FIDELITY
(REGISTERED TRADEMARK)
FREEDOM
FUNDS - INCOME, 2000, 2010, 2020, 2030
SEMIANNUAL REPORT
(FIDELITY_LOGO_GRAPHIC) Fidelity Investments (Registered Trademark)
SEPTEMBER 30, 1998
CONTENTS
PRESIDENT'S MESSAGE 3 Ned Johnson on investing strategies.
PERFORMANCE 4 How the funds have done over time.
FUND TALK 14 The managers' review of the funds'
performance, strategy and outlook.
FREEDOM INCOME 18 Investment Changes
20 Investments
21 Financial Statements
FREEDOM 2000 25 Investment Changes
27 Investments
29 Financial Statements
FREEDOM 2010 33 Investment Changes
35 Investments
37 Financial Statements
FREEDOM 2020 41 Investment Changes
43 Investments
45 Financial Statements
FREEDOM 2030 49 Investment Changes
51 Investments
53 Financial Statements
NOTES 57 Notes to the financial statements.
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:
The stock and bond markets continued to be influenced by competing
factors as the third quarter of 1998 ended. On the one hand, low
inflation, low unemployment and moderate growth in the U.S. economy
provided a foundation for positive returns. But growing concerns about
U.S. corporate earnings, combined with fears about the health of the
economies and financial markets in Japan, Russia and many emerging
markets, led to a continuation of the volatility that has marked most
of the year.
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 with both domestic and
foreign exposures. 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 FUND(REGISTERED TRADEMARK)
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
PERIODS ENDED SEPTEMBER 30, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY FREEDOM INCOME 2.04% 7.69% 19.56%
FIDELITY FREEDOM INCOME COMPOSITE 1.82% 7.80% 20.86%
Wilshire 5000 -10.32% 3.28% 39.37%
LB Aggregate Bond 6.66% 11.51% 20.88%
LB 3 Month T-Bill 2.78% 5.50% 11.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on October 17, 1996. For example, if you had 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 Fidelity Freedom Income Composite Index, a
hypothetical combination of the following unmanaged indices: the
Wilshire 5000 Index, the Lehman Brothers Aggregate Bond Index, and the
Lehman Brothers 3 Month Treasury Bill Index according to the composite
benchmark weightings. This benchmark includes reinvested dividends and
capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM INCOME 7.69% 9.58%
FIDELITY FREEDOM INCOME COMPOSITE 7.80% 10.19%
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.
$10,000 OVER LIFE OF FUND
Freedom Income LB Aggregate Bond
FID Freedom Income
00369 LB001
F0199
1996/10/17 10000.00 10000.00
10000.00
1996/10/31 10030.00 10097.80
10028.71
1996/11/30 10240.00 10270.47
10247.43
1996/12/31 10179.60 10174.95
10204.29
1997/01/31 10310.89 10206.50
10344.97
1997/02/28 10320.95 10232.01
10370.50
1997/03/31 10199.19 10118.44
10250.14
1997/04/30 10361.97 10270.21
10421.14
1997/05/31 10556.06 10367.78
10630.51
1997/06/30 10709.79 10491.16
10794.08
1997/07/31 11018.25 10774.42
11097.90
1997/08/31 10904.70 10682.84
10998.12
1997/09/30 11101.56 10840.94
11211.80
1997/10/31 11101.33 10998.14
11223.03
1997/11/30 11195.23 11048.73
11335.53
1997/12/31 11290.08 11160.32
11442.44
1998/01/31 11396.39 11303.17
11535.51
1998/02/28 11577.51 11294.13
11716.00
1998/03/31 11716.58 11332.53
11870.69
1998/04/30 11770.00 11391.46
11944.85
1998/05/31 11780.60 11499.68
11948.60
1998/06/30 11933.05 11597.42
12093.25
1998/07/31 11954.76 11621.78
12071.70
1998/08/31 11669.66 11811.21
11796.63
1998/09/30 11955.69 12087.60
12090.00
IMATRL PRASUN SHR__CHT 19980930 19981022 102635 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom Income Fund on October 17, 1996, when the
fund started. As the chart shows, by September 30, 1998, the value of
the investment would have grown to $11,956 - a 19.56% 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 $12,088 - a 20.88% increase. With dividends and capital
gains, if any, reinvested, the same $10,000 investment in the Fidelity
Freedom Income Composite Index would have grown to $12,086 - a 20.86%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means 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)
* LEHMAN BROTHERS AGGREGATE BOND INDEX IS 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.
FIDELITY FREEDOM 2000 FUND(REGISTERED TRADEMARK)
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
PERIODS ENDED SEPTEMBER 30, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY FREEDOM 2000 -0.69% 7.08% 24.95%
FIDELITY FREEDOM 2000 COMPOSITE -1.15% 7.15% 26.75%
Wilshire 5000 -10.32% 3.28% 39.37%
MSCI EAFE -13.20% -8.12% 2.81%
LB Aggregate Bond 6.66% 11.51% 20.88%
ML High Yield Master -1.96% 3.37% 17.19%
LB 3 Month T-Bill 2.78% 5.50% 11.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on October 17, 1996. For example, if you had 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 Fidelity Freedom 2000 Composite Index, a
hypothetical combination of the following unmanaged indices: the
Wilshire 5000 Index, the Morgan Stanley Capital International Europe,
Australasia and Far East (MSCI EAFE) Index, the Lehman Brothers
Aggregate Bond Index, the Merrill Lynch High Yield Master Index, and
the Lehman Brothers 3 Month Treasury Bill Index. The index weightings
are adjusted twice a year to reflect the fund's changing asset
allocations. This benchmark includes reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2000 7.08% 12.08%
FIDELITY FREEDOM 2000 COMPOSITE 7.15% 12.90%
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.
$10,000 OVER LIFE OF FUND
Freedom 2000 FID Freedom 2000
LB Aggregate Bond
00370 F0200
LB001
1996/10/17 10000.00 10000.00
10000.00
1996/10/31 10000.00 10002.40
10097.80
1996/11/30 10340.00 10362.67
10270.47
1996/12/31 10239.47 10280.05
10174.95
1997/01/31 10441.23 10501.66
10206.50
1997/02/28 10451.32 10528.77
10232.01
1997/03/31 10209.21 10300.61
10118.44
1997/04/30 10451.32 10552.89
10270.21
1997/05/31 10806.18 10932.24
10367.78
1997/06/30 11070.24 11220.08
10491.16
1997/07/31 11578.05 11699.65
10774.42
1997/08/31 11313.99 11457.72
10682.84
1997/09/30 11669.45 11828.31
10840.94
1997/10/31 11517.11 11716.52
10998.14
1997/11/30 11669.45 11890.52
11048.73
1997/12/31 11805.30 12039.13
11160.32
1998/01/31 11941.83 12164.84
11303.17
1998/02/28 12319.94 12538.20
11294.13
1998/03/31 12582.51 12822.10
11332.53
1998/04/30 12656.03 12921.34
11391.46
1998/05/31 12591.25 12849.45
11499.68
1998/06/30 12836.88 13078.62
11597.42
1998/07/31 12847.56 13001.04
11621.78
1998/08/31 12067.95 12267.65
11811.21
1998/09/30 12495.13 12674.56
12087.60
IMATRL PRASUN SHR__CHT 19980930 19981020 133940 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2000 Fund on October 17, 1996, when the
fund started. As the chart shows, by September 30, 1998 the value of
the investment would have grown to $12,495 - a 24.95% 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 $12,088 - a 20.88% increase. With dividends and capital
gains, if any, reinvested, the same $10,000 investment in the Fidelity
Freedom 2000 Composite Index would have grown to $12,675 - a 26.75%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means 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)
* LEHMAN BROTHERS AGGREGATE BOND INDEX IS 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.
FIDELITY FREEDOM 2010 FUND(REGISTERED TRADEMARK)
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
PERIODS ENDED SEPTEMBER 30, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY FREEDOM 2010 -4.07% 5.35% 29.24%
FIDELITY FREEDOM 2010 COMPOSITE -4.98% 5.21% 30.82%
Wilshire 5000 -10.32% 3.28% 39.37%
MSCI EAFE -13.20% -8.12% 2.81%
LB Aggregate Bond 6.66% 11.51% 20.88%
ML High Yield Master -1.96% 3.37% 17.19%
LB 3 Month T-Bill 2.78% 5.50% 11.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on October 17, 1996. For example, if you had 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 Fidelity Freedom 2010 Composite Index, a
hypothetical combination of the following unmanaged indices: the
Wilshire 5000 Index, the Morgan Stanley Capital International Europe,
Australasia and Far East (MSCI EAFE) Index, the Lehman Brothers
Aggregate Bond Index, the Merrill Lynch High Yield Master Index, and
the Lehman Brothers 3 Month Treasury Bill Index. The index weightings
are adjusted twice a year to reflect the fund's changing asset
allocations. This benchmark includes reinvested dividends and capital
gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2010 5.35% 14.03%
FIDELITY FREEDOM 2010 COMPOSITE 5.21% 14.74%
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.
