FIDELITY
(REGISTERED TRADEMARK)
FREEDOM
FUNDS - INCOME, 2000, 2010, 2020, 2030
SM
ANNUAL REPORT
MARCH 31, 1997
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing
strategies.
PERFORMANCE 4 How the funds have done over time.
FUND TALK 14 The manager's review of the funds'
performance, strategy and outlook.
FREEDOM INCOME 19 Investment Summary
21 Investments
22 Financial Statements
FREEDOM 2000 26 Investment Summary
28 Investments
30 Financial Statements
FREEDOM 2010 34 Investment Summary
36 Investments
38 Financial Statements
FREEDOM 2020 42 Investment Summary
44 Investments
46 Financial Statements
FREEDOM 2030 50 Investment Summary
52 Investments
54 Financial Statements
NOTES 58 Notes to the financial statements.
REPORT OF INDEPENDENT 61 The auditor's opinion.
ACCOUNTANTS
DISTRIBUTIONS 62
THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL
INFORMATION OF THE SHAREHOLDERS OF THE FUND. THIS REPORT IS NOT AUTHORIZED
FOR DISTRIBUTION TO
PROSPECTIVE INVESTORS IN THE FUND UNLESS PRECEDED OR ACCOMPANIED BY AN
EFFECTIVE
PROSPECTUS.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED BY,
ANY DEPOSITORY INSTITUTION. SHARES ARE NOT INSURED BY THE FDIC, 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.
FOR MORE INFORMATION ON ANY FIDELITY FUND, INCLUDING CHARGES AND EXPENSES,
CALL
1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE YOU INVEST
OR SEND MONEY.
To reduce expenses and demonstrate respect for our environment, we have
initiated a project through which we will begin eliminating duplicate
copies of most financial reports and prospectuses to most households, even
if they have more than one account in the fund. If additional copies of
financial reports, prospectuses or historical account information are
needed, please call 1-800-544-6666.
PRESIDENT'S MESSAGE
(photo_of_Edward_C_Johnson_3d)
DEAR SHAREHOLDER:
As the first quarter of 1997 came to an end, stock and bond markets
experienced the kind of short-term volatility that can affect them from
time to time. After climbing steadily upward for more than two years, stock
prices saw a sharp correction over the second half of March. Returns in the
bond market were essentially stagnant as the Federal Reserve Board
implemented a long-expected increase in short-term interest rates at the
end of March.
While it's impossible to predict the future direction of the markets with
any degree of certainty, there are certain basic principles that can help
investors plan for their future needs.
First, investors are encouraged to take a long-term view of their
portfolios. If you can afford to leave your money invested through the
inevitable up and down cycles of the financial markets, you will greatly
reduce your vulnerability to any single decline. We know from experience,
for example, that stock prices have gone up over longer periods of time,
have significantly outperformed other types of investments and have stayed
ahead of inflation.
Second, you can further manage your investing risk through diversification.
Freedom Funds are already diversified because they invest in stock, bond
and money market funds, both domestic and foreign. If you have a short
investment time horizon, you might want to consider moving some of your
investment into a money market fund, which seeks income and a stable share
price by investing in high-quality, short-term investments. Of course, it's
important to remember that there is no assurance that a money market fund
will achieve its goal of maintaining a stable net asset value of $1.00 per
share, and that these types of funds are neither insured nor guaranteed by
any agency of the U.S. government.
Finally, no matter what your time horizon or portfolio diversity, it makes
good sense to follow a regular investment plan, investing a certain amount
of money in a fund at the same time each month or quarter and periodically
reviewing your overall portfolio. By doing so, you won't get caught up in
the excitement of a rapidly rising market, nor will you buy all your shares
at market highs. While this strategy - known as dollar cost averaging -
won't assure a profit or protect you from a loss in a declining market, it
should help you lower the average cost of your purchases.
If you have questions, please call us at 1-800-544-8888. We are available
24 hours a day, seven days a week to provide you the information you need
to make the investments that are right for you.
Best regards,
Edward C. Johnson 3d
FIDELITY FREEDOM INCOME
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). If Strategic Advisers had not
reimbursed certain fund expenses, the fund's total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED MARCH 31, 1997 LIFE OF
FUND
Freedom Income Fund 1.99%
Lehman Brothers Aggregate Bond Index 1.50%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on October 17,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Lehman Brothers
Aggregate Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government, corporate,
asset-backed and mortgage-backed securities, with maturities of at least
one year. This benchmark includes reinvested dividends and capital gains,
if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund
had performed at a constant rate each year. Average annual total returns
will appear once the fund is a year old.
$10,000 OVER LIFE OF FUND
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10209.37 10171.29
10236.37
1996/12/31 10149.16 10076.71
10175.39
1997/01/31 10280.05 10107.57
10332.71
1997/02/28 10290.08 10132.71
10375.28
1997/03/31 10168.68 10020.43
10262.22
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Freedom Income Fund on October 31, 1996, shortly after the fund
started. As the chart shows, by March 31, 1997, the value of the investment
would have grown to $10,169 - a 1.69% increase on the initial investment.
For comparison, look at how the Lehman Brothers Aggregate Bond Index did
over the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $10,020 - a 0.20% increase.
You can also look at how the Fidelity Freedom Income Composite Index, a
hypothetical combination of unmanaged indices, did over the same period.
The composite index combines the total returns of the S&P 500 (+8.25%), the
Lehman Brothers Aggregate Bond Index (+0.20%), and the Salomon Brothers
3-month T-Bill Total Rate of Return Index (+2.13%) according to the fund's
initial target asset allocation.* With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $10,262 - a
2.62% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. If you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* 20.0% DOMESTIC EQUITY, 40.0% INVESTMENT GRADE FIXED-INCOME, AND 40.0%
MONEY MARKET.
FIDELITY FREEDOM 2000
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). If Strategic Advisers had not
reimbursed certain fund expenses, the fund's total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED MARCH 31, 1997 LIFE OF
FUND
Freedom 2000 Fund 2.09%
Lehman Brothers Aggregate Bond Index 1.50%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on October 17,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Lehman Brothers
Aggregate Bond Index - a market value weighted performance benchmark for
investment-grade fixed-rate debt issues, including government, corporate,
asset-backed and mortgage-backed securities, with maturities of at least
one year. This benchmark includes reinvested dividends and capital gains,
if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the
fund had performed at a constant rate each year. Average annual total
returns will appear once the fund is a year old.
$10,000 OVER LIFE OF FUND
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10340.00 10171.29
10395.74
1996/12/31 10239.47 10076.71
10278.18
1997/01/31 10441.23 10107.57
10533.93
1997/02/28 10451.32 10132.71
10595.26
1997/03/31 10209.21 10020.43
10379.71
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Freedom 2000 Fund on October 31, 1996, shortly after the fund
started. As the chart shows, by March 31, 1997, the value of the investment
would have grown to $10,209 - a 2.09% increase on the initial investment.
For comparison, look at how the Lehman Brothers Aggregate Bond Index did
over the same period. With dividends and capital gains, if any, reinvested,
the same $10,000 investment would have grown to $10,020 - a 0.20% increase.
You can also look at how the Fidelity Freedom 2000 Composite Index, a
hypothetical combination of unmanaged indices, did over the same period.
The composite index combines the total returns of the S&P 500 (+8.25%), the
Morgan Stanley Capital International Europe, Australasia and Far East
(EAFE) Index (+1.10%), the Lehman Brothers Aggregate Bond Index (+0.20%),
the Merrill Lynch High Yield Master Index (+3.88%), and the Salomon
Brothers 3-month T-Bill Total Rate of Return Index (+2.13%), according to
the fund's initial target asset allocation.* With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have grown to
$10,380 - a 3.80% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. If you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* 39.2% DOMESTIC EQUITY, 4.4% INTERNATIONAL EQUITY, 40.9% INVESTMENT GRADE
FIXED-INCOME, 4.0% HIGH YIELD FIXED-INCOME, AND 11.5% MONEY MARKET.
