FIDELITY
(REGISTERED TRADEMARK)
FREEDOM
FUNDS - INCOME, 2000, 2010, 2020, 2030
SM
ANNUAL REPORT
MARCH 31, 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.
REPORT OF INDEPENDENT 60 THE AUDITORS' OPINION.
ACCOUNTANTS
DISTRIBUTIONS 61
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:
In the first quarter of 1998, the U.S. stock and bond markets
responded differently to lingering uncertainty over the direction of
the U.S. and global economies. On the one hand, the U.S. stock market
soared to record heights as corporate earnings proved to be stronger
than expected and investors shrugged off concerns about the effects of
economic difficulties in Asia. On the other hand, two factors tempered
returns in the bond market. First, interest-rate levels were generally
positive, but were low enough to encourage a flood of new issuance
that dampened performance. Second, there were concerns that continued
economic strength might lead to eventual inflation, even though
inflation indicators remained benign during the quarter.
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
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 MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM INCOME 14.88% 17.17%
FIDELITY FREEDOM INCOME COMPOSITE 15.88% 19.44%
S&P 500(REGISTERED TRADEMARK) 48.00% 59.93%
LB AGGREGATE BOND 11.99% 13.30%
LB 3 MONTH T-BILL 5.58% 8.05%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, 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
Standard & Poor's 500 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, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM INCOME 14.88% 11.53%
FIDELITY FREEDOM INCOME COMPOSITE 15.88% 13.01%
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
IMAHDR PRASUN SHR__CHT 19971231 19980126 092753 S00000000000001
Freedom Inco LB Aggregate Bond
FID Freedom Income Comp.
00369 LB001
F0205
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10209.37 10171.29
10236.94
1996/12/31 10149.16 10076.71
10176.36
1997/01/31 10280.05 10107.57
10334.86
1997/02/28 10290.08 10132.71
10377.53
1997/03/31 10168.68 10020.43
10263.60
1997/04/30 10330.98 10170.43
10467.85
1997/05/31 10524.49 10266.57
10657.27
1997/06/30 10677.76 10388.43
10818.84
1997/07/31 10985.29 10668.57
11129.08
1997/08/31 10872.09 10577.57
10988.62
1997/09/30 11068.36 10733.57
11192.94
1997/10/31 11068.12 10889.29
11203.95
1997/11/30 11161.75 10939.43
11346.16
1997/12/31 11256.31 11049.57
11450.24
1998/01/31 11362.30 11191.43
11556.20
1998/02/28 11542.88 11183.00
11735.45
1998/03/31 11681.54 11221.02
11893.10
IMATRL PRASUN SHR__CHT 19971231 19980126 092754 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom Income Fund on October 31, 1996, shortly
after the fund started. As the chart shows, by March 31, 1998, the
value of the investment would have grown to $11,682 - a 16.82%
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 $11,221 - a 12.21% 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 $11,893 - an 18.93% 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
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 MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2000 23.25% 25.83%
FIDELITY FREEDOM 2000 COMPOSITE 24.60% 29.74%
S&P 500 48.00% 59.93%
MS EAFE 18.86% 18.45%
LB AGGREGATE BOND 11.99% 13.30%
ML HIGH YIELD MASTER 14.77% 19.54%
LB 3 MONTH T-BILL 5.58% 8.05%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, 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
Standard & Poor's 500 Index, the Morgan Stanley Capital International
Europe, Australasia and Far East (MS 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, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2000 23.25% 17.14%
FIDELITY FREEDOM 2000 COMPOSITE 24.60% 19.64%
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
IMAHDR PRASUN SHR__CHT 19971231 19980126 092753 S00000000000001
Freedom 2000 LB Aggregate Bond
FID Freedom 2000 Composite
00370 SP001
F0206
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10340.00 10171.29
10396.84
1996/12/31 10239.47 10076.71
10279.14
1997/01/31 10441.23 10107.57
10536.79
1997/02/28 10451.32 10132.71
10598.28
1997/03/31 10209.21 10020.43
10381.64
1997/04/30 10451.32 10170.43
10701.37
1997/05/31 10806.18 10266.57
11044.22
1997/06/30 11070.24 10388.43
11330.10
1997/07/31 11578.05 10668.57
11826.01
1997/08/31 11313.99 10577.57
11498.22
1997/09/30 11669.45 10733.57
11851.51
1997/10/31 11517.11 10889.29
11739.07
1997/11/30 11669.45 10939.43
11974.16
1997/12/31 11805.30 11049.57
12117.82
1998/01/31 11941.83 11191.43
12270.20
1998/02/28 12319.84 11183.00
12643.62
1998/03/31 12582.51 11221.02
12935.48
IMATRL PRASUN SHR__CHT 19971231 19980126 092754 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2000 Fund on October 31, 1996, shortly
after the fund started. As the chart shows, by March 31, 1998 the
value of the investment would have grown to $12,583 - a 25.83%
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 $11,221 - a 12.21% 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 $12,935 - a 29.35% 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
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 MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2010 31.31% 34.71%
FIDELITY FREEDOM 2010 COMPOSITE 32.94% 40.09%
S&P 500 48.00% 59.93%
MS EAFE 18.86% 18.45%
LB AGGREGATE BOND 11.99% 13.30%
ML HIGH YIELD MASTER 14.77% 19.54%
LB 3 MONTH T-BILL 5.58% 8.05%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, 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
Standard & Poor's 500 Index, the Morgan Stanley Capital International
Europe, Australasia and Far East (MS 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, and excludes the effect of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2010 31.31% 22.78%
FIDELITY FREEDOM 2010 COMPOSITE 32.94% 26.13%
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
IMAHDR PRASUN SHR__CHT 19971231 19980126 092753 S00000000000001
Freedom 2010 S&P 500
FID Freedom 2010 Composite
00371 SP001
F0207
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10471.89 10755.90
10541.45
1996/12/31 10340.61 10542.83
10386.72
1997/01/31 10634.90 11201.54
10749.20
1997/02/28 10645.05 11289.36
10833.43
1997/03/31 10300.02 10825.48
10536.49
1997/04/30 10624.75 11471.76
10960.98
1997/05/31 11144.12 12170.16
11465.97
1997/06/30 11521.36 12715.39
11876.68
1997/07/31 12214.69 13727.15
12541.22
1997/08/31 11796.65 12958.16
12019.22
1997/09/30 12316.64 13667.87
12522.18
1997/10/31 11980.18 13211.37
12241.40
1997/11/30 12194.29 13822.92
12579.40
1997/12/31 12342.84 14060.26
12755.29
1998/01/31 12511.77 14215.77
12945.36
1998/02/28 13124.16 15241.01
13554.00
1998/03/31 13525.38 16021.50
14007.73
IMATRL PRASUN SHR__CHT 19971231 19980126 092754 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2010 Fund on October 31, 1996, shortly
after the fund started. As the chart shows, by March 31, 1998, the
value of the investment would have grown to $13,525 - a 35.25%
increase on the initial investment. For comparison, look at how the
S&P 500* did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$16,022 - a 60.22% 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 $14,008 - a 40.08% 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
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 MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2020 35.36% 39.41%
FIDELITY FREEDOM 2020 COMPOSITE 37.39% 45.76%
S&P 500 48.00% 59.93%
MS EAFE 18.86% 18.45%
LB AGGREGATE BOND 11.99% 13.30%
ML HIGH YIELD MASTER 14.77% 19.54%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, 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
Standard & Poor's 500 Index, the Morgan Stanley Capital International
Europe, Australasia and Far East (MS 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, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2020 35.36% 25.71%
FIDELITY FREEDOM 2020 COMPOSITE 37.39% 29.63%
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
IMAHDR PRASUN SHR__CHT 19971231 19980126 092753 S00000000000001
Freedom 2020 S&P 500
FID Freedom 2020 Composite
00372 SP001
F0208
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10523.14 10755.90
10610.90
1996/12/31 10391.74 10542.83
10442.99
1997/01/31 10726.63 11201.54
10863.95
1997/02/28 10736.78 11289.36
10960.11
1997/03/31 10361.29 10825.48
10628.61
1997/04/30 10716.48 11471.76
11105.20
1997/05/31 11317.32 12170.16
11685.78
1997/06/30 11755.74 12715.39
12170.18
1997/07/31 12530.62 13727.15
12921.71
1997/08/31 12031.02 12958.16
12286.67
1997/09/30 12642.77 13667.87
12873.55
1997/10/31 12183.96 13211.37
12478.64
1997/11/30 12438.85 13822.92
12877.18
1997/12/31 12599.09 14060.26
13067.63
1998/01/31 12768.07 14215.77
13275.04
1998/02/28 13539.01 15241.01
14040.69
1998/03/31 14024.81 16021.50