$10,000 OVER LIFE OF FUND
Freedom 2010 S&P 500
FID Freedom 2010
00371 SP001
F0201
1996/10/17 10000.00 10000.00
10000.00
1996/10/31 9960.00 9982.17
9959.84
1996/11/30 10430.00 10736.72
10444.05
1996/12/31 10299.25 10524.02
10343.55
1997/01/31 10592.36 11181.56
10649.72
1997/02/28 10602.47 11269.23
10680.84
1997/03/31 10258.82 10806.17
10368.25
1997/04/30 10582.25 11451.30
10687.21
1997/05/31 11099.54 12148.46
11242.70
1997/06/30 11475.28 12692.71
11652.96
1997/07/31 12165.83 13702.67
12286.92
1997/08/31 11749.47 12935.04
11906.14
1997/09/30 12267.38 13643.50
12433.46
1997/10/31 11932.26 13187.80
12155.35
1997/11/30 12145.52 13798.27
12395.96
1997/12/31 12293.47 14035.18
12578.66
1998/01/31 12461.73 14190.41
12725.89
1998/02/28 13071.67 15213.83
13329.13
1998/03/31 13471.28 15992.93
13766.53
1998/04/30 13576.44 16153.81
13893.36
1998/05/31 13404.55 15876.13
13718.91
1998/06/30 13746.61 16521.02
14037.41
1998/07/31 13746.61 16345.07
13894.82
1998/08/31 12346.29 13981.90
12577.21
1998/09/30 12923.52 14877.58
13081.51
IMATRL PRASUN SHR__CHT 19980930 19981022 103357 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2010 Fund on October 17, 1996, when the
fund started. As the chart shows, by September 30, 1998, the value of
the investment would have grown to $12,924 - a 29.24% increase on the
initial investment. For comparison, look at how the S&P 500(registered
trademark) Index* did over the same period. With dividends and capital
gains, if any, reinvested, the same $10,000 investment would have
grown to $14,878 - a 48.78% increase. With dividends and capital
gains, if any, reinvested, the same $10,000 investment in the Fidelity
Freedom 2010 Composite Index would have grown to $13,082 - a 30.82%
increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means 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)
* STANDARD & POOR'S 500 INDEX IS A WIDELY RECOGNIZED, UNMANAGED INDEX
OF COMMON STOCKS.
FIDELITY FREEDOM 2020 FUND(REGISTERED TRADEMARK)
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
PERIODS ENDED SEPTEMBER 30, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY FREEDOM 2020 -6.73% 3.47% 30.03%
FIDELITY FREEDOM 2020 COMPOSITE -7.79% 3.32% 31.68%
Wilshire 5000 -10.32% 3.28% 39.37%
MSCI EAFE -13.20% -8.12% 2.81%
LB Aggregate Bond 6.66% 11.51% 20.88%
ML High Yield Master -1.96% 3.37% 17.19%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on October 17, 1996. For example, if you had 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 Fidelity Freedom 2020 Composite Index, a
hypothetical combination of the following unmanaged indices: the
Wilshire 5000 Index, the Morgan Stanley Capital International Europe,
Australasia and Far East (MSCI EAFE) Index, the Lehman Brothers
Aggregate Bond Index, and the Merrill Lynch High Yield Master Index.
The index weightings are adjusted twice a year to reflect the fund's
changing asset allocations. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2020 3.47% 14.39%
FIDELITY FREEDOM 2020 COMPOSITE 3.32% 15.13%
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.
$10,000 OVER LIFE OF FUND
Freedom 2020 S&P 500
FID Freedom 2020
00372 SP001
F0202
1996/10/17 10000.00 10000.00
10000.00
1996/10/31 9940.00 9982.17
9933.16
1996/11/30 10460.00 10736.72
10475.04
1996/12/31 10329.39 10524.02
10371.89
1997/01/31 10662.27 11181.56
10725.02
1997/02/28 10672.36 11269.23
10757.63
1997/03/31 10299.13 10806.17
10408.63
1997/04/30 10652.18 11451.30
10758.15
1997/05/31 11249.41 12148.46
11405.38
1997/06/30 11685.20 12692.71
11877.05
1997/07/31 12455.43 13702.67
12588.43
1997/08/31 11958.84 12935.04
12130.06
1997/09/30 12566.91 13643.50
12744.96
1997/10/31 12110.86 13187.80
12354.83
1997/11/30 12364.22 13798.27
12633.76
1997/12/31 12523.50 14035.18
12832.04
1998/01/31 12691.46 14190.41
12986.18
1998/02/28 13457.77 15213.83
13741.24
1998/03/31 13940.66 15992.93
14280.13
1998/04/30 14056.13 16153.81
14424.33
1998/05/31 13821.29 15876.13
14175.93
1998/06/30 14225.30 16521.02
14549.62
1998/07/31 14214.67 16345.07
14361.13
1998/08/31 12354.11 13981.90
12614.38
1998/09/30 13002.65 14877.58
13167.56
IMATRL PRASUN SHR__CHT 19980930 19981022 103647 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2020 Fund on October 17, 1996, when the
fund started. As the chart shows, by September 30, 1998, the value of
the investment would have grown to $13,003 - a 30.03% increase on the
initial investment. For comparison, look at how the S&P 500 Index* did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $14,878 -
a 48.78% increase. With dividends and capital gains, if any,
reinvested, the same $10,000 investment in the Fidelity Freedom 2020
Composite Index would have grown to $13,168 - a 31.68% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means 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)
* STANDARD & POOR'S 500 INDEX IS A WIDELY RECOGNIZED, UNMANAGED INDEX
OF COMMON STOCKS.
FIDELITY FREEDOM 2030 FUND(REGISTERED TRADEMARK)
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
PERIODS ENDED SEPTEMBER 30, 1998 PAST 6 PAST 1 LIFE OF
MONTHS YEAR FUND
FIDELITY FREEDOM 2030 -7.88% 2.34% 29.30%
FIDELITY FREEDOM 2030 COMPOSITE -8.83% 2.32% 30.70%
Wilshire 5000 -10.32% 3.28% 39.37%
MSCI EAFE -13.20% -8.12% 2.81%
LB Aggregate Bond 6.66% 11.51% 20.88%
ML High Yield Master -1.96% 3.37% 17.19%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, six months, one year or since
the fund started on October 17, 1996. For example, if you had 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 Fidelity Freedom 2030 Composite Index, a
hypothetical combination of the following unmanaged indices: the
Wilshire 5000 Index, the Morgan Stanley Capital International Europe,
Australasia and Far East (MSCI EAFE) Index, the Lehman Brothers
Aggregate Bond Index, and the Merrill Lynch High Yield Master Index.
The index weightings are adjusted twice a year to reflect the fund's
changing asset allocations. This benchmark includes reinvested
dividends and capital gains, if any.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED SEPTEMBER 30, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2030 2.34% 14.06%
FIDELITY FREEDOM 2030 COMPOSITE 2.32% 14.69%
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.
$10,000 OVER LIFE OF FUND
Freedom 2030 S&P 500
FID Freedom 2030
00373 SP001
F0203
1996/10/17 10000.00 10000.00
10000.00
1996/10/31 9930.00 9982.17
9925.17
1996/11/30 10460.00 10736.72
10473.24
1996/12/31 10329.39 10524.02
10373.59
1997/01/31 10662.27 11181.56
10717.74
1997/02/28 10682.44 11269.23
10757.34
1997/03/31 10299.13 10806.17
10412.52
1997/04/30 10652.18 11451.30
10758.65
1997/05/31 11289.01 12148.46
11424.38
1997/06/30 11734.10 12692.71
11910.68
1997/07/31 12513.00 13702.67
12623.01
1997/08/31 11997.10 12935.04
12142.74
1997/09/30 12634.39 13643.50
12774.04
1997/10/31 12128.61 13187.80
12348.46
1997/11/30 12381.50 13798.27
12625.93
1997/12/31 12539.75 14035.18
12824.05
1998/01/31 12728.00 14190.41
12988.81
1998/02/28 13522.85 15213.83
13777.06
1998/03/31 14035.31 15992.93
14335.30
1998/04/30 14160.81 16153.81
14481.95
1998/05/31 13910.46 15876.13
14221.14
1998/06/30 14319.91 16521.02
14598.36
1998/07/31 14309.13 16345.07
14406.06
1998/08/31 12272.67 13981.90
12532.23
1998/09/30 12929.94 14877.58
13069.93
IMATRL PRASUN SHR__CHT 19980930 19981022 103917 R00000000000027
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2030 Fund on October 17, 1996, when the
fund started. As the chart shows, by September 30, 1998, the value of
the investment would have grown to $12,930 - a 29.30% increase on the
initial investment. For comparison, look at how the S&P 500 Index* did
over the same period. With dividends and capital gains, if any,
reinvested, the same $10,000 investment would have grown to $14,878 -
a 48.78% increase. With dividends and capital gains, if any,
reinvested, the same $10,000 investment in the Fidelity Freedom 2030
Composite Index would have grown to $13,070 - a 30.70% increase.
UNDERSTANDING
PERFORMANCE
How a fund did yesterday is
no guarantee of how it will do
tomorrow. The stock market, for
example, has a history of
long-term growth and
short-term volatility. In turn, the
share price and return of a
fund that invests in stocks will
vary. That means 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)
* STANDARD & POOR'S 500 INDEX IS A WIDELY RECOGNIZED, UNMANAGED INDEX
OF COMMON STOCKS.
FUND TALK: THE MANAGERS' OVERVIEW
MARKET RECAP
While it may be a cliche to compare
the performance of a volatile market
to a roller coaster, few comparisons
were more appropriate for the ups
and downs that equity investors
experienced during the six-month
period ending September 30, 1998.
Consider these swings: On Friday,
July 17, the Dow Jones Industrial
Average - an index of 30 blue-chip
stocks - reached a record high of
9337.97. By the following Friday,
it dropped over 400 points. On
August 31, the Dow plunged 512.61
points - erasing all previous gains
for the year. The next day, blue-chips
roared back up 288.36. Other
skyrocketing rallies and precipitous
drops include the record-setting
one-day gain of 380.53 points on
September 8, followed by a
275.75-point plummet on
September 9. Appropriately, the
Dow closed on September 30 with
a 237.90 loss, triggered by
investor disappointment over a
lower-than-hoped-for decrease in
the Federal interest rate. At the
controls of this see-sawing volatility
were several drivers, including the
continuing Asian and Russian
economic dilemmas, chaotic
emerging markets and concerns
over U.S. political leadership.
