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FIDELITY BLUE CHIP GROWTH

FIDELITY BLUE CHIP GROWTH. Presentation to The Investment Committee Of The ...... Company Defined Benefit Plan March 1998. FIDELITY Blue Chip Growth. Fund Facts Diversified fund organized as a Massachusetts business trust on October 2, 1984.

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FIDELITY BLUE CHIP GROWTH

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  1. FIDELITYBLUE CHIP GROWTH Presentation to The Investment Committee Of The ...... Company Defined Benefit Plan March 1998

  2. FIDELITYBlue Chip Growth Fund Facts Diversified fund organized as a Massachusetts business trust on October 2, 1984. As of July 31, 1997, $12.8 Billions in assets. Focuses on well known established (blue chip) companies. Low Investment costs: Total fund operating expenses 0.80%. Morningstar rating *****

  3. FIDELITYBlue Chip Growth Investment Objective Primary - Long-Term Capital Growth Who Runs the Funds? The fund is managed by FMR, which chooses the fund’s investments and handles its business affairs. Fidelity Management & Research (U.K.) Inc. (FMR U.K.) in London, England and FMR Far East in Tokyo, Japan assist FMR with foreign investments.

  4. FIDELITYBlue Chip Growth Investment Strategy Invests mainly in common stocks of well known and established companies. Strong growth prospects and reasonable valuations. Use various investment techniques to hedge a portion of the fund’s risks. Seeks companies that it expects will demonstrate greater long-term earnings growth than the average company included in S&P 500.

  5. FIDELITYBlue Chip Growth Investment Strategy (Cont’d) High turnover rates: 51%, 206%, and 182% during 1997, 1996,and 1995 respectively. Average turnover is 139%.

  6. FIDELITYBlue Chip Growth Portfolio Strategy Seek growth of capital over the long term by investing in a diversified portfolio of common stocks. 65% of the funds total assets in Blue chip companies. Blue chip company is defined as a firm with at least $200m capitalization if the stock is included in the S&P 500 or the Dow Jones Industrial Average; $1 billion if not included in either index.

  7. FIDELITYBlue Chip Growth Fund, Market, and Risk Characteristics Geographical Emphasis: Predominantly U.S. and Canada. Portfolio Manager: John McDowell, MBA, CFA since March 1996. Senior Vice president with Fidelity Management Trust Co. Employed since 1985 Other Assets managed: Fidelity Large Cap Stock from June 1995 - April 1996

  8. FIDELITYBlue Chip Growth Risk Characteristics Risk associated with individual companies, general markets and overall economy. For foreign securities additional risk factors such as Political and Economic Risks, Legal and Regulatory Issues, and exposure to currency fluctuations

  9. FIDELITYBlue Chip Growth How is Risk Managed? By diversification. The Fund reserves the right to invest without limitation in Preferred Stocks and investment grade debt instruments for temporary defensive purposes. Debt securities are Baa rated or better.

  10. FIDELITYBlue Chip Growth How is Risk Managed? (Cont’d) The fund may borrow only for temporary or emergency purposes, but not in the amount exceeding 33.33% of total assets. Loans in aggregate may not exceed 33.33% of total assets. Risk- Reward Potential Moderate

  11. FIDELITYBlue Chip Growth Investment Policies and Practices • Investors are encouraged to take a long term view of their portfolios. • FMR selects companies that demonstrate the potential to become blue chip companies in the future. • Importance of earnings growth is stressed.

  12. FIDELITYBlue Chip Growth Investment Policies and Practices 3 step selection process for companies with earnings growth potential * Focus on a universe of 500-600 blue chip growth stock. * Meet with company management to determine which companies offer the best future earnings growth. * Strike a good balance between rapid earnings growth and reasonable valuation.