14602.52
IMATRL PRASUN SHR__CHT 19971231 19980126 092754 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2020 Fund on October 31, 1996, shortly
after the fund started. As the chart shows, by March 31, 1998, the
value of the investment would have grown to $14,025 - a 40.25%
increase on the initial investment. For comparison, look at how the
S&P 500* did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$16,022 - a 60.22% 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 $14,603 - a 46.03% 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
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 MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2030 36.28% 40.35%
FIDELITY FREEDOM 2030 COMPOSITE 37.87% 46.32%
S&P 500 48.00% 59.93%
MS EAFE 18.86% 18.45%
LB AGGREGATE BOND 11.99% 13.30%
ML HIGH YIELD MASTER 14.77% 19.54%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage
terms over a set period - in this case, 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
Standard & Poor's 500 Index, the Morgan Stanley Capital International
Europe, Australasia and Far East (MS EAFE) Index, the Lehman Brothers
Aggregate Bond Index, 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, and excludes the effect of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED MARCH 31, 1998 PAST 1 LIFE OF
YEAR FUND
FIDELITY FREEDOM 2030 36.28% 26.30%
FIDELITY FREEDOM 2030 COMPOSITE 37.87% 29.97%
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
IMAHDR PRASUN SHR__CHT 19971231 19980126 092753 S00000000000001
Freedom 2030 S&P 500
FID Freedom 2030 Composite
00373 SP001
F0209
1996/10/31 10000.00 10000.00
10000.00
1996/11/30 10533.74 10755.90
10617.58
1996/12/31 10402.20 10542.83
10453.09
1997/01/31 10737.43 11201.54
10865.36
1997/02/28 10757.75 11289.36
10968.64
1997/03/31 10371.73 10825.48
10641.13
1997/04/30 10727.27 11471.76
11114.69
1997/05/31 11368.59 12170.16
11724.85
1997/06/30 11816.82 12715.39
12214.63
1997/07/31 12601.21 13727.15
12967.98
1997/08/31 12081.68 12958.16
12308.27
1997/09/30 12723.45 13667.87
12911.89
1997/10/31 12214.11 13211.37
12480.87
1997/11/30 12468.78 13822.92
12878.99
1997/12/31 12628.14 14060.26
13069.34
1998/01/31 12817.72 14215.77
13288.44
1998/02/28 13618.17 15241.01
14088.57
1998/03/31 14134.25 16021.50
14670.85
IMATRL PRASUN SHR__CHT 19971231 19980126 092754 R00000000000038
$10,000 OVER LIFE OF FUND: Let's say hypothetically that $10,000 was
invested in Fidelity Freedom 2030 Fund on October 31, 1996, shortly
after the fund started. As the chart shows, by March 31, 1998, the
value of the investment would have grown to $14,134 - a 41.34%
increase on the initial investment. For comparison, look at how the
S&P 500* did over the same period. With dividends and capital gains,
if any, reinvested, the same $10,000 investment would have grown to
$16,022 - a 60.22% 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 $14,671 - a 46.71% 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
With a favorable U.S. economic
backdrop playing an important
role, the U.S. stock and bond
markets performed well for the 12
months that ended March 31, 1998.
The U.S. stock market's resolve was
tested repeatedly during this time,
particularly when Southeast Asia's
financial markets collapsed in late
October 1997. But the stock market
proved resilient. The Standard &
Poor's 500 Index - a measure of
U.S. stock performance - gained
48.00% during this time. During the
early part of the period, stocks of
large-capitalization companies
were responsible for much of the
market's advance. In August and
September 1997, however, stocks
of smaller companies gained
momentum. After the Asian
debacle, investors embarked on a
"flight to quality," seeking shelter in
securities with less international
emphasis. The bond market, in
fact, attracted many wary stock
investors. By the end of the period,
though, investors had regained
confidence in stocks and the Dow
Jones Industrial Average was
homing in on the 9000-point barrier.
A lack of inflationary pressure, low
interest rates and steady economic
growth translated into a strong year
for bonds. The Lehman Brothers
Aggregate Bond Index - a
measure of the taxable bond
market - had a 12-month return of
11.99%. Though investors feared a
slowdown in Asian demand would
hamper corporate earnings,
corporate bonds remained attractive
from a yield perspective. High-yield,
emerging-market and
mortgage-backed bonds also
performed nicely during the period.
An interview with Ren Cheng (left photo), with additional comments
from Scott Stewart, Portfolio Managers of the Fidelity Freedom Funds
Q. HOW DID THE FUNDS PERFORM, SCOTT?
S.S. For the 12 months that ended March 31, 1998, the Income, 2000 and
2010 portfolios returned 14.88%, 23.25% and 31.31%, respectively. The
2020 and 2030 portfolios returned 35.36% and 36.28%, 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 12 months,
the composite benchmarks for the Income, 2000 and 2010 portfolios
returned 15.88%, 24.60% and 32.94%, respectively. The composite
benchmarks for the 2020 and 2030 portfolios returned 37.39% and
37.87%, respectively, during the same period.
Q. REN, WHAT TYPES OF MARKET FACTORS SHAPED THE FUNDS' PERFORMANCE?
R.C. It was really a tale of two different periods. From April 1997
through September 1997, the funds' underlying investments performed
well. The stock market - which had been dominated by the performance
of certain large-capitalization stocks - began to broaden to include
small- and medium-capitalization stocks. Since many of the underlying
Fidelity funds emphasize smaller stocks, this was a beneficial turn of
events. The second half of the period, however, was a different story.
As investors are aware by now, Asian financial markets collapsed in
October and markets across the world were negatively affected. As a
result of this increased volatility, the U.S. stock market cooled off
a bit. Over the course of the period, the 2020 and 2030 portfolios, in
particular, underperformed the S&P 500 because both portfolios are
designed to hold a smattering of bond and international investments.
Lastly, since Asia accounts for a significant portion of worldwide
technology production and demand, the technology sector was hurt when
Asian markets fell. Many of the funds' underlying investments had
substantial positions in technology-related securities.
Q. HOW DID THE FIXED-INCOME MARKETS PERFORM?
R.C. Bonds had a pretty good first half of the period, but were
somewhat flat in the second half. The favorable economic conditions
we've seen lately - namely low inflation and moderate growth -
translated into a very low interest-rate
environment. In that situation, the best bond investors could do was
to "clip the coupon," or simply be content to realize the face value
of bonds rather than collect a profit. The high-yield market, on the
other hand, rode the wave of good credit quality and a healthy
supply/demand situation during the period. Over the past 12 months,
the high-yield bond fund in which the 2030, 2020, 2010 and 2000
portfolios invest - Fidelity Capital & Income Fund - returned just
over 22%. That's a pretty attractive number.
Q. WHAT WAS THE STORY ON AN INTERNATIONAL BASIS?
R.C. Of course, Southeast Asia's problems have been well-documented.
Aside from the poor performance of many technology stocks - which I
mentioned earlier as being an obstacle to better performance - some of
the Freedom portfolios also had small positions in the Fidelity
Southeast Asia Fund. Europe, meanwhile, turned out to be a pleasant
surprise as the push toward a uniform currency began to solidify.
Having a uniform currency should help streamline economic philosophies
throughout Europe. Can you imagine if each of the 12 Federal Reserve
banks in the U.S. issued different forms of currency? It would be
crazy. That's why a convergence in European economic philosophy should
be beneficial. The underlying funds with significant European
investments included Fidelity Diversified International Fund, Fidelity
Europe Fund and Fidelity Overseas Fund.
Q. THE FUNDS' ASSETS GREW RAPIDLY DURING THE PERIOD, FROM AROUND $69
MILLION TO OVER $1.7 BILLION. DOES A RISE IN ASSETS AFFECT THE WAY YOU
MANAGE THE FUNDS?
R.C. These funds are quite different than say, a regular stock fund.
If the manager of a diversified stock fund experienced a similar asset
jump, he or she might have had some difficulty putting that new money
to work right away. Also, the inflows were spread out over five
portfolios, so the impact to each wasn't too significant. With the
Freedom Funds, once the money comes in, it is
automatically diverted to the underlying funds according to the target
mixes of each Freedom Fund.
Q. SCOTT, WHAT SORTS OF NEAR-TERM CHANGES WILL YOU MAKE TO THE
PORTFOLIOS?