Despite these drawbacks, the U.S.
economy demonstrated exceptional
resiliency. Inflation remained benign,
unemployment was at its lowest rate
in decades and interest rates
continued to decline. For the period,
the Dow was down -10.10%, while
the Standard & Poor's 500 Index
- - a market-capitalization
weighted index of 500 widely held
U.S. stocks - returned -6.97%.
An interview with Ren Cheng (left photo), and Scott Stewart, Portfolio
Managers of the Fidelity Freedom Funds
Q. HOW DID THE FUND PERFORM, SCOTT?
S.S. For the six-month period that ended September 30, 1998, the
Income, 2000 and 2010 portfolios returned 2.04%, -0.69% and -4.07%,
respectively. The 2020 and 2030 portfolios returned -6.73% and -7.88%,
respectively, over the same period. Each Freedom Fund compares its
performance to a composite benchmark, which is comprised of various
indexes and reflects the fund's target allocation mix. Over the past
six months, the composite benchmarks for the Income, 2000 and 2010
portfolios returned 1.82%, -1.15% and -4.98%, respectively. The
composite benchmarks for the 2020 and 2030 portfolios returned -7.79%
and -8.83%, respectively, during the same period. For the 12-month
period that ended September 30, 1998, the Income, 2000 and 2010
portfolios returned 7.69%, 7.08% and 5.35%, respectively. The 2020 and
2030 portfolios returned 3.47% and 2.34%, respectively, over the same
period. The composite benchmarks for the Income, 2000, 2010 portfolios
returned 7.80%, 7.15% and 5.21%, respectively. The benchmarks for the
2020 and 2030 portfolio returned 3.32% and 2.32%, respectively, during
the same period.
Q. REN, WHAT MARKET FACTORS SHAPED THE FUNDS' PERFORMANCE? HOW HAVE
THE FUNDS PERFORMED IN THIS VOLATILE ENVIRONMENT?
R.C. With the exception of U.S. government bonds, most of the global
securities' markets struggled. In this difficult environment, the
funds have performed as I expected. As shareholders can see, the
Freedom Funds with the shorter maturities - and therefore higher
allocations toward fixed-income investments - performed better than
the longer-maturity portfolios, which have higher concentrations in
stock funds. While the funds posted mixed results against their
benchmarks over the past six-month period, all of the Freedom Funds
posted positive returns year-to-date. What this shows us is that
well-planned diversification is very effective in controlling risk
when it is most needed.
Q. WHAT SEGMENTS OF THE MARKET CONTRIBUTED TO PERFORMANCE? WHICH
PROVED TO BE DETRACTORS?
R.C. The U.S. government bond market performed very well, but in many
ways this performance was a result of a superficial flight to quality
with investors moving into government bonds at any cost. Domestic and
international equity exposure detracted from fund performance.
Although the funds have a very small weighing in emerging markets,
fund holdings in overseas markets in the portfolios' underlying
Fidelity mutual funds - such as Overseas, Diversified International
and Europe - had a negative impact on performance, as they were hurt
by economic, political and currency turmoil. Exposure to certain
technology and financial stocks in Disciplined Equity Fund,
Equity-Income Fund and OTC Portfolio also hurt performance.
Q. GIVEN THE PERIOD'S VOLATILITY, COULD YOU EXPLAIN YOUR
ASSET-ALLOCATION STRATEGY . . .
R.C. Risk control is one of the most important investment strategies
behind the Freedom Funds, with both long-term and short-term risk
playing key roles in determining asset allocation. There is always a
well-defined tradeoff between risk and return, and the emerging-market
meltdown we saw in the third quarter was but the latest example. Since
the basic asset allocation structure within the Freedom Funds took the
possibility of such volatility into account, I didn't make any
short-term moves during that time. For investors in the Income fund
who are nearing retirement, for example, this strategy provides peace
of mind because they know capital preservation is my primary
objective. The Income fund is currently allocated approximately 20%
domestic stock funds, 40% investment-grade bond funds and 40% money
market funds. It would take a severe and extended market decline to
lose money in this fund. I do not try to predict short-term volatility
because it is usually too late to make changes when bad news hits the
markets. My goal is to make sure the funds are properly allocated to
perform as expected in negative or positive market environments. The
underlying funds are chosen to provide a well-balanced mix of stocks,
bonds and cash.
Q. TURNING BACK TO YOU, SCOTT, WHAT'S YOUR OUTLOOK?
S.S. I think volatility will continue in the global markets. As a
result, I'll try to keep the funds' target allocation mixes compatible
with their respective risk control targets. Though I don't change the
Freedom Funds' investments on a regular basis, I do actively monitor
the underlying funds. If I detect a stock or bond bias of any kind, or
if the underlying fund has made an investment policy change, then I
may consider making changes. In keeping with the Freedom Funds'
long-term strategies, I'll gradually reallocate each fund's target
investment mix over the coming months. The table below illustrates the
target asset mix I expect to set for each fund by the time we next
address our shareholders on March 31, 1999.
INCOME 2000 2010 2020 2030
Domestic Equity Funds 20.0% 34.4% 51.5% 65.7% 70.0%
International Equity Funds - 3.4% 7.8% 11.4% 14.0%
Inv. Grade Fixed-Income Funds 40.0% 40.1% 30.0% 15.4% 7.0%
High Yield Fixed-Income Funds - 3.2% 6.4% 7.5% 9.0%
Money Market Funds 40.0% 18.9% 4.3% - -
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 TO THE TARGET INVESTMENT MIXES DESCRIBED ABOVE,
EACH FUND'S COMPOSITE BENCHMARK WILL CHANGE ITS ALLOCATION AS OF
DECEMBER 31, 1998. THE TABLE BELOW ILLUSTRATES THESE CHANGES.
COMPOSITE BENCHMARKS
INCOME 2000 2010 2020 2030
Wilshire 5000 20.0% 34.9% 52.4% 66.3% 70.0%
MSCI EAFE - 3.4% 7.8% 11.3% 13.9%
LB Aggregate Bond 40.0% 40.5% 29.5% 14.8% 6.8%
ML High Yield Master - 3.4% 6.6% 7.6% 9.3%
LB 3 Month T-Bill 40.0% 17.8% 3.7% - -
REN CHENG ON THE STATE OF
THE WORLD FINANCIAL SYSTEM:
"The market correction we are
experiencing is not a standard
valuation-based correction. What
we are now seeing is a major
change or shift in the structure of
the global financial system. More
specifically, the post-Cold War
model of capitalism, meaning free
capital flow and free markets, is
giving way to more and more
controls on foreign exchange and
capital flow in Asia and Europe.
This is a very important
development, and I believe that
capitalism has failed in certain
economies because it has been
based upon little more than just
superficial money flow. Capitalism
is a system that needs to be based
upon the free flow of information,
credible financial reports, and
sound financial and legal systems,
as well as the smooth interaction of
all of these elements. What we have
seen in many emerging markets is
superficial money flow without a
solid infrastructure to support the
efficient use of financial capital.
As a result, investors have lost faith
in many of these markets, causing
widespread global market volatility."
NOTE TO SHAREHOLDERS:
In a change from prior practice,
the Wilshire 5000 is now the
benchmark for the performance of
domestic equities in the calculation
of the Freedom Funds' composite
indexes. The Wilshire 5000 provides
a broader measure of the market
than the large-cap oriented
Standard & Poor's 500 Index and is
more representative of the
performance of the underlying
domestic equity funds in which the
Freedom Funds invest.
FUND FACTS
GOAL: The Income fund seeks
high current income and, as
a secondary objective, capital
appreciation. The 2000, 2010,
2020 and 2030 funds each
seek high total return. Each
fund seeks to achieve its goal
by investing in a combination
of underlying Fidelity equity,
fixed-income and money
market funds.
FUND NUMBERS: Income (369);
2000 (370); 2010 (371);
2020 (372); 2030 (373)
SIZE: as of September 30,
1998, more than $115 million
(Income); $390 million (2000);
$707 million (2010); $658
million (2020); $188 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)
FIDELITY FREEDOM INCOME FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF SEPTEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 2.9% 3.0%
Disciplined Equity Fund 2.9 3.0
Equity-Income Fund 2.9 2.9
Fidelity Fund 2.9 3.0
Growth & Income Portfolio 3.0 3.0
Growth Company Fund 3.0 3.0
OTC Portfolio 2.0 2.0
19.6 19.9
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Income Fund 15.3 15.0
Intermediate Bond Fund 10.0 9.9
Investment Grade Bond Fund 15.2 15.1
40.5 40.0
MONEY MARKET FUND
Fidelity Money Market Trust: 39.9 40.1
Retirement Money Market Portfolio
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
ROW: 1, COL: 1, VALUE: 40.1
ROW: 1, COL: 2, VALUE: 40.0
ROW: 1, COL: 3, VALUE: 19.9
19.9%
40.1%
40.0%
CURRENT
ROW: 1, COL: 1, VALUE: 39.9
ROW: 1, COL: 2, VALUE: 40.5
ROW: 1, COL: 3, VALUE: 19.6
19.6%
39.9%
40.5%
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 SIX MONTHS AGO ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF
MARCH 31, 1998. THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS
AS OF SEPTEMBER 30, 1998. THE EXPECTED ALLOCATION REPRESENTS THE
FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT MARCH 31, 1999.
