QUARTERLY FUND REVIEW AS OF SEPTEMBER 30, 2017 Fidelity Freedom 2020 Fund Investment Approach Fidelity Freedom Funds (the Funds) are designed so that the target date referenced in the Fund name is the approximate year when we expect investors to retire and begin gradually withdrawing their investment. Except for Fidelity Freedom Income Fund, each of the Funds seeks high total return until reaching its respective target retirement date; thereafter, each Fund's objective will be to seek high current income and, as a secondary objective, capital appreciation. Except for Fidelity Freedom Income Fund, each Fund's asset allocation strategy becomes increasingly conservative as it approaches its target date and beyond. Ultimately, the Funds are expected to merge with Fidelity Freedom Income Fund. The Funds employ a robust investment process focused on helping investors solve the challenge of investing through retirement by leveraging the depth and strength of Fidelity's investment research and resources. PERFORMANCE SUMMARY Cumulative 3 Month YTD 1 Year Annualized 3 Year 5 Year 10 Year/ LOF 1 Fidelity Freedom 2020 Fund Gross Expense Ratio: 0.62% 2 3.51% 11.85% 11.94% 6.79% 7.51% 4.38% S&P 500 Index 4.48% 14.24% 18.61% 10.81% 14.22% 7.44% Fidelity Freedom 2020 Composite Index 3.24% 10.37% 10.97% 6.31% 7.88% 4.92% Morningstar Fund Target-Date 2020 2.86% 9.26% 8.92% 5.22% 6.40% 4.12% % Rank in Morningstar Category (1% = Best) -- -- 6% 3% 21% 42% # of Funds in Morningstar Category -- -- 239 188 155 89 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 10/17/1996. 2 This expense ratio is from the most recent prospectus and generally is based on amounts incurred during the most recent fiscal year. Past performance is no guarantee of future results. Investment return and principal value of an investment will fluctuate; therefore, you may have a gain or loss when you sell your shares. Current performance may be higher or lower than the performance stated. Performance shown is that of the fund's Retail Class shares (if multiclass). You may own another share class of the fund with a different expense structure and, thus, have different returns. To learn more or to obtain the most recent month-end or other share-class performance, visit fidelity.com/performance, institutional.fidelity.com, or 401k.com. Total returns are historical and include change in share value and reinvestment of dividends and capital gains, if any. Cumulative total returns are reported as of the period indicated. For definitions and other important information, please see the Definitions and Important Information section of this Fund Review. FUND INFORMATION Manager(s): Andrew Dierdorf Brett Sumsion Trading Symbol: FFFDX Start Date: October 17, 1996 Size (in millions): $29,901.25 Morningstar Category: Fund Target-Date 2020 The investment risk of each Fidelity Freedom Fund changes over time as its asset allocation changes. These risks are subject to the asset allocation decisions of the Investment Adviser. Pursuant to the Adviser's ability to use an active asset allocation strategy, investors may be subject to a different risk profile compared to the fund's neutral asset allocation strategy shown in its glide path. The funds are subject to the volatility of the financial markets, including that of 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, commodity-linked, and foreign securities. No target date fund is considered a complete retirement program and there is no guarantee any single fund will provide sufficient retirement income at or through retirement. Principal invested is not guaranteed at any time, including at or after the funds' target dates. Not FDIC Insured May Lose Value No Bank Guarantee
Market Review For the three months ending September 30, 2017, persistent expansion in global economic activity along with low volatility, low inflation and accommodative monetary policies continued to support asset markets. All major categories posted gains. Emerging-markets (EM) equities led the global stock-market rally for the third quarter in a row. The MSCI Emerging Markets Index rose 8.04%, bolstered by a weaker U.S. dollar as well as rising import demand and manufacturing activity, particularly in China. Meanwhile, the MSCI World Index of global developed-markets stocks returned 4.95%. Small-cap and growth-oriented stocks outpaced other MSCI World size and style segments. MSCI World sector results were mixed, with only