1. Individual bond investors do not have to pay the annual expense of mutual funds, and individual bond investors generally have greater control of the credit quality and maturity date of the bonds that they choose to invest in.
In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Any fixed income security sold or redeemed prior to maturity may be subject to loss. Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties.
The municipal market can be affected by adverse tax, legislative or political changes and the financial condition of the issuers of municipal securities.
Defined Maturity Funds are not designed for investors seeking a stable NAV or guaranteed income.
Diversification/Asset Allocation does not ensure a profit or guarantee against loss.
To protect existing shareholders and to ensure orderly liquidation of the DMFs, the funds will close to purchases for new and existing shareholders 12 months prior to their maturity date. As the funds approach their liquidation date, the funds' securities will mature, and the funds may reinvest the proceeds in money market securities with lower yields than the securities previously held by the funds. Investment in money market securities is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. In addition, the amount of the fund's income distributions will vary over time and the breakdown of returns between fund distributions and liquidation proceeds will not be predictable at the time of your investment, resulting in a gain or loss for tax purposes.
Municipal funds normally seek to earn income and pay dividends that are expected to be exempt from federal income tax. If a fund investor is resident in the state of issuance of the bonds held by the fund, interest dividends may also be exempt from state and local income taxes. Such interest dividends may be subject to federal and/or state alternative minimum taxes. Certain funds normally seek to invest only in municipal securities generating income exempt from both federal income taxes and the federal alternative minimum tax; however, outcomes cannot be guaranteed, and the funds may sometimes generate income subject to these taxes. Fund shareholders may also receive taxable distributions attributable to a fund's sale of municipal bonds. Generally, tax-exempt municipal securities are not appropriate holdings for tax advantaged accounts such as IRAs and 401(k)s.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.