FIDELITY FREEDOM INCOME FUND
INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 19.6%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 19.6%
Blue Chip Growth Fund 82,930 $ 3,387,677
Disciplined Equity Fund 129,509 3,371,107
Equity-Income Fund 68,324 3,388,862
Fidelity Fund 111,600 3,347,996
Growth & Income Portfolio 88,743 3,427,246
Growth Company Fund 76,820 3,459,995
OTC Portfolio 68,583 2,322,235
TOTAL EQUITY FUNDS 22,705,118
(Cost $23,569,619)
FIXED-INCOME FUNDS - 40.5%
INVESTMENT GRADE FIXED-INCOME FUNDS - 40.5%
Government Income Fund 1,708,807 17,686,155
Intermediate Bond Fund 1,107,894 11,522,093
Investment Grade Bond Fund 2,354,958 17,638,633
TOTAL FIXED-INCOME FUNDS 46,846,881
(Cost $45,413,585)
<TABLE>
<CAPTION>
<S> <C> <C>
MONEY MARKET FUND - 39.9%
Fidelity Money Market Trust: 46,244,781 46,244,781
Retirement Money Market Portfolio
(Cost $46,244,781)
TOTAL INVESTMENT IN SECURITIES - 100% $ 115,796,780
(Cost $115,227,985)
</TABLE>
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$76,505,810 and $15,401,535, respectively (see Note 3 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $115,228,302. Net unrealized appreciation
aggregated $568,478, of which $1,689,905 related to appreciated
investment securities and $1,121,427 related to depreciated investment
securities.
FIDELITY FREEDOM INCOME FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $115,227,985) - $ 115,796,780
See accompanying schedule
Cash 5,279
Receivable for underlying fund shares redeemed 61
Receivable for Freedom Fund shares sold 2,838,858
Dividends receivable 390,030
TOTAL ASSETS 119,031,008
LIABILITIES
Payable for underlying fund shares purchased $ 2,932,328
Payable for Freedom Fund shares redeemed 290,750
Accrued management fee 7,238
TOTAL LIABILITIES 3,230,316
NET ASSETS $ 115,800,692
Net Assets consist of:
Paid in capital $ 114,396,080
Undistributed net investment income 477,824
Accumulated undistributed net realized gain (loss) on 357,993
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on investments 568,795
NET ASSETS, for 10,658,175 shares outstanding $ 115,800,692
NET ASSET VALUE, offering price and redemption price $10.86
per share ($115,800,692 (divided by) 10,658,175 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 2,041,752
Income distributions from underlying funds
Interest 108
TOTAL INCOME 2,041,860
EXPENSES
Management fee $ 43,790
Non-interested trustees' compensation 137
Total expenses before reductions 43,927
Expense reductions (11,959) 31,968
NET INVESTMENT INCOME 2,009,892
REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on sale of underlying fund shares (214,005)
Capital gain distributions from underlying funds 559,773 345,768
Change in net unrealized appreciation (depreciation) on (574,461)
investment securities
NET GAIN (LOSS) (228,693)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 1,781,199
FROM OPERATIONS
OTHER INFORMATION
Expense reductions $ 8,453
Reimbursement from investment adviser
Transfer agent credits 3,506
$ 11,959
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET ASSETS
Operations $ 2,009,892 $ 1,148,921
Net investment income
Net realized gain (loss) 345,768 834,555
Change in net unrealized appreciation (depreciation) (574,461) 1,304,056
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 1,781,199 3,287,532
FROM OPERATIONS
Distributions to shareholders (1,721,552) (1,139,587)
From net investment income
From net realized gain (542,607) (147,075)
TOTAL DISTRIBUTIONS (2,264,159) (1,286,662)
Share transactions 122,400,345 69,897,635
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 2,237,128 1,274,256
Cost of Freedom Fund shares redeemed (63,826,133) (27,126,984)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 60,811,340 44,044,907
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 60,328,380 46,045,777
NET ASSETS
Beginning of period 55,472,312 9,426,535
End of period (including undistributed net investment $ 115,800,692 $ 55,472,312
income of $477,824 and $189,484, respectively)
OTHER INFORMATION
Shares
Sold 11,252,563 6,546,429
Issued in reinvestment of distributions 206,257 120,112
Redeemed (5,866,180) (2,537,779)
Net increase (decrease) 5,592,640 4,128,762
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1998
(UNAUDITED) 1998 1997 F
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.95 $ 10.06 $ 10.00
Income from Investment Operations
Net investment income D .24 .50 .22
Net realized and unrealized gain (loss) (.02) .96 (.02) G
Total from investment operations .22 1.46 .20
Less Distributions
From net investment income (.22) (.51) (.14)
From net realized gain (.09) (.06) -
Total distributions (.31) (.57) (.14)
Net asset value, end of period $ 10.86 $ 10.95 $ 10.06
TOTAL RETURN B, C 2.04% 14.88% 1.99%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the
underlying funds)
Net assets, end of period (000 omitted) $ 115,801 $ 55,472 $ 9,427
Ratio of expenses to average net assets .08% A, E .08% E .08% A, E
Ratio of expenses to average net assets after .07% A, H .08% .08% A
expense reductions
Ratio of net investment income to average net assets 4.58% A 4.71% 4.95% A
Portfolio turnover rate 35% A 33% 32% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL
STATEMENTS).
F FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
MARCH 31, 1997.
G 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 REPURCHASE OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H STRATEGIC ADVISERS OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES. (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS)
FIDELITY FREEDOM 2000 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF SEPTEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 5.3% 5.6%
Disciplined Equity Fund 5.3 5.6
Equity-Income Fund 5.3 5.5
Fidelity Fund 5.2 5.6
Growth & Income Portfolio 5.3 5.6
Growth Company Fund 5.4 5.6
OTC Portfolio 3.6 3.8
35.4 37.3
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 0.9 1.0
Europe Fund 1.2 1.0
Japan Fund 0.3 0.8
Overseas Fund 0.9 1.0
Southeast Asia Fund 0.2 0.2
3.5 4.0
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Income Fund 15.5 15.2
Intermediate Bond Fund 10.0 9.9
Investment Grade Bond Fund 15.4 15.2
40.9 40.3
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 3.5 3.8
MONEY MARKET FUND
Fidelity Money Market Trust: 16.7 14.6
Retirement Money Market Portfolio
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
14.6% (MM)
ROW: 1, COL: 1, VALUE: 14.6
ROW: 1, COL: 2, VALUE: 3.8
ROW: 1, COL: 3, VALUE: 40.3
ROW: 1, COL: 4, VALUE: 4.0
ROW: 1, COL: 5, VALUE: 37.3
37.3% (DE)
3.8% (HY)
40.3% (IG)
4.0% (IE)
CURRENT
16.7% (MM)
ROW: 1, COL: 1, VALUE: 16.7
ROW: 1, COL: 2, VALUE: 3.5
ROW: 1, COL: 3, VALUE: 40.9
ROW: 1, COL: 4, VALUE: 3.5
ROW: 1, COL: 5, VALUE: 35.4
35.4% (DE)
3.5% (HY)
40.9% (IG)
3.5% (IE)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUND
18.9% (MM)
ROW: 1, COL: 1, VALUE: 18.9
ROW: 1, COL: 2, VALUE: 3.2
ROW: 1, COL: 3, VALUE: 40.1
ROW: 1, COL: 4, VALUE: 3.4
ROW: 1, COL: 5, VALUE: 34.4
34.4% (DE)
MONEY MARKET FUND (MM)
3.2% (HY)
40.1% (IG)
3.4% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT
BECOMES INCREASINGLY CONSERVATIVE OVER TIME. THE SIX MONTHS AGO
ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31, 1998. THE
CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF SEPTEMBER 30,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT MARCH 31, 1999.
FIDELITY FREEDOM 2000 FUND
INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 38.9%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 35.4%
Blue Chip Growth Fund 504,840 $ 20,622,730
Disciplined Equity Fund 788,964 20,536,725
Equity-Income Fund 415,306 20,599,154
Fidelity Fund 679,792 20,393,768
Growth & Income Portfolio 540,186 20,861,998
Growth Company Fund 468,346 21,094,326
OTC Portfolio 418,019 14,154,118
138,262,819
INTERNATIONAL EQUITY FUNDS - 3.5%
Diversified International Fund 215,364 3,447,980
Europe Fund 155,773 4,790,024
Japan Fund 152,298 1,413,322
Overseas Fund 110,023 3,426,108
Southeast Asia Fund 106,050 727,504
13,804,938
TOTAL EQUITY FUNDS 152,067,757
(Cost $155,000,013)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIXED-INCOME FUNDS - 44.4%
INVESTMENT GRADE FIXED-INCOME FUNDS - 40.9%
Government Income Fund 5,827,024 60,309,703
Intermediate Bond Fund 3,773,530 39,244,712
Investment Grade Bond Fund 8,024,458 60,103,193
159,657,608
HIGH YIELD FIXED-INCOME FUNDS - 3.5%
Capital & Income Fund 1,481,982 13,782,428
TOTAL FIXED-INCOME FUNDS 173,440,036
(Cost $169,952,758)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MONEY MARKET FUND - 16.7%
SHARES VALUE (NOTE 1)
Fidelity Money Market Trust: 65,432,999 $ 65,432,999
Retirement Money Market Portfolio
(Cost $65,432,999)
TOTAL INVESTMENT IN SECURITIES - 100% $ 390,940,792
(Cost $390,385,770)
</TABLE>
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$132,901,820 and $53,356,142, respectively (see Note 3 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $390,386,287. Net unrealized appreciation
aggregated $554,505, of which $6,250,255 related to appreciated
investment securities and $5,695,750 related to depreciated investment
securities.