consumer staples (0%) failing to gain this quarter. Other notable laggards included the more cyclical real estate (+2%) and consumer discretionary (+3%) sectors, as well as more-defensive health care (+2%) and utilities (+3%). Top performers were energy, materials and information technology, each up about 9%. Regionally, continental Europe (+7%) again outpaced the U.K. (+6%), although the gap was narrower than in prior quarters. Mid-cycle expansion continued across the eurozone's core and periphery, while consumer and industry confidence remained at multiyear highs. Expectations in the U.K., however, deteriorated alongside rising inflation and faltering real income growth. Resource-rich Canada (+8%) was buoyed by a rebound in prices for crude oil and commodity stocks, especially those related to metals & mining and forest products. Japan (+4%), aided by rising confidence and consumer spending, outperformed the rest of the Asia-Pacific group (+3%). Both trailed the MSCI World Index, though, influenced by currency volatility and geopolitical worries, especially concerning North Korea. In the U.S., another MSCI World laggard, the large-cap S&P 500 returned 4.48%, behind the 5.67% gain of the small-cap Russell 2000 Index. Improving economies, generally positive issuer fundamentals and enormous monetary support from global central banks benefited bond markets as well. The Bloomberg Barclays U.S. Aggregate Bond Index returned 0.85% the past three months, with bond yields largely unchanged across most investment-grade categories. Credit spreads tightened amid the general "risk on" tone, though, allowing U.S. high-yield corporate credit to add to a solid year-to-date gain. The BofA Merrill Lynch SM US High Yield Constrained Index rose 2.02% for the third quarter, extending the upward trend that began in mid-february 2016; the return for EM debt was slightly higher. Lastly, tight labor markets and rising wages in the U.S. provided support to the country's core inflation and, consequently, U.S. inflation-protected debt. BROAD ASSET CLASS RETURNS (%) PERIOD ENDING SEPTEMBER 30, 2017 P e r f o r m a n c e Best Worst Dispersion of Returns* Calendar-Year Returns Average Annual Cumulative 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 5 Year 3 Year 1 Year 6 Mos 3 Mos 39.8 5.2 79.0 19.7 8.9 18.6 33.5 16.9 4.1 17.5 14.2 10.7 22.9 14.9 8.0 16.2 2.2 58.1 19.2 8.7 18.5 21.2 12.5 1.2 12.6 8.0 6.8 19.0 11.7 5.7 12.6-2.4 53.5 17.5 8.5 16.6 7.4 6.0 0.5 11.8 6.4 6.1 18.7 7.7 4.6 11.4-10.9 52.5 16.8 7.8 16.4 5.4 5.5 0.4 11.6 6.4 5.9 9.1 4.6 2.5 7.0-25.5 33.9 15.1 4.4 15.5 0.1 2.5 0.1 10.4 4.4 5.3 5.4 4.2 2.4 6.3-26.1 28.6 12.0 1.5 12.7-1.8 1.8 0.1 10.2 4.4 4.8 4.2 3.8 2.0 5.6-29.3 28.2 10.4 1.1 9.8-2.0 0.9-0.5 4.9 4.3 4.3 3.7 2.3 1.4 5.1-35.6 18.9 9.1 0.1 5.0-2.3 0.1-2.9 4.0 2.1 2.7 0.7 1.8 1.0 2.5-37.2 12.0 6.5-12.1 4.2-5.6-1.8-4.6 3.0 0.2 1.3 0.1 0.5 0.8 2.0-43.4 5.9 5.2-13.3 0.1-6.6-4.2-14.6 2.6 0.1 0.3-0.1 0.3 0.7-7.8-53.2 0.2 0.2-18.2-1.1-9.5-17.0-24.7 0.3-10.5-10.4-0.3-0.6 0.3 47.5 58.4 78.8 19.5 27.1 19.7 43.0 33.9 28.8 17.1 24.6 21.1 23.2 15.5 7.8 Source: FMRCo., periods greater than one year are annualized *Difference between best- and worst-performing asset classes over the given time period You cannot invest directly in an index. Past performance is no guarantee of future results. U.S. Equities - Dow Jones U.S. Total Stock Market Index, Non-U.S. Developed-Markets Equities - MSCI World ex USA Net Mass, Emerging-Markets Equities - MSCI Emerging Markets Index, Commodities - Bloomberg Commodity Index Total Return, High-Yield Debt - The BofA Merrill Lynch U.S. High Yield Constrained Index, Floating-Rate Debt - S&P/LSTA Leveraged Performing Loan Index, Emerging-Markets Debt - J.P. Morgan Emerging Markets Bond Index Global, Real Estate Debt - Fidelity Real Estate Income Composite Index, Investment-Grade Debt - Bloomberg Barclays U.S. Aggregate Bond Index, Inflation-Protected Debt - Bloomberg Barclays U.S. 1-10 Year Treasury Inflation-Protected Securities (TIPS) Index (Series-L), Short-Term Debt - Bloomberg Barclays U.S. 3 Month Treasury Bellwether Index U.S. Equities Non-U.S. Developed-Markets Equities Emerging-Markets Equities Commodities High-Yield Debt Floating-Rate Debt Emerging-Markets Debt Real Estate Debt Investment-Grade Debt Inflation-Protected Debt Short-Term Debt 2 For definitions and other important information, please see Definitions and Important Information section of this Fund Review.