S.S. In keeping with the funds' long-term strategy, we'll gradually
reallocate each Freedom Fund's target investment mix over the coming
months. The table below illustrates the target asset mix we'd like to
achieve for each fund by the next time we address our shareholders on
September 30, 1998:
INCOME 2000 2010 2020 2030
DOMESTIC EQUITY FUNDS 20.0% 36.3% 54.4% 67.4% 70.0%
INTERNATIONAL EQUITY FUNDS - 3.8% 8.4% 11.8% 14.4%
INV. GRADE FIXED-INCOME FUNDS 40.0% 40.2% 27.8% 13.3% 6.2%
HIGH YIELD FIXED-INCOME FUNDS - 3.5% 6.6% 7.5% 9.4%
MONEY MARKET FUNDS 40.0% 16.2% 2.8% - -
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 JUNE 30, 1998. THE TABLE BELOW ILLUSTRATES THESE CHANGES.
COMPOSITE BENCHMARKS
INCOME 2000 2010 2020 2030
S&P 500 20.0% 36.8% 55.2% 67.9% 70.0%
MS EAFE - 3.9% 8.5% 11.9% 14.5%
LB AGGREGATE BOND 40.0% 40.3% 27.2% 12.7% 6.0%
ML HIGH YIELD MASTER - 3.6% 6.7% 7.5% 9.5%
LB 3 MONTH T-BILL 40.0% 15.4% 2.4% - -
REN CHENG PREACHES THE
BENEFITS OF AUTOMATIC
DIVERSIFICATION:
"Diversification is a very simple
concept ... you shouldn't put all
of your eggs into one basket. Most
investors understand the value of
diversification and many spend a
fair amount of time trying to decide
which combination of funds is best
for them. With the Freedom Funds,
that guesswork is essentially
already done.
"In most cases, each of the Freedom
Funds invests in an assortment of
domestic and international equity
and bond funds. Because each fund
carries a mixture of asset types,
performance may not look great
when domestic stocks stage a long
rally. But to use a baseball analogy,
our goal in managing these funds
is not to swing for the fences, but
to hit a lot of singles and doubles.
"The just-completed period actually
serves as a nice example of how
diversification can be beneficial.
When trouble erupted in Asia, the
funds had enough exposure to
European markets - which
performed well - to more than
offset their limited investments in
Asia. Of course, having exposure to
different types of markets doesn't
guarantee against poor performance.
It does, however, give investors a
chance to neutralize significant
losses in any one specific area."
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
equity, fixed-income, and
money market underlying
Fidelity funds
FUND NUMBERS: Income (369);
2000 (370); 2010 (371);
2020 (372); 2030 (373)
SIZE: as of March 31, 1998,
more than $55 million (Income);
$325 million (2000); $647
million (2010); $577 million
(2020); $115 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 MARCH 31, 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 3.0% 3.0%
DISCIPLINED EQUITY FUND 3.0 2.9
EQUITY-INCOME FUND 2.9 3.0
FIDELITY FUND 3.0 3.0
GROWTH & INCOME PORTFOLIO 3.0 3.0
GROWTH COMPANY FUND 3.0 2.9
OTC PORTFOLIO 2.0 2.0
19.9 19.8
INVESTMENT GRADE FIXED-INCOME FUNDS
GOVERNMENT SECURITIES FUND 15.0 15.2
INTERMEDIATE BOND FUND 9.9 9.9
INVESTMENT GRADE BOND FUND 15.1 15.2
40.0 40.3
MONEY MARKET FUND
FIDELITY MONEY MARKET TRUST: RETIREMENT 40.1 39.9
MONEY MARKET PORTFOLIO
100.0% 100.0%
</TABLE>
ASSET ALLOCATION
SIX MONTHS AGO
ROW: 1, COL: 1, VALUE: 39.9
ROW: 1, COL: 2, VALUE: 40.3
ROW: 1, COL: 3, VALUE: 19.8
19.8%
39.9%
40.3%
CURRENT
ROW: 1, COL: 1, VALUE: 40.1
ROW: 1, COL: 2, VALUE: 39.9
ROW: 1, COL: 3, VALUE: 20.0
19.9%
40.1%
40.0%
DOMESTIC EQUITY FUNDS
EXPECTED
INVESTMENT GRADE FIXED-INCOME FUNDS
ROW: 1, COL: 1, VALUE: 40.0
ROW: 1, COL: 2, VALUE: 40.0
ROW: 1, COL: 3, VALUE: 20.0
20.0%
MONEY MARKET FUND
40.0%
40.0%
THE SIX MONTHS AGO ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF
SEPTEMBER 30, 1997. THE CURRENT ALLOCATION IS BASED ON THE FUND'S
HOLDINGS AS OF MARCH 31, 1998. THE EXPECTED ALLOCATION REPRESENTS THE
FUND'S ANTICIPATED TARGET ASSET ALLOCATION AT SEPTEMBER 30, 1998.
FIDELITY FREEDOM INCOME FUND
INVESTMENTS MARCH 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 19.9%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 19.9%
Blue Chip Growth Fund 36,948 $ 1,661,929
Disciplined Equity Fund 56,316 1,655,125
Equity-Income Fund 28,628 1,646,417
Fidelity Fund 49,174 1,653,222
Growth & Income Portfolio 38,602 1,653,707
Growth Company Fund 34,464 1,667,380
OTC Portfolio 28,263 1,120,896
TOTAL EQUITY FUNDS
(Cost $10,035,824) 11,058,676
FIXED-INCOME FUNDS - 40.0%
INVESTMENT GRADE FIXED-INCOME FUNDS - 40.0%
Government Securities Fund 841,812 8,350,777
Intermediate Bond Fund 537,928 5,470,728
Investment Grade Bond Fund 1,144,050 8,351,563
TOTAL FIXED-INCOME FUNDS
(Cost $22,052,664) 22,173,068
MONEY MARKET FUND - 40.1%
Fidelity Money Market Trust: Retirement
Money Market Portfolio
(Cost $22,249,227) 22,249,227 22,249,227
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $54,337,715) $ 55,480,971
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$52,581,054 and $8,302,201, respectively.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $54,338,032. Net unrealized appreciation
aggregated $1,142,939, of which $1,200,852 related to appreciated
investment securities and $57,913 related to depreciated investment
securities.
The fund hereby designates approximately $28,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY FREEDOM INCOME FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $54,337,715) - $ 55,480,971
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR UNDERLYING FUND SHARES REDEEMED 98,104
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 310,420
DIVIDENDS RECEIVABLE 197,332
TOTAL ASSETS 56,086,827
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 5,236
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED 197,355
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 408,481
ACCRUED MANAGEMENT FEE 3,443
TOTAL LIABILITIES 614,515
NET ASSETS $ 55,472,312
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 53,584,740
UNDISTRIBUTED NET INVESTMENT INCOME 189,484
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 554,832
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 1,143,256
NET ASSETS, FOR 5,065,535 SHARES OUTSTANDING $ 55,472,312
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $10.95
SHARE ($55,472,312 (DIVIDED BY) 5,065,535 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 31, 1998
INVESTMENT INCOME $ 1,168,364
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST 116
TOTAL INCOME 1,168,480
EXPENSES
MANAGEMENT FEE $ 24,325
NON-INTERESTED TRUSTEES' COMPENSATION 80
TOTAL EXPENSES BEFORE REDUCTIONS 24,405
EXPENSE REDUCTIONS (4,846) 19,559
NET INVESTMENT INCOME 1,148,921
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES 472,388
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 362,167 834,555
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 1,304,056
INVESTMENT SECURITIES
NET GAIN (LOSS) 2,138,611
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 3,287,532
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 4,813
REIMBURSEMENT FROM INVESTMENT ADVISER
CUSTODIAN CREDITS 33
$ 4,846
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
1998 OF OPERATIONS) TO
MARCH 31,
1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 1,148,921 $ 73,301
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 834,555 12,977
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 1,304,056 (160,800)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 3,287,532 (74,522)
OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (1,139,587) (33,604)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (147,075) -
TOTAL DISTRIBUTIONS (1,286,662) (33,604)
SHARE TRANSACTIONS 69,897,635 11,258,281
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 1,274,256 33,565
COST OF FREEDOM FUND SHARES REDEEMED (27,126,984) (1,757,185)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM 44,044,907 9,534,661
SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 46,045,777 9,426,535
NET ASSETS
BEGINNING OF PERIOD 9,426,535 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 55,472,312 $ 9,426,535
INCOME OF $189,484 AND $41,001, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 6,546,429 1,105,915
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 120,112 3,290
REDEEMED (2,537,779) (172,432)
NET INCREASE (DECREASE) 4,128,762 936,773
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
OF OPERATIONS) TO
MARCH 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.06 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .50 .22
NET REALIZED AND UNREALIZED GAIN (LOSS) .96 (.02) F
TOTAL FROM INVESTMENT OPERATIONS 1.46 .20
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.51) (.14)
FROM NET REALIZED GAIN (.06) -
TOTAL DISTRIBUTIONS (.57) (.14)
NET ASSET VALUE, END OF PERIOD $ 10.95 $ 10.06
TOTAL RETURN B, C 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) $ 55,472 $ 9,427
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% E .08% A, E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 4.71% 4.95% A
PORTFOLIO TURNOVER RATE 33% 32% A
</TABLE>
ANNUALIZED
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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).