FIDELITY FREEDOM 2000 FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $390,385,770) - $ 390,940,792
See accompanying schedule
Cash 7,095
Receivable for underlying fund shares redeemed 212,891
Receivable for Freedom Fund shares sold 1,045,492
Dividends receivable 1,076,757
TOTAL ASSETS 393,283,027
LIABILITIES
Payable for underlying fund shares purchased $ 1,076,936
Payable for Freedom Fund shares redeemed 1,232,875
Accrued management fee 25,808
TOTAL LIABILITIES 2,335,619
NET ASSETS $ 390,947,408
Net Assets consist of:
Paid in capital $ 380,906,747
Undistributed net investment income 6,844,858
Accumulated undistributed net realized gain (loss) on 2,640,781
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on investments 555,022
NET ASSETS, for 33,401,849 shares outstanding $ 390,947,408
NET ASSET VALUE, offering price and redemption price $11.70
per share ($390,947,408 (divided by) 33,401,849 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 6,962,528
Income distributions from underlying funds
Interest 143
TOTAL INCOME 6,962,671
EXPENSES
Management fee $ 187,788
Non-interested trustees' compensation 121
Total expenses before reductions 187,909
Expense reductions (67,358) 120,551
NET INVESTMENT INCOME 6,842,120
REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on sale of underlying funds (1,073,106)
Capital gain distributions from underlying funds 3,761,536 2,688,430
Change in net unrealized appreciation (depreciation) on (12,667,722)
investment securities
NET GAIN (LOSS) (9,979,292)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (3,137,172)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 38,892
Transfer agent credits 28,429
Custodian credits 37
$ 67,358
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET ASSETS
Operations $ 6,842,120 $ 3,425,458
Net investment income
Net realized gain (loss) 2,688,430 4,861,844
Change in net unrealized appreciation (depreciation) (12,667,722) 13,600,251
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (3,137,172) 21,887,553
FROM OPERATIONS
Distributions to shareholders (2,281,685) (2,016,719)
From net investment income
From net realized gain (3,428,132) (723,870)
TOTAL DISTRIBUTIONS (5,709,817) (2,740,589)
Share transactions 216,345,791 361,047,372
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 5,706,912 2,734,857
Cost of Freedom Fund shares redeemed (147,383,809) (73,749,351)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 74,668,894 290,032,878
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 65,821,905 309,179,842
NET ASSETS
Beginning of period 325,125,503 15,945,661
End of period (including undistributed net investment $ 390,947,408 $ 325,125,503
income of $6,844,858 and $2,284,423, respectively)
OTHER INFORMATION
Shares
Sold 18,165,386 31,728,940
Issued in reinvestment of distributions 479,975 246,530
Redeemed (12,386,820) (6,408,111)
Net increase (decrease) 6,258,541 25,567,359
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1998
(UNAUDITED) 1998 1997 F
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 11.98 $ 10.12 $ 10.00
Income from Investment Operations
Net investment income D .22 .60 .18
Net realized and unrealized gain (loss) (.30) 1.71 .03 G
Total from investment operations (.08) 2.31 .21
Less Distributions
From net investment income (.08) (.33) (.09)
From net realized gain (.12) (.12) -
Total distributions (.20) (.45) (.09)
Net asset value, end of period $ 11.70 $ 11.98 $ 10.12
TOTAL RETURN B, C (.69)% 23.25% 2.09%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the
underlying funds)
Net assets, end of period (000 omitted) $ 390,947 $ 325,126 $ 15,946
Ratio of expenses to average net assets .08% A, E .08% E .08% A, E
Ratio of expenses to average net assets after .06% A, H .08% .08% A
expense reductions
Ratio of net investment income to average net assets 3.64% A 3.72% 4.00% A
Portfolio turnover rate 29% A 24% 19% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL
STATEMENTS).
F FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
MARCH 31, 1997.
G 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 REPURCHASE OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H STRATEGIC ADVISERS OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY FREEDOM 2010 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF SEPTEMBER 30, 1998
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 7.9% 8.4%
Disciplined Equity Fund 7.9 8.4
Equity-Income Fund 7.9 8.3
Fidelity Fund 7.9 8.4
Growth & Income Portfolio 8.0 8.3
Growth Company Fund 8.1 8.4
OTC Portfolio 5.5 5.7
53.2 55.9
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 2.0 2.2
Europe Fund 2.7 2.2
Japan Fund 0.8 1.7
Overseas Fund 2.0 2.2
Southeast Asia Fund 0.4 0.4
7.9 8.7
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Income Fund 11.0 10.0
Intermediate Bond Fund 7.1 6.5
Investment Grade Bond Fund 10.9 10.0
29.0 26.5
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 6.7 6.9
MONEY MARKET FUND
Fidelity Money Market Trust: Retirement 3.2 2.0
Money Market Portfolio
100.0% 100.0%
</TABLE>
ASSET ALLOCATION
SIX MONTHS AGO
2.0% (MM)
6.9% (HY)
ROW: 1, COL: 1, VALUE: 2.0
ROW: 1, COL: 2, VALUE: 6.9
ROW: 1, COL: 3, VALUE: 26.5
ROW: 1, COL: 4, VALUE: 8.699999999999999
ROW: 1, COL: 5, VALUE: 55.9
26.5% (IG)
55.9% (DE)
8.7% (IE)
CURRENT
3.2% (MM)
6.7% (HY)
ROW: 1, COL: 1, VALUE: 3.2
ROW: 1, COL: 2, VALUE: 6.7
ROW: 1, COL: 3, VALUE: 29.0
ROW: 1, COL: 4, VALUE: 7.9
ROW: 1, COL: 5, VALUE: 53.2
29.0% (IG)
53.2% (DE)
7.9% (IE)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
4.3% (MM)
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUNDS
6.4% (HY)
ROW: 1, COL: 1, VALUE: 4.3
ROW: 1, COL: 2, VALUE: 6.4
ROW: 1, COL: 3, VALUE: 30.0
ROW: 1, COL: 4, VALUE: 7.8
ROW: 1, COL: 5, VALUE: 51.5
MONEY MARKET FUND (MM)
30.0% (IG)
51.5% (DE)
7.8% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT
BECOMES INCREASINGLY CONSERVATIVE OVER TIME. THE SIX MONTHS AGO
ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31, 1998. THE
CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF SEPTEMBER 30,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT MARCH 31, 1999.
FIDELITY FREEDOM 2010 FUND
INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 61.1%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 53.2%
Blue Chip Growth Fund 1,375,962 $ 56,208,053
Disciplined Equity Fund 2,150,354 55,973,711
Equity-Income Fund 1,132,556 56,174,798
Fidelity Fund 1,852,728 55,581,836
Growth & Income Portfolio 1,471,403 56,825,567
Growth Company Fund 1,275,533 57,450,001
OTC Portfolio 1,139,357 38,578,614
376,792,580
INTERNATIONAL EQUITY FUNDS - 7.9%
Diversified International Fund 875,560 14,017,710
Europe Fund 627,317 19,290,006
Japan Fund 607,243 5,635,214
Overseas Fund 446,173 13,893,827
Southeast Asia Fund 428,833 2,941,793
55,778,550
TOTAL EQUITY FUNDS 432,571,130
(Cost $439,543,542)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIXED-INCOME FUNDS - 35.7%
INVESTMENT GRADE FIXED-INCOME FUNDS - 29.0%
Government Income Fund 7,485,188 77,471,690
Intermediate Bond Fund 4,846,824 50,406,966
Investment Grade Bond Fund 10,306,991 77,199,365
205,078,021
HIGH YIELD FIXED-INCOME FUNDS - 6.7%
Capital & Income Fund 5,114,395 47,563,869
TOTAL FIXED-INCOME FUNDS 252,641,890
(Cost $251,154,678)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
MONEY MARKET FUND - 3.2%
SHARES VALUE (NOTE 1)
Fidelity Money Market Trust: 22,414,221 $ 22,414,221
Retirement Money Market Portfolio
(Cost $22,414,221)
TOTAL INVESTMENT IN SECURITIES - 100% $ 707,627,241
(Cost $713,112,441)
</TABLE>
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$199,063,451 and $88,087,411, respectively (see Note 3 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $713,112,465. Net unrealized depreciation
aggregated $5,485,224, of which $10,410,465 related to appreciated
investment securities and $15,895,689 related to depreciated
investment securities.