FIDELITY FREEDOM 2010
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). If Strategic Advisers had not
reimbursed certain fund expenses, the fund's total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED MARCH 31, 1997 LIFE OF
FUND
Freedom 2010 Fund 2.59%
S&P 500 (registered trademark) 8.46%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on October 17,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund
had performed at a constant rate each year. Average annual total returns
will appear once the fund is a year old.
$10,000 OVER LIFE OF FUND
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10471.89 10755.90
10540.53
1996/12/31 10340.61 10542.83
10386.09
1997/01/31 10634.90 11201.54
10747.05
1997/02/28 10645.05 11289.36
10831.03
1997/03/31 10300.02 10825.48
10534.95
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Freedom 2010 Fund on October 31, 1996, shortly after the fund
started. As the chart shows, by March 31, 1997, the value of the investment
would have grown to $10,300 - a 3.00% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $10,825 - a 8.25% increase. You can also
look at how the Fidelity Freedom 2010 Composite Index, a hypothetical
combination of unmanaged indices, did over the same period. The composite
index combines the total returns of the S&P 500 (+8.25%), the Morgan
Stanley Capital International Europe, Australasia and Far East (EAFE) Index
(+1.10%), the Lehman Brothers Aggregate Bond Index (+0.20%), and the
Merrill Lynch High Yield Master Index (+3.88%), according to the fund's
initial target asset allocation.* With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $10,535 - a
5.35% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. If you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* 59.2% DOMESTIC EQUITY, 9.7% INTERNATIONAL EQUITY, 24.1% INVESTMENT GRADE
FIXED-INCOME,
AND 7.0% HIGH YIELD FIXED-INCOME.
FIDELITY FREEDOM 2020
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). If Strategic Advisers had not
reimbursed certain fund expenses, the fund's total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED MARCH 31, 1997 LIFE OF
FUND
Freedom 2020 Fund 2.99%
S&P 500 (registered trademark) 8.46%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on October 17,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund
had performed at a constant rate each year. Average annual total returns
will appear once the fund is a year old.
$10,000 OVER LIFE OF FUND
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10523.14 10755.90
10611.16
1996/12/31 10391.74 10542.83
10443.31
1997/01/31 10726.63 11201.54
10864.05
1997/02/28 10736.78 11289.36
10960.04
1997/03/31 10361.29 10825.48
10628.67
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Freedom 2020 Fund on October 31, 1996, shortly after the fund
started. As the chart shows, by March 31, 1997, the value of the investment
would have grown to $10,361 - a 3.61% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $10,825 - an 8.25% increase. You can also
look at how the Fidelity Freedom 2020 Composite Index, a hypothetical
combination of unmanaged indices, did over the same period. The composite
index combines the total returns of the S&P 500 (+8.25%), the Morgan
Stanley Capital International Europe, Australasia and Far East (EAFE) Index
(+1.10%), the Lehman Brothers Aggregate Bond Index (+0.20%), and the
Merrill Lynch High Yield Master Index (+3.88%) according to the fund's
initial target asset allocation.* With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $10,629 - a
6.29% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. If you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* 70.0% DOMESTIC EQUITY, 12.4% INTERNATIONAL EQUITY, 10.1% INVESTMENT GRADE
FIXED-INCOME,
AND 7.5% HIGH YIELD FIXED-INCOME.
FIDELITY FREEDOM 2030
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Total return
reflects the change in the value of an investment, assuming reinvestment of
the fund's dividend income and capital gains (the profits earned upon the
sale of securities that have grown in value). If Strategic Advisers had not
reimbursed certain fund expenses, the fund's total returns would have been
lower.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED MARCH 31, 1997 LIFE OF
FUND
Freedom 2030 Fund 2.99%
S&P 500 (registered trademark) 8.46%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, since the fund started on October 17,
1996. For example, if you invested $1,000 in a fund that had a 5% return
over the past year, the value of your investment would be $1,050. You can
compare the fund's returns to the performance of the Standard & Poor's 500
Index - a widely recognized, unmanaged index of common stocks. This
benchmark includes reinvested dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's cumulative return and show you
what would have happened if the fund
had performed at a constant rate each year. Average annual total returns
will appear once the fund is a year old.
$10,000 OVER LIFE OF FUND
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10533.74 10755.90
10617.61
1996/12/31 10402.20 10542.83
10453.23
1997/01/31 10737.43 11201.54
10865.66
1997/02/28 10757.75 11289.36
10968.62
1997/03/31 10371.73 10825.48
10641.07
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Freedom 2030 Fund on October 31, 1996, shortly after the fund
started. As the chart shows, by March 31, 1997, the value of the investment
would have grown to $10,372 - a 3.72% increase on the initial investment.
For comparison, look at how the S&P 500 did over the same period. With
dividends and capital gains, if any, reinvested, the same $10,000
investment would have grown to $10,825 - an 8.25% increase. You can also
look at how the Fidelity Freedom 2030 Composite Index, a hypothetical
combination of unmanaged indices, did over the same period. The composite
index combines the total returns of the S&P 500 (+8.25%), the Morgan
Stanley Capital International Europe, Australasia and Far East (EAFE) Index
(+1.10%), the Lehman Brothers Aggregate Bond Index (+0.20%), and the
Merrill Lynch High Yield Master Index (+3.88%) according to the fund's
initial target asset allocation.* With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $10,641 - a
6.41% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is no
guarantee of how it will do
tomorrow. If you sell your
shares during a market
downturn, you might lose
money. But if you can ride out
the market's ups and downs,
you may have a gain.
(checkmark)
* 70.0% DOMESTIC EQUITY, 15.0% INTERNATIONAL EQUITY, 5.0% INVESTMENT GRADE
FIXED-INCOME,
AND 10.0% HIGH YIELD FIXED-INCOME.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
Moderate economic growth and
the direction of the Federal
Reserve Board's monetary policy
were two of the main focal points
for stock and bond markets in the
U.S. for the 12 months that ended
March 31, 1997. The Standard &
Poor's 500 Index returned 19.83%
during the period - above its
long-term average of about 12%.
Solid corporate earnings reports,
large cash inflows into mutual
funds, widespread optimism,
moderate economic growth, low
inflation and a generally favorable
interest rate environment
propelled share prices higher until
mid-March. At that point, the
combination of an anticipated
increase in short-term interest
rates by the Fed and indications of
disappointing fourth-quarter 1996
earnings caused a sharp sell-off in
the stock market. During the
12-month period, bonds were
affected by the anticipation and
implementation of an increase in a
key short-term rate by the Fed. The
Lehman Brothers Aggregate Bond
Index - a broad measure of the
U.S. taxable bond market -
returned 4.91% over the 12-month
period. The bond market spent
much of the year responding to
each new economic statistic,
wondering whether it would lead
the Fed to increase the rate banks
charge each other for overnight
loans, known as the fed funds rate.
On March 25, the Fed followed
through on its well-telegraphed
pre-emptive strike against inflation
by raising the fed funds rate by
0.25% to 5.50%, a move that
largely had been priced into the
market.
An interview with Ren Cheng (left photo) and Scott Stewart, Portfolio
Managers of the Fidelity Freedom Funds
Q. HOW DID THE FUNDS PERFORM, REN?
R.C. From October 17, 1996 - the date of the funds' commencement - through
March 31, 1997, the 2030 and 2020 portfolios each returned 2.99%. The 2010,
2000 and Income portfolios returned 2.59%, 2.09% and 1.99%, respectively,
over the same time period. The Standard & Poor's 500 Index and Lehman
Brothers Aggregate Bond Index returned 8.46% and 1.50%, respectively. While
the Freedom Funds compare to these broad stock and bond market indexes,
they also measure their performance to that of their composite benchmarks.
The funds trailed the returns of these benchmarks, which are comprised of
various indexes and reflect the funds' allocation mixes.
Q. CAN YOU ISOLATE ANY MARKET TRENDS THAT PLAYED KEY ROLES IN THE FUNDS'
PERFORMANCE?
R.C. The most obvious trend in the overall stock market for 1996 was the
strength of the blue chip, or household name, stocks. Much of the market's
gains for 1996 was achieved by a shockingly small number of these stocks.