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S
EXPENSE RATIO WOULD HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2000 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF MARCH 31, 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 5.6% 5.7%
DISCIPLINED EQUITY FUND 5.6 5.7
EQUITY-INCOME FUND 5.5 5.8
FIDELITY FUND 5.6 5.8
GROWTH & INCOME PORTFOLIO 5.6 5.8
GROWTH COMPANY FUND 5.6 5.7
OTC PORTFOLIO 3.8 3.8
37.3 38.3
INTERNATIONAL EQUITY FUNDS
DIVERSIFIED INTERNATIONAL FUND 1.0 1.2
EUROPE FUND 1.0 1.2
JAPAN FUND 0.8 0.9
OVERSEAS FUND 1.0 1.1
SOUTHEAST ASIA FUND 0.2 0.2
4.0 4.6
INVESTMENT GRADE FIXED-INCOME FUNDS
GOVERNMENT SECURITIES FUND 15.2 15.4
INTERMEDIATE BOND FUND 9.9 10.0
INVESTMENT GRADE BOND FUND 15.2 15.3
40.3 40.7
HIGH YIELD FIXED-INCOME FUND
CAPITAL & INCOME FUND 3.8 4.1
MONEY MARKET FUND
FIDELITY MONEY MARKET TRUST: RETIREMENT 14.6 12.3
MONEY MARKET PORTFOLIO
100.0% 100.0%
</TABLE>
ASSET ALLOCATION
SIX MONTHS AGO
12.3% (MM)
ROW: 1, COL: 1, VALUE: 12.3
ROW: 1, COL: 2, VALUE: 4.1
ROW: 1, COL: 3, VALUE: 40.7
ROW: 1, COL: 4, VALUE: 4.6
ROW: 1, COL: 5, VALUE: 38.3
4.1% (HY)
38.3% (DE)
40.7% (IG)
4.6% (IE)
CURRENT
14.6% (MM)
ROW: 1, COL: 1, VALUE: 14.6
ROW: 1, COL: 2, VALUE: 3.8
ROW: 1, COL: 3, VALUE: 40.4
ROW: 1, COL: 4, VALUE: 3.8
ROW: 1, COL: 5, VALUE: 37.4
37.3% (DE)
3.8% (HY)
40.3% (IG)
4.0% (IE)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUND
16.2% (MM)
ROW: 1, COL: 1, VALUE: 16.1
ROW: 1, COL: 2, VALUE: 3.4
ROW: 1, COL: 3, VALUE: 40.2
ROW: 1, COL: 4, VALUE: 3.7
ROW: 1, COL: 5, VALUE: 35.8
36.3% (DE)
3.5% (HY)
MONEY MARKET FUND (MM)
40.2% (IG)
3.8% (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 SEPTEMBER 30, 1997.
THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT SEPTEMBER 30, 1998.
FIDELITY FREEDOM 2000 FUND
INVESTMENTS MARCH 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 41.3%
SHARES VALUE (NOTE 1)
DOMESTIC EQUITY FUNDS - 37.3%
Blue Chip Growth Fund 404,777 $ 18,206,883
Disciplined Equity Fund 618,707 18,183,810
Equity-Income Fund 313,821 18,047,843
Fidelity Fund 539,516 18,138,525
Growth & Income Portfolio 423,402 18,138,535
Growth Company Fund 377,519 18,264,348
OTC Portfolio 309,866 12,289,298
121,269,242
INTERNATIONAL EQUITY FUNDS - 4.0%
Diversified International Fund 180,761 3,304,311
Europe Fund 92,657 3,300,429
Japan Fund 262,988 2,582,543
Overseas Fund 89,211 3,308,847
Southeast Asia Fund 65,007 640,965
13,137,095
TOTAL EQUITY FUNDS
(Cost $121,634,887) 134,406,337
FIXED-INCOME FUNDS - 44.1%
INVESTMENT GRADE FIXED-INCOME FUNDS - 40.3 %
Government Securities Fund 4,974,691 49,348,936
Intermediate Bond Fund 3,177,245 32,312,585
Investment Grade Bond Fund 6,760,318 49,350,321
131,011,842
HIGH YIELD FIXED-INCOME FUNDS - 3.8%
Capital & Income Fund 1,150,975 12,211,849
TOTAL FIXED-INCOME FUNDS
(Cost $142,772,397) 143,223,691
MONEY MARKET FUND - 14.6%
Fidelity Money Market Trust: Retirement
Money Market Portfolio
(Cost $47,505,914) 47,505,914 47,505,914
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $311,913,198) $ 325,135,942
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$315,355,057 and $22,464,514, respectively.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $311,914,004. Net unrealized appreciation
aggregated $13,221,938, of which $14,219,698 related to appreciated
investment securities and $997,760 related to depreciated investment
securities.
The fund hereby designates approximately $225,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2000 FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $311,913,198) - $ 325,135,942
SEE ACCOMPANYING SCHEDULE
CASH 18,388
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 1,799,566
DIVIDENDS RECEIVABLE 882,128
TOTAL ASSETS 327,836,024
LIABILITIES
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED $ 1,716,562
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 972,576
ACCRUED MANAGEMENT FEE 21,383
TOTAL LIABILITIES 2,710,521
NET ASSETS $ 325,125,503
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 306,237,853
UNDISTRIBUTED NET INVESTMENT INCOME 2,284,423
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 3,380,483
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 13,222,744
NET ASSETS, FOR 27,143,308 SHARES OUTSTANDING $ 325,125,503
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $11.98
SHARE ($325,125,503 (DIVIDED BY) 27,143,308 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 31, 1998
INVESTMENT INCOME $ 3,495,853
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST 741
TOTAL INCOME 3,496,594
EXPENSES
MANAGEMENT FEE $ 91,925
NON-INTERESTED TRUSTEES' COMPENSATION 255
TOTAL EXPENSES BEFORE REDUCTIONS 92,180
EXPENSE REDUCTIONS (21,044) 71,136
NET INVESTMENT INCOME 3,425,458
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES 2,700,525
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 2,161,319 4,861,844
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 13,600,251
INVESTMENT SECURITIES
NET GAIN (LOSS) 18,462,095
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 21,887,553
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 17,482
REIMBURSEMENT FROM INVESTMENT ADVISER
CUSTODIAN CREDITS 23
TRANSFER AGENT CREDITS 3,539
$ 21,044
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
1998 OF OPERATIONS) TO
MARCH 31,
1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 3,425,458 $ 108,956
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 4,861,844 36,358
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 13,600,251 (377,507)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 21,887,553 (232,193)
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (2,016,719) (14,410)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (723,870) -
TOTAL DISTRIBUTIONS (2,740,589) (14,410)
SHARE TRANSACTIONS 361,047,372 18,502,730
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 2,734,857 14,332
COST OF FREEDOM FUND SHARES REDEEMED (73,749,351) (2,324,798)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 290,032,878 16,192,264
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 309,179,842 15,945,661
NET ASSETS
BEGINNING OF PERIOD 15,945,661 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 325,125,503 $ 15,945,661
INCOME OF $2,284,423 AND $99,480, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 31,728,940 1,799,764
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 246,530 1,404
REDEEMED (6,408,111) (225,219)
NET INCREASE (DECREASE) 25,567,359 1,575,949
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
OF OPERATIONS) TO
MARCH 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.12 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .60 .18
NET REALIZED AND UNREALIZED GAIN (LOSS) 1.71 .03 F
TOTAL FROM INVESTMENT OPERATIONS 2.31 .21
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.33) (.09)
FROM NET REALIZED GAIN (.12) -
TOTAL DISTRIBUTIONS (.45) (.09)
NET ASSET VALUE, END OF PERIOD $ 11.98 $ 10.12
TOTAL RETURN B, C 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) $ 325,126 $ 15,946
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% E .08% A, E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 3.72% 4.00% A
PORTFOLIO TURNOVER RATE 24% 19% A
</TABLE>
ANNUALIZED
TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
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).
NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
STRATEGIC ADVISERS AGREED TO REIMBURSE A PORTION OF THE FUND'S
EXPENSES DURING THE PERIOD. WITHOUT THIS REIMBURSEMENT, THE FUND'S
EXPENSE RATIO WOULD HAVE BEEN HIGHER (SEE NOTE 5 OF NOTES TO FINANCIAL
STATEMENTS).
THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2010 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF MARCH 31, 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 8.4% 8.6%
DISCIPLINED EQUITY FUND 8.4 8.6
EQUITY-INCOME FUND 8.3 8.7
FIDELITY FUND 8.4 8.7
GROWTH & INCOME PORTFOLIO 8.3 8.6
GROWTH COMPANY FUND 8.4 8.6
OTC PORTFOLIO 5.7 5.8
55.9 57.6
INTERNATIONAL EQUITY FUNDS
DIVERSIFIED INTERNATIONAL FUND 2.2 2.4
EUROPE FUND 2.2 2.4
JAPAN FUND 1.7 2.0
OVERSEAS FUND 2.2 2.4
SOUTHEAST ASIA FUND 0.4 0.5
8.7 9.7
INVESTMENT GRADE FIXED-INCOME FUNDS
GOVERNMENT SECURITIES FUND 10.0 9.4
INTERMEDIATE BOND FUND 6.5 6.1
INVESTMENT GRADE BOND FUND 10.0 9.4
26.5 24.9
HIGH YIELD FIXED-INCOME FUND
CAPITAL & INCOME FUND 6.9 7.2
MONEY MARKET FUND
FIDELITY MONEY MARKET TRUST: RETIREMENT 2.0 0.6
MONEY MARKET PORTFOLIO
100.0% 100.0%
</TABLE>
ASSET ALLOCATION
SIX MONTHS AGO
0.6% (MM)
7.2% (HY)
ROW: 1, COL: 1, VALUE: 1.6
ROW: 1, COL: 2, VALUE: 7.2
ROW: 1, COL: 3, VALUE: 24.3
ROW: 1, COL: 4, VALUE: 9.699999999999999
ROW: 1, COL: 5, VALUE: 57.2
24.9% (IG)
57.6% (DE)
9.7% (IE)
CURRENT
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)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
2.8% (MM)
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUNDS
6.6% (HY)
ROW: 1, COL: 1, VALUE: 2.8
ROW: 1, COL: 2, VALUE: 6.6
ROW: 1, COL: 3, VALUE: 27.8
ROW: 1, COL: 4, VALUE: 8.4
ROW: 1, COL: 5, VALUE: 54.4
MONEY MARKET FUND (MM)
27.8% (IG)
54.4% (DE)
8.4% (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 SEPTEMBER 30, 1997.
THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT SEPTEMBER 30, 1998.
FIDELITY FREEDOM 2010 FUND
INVESTMENTS MARCH 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 64.6%
SHARES VALUE
(NOTE 1)
DOMESTIC EQUITY FUNDS - 55.9%
Blue Chip Growth Fund 1,208,326 $ 54,350,519
Disciplined Equity Fund 1,844,881 54,221,040
Equity-Income Fund 937,420 53,911,043
Fidelity Fund 1,610,880 54,157,779
Growth & Income Portfolio 1,263,662 54,135,276
Growth Company Fund 1,127,592 54,552,924
OTC Portfolio 926,220 36,733,899
362,062,480
INTERNATIONAL EQUITY FUNDS - 8.7%
Diversified International Fund 774,515 14,158,127
Europe Fund 398,363 14,189,678
Japan Fund 1,128,221 11,079,135
Overseas Fund 380,699 14,120,128
Southeast Asia Fund 282,160 2,782,094
56,329,162
TOTAL EQUITY FUNDS
(Cost $377,722,702) 418,391,642
FIXED-INCOME FUNDS - 33.4%
INVESTMENT GRADE FIXED-INCOME FUNDS - 26.5%
Government Securities Fund 6,515,388 64,632,649
Intermediate Bond Fund 4,161,292 42,320,343
Investment Grade Bond Fund 8,857,622 64,660,644
171,613,636
HIGH YIELD FIXED-INCOME FUND - 6.9%
Capital & Income Fund 4,171,133 44,255,719
TOTAL FIXED-INCOME FUNDS
(Cost $214,277,828) 215,869,355
MONEY MARKET FUND - 2.0%
Fidelity Money Market Trust: Retirement
Money Market Portfolio
(Cost $13,102,424) 13,102,424 13,102,424
CASH EQUIVALENTS - 0.0%
MATURITY VALUE
AMOUNT (NOTE 1)
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.92%, dated
3/31/98 due 4/1/98 $ 44,007 $ 44,000
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $605,146,954) $ 647,407,421
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$608,558,896 and $33,290,093, respectively.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $605,146,990. Net unrealized appreciation
aggregated $42,260,431, of which $44,428,773 related to appreciated
investment securities and $2,168,342 related to depreciated investment
securities.
The fund hereby designates approximately $430,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2010 FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 647,407,421
AGREEMENTS OF $44,000) (COST $605,146,954) -
SEE ACCOMPANYING SCHEDULE
CASH 986
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 2,748,386
DIVIDENDS RECEIVABLE 1,053,662
TOTAL ASSETS 651,210,455
LIABILITIES
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED $ 3,458,192
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 353,541
ACCRUED MANAGEMENT FEE 42,269
TOTAL LIABILITIES 3,854,002
NET ASSETS $ 647,356,453
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 594,483,471
UNDISTRIBUTED NET INVESTMENT INCOME 2,560,461
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 8,052,054
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 42,260,467
NET ASSETS, FOR 50,524,663 SHARES OUTSTANDING $ 647,356,453
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $12.81
SHARE ($647,356,453 (DIVIDED BY) 50,524,663 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 31, 1998
INVESTMENT INCOME $ 4,212,894
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST 1,066
TOTAL INCOME 4,213,960
EXPENSES
MANAGEMENT FEE $ 160,385
NON-INTERESTED TRUSTEES' COMPENSATION 418
TOTAL EXPENSES BEFORE REDUCTIONS 160,803
EXPENSE REDUCTIONS (37,933) 122,870
NET INVESTMENT INCOME 4,091,090
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES 5,582,413
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 5,083,062 10,665,475
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 42,914,286
INVESTMENT SECURITIES
NET GAIN (LOSS) 53,579,761
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 57,670,851
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 30,159
REIMBURSEMENT FROM INVESTMENT ADVISER
CUSTODIAN CREDITS 39
TRANSFER AGENT CREDITS 7,735
$ 37,933
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
1998 OF OPERATIONS) TO
MARCH 31,
1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 4,091,090 $ 93,648
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 10,665,475 31,087
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 42,914,286 (653,819)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 57,670,851 (529,084)
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (3,427,770) (5,289)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (831,579) -
TOTAL DISTRIBUTIONS (4,259,349) (5,289)
SHARE TRANSACTIONS 632,743,131 26,783,587
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 4,255,727 5,289
COST OF FREEDOM FUND SHARES REDEEMED (66,653,573) (2,654,837)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 570,345,285 24,134,039
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 623,756,787 23,599,666
NET ASSETS
BEGINNING OF PERIOD 23,599,666 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 647,356,453 $ 23,599,666
INCOME OF $2,560,461 AND $93,710, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 53,347,199 2,579,315
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 370,207 516
REDEEMED (5,517,029) (255,545)
NET INCREASE (DECREASE) 48,200,377 2,324,286
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
OF OPERATIONS) TO
MARCH 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.15 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .30 .11
NET REALIZED AND UNREALIZED GAIN (LOSS) 2.82 .15 F
TOTAL FROM INVESTMENT OPERATIONS 3.12 .26
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.37) (.11)
FROM NET REALIZED GAIN (.09) -
TOTAL DISTRIBUTIONS (.46) (.11)
NET ASSET VALUE, END OF PERIOD $ 12.81 $ 10.15
TOTAL RETURN B, C 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) $ 647,356 $ 23,600
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% E .08% A, E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 2.54% 2.56% A
PORTFOLIO TURNOVER RATE 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 THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2020 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF MARCH 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
BLUE CHIP GROWTH FUND 10.3% 10.3%
DISCIPLINED EQUITY FUND 10.2 10.3
EQUITY-INCOME FUND 10.2 10.4
FIDELITY FUND 10.2 10.3
GROWTH & INCOME PORTFOLIO 10.2 10.3
GROWTH COMPANY FUND 10.3 10.3
OTC PORTFOLIO 6.9 6.9
68.3 68.8
INTERNATIONAL EQUITY FUNDS
DIVERSIFIED INTERNATIONAL FUND 3.0 3.2
EUROPE FUND 3.0 3.2
JAPAN FUND 2.4 2.6
OVERSEAS FUND 3.0 3.2
SOUTHEAST ASIA FUND 0.6 0.6
12.0 12.8
INVESTMENT GRADE FIXED-INCOME FUNDS
GOVERNMENT SECURITIES FUND 4.6 4.0
INTERMEDIATE BOND FUND 3.0 2.7
INVESTMENT GRADE BOND FUND 4.6 4.0
12.2 10.7
HIGH YIELD FIXED-INCOME FUND
CAPITAL & INCOME FUND 7.5 7.7
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
7.7% (HY)
ROW: 1, COL: 1, VALUE: 7.7
ROW: 1, COL: 2, VALUE: 10.7
ROW: 1, COL: 3, VALUE: 12.8
ROW: 1, COL: 4, VALUE: 68.8
10.7% (IG)
68.8% (DE)
12.8% (IE)
CURRENT
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
68.3% (DE)
12.2% (IG)
12.0% (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: 13.3
ROW: 1, COL: 3, VALUE: 11.8
ROW: 1, COL: 4, VALUE: 67.40000000000001
13.3% (IG)
67.4% (DE)
11.8% (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 SEPTEMBER 30, 1997.
THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT SEPTEMBER 30, 1998.
FIDELITY FREEDOM 2020 FUND
INVESTMENTS MARCH 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 80.3%
MATURITY VALUE
AMOUNT (NOTE 1)
DOMESTIC EQUITY FUNDS - 68.3%
Blue Chip Growth Fund 1,316,762 $ 59,227,975
Disciplined Equity Fund 2,009,165 59,049,358
Equity-Income Fund 1,020,351 58,680,388
Fidelity Fund 1,754,884 58,999,215
Growth & Income Portfolio 1,376,975 58,989,608
Growth Company Fund 1,227,838 59,402,824
OTC Portfolio 1,008,413 39,993,671
394,343,039
INTERNATIONAL EQUITY FUNDS - 12.0%
Diversified International Fund 957,177 17,497,197
Europe Fund 490,819 17,482,965
Japan Fund 1,392,392 13,673,288
Overseas Fund 469,672 17,420,136
Southeast Asia Fund 350,323 3,454,192
69,527,778
TOTAL EQUITY FUNDS
(Cost $417,866,311) 463,870,817
FIXED-INCOME FUNDS - 19.7%
INVESTMENT GRADE FIXED-INCOME FUNDS - 12.2%
Government Securities Fund 2,664,856 26,435,373
Intermediate Bond Fund 1,704,783 17,337,440
Investment Grade Bond Fund 3,617,662 26,408,934
70,181,747
HIGH YIELD FIXED-INCOME FUNDS - 7.5%
Capital & Income Fund 4,104,372 43,547,388
TOTAL FIXED-INCOME FUNDS
(Cost $112,122,598) 113,729,135
CASH EQUIVALENTS - 0.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 5.92%, dated
3/31/98 due 4/1/98 $ 59,010 59,000
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $530,047,909) $ 577,658,952
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$531,084,199 and $20,114,508, respectively.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $530,048,173. Net unrealized appreciation
aggregated $47,610,779, of which $49,421,727 related to appreciated
investment securities and $1,810,948 related to depreciated investment
securities.
The fund hereby designates approximately $422,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2020 FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (INCLUDING REPURCHASE $ 577,658,952
AGREEMENTS OF $59,000) (COST $530,047,909) -
SEE ACCOMPANYING SCHEDULE
CASH 317
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 2,448,202
DIVIDENDS RECEIVABLE 523,400
TOTAL ASSETS 580,630,871
LIABILITIES
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED $ 2,054,993
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 935,929
ACCRUED MANAGEMENT FEE 37,315
TOTAL LIABILITIES 3,028,237
NET ASSETS $ 577,602,634
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 522,608,578
UNDISTRIBUTED NET INVESTMENT INCOME 1,669,019
ACCUMULATED UNDISTRIBUTED NET REALIZED 5,713,994
GAIN (LOSS) ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 47,611,043
NET ASSETS, FOR 43,486,151 SHARES OUTSTANDING $ 577,602,634
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $13.28
SHARE ($577,602,634 (DIVIDED BY) 43,486,151 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 31, 1998
INVESTMENT INCOME $ 2,381,876
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST INCOME 670
TOTAL INCOME 2,382,546
EXPENSES
MANAGEMENT FEE $ 129,562
NON-INTERESTED TRUSTEES' COMPENSATION 319
TOTAL EXPENSES BEFORE REDUCTIONS 129,881
EXPENSE REDUCTIONS (29,238) 100,643
NET INVESTMENT INCOME 2,281,903
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES 3,631,846
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 4,308,658 7,940,504
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 48,041,041
INVESTMENT SECURITIES
NET GAIN (LOSS) 55,981,545
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 58,263,448
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 24,214
REIMBURSEMENT FROM INVESTMENT ADVISER
CUSTODIAN CREDITS 61
TRANSFER AGENT CREDITS 4,963
$ 29,238
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
1998 OF OPERATIONS) TO
MARCH 31,
1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 2,281,903 $ 43,262
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 7,940,504 44,065
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 48,041,041 (429,998)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 58,263,448 (342,671)
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (2,139,443) (4,270)
FROM NET INVESTMENT INCOME
FROM NET REALIZED GAIN (775,606) -
TOTAL DISTRIBUTIONS (2,915,049) (4,270)
SHARE TRANSACTIONS 561,324,674 17,189,961
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 2,914,790 4,270
COST OF FREEDOM FUND SHARES REDEEMED (56,943,712) (1,888,807)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 507,295,752 15,305,424
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 562,644,151 14,958,483
NET ASSETS
BEGINNING OF PERIOD 14,958,483 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 577,602,634 $ 14,958,483
INCOME OF $1,669,019 AND $43,724, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 46,318,365 1,645,700
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 249,279 414
REDEEMED (4,547,206) (180,401)
NET INCREASE (DECREASE) 42,020,438 1,465,713
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
OF OPERATIONS) TO
MARCH 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.21 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .21 .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 3.33 .22 F
TOTAL FROM INVESTMENT OPERATIONS 3.54 .30
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.34) (.09)
FROM NET REALIZED GAIN (.13) -
TOTAL DISTRIBUTIONS (.47) (.09)
NET ASSET VALUE, END OF PERIOD $ 13.28 $ 10.21
TOTAL RETURN B, C 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) $ 577,603 $ 14,958
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% E .08% A, E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.76% 1.75% A
PORTFOLIO TURNOVER RATE 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 THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
FIDELITY FREEDOM 2030 FUND
INVESTMENT CHANGES
FUND HOLDINGS AS OF MARCH 31, 1998
% OF FUND'S % OF FUND'S INVESTMENTS
INVESTMENTS IN THESE HOLDINGS
6 MONTHS AGO
DOMESTIC EQUITY FUNDS
BLUE CHIP GROWTH FUND 10.5% 10.4%
DISCIPLINED EQUITY FUND 10.5 10.3
EQUITY-INCOME FUND 10.4 10.4
FIDELITY FUND 10.5 10.4
GROWTH & INCOME PORTFOLIO 10.5 10.4
GROWTH COMPANY FUND 10.5 10.4
OTC PORTFOLIO 7.1 6.9
70.0 69.2
INTERNATIONAL EQUITY FUNDS
DIVERSIFIED INTERNATIONAL FUND 3.7 3.9
EUROPE FUND 3.6 3.9
JAPAN FUND 2.9 3.1
OVERSEAS FUND 3.6 3.8
SOUTHEAST ASIA FUND 0.7 0.7
14.5 15.4
INVESTMENT GRADE FIXED-INCOME FUNDS
GOVERNMENT SECURITIES FUND 2.2 2.0
INTERMEDIATE BOND FUND 1.4 1.3
INVESTMENT GRADE BOND FUND 2.2 2.0
5.8 5.3
HIGH YIELD FIXED-INCOME FUND
CAPITAL & INCOME FUND 9.7 10.1
100.0% 100.0%
ASSET ALLOCATION
SIX MONTHS AGO
10.1% (HY)
ROW: 1, COL: 1, VALUE: 10.1
ROW: 1, COL: 2, VALUE: 5.3
ROW: 1, COL: 3, VALUE: 15.4
ROW: 1, COL: 4, VALUE: 69.2
5.3% (IG)
69.2% (DE)
15.4% (IE)
CURRENT
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)
EQUITY
DE = DOMESTIC EQUITY FUNDS
IE = INTERNATIONAL EQUITY FUNDS
EXPECTED
FIXED-INCOME
IG = INVESTMENT GRADE FUNDS
HY = HIGH YIELD FUNDS
9.4% (HY)
ROW: 1, COL: 1, VALUE: 9.4
ROW: 1, COL: 2, VALUE: 6.2
ROW: 1, COL: 3, VALUE: 14.4
ROW: 1, COL: 4, VALUE: 70.0
70.0% (DE)
6.2% (IG)
14.4% (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 SEPTEMBER 30, 1997.
