38%	.38%	.38% A
Net investment income (loss)	1.23% A	1.40%	1.24%	.99%	.84% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 18,376	$ 15,404	$ 7,494	$ 3,278	$ 90
Portfolio turnover rate	5% A	6%	7%	9%	10%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period July 7, 2000 (commencement of sale of shares) to December 31, 2000. ^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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 125.31	$ 99.29	$ 129.43	$ 149.18	$ 163.25
Income from Investment Operations
Net investment income (loss) E	.68	1.37	1.19	1.09	1.04
Net realized and unrealized gain (loss)	3.32	26.03	(30.00)	(19.23)	(12.71)
Total from investment operations	4.00	27.40	(28.81)	(18.14)	(11.67)
Distributions from net investment income	(1.46)	(1.38)	(1.33)	(1.61)	(1.67)
Distributions from net realized gain	-	-	-	-	(.73)
Total distributions	(1.46)	(1.38)	(1.33)	(1.61)	(2.40)
Net asset value, end of period	$ 127.85	$ 125.31	$ 99.29	$ 129.43	$ 149.18
Total Return B, C, D	3.19%	28.09%	(22.45)%	(12.31)%	(7.21)%
Ratios to Average Net Assets G
Expenses before expense reductions	.60% A	.60%	.60%	.61%	.76% A
Expenses net of voluntary waivers, if any	.53% A	.53%	.53%	.53%	.53% A
Expenses net of all reductions	.53% A	.53%	.53%	.53%	.53% A
Net investment income (loss)	1.08% A	1.25%	1.09%	.84%	.69% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 82,588	$ 64,844	$ 31,035	$ 19,338	$ 323
Portfolio turnover rate	5% A	6%	7%	9%	10%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^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.

Index 500 Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Vodafone Group PLC (United Kingdom)	3.9
Deutsche Telekom AG sponsored ADR (Germany)	3.4
Total SA Series B (France)	2.8
HSBC Holdings PLC (United Kingdom) (Reg.) (United Kingdom)	2.0
Allianz AG (Reg.) (Germany)	1.8
	13.9
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	24.6
Information Technology	12.9
Telecommunication Services	12.2
Consumer Discretionary	12.1
Energy	9.5
Top Five Countries as of June 30, 2004
(excluding cash equivalents)	% of fund's net assets
Japan	18.6
United Kingdom	17.8
France	10.4
Germany	10.2
Switzerland	6.2

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 91.0%
	Shares		Value (Note 1)
Australia - 1.7%
CSL Ltd.	698,840		$ 10,892,529
Newcrest Mining Ltd.	149,871		1,443,487
News Corp. Ltd. sponsored ADR	693,600		22,805,568
TOTAL AUSTRALIA			35,141,584
Belgium - 0.2%
Fortis	215,200		4,776,734
Bermuda - 0.1%
Golar LNG Ltd. (a)	101,400		1,565,944
Brazil - 0.1%
Petroleo Brasileiro SA Petrobras sponsored ADR	47,300		1,327,711
Canada - 3.7%
Agnico-Eagle Mines Ltd.	99,100		1,320,194
Bombardier, Inc. Class B (sub. vtg.)	961,400		2,897,390
Canadian Natural Resources Ltd.	229,700		6,896,683
EnCana Corp.	565,100		24,410,422
Kinross Gold Corp. (a)	975,100		5,424,126
Meridian Gold, Inc. (a)	119,300		1,543,682
Petro-Canada	26,900		1,162,595
Precision Drilling Corp. (a)	94,800		4,529,278
Talisman Energy, Inc.	1,272,100		27,751,788
Wheaton River Minerals Ltd. (a)	835,200		2,341,741
TOTAL CANADA			78,277,899
China - 0.6%
BYD Co. Ltd. (H Shares)	683,600		2,020,177
China Telecom Corp. Ltd. sponsored ADR	200,280		7,067,881
Global Bio-Chem Technology Group Co. Ltd.	4,130,000		2,991,679
Global Bio-Chem Technology Group Co. Ltd. warrants 5/31/07 (a)	516,250		33,756
People's Food Holdings Ltd.	1,700,000		1,118,226
TOTAL CHINA			13,231,719
Denmark - 1.0%
Coloplast AS Series B	27,200		2,571,007
Danske Bank AS	163,300		3,878,971
Novo Nordisk AS Series B	110,100		5,682,243
TDC AS	283,900		9,247,785
TOTAL DENMARK			21,380,006
Finland - 0.5%
Nokia Corp.	682,200		9,919,188
France - 10.4%
Alcatel SA sponsored ADR (a)	813,300		12,598,017
Assurances Generales France SA (Bearer)	51,100		3,111,715
AXA SA	710,604		15,732,773
BNP Paribas SA	376,602		23,217,807
Business Objects SA sponsored ADR (a)	158,400		3,584,592
Credit Agricole SA	113,400		2,766,053
	Shares		Value (Note 1)
Dassault Systemes SA	113,914		$ 5,294,604
France Telecom SA	709,661		18,649,891
L'Oreal SA	162,395		13,002,438
Pernod-Ricard	96,600		12,382,184
Peugeot Citroen SA	47,200		2,634,756
Sanofi-Synthelabo SA sponsored ADR	518,200		16,577,218
Television Francaise 1 SA	96,500		3,047,030
Total SA Series B	308,800		59,339,008
Vivendi Universal SA sponsored ADR (a)	928,000		25,891,200
TOTAL FRANCE			217,829,286
Germany - 8.8%
Adidas-Salomon AG	75,759		9,066,788
Allianz AG (Reg.)	350,800		38,090,211
Altana AG sponsored ADR	31,600		1,908,008
BASF AG	298,725		16,086,341
Deutsche Bank AG (NY Shares)	56,700		4,485,537
Deutsche Boerse AG	139,239		7,093,210
Deutsche Telekom AG sponsored ADR (a)	4,044,300		71,624,553
E.ON AG	72,544		5,258,715
Fresenius Medical Care AG	182,200		13,552,656
Infineon Technologies AG sponsored ADR (a)	185,800		2,526,880
Muenchener Rueckversicherungs-Gesellschaft AG (Reg.)	59,800		6,498,248
RWE AG	164,060		7,733,385
TOTAL GERMANY			183,924,532
Greece - 0.2%
Cosmote Mobile Telecommunications SA	159,500		2,509,388
Greek Organization of Football Prognostics SA	129,780		2,456,501
TOTAL GREECE			4,965,889
Hong Kong - 1.2%
Esprit Holdings Ltd.	221,000		988,859
Hong Kong Exchanges & Clearing Ltd.	1,952,000		4,004,205
Hutchison Whampoa Ltd.	950,600		6,489,840
Techtronic Industries Co. Ltd.	6,544,000		10,445,499
Television Broadcasts Ltd.	511,000		2,188,184
TOTAL HONG KONG			24,116,587
India - 2.7%
Bank of Baroda	501,743		1,637,554
Cipla Ltd.	633,000		2,918,891
Dr. Reddy's Laboratories Ltd.	151,900		2,427,592
Housing Development Finance Corp. Ltd.	1,107,583		12,457,448
I-Flex Solutions Ltd.	429,464		5,420,728
Infosys Technologies Ltd.	135,558		16,287,895
Reliance Industries Ltd.	367,900		3,438,135
Satyam Computer Services Ltd.	1,219,887		8,106,046
Common Stocks - continued
	Shares		Value (Note 1)
India - continued
State Bank of India	179,400		$ 1,760,364
Wipro Ltd.	86,289		998,681
TOTAL INDIA			55,453,334
Indonesia - 0.1%
PT Bank Mandiri Persero Tbk	14,066,000		1,758,250
Italy - 0.3%
ENI Spa	328,286		6,588,043
Japan - 18.0%
Advantest Corp.	63,200		4,296,021
Canon, Inc.	243,600		13,008,240
Daiwa Securities Group, Inc.	1,417,000		10,330,416
FamilyMart Co. Ltd.	276,700		9,159,907
Honda Motor Co. Ltd.	157,000		7,636,480
Ito Yokado Ltd.	622,000		27,010,906
JAFCO Co. Ltd.	247,800		19,194,561
KDDI Corp.	3,889		22,565,992
Kyocera Corp.	137,700		11,814,660
Millea Holdings, Inc.	529		7,968,977
Mizuho Financial Group, Inc.	5,570		25,638,481
Murata Manufacturing Co. Ltd.	181,500		10,497,815
Nikko Cordial Corp.	3,191,000		15,696,917
Nippon System Development Co. Ltd.	102,000		2,257,403
Nitto Denko Corp.	219,600		11,394,583
Nomura Holdings, Inc.	1,729,000		25,848,550
Nomura Research Institute Ltd.	20,200		2,184,555
Oriental Land Co. Ltd.	38,700		2,580,251
ORIX Corp.	92,700		10,775,108
Rohm Co. Ltd.	62,600		7,602,377
Seiyu Ltd. (a)	1,091,000		3,631,948
SMC Corp.	35,400		3,884,339
Softbank Corp.	94,200		4,204,594
Sumitomo Electric Industries Ltd.	852,000		8,817,930
Sumitomo Mitsui Financial Group, Inc.	4,997		34,757,044
TDK Corp.	98,500		7,584,002
Tokyo Electron Ltd.	206,800		11,768,845
Toyota Motor Corp.	631,800		25,783,758
UFJ Holdings, Inc. (a)	6,564		29,420,327
TOTAL JAPAN			377,314,987
Korea (South) - 2.6%
Honam Petrochemical Corp.	118,960		4,059,788
Kookmin Bank (a)	167,140		5,197,338
LG Electronics, Inc.	254,140		12,063,122
Samsung Electro-Mechanics Co. Ltd. (a)	183,200		5,196,883
Samsung Electronics Co. Ltd.	60,640		25,054,383
Shinhan Financial Group Co. Ltd.	261,240		3,801,501
TOTAL KOREA (SOUTH)			55,373,015
Malaysia - 0.1%
Public Bank BHD (For. Reg.)	1,452,250		2,522,329
	Shares		Value (Note 1)
Netherlands - 5.1%
Aegon NV	72,300		$ 873,835
ASML Holding NV (a)	1,780,174		30,458,777
EADS NV	105,300		2,938,338
ING Groep NV (Certificaten Van Aandelen)	832,324		19,726,079
Koninklijke Ahold NV (a)	461,300		3,658,109
Koninklijke KPN NV	845,606		6,455,945
Unilever NV (NY Shares)	237,400		16,264,274
VNU NV	547,525		15,939,467
Wolters Kluwer NV (Certificaten Van Aandelen)	514,275		9,357,970
TOTAL NETHERLANDS			105,672,794
Peru - 0.1%
Compania de Minas Buenaventura SA sponsored ADR	52,500		1,160,250
Portugal - 0.2%
Portugal Telecom SGPS SA (Reg.)	443,150		4,793,931
Russia - 0.8%
JSC MMC 'Norilsk Nickel' sponsored ADR	75,800		4,153,840
Lukoil Oil Co. sponsored ADR	39,300		4,106,850
OAO Gazprom sponsored ADR	136,600		3,920,420
YUKOS Corp. sponsored ADR	132,403		4,210,415
TOTAL RUSSIA			16,391,525
South Africa - 0.3%
Harmony Gold Mining Co. Ltd. sponsored ADR	172,600		1,827,834
MTN Group Ltd. (a)	904,583		4,190,267
TOTAL SOUTH AFRICA			6,018,101
Spain - 2.2%
Banco Bilbao Vizcaya Argentaria SA	184,900		2,476,034
Banco Popular Espanol SA (Reg.)	174,700		9,890,436
Banco Santander Central Hispano SA	1,208,868		12,693,114
Telefonica SA	1,446,462		21,518,533
TOTAL SPAIN			46,578,117
Sweden - 1.4%
Skandia Foersaekrings AB	355,200		1,474,918
Skandinaviska Enskilda Banken AB (A Shares)	269,900		3,915,342
Telefonaktiebolaget LM Ericsson ADR (a)	784,500		23,472,240
TOTAL SWEDEN			28,862,500
Switzerland - 6.2%
Actelion Ltd. (Reg.) (a)	22,893		2,638,540
Adecco SA	96,840		4,836,574
Compagnie Financiere Richemont unit	312,115		8,168,849
Credit Suisse Group (Reg.)	545,503		19,534,462
Novartis AG (Reg.)	782,531		34,822,629
Roche Holding AG (participation certificate)	242,968		24,114,000
Common Stocks - continued
	Shares		Value (Note 1)
Switzerland - continued
UBS AG (Reg.)	411,514		$ 29,242,185
Zurich Financial Services AG	43,940		6,954,646
TOTAL SWITZERLAND			130,311,885
Taiwan - 2.1%
High Tech Computer Corp.	639,000		2,798,123
Hon Hai Precision Industries Co. Ltd.	1,834,880		6,832,291
Quanta Computer, Inc.	2,701,000		5,752,800
Taishin Financial Holdings Co. Ltd.	1,668,000		1,376,336
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR	312,200		2,594,382
United Microelectronics Corp. (a)	21,867,000		16,284,629
United Microelectronics Corp. sponsored ADR (a)	605,100		2,607,981
Yageo Corp. (a)	9,414,000		4,851,421
TOTAL TAIWAN			43,097,963
United Kingdom - 17.3%
3i Group PLC	663,873		7,398,085
Abbey National PLC	616,800		5,759,722
AstraZeneca PLC (United Kingdom)	497,100		22,687,644
Aviva PLC	266,300		2,756,840
BHP Billiton PLC	593,577		5,167,580
BP PLC	2,634,894		23,525,212
British Sky Broadcasting Group PLC (BSkyB)	310,800		3,517,220
Centrica PLC	1,630,900		6,661,497
Dixons Group PLC	5,328,300		16,019,846
Enterprise Inns PLC	281,200		2,941,788
Hilton Group PLC	2,014,800		10,117,407
HSBC Holdings PLC (United Kingdom) (Reg.)	2,842,849		42,591,564
ITV PLC	2,419,372		5,084,085
Kesa Electricals PLC	1,433,748		7,545,263
Lloyds TSB Group PLC	248,850		1,954,781
Man Group PLC	611,067		15,876,151
mmO2 PLC (a)	2,395,800		4,042,897
Prudential PLC	552,578		4,770,435
Reckitt Benckiser PLC	331,800		9,423,397
Reuters Group PLC	1,006,400		6,784,019
Rexam PLC	298,902		2,437,683
Rio Tinto PLC (Reg.)	642,180		15,741,437
Royal Bank of Scotland Group PLC	243,400		7,032,330
Shire Pharmaceuticals Group PLC sponsored ADR (a)	369,700		9,885,778
Smith & Nephew PLC	1,796,100		19,854,089
Tesco PLC	1,548,141		7,499,431
Vodafone Group PLC	37,316,904		82,470,360
William Hill PLC	189,500		1,910,061
	Shares		Value (Note 1)
Xstrata PLC	367,500		$ 4,927,799
Yell Group PLC	1,044,000		6,548,366
TOTAL UNITED KINGDOM			362,932,767
United States of America - 3.0%
ENSCO International, Inc.	288,900		8,406,990
Fox Entertainment Group, Inc. Class A (a)	83,900		2,240,130
Freeport-McMoRan Copper & Gold, Inc. Class B	285,900		9,477,585
Grant Prideco, Inc. (a)	373,900		6,902,194
Nabors Industries Ltd. (a)	110,200		4,983,244
Newmont Mining Corp.	31,700		1,228,692
NTL, Inc. (a)	230,100		13,258,362
Pride International, Inc. (a)	175,400		3,001,094
Synthes, Inc.	77,867		8,896,682
Weatherford International Ltd. (a)	113,100		5,087,238
Wellcare Group, Inc.	1,300		22,100
TOTAL UNITED STATES OF AMERICA			63,504,311
TOTAL COMMON STOCKS (Cost $1,535,585,706)		1,904,791,181
Nonconvertible Preferred Stocks - 0.8%
Germany - 0.8%
Fresenius Medical Care AG	129,900		6,969,161
Porsche AG (non-vtg.)	14,600		9,794,278
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $12,028,885)		16,763,439

Nonconvertible Bonds - 0.5%
		Principal Amount
United Kingdom - 0.5%
Telewest Communications PLC yankee:
0% 2/1/10 (c)(d)		$ 630,000		270,900
9.25% 4/15/09 (c)		1,680,000		772,800
9.875% 2/1/10 (c)		4,295,000		2,405,200
Telewest PLC:
11% 10/1/07 (c)		8,260,000		4,914,700
yankee 9.625% 10/1/06 (c)		2,960,000		1,687,200
TOTAL NONCONVERTIBLE BONDS (Cost $8,459,875)			10,050,800
Government Obligations - 1.2%
Germany - 0.6%
German Federal Republic:
4.25% 7/4/14	EUR	5,000,000		6,063,729
- principal STRIPS 0% 1/4/14	EUR	7,440,000		6,043,348
TOTAL GERMANY				12,107,077
Government Obligations - continued
		Principal Amount		Value (Note 1)
Japan - 0.6%
Japan Government 0.1% 8/20/05	JPY	1,352,700,000		$ 12,433,703
TOTAL GOVERNMENT OBLIGATIONS (Cost $24,480,193)			24,540,780

Money Market Funds - 12.5%
	Shares
Fidelity Cash Central Fund, 1.16% (b)	198,108,075		198,108,075
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	63,694,061		63,694,061
TOTAL MONEY MARKET FUNDS (Cost $261,802,136)		261,802,136
TOTAL INVESTMENT PORTFOLIO - 106.0% (Cost $1,842,356,795)			2,217,948,336
NET OTHER ASSETS - (6.0)%			(124,745,779)
NET ASSETS - 100%		$ 2,093,202,557

Currency Abbreviations
EUR	-	European Monetary Unit
JPY	-	Japanese yen

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $870,741,019 and $787,320,568, 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 $502 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $606,700,000 of which $367,608,000, $191,786,000 and $47,306,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Overseas Portfolio

Fidelity Variable Insurance Products: Overseas Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $61,286,817) (cost $1,842,356,795) - See accompanying schedule		$ 2,217,948,336
Cash		5,534
Foreign currency held at value (cost $ 3,891,360)		3,846,270
Receivable for investments sold		536,942
Receivable for fund shares sold		5,995,097
Dividends receivable		2,338,233
Interest receivable		184,816
Prepaid expenses		3,732
Other affiliated receivables		8,536
Other receivables		383,905
Total assets		2,231,251,401
Liabilities
Payable for investments purchased	$ 67,792,625
Payable for fund shares redeemed	4,726,022
Accrued management fee	1,251,048
Distribution fees payable	74,700
Other affiliated payables	235,130
Other payables and accrued expenses	275,258
Collateral on securities loaned, at value	63,694,061
Total liabilities		138,048,844
Net Assets		$ 2,093,202,557
Net Assets consist of:
Paid in capital		$ 2,274,934,071
Distributions in excess of net investment income		(2,882,395)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(554,287,061)
Net unrealized appreciation (depreci- ation) on investments and assets and liabilities in foreign currencies		375,437,942
Net Assets		$ 2,093,202,557
Calculation of Maximum Offering Price Initial Class: Net Asset Value, offering price and redemption price per share ($1,430,323,652 ÷ 91,840,585 shares)		$ 15.57
Service Class: Net Asset Value, offering price and redemption price per share ($276,536,907 ÷ 17,821,383 shares)		$ 15.52
Service Class 2: Net Asset Value, offering price and redemption price per share ($217,429,253 ÷ 14,043,824 shares)		$ 15.48
Initial Class R: Net Asset Value, offering price and redemption price per share ($81,566,300 ÷ 5,244,063 shares)		$ 15.55
Service Class R: Net Asset Value, offering price and redemption price per share ($72,878,646 ÷ 4,701,272 shares)		$ 15.50
Service Class 2R: Net Asset Value, offering price and redemption price per share ($14,467,799 ÷ 939,385 shares)		$ 15.40

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 20,677,073
Interest		928,505
Security lending		972,053
		22,577,631
Less foreign taxes withheld		(2,419,794)
Total income		20,157,837
Expenses
Management fee	$ 7,508,274
Transfer agent fees	700,898
Distribution fees	406,575
Accounting and security lending fees	488,651
Non-interested trustees' compensation	4,807
Appreciation in deferred trustee compensation account	6,454
Custodian fees and expenses	371,773
Registration fees	195
Audit	33,016
Legal	2,428
Miscellaneous	49,286
Total expenses before reductions	9,572,357
Expense reductions	(384,397)	9,187,960
Net investment income (loss)		10,969,877
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities (net of foreign taxes of $215,094)	65,555,846
Foreign currency transactions	(41,511)
Total net realized gain (loss)		65,514,335
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $3,690,743)	(61,392,641)
Assets and liabilities in foreign currencies	(74,717)
Total change in net unrealized appreciation (depreciation)		(61,467,358)
Net gain (loss)		4,046,977
Net increase (decrease) in net assets resulting from operations		$ 15,016,854

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

Semiannual Report

Fidelity Variable Insurance Products: Overseas Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 10,969,877	$ 12,219,607
Net realized gain (loss)	65,514,335	(23,642,194)
Change in net unrealized appreciation (depreciation)	(61,467,358)	580,158,781
Net increase (decrease) in net assets resulting from operations	15,016,854	568,736,194
Distributions to shareholders from net investment income	(22,557,627)	(11,225,102)
Share transactions - net increase (decrease)	174,447,818	76,831,320
Redemption fees	25,840	30,862
Total increase (decrease) in net assets	166,932,885	634,373,274
Net Assets
Beginning of period	1,926,269,672	1,291,896,398
End of period (including distributions in excess of net investment income of $2,882,395 and undistributed net investment income of $8,430,134, respectively)	$ 2,093,202,557	$ 1,926,269,672

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
Shares Sold	11,075,633	3,058,353	6,755,093	2,950,158	1,213,826	503,458
Reinvested	1,047,651	175,526	101,002	30,931	41,469	4,934
Redeemed	(12,405,150)	(1,292,239)	(1,898,355)	(271,905)	(172,337)	(27,665)
Net increase (decrease)	(281,866)	1,941,640	4,957,740	2,709,184	1,082,958	480,727
Dollars Sold	$ 176,812,653	$ 48,615,520	$ 107,053,104	$ 45,816,556	$ 19,324,001	$ 7,674,161
Reinvested	16,877,656	2,818,947	1,619,063	497,678	665,579	78,704
Redeemed	(195,405,519)	(20,377,386)	(30,204,082)	(4,290,617)	(2,693,039)	(435,161)
Net increase (decrease)	$ (1,715,210)	$ 31,057,081	$ 78,468,085	$ 42,023,617	$ 17,296,541	$ 7,317,704
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
Shares Sold	135,754,582	34,982,458	57,905,822	1,401,445	2,096,259	337,680
Reinvested	891,621	140,448	26,238	15,499	17,531	2,278
Redeemed	(138,456,054)	(35,447,830)	(53,234,293)	(307,443)	(140,438)	(29,586)
Net increase (decrease)	(1,809,851)	(324,924)	4,697,767	1,109,501	1,973,352	310,372
Dollars Sold	$ 1,613,667,675	$ 391,087,076	$ 672,794,854	$ 17,351,785	$ 25,897,371	$ 3,723,543
Reinvested	9,156,952	1,438,187	268,410	159,020	179,341	23,192
Redeemed	(1,637,501,847)	(397,130,238)	(618,521,317)	(3,679,685)	(1,677,969)	(405,030)
Net increase (decrease)	$ (14,677,220)	$ (4,604,975)	$ 54,541,947	$ 13,831,120	$ 24,398,743	$ 3,341,705
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
From net investment income	$ 16,877,656	$ 2,818,947	$ 1,619,063	$ 497,678	$ 665,579	$ 78,704
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2	Initial Class R	Service Class R	Service Class 2R
From net investment income	$ 9,156,952	$ 1,438,187	$ 268,410	$ 159,020	$ 179,341	$ 23,192

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

Overseas Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 15.59	$ 10.98	$ 13.88	$ 20.00	$ 27.44	$ 20.06
Income from Investment Operations
Net investment income (loss) D	.09	.11	.10	.14	.19 E	.24
Net realized and unrealized gain (loss)	.07	4.60	(2.90)	(3.86)	(4.93)	7.95
Total from investment operations	.16	4.71	(2.80)	(3.72)	(4.74)	8.19
Distributions from net investment income	(.18)	(.10)	(.10)	(.93)	(.31)	(.31)
Distributions in excess of net investment income	-	-	-	-	(.06)	-
Distributions from net realized gain	-	-	-	(1.47)	(2.33)	(.50)
Total distributions	(.18)	(.10)	(.10)	(2.40)	(2.70)	(.81)
Redemption fees added to paid in capital D	- G	- G	- G	-	-	-
Net asset value, end of period	$ 15.57	$ 15.59	$ 10.98	$ 13.88	$ 20.00	$ 27.44
Total Return B,C,H	.99%	43.37%	(20.28)%	(21.21)%	(19.07)%	42.55%
Ratios to Average Net Assets F
Expenses before expense reductions	.88% A	.90%	.90%	.92%	.89%	.91%
Expenses net of voluntary waivers, if any	.88% A	.90%	.90%	.92%	.89%	.91%
Expenses net of all reductions	.85% A	.86%	.86%	.87%	.87%	.87%
Net investment income (loss)	1.10% A	.87%	.79%	.91%	.84%	1.10%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,430,324	$ 1,436,137	$ 1,031,489	$ 1,496,873	$ 2,267,507	$ 2,736,851
Portfolio turnover rate	83% A	99%	77%	98%	136%	78%
A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. 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 Investment income per share reflects a special dividend which amounted to $.04 per share. 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. 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. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 15.53	$ 10.94	$ 13.83	$ 19.94	$ 27.39	$ 20.04
Income from Investment Operations
Net investment income (loss) D	.08	.09	.09	.12	.17 E	.22
Net realized and unrealized gain (loss)	.08	4.59	(2.89)	(3.84)	(4.93)	7.94
Total from investment operations	.16	4.68	(2.80)	(3.72)	(4.76)	8.16
Distributions from net investment income	(.17)	(.09)	(.09)	(.92)	(.30)	(.31)
Distributions in excess of net investment income	-	-	-	-	(.06)	-
Distributions from net realized gain	-	-	-	(1.47)	(2.33)	(.50)
Total distributions	(.17)	(.09)	(.09)	(2.39)	(2.69)	(.81)
Redemption fees added to paid in capital D	- G	- G	- G	-	-	-
Net asset value, end of period	$ 15.52	$ 15.53	$ 10.94	$ 13.83	$ 19.94	$ 27.39
Total Return B,C,H	.99%	43.20%	(20.34)%	(21.27)%	(19.18)%	42.44%
Ratios to Average Net Assets F
Expenses before expense reductions	.99% A	1.00%	1.00%	1.03%	.99%	1.01%
Expenses net of voluntary waivers, if any	.99% A	1.00%	1.00%	1.03%	.99%	1.01%
Expenses net of all reductions	.95% A	.96%	.96%	.97%	.97%	.98%
Net investment income (loss)	1.00% A	.77%	.69%	.81%	.74%	1.00%
Supplemental Data
Net assets, end of period (000 omitted)	$ 276,537	$ 246,632	$ 177,322	$ 240,525	$ 257,257	$ 144,371
Portfolio turnover rate	83% A	99%	77%	98%	136%	78%
A Annualized B Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. 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 Investment income per share reflects a special dividend which amounted to $.04 per share. 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. 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. G Amount represents less than $.01 per share. H Total returns for periods of less than one year are not annualized.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 G
Selected Per-Share Data
Net asset value, beginning of period	$ 15.50	$ 10.90	$ 13.81	$ 19.91	$ 26.16
Income from Investment Operations
Net investment income (loss) E	.07	.08	.07	.10	.12 F
Net realized and unrealized gain (loss)	.07	4.58	(2.88)	(3.80)	(3.68)
Total from investment operations	.14	4.66	(2.81)	(3.70)	(3.56)
Distributions from net investment income	(.16)	(.06)	(.10)	(.93)	(.30)
Distributions in excess of net investment income	-	-	-	-	(.06)
Distributions from net realized gain	-	-	-	(1.47)	(2.33)
Total distributions	(.16)	(.06)	(.10)	(2.40)	(2.69)
Redemption fees added to paid in capital E	- I	- I	- I	-	-
Net asset value, end of period	$ 15.48	$ 15.50	$ 10.90	$ 13.81	$ 19.91
Total Return B, C, D	.87%	43.04%	(20.46)%	(21.20)%	(15.50)%
Ratios to Average Net Assets H
Expenses before expense reductions	1.14% A	1.16%	1.16%	1.18%	1.15% A
Expenses net of voluntary waivers, if any	1.14% A	1.16%	1.16%	1.18%	1.15% A
Expenses net of all reductions	1.10% A	1.12%	1.12%	1.12%	1.13% A
Net investment income (loss)	.84% A	.61%	.53%	.65%	.58% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 217,429	$ 140,822	$ 47,824	$ 48,843	$ 12,351
Portfolio turnover rate	83% A	99%	77%	98%	136%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^DTotal returns would have been lower had certain expenses not been reduced during the periods shown. ^ECalculated based on average shares outstanding during the period. ^FInvestment income per share reflects a special dividend which amounted to $.04 per share. ^GFor the period January 12, 2000 (commencement of sale of shares) to December 31, 2000. ^HExpense 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. ^IAmount represents less than $.01 per share.

Financial Highlights - Initial Class R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 15.57	$ 10.98	$ 14.05
Income from Investment Operations
Net investment income (loss) E	.09	.11	.06
Net realized and unrealized gain (loss)	.07	4.59	(3.13)
Total from investment operations	.16	4.70	(3.07)
Distributions from net investment income	(.18)	(.11)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 15.55	$ 15.57	$ 10.98
Total Return B, C, D	.99%	43.32%	(21.85)%
Ratios to Average Net Assets G
Expenses before expense reductions	.89% A	.90%	.91% A
Expenses net of voluntary waivers, if any	.89% A	.90%	.91% A
Expenses net of all reductions	.85% A	.86%	.87% A
Net investment income (loss)	1.10% A	.87%	.79% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 81,566	$ 39,466	$ 15,649
Portfolio turnover rate	83% A	99%	77%

^A Annualized ^BTotal returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. ^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. ^H Amount represents less than $.01 per share.

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

Overseas Portfolio

Financial Highlights - Service Class R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 15.52	$ 10.94	$ 14.01
Income from Investment Operations
Net investment income (loss) E	.08	.10	.05
Net realized and unrealized gain (loss)	.07	4.58	(3.12)
Total from investment operations	.15	4.68	(3.07)
Distributions from net investment income	(.17)	(.10)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 15.50	$ 15.52	$ 10.94
Total Return B, C, D	.93%	43.25%	(21.91)%
Ratios to Average Net Assets G
Expenses before expense reductions	.98% A	1.00%	1.01% A
Expenses net of voluntary waivers, if any	.98% A	1.00%	1.01% A
Expenses net of all reductions	.95% A	.96%	.97% A
Net investment income (loss)	1.00% A	.77%	.69% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 72,879	$ 56,141	$ 17,997
Portfolio turnover rate	83% A	99%	77%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. ^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. ^H Amount represents less than $.01 per share.

Financial Highlights - Service Class 2R

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002 F
Selected Per-Share Data
Net asset value, beginning of period	$ 15.42	$ 10.90	$ 13.96
Income from Investment Operations
Net investment income (loss) E	.07	.08	.04
Net realized and unrealized gain (loss)	.07	4.55	(3.10)
Total from investment operations	.14	4.63	(3.06)
Distributions from net investment income	(.16)	(.11)	-
Redemption fees added to paid in capital E, H	-	-	-
Net asset value, end of period	$ 15.40	$ 15.42	$ 10.90
Total Return B, C, D	.87%	43.00%	(21.92)%
Ratios to Average Net Assets G
Expenses before expense reductions	1.14% A	1.15%	1.17% A
Expenses net of voluntary waivers, if any	1.14% A	1.15%	1.17% A
Expenses net of all reductions	1.10% A	1.11%	1.14% A
Net investment income (loss)	.85% A	.62%	.52% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 14,468	$ 7,072	$ 1,616
Portfolio turnover rate	83% A	99%	77%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002. ^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. ^H Amount represents less than $.01 per share.

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

Semiannual Report

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Equity-Income Portfolio, Growth Portfolio, High Income Portfolio, and Overseas Portfolio (the funds) are funds of Variable Insurance Products Fund. Asset Manager Portfolio, Contrafund Portfolio and Index 500 Portfolio (the funds) are funds of Variable Insurance Products Fund II. The Variable Insurance Products Fund and Variable Insurance Products Fund II (the trusts) (referred to in this report as Fidelity Variable Insurance Products) are registered under the Investment Company Act of 1940, as amended (the 1940 Act), as open-end management investment companies organized as Massachusetts business trusts. Each fund is authorized to issue an unlimited number of shares. Shares of each fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. Each fund offers the following classes of shares: Initial Class shares, Service Class shares and Service Class 2 shares. VIP Equity-Income, VIP Growth and VIP Contrafund Portfolios also offer Service Class 2R shares. VIP Overseas and VIP High Income Portfolios also offer Initial Class R, Service Class R, and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. 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 distribution and service plan fees incurred. Certain expense reductions also differ by class. Certain funds' investments in emerging markets can be subject to social, economic, regulatory, and political uncertainties and can be extremely volatile.

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 funds:

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. Equity securities, including restricted 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. Debt securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. 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.

Foreign Currency. Certain funds may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

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 funds are 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The funds estimate the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Large, non-recurring dividends recognized by the funds are presented separately on the Statement of Operations as "Special Dividends" and the impact of these dividends to net investment income per share is presented in the Financial Highlights. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld 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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Expenses. Most expenses of each 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 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, each 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.

Distributions are recorded on the ex-dividend date. Income dividends and capital gain distributions are declared separately for each class. 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 book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, foreign currency transactions, passive foreign investment companies (PFIC), prior period premium and discount on debt securities, defaulted bonds, market discount, partnerships, financing transactions, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each fund:

	Cost for Federal Income Tax Purposes	Unrealized Appreciation	Unrealized Depreciation	Net Unrealized Appreciation/ (Depreciation)
Asset Manager	$ 2,778,921,868	$ 246,631,199	$ (69,804,501)	$ 176,826,698
Contrafund	$ 8,512,255,064	$ 3,109,225,863	$ (125,168,631)	$ 2,984,057,232
Equity-Income	$ 8,584,905,505	$ 2,704,753,289	$ (529,578,585)	$ 2,175,174,704
Growth	$ 8,407,236,379	$ 2,397,984,284	$ (263,319,281)	$ 2,134,665,003
High Income	$ 1,652,334,837	$ 58,226,644	$ (32,829,997)	$ 25,396,647
Index 500	$ 1,965,045,283	$ 1,113,237,922	$ (216,065,714)	$ 897,172,208
Overseas	$ 1,846,877,860	$ 429,755,451	$ (58,684,975)	$ 371,070,476

Trading (Redemption) Fees. Initial Class R shares, Service Class R shares and Service Class 2R shares held less than 60 days are subject to a redemption fee equal to 1% of the proceeds of the redeemed shares. All redemption fees, including any estimated redemption fees paid by Fidelity Management & Research Company (FMR), are retained by the applicable fund and accounted for as an addition to paid in capital.

2. Operating Policies.

Repurchase Agreements. FMR has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the funds 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. Certain funds 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. Each 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 each applicable fund's Schedule of Investments. Each fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, each 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's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Semiannual Report

2. Operating Policies - continued

Futures Contracts. Certain funds may use futures contracts to manage their exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a 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 each applicable fund's Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in each applicable fund's 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 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. Certain funds 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 each applicable fund's Schedule of Investments.

Loans and Other Direct Debt Instruments. Certain funds 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 each applicable fund's Schedule of Investments.

Swap Agreements. Certain funds may invest in swaps for the purpose of managing their 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. Periodic payments received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact each applicable fund.

Total return swaps are agreements to exchange the return generated by one instrument for the return generated by another instrument, for example, the agreement to pay interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the index exceeds the offsetting interest obligation, each applicable fund will receive a payment from the counterparty. To the extent it is less, each applicable fund will make a payment to the counterparty. Periodic payments received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

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. Each applicable 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. Periodic payments and premiums received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

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 each applicable 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 each applicable fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, certain funds 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

Notes to Financial Statements (Unaudited) - continued

3. Purchases and Sales of Investments.

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

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the funds with investment management related services for which the funds pay a monthly management fee.

For all funds except the Index 500 Portfolio, the management fee is the sum of an individual fund fee rate applied to the average net assets of each fund and a group fee rate. The group fee rates differ for equity and fixed-income funds and are each based upon the average net assets of all the mutual funds advised by FMR. The group fee rates decrease as assets under management increase and increase as assets under management decrease. The annual individual fund fee rate is .45% of the fund's average net assets for High Income and Overseas Portfolios, .30% for Contrafund and Growth Portfolios, .25% for Asset Manager Portfolio, and .20% for Equity-Income Portfolio. The group fee rates averaged .28% for the equity funds and .13% for the fixed-income funds during the period.

For Index 500 Portfolio, FMR receives a fee that is computed at an annual rate of .24% of the fund's average net assets.

For the period each fund's total annualized management fee rate, expressed as a percentage of each fund's average net assets, was as follows:

Asset Manager	.53%	|
Contrafund	.58%
Equity-Income	.48%
Growth	.58%
High Income	.58%
Index 500	.24%
Overseas	.73%

Sub-Adviser. Geode Capital Management, LLC (Geode), serves as sub-adviser for the Index 500 Portfolio. Geode provides discretionary investment advisory services to the fund and is paid by FMR for providing these services.

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Funds have adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' and Service Class R's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

	Service Class	Service Class 2	Service Class R	Service Class 2R
Asset Manager	$ 17,325	$ 30,195	$ -	$ -
Contrafund	$ 893,431	$ 1,319,171	$ -	$ 4,262
Equity-Income	$ 549,203	$ 1,298,023	$ -	$ 3,595
Growth	$ 709,744	$ 855,290	$ -	$ 2,488
High Income	$ 184,449	$ 91,344	$ 16	$ 40
Index 500	$ 8,457	$ 91,150	$ -	$ -
Overseas	$ 135,043	$ 227,199	$ 33,316	$ 11,017

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investment Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets. For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses, were as follows:

Asset Manager		|
Initial Class	$ 971,279
Service Class	13,567
Service Class 2	10,782
	$ 995,628
Contrafund
Initial Class	$ 2,609,330
Service Class	592,177
Service Class 2	362,841
Service Class 2R	1,163
	$ 3,565,511
Equity-Income
Initial Class	$ 2,767,209
Service Class	360,175
Service Class 2	354,461
Service Class 2R	986
	$ 3,482,831
Growth
Initial Class	$ 2,789,501
Service Class	465,988
Service Class 2	232,191
Service Class 2R	681
	$ 3,488,361
High Income
Initial Class	$ 478,335
Service Class	122,089
Service Class 2	27,751
Initial Class R	12
Service Class R	12
Service Class 2R	12
	$ 628,211
Index 500
Initial Class	$ 983,243
Service Class	7,170
Service Class 2	27,833
	$ 1,018,246
Overseas
Initial Class	$ 498,192
Service Class	93,197
Service Class 2	66,234
Initial Class R	18,014
Service Class R	22,187
Service Class 2R	3,074
	$ 700,898

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains each fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Central Funds. The funds 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 funds are recorded as income in the accompanying financial statements. Distributions from the Central Funds are noted in the table below:

	Income Distributions
Asset Manager	$ 3,234,083
Contrafund	$ 3,912,051
Equity-Income	$ 493,725
Growth	$ 193,333
High Income	$ 237,616
Index 500	$ 131,330
Overseas	$ 879,310

Brokerage Commissions. Certain funds placed a portion of their 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 each applicable fund's Schedule of Investments.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the funds, 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 each applicable fund's participation in the program is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

5. Committed Line of Credit.

Certain funds participate with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

Certain funds lend portfolio securities from time to time in order to earn additional income. Each applicable 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 funds and any additional required collateral is delivered to the funds 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. The value of loaned securities and cash collateral at period end are disclosed on each applicable fund's Statement of Assets and Liabilities.

7. Bank Borrowings.

Each fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. Each 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. Information regarding each applicable fund's participation in the program is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

Semiannual Report

8. Expense Reductions.

FMR agreed to reimburse certain funds to the extent annual 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
Index 500
Initial Class	.28%	$ 885,755
Service Class	.38%	6,648
Service Class 2	.53%	25,611 $ 918,014

Many of the brokers with whom FMR places trades on behalf of certain funds provided services to these funds in addition to trade execution. These services included payments of expenses on behalf of each applicable fund. In addition, through arrangements with each applicable fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. All of the applicable expense reductions are noted in the table below:

	Brokerage Service Arrangement	Custody Expense Reduction
Asset Manager	$ 120,961	$ 3,473
Contrafund	$ 1,187,540	$ 47,466
Equity-Income	$ 367,594	$ 542
Growth	$ 1,714,681	$ -
High Income	$ 158	$ 738
Index 500	$ -	$ -
Overseas	$ 383,399	$ 998

9. Other Information.

At the end of the period, FMR or its affiliates and certain otherwise unaffiliated shareholders each were owners of record of more than 10% of the total outstanding shares of the following funds:

	Affiliated %	Number of Unaffiliated Shareholders	Unaffiliated Shareholders %
Asset Manager	23%	1	19%
Contrafund	14%	2	32%
Equity-Income	11%	2	35%
Growth	12%	2	36%
High Income	20%	2	49%
Index 500	34%	-	-
Overseas	15%	3	49%

Semiannual Report

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.
Asset Manager, Contrafund, Equity-Income, Growth,
High Income, Index 500, and Overseas Portfolios

Fidelity Investments Money Management, Inc.
Asset Manager Portfolio

Fidelity Management & Research (U.K.) Inc.
Asset Manager, Contrafund, High Income, and
Overseas Portfolios

Fidelity Management & Research (Far East) Inc.
Asset Manager, Contrafund, High Income, and
Overseas Portfolios

Fidelity Investments Japan Limited
Asset Manager, Contrafund, High Income, and
Overseas Portfolios

Fidelity International Investment Advisors
Asset Manager, Contrafund, High Income, and
Overseas Portfolios

Fidelity International Investment Advisors (U.K.) Limited
Asset Manager, Contrafund, High Income, and
Overseas Portfolios

Geode Capital Management, LLC
Index 500 Portfolio

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
High Income Portfolio

JPMorgan Chase Bank, New York, NY
Asset Manager, Equity-Income, and Overseas Portfolios

Brown Brothers Harriman & Co., Boston, MA
Contrafund Portfolio

Mellon Bank, N.A., Pittsburgh, PA
Growth and Index 500 Portfolios

VIPGRP1-SANN-0804
1.803533.100

Fidelity® Variable Insurance Products

Asset Manager: Growth® Portfolio

Balanced Portfolio

Growth & Income Portfolio

Growth Opportunities Portfolio

Investment Grade Bond Portfolio

Mid Cap Portfolio

Money Market Portfolio

Semiannual Report

June 30, 2004

(2_fidelity_logos) (Registered_Trademark)

Contents

Asset Manager: Growth Portfolio	3 4 19	Investment Summary Investments Financial Statements
Balanced Portfolio	23 24 38	Investment Summary Investments Financial Statements
Growth & Income Portfolio	42 43 45	Investment Summary Investments Financial Statements
Growth Opportunities Portfolio	49 50 53	Investment Summary Investments Financial Statements
Investment Grade Bond Portfolio	57 58 66	Investment Summary Investments Financial Statements
Mid Cap Portfolio	70 71 85	Investment Summary Investments Financial Statements
Money Market Portfolio	89 93	Investments Financial Statements
Notes to Financial Statements	97	Notes to the Financial Statements

For a free copy of the fund's proxy voting guidelines call 877-208-0098 or visit the Securities and Exchange Commission (SEC)'s web site at www.sec.gov.

Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.

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 funds. This report is not
authorized for distribution to prospective investors in the funds 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 funds nor Fidelity Distributors Corporation is a bank.

Semiannual Report

Fidelity Variable Insurance Products: Asset Manager: Growth Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Cardinal Health, Inc.	4.8
American International Group, Inc.	4.1
Microsoft Corp.	3.8
Fannie Mae	3.2
Pfizer, Inc.	3.1
	19.0

Top Five Market Sectors as of June 30, 2004
(stocks only)	% of fund's net assets
Financials	19.0
Health Care	14.3
Information Technology	9.6
Consumer Discretionary	7.7
Consumer Staples	6.0

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks and Equity Futures	75.9%
	Bonds	16.0%
	Short-Term Investments and Net Other Assets	8.1%

* Foreign
investments 9.4%

Asset allocations in the pie charts reflect the categorization of assets as defined in the fund's prospectus in effect as of the time periods indicated above. Financial Statement categorizations conform to accounting standards and will differ from the pie chart. Percentages are adjusted for the effect of futures contracts and swap contracts, if applicable.

