Fidelity Investments Introduces Tax Managed Stock Fund; Fidelity Tax Managed Stock Fund Aims to Reduce Impact of Federal Income Tax on Investment Returns

Business Wire, Nov 3, 1998

BOSTON--(BUSINESS WIRE)--Nov. 3, 1998--Fidelity Investments(R) today announced the opening of Fidelity Tax Managed Stock Fund. The new fund - the first Fidelity retail stock fund to be managed using a tax-sensitive investment strategy- will seek long-term growth by investing mainly in equity securities. In addition, the fund will attempt to reduce the impact of federal income tax on shareholders' investment returns.

Fidelity Tax Managed Stock Fund will be actively managed using an investment strategy that is sensitive to the potential impact of federal income tax on shareholders' investment returns. The portfolio manager will seek long-term investment opportunities by buying securities that offer strong long-term growth potential and attractive valuations. The manager will also seek to diversify the portfolio across many sectors. When determining whether to sell a security, the manager will consider the impact of doing so on shareholder distributions. This tax-sensitive strategy is designed to pursue lower distributions of realized capital gains and income than growth-oriented funds that do not employ a tax-sensitive investment strategy. The fund, however, may realize capital gains from time to time.

"Changes to the tax code and the strength of the stock market over the past several years have created a heightened awareness of taxes," said Stephen Cone, president of customer marketing and development for Fidelity Investments Personal Investments and Brokerage Group. "As a result, it became clear that many customers were interested in a tax-managed fund as an investment alternative. In Fidelity Tax Managed Stock Fund, we believe we've developed an effective investment solution with a tax-sensitive focus."

The fund will be managed by 14-year Fidelity veteran Timothy E. Heffernan. Mr. Heffernan manages the tax-sensitive Fidelity Congress Street Fund and Fidelity Exchange Fund, and has managed separate accounts for tax-sensitive institutional investors for five years. He also manages two limited partnerships - Fidelity Congress Exchange 1992 and Fidelity Exchange 1988. In selecting investments for the fund, Mr. Heffernan will analyze the fundamental characteristics of a stock, and will use quantitative models to assess the security's growth potential, valuation, liquidity and investment risk. In order to partially protect the fund from being forced to realize gains in response to investor cash flows, Fidelity Tax Managed Stock Fund will carry a 1% redemption fee on shares held less than two years. The minimum investment amount will be $10,000.

Fidelity Tax Managed Stock Fund may be appropriate for investors seeking to reduce the impact of federal income taxes on their investment returns, investors in higher tax brackets or for those investors in search of capital growth that have a fairly long-term time horizon. Investors who are not subject to current income tax - i.e., those investing through tax-deferred vehicles such as 401(k) plans or Individual Retirement Accounts - may not find the fund's tax-sensitive investment approach suitable for their needs.

Fidelity Investments is the nation's largest mutual fund company and one of the leading providers of financial services. Fidelity offers investment management, retirement, brokerage and shareholder services directly to individuals and institutions, and through financial intermediaries. The firm also is the No. 1 provider of 401(k) retirement savings plans, the second largest discount brokerage firm and the third largest provider of 403(b) retirement plans for not-for-profit institutions in the United States. At September 30, 1998, Fidelity had total managed assets of $645.4 billion.

For more complete information about Fidelity funds, including charges and expenses, call 1-800-544-8888 for a free prospectus. Read it carefully before you invest or send money.