FIDELITY FREEDOM 2010 FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (cost $713,112,441) - $ 707,627,241
See accompanying schedule
Cash 14,813
Receivable for Freedom Fund shares sold 2,391,421
Dividends receivable 1,263,669
TOTAL ASSETS 711,297,144
LIABILITIES
Payable for underlying fund shares purchased $ 2,793,017
Payable for Freedom Fund shares redeemed 819,706
Accrued management fee 46,546
TOTAL LIABILITIES 3,659,269
NET ASSETS $ 707,637,875
Net Assets consist of:
Paid in capital $ 696,952,255
Undistributed net investment income 9,101,910
Accumulated undistributed net realized gain (loss) on 7,068,910
investments and foreign currency transactions
Net unrealized appreciation (depreciation) on investments (5,485,200)
NET ASSETS, for 58,547,414 shares outstanding $ 707,637,875
NET ASSET VALUE, offering price and redemption price $12.09
per share ($707,637,875 (divided by) 58,547,414 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 9,377,261
Income distributions from underlying funds
Interest 189
TOTAL INCOME 9,377,450
EXPENSES
Management fee $ 352,466
Non-interested trustees' compensation 1,193
Total expenses before reductions 353,659
Expense reductions (105,132) 248,527
NET INVESTMENT INCOME 9,128,923
REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on sale of underlying fund shares (2,966,553)
Capital gain distributions from underlying funds 10,272,767 7,306,214
Change in net unrealized appreciation (depreciation) on (47,745,667)
investment securities
NET GAIN (LOSS) (40,439,453)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (31,310,530)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions
Reimbursement from investment adviser $ 73,137
Transfer agent credits 31,995
$ 105,132
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET ASSETS
Operations $ 9,128,923 $ 4,091,090
Net investment income
Net realized gain (loss) 7,306,214 10,665,475
Change in net unrealized appreciation (depreciation) (47,745,667) 42,914,286
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (31,310,530) 57,670,851
FROM OPERATIONS
Distributions to shareholders (2,587,474) (3,427,770)
From net investment income
From net realized gain (8,289,358) (831,579)
TOTAL DISTRIBUTIONS (10,876,832) (4,259,349)
Share transactions 230,054,454 632,743,131
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 10,876,668 4,255,727
Cost of Freedom Fund shares redeemed (138,462,338) (66,653,573)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 102,468,784 570,345,285
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 60,281,422 623,756,787
NET ASSETS
Beginning of period 647,356,453 23,599,666
End of period (including undistributed net investment $ 707,637,875 $ 647,356,453
income of $9,101,910 and $2,560,461, respectively)
OTHER INFORMATION
Shares
Sold 18,138,945 53,347,199
Issued in reinvestment of distributions 853,074 370,207
Redeemed (10,969,268) (5,517,029)
Net increase (decrease) 8,022,751 48,200,377
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1998
(UNAUDITED) 1998 1997 F
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 12.81 $ 10.15 $ 10.00
Income from Investment Operations
Net investment income D .16 .30 .11
Net realized and unrealized gain (loss) (.67) 2.82 .15 G
Total from investment operations (.51) 3.12 .26
Less Distributions
From net investment income (.05) (.37) (.11)
From net realized gain (.16) (.09) -
Total distributions (.21) (.46) (.11)
Net asset value, end of period $ 12.09 $ 12.81 $ 10.15
TOTAL RETURN B, C (4.07)% 31.31% 2.59%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the
underlying funds)
Net assets, end of period (000 omitted) $ 707,638 $ 647,356 $ 23,600
Ratio of expenses to average net assets .08% A, E .08% E .08% A, E
Ratio of expenses to average net assets after .07% A, H .08% .08% A
expense reductions
Ratio of net investment income to average 2.58% A 2.54% 2.56% A
net assets
Portfolio turnover rate 25% A 20% 3% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL
STATEMENTS).
F FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
MARCH 31, 1997.
G 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 REPURCHASE OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H STRATEGIC ADVISERS OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY FREEDOM 2020 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF SEPTEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 10.0% 10.3%
Disciplined Equity Fund 9.9 10.2
Equity-Income Fund 10.0 10.2
Fidelity Fund 9.8 10.2
Growth & Income Portfolio 10.1 10.2
Growth Company Fund 10.2 10.3
OTC Portfolio 6.8 6.9
66.8 68.3
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 2.9 3.0
Europe Fund 3.9 3.0
Japan Fund 1.1 2.4
Overseas Fund 2.9 3.0
Southeast Asia Fund 0.5 0.6
11.3 12.0
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Income Fund 5.4 4.6
Intermediate Bond Fund 3.5 3.0
Investment Grade Bond Fund 5.3 4.6
14.2 12.2
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 7.7 7.5
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
7.5% (HY)
ROW: 1, COL: 1, VALUE: 7.5
ROW: 1, COL: 2, VALUE: 12.2
ROW: 1, COL: 3, VALUE: 12.0
ROW: 1, COL: 4, VALUE: 68.3
12.2% (IG)
68.3% (DE)
12.0% (IE)
CURRENT
7.7% (HY)
ROW: 1, COL: 1, VALUE: 7.7
ROW: 1, COL: 2, VALUE: 14.2
ROW: 1, COL: 3, VALUE: 11.3
ROW: 1, COL: 4, VALUE: 66.8
66.8% (DE)
14.2% (IG)
11.3% (IE)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
7.5% (HY)
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUNDS
ROW: 1, COL: 1, VALUE: 7.5
ROW: 1, COL: 2, VALUE: 15.4
ROW: 1, COL: 3, VALUE: 11.4
ROW: 1, COL: 4, VALUE: 65.7
15.4% (IG)
65.7% (DE)
11.4% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT
BECOMES INCREASINGLY CONSERVATIVE OVER TIME. THE SIX MONTHS AGO
ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31, 1998. THE
CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF SEPTEMBER 30,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT MARCH 31, 1999.
FIDELITY FREEDOM 2020 FUND
INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 78.1%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 66.8%
Blue Chip Growth Fund 1,607,725 $ 65,675,572
Disciplined Equity Fund 2,514,386 65,449,475
Equity-Income Fund 1,323,936 65,667,222
Fidelity Fund 2,165,379 64,961,380
Growth & Income Portfolio 1,717,890 66,344,902
Growth Company Fund 1,489,084 67,068,333
OTC Portfolio 1,328,322 44,976,984
440,143,868
INTERNATIONAL EQUITY FUNDS - 11.3%
Diversified International Fund 1,195,319 19,137,065
Europe Fund 830,354 25,533,390
Japan Fund 765,129 7,100,401
Overseas Fund 610,490 19,010,650
Southeast Asia Fund 548,518 3,762,834
74,544,340
TOTAL EQUITY FUNDS 514,688,208
(Cost $524,116,721)
FIXED-INCOME FUNDS - 21.9%
INVESTMENT GRADE FIXED-INCOME FUNDS - 14.2%
Government Income Fund 3,407,267 35,265,211
Intermediate Bond Fund 2,208,208 22,965,361
Investment Grade Bond Fund 4,691,552 35,139,723
93,370,295
HIGH YIELD FIXED-INCOME FUNDS - 7.7%
Capital & Income Fund 5,452,909 50,712,049
TOTAL FIXED-INCOME FUNDS 144,082,344
(Cost $145,871,590)
CASH EQUIVALENTS - 0.0%
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
MATURITY VALUE (NOTE 1)
AMOUNT
Investments in repurchase agreements $ 33,005 $ 33,000
(U.S. Treasury obligations), in a joint
trading account at 5.44%, dated 9/30/98
due 10/1/98
TOTAL INVESTMENT IN SECURITIES - 100% $ 658,803,552
(Cost $670,021,311)
</TABLE>
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$199,171,620 and $56,939,369, respectively (see Note 3 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $670,021,573. Net unrealized depreciation
aggregated $11,218,021, of which $7,528,564 related to appreciated
investment securities and $18,746,585 related to depreciated
investment securities.
FIDELITY FREEDOM 2020 FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase $ 658,803,552
agreements of $33,000) (cost $670,021,311) -
See accompanying schedule
Cash 506
Receivable for Freedom Fund shares sold 40,986,376
Dividends receivable 655,658
TOTAL ASSETS 700,446,092
LIABILITIES
Payable for underlying fund shares purchased $ 41,109,035
Payable for Freedom Fund shares redeemed 491,134
Accrued management fee 40,851
TOTAL LIABILITIES 41,641,020
NET ASSETS $ 658,805,072
Net Assets consist of:
Paid in capital $ 655,848,510
Undistributed net investment income 5,436,275
Accumulated undistributed net realized gain (loss) 8,738,046
on investments
Net unrealized appreciation (depreciation) on investments (11,217,759)
NET ASSETS, for 53,859,213 shares outstanding $ 658,805,072
NET ASSET VALUE, offering price and redemption price $12.23
per share ($658,805,072 (divided by) 53,859,213 shares)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 5,764,438
Income distributions from underlying funds
Interest income 180
TOTAL INCOME 5,764,618
EXPENSES
Management fee $ 313,089
Non-interested trustees' compensation 1,061
Total expenses before reductions 314,150
Expense reductions (96,397) 217,753
NET INVESTMENT INCOME 5,546,865
REALIZED AND UNREALIZED GAIN (LOSS)
Realized gain (loss) on sale of underlying fund shares (2,232,849)
Capital gain distributions from underlying funds 11,054,620 8,821,771
Change in net unrealized appreciation (depreciation) on (58,828,802)
investment securities
NET GAIN (LOSS) (50,007,031)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (44,460,166)
FROM OPERATIONS
OTHER INFORMATION
Expense reductions $ 64,996
Reimbursement from investment adviser
Transfer agent credits 31,401
$ 96,397
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,546,865 $ 2,281,903
Net investment income
Net realized gain (loss) 8,821,771 7,940,504
Change in net unrealized appreciation (depreciation) (58,828,802) 48,041,041
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (44,460,166) 58,263,448
FROM OPERATIONS
Distributions to shareholders (1,779,609) (2,139,443)
From net investment income
From net realized gain (5,797,719) (775,606)
TOTAL DISTRIBUTIONS (7,577,328) (2,915,049)
Share transactions 244,975,666 561,324,674
Net proceeds from sales of Freedom Fund shares
Reinvestment of distributions 7,577,284 2,914,790
Cost of Freedom Fund shares redeemed (119,313,018) (56,943,712)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 133,239,932 507,295,752
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 81,202,438 562,644,151
NET ASSETS
Beginning of period 577,602,634 14,958,483
End of period (including undistributed net investment $ 658,805,072 $ 577,602,634
income of $5,436,275 and $1,669,019, respectively)
OTHER INFORMATION
Shares
Sold 18,896,833 46,318,365
Issued in reinvestment of distributions 570,147 249,279
Redeemed (9,093,918) (4,547,206)
Net increase (decrease) 10,373,062 42,020,438
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1998
(UNAUDITED) 1998 1997 F
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.28 $ 10.21 $ 10.00
Income from Investment Operations
Net investment income D .12 .21 .08
Net realized and unrealized gain (loss) (1.00) 3.33 .22 G
Total from investment operations (.88) 3.54 .30
Less Distributions
From net investment income (.04) (.34) (.09)
From net realized gain (.13) (.13) -
Total distributions (.17) (.47) (.09)
Net asset value, end of period $ 12.23 $ 13.28 $ 10.21
TOTAL RETURN B, C (6.73)% 35.36% 2.99%
RATIOS AND SUPPLEMENTAL DATA
(amounts do not include the activity of the
underlying funds)
Net assets, end of period (000 omitted) $ 658,805 $ 577,603 $ 14,958
Ratio of expenses to average net assets .08% A, E .08% E .08% A, E
Ratio of expenses to average net assets after .07% A, H .08% .08% A
expense reductions
Ratio of net investment income to average net assets 1.77% A 1.76% 1.75% A
Portfolio turnover rate 18% A 15% 21% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL
STATEMENTS).
F FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
MARCH 31, 1997.
G 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 REPURCHASE OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H STRATEGIC ADVISERS OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OR REDUCED A PORTION OF THE FUND'S
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
FIDELITY FREEDOM 2030 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF SEPTEMBER 30, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
Blue Chip Growth Fund 10.4% 10.5%
Disciplined Equity Fund 10.4 10.5
Equity-Income Fund 10.4 10.4
Fidelity Fund 10.3 10.5
Growth & Income Portfolio 10.6 10.5
Growth Company Fund 10.7 10.5
OTC Portfolio 7.2 7.1
70.0 70.0
INTERNATIONAL EQUITY FUNDS
Diversified International Fund 3.5 3.7
Europe Fund 4.7 3.6
Japan Fund 1.4 2.9
Overseas Fund 3.5 3.6
Southeast Asia Fund 0.7 0.7
13.8 14.5
INVESTMENT GRADE FIXED-INCOME FUNDS
Government Income Fund 2.5 2.2
Intermediate Bond Fund 1.6 1.4
Investment Grade Bond Fund 2.5 2.2
6.6 5.8
HIGH YIELD FIXED-INCOME FUND
Capital & Income Fund 9.6 9.7
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
9.7% (HY)
ROW: 1, COL: 1, VALUE: 9.699999999999999
ROW: 1, COL: 2, VALUE: 5.8
ROW: 1, COL: 3, VALUE: 14.5
ROW: 1, COL: 4, VALUE: 70.0
5.8% (IG)
70.0% (DE)
14.5% (IE)
CURRENT
9.6% (HY)
ROW: 1, COL: 1, VALUE: 9.6
ROW: 1, COL: 2, VALUE: 6.6
ROW: 1, COL: 3, VALUE: 13.8
ROW: 1, COL: 4, VALUE: 70.0
6.6% (IG)
70.0% (DE)
13.8% (IE)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUNDS
9.0% (HY)
ROW: 1, COL: 1, VALUE: 9.0
ROW: 1, COL: 2, VALUE: 7.0
ROW: 1, COL: 3, VALUE: 14.0
ROW: 1, COL: 4, VALUE: 70.0
70.0% (DE)
7.0% (IG)
14.0% (IE)
THE FUND INVESTS ACCORDING TO AN ASSET ALLOCATION STRATEGY THAT
BECOMES INCREASINGLY CONSERVATIVE OVER TIME. THE SIX MONTHS AGO
ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31, 1998. THE
CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF SEPTEMBER 30,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT MARCH 31, 1999.
FIDELITY FREEDOM 2030 FUND
INVESTMENTS SEPTEMBER 30, 1998 (UNAUDITED)
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 83.8%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 70.0%
Blue Chip Growth Fund 482,556 $ 19,712,394
Disciplined Equity Fund 754,021 19,627,170
Equity-Income Fund 396,867 19,684,583
Fidelity Fund 649,405 19,482,164
Growth & Income Portfolio 515,501 19,908,661
Growth Company Fund 447,031 20,134,271
OTC Portfolio 398,773 13,502,464
132,051,707
INTERNATIONAL EQUITY FUNDS - 13.8%
Diversified International Fund 410,285 6,568,664
Europe Fund 291,256 8,956,125
Japan Fund 278,567 2,585,104
Overseas Fund 209,327 6,518,443
Southeast Asia Fund 199,318 1,367,322
25,995,658
TOTAL EQUITY FUNDS 158,047,365
(Cost $168,813,660)
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FIXED-INCOME FUNDS - 16.2%
INVESTMENT GRADE FIXED-INCOME FUNDS - 6.6%
Government Income Fund 455,659 4,716,071
Intermediate Bond Fund 294,531 3,063,125
Investment Grade Bond Fund 626,257 4,690,663
12,469,859
HIGH YIELD FIXED-INCOME FUNDS - 9.6%
Capital & Income Fund 1,943,381 18,073,442
TOTAL FIXED-INCOME FUNDS 30,543,301
(Cost $31,782,427)
TOTAL INVESTMENT IN SECURITIES - 100% $ 188,590,666
(Cost $200,596,087)
</TABLE>
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$106,610,946 and $12,269,435, respectively. (see Note 3 of Notes to
Financial Statements).
INCOME TAX INFORMATION
At September 30, 1998, the aggregate cost of investment securities for
income tax purposes was $200,597,345. Net unrealized depreciation
aggregated $12,006,679, of which $1,679,440 related to appreciated
investment securities and $13,686,119 related to depreciated
investment securities.
FIDELITY FREEDOM 2030 FUND
FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998 (UNAUDITED)
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $200,596,087) - $ 188,590,666
SEE ACCOMPANYING SCHEDULE
CASH 15,670
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 1,634,016
DIVIDENDS RECEIVABLE 153,341
TOTAL ASSETS 190,393,693
LIABILITIES
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED $ 1,218,238
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 561,740
ACCRUED MANAGEMENT FEE 12,194
TOTAL LIABILITIES 1,792,172
NET ASSETS $ 188,601,521
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 197,053,712
UNDISTRIBUTED NET INVESTMENT INCOME 1,271,675
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 2,281,555
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS (12,005,421)
NET ASSETS, FOR 15,718,397 SHARES OUTSTANDING $ 188,601,521
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE $12.00
PER SHARE ($188,601,521 (DIVIDED BY) 15,718,397 SHARES)
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998 (UNAUDITED)
INVESTMENT INCOME $ 1,380,754
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST INCOME 66
TOTAL INCOME 1,380,820
EXPENSES
MANAGEMENT FEE $ 81,698
NON-INTERESTED TRUSTEES' COMPENSATION 259
TOTAL EXPENSES BEFORE REDUCTIONS 81,957
EXPENSE REDUCTIONS (26,753) 55,204
NET INVESTMENT INCOME 1,325,616
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES (1,071,441)
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 3,379,594 2,308,153
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON (19,763,477)
INVESTMENT SECURITIES
NET GAIN (LOSS) (17,455,324)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ (16,129,708)
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS
REIMBURSEMENT FROM INVESTMENT ADVISER $ 17,016
CUSTODIAN CREDITS 21
TRANSFER AGENT CREDITS 9,716
$ 26,753
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
STATEMENT OF CHANGES IN NET ASSETS
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1998 MARCH 31,
(UNAUDITED) 1998
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 1,325,616 $ 747,707
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 2,308,153 4,956,471
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) (19,763,477) 7,933,861
NET INCREASE (DECREASE) IN NET ASSETS RESULTING (16,129,708) 13,638,039
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (398,139) (757,317)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME - (610,205)
FROM NET REALIZED GAIN (3,573,142) (471,015)
TOTAL DISTRIBUTIONS (3,971,281) (1,838,537)
SHARE TRANSACTIONS 143,832,582 138,314,449
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 3,970,091 1,838,434
COST OF FREEDOM FUND SHARES REDEEMED (54,172,243) (42,605,715)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 93,630,430 97,547,168
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 73,529,441 109,346,670
NET ASSETS
BEGINNING OF PERIOD 115,072,080 5,725,410
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 188,601,521 $ 115,072,080
INCOME OF $1,271,675 AND $344,198, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 10,996,518 11,252,452
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 300,307 156,038
REDEEMED (4,151,613) (3,395,851)
NET INCREASE (DECREASE) 7,145,212 8,012,639
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
FINANCIAL HIGHLIGHTS
SIX MONTHS ENDED YEARS ENDED MARCH 31,
SEPTEMBER 30, 1998
(UNAUDITED) 1998 1997 F
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 13.42 $ 10.21 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .10 .22 .08
NET REALIZED AND UNREALIZED GAIN (LOSS) (1.12) 3.42 .22 G
TOTAL FROM INVESTMENT OPERATIONS (1.02) 3.64 .30
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.04) (.17) (.09)
IN EXCESS OF NET INVESTMENT INCOME - (.14) -
FROM NET REALIZED GAIN (.36) (.12) -
TOTAL DISTRIBUTIONS (.40) (.43) (.09)
NET ASSET VALUE, END OF PERIOD $ 12.00 $ 13.42 $ 10.21
TOTAL RETURN B, C (7.88)% 36.28% 2.99%
RATIOS AND SUPPLEMENTAL DATA
(AMOUNTS DO NOT INCLUDE THE ACTIVITY OF THE
UNDERLYING FUNDS)
NET ASSETS, END OF PERIOD (000 OMITTED) $ 188,602 $ 115,072 $ 5,725
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% A, E .08% E .08% A,E
RATIO OF EXPENSES TO AVERAGE NET ASSETS AFTER .07% A, H .08% .08% A
EXPENSE REDUCTIONS
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.62% A 1.78% 1.71% A
PORTFOLIO TURNOVER RATE 15% A 34% 19% A
</TABLE>
A ANNUALIZED
B TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
C THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT
BEEN REDUCED DURING THE PERIODS SHOWN (SEE NOTE 5 OF NOTES TO
FINANCIAL STATEMENTS).
D NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
E 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 5 OF NOTES TO FINANCIAL
STATEMENTS).
