SUPPLEMENT TO THE FIDELITY FREEDOM FUNDS(registered trademark)
MAY 21, 1998
STATEMENT OF ADDITIONAL INFORMATION
Fidelity Government Securities Fund, an underlying fund of the
Fidelity Freedom Funds, has been renamed Fidelity Government Income
Fund.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"INVESTMENT POLICIES AND LIMITATIONS" SECTION ON PAGE 3 AND IS
INSERTED AS THE PENULTIMATE PARAGRAPH OF THE SECTION.
Each Freedom Fund intends to comply with the requirements of Section
12(d)(1)(G)(i)(IV) of the 1940 Act.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND UNDER THE
HEADING "EXPOSURE TO FOREIGN MARKETS" IN THE "INVESTMENT PRACTICES OF
THE UNDERLYING FIDELITY FUNDS" SECTION ON PAGE 6.
It is anticipated that in most cases the best available market for
foreign securities will be on an exchange or in over-the-counter (OTC)
markets located outside of the United States. Foreign stock markets,
while growing in volume and sophistication, are generally not as
developed as those in the United States, and securities of some
foreign issuers may be less liquid and more volatile than securities
of comparable U.S. issuers. Foreign security trading, settlement and
custodial practices (including those involving securities settlement
where fund assets may be released prior to receipt of payment) are
often less developed than those in U.S. markets, and may result in
increased risk or substantial delays in the event of a failed trade or
the insolvency of, or breach of duty by, a foreign broker-dealer,
securities depository or foreign subcustodian. For example, many
foreign countries are less prepared than the United States to properly
process and calculate information related to dates from and after
January 1, 2000. As a result, some foreign markets, brokers, banks or
securities depositories could experience at least temporary
disruptions, which could result in difficulty buying and selling
securities in certain foreign markets and pricing foreign investments,
and foreign issuers could fa il to pay timely dividends, interest
or principal. In addition, the costs associated with foreign
investments, including withholding taxes, brokerage commissions and
custodial costs, are generally higher than with U.S. investments.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER THE
HEADING "FUTURES CONTRACTS" IN THE "INVESTMENT PRACTICES OF THE
UNDERLYING FIDELITY FUNDS" SECTION ON PAGE 9.
Futures may be based on foreign indexes such as the CAC40 (France),
DAX30 (Germany), EuroTop 100 (Europe), IBEX (Spain), FTSE 100 (United
Kingdom), All Ordinary (Australia), Hang Seng (Hong Kong), and Nikkei
225, Nikkei 300 and TOPIX (Japan).
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND UNDER THE
HEADING "FUTURES MARGIN PAYMENTS" IN THE "INVESTMENT PRACTICES OF THE
UNDERLYING FIDELITY FUNDS" SECTION ON PAGE 9.
Although futures exchanges generally operate similarly in the United
States and abroad, foreign futures exchanges may follow trading,
settlement and margin procedures that are different from those for
U.S. exchanges. Futures contracts traded outside the United States may
involve greater risk of loss than U.S.-traded contracts, including
potentially greater risk of losses due to insolvency of a futures
broker, exchange member or other party that may owe initial or
variation margin to a fund. Because initial and variation margin
payments may be measured in foreign currency, a futures contract
traded outside the United States may also involve the risk of foreign
currency fluctuation.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 25.
The performance of each Freedom Fund may be compared to the
performance of a Target Asset Allocation Composite Index (Composite
Index). A Freedom Fund's Composite Index is a representation of the
performance of the asset classes (domestic and international equity
funds, investment grade and high yield fixed-income funds, and money
market funds) in which a Freedom Fund is invested and is based on the
weightings of each asset class in a Freedom Fund. The following
indices are used to calculate a Freedom Fund's Composite Index:
Wilshire 5000 Index for the domestic equity fund class, Morgan Stanley
Capital International Europe, Australasia, Far East (EAFE) Index for
the international equity fund class, Lehman Brothers Aggregate Bond
Index for the investment grade fixed-income fund class, Merrill Lynch
High Yield Master Index for the high yield fixed-income fund class,
and Lehman Brothers 3-Month T-Bill Index for the money market fund
class. The index weightings of each Composite Index are rebalanced
monthly.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 25.