  13. FIDELITYBlue Chip Growth Organization and Management of the Fund The Corporation is governed by a Board of Trustees. Board of trustees review the fund’s performance, expenses and other business affairs. Fund is managed by FMR which chooses fund’s investment and handles its business affairs. John McDowell is Vice President and Manager of Blue Chip Growth, which he has managed since March 1996. Fidelity Distributors Corporation (FDC) distributes and markets Fidelity funds and services.

  14. FIDELITYBlue Chip Growth Regional Exposure (% of Assets) As of December 31, 1997

  15. FIDELITYBlue Chip Growth Top 5 Country Exposure (As of 07-31-97) Top 5 Countries %Assets USA 92.8 United Kingdom 1.5 Netherlands 0.6 France 0.5 Switzerland 0.3

  16. FIDELITYBlue Chip Growth Transaction and Fund Expenses Individual Fund Fee Shareholder Transaction Expenses Sales charge “load” on purchase 3.00% ** Sales charge “load” on reinvest. Distribution None Redemption fee None Exchange fee None

  17. FIDELITYBlue Chip Growth Transaction and Fund Expenses Annual Fund Expenses Percent of Fiscal 1996 average net assets Management fee 0.51% Marketing fee (12b-1) None Other (shareholder servicing, custodial, auditing, etc..) 0.29% Total fund expenses 0.80% ** Waived for certain Fidelity retirement plan accounts marketed and distributed directly by fidelity.

  18. FIDELITYBlue Chip Growth Performance(in %) Calender Year Fidelity +/- S&P 500 +/-Will LargeBlend 1993 24.50 14.44 14.76 1994 9.85 8.53 12.20 1995 28.38 -9.15 -9.28 1996 15.38 -7.57 -6.17 1997 27.02 -6.33 -6.28 1 Year 23.21% 5 Year 20.07 10 Year 19.87

  19. FIDELITYBlue Chip Growth 1919 Sector Weightings (As of 07-31-97) % of stocks Relative S&P 500 Utilities 0.0 0.0 Energy 5.0 0.61 Financial 3.3 0.79 Industrial Cyclicals 15.9 1.11 Consumer Durables 1.9 0.56 Consumer Staples 10.1 0.95 Services 10.8 0.78 Retail 7.8 1.39 Health 16.1 1.36 Technology 19.2 1.51

  20. FIDELITYBlue Chip Growth Investment Changes(as of July 31,1997) % of fund % of fund investments investments in these stocks 6 months ago General Electric Company 3.0 2.8 Philip Morris Companies Inc 2.3 2.4 Intel Corp 2.2 1.9 Microsoft Corp 2.1 0.6 Merck & Co Inc 1.7 2.0 Procter & Gamble Co 1.6 1.3 Americanhome Products Corp 1.5 1.0 Intern’l Business Machines Corp. 1.4 2.2 Bristol-Myers Squibb Co. 1.4 1.4 Wal- Mart Stores Inc 1.4 0.6

  21. FIDELITYBlue Chip Growth Investment Changes(as of July 31,1997) % of fund % of fund investments investments in these market sectors 6 months ago Technology 21.4 18.9 Health 15.1 14.4 Finance 12.8 11.8 Nondurables 10.0 10.1 Retail & Wholesale 7.1 6.1

  22. Portfolio Relative Statistics Average Index P/E Ratio 28.5 1.05 P/CF Ratio 19.8 1.11 P/B Ratio 6.6 1.08 3 yr. Earnings growth 21% 1.02 Modern Portfolio Theory Statistics Alpha Beta R-Square 3 yr. -3.7 0.98 85 5 yr. 1.9 0.93 72 10 yr. 2.0 1.05 83 Sharpe Index Year Mean Std. Dev Sharpe 3 yr. 25.27 14.81 1.53 5 yr. 21.20 13.84 -- 10 yr. 20.38 16.60 -- Morningstar Measures Year Risk Return Risk Adj Ret 3 yr. 0.97 1.10 3* 5 yr. 0.90 1.62 5* 10 yr. 0.96 1.85 5* FIDELITYBlue Chip Growth

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