SUPPLEMENT TO THE FIDELITY FREEDOM FUNDS(registered trademark)' MAY
20, 1999 PROSPECTUS
SHAREHOLDER MEETING. On or about March 15, 2000, a meeting
of the shareholders of Fidelity Freedom Income Fund (registered
trademark) , Fidelity Freedom 2000 Fund (registered
trademark) , Fidelity Freedom 2010 Fund (registered
trademark) , Fidelity Freedom 2020 Fund (registered
trademark) , and Fidelity Freedom 2030 Fund (registered
trademark) will be held to approve various proposals. Shareholders
of record on January 18, 2000 are entitled to vote at the meeting.
For more detailed information concerning the proposals under
consideration, please contact Fidelity at 1-800-544-6666 to request a
free copy of the proxy statement.
The following information replaces similar information found under the
heading "Performance" in the "Fund Summary" section on page 12.
AVERAGE ANNUAL RETURNS
For the periods ended Past 1 year Life of fundA,B
December 31, 1998
Freedom Income 11.10% 11.01%
Lehman Bros. Aggregate Bond 8.69% 9.17%
Index
Freedom Income Composite Index 10.58% 11.36%
Freedom 2000 15.26% 15.28%
Lehman Bros. Aggregate Bond 8.69% 9.17%
Index
Freedom 2000 Composite Index 14.55% 15.83%
Freedom 2010 19.31% 19.34%
S&P 500 28.58% 30.95%
Freedom 2010 Composite Index 18.16% 19.89%
Freedom 2020 21.67% 21.46%
S&P 500 28.58% 30.95%
Freedom 2020 Composite Index 20.16% 21.94%
Freedom 2030 22.12% 21.76%
S&P 500 28.58% 30.95%
Freedom 2030 Composite Index 20.42% 22.03%
A BEGINNING JANUARY 1 OF THE FIRST CALENDAR YEAR FOLLOWING THE FUNDS'
COMMENCEMENT OF OPERATIONS.
B FROM JANUARY 1, 1997.
The following information replaces similar information found under the
heading "Performance" in the "Fund Summary" section on page 13.
The following indexes 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 II Index for the high yield
fixed-income fund class, and Lehman Brothers 3-Month Treasury Bill
Index for the money market fund class. The index weightings of each
Composite Index are rebalanced monthly.
The following information replaces the Merrill Lynch High Yield Master
Index description found under the heading "Performance" in the "Fund
Summary" section on page 13.
Merrill Lynch High Yield Master II Index is a market value-weighted
index of all domestic and yankee high-yield bonds, including deferred
interest bonds and payment in kind securities. Issues included in the
index have maturities of one year or more and have a credit rating
lower than BBB-/Baa3, but are not in default.
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 supplements information found under the
heading "Description of Underlying Fidelity Funds" in the "Investment
Details" section on page 20 for Fidelity Disciplined Equity Fund.
FMR may lend the fund's securities to broker-dealers or other
institutions to earn income for the fund.
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.
MONEY MARKET FUND
RETIREMENT MONEY MARKET PORTFOLIO seeks to obtain as high a level of
current income as is consistent with the preservation of capital and
liquidity.
FMR invests the fund's assets in U.S. dollar-denominated money market
securities of domestic and foreign issuers and repurchase agreements.
FMR also may enter into reverse repurchase agreements for the fund.
FMR will invest more than 25% of the fund's total assets in the
financial services industry.
In buying and selling securities for the fund, FMR complies with
industry-standard requirements for money market funds regarding the
quality, maturity, and diversification of the fund's investments. FMR
stresses maintaining a stable $1.00 share price, liquidity, and
income.
The following information replaces similar information found under the
heading "Principal Investment Risks" in the "Investment Details"
section on page 28.
FOREIGN EXPOSURE. Foreign securities, foreign currencies, and
securities issued by U.S. entities with substantial foreign
operations, and securities for which an entity located in a foreign
country provides credit support or a maturity-shortening structure can
involve additional risks relating to political, economic, or
regulatory conditions in foreign countries. These risks include
fluctuations in foreign currencies; withholding or other taxes;
trading, settlement, custodial, and other operational risks; and the
less stringent investor protection and disclosure standards of some
foreign markets. 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, which could result in
difficulty pricing foreign investments and failure by foreign issuers
to pay timely dividends, interest, or principal. All of these factors
can make foreign investments, especially those in emerging markets,
more volatile and potentially less liquid than U.S. investments. In
addition, foreign markets can perform differently from the U.S.
market.
Investing in emerging markets can involve risks in addition to and
greater than those generally associated with investing in more
developed foreign markets. The extent of economic development;
political stability; market depth, infrastructure, and capitalization;
and regulatory oversight can be less than in more developed markets.
Emerging market economies can be subject to greater social, economic,
regulatory, and political uncertainties. All of these factors can make
emerging market securities more volatile and potentially less liquid
than securities issued in more developed markets.
EUROPE. Europe includes both developed and emerging markets. Most
developed countries in Western Europe are members of the European
Union (EU) and many are also members of the EMU, which requires
compliance with restrictions on inflation rates, deficits and debt
levels. Many Eastern European countries continue to move toward market
economies. However, their markets remain relatively undeveloped and
can be particularly sensitive to political and economic developments.
The tight fiscal and monetary controls necessary to join the EMU will
significantly affect every country in Europe.
ASIA. Asia includes countries in all stages of economic development,
from the highly developed economy of Japan to the emerging market
economy of the People's Republic of China. Most Asian economies are
characterized by over-extension of credit, currency devaluations,
rising unemployment, decreased exports, and economic recessions.
Currency devaluations in any one country can have a significant effect
on the entire region. Recently, the markets in each Asian country have
suffered significant downturns as well as significant volatility.
Increased political and social unrest in some or all Asian countries
could cause further economic and market uncertainty.
The following information replaces similar information found under the
heading "Policies" in the "Account Features and Policies" section on
page 41.
(small solid bullet) Confirmation statements (after transactions
affecting your account balance except reinvestment of distributions in
the fund or another fund and certain transactions through automatic
investment or withdrawal programs).