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

Fidelity Variable Insurance Products: Asset Manager: Growth Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 73.0%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 7.7%
Auto Components - 0.0%
Exide Technologies warrants 3/18/06 (a)	5		$ 0
Automobiles - 0.2%
Fiat Spa (a)	28,000		235,490
Toyota Motor Corp.	8,800		359,128
			594,618
Hotels, Restaurants & Leisure - 0.3%
McDonald's Corp.	33,800		878,800
Rank Group PLC	20,400		111,347
			990,147
Household Durables - 0.2%
LG Electronics, Inc.	9,230		438,115
Techtronic Industries Co. Ltd.	194,000		309,662
			747,777
Media - 3.6%
Clear Channel Communications, Inc.	246,700		9,115,565
McGraw-Hill Companies, Inc.	1,500		114,855
News Corp. Ltd. sponsored ADR	38,200		1,256,016
NRJ Group	12,100		265,629
SKY Perfect Communications, Inc.	9		10,545
Taylor Nelson Sofres PLC	29,500		112,175
Time Warner, Inc. (a)	41,600		731,328
Tv Asahi Corp.	210		402,271
			12,008,384
Multiline Retail - 0.1%
Barneys, Inc. warrants 4/1/08 (a)	170		5,950
Kohl's Corp. (a)	4,700		198,716
			204,666
Specialty Retail - 3.0%
Home Depot, Inc.	272,200		9,581,440
Office Depot, Inc. (a)	5,400		96,714
Staples, Inc.	13,800		404,478
			10,082,632
Textiles Apparel & Luxury Goods - 0.3%
Adidas-Salomon AG	3,655		437,428
The Swatch Group AG (Reg.)	19,206		513,431
			950,859
TOTAL CONSUMER DISCRETIONARY			25,579,083
CONSUMER STAPLES - 6.0%
Beverages - 1.0%
PepsiCo, Inc.	21,900		1,179,972
Pernod-Ricard	3,900		499,902
The Coca-Cola Co.	31,800		1,605,264
			3,285,138
Food & Staples Retailing - 3.0%
CVS Corp.	117,300		4,928,946
	Shares		Value (Note 1)
Safeway, Inc. (a)	90,200		$ 2,285,668
Wal-Mart Stores, Inc.	52,800		2,785,728
			10,000,342
Food Products - 0.1%
Barry Callebaut AG	1,060		249,856
People's Food Holdings Ltd.	201,000		132,214
			382,070
Household Products - 0.2%
Kimberly-Clark Corp.	3,400		223,992
Procter & Gamble Co.	9,200		500,848
			724,840
Personal Products - 0.8%
Alberto-Culver Co.	50,600		2,537,084
Estee Lauder Companies, Inc. Class A	3,600		175,608
			2,712,692
Tobacco - 0.9%
Altria Group, Inc.	60,000		3,003,000
TOTAL CONSUMER STAPLES			20,108,082
ENERGY - 4.0%
Energy Equipment & Services - 2.1%
Diamond Offshore Drilling, Inc.	67,100		1,598,993
ENSCO International, Inc.	49,500		1,440,450
GlobalSantaFe Corp.	69,300		1,836,450
Nabors Industries Ltd. (a)	9,500		429,590
Transocean, Inc. (a)	61,100		1,768,234
			7,073,717
Oil & Gas - 1.9%
Canadian Natural Resources Ltd.	16,100		483,398
ChevronTexaco Corp.	22,800		2,145,708
ConocoPhillips	18,523		1,413,120
EnCana Corp.	14,300		617,712
Exxon Mobil Corp.	16,700		741,647
Royal Dutch Petroleum Co. (Hague Registry)	5,500		284,185
Total SA Series B	2,370		455,419
			6,141,189
TOTAL ENERGY			13,214,906
FINANCIALS - 19.0%
Capital Markets - 2.8%
Bear Stearns Companies, Inc.	1,800		151,758
Collins Stewart Tullett PLC	41,600		319,399
Greenhill & Co., Inc.	100		2,091
JAFCO Co. Ltd.	3,000		232,380
Julius Baer Holding AG (Bearer)	1,270		353,230
Lehman Brothers Holdings, Inc.	2,000		150,500
Man Group PLC	13,300		345,548
Merrill Lynch & Co., Inc.	39,800		2,148,404
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Capital Markets - continued
Morgan Stanley	95,500		$ 5,039,535
UBS AG (Reg.)	8,509		604,650
			9,347,495
Commercial Banks - 3.3%
Banco Popular Espanol SA (Reg.)	5,800		328,360
Bank of America Corp.	67,965		5,751,179
Bank One Corp.	51,500		2,626,500
Societe Generale Series A	4,000		340,756
SouthTrust Corp.	5,900		228,979
Sumitomo Mitsui Financial Group, Inc.	49		340,824
Synovus Financial Corp.	22,800		577,296
UFJ Holdings, Inc. (a)	126		564,741
Wachovia Corp.	6,000		267,000
			11,025,635
Consumer Finance - 0.1%
MBNA Corp.	21,500		554,485
Diversified Financial Services - 2.4%
Citigroup, Inc.	171,000		7,951,500
Insurance - 6.3%
AFLAC, Inc.	4,800		195,888
AMBAC Financial Group, Inc.	15,400		1,130,976
American International Group, Inc.	192,700		13,735,656
Hartford Financial Services Group, Inc.	36,500		2,509,010
MBIA, Inc.	14,500		828,240
MetLife, Inc.	47,500		1,702,875
PartnerRe Ltd.	5,500		312,015
St. Paul Travelers Companies, Inc.	15,628		633,559
			21,048,219
Thrifts & Mortgage Finance - 4.1%
Fannie Mae	151,200		10,789,632
Golden West Financial Corp., Delaware	400		42,540
Greenpoint Financial Corp.	7,400		293,780
MGIC Investment Corp.	19,700		1,494,442
New York Community Bancorp, Inc.	45,233		887,924
Sovereign Bancorp, Inc.	3,000		66,300
			13,574,618
TOTAL FINANCIALS			63,501,952
HEALTH CARE - 14.3%
Biotechnology - 0.2%
Actelion Ltd. (Reg.) (a)	603		69,499
Angiotech Pharmaceuticals, Inc. (a)	5,400		110,194
CSL Ltd.	21,942		342,001
QIAGEN NV (a)	15,600		188,916
			710,610
	Shares		Value (Note 1)
Health Care Equipment & Supplies - 0.4%
Baxter International, Inc.	29,800		$ 1,028,398
Smith & Nephew PLC	37,000		408,998
			1,437,396
Health Care Providers & Services - 5.0%
Cardinal Health, Inc.	229,850		16,100,978
Fountain View, Inc. (l)	225		3,771
Henry Schein, Inc. (a)	4,200		265,188
Service Corp. International (SCI) (a)	15,898		117,168
Wellcare Group, Inc.	200		3,400
			16,490,505
Pharmaceuticals - 8.7%
Altana AG	4,300		259,225
Barr Pharmaceuticals, Inc. (a)	3,300		111,210
Johnson & Johnson	96,300		5,363,910
Merck & Co., Inc.	63,700		3,025,750
Novartis AG (Reg.)	11,663		519,004
Novo Nordisk AS Series B	5,400		278,693
Pfizer, Inc.	298,600		10,236,008
Recordati Spa	5,813		110,313
Roche Holding AG (participation certificate)	7,740		768,177
Schering-Plough Corp.	71,353		1,318,603
Shire Pharmaceuticals Group PLC (a)	29,500		262,943
Wyeth	188,400		6,812,544
			29,066,380
TOTAL HEALTH CARE			47,704,891
INDUSTRIALS - 5.2%
Aerospace & Defense - 0.4%
Lockheed Martin Corp.	7,200		374,976
United Technologies Corp.	10,200		933,096
			1,308,072
Commercial Services & Supplies - 0.5%
Adecco SA	10,038		501,338
Aramark Corp. Class B	9,900		284,724
Capita Group PLC	22,600		130,962
ChoicePoint, Inc. (a)	14,300		652,938
			1,569,962
Electrical Equipment - 0.1%
ABB Ltd. (Switzerland) (Reg.) (a)	39,448		216,279
Furukawa Electric Co. Ltd.	34,000		147,332
			363,611
Industrial Conglomerates - 3.6%
General Electric Co.	254,380		8,241,912
Tyco International Ltd.	112,900		3,741,506
			11,983,418
Machinery - 0.4%
Ingersoll-Rand Co. Ltd. Class A	20,600		1,407,186
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Road & Rail - 0.2%
CSX Corp.	11,200		$ 367,024
Union Pacific Corp.	3,800		225,910
			592,934
TOTAL INDUSTRIALS			17,225,183
INFORMATION TECHNOLOGY - 9.6%
Communications Equipment - 1.2%
Cisco Systems, Inc. (a)	79,386		1,881,448
Comverse Technology, Inc. (a)	33,100		660,014
Motorola, Inc.	81,320		1,484,090
			4,025,552
Computers & Peripherals - 1.5%
Dell, Inc. (a)	81,000		2,901,420
Diebold, Inc.	5,300		280,211
Hewlett-Packard Co.	69,100		1,458,010
Sun Microsystems, Inc. (a)	54,100		234,794
			4,874,435
Electronic Equipment & Instruments - 0.7%
Flextronics International Ltd. (a)	34,300		547,085
Jabil Circuit, Inc. (a)	16,600		417,988
Sanmina-SCI Corp. (a)	36,400		331,240
Solectron Corp. (a)	126,900		821,043
Thermo Electron Corp. (a)	6,900		212,106
Yageo Corp. (a)	308,000		158,725
			2,488,187
IT Services - 0.8%
Affiliated Computer Services, Inc. Class A (a)	16,400		868,216
First Data Corp.	36,700		1,633,884
			2,502,100
Semiconductors & Semiconductor Equipment - 1.2%
ASM International NV (Netherlands) (a)	16,100		333,412
ASML Holding NV (NY Shares) (a)	19,600		335,356
Intel Corp.	48,500		1,338,600
KLA-Tencor Corp. (a)	2,200		108,636
Lam Research Corp. (a)	11,000		294,800
Linear Technology Corp.	3,100		122,357
Novellus Systems, Inc. (a)	2,300		72,312
Taiwan Semiconductor Manufacturing Co. Ltd. sponsored ADR	43,905		364,851
Tokyo Electron Ltd.	5,100		290,237
United Microelectronics Corp. (a)	661,000		492,255
United Microelectronics Corp. sponsored ADR (a)	76,809		331,047
Xilinx, Inc.	2,100		69,951
			4,153,814
Software - 4.2%
BEA Systems, Inc. (a)	40,500		332,910
	Shares		Value (Note 1)
Dassault Systemes SA	8,500		$ 395,071
Microsoft Corp.	436,075		12,454,302
Temenos Group AG (a)	9,346		85,650
VERITAS Software Corp. (a)	24,700		684,190
			13,952,123
TOTAL INFORMATION TECHNOLOGY			31,996,211
MATERIALS - 1.0%
Chemicals - 0.4%
Dow Chemical Co.	25,400		1,033,780
Nitto Denko Corp.	5,800		300,950
			1,334,730
Construction Materials - 0.1%
HeidelbergCement AG	5,163		257,854
Metals & Mining - 0.2%
Alcan, Inc.	16,500		682,810
Paper & Forest Products - 0.3%
Aracruz Celulose SA sponsored ADR	18,500		604,210
Bowater, Inc.	4,100		170,519
International Paper Co.	3,200		143,040
Votorantim Celulose e Papel SA sponsored ADR	7,000		222,600
			1,140,369
TOTAL MATERIALS			3,415,763
TELECOMMUNICATION SERVICES - 5.5%
Diversified Telecommunication Services - 4.7%
BellSouth Corp.	61,700		1,617,774
China Telecom Corp. Ltd. (H Shares)	994,000		350,783
Deutsche Telekom AG (Reg.) (a)	26,200		464,002
Ono Finance PLC rights 5/31/09 (a)(f)	310		3
Qwest Communications International, Inc. (a)	349,100		1,253,269
SBC Communications, Inc.	342,100		8,295,925
Verizon Communications, Inc.	94,400		3,416,336
Versatel Telecom International NV (a)	113,200		220,894
			15,618,986
Wireless Telecommunication Services - 0.8%
KDDI Corp.	126		731,117
Nextel Communications, Inc. Class A (a)	37,900		1,010,414
Vodafone Group PLC	429,500		949,195
			2,690,726
TOTAL TELECOMMUNICATION SERVICES			18,309,712
UTILITIES - 0.7%
Electric Utilities - 0.6%
Entergy Corp.	5,900		330,459
FirstEnergy Corp.	25,400		950,214
PG&E Corp. (a)	24,600		687,324
			1,967,997
Common Stocks - continued
	Shares		Value (Note 1)
UTILITIES - continued
Gas Utilities - 0.1%
NiSource, Inc.	7,100		$ 146,402
Multi-Utilities & Unregulated Power - 0.0%
Public Service Enterprise Group, Inc.	3,000		120,090
TOTAL UTILITIES			2,234,489
TOTAL COMMON STOCKS (Cost $220,664,029)		243,290,272
Convertible Preferred Stocks - 0.1%
MATERIALS - 0.1%
Paper & Forest Products - 0.1%
International Paper Capital Trust 2.625%	5,200		261,950
TELECOMMUNICATION SERVICES - 0.0%
Diversified Telecommunication Services - 0.0%
Cincinnati Bell, Inc. Series B, 6.75%	1,300		54,574
TOTAL CONVERTIBLE PREFERRED STOCKS (Cost $302,688)		316,524

Corporate Bonds - 11.1%
	Principal Amount
Convertible Bonds - 0.5%
CONSUMER DISCRETIONARY - 0.1%
Specialty Retail - 0.1%
Gap, Inc. 5.75% 3/15/09 (f)	$ 180,000		279,914
FINANCIALS - 0.4%
Diversified Financial Services - 0.4%
Tyco International Group SA yankee 3.125% 1/15/23	720,000		1,164,312
INFORMATION TECHNOLOGY - 0.0%
Communications Equipment - 0.0%
CIENA Corp. 3.75% 2/1/08	100,000		86,500
TOTAL CONVERTIBLE BONDS			1,530,726
Nonconvertible Bonds - 10.6%
CONSUMER DISCRETIONARY - 2.0%
Auto Components - 0.2%
DaimlerChrysler NA Holding Corp. 7.2% 9/1/09	50,000		54,428
Dana Corp.:
9% 8/15/11	95,000		111,150
10.125% 3/15/10	160,000		181,200
Delco Remy International, Inc. 9.375% 4/15/12 (f)	80,000		78,000
Stoneridge, Inc. 11.5% 5/1/12	10,000		11,650
	Principal Amount		Value (Note 1)
Visteon Corp.:
7% 3/10/14	$ 245,000		$ 236,119
8.25% 8/1/10	65,000		69,388
			741,935
Automobiles - 0.1%
Case New Holland, Inc. 9.25% 8/1/11 (f)	60,000		63,300
General Motors Corp.:
7.2% 1/15/11	125,000		130,974
8.25% 7/15/23	70,000		73,308
8.375% 7/15/33	25,000		26,462
			294,044
Distributors - 0.0%
Adesa, Inc. 7.625% 6/15/12	50,000		50,250
Hotels, Restaurants & Leisure - 0.6%
Argosy Gaming Co. 7% 1/15/14 (f)	70,000		67,900
Friendly Ice Cream Corp. 8.375% 6/15/12 (f)	30,000		29,250
Gaylord Entertainment Co. 8% 11/15/13	60,000		60,900
Host Marriott LP 7.125% 11/1/13	200,000		196,000
Mandalay Resort Group 6.5% 7/31/09	180,000		183,600
MGM MIRAGE:
5.875% 2/27/14 (f)	140,000		127,050
9.75% 6/1/07	15,000		16,425
Morton's Restaurant Group, Inc. 7.5% 7/1/10	40,000		37,200
Penn National Gaming, Inc. 6.875% 12/1/11 (f)	190,000		184,300
Six Flags, Inc.:
8.875% 2/1/10	75,000		74,625
9.625% 6/1/14 (f)	215,000		213,925
9.75% 4/15/13	20,000		20,100
Starwood Hotels & Resorts Worldwide, Inc. 7.375% 5/1/07	265,000		278,250
Station Casinos, Inc. 6% 4/1/12	90,000		86,850
Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11	100,000		106,750
Vail Resorts, Inc. 6.75% 2/15/14	70,000		66,063
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (f)	57,000		60,420
Wheeling Island Gaming, Inc. 10.125% 12/15/09	90,000		95,400
			1,905,008
Household Durables - 0.0%
Standard Pacific Corp. 9.25% 4/15/12	120,000		130,200
WCI Communities, Inc. 7.875% 10/1/13	60,000		60,750
			190,950
Leisure Equipment & Products - 0.1%
K2, Inc. 7.375% 7/1/14 (f)	40,000		40,700
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
CONSUMER DISCRETIONARY - continued
Leisure Equipment & Products - continued
The Hockey Co. 11.25% 4/15/09	$ 175,000		$ 204,750
True Temper Sports, Inc. 8.375% 9/15/11	80,000		80,000
			325,450
Media - 0.8%
Advanstar Communications, Inc. 10.75% 8/15/10	70,000		77,175
AOL Time Warner, Inc. 7.625% 4/15/31	75,000		81,161
Cablevision Systems Corp.:
5.66% 4/1/09 (f)(i)	140,000		143,150
8% 4/15/12 (f)	185,000		182,688
Charter Communications Operating LLC/Charter Communications Operating Capital Corp. 8% 4/30/12 (f)	110,000		106,150
Cox Communications, Inc. 7.125% 10/1/12	40,000		43,838
CSC Holdings, Inc.:
7.625% 4/1/11	335,000		340,025
7.625% 7/15/18	115,000		107,525
Dex Media, Inc. 8% 11/15/13 (f)	120,000		113,700
EchoStar DBS Corp. 10.375% 10/1/07	85,000		90,780
Houghton Mifflin Co. 9.875% 2/1/13	110,000		110,275
Kabel Deutschland Gmbh 10.625% 7/1/14 (f)	110,000		113,025
LBI Media Holdings, Inc. 0% 10/15/13 (d)	150,000		106,500
Liberty Media Corp. 8.25% 2/1/30	100,000		113,935
News America Holdings, Inc. 7.75% 12/1/45	50,000		57,006
Nextmedia Operating, Inc. 10.75% 7/1/11	100,000		111,750
PRIMEDIA, Inc. 7.625% 4/1/08	500,000		495,000
Radio One, Inc. 8.875% 7/1/11	105,000		114,450
Telewest PLC 11% 10/1/07 (c)	300,000		178,500
Videotron LTEE 6.875% 1/15/14	50,000		48,000
			2,734,633
Specialty Retail - 0.2%
Asbury Automotive Group, Inc. 8% 3/15/14	210,000		200,550
Boise Cascade Corp. 6.5% 11/1/10	60,000		61,200
CSK Automotive, Inc. 7% 1/15/14	40,000		38,200
General Nutrition Centers, Inc. 8.5% 12/1/10 (f)	40,000		41,600
Hollywood Entertainment Corp. 9.625% 3/15/11	70,000		80,500
Sonic Automotive, Inc. 8.625% 8/15/13	120,000		124,500
			546,550
TOTAL CONSUMER DISCRETIONARY			6,788,820
	Principal Amount		Value (Note 1)
CONSUMER STAPLES - 0.3%
Food & Staples Retailing - 0.1%
Kroger Co. 6.8% 4/1/11	$ 65,000		$ 70,829
NeighborCare, Inc. 6.875% 11/15/13 (f)	125,000		132,500
Rite Aid Corp. 6.875% 8/15/13	70,000		64,750
Safeway, Inc. 6.5% 3/1/11	35,000		37,085
Stater Brothers Holdings, Inc.:
5.06% 6/15/10 (f)(i)	90,000		91,463
8.125% 6/15/12 (f)	70,000		70,613
			467,240
Food Products - 0.2%
Central Garden & Pet Co. 9.125% 2/1/13	30,000		32,550
Corn Products International, Inc. 8.25% 7/15/07	235,000		256,150
Dean Foods Co. 8.15% 8/1/07	111,000		118,770
Hines Nurseries, Inc. 10.25% 10/1/11	30,000		32,400
Pierre Foods, Inc. 9.875% 7/15/12 (f)	40,000		40,550
United Agriculture Products, Inc. 8.25% 12/15/11 (f)	50,000		54,250
			534,670
Household Products - 0.0%
JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)	70,000		53,900
Tobacco - 0.0%
Altria Group, Inc. 7% 11/4/13	30,000		30,550
Philip Morris Companies, Inc. 7.75% 1/15/27	50,000		51,123
			81,673
TOTAL CONSUMER STAPLES			1,137,483
ENERGY - 1.0%
Energy Equipment & Services - 0.2%
Grant Prideco, Inc. 9.625% 12/1/07	110,000		121,000
Hanover Compressor Co.:
8.625% 12/15/10	40,000		41,500
9% 6/1/14	60,000		62,250
Key Energy Services, Inc. 8.375% 3/1/08	100,000		103,500
Kinder Morgan, Inc. 6.5% 9/1/12	25,000		26,488
Pride International, Inc. 7.375% 7/15/14 (f)(g)	60,000		60,675
Seabulk International, Inc. 9.5% 8/15/13	105,000		107,625
SESI LLC 8.875% 5/15/11	30,000		32,325
			555,363
Oil & Gas - 0.8%
Amerada Hess Corp.:
6.65% 8/15/11	5,000		5,291
7.125% 3/15/33	15,000		14,952
7.375% 10/1/09	10,000		10,890
Chesapeake Energy Corp. 7.5% 6/15/14 (f)	60,000		61,800
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
ENERGY - continued
Oil & Gas - continued
El Paso Corp. 7.875% 6/15/12	$ 165,000		$ 148,294
El Paso Energy Corp.:
6.95% 12/15/07	95,000		91,438
7.375% 12/15/12	80,000		69,500
Empresa Nacional de Petroleo 6.75% 11/15/12 (f)	25,000		26,832
EXCO Resources, Inc. 7.25% 1/15/11	40,000		40,500
Forest Oil Corp. 8% 12/15/11	120,000		127,800
General Maritime Corp. 10% 3/15/13	165,000		182,738
GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12	41,000		47,560
KCS Energy, Inc. 7.125% 4/1/12 (f)	60,000		60,000
Plains Exploration & Production Co. 7.125% 6/15/14 (f)	60,000		61,050
Plains Exploration & Production Co. LP Series B, 8.75% 7/1/12	125,000		134,375
Range Resources Corp.:
7.375% 7/15/13	135,000		134,325
7.375% 7/15/13 (f)	40,000		39,800
Teekay Shipping Corp. 8.875% 7/15/11	325,000		357,500
The Coastal Corp.:
6.5% 5/15/06	87,000		85,586
6.5% 6/1/08	95,000		85,500
7.5% 8/15/06	440,000		435,600
7.625% 9/1/08	30,000		27,825
7.75% 6/15/10	200,000		180,500
9.625% 5/15/12	45,000		42,750
Vintage Petroleum, Inc. 8.25% 5/1/12	90,000		98,438
Williams Companies, Inc.:
7.125% 9/1/11	95,000		96,425
7.5% 1/15/31	10,000		9,050
7.625% 7/15/19	180,000		172,800
			2,849,119
TOTAL ENERGY			3,404,482
FINANCIALS - 2.2%
Capital Markets - 0.2%
Amvescap PLC 5.9% 1/15/07	25,000		26,402
BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (f)	180,000		186,750
Credit Suisse First Boston (USA), Inc. 6.5% 1/15/12	20,000		21,492
Equinox Holdings Ltd. 9% 12/15/09 (f)	30,000		29,700
Goldman Sachs Group, Inc. 6.6% 1/15/12	125,000		134,511
J.P. Morgan Chase & Co.:
4.875% 3/15/14	30,000		28,264
6.75% 2/1/11	75,000		81,743
	Principal Amount		Value (Note 1)
Merrill Lynch & Co., Inc. 4.125% 1/15/09	$ 75,000		$ 73,977
Morgan Stanley:
4.75% 4/1/14	100,000		92,262
6.6% 4/1/12	40,000		43,063
			718,164
Commercial Banks - 0.1%
Bank of America Corp. 6.25% 4/15/12	70,000		74,673
Bank One NA, Chicago 3.7% 1/15/08	50,000		49,673
Export-Import Bank of Korea:
4.125% 2/10/09 (f)	10,000		9,701
5.25% 2/10/14 (f)	30,000		28,761
Fleet Financial Group, Inc. 7.125% 4/15/06	40,000		42,901
Korea Development Bank 3.875% 3/2/09	75,000		71,803
Wachovia Corp. 4.875% 2/15/14	15,000		14,328
			291,840
Consumer Finance - 0.1%
Capital One Bank:
4.875% 5/15/08	50,000		50,538
5% 6/15/09	25,000		25,072
Ford Motor Credit Co.:
7.375% 10/28/09	55,000		58,697
7.375% 2/1/11	100,000		105,477
Household Finance Corp.:
6.375% 10/15/11	15,000		16,011
7% 5/15/12	5,000		5,523
Household International, Inc. 8.875% 2/15/08	75,000		81,672
MBNA America Bank NA 6.625% 6/15/12	30,000		32,162
MBNA Corp. 7.5% 3/15/12	45,000		51,018
			426,170
Diversified Financial Services - 1.6%
Ahold Finance USA, Inc. 8.25% 7/15/10	190,000		199,500
American Airlines, Inc. pass thru trust certificates:
6.817% 5/23/11	170,000		151,300
6.977% 11/23/22	15,332		13,492
7.377% 5/23/19	151,667		106,167
7.379% 5/23/16	102,559		71,791
7.8% 4/1/08	80,000		72,800
8.608% 10/1/12	120,000		110,400
10.18% 1/2/13	65,000		47,450
Bellsouth Capital Funding Corp. 7.875% 2/15/30	25,000		28,966
Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (f)	145,000		139,200
Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.:
0% 5/15/11 (d)	180,000		115,200
8.625% 4/1/09	335,000		266,325
Citigroup, Inc. 7.25% 10/1/10	75,000		84,465
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
FINANCIALS - continued
Diversified Financial Services - continued
Continental Airlines, Inc. pass thru trust certificates:
6.795% 2/2/20	$ 170,391		$ 136,313
6.9% 7/2/18	151,878		118,465
7.373% 12/15/15	162,305		128,221
7.568% 12/1/06	60,000		44,400
7.73% 9/15/12	25,742		19,307
8.312% 10/2/12	108,220		80,083
8.388% 5/1/22	43,837		33,316
8.499% 11/1/12	52,098		39,595
Couche Tard U.S. LP /Couche Tard Financing Corp. 7.5% 12/15/13	105,000		105,000
Delta Air Lines, Inc. pass thru trust certificates:
7.299% 9/18/06	30,000		18,300
7.57% 11/18/10	20,000		18,561
7.711% 9/18/11	15,000		9,450
7.779% 11/18/05	70,000		43,400
7.779% 1/2/12	129,400		69,876
7.92% 5/18/12	310,000		202,971
10.06% 1/2/16	80,000		40,000
Deutsche Telekom International Finance BV 8.75% 6/15/30	50,000		60,857
Dex Media West LLC/Dex Media West Finance Co. 9.875% 8/15/13	70,000		77,525
El Paso Energy Partners LP/El Paso Energy Partners Finance Corp. 8.5% 6/1/11	154,000		165,550
EnCana Holdings Finance Corp. 5.8% 5/1/14	65,000		66,128
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11	110,000		121,825
Goldman Sachs Capital I 6.345% 2/15/34	50,000		46,954
Huntsman Advanced Materials LLC:
10% 7/15/08 (f)(i)	100,000		103,750
11% 7/15/10 (f)	80,000		88,800
Hutchison Whampoa International 03/13 Ltd. 6.5% 2/13/13 (f)	10,000		10,008
Hutchison Whampoa International Ltd.:
6.25% 1/24/14 (f)	25,000		24,237
7.45% 11/24/33 (f)	15,000		14,356
Inmarsat Finance PLC 7.625% 6/30/12 (f)	100,000		96,750
Ispat Inland ULC 9.75% 4/1/14 (f)	95,000		97,850
Mizuho Financial Group Cayman Ltd. 5.79% 4/15/14 (f)	30,000		29,490
National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11	130,000		135,850
Nexstar Finance, Inc. 7% 1/15/14	90,000		84,600
NiSource Finance Corp. 7.875% 11/15/10	70,000		80,248
	Principal Amount		Value (Note 1)
Northwest Airlines, Inc. pass thru trust certificates:
7.248% 7/2/14	$ 128,622		$ 91,321
7.626% 4/1/10	135,096		105,375
7.691% 4/1/17	17,854		13,569
7.95% 9/1/16	18,015		13,872
8.304% 9/1/10	89,446		70,215
Pemex Project Funding Master Trust:
6.125% 8/15/08	50,000		51,125
7.875% 2/1/09 (i)	100,000		108,750
Petronas Capital Ltd. 7% 5/22/12 (f)	55,000		59,967
Rabobank Capital Funding Trust II 5.26% 12/31/49 (f)(i)	100,000		96,768
Ship Finance International Ltd. 8.5% 12/15/13 (f)	460,000		443,900
Sprint Capital Corp. 6.875% 11/15/28	75,000		72,094
Suburban Propane Partners LP/Suburban Energy Finance Corp. 6.875% 12/15/13	40,000		38,900
Telecom Italia Capital 5.25% 11/15/13 (f)	50,000		48,392
Tyco International Group SA yankee 6.75% 2/15/11	25,000		27,165
UGS Corp. 10% 6/1/12 (f)	110,000		116,600
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10	110,000		127,325
Verizon Global Funding Corp.:
7.25% 12/1/10	70,000		78,258
7.75% 12/1/30	30,000		33,695
WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (f)	40,000		41,600
			5,457,983
Insurance - 0.0%
Principal Life Global Funding I 6.25% 2/15/12 (f)	25,000		26,701
Real Estate - 0.1%
EOP Operating LP:
4.75% 3/15/14	30,000		27,640
7.75% 11/15/07	50,000		55,489
Regency Centers LP 6.75% 1/15/12	45,000		48,904
Senior Housing Properties Trust 8.625% 1/15/12	115,000		124,775
			256,808
Thrifts & Mortgage Finance - 0.1%
Countrywide Home Loans, Inc. 4% 3/22/11	50,000		46,635
Independence Community Bank Corp. 3.75% 4/1/14 (i)	20,000		19,030
Washington Mutual, Inc.:
4.375% 1/15/08	20,000		20,127
4.625% 4/1/14	50,000		45,602
			131,394
TOTAL FINANCIALS			7,309,060
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
HEALTH CARE - 0.5%
Health Care Equipment & Supplies - 0.0%
Medical Device Manufacturing, Inc. 10% 7/15/12 (f)	$ 60,000		$ 61,200
Health Care Providers & Services - 0.5%
AmeriPath, Inc. 10.5% 4/1/13	345,000		349,313
Concentra Operating Corp. 9.125% 6/1/12 (f)	20,000		20,900
Fountain View, Inc. 9.25% 8/19/08 (e)	454,253		454,253
Genesis HealthCare Corp. 8% 10/15/13 (f)	30,000		30,825
IASIS Healthcare LLC/IASIS Capital Corp. 8.75% 6/15/14 (f)	185,000		188,700
Mariner Health Care, Inc. 8.25% 12/15/13 (f)	70,000		70,700
National Nephrology Associates, Inc. 9% 11/1/11 (f)	40,000		45,800
Psychiatric Solutions, Inc. 10.625% 6/15/13	75,000		85,500
Quintiles Transnational Corp. 10% 10/1/13	25,000		24,875
Tenet Healthcare Corp.:
6.375% 12/1/11	105,000		90,300
7.375% 2/1/13	165,000		150,150
			1,511,316
TOTAL HEALTH CARE			1,572,516
INDUSTRIALS - 0.7%
Aerospace & Defense - 0.2%
BE Aerospace, Inc.:
8% 3/1/08	65,000		60,613
8.875% 5/1/11	60,000		55,950
9.5% 11/1/08	305,000		295,850
Bombardier, Inc. 6.3% 5/1/14 (f)	100,000		84,935
Raytheon Co. 8.3% 3/1/10	50,000		58,650
Vought Aircraft Industries, Inc. 8% 7/15/11 (f)	90,000		85,500
			641,498
Airlines - 0.1%
Delta Air Lines, Inc.:
equipment trust certificates 8.54% 1/2/07	31,037		22,657
7.9% 12/15/09	30,000		15,000
8.3% 12/15/29	190,000		77,900
NWA Trust 10.23% 6/21/14	56,615		49,821
			165,378
Building Products - 0.1%
Mueller Group, Inc. 5.9188% 11/1/11 (f)(i)	120,000		123,000
	Principal Amount		Value (Note 1)
Commercial Services & Supplies - 0.1%
Allied Waste North America, Inc.:
5.75% 2/15/11 (f)	$ 60,000		$ 56,850
6.375% 4/15/11 (f)	60,000		58,800
7.625% 1/1/06	185,000		193,788
American Color Graphics, Inc. 10% 6/15/10	40,000		35,800
			345,238
Construction & Engineering - 0.0%
Great Lakes Dredge & Dock Corp. 7.75% 12/15/13	50,000		42,750
Machinery - 0.1%
Cummins, Inc. 9.5% 12/1/10 (i)	80,000		90,800
Dresser, Inc. 9.375% 4/15/11	30,000		32,100
Invensys PLC 9.875% 3/15/11 (f)	130,000		130,000
Terex Corp. 7.375% 1/15/14	120,000		117,600
			370,500
Marine - 0.0%
Horizon Lines LLC 9% 11/1/12 (f)	40,000		40,750
OMI Corp. 7.625% 12/1/13	50,000		49,000
			89,750
Road & Rail - 0.1%
Kansas City Southern Railway Co. 9.5% 10/1/08	40,000		43,000
TFM SA de CV yankee 11.75% 6/15/09	360,000		352,800
			395,800
TOTAL INDUSTRIALS			2,173,914
INFORMATION TECHNOLOGY - 0.5%
Communications Equipment - 0.1%
L-3 Communications Corp. 6.125% 1/15/14	100,000		96,000
Marconi Corp. PLC 8% 4/30/08 (f)	72,959		78,795
Motorola, Inc.:
6.5% 11/15/28	100,000		96,858
7.625% 11/15/10	25,000		28,146
Nortel Networks Corp. 6.125% 2/15/06	145,000		145,363
			445,162
Electronic Equipment & Instruments - 0.1%
Celestica, Inc. 7.875% 7/1/11	280,000		284,200
Flextronics International Ltd. 6.5% 5/15/13	30,000		29,175
Sanmina-SCI Corp. 10.375% 1/15/10	85,000		97,750
			411,125
IT Services - 0.0%
Iron Mountain, Inc. 6.625% 1/1/16	110,000		99,550
Office Electronics - 0.1%
Xerox Corp.:
7.125% 6/15/10	125,000		128,125
7.625% 6/15/13	180,000		184,500
			312,625
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
INFORMATION TECHNOLOGY - continued
Semiconductors & Semiconductor Equipment - 0.2%
Amkor Technology, Inc.:
7.125% 3/15/11 (f)	$ 65,000		$ 60,613
7.75% 5/15/13	40,000		37,700
9.25% 2/15/08	20,000		20,950
Semiconductor Note Partners Trust 0% 8/4/11 (f)	155,000		221,650
Viasystems, Inc. 10.5% 1/15/11 (f)	165,000		174,075
			514,988
TOTAL INFORMATION TECHNOLOGY			1,783,450
MATERIALS - 1.1%
Chemicals - 0.3%
America Rock Salt Co. LLC 9.5% 3/15/14 (f)	65,000		66,625
Berry Plastics Corp. 10.75% 7/15/12	90,000		99,450
Compass Minerals Group, Inc. 10% 8/15/11	150,000		166,500
Equistar Chemicals LP/Equistar Funding Corp. 10.625% 5/1/11	165,000		183,150
Geon Co. 6.875% 12/15/05	25,000		25,375
Huntsman ICI Holdings LLC 0% 12/31/09	85,000		41,225
Lyondell Chemical Co.:
9.625% 5/1/07	45,000		46,800
9.875% 5/1/07	135,000		141,075
Nalco Co. 7.75% 11/15/11 (f)	70,000		72,975
PolyOne Corp.:
8.875% 5/1/12	90,000		87,750
10.625% 5/15/10	50,000		52,750
The Scotts Co. 6.625% 11/15/13	70,000		70,000
			1,053,675
Construction Materials - 0.0%
U.S. Concrete, Inc. 8.375% 4/1/14 (f)	70,000		69,825
Containers & Packaging - 0.3%
BWAY Corp. 10% 10/15/10	80,000		84,800
Crown European Holdings SA 10.875% 3/1/13	85,000		97,325
Owens-Brockway Glass Container, Inc. 8.875% 2/15/09	305,000		327,875
Owens-Illinois, Inc.:
7.15% 5/15/05	110,000		113,163
7.8% 5/15/18	30,000		27,075
8.1% 5/15/07	150,000		154,500
Sealed Air Corp.:
5.625% 7/15/13 (f)	5,000		4,939
6.875% 7/15/33 (f)	15,000		15,141
Tekni-Plex, Inc. 8.75% 11/15/13 (f)	100,000		96,000
			920,818
Metals & Mining - 0.2%
Allegheny Technologies, Inc. 8.375% 12/15/11	60,000		60,300
	Principal Amount		Value (Note 1)
California Steel Industries, Inc. 6.125% 3/15/14	$ 85,000		$ 78,838
CSN Islands VIII Corp. 9.75% 12/16/13 (f)	130,000		117,000
International Steel Group, Inc. 6.5% 4/15/14 (f)	190,000		177,650
Steel Dynamics, Inc. 9.5% 3/15/09	35,000		38,675
Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (f)	90,000		92,250
			564,713
Paper & Forest Products - 0.3%
Georgia-Pacific Corp.:
8% 1/15/24 (f)	120,000		120,300
9.5% 12/1/11	245,000		286,650
International Paper Co.:
4.25% 1/15/09	5,000		4,915
5.5% 1/15/14	20,000		19,579
Norske Skog Canada Ltd.:
7.375% 3/1/14	50,000		48,250
8.625% 6/15/11	140,000		148,400
Solo Cup Co. 8.5% 2/15/14 (f)	60,000		55,800
Stone Container Corp. 9.75% 2/1/11	205,000		225,500
Weyerhaeuser Co. 6.75% 3/15/12	25,000		27,074
			936,468
TOTAL MATERIALS			3,545,499
TELECOMMUNICATION SERVICES - 1.0%
Diversified Telecommunication Services - 0.4%
AT&T Broadband Corp. 8.375% 3/15/13	50,000		58,697
BellSouth Corp. 6.55% 6/15/34	30,000		29,905
British Telecommunications PLC 8.875% 12/15/30	50,000		61,684
France Telecom SA:
8.75% 3/1/11	40,000		46,353
9.5% 3/1/31	50,000		62,751
NTL Cable PLC 8.75% 4/15/14 (f)	170,000		174,675
Primus Telecommunications Group, Inc. 8% 1/15/14	85,000		73,100
Qwest Communications International, Inc.:
7.25% 2/15/11 (f)	25,000		23,250
7.5% 2/15/14 (f)	175,000		159,250
Qwest Corp. 9.125% 3/15/12 (f)	140,000		151,200
Qwest Services Corp. 13.5% 12/15/10 (f)	150,000		174,000
Telecomunicaciones de Puerto Rico, Inc. 6.65% 5/15/06	15,000		15,847
Telefonica Europe BV 7.75% 9/15/10	50,000		57,188
Triton PCS, Inc.:
8.75% 11/15/11	210,000		173,250
9.375% 2/1/11	65,000		55,575
			1,316,725
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
TELECOMMUNICATION SERVICES - continued
Wireless Telecommunication Services - 0.6%
America Movil SA de CV:
4.125% 3/1/09 (f)	$ 20,000		$ 18,785
5.5% 3/1/14 (f)	15,000		13,818
American Cellular Corp. 10% 8/1/11	60,000		52,200
American Tower Corp. 9.375% 2/1/09	175,000		187,250
AT&T Wireless Services, Inc.:
7.875% 3/1/11	5,000		5,687
8.75% 3/1/31	60,000		73,150
Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (f)	120,000		111,300
Crown Castle International Corp.:
Series B, 7.5% 12/1/13	120,000		118,800
7.5% 12/1/13	80,000		79,200
10.75% 8/1/11	90,000		100,575
DirecTV Holdings LLC/DirecTV Financing, Inc. 8.375% 3/15/13	80,000		88,600
Millicom International Cellular SA 10% 12/1/13 (f)	120,000		121,200
Nextel Communications, Inc.:
7.375% 8/1/15	390,000		391,950
9.5% 2/1/11	35,000		39,113
Nextel Partners, Inc. 8.125% 7/1/11	100,000		101,500
Rogers Wireless, Inc.:
6.375% 3/1/14	120,000		110,100
9.625% 5/1/11	230,000		256,450
Western Wireless Corp. 9.25% 7/15/13	140,000		143,500
			2,013,178
TOTAL TELECOMMUNICATION SERVICES			3,329,903
UTILITIES - 1.3%
Electric Utilities - 0.6%
Allegheny Energy Supply Co. LLC 8.25% 4/15/12 (f)	100,000		98,000
Cleveland Electric Illuminating Co. 5.65% 12/15/13 (f)	15,000		14,597
CMS Energy Corp.:
7.625% 11/15/04	190,000		192,613
7.75% 8/1/10 (f)	235,000		234,413
8.5% 4/15/11	40,000		41,000
8.9% 7/15/08	220,000		231,275
9.875% 10/15/07	245,000		264,294
DTE Energy Co. 7.05% 6/1/11	15,000		16,259
	Principal Amount		Value (Note 1)
Duke Capital Corp.:
6.25% 2/15/13	$ 50,000		$ 50,692
6.75% 2/15/32	55,000		52,766
Exelon Corp. 6.75% 5/1/11	50,000		54,376
FirstEnergy Corp. 6.45% 11/15/11	20,000		20,735
Illinois Power Co.:
7.5% 6/15/09	65,000		71,013
11.5% 12/15/10	160,000		189,200
MidAmerican Energy Holdings, Inc. 5.875% 10/1/12	50,000		50,770
Nevada Power Co. 10.875% 10/15/09	50,000		56,625
Pacific Gas & Electric Co.:
4.2% 3/1/11	5,000		4,761
4.8% 3/1/14	10,000		9,475
Progress Energy, Inc.:
6.85% 4/15/12	75,000		81,047
7.1% 3/1/11	30,000		32,874
Sierra Pacific Power Co. 6.25% 4/15/12 (f)	40,000		37,500
Southern California Edison Co.:
5% 1/15/14	5,000		4,864
7.625% 1/15/10	120,000		135,408
TECO Energy, Inc. 6.125% 5/1/07	85,000		85,000
			2,029,557
Gas Utilities - 0.2%
ANR Pipeline, Inc. 8.875% 3/15/10	70,000		76,125
Consolidated Natural Gas Co. 6.85% 4/15/11	25,000		27,377
Dynegy Holdings, Inc. 10.125% 7/15/13 (f)	90,000		97,200
Northwest Pipeline Corp. 8.125% 3/1/10	70,000		75,950
Sonat, Inc.:
6.75% 10/1/07	35,000		33,206
7.625% 7/15/11	25,000		22,188
Southern Natural Gas Co. 8.875% 3/15/10	90,000		97,875
Transcontinental Gas Pipe Line Corp.:
6.125% 1/15/05	100,000		100,500
6.25% 1/15/08	215,000		218,225
			748,646
Multi-Utilities & Unregulated Power - 0.5%
AES Corp.:
8.75% 5/15/13 (f)	300,000		321,000
8.875% 2/15/11	46,000		47,783
9.375% 9/15/10	161,000		171,868
9.5% 6/1/09	248,000		265,050
Calpine Corp. 6.89% 7/15/07 (f)(i)	193,538		172,732
Calpine Generating Co. LLC 7% 4/1/10 (f)(i)	60,000		57,900
Constellation Energy Group, Inc. 7% 4/1/12	50,000		54,448
Dominion Resources, Inc.:
6.25% 6/30/12	85,000		89,090
8.125% 6/15/10	10,000		11,540
NRG Energy, Inc. 8% 12/15/13 (f)	190,000		191,425
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
UTILITIES - continued
Multi-Utilities & Unregulated Power - continued
Reliant Energy, Inc. 9.25% 7/15/10	$ 85,000		$ 90,950
Western Resources, Inc. 7.125% 8/1/09	50,000		53,563
			1,527,349
TOTAL UTILITIES			4,305,552
TOTAL NONCONVERTIBLE BONDS			35,350,679
TOTAL CORPORATE BONDS (Cost $35,207,859)		36,881,405
U.S. Government and Government Agency Obligations - 1.7%
U.S. Government Agency Obligations - 0.3%
Fannie Mae:
3.25% 2/15/09	380,000		366,112
5.25% 8/1/12	28,000		27,983
5.5% 3/15/11	35,000		36,608
6.25% 2/1/11	100,000		107,364
Freddie Mac:
3.625% 9/15/08	71,000		69,991
4% 6/12/13	87,000		79,412
4.5% 1/15/14	200,000		190,073
5.875% 3/21/11	170,000		178,688
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			1,056,231
U.S. Treasury Obligations - 1.4%
U.S. Treasury Bills, yield at date of purchase 1.25% 9/9/04 (h)	600,000		598,558
U.S. Treasury Bonds:
5.375% 2/15/31	50,000		50,428
6.25% 5/15/30	450,000		503,842
U.S. Treasury Notes:
1.625% 2/28/06	3,215,000		3,167,907
3.125% 5/15/07	125,000		125,000
6.5% 2/15/10	230,000		259,163
TOTAL U.S. TREASURY OBLIGATIONS			4,704,898
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $5,796,235)		5,761,129
U.S. Government Agency - Mortgage Securities - 2.4%
Fannie Mae - 2.2%
4.5% 7/1/19 (g)	240,000		234,375
4.5% 10/1/33	1,212,825		1,135,918
5% 7/1/18	837,762		840,743
	Principal Amount		Value (Note 1)
5% 7/1/34 (g)	$ 400,000		$ 386,125
5.5% 4/1/16 to 6/1/29	360,924		369,289
5.5% 7/1/34 (g)	2,271,356		2,259,289
6% 4/1/13 to 4/1/33	661,919		690,244
6.5% 3/1/13 to 4/1/33	1,165,740		1,219,404
6.5% 7/1/19 (g)	291,806		307,855
7.5% 5/1/24 to 2/1/28	46,720		50,224
TOTAL FANNIE MAE			7,493,466
Freddie Mac - 0.0%
7.5% 8/1/28	11,819		12,767
Government National Mortgage Association - 0.2%
6.5% 8/15/27	113,359		119,133
7% 7/15/28 to 7/15/32	188,845		200,871
7.5% 1/15/26 to 8/15/28	119,870		129,402
8.5% 11/15/30	54,338		59,609
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			509,015
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $7,927,214)		8,015,248
Asset-Backed Securities - 0.1%
Ameriquest Mortgage Securities, Inc. Series 2004-R2 Class M1, 1.73% 4/25/34 (i)	5,000		5,000
Amortizing Residential Collateral Trust Series 2003-BC1 Class M2, 2.4% 1/25/32 (i)	10,000		10,020
Argent Securities, Inc. Series 2004-W5 Class M1, 1.9% 4/25/34 (i)	15,000		15,018
Capital One Multi-Asset Execution Trust Series 2003-B4 Class B4, 2.0388% 7/15/11 (i)	25,000		25,474
CDC Mortgage Capital Trust Series 2004-HE2 Class M2, 2.5% 7/26/34 (i)	10,000		9,975
Citibank Credit Card Issuance Trust:
Series 2002-B1 Class B1, 1.9% 6/25/09 (i)	30,000		30,106
Series 2002-C1 Class C1, 2.17% 2/9/09 (i)	50,000		50,734
Countrywide Home Loans, Inc.:
Series 2004-2 Class M1, 1.8% 5/25/34 (i)	25,000		24,999
Series 2004-4:
Class A, 1.67% 8/25/34 (i)	24,459		24,416
Class M1, 1.78% 7/25/34 (i)	25,000		24,938
Class M2, 1.83% 6/25/34 (i)	15,000		14,953
Discover Card Master Trust I Series 2003-4 Class B1, 1.5688% 5/16/11 (i)	30,000		30,105
Ford Credit Auto Owner Trust Series 2001-B Class B, 5.71% 9/15/05	35,000		35,060
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
Fremont Home Loan Trust Series 2004-A:
Class M1, 1.85% 1/25/34 (i)	$ 25,000		$ 24,999
Class M2, 2.45% 1/25/34 (i)	25,000		24,999
Household Private Label Credit Card Master Note Trust I Series 2002-1 Class A, 5.5% 1/18/11	125,000		131,033
Long Beach Mortgage Loan Trust Series 2004-2 Class M1, 1.83% 6/25/34 (i)	25,000		25,002
Morgan Stanley Dean Witter Capital I Trust Series 2003-NC1 Class M1, 2.35% 11/25/32 (i)	10,000		10,121
TOTAL ASSET-BACKED SECURITIES (Cost $510,071)		516,952
Collateralized Mortgage Obligations - 0.1%
Private Sponsor - 0.0%
CS First Boston Mortgage Securities Corp. floater:
Series 2004-AR3 Class 6A2, 1.67% 3/25/34 (i)	18,628		18,667
Series 2004-AR5 Class 11A2, 1.67% 6/25/34 (i)	24,403		24,330
TOTAL PRIVATE SPONSOR			42,997
U.S. Government Agency - 0.1%
Fannie Mae:
planned amortization class:
Series 1999-54 Class PH, 6.5% 11/18/29	100,000		105,266
Series 1999-57 Class PH, 6.5% 12/25/29	100,000		103,743
sequential pay Series 1999-10 Class MZ, 6.5% 9/17/38	42,391		44,260
TOTAL U.S. GOVERNMENT AGENCY			253,269
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $268,736)		296,266
Commercial Mortgage Securities - 0.3%
Asset Securitization Corp. sequential pay Series 1995-MD4 Class A1, 7.1% 8/13/29	47,459		49,704
CBM Funding Corp. sequential pay Series 1996-1:
Class A3PI, 7.08% 11/1/07	66,934		70,893
Class B, 7.48% 2/1/08	80,000		87,548
	Principal Amount		Value (Note 1)
COMM:
floater:
Series 2002-FL7 Class D, 1.8088% 11/15/14 (f)(i)	$ 10,000		$ 9,997
Series 2003-FL9 Class B, 1.7388% 11/15/15 (f)(i)	15,000		15,014
Series 2004-LBN2 Class X2, 1.1206% 3/10/39 (f)(i)(k)	60,000		2,834
CS First Boston Mortgage Securities Corp.:
sequential pay:
Series 1999-C1 Class A2, 7.29% 9/15/41	50,000		55,850
Series 2004-C1 Class A3, 4.321% 1/15/37	20,000		19,239
Series 1998-C1 Class D, 7.17% 5/17/40	15,000		16,126
Series 2004-C1 Class ASP, 1.2151% 1/15/37 (f)(i)(k)	295,000		13,102
Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31	145,000		156,130
FMAC Loan Receivables Trust weighted average coupon Series 1997-A Class E, 0% 4/15/19 (c)(f)(i)	213,797		0
GS Mortgage Securities Corp. II:
sequential pay Series 2001-LIBA Class A2, 6.615% 2/14/16 (f)	15,000		16,151
Series 1998-GLII Class E, 6.9702% 4/13/31 (i)	45,000		47,030
Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A Class B, 4.13% 11/20/37 (f)	100,000		92,390
LTC Commercial Mortgage pass thru certificates sequential pay Series 1998-1 Class A, 6.029% 5/28/30 (f)	52,259		52,520
Morgan Stanley Capital I, Inc. sequential pay Series 2004-HQ3 Class A2, 4.05% 1/13/41	20,000		19,368
Thirteen Affiliates of General Growth Properties, Inc. Series 1:
Class D2, 6.992% 11/15/07 (f)	140,000		151,114
Class E2, 7.224% 11/15/07 (f)	100,000		107,391
Wachovia Bank Commercial Mortgage Trust sequential pay Series 2003-C6 Class A2, 4.498% 8/15/35	30,000		29,899
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $1,178,058)		1,012,300
Foreign Government and Government Agency Obligations - 0.0%
Chilean Republic:
6.875% 4/28/09	50,000		54,920
7.125% 1/11/12	15,000		16,706
Foreign Government and Government Agency Obligations - continued
	Principal Amount		Value (Note 1)
South African Republic 6.5% 6/2/14	$ 20,000		$ 20,000
United Mexican States 7.5% 4/8/33	100,000		97,250
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $178,807)		188,876
Floating Rate Loans - 0.1%
TELECOMMUNICATION SERVICES - 0.1%
Diversified Telecommunication Services - 0.1%
Qwest Corp. Tranche A term loan 6.5% 6/30/07 (i)	260,000		270,400
TOTAL FLOATING RATE LOANS (Cost $261,235)		270,400