THE CURRENT ALLOCATION IS BASED ON THE FUND'S HOLDINGS AS OF MARCH 31,
1998. THE EXPECTED ALLOCATION REPRESENTS THE FUND'S ANTICIPATED TARGET
ASSET ALLOCATION AT SEPTEMBER 30, 1998.
FIDELITY FREEDOM 2030 FUND
INVESTMENTS MARCH 31, 1998
SHOWING PERCENTAGE OF TOTAL VALUE OF INVESTMENT IN SECURITIES
EQUITY FUNDS - 84.5%
MATURITY VALUE
AMOUNT (NOTE 1)
DOMESTIC EQUITY FUNDS - 70.0%
Blue Chip Growth Fund 268,915 $ 12,095,799
Disciplined Equity Fund 410,298 12,058,652
Equity-Income Fund 208,508 11,991,302
Fidelity Fund 358,243 12,044,122
Growth & Income Portfolio 281,306 12,051,164
Growth Company Fund 250,907 12,138,885
OTC Portfolio 205,955 8,168,194
80,548,118
INTERNATIONAL EQUITY FUNDS - 14.5%
Diversified International Fund 230,280 4,209,517
Europe Fund 118,127 4,207,691
Japan Fund 336,255 3,302,022
Overseas Fund 113,218 4,199,258
Southeast Asia Fund 84,019 828,427
16,746,915
TOTAL EQUITY FUNDS
(Cost $90,073,112) 97,295,033
FIXED-INCOME FUNDS - 15.5%
INVESTMENT GRADE FIXED-INCOME FUNDS - 5.8%
Government Securities Fund 252,806 2,507,834
Intermediate Bond Fund 161,645 1,643,934
Investment Grade Bond Fund 345,034 2,518,749
6,670,517
HIGH YIELD FIXED-INCOME FUND - 9.7%
Capital & Income Fund 1,047,929 11,118,523
TOTAL FIXED-INCOME FUNDS
(Cost $17,252,905) 17,789,040
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $107,326,017) $ 115,084,073
OTHER INFORMATION
Purchases and redemptions of the underlying fund shares aggregated
$113,742,456 and $14,689,191, respectively.
INCOME TAX INFORMATION
At March 31, 1998, the aggregate cost of investment securities for
income tax purposes was $107,329,455. Net unrealized appreciation
aggregated $7,754,618, of which $8,296,363 related to appreciated
investment securities and $541,745 related to depreciated investment
securities.
The fund hereby designates approximately $236,000 as a capital gain
dividend for the purpose of the dividend paid deduction.
FIDELITY FREEDOM 2030 FUND
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
MARCH 31, 1998
ASSETS
INVESTMENT IN SECURITIES, AT VALUE (COST $107,326,017) - $ 115,084,073
SEE ACCOMPANYING SCHEDULE
RECEIVABLE FOR FREEDOM FUND SHARES SOLD 1,849,433
DIVIDENDS RECEIVABLE 80,255
TOTAL ASSETS 117,013,761
LIABILITIES
PAYABLE TO CUSTODIAN BANK $ 3,781
PAYABLE FOR UNDERLYING FUND SHARES PURCHASED 1,732,511
PAYABLE FOR FREEDOM FUND SHARES REDEEMED 197,986
ACCRUED MANAGEMENT FEE 7,403
TOTAL LIABILITIES 1,941,681
NET ASSETS $ 115,072,080
NET ASSETS CONSIST OF:
PAID IN CAPITAL $ 103,423,282
UNDISTRIBUTED NET INVESTMENT INCOME 344,198
ACCUMULATED UNDISTRIBUTED NET REALIZED GAIN (LOSS) 3,546,544
ON INVESTMENTS
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS 7,758,056
NET ASSETS, FOR 8,573,185 SHARES OUTSTANDING $ 115,072,080
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER $13.42
SHARE ($115,072,080 (DIVIDED BY) 8,573,185 SHARES)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED MARCH 31, 1998
INVESTMENT INCOME $ 781,402
INCOME DISTRIBUTIONS FROM UNDERLYING FUNDS
INTEREST 78
TOTAL INCOME 781,480
EXPENSES
MANAGEMENT FEE $ 41,977
NON-INTERESTED TRUSTEES' COMPENSATION 126
TOTAL EXPENSES BEFORE REDUCTIONS 42,103
EXPENSE REDUCTIONS (8,330) 33,773
NET INVESTMENT INCOME 747,707
REALIZED AND UNREALIZED GAIN (LOSS)
REALIZED GAIN (LOSS) ON SALE OF UNDERLYING FUND SHARES 2,372,290
CAPITAL GAIN DISTRIBUTIONS FROM UNDERLYING FUNDS 2,584,181 4,956,471
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) ON 7,933,861
INVESTMENT SECURITIES
NET GAIN (LOSS) 12,890,332
NET INCREASE (DECREASE) IN NET ASSETS RESULTING $ 13,638,039
FROM OPERATIONS
OTHER INFORMATION
EXPENSE REDUCTIONS $ 8,077
REIMBURSEMENT FROM INVESTMENT ADVISER
CUSTODIAN CREDITS 67
TRANSFER AGENT CREDITS 186
$ 8,330
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
1998 OF OPERATIONS) TO
MARCH 31,
1997
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS $ 747,707 $ 12,270
NET INVESTMENT INCOME
NET REALIZED GAIN (LOSS) 4,956,471 19,374
CHANGE IN NET UNREALIZED APPRECIATION (DEPRECIATION) 7,933,861 (175,805)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 13,638,039 (144,161)
FROM OPERATIONS
DISTRIBUTIONS TO SHAREHOLDERS (757,317) (3,835)
FROM NET INVESTMENT INCOME
IN EXCESS OF NET INVESTMENT INCOME (610,205) -
FROM NET REALIZED GAIN (471,015) -
TOTAL DISTRIBUTIONS (1,838,537) (3,835)
SHARE TRANSACTIONS 138,314,449 6,627,125
NET PROCEEDS FROM SALES OF FREEDOM FUND SHARES
REINVESTMENT OF DISTRIBUTIONS 1,838,434 3,834
COST OF FREEDOM FUND SHARES REDEEMED (42,605,715) (757,553)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING 97,547,168 5,873,406
FROM SHARE TRANSACTIONS
TOTAL INCREASE (DECREASE) IN NET ASSETS 109,346,670 5,725,410
NET ASSETS
BEGINNING OF PERIOD 5,725,410 -
END OF PERIOD (INCLUDING UNDISTRIBUTED NET INVESTMENT $ 115,072,080 $ 5,725,410
INCOME OF $344,198 AND $10,649, RESPECTIVELY)
OTHER INFORMATION
SHARES
SOLD 11,252,452 632,180
ISSUED IN REINVESTMENT OF DISTRIBUTIONS 156,038 372
REDEEMED (3,395,851) (72,006)
NET INCREASE (DECREASE) 8,012,639 560,546
</TABLE>
FINANCIAL HIGHLIGHTS
YEAR ENDED OCTOBER 17, 1996
MARCH 31, (COMMENCEMENT
OF OPERATIONS) TO
MARCH 31,
1998 1997
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA
NET ASSET VALUE, BEGINNING OF PERIOD $ 10.21 $ 10.00
INCOME FROM INVESTMENT OPERATIONS
NET INVESTMENT INCOME D .22 .08
NET REALIZED AND UNREALIZED GAIN (LOSS) 3.42 .22 F
TOTAL FROM INVESTMENT OPERATIONS 3.64 .30
LESS DISTRIBUTIONS
FROM NET INVESTMENT INCOME (.17) (.09)
IN EXCESS OF NET INVESTMENT INCOME (.14) -
FROM NET REALIZED GAIN (.12) -
TOTAL DISTRIBUTIONS (.43) (.09)
NET ASSET VALUE, END OF PERIOD $ 13.42 $ 10.21
TOTAL RETURN B, C 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) $ 115,072 $ 5,725
RATIO OF EXPENSES TO AVERAGE NET ASSETS .08% E .08% A, E
RATIO OF NET INVESTMENT INCOME TO AVERAGE NET ASSETS 1.78% 1.71% A
PORTFOLIO TURNOVER RATE 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 THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH
THE AGGREGATE NET LOSS ON INVESTMENTS FOR THE PERIOD DUE TO THE TIMING
OF SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING
MARKET VALUES OF THE INVESTMENTS OF THE FUND.