Performance Review For the quarter, the Retail Class shares of each Freedom Fund posted a positive result. Gains ranged from 1.99% for Freedom Income Fund to closer to 5% for Freedom 2035 and longerdated, more-aggressive Funds. Each Fund outperformed its respective Composite index. Also, all Funds outperformed the Bloomberg Barclays U.S. Aggregate Bond Index, with many topping the S&P 500 equity index. Versus Composite benchmarks, our top-down active asset allocation decisions primarily, overweighting stocks and underweighting investment-grade bonds and results among underlying managers added value in roughly equal measure. Within the equity asset class, our strategy of underweighting U.S. in favor of non-u.s. stocks particularly in emerging markets (EM) added notable value, as both foreign developed-markets (DM) and, more so, EM equities outperformed the U.S. market. Among underlying investments, manager decisions in the U.S. equity segment added the most value, especially Fidelity Series Growth Company Fund (+8%). Its heavy and helpful exposure to the tech sector was rooted in the investment philosophy that the market often underestimates the duration of a company's growth. Allocations to value-oriented stock funds generally detracted, as value lagged the growth segment. Also, both Fidelity Series Value Discovery Fund (+2%) and Fidelity Series Small Cap Discovery Fund (+2%) lagged their specific benchmarks. Turning to non-u.s. equity: Fidelity Series Emerging Markets Fund (+9%) outperformed its EM benchmark by roughly a percentage point. In a turnaround from last quarter, all DM investments held for the full period lagged their specific benchmarks; Fidelity Series International Value Fund, by a percentage point; Fidelity Series International Small Cap Fund, by 2 percentage points. Elsewhere, our allocations to inflation-sensitive assets detracted. Fidelity Series Commodity Strategy Fund (+2%), grouped with equities, marked a positive result. In the fixed-income asset class, we were pleased to see Fidelity Series Investment Grade Bond Fund (+1%) outperform its asset class benchmark. Our small positions in fixed-income portfolio diversifiers also posted gains but had only marginal effect on overall results. Fidelity Series Inflation-Protected Bond Index Fund (+1%) performed roughly in line with its specific benchmark, but investments in high-yield, floating-rate, EM and real estate debt all outperformed. We believe such out-of-index exposure can help reduce volatility and guard against inflation in the long run. Also, we take a "gradual contrarian" approach often seeking to be ahead of anticipated trends; from here, we see greater potential upside than downside. Outlook and Positioning Our philosophy is that financial markets are largely efficient, and that fundamentals drive markets and security prices over the long term. We also believe that prices of financial assets can diverge from underlying fair value due to such factors as overreaction, regimes and cycles, and liquidity preferences, among others. Ongoing structural shifts are reflected via our capital-markets views and in our quantitative/qualitative assessment for how to position the strategic glide path overall. Our views also inform each Freedom Fund's active positioning relative to its specific glide path as we work to exploit our active allocation tools, tilting the Funds, via our "gradual contrarian" approach, toward where we think they could be rewarded for taking risk in the one- to three-year time frame. To evaluate opportunities, we synthesize information from across Fidelity and through several "lenses." Our view is favorable for equity markets, moderated by the risk of near-peak profit margins in the U.S. and potential consequences of global monetary policy. Our equity overweighting emphasizes EM stocks based on improving fundamentals and what we see as stronger growth prospects there than for DM economies. Despite recent strong performance, we see EM as favorably valued versus U.S. equity, which we think is more exposed to late-cycle risks. In our view, inflation-sensitive assets are attractively valued and sentiment is bearish following a long period of low inflation. As late-cycle pressure builds in DM economies against the backdrop of easy monetary and fiscal policy, markets may be mispricing the potential for inflation. To gain targeted exposure to foreign credit markets, during the quarter we added the newly created Fidelity Series International Credit Fund to our lineup of underlying investments. Yields on sovereign bonds are at historical lows, and we believe the distribution of potential outcomes supports an underweighting; tighter spreads reduce the "margin of safety" in credit. We are committed to ongoing excellence in our target-date strategies, providing client-focused solutions supported by Fidelity's deep capabilities and resources across all aspects of the investment process. We believe Freedom Funds' dynamic and diversified investment strategy can provide an effective approach to retirement saving. 3 For definitions and other important information, please see Definitions and Important Information section of this Fund Review.
