How do Fidelity Freedom Funds^® work?

The fund manager sets the target asset allocation mix for all of the Freedom Funds. Each fund is comprised of as many as 23 carefully chosen underlying Fidelity funds. The fund manager goes through a rigorous process of selecting the funds, based on an analysis of performance, risk, style consistency, and how the funds would work together. Although our fund manager takes a long-term approach to key asset allocation decisions, he also reviews the portfolio on a daily basis and makes adjustments and rebalances if needed. One of the greatest benefits of this approach is that it's disciplined, so it doesn't factor in the emotion of trying to benefit from a short-term fad. It doesn't try to time the market. Once again, as each Freedom Fund nears its target date, the investment mix gradually becomes more conservative.

What's Unique about Fidelity's Approach

At Fidelity, we spent three years perfecting our dynamic asset allocation rolldown technique before ever using it in the marketplace, and we believe our technique is the most effective in the industry. Our closely protected, non-linear technique strives to maximize returns during a shareholder's accumulation years and minimize downside risk after retirement.

Please note that with the exception of the Freedom Income Fund, each fund's asset allocation strategy becomes increasingly conservative as it approaches the target rate and beyond. The funds are subject to the volatility of the financial markets, including equity and fixed income investments in the U.S. and abroad and may be subject to risks associated with investing in high yield, small cap and foreign securities. Principal invested is not guaranteed at any time, including at or after their target dates.

What are some questions you should ask a fund manager about a single fund retirement option, whether you choose Fidelity or not?

• Is there a named portfolio manager?
• How are critical asset allocation decisions made?
• Does the company have experience and a track record managing this type of investment?
• How are the underlying mutual funds chosen?
• How often are the portfolios monitored and rebalanced?