<TABLE>
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THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: OCTOBER
17, 1996 THROUGH JUNE 30,
1997*
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 39.2% 4.4% 40.9% 4.0%
Freedom 2010 59.2% 9.7% 24.1% 7.0%
Freedom 2020 70.0% 12.4% 10.1% 7.5%
Freedom 2030 70.0% 15.0% 5.0% 10.0%
</TABLE>
<TABLE>
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THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: OCTOBER
17, 1996 THROUGH JUNE 30,
1997*
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 11.5%
Freedom 2010 --
Freedom 2020 --
Freedom 2030 --
</TABLE>
* The weightings of the Composite Indices of the Freedom Funds' did
not change on December 31, 1996.
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THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1997 THROUGH DECEMBER 31, 1997
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 38.2% 4.5% 40.8% 4.0%
Freedom 2010 57.7% 9.5% 25.0% 7.1%
Freedom 2020 69.1% 12.6% 10.7% 7.6%
Freedom 2030 69.6% 15.1% 5.3% 10.0%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1997 THROUGH JUNE 30, 1998
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 37.9% 4.3% 40.5% 3.9%
Freedom 2010 56.8% 9.2% 25.7% 7.0%
Freedom 2020 68.6% 12.4% 11.4% 7.6%
Freedom 2030 69.6% 15.0% 5.5% 9.9%
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1998 THROUGH DECEMBER 31, 1998
Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield
Bond Index Master Index
Freedom Income 20.0% -- 40.0% --
Freedom 2000 36.8% 3.9% 40.3% 3.6%
Freedom 2010 55.2% 8.5% 27.2% 6.7%
Freedom 2020 67.9% 11.9% 12.7% 7.5%
Freedom 2030 70.0% 14.5% 6.0% 9.5%
</TABLE>
<TABLE>
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THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1997 THROUGH DECEMBER 31, 1997
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 12.5%
Freedom 2010 0.7%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: DECEMBER
31, 1997 THROUGH JUNE 30, 1998
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 13.4%
Freedom 2010 1.3%
Freedom 2020 --
Freedom 2030 --
THE FREEDOM FUNDS' COMPOSITE
INDEX WEIGHTINGS: JUNE 30,
1998 THROUGH DECEMBER 31, 1998
Lehman Brothers 3-Month
T-Bill Index
Freedom Income 40.0%
Freedom 2000 15.4%
Freedom 2010 2.4%
Freedom 2020 --
Freedom 2030 --
</TABLE>
THE FOLLOWING INFORMATION REPLACES THE STANDARD & POOR'S 500 INDEX
DESCRIPTION FOUND IN THE "PERFORMANCE" SECTION ON PAGE 26.
WILSHIRE 5000 is a market capitalization-weighted index of
approximately 7,000 U.S. equity securities. The index contains all
actively traded common stocks with readily available price data traded
on the New York Stock Exchange, American Stock Exchange, and NASDAQ.
THE FOLLOWING TABLE REPLACES THE SIMILAR TABLE FOUND IN THE
"PERFORMANCE" SECTION ON PAGE 27.
The following table represents the comparative indices' calendar
year-to-year performance.
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Wilshire 5000 MSCI EAFE Lehman Brothers Aggregate Merrill Lynch High Yield Lehman Brothers 3-Month
Bond Index Master Index T-Bill Index
1997 31.29% 2.01% 9.65% 12.82% 5.52%
1996 21.21% 6.05% 3.63% 11.06% 5.38%
1995 36.45% 11.21% 18.47% 19.91% 6.09%
1994 (0.06)% 7.78% (2.92)% (1.17)% 4.26%
1993 11.28% 32.56% 9.75% 17.18% 3.20%
1992 8.97% (12.17)% 7.40% 18.16% 2.92%
1991 34.21% 12.13% 16.00% 34.58% 6.22%
1990 (6.18)% (23.45)% 8.96% (4.35)% 8.21%
1989 29.17% 10.53% 14.53% 4.23% 8.74%
1988 17.94% 28.27% 7.89% 13.47% 6.40%
</TABLE>
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 30.
*EDWARD C. JOHNSON 3d (67), Trustee and President, is Chairman, Chief
Executive Officer and a Director of FMR Corp.; a Director and Chairman
of the Board and of the Executive Committee of FMR; Chairman and a
Director of Fidelity Investments Money Management, Inc.(1998),
Fidelity Management & Research (U.K.) Inc., and Fidelity Management &
Research (Far East) Inc. Abig ail Johnson, Member of the
Advisory Board of Fidelity Aberdeen Street Trust, is Mr. Johnson's
daughter.
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 30.