This had somewhat of a negative effect on the performance of some of our
underlying funds because many of them invest in medium- and smaller-cap
stocks. Other factors that influenced the funds' performance included the
Federal Reserve Board interest rate hike in March 1997, the rising U.S.
dollar and the continuing economic struggles of Japan. Each event had
negative ramifications in one way or another. Investors should keep in
mind, however, that while these developments had an impact, the 2030, 2020
and 2010 portfolios are designed for long-term investing. Over time, we
feel the funds' built-in diversification should override any short-term
market fluctuations. At the same time, the 2000 and Income portfolios are
designed to be more resistant to short-term market swings.
Q. TURNING TO YOU, SCOTT, CAN YOU EXPLAIN HOW A RISE IN INTEREST RATES
AFFECTS THE FUNDS AND HOW THEY REACT TO SUCH MOVES?
S.S. These funds invest in both bond and stock funds, each of which can
react differently to interest rate hikes. Fixed-interest bond prices are
closely tied to general interest rates since new fixed-rate bonds will
offer a different rate. With stocks, any increase in rates can affect a
company's current and future earnings by causing a revaluation of both.
Rate increases can also change the appeal of stocks. If an investor can get
an 8% yield on a bank CD, will that investor still want to invest as
aggressively in stocks? Probably not. When the Fed raised rates a quarter
percentage point recently, both bonds and stocks were affected. With the
Freedom Funds, we continued to follow our long-term asset mixes and did not
alter our strategic allocation of underlying funds. That being said,
investors with a long-term time horizon shouldn't be too concerned with
short-term interest rate swings. They're going to happen. We're not going
to make any knee-jerk reactions as a result of short-term rate movements.
Q. REN, CAN YOU EXPLAIN HOW A RISING U.S. DOLLAR AFFECTS THE FUNDS?
R.C. When the value of the U.S. dollar is rising - as it was through much
of the period - a fund's international positions get hit the hardest. In
the case of the Freedom Funds, the rising dollar spelled performance
trouble for those underlying funds with an international focus. Because
these funds invest in securities denominated in various world currencies,
any sign of strength in the U.S. dollar is going to have a negative impact.
Conversely, when the dollar is weak, these funds have a better chance to
outperform. It's important to note that currencies go through cycles. Two
years ago, the dollar was in pretty tough shape and investors were
concerned. Now, there's a sense that the dollar may be too highly valued.
While exposure to currencies is part of the Freedom Funds' overall
diversification strategies, day-to-day movements won't dictate my
allocation strategies.
Q. REN, WHY DID JAPAN CONTINUE TO STRUGGLE AND HOW DID THIS INFLUENCE THE
FUNDS' RETURNS?
R.C. While Japan's local securities markets have performed relatively well,
the yen has been hit hard over the year - to the tune of about a 20%
depreciation relative to the dollar. This has diminished returns realized
by dollar-based investors. We've also encountered confusion from the
Japanese government as to how it plans to address the currency problem.
Through the underlying funds, the Freedom Funds had a small percentage of
their assets affected by the Japanese markets' underperformance.
Q. TECHNOLOGY STOCKS HAVE HAD A BUMPY RIDE. CAN YOU EXPLAIN THE GOINGS-ON
IN THE TECHNOLOGY SECTOR?
R.C. The technology story is an interesting one. At the beginning of the
period, tech stocks were cooling off from their summertime rally but were
still somewhat attractive. Toward the end of 1996 and beginning of 1997,
however, the sector went through a severe correction due to a lack of
demand in several key areas. The 2020 and 2030 portfolios, those with the
highest equity fund concentrations, suffered the most from this fallout. Of
the Freedom Funds' underlying investments, Fidelity Growth Company Fund and
Fidelity OTC Portfolio each felt the wrath of the tech stock correction.
S.S. I would add here that the technology story illustrates the
diversification strength of the Freedom Funds. If the underlying funds were
invested solely in the more aggressive, technology-oriented stocks, we most
likely would be looking at negative returns today. The same holds true with
interest rates. While the Income and 2000 portfolios invest heavily in bond
funds and suffer a bit more than the long-term portfolios when interest
rates climb, the Freedom Funds are spread out enough among asset classes to
minimize any dramatic swings in performance.
Q. WHILE TRADITIONAL STOCK FUND MANAGERS RESEARCH COMPANIES ON A DAILY
BASIS, THE FREEDOM FUNDS INVEST IN OTHER FIDELITY FUNDS. HOW DO YOU ANALYZE
THE UNDERLYING INVESTMENTS?
S.S. Since the composition of the Freedom Funds will be adjusted relative
to an investor's target retirement date, monitoring the underlying
investments, or funds, is crucial. I track the holdings and performance of
each underlying fund on a daily basis and then process that information to
determine its effect on the Freedom Funds. The underlying funds won't
generally change, but to remain consistent with the Freedom Funds' goals,
my weightings in them might.
Q. WHAT'S YOUR OUTLOOK, REN?
R.C. In keeping with the funds' long-term strategy, I'll gradually
reallocate each Freedom Fund's target investment mix over the coming
months. The table below illustrates the target asset mix I'd like to
achieve for each fund by the next time we speak with shareholders on
September 30:
2030 2020 2010 2000 INCOME
Domestic Equity Funds 70.0% 69.0% 57.2% 38.2% 20.0%
International Equity Funds 14.7% 12.2% 9.0% 4.3% -
Inv. Grade Fixed-Income 5.5% 11.3% 25.4% 40.3% 40.0%
Funds
High Yield Fixed-Income 9.8% 7.5% 7.0% 3.9% -
Funds
Money Market Funds - - 1.4% 13.3% 40.0%
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGERS
ONLY THROUGH THE END OF THE PERIOD OF THE REPORT AS STATED ON THE COVER.
THE MANAGERS' VIEWS ARE SUBJECT TO CHANGE AT ANY TIME BASED ON MARKET AND
OTHER CONDITIONS.
REFLECTING THE CHANGES DISCUSSED IN THIS REPORT, THE FUNDS' COMPOSITE
BENCHMARKS WILL CHANGE THEIR ALLOCATIONS AS OF JUNE 30, 1997. THE TABLE
BELOW ILLUSTRATES THESE CHANGES.
COMPOSITE BENCHMARKS
2030 2020 2010 2000 INCOME
Domestic Equity Funds 69.6% 69.1% 57.7% 38.2% 19.7%
International Equity Funds 15.1% 12.6% 9.5% 4.5% -
Inv. Grade Fixed-Income 5.3% 10.7% 25.0% 40.8% 40.3%
Funds
High Yield Fixed-Income Funds 10.0% 7.6% 7.1% 4.0% -
Money Market Funds - - 0.7% 12.5% 40.0%
FUND FACTS
GOAL: the 2000, 2010,2020
and 2030 funds each seek
high total return. The Income
fund seeks high current
income and, as a secondary
objective, capital appreciation.
Each fund seeks to achieve
its goal by investing in a
combination of equity,
fixed-income, and money
market underlying Fidelity
funds
FUND NUMBERS: Income
(369); 2000 (370); 2010
(371); 2020 (372); 2030
(373)
SIZE: as of March 31, 1997,
more than $9.4 million
(Income); $15.9 million
(2000); $23.5 million (2010);
$14.9 million (2020); $5.7
million (2030)
MANAGERS: Ren Cheng,
since inception; manager,
various structured
investments for Fidelity
Management Trust
Company; joined Fidelity in
1994; Scott Stewart, since
inception; manager, Fidelity
Fifty, since 1993; founder
and head of Fidelity's
Structured Equity Group since
1987; joined Fidelity in 1987
(checkmark)
SCOTT STEWART DISCUSSES THE
CONCEPT BEHIND THE FREEDOM
FUNDS:
"These funds are unique to
Fidelity in that they're "funds of
funds." They invest in a
diversified assortment of
other Fidelity mutual funds
and reallocate their underlying
investments relative to a
shareholder's anticipated
retirement date. The
longer-term funds - 2030,
2020 and 2010 - will be more
concentrated in equity funds
and less in fixed-income
funds, and will adjust their
investment mix to become
more conservative over time.
The 2000 and Income funds,
on the other hand, have more
of a conservative flavor to
them. The key advantages to
the Freedom Funds are the
simplification and
diversification they offer.