Fixed-Income Funds - 0.3%
	Shares
Fidelity Ultra-Short Central Fund (j) (Cost $899,956)	9,041		900,303
Money Market Funds - 10.9%
Fidelity Cash Central Fund, 1.16% (b)	34,529,503		34,529,503
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	1,723,659		1,723,659
TOTAL MONEY MARKET FUNDS (Cost $36,253,162)		36,253,162
TOTAL INVESTMENT PORTFOLIO - 100.1% (Cost $309,448,050)			333,702,837
NET OTHER ASSETS - (0.1)%			(334,011)
NET ASSETS - 100%		$ 333,368,826

Futures Contracts
	Expiration Date	Underlying Face Amount at Value	Unrealized Appreciation/(Depreciation)
Purchased
Equity Index Contracts
33 S&P 500 Index Contracts	Sept. 2004	$ 9,408,300	$ 62,090

The face value of futures purchased as a percentage of net assets - 2.8%

Swap Agreements
	Expiration Date	Notional Amount	Value
Credit Default Swap
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	$ 25,000	$ (158)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon default event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27	March 2009	25,000	(72)
Receive quarterly notional amount multiplied by .62% and pay Lehman Brothers, Inc. upon default event of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11	June 2009	25,000	45
		75,000	(185)
Interest Rate Swap
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	275,000	(1,903)
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	235,000	(1,293)
		510,000	(3,196)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Total Return Swap
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 65 basis points with Lehman Brothers, Inc.	Oct. 2004	$ 75,000	$ 238
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 45 basis points with Lehman Brothers, Inc.	Nov. 2004	500,000	1,058
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 55 basis points with Deutsche Bank	Dec. 2004	150,000	480
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	July 2004	75,000	841
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	Nov. 2004	100,000	(49)
		900,000	2,568
		$ 1,485,000	$ (813)

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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 $9,292,245 or 2.8% of net assets.

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

(h) 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 $598,558.

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

(j) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

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

(l) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $3,771 or 0.0% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Acquisition Cost
Fountain View, Inc.	8/19/03 - 1/27/04	$ 2

Other Information

The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited):

U.S. Government and U.S. Government Agency Obligations	4.1%
AAA,AA,A	0.5%
BBB	1.1%
BB	2.5%
B	5.8%
CCC,CC,C	1.5%
Not Rated	0.3%
Equities	75.9%
Short-Term Investments and Net Other Assets	8.3%
	100.0%

We have used ratings from Moody's Investors Services, Inc. Where Moody's ratings are not available, we have used S&P ratings. Percentages are adjusted for the effect of futures contracts, if applicable.

Purchases and sales of securities, other than short-term securities, aggregated $117,052,746 and $121,103,081, respectively, of which long-term U.S. government and government agency obligations aggregated $19,406,221 and $21,386,898, 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 $1,235 for the period.

The fund participated in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $270,400 or 0.1% of net assets.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $74,491,000 of which $54,731,000, $11,142,000 and $8,618,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Semiannual Report

Fidelity Variable Insurance Products: Asset Manager: Growth Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $1,706,185) (cost $309,448,050) - See accompanying schedule		$ 333,702,837
Cash		490,863
Foreign currency held at value (cost $ 1,280,908)		1,267,341
Receivable for investments sold		4,108,728
Receivable for swap agreements		28
Receivable for fund shares sold		22,966
Dividends receivable		237,155
Interest receivable		893,016
Receivable for daily variation on futures contracts		37,950
Prepaid expenses		789
Other receivables		7,453
Total assets		340,769,126
Liabilities
Payable for investments purchased Regular delivery	$ 1,908,483
Delayed delivery	3,219,099
Payable for fund shares redeemed	313,974
Swap agreements, at value	813
Accrued management fee	159,132
Distribution fees payable	1,916
Other affiliated payables	32,975
Other payables and accrued expenses	40,249
Collateral on securities loaned, at value	1,723,659
Total liabilities		7,400,300
Net Assets		$ 333,368,826
Net Assets consist of:
Paid in capital		$ 379,713,696
Undistributed net investment income		3,575,400
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(74,222,415)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		24,302,145
Net Assets		$ 333,368,826
Initial Class: Net Asset Value, offering price and redemption price per share ($320,251,912 ÷ 26,180,467 shares)		$ 12.23
Service Class: Net Asset Value, offering price and redemption price per share ($6,383,937 ÷ 525,223 shares)		$ 12.15
Service Class 2: Net Asset Value, offering price and redemption price per share ($6,732,977 ÷ 556,889 shares)		$ 12.09

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 1,923,121
Interest		2,574,185
Security lending		2,724
Total income		4,500,030
Expenses
Management fee	$ 997,453
Transfer agent fees	121,423
Distribution fees	12,114
Accounting and security lending fees	91,935
Non-interested trustees' compensation	833
Custodian fees and expenses	31,047
Registration fees	5
Audit	25,094
Legal	325
Miscellaneous	13,634
Total expenses before reductions	1,293,863
Expense reductions	(21,855)	1,272,008
Net investment income (loss)		3,228,022
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	3,387,470
Foreign currency transactions	(15,887)
Futures contracts	429,310
Swap agreements	1,370
Total net realized gain (loss)		3,802,263
Change in net unrealized appreciation (depreciation) on: Investment securities	(2,000,873)
Assets and liabilities in foreign currencies	(13,943)
Futures contracts	(334,331)
Swap agreements	(8,750)
Delayed delivery commitments	(9)
Total change in net unrealized appreciation (depreciation)		(2,357,906)
Net gain (loss)		1,444,357
Net increase (decrease) in net assets resulting from operations		$ 4,672,379

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

Semiannual Report

Fidelity Variable Insurance Products: Asset Manager: Growth Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 3,228,022	$ 7,266,015
Net realized gain (loss)	3,802,263	(6,943,753)
Change in net unrealized appreciation (depreciation)	(2,357,906)	65,516,088
Net increase (decrease) in net assets resulting from operations	4,672,379	65,838,350
Distributions to shareholders from net investment income	(7,897,225)	(8,995,679)
Share transactions - net increase (decrease)	(12,077,459)	(2,618,363)
Total increase (decrease) in net assets	(15,302,305)	54,224,308
Net Assets
Beginning of period	348,671,131	294,446,823
End of period (including undistributed net investment income of $3,575,400 and undistributed net investment income of $8,517,550, respectively)	$ 333,368,826	$ 348,671,131

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	1,130,153	9,762	158,111
Reinvested	611,000	11,814	12,205
Redeemed	(2,746,547)	(42,406)	(162,460)
Net increase (decrease)	(1,005,394)	(20,830)	7,856
Dollars Sold	$ 13,964,437	$ 119,018	$ 1,927,926
Reinvested	7,600,835	146,142	150,249
Redeemed	(33,521,816)	(515,522)	(1,948,728)
Net increase (decrease)	$ (11,956,544)	$ (250,362)	$ 129,447
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	2,762,140	14,055	234,611
Reinvested	904,884	18,903	12,490
Redeemed	(4,008,936)	(81,582)	(93,999)
Net increase (decrease)	(341,912)	(48,624)	153,102
Dollars Sold	$ 30,831,473	$ 157,481	$ 2,571,962
Reinvested	8,695,938	180,711	119,030
Redeemed	(43,277,864)	(881,741)	(1,015,353)
Net increase (decrease)	$ (3,750,453)	$ (543,549)	$ 1,675,639
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 7,600,835	$ 146,142	$ 150,248
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 8,695,938	$ 180,711	$ 119,030

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

Asset Manager: Growth Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 12.33	$ 10.33	$ 12.56	$ 14.41	$ 18.38	$ 17.03
Income from Investment Operations
Net investment income (loss)	.12	.26	.32	.32	.42	.40
Net realized and unrealized gain (loss) E	.06	2.06	(2.23)	(1.31)	(2.52)	2.04
Total from investment operations	.18	2.32	(1.91)	(.99)	(2.10)	2.44
Distributions from net investment income	(.28)	(.32)	(.32)	(.39)	(.37)	(.41)
Distributions from net realized gain	-	-	-	(.47)	(1.50)	(.68)
Total distributions	(.28)	(.32)	(.32)	(.86)	(1.87)	(1.09)
Net asset value, end of period	$ 12.23	$ 12.33	$ 10.33	$ 12.56	$ 14.41	$ 18.38
Total ReturnB,C,D	1.42%	23.34%	(15.53)%	(7.39)%	(12.47)%	15.26%
Ratios to Average Net AssetsF
Expenses before expense reductions	.74%A	.73%	.73%	.73%	.69%	.71%
Expenses net of voluntary waivers, if any	.74%A	.73%	.73%	.73%	.69%	.71%
Expenses net of all reductions	.72%A	.72%	.69%	.72%	.68%	.70%
Net investment income (loss)	1.87%A	2.33%	2.88%	2.55%	2.61%	2.38%
Supplemental Data
Net assets, end of period (000 omitted)	$ 320,252	$ 335,285	$ 284,298	$ 399,273	$ 482,165	$ 580,555
Portfolio turnover rate	76%A	65%	149%	111%	147%	92%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 12.25	$ 10.27	$ 12.47	$ 14.32	$ 18.28	$ 16.96
Income from Investment Operations
Net investment income (loss)E	.11	.24	.30	.31	.40	.38
Net realized and unrealized gain (loss)	.06	2.05	(2.20)	(1.32)	(2.50)	2.03
Total from investment operations	.17	2.29	(1.90)	(1.01)	(2.10)	2.41
Distributions from net investment income	(.27)	(.31)	(.30)	(.37)	(.36)	(.41)
Distributions from net realized gain	-	-	-	(.47)	(1.50)	(.68)
Total distributions	(.27)	(.31)	(.30)	(.84)	(1.86)	(1.09)
Net asset value, end of period	$ 12.15	$ 12.25	$ 10.27	$ 12.47	$ 14.32	$ 18.28
Total ReturnB,C,D	1.35%	23.15%	(15.54)%	(7.57)%	(12.54)%	15.13%
Ratios to Average Net AssetsF
Expenses before expense reductions	.87%A	.85%	.84%	.83%	.80%	.82%
Expenses net of voluntary waivers, if any	.87%A	.85%	.84%	.83%	.80%	.82%
Expenses net of all reductions	.86%A	.84%	.80%	.82%	.79%	.81%
Net investment income (loss)	1.74%A	2.21%	2.77%	2.44%	2.50%	2.27%
Supplemental Data
Net assets, end of period (000 omitted)	$ 6,384	$ 6,692	$ 6,105	$ 9,542	$ 12,449	$ 10,825
Portfolio turnover rate	76%A	65%	149%	111%	147%	92%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 12.19	$ 10.21	$ 12.43	$ 14.30	$ 17.78
Income from Investment Operations
Net investment income (loss)E	.09	.22	.28	.28	.34
Net realized and unrealized gain (loss)	.07	2.05	(2.21)	(1.30)	(1.96)
Total from investment operations	.16	2.27	(1.93)	(1.02)	(1.62)
Distributions from net investment income	(.26)	(.29)	(.29)	(.38)	(.36)
Distributions from net realized gain	-	-	-	(.47)	(1.50)
Total distributions	(.26)	(.29)	(.29)	(.85)	(1.86)
Net asset value, end of period	$ 12.09	$ 12.19	$ 10.21	$ 12.43	$ 14.30
Total ReturnB,C,D	1.27%	23.03%	(15.83)%	(7.66)%	(10.21)%
Ratios to Average Net Assets G
Expenses before expense reductions	1.06%A	1.05%	1.03%	1.00%	.97%A
Expenses net of voluntary waivers, if any	1.06%A	1.05%	1.03%	1.00%	.97%A
Expenses net of all reductions	1.05%A	1.04%	.99%	.99%	.95%A
Net investment income (loss)	1.55%A	2.01%	2.58%	2.28%	2.33%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 6,733	$ 6,694	$ 4,044	$ 5,213	$ 3,091
Portfolio turnover rate	76%A	65%	149%	111%	147%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

Asset Manager: Growth Portfolio

Fidelity Variable Insurance Products: Balanced Portfolio

Investment Changes

Top Five Stocks as of June 30, 2004
	% of fund's net assets
EchoStar Communications Corp. Class A	3.8
Omnicom Group, Inc.	3.7
BellSouth Corp.	3.2
Morgan Stanley	3.2
Wells Fargo & Co.	3.0
	16.9
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	18.4
Consumer Discretionary	13.6
Consumer Staples	10.2
Telecommunication Services	7.9
Information Technology	4.8

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	58.2%
	Bonds	36.6%
	Short-Term Investments and Net Other Assets	5.1%
	Other Investments	0.1%
* Foreign investments		5.9%

Percentages are adjusted for the effect of futures contracts and swaps, if applicable. 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

Fidelity Variable Insurance Products: Balanced Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 58.2%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 11.6%
Hotels, Restaurants & Leisure - 0.3%
Carnival Corp. unit	21,100		$ 991,700
Media - 9.5%
E.W. Scripps Co. Class A	41,800		4,389,000
EchoStar Communications Corp. Class A (a)	429,279		13,200,297
News Corp. Ltd. ADR	70,500		2,497,110
Omnicom Group, Inc.	165,300		12,544,617
			32,631,024
Multiline Retail - 1.5%
Barneys, Inc. warrants 4/1/08 (a)	120		4,200
Dollar Tree Stores, Inc. (a)	19,100		523,913
Kohl's Corp. (a)	108,500		4,587,380
			5,115,493
Textiles Apparel & Luxury Goods - 0.3%
Liz Claiborne, Inc.	29,000		1,043,420
TOTAL CONSUMER DISCRETIONARY			39,781,637
CONSUMER STAPLES - 9.6%
Beverages - 0.6%
The Coca-Cola Co.	43,600		2,200,928
Food & Staples Retailing - 3.6%
Costco Wholesale Corp.	61,600		2,529,912
Wal-Mart Stores, Inc.	138,400		7,301,984
Walgreen Co.	72,800		2,636,088
			12,467,984
Food Products - 0.8%
McCormick & Co., Inc. (non-vtg.)	63,200		2,148,800
Unilever PLC sponsored ADR	10,400		413,608
			2,562,408
Household Products - 1.9%
Colgate-Palmolive Co.	46,400		2,712,080
Kimberly-Clark Corp.	58,100		3,827,628
			6,539,708
Personal Products - 2.0%
Gillette Co.	164,600		6,979,040
Tobacco - 0.7%
Altria Group, Inc.	47,950		2,399,898
TOTAL CONSUMER STAPLES			33,149,966
ENERGY - 3.2%
Oil & Gas - 3.2%
BP PLC sponsored ADR	70,800		3,792,756
Exxon Mobil Corp.	162,532		7,218,046
			11,010,802
	Shares		Value (Note 1)
FINANCIALS - 13.3%
Capital Markets - 6.9%
Goldman Sachs Group, Inc.	56,200		$ 5,291,792
Merrill Lynch & Co., Inc.	140,400		7,578,792
Morgan Stanley	205,100		10,823,127
			23,693,711
Commercial Banks - 3.0%
Wells Fargo & Co.	178,200		10,198,386
Consumer Finance - 0.5%
American Express Co.	35,600		1,829,128
Insurance - 2.9%
Allstate Corp.	43,300		2,015,615
American International Group, Inc.	68,350		4,871,988
PartnerRe Ltd.	19,200		1,089,216
St. Paul Travelers Companies, Inc.	45,249		1,834,394
			9,811,213
TOTAL FINANCIALS			45,532,438
HEALTH CARE - 2.4%
Biotechnology - 0.5%
Amgen, Inc. (a)	32,300		1,762,611
Health Care Equipment & Supplies - 0.7%
Alcon, Inc.	20,800		1,635,920
Medtronic, Inc.	14,300		696,696
			2,332,616
Pharmaceuticals - 1.2%
Allergan, Inc.	16,500		1,477,080
Pfizer, Inc.	80,100		2,745,828
			4,222,908
TOTAL HEALTH CARE			8,318,135
INDUSTRIALS - 3.2%
Aerospace & Defense - 0.7%
Lockheed Martin Corp.	19,500		1,015,560
Northrop Grumman Corp.	27,800		1,492,860
			2,508,420
Airlines - 0.6%
Continental Airlines, Inc. Class B (a)	97,900		1,113,123
MAIR Holdings, Inc. (a)	2,493		20,343
Northwest Airlines Corp. (a)	47,800		531,536
Southwest Airlines Co.	31,200		523,224
			2,188,226
Commercial Services & Supplies - 0.3%
Avery Dennison Corp.	15,600		998,556
Industrial Conglomerates - 1.2%
General Electric Co.	127,800		4,140,720
Road & Rail - 0.4%
Union Pacific Corp.	19,900		1,183,055
TOTAL INDUSTRIALS			11,018,977
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - 4.2%
Communications Equipment - 1.2%
Cisco Systems, Inc. (a)	171,200		$ 4,057,440
Computers & Peripherals - 0.4%
Diebold, Inc.	25,500		1,348,185
IT Services - 0.4%
Paychex, Inc.	39,600		1,341,648
Software - 2.2%
Microsoft Corp.	272,600		7,785,456
TOTAL INFORMATION TECHNOLOGY			14,532,729
MATERIALS - 3.4%
Containers & Packaging - 1.9%
Packaging Corp. of America	25,900		619,010
Smurfit-Stone Container Corp. (a)	289,306		5,771,655
			6,390,665
Paper & Forest Products - 1.5%
International Paper Co.	116,100		5,189,670
TOTAL MATERIALS			11,580,335
TELECOMMUNICATION SERVICES - 6.7%
Diversified Telecommunication Services - 6.7%
BellSouth Corp.	414,900		10,878,678
SBC Communications, Inc.	134,570		3,263,323
Verizon Communications, Inc.	241,700		8,747,123
			22,889,124
Wireless Telecommunication Services - 0.0%
DigitalGlobe, Inc. (a)(f)	163		163
TOTAL TELECOMMUNICATION SERVICES			22,889,287
UTILITIES - 0.6%
Electric Utilities - 0.6%
Entergy Corp.	34,300		1,921,143
TOTAL COMMON STOCKS (Cost $174,279,423)		199,735,449
Nonconvertible Preferred Stocks - 0.0%
CONSUMER DISCRETIONARY - 0.0%
Media - 0.0%
PRIMEDIA, Inc. Series D, 10.00%	80		7,560
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $7,680)		7,560
Corporate Bonds - 13.7%
	Principal Amount		Value (Note 1)
Convertible Bonds - 0.1%
INFORMATION TECHNOLOGY - 0.1%
Electronic Equipment & Instruments - 0.1%
Celestica, Inc. liquid yield option note 0% 8/1/20	$ 410,000		$ 227,038
TELECOMMUNICATION SERVICES - 0.0%
Wireless Telecommunication Services - 0.0%
Nextel Communications, Inc. 5.25% 1/15/10	150,000		145,500
TOTAL CONVERTIBLE BONDS			372,538
Nonconvertible Bonds - 13.6%
CONSUMER DISCRETIONARY - 2.0%
Auto Components - 0.2%
DaimlerChrysler NA Holding Corp. 7.2% 9/1/09	150,000		163,283
Dana Corp.:
6.5% 3/1/09	30,000		31,050
9% 8/15/11	30,000		35,100
Delco Remy International, Inc. 9.375% 4/15/12 (f)	55,000		53,625
Stoneridge, Inc. 11.5% 5/1/12	15,000		17,475
Visteon Corp.:
7% 3/10/14	170,000		163,838
8.25% 8/1/10	45,000		48,038
			512,409
Automobiles - 0.3%
Case New Holland, Inc. 9.25% 8/1/11 (f)	60,000		63,300
General Motors Corp.:
7.2% 1/15/11	500,000		523,898
8.25% 7/15/23	350,000		366,538
8.375% 7/15/33	120,000		127,019
			1,080,755
Distributors - 0.0%
Adesa, Inc. 7.625% 6/15/12	40,000		40,200
Hotels, Restaurants & Leisure - 0.3%
Argosy Gaming Co. 7% 1/15/14 (f)	40,000		38,800
Friendly Ice Cream Corp. 8.375% 6/15/12 (f)	15,000		14,625
Gaylord Entertainment Co. 8% 11/15/13	40,000		40,600
Host Marriott LP 7.125% 11/1/13	35,000		34,300
Mandalay Resort Group 6.5% 7/31/09	95,000		96,900
MGM MIRAGE:
5.875% 2/27/14 (f)	90,000		81,675
9.75% 6/1/07	15,000		16,425
Mohegan Tribal Gaming Authority 6.375% 7/15/09	80,000		80,200
Morton's Restaurant Group, Inc. 7.5% 7/1/10	30,000		27,900
Penn National Gaming, Inc. 6.875% 12/1/11 (f)	110,000		106,700
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
CONSUMER DISCRETIONARY - continued
Hotels, Restaurants & Leisure - continued
Six Flags, Inc.:
8.875% 2/1/10	$ 30,000		$ 29,850
9.625% 6/1/14 (f)	160,000		159,200
9.75% 4/15/13	15,000		15,075
Station Casinos, Inc. 6% 4/1/12	60,000		57,900
Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11	55,000		58,713
Vail Resorts, Inc. 6.75% 2/15/14	40,000		37,750
Venetian Casino Resort LLC/Las Vegas Sands, Inc. 11% 6/15/10	125,000		144,375
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (f)	27,000		28,620
Wheeling Island Gaming, Inc. 10.125% 12/15/09	100,000		106,000
			1,175,608
Household Durables - 0.1%
Beazer Homes USA, Inc. 8.375% 4/15/12	20,000		21,150
Standard Pacific Corp. 7.75% 3/15/13	150,000		151,125
WCI Communities, Inc. 7.875% 10/1/13	40,000		40,500
William Lyon Homes, Inc. 10.75% 4/1/13	95,000		104,500
			317,275
Internet & Catalog Retail - 0.0%
J. Crew Operating Corp. 10.375% 10/15/07	120,000		122,400
Leisure Equipment & Products - 0.1%
K2, Inc. 7.375% 7/1/14 (f)	30,000		30,525
The Hockey Co. 11.25% 4/15/09	100,000		117,000
True Temper Sports, Inc. 8.375% 9/15/11	50,000		50,000
			197,525
Media - 0.9%
Advanstar Communications, Inc. 10.75% 8/15/10	40,000		44,100
AMC Entertainment, Inc. 9.875% 2/1/12	35,000		36,750
American Media Operations, Inc. 10.25% 5/1/09	60,000		62,100
AOL Time Warner, Inc. 7.625% 4/15/31	200,000		216,428
Cablevision Systems Corp.:
5.66% 4/1/09 (f)(h)	90,000		92,025
8% 4/15/12 (f)	170,000		167,875
CBD Media LLC/ CBD Finance, Inc. 8.625% 6/1/11	20,000		21,150
Charter Communications Operating LLC/Charter Communications Operating Capital Corp. 8% 4/30/12 (f)	80,000		77,200
	Principal Amount		Value (Note 1)
Corus Entertainment, Inc. 8.75% 3/1/12	$ 240,000		$ 256,500
Cox Communications, Inc. 7.125% 10/1/12	195,000		213,710
CSC Holdings, Inc.:
7.625% 4/1/11	170,000		172,550
7.625% 7/15/18	20,000		18,700
Dex Media, Inc.:
0% 11/15/13 (d)(f)	75,000		48,000
8% 11/15/13 (f)	150,000		142,125
EchoStar DBS Corp. 10.375% 10/1/07	165,000		176,220
Houghton Mifflin Co. 9.875% 2/1/13	85,000		85,213
Kabel Deutschland Gmbh 10.625% 7/1/14 (f)(g)	80,000		82,200
LBI Media Holdings, Inc. 0% 10/15/13 (d)	90,000		63,900
LBI Media, Inc. 10.125% 7/15/12	160,000		178,400
Liberty Media Corp. 8.25% 2/1/30	250,000		284,839
News America Holdings, Inc. 7.75% 12/1/45	100,000		114,012
PEI Holdings, Inc. 11% 3/15/10	27,000		31,320
PRIMEDIA, Inc. 7.625% 4/1/08	260,000		257,400
Telewest PLC:
11% 10/1/07 (c)	30,000		17,850
yankee 9.625% 10/1/06 (c)	90,000		51,300
Time Warner, Inc. 6.625% 5/15/29	105,000		101,893
Videotron LTEE 6.875% 1/15/14	30,000		28,800
			3,042,560
Multiline Retail - 0.0%
Barneys, Inc. 9% 4/1/08	120,000		124,800
Specialty Retail - 0.1%
Asbury Automotive Group, Inc.:
8% 3/15/14	145,000		138,475
9% 6/15/12	45,000		45,675
Boise Cascade Corp. 6.5% 11/1/10	40,000		40,800
CSK Automotive, Inc. 7% 1/15/14	20,000		19,100
General Nutrition Centers, Inc. 8.5% 12/1/10 (f)	30,000		31,200
Sonic Automotive, Inc. 8.625% 8/15/13	80,000		83,000
			358,250
TOTAL CONSUMER DISCRETIONARY			6,971,782
CONSUMER STAPLES - 0.6%
Food & Staples Retailing - 0.2%
Kroger Co. 6.8% 4/1/11	195,000		212,487
NeighborCare, Inc. 6.875% 11/15/13 (f)	75,000		79,500
Rite Aid Corp.:
6% 12/15/05 (f)	35,000		35,175
8.125% 5/1/10	60,000		63,300
9.5% 2/15/11	60,000		66,000
Safeway, Inc. 6.5% 3/1/11	190,000		201,317
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
CONSUMER STAPLES - continued
Food & Staples Retailing - continued
Stater Brothers Holdings, Inc.:
5.06% 6/15/10 (f)(h)	$ 60,000		$ 60,975
8.125% 6/15/12 (f)	70,000		70,613
			789,367
Food Products - 0.2%
Corn Products International, Inc. 8.25% 7/15/07	175,000		190,750
Del Monte Corp. 9.25% 5/15/11	145,000		158,413
Doane Pet Care Co. 10.75% 3/1/10	45,000		47,925
Hines Nurseries, Inc. 10.25% 10/1/11	20,000		21,600
Pierre Foods, Inc. 9.875% 7/15/12 (f)	30,000		30,413
Reddy Ice Group, Inc. 8.875% 8/1/11	20,000		21,100
United Agriculture Products, Inc. 8.25% 12/15/11 (f)	30,000		32,550
			502,751
Household Products - 0.0%
JohnsonDiversey Holdings, Inc. 0% 5/15/13 (d)	45,000		34,650
Personal Products - 0.0%
Jafra Cosmetics International, Inc./Distribuidora Comercial Jafra SA de CV 10.75% 5/15/11	40,000		44,000
Tobacco - 0.2%
Altria Group, Inc. 7% 11/4/13	175,000		178,207
Philip Morris Companies, Inc. 7.75% 1/15/27	275,000		281,178
			459,385
TOTAL CONSUMER STAPLES			1,830,153
ENERGY - 0.8%
Energy Equipment & Services - 0.1%
Grant Prideco, Inc. 9% 12/15/09	20,000		21,750
Hanover Compressor Co.:
8.625% 12/15/10	30,000		31,125
9% 6/1/14	30,000		31,125
Kinder Morgan, Inc. 6.5% 9/1/12	100,000		105,951
Pride International, Inc. 7.375% 7/15/14 (f)(g)	40,000		40,450
Seabulk International, Inc. 9.5% 8/15/13	80,000		82,000
Universal Compression, Inc. 7.25% 5/15/10	115,000		118,738
			431,139
Oil & Gas - 0.7%
Amerada Hess Corp.:
6.65% 8/15/11	25,000		26,455
7.125% 3/15/33	75,000		74,762
7.375% 10/1/09	60,000		65,341
	Principal Amount		Value (Note 1)
Chesapeake Energy Corp.:
7.5% 9/15/13	$ 70,000		$ 72,888
7.5% 6/15/14 (f)	40,000		41,200
El Paso Corp.:
7% 5/15/11	90,000		78,750
7.875% 6/15/12	120,000		107,850
El Paso Energy Corp.:
6.95% 12/15/07	95,000		91,438
7.375% 12/15/12	30,000		26,063
El Paso Production Holding Co. 7.75% 6/1/13	180,000		166,500
Empresa Nacional de Petroleo 6.75% 11/15/12 (f)	120,000		128,794
EXCO Resources, Inc. 7.25% 1/15/11	30,000		30,375
General Maritime Corp. 10% 3/15/13	120,000		132,900
GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12	20,000		23,200
KCS Energy, Inc. 7.125% 4/1/12 (f)	40,000		40,000
Overseas Shipholding Group, Inc. 8.25% 3/15/13	110,000		117,700
Plains Exploration & Production Co. 7.125% 6/15/14 (f)	40,000		40,700
Plains Exploration & Production Co. LP:
Series B, 8.75% 7/1/12	60,000		64,500
8.75% 7/1/12	50,000		53,750
Range Resources Corp.:
7.375% 7/15/13	80,000		79,600
7.375% 7/15/13 (f)	30,000		29,850
Teekay Shipping Corp. 8.875% 7/15/11	200,000		220,000
The Coastal Corp.:
6.5% 5/15/06	15,000		14,756
6.5% 6/1/08	75,000		67,500
7.5% 8/15/06	90,000		89,100
7.625% 9/1/08	10,000		9,275
7.75% 6/15/10	35,000		31,588
Williams Companies, Inc.:
7.125% 9/1/11	235,000		238,525
7.5% 1/15/31	10,000		9,050
7.625% 7/15/19	105,000		100,800
8.625% 6/1/10	80,000		87,700
8.75% 3/15/32	25,000		25,000
			2,385,910
TOTAL ENERGY			2,817,049
FINANCIALS - 5.0%
Capital Markets - 0.9%
Amvescap PLC yankee 6.6% 5/15/05	35,000		36,048
BCP Caylux Holdings Luxembourg SCA 9.625% 6/15/14 (f)	150,000		155,625
Credit Suisse First Boston (USA), Inc. 6.5% 1/15/12	200,000		214,918
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
FINANCIALS - continued
Capital Markets - continued
Equinox Holdings Ltd. 9% 12/15/09 (f)	$ 20,000		$ 19,800
Goldman Sachs Group, Inc.:
4.125% 1/15/08	500,000		501,515
6.6% 1/15/12	410,000		441,196
J.P. Morgan Chase & Co.:
4.875% 3/15/14	165,000		155,452
6.75% 2/1/11	250,000		272,476
Merrill Lynch & Co., Inc. 4.125% 1/15/09	700,000		690,456
Morgan Stanley:
3.875% 1/15/09	500,000		486,805
4.75% 4/1/14	100,000		92,262
6.6% 4/1/12	160,000		172,250
			3,238,803
Commercial Banks - 0.4%
Bank of America Corp.:
6.25% 4/15/12	125,000		133,346
7.4% 1/15/11	200,000		226,664
Bank One NA, Chicago 3.7% 1/15/08	220,000		218,563
Export-Import Bank of Korea:
4.125% 2/10/09 (f)	50,000		48,503
5.25% 2/10/14 (f)	155,000		148,598
Fleet Financial Group, Inc. 7.125% 4/15/06	140,000		150,154
Korea Development Bank 3.875% 3/2/09	250,000		239,345
PNC Funding Corp. 5.75% 8/1/06	155,000		162,887
Wachovia Corp. 4.875% 2/15/14	90,000		85,969
			1,414,029
Consumer Finance - 0.7%
American General Finance Corp. 2.75% 6/15/08	820,000		774,915
Capital One Bank:
4.875% 5/15/08	125,000		126,344
5% 6/15/09	250,000		250,716
Ford Motor Credit Co. 7.375% 10/28/09	525,000		560,294
Household Finance Corp.:
6.375% 10/15/11	260,000		277,526
7% 5/15/12	40,000		44,185
Household International, Inc. 8.875% 2/15/08	150,000		163,344
MBNA Corp.:
6.25% 1/17/07	120,000		127,143
7.5% 3/15/12	175,000		198,404
			2,522,871
Diversified Financial Services - 2.5%
Ahold Finance USA, Inc.:
6.875% 5/1/29	50,000		42,500
8.25% 7/15/10	150,000		157,500
	Principal Amount		Value (Note 1)
Alliance Capital Management LP 5.625% 8/15/06	$ 150,000		$ 156,902
American Airlines, Inc. pass thru trust certificates:
6.817% 5/23/11	115,000		102,350
6.977% 11/23/22	11,499		10,119
7.377% 5/23/19	99,781		69,846
7.379% 5/23/16	75,970		53,179
7.8% 4/1/08	10,000		9,100
8.608% 10/1/12	75,000		69,000
10.18% 1/2/13	45,000		32,850
Bellsouth Capital Funding Corp. 7.875% 2/15/30	115,000		133,245
BRL Universal Equipment 2001 A LP/BRL Universal Equipment Corp. 8.875% 2/15/08	120,000		128,250
Cellu Tissue Holdings, Inc. 9.75% 3/15/10 (f)	110,000		105,600
Charter Communications Holdings LLC/Charter Communications Holdings Capital Corp.:
0% 5/15/11 (d)	116,000		74,240
9.625% 11/15/09	170,000		137,700
Citigroup, Inc. 7.25% 10/1/10	500,000		563,103
CMS Energy X-TRAS pass thru trust certificates 7% 1/15/05	75,000		75,656
Continental Airlines, Inc. pass thru trust certificates:
6.748% 9/15/18	7,744		6,196
6.9% 7/2/18	75,939		59,232
7.373% 12/15/15	85,423		67,485
7.568% 12/1/06	40,000		29,600
7.73% 9/15/12	30,423		22,817
8.312% 10/2/12	32,466		24,025
8.321% 11/1/06	10,000		9,000
8.388% 5/1/22	21,919		16,658
8.499% 11/1/12	34,732		26,396
Couche Tard U.S. LP /Couche Tard Financing Corp. 7.5% 12/15/13	70,000		70,000
Delta Air Lines, Inc. pass thru trust certificates:
7.299% 9/18/06	20,000		12,200
7.57% 11/18/10	45,000		41,762
7.779% 1/2/12	317,239		171,309
7.92% 5/18/12	75,000		49,106
Deutsche Telekom International Finance BV 8.75% 6/15/30	250,000		304,284
Dex Media West LLC/Dex Media West Finance Co. 9.875% 8/15/13	40,000		44,300
El Paso Energy Partners LP/El Paso Energy Partners Finance Corp. 8.5% 6/1/11	17,000		18,275
EnCana Holdings Finance Corp. 5.8% 5/1/14	80,000		81,388
Gemstone Investor Ltd./Gemstone Investor, Inc. 7.71% 10/31/04 (f)	50,000		50,500
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11	130,000		143,975
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
FINANCIALS - continued
Diversified Financial Services - continued
Goldman Sachs Capital I 6.345% 2/15/34	$ 265,000		$ 248,854
Huntsman Advanced Materials LLC 11% 7/15/10 (f)	40,000		44,400
Hutchison Whampoa International 03/13 Ltd. 6.5% 2/13/13 (f)	55,000		55,042
Hutchison Whampoa International Ltd.:
6.25% 1/24/14 (f)	120,000		116,337
7.45% 11/24/33 (f)	85,000		81,352
Inmarsat Finance PLC 7.625% 6/30/12 (f)	80,000		77,400
Ispat Inland ULC 9.75% 4/1/14 (f)	100,000		103,000
Level 3 Financing, Inc. 10.75% 10/15/11 (f)	75,000		66,000
Mizuho Financial Group Cayman Ltd. 5.79% 4/15/14 (f)	145,000		142,533
National Beef Packing Co. LLC/National Beef Finance Corp. 10.5% 8/1/11	105,000		109,725
Nexstar Finance, Inc. 7% 1/15/14	60,000		56,400
NiSource Finance Corp. 7.875% 11/15/10	335,000		384,042
Northwest Airlines, Inc. pass thru trust certificates:
7.068% 7/2/17	24,756		20,547
7.626% 4/1/10	82,559		64,396
7.67% 1/2/15	21,493		18,054
Pemex Project Funding Master Trust:
6.125% 8/15/08	400,000		409,000
7.875% 2/1/09 (h)	180,000		195,750
Petronas Capital Ltd. 7% 5/22/12 (f)	395,000		430,670
Qwest Capital Funding, Inc.:
7% 8/3/09	60,000		53,400
7.75% 8/15/06	270,000		267,300
Rabobank Capital Funding Trust II 5.26% 12/31/49 (f)(h)	415,000		401,588
Ship Finance International Ltd. 8.5% 12/15/13 (f)	360,000		347,400
Sprint Capital Corp. 6.875% 11/15/28	295,000		283,568
Suburban Propane Partners LP/Suburban Energy Finance Corp. 6.875% 12/15/13	30,000		29,175
Telecom Italia Capital 5.25% 11/15/13 (f)	250,000		241,962
Tyco International Group SA yankee 6.75% 2/15/11	200,000		217,316
U.S. West Capital Funding, Inc. 6.375% 7/15/08	45,000		40,275
UGS Corp. 10% 6/1/12 (f)	70,000		74,200
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10	80,000		92,600
	Principal Amount		Value (Note 1)
Verizon Global Funding Corp.:
7.25% 12/1/10	$ 385,000		$ 430,420
7.75% 12/1/30	200,000		224,636
WH Holdings Ltd./WH Capital Corp. 9.5% 4/1/11 (f)	30,000		31,200
			8,528,190
Insurance - 0.0%
Principal Life Global Funding I 6.25% 2/15/12 (f)	85,000		90,784
Real Estate - 0.3%
BRE Properties, Inc. 5.95% 3/15/07	250,000		263,276
EOP Operating LP:
7% 7/15/11	200,000		217,983
8.1% 8/1/10	200,000		228,724
Senior Housing Properties Trust:
7.875% 4/15/15	40,000		40,900
8.625% 1/15/12	80,000		86,800
			837,683
Thrifts & Mortgage Finance - 0.2%
Countrywide Home Loans, Inc. 4% 3/22/11	250,000		233,175
Independence Community Bank Corp. 3.75% 4/1/14 (h)	85,000		80,877
Washington Mutual, Inc.:
4.375% 1/15/08	90,000		90,572
4.625% 4/1/14	250,000		228,008
			632,632
TOTAL FINANCIALS			17,264,992
HEALTH CARE - 0.3%
Health Care Equipment & Supplies - 0.0%
Medical Device Manufacturing, Inc. 10% 7/15/12 (f)	40,000		40,800
Health Care Providers & Services - 0.3%
AmeriPath, Inc. 10.5% 4/1/13	235,000		237,938
Beverly Enterprises, Inc. 7.875% 6/15/14 (f)	40,000		39,500
Concentra Operating Corp. 9.125% 6/1/12 (f)	10,000		10,450
Fountain View, Inc. 9.25% 8/19/08 (e)	135,000		135,000
Genesis HealthCare Corp. 8% 10/15/13 (f)	20,000		20,550
IASIS Healthcare LLC/IASIS Capital Corp. 8.75% 6/15/14 (f)	155,000		158,100
Mariner Health Care, Inc. 8.25% 12/15/13 (f)	40,000		40,400
National Nephrology Associates, Inc. 9% 11/1/11 (f)	30,000		34,350
Psychiatric Solutions, Inc. 10.625% 6/15/13	45,000		51,300
Quintiles Transnational Corp. 10% 10/1/13	20,000		19,900
Rotech Healthcare, Inc. 9.5% 4/1/12	75,000		80,250
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
HEALTH CARE - continued
Health Care Providers & Services - continued
Tenet Healthcare Corp.:
6.375% 12/1/11	$ 65,000		$ 55,900
7.375% 2/1/13	150,000		136,500
			1,020,138
TOTAL HEALTH CARE			1,060,938
INDUSTRIALS - 0.6%
Aerospace & Defense - 0.3%
BE Aerospace, Inc.:
8% 3/1/08	65,000		60,613
8.875% 5/1/11	40,000		37,300
9.5% 11/1/08	135,000		130,950
Bombardier, Inc. 6.3% 5/1/14 (f)	400,000		339,739
Raytheon Co. 8.3% 3/1/10	250,000		293,251
			861,853
Airlines - 0.1%
Delta Air Lines, Inc.:
7.9% 12/15/09	10,000		5,000
8.3% 12/15/29	30,000		12,300
Northwest Airlines, Inc. 7.875% 3/15/08	255,000		178,500
			195,800
Building Products - 0.0%
FastenTech, Inc. 11.5% 5/1/11 (f)	50,000		55,000
Mueller Group, Inc. 5.9188% 11/1/11 (f)(h)	80,000		82,000
			137,000
Commercial Services & Supplies - 0.0%
Allied Waste North America, Inc.:
5.75% 2/15/11 (f)	40,000		37,900
6.375% 4/15/11 (f)	40,000		39,200
7.625% 1/1/06	30,000		31,425
American Color Graphics, Inc. 10% 6/15/10	20,000		17,900
Mail-Well I Corp. 7.875% 12/1/13 (f)	15,000		13,538
			139,963
Construction & Engineering - 0.0%
Great Lakes Dredge & Dock Corp. 7.75% 12/15/13	30,000		25,650
Machinery - 0.2%
Cummins, Inc. 9.5% 12/1/10 (h)	50,000		56,750
Dresser, Inc. 9.375% 4/15/11	30,000		32,100
Invensys PLC 9.875% 3/15/11 (f)	135,000		135,000
Terex Corp.:
7.375% 1/15/14	70,000		68,600
9.25% 7/15/11	195,000		214,013
			506,463
	Principal Amount		Value (Note 1)
Marine - 0.0%
Horizon Lines LLC 9% 11/1/12 (f)	$ 30,000		$ 30,563
OMI Corp. 7.625% 12/1/13	40,000		39,200
			69,763
Road & Rail - 0.0%
TFM SA de CV yankee:
10.25% 6/15/07	20,000		20,000
11.75% 6/15/09	60,000		58,800
			78,800
TOTAL INDUSTRIALS			2,015,292
INFORMATION TECHNOLOGY - 0.5%
Communications Equipment - 0.2%
Corning, Inc. 6.2% 3/15/16	40,000		37,500
L-3 Communications Corp. 6.125% 1/15/14	70,000		67,200
Marconi Corp. PLC 8% 4/30/08 (f)	51,071		55,157
Motorola, Inc.:
6.5% 11/15/28	360,000		348,690
7.625% 11/15/10	100,000		112,586
Nortel Networks Corp. 6.125% 2/15/06	80,000		80,200
			701,333
Electronic Equipment & Instruments - 0.1%
Celestica, Inc. 7.875% 7/1/11	200,000		203,000
Flextronics International Ltd. 6.5% 5/15/13	20,000		19,450
Sanmina-SCI Corp. 10.375% 1/15/10	65,000		74,750
Solectron Corp. 7.375% 3/1/06	115,000		119,025
			416,225
IT Services - 0.0%
Iron Mountain, Inc. 6.625% 1/1/16	80,000		72,400
Office Electronics - 0.1%
Xerox Corp.:
7.125% 6/15/10	60,000		61,500
7.15% 8/1/04	5,000		5,019
7.625% 6/15/13	70,000		71,750
			138,269
Semiconductors & Semiconductor Equipment - 0.1%
Amkor Technology, Inc.:
7.125% 3/15/11 (f)	45,000		41,963
7.75% 5/15/13	110,000		103,675
9.25% 2/15/08	20,000		20,950
Semiconductor Note Partners Trust 0% 8/4/11 (f)	105,000		150,150
Viasystems, Inc. 10.5% 1/15/11 (f)	110,000		116,050
			432,788
TOTAL INFORMATION TECHNOLOGY			1,761,015
MATERIALS - 1.0%
Chemicals - 0.2%
America Rock Salt Co. LLC 9.5% 3/15/14 (f)	50,000		51,250
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
MATERIALS - continued
Chemicals - continued
Berry Plastics Corp. 10.75% 7/15/12	$ 60,000		$ 66,300
Equistar Chemicals LP/Equistar Funding Corp. 10.625% 5/1/11	110,000		122,100
Geon Co. 6.875% 12/15/05	15,000		15,225
Huntsman ICI Holdings LLC 0% 12/31/09	55,000		26,675
Huntsman International LLC 9.875% 3/1/09	60,000		64,200
Lyondell Chemical Co.:
9.5% 12/15/08	25,000		26,063
9.625% 5/1/07	30,000		31,200
9.875% 5/1/07	55,000		57,475
Methanex Corp. yankee 7.75% 8/15/05	155,000		161,588
Millennium America, Inc.:
9.25% 6/15/08	40,000		42,400
9.25% 6/15/08 (f)	30,000		31,800
Nalco Co. 7.75% 11/15/11 (f)	50,000		52,125
PolyOne Corp.:
8.875% 5/1/12	45,000		43,875
10.625% 5/15/10	25,000		26,375
The Scotts Co. 6.625% 11/15/13	50,000		50,000
			868,651
Construction Materials - 0.1%
Texas Industries, Inc. 10.25% 6/15/11	140,000		155,750
U.S. Concrete, Inc. 8.375% 4/1/14 (f)	50,000		49,875
			205,625
Containers & Packaging - 0.3%
Anchor Glass Container Corp. 11% 2/15/13	60,000		68,400
BWAY Corp. 10% 10/15/10	40,000		42,400
Crown European Holdings SA 10.875% 3/1/13	80,000		91,600
Jefferson Smurfit Corp. U.S. 7.5% 6/1/13	130,000		127,725
Owens-Brockway Glass Container, Inc.:
7.75% 5/15/11	50,000		51,750
8.75% 11/15/12	25,000		27,000
8.875% 2/15/09	185,000		198,875
Owens-Illinois, Inc.:
7.15% 5/15/05	35,000		36,006
7.35% 5/15/08	295,000		294,263
7.8% 5/15/18	45,000		40,613
Sealed Air Corp.:
5.625% 7/15/13 (f)	30,000		29,635
6.875% 7/15/33 (f)	60,000		60,565
Tekni-Plex, Inc. 8.75% 11/15/13 (f)	65,000		62,400
			1,131,232
	Principal Amount		Value (Note 1)
Metals & Mining - 0.2%
Allegheny Technologies, Inc. 8.375% 12/15/11	$ 45,000		$ 45,225
California Steel Industries, Inc. 6.125% 3/15/14	60,000		55,650
Compass Minerals International, Inc. 0% 12/15/12 (d)	80,000		63,200
CSN Islands VIII Corp. 9.75% 12/16/13 (f)	160,000		144,000
International Steel Group, Inc. 6.5% 4/15/14 (f)	125,000		116,875
Massey Energy Co. 6.625% 11/15/10	40,000		39,800
Steel Dynamics, Inc. 9.5% 3/15/09	35,000		38,675
Wise Metals Group LLC/Alloys Finance 10.25% 5/15/12 (f)	60,000		61,500
			564,925
Paper & Forest Products - 0.2%
Georgia-Pacific Corp.:
7.5% 5/15/06	120,000		126,900
8% 1/15/24 (f)	80,000		80,200
8.125% 5/15/11	120,000		132,300
International Paper Co.:
4.25% 1/15/09	35,000		34,406
5.5% 1/15/14	95,000		93,002
Norske Skog Canada Ltd. 8.625% 6/15/11	150,000		159,000
Solo Cup Co. 8.5% 2/15/14 (f)	40,000		37,200
Weyerhaeuser Co. 6.75% 3/15/12	100,000		108,295
			771,303
TOTAL MATERIALS			3,541,736
TELECOMMUNICATION SERVICES - 1.1%
Diversified Telecommunication Services - 0.6%
BellSouth Corp. 6.55% 6/15/34	150,000		149,523
British Telecommunications PLC 8.875% 12/15/30	200,000		246,737
Citizens Communications Co. 9.25% 5/15/11	30,000		31,275
France Telecom SA:
8.75% 3/1/11	105,000		121,676
9.5% 3/1/31	200,000		251,004
Koninklijke KPN NV yankee 8% 10/1/10	200,000		231,574
NTL Cable PLC 8.75% 4/15/14 (f)	115,000		118,163
Primus Telecommunications Group, Inc. 8% 1/15/14	60,000		51,600
Qwest Communications International, Inc.:
7.25% 2/15/11 (f)	20,000		18,600
7.5% 2/15/14 (f)	120,000		109,200
Qwest Corp. 9.125% 3/15/12 (f)	85,000		91,800
Qwest Services Corp. 13.5% 12/15/10 (f)	75,000		87,000
Telecomunicaciones de Puerto Rico, Inc. 6.65% 5/15/06	30,000		31,693
Telefonica Europe BV 7.75% 9/15/10	200,000		228,751
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Triton PCS, Inc.:
8.75% 11/15/11	$ 110,000		$ 90,750
9.375% 2/1/11	105,000		89,775
			1,949,121
Wireless Telecommunication Services - 0.5%
America Movil SA de CV:
4.125% 3/1/09 (f)	100,000		93,923
5.5% 3/1/14 (f)	90,000		82,907
American Cellular Corp. 10% 8/1/11	45,000		39,150
American Tower Corp. 9.375% 2/1/09	175,000		187,250
AT&T Wireless Services, Inc.:
7.875% 3/1/11	55,000		62,560
8.75% 3/1/31	195,000		237,738
Centennial Communications Corp./Centennial Cellular Operating Co. LLC/Centennial Puerto Rico Operations Corp. 8.125% 2/1/14 (f)	80,000		74,200
Crown Castle International Corp.:
Series B, 7.5% 12/1/13	80,000		79,200
7.5% 12/1/13	50,000		49,500
10.75% 8/1/11	25,000		27,938
DirecTV Holdings LLC/DirecTV Financing, Inc. 8.375% 3/15/13	50,000		55,375
Millicom International Cellular SA 10% 12/1/13 (f)	80,000		80,800
Nextel Communications, Inc.:
7.375% 8/1/15	160,000		160,800
9.5% 2/1/11	20,000		22,350
Nextel Partners, Inc. 8.125% 7/1/11	80,000		81,200
Rogers Wireless, Inc.:
6.375% 3/1/14	155,000		142,213
9.625% 5/1/11	40,000		44,600
Western Wireless Corp. 9.25% 7/15/13	100,000		102,500
			1,624,204
TOTAL TELECOMMUNICATION SERVICES			3,573,325
UTILITIES - 1.7%
Electric Utilities - 0.8%
Allegheny Energy Supply Co. LLC:
8.25% 4/15/12 (f)	220,000		216,169
13% 11/15/07 (f)(h)	6,204		6,282
Cleveland Electric Illuminating Co. 5.65% 12/15/13 (f)	85,000		82,715
CMS Energy Corp.:
7.625% 11/15/04	110,000		111,513
7.75% 8/1/10 (f)	125,000		124,688
8.5% 4/15/11	85,000		87,125
8.9% 7/15/08	125,000		131,406
9.875% 10/15/07	105,000		113,269
	Principal Amount		Value (Note 1)
Duke Capital Corp.:
4.37% 3/1/09	$ 400,000		$ 388,658
6.75% 2/15/32	210,000		201,471
Edison International 6.875% 9/15/04	35,000		35,396
Exelon Corp. 6.75% 5/1/11	200,000		217,505
FirstEnergy Corp. 6.45% 11/15/11	85,000		88,125
Illinois Power Co.:
7.5% 6/15/09	155,000		169,338
11.5% 12/15/10	80,000		94,600
Nevada Power Co. 10.875% 10/15/09	65,000		73,613
Niagara Mohawk Power Corp. 8.875% 5/15/07	75,000		84,905
Pacific Gas & Electric Co. 4.8% 3/1/14	45,000		42,639
PG&E Corp. 6.875% 7/15/08 (f)	45,000		46,969
Progress Energy, Inc.:
6.85% 4/15/12	125,000		135,078
7.1% 3/1/11	145,000		158,890
Sierra Pacific Power Co. 6.25% 4/15/12 (f)	30,000		28,125
Southern California Edison Co. 5% 1/15/14	10,000		9,729
TECO Energy, Inc.:
6.125% 5/1/07	55,000		55,000
10.5% 12/1/07	105,000		116,944
			2,820,152
Gas Utilities - 0.2%
Consolidated Natural Gas Co. 6.85% 4/15/11	70,000		76,655
Dynegy Holdings, Inc. 10.125% 7/15/13 (f)	50,000		54,000
Sonat, Inc.:
6.625% 2/1/08	65,000		59,556
6.75% 10/1/07	70,000		66,413
6.875% 6/1/05	220,000		221,100
7.625% 7/15/11	20,000		17,750
Southern Natural Gas Co. 8.875% 3/15/10	40,000		43,500
Texas Eastern Transmission Corp. 7.3% 12/1/10	185,000		206,911
Transcontinental Gas Pipe Line Corp. 6.125% 1/15/05	20,000		20,100
			765,985
Multi-Utilities & Unregulated Power - 0.7%
AES Corp.:
8.375% 8/15/07	50,000		50,500
8.5% 11/1/07	29,000		29,725
8.75% 6/15/08	30,000		31,200
8.75% 5/15/13 (f)	170,000		181,900
8.875% 2/15/11	54,000		56,093
9% 5/15/15 (f)	90,000		96,300
9.375% 9/15/10	16,000		17,080
9.5% 6/1/09	144,000		153,900
Calpine Corp.:
6.89% 7/15/07 (f)(h)	114,138		101,868
8.5% 7/15/10 (f)	20,000		16,500
Corporate Bonds - continued
	Principal Amount		Value (Note 1)
Nonconvertible Bonds - continued
UTILITIES - continued
Multi-Utilities & Unregulated Power - continued
Calpine Generating Co. LLC 7% 4/1/10 (f)(h)	$ 30,000		$ 28,950
Constellation Energy Group, Inc. 7% 4/1/12	350,000		381,138
Dominion Resources, Inc.:
6.25% 6/30/12	685,000		717,963
8.125% 6/15/10	60,000		69,240
NRG Energy, Inc. 8% 12/15/13 (f)	160,000		161,200
Reliant Energy, Inc.:
9.25% 7/15/10	60,000		64,200
9.5% 7/15/13	20,000		21,600
			2,179,357
TOTAL UTILITIES			5,765,494
TOTAL NONCONVERTIBLE BONDS			46,601,776
TOTAL CORPORATE BONDS (Cost $45,890,161)		46,974,314
U.S. Government and Government Agency Obligations - 6.7%
U.S. Government Agency Obligations - 2.1%
Fannie Mae:
3.25% 2/15/09	1,716,000		1,653,285
5.25% 8/1/12	75,000		74,953
5.5% 3/15/11	315,000		329,472
6.25% 2/1/11	260,000		279,147
6.625% 11/15/10	2,100,000		2,331,626
Freddie Mac:
3.625% 9/15/08	318,000		313,481
4% 6/12/13	1,575,000		1,437,640
6.25% 7/15/32	166,000		174,855
6.625% 9/15/09	475,000		524,892
6.75% 3/15/31	244,000		272,393
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			7,391,744
U.S. Treasury Obligations - 4.6%
U.S. Treasury Bonds:
6.25% 5/15/30	1,500,000		1,679,472
8% 11/15/21	1,000,000		1,310,703
	Principal Amount		Value (Note 1)
U.S. Treasury Notes:
1.625% 2/28/06	$ 8,570,000		$ 8,444,467
3.125% 5/15/07	200,000		200,000
6.5% 2/15/10	1,190,000		1,340,888
7% 7/15/06	2,600,000		2,817,040
TOTAL U.S. TREASURY OBLIGATIONS			15,792,570
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $23,428,227)		23,184,314
U.S. Government Agency - Mortgage Securities - 9.1%
Fannie Mae - 8.0%
4.5% 7/1/19 (g)	2,000,000		1,953,125
4.5% 7/1/19 (g)	50,000		48,828
4.5% 7/1/33 to 10/1/33	4,117,496		3,856,399
5% 11/1/17 to 8/1/18	4,752,691		4,770,038
5% 7/1/34 (g)	3,000,000		2,895,938
5% 7/1/34 (g)	2,000,000		1,930,625
5.5% 2/1/11 to 6/1/29	1,527,179		1,560,915
5.5% 7/1/34 (g)	4,105,130		4,083,322
6% 4/1/09 to 1/1/34	2,272,032		2,362,207
6.5% 5/1/11 to 7/1/32	3,015,771		3,167,868
6.5% 7/1/19 (g)	54,792		57,806
7% 12/1/24 to 2/1/28	161,780		171,959
7.5% 10/1/26 to 8/1/28	509,007		546,531
TOTAL FANNIE MAE			27,405,561
Freddie Mac - 0.0%
7.5% 1/1/27	40,973		44,259
Government National Mortgage Association - 1.1%
6% 7/1/34 (g)	1,661,547		1,701,009
6.5% 10/15/27 to 8/15/32	1,014,386		1,062,817
7% 1/15/28 to 7/15/32	682,682		725,699
7.5% 6/15/27 to 3/15/28	153,508		165,724
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			3,655,249
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $31,035,519)		31,105,069
Asset-Backed Securities - 1.3%
	Principal Amount		Value (Note 1)
ACE Securities Corp. Series 2004-HE1:
Class M1, 1.8% 2/25/34 (h)	$ 50,000		$ 50,004
Class M2, 2.4% 2/25/34 (h)	50,000		50,010
American Express Credit Account Master Trust Series 2001-6 Class B, 1.5888% 12/15/08 (h)	200,000		200,706
Ameriquest Mortgage Securities, Inc. Series 2004-R2:
Class M1, 1.73% 4/25/34 (h)	25,000		24,999
Class M2, 1.78% 4/25/34 (h)	25,000		24,999
Amortizing Residential Collateral Trust Series 2003-BC1 Class M2, 2.4% 1/25/32 (h)	45,000		45,092
Argent Securities, Inc. Series 2004-W5 Class M1, 1.9% 4/25/34 (h)	75,000		75,092
Capital One Master Trust Series 2001-3A Class A, 5.45% 3/16/09	140,000		144,996
Capital One Multi-Asset Execution Trust:
Series 2003-A4 Class A4, 3.65% 7/15/11	116,000		113,561
Series 2003-B4 Class B4, 2.0388% 7/15/11 (h)	105,000		106,989
Chase Manhattan Auto Owner Trust Series 2001-A:
Class A4, 5.07% 2/15/08	369,415		374,843
Class CTFS, 5.06% 2/15/08	22,446		22,748
Citibank Credit Card Issuance Trust:
Series 2002-B1 Class B1, 1.9% 6/25/09 (h)	165,000		165,582
Series 2002-C1 Class C1, 2.17% 2/9/09 (h)	250,000		253,671
Countrywide Home Loans, Inc.:
Series 2004-2 Class M1, 1.8% 5/25/34 (h)	100,000		99,996
Series 2004-3 Class M1, 1.8% 6/25/34 (h)	25,000		25,026
Series 2004-4:
Class A, 1.67% 8/25/34 (h)	97,835		97,665
Class M1, 1.78% 7/25/34 (h)	75,000		74,813
Class M2, 1.83% 6/25/34 (h)	80,000		79,750
Discover Card Master Trust I:
Series 2001-6 Class A, 5.75% 12/15/08	600,000		630,407
Series 2003-4 Class B1, 1.5688% 5/16/11 (h)	155,000		155,541
Ford Credit Auto Owner Trust:
Series 2001-B Class B, 5.71% 9/15/05	90,000		90,154
Series 2001-C Class B, 5.54% 12/15/05	100,000		100,485
Fremont Home Loan Trust Series 2004-A:
Class M1, 1.85% 1/25/34 (h)	75,000		74,997
Class M2, 2.45% 1/25/34 (h)	100,000		99,995
Home Equity Asset Trust Series 2002-4 Class M2, 3.35% 3/25/33 (h)	25,000		25,392
Honda Auto Receivables Owner Trust Series 2001-2 Class A4, 5.09% 10/18/06	111,682		111,889
MBNA Credit Card Master Note Trust Series 2001-A1 Class A1, 5.75% 10/15/08	200,000		209,877
	Principal Amount		Value (Note 1)
Meritage Mortgage Loan Trust Series 2004-1:
Class M1, 1.8% 7/25/34 (h)	$ 50,000		$ 49,998
Class M3, 2.25% 7/25/34 (h)	25,000		24,999
Morgan Stanley ABS Capital I, Inc.:
Series 2003-HE1 Class M2, 3.2% 5/25/33 (h)	25,000		25,477
Series 2003-NC5 Class M2, 3.3% 4/25/33 (h)	50,000		51,081
Morgan Stanley Dean Witter Capital I Trust Series 2003-NC1 Class M1, 2.35% 11/25/32 (h)	45,000		45,546
Sears Credit Account Master Trust II:
Series 2000-2 Class A, 6.75% 9/16/09	365,000		382,334
Series 2001-2 Class B, 1.5288% 6/16/08 (h)	200,000		199,997
Structured Asset Securities Corp. Series 2004-GEL1 Class A, 1.66% 2/25/34 (h)	43,103		43,101
TOTAL ASSET-BACKED SECURITIES (Cost $4,277,441)		4,351,812
Collateralized Mortgage Obligations - 0.1%
Private Sponsor - 0.0%
CS First Boston Mortgage Securities Corp. floater Series 2004-AR3 Class 6A2, 1.67% 3/25/34 (h)	93,140		93,337
Master Alternative Loan Trust Series 2004-3 Class 3A1, 6% 4/25/34	23,740		24,252
Residential Asset Mortgage Products, Inc. sequential payer Series 2004-SL2 Class A1, 6.5% 11/25/16	50,000		51,828
TOTAL PRIVATE SPONSOR			169,417
U.S. Government Agency - 0.1%
Fannie Mae sequential pay Series 1999-10 Class MZ, 6.5% 9/17/38	240,214		250,808
Fannie Mae guaranteed REMIC pass thru certificates Series 2004-29 Class ZM, 5.5% 5/25/34	14,471		14,568
Freddie Mac Multi-class participation certificates guaranteed target amortization class Series 2794 Class ZL, 6% 10/15/31	25,834		25,737
TOTAL U.S. GOVERNMENT AGENCY			291,113
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $464,842)		460,530
Commercial Mortgage Securities - 1.0%
	Principal Amount		Value (Note 1)
Bayview Commercial Asset Trust floater Series 2004-1 Class A, 1.66% 4/25/34 (f)(h)	$ 98,172		$ 98,111
COMM:
floater:
Series 2002-FL7 Class D, 1.8088% 11/15/14 (f)(h)	45,000		44,987
Series 2003-FL9 Class B, 1.7388% 11/15/15 (f)(h)(j)	90,000		90,083
Series 2004-LBN2 Class X2, 1.1206% 3/10/39 (f)(h)	315,000		14,879
CS First Boston Mortgage Securities Corp.:
sequential pay:
Series 1999-C1 Class A2, 7.29% 9/15/41	250,000		279,249
Series 2000-C1 Class A2, 7.545% 4/15/62	500,000		566,239
Series 2004-C1 Class A3, 4.321% 1/15/37	95,000		91,387
Series 1997-C2 Class D, 7.27% 1/17/35	150,000		162,995
Series 2004-C1 Class ASP, 1.2151% 1/15/37 (f)(h)(j)	1,540,000		68,397
DLJ Commercial Mortgage Corp. sequential pay Series 2000-CF1 Class A1B, 7.62% 6/10/33	500,000		567,780
GS Mortgage Securities Corp. II:
sequential pay:
Series 2001-LIBA Class A2, 6.615% 2/14/16 (f)	70,000		75,370
Series 2003-C1 Class A2A, 3.59% 1/10/40	125,000		123,213
Series 1998-GLII Class E, 6.9702% 4/13/31 (h)	120,000		125,412
J.P. Morgan Commercial Mortgage Finance Corp. sequential pay Series 2000-C9 Class A2, 7.77% 10/15/32	225,000		255,066
Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A:
Class B, 4.13% 11/20/37 (f)	110,000		101,629
Class C, 4.13% 11/20/37 (f)	110,000		96,987
Morgan Stanley Capital I, Inc. sequential pay Series 2004-HQ3 Class A2, 4.05% 1/13/41	105,000		101,682
Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A2, 6.602% 11/15/07 (f)	500,000		533,533
Wachovia Bank Commercial Mortgage Trust sequential pay Series 2003-C6 Class A2, 4.498% 8/15/35	165,000		164,443
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $3,390,817)		3,561,442
Foreign Government and Government Agency Obligations - 0.3%
	Principal Amount		Value (Note 1)
Chilean Republic:
5.5% 1/15/13	$ 40,000		$ 40,104
6.875% 4/28/09	150,000		164,760
7.125% 1/11/12	150,000		167,063
South African Republic 6.5% 6/2/14	90,000		90,000
State of Israel 4.625% 6/15/13	30,000		27,788
United Mexican States:
4.625% 10/8/08	150,000		147,900
6.375% 1/16/13	300,000		299,400
7.5% 4/8/33	175,000		170,188
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $1,091,470)		1,107,203
Floating Rate Loans - 0.1%
TELECOMMUNICATION SERVICES - 0.1%
Diversified Telecommunication Services - 0.1%
Qwest Corp. Tranche A term loan 6.5% 6/30/07 (h)	190,000		197,600
UTILITIES - 0.0%
Multi-Utilities & Unregulated Power - 0.0%
AES Corp. term loan 5.32% 4/30/08 (h)	85,714		86,893
TOTAL FLOATING RATE LOANS (Cost $276,261)		284,493
Fixed-Income Funds - 2.0%
	Shares
Fidelity Ultra-Short Central Fund (i) (Cost $6,999,960)	70,311		7,001,569
Money Market Funds - 10.5%
Fidelity Cash Central Fund, 1.16% (b)	35,721,615		35,721,615
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	170,375		170,375
TOTAL MONEY MARKET FUNDS (Cost $35,891,990)		35,891,990