NOTES TO FINANCIAL STATEMENTS
For the period ended March 31, 1998
1. SIGNIFICANT ACCOUNTING POLICIES.
Freedom Income Fund, Freedom 2000 Fund, Freedom 2010 Fund, Freedom
2020 Fund, and Freedom 2030 Fund (the funds) are funds of Fidelity
Aberdeen Street Trust (the trust). The trust is registered under the
Investment Company Act of 1940, as amended (the 1940 Act), as an
open-end management investment company organized as a Delaware
business trust. Each fund is authorized to issue an unlimited number
of shares. The funds primarily invest in a combination of other
Fidelity equity, fixed income, and money market funds (the Underlying
Funds) managed by Fidelity Management & Research Company (FMR). The
financial statements have been prepared in conformity with generally
accepted accounting principles which 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 to shareholders of the
Freedom Income Fund are paid monthly, while distributions from capital
gains, if any, are recorded on the ex-dividend date. Income and
capital gain distributions to shareholders of the other Freedom Funds
are recorded on the ex-dividend date.
Income and capital gain distributions are determined in accordance
with income tax regulations which may differ from generally accepted
accounting principles. These differences, which may result in
distribution reclassifications, are primarily due to differing
treatments for the short-term gain distributions from the underlying
funds, non-taxable dividends and losses deferred due to wash sales.
1. SIGNIFICANT ACCOUNTING
POLICIES - CONTINUED
DISTRIBUTIONS TO SHAREHOLDERS -
CONTINUED
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income and accumulated undistributed net
realized gain (loss) on investments may include temporary book and tax
basis differences that 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 each fund's average net
assets.
OTHER TRANSACTIONS. Strategic Advisers has entered into an
administration agreement with FMR under which FMR provides management
and administrative services (other than investment advisory services)
necessary for the operation of each fund. Pursuant to this agreement,
FMR pays all expenses of each fund, except the compensation of the
non-interested trustees and certain exceptions such as interest,
taxes, brokerage commissions, and extraordinary expenses. FMR also
contracts with other Fidelity companies to perform the services
necessary for the operation of each fund. For the services under the
agreement, Strategic Advisers pays FMR a monthly administration fee
equal to the management fee received by Strategic Advisers, minus an
amount equal to an annual rate of .02% of each fund's average net
assets.
5. EXPENSE REDUCTIONS.
Strategic Advisers voluntarily agreed to reimburse each fund's total
operating expenses 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 reduce a portion of each applicable funds' 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 10% or more of the total outstanding shares of the
following funds:
BENEFICIAL INTEREST
FUND NUMBER OF SHAREHOLDERS % OWNERSHIP
Freedom Income 2 34%
Freedom 2000 1 62% Freedom 2010 1 70%
Freedom 2020 1 77%
Freedom 2030 1 22%
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Fidelity Aberdeen Street Trust and the Shareholders
of Fidelity Freedom Income, Fidelity Freedom 2000, Fidelity Freedom
2010, Fidelity Freedom 2020, and Fidelity Freedom 2030 Funds:
We have audited the accompanying statements of assets and liabilities
of Fidelity Aberdeen Street Trust: Fidelity Freedom Income, Fidelity
Freedom 2000, Fidelity Freedom 2010, Fidelity Freedom 2020, and
Fidelity Freedom 2030 Funds, including the schedules of portfolio
investments, as of March 31, 1998, and the related statements of
operations for the year then ended, and the statements of changes in
net assets and financial highlights for the year then ended and for
the period from October 17, 1996 (commencement of operations) to March
31, 1997. These financial statements and financial highlights are the
responsibility of the funds' management. Our responsibility is to
express an opinion on these financial statements and financial
highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities owned as of March 31, 1998 by
correspondence with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of Fidelity Aberdeen Street Trust: Fidelity Freedom
Income, Fidelity Freedom 2000, Fidelity Freedom 2010, Fidelity Freedom
2020, and Fidelity Freedom 2030 Funds as of March 31, 1998 the results
of their operations for the year then ended, and the changes in their
net assets and financial highlights for the year then ended, and for
the period from October 17, 1996 (commencement of operations) to March
31, 1997, in conformity with generally accepted accounting principles.
/s/COOPERS & LYBRAND L.L.P.
Boston, Massachusetts
May 8, 1998
DISTRIBUTIONS
The Board of Trustees of each fund voted to pay to shareholders of
record at the opening of business on record date, the following
distributions derived from capital gains realized from sales of
portfolio securities and distributions from underlying funds, and
dividends derived from net investment income:
LONG TERM
SHORT TERM LONG TERM CAPITAL GAINS BREAK DOWN
PAY DATE RECORD DATE DIVIDENDS CAPITAL GAINS CAPITAL GAINS 28% RATE
20% RATE
Freedom Income 12/30/97 12/29/97 $0.10 $0.04 $0.01 58.49% 41.51%
5/4/98 5/1/98 $0.04 $0.04 $0.05 62.00% 38.00%
Freedom 2000 5/5/97 5/2/97 $0.05 $0.01 $0.01 100.00% 0.00%
12/30/97 12/29/97 $0.28 $0.07 $0.03 58.48% 41.52%
5/4/98 5/1/98 $0.08 $0.06 $0.06 60.00% 40.00%
Freedom 2010 5/5/97 5/2/97 $0.04 - $0.01 100.00% 0.00%
12/30/97 12/29/97 $0.33 $0.04 $0.04 57.27% 42.73%
5/4/98 5/1/98 $0.05 $0.05 $0.11 68.18% 31.82%
Freedom 2020 5/5/97 5/2/97 $0.03 $0.01 $0.01 100.00% 0.00%
12/30/97 12/29/97 $0.31 $0.05 $0.06 58.45% 41.55%
5/4/98 5/1/98 $0.04 $0.04 $0.09 63.33% 36.67%
Freedom 2030 5/5/97 5/2/97 $0.01 $0.01 $0.01 100.00% 0.00%
12/30/97 12/29/97 $0.30 $0.05 $0.05 58.37% 41.63%
5/4/98 5/1/98 $0.04 $0.13 $0.23 64.78% 35.22%
The following percentages of dividends distributed during the fiscal
year were derived from interest on U.S. Government securities which is
generally exempt from state income tax.
Freedom Income 16.0%
Freedom 2000 20.5%
Freedom 2010 11.7%
Freedom 2020 6.7%
Freedom 2030 2.7%
The following percentages of the dividends distributed during the
fiscal year qualifies for the dividends-received deduction for
corporate shareholders.
Freedom Income 5%
Freedom 2000 11%
Freedom 2010 17%
Freedom 2020 21%
Freedom 2030 21%
The fund will notify shareholders in January 1999 of the applicable
percentage for use in preparing 1998 income tax returns.
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 Xpressprovides 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.
SM
(PHONE_GRAPHIC)TOUCHTONE XPRESS
1-800-544-5555
PRESS
For mutual fund and brokerage trading.
For quotes.*
For account balances and holdings.
To review orders and mutual
fund activity.
To change your PIN.
To speak to a Fidelity representative.
0
*
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.
(PHONE_GRAPHIC)FIDELITY'S WEB SITE
WWW.FIDELITY.COM
If you are not currently on the Internet, call Fidelity at
1-800-544-7272 for significant savings on Web access from internetMCI.
SM
(PHONE_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
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
CUSTODIAN
The Bank of New York
New York, NY
FIDELITY'S ASSET ALLOCATION FUNDS
Asset Manager
SM
Asset Manager: Growth
SM
Asset Manager: Income
SM
Fidelity Freedom Funds
Income, 2000, 2010, 2020, 2030
SM
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Exchanges/Redemptions 1-800-544-7777
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
(registered trademark)
TouchTone Xpress 1-800-544-5555
SM
AUTOMATED LINE FOR QUICKEST SERVICE