While each fund will
reallocate its investments
accordingly, we still
encourage investors to
monitor their allocations. In
terms of diversification, the
underlying funds are spread
out among various investment
disciplines. If one asset class
suffers a major setback,
chances are good that the
Freedom Funds' other
investments will be able to
offset the effect somewhat."
FIDELITY FREEDOM INCOME
INVESTMENT SUMMARY
FUND HOLDINGS AS OF MARCH 31, 1997
% OF FUND'S
INVESTMENTS
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 2.9%
Disciplined Equity Fund 2.9
Equity-Income Fund 3.0
Fidelity Fund 2.9
Growth & Income Portfolio 3.0
Growth Company Fund 2.9
OTC Portfolio 1.8
19.4
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Securities Fund 15.0
Intermediate Bond Fund 9.9
Investment Grade Bond Fund 15.1
40.0
MONEY MARKET FUND
Fidelity Money Market Trust: Retirement 40.6
Money Market Portfolio
100.0%
ASSET ALLOCATION
INITIAL
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 20.0
20.0%
40.0%
40.0%
CURRENT
Row: 1, Col: 1, Value: 40.6
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 19.4
19.4%
40.6%
40.0%
Domestic Equity funds
EXPECTED
Investment Grade Fixed-Income funds
Row: 1, Col: 1, Value: 40.0
Row: 1, Col: 2, Value: 40.0
Row: 1, Col: 3, Value: 20.0
20.0%
Money Market fund
40.0%
40.0%
THE INITIAL ALLOCATION REPRESENTS THE TARGET ASSET ALLOCATION AT INCEPTION.
THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31,
1997. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT SEPTEMBER 30, 1997.
FIDELITY FREEDOM INCOME
INVESTMENTS MARCH 31, 1997
Showing Percentage of Total Value of Investment in Securities
EQUITY FUNDS - 19.4%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 19.4%
Blue Chip Growth Fund 8,375 $ 273,780
Disciplined Equity Fund 12,390 276,419
Equity-Income Fund 6,526 281,140
Fidelity Fund 11,146 274,525
Growth & Income Portfolio 8,979 278,182
Growth Company Fund 6,813 267,686
OTC Portfolio 5,774 172,630
TOTAL EQUITY FUNDS
(Cost $1,916,733) 1,824,362
FIXED-INCOME FUNDS - 40.0%
INVESTMENT GRADE FIXED-INCOME FUNDS - 40.0%
Government Securities Fund 150,015 1,417,645
Intermediate Bond Fund 94,218 932,758
Investment Grade Bond Fund 203,961 1,419,571
TOTAL FIXED-INCOME FUNDS
(Cost $3,838,403) 3,769,974
MONEY MARKET FUND - 40.6%
Fidelity Money Market Trust: Retirement
Money Market Portfolio
(Cost $3,831,338) 3,831,338 3,831,338
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $9,586,474) $ 9,425,674
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$10,134,834 and $554,928, respectively.
INCOME TAX INFORMATION
At March 31, 1997, the aggregate cost of investment securities for income
tax purposes was $9,586,482. Net unrealized depreciation aggregated
$160,808, of which $588 related to appreciated investment securities and
$161,396 related to depreciated investment securities.
The fund hereby designates approximately $5,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
FIDELITY FREEDOM INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1997
ASSETS
Investment in securities, at value (cost $9,586,474) - $ 9,425,674
See accompanying schedule
Cash 1,398
Receivable for Freedom Fund shares sold 240,390
Dividends receivable 35,005
TOTAL ASSETS 9,702,467
LIABILITIES
Payable for underlying fund shares purchased $ 266,724
Payable for Freedom Fund shares redeemed 8,628
Accrued management fee 580
TOTAL LIABILITIES 275,932
NET ASSETS $ 9,426,535
Net Assets consist of:
Paid in capital $ 9,534,660
Undistributed net investment income 41,001
Accumulated undistributed net realized gain (loss) 11,674
on investments
Net unrealized appreciation (depreciation) on (160,800)
investments
NET ASSETS, for 936,773 shares outstanding $ 9,426,535
NET ASSET VALUE, offering price and redemption price per $10.06
share ($9,426,535 (divided by) 936,773 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1997
INVESTMENT INCOME $ 74,449
Income distributions from underlying funds
EXPENSES
Management fee $ 1,478
Non-interested trustees' compensation 3
Total expenses before reductions 1,481
Expense reductions (333) 1,148
NET INVESTMENT INCOME 73,301
REALIZED AND UNREALIZED GAIN (LOSS)
Capital gain distributions from underlying funds 6,409
Realized gain (loss) on sale of underlying fund shares 6,568 12,977
Change in net unrealized appreciation (depreciation) (160,800)
on investment securities
NET GAIN (LOSS) (147,823)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (74,522)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 283
Custodian interest credits 50
$ 333
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 73,301
Net investment income
Net realized gain (loss) 12,977
Change in net unrealized appreciation (depreciation) (160,800)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (74,522)
Distributions to shareholders from net investment income (33,604)
Share transactions 11,258,281
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 33,565
Cost of Freedom Fund shares redeemed (1,757,185)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE 9,534,661
TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 9,426,535
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $41,001) $ 9,426,535
OTHER INFORMATION
Shares
Sold 1,105,915
Issued in reinvestment of distributions 3,290
Redeemed (172,432)
Net increase (decrease) 936,773
</TABLE>
FINANCIAL HIGHLIGHTS
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income D .22
Net realized and unrealized gain (loss) (.02) F
Total from investment operations .20
Less Distributions
From net investment income (.14)
Net asset value, end of period $ 10.06
TOTAL RETURN B, C 1.99%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the underlying funds)
Net assets, end of period (000 omitted) $ 9,427
Ratio of expenses to average net assets .08% A
, E
Ratio of net investment income to average net assets 4.95% A
Portfolio turnover rate 32% A
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS DUE TO THE TIMING OF SALES AND
REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE
INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2000
INVESTMENT SUMMARY
FUND HOLDINGS AS OF MARCH 31, 1997
% OF FUND'S
INVESTMENTS
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 5.8%
Disciplined Equity Fund 5.8
Equity-Income Fund 5.9
Fidelity Fund 5.8
Growth & Income Portfolio 5.8
Growth Company Fund 5.6
OTC Portfolio 3.6
38.3
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 1.1
Europe Fund 1.2
Japan Fund 0.9
Overseas Fund 1.2
Southeast Asia Fund 0.2
4.6
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Securities Fund 15.5
Intermediate Bond Fund 10.2
Investment Grade Bond Fund 15.6
41.3
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 4.0
MONEY MARKET FUND
Fidelity Money Market Trust: Retirement 11.8
Money Market Portfolio
100.0%
ASSET ALLOCATION
INITIAL
11.5% (MM)
Row: 1, Col: 1, Value: 11.5
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 40.9
Row: 1, Col: 4, Value: 4.4
Row: 1, Col: 5, Value: 39.2
4.0% (HY)
39.2% (DE)
40.9% (IG)
4.4% (IE)
CURRENT
11.8% (MM)
Row: 1, Col: 1, Value: 11.8
Row: 1, Col: 2, Value: 4.0
Row: 1, Col: 3, Value: 41.3
Row: 1, Col: 4, Value: 4.6
Row: 1, Col: 5, Value: 38.3
38.3% (DE)
4.0% (HY)
41.3% (IG)
4.6% (IE)
Equity
DE = Domestic Equity funds
IE = International Equity funds
EXPECTED
Fixed-income
IG = Investment Grade funds
HY = High Yield fund
13.3% (MM)
Row: 1, Col: 1, Value: 13.3
Row: 1, Col: 2, Value: 3.9
Row: 1, Col: 3, Value: 40.3
Row: 1, Col: 4, Value: 4.3
Row: 1, Col: 5, Value: 38.2
3.9% (HY)
38.2% (DE)
Money Market fund (MM)
40.3% (IG)
4.3% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT BECOMES
INCREASINGLY CONSERVATIVE OVER TIME. THE INITIAL ALLOCATION REPRESENTS THE
TARGET ASSET ALLOCATION AT INCEPTION. THE CURRENT ALLOCATION IS BASED ON
THE FUND'S HOLDINGS AS OF MARCH 31, 1997. THE EXPECTED ALLOCATION
REPRESENTS THE FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT SEPTEMBER 30,
1997.