ASSET ALLOCATION Asset Class Portfolio Weight Domestic Equity Funds 40.08% Equity Funds 38.09% Commodity Funds 1.99% International Equity Funds 21.35% Developed-Markets Equity Funds 14.47% Emerging-Markets Equity Funds 6.88% Bond Funds 29.71% Investment-Grade Bond Funds 25.79% Inflation-Protected Bond Funds 1.03% High-Yield Bond Funds 1.47% Floating-Rate Funds 0.23% Emerging-Markets Debt Funds 0.71% Real Estate Debt Funds 0.47% Short-Term Funds & Net Other Assets 8.86% 3-YEAR RISK/RETURN STATISTICS Portfolio Index Beta 1.07 1.00 Standard Deviation 6.64% 6.17% Sharpe Ratio 0.98 0.98 Tracking Error 0.99% -- Information Ratio 0.49 -- R-Squared 0.98 -- Fidelity Freedom 2020 Fund TARGET ASSET ALLOCATION Current Year 100% 80% 60% 40% 20% 0% 45 40 35 30 25 20 15 10 5 0 5 10 15 20 25 YEARS TO RETIREMENT RETIREMENT YEARS Domestic Equity Funds International Equity Funds Bond Funds Short-Term Funds Source: FMRCo. Fidelity Freedom Funds invest in a diversified mix of Fidelity domestic equity, international equity, bond, and short-term funds, many of which are managed exclusively for this purpose. As the chart above shows, Freedom Funds follows an asset allocation strategy that becomes increasingly more conservative as the target date approaches and passes. Freedom Funds are generally expected to reach their most conservative allocation 10 19 years after the target date. Future target allocations for the Freedom Fund featured above may differ from this approximate illustration. 4 For definitions and other important information, please see Definitions and Important Information section of this Fund Review.
Definitions and Important Information Unless otherwise disclosed to you, in providing this information, Fidelity is not undertaking to provide impartial investment advice, act as an impartial adviser, or to give advice in a fiduciary capacity. BROAD ASSET CLASS RETURNS A graphical representation of historical market performance and the variations in returns among asset classes, as represented by the following indexes: Bloomberg Barclays U.S. 1-10 Year Treasury Inflation-Protected Securities (TIPS) Index (Series-L) is a market value-weighted index that measures the performance of inflation-protected securities issued by the U.S. Treasury that have a remaining average life between 1 and 10 years. Bloomberg Barclays U.S. 3 Month Treasury Bellwether Index is a market value-weighted index of investment-grade fixed-rate public obligations of the U.S. Treasury with maturities of 3 months, excluding zero coupon strips. Bloomberg Barclays U.S. Aggregate Bond Index is a broad-based, market-value-weighted benchmark that measures the performance of the investment grade, U.S. dollardenominated, fixed-rate taxable bond market. Sectors in the index include Treasuries, governmentrelated and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS. BofA Merrill Lynch U.S. High Yield Constrained Index is a modified market capitalization weighted index of US dollar denominated below investment grade corporate debt publicly issued in the US domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody's, S&P and Fitch). The country of risk of qualifying issuers must be an FX-G10 member, a Western European nation, or a territory of the US or a Western European nation. The FX-G10 includes all Euro members, the US, Japan, the UK, Canada, Australia, New Zealand, Switzerland, Norway and Sweden. In addition, qualifying securities must have at least one year remaining to final maturity, a fixed coupon schedule and at least $100 million in outstanding face value. Defaulted securities are excluded. The index contains all securities of The BofA Merrill Lynch US High Yield Index but caps issuer exposure at 2%. Bloomberg Commodity Index Total Return measures the performance of the commodities market. It consists of exchangetraded futures contracts on physical commodities that are weighted to account for the economic significance and market liquidity of each commodity. Dow Jones U.S. Total Stock Market Index is a float-adjusted market capitalization weighted index of all equity securities of U.S. headquartered companies with readily available price data. Fidelity Real Estate Income Composite Index is a customized blend of unmanaged indexes, weighted as follows: The BofA Merrill Lynch US Real Estate Index - 40%; MSCI REIT Preferred Index - 40%; and FTSE NAREIT All REITs Index - 20%. J.P. Morgan Emerging Markets Bond Index Global tracks total returns for the U.S. dollar-denominated debt instruments issued by Emerging Market sovereign and quasi-sovereign entities, such as Brady bonds, loans, and Eurobonds. MSCI World ex USA Index is a market capitalization weighted index that is designed to measure the investable equity market performance for global investors of developed markets outside the United States. MSCI Emerging Markets Index is a market capitalization-weighted index that is designed to measure the investable equity market performance for global investors in emerging markets. S&P/LSTA Leveraged Performing Loan Index is a market valueweighted index designed to represent the performance of U.S. dollar-denominated institutional leveraged performing loan portfolios (excluding loans in payment default) using current market weightings, spreads and interest payments. IMPORTANT FUND INFORMATION Relative positioning data