F FOR THE PERIOD OCTOBER 17, 1996 (COMMENCEMENT OF SALE OF SHARES) TO
MARCH 31, 1997.
G 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 REPURCHASE OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
H STRATEGIC ADVISERS OR THE FUND HAS ENTERED INTO VARYING ARRANGEMENTS
WITH THIRD PARTIES WHO EITHER PAID OF REDUCED A PORTION OF THE FUND'S
EXPENSES (SEE NOTE 5 OF NOTES TO FINANCIAL STATEMENTS).
NOTES TO FINANCIAL STATEMENTS
FOR THE PERIOD ENDED SEPTEMBER 30, 1998 (UNAUDITED)
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, 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 require management to make certain estimates and
assumptions at the date of the financial statements. The following
summarizes the significant accounting policies of the funds:
SECURITY VALUATION. 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. As a qualified regulated investment company under
Subchapter M of the Internal Revenue Code, each fund is not 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.
Interest income is accrued as earned.
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 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 the short-term gain distributions from the Underlying
Funds, non-taxable dividends and losses deferred due to wash sales.
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
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS - CONTINUED
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. OPERATING POLICIES.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the funds, along with other
affiliated entities of FMR, may transfer uninvested cash balances into
one or more joint trading accounts. These balances are invested in one
or more repurchase agreements for U.S. Treasury or Federal Agency
obligations.
REPURCHASE AGREEMENTS. The underlying U.S. Treasury or Federal Agency
securities are transferred to an account of the funds, or to the Joint
Trading Account, at a bank custodian. The securities are
marked-to-market daily and maintained at a value at least equal to the
principal amount of the repurchase agreement (including accrued
interest). FMR is responsible for determining that the value of the
underlying securities remains in accordance with the market value
requirements stated above.
3. 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.
4. 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 the 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.
5. EXPENSE REDUCTIONS.
Strategic Advisers voluntarily agreed to reimburse each fund's
management fee above an annual rate of .08% of the fund's average net
assets.
In addition, Strategic Advisers has entered into arrangements on
behalf of certain funds with the funds' custodian and transfer agent
whereby credits realized as a result of uninvested cash balances were
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.
6. BENEFICIAL INTEREST.
At the end of the period, certain unaffiliated shareholders were each
record owners of more than 10% or more of the total outstanding shares
of the following funds:
<TABLE>
<CAPTION>
<S> <C> <C>
BENEFICIAL INTEREST
FUND NUMBER OF SHAREHOLDERS % OWNERSHIP
Freedom Income 1 22%
Freedom 2000 1 52%
Freedom 2010 1 59%
Freedom 2020 1 61%
Freedom 2030 1 23%
</TABLE>
MANAGING YOUR INVESTMENTS
Fidelity offers several ways to conveniently manage your personal
investments via your telephone or PC. You can access your account
information, conduct trades and research your investments 24 hours a
day.
BY PHONE
Fidelity TouchTone Xpress(registered trademark) provides a single
toll-free number to access account balances, positions, quotes and
trading. It's easy to navigate the service, and on your first call,
the system will help you create a personal identification number (PIN)
for security.
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
1 For mutual fund and brokerage trading.
2 For quotes.*
3 For account balances and holdings.
4 To review orders and mutual
fund activity.
5 To change your PIN.
*0 To speak to a Fidelity representative.
BY PC
Fidelity's Web site on the Internet provides a wide range of
information, including daily financial news, fund performance,
interactive planning tools and news about Fidelity products and
services.
(COMPUTER_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 and we'll send you an America Online CD or disk with up
to 50 free hours of Web access.
(COMPUTER_GRAPHIC)
FIDELITY ON-LINE XPRESS+
TM
Fidelity On-line Xpress+ software for Windows combines comprehensive
portfolio management capabilities, securities trading and access to
research and analysis tools . . . all on your desktop. Call Fidelity
at 1-800-544-7272 or visit our Web site for more information on how to
manage your investments via your PC.
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD
AND RETURN WILL VARY AND,
EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL ALSO VARY. THIS MEANS
THAT YOU MAY HAVE A GAIN
OR LOSS WHEN YOU SELL YOUR SHARES. THERE IS NO ASSURANCE THAT MONEY
MARKET FUNDS WILL BE ABLE TO
MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR
GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS ARE HISTORICAL AND
INCLUDE CHANGES IN SHARE PRICE,
REINVESTMENT OF DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY
SALES CHARGES.
TO WRITE FIDELITY
If more than one address is listed, please locate the address that is
closest to you. We'll give your correspondence immediate attention and
send you written confirmation upon completion of your request.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0002
(LETTER_GRAPHIC)FOR NON-RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
OVERNIGHT EXPRESS
Fidelity Investments
2300 Litton Lane - KH1A
Hebron, KY 41048
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6I
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 770001
Cincinnati, OH 45277-0003
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions - CP6R
400 East Las Colinas Blvd.
Irving, TX 75309-5517
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 500
Merrimack, NH 03054-0500
TO VISIT FIDELITY
For directions and hours,
please call 1-800-544-9797.
ARIZONA
7373 N. Scottsdale Road
Scottsdale, AZ
CALIFORNIA
815 East Birch Street
Brea, CA
851 East Hamilton Avenue
Campbell, CA
527 North Brand Boulevard
Glendale, CA
19100 Von Karman Avenue
Irvine, CA
10100 Santa Monica Blvd.
Los Angeles, CA
251 University Avenue
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1760 Challenge Way
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7676 Hazard Center Drive
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455 Market Street
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950 Northgate Drive
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1400 Civic Drive
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COLORADO
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Denver, CO
CONNECTICUT
48 West Putnam Avenue
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300 Atlantic Street
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29 South Main Street
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DELAWARE
222 Delaware Avenue
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FLORIDA
4400 N. Federal Highway
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4090 N. Ocean Boulevard
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1907 West State Road 434
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1502 N. Westshore Blvd.
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GEORGIA
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1000 Abernathy Road
Atlanta, GA
HAWAII
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Honolulu, HI
ILLINOIS
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Chicago, IL
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3232 Lake Avenue
Wilmette, IL
INDIANA
4729 East 82nd Street
Indianapolis, IN
MAINE
3 Canal Plaza
Portland, ME
MARYLAND
7401 Wisconsin Avenue
Bethesda, MD
1 West Pennsylvania Ave.
Towson, MD
MASSACHUSETTS
470 Boylston Street
Boston, MA
155 Congress Street
Boston, MA
25 State Street
Boston, MA
300 Granite Street
Braintree, MA
44 Mall Road
Burlington, MA
416 Belmont Street
Worcester, MA
MICHIGAN
280 North Woodward Ave.
Birmingham, MI
29155 Northwestern Hwy.
Southfield, MI
MINNESOTA
7600 France Avenue South
Edina, MN
MISSOURI
700 West 47th Street
Kansas City, MO
8885 Ladue Road
Ladue, MO
200 North Broadway
St. Louis, MO
NEW JERSEY
150 Essex Street
Millburn, NJ
56 South Street
Morristown, NJ
501 Route 17, South
Paramus, NJ
NEW YORK
1055 Franklin Avenue
Garden City, NY
999 Walt Whitman Road
Melville, L.I., NY
1271 Avenue of the Americas
New York, NY
71 Broadway
New York, NY
350 Park Avenue
New York, NY
NORTH CAROLINA
4611 Sharon Road
Charlotte, NC
2200 West Main Street
Durham, NC
OHIO
600 Vine Street
Cincinnati, OH
28699 Chagrin Boulevard
Woodmere Village, OH
OREGON
16850 SW 72 Avenue
Tigard, OR
PENNSYLVANIA
1735 Market Street
Philadelphia, PA
439 Fifth Avenue
Pittsburgh, PA
TENNESSEE
6150 Poplar Road
Memphis, TN
TEXAS
10000 Research Boulevard
Austin, TX
4017 Northwest Parkway
Dallas, TX
1155 Dairy Ashford Street
Houston, TX
2701 Drexel Drive
Houston, TX
400 East Las Colinas Blvd.
Irving, TX
14100 San Pedro
San Antonio, TX
19740 IH 45 North
Spring, TX
UTAH
215 South State Street
Salt Lake City, UT
VIRGINIA
8180 Greensboro Drive
McLean, VA
WASHINGTON
411 108th Avenue, N.E.
Bellevue, WA
511 Pine Street
Seattle, WA
WASHINGTON, DC
1900 K Street, N.W.
Washington, DC
WISCONSIN
595 North Barker Road
Brookfield, WI
INVESTMENT ADVISER
Strategic Advisers, Inc.
Boston, MA
OFFICERS
Edward C. Johnson 3d, President
Robert C. Pozen, Senior Vice President
Robert A. Lawrence, Vice President
Scott D. Stewart, Vice President
Eric D. Roiter, Secretary
Richard A. Silver, Treasurer
John H. Costello, Assistant Treasurer
Leonard M. Rush, Assistant Treasurer
BOARD OF TRUSTEES
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 *
Robert C. Pozen
Thomas R. Williams *
ADVISORY BOARD
J. Gary Burkhead
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Investments Institutional
Operations Company, Inc.
Boston, MA
* INDEPENDENT TRUSTEES
FF-SANN-1198 64298
1.537284.101
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S ASSET ALLOCATION FUNDS
Asset Manager
SM
Asset Manager: GrowthSM
Asset Manager: IncomeSM
Fidelity Freedom Funds (registered trademark) -
Income, 2000, 2010, 2020, 2030
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 (registered trademark) 1-800-544-5555
AUTOMATED LINE FOR QUICKEST SERVICE
(FIDELITY_LOGO_GRAPHIC) Fidelity Investments (Registered Trademark)
Corporate Headquarters, 82 Devonshire St., Boston, MA 02109
www.fidelity.com