FIDELITY FREEDOM 2000
INVESTMENTS MARCH 31, 1997
Showing Percentage of Total Value of Investment in Securities
EQUITY FUNDS - 42.9%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 38.3%
Blue Chip Growth Fund 28,026 $ 916,197
Disciplined Equity Fund 41,458 924,928
Equity-Income Fund 21,830 940,430
Fidelity Fund 37,314 919,040
Growth & Income Portfolio 30,041 930,668
Growth Company Fund 22,767 894,549
OTC Portfolio 19,224 574,794
6,100,606
INTERNATIONAL EQUITY FUNDS - 4.6%
Diversified International Fund 12,344 186,153
Europe Fund 6,850 188,941
Japan Fund 13,345 142,262
Overseas Fund 5,904 187,904
Southeast Asia Fund 2,265 32,190
737,450
TOTAL EQUITY FUNDS
(Cost $7,086,484) 6,838,056
FIXED-INCOME FUNDS - 45.3%
INVESTMENT GRADE FIXED-INCOME FUNDS - 41.3%
Government Securities Fund 261,999 2,475,892
Intermediate Bond Fund 164,445 1,628,004
Investment Grade Bond Fund 356,239 2,479,426
6,583,322
HIGH YIELD FIXED-INCOME FUND - 4.0%
Capital & Income Fund 69,550 646,123
TOTAL FIXED-INCOME FUNDS
(Cost $7,358,524) 7,229,445
MONEY MARKET FUND - 11.8%
Fidelity Money Market Trust: Retirement
Money Market Portfolio
(Cost $1,877,122) 1,877,122 1,877,122
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $16,322,130) $ 15,944,623
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$16,881,523 and $570,851, respectively.
INCOME TAX INFORMATION
At March 31, 1997, the aggregate cost of investment securities for income
tax purposes was $16,322,198. Net unrealized depreciation aggregated
$377,575, of which $19,847 related to appreciated investment securities and
$397,422 related to depreciated investment securities.
The fund hereby designates approximately $13,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2000
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1997
ASSETS
Investment in securities, at value (cost $16,322,130) - $ 15,944,623
See accompanying schedule
Cash 2,013
Receivable for Freedom Fund shares sold 333,535
Dividends receivable 43,528
TOTAL ASSETS 16,323,699
LIABILITIES
Payable for underlying fund shares purchased $ 307,793
Payable for Freedom Fund shares redeemed 69,220
Accrued management fee 970
Other payables and accrued expenses 55
TOTAL LIABILITIES 378,038
NET ASSETS $ 15,945,661
Net Assets consist of:
Paid in capital $ 16,192,263
Undistributed net investment income 99,480
Accumulated undistributed net realized gain (loss) 31,425
on investments
Net unrealized appreciation (depreciation) on (377,507)
investments
NET ASSETS, for 1,575,949 shares outstanding $ 15,945,661
NET ASSET VALUE, offering price and redemption price $10.12
per share ($15,945,661 (divided by) 1,575,949 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1997
INVESTMENT INCOME $ 111,210
Income distributions from underlying funds
EXPENSES
Management fee $ 2,718
Non-interested trustees' compensation 7
Total expenses before reductions 2,725
Expense reductions (471) 2,254
NET INVESTMENT INCOME 108,956
REALIZED AND UNREALIZED GAIN (LOSS)
Capital gain distributions from underlying funds 24,900
Realized gain (loss) on sale of underlying fund shares 11,458 36,358
Change in net unrealized appreciation (depreciation) on (377,507)
investment securities
NET GAIN (LOSS) (341,149)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (232,193)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 444
Custodian interest credits 27
$ 471
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 108,956
Net investment income
Net realized gain (loss) 36,358
Change in net unrealized appreciation (depreciation) (377,507)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (232,193)
FROM OPERATIONS
Distributions to shareholders from net investment income (14,410)
Share transactions 18,502,730
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 14,332
Cost of Freedom Fund shares redeemed (2,324,798)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 16,192,264
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 15,945,661
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $99,480) $ 15,945,661
OTHER INFORMATION
Shares
Sold 1,799,764
Issued in reinvestment of distributions 1,404
Redeemed (225,219)
Net increase (decrease) 1,575,949
</TABLE>
FINANCIAL HIGHLIGHTS
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income D .18
Net realized and unrealized gain (loss) .03 F
Total from investment operations .21
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.12
TOTAL RETURN B, C 2.09%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the underlying funds)
Net assets, end of period (000 omitted) $ 15,946
Ratio of expenses to average net assets .08% A
, E
Ratio of net investment income to average net assets 4.00% A
Portfolio turnover rate 19% A
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2010
INVESTMENT SUMMARY
FUND HOLDINGS AS OF MARCH 31, 1997
% OF FUND'S
INVESTMENTS
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 8.7%
Disciplined Equity Fund 8.8
Equity-Income Fund 9.0
Fidelity Fund 8.8
Growth & Income Portfolio 8.9
Growth Company Fund 8.5
OTC Portfolio 5.5
58.2
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 2.5
Europe Fund 2.6
Japan Fund 1.9
Overseas Fund 2.6
Southeast Asia Fund 0.5
10.1
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Securities Fund 9.2
Intermediate Bond Fund 6.1
Investment Grade Bond Fund 9.3
24.6
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 7.1
100.0%
ASSET ALLOCATION
INITIAL
7.0% (HY)
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 24.1
Row: 1, Col: 3, Value: 9.699999999999999
Row: 1, Col: 4, Value: 59.2
24.1% (IG)
59.2% (DE)
9.7% (IE)
CURRENT
7.1% (HY)
Row: 1, Col: 1, Value: 7.1
Row: 1, Col: 2, Value: 24.6
Row: 1, Col: 3, Value: 10.1
Row: 1, Col: 4, Value: 58.2
24.6% (IG)
58.2% (DE)
10.1% (IE)
Equity
DE = Domestic Equity funds
IE = International Equity funds
EXPECTED
1.4% (MM)
Fixed-income
IG = Investment Grade funds
HY = High Yield funds
7.0% (HY)
Row: 1, Col: 1, Value: 2.0
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 25.4
Row: 1, Col: 4, Value: 9.0
Row: 1, Col: 5, Value: 57.2
Money Market fund (MM)
25.4% (IG)
57.2% (DE)
9.0% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT BECOMES
INCREASINGLY CONSERVATIVE OVER TIME. THE INITIAL ALLOCATION REPRESENTS THE
TARGET ASSET ALLOCATION AT INCEPTION. THE CURRENT ALLOCATION IS BASED ON
THE FUND'S HOLDINGS AS OF MARCH 31, 1997. THE EXPECTED ALLOCATION
REPRESENTS THE FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT SEPTEMBER 30,
1997.
FIDELITY FREEDOM 2010
INVESTMENTS MARCH 31, 1997
Showing Percentage of Total Value of Investment in Securities
EQUITY FUNDS - 68.3%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 58.2%
Blue Chip Growth Fund 63,060 $ 2,061,419
Disciplined Equity Fund 93,365 2,082,971
Equity-Income Fund 49,045 2,112,849
Fidelity Fund 83,909 2,066,688
Growth & Income Portfolio 67,514 2,091,572
Growth Company Fund 51,338 2,017,050
OTC Portfolio 43,385 1,297,197
13,729,746
INTERNATIONAL EQUITY FUNDS - 10.1%
Diversified International Fund 39,802 600,227
Europe Fund 22,093 609,317
Japan Fund 43,507 463,782
Overseas Fund 19,034 605,855
Southeast Asia Fund 7,882 112,006
2,391,187
TOTAL EQUITY FUNDS
(Cost $16,654,469) 16,120,933
FIXED-INCOME FUNDS - 31.7%
INVESTMENT GRADE FIXED-INCOME FUNDS - 24.6%
Government Securities Fund 230,616 2,179,323
Intermediate Bond Fund 144,719 1,432,713
Investment Grade Bond Fund 313,580 2,182,520
5,794,556
HIGH YIELD FIXED-INCOME FUND - 7.1%
Capital & Income Fund 181,101 1,682,430
TOTAL FIXED-INCOME FUNDS
(Cost $7,597,269) 7,476,986
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $24,251,738) $ 23,597,919
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$24,352,934 and $103,744, respectively.