TOTAL INVESTMENT PORTFOLIO - 103.0% (Cost $327,033,791)		353,665,745
NET OTHER ASSETS - (3.0)%		(10,249,397)
NET ASSETS - 100%	$ 343,416,348

Swap Agreements
	Expiration Date	Notional Amount	Value
Credit Default Swap
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	$ 100,000	$ (633)
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	50,000	(317)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon default event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27	March 2009	100,000	(290)
Receive quarterly notional amount multiplied by .62% and pay Lehman Brothers, Inc. upon default event of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11	June 2009	200,000	358
TOTAL CREDIT DEFAULT SWAP		450,000	(882)
Interest Rate Swap
Receive quarterly a fixed rate equal to 2.865% and pay quarterly a floating rate based on 3-month LIBOR with Citibank	August 2007	280,000	(5,955)
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Interest Rate Swap - continued
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	$ 1,550,000	$ (10,728)
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	1,320,000	(7,265)
TOTAL INTEREST RATE SWAP		3,150,000	(23,948)
Total Return Swap
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 65 basis points with Lehman Brothers, Inc.	Oct. 2004	500,000	1,591
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 45 basis points with Lehman Brothers, Inc.	Nov. 2004	2,500,000	5,292
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 50 basis points with Lehman Brothers, Inc.	Sept. 2004	355,000	877
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 50 basis points with Lehman Brothers, Inc.	Sept. 2004	135,000	333
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Total Return Swap - continued
Receive monthly a return equal to Lehman Brothers CMBS Erisa Eligible and pay monthly a floating rate based on 1-month LIBOR minus 55 basis points with Deutsche Bank	Dec. 2004	$ 2,000,000	$ 6,409
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	July 2004	500,000	5,611
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	Nov. 2004	500,000	(246)
TOTAL TOTAL RETURN SWAP		6,490,000	19,867
		$ 10,090,000	$ (4,963)

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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 $9,924,642 or 2.9% 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) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

(j) 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

The composition of credit quality ratings as a percentage of net assets is as follows (ratings are unaudited):

U.S.Government and U.S.Government Agency Obligations	16.3%
AAA,AA,A	6.1
BBB	5.1
BB	1.5
B	3.7
CCC,CC,C	1.0
Not Rated	0.1
Equities	58.2
Short-Term Investments and Net Other Assets	8.0
	100.0%

We have used ratings from Moody's® Investors Services, Inc. Where Moody's ratings are not available, we have used S&P® ratings.

Purchases and sales of securities, other than short-term securities, aggregated $125,599,612 and $119,107,317, respectively, of which long-term U.S. government and government agency obligations aggregated $73,222,957 and $78,417,818, 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 $3,579 for the period.

Loans & Other Direct Debt Instruments

The fund invested in loans and loan participations, trade claims or other receivables. At period end the value of these investments amounted to $284,492 or 0.1% of net assets.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $19,804,000 of which $10,146,000 and $9,658,000 will expire on December 31, 2009 and 2010, respectively.

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

Balanced Portfolio

Fidelity Variable Insurance Products: Balanced Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $166,474) (cost $327,033,791) - See accompanying schedule		$ 353,665,745
Cash		289,976
Receivable for investments sold		1,030,146
Receivable for fund shares sold		229,374
Dividends receivable		167,696
Interest receivable		1,302,203
Prepaid expenses		771
Other receivables		3,468
Total assets		356,689,379
Liabilities
Payable for investments purchased Regular delivery	$ 123,800
Delayed delivery	12,669,805
Payable for fund shares redeemed	99,188
Swap agreements, at value	4,963
Accrued management fee	121,821
Distribution fees payable	8,545
Other affiliated payables	30,857
Other payables and accrued expenses	43,677
Collateral on securities loaned, at value	170,375
Total liabilities		13,273,031
Net Assets		$ 343,416,348
Net Assets consist of:
Paid in capital		$ 328,325,746
Undistributed net investment income		4,170,838
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(15,707,227)
Net unrealized appreciation (depreciation) on investments		26,626,991
Net Assets		$ 343,416,348
Initial Class: Net Asset Value, offering price and redemption price per share ($289,289,943 ÷ 21,266,607 shares)		$ 13.60
Service Class: Net Asset Value, offering price and redemption price per share ($20,876,135 ÷ 1,541,413 shares)		$ 13.54
Service Class 2: Net Asset Value, offering price and redemption price per share ($33,250,270 ÷ 2,465,379 shares)		$ 13.49

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 1,582,454
Interest		3,390,004
Security lending		860
Total income		4,973,318
Expenses
Management fee	$ 743,817
Transfer agent fees	119,602
Distribution fees	49,872
Accounting and security lending fees	74,000
Non-interested trustees' compensation	831
Custodian fees and expenses	11,768
Audit	24,736
Legal	282
Miscellaneous	5,025
Total expenses before reductions	1,029,933
Expense reductions	(6,660)	1,023,273
Net investment income (loss)		3,950,045
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	4,873,025
Foreign currency transactions	(1,576)
Swap agreements	5,522
Total net realized gain (loss)		4,876,971
Change in net unrealized appreciation (depreciation) on: Investment securities	(8,944,600)
Swap agreements	(51,126)
Delayed delivery commitments	(464)
Total change in net unrealized appreciation (depreciation)		(8,996,190)
Net gain (loss)		(4,119,219)
Net increase (decrease) in net assets resulting from operations		$ (169,174)

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 June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 3,950,045	$ 6,987,022
Net realized gain (loss)	4,876,971	3,062,346
Change in net unrealized appreciation (depreciation)	(8,996,190)	38,999,107
Net increase (decrease) in net assets resulting from operations	(169,174)	49,048,475
Distributions to shareholders from net investment income	(6,988,389)	(7,974,845)
Share transactions - net increase (decrease)	3,529,352	32,311,069
Total increase (decrease) in net assets	(3,628,211)	73,384,699
Net Assets
Beginning of period	347,044,559	273,659,860
End of period (including undistributed net investment income of $4,170,838 and undistributed net investment income of $7,087,612, respectively)	$ 343,416,348	$ 347,044,559

Other Information:
Share Transactions	Six months ended June 30, 2004
	Initial Class	Service Class	Service Class 2
Shares Sold	1,272,853	44,709	443,323
Reinvested	432,646	31,049	40,193
Redeemed	(1,744,592)	(119,813)	(162,724)
Net increase (decrease)	(39,093)	(44,055)	320,792
Dollars Sold	$ 17,631,316	$ 619,361	$ 6,033,873
Reinvested	6,005,123	429,413	553,854
Redeemed	(23,898,207)	(1,635,813)	(2,209,568)
Net increase (decrease)	$ (261,768)	$ (587,039)	$ 4,378,159
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	4,747,709	87,816	932,305
Reinvested	599,512	50,167	45,486
Redeemed	(3,372,673)	(205,767)	(374,801)
Net increase (decrease)	1,974,548	(67,784)	602,990
Dollars Sold	$ 61,609,403	$ 1,115,888	$ 11,910,142
Reinvested	6,882,396	573,909	518,540
Redeemed	(42,908,423)	(2,600,420)	(4,790,366)
Net increase (decrease)	$ 25,583,376	$ (910,623)	$ 7,638,316
Distributions	Six months ended June 30, 2004
	Initial Class	Service Class	Service Class 2
From net investment income	$ 6,005,122	$ 429,413	$ 553,854
From net realized gain	-	-	-
Total	$ 6,005,122	$ 429,413	$ 553,854
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 6,882,396	$ 573,909	$ 518,540
From net realized gain	-	-	-
Total	$ 6,882,396	$ 573,909	$ 518,540

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

Balanced Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 13.88	$ 12.16	$ 13.72	$ 14.45	$ 16.00	$ 16.11
Income from Investment Operations
Net investment income (loss) E	.16	.30	.36	.42	.48	.45
Net realized and unrealized gain (loss)	(.16)	1.78	(1.53)	(.63)	(1.15)	.24
Total from investment operations	-	2.08	(1.17)	(.21)	(.67)	.69
Distributions from net investment income	(.28)	(.36)	(.39)	(.52)	(.48)	(.37)
Distributions from net realized gain	-	-	-	-	(.35)	(.43)
Distributions in excess of net realized gain	-	-	-	-	(.05)	-
Total distributions	(.28)	(.36)	(.39)	(.52)	(.88)	(.80)
Net asset value, end of period	$ 13.60	$ 13.88	$ 12.16	$ 13.72	$ 14.45	$ 16.00
Total Return B, C, D	(0.04)%	17.72%	(8.72)%	(1.58)%	(4.30)%	4.55%
Ratios to Average Net Assets F
Expenses before expense reductions	.56% A	.59%	.57%	.57%	.58%	.57%
Expenses net of voluntary waivers, if any	.56% A	.59%	.57%	.57%	.58%	.57%
Expenses net of all reductions	.56% A	.58%	.55%	.55%	.56%	.55%
Net investment income (loss)	2.29% A	2.32%	2.84%	3.11%	3.18%	2.87%
Supplemental Data
Net assets, end of period (000 omitted)	$ 289,290	$ 295,656	$ 235,064	$ 264,608	$ 250,802	$ 325,371
Portfolio turnover rate	75% A	102%	134%	126%	126%	108%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 13.81	$ 12.11	$ 13.66	$ 14.39	$ 15.94	$ 16.07
Income from Investment Operations
Net investment income (loss) E	.15	.28	.34	.41	.46	.43
Net realized and unrealized gain (loss)	(.15)	1.77	(1.51)	(.64)	(1.14)	.24
Total from investment operations	-	2.05	(1.17)	(.23)	(.68)	.67
Distributions from net investment income	(.27)	(.35)	(.38)	(.50)	(.47)	(.37)
Distributions from net realized gain	-	-	-	-	(.35)	(.43)
Distributions in excess of net realized gain	-	-	-	-	(.05)	-
Total distributions	(.27)	(.35)	(.38)	(.50)	(.87)	(.80)
Net asset value, end of period	$ 13.54	$ 13.81	$ 12.11	$ 13.66	$ 14.39	$ 15.94
Total Return B, C, D	(0.04)%	17.53%	(8.75)%	(1.72)%	(4.38)%	4.43%
Ratios to Average Net Assets F
Expenses before expense reductions	.67% A	.69%	.67%	.67%	.68%	.67%
Expenses net of voluntary waivers, if any	.67% A	.69%	.67%	.67%	.68%	.67%
Expenses net of all reductions	.66% A	.68%	.65%	.65%	.66%	.66%
Net investment income (loss)	2.18% A	2.22%	2.74%	3.01%	3.08%	2.77%
Supplemental Data
Net assets, end of period (000 omitted)	$ 20,876	$ 21,903	$ 20,019	$ 25,455	$ 27,563	$ 27,054
Portfolio turnover rate	75% A	102%	134%	126%	126%	108%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 13.75	$ 12.05	$ 13.61	$ 14.37	$ 15.59
Income from Investment Operations
Net investment income (loss) E	.14	.26	.32	.38	.40
Net realized and unrealized gain (loss)	(.15)	1.77	(1.51)	(.63)	(.75)
Total from investment operations	(.01)	2.03	(1.19)	(.25)	(.35)
Distributions from net investment income	(.25)	(.33)	(.37)	(.51)	(.47)
Distributions from net realized gain	-	-	-	-	(.35)
Distributions in excess of net realized gain	-	-	-	-	(.05)
Total distributions	(.25)	(.33)	(.37)	(.51)	(.87)
Net asset value, end of period	$ 13.49	$ 13.75	$ 12.05	$ 13.61	$ 14.37
Total Return B, C, D	(0.11)%	17.41%	(8.93)%	(1.87)%	(2.37)%
Ratios to Average Net Assets G
Expenses before expense reductions	.82% A	.84%	.83%	.83%	.85% A
Expenses net of voluntary waivers, if any	.82% A	.84%	.83%	.83%	.85% A
Expenses net of all reductions	.81% A	.84%	.81%	.81%	.83% A
Net investment income (loss)	2.03% A	2.06%	2.58%	2.85%	2.91% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 33,250	$ 29,485	$ 18,577	$ 16,798	$ 4,797
Portfolio turnover rate	75% A	102%	134%	126%	126%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

Balanced Portfolio

Fidelity Variable Insurance Products: Growth & Income Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
EchoStar Communications Corp. Class A	6.5
Omnicom Group, Inc.	5.8
BellSouth Corp.	5.0
Morgan Stanley	5.0
Wells Fargo & Co.	4.7
	27.0
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	21.1
Consumer Discretionary	19.0
Consumer Staples	15.4
Telecommunication Services	10.8
Information Technology	6.7

Asset Allocation as of June 30, 2004
% of fund's net assets *
	Stocks	93.0%
	Short-Term Investments and Net Other Assets	7.0%

* Foreign investments 4.6%

Semiannual Report

Fidelity Variable Insurance Products: Growth & Income Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 93.0%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 19.0%
Hotels, Restaurants & Leisure - 0.5%
Carnival Corp. unit	152,200		$ 7,153,400
Media - 15.6%
E.W. Scripps Co. Class A	313,700		32,938,500
EchoStar Communications Corp. Class A (a)	3,300,000		101,475,000
News Corp. Ltd. ADR	509,100		18,032,322
Omnicom Group, Inc.	1,194,600		90,658,194
			243,104,016
Multiline Retail - 2.4%
Dollar Tree Stores, Inc. (a)	144,700		3,969,121
Kohl's Corp. (a)	783,900		33,143,292
			37,112,413
Textiles Apparel & Luxury Goods - 0.5%
Liz Claiborne, Inc.	205,800		7,404,684
TOTAL CONSUMER DISCRETIONARY			294,774,513
CONSUMER STAPLES - 15.4%
Beverages - 1.0%
The Coca-Cola Co.	315,100		15,906,248
Food & Staples Retailing - 5.8%
Costco Wholesale Corp.	444,800		18,267,936
Wal-Mart Stores, Inc.	1,000,500		52,786,380
Walgreen Co.	526,400		19,060,944
			90,115,260
Food Products - 1.0%
McCormick & Co., Inc. (non-vtg.)	457,000		15,538,000
Household Products - 3.1%
Colgate-Palmolive Co.	335,700		19,621,665
Kimberly-Clark Corp.	419,900		27,663,012
			47,284,677
Personal Products - 3.4%
Gillette Co.	1,250,000		53,000,000
Tobacco - 1.1%
Altria Group, Inc.	346,260		17,330,313
TOTAL CONSUMER STAPLES			239,174,498
ENERGY - 5.1%
Oil & Gas - 5.1%
BP PLC sponsored ADR	511,300		27,390,341
Exxon Mobil Corp.	1,174,456		52,157,591
			79,547,932
FINANCIALS - 21.1%
Capital Markets - 11.0%
Goldman Sachs Group, Inc.	406,400		38,266,624
Merrill Lynch & Co., Inc.	1,014,900		54,784,302
Morgan Stanley	1,481,900		78,199,863
			171,250,789
	Shares		Value (Note 1)
Commercial Banks - 4.7%
Wells Fargo & Co.	1,287,700		$ 73,695,071
Consumer Finance - 0.9%
American Express Co.	257,100		13,209,798
Insurance - 4.5%
Allstate Corp.	313,100		14,574,805
American International Group, Inc.	493,605		35,184,164
PartnerRe Ltd.	111,600		6,331,068
St. Paul Travelers Companies, Inc.	326,639		13,241,945
			69,331,982
TOTAL FINANCIALS			327,487,640
HEALTH CARE - 3.7%
Biotechnology - 0.8%
Amgen, Inc. (a)	233,300		12,731,181
Health Care Equipment & Supplies - 1.0%
Advanced Medical Optics, Inc. (a)	1		43
Alcon, Inc.	124,300		9,776,195
Medtronic, Inc.	102,200		4,979,184
			14,755,422
Health Care Providers & Services - 0.0%
Wellcare Group, Inc.	1,000		17,000
Pharmaceuticals - 1.9%
Allergan, Inc.	98,500		8,817,720
Pfizer, Inc.	608,000		20,842,240
			29,659,960
TOTAL HEALTH CARE			57,163,563
INDUSTRIALS - 4.9%
Aerospace & Defense - 1.0%
Lockheed Martin Corp.	115,500		6,015,240
Northrop Grumman Corp.	166,200		8,924,940
			14,940,180
Airlines - 1.1%
Continental Airlines, Inc. Class B (a)	668,500		7,600,845
MAIR Holdings, Inc. (a)	435,200		3,551,232
Northwest Airlines Corp. (a)	320,000		3,558,400
Southwest Airlines Co.	179,500		3,010,215
			17,720,692
Commercial Services & Supplies - 0.4%
Avery Dennison Corp.	92,400		5,914,524
Industrial Conglomerates - 1.9%
General Electric Co.	923,400		29,918,160
Road & Rail - 0.5%
Union Pacific Corp.	136,200		8,097,090
TOTAL INDUSTRIALS			76,590,646
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - 6.7%
Communications Equipment - 1.9%
Cisco Systems, Inc. (a)	1,236,900		$ 29,314,530
Foundry Networks, Inc. (a)	300		4,221
			29,318,751
Computers & Peripherals - 0.7%
Diebold, Inc.	185,600		9,812,672
IT Services - 0.5%
Paychex, Inc.	241,819		8,192,828
Software - 3.6%
Microsoft Corp.	1,969,700		56,254,632
TOTAL INFORMATION TECHNOLOGY			103,578,883
MATERIALS - 5.4%
Containers & Packaging - 3.0%
Ball Corp.	6		432
Packaging Corp. of America	186,400		4,454,960
Smurfit-Stone Container Corp. (a)	2,090,700		41,709,465
			46,164,857
Paper & Forest Products - 2.4%
International Paper Co.	839,100		37,507,770
TOTAL MATERIALS			83,672,627
TELECOMMUNICATION SERVICES - 10.8%
Diversified Telecommunication Services - 10.8%
BellSouth Corp.	2,998,100		78,610,182
SBC Communications, Inc.	972,530		23,583,853
Verizon Communications, Inc.	1,837,000		66,481,030
			168,675,065
UTILITIES - 0.9%
Electric Utilities - 0.9%
Entergy Corp.	247,700		13,873,677
TOTAL COMMON STOCKS (Cost $1,305,233,216)		1,444,539,044
Money Market Funds - 7.4%
	Shares		Value (Note 1)
Fidelity Cash Central Fund, 1.16% (b)	103,457,245		$ 103,457,245
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	11,518,500	11,518,500
TOTAL MONEY MARKET FUNDS (Cost $114,975,745)		114,975,745
TOTAL INVESTMENT PORTFOLIO - 100.4% (Cost $1,420,208,961)			1,559,514,789
NET OTHER ASSETS - (0.4)%		(6,664,212)
NET ASSETS - 100%		$ 1,552,850,577

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $292,726,963 and $153,931,944.

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 $23,804 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $166,422,000 of which $49,149,000, $107,382,000 and $9,891,000 will expire on December 31, 2009, 2010 and 2011, respectively.