ABIGAIL P. JOH NSON (36), Member of the Advisory Board of Fidelity
Aberdeen Street Trust (1999), is Vice President of certain Equity
Funds (1997), and is a Director of FMR Corp.(1994). Before assuming
her current responsibilities, Ms. Johnson managed a number of Fidelity
Funds . Edward C. Johnson 3d, Trustee and President of the Funds,
is Ms. Johnson's father.
THE FOLLOWING INFORMATION REPLACES SIMILAR INFORMATION FOUND IN THE
"TRUSTEES AND OFFICERS" SECTION ON PAGE 31.
*ROBERT C. POZEN (51), Trustee (1997) and Senior Vice President, is
also President and a Director of FMR (1997); and President and a
Director of Fidelity Investments Money Management, Inc. (1998),
Fidelity Management & Research (U.K.) Inc. (1997), and Fidelity
Management & Research (Far East) Inc. (1997). Previously, Mr. Pozen
served as General Counsel, Managing Director, and Senior Vice
President of FMR Corp.
THE FOLLOWING INFORMATION REPLACES THE "COMPENSATION TABLE" FOUND IN
THE "TRUSTEES AND OFFICERS" SECTION ON PAGE 32.
The following table sets forth information describing the compensation
of each Trustee and Member of the Advisory Board of each fund for his
or her services for the fiscal year ended March 31, 1998, or calendar
year ended December 31, 1997, as applicable.
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COMPENSATION TABLE
AGGREGATE COMPENSATION FROM Edward C.
Johnson 3d** J. Gary Burkhead ** Ralph F. Cox Phyllis Burke Davis
A FUND
Abigail
P. Johnson**
Freedom IncomeB $ 0 $ 0 $ 0 $ 8 $ 8
Freedom 2000B 0 0 0 26 26
Freedom 2010B 0 0 0 43 43
Freedom 2020B 0 0 0 33 33
Freedom 2030B 0 0 0 13 13
TOTAL COMPENSATION FROM THE $ 0 $ 0 $ 0 $ 214,000 $ 210,000
FUND COMPLEX*,A
</TABLE>
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AGGREGATE
COMPENSATION FROM Robert M. Gates *** E. Bradley Jones Donald J. Kirk Peter S. Lynch ** William O. McCoy ****
A FUND
Freedom IncomeB $ 8 $ 8 $ 8 $ 0 $ 8
Freedom 2000B 26 26 26 0 26
Freedom 2010B 43 43 43 0 43
Freedom 2020B 33 33 33 0 33
Freedom 2030B 13 13 13 0 13
TOTAL COMPENSATION
FROM THE $ 176,000 $ 211,500 $ 211,500 $ 0 $ 214,500
FUND COMPLEX*,A
</TABLE>
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AGGREGATE COMPENSATION FROM Gerald C. McDonough Marvin L. Mann Robert C. Pozen ** Thomas R. Williams
A FUND
Freedom IncomeB $ 10 $ 8 $ 0 $ 8
Freedom 2000B 32 26 0 26
Freedom 2010B 53 42 0 43
Freedom 2020B 41 32 0 33
Freedom 2030B 16 13 0 13
TOTAL COMPENSATION FROM THE $ 264,500 $ 214,500 $ 0 $ 214,500
FUND COMPLEX*,A
</TABLE>
* Information is for the calendar year ended December 31, 1997 for 230
funds in the complex.
** Interested Trustees of the fun ds, Ms. Johnson and Mr.
Burkhead are compensated by FMR.
*** Mr. Gates was appointed to the Board of Trustees effective March
1, 1997.
**** Mr. McCoy was appointed to the Board of Trustees effective
January 1, 1997.
A Compensation figures include cash, amounts required to be deferred,
and may include amounts deferred at the election of Trustees. For the
calendar year ended December 31, 1997, the Trustees accrued required
deferred compensation from the funds as follows: Ralph F. Cox,
$75,000; Phyllis Burke Davis, $75,000; Robert M. Gates, $62,500; E.
Bradley Jones, $75,000; Donald J. Kirk, $75,000; William O. McCoy,
$75,000; Gerald C. McDonough, $87,500; Marvin L,. Mann, $75,000; and
Thomas R. Williams, $75,000. Certain of the non-interested Trustees
elected voluntarily to defer a portion of their compensation as
follows: Ralph F. Cox, $53,699; Marvin L. Mann, $53,699; and Thomas R.
Williams, $62,462.
B Compensation figures include cash.