INCOME TAX INFORMATION
At March 31, 1997, the aggregate cost of investment securities for income
tax purposes was $24,251,919. Net unrealized depreciation aggregated
$654,000, of which $69,893 related to appreciated investment securities and
$723,893 related to depreciated investment securities.
The fund hereby designates approximately $4,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2010
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1997
ASSETS
Investment in securities, at value (cost $24,251,738) - $ 23,597,919
See accompanying schedule
Cash 3,161
Receivable for Freedom Fund shares sold 389,047
Dividends receivable 35,463
TOTAL ASSETS 24,025,590
LIABILITIES
Payable for underlying fund shares purchased $ 386,541
Payable for Freedom Fund shares redeemed 37,900
Accrued management fee 1,422
Other payables and accrued expenses 61
TOTAL LIABILITIES 425,924
NET ASSETS $ 23,599,666
Net Assets consist of:
Paid in capital $ 24,134,039
Undistributed net investment income 93,710
Accumulated undistributed net realized gain (loss) 25,736
on investments
Net unrealized appreciation (depreciation) on (653,819)
investments
NET ASSETS, for 2,324,286 shares outstanding $ 23,599,666
NET ASSET VALUE, offering price and redemption price $10.15
per share ($23,599,666 (divided by) 2,324,286 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1997
INVESTMENT INCOME $ 96,685
Income distributions from underlying funds
EXPENSES
Management fee $ 3,682
Non-interested trustees' compensation 9
Total expenses before reductions 3,691
Expense reductions (654) 3,037
NET INVESTMENT INCOME 93,648
REALIZED AND UNREALIZED GAIN (LOSS)
Capital gain distributions from underlying funds 28,539
Realized gain (loss) on sale of underlying fund shares 2,548 31,087
Change in net unrealized appreciation (depreciation) on (653,819)
investment securities
NET GAIN (LOSS) (622,732)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (529,084)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 623
Custodian interest credits 31
$ 654
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 93,648
Net investment income
Net realized gain (loss) 31,087
Change in net unrealized appreciation (depreciation) (653,819)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (529,084)
Distributions to shareholders from net investment income (5,289)
Share transactions 26,783,587
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 5,289
Cost of Freedom Fund shares redeemed (2,654,837)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE 24,134,039
TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 23,599,666
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $93,710) $ 23,599,666
OTHER INFORMATION
Shares
Sold 2,579,315
Issued in reinvestment of distributions 516
Redeemed (255,545)
Net increase (decrease) 2,324,286
</TABLE>
FINANCIAL HIGHLIGHTS
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income D .11
Net realized and unrealized gain (loss) .15 F
Total from investment operations .26
Less Distributions
From net investment income (.11)
Net asset value, end of period $ 10.15
TOTAL RETURN B, C 2.59%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the underlying funds)
Net assets, end of period (000 omitted) $ 23,600
Ratio of expenses to average net assets .08% A
, E
Ratio of net investment income to average net assets 2.56% A
Portfolio turnover rate 3% A
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2020
INVESTMENT SUMMARY
FUND HOLDINGS AS OF MARCH 31, 1997
% OF FUND'S
INVESTMENTS
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 10.4%
Disciplined Equity Fund 10.5
Equity-Income Fund 10.7
Fidelity Fund 10.4
Growth & Income Portfolio 10.6
Growth Company Fund 10.2
OTC Portfolio 6.5
69.3
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 3.2
Europe Fund 3.3
Japan Fund 2.5
Overseas Fund 3.3
Southeast Asia Fund 0.6
12.9
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Securities Fund 3.8
Intermediate Bond Fund 2.5
Investment Grade Bond Fund 3.8
10.1
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 7.7
100.0%
ASSET ALLOCATION
INITIAL
7.5% (HY)
Row: 1, Col: 1, Value: 7.5
Row: 1, Col: 2, Value: 10.1
Row: 1, Col: 3, Value: 12.4
Row: 1, Col: 4, Value: 70.0
10.1% (IG)
12.4% (IE)
70.0% (DE)
CURRENT
7.7% (HY)
Row: 1, Col: 1, Value: 7.7
Row: 1, Col: 2, Value: 20.0
Row: 1, Col: 3, Value: 12.9
Row: 1, Col: 4, Value: 69.3
10.1% (IG)
69.3% (DE)
12.9% (IE)
Equity
DE = Domestic Equity funds
IE = International Equity funds
EXPECTED
7.5% (HY)
Fixed-income
IG = Investment Grade funds
HY = High Yield fund
Row: 1, Col: 1, Value: 7.5
Row: 1, Col: 2, Value: 11.3
Row: 1, Col: 3, Value: 12.2
Row: 1, Col: 4, Value: 69.0
11.3% (IG)
12.2% (IE)
69.0% (DE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT BECOMES
INCREASINGLY CONSERVATIVE OVER TIME. THE INITIAL ALLOCATION REPRESENTS THE
TARGET ASSET ALLOCATION AT INCEPTION. THE CURRENT ALLOCATION IS BASED ON
THE FUND'S HOLDINGS AS OF MARCH 31, 1997. THE EXPECTED ALLOCATION
REPRESENTS THE FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT SEPTEMBER 30,
1997.
FIDELITY FREEDOM 2020
INVESTMENTS MARCH 31, 1997
Showing Percentage of Total Value of Investment in Securities
EQUITY FUNDS - 82.2%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 69.3%
Blue Chip Growth Fund 47,597 $ 1,555,964
Disciplined Equity Fund 70,515 1,573,187
Equity-Income Fund 37,016 1,594,661
Fidelity Fund 63,328 1,559,763
Growth & Income Portfolio 50,954 1,578,546
Growth Company Fund 38,747 1,522,351
OTC Portfolio 32,692 977,501
10,361,973
INTERNATIONAL EQUITY FUNDS - 12.9%
Diversified International Fund 32,281 486,800
Europe Fund 17,927 494,420
Japan Fund 34,949 372,556
Overseas Fund 15,433 491,256
Southeast Asia Fund 6,235 88,611
1,933,643
TOTAL EQUITY FUNDS
(Cost $12,685,264) 12,295,616
FIXED-INCOME FUNDS - 17.8%
INVESTMENT GRADE FIXED-INCOME FUNDS - 10.1%
Government Securities Fund 60,339 570,210
Intermediate Bond Fund 37,882 375,037
Investment Grade Bond Fund 82,118 571,548
1,516,795
HIGH YIELD FIXED-INCOME FUND - 7.7%
Capital & Income Fund 123,250 1,144,963
TOTAL FIXED-INCOME FUNDS
(Cost $2,702,108) 2,661,758
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $15,387,372) $ 14,957,374
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$15,949,062 and $580,235, respectively.
INCOME TAX INFORMATION
At March 31, 1997, the aggregate cost of investment securities for income
tax purposes was $15,387,374. Net unrealized depreciation aggregated
$430,000, of which $61,780 related to appreciated investment securities and
$491,780 related to depreciated investment securities.