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

Growth & Income Portfolio

Fidelity Variable Insurance Products: Growth & Income Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $11,743,080) (cost $1,420,208,961) - See accompanying schedule		$ 1,559,514,789
Receivable for investments sold		5,999,415
Receivable for fund shares sold		523,783
Dividends receivable		1,193,880
Interest receivable		114,687
Prepaid expenses		3,157
Other receivables		29,679
Total assets		1,567,379,390
Liabilities
Payable to custodian bank	$ 1,390,899
Payable for investments purchased	17,000
Payable for fund shares redeemed	689,142
Accrued management fee	613,687
Distribution fees payable	121,737
Other affiliated payables	127,783
Other payables and accrued expenses	50,065
Collateral on securities loaned, at value	11,518,500
Total liabilities		14,528,813
Net Assets		$ 1,552,850,577
Net Assets consist of:
Paid in capital		$ 1,584,686,559
Undistributed net investment income		6,363,932
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(177,505,742)
Net unrealized appreciation (depreciation) on investments		139,305,828
Net Assets		$ 1,552,850,577
Initial Class: Net Asset Value, offering price and redemption price per share ($733,237,691 ÷ 55,816,920 shares)		$ 13.14
Service Class: Net Asset Value, offering price and redemption price per share ($379,250,003 ÷ 29,037,278 shares)		$ 13.06
Service Class 2: Net Asset Value, offering price and redemption price per share ($440,362,883 ÷ 33,969,343 shares)		$ 12.96

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 11,025,391
Interest		722,642
Security lending		42,466
Total income		11,790,499
Expenses
Management fee	$ 3,633,939
Transfer agent fees	510,844
Distribution fees	679,210
Accounting and security lending fees	254,278
Non-interested trustees' compensation	3,603
Custodian fees and expenses	10,667
Audit	25,288
Legal	1,685
Miscellaneous	40,288
Total expenses before reductions	5,159,802
Expense reductions	(52,142)	5,107,660
Net investment income (loss)		6,682,839
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	(8,142,382)
Foreign currency transactions	(11,098)
Total net realized gain (loss)		(8,153,480)
Change in net unrealized appreciation (depreciation) on investment securities		(895,019)
Net gain (loss)		(9,048,499)
Net increase (decrease) in net assets resulting from operations		$ (2,365,660)

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

Semiannual Report

Fidelity Variable Insurance Products: Growth & Income Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 6,682,839	$ 11,563,948
Net realized gain (loss)	(8,153,480)	(8,957,165)
Change in net unrealized appreciation (depreciation)	(895,019)	256,023,394
Net increase (decrease) in net assets resulting from operations	(2,365,660)	258,630,177
Distributions to shareholders from net investment income	(12,447,351)	(12,772,749)
Share transactions - net increase (decrease)	82,595,302	210,037,372
Total increase (decrease) in net assets	67,782,291	455,894,800
Net Assets
Beginning of period	1,485,068,286	1,029,173,486
End of period (including undistributed net investment income of $6,363,932 and undistributed net investment income of $12,027,562, respectively)	$ 1,552,850,577	$ 1,485,068,286

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	1,870,914	2,022,767	8,109,891
Reinvested	498,735	216,143	212,315
Redeemed	(5,802,379)	(335,541)	(486,624)
Net increase (decrease)	(3,432,730)	1,903,369	7,835,582
Dollars Sold	$ 24,906,434	$ 26,650,935	$ 106,026,256
Reinvested	6,722,963	2,898,471	2,825,917
Redeemed	(76,684,201)	(4,409,348)	(6,342,125)
Net increase (decrease)	$ (45,054,804)	$ 25,140,058	$ 102,510,048
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	8,588,135	4,730,597	14,305,974
Reinvested	791,445	298,276	164,516
Redeemed	(8,881,933)	(1,062,769)	(1,468,648)
Net increase (decrease)	497,647	3,966,104	13,001,842
Dollars Sold	$ 102,662,499	$ 56,731,473	$ 170,921,383
Reinvested	8,080,656	3,030,479	1,661,614
Redeemed	(103,784,385)	(12,033,144)	(17,233,203)
Net increase (decrease)	$ 6,958,770	$ 47,728,808	$ 155,349,794
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 6,722,963	$ 2,898,471	$ 2,825,917
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 8,080,656	$ 3,030,479	$ 1,661,614

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

Growth & Income Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 13.26	$ 10.86	$ 13.19	$ 15.26	$ 17.30	$ 16.15
Income from Investment Operations
Net investment income (loss)E	.06	.12	.15	.18	.20	.18
Net realized and unrealized gain (loss)	(.06)	2.42	(2.32)	(1.45)	(.81)	1.27
Total from investment operations	-	2.54	(2.17)	(1.27)	(.61)	1.45
Distributions from net investment income	(.12)	(.14)	(.16)	(.19)	(.19)	(.10)
Distributions from net realized gain	-	-	-	(.61)	(1.24)	(.20)
Total distributions	(.12)	(.14)	(.16)	(.80)	(1.43)	(.30)
Net asset value, end of period	$ 13.14	$ 13.26	$ 10.86	$ 13.19	$ 15.26	$ 17.30
Total ReturnB,C,D	(.06)%	23.77%	(16.61)%	(8.75)%	(3.62)%	9.17%
Ratios to Average Net AssetsF
Expenses before expense reductions	.59%A	.59%	.59%	.58%	.58%	.60%
Expenses net of voluntary waivers, if any	.59%A	.59%	.59%	.58%	.58%	.60%
Expenses net of all reductions	.58%A	.59%	.58%	.56%	.57%	.59%
Net investment income (loss)	.96%A	1.02%	1.30%	1.34%	1.26%	1.08%
Supplemental Data
Net assets, end of period (000 omitted)	$ 733,238	$ 785,494	$ 638,124	$ 893,359	$ 1,011,393	$ 1,259,396
Portfolio turnover rate	22%A	25%	43%	58%	72%	58%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 13.18	$ 10.80	$ 13.12	$ 15.19	$ 17.24	$ 16.11
Income from Investment Operations
Net investment income (loss)E	.06	.11	.14	.16	.18	.16
Net realized and unrealized gain (loss)	(.07)	2.40	(2.31)	(1.44)	(.80)	1.27
Total from investment operations	(.01)	2.51	(2.17)	(1.28)	(.62)	1.43
Distributions from net investment income	(.11)	(.13)	(.15)	(.18)	(.19)	(.10)
Distributions from net realized gain	-	-	-	(.61)	(1.24)	(.20)
Total distributions	(.11)	(.13)	(.15)	(.79)	(1.43)	(.30)
Net asset value, end of period	$ 13.06	$ 13.18	$ 10.80	$ 13.12	$ 15.19	$ 17.24
Total ReturnB,C,D	(.13)%	23.60%	(16.69)%	(8.85)%	(3.69)%	9.06%
Ratios to Average Net AssetsF
Expenses before expense reductions	.69%A	.69%	.69%	.68%	.69%	.70%
Expenses net of voluntary waivers, if any	.69%A	.69%	.69%	.68%	.69%	.70%
Expenses net of all reductions	.68%A	.69%	.68%	.66%	.68%	.69%
Net investment income (loss)	.86%A	.92%	1.20%	1.24%	1.16%	.98%
Supplemental Data
Net assets, end of period (000 omitted)	$ 379,250	$ 357,585	$ 250,160	$ 281,194	$ 212,994	$ 95,600
Portfolio turnover rate	22%A	25%	43%	58%	72%	58%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period.^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. 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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 F
Selected Per-Share Data
Net asset value, beginning of period	$ 13.09	$ 10.73	$ 13.07	$ 15.17	$ 16.94
Income from Investment Operations
Net investment income (loss)E	.05	.09	.12	.14	.15
Net realized and unrealized gain (loss)	(.08)	2.39	(2.30)	(1.44)	(.49)
Total from investment operations	(.03)	2.48	(2.18)	(1.30)	(.34)
Distributions from net investment income	(.10)	(.12)	(.16)	(.19)	(.19)
Distributions from net realized gain	-	-	-	(.61)	(1.24)
Total distributions	(.10)	(.12)	(.16)	(.80)	(1.43)
Net asset value, end of period	$ 12.96	$ 13.09	$ 10.73	$ 13.07	$ 15.17
Total ReturnB,C,D	(.25)%	23.44%	(16.84)%	(9.01)%	(2.11)%
Ratios to Average Net AssetsG
Expenses before expense reductions	.84%A	.85%	.85%	.84%	.85%A
Expenses net of voluntary waivers, if any	.84%A	.85%	.85%	.84%	.85%A
Expenses net of all reductions	.83%A	.84%	.84%	.82%	.84%A
Net investment income (loss)	.71%A	.76%	1.05%	1.08%	1.00%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 440,363	$ 341,989	$ 140,890	$ 76,237	$ 13,025
Portfolio turnover rate	22%A	25%	43%	58%	72%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of operations) to December 31, 2000. ^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.

Growth & Income Portfolio

Fidelity Variable Insurance Products: Growth Opportunities Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Citigroup, Inc.	3.4
Pfizer, Inc.	3.2
General Electric Co.	3.2
Microsoft Corp.	3.1
American International Group, Inc.	2.5
	15.4
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Information Technology	19.4
Financials	16.4
Consumer Discretionary	16.1
Health Care	13.6
Industrials	11.4

Asset Allocation as of June 30, 2004
% of fund's net assets *
	Stocks	97.9%
	Short-Term Investments and Net Other Assets	2.1%

* Foreign investments 5.1%

Semiannual Report

Fidelity Variable Insurance Products: Growth Opportunities Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 97.9%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 16.1%
Automobiles - 0.8%
Harley-Davidson, Inc.	89,500		$ 5,543,630
Hotels, Restaurants & Leisure - 1.8%
Carnival Corp. unit	47,800		2,246,600
Hilton Hotels Corp.	226,370		4,224,064
McDonald's Corp.	95,200		2,475,200
Royal Caribbean Cruises Ltd.	23,500		1,020,135
Starwood Hotels & Resorts Worldwide, Inc. unit	77,700		3,484,845
			13,450,844
Internet & Catalog Retail - 0.4%
Amazon.com, Inc. (a)	47,700		2,594,880
Media - 8.6%
Clear Channel Communications, Inc.	65,600		2,423,920
Comcast Corp. Class A (special) (a)	52,508		1,449,746
Dow Jones & Co., Inc.	11,900		536,690
Fox Entertainment Group, Inc. Class A (a)	255,300		6,816,510
Lamar Advertising Co. Class A (a)	53,500		2,319,225
McGraw-Hill Companies, Inc.	35,700		2,733,549
Meredith Corp.	41,800		2,297,328
News Corp. Ltd. ADR	294,600		10,434,732
Omnicom Group, Inc.	77,700		5,896,653
The DIRECTV Group, Inc. (a)	77,500		1,325,250
Time Warner, Inc. (a)	362,200		6,367,476
Univision Communications, Inc. Class A (a)	261,700		8,356,081
Viacom, Inc. Class B (non-vtg.)	284,820		10,173,770
Walt Disney Co.	112,900		2,877,821
			64,008,751
Multiline Retail - 1.0%
Kohl's Corp. (a)	47,700		2,016,756
Nordstrom, Inc.	95,000		4,047,950
Target Corp.	35,700		1,516,179
			7,580,885
Specialty Retail - 2.5%
Best Buy Co., Inc.	47,800		2,425,372
Home Depot, Inc.	212,000		7,462,400
Lowe's Companies, Inc.	18,800		987,940
Staples, Inc.	250,400		7,339,224
			18,214,936
Textiles Apparel & Luxury Goods - 1.0%
Coach, Inc. (a)	53,600		2,422,184
NIKE, Inc. Class B	23,900		1,810,425
Polo Ralph Lauren Corp. Class A	65,200		2,246,140
Warnaco Group, Inc. (a)	53,800		1,144,326
			7,623,075
TOTAL CONSUMER DISCRETIONARY			119,017,001
	Shares		Value (Note 1)
CONSUMER STAPLES - 11.2%
Beverages - 2.3%
PepsiCo, Inc.	112,900		$ 6,083,052
The Coca-Cola Co.	213,000		10,752,240
			16,835,292
Food & Staples Retailing - 2.9%
Albertsons, Inc.	71,700		1,902,918
CVS Corp.	71,600		3,008,632
Safeway, Inc. (a)	41,600		1,054,144
Sysco Corp.	23,800		853,706
Wal-Mart Stores, Inc.	275,100		14,514,276
			21,333,676
Food Products - 2.4%
Archer-Daniels-Midland Co.	144,000		2,416,320
Bunge Ltd.	77,200		3,006,168
Dean Foods Co. (a)	113,000		4,216,030
Hershey Foods Corp.	118,800		5,496,876
Kellogg Co.	23,800		996,030
The J.M. Smucker Co.	42,378		1,945,574
			18,076,998
Household Products - 1.1%
Clorox Co.	53,800		2,893,364
Colgate-Palmolive Co.	70,500		4,120,725
Procter & Gamble Co.	21,640		1,178,082
			8,192,171
Personal Products - 2.2%
Avon Products, Inc.	31,044		1,432,370
Gillette Co.	353,270		14,978,648
			16,411,018
Tobacco - 0.3%
Altria Group, Inc.	47,520		2,378,376
TOTAL CONSUMER STAPLES			83,227,531
ENERGY - 5.0%
Energy Equipment & Services - 1.5%
Baker Hughes, Inc.	65,700		2,473,605
Halliburton Co.	23,900		723,214
Schlumberger Ltd. (NY Shares)	125,100		7,945,101
			11,141,920
Oil & Gas - 3.5%
BP PLC sponsored ADR	146,790		7,863,540
Exxon Mobil Corp.	387,800		17,222,198
Valero Energy Corp.	11,900		877,744
			25,963,482
TOTAL ENERGY			37,105,402
FINANCIALS - 16.4%
Capital Markets - 4.2%
Charles Schwab Corp.	67,300		646,753
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Capital Markets - continued
E*TRADE Financial Corp. (a)	322,500		$ 3,595,875
Goldman Sachs Group, Inc.	47,500		4,472,600
Lehman Brothers Holdings, Inc.	22,700		1,708,175
Merrill Lynch & Co., Inc.	173,200		9,349,336
Morgan Stanley	220,900		11,656,893
			31,429,632
Commercial Banks - 3.1%
Bank of America Corp.	215,200		18,210,224
Wells Fargo & Co.	77,700		4,446,771
			22,656,995
Consumer Finance - 2.0%
American Express Co.	283,600		14,571,368
Diversified Financial Services - 3.4%
Citigroup, Inc.	548,507		25,505,575
Insurance - 2.9%
AFLAC, Inc.	35,700		1,456,917
American International Group, Inc.	258,662		18,437,427
MetLife, Inc.	41,700		1,494,945
			21,389,289
Thrifts & Mortgage Finance - 0.8%
Fannie Mae	78,100		5,573,216
TOTAL FINANCIALS			121,126,075
HEALTH CARE - 13.6%
Biotechnology - 1.2%
Celgene Corp. (a)	27,900		1,597,554
Genentech, Inc. (a)	95,600		5,372,720
Genzyme Corp. - General Division (a)	11,900		563,227
OSI Pharmaceuticals, Inc. (a)	19,000		1,338,360
			8,871,861
Health Care Equipment & Supplies - 3.9%
Alcon, Inc.	65,500		5,151,575
Bausch & Lomb, Inc.	53,600		3,487,752
Becton, Dickinson & Co.	91,700		4,750,060
Boston Scientific Corp. (a)	35,700		1,527,960
C.R. Bard, Inc.	47,600		2,696,540
Dade Behring Holdings, Inc. (a)	47,500		2,257,200
Guidant Corp.	23,900		1,335,532
Medtronic, Inc.	85,200		4,150,944
St. Jude Medical, Inc. (a)	42,830		3,240,090
			28,597,653
Health Care Providers & Services - 1.4%
Cardinal Health, Inc.	53,105		3,720,005
UnitedHealth Group, Inc.	77,700		4,836,825
WebMD Corp. (a)	217,300		2,025,236
Wellcare Group, Inc.	500		8,500
			10,590,566
	Shares		Value (Note 1)
Pharmaceuticals - 7.1%
Abbott Laboratories	95,630		$ 3,897,879
Eli Lilly & Co.	35,800		2,502,778
Johnson & Johnson	151,000		8,410,700
Merck & Co., Inc.	124,900		5,932,750
Pfizer, Inc.	684,593		23,467,848
Schering-Plough Corp.	196,500		3,631,320
Wyeth	139,000		5,026,240
			52,869,515
TOTAL HEALTH CARE			100,929,595
INDUSTRIALS - 11.4%
Aerospace & Defense - 2.2%
Honeywell International, Inc.	179,100		6,560,433
Lockheed Martin Corp.	35,800		1,864,464
Northrop Grumman Corp.	53,800		2,889,060
The Boeing Co.	100,800		5,149,872
			16,463,829
Air Freight & Logistics - 1.9%
FedEx Corp.	95,400		7,793,226
United Parcel Service, Inc. Class B	83,500		6,276,695
			14,069,921
Airlines - 0.4%
Southwest Airlines Co.	183,950		3,084,842
Commercial Services & Supplies - 0.4%
Manpower, Inc.	23,800		1,208,326
Monster Worldwide, Inc. (a)	62,700		1,612,644
			2,820,970
Construction & Engineering - 0.4%
Fluor Corp.	59,500		2,836,365
Industrial Conglomerates - 5.4%
3M Co.	90,300		8,127,903
General Electric Co.	719,350		23,306,940
Tyco International Ltd.	255,500		8,467,270
			39,902,113
Machinery - 0.7%
Caterpillar, Inc.	11,700		929,448
Danaher Corp.	14,000		725,900
Deere & Co.	47,600		3,338,664
			4,994,012
TOTAL INDUSTRIALS			84,172,052
INFORMATION TECHNOLOGY - 19.4%
Communications Equipment - 4.6%
Cisco Systems, Inc. (a)	624,860		14,809,182
Juniper Networks, Inc. (a)	304,100		7,471,737
Motorola, Inc.	267,500		4,881,875
QUALCOMM, Inc.	83,600		6,101,128
Sonus Networks, Inc. (a)	247,900		1,184,962
			34,448,884
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Computers & Peripherals - 3.1%
Dell, Inc. (a)	150,300		$ 5,383,746
Diebold, Inc.	89,100		4,710,717
EMC Corp. (a)	190,700		2,173,980
International Business Machines Corp.	41,700		3,675,855
Network Appliance, Inc. (a)	328,100		7,063,993
			23,008,291
Internet Software & Services - 1.3%
Yahoo!, Inc. (a)	267,300		9,711,009
IT Services - 0.4%
Paychex, Inc.	84,266		2,854,932
Office Electronics - 0.4%
Xerox Corp. (a)	184,300		2,672,350
Semiconductors & Semiconductor Equipment - 4.7%
Analog Devices, Inc.	121,500		5,720,220
Applied Materials, Inc. (a)	47,600		933,912
Intel Corp.	378,010		10,433,076
KLA-Tencor Corp. (a)	16,300		804,894
Lam Research Corp. (a)	45,600		1,222,080
National Semiconductor Corp. (a)	321,600		7,071,984
Teradyne, Inc. (a)	41,700		946,590
Texas Instruments, Inc.	191,200		4,623,216
Xilinx, Inc.	92,900		3,094,499
			34,850,471
Software - 4.9%
Microsoft Corp.	795,320		22,714,339
Novell, Inc. (a)	53,800		451,382
Oracle Corp. (a)	173,000		2,063,890
Red Hat, Inc. (a)	105,699		2,427,906
Symantec Corp. (a)	101,383		4,438,548
VERITAS Software Corp. (a)	150,488		4,168,518
			36,264,583
TOTAL INFORMATION TECHNOLOGY			143,810,520
MATERIALS - 2.4%
Chemicals - 2.0%
Dow Chemical Co.	169,300		6,890,510
International Flavors & Fragrances, Inc.	17,900		669,460
Monsanto Co.	41,600		1,601,600
Praxair, Inc.	143,300		5,719,103
			14,880,673
Metals & Mining - 0.1%
Alcoa, Inc.	23,700		782,811
Paper & Forest Products - 0.3%
International Paper Co.	47,600		2,127,720
TOTAL MATERIALS			17,791,204
	Shares		Value (Note 1)
TELECOMMUNICATION SERVICES - 2.4%
Diversified Telecommunication Services - 2.0%
BellSouth Corp.	35,500		$ 930,810
SBC Communications, Inc.	270,560		6,561,080
Verizon Communications, Inc.	210,800		7,628,852
			15,120,742
Wireless Telecommunication Services - 0.4%
Nextel Communications, Inc. Class A (a)	41,600		1,109,056
SpectraSite, Inc. (a)	40,900		1,767,698
			2,876,754
TOTAL TELECOMMUNICATION SERVICES			17,997,496
TOTAL COMMON STOCKS (Cost $602,142,869)		725,176,876
Money Market Funds - 1.7%
Fidelity Cash Central Fund, 1.16% (b) (Cost $12,875,320)	12,875,320		12,875,320

TOTAL INVESTMENT PORTFOLIO - 99.6% (Cost $615,018,189) 738,052,196

NET OTHER ASSETS - 0.4%		3,067,953
NET ASSETS - 100%	$ 741,120,149

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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.

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $297,534,470 and $306,441,026, 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 $15,093 for the period.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $277,246,000 of which $11,753,000, $149,878,000 and $115,615,000 will expire on December 31, 2008, 2009 and 2010, respectively.

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Opportunities Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (cost $615,018,189) - See accompanying schedule		$ 738,052,196
Receivable for investments sold		5,350,279
Receivable for fund shares sold		45,012
Dividends receivable		545,598
Interest receivable		13,949
Prepaid expenses		1,699
Other receivables		50,106
Total assets		744,058,839
Liabilities
Payable to custodian bank	$ 5,590
Payable for investments purchased	1,394,152
Payable for fund shares redeemed	1,054,735
Accrued management fee	354,363
Distribution fees payable	30,327
Other affiliated payables	64,118
Other payables and accrued expenses	35,405
Total liabilities		2,938,690
Net Assets		$ 741,120,149
Net Assets consist of:
Paid in capital		$ 883,737,339
Undistributed net investment income		1,756,028
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(267,414,749)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		123,041,531
Net Assets		$ 741,120,149
Initial Class: Net Asset Value, offering price and redemption price per share ($463,957,156 ÷ 30,512,996 shares)		$ 15.21
Service Class: Net Asset Value, offering price and redemption price per share ($218,543,676 ÷ 14,378,075 shares)		$ 15.20
Service Class 2: Net Asset Value, offering price and redemption price per share ($58,619,317 ÷ 3,875,404 shares)		$ 15.13

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 4,570,178
Interest		163,801
Security lending		10,172
Total income		4,744,151
Expenses
Management fee	$ 2,201,800
Transfer agent fees	260,305
Distribution fees	185,990
Accounting and security lending fees	142,345
Non-interested trustees' compensation	1,836
Custodian fees and expenses	14,372
Audit	21,250
Legal	935
Miscellaneous	27,494
Total expenses before reductions	2,856,327
Expense reductions	(67,845)	2,788,482
Net investment income (loss)		1,955,669
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	13,610,642
Foreign currency transactions	1,269
Futures contracts	1,324,924
Total net realized gain (loss)		14,936,835
Change in net unrealized appreciation (depreciation) on: Investment securities	(6,251,243)
Assets and liabilities in foreign currencies	(2,317)
Futures contracts	(853,313)
Total change in net unrealized appreciation (depreciation)		(7,106,873)
Net gain (loss)		7,829,962
Net increase (decrease) in net assets resulting from operations		$ 9,785,631

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

Semiannual Report

Fidelity Variable Insurance Products: Growth Opportunities Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 1,955,669	$ 3,979,285
Net realized gain (loss)	14,936,835	18,204,829
Change in net unrealized appreciation (depreciation)	(7,106,873)	154,484,695
Net increase (decrease) in net assets resulting from operations	9,785,631	176,668,809
Distributions to shareholders from net investment income	(3,865,122)	(4,842,328)
Share transactions - net increase (decrease)	(40,299,015)	(29,607,058)
Total increase (decrease) in net assets	(34,378,506)	142,219,423
Net Assets
Beginning of period	775,498,655	633,279,232
End of period (including undistributed net investment income of $1,756,028 and undistributed net investment income of $3,663,993, respectively)	$ 741,120,149	$ 775,498,655

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	1,675,863	626,797	529,286
Reinvested	170,805	67,879	13,011
Redeemed	(3,894,591)	(1,231,415)	(680,023)
Net increase (decrease)	(2,047,923)	(536,739)	(137,726)
Dollars Sold	$ 25,593,351	$ 9,521,663	$ 7,947,026
Reinvested	2,623,558	1,042,625	198,939
Redeemed	(58,494,260)	(18,564,309)	(10,167,608)
Net increase (decrease)	$ (30,277,351)	$ (8,000,021)	$ (2,021,643)
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	4,861,113	1,609,284	1,388,002
Reinvested	309,123	114,933	19,452
Redeemed	(7,052,265)	(2,906,117)	(959,886)
Net increase (decrease)	(1,882,029)	(1,181,900)	447,568
Dollars Sold	$ 63,883,410	$ 21,117,379	$ 18,018,110
Reinvested	3,375,625	1,255,069	211,634
Redeemed	(88,846,190)	(36,517,831)	(12,104,264)
Net increase (decrease)	$ (21,587,155)	$ (14,145,383)	$ 6,125,480
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 2,623,558	$ 1,042,625	$ 198,939
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 3,375,625	$ 1,255,069	$ 211,634

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

Growth Opportunities Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 15.07	$ 11.71	$ 15.13	$ 17.74	$ 23.15	$ 22.88
Income from Investment Operations
Net investment income (loss)E	.04	.08	.09	.12	.06	.27
Net realized and unrealized gain (loss)	.18	3.38	(3.37)	(2.67)	(3.77)	.66
Total from investment operations	.22	3.46	(3.28)	(2.55)	(3.71)	.93
Distributions from net investment income	(.08)	(.10)	(.14)	(.06)	(.29)	(.23)
Distributions from net realized gain	-	-	-	-	(1.41)	(.43)
Total distributions	(.08)	(.10)	(.14)	(.06)	(1.70)	(.66)
Net asset value, end of period	$ 15.21	$ 15.07	$ 11.71	$ 15.13	$ 17.74	$ 23.15
Total ReturnB,C,D	1.45%	29.87%	(21.84)%	(14.42)%	(17.07)%	4.27%
Ratios to Average Net AssetsF
Expenses before expense reductions	.70%A	.72%	.70%	.69%	.68%	.69%
Expenses net of voluntary waivers, if any	.70%A	.72%	.70%	.69%	.68%	.69%
Expenses net of all reductions	.68%A	.70%	.66%	.67%	.66%	.68%
Net investment income (loss)	.56%A	.64%	.68%	.79%	.31%	1.20%
Supplemental Data
Net assets, end of period (000 omitted)	$ 463,957	$ 490,710	$ 403,476	$ 652,493	$ 951,875	$ 1,541,587
Portfolio turnover rate	82%A	62%	60%	89%	117%	42%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 15.06	$ 11.70	$ 15.11	$ 17.71	$ 23.12	$ 22.86
Income from Investment Operations
Net investment income (loss)E	.03	.07	.08	.11	.04	.25
Net realized and unrealized gain (loss)	.18	3.37	(3.37)	(2.67)	(3.76)	.66
Total from investment operations	.21	3.44	(3.29)	(2.56)	(3.72)	.91
Distributions from net investment income	(.07)	(.08)	(.12)	(.04)	(.28)	(.22)
Distributions from net realized gain	-	-	-	-	(1.41)	(.43)
Total distributions	(.07)	(.08)	(.12)	(.04)	(1.69)	(.65)
Net asset value, end of period	$ 15.20	$ 15.06	$ 11.70	$ 15.11	$ 17.71	$ 23.12
Total ReturnB,C,D	1.39%	29.66%	(21.92)%	(14.49)%	(17.13)%	4.18%
Ratios to Average Net AssetsF
Expenses before expense reductions	.80%A	.82%	.80%	.79%	.79%	.79%
Expenses net of voluntary waivers, if any	.80%A	.82%	.80%	.79%	.79%	.79%
Expenses net of all reductions	.78%A	.80%	.77%	.77%	.76%	.78%
Net investment income (loss)	.46%A	.54%	.58%	.69%	.21%	1.09%
Supplemental Data
Net assets, end of period (000 omitted)	$ 218,544	$ 224,660	$ 188,318	$ 278,446	$ 345,960	$ 344,778
Portfolio turnover rate	82%A	62%	60%	89%	117%	42%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 14.98	$ 11.64	$ 15.04	$ 17.68	$ 22.70
Income from Investment Operations
Net investment income (loss)E	.02	.05	.05	.08	.01
Net realized and unrealized gain (loss)	.18	3.35	(3.34)	(2.66)	(3.34)
Total from investment operations	.20	3.40	(3.29)	(2.58)	(3.33)
Distributions from net investment income	(.05)	(.06)	(.11)	(.06)	(.28)
Distributions from net realized gain	-	-	-	-	(1.41)
Total distributions	(.05)	(.06)	(.11)	(.06)	(1.69)
Net asset value, end of period	$ 15.13	$ 14.98	$ 11.64	$ 15.04	$ 17.68
Total ReturnB,C,D	1.33%	29.40%	(22.01)%	(14.64)%	(15.74)%
Ratios to Average Net AssetsG
Expenses before expense reductions	.96%A	.99%	.97%	.95%	.95%A
Expenses net of voluntary waivers, if any	.96%A	.99%	.97%	.95%	.95%A
Expenses net of all reductions	.94%A	.96%	.94%	.93%	.93%A
Net investment income (loss)	.30%A	.37%	.41%	.53%	.04%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 58,619	$ 60,129	$ 41,486	$ 44,643	$ 25,827
Portfolio turnover rate	82%A	62%	60%	89%	117%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

Growth Opportunities Portfolio

Fidelity Variable Insurance Products: Investment Grade Bond Portfolio

Investment Summary

Quality Diversification (% of fund's net assets)

As of June 30, 2004

	U.S.Government and U.S.Government Agency Obligations	52.7%
	AAA	8.5%
	AA	5.5%
	A	10.9%
	BBB	15.9%
	BB and Below	1.0%
	Not Rated	0.2%
	Short-Term Investments and Net Other Assets	5.3%

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 June 30, 2004
Years	5.5

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.

Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Financials	13.9
Utilities	2.5
Consumer Discretionary	2.2
Telecommunication Services	2.0
Energy	1.9

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

Fidelity Variable Insurance Products: Investment Grade Bond Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Nonconvertible Bonds - 23.4%
	Principal Amount		Value (Note 1)
CONSUMER DISCRETIONARY - 2.0%
Auto Components - 0.3%
DaimlerChrysler NA Holding Corp. 7.2% 9/1/09	$ 4,645,000		$ 5,056,333
Automobiles - 0.7%
General Motors Corp.:
7.2% 1/15/11	4,000,000		4,191,180
8.25% 7/15/23	2,510,000		2,628,600
8.375% 7/15/33	3,080,000		3,260,155
			10,079,935
Media - 1.0%
AOL Time Warner, Inc. 7.625% 4/15/31	2,500,000		2,705,353
Cox Communications, Inc. 7.75% 11/1/10	3,350,000		3,797,470
Liberty Media Corp. 8.25% 2/1/30	3,150,000		3,588,965
News America Holdings, Inc. 7.75% 12/1/45	3,000,000		3,420,357
Time Warner, Inc. 6.625% 5/15/29	1,745,000		1,693,372
			15,205,517
TOTAL CONSUMER DISCRETIONARY			30,341,785
CONSUMER STAPLES - 1.1%
Food & Staples Retailing - 0.4%
Kroger Co. 6.8% 4/1/11	2,285,000		2,489,907
Safeway, Inc. 6.5% 3/1/11	3,050,000		3,231,664
			5,721,571
Food Products - 0.1%
ConAgra Foods, Inc. 6.75% 9/15/11	1,870,000		2,048,952
Tobacco - 0.6%
Altria Group, Inc. 7% 11/4/13	3,125,000		3,182,259
Philip Morris Companies, Inc.:
7.65% 7/1/08	5,000,000		5,387,640
7.75% 1/15/27	1,000,000		1,022,464
			9,592,363
TOTAL CONSUMER STAPLES			17,362,886
ENERGY - 1.2%
Energy Equipment & Services - 0.1%
Kinder Morgan, Inc. 6.5% 9/1/12	1,740,000		1,843,553
Oil & Gas - 1.1%
Amerada Hess Corp.:
6.65% 8/15/11	445,000		470,902
7.125% 3/15/33	1,145,000		1,141,360
7.375% 10/1/09	1,010,000		1,099,902
Empresa Nacional de Petroleo 6.75% 11/15/12 (a)	5,050,000		5,420,084
Ras Laffan Liquid Natural Gas Co. Ltd. yankee 8.294% 3/15/14 (a)	4,370,000		4,894,400
	Principal Amount		Value (Note 1)
Williams Companies, Inc.:
7.125% 9/1/11	$ 2,320,000		$ 2,354,800
7.5% 1/15/31	505,000		457,025
			15,838,473
TOTAL ENERGY			17,682,026
FINANCIALS - 13.6%
Capital Markets - 2.5%
Amvescap PLC yankee 6.6% 5/15/05	1,890,000		1,946,604
Credit Suisse First Boston (USA), Inc.:
4.625% 1/15/08	3,400,000		3,463,335
6.5% 1/15/12	3,520,000		3,782,553
Goldman Sachs Group, Inc.:
4.125% 1/15/08	3,270,000		3,279,905
5.7% 9/1/12	2,935,000		2,977,223
J.P. Morgan Chase & Co.:
4.875% 3/15/14	2,650,000		2,496,658
5.75% 1/2/13	3,500,000		3,557,260
6.75% 2/1/11	3,505,000		3,820,117
Merrill Lynch & Co., Inc. 4.125% 1/15/09	7,285,000		7,185,669
Morgan Stanley 6.6% 4/1/12	5,695,000		6,131,032
			38,640,356
Commercial Banks - 2.1%
Bank of America Corp. 7.4% 1/15/11	7,300,000		8,273,221
Bank One NA, Chicago 3.7% 1/15/08	5,075,000		5,041,840
Corporacion Andina de Fomento 5.2% 5/21/13	1,560,000		1,500,165
Export-Import Bank of Korea:
4.125% 2/10/09 (a)	845,000		819,702
5.25% 2/10/14 (a)	3,130,000		3,000,725
Fleet Financial Group, Inc. 7.125% 4/15/06	980,000		1,051,080
Korea Development Bank 3.875% 3/2/09	3,500,000		3,350,827
PNC Funding Corp. 5.75% 8/1/06	4,440,000		4,665,921
SouthTrust Corp. 5.8% 6/15/14	1,440,000		1,467,238
Wachovia Corp. 4.875% 2/15/14	1,455,000		1,389,826
Wells Fargo Bank NA, San Francisco 7.55% 6/21/10	900,000		1,036,008
			31,596,553
Consumer Finance - 2.0%
American General Finance Corp. 2.75% 6/15/08	145,000		137,028
Capital One Bank 4.875% 5/15/08	4,295,000		4,341,184
Ford Motor Credit Co.:
7.375% 10/28/09	6,870,000		7,331,843
7.875% 6/15/10	1,350,000		1,468,885
General Motors Acceptance Corp. 7.75% 1/19/10	5,650,000		6,133,493
Household Finance Corp.:
6.375% 10/15/11	1,290,000		1,376,955
7% 5/15/12	840,000		927,893
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
FINANCIALS - continued
Consumer Finance - continued
Household International, Inc. 8.875% 2/15/08	$ 3,775,000		$ 4,110,820
MBNA Corp.:
6.25% 1/17/07	1,905,000		2,018,393
7.5% 3/15/12	3,005,000		3,406,883
			31,253,377
Diversified Financial Services - 4.9%
Alliance Capital Management LP 5.625% 8/15/06	2,475,000		2,588,875
Bellsouth Capital Funding Corp. 7.875% 2/15/30	1,920,000		2,224,606
Citigroup, Inc. 7.25% 10/1/10	4,550,000		5,124,233
Delta Air Lines, Inc. pass thru trust certificates:
7.57% 11/18/10	315,000		292,332
7.92% 5/18/12	3,700,000		2,422,563
Deutsche Telekom International Finance BV 8.75% 6/15/30	3,250,000		3,955,692
EnCana Holdings Finance Corp. 5.8% 5/1/14	1,260,000		1,281,864
Goldman Sachs Capital I 6.345% 2/15/34	4,225,000		3,967,583
Hutchison Whampoa International 03/13 Ltd. 6.5% 2/13/13 (a)	830,000		830,632
Hutchison Whampoa International Ltd.:
6.25% 1/24/14 (a)	1,630,000		1,580,239
7.45% 11/24/33 (a)	1,200,000		1,148,500
Mizuho Financial Group Cayman Ltd. 5.79% 4/15/14 (a)	2,275,000		2,236,298
NiSource Finance Corp. 7.875% 11/15/10	6,905,000		7,915,844
Pemex Project Funding Master Trust:
6.125% 8/15/08	3,630,000		3,711,675
7.375% 12/15/14	2,000,000		2,040,000
7.875% 2/1/09 (d)	1,200,000		1,305,000
Petronas Capital Ltd. 7% 5/22/12 (a)	4,320,000		4,710,109
Rabobank Capital Funding Trust II 5.26% 12/31/49 (a)(d)	5,870,000		5,680,299
Sprint Capital Corp. 6.875% 11/15/28	4,040,000		3,883,438
Telecom Italia Capital 5.25% 11/15/13 (a)	4,500,000		4,355,307
Tyco International Group SA yankee 6.75% 2/15/11	3,000,000		3,259,743
Verizon Global Funding Corp.:
7.25% 12/1/10	4,965,000		5,550,746
7.75% 12/1/30	5,000,000		5,615,900
			75,681,478
Insurance - 0.1%
Principal Life Global Funding I 6.25% 2/15/12 (a)	1,350,000		1,441,858
Real Estate - 1.1%
Arden Realty LP 7% 11/15/07	5,000,000		5,469,450
	Principal Amount		Value (Note 1)
AvalonBay Communities, Inc. 5% 8/1/07	$ 2,315,000		$ 2,398,907
EOP Operating LP:
7% 7/15/11	1,725,000		1,880,102
8.1% 8/1/10	3,450,000		3,945,486
Mack-Cali Realty LP 7.75% 2/15/11	2,700,000		3,061,711
			16,755,656
Thrifts & Mortgage Finance - 0.9%
Countrywide Home Loans, Inc.:
4% 3/22/11	2,500,000		2,331,750
5.5% 8/1/06	4,500,000		4,689,648
Independence Community Bank Corp. 3.75% 4/1/14 (d)	1,320,000		1,255,969
Washington Mutual, Inc.:
4.375% 1/15/08	2,330,000		2,344,819
4.625% 4/1/14	3,000,000		2,736,099
			13,358,285
TOTAL FINANCIALS			208,727,563
INDUSTRIALS - 0.3%
Aerospace & Defense - 0.3%
Bombardier, Inc.:
6.3% 5/1/14 (a)	2,845,000		2,416,395
7.45% 5/1/34 (a)	840,000		691,659
Raytheon Co. 8.3% 3/1/10	1,500,000		1,759,505
			4,867,559
INFORMATION TECHNOLOGY - 0.4%
Communications Equipment - 0.4%
Motorola, Inc. 6.5% 11/15/28	6,685,000		6,474,971
MATERIALS - 0.4%
Containers & Packaging - 0.1%
Sealed Air Corp.:
5.625% 7/15/13 (a)	745,000		735,924
6.875% 7/15/33 (a)	1,565,000		1,579,739
			2,315,663
Paper & Forest Products - 0.3%
International Paper Co.:
4.25% 1/15/09	635,000		624,224
5.5% 1/15/14	1,595,000		1,561,456
Weyerhaeuser Co. 6.75% 3/15/12	1,675,000		1,813,945
			3,999,625
TOTAL MATERIALS			6,315,288
TELECOMMUNICATION SERVICES - 1.9%
Diversified Telecommunication Services - 1.4%
British Telecommunications PLC 8.875% 12/15/30	3,000,000		3,701,061
France Telecom SA 9.5% 3/1/31	6,550,000		8,220,381
Koninklijke KPN NV 8.375% 10/1/30	4,500,000		5,467,082
KT Corp. 5.875% 6/24/14 (a)	1,410,000		1,396,563
Nonconvertible Bonds - continued
	Principal Amount		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Telecomunicaciones de Puerto Rico, Inc. 6.65% 5/15/06	$ 245,000		$ 258,827
Telefonica Europe BV 7.75% 9/15/10	2,500,000		2,859,385
			21,903,299
Wireless Telecommunication Services - 0.5%
America Movil SA de CV:
4.125% 3/1/09 (a)	1,585,000		1,488,678
5.5% 3/1/14 (a)	1,430,000		1,317,299
AT&T Wireless Services, Inc.:
7.875% 3/1/11	1,070,000		1,217,085
8.75% 3/1/31	3,090,000		3,767,232
			7,790,294
TOTAL TELECOMMUNICATION SERVICES			29,693,593
UTILITIES - 2.5%
Electric Utilities - 1.7%
Cleveland Electric Illuminating Co. 5.65% 12/15/13 (a)	1,320,000		1,284,508
DTE Energy Co. 7.05% 6/1/11	2,004,000		2,172,264
Duke Capital Corp.:
6.25% 2/15/13	805,000		816,136
6.75% 2/15/32	4,610,000		4,422,765
Exelon Corp. 6.75% 5/1/11	2,250,000		2,446,929
FirstEnergy Corp. 6.45% 11/15/11	2,770,000		2,871,822
MidAmerican Energy Holdings, Inc.:
4.625% 10/1/07	1,795,000		1,815,152
5.875% 10/1/12	1,955,000		1,985,123
Monongahela Power Co. 5% 10/1/06	2,260,000		2,307,503
Pacific Gas & Electric Co.:
4.2% 3/1/11	565,000		537,993
4.8% 3/1/14	750,000		710,655
Progress Energy, Inc.:
6.85% 4/15/12	1,970,000		2,128,823
7.1% 3/1/11	2,690,000		2,947,675
Southern California Edison Co. 5% 1/15/14	165,000		160,528
			26,607,876
Gas Utilities - 0.0%
Consolidated Natural Gas Co. 6.85% 4/15/11	445,000		487,307
Multi-Utilities & Unregulated Power - 0.8%
Constellation Energy Group, Inc. 7% 4/1/12	5,150,000		5,608,180
	Principal Amount		Value (Note 1)
Dominion Resources, Inc.:
6.25% 6/30/12	$ 4,220,000		$ 4,423,071
8.125% 6/15/10	1,200,000		1,384,802
			11,416,053
TOTAL UTILITIES			38,511,236
TOTAL NONCONVERTIBLE BONDS (Cost $355,263,845)		359,976,907
U.S. Government and Government Agency Obligations - 16.2%
U.S. Government Agency Obligations - 5.6%
Fannie Mae:
2.5% 6/15/06	2,185,000		2,164,100
5.5% 3/15/11	13,505,000		14,125,447
Freddie Mac:
2.375% 2/15/07	13,300,000		12,960,717
3.625% 9/15/08	8,515,000		8,393,985
4% 6/12/13	4,640,000		4,235,332
4.5% 1/15/14	25,000,000		23,759,125
5.75% 1/15/12	7,740,000		8,165,607
5.875% 3/21/11	6,035,000		6,343,407
6.25% 7/15/32	1,001,000		1,054,396
6.625% 9/15/09	3,000,000		3,315,105
6.75% 3/15/31	1,479,000		1,651,101
Government Loan Trusts (assets of Trust guaranteed by U.S. Government through Agency for International Development) Series 1-B, 8.5% 4/1/06	605,010		642,333
Guaranteed Export Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank):
Series 1993-C, 5.2% 10/15/04	445		447
Series 1993-D, 5.23% 5/15/05	1,702		1,729
Series 1994-A, 7.12% 4/15/06	2,304		2,402
Guaranteed Trade Trust Certificates (assets of Trust guaranteed by U.S. Government through Export-Import Bank) Series 1994-B, 7.5% 1/26/06	2,124		2,231
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS			86,817,464
U.S. Treasury Obligations - 10.6%
U.S. Treasury Bonds:
6.25% 5/15/30	32,015,000		35,845,531
8% 11/15/21	10,890,000		14,273,556
U.S. Treasury Notes:
1.625% 2/28/06	20,000,000		19,707,040
U.S. Government and Government Agency Obligations - continued
	Principal Amount		Value (Note 1)
U.S. Treasury Obligations - continued
U.S. Treasury Notes: - continued
3.125% 5/15/07	$ 14,018,000		$ 14,018,000
6.5% 2/15/10 (c)	69,950,000		78,819,450
TOTAL U.S. TREASURY OBLIGATIONS			162,663,577
TOTAL U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $252,285,178)		249,481,041
U.S. Government Agency - Mortgage Securities - 33.9%
Fannie Mae - 29.1%
4% 8/1/18 to 10/1/18	1,525,288		1,456,378
4% 7/1/19 (b)	8,309,930		7,912,611
4.5% 7/1/19 (b)	26,330,000		25,712,891
4.5% 6/1/33 to 10/1/33	19,249,011		18,028,398
5% 10/1/17 to 4/1/19	45,481,253		45,664,256
5% 7/1/19 to 7/1/34 (b)	88,860,997		85,914,973
5.5% 4/1/13 to 2/1/29	43,979,377		45,017,174
5.5% 7/1/34 (b)	98,771,299		98,246,570
6% 2/1/13 to 1/1/34	19,490,436		20,321,813
6.5% 3/1/13 to 2/1/33	85,982,302		90,164,615
6.5% 7/1/19 (b)	2,075,384		2,189,530
7% 3/1/15 to 8/1/32	2,185,465		2,318,766
7.5% 8/1/08 to 11/1/31	4,360,061		4,680,767
8% 3/1/30	4,218		4,587
8.5% 3/1/25 to 6/1/25	4,910		5,385
TOTAL FANNIE MAE			447,638,714
Freddie Mac - 0.0%
8.5% 3/1/20 to 1/1/28	491,103		539,354
Government National Mortgage Association - 4.8%
6% 8/15/08 to 8/15/29	6,408,273		6,606,498
6% 7/1/34 (b)	38,667,795		39,586,155
6.5% 10/15/27 to 8/15/32	2,773,835		2,908,997
7% 1/15/28 to 11/15/32	16,025,315		17,038,037
7% 7/1/34 (b)	5,758,802		6,107,929
7.5% 3/15/06 to 10/15/28	1,035,651		1,120,892
8% 2/15/17	35,289		38,973
TOTAL GOVERNMENT NATIONAL MORTGAGE ASSOCIATION			73,407,481
TOTAL U.S. GOVERNMENT AGENCY - MORTGAGE SECURITIES (Cost $520,820,324)		521,585,549
Asset-Backed Securities - 4.8%
ACE Securities Corp. Series 2004-HE1:
Class M1, 1.8% 2/25/34 (d)	650,000		650,054
	Principal Amount		Value (Note 1)
Class M2, 2.4% 2/25/34 (d)	$ 725,000		$ 725,143
AmeriCredit Automobile Receivables Trust:
Series 2003-AM Class A4A, 3.1% 11/6/09	1,705,000		1,701,789
Series 2003-BX:
Class A4A, 2.72% 1/6/10	2,115,000		2,090,340
Class A4B, 1.53% 1/6/10 (d)	1,570,000		1,581,275
Ameriquest Mortgage Securities, Inc. Series 2004-R2:
Class M1, 1.73% 4/25/34 (d)	360,000		359,984
Class M2, 1.78% 4/25/34 (d)	275,000		274,988
Amortizing Residential Collateral Trust Series 2003-BC1 Class M2, 2.4% 1/25/32 (d)	745,000		746,515
Argent Securities, Inc. Series 2004-W5 Class M1, 1.9% 4/25/34 (d)	1,165,000		1,166,432
Capital One Master Trust Series 2001-3A Class A, 5.45% 3/16/09	1,390,000		1,439,605
Capital One Multi-Asset Execution Trust:
Series 2003-A4 Class A4, 3.65% 7/15/11	1,144,000		1,119,950
Series 2003-B4 Class B4, 2.0388% 7/15/11 (d)	2,230,000		2,272,242
Chase Manhattan Auto Owner Trust Series 2001-A:
Class A4, 5.07% 2/15/08	4,209,611		4,271,463
Class CTFS, 5.06% 2/15/08	253,816		257,230
Citibank Credit Card Issuance Trust:
Series 2002-B1 Class B1, 1.9% 6/25/09 (d)	2,655,000		2,664,358
Series 2002-C1 Class C1, 2.17% 2/9/09 (d)	4,500,000		4,566,082
Countrywide Home Loans, Inc.:
Series 2004-2 Class M1, 1.8% 5/25/34 (d)	1,525,000		1,524,932
Series 2004-3 Class M1, 1.8% 6/25/34 (d)	425,000		425,435
Discover Card Master Trust I:
Series 2001-6 Class A, 5.75% 12/15/08	7,000,000		7,354,748
Series 2003-4 Class B1, 1.5688% 5/16/11 (d)	2,620,000		2,629,149
First Franklin Mortgage Loan Trust Series 2004-FF2:
Class M3, 1.85% 3/25/34 (d)	125,000		124,994
Class M4, 2.2% 3/25/34 (d)	100,000		99,996
Class M6, 2.55% 3/25/34 (d)	100,000		99,594
Ford Credit Auto Owner Trust:
Series 2001-B Class B, 5.71% 9/15/05	755,000		756,288
Series 2001-C Class B, 5.54% 12/15/05	1,400,000		1,406,790
Fremont Home Loan Trust Series 2004-A:
Class M1, 1.85% 1/25/34 (d)	1,350,000		1,349,940
Class M2, 2.45% 1/25/34 (d)	1,550,000		1,549,930
Asset-Backed Securities - continued
	Principal Amount		Value (Note 1)
GSAMP Trust Series 2004-FM2:
Class M1, 1.8% 1/25/34 (d)	$ 1,000,000		$ 999,956
Class M2, 2.4% 1/25/34 (d)	400,000		399,982
Class M3, 2.6% 1/25/34 (d)	400,000		399,982
Home Equity Asset Trust Series 2002-4 Class M2, 3.35% 3/25/33 (d)	550,000		558,616
Honda Auto Receivables Owner Trust Series 2001-2 Class A4, 5.09% 10/18/06	1,263,164		1,265,497
Household Private Label Credit Card Master Note Trust I Series 2002-1 Class A, 5.5% 1/18/11	4,875,000		5,110,274
MBNA Credit Card Master Note Trust:
Series 2001-A1 Class A1, 5.75% 10/15/08	1,800,000		1,888,890
Series 2001-B2 Class B2, 1.5988% 1/15/09 (d)	12,100,000		12,145,852
Series 2003-B3 Class B3, 1.6138% 1/18/11 (d)	1,810,000		1,815,484
Series 2003-B5 Class B5, 1.6088% 2/15/11 (d)	725,000		730,091
Meritage Mortgage Loan Trust Series 2004-1:
Class M1, 1.8% 7/25/34 (d)	625,000		624,972
Class M2, 1.85% 7/25/34 (d)	100,000		99,996
Class M3, 2.25% 7/25/34 (d)	225,000		224,990
Class M4, 2.4% 7/25/34 (d)	150,000		149,993
Morgan Stanley ABS Capital I, Inc.:
Series 2003-HE1 Class M2, 3.2% 5/25/33 (d)	455,000		463,686
Series 2003-NC5 Class M2, 3.3% 4/25/33 (d)	825,000		842,844
Morgan Stanley Dean Witter Capital I Trust Series 2003-NC1 Class M1, 2.35% 11/25/32 (d)	750,000		759,102
Sears Credit Account Master Trust II Series 2000-2 Class A, 6.75% 9/16/09	2,255,000		2,362,092
Structured Asset Securities Corp. Series 2004-GEL1 Class A, 1.66% 2/25/34 (d)	581,886		581,861
TOTAL ASSET-BACKED SECURITIES (Cost $73,609,224)		74,633,406
Collateralized Mortgage Obligations - 0.8%
Private Sponsor - 0.4%
CS First Boston Mortgage Securities Corp. floater Series 2004-AR3 Class 6A2, 1.67% 3/25/34 (d)	1,480,926		1,484,054
Master Alternative Loan Trust Series 2004-3 Class 3A1, 6% 4/25/34	569,772		582,037
Residential Asset Mortgage Products, Inc. sequential payer Series 2004-SL2 Class A1, 6.5% 11/25/16	700,000		725,594
	Principal Amount		Value (Note 1)
Residential Finance LP/Residential Finance Development Corp. floater Series 2003-CB1:
Class B3, 2.6288% 6/10/35 (a)(d)	$ 1,214,895		$ 1,233,507
Class B4, 2.8288% 6/10/35 (a)(d)	1,087,011		1,103,501
Class B5, 3.4288% 6/10/35 (a)(d)	742,709		756,421
Class B6, 3.9288% 6/10/35 (a)(d)	437,756		445,646
TOTAL PRIVATE SPONSOR			6,330,760
U.S. Government Agency - 0.4%
Fannie Mae sequential pay Series 1999-10 Class MZ, 6.5% 9/17/38	3,857,552		4,027,676
Freddie Mac Multi-class participation certificates guaranteed sequential pay Series 2750 Class ZT, 5% 2/15/34	1,972,536		1,546,744
TOTAL U.S. GOVERNMENT AGENCY			5,574,420
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS (Cost $11,988,591)		11,905,180
Commercial Mortgage Securities - 5.1%
Chase Commercial Mortgage Securities Corp. Series 2001-245 Class A2, 6.275% 2/12/16 (a)(d)	1,345,000		1,447,423
Chase Manhattan Bank-First Union National Bank Commercial Mortgage Trust sequential pay Series 1999-1 Class A2, 7.439% 8/15/31	5,000,000		5,631,305
COMM:
floater:
Series 2002-FL7 Class D, 1.8088% 11/15/14 (a)(d)	735,000		734,795
Series 2003-FL9 Class B, 1.7388% 11/15/15 (a)(d)	1,450,000		1,451,339
Series 2004-LBN2 Class X2, 1.1206% 3/10/39 (a)(d)(f)	4,995,000		235,931
Commercial Resecuritization Trust sequential pay Series 1999-ABC1 Class A, 6.74% 1/27/09 (a)	2,933,755		3,040,562
CS First Boston Mortgage Securities Corp.:
floater Series 2003-TF2A Class A2, 1.5588% 11/15/14 (a)(d)	2,500,000		2,500,286
sequential pay:
Series 1997-C2 Class A3, 6.55% 1/17/35	2,075,000		2,223,368
Series 1999-C1 Class A2, 7.29% 9/15/41	3,500,000		3,909,489
Series 2000-C1 Class A2, 7.545% 4/15/62	1,100,000		1,245,726
Series 2004-C1 Class A3, 4.321% 1/15/37	1,505,000		1,447,768
Series 1997-C2 Class D, 7.27% 1/17/35	1,750,000		1,901,608
Commercial Mortgage Securities - continued
	Principal Amount		Value (Note 1)
CS First Boston Mortgage Securities Corp.: - continued
Series 1998-C1 Class C, 6.78% 5/17/40	$ 5,000,000		$ 5,395,010
Series 2001-CKN5 Class AX, 1.0026% 9/15/34 (a)(d)(f)	31,322,883		2,088,416
Series 2004-C1 Class ASP, 1.2151% 1/15/37 (a)(d)(f)	24,490,000		1,087,692
Deutsche Mortgage & Asset Receiving Corp. sequential pay Series 1998-C1 Class D, 7.231% 6/15/31	1,120,000		1,205,969
DLJ Commercial Mortgage Corp. sequential pay Series 2000-CF1 Class A1B, 7.62% 6/10/33	3,000,000		3,406,681
Equitable Life Assurance Society of the United States Series 174:
Class B1, 7.33% 5/15/06 (a)	500,000		533,627
Class C1, 7.52% 5/15/06 (a)	500,000		534,324
GGP Mall Properties Trust sequential pay Series 2001-C1A Class A2, 5.007% 11/15/11 (a)	3,422,324		3,521,901
Ginnie Mae guaranteed REMIC pass thru securities sequential pay:
Series 2002-83 Class B, 4.6951% 12/16/24	1,860,000		1,844,764
Series 2003-22 Class B, 3.963% 5/16/32	3,295,000		3,160,534
GS Mortgage Securities Corp. II:
sequential pay:
Series 2001-LIBA Class A2, 6.615% 2/14/16 (a)	1,150,000		1,238,228
Series 2003-C1 Class A2A, 3.59% 1/10/40	3,220,000		3,173,957
Series 1998-GLII Class E, 6.9702% 4/13/31 (d)	245,000		256,050
J.P. Morgan Commercial Mortgage Finance Corp. sequential pay Series 2000-C9 Class A2, 7.77% 10/15/32	3,745,000		4,245,424
LB-UBS Commercial Mortgage Trust sequential pay:
Series 2000-C3 Class A2, 7.95% 1/15/10	2,180,000		2,513,307
Series 2001-C3 Class A1, 6.058% 6/15/20	5,378,723		5,681,559
Leafs CMBS I Ltd./Leafs CMBS I Corp. Series 2002-1A:
Class B, 4.13% 11/20/37 (a)	2,600,000		2,402,140
Class C, 4.13% 11/20/37 (a)	2,600,000		2,292,420
Morgan Stanley Capital I, Inc. sequential pay Series 2004-HQ3 Class A2, 4.05% 1/13/41	1,480,000		1,433,238
	Principal Amount		Value (Note 1)
Thirteen Affiliates of General Growth Properties, Inc. sequential pay Series 1 Class A2, 6.602% 11/15/07 (a)	$ 2,500,000		$ 2,667,665
Trizechahn Office Properties Trust Series 2001-TZHA Class E3, 7.253% 3/15/13 (a)	1,390,000		1,468,243
Wachovia Bank Commercial Mortgage Trust sequential pay Series 2003-C6 Class A2, 4.498% 8/15/35	2,385,000		2,376,952
TOTAL COMMERCIAL MORTGAGE SECURITIES (Cost $76,661,876)		78,297,701
Foreign Government and Government Agency Obligations - 1.3%
Chilean Republic:
6.875% 4/28/09	2,300,000		2,526,320
7.125% 1/11/12	3,470,000		3,864,713
South African Republic 6.5% 6/2/14	1,295,000		1,295,000
State of Israel 4.625% 6/15/13	725,000		671,531
United Mexican States:
4.625% 10/8/08	3,835,000		3,781,310
7.5% 4/8/33	8,587,000		8,350,858
TOTAL FOREIGN GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS (Cost $20,187,201)		20,489,732
Supranational Obligations - 0.1%
Corporacion Andina de Fomento 6.875% 3/15/12 (Cost $1,706,548)	1,725,000		1,854,385