presented in this commentary is based on the fund's primary benchmark (index) unless a secondary benchmark is provided to assess performance. INDICES It is not possible to invest directly in an index. All indices represented are unmanaged. All indices include reinvestment of dividends and interest income unless otherwise noted. Fidelity Freedom 2020 Composite Index is a customized blend of the following unmanaged indexes: Dow Jones U.S. Total Stock Market Index; MSCI ACWI (All Country World Index) ex USA Index; Bloomberg Barclays U.S. Aggregate Bond Index; and Bloomberg Barclays U.S. 3 Month Treasury Bellwether Index. The composition differed in periods prior to January 1, 2014. The index weightings are adjusted monthly to reflect the fund's changing asset allocations. S&P 500 is a market-capitalization-weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance. MSCI World Index is a market-capitalization-weighted index that is designed to measure the investable equity market performance for global investors of developed markets. Russell 2000 Index is a market-capitalization-weighted index designed to measure the performance of the small-cap segment of the U.S. equity market. It includes approximately 2,000 of the smallest securities in the Russell 3000 Index. 5
RANKING INFORMATION 2017 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current prospectus for the most up-to-date information concerning applicable loads, fees and expenses. % Rank in Morningstar Category is the fund's total-return percentile rank relative to all funds that have the same Morningstar Category. The highest (or most favorable) percentile rank is 1 and the lowest (or least favorable) percentile rank is 100. The top-performing fund in a category will always receive a rank of 1%. % Rank in Morningstar Category is based on total returns which include reinvested dividends and capital gains, if any, and exclude sales charges. Multiple share classes of a fund have a common portfolio but impose different expense structures. 3-YEAR RISK/RETURN STATISTICS Beta is a measure of the volatility of a fund relative to its benchmark index. A beta greater (less) than 1 is more (less) volatile than the index. Information Ratio measures a fund's active return (fund's average monthly return minus the benchmark's average monthly return) in relation to the volatility of its active returns. R-Squared measures how a fund's performance correlates with a benchmark index's performance and shows what portion of it can be explained by the performance of the overall market/index. R- Squared ranges from 0, meaning no correlation, to 1, meaning perfect correlation. An R-Squared value of less than 0.5 indicates that annualized alpha and beta are not reliable performance statistics. Sharpe Ratio is a measure of historical risk-adjusted performance. It is calculated by dividing the fund's excess returns (the fund's average annual return for the period minus the 3-month "risk free" return rate) and dividing it by the standard deviation of the fund's returns. The higher the ratio, the better the fund's return per unit of risk. The three month "risk free" rate used is the 90-day Treasury Bill rate. Standard Deviation is a statistical measurement of the dispersion of a fund's return over a specified time period. Fidelity calculates standard deviations by comparing a fund's monthly returns to its average monthly return over a 36-month period, and then annualizes the number. Investors may examine historical standard deviation in conjunction with historical returns to decide whether a fund's volatility would have been acceptable given the returns it would have produced. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation does not indicate how the fund actually performed, but merely indicates the volatility of its returns over time. Tracking Error is the divergence between the price behavior of a position or a portfolio and the price behavior of a benchmark, creating an unexpected profit or loss. Before investing in any mutual fund, please carefully consider the investment objectives, risks, charges, and expenses. For this and other information, call or write Fidelity for a free prospectus or, if available, a summary prospectus. Read it carefully before you invest. Past performance is no guarantee of future results. Views expressed are through the end of the period stated and do not necessarily represent the views of Fidelity. Views are subject to change at any time based upon market or other conditions and Fidelity disclaims any responsibility to update such views. These views may not be relied on as investment advice and, because investment decisions for a Fidelity fund are based on numerous factors, may not be relied on as an indication of trading intent on behalf of any Fidelity fund. The securities mentioned are not necessarily holdings invested in by the portfolio manager(s) or FMR LLC. References to specific company securities should not be construed as recommendations or investment advice. Diversification does not ensure a profit or guarantee against a loss. S&P 500 is a registered service mark of Standard & Poor's Financial Services LLC. Other third-party marks appearing herein are the property of their respective owners. All other marks appearing herein are registered or unregistered trademarks or service marks of FMR LLC or