The fund hereby designates approximately $8,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2020
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1997
ASSETS
Investment in securities, at value (cost $15,387,372) - $ 14,957,374
See accompanying schedule
Cash 2,029
Receivable for Freedom Fund shares sold 183,499
Dividends receivable 12,130
TOTAL ASSETS 15,155,032
LIABILITIES
Payable for underlying fund shares purchased $ 122,438
Payable for Freedom Fund shares redeemed 73,169
Accrued management fee 917
Other payables and accrued expenses 25
TOTAL LIABILITIES 196,549
NET ASSETS $ 14,958,483
Net Assets consist of:
Paid in capital $ 15,305,424
Undistributed net investment income 43,724
Accumulated undistributed net realized gain (loss) 39,333
on investments
Net unrealized appreciation (depreciation) on (429,998)
investments
NET ASSETS, for 1,465,713 shares outstanding $ 14,958,483
NET ASSET VALUE, offering price and redemption price $10.21
per share ($14,958,483 (divided by) 1,465,713 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1997
INVESTMENT INCOME $ 45,301
Income distributions from underlying funds
EXPENSES
Management fee $ 2,501
Non-interested trustees' compensation 6
Total expenses before reductions 2,507
Expense reductions (468) 2,039
NET INVESTMENT INCOME 43,262
REALIZED AND UNREALIZED GAIN (LOSS)
Capital gain distributions from underlying funds 25,520
Realized gain (loss) on sale of underlying fund shares 18,545 44,065
Change in net unrealized appreciation (depreciation) on (429,998)
investment securities
NET GAIN (LOSS) (385,933)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (342,671)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 436
Custodian interest credits 32
$ 468
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 43,262
Net investment income
Net realized gain (loss) 44,065
Change in net unrealized appreciation (depreciation) (429,998)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (342,671)
FROM OPERATIONS
Distributions to shareholders from net investment income (4,270)
Share transactions 17,189,961
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 4,270
Cost of Freedom Fund shares redeemed (1,888,807)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 15,305,424
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 14,958,483
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $43,724) $ 14,958,483
OTHER INFORMATION
Shares
Sold 1,645,700
Issued in reinvestment of distributions 414
Redeemed (180,401)
Net increase (decrease) 1,465,713
</TABLE>
FINANCIAL HIGHLIGHTS
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income D .08
Net realized and unrealized gain (loss) .22 F
Total from investment operations .30
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.21
TOTAL RETURN B, C 2.99%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the underlying funds)
Net assets, end of period (000 omitted) $ 14,958
Ratio of expenses to average net assets .08% A
, E
Ratio of net investment income to average net assets 1.75% A
Portfolio turnover rate 21% A
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2030
INVESTMENT SUMMARY
FUND HOLDINGS AS OF MARCH 31, 1997
% OF FUND'S
INVESTMENTS
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 10.4%
Disciplined Equity Fund 10.5
Equity-Income Fund 10.6
Fidelity Fund 10.4
Growth & Income Portfolio 10.5
Growth Company Fund 10.2
OTC Portfolio 6.6
69.2
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 3.9
Europe Fund 4.0
Japan Fund 3.0
Overseas Fund 3.9
Southeast Asia Fund 0.7
15.5
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Securities Fund 1.9
Intermediate Bond Fund 1.3
Investment Grade Bond Fund 1.9
5.1
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 10.2
100.0%
ASSET ALLOCATION
INITIAL
10.0% (HY)
Row: 1, Col: 1, Value: 10.0
Row: 1, Col: 2, Value: 5.0
Row: 1, Col: 3, Value: 15.0
Row: 1, Col: 4, Value: 70.0
5.0% (IG)
15.0% (IE)
70.0% (DE)
CURRENT
10.2% (HY)
Row: 1, Col: 1, Value: 10.2
Row: 1, Col: 2, Value: 5.1
Row: 1, Col: 3, Value: 15.5
Row: 1, Col: 4, Value: 69.2
5.1% (IG)
15.5% (IE)
69.2% (DE)
Equity
DE = Domestic Equity funds
IE = International Equity funds
EXPECTED
9.8% (HY)
Fixed-income
IG = Investment Grade funds
HY = High Yield fund
Row: 1, Col: 1, Value: 9.800000000000001
Row: 1, Col: 2, Value: 5.5
Row: 1, Col: 3, Value: 14.7
Row: 1, Col: 4, Value: 70.0
5.5% (IG)
14.7% (IE)
70.0% (DE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT BECOMES
INCREASINGLY CONSERVATIVE OVER TIME. THE INITIAL ALLOCATION REPRESENTS THE
TARGET ASSET ALLOCATION AT INCEPTION. THE CURRENT ALLOCATION IS BASED ON
THE FUND'S HOLDINGS AS OF MARCH 31, 1997. THE EXPECTED ALLOCATION
REPRESENTS THE FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT SEPTEMBER 30,
1997.
FIDELITY FREEDOM 2030
INVESTMENTS MARCH 31, 1997
Showing Percentage of Total Value of Investment in Securities
EQUITY FUNDS - 84.7%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 69.2%
Blue Chip Growth Fund 18,160 $ 593,634
Disciplined Equity Fund 26,882 599,742
Equity-Income Fund 14,090 606,986
Fidelity Fund 24,143 594,638
Growth & Income Portfolio 19,417 601,520
Growth Company Fund 14,842 583,124
OTC Portfolio 12,710 380,018
3,959,662
INTERNATIONAL EQUITY FUNDS - 15.5%
Diversified International Fund 14,794 223,087
Europe Fund 8,209 226,410
Japan Fund 16,314 173,905
Overseas Fund 7,065 224,878
Southeast Asia Fund 2,967 42,162
890,442
TOTAL EQUITY FUNDS
(Cost $5,017,171) 4,850,104
FIXED-INCOME FUNDS - 15.3%
INVESTMENT GRADE FIXED-INCOME FUNDS - 5.1%
Government Securities Fund 11,584 109,476
Intermediate Bond Fund 7,205 71,331
Investment Grade Bond Fund 15,814 110,071
290,878
HIGH YIELD FIXED-INCOME FUND - 10.2%
Capital & Income Fund 62,820 583,675
TOTAL FIXED-INCOME FUNDS
(Cost $883,291) 874,553
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $5,900,462) $ 5,724,657
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$6,061,100 and $168,108, respectively.
INCOME TAX INFORMATION
At March 31, 1997, the aggregate cost of investment securities for income
tax purposes was $5,900,661. Net unrealized depreciation aggregated
$176,004, of which $15,325 related to appreciated investment securities and
$191,329 related to depreciated investment securities.
The fund hereby designates approximately $3,000 as a capital gain dividend
for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2030
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1997
ASSETS
Investment in securities, at value (cost $5,900,462) - $ 5,724,657
See accompanying schedule
Cash 999
Receivable for Freedom Fund shares sold 201,821
Dividends receivable 3,093
TOTAL ASSETS 5,930,570
LIABILITIES
Payable for underlying fund shares purchased $ 186,762
Payable for Freedom Fund shares redeemed 18,113
Accrued management fee 285
TOTAL LIABILITIES 205,160
NET ASSETS $ 5,725,410
Net Assets consist of:
Paid in capital $ 5,873,405
Undistributed net investment income 10,649
Accumulated undistributed net realized gain (loss) 17,161
on investments
Net unrealized appreciation (depreciation) on (175,805)
investments
NET ASSETS, for 560,546 shares outstanding $ 5,725,410
NET ASSET VALUE, offering price and redemption price $10.21
per share ($5,725,410 (divided by) 560,546 shares)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
OCTOBER 17, 1996 (COMMENCEMENT OF OPERATIONS) TO MARCH 31, 1997
INVESTMENT INCOME $ 12,846
Income distributions from underlying funds
EXPENSES
Management fee $ 719
Non-interested trustees' compensation 2
Total expenses before reductions 721
Expense reductions (145) 576
NET INVESTMENT INCOME 12,270
REALIZED AND UNREALIZED GAIN (LOSS)
Capital gain distributions from underlying funds 11,904
Realized gain (loss) on sale of underlying fund shares 7,470 19,374
Change in net unrealized appreciation (depreciation) on (175,805)
investment securities
NET GAIN (LOSS) (156,431)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (144,161)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 118
Custodian interest credits 27
$ 145
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
INCREASE (DECREASE) IN NET ASSETS
Operations $ 12,270
Net investment income
Net realized gain (loss) 19,374
Change in net unrealized appreciation (depreciation) (175,805)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (144,161)
Distributions to shareholders from net investment income (3,835)
Share transactions 6,627,125
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 3,834
Cost of Freedom Fund shares redeemed (757,553)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM SHARE 5,873,406
TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 5,725,410
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $10,649) $ 5,725,410
OTHER INFORMATION
Shares
Sold 632,180
Issued in reinvestment of distributions 372
Redeemed (72,006)
Net increase (decrease) 560,546
</TABLE>
FINANCIAL HIGHLIGHTS
OCTOBER 17, 1996
(COMMENCEMENT
OF OPERATIONS) TO
MARCH 31, 1997
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income D .08
Net realized and unrealized gain (loss) .22 F
Total from investment operations .30
Less Distributions
From net investment income (.09)
Net asset value, end of period $ 10.21
TOTAL RETURN B, C 2.99%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the underlying funds)
Net assets, end of period (000 omitted) $ 5,725
Ratio of expenses to average net assets .08% A
, E
Ratio of net investment income to average net assets 1.71% A
Portfolio turnover rate 19% A
ANNUALIZED
THE TOTAL RETURN WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN
REDUCED DURING THE PERIOD SHOWN (SEE NOTE 4 OF NOTES TO FINANCIAL
STATEMENTS).