Fixed-Income Funds - 12.4%
	Shares
Fidelity Ultra-Short Central Fund (e) (Cost $189,752,518)	1,909,521	190,150,091
Cash Equivalents - 17.7%
	Maturity Amount
Investments in repurchase agreements (Collateralized by U.S. Government Obligations, in a joint trading account at 1.53%, dated 6/30/04 due 7/1/04) (g) (Cost $272,990,000)	$ 273,001,630	272,990,000

TOTAL INVESTMENT PORTFOLIO - 115.7% (Cost $1,775,265,305) 1,781,363,992

NET OTHER ASSETS - (15.7)%		(242,415,184)
NET ASSETS - 100%	$ 1,538,948,808

Swap Agreements
	Expiration Date	Notional Amount	Value
Credit Default Swap
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	$ 1,800,000	$ (11,398)
Receive quarterly notional amount multiplied by .38% and pay Merrill Lynch, Inc. upon default event of EnCana Corp., par value of the notional amount of EnCana Corp. 4.75% 10/15/13	March 2009	700,000	(4,432)
Receive quarterly notional amount multiplied by .41% and pay Merrill Lynch, Inc. upon default event of Talisman Energy, Inc., par value of the notional amount of Talisman Energy, Inc. 7.25% 10/15/27	March 2009	1,400,000	(4,055)
Receive quarterly notional amount multiplied by .62% and pay Lehman Brothers, Inc. upon default event of Comcast Cable Communications, Inc., par value of the notional amount of Comcast Cable Communications, Inc. 6.75% 1/30/11	June 2009	6,000,000	10,727
	Expiration Date	Notional Amount	Value
Receive quarterly notional amount multiplied by .87% and pay Merrill Lynch, Inc. upon default of Raytheon Co., par value of the notional amount of Raytheon Co. 5.375% 4/1/13	June 2008	$ 5,000,000	$ 54,556
TOTAL CREDIT DEFAULT SWAP		14,900,000	45,398
Interest Rate Swap
Receive quarterly a fixed rate equal to 2.865% and pay quarterly a floating rate based on 3-month LIBOR with Citibank	August 2007	33,400,000	(710,405)
Receive quarterly a fixed rate equal to 3.273% and pay quarterly a floating rate based on 3-month LIBOR with Goldman Sachs	April 2008	19,000,000	(330,344)
Receive quarterly a fixed rate equal to 3.5146% and pay quarterly a floating rate based on 3-month LIBOR with Merrill Lynch, Inc.	Nov. 2008	2,000,000	(43,034)
TOTAL INTEREST RATE SWAP		54,400,000	(1,083,783)
Total Return Swap
Receive monthly a return equal to Lehman Brothers CMBS AAA 8.5+ and pay monthly a floating rate based on 1-month LIBOR minus 65 basis points with Lehman Brothers, Inc.	Oct. 2004	10,000,000	31,812
Swap Agreements - continued
	Expiration Date	Notional Amount	Value
Total Return Swap - continued
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 70 basis points with Bank of America	Dec. 2004	$ 10,000,000	$ 112,452
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	July 2004	10,000,000	112,220
Receive quarterly a return equal to Banc of America Securities LLC AAA 10Yr Commercial Mortgage-Backed Securities Daily Index and pay quarterly a floating rate based on 3-month LIBOR minus 80 basis points with Bank of America	Nov. 2004	10,000,000	(4,915)
TOTAL RETURN SWAP		40,000,000	251,569
		$ 109,300,000	$ (786,816)

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 $77,812,985 or 5.1% 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 has been segregated as collateral for open swap agreements. At the period end, the value of securities pledged amounted to $1,014,117.

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

(e) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request.

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

(g) Additional information on each counterparty to the repurchase agreement is as follows:

Repurchase Agreement/ Counterparty	Value
$272,990,000 due 7/1/04 at 1.53%
Bank of America, National Association	$ 38,254,349
Banc of America Securities LLC	33,472,555
Countrywide Securities Corporation	8,607,229
Goldman, Sachs & Co.	19,127,175
Greenwich Capital Markets, Inc.	7,650,870
Lehman Brothers Inc.	38,254,349
Merrill Lynch Government Securities, Inc.	12,860,424
Morgan Stanley & Co. Incorporated	66,945,112
BNP Paribas Securities Corp.	9,563,587
Wachovia Capital Markets, LLC	19,127,175
UBS Securities LLC	19,127,175
	$ 272,990,000

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,116,133,722 and $1,278,548,418, respectively, of which long-term U.S. government and government agency obligations aggregated $956,790,456 and $1,105,903,540, respectively.

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

Investment Grade Bond Portfolio

Fidelity Variable Insurance Products: Investment Grade Bond Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $272,990,000) (cost $1,775,265,305) - See accompanying schedule		$ 1,781,363,992
Cash		707
Receivable for investments sold		10,673,280
Receivable for fund shares sold		1,037,181
Interest receivable		12,631,394
Prepaid expenses		4,618
Total assets		1,805,711,172
Liabilities
Payable for investments purchased Regular delivery	$ 159,957
Delayed delivery	263,319,099
Payable for fund shares redeemed	1,408,756
Swap agreements, at value	786,816
Accrued management fee	545,850
Distribution fees payable	31,527
Other affiliated payables	135,555
Other payables and accrued expenses	374,804
Total liabilities		266,762,364
Net Assets		$ 1,538,948,808
Net Assets consist of:
Paid in capital		$ 1,487,792,308
Undistributed net investment income		30,790,748
Accumulated undistributed net realized gain (loss) on investments		15,053,881
Net unrealized appreciation (depreciation) on investments		5,311,871
Net Assets		$ 1,538,948,808
Initial Class: Net Asset Value, offering price and redemption price per share ($1,361,024,540 ÷ 107,230,673 shares)		$ 12.69
Service Class: Net Asset Value, offering price and redemption price per share ($36,228,064 ÷ 2,867,267 shares)		$ 12.64
Service Class 2: Net Asset Value, offering price and redemption price per share ($141,696,204 ÷ 11,294,883 shares)		$ 12.55

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Interest		$ 34,970,783
Security lending		10,262
Total income		33,981,045
Expenses
Management fee	$ 3,415,456
Transfer agent fees	542,454
Distribution fees	174,078
Accounting and security lending fees	316,077
Non-interested trustees' compensation	3,937
Custodian fees and expenses	43,492
Audit	28,338
Legal	913
Miscellaneous	62,448
Total expenses before reductions	4,587,193
Expense reductions	(1,199)	4,585,994
Net investment income (loss)		29,395,051
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities	17,923,245
Swap agreements	656,692
Total net realized gain (loss)		18,579,937
Change in net unrealized appreciation (depreciation) on: Investment securities	(45,745,065)
Swap agreements	(1,368,046)
Delayed delivery commitments	(6,281)
Total change in net unrealized appreciation (depreciation)		(47,119,392)
Net gain (loss)		(28,539,455)
Net increase (decrease) in net assets resulting from operations		$ 855,596

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 June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ 29,395,051	$ 67,814,156
Net realized gain (loss)	18,579,937	46,329,913
Change in net unrealized appreciation (depreciation)	(47,119,392)	(17,351,198)
Net increase (decrease) in net assets resulting from operations	855,596	96,792,871
Distributions to shareholders from net investment income	(66,752,508)	(82,217,412)
Distributions to shareholders from net realized gain	(48,129,691)	(28,967,100)
Total distributions	(114,882,199)	(111,184,512)
Share transactions - net increase (decrease)	(9,157,498)	(361,117,397)
Total increase (decrease) in net assets	(123,184,101)	(375,509,038)
Net Assets
Beginning of period	1,662,132,909	2,037,641,947
End of period (including undistributed net investment income of $30,790,748 and undistributed net investment income of $68,804,726, respectively)	$ 1,538,948,808	$ 1,662,132,909

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	4,722,764	2,053,822	3,739,349
Reinvested	8,127,198	133,843	666,249
Redeemed	(17,605,646)	(665,637)	(1,661,110)
Net increase (decrease)	(4,755,684)	1,522,028	2,744,488
Dollars Sold	$ 61,467,081	$ 26,706,437	$ 47,933,069
Reinvested	104,678,316	1,715,870	8,488,014
Redeemed	(230,215,698)	(8,580,750)	(21,349,837)
Net increase (decrease)	$ (64,070,301)	$ 19,841,557	$ 35,071,246
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	23,978,195	1,752,061	7,214,822
Reinvested	8,213,993	2,020	300,111
Redeemed	(63,630,168)	(480,248)	(4,242,792)
Net increase (decrease)	(31,437,980)	1,273,833	3,272,141
Dollars Sold	$ 320,978,012	$ 23,516,680	$ 95,735,008
Reinvested	107,274,755	26,323	3,883,434
Redeemed	(849,723,435)	(6,448,689)	(56,359,485)
Net increase (decrease)	$ (421,470,668)	$ 17,094,314	$ 43,258,957
Distributions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
From net investment income	$ 60,884,326	$ 1,005,257	$ 4,862,925
From net realized gain	43,793,989	710,613	3,625,089
Total	$ 104,678,315	$ 1,715,870	$ 8,488,014
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 79,353,928	$ 19,279	$ 2,844,205
From net realized gain	27,920,827	7,044	1,039,229
Total	$ 107,274,755	$ 26,323	$ 3,883,434

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

Investment Grade Bond Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 13.65	$ 13.70	$ 12.92	$ 12.59	$ 12.16	$ 12.96
Income from Investment Operations
Net investment income (loss)E	.240	.467	.610	.685G	.771	.743
Net realized and unrealized gain (loss)	(.220)	.213	.680	.335G	.499	(.873)
Total from investment operations	.020	.680	1.290	1.020	1.270	(.130)
Distributions from net investment income	(.570)	(.540)	(.510)	(.690)	(.840)	(.510)
Distributions from net realized gain	(.410)	(.190)	-	-	-	(.160)
Total distributions	(.980)	(.730)	(.510)	(.690)	(.840)	(.670)
Net asset value, end of period	$ 12.69	$ 13.65	$ 13.70	$ 12.92	$ 12.59	$ 12.16
Total ReturnB,C,D	.04%	5.20%	10.34%	8.46%	11.22%	(1.05)%
Ratios to Average Net AssetsF
Expenses before expense reductions	.55%A	.54%	.54%	.54%	.54%	.54%
Expenses net of voluntary waivers, if any	.55%A	.54%	.54%	.54%	.54%	.54%
Expenses net of all reductions	.55%A	.54%	.53%	.54%	.54%	.54%
Net investment income (loss)	3.71%A	3.48%	4.71%	5.47%G	6.50%	6.07%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,361,025	$ 1,528,417	$ 1,965,036	$ 1,445,925	$ 739,911	$ 658,852
Portfolio turnover rate	136%A	218%	192%	278%	154%	87%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^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. 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.

^G Effective January 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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 13.61	$ 13.66	$ 12.89	$ 12.58	$ 11.80
Income from Investment Operations
Net investment income (loss)E	.228	.448	.591	.674H	.377
Net realized and unrealized gain (loss)	(.208)	.212	.679	.326H	.403
Total from investment operations	.020	.660	1.270	1.000	.780
Distributions from net investment income	(.580)	(.520)	(.500)	(.690)	-
Distributions from net realized gain	(.410)	(.190)	-	-	-
Total distributions	(.990)	(.710)	(.500)	(.690)	-
Net asset value, end of period	$ 12.64	$ 13.61	$ 13.66	$ 12.89	$ 12.58
Total ReturnB,C,D	.04%	5.06%	10.20%	8.30%	6.61%
Ratios to Average Net AssetsG
Expenses before expense reductions	.66%A	.64%	.64%	.64%	.64%A
Expenses net of voluntary waivers, if any	.66%A	.64%	.64%	.64%	.64%A
Expenses net of all reductions	.66%A	.64%	.64%	.64%	.64%A
Net investment income (loss)	3.60%A	3.38%	4.60%	5.37%H	6.40%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 36,228	$ 18,305	$ 975	$ 115	$ 107
Portfolio turnover rate	136%A	218%	192%	278%	154%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period July 7, 2000 (commencement of sale of shares) to December 31, 2000.

^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 operation 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.

^H Effective January 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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 13.50	$ 13.57	$ 12.82	$ 12.54	$ 12.06
Income from Investment Operations
Net investment income (loss)E	.219	.427	.571	.643H	.686
Net realized and unrealized gain (loss)	(.209)	.213	.679	.327H	.634
Total from investment operations	.010	.640	1.250	.970	1.320
Distributions from net investment income	(.550)	(.520)	(.500)	(.690)	(.840)
Distributions from net realized gain	(.410)	(.190)	-	-	-
Total distributions	(.960)	(.710)	(.500)	(.690)	(.840)
Net asset value, end of period	$ 12.55	$ 13.50	$ 13.57	$ 12.82	$ 12.54
Total ReturnB,C,D	(.03)%	4.94%	10.09%	8.08%	11.69%
Ratios to Average Net AssetsG
Expenses before expense reductions	.81%A	.79%	.79%	.82%	1.75%A
Expenses net of voluntary waivers, if any	.81%A	.79%	.79%	.82%	1.05%A
Expenses net of all reductions	.81%A	.79%	.79%	.82%	1.05%A
Net investment income (loss)	3.45%A	3.23%	4.45%	5.19%H	5.99%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 141,696	$ 115,411	$ 71,631	$ 18,225	$ 229
Portfolio turnover rate	136%A	218%	192%	278%	154%

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E Calculated based on average shares outstanding during the period.

^F For the period January 12, 2000 (commencement of sale of shares) to Decmeber 31, 2000.

^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.

^H Effective January 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.

Investment Grade Bond Portfolio

Fidelity Variable Insurance Products: Mid Cap Portfolio

Investment Summary

Top Five Stocks as of June 30, 2004
	% of fund's net assets
Newmont Mining Corp.	3.5
Invitrogen Corp.	2.9
Nucor Corp.	2.6
Charles River Laboratories International, Inc.	2.0
Steel Dynamics, Inc.	1.9
	12.9
Top Five Market Sectors as of June 30, 2004
	% of fund's net assets
Materials	21.0
Health Care	19.1
Energy	15.6
Consumer Discretionary	12.1
Industrials	8.6

Asset Allocation as of June 30, 2004
% of fund's net assets*
	Stocks	98.9%
	Short-Term Investments and Net Other Assets	1.1%

