SUPPLEMENT TO THE FIDELITY FREEDOM FUNDS(registered trademark)' MAY
20, 1999 PROSPECTUS
The following information replaces similar information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details" section on page 19.
FIDELITY BLUE CHIP GROWTH FUND seeks growth of capital over the long
term.
FMR normally invests the fund's assets primarily in common stocks of
well-known and established companies.
FMR normally invests at least 65% of the fund's total assets in blue
chip companies. FMR defines blue chip companies to include those with
a market capitalization of at least $200 million, if the company's
stock is included in the S&P 500 or the Dow Jones Industrial Average,
or $1 billion if not included in either index.
FMR invests the fund's assets in companies FMR believes have
above-average growth potential. Growth may be measured by factors such
as earnings or revenue. Companies with high growth potential tend to
be companies with higher than average price/earnings (P/E) ratios.
Companies with strong growth potential often have new products,
technologies, distribution channels or other opportunities or have a
strong industry or market position. The stocks of these companies are
often called "growth" stocks.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include growth
potential, earnings estimates and management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
The following information replaces similar information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details" section on page 20.
FIDELITY FUND seeks long-term capital growth.
FMR normally invests the fund's assets primarily in common stocks.
FMR, to some extent, limits the emphasis on the fund's growth
objective by investing a portion of the fund's assets in securities
selected for their current income characteristics. FMR may from time
to time invest a portion of the fund's assets in bonds, including
lower-quality debt securities.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
FIDELITY GROWTH & INCOME PORTFOLIO seeks high total return through a
combination of current income and capital appreciation.
FMR normally invests a majority of the fund's assets in common stocks
with a focus on those that pay current dividends and show potential
for capital appreciation. FMR may also invest the fund's assets in
bonds, including lower-quality debt securities, as well as stocks that
are not currently paying dividends, but offer prospects for future
income or capital appreciation.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks, or
a combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
The following information replaces similar information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details" section on page 22.
FIDELITY OTC PORTFOLIO seeks capital appreciation.
FMR normally invests the fund's assets primarily in common stocks.
FMR normally invests at least 65% of the fund's total assets in
securities principally traded on the OTC market. OTC securities are
securities principally traded on the OTC market (a telephone or
computer network that connects securities dealers). However, OTC
securities can be listed for trading on the New York or American Stock
Exchange or a foreign exchange and may include American Depositary
Receipts and securities eligible for unlisted trading privileges on
such exchanges. Securities that begin to trade principally on an
exchange after purchase continue to be considered OTC securities for
the purpose of the 65% policy. OTC securities can be issued by
companies of any size. However, the OTC market has more small and
medium-sized companies than other markets. FMR may also invest the
fund's assets in non-OTC securities.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
FMR is not constrained by any particular investment style. At any
given time, FMR may tend to buy "growth" stocks or "value" stocks or a
combination of both types. In buying and selling securities for the
fund, FMR relies on fundamental analysis of each issuer and its
potential for success in light of its current financial condition, its
industry position, and economic and market conditions. Factors
considered include growth potential, earnings estimates and
management.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices or other factors that affect security values. If FMR's
strategies do not work as intended, the fund may not achieve its
objective.
The following information replaces similar information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details" section on page 24.
INVESTMENT-GRADE FIXED-INCOME FUNDS
FIDELITY GOVERNMENT INCOME FUND seeks a high level of current income,
consistent with preservation of principal.
FMR normally invests the fund's assets in U.S. Government securities
and instruments related to U.S. Government securities. FMR normally
invests at least 65% of the fund's total assets in U.S. Government
securities. FMR does not currently intend to invest more than 40% of
the fund's assets in mortgage securities.
FMR uses the Lehman Brothers Government Bond Index as a guide in
structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. As of
July 31, 1999, the dollar-weighted average maturity of the fund and
the index was approximately 8.6 and 8.9 years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, U.S. Treasury or U.S. Government agency securities) and
different maturities based on its view of the relative value of each
sector or maturity.
Because the fund is considered non-diversified, FMR may invest a
significant percentage of the fund's assets in a single issuer.
In buying and selling securities for the fund, FMR analyzes a
security's structural features and current price compared to its
estimated long-term value, any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY INTERMEDIATE BOND FUND seeks a high level of current income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Intermediate Government/Corporate Bond
Index as a guide in structuring the fund and selecting its
investments. FMR manages the fund to have similar overall interest
rate risk to the index. In addition, the fund normally maintains a
dollar-weighted average maturity between three and 10 years. As of
April 30, 1999, the dollar-weighted average maturity of the fund and
the index was approximately 5.5 and 4.4 years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features, current price compared to its
estimated long-term value, and any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
In order to earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
FIDELITY INVESTMENT GRADE BOND FUND seeks a high level of current
income.
FMR normally invests the fund's assets in U.S. dollar-denominated
investment-grade bonds (those of medium and high quality).
FMR uses the Lehman Brothers Aggregate Bond Index as a guide in
structuring the fund and selecting its investments. FMR manages the
fund to have similar overall interest rate risk to the index. As of
April 30, 1999, the dollar-weighted average maturity of the fund and
the index was approximately 8.8 and 9.0 years, respectively. In
determining a security's maturity for purposes of calculating the
fund's average maturity, an estimate of the average time for its
principal to be paid may be used. This can be substantially shorter
than its stated maturity.
FMR allocates the fund's assets among different market sectors (for
example, corporate or government securities) and different maturities
based on its view of the relative value of each sector or maturity.
In buying and selling securities for the fund, FMR analyzes a
security's structural features, current price compared to its
estimated long-term value, and any short-term trading opportunities
resulting from market inefficiencies, and the credit quality of its
issuer.
In order to earn additional income for the fund, FMR may use a trading
strategy that involves selling mortgage securities and simultaneously
agreeing to purchase similar securities on a later date at a set
price. This trading strategy may result in an increased portfolio
turnover rate which increases transaction costs and may increase
taxable gains.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
HIGH YIELD FIXED-INCOME FUND
FIDELITY CAPITAL & INCOME FUND seeks to provide a combination of
income and capital growth.
FMR invests the fund's assets in equity and debt securities. FMR has
the flexibility to invest the fund's assets in securities of any type
or quality, including defaulted securities, but expects to invest the
majority of the fund's assets in debt securities and convertible
securities, with an emphasis on lower-quality debt securities. Many
lower-quality debt securities are subject to legal or contractual
restrictions limiting FMR's ability to resell the securities to the
general public. FMR may invest in companies whose financial condition
is troubled or uncertain and that may be involved in bankruptcy
proceedings, reorganizations or financial restructurings.
FMR may invest the fund's assets in securities of foreign issuers in
addition to securities of domestic issuers.
In buying and selling securities for the fund, FMR relies on
fundamental analysis of each issuer and its potential for success in
light of its current financial condition, its industry position, and
economic and market conditions. Factors considered include a
security's structural features and current price compared to its
long-term value, and the earnings potential, credit standing and
management of the security's issuer.
FMR may use various techniques, such as buying and selling futures
contracts, to increase or decrease the fund's exposure to changing
security prices, interest rates or other factors that affect security
values. If FMR's strategies do not work as intended, the fund may not
achieve its objective.