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S EXPENSES
DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S EXPENSE RATIO
WOULD HAVE BEEN HIGHER (SEE NOTE 4 OF NOTES TO FINANCIAL STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF SALES
AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF
THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended March 31, 1997
1. SIGNIFICANT ACCOUNTING POLICIES.
Freedom Income Fund, Freedom 2000 Fund, Freedom 2010 Fund, Freedom 2020
Fund, and Freedom 2030 Fund (the funds) are funds of Fidelity Aberdeen
Street Trust (the trust). The trust is registered under the Investment
Company Act of 1940, as amended (the 1940 Act), as an open-end management
investment company organized as a Delaware business trust. Each fund is
authorized to issue an unlimited number of shares. The funds primarily
invest in a combination of other Fidelity equity, fixed-income, and money
market funds (the Underlying Funds) managed by Fidelity Management &
Research Company (FMR). The financial statements have been prepared in
conformity with generally accepted accounting principles which permit
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. Investments in the Underlying Funds are valued at the
closing net asset value per share of each Underlying Fund on the day of
valuation. Short-term securities maturing within sixty days of their
purchase date are valued either at amortized cost or original cost plus
accrued interest, both of which approximate current value.
INCOME TAXES. Each fund intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code. By so qualifying,
each fund will not be subject to income taxes to the extent that it
distributes substantially all of its taxable income for the fiscal year.
The schedules of investments include information regarding income taxes
under the caption "Income Tax Information."
INVESTMENT INCOME. Income and capital gain distributions from the
Underlying Funds, if any, are recorded on the ex-dividend date.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust. Expenses included in the accompanying financial
statements reflect the expenses of each fund and do not include any
expenses associated with the Underlying Funds.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions from net investment income to
shareholders of the Freedom Income Fund are paid monthly, while
distributions from capital gains, if any, are recorded on the ex-dividend
date. Income and capital gain distributions to shareholders of the other
Freedom Funds are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences, which may result in distribution
reclassifications, are primarily due to differing treatments for
non-taxable dividends and losses deferred due to wash sales. The funds also
utilized earnings and profits distributed to shareholders on redemption of
shares as a part of the dividends paid deduction for income tax purposes.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
2. PURCHASES AND SALES OF INVESTMENTS.
Information regarding purchases and redemptions of the underlying fund
shares is included under the caption "Other Information" at the end of each
fund's schedule of investments.
3. FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. Each fund pays a management fee to Strategic Advisers,
Inc., an affiliate of FMR. Strategic Advisers receives a fee that is
computed daily at an annual rate of .10% of each fund's average net assets.
OTHER TRANSACTIONS. Strategic Advisers has entered into an administration
agreement with FMR under which FMR provides management and administrative
services (other than investment advisory services) necessary for the
operation of each fund. Pursuant to this agreement, FMR pays all expenses
of each fund, except the compensation of the non-interested trustees and
certain exceptions such as interest, taxes, brokerage commissions, and
extraordinary expenses. FMR also contracts with other Fidelity companies to
perform the services necessary for the operation of each fund. For the
services under the agreement, Strategic Advisers pays FMR a monthly
administration fee equal to the management fee received by Strategic
Advisers, minus an amount equal to an annual rate of .02% of each fund's
average net assets.
4. EXPENSE REDUCTIONS.
Strategic Advisers voluntarily agreed to reimburse each fund's total
operating expenses above an annual rate of .08% of each fund's average net
assets.
In addition, certain funds have entered into an arrangement with their
custodian whereby interest earned on uninvested cash balances was used to
offset a portion of each applicable fund's expenses.
For the period, the reductions under these arrangements are shown under the
caption "Other Information" on each applicable fund's Statement of
Operations.
5. BENEFICIAL INTEREST.
At the end of the period, certain unaffiliated shareholders were each
record owners of more than 10% of the total outstanding shares of the
following funds:
BENEFICIAL INTEREST
NUMBER OF
FUND SHAREHOLDERS % OWNERSHIP
Freedom Income 1 39%
Freedom 2000 1 40%
Freedom 2010 2 54%
Freedom 2020 2 49%
Freedom 2030 1 30%
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Aberdeen Street Trust and the Shareholders of
Fidelity Freedom Income, Fidelity Freedom 2000, Fidelity Freedom 2010,
Fidelity Freedom 2020, and Fidelity Freedom 2030 Funds:
We have audited the accompanying statements of assets and liabilities of
Fidelity Aberdeen Street Trust: Fidelity Freedom Income, Fidelity Freedom
2000, Fidelity Freedom 2010, Fidelity Freedom 2020, and Fidelity Freedom
2030 Funds, including the schedules of portfolio investments, as of March
31, 1997, and the related statements of operations, the statements of
changes in net assets and the financial highlights for the period October
17, 1996 (commencement of operations) to March 31, 1997. These financial
statements and financial highlights are the responsibility of the fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of March 31, 1997 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial positions
of Fidelity Aberdeen Street Trust: Fidelity Freedom Income, Fidelity
Freedom 2000, Fidelity Freedom 2010, Fidelity Freedom 2020, and Fidelity
Freedom 2030 Funds as of March 31, 1997, the results of their operations,
the changes in their net assets, and the financial highlights for the
period October 17, 1996 (commencement of operations) to March 31, 1997, in
conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 9, 1997
DISTRIBUTIONS
The Board of Trustees of each fund voted to pay shareholders of record at
the opening of business on 5/2/97, the following distributions derived from
capital gains realized from sales of portfolio securities and distributions
from underlying funds, and dividends derived from net investment income:
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS
Freedom Income 5/5/97 5/2/97 $0.04 $0.01
Freedom 2000 5/5/97 5/2/97 $0.05 $0.02
Freedom 2010 5/5/97 5/2/97 $0.04 $0.01
Freedom 2020 5/5/97 5/2/97 $0.03 $0.02
Freedom 2030 5/5/97 5/2/97 $0.01 $0.02
The following percentages of dividends distributed during the fiscal year
were derived from interest on U.S. Government securities which is generally
exempt from state income tax:
Freedom Income 18.8%
Freedom 2000 13.2%
Freedom 2010 4.8%
Freedom 2020 1.8%
Freedom 2030 3.3%
The following percentages of dividends distributed during the fiscal year
qualifies for the dividends-received deduction for corporate shareholders:
Freedom Income 9%
Freedom 2000 18%
Freedom 2010 25%
Freedom 2020 29%
Freedom 2030 29%
The funds will notify shareholders in January 1998 of the applicable
percentages for use in preparing 1997 income tax returns.
INVESTMENT ADVISER
Strategic Advisers, Inc.
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
J. Gary Burkhead, Senior Vice President
William J. Hayes, Vice President
Arthur S. Loring, Secretary
Kenneth A. Rathgeber, Treasurer
Robert H. Morrison, Manager,
Security Transactions
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox *
Phyllis Burke Davis *
Robert M. Gates *
Edward C. Johnson 3d
E. Bradley Jones *
Donald J. Kirk *
Peter S. Lynch
Marvin L. Mann *
William O. McCoy *
Gerald C. McDonough *
Thomas R. Williams *
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S ASSET ALLOCATION FUNDS
Asset Manager
SM
Asset Manager: Growth
SM
Asset Manager: Income
SM
Fidelity Freedom Funds-
Income, 2000, 2010, 2020, 2030
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
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