* Foreign
investments 26.8%

Semiannual Report

Fidelity Variable Insurance Products: Mid Cap Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Common Stocks - 98.9%
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - 12.1%
Auto Components - 1.5%
Autoliv, Inc.	192,500		$ 8,123,500
China Yuchai International Ltd.	100		1,822
Gentex Corp.	340,900		13,526,912
IMPCO Technologies, Inc. (a)(c)	1,134,900		7,183,917
Johnson Controls, Inc.	200		10,676
Nokian Tyres Ltd.	158,750		15,502,473
Starcraft Corp. (a)	105		1,428
Superior Industries International, Inc.	100		3,345
			44,354,073
Automobiles - 0.1%
Bajaj Auto Ltd.	35,300		678,589
Denway Motors Ltd.	4,000		1,449
Fiat Spa sponsord ADR	100		845
Harley-Davidson, Inc.	100		6,194
Hero Honda Motors Ltd.	155,171		1,710,341
Mahindra & Mahindra Ltd.	100		962
Maruti Udyog Ltd.	100		877
Monaco Coach Corp.	200		5,634
Tata Motors Ltd.	100		827
Thor Industries, Inc.	200		6,692
			2,412,410
Distributors - 0.0%
Advanced Marketing Services, Inc.	100		1,291
Educational Development Corp.	100		1,103
Li & Fung Ltd.	2,000		2,923
			5,317
Hotels, Restaurants & Leisure - 2.4%
Accor SA	100		4,231
AFC Enterprises, Inc. (a)	100		2,150
Applebee's International, Inc.	150		3,453
Buffalo Wild Wings, Inc.	91,400		2,527,210
Chicago Pizza & Brewery, Inc. (a)	100		1,521
Greek Organization of Football Prognostics SA	100		1,893
GTECH Holdings Corp.	22		998
Jurys Doyle Hotel Group PLC (Ireland)	100		1,268
Krispy Kreme Doughnuts, Inc. (a)	93,000		1,775,370
Kuoni Reisen Holding AG Class B (Reg.)	100		43,141
Outback Steakhouse, Inc.	808,100		33,423,016
P.F. Chang's China Bistro, Inc. (a)	100		4,115
Panera Bread Co. Class A (a)	100		3,588
Red Robin Gourmet Burgers, Inc. (a)	8,800		240,856
Royal Caribbean Cruises Ltd.	120,800		5,243,928
Sonic Corp. (a)	1,298,025		29,530,069
Starbucks Corp. (a)	100		4,348
Total Entertainment Restaurant Corp. (a)	100		1,353
			72,812,508
Household Durables - 1.7%
Alba PLC	756,464		11,113,708
CFM, Inc. (a)	100		731
	Shares		Value (Note 1)
Fedders Corp.	100		$ 435
Garmin Ltd.	51		1,889
Harman International Industries, Inc.	155,300		14,132,300
Hovnanian Enterprises, Inc. Class A (a)	200		6,942
Lennar Corp.:
Class A	200		8,944
Class B	20		829
LG Electronics, Inc.	167,270		7,939,712
Makita Corp. sponsored ADR	100		1,530
Mohawk Industries, Inc. (a)	100		7,333
Rational AG	39,471		2,565,800
Sekisui House Ltd.	877,000		9,875,876
Skyworth Digital Holdings Ltd.	2,000		526
Techtronic Industries Co. Ltd.	4,000		6,385
The Stanley Works	100		4,558
Toll Brothers, Inc. (a)	94,300		3,990,776
William Lyon Homes, Inc. (a)	100		9,215
			49,667,489
Internet & Catalog Retail - 0.0%
1-800-FLOWERS.com, Inc. Class A (a)	200		1,628
Alloy, Inc. (a)	100		615
Drugstore.com, Inc. (a)	100		349
eBay, Inc. (a)	100		9,195
GSI Commerce, Inc. (a)	100		963
InterActiveCorp (a)	487		14,678
J. Jill Group, Inc. (a)	100		2,359
Netflix, Inc. (a)	400		14,380
Overstock.com, Inc. (a)	100		3,908
Rakuten, Inc.	1		7,746
Sportsmans Guide, Inc. (a)	100		2,340
ValueVision Media, Inc. Class A (a)	100		1,302
			59,463
Leisure Equipment & Products - 0.0%
Arctic Cat, Inc.	100		2,753
Asia Optical Co., Inc.	25,000		151,921
Leapfrog Enterprises, Inc. Class A (a)	100		1,989
Mega Bloks, Inc. (a)	100		1,649
Oakley, Inc.	100		1,294
Polaris Industries, Inc.	200		9,600
SCP Pool Corp.	150		6,750
SHIMANO, Inc.	100		2,418
			178,374
Media - 0.7%
Astral Media, Inc. Class A (non-vtg.)	365,800		7,801,942
British Sky Broadcasting Group PLC (BSkyB)	100		1,132
Chum Ltd. Class B (non-vtg.)	200		4,198
Clear Media Ltd. (a)	1,000		795
Cumulus Media, Inc. Class A (a)	100		1,681
E.W. Scripps Co. Class A	100		10,500
EchoStar Communications Corp. Class A (a)	100		3,075
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Media - continued
Entercom Communications Corp. Class A (a)	100		$ 3,730
Entravision Communications Corp. Class A (a)	100		768
Fox Entertainment Group, Inc. Class A (a)	100		2,670
Gemstar-TV Guide International, Inc. (a)	100		480
Getty Images, Inc. (a)	100		6,000
Grupo Televisa SA de CV sponsored ADR	100		4,527
Harris Interactive, Inc. (a)	100		672
Insignia Systems, Inc. (a)	100		150
Modern Times Group AB (MTG) (B Shares) (a)	100		1,943
News Corp. Ltd. sponsored ADR	9		296
Omnicom Group, Inc.	100		7,589
Padmalaya Telefilms Ltd.	100		115
Pixar (a)	100		6,951
Radio One, Inc. Class A (a)	100		1,611
Saga Communications, Inc. Class A (a)	100		1,825
Salem Communications Corp. Class A (a)	36,900		1,001,097
SBS Broadcasting SA (a)	100		3,071
Scholastic Corp. (a)	100		2,995
SKY Perfect Communications, Inc.	4,246		4,974,878
Sogecable SA (a)	129,200		5,223,522
Spanish Broadcasting System, Inc. Class A (a)	100		931
Television Broadcasts Ltd.	1,000		4,282
The DIRECTV Group, Inc. (a)	82		1,402
The Reader's Digest Association, Inc. (non-vtg.)	100		1,599
TiVo, Inc. (a)	195,200		1,383,968
Torstar Corp. Class B	100		2,023
Univision Communications, Inc. Class A (a)	100		3,193
Washington Post Co. Class B	100		93,001
Westwood One, Inc. (a)	100		2,380
Yell Group PLC	100		627
Zee Telefilms Ltd.	695,914		1,907,993
			22,469,612
Multiline Retail - 0.2%
99 Cents Only Stores (a)	100		1,525
Big Lots, Inc. (a)	100		1,446
Dollar General Corp.	100		1,956
Dollar Tree Stores, Inc. (a)	100		2,743
Don Quijote Co. Ltd.	94,000		6,066,235
Family Dollar Stores, Inc.	100		3,042
Kohl's Corp. (a)	100		4,228
			6,081,175
Specialty Retail - 4.1%
Abercrombie & Fitch Co. Class A	100		3,875
AC Moore Arts & Crafts, Inc. (a)	707,100		19,452,321
	Shares		Value (Note 1)
Advance Auto Parts, Inc. (a)	200		$ 8,836
AutoZone, Inc. (a)	100		8,010
Bed Bath & Beyond, Inc. (a)	100		3,845
Best Buy Co., Inc.	200		10,148
Cabela's, Inc. Class A	900		24,255
Cache, Inc. (a)	150		2,027
CarMax, Inc. (a)	1,313,800		28,732,806
Chico's FAS, Inc. (a)	42,700		1,928,332
Christopher & Banks Corp.	51		903
Cole National Corp. Class A (a)	100		2,335
Cost Plus, Inc. (a)	100		3,245
Deb Shops, Inc.	100		2,406
Esprit Holdings Ltd.	500		2,237
Forzani Group Ltd. Class A (a)	100		1,026
French Connection Group PLC	100		755
Genesco, Inc. (a)	100		2,363
Group 1 Automotive, Inc. (a)	100		3,321
Guitar Center, Inc. (a)	100		4,447
Hibbett Sporting Goods, Inc. (a)	150		4,103
Hot Topic, Inc. (a)	181,983		3,728,832
Kirkland's, Inc. (a)	100		1,193
KOMERI Co. Ltd.	659,700		17,912,707
Michaels Stores, Inc.	100		5,500
Nitori Co. Ltd.	274,600		17,465,802
O'Reilly Automotive, Inc. (a)	100		4,520
Pacific Sunwear of California, Inc. (a)	151,100		2,957,027
Peacock Group PLC	1,271,844		5,993,242
PETsMART, Inc.	100		3,245
Pier 1 Imports, Inc.	100		1,769
RONA, Inc. (a)	100,000		2,159,832
Ross Stores, Inc.	408,200		10,923,432
Sa Sa International Holdings Ltd.	2,000		782
Select Comfort Corp. (a)	346,900		9,851,960
Sharper Image Corp. (a)	100		3,139
Shimamura Co. Ltd.	100		8,797
Signet Group PLC	100		208
Sports Authority, Inc. (a)	100		3,590
Staples, Inc.	100		2,931
Talbots, Inc.	100		3,915
TBC Corp. (a)	100		2,380
The Bombay Company, Inc. (a)	100		613
Tiffany & Co., Inc.	100		3,685
TJX Companies, Inc.	100		2,414
Too, Inc. (a)	100		1,670
Tractor Supply Co. (a)	100		4,182
Urban Outfitters, Inc. (a)	200		12,182
Weight Watchers International, Inc. (a)	100		3,914
Williams-Sonoma, Inc. (a)	200		6,592
			121,271,651
Textiles Apparel & Luxury Goods - 1.4%
Adidas-Salomon AG	100		11,968
Brown Shoe Co., Inc.	100		4,093
Coach, Inc. (a)	200		9,038
Common Stocks - continued
	Shares		Value (Note 1)
CONSUMER DISCRETIONARY - continued
Textiles Apparel & Luxury Goods - continued
Columbia Sportswear Co. (a)	579,600		$ 31,657,752
Compagnie Financiere Richemont unit	100		2,617
DHB Industries, Inc. (a)	100		1,518
Fossil, Inc. (a)	258,600		7,046,850
Gildan Activewear, Inc. Class A (sub. vtg.) (a)	100		2,870
K-Swiss, Inc. Class A	200		4,042
Kenneth Cole Productions, Inc. Class A	100		3,427
Liz Claiborne, Inc.	100		3,598
NIKE, Inc. Class B	100		7,575
Polo Ralph Lauren Corp. Class A	100		3,445
Quiksilver, Inc. (a)	200		4,762
Ted Baker PLC	300,835		2,279,668
The Swatch Group AG (Bearer)	100		13,046
Timberland Co. Class A (a)	100		6,459
Weyco Group, Inc.	100		3,429
Wolverine World Wide, Inc.	100		2,625
			41,068,782
TOTAL CONSUMER DISCRETIONARY			360,380,854
CONSUMER STAPLES - 5.4%
Beverages - 0.0%
Boston Beer Co., Inc. Class A (a)	100		2,014
Companhia de Bebidas das Americas (AmBev) sponsored ADR	100		2,007
Fomento Economico Mexicano SA de CV sponsored ADR	100		4,584
Grupo Modelo SA de CV Series C	100		251
Hansen Natural Corp. (a)	100		2,533
Harbin Brewery Group Ltd.	2,000		1,436
MGP Ingredients, Inc.	100		3,869
Tsingtao Brewery Co. Ltd. (H Shares)	1,000		885
			17,579
Food & Staples Retailing - 0.4%
Central European Distribution Corp. (a)	150		3,887
Companhia Brasileira de Distribuicao Grupo Pao de Acucar sponsored ADR	100		1,730
Costco Wholesale Corp.	100		4,107
Massmart Holdings Ltd.	622,969		3,311,026
Plant Co. Ltd.	113,700		1,733,949
United Natural Foods, Inc. (a)	200		5,782
Whole Foods Market, Inc.	64,100		6,118,345
			11,178,826
Food Products - 4.7%
Archer-Daniels-Midland Co.	316,500		5,310,870
Barry Callebaut AG	100		23,571
Bunge Ltd.	293,900		11,444,466
Central Garden & Pet Co. Class A (a)	100		3,577
Corn Products International, Inc.	432,000		20,109,600
Delta & Pine Land Co.	74,316		1,631,236
	Shares		Value (Note 1)
Fresh Del Monte Produce, Inc.	100		$ 2,527
Glanbia PLC	784,887		2,536,708
Green Mountain Coffee Roasters, Inc. (a)	248,711		4,618,563
Hershey Foods Corp.	504,300		23,333,961
Hormel Foods Corp.	100		3,110
IAWS Group PLC (Ireland)	50		598
Lindt & Spruengli AG (participation certificate)	2,770		2,915,439
McCormick & Co., Inc. (non-vtg.)	496,000		16,864,000
Peet's Coffee & Tea, Inc. (a)	100		2,499
People's Food Holdings Ltd.	8,370,665		5,506,055
PT Indofood Sukses Makmur Tbk	78,659,500		5,857,624
Riviana Foods, Inc.	100		2,617
Smithfield Foods, Inc. (a)	1,357,300		39,904,620
SunOpta, Inc. (a)	92,100		789,882
Tootsie Roll Industries, Inc.	103		3,348
Wimm-Bill-Dann Foods OJSC ADR (a)	65,400		912,330
Wm. Wrigley Jr. Co.	100		6,305
Yakult Honsha Co. Ltd.	1,000		14,692
			141,798,198
Household Products - 0.0%
Godrej Consumer Products Ltd. (a)	178,876		776,199
Hindustan Lever Ltd.	104,300		288,796
Kao Corp.	1,000		24,456
Reckitt Benckiser PLC	100		2,840
Uni-Charm Corp.	100		5,059
			1,097,350
Personal Products - 0.3%
Alberto-Culver Co.	150		7,521
Clarins SA	100		6,519
Hengan International Group Co. Ltd.	11,594,000		7,432,242
Kose Corp.	110		4,296
NBTY, Inc. (a)	100		2,939
USANA Health Sciences, Inc. (a)	200		6,216
			7,459,733
TOTAL CONSUMER STAPLES			161,551,686
ENERGY - 15.6%
Energy Equipment & Services - 9.2%
BJ Services Co. (a)	622,810		28,549,610
Cal Dive International, Inc. (a)	258,600		7,840,752
Carbo Ceramics, Inc.	25,000		1,706,250
Cooper Cameron Corp. (a)	317,000		15,437,900
Core Laboratories NV (a)	100		2,300
FMC Technologies, Inc. (a)	226,600		6,526,080
Global Industries Ltd. (a)	1,355,189		7,751,681
GlobalSantaFe Corp.	651,750		17,271,375
Gulf Island Fabrication, Inc.	168,300		3,640,329
Helmerich & Payne, Inc.	169,800		4,440,270
Hydril Co. (a)	239,600		7,547,400
Input/Output, Inc. (a)	1,239,000		10,271,310
Matrix Service Co. (a)	232,600		2,128,290
Common Stocks - continued
	Shares		Value (Note 1)
ENERGY - continued
Energy Equipment & Services - continued
Nabors Industries Ltd. (a)	480,300		$ 21,719,166
National-Oilwell, Inc. (a)	235,300		7,409,597
Noble Corp. (a)	258,200		9,783,198
NS Group, Inc. (a)	100		1,644
Oceaneering International, Inc. (a)	334,986		11,473,271
Parker Drilling Co. (a)	1,344,400		5,135,608
Pason Systems, Inc.	626,100		14,550,641
Pioneer Drilling Co. (a)	718,200		5,515,776
Precision Drilling Corp. (a)	115,900		5,537,377
Pride International, Inc. (a)	519,500		8,888,645
Rowan Companies, Inc. (a)	549,900		13,379,067
Smith International, Inc. (a)	233,890		13,041,706
Tidewater, Inc.	100		2,980
Transocean, Inc. (a)	272,800		7,894,832
Trico Marine Services, Inc. (a)	686,600		308,970
Unit Corp. (a)	188,700		5,934,615
Varco International, Inc. (a)	1,084,548		23,740,745
Weatherford International Ltd. (a)	118,100		5,312,138
			272,743,523
Oil & Gas - 6.4%
Apache Corp.	100		4,355
Burlington Resources, Inc.	219,200		7,930,656
Caltex Australia Ltd.	1,004,943		6,483,197
China Petroleum & Chemical Corp. sponsored ADR	100		3,695
Comstock Resources, Inc. (a)	454,200		8,838,732
Enbridge Energy Partners LP	45,800		2,120,540
Golar LNG Ltd. (a)	312,000		4,818,289
Golar LNG Ltd. (Nasdaq) (a)	70		1,097
JKX Oil & Gas	91		202
KFX, Inc. (a)	65,600		499,872
Niko Resources Ltd.	138,000		3,993,403
Noble Energy, Inc.	214,700		10,949,700
OAO Gazprom sponsored ADR	100		2,870
Petro-Canada	100		4,322
PetroChina Co. Ltd. sponsored ADR	100		4,630
PetroKazakhstan, Inc. Class A	1,292,100		35,094,672
Petroleo Brasileiro SA Petrobras sponsored:
ADR	100		2,807
ADR (non-vtg.)	100		2,520
Pioneer Natural Resources Co.	309,500		10,857,260
Plains Exploration & Production Co. (a)	510,438		9,366,537
Pogo Producing Co.	120,500		5,952,700
Premcor, Inc. (a)	304,600		11,422,500
Southwestern Energy Co. (a)	1,058,900		30,358,663
Suncor Energy, Inc.	100		2,550
Surgutneftegaz JSC sponsored ADR	100		3,270
Talisman Energy, Inc.	457,200		9,974,151
Tesoro Petroleum Corp. (a)	436,500		12,047,400
Valero Energy Corp.	252,000		18,587,520
	Shares		Value (Note 1)
Vintage Petroleum, Inc.	70,700		$ 1,199,779
World Fuel Services Corp.	23,900		1,077,412
XTO Energy, Inc.	125		3,724
YUKOS Corp. sponsored ADR	100		3,180
			191,612,205
TOTAL ENERGY			464,355,728
FINANCIALS - 7.0%
Capital Markets - 0.2%
A.G. Edwards, Inc.	100		3,403
BlackRock, Inc. Class A	100		6,383
Charles Schwab Corp.	100		961
E*TRADE Financial Corp. (a)	100		1,115
Eaton Vance Corp. (non-vtg.)	100		3,821
Federated Investors, Inc. Class B (non-vtg.)	100		3,034
Franklin Resources, Inc.	100		5,008
International Assets Holding Corp. (a)	100		987
Investment Technology Group, Inc. (a)	100		1,279
Investors Financial Services Corp.	100		4,358
Mitsubishi Securities Co. Ltd.	556,000		7,408,885
Nuveen Investments, Inc. Class A	100		2,680
T. Rowe Price Group, Inc.	200		10,080
			7,451,994
Commercial Banks - 3.4%
Capitalia Spa	9,229,479		28,951,133
Banco Itau Holding Financeira SA sponsored ADR	8,000		373,120
Bank Austria Creditanstalt AG	170,570		10,026,910
Bank of Baroda	659,249		2,151,611
Bank of Fukuoka Ltd.	1,587,000		9,548,015
Bank of India	6,108,556		6,211,528
Bank of Yokohama Ltd.	2,431,000		15,417,048
BOK Financial Corp.	103		4,045
Boston Private Financial Holdings, Inc.	142,900		3,309,564
Bryn Mawr Bank Corp.	20		455
Cathay General Bancorp	10		667
Charter One Financial, Inc.	100		4,419
City National Corp.	100		6,570
Commerce Bancorp, Inc., New Jersey	183,800		10,110,838
CVB Financial Corp.	110		2,396
East West Bancorp, Inc.	200		6,140
First Horizon National Corp.	100		4,547
Fulton Financial Corp.	231		4,653
Great Southern Bancorp, Inc.	200		5,850
Hancock Holding Co.	300		8,718
Harleysville National Corp., Pennsylvania	125		3,200
HDFC Bank Ltd. sponsored ADR	100		2,686
Hiroshima Bank Ltd.	327,000		1,778,834
Independent Bank Corp., Massachusetts	100		2,895
International Bancshares Corp.	125		5,069
Irwin Financial Corp.	100		2,640
Kookmin Bank sponsored ADR (a)	100		3,138
Common Stocks - continued
	Shares		Value (Note 1)
FINANCIALS - continued
Commercial Banks - continued
Lakeland Financial Corp.	100		$ 3,350
M&T Bank Corp.	100		8,730
Marshall & Ilsley Corp.	100		3,909
Nara Bancorp, Inc.	434,780		7,447,781
National Commerce Financial Corp.	100		3,250
North Fork Bancorp, Inc., New York	100		3,805
OTP Bank Rt.	100		2,047
Pacific Capital Bancorp	133		3,741
Popular, Inc.	100		4,277
PrivateBancorp, Inc.	200		5,492
SouthTrust Corp.	100		3,881
State Bancorp, Inc., New York	105		2,565
State Bank of India	326,976		3,208,454
Sterling Bancshares, Inc.	10		142
Sumitomo Trust & Banking Co. Ltd.	1,000		7,225
Synovus Financial Corp.	100		2,532
TCF Financial Corp.	100		5,805
Texas Regional Bancshares, Inc. Class A	100		4,591
Tompkins Trustco, Inc.	100		4,750
UCBH Holdings, Inc.	100		3,952
UnionBanCal Corp.	100		5,640
Valley National Bancorp	105		2,654
West Coast Bancorp, Oregon	100		2,144
Westcorp	100		4,545
Wintrust Financial Corp.	42,200		2,131,522
Zions Bancorp	100		6,145
			100,829,618
Consumer Finance - 0.0%
American Express Co.	100		5,138
Capital One Financial Corp.	100		6,838
First Cash Financial Services, Inc. (a)	150		3,192
Student Loan Corp.	100		13,650
			28,818
Diversified Financial Services - 0.1%
Deutsche Boerse AG	100		5,094
eSpeed, Inc. Class A (a)	100		1,765
Moody's Corp.	58,600		3,789,076
Power Financial Corp.	100		4,112
Principal Financial Group, Inc.	100		3,478
TSX Group, Inc.	100		3,568
			3,807,093
Insurance - 2.6%
ACE Ltd.	100		4,228
AFLAC, Inc.	2,800		114,268
Arthur J. Gallagher & Co.	100		3,045
Assurant, Inc.	232,000		6,120,160
Brown & Brown, Inc.	38,000		1,637,800
Erie Indemnity Co. Class A	100		4,678
Genworth Financial, Inc. Class A	100		2,295
Great-West Lifeco, Inc.	100		3,613
	Shares		Value (Note 1)
Hilb Rogal & Hobbs Co.	200		$ 7,136
Horace Mann Educators Corp.	100		1,748
MBIA, Inc.	22,700		1,296,624
Mercury General Corp.	34,500		1,712,925
MetLife, Inc.	100		3,585
Ohio Casualty Corp. (a)	281,300		5,662,569
Old Republic International Corp.	150		3,558
PartnerRe Ltd.	100		5,673
Progressive Corp.	67,100		5,723,630
Protective Life Corp.	100		3,867
Reinsurance Group of America, Inc.	456,400		18,552,660
Scottish Re Group Ltd.	8,100		188,325
StanCorp Financial Group, Inc.	84,300		5,648,100
Triad Guaranty, Inc. (a)	100		5,820
UICI (a)	33,400		795,254
UnumProvident Corp.	100		1,590
W.R. Berkley Corp.	706,275		30,334,511
Zenith National Insurance Corp.	300		14,580
			77,852,242
Real Estate - 0.4%
CBL & Associates Properties, Inc.	43,400		2,387,000
Corporate Office Properties Trust (SBI)	100		2,485
Equity Residential (SBI)	100		2,973
Kimco Realty Corp.	100		4,550
Pan Pacific Retail Properties, Inc.	76,600		3,869,832
Plum Creek Timber Co., Inc.	132,400		4,313,592
			10,580,432
Thrifts & Mortgage Finance - 0.3%
Doral Financial Corp.	146,600		5,057,700
Farmer Mac Class C (non-vtg.) (a)	100		2,393
Golden West Financial Corp., Delaware	30,770		3,272,390
MGIC Investment Corp.	100		7,586
NetBank, Inc.	76,900		840,517
New York Community Bancorp, Inc.	133		2,611
R&G Financial Corp. Class B	150		4,959
Radian Group, Inc.	100		4,790
Sterling Financial Corp., Washington (a)	110		3,506
W Holding Co., Inc.	153		2,627
Washington Federal, Inc.	110		2,640
			9,201,719
TOTAL FINANCIALS			209,751,916
HEALTH CARE - 19.1%
Biotechnology - 8.4%
Actelion Ltd. (Reg.) (a)	100		11,526
Affymetrix, Inc. (a)	157,100		5,141,883
Alnylam Pharmaceuticals, Inc.	100		756
Bachem Holding AG (B Shares)	100		5,731
BioSource International, Inc. (a)	100		706
Caliper Life Sciences, Inc. (a)	100		465
Celgene Corp. (a)	100		5,726
Cell Genesys, Inc. (a)	100		1,039
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Biotechnology - continued
Celltech Group PLC sponsored ADR (a)	100		$ 1,993
Charles River Laboratories International, Inc. (a)	1,215,400		59,396,598
Ciphergen Biosystems, Inc. (a)	100		732
Connetics Corp. (a)	100		2,020
CSL Ltd.	19,303		300,868
CytRx Corp. (a)	100		112
Dendreon Corp. (a)	146,900		1,799,525
Digene Corp. (a)	100		3,653
Enzon Pharmaceuticals, Inc. (a)	100		1,276
Exact Sciences Corp. (a)	100		615
Gen-Probe, Inc. (a)	200		9,464
Genencor International, Inc. (a)	100		1,637
Genentech, Inc. (a)	32,400		1,820,880
Gilead Sciences, Inc. (a)	100		6,700
Global Bio-Chem Technology Group Co. Ltd.	15,460,000		11,198,877
Global Bio-Chem Technology Group Co. Ltd. warrants 5/31/07 (a)	1,932,500		126,359
Harvard Bioscience, Inc. (a)(c)	3,017,047		13,516,371
IDEXX Laboratories, Inc. (a)	100		6,294
Ilex Oncology, Inc. (a)	100		2,499
ImmunoGen, Inc. (a)	132,000		806,520
Invitrogen Corp. (a)	1,211,100		87,187,089
Kosan Biosciences, Inc. (a)	100		790
Lexicon Genetics, Inc. (a)	100		784
Luminex Corp. (a)	100		1,006
Martek Biosciences (a)	55,900		3,139,903
Medarex, Inc. (a)	100		729
MedImmune, Inc. (a)	100		2,340
Myriad Genetics, Inc. (a)	100		1,492
Nabi Biopharmaceuticals (a)	1,900		27,018
Neogen Corp. (a)	47,063		810,006
ONYX Pharmaceuticals, Inc. (a)	100		4,236
PRAECIS Pharmaceuticals, Inc. (a)	100		380
QIAGEN NV (a)	3,944,300		47,765,473
Renovis, Inc.	100		916
Seattle Genetics, Inc. (a)	81,000		569,430
Serologicals Corp. (a)	84,200		1,683,158
Sirna Therapeutics, Inc. (a)	100		294
Strategic Diagnostics, Inc. (a)	626,000		2,629,200
Tanox, Inc. (a)	100		1,907
Techne Corp. (a)	265,600		11,540,320
Trimeris, Inc. (a)	100		1,443
United Therapeutics Corp. (a)	100		2,565
			249,541,304
Health Care Equipment & Supplies - 1.4%
Abaxis, Inc. (a)	100		1,898
Advanced Medical Optics, Inc. (a)	100		4,257
Advanced Neuromodulation Systems, Inc. (a)	150		4,920
	Shares		Value (Note 1)
Alcon, Inc.	100		$ 7,865
Align Technology, Inc. (a)	100		1,900
Apogent Technologies, Inc. (a)	100		3,200
Arthrocare Corp. (a)	100		2,908
Becton, Dickinson & Co.	100		5,180
Biacore International AB sponsored ADR	100		2,263
Bio-Rad Laboratories, Inc. Class A (a)	100		5,886
Biomet, Inc.	100		4,444
Biosite, Inc. (a)	100		4,492
Bruker BioSciences Corp. (a)	163		794
C.R. Bard, Inc.	200		11,330
Cardiodynamics International Corp. (a)	100		505
Cholestech Corp. (a)	291,900		2,378,985
Chromavision Medical Systems, Inc. (a)	100		186
Closure Medical Corp. (a)	100		2,511
CNS., Inc.	100		1,003
Cooper Companies, Inc.	100		6,317
CTI Molecular Imaging, Inc. (a)	100		1,418
Cyberonics, Inc. (a)	100		3,336
Cytyc Corp. (a)	100		2,537
DENTSPLY International, Inc.	100		5,210
Diagnostic Products Corp.	100		4,394
Edwards Lifesciences Corp. (a)	318,400		11,096,240
Epix Medical, Inc. (a)	228,600		4,823,460
Guidant Corp.	3,800		212,344
Illumina, Inc. (a)	200		1,270
INAMED Corp. (a)	150		9,428
Integra LifeSciences Holdings Corp. (a)	98,400		3,470,568
Kensey Nash Corp. (a)	100		3,450
Kinetic Concepts, Inc.	100		4,990
Matthews International Corp. Class A	100		3,294
Merit Medical Systems, Inc. (a)	133		2,124
Millipore Corp. (a)	154,300		8,697,891
Mine Safety Appliances Co.	300		10,110
Molecular Devices Corp. (a)	100		1,778
Nobel Biocare Holding AG (Switzerland)	100		15,688
Nutraceutical International Corp. (a)	100		2,131
Ocular Sciences, Inc. (a)	54,400		2,067,200
Orthologic Corp. (a)	100,600		872,202
Osteotech, Inc. (a)	100		649
PolyMedica Corp.	200		6,208
Possis Medical, Inc. (a)	148,300		5,064,445
Schick Technologies, Inc. (a)	100		1,345
Sola International, Inc. (a)	191,000		3,290,930
Sonic Innovations, Inc. (a)	164,700		935,496
SonoSight, Inc. (a)	100		2,391
St. Jude Medical, Inc. (a)	100		7,565
SurModics, Inc. (a)	100		2,464
Synovis Life Technologies, Inc. (a)	100		1,075
Synthes, Inc.	1,000		114,255
Tecan Group AG	100		4,282
Thoratec Corp. (a)	100		1,073
TriPath Imaging, Inc. (a)	100		941
Varian Medical Systems, Inc. (a)	100		7,935
Common Stocks - continued
	Shares		Value (Note 1)
HEALTH CARE - continued
Health Care Equipment & Supplies - continued
Ventana Medical Systems, Inc. (a)	100		$ 4,753
VSM MedTech Ltd. (a)	100		222
Wilson Greatbatch Technologies, Inc. (a)	100		2,795
Wright Medical Group, Inc. (a)	100		3,560
Young Innovations, Inc.	100		2,540
Zimmer Holdings, Inc. (a)	100		8,820
			43,225,651
Health Care Providers & Services - 8.6%
Accredo Health, Inc. (a)	100		3,895
Advisory Board Co. (a)	100		3,560
Aetna, Inc.	240,900		20,476,500
American Healthways, Inc. (a)	147,600		3,929,112
AMERIGROUP Corp. (a)	49,400		2,430,480
AmSurg Corp. (a)	150		3,770
Andrx Corp. (a)	100		2,793
Anthem, Inc. (a)	100		8,956
Caremark Rx, Inc. (a)	1,049,006		34,554,258
Centene Corp. (a)	30,000		1,156,500
Cerner Corp. (a)	388,700		17,328,246
CIGNA Corp.	100		6,881
Computer Programs & Systems, Inc.	100		2,038
Covance, Inc. (a)	626,500		24,170,370
Coventry Health Care, Inc. (a)	269,350		13,171,215
Dendrite International, Inc. (a)	100		1,858
Dynacq Healthcare, Inc. (a)	100		590
Eclipsys Corp. (a)	100		1,526
eResearchTechnology, Inc. (a)	73,200		2,049,600
Express Scripts, Inc. (a)	100		7,923
First Health Group Corp. (a)	9,800		152,978
Health Management Associates, Inc. Class A	254,100		5,696,922
HealthExtras, Inc. (a)	131,900		2,185,583
ICON PLC sponsored ADR (a)	380,326		16,730,541
IDX Systems Corp. (a)	100		3,189
IMS Health, Inc.	1,757,800		41,202,832
Inveresk Research Group, Inc. (a)	639,800		19,731,432
iSoft Group PLC	602,200		4,744,133
Laboratory Corp. of America Holdings (a)	100		3,970
Lifeline Systems, Inc. (a)	200		4,732
Lincare Holdings, Inc. (a)	100		3,286
McKesson Corp.	3,500		120,155
MIM Corp.	100		870
Molina Healthcare, Inc.	132,200		5,047,396
NDCHealth Corp.	100		2,320
Odyssey Healthcare, Inc. (a)	200		3,764
Omnicare, Inc.	100		4,281
Orthodontic Centers of America, Inc. (a)	100		819
Oxford Health Plans, Inc.	100		5,504
PAREXEL International Corp. (a)	267,500		5,296,500
Patterson Dental Co. (a)	100		7,649
	Shares		Value (Note 1)
Pediatrix Medical Group, Inc. (a)	71,100		$ 4,966,335
Per-Se Technologies, Inc. (a)	100		1,454
Pharmaceutical Product Development, Inc. (a)	451,700		14,350,509
ProxyMed, Inc. (a)	181,142		3,054,054
Quest Diagnostics, Inc.	200		16,990
Renal Care Group, Inc. (a)	150		4,970
ResCare, Inc. (a)	1,188,803		15,097,798
Tripos, Inc. (a)	100		500
TriZetto Group, Inc. (a)	100		670
Vital Images, Inc. (a)	100		1,240
WebMD Corp. (a)	100		932
Wellcare Group, Inc.	1,900		32,300
WellPoint Health Networks, Inc. (a)	100		11,201
			257,797,880
Pharmaceuticals - 0.7%
Able Laboratories, Inc. (a)	100		2,056
Allergan, Inc.	100		8,952
Alpharma, Inc. Class A	100		2,048
Altana AG sponsored ADR	100		6,038
American Pharmaceutical Partners, Inc. (a)	150		4,557
Bentley Pharmaceuticals, Inc. (a)	100		1,374
Caraco Pharmaceutical Laboratories Ltd. (a)	100		964
Cipla Ltd.	50,500		232,866
Dr. Reddy's Laboratories Ltd. ADR	248,100		4,311,978
Endo Pharmaceuticals Holdings, Inc. (a)	200		4,690
Flamel Technologies SA sponsored ADR (a)	100		2,463
Forest Laboratories, Inc. (a)	200		11,326
Guilford Pharmaceuticals, Inc. (a)	100		475
Hi-Tech Pharmacal Co., Inc. (a)	100		1,634
Impax Laboratories, Inc. (a)	100		1,938
King Pharmaceuticals, Inc. (a)	100		1,145
KV Pharmaceutical Co. Class A (a)	150		3,464
Merck KGaA	117,343		7,084,020
Nektar Therapeutics (a)	100		1,996
Novo Nordisk AS Series B	100		5,161
Pure World, Inc. (a)	100		199
Ranbaxy Laboratories Ltd. sponsored GDR	270,300		5,346,534
Roche Holding AG (participation certificate)	41,588		4,127,511
Salix Pharmaceuticals Ltd. (a)	100		3,295
Stada Arzneimittel AG	24		1,003
SuperGen, Inc. (a)	100		645
Warner Chilcott PLC ADR	100		5,019
Watson Pharmaceuticals, Inc. (a)	100		2,690
			21,176,041
TOTAL HEALTH CARE			571,740,876
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - 8.6%
Aerospace & Defense - 1.3%
Alliant Techsystems, Inc. (a)	100		$ 6,334
Applied Signal Technology, Inc.	100		3,505
Cubic Corp.	100		2,093
DRS Technologies, Inc. (a)	204,900		6,536,310
Embraer - Empresa Brasileira de Aeronautica SA sponsored ADR	100		2,859
Engineered Support Systems, Inc.	225		13,165
General Dynamics Corp.	100		9,930
Herley Industries, Inc. (a)	100		1,954
Invision Technologies, Inc. (a)	100		4,990
KVH Industries, Inc. (a)	100		1,273
L-3 Communications Holdings, Inc.	478,800		31,983,840
Rockwell Collins, Inc.	100		3,332
VT Group PLC	100		481
			38,570,066
Air Freight & Logistics - 0.2%
Business Post Group PLC	100		893
C.H. Robinson Worldwide, Inc.	65,850		3,018,564
CNF, Inc.	100		4,156
Expeditors International of Washington, Inc.	54,900		2,712,609
FedEx Corp.	100		8,169
Forward Air Corp. (a)	100		3,740
UTI Worldwide, Inc.	100		5,269
			5,753,400
Airlines - 0.0%
Southwest Airlines Co.	100		1,677
Building Products - 0.0%
American Woodmark Corp.	100		5,985
Quixote Corp.	100		2,005
Simpson Manufacturing Co. Ltd.	100		5,612
Trex Co., Inc. (a)	100		3,775
Wienerberger AG	100		3,489
			20,866
Commercial Services & Supplies - 3.3%
Administaff, Inc. (a)	100		1,660
Apollo Group, Inc.:
- University of Phoenix Online (a)	100		8,759
Class A (a)	200		17,658
Avery Dennison Corp.	100		6,401
Benesse Corp.	100		3,329
Bennett Environmental, Inc. (a)	370,800		4,656,196
Bright Horizons Family Solutions, Inc. (a)(c)	685,300		36,738,933
Bunzl PLC	100		836
Career Education Corp. (a)	200		9,112
ChoicePoint, Inc. (a)	350,500		16,003,830
Cintas Corp.	100		4,767
Coinstar, Inc. (a)	100		2,197
Concorde Career Colleges, Inc. (a)	100		1,749
	Shares		Value (Note 1)
Corinthian Colleges, Inc. (a)	200		$ 4,948
Corporate Executive Board Co.	100		5,779
CoStar Group, Inc. (a)	100		4,593
Danka Business Systems PLC sponsored ADR (a)	17,000		76,840
DeVry, Inc. (a)	3,900		106,938
Education Management Corp. (a)	31,200		1,025,232
FTI Consulting, Inc. (a)	150		2,475
Fullcast Co. Ltd.	5,184		14,461,660
Gevity HR, Inc.	100		2,619
GFK AG	100		3,500
H&R Block, Inc.	100		4,768
Herman Miller, Inc.	100		2,894
HNI Corp.	100		4,233
Intertek Group PLC	100		1,041
Ionics, Inc. (a)	359,900		10,167,175
ITE Group PLC	100		119
ITT Educational Services, Inc. (a)	100		3,802
Labor Ready, Inc. (a)	100		1,550
Manpower, Inc.	38		1,929
National Research Corp. (a)	100		1,700
On Assignment, Inc. (a)	124,300		733,370
Princeton Review, Inc. (a)	578,377		4,378,314
Resources Connection, Inc. (a)	100		3,911
Ritchie Brothers Auctioneers, Inc.	200		5,822
Robert Half International, Inc.	100		2,977
Stericycle, Inc. (a)	100		5,174
Strayer Education, Inc.	100		11,157
Tetra Tech, Inc. (a)	447,374		7,301,144
Trojan Technologies Corp. (a)	100		571
Universal Technical Institute, Inc.	42,900		1,714,713
Vedior NV (Certificaten Van Aandelen)	101		1,476
West Corp. (a)	100		2,615
			97,500,466
Construction & Engineering - 1.3%
Arcadis NV	9,700		133,207
Chicago Bridge & Iron Co. NV	294,400		8,199,040
Dycom Industries, Inc. (a)	218,400		6,115,200
EMCOR Group, Inc. (a)	100		4,398
Fluor Corp.	459,000		21,880,530
Granite Construction, Inc.	100		1,823
Jacobs Engineering Group, Inc. (a)	55,000		2,165,900
Perini Corp. (a)	100		1,067
			38,501,165
Electrical Equipment - 0.3%
AstroPower, Inc. (a)	100		2
BYD Co. Ltd. (H Shares)	184,500		545,235
Fujikura Ltd.	1,000		5,710
II-VI, Inc. (a)	100		3,066
Johnson Electric Holdings Ltd.	500		510
REPower Systems AG	100		2,229
Common Stocks - continued
	Shares		Value (Note 1)
INDUSTRIALS - continued
Electrical Equipment - continued
Rockwell Automation, Inc.	259,700		$ 9,741,347
Roper Industries, Inc.	100		5,690
			10,303,789
Industrial Conglomerates - 0.0%
Teleflex, Inc.	18,000		902,700
Machinery - 2.0%
AGCO Corp. (a)	1,402,200		28,562,814
Cascade Corp.	200		6,250
Ceradyne, Inc. (a)	150		5,366
CNH Global NV	100		2,064
CUNO, Inc. (a)	99,900		5,329,665
Donaldson Co., Inc.	200		5,860
ESCO Technologies, Inc. (a)	100		5,336
Graco, Inc.	668,700		20,763,135
Husky Injection Molding Systems Ltd. (a)	100		401
Illinois Tool Works, Inc.	100		9,589
Joy Global, Inc.	100		2,994
Middleby Corp.	100		5,462
PACCAR, Inc.	150		8,699
Pentair, Inc.	200		6,728
Reliance Steel & Aluminum Co.	54,300		2,189,376
Toshiba Machine Co. Ltd.	1,000		4,389
Trinity Industries, Inc.	100		3,179
Wabash National Corp. (a)	100		2,755
Zenon Environmental, Inc. (a)	197,300		3,401,979
			60,316,041
Marine - 0.1%
Alexander & Baldwin, Inc.	48,700		1,629,015
Road & Rail - 0.1%
Canadian National Railway Co.	150		6,495
Guangshen Railway Co. Ltd. sponsored ADR	100		1,422
Heartland Express, Inc.	100		2,736
Knight Transportation, Inc. (a)	100		2,873
Landstar System, Inc. (a)	37,600		1,987,912
Old Dominion Freight Lines, Inc. (a)	150		4,422
			2,005,860
Trading Companies & Distributors - 0.0%
Fastenal Co.	200		11,366
Richelieu Hardware Ltd.	100		1,421
			12,787
Transportation Infrastructure - 0.0%
Sea Containers Ltd. Class B	7,900		139,672
TOTAL INDUSTRIALS			255,657,504
INFORMATION TECHNOLOGY - 7.8%
Communications Equipment - 0.4%
3Com Corp. (a)	100		625
Arris Group, Inc. (a)	100		594
	Shares		Value (Note 1)
Avaya, Inc. (a)	43,400		$ 685,286
Avocent Corp. (a)	100		3,674
Black Box Corp.	100		4,726
Comtech Telecommunications Corp. (a)	100		2,256
ECtel Ltd. (a)	100		289
Emulex Corp. (a)	100		1,431
F5 Networks, Inc. (a)	65,400		1,731,792
Harris Corp.	100		5,075
InterDigital Communication Corp. (a)	100		1,881
Juniper Networks, Inc. (a)	281		6,899
Loral Space & Communications Ltd.	67,810		9,832
NETGEAR, Inc.	283,600		3,045,864
Option NV (a)	90		2,289
Packeteer, Inc. (a)	10		162
Plantronics, Inc. (a)	100		4,210
Polycom, Inc. (a)	200		4,482
QLogic Corp. (a)	81		2,154
QUALCOMM, Inc.	100		7,298
Research in Motion Ltd. (a)	110,600		7,565,972
Scientific-Atlanta, Inc.	100		3,450
SeaChange International, Inc. (a)	100		1,688
SpectraLink Corp.	100		1,490
ViaSat, Inc. (a)	100		2,495
			13,095,914
Computers & Peripherals - 0.0%
Applied Films Corp. (a)	100		2,902
Avid Technology, Inc. (a)	100		5,457
Compal Electronics, Inc.	1,000		1,087
Drexler Technology Corp. (a)	100		1,333
EMC Corp. (a)	6,300		71,820
iCAD, Inc. (a)	100		370
Lexmark International, Inc. Class A (a)	100		9,653
M-Systems Flash Disk Pioneers Ltd. (a)	900		13,419
Moser-Baer India Ltd.	200		781
Network Appliance, Inc. (a)	100		2,153
Overland Storage, Inc. (a)	100		1,329
Psion PLC (a)	100		113
SanDisk Corp. (a)	200		4,338
Stratasys, Inc. (a)	150		3,714
Synaptics, Inc. (a)	100		1,915
			120,384
Electronic Equipment & Instruments - 4.9%
AU Optronics Corp. sponsored ADR	17,850		291,669
Brightpoint, Inc. (a)	150		2,063
CDW Corp.	90,892		5,795,274
CellStar Corp. (a)	100		736
Cognex Corp.	100		3,848
Dionex Corp. (a)	100		5,517
Elec & Eltek International Co. Ltd.	1,929,000		5,401,200
Excel Technology, Inc. (a)	100		3,325
Fargo Electronics, Inc. (a)	100		1,111
Flir Systems, Inc. (a)	136,745		7,507,301
Global Imaging Systems, Inc. (a)	100		3,666
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Electronic Equipment & Instruments - continued
Hon Hai Precision Industries Co. Ltd.	7,609,400		$ 28,334,078
I. D. Systems Inc. (a)	100		1,507
Identix, Inc. (a)	100		747
INFICON Holding AG (a)	100		8,724
Itron, Inc. (a)	100		2,294
Keyence Corp.	19,700		4,559,561
Landauer, Inc.	100		4,466
Lexar Media, Inc. (a)	100		668
LoJack Corp. (a)	100		879
Metrologic Instruments, Inc. (a)	200		3,988
Mettler-Toledo International, Inc. (a)	186,700		9,174,438
MOCON, Inc.	100		850
MTS Systems Corp.	100		2,345
Nam Tai Electronics, Inc.	30		646
National Instruments Corp.	150		4,598
ScanSource, Inc. (a)	100		5,942
Symbol Technologies, Inc.	2,608,600		38,450,764
Thermo Electron Corp. (a)	100		3,074
Trimble Navigation Ltd. (a)	150		4,169
Universal Display Corp. (a)	100		1,074
Varian, Inc. (a)	100		4,215
Viisage Technology, Inc. (a)	100		872
Waters Corp. (a)	978,720		46,763,242
Yageo Corp. sponsored GDR (a)	100		245
			146,349,096
Internet Software & Services - 0.4%
Aquantive, Inc. (a)	190,200		1,879,176
Ariba, Inc. (a)	100		198
AsiaInfo Holdings, Inc. (a)	100		528
Ask Jeeves, Inc. (a)	100		3,903
Autobytel, Inc. (a)	100		908
Blue Coat Systems, Inc. (a)	100		3,349
CNET Networks, Inc. (a)	100		1,107
Digital Impact, Inc. (a)	100		190
Digital Insight Corp. (a)	10		207
Digital River, Inc. (a)	100		3,263
DoubleClick, Inc. (a)	515,559		4,005,893
EarthLink, Inc. (a)	100		1,035
FindWhat.com (a)	100		2,314
FreeMarkets, Inc. (a)	100		652
Internet Commerce Corp. Class A (a)	100		120
iPass, Inc.	100		1,059
j2 Global Communications, Inc. (a)	200		5,560
LookSmart Ltd. (a)	100		217
Neoforma, Inc. (a)	100		1,214
Netease.com, Inc. sponsored ADR (a)	100		4,132
Netegrity, Inc. (a)	100		846
NetRatings, Inc. (a)	10		163
NIC, Inc. (a)	10		72
Open Text Corp. (a)	100		3,201
PEC Solutions, Inc. (a)	100		1,193
	Shares		Value (Note 1)
Quovadx, Inc. (a)	10		$ 12
Raindance Communications, Inc. (a)	10		21
RealNetworks, Inc. (a)	647,309		4,427,594
Retek, Inc. (a)	100		614
Sina Corp. (a)	100		3,299
Sohu.com, Inc. (a)	39,000		775,320
Supportsoft, Inc. (a)	10		87
United Online, Inc. (a)	150		2,642
ValueClick, Inc. (a)	100		1,198
VeriSign, Inc. (a)	100		1,990
WebEx Communications, Inc. (a)	100		2,176
Websense, Inc. (a)	27,400		1,020,102
Yahoo!, Inc. (a)	200		7,266
			12,162,821
IT Services - 0.8%
Affiliated Computer Services, Inc. Class A (a)	262,700		13,907,338
Alliance Data Systems Corp. (a)	100		4,225
Anteon International Corp. (a)	100		3,262
CACI International, Inc. Class A (a)	300		12,132
CheckFree Corp. (a)	100		3,000
Cognizant Technology Solutions Corp. Class A (a)	600		15,246
DST Systems, Inc. (a)	150,800		7,251,972
First Data Corp.	36		1,603
Global Payments, Inc.	100		4,502
Hewitt Associates, Inc. Class A (a)	100		2,750
iGate Corp. (a)	100		398
Indra Sistemas SA	90		1,150
Infocrossing, Inc. (a)	100		1,350
Infosys Technologies Ltd. sponsored ADR	100		9,277
infoUSA, Inc. (a)	100		1,014
InteliData Technologies Corp. (a)	100		66
Intrado, Inc. (a)	100		1,609
ManTech International Corp. Class A (a)	141,100		2,648,447
Maximus, Inc. (a)	100		3,546
Paychex, Inc.	100		3,388
Satyam Computer Services Ltd.	100		664
SRA International, Inc. Class A (a)	200		8,464
StarTek, Inc.	100		3,580
SunGard Data Systems, Inc. (a)	200		5,200
Syntel, Inc.	100		1,655
The BISYS Group, Inc. (a)	100		1,406
TietoEnator Oyj	100		3,043
Total System Services, Inc.	100		2,190
Tyler Technologies, Inc. (a)	100		946
			23,903,423
Office Electronics - 0.5%
Neopost SA	2,200		130,346
Zebra Technologies Corp. Class A (a)	172,750		15,029,250
			15,159,596
Semiconductors & Semiconductor Equipment - 0.4%
Agere Systems, Inc. Class A (a)	100		230
Common Stocks - continued
	Shares		Value (Note 1)
INFORMATION TECHNOLOGY - continued
Semiconductors & Semiconductor Equipment - continued
Analog Devices, Inc.	100		$ 4,708
ARM Holdings PLC sponsored ADR	100		665
ASM Pacific Technology Ltd.	500		1,875
ATI Technologies, Inc. (a)	100		1,886
Broadcom Corp. Class A (a)	100		4,677
Cabot Microelectronics Corp. (a)	100		3,061
Cree, Inc. (a)	46,100		1,073,208
Hi/fn, Inc. (a)	8		96
International Rectifier Corp. (a)	77,600		3,214,192
Intersil Corp. Class A	57,000		1,234,620
KLA-Tencor Corp. (a)	100		4,938
Lam Research Corp. (a)	100		2,680
Linear Technology Corp.	100		3,947
Marvell Technology Group Ltd. (a)	200		5,340
Micrel, Inc. (a)	100		1,215
Microchip Technology, Inc.	100		3,154
Novellus Systems, Inc. (a)	100		3,144
NVIDIA Corp. (a)	209,700		4,298,850
Omnivision Technologies, Inc. (a)	400		6,380
Pixelworks, Inc. (a)	178,900		2,740,748
PLX Technology, Inc. (a)	100		1,726
Rambus, Inc. (a)	100		1,777
RF Micro Devices, Inc. (a)	100		750
Silicon Image, Inc. (a)	100		1,313
Standard Microsystems Corp. (a)	100		2,332
Tundra Semiconductor Corp. Ltd. (a)	100		1,706
Zoran Corp. (a)	100		1,835
			12,621,053
Software - 0.4%
Activision, Inc. (a)	225		3,578
Adobe Systems, Inc.	100		4,650
Altiris, Inc. (a)	100		2,761
Ansys, Inc. (a)	100		4,700
BEA Systems, Inc. (a)	100		822
Borland Software Corp. (a)	100		849
Bottomline Technologies, Inc. (a)	11		116
Business Objects SA sponsored ADR (a)	100		2,263
Cadence Design Systems, Inc. (a)	100		1,463
Check Point Software Technologies Ltd. (a)	100		2,699
Citrix Systems, Inc. (a)	100		2,036
Cognos, Inc. (a)	100		3,613
Concur Technologies, Inc. (a)	100		1,070
Creo, Inc. (a)	100		877
Dassault Systemes SA sponsored ADR	100		4,687
Digimarc Corp. (a)	100		1,335
Dwango Co. Ltd.	1		34,499
Electronic Arts, Inc. (a)	100		5,455
EPIQ Systems, Inc. (a)	100		1,450
Evolving Systems, Inc. (a)	100		475
FactSet Research Systems, Inc.	100		4,727
	Shares		Value (Note 1)
FileNET Corp. (a)	100		$ 3,157
Hudson Soft Co. Ltd.	100		934
Hyperion Solutions Corp. (a)	100		4,372
Informatica Corp. (a)	100		763
Intuit, Inc. (a)	100		3,858
Kewill Systems PLC (a)	100		120
Kronos, Inc. (a)	150		6,180
Macrovision Corp. (a)	100		2,503
Magma Design Automation, Inc. (a)	100		1,923
Manhattan Associates, Inc. (a)	100		3,088
Mercury Interactive Corp. (a)	100		4,983
Merge Technologies, Inc. (a)	100		1,463
MRO Software, Inc. (a)	100		1,361
NDS Group PLC sponsored ADR (a)	100		2,522
Network Associates, Inc. (a)	100		1,813
PeopleSoft, Inc. (a)	100		1,850
Plato Learning, Inc. (a)	94,100		932,531
Quality Systems, Inc. (a)	100		4,909
Quest Software, Inc. (a)	100		1,290
Red Hat, Inc. (a)	100		2,297
Renaissance Learning, Inc.	55,870		1,252,605
Roxio, Inc. (a)	100		491
RSA Security, Inc. (a)	100		2,047
ScanSoft, Inc. (a)	100		495
SERENA Software, Inc. (a)	100		1,909
Symantec Corp. (a)	17,700		774,906
Synopsys, Inc. (a)	100		2,843
TALX Corp.	83,200		2,032,576
Temenos Group AG (a)	100		916
THQ, Inc. (a)	182,500		4,179,250
Trend Micro, Inc. sponsored ADR	100		4,497
Vastera, Inc. (a)	392,400		1,177,200
WatchGuard Technologies, Inc. (a)	10		72
			10,495,849
TOTAL INFORMATION TECHNOLOGY			233,908,136
MATERIALS - 21.0%
Chemicals - 1.2%
American Vanguard Corp.	150		5,060
Asian Paints India Ltd. (a)	45,800		312,307
Balchem Corp.	100		2,750
BOC Group PLC	100		1,679
Cambrex Corp.	100		2,523
Ecolab, Inc.	500,300		15,859,510
Headwaters, Inc. (a)	100		2,593
IMC Global, Inc.	100		1,340
International Flavors & Fragrances, Inc.	100		3,740
Minerals Technologies, Inc.	56,200		3,259,600
Nitto Denko Corp.	233,100		12,095,069
Novozymes AS Series B	18,800		849,946
Potash Corp. of Saskatchewan	100		9,626
Praxair, Inc.	200		7,982
Quaker Chemical Corp.	100		2,762
Common Stocks - continued
	Shares		Value (Note 1)
MATERIALS - continued
Chemicals - continued
Sasa Dupont Sabanci Polyester Sanayi AS (a)	1,000		$ 1
Sensient Technologies Corp.	100		2,148
Sigma Aldrich Corp.	100		5,961
Sinopec Beijing Yanhua Petrochemical Co. Ltd. sponsored ADR (a)	100		1,617
Sinopec Shanghai Petrochemical Co. Ltd.:
(H Shares)	2,000		667
sponsored ADR	134,900		4,477,331
Spartech Corp.	100		2,594
Terra Nitrogen Co. LP	100		1,200
Valspar Corp.	100		5,039
			36,913,045
Construction Materials - 0.0%
Anhui Conch Cement Co. Ltd. (H Shares)	1,000,000		1,109,003
Cemex SA de CV sponsored ADR	104		3,026
Cheung Kong Infrastructure Holdings Ltd.	1,000		2,410
Florida Rock Industries, Inc.	150		6,326
James Hardie Industries NV	100		419
Vulcan Materials Co.	100		4,755
			1,125,939
Containers & Packaging - 0.4%
Aptargroup, Inc.	100		4,369
Essel Propack Ltd.	13,700		56,022
IPL, Inc. Class A	100		693
Packaging Corp. of America	443,600		10,602,040
			10,663,124
Metals & Mining - 19.0%
Agnico-Eagle Mines Ltd.	1,180,230		15,722,833
Agnico-Eagle Mines Ltd. warrants 11/14/07 (a)	23,350		65,380
AK Steel Holding Corp. (a)	380,000		2,002,600
Alumina Ltd.	1,236,600		4,563,618
Alumina Ltd. sponsored ADR	131,100		1,959,945
Apex Silver Mines Ltd. (a)	100		1,705
Arch Coal, Inc.	340,200		12,447,918
AUR Resources, Inc. (a)	100		450
Barrick Gold Corp.	100		1,993
BHP Billiton Ltd. sponsored ADR	100		1,752
BHP Steel Ltd.	1,037,200		4,886,169
Brush Engineered Materials, Inc. (a)	100		1,890
Commercial Metals Co.	83,600		2,712,820
Compania de Minas Buenaventura SA sponsored ADR	1,405,000		31,050,500
CONSOL Energy, Inc.	681,900		24,548,400
Dofasco, Inc.	100		2,969
Falconbridge Ltd.	352,900		8,664,424
Freeport-McMoRan Copper & Gold, Inc. Class B	1,300,600		43,114,890
	Shares		Value (Note 1)
Glamis Gold Ltd. (a)	146,800		$ 2,580,748
Goldcorp, Inc.	50,000		583,627
Golden Star Resources Ltd. (a)	250,000		1,167,629
Harmony Gold Mining Co. Ltd.	1,049,100		11,126,172
High River Gold Mines Ltd. (a)	1,989,600		2,431,253
IMCO Recycling, Inc. (a)	100		1,322
Inco Ltd. (a)	100		3,449
Inmet Mining Corp. (a)	658,400		9,131,419
International Steel Group, Inc.	2,500		74,375
IPSCO, Inc.	1,165,900		26,291,530
Kinross Gold Corp. (a)	3,984,866		22,166,359
Massey Energy Co.	562,800		15,876,588
Meridian Gold, Inc. (a)	100		1,294
Newmont Mining Corp.	2,665,980		103,333,371
Nippon Steel Corp.	3,401,000		7,242,258
Noranda, Inc.	100		1,720
Nucor Corp.	991,100		76,076,836
Peabody Energy Corp.	395,000		22,116,050
Phelps Dodge Corp.	160,700		12,455,857
Placer Dome, Inc.	100		1,679
POSCO sponsored ADR	100		3,351
Quanex Corp.	100		4,870
Ryerson Tull, Inc.	100		1,588
Schnitzer Steel Industries, Inc. Class A	150		5,094
Sons of Gwalia Ltd. ADR (a)	100		965
Steel Dynamics, Inc. (a)	1,977,210		56,607,522
Steel Technologies, Inc.	100		2,208
Stillwater Mining Co. (a)	100		1,501
Teck Cominco Ltd. Class B (sub. vtg.)	1,118,800		20,129,845
United States Steel Corp.	460,700		16,179,784
Usinas Siderurgicas de Minas Gerais SA (Usiminas) (PN-A)	164,400		1,709,014
WMC Resources Ltd.	1,265,500		4,351,844
Xstrata PLC	276,600		3,708,923
			567,120,301
Paper & Forest Products - 0.4%
Aracruz Celulose SA sponsored ADR	100		3,266
International Forest Products (Interfor) Class A (a)	9,100		46,390
Lee & Man Paper Manufacturing Ltd.	6,292,000		5,646,811
MAXXAM, Inc. (a)	100		2,660
Sino-Forest Corp. Class A (sub. vtg.) (a)	2,375,400		4,380,751
Votorantim Celulose e Papel SA sponsored ADR	100		3,180
			10,083,058
TOTAL MATERIALS			625,905,467
TELECOMMUNICATION SERVICES - 2.3%
Diversified Telecommunication Services - 0.9%
BCE, Inc.	100		2,002
Covad Communications Group, Inc. (a)	387,261		929,426
General Communications, Inc. Class A (a)	100		794
Common Stocks - continued
	Shares		Value (Note 1)
TELECOMMUNICATION SERVICES - continued
Diversified Telecommunication Services - continued
Golden Telecom, Inc.	139,500		$ 3,925,530
Hungarian Telephone & Cable Corp. (a)	100		970
Matav Rt. sponsored ADR	100		2,031
Philippine Long Distance Telephone Co. (a)	100		2,052
Philippine Long Distance Telephone Co. sponsored ADR (a)	516,100		10,765,846
PT Indosat Tbk sponsored ADR	100		2,120
PT Telkomunikasi Indonesia Tbk sponsored ADR	695,200		10,810,360
Rostelecom sponsored ADR	100		1,292
Telefonica del Peru SA sponsored ADR	100		261
Teleglobe International Holdings Ltd. (a)	5		25
Warwick Valley Telephone Co.	300		6,375
			26,449,084
Wireless Telecommunication Services - 1.4%
Advanced Info Service PCL (For. Reg.)	100		217
America Movil SA de CV sponsored ADR	224,300		8,157,791
At Road, Inc. (a)	211,427		1,617,417
Boston Communications Group, Inc. (a)	100		1,025
Mobile TeleSystems OJSC sponsored ADR	55,700		6,795,400
MTN Group Ltd. (a)	2,190,216		10,145,657
Nextel Communications, Inc. Class A (a)	100		2,666
Nextel Partners, Inc. Class A (a)	100		1,592
NII Holdings, Inc. (a)	471,908		15,898,581
Telemig Celular Participacoes SA ADR	100		2,950
Telephone & Data Systems, Inc.	100		7,120
Vimpel Communications sponsored ADR (a)	100		9,645
			42,640,061
TOTAL TELECOMMUNICATION SERVICES			69,089,145
UTILITIES - 0.0%
Electric Utilities - 0.0%
Ameren Corp.	100		4,296
Black Hills Corp.	100		3,150
Cinergy Corp.	100		3,800
Empire District Electric Co.	100		2,011
FPL Group, Inc.	100		6,395
Otter Tail Corp.	100		2,686
PPL Corp.	100		4,590
Wisconsin Energy Corp.	100		3,261
			30,189
Gas Utilities - 0.0%
KeySpan Corp.	100		3,670
Multi-Utilities & Unregulated Power - 0.0%
Energy East Corp.	100		2,425
Equitable Resources, Inc.	1,100		56,881
	Shares		Value (Note 1)
Public Service Enterprise Group, Inc.	100		$ 4,003
Questar Corp.	5,600		216,384
			279,693
TOTAL UTILITIES			313,552
TOTAL COMMON STOCKS (Cost $2,283,944,287)		2,952,654,864
Nonconvertible Preferred Stocks - 0.0%
CONSUMER DISCRETIONARY - 0.0%
Automobiles - 0.0%
Porsche AG (non-vtg.)	100		67,084
Household Durables - 0.0%
Fedders Corp. Series A, 8.60%	5		122
TOTAL NONCONVERTIBLE PREFERRED STOCKS (Cost $58,459)		67,206
Money Market Funds - 3.0%
Fidelity Cash Central Fund, 1.16% (b)	19,807,160		19,807,160
Fidelity Securities Lending Cash Central Fund, 1.18% (b)	71,001,350		71,001,350
TOTAL MONEY MARKET FUNDS (Cost $90,808,510)		90,808,510

TOTAL INVESTMENT PORTFOLIO - 101.9% (Cost $2,374,811,256) 3,043,530,580

NET OTHER ASSETS - (1.9)%		(58,193,567)
NET ASSETS - 100%	$2,985,337,013

Legend

(a) Non-income producing

(b) Affiliated fund that is available only to investment companies and other accounts managed by Fidelity Investments. 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) Affiliated company

Other Information

Purchases and sales of securities, other than short-term securities, aggregated $1,314,182,787 and $878,592,003, 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 $86,513 for the period.

The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which loans were outstanding amounted to $11,369,500. The weighted average interest rate was 1.12%. At period end there were no interfund loans outstanding.

Distribution of investments by country of issue, as a percentage of total net assets, is as follows:

United States of America	73.2%
Canada	6.9%
Japan	4.4%
Netherlands	1.9%
Cayman Islands	1.1%
Peru	1.0%
Italy	1.0%
India	1.0%
Others (individually less than 1%)	9.5%
	100.0%

Companies which are affiliates of the fund at period end are noted in the fund's Schedule of Investments. Transactions during the period with companies which are or were affiliates are as follows:

Affiliate	Value, beginning of period	Purchases	Sales Proceeds	Dividend Income	Value, end of period
Bright Horizons Family Solutions, Inc.	$ 28,782,600	$ -	$ -	$ -	$ 36,738,933
Harvard Bioscience, Inc.	24,939,580	1,588,729	1,104,712	-	13,516,371
IMPCO Technologies, Inc.	1,771,032	6,691,612	791,283	-	7,183,917
TOTALS	$ 55,493,212	$ 8,280,341	$ 1,895,995	$ -	$ 57,439,221

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $128,510,000 of which $28,092,000 and $100,418,000 will expire on December 31, 2009 and 2010, respectively.

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

Mid Cap Portfolio

Fidelity Variable Insurance Products: Mid Cap Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including securities loaned of $68,587,070) (cost $2,374,811,256) - See accompanying schedule		$ 3,043,530,580
Cash		617,427
Foreign currency held at value (cost $9,038,195)		8,993,492
Receivable for investments sold		4,201,220
Receivable for fund shares sold		4,928,190
Dividends receivable		1,817,550
Interest receivable		27,940
Prepaid expenses		4,347
Other receivables		256,232
Total assets		3,064,376,978
Liabilities
Payable for investments purchased	$ 5,321,531
Payable for fund shares redeemed	653,409
Accrued management fee	1,371,554
Distribution fees payable	364,734
Other affiliated payables	236,506
Other payables and accrued expenses	90,881
Collateral on securities loaned, at value	71,001,350
Total liabilities		79,039,965
Net Assets		$ 2,985,337,013
Net Assets consist of:
Paid in capital		$ 2,346,608,712
Accumulated net investment loss		(81,196)
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions		(29,863,309)
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies		668,672,806
Net Assets		$ 2,985,337,013
Initial Class: Net Asset Value, offering price and redemption price per share ($747,711,432 ÷ 29,146,847 shares)		$ 25.65
Service Class: Net Asset Value, offering price and redemption price per share ($666,339,889 ÷ 26,053,220 shares)		$ 25.58
Service Class 2: Net Asset Value, offering price and redemption price per share ($1,571,285,692 ÷ 61,790,767 shares)		$ 25.43

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Dividends		$ 9,539,548
Interest		184,569
Security lending		495,497
Total income		10,219,614
Expenses
Management fee	$ 7,805,781
Transfer agent fees	909,886
Distribution fees	2,028,967
Accounting and security lending fees	433,156
Non-interested trustees' compensation	6,198
Custodian fees and expenses	197,020
Audit	25,377
Legal	1,465
Interest	709
Miscellaneous	61,611
Total expenses before reductions	11,470,170
Expense reductions	(422,281)	11,047,889
Net investment income (loss)		(828,275)
Realized and Unrealized Gain (Loss) Net realized gain (loss) on:
Investment securities (Including realized gain of $497,820 on sales of investments in affiliated issuers)	102,252,078
Foreign currency transactions	(90,332)
Total net realized gain (loss)		102,161,746
Change in net unrealized appreciation (depreciation) on: Investment securities (net of decrease in deferred foreign taxes of $336,495)	55,881,976
Assets and liabilities in foreign currencies	(49,956)
Total change in net unrealized appreciation (depreciation)		55,832,020
Net gain (loss)		157,993,766
Net increase (decrease) in net assets resulting from operations		$ 157,165,491

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

Semiannual Report

Mid Cap Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003A
Increase (Decrease) in Net Assets
Operations
Net investment income (loss)	$ (828,275)	$ (2,294,177)
Net realized gain (loss)	102,161,746	29,542,718
Change in net unrealized appreciation (depreciation)	55,832,020	575,223,419
Net increase (decrease) in net assets resulting from operations	157,165,491	602,471,960
Distributions to shareholders from net investment income	-	(5,082,393)
Share transactions - net increase (decrease)	391,938,620	440,089,337
Total increase (decrease) in net assets	549,104,111	1,037,478,904
Net Assets
Beginning of period	2,436,232,902	1,398,753,998
End of period (including accumulated net investment loss of $81,196 and undistributed net investment income of $76,412, respectively)	$ 2,985,337,013	$ 2,436,232,902

Other Information:
Share Transactions	Six months ended June 30, 2004 (Unaudited)
	Initial Class	Service Class	Service Class 2
Shares Sold	3,033,539	2,796,337	15,362,035
Redeemed	(1,972,466)	(820,174)	(2,686,035)
Net increase (decrease)	1,061,073	1,976,163	12,676,000
Dollars Sold	$ 75,752,954	$ 69,585,537	$ 380,650,840
Redeemed	(48,337,345)	(20,166,493)	(65,546,873)
Net increase (decrease)	$ 27,415,609	$ 49,419,044	$ 315,103,967
Share Transactions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Shares Sold	4,434,612	4,691,539	24,537,608
Reinvested	131,528	76,717	95,288
Redeemed	(5,011,471)	(2,353,097)	(5,472,778)
Net increase (decrease)	(445,331)	2,415,159	19,160,118
Dollars Sold	$ 95,795,053	$ 94,175,028	$ 482,784,357
Reinvested	2,207,036	1,285,007	1,590,350
Redeemed	(89,867,137)	(43,168,976)	(104,711,381)
Net increase (decrease)	$ 8,134,952	$ 52,291,059	$ 379,663,326
Distributions	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 2,207,036	$ 1,285,007	$ 1,590,350

^A Certain amounts have been reclassified. See Note 1 of Notes to Financial Statements.

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

Mid Cap Portfolio

Fidelity Variable Insurance Products: Mid Cap Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003H	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 24.16	$ 17.51	$ 19.60	$ 20.26	$ 15.25	$ 10.31
Income from Investment Operations
Net investment income (loss)E	.01	-G	.09	.20	.19	-G
Net realized and unrealized gain (loss)	1.48	6.73	(2.00)	(.86)	4.95	5.05
Total from investment operations	1.49	6.73	(1.91)	(.66)	5.14	5.05
Distributions from net investment income	-	(.08)	(.18)	-	(.08)	-
Distributions from net realized gain	-	-	-	-	-	(.09)
Distributions in excess of net realized gain	-	-	-	-	(.05)	(.02)
Total distributions	-	(.08)	(.18)	-	(.13)	(.11)
Net asset value, end of period	$ 25.65	$ 24.16	$ 17.51	$ 19.60	$ 20.26	$ 15.25
Total ReturnB,C,D	6.17%	38.64%	(9.82)%	(3.26)%	33.78%	49.04%
Ratios to Average Net AssetsF
Expenses before expense reductions	.69%A	.70%	.70%	.69%	.74%	3.34%
Expenses net of voluntary waivers, if any	.69%A	.70%	.70%	.69%	.74%	1.00%
Expenses net of all reductions	.66%A	.68%	.63%	.62%	.69%	.97%
Net investment income (loss)	.09%A	-%	.51%	1.06%	1.01%	.01%
Supplemental Data
Net assets, end of period (000 omitted)	$ 747,711	$ 678,480	$ 499,557	$ 574,934	$ 589,026	$ 1,744
Portfolio turnover rate	66%A	51%	135%	144%	245%	163%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share. ^H As the result of a correction made in the classification of distributions received on securities representing realized gains for the year ended December 31, 2003, amounts previously reported have been reclassified. The impact of this correction was a decrease in net investment loss of $0.01 per share and a corresponding decrease in net realized and unrealized gain (loss). The ratio of net investment loss to average net assets decreased from (0.04)% to 0.00%. The reclassification had no impact on total net assets or total return of the class.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003H	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 24.10	$ 17.46	$ 19.54	$ 20.22	$ 15.24	$ 10.31
Income from Investment Operations
Net investment income (loss)E	-G	(.02)	.08	.18	.17	(.01)
Net realized and unrealized gain (loss)	1.48	6.72	(2.00)	(.86)	4.93	5.05
Total from investment operations	1.48	6.70	(1.92)	(.68)	5.10	5.04
Distributions from net investment income	-	(.06)	(.16)	-	(.07)	-
Distributions from net realized gain	-	-	-	-	-	(.09)
Distributions in excess of net realized gain	-	-	-	-	(.05)	(.02)
Total distributions	-	(.06)	(.16)	-	(.12)	(.11)
Net asset value, end of period	$ 25.58	$ 24.10	$ 17.46	$ 19.54	$ 20.22	$ 15.24
Total ReturnB,C,D	6.14%	38.52%	(9.90)%	(3.36)%	33.54%	48.94%
Ratios to Average Net AssetsF
Expenses before expense reductions	.79%A	.80%	.80%	.79%	.84%	3.41%
Expenses net of voluntary waivers, if any	.79%A	.80%	.80%	.79%	.84%	1.10%
Expenses net of all reductions	.76%A	.78%	.73%	.72%	.79%	1.07%
Net investment income (loss)	(.01)%A	(.10)%	.41%	.96%	.92%	(.09)%
Supplemental Data
Net assets, end of period (000 omitted)	$ 666,340	$ 580,179	$ 378,264	$ 366,665	$ 282,941	$ 25,908
Portfolio turnover rate	66%A	51%	135%	144%	245%	163%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^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. 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. ^G Amount represents less than $.01 per share. ^H As the result of a correction made in the classification of distributions received on securities representing realized gains for the year ended December 31, 2003, amounts previously reported have been reclassified. The impact of this correction was a decrease in net investment loss of $0.01 per share and a corresponding decrease in net realized and unrealized gain (loss). The ratio of net investment loss to average net assets decreased from (0.14)% to (0.10)%. The reclassification had no impact on total net assets or total return of the class.

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

Semiannual Report

Financial Highlights - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003H	2002	2001	2000F
Selected Per-Share Data
Net asset value, beginning of period	$ 23.98	$ 17.39	$ 19.49	$ 20.20	$ 14.82
Income from Investment Operations
Net investment income (loss)E	(.02)	(.05)	.05	.15	.14
Net realized and unrealized gain (loss)	1.47	6.69	(1.99)	(.86)	5.35
Total from investment operations	1.45	6.64	(1.94)	(.71)	5.49
Distributions from net investment income	-	(.05)	(.16)	-	(.06)
Distributions in excess of net realized gain	-	-	-	-	(.05)
Total distributions	-	(.05)	(.16)	-	(.11)
Net asset value, end of period	$ 25.43	$ 23.98	$ 17.39	$ 19.49	$ 20.20
Total ReturnB,C,D	6.05%	38.31%	(10.02)%	(3.51)%	37.12%
Ratios to Average Net AssetsG
Expenses before expense reductions	.95%A	.95%	.95%	.94%	.99%A
Expenses net of voluntary waivers, if any	.95%A	.95%	.95%	.94%	.99%A
Expenses net of all reductions	.91%A	.93%	.88%	.88%	.94%A
Net investment income (loss)	(.16)%A	(.25)%	.25%	.81%	.76%A
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,571,286	$ 1,177,574	$ 520,933	$ 210,356	$ 73,039
Portfolio turnover rate	66%A	51%	135%	144%	245%

^A Annualized ^B Total returns for periods of less than one year are not annualized. ^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown. ^D Total returns would have been lower had certain expenses not been reduced during the periods shown. ^E Calculated based on average shares outstanding during the period. ^F For the period January 12, 2000 (commencement of operations) to December 31, 2000. ^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. ^H As the result of a correction made in the classification of distributions received on securities representing realized gains for the year ended December 31, 2003, amounts previously reported have been reclassified. The impact of this correction was a decrease in net investment loss of $0.01 per share and a corresponding decrease in net realized and unrealized gain (loss). The ratio of net investment loss to average net assets decreased from (0.29)% to (0.25)%. The reclassification had no impact on total net assets or total return of the class.

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

Mid Cap Portfolio

Fidelity Variable Insurance Products: Money Market Portfolio

Investments June 30, 2004 (Unaudited)

Showing Percentage of Net Assets

Corporate Bonds - 1.4%
Due Date	Annualized Yield at Time of Purchase	Principal Amount		Value (Note 1)
Ameritech Capital Funding Corp.
10/15/04	1.15%	$ 10,500,000		$ 10,653,657
Bell Trace Obligated Group
7/7/04	1.38 (c)	11,600,000		11,600,000
TOTAL CORPORATE BONDS			22,253,657
Certificates of Deposit - 19.7%
Domestic Certificates Of Deposit - 0.9%
Washington Mutual Bank, California
9/7/04	1.31	5,000,000		5,000,000
Washington Mutual Bank, Seattle
7/14/04	1.12	5,000,000		5,000,000
8/10/04	1.19	5,000,000		5,000,000
				15,000,000
London Branch, Eurodollar, Foreign Banks - 6.2%
BNP Paribas SA
9/14/04	1.43	10,000,000		10,000,000
Credit Agricole Indosuez
8/5/04	1.39	10,000,000		10,000,000
8/5/04	1.40	10,000,000		10,000,000
Credit Suisse First Boston Bank
7/13/04	1.11	10,000,000		10,000,000
DEPFA BANK PLC
9/16/04	1.15	5,000,000		5,000,000
Landesbank Hessen-Thuringen
9/14/04	1.30	10,000,000		10,000,000
Royal Bank of Scotland PLC
7/19/04	1.05	25,000,000		25,000,000
Unicredito Italiano Spa
7/22/04	1.08	20,000,000		20,000,000
				100,000,000
New York Branch, Yankee Dollar, Foreign Banks - 12.6%
Bank of Scotland Treasury Services
8/31/04	1.23 (c)	5,000,000		4,999,543
BNP Paribas SA
7/22/04	1.20 (c)	10,000,000		9,995,092
8/5/04	1.41	15,000,000		15,000,000
Canadian Imperial Bank of Commerce
7/15/04	1.29 (c)	20,000,000		20,000,000
7/28/04	1.27 (c)	25,000,000		24,996,533
7/29/04	1.27 (c)	10,000,000		9,997,512
Credit Agricole Indosuez
7/22/04	1.15 (c)	5,000,000		5,002,129
Due Date	Annualized Yield at Time of Purchase	Principal Amount		Value (Note 1)
Dresdner Bank AG
8/23/04	1.13%	$ 5,000,000		$ 5,000,000
HBOS Treasury Services PLC
9/4/04	1.29 (c)	20,000,000		20,000,000
HSH Nordbank AG
10/29/04	1.50	15,000,000		14,983,339
Landesbank Baden-Wuerttemberg
8/25/04	1.21 (c)	15,000,000		14,995,956
9/7/04	1.29 (c)	5,000,000		4,998,967
Societe Generale
7/1/04	1.05 (c)	15,000,000		14,998,667
7/8/04	1.09 (c)	5,000,000		4,998,962
7/20/04	1.19 (c)	15,000,000		14,994,827
UBS AG
10/5/04	1.52 (c)	20,000,000		19,989,856
				204,951,383
TOTAL CERTIFICATES OF DEPOSIT			319,951,383
Commercial Paper - 11.9%
Charta LLC
8/12/04	1.30	14,325,000		14,303,274
Citibank Credit Card Master Trust I (Dakota Certificate Program)
7/12/04	1.10	5,000,000		4,998,319
7/29/04	1.34	15,000,000		14,984,367
Comcast Corp.
7/14/04	1.50 (a)	5,000,000		4,997,292
CRC Funding LLC
9/1/04	1.47	5,000,000		4,987,342
DaimlerChrysler NA Holding Corp.
7/16/04	1.38	5,000,000		4,997,125
7/20/04	1.48	5,000,000		4,996,094
Dorada Finance, Inc.
9/22/04	1.51	5,000,000		4,982,708
Dresdner U.S. Finance, Inc.
8/13/04	1.11	10,000,000		9,986,742
Emerald (MBNA Credit Card Master Note Trust)
7/27/04	1.13	28,800,000		28,776,496
Ford Motor Credit Co.
7/8/04	1.35	10,000,000		9,997,375
7/15/04	1.40	5,000,000		4,997,278
Grampian Funding Ltd.
11/3/04	1.48	10,000,000		9,948,958
11/10/04	1.48	5,000,000		4,973,050
Motown Notes Program
7/16/04	1.10	5,000,000		4,997,708
8/10/04	1.35	5,000,000		4,992,500
8/12/04	1.34	5,000,000		4,992,183
Commercial Paper - continued
Due Date	Annualized Yield at Time of Purchase	Principal Amount		Value (Note 1)
Park Granada LLC
7/2/04	1.08%	$ 30,000,000		$ 29,999,100
7/19/04	1.09	10,000,000		9,994,550
9/21/04	1.31	10,000,000		9,970,389
TOTAL COMMERCIAL PAPER			192,872,850
Federal Agencies - 25.7%
Fannie Mae - 10.4%
Agency Coupons - 10.2%
7/7/04	1.25 (b)(c)	21,000,000		20,978,194
9/23/04	1.49 (c)	25,000,000		24,996,351
2/15/05	1.40	10,000,000		10,000,000
2/23/05	1.33	20,000,000		20,000,000
2/25/05	1.40	25,000,000		25,000,000
3/29/05	1.40	15,000,000		15,000,000
5/4/05	1.54	20,000,000		20,000,000
5/13/05	1.59	20,000,000		20,000,000
5/16/05	1.64	5,000,000		5,000,000
6/3/05	1.84	5,000,000		5,000,000
				165,974,545
Discount Notes - 0.2%
11/10/04	1.51	3,915,000		3,893,468
				169,868,013
Federal Home Loan Bank - 15.3%
Agency Coupons - 15.3%
7/16/04	1.15 (c)	22,000,000		21,986,620
9/21/04	1.48 (c)	34,000,000		33,995,075
12/17/04	1.42	2,000,000		1,997,263
2/25/05	1.40	25,000,000		25,000,000
2/25/05	1.82	5,000,000		4,986,556
3/1/05	1.49	5,000,000		5,000,000
3/11/05	1.44	35,000,000		35,000,000
4/1/05	1.40	55,000,000		55,000,001
4/1/05	1.45	10,240,000		10,236,249
4/27/05	1.30	10,000,000		10,000,000
4/27/05	1.74	5,000,000		4,982,242
4/28/05	1.35	5,000,000		5,000,000
4/29/05	2.03	5,000,000		4,972,274
5/2/05	1.92	5,000,000		4,977,365
5/3/05	1.37	20,000,000		20,000,000
5/16/05	1.65	5,000,000		5,000,000
				248,133,645
TOTAL FEDERAL AGENCIES			418,001,658
Master Notes - 4.3%
Due Date	Annualized Yield at Time of Purchase	Principal Amount		Value (Note 1)
General Motors Acceptance Corp. Mortgage Credit
7/1/04	1.61% (c)(f)	$ 15,000,000		$ 15,000,000
Goldman Sachs Group, Inc.
7/8/04	1.25 (f)	14,000,000		14,000,000
8/26/04	1.22 (f)	36,000,000		36,000,000
9/14/04	1.21 (f)	5,000,000		5,000,000
TOTAL MASTER NOTES			70,000,000
Medium-Term Notes - 17.2%
American Express Credit Corp.
7/6/04	1.20 (c)	10,000,000		10,001,004
7/27/04	1.44 (c)	5,000,000		5,004,070
Bank of New York Co., Inc.
7/27/04	1.34 (a)(c)	15,000,000		15,000,000
Bank of Scotland Treasury Services PLC
9/14/04	1.52 (a)(c)	10,000,000		10,004,521
BellSouth Telecommunications
9/4/04	1.40 (c)	5,000,000		5,000,000
Citigroup Global Markets Holdings, Inc.
9/7/04	1.42 (c)	5,000,000		5,005,252
Descartes Funding Trust
7/15/04	1.24 (c)	5,000,000		5,000,000
General Electric Capital Corp.
7/9/04	1.25 (c)	25,000,000		25,000,000
7/19/04	1.36 (c)	20,000,000		20,000,000
HBOS Treasury Services PLC
9/24/04	1.58 (c)	20,000,000		20,000,000
Household Finance Corp.
8/26/04	1.29 (c)	5,000,000		5,000,000
Morgan Stanley
7/6/04	1.13 (c)	5,000,000		5,000,000
7/15/04	1.36 (c)	20,000,000		20,000,000
7/27/04	1.33 (c)	10,000,000		10,000,000
National City Bank
9/1/04	1.23 (c)	10,000,000		9,997,247
RACERS
7/22/04	1.28 (a)(c)	10,000,000		10,000,000
SLM Corp.
7/26/04	1.32 (c)	20,000,000		20,002,339
Verizon Global Funding Corp.
9/15/04	1.61 (c)	15,000,000		15,000,346
9/15/04	1.63 (c)	5,000,000		5,000,000
9/15/04	1.97 (c)	30,000,000		30,000,000
Wells Fargo & Co.
7/15/04	1.30 (c)	15,000,000		15,000,000
Medium-Term Notes - continued
Due Date	Annualized Yield at Time of Purchase	Principal Amount		Value (Note 1)
Westpac Banking Corp.
9/13/04	1.39% (c)	$ 10,000,000		$ 9,997,104
9/13/04	1.41 (c)	5,000,000		5,000,000
TOTAL MEDIUM-TERM NOTES			280,011,883
Short-Term Notes - 5.0%
Jackson National Life Insurance Co.
7/1/04	1.25 (c)(f)	7,000,000		7,000,000
Metropolitan Life Insurance Co.
7/1/04	1.30 (c)(f)	10,000,000		10,000,000
7/28/04	1.36 (c)	5,000,000		5,000,000
8/1/04	1.33 (c)(f)	5,000,000		5,000,000
Monumental Life Insurance Co.
7/1/04	1.25 (c)(f)	5,000,000		5,000,000
7/1/04	1.28 (c)(f)	5,000,000		5,000,000
New York Life Insurance Co.
7/1/04	1.24 (c)(f)	30,000,000		30,000,000
Pacific Life Insurance Co.
9/10/04	1.58 (c)(f)	5,000,000		5,000,000
Transamerica Occidental Life Insurance Co.
8/1/04	1.34 (c)(f)	10,000,000		10,000,000
TOTAL SHORT-TERM NOTES			82,000,000
Municipal Securities - 3.6%
Alaska Hsg. Fin. Corp. Bonds Series A, 1.4%, tender 9/1/04 (FSA Insured) (c)		10,000,000		10,000,000
New York State Hsg. Fin. Svc. Contract Rev. Series 2003 H, 1.34%, LOC Dexia Cr. Local de France, VRDN (c)		11,700,000		11,700,000
San Jose Redev. Agcy. Rev. Series A, 1.34%, LOC JPMorgan Chase Bank, VRDN (c)(d)		11,250,000		11,250,000
Texas Pub. Fin. Auth. Rev. Bonds Series 2003 C3, 1.27% tender 7/14/04 (Liquidity Facility Texas Comptroller Pub. Acnts), CP mode		16,600,000		16,600,000
West Baton Rouge Parish Indl. District #3 Rev. Bonds (Dow Chemical Co. Proj.) Series 1995, 1.27% tender 7/14/04, CP mode		9,400,000		9,400,000
TOTAL MUNICIPAL SECURITIES			58,950,000

Repurchase Agreements - 13.7%
	Maturity Amount		Value (Note 1)
In a joint trading account (Collateralized by U.S. Government Obligations dated 6/30/04 due 7/1/04 At 1.55%)	$ 873,038		$ 873,000
With:
Banc of America Securities LLC At 1.63%, dated 6/30/04 due 7/1/04 (Collateralized by Corporate Obligations with principal amounts of $86,513,121, 1.57% - 8.98%, 8/15/06 - 11/20/36)	80,003,622		80,000,000
Goldman Sachs & Co. At 1.12%, dated 4/22/04 due 7/13/04 (Collateralized by Corporate Obligations with principal amounts of $5,050,913, 3.95%, 8/25/32)	5,012,756		5,000,000
J.P. Morgan Securities, Inc. At 1.57%, dated 6/30/04 due 7/1/04 (Collateralized by Commercial Paper Obligations with principal amounts of $68,380,000, 0%, 7/1/04 - 7/23/04)	67,002,922		67,000,000
Merrill Lynch, Pierce, Fenner & Smith At 1.65%, dated 5/10/04 due 8/9/04 (Collateralized by Corporate Obligations with principal amounts of $34,617,000, 6% - 12.13%, 9/1/07 - 10/1/20) (c)(e)	25,104,271		25,000,000
Morgan Stanley & Co. At:
1.13%, dated 5/5/04 due 7/1/04 (Collateralized by Mortgage Loan Obligations with principal amounts of $508,676,467, 1.07%, 4/15/36)	25,044,729		25,000,000
1.58%, dated 6/30/04 due 7/1/04 (Collateralized by Corporate Obligations with principal amounts of $20,456,564, 0.79% - 3.85%, 7/1/04 - 6/25/33)	20,000,878		20,000,000
TOTAL REPURCHASE AGREEMENTS		222,873,000

TOTAL INVESTMENT PORTFOLIO - 102.5%		1,666,914,431
NET OTHER ASSETS - (2.5)%		(41,385,274)
NET ASSETS - 100%	$ 1,625,529,157

Total Cost for Federal Income Tax Purposes $ 1,666,914,431

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 $40,001,813 or 2.5% of net assets.

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

(c) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. The due dates on these types of securities reflect the next interest rate reset date or, when applicable, the final maturity date.

(d) Private activity obligations whose interest is subject to the federal alternative minimum tax for individuals.

(e) For financial statement purposes, the maturity amount is calculated based on the rate at period end.

(f) Restricted securities - Investment in securities not registered under the Securities Act of 1933 (excluding 144A issues). At the end of the period, the value of restricted securities (excluding 144A issues) amounted to $147,000,000 or 9.0% of net assets.

Additional information on each holding is as follows:

Security	Acquisition Date	Cost
General Motors Acceptance Corp. Mortgage Credit 1.61%, 7/1/04	6/1/04	$ 15,000,000
Goldman Sachs Group, Inc.: 1.21%, 9/14/04	2/17/04	$ 5,000,000
1.22%, 8/26/04	1/27/04	$ 36,000,000
1.25%, 7/8/04	1/5/04	$ 14,000,000
Jackson National Life Insurance Co. 1.25%, 7/1/04	3/31/03	$ 7,000,000
Metropolitan Life Insurance Co.: 1.3%, 7/1/04	3/26/02	$ 10,000,000
1.33%, 8/1/04	2/24/03	$ 5,000,000
Monumental Life Insurance Co.: 1.25%, 7/1/04	9/17/98	$ 5,000,000
1.28%, 7/1/04	3/12/99	$ 5,000,000
New York Life Insurance Co. 1.24%, 7/1/04	2/28/02 - 12/19/02	$ 30,000,000
Pacific Life Insurance Co 1.58%, 9/10/04	3/10/03	$ 5,000,000
Transamerica Occidental Life Insurance Co. 1.34%, 8/1/04	4/28/00	$ 10,000,000

Other Information

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 $8,969,714. The weighted average interest rate was 1.13%. Interest earned from the interfund lending program amounted to $3,928 and is included in interest income on the Statement of Operations. At period end, there were no interfund loans outstanding.

Income Tax Information

At December 31, 2003, the fund had a capital loss carryforward of approximately $109,000 all of which will expire on December 31, 2011.

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

Money Market Portfolio

Fidelity Variable Insurance Products: Money Market Portfolio

Financial Statements

Statement of Assets and Liabilities

	June 30, 2004 (Unaudited)
Assets
Investment in securities, at value (including repurchase agreements of $222,873,000) - See accompanying schedule		$ 1,666,914,431
Cash		126,845
Receivable for investments sold		1,728
Receivable for fund shares sold		321,432
Interest receivable		3,181,423
Prepaid expenses		5,493
Other receivables		31
Total assets		1,670,551,383
Liabilities
Payable for investments purchased Regular delivery	$ 19,989,856
Delayed delivery	20,978,194
Payable for fund shares redeemed	3,549,771
Accrued management fee	288,945
Distribution fees payable	2,705
Other affiliated payables	120,218
Other payables and accrued expenses	92,537
Total liabilities		45,022,226
Net Assets		$ 1,625,529,157
Net Assets consist of:
Paid in capital		$ 1,625,672,754
Accumulated net realized gain (loss) on investments		(143,597)
Net Assets		$ 1,625,529,157
Initial Class: Net Asset Value, offering price and redemption price per share ($1,584,089,444 ÷ 1,584,153,650 shares)		$ 1.00
Service Class: Net Asset Value, offering price and redemption price per share ($34,590,107 ÷ 34,590,447 shares)		$ 1.00
Service Class 2: Net Asset Value, offering price and redemption price per share ($6,849,606 ÷ 6,849,820 shares)		$ 1.00

Statement of Operations

	Six months ended June 30, 2004 (Unaudited)
Investment Income
Interest		$ 10,779,359
Expenses
Management fee	$ 1,726,441
Transfer agent fees	588,523
Distribution fees	14,059
Accounting fees and expenses	94,198
Non-interested trustees' compensation	4,317
Custodian fees and expenses	19,179
Audit	20,034
Legal	1,054
Miscellaneous	94,342
Total expenses before reductions	2,562,147
Expense reductions	(272)	2,561,875
Net investment income		8,217,484
Net realized gain (loss) on investment securities		(34,998)
Net increase in net assets resulting from operations		$ 8,182,486

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

Semiannual Report

Fidelity Variable Insurance Products: Money Market Portfolio
Financial Statements - continued

Statement of Changes in Net Assets

	Six months ended June 30, 2004 (Unaudited)	Year ended December 31, 2003
Increase (Decrease) in Net Assets
Operations
Net investment income	$ 8,217,484	$ 23,975,974
Net realized gain (loss)	(34,998)	(133,557)
Net increase (decrease) in net assets resulting from operations	8,182,486	23,842,417
Distributions to shareholders from net investment income	(8,217,484)	(23,975,974)
Share transactions - net increase (decrease)	(214,549,398)	(920,442,277)
Total increase (decrease) in net assets	(214,584,396)	(920,575,834)
Net Assets
Beginning of period	1,840,113,553	2,760,689,387
End of period	$ 1,625,529,157	$ 1,840,113,553

Other Information:
Share Transactions at net asset value of $1.00 per share	Six months ended June 30, 2004
	Initial Class	Service Class	Service Class 2
Sold	632,365,586	28,301,387	5,311,766
Reinvested	8,131,151	71,180	15,137
Redeemed	(873,812,194)	(13,388,086)	(1,545,325)
Net increase (decrease)	(233,315,457)	14,984,481	3,781,578
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
Sold	6,056,411,700	54,027,987	82,930,007
Reinvested	23,602,029	128,154	208,645
Redeemed	(6,967,511,919)	(42,565,009)	(127,673,871)
Net increase (decrease)	(887,498,190)	11,591,132	(44,535,219)
Distributions	Six months ended June 30, 2004
	Initial Class	Service Class	Service Class 2
From net investment income	$ 8,131,151	$ 71,180	$ 15,153
	Year ended December 31, 2003
	Initial Class	Service Class	Service Class 2
From net investment income	$ 23,625,076	$ 137,269	$ 213,629

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

Money Market Portfolio

Financial Highlights - Initial Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000	1999
Selected Per-Share Data
Net asset value, beginning of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Income from Investment Operations
Net investment income	.005	.010	.017	.041	.062	.050
Distributions from net investment income	(.005)	(.010)	(.017)	(.041)	(.062)	(.050)
Net asset value, end of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Total Return B, C, D	.47%	1.00%	1.69%	4.18%	6.30%	5.17%
Ratios to Average Net Assets E
Expenses before expense reductions	.29% A	.29%	.29%	.28%	.33%	.27%
Expenses net of voluntary waivers, if any	.29% A	.29%	.29%	.28%	.33%	.27%
Expenses net of all reductions	.29% A	.29%	.29%	.28%	.33%	.27%
Net investment income	.94% A	1.00%	1.68%	3.99%	6.18%	5.06%
Supplemental Data
Net assets, end of period (000 omitted)	$ 1,584,089	$ 1,817,440	$ 2,705,069	$ 2,753,379	$ 2,233,342	$ 1,939,491

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^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.

Financial Highlights - Service Class

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 E
Selected Per-Share Data
Net asset value, beginning of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Income from Investment Operations
Net investment income	.004	.009	.016	.040	.031
Distributions from net investment income	(.004)	(.009)	(.016)	(.040)	(.031)
Net asset value, end of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Total Return B, C, D	.42%	.90%	1.61%	4.10%	3.06%
Ratios to Average Net Assets F
Expenses before expense reductions	.39% A	.38%	.39%	.39%	.47% A
Expenses net of voluntary waivers, if any	.39% A	.38%	.39%	.39%	.45% A
Expenses net of all reductions	.39% A	.38%	.39%	.39%	.45% A
Net investment income	.84% A	.91%	1.58%	3.87%	6.28% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 34,590	$ 19,606	$ 8,017	$ 6,143	$ 103

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E For the period July 7, 2000 (commencement of sale of shares) to December 31, 2000.

^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 - Service Class 2

	Six months ended June 30, 2004	Years ended December 31,
	(Unaudited)	2003	2002	2001	2000 E
Selected Per-Share Data
Net asset value, beginning of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Income from Investment Operations
Net investment income	.003	.007	.014	.039	.058
Distributions from net investment income	(.003)	(.007)	(.014)	(.039)	(.058)
Net asset value, end of period	$ 1.00	$ 1.00	$ 1.00	$ 1.00	$ 1.00
Total Return B, C, D	.34%	.75%	1.45%	3.96%	5.89%
Ratios to Average Net Assets F
Expenses before expense reductions	.54% A	.54%	.54%	.55%	.96% A
Expenses net of voluntary waivers, if any	.54% A	.54%	.54%	.55%	.60% A
Expenses net of all reductions	.54% A	.54%	.54%	.55%	.60% A
Net investment income	.69% A	.75%	1.43%	3.71%	5.94% A
Supplemental Data
Net assets, end of period (000 omitted)	$ 6,850	$ 3,068	$ 47,604	$ 40,267	$ 108

^A Annualized

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

^C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.

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

^E For the period January 12, 2000 (commencement of sale of shares) to December 31, 2000.

^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.

Money Market Portfolio

Notes to Financial Statements

For the period ended June 30, 2004 (Unaudited)

1. Significant Accounting Policies.

Money Market Portfolio (the fund) is a fund of Variable Insurance Products Fund. Asset Manager: Growth Portfolio and Investment Grade Bond Portfolio (the funds) are funds of Variable Insurance Products Fund II. Balanced Portfolio, Growth & Income Portfolio, Growth Opportunities Portfolio, and Mid Cap Portfolio (the funds) are funds of Variable Insurance Products Fund III. The Variable Insurance Products Fund, Variable Insurance Products Fund II, and Variable Insurance Products Fund III (the trusts) (referred to in this report as Fidelity Variable Insurance Products) are registered under the Investment Company Act of 1940, as amended (the 1940 Act), as open-end management investment companies organized as Massachusetts business trusts. Each fund is authorized to issue an unlimited number of shares. Shares of each fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. Each fund offers three classes of shares: Initial Class shares, Service Class shares and Service Class 2 shares. All classes have equal rights and voting privileges, except for matters affecting a single class. 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 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 funds:

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. Equity securities, including restricted 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. Debt securities, including restricted 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 prices are not readily available or do not accurately reflect fair value for a security, or if a security's value has been materially affected by events occurring after the close of the exchange or market on which the security is principally traded, that security may be valued by another method that the Board of Trustees believes accurately reflects fair value. A security's valuation may differ depending on the method used for determining value. 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.

As permitted under Rule 2a-7 of the 1940 Act, and certain conditions therein, securities owned by the money market fund are valued initially at cost and thereafter assume a constant amortization to maturity of any discount or premium.

Foreign Currency. Certain funds may use foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.

Foreign-denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.

The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.

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 funds are 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. Distributions received on securities that represent a return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain. The funds estimate the components of distributions received that may be considered nontaxable distributions or capital gain distributions for income tax purposes. Interest income is accrued as earned. Interest income includes coupon interest and amortization of premium and accretion of discount on debt securities. Investment income is recorded net of foreign taxes withheld 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.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

1. Significant Accounting Policies - continued

Reclassification of Financial Information. As the result of a correction made in the classification of distributions received on securities representing realized gains for the year ended December 31, 2003, amounts previously reported have been reclassified. Net investment loss for the fund decreased by $669,090, with a corresponding decrease to net realized gain. The reclassification has no impact on total net assets or total return of the fund.

Expenses. Most expenses of each 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, each 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. For the Money Market Portfolio, dividends are declared daily and paid monthly from net investment income and distributions from realized gains, if any, are recorded on the ex-dividend date. Distributions from net investment income and realized gains are recorded on the ex-dividend date for all other funds. Income dividends and capital gain distributions are declared separately for each class.

Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. There were no significant book-to-tax differences for the Money Market Portfolio. Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences will reverse in a subsequent period.

Book-tax differences are primarily due to futures transactions, foreign currency transactions, passive foreign investment companies (PFIC), prior period premium and discount on debt securities, defaulted bonds, market discount, non-taxable dividends, net operating losses, financing transactions, capital loss carryforwards and losses deferred due to wash sales.

The federal tax cost of investments and unrealized appreciation (depreciation) as of period end were as follows for each fund:

	Cost for Federal Income Tax Purposes	Unrealized Appreciation	Unrealized Depreciation	Net Unrealized Appreciation/ (Depreciation)
Asset Manager: Growth	$ 311,151,031	$ 33,314,192	$ (10,762,386)	$ 22,551,806
Balanced	$ 327,211,964	$ 35,446,019	$ (8,992,238)	$ 26,453,781
Growth & Income	$ 1,423,075,186	$ 200,759,690	$ (64,320,087)	$ 136,439,603
Growth Opportunities	$ 616,883,481	$ 139,433,880	$ (18,265,165)	$ 121,168,715
Investment Grade Bond	$ 1,768,350,467	$ 27,160,189	$ (14,146,664)	$ 13,013,525
Mid Cap	$ 2,380,675,545	$ 723,183,925	$ (60,328,890)	$ 662,855,035

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 funds 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. Certain funds may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations, corporate obligations and mortgage loan obligations which may be below investment-grade quality, and equity securities. 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. Each 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 each applicable fund's Schedule of Investments. Each fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, each 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's terms, or if the issuer does not issue the securities due to political, economic, or other factors.

Semiannual Report

2. Operating Policies - continued

Futures Contracts. Certain funds may use futures contracts to manage their exposure to the stock market. Buying futures tends to increase a fund's exposure to the underlying instrument, while selling futures tends to decrease a 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 each applicable fund's Statement of Assets and Liabilities. The underlying face amount at value of any open futures contracts at period end is shown in each applicable fund's 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 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. Certain funds 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 each applicable fund's Schedule of Investments.

Loans and Other Direct Debt Instruments. Certain funds 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 each applicable fund's Schedule of Investments.

Swap Agreements. Certain funds may invest in swaps for the purpose of managing their 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. Periodic payments received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively. The primary risk associated with interest rate swaps is that unfavorable changes in the fluctuation of interest rates could adversely impact each applicable fund.

Total return swaps are agreements to exchange the return generated by one instrument for the return generated by another instrument, for example, the agreement to pay interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the index exceeds the offsetting interest obligation, each applicable fund will receive a payment from the counterparty. To the extent it is less, each applicable fund will make a payment to the counterparty. Periodic payments received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

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. Each applicable 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. Periodic payments and premiums received or made by each applicable fund are recorded in the accompanying Statement of Operations as realized gains or losses, respectively.

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 each applicable 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 each applicable fund's Schedule of Investments under the caption "Swap Agreements."

Financing Transactions. To earn additional income, certain funds 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

Notes to Financial Statements (Unaudited) - continued

3. Purchases and Sales of Investments.

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

4. Fees and Other Transactions with Affiliates.

Management Fee. FMR and its affiliates provide the funds with investment management related services for which the funds pay a monthly management fee.

For all funds except the Money Market Portfolio, the management fee is the sum of an individual fund fee rate applied to the average net assets of each fund and a group fee rate. The group fee rates differ for equity and fixed-income funds and are each based upon the average net assets of all the mutual funds advised by FMR. The group fee rates decrease as assets under management increase and increase as assets under management decrease. The annual individual fund fee rate is .30% of the fund's average net assets for Asset Manager: Growth, Growth Opportunities, Investment Grade Bond, and Mid Cap Portfolios, .20% for Growth & Income Portfolio, and .15% for Balanced Portfolio. The group fee rates averaged .28% for the equity funds and .13% for the fixed-income funds during the period.

For the Money Market Portfolio, the management fee is calculated on the basis of a group fee rate plus a total income-based component. The group fee rate averaged .13% during the period. The total income-based component is calculated according to a graduated schedule providing for different rates based on the fund's gross annualized yield. The rate increases as the fund's gross yield increases. During the period the income-based portion of the management fee was $617,350 or an annualized rate of .07% of the fund's average net assets.

For the period each fund's total annualized management fee rate, expressed as a percentage of each fund's average net assets, was as follows:

Asset Manager: Growth	.58%	|
Balanced	.43%
Growth & Income	.48%
Growth Opportunities	.58%
Investment Grade Bond	.43%
Mid Cap	.57%
Money Market	.20%

Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Funds have adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class' average net assets and .25% of Service Class 2's average net assets.

For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies for the distribution of shares and providing shareholder support services:

	Service Class	Service Class 2
Asset Manager: Growth	$ 3,307	$ 8,807
Balanced	$ 10,825	$ 39,047
Growth & Income	$ 185,695	$ 493,515
Growth Opportunities	$ 111,356	$ 74,634
Investment Grade Bond	$ 14,564	$ 159,514
Mid Cap	$ 312,435	$ 1,716,532
Money Market	$ 8,533	$ 5,526

Semiannual Report

4. Fees and Other Transactions with Affiliates - continued

Transfer Agent Fees. Fidelity Investment Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the funds' transfer, dividend disbursing and shareholder servicing agent. FIIOC receives an asset-based fee with respect to each account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of shareholder reports, except proxy statements. Each class pays a transfer agent fee, excluding out of pocket expenses, equal to an annual rate of .07% of their month end net assets.

For the period, the total transfer agent fees paid by each class to FIIOC, including out of pocket expenses were as follows:

Asset Manager: Growth		|
Initial Class	$ 113,172
Service Class	3,335
Service Class 2	4,916
	$ 121,423
Balanced
Initial Class	$ 99,859
Service Class	7,971
Service Class 2	11,772
	$ 119,602
Growth & Income
Initial Class	$ 252,343
Service Class	123,656
Service Class 2	134,845
	$ 510,844
Growth Opportunities
Initial Class	$ 160,979
Service Class	75,315
Service Class 2	24,011
	$ 260,305
Investment Grade Bond
Initial Class	$ 486,213
Service Class	10,264
Service Class 2	45,977
	$ 542,454
Mid Cap
Initial Class	$ 237,895
Service Class	208,428
Service Class 2	463,563
	$ 909,886
Money Market
Initial Class	$ 581,184
Service Class	5,815
Service Class 2	1,524
	$ 588,523

Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains each fund's accounting records. The accounting fee is based on the level of average net assets for the month. Under a separate contract, FSC administers the security lending program. The security lending fee is based on the number and duration of lending transactions.

Semiannual Report

Notes to Financial Statements (Unaudited) - continued

4. Fees and Other Transactions with Affiliates - continued

Central Funds. The funds 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 funds are recorded as income in the accompanying financial statements. Distributions from the Central Funds are noted in the table below:

	Income Distributions
Asset Manager: Growth	$ 210,682
Balanced	$ 264,942
Growth & Income	$ 722,438
Growth Opportunities	$ 154,750
Investment Grade Bond	$ 1,627,259
Mid Cap	$ 182,572

Brokerage Commissions. Certain funds placed a portion of their 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 each applicable fund's Schedule of Investments.

Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the funds, 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 each applicable fund's participation in the program is included under the caption "Other Information" at the end of each applicable fund's Schedule of Investments.

5. Committed Line of Credit.

Certain funds participate with other funds managed by FMR in a $4.2 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 participating funds have agreed to pay commitment fees on their pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.

6. Security Lending.

Certain funds lend portfolio securities from time to time in order to earn additional income. Each applicable 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 funds and any additional required collateral is delivered to the funds 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. The value of loaned securities and cash collateral at period end are disclosed on each applicable fund's Statement of Assets and Liabilities.

7. Expense Reductions.

Many of the brokers with whom FMR places trades on behalf of certain funds provided services to these funds in addition to trade execution. These services included payments of expenses on behalf of each applicable fund. In addition, through arrangements with each applicable fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. All of the applicable expense reductions are noted in the table below.

	Brokerage Service Arrangement	Custody Expense Reduction
Asset Manager: Growth	$ 21,533	$ 322
Balanced	$ 6,494	$ 166
Growth & Income	$ 52,073	$ 69
Growth Opportunities	$ 67,741	$ 104
Investment Grade Bond	$ -	$ 1,199
Mid Cap	$ 421,598	$ 683
Money Market	$ -	$ 272

Semiannual Report

8. Other Information.

At the end of the period, FMR or its affiliates and certain otherwise unaffiliated shareholders each were owners of record of more than 10% of the outstanding shares of the following funds:

	Affiliated %	Number of Unaffiliated Shareholders	Unaffiliated Shareholders %
Asset Manager: Growth	69%	-	-
Balanced	56%	1	24%
Growth & Income	22%	1	44%
Growth Opportunities	22%	1	46%
Investment Grade Bond	46%	1	12%
Mid Cap	21%	2	44%
Money Market	63%	1	13%

9. Transactions with Affiliated Companies.

An affiliated company is a company which the fund has ownership of at least 5% of the voting securities. Information regarding transactions with affiliated companies is included in "Other Information" at the end of each applicable fund's Schedule of Investments.

Semiannual Report

Investment Adviser

Fidelity Management & Research Company
Boston, MA

Investment Sub-Advisers

FMR Co., Inc.
Asset Manager: Growth, Balanced,
Growth & Income, Growth Opportunities,
and Mid Cap Portfolios

Fidelity Investments Money Management, Inc.
Asset Manager: Growth, Balanced,
Investment Grade Bond, and Money Market Portfolios

Fidelity Management & Research (U.K.) Inc.
Asset Manager: Growth, Balanced, Growth & Income,
Growth Opportunities, and Mid Cap Portfolios

Fidelity Management & Research (Far East) Inc.
Asset Manager: Growth, Balanced, Growth & Income,
Growth Opportunities, and Mid Cap Portfolios

Fidelity Investments Japan Limited
Asset Manager: Growth, Balanced, Growth & Income,
Growth Opportunities, and Mid Cap Portfolios

Fidelity International Investment Advisors
Asset Manager: Growth, Balanced, Growth & Income,
Growth Opportunities, Investment Grade Bond, Mid Cap
and Money Market Portfolios

Fidelity International Investment Advisors (U.K.) Limited
Asset Manager: Growth, Balanced, Growth & Income,
Growth Opportunities, Investment Grade Bond, Mid Cap
and Money Market Portfolios

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
Investment Grade Bond and Money Market Portfolios

JPMorgan Chase Bank, New York, NY
Asset Manager: Growth, Balanced,
and Growth & Income Portfolios
Brown Brothers Harriman & Co., Boston, MA
Mid Cap Portfolio

Mellon Bank, N.A., Pittsburgh, PA
Growth Opportunities Portfolio

VIPGRP2-SANN-0804
1.803535.100

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. Schedule of Investments

Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies

Not applicable.

Item 8. Purchase of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers

Not applicable.

Item 9. Submission of Matters to a Vote of Security Holders

There were no material changes to the procedures by which shareholders may recommend nominees to the Variable Insurance Products Fund II's Board of Trustees.

Item 10. Controls and Procedures

(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Variable Insurance Products Fund II'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 11. 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.
(a)	(3)	Not applicable.
(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.

Variable Insurance Products Fund II

By:	/s/Christine Reynolds
	Christine Reynolds
	President and Treasurer
Date:	August 17, 2004

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/Christine Reynolds
	Christine Reynolds
	President and Treasurer
Date:	August 17, 2004

By:	/s/Timothy F. Hayes
	Timothy F. Hayes
	Chief Financial Officer
Date:	August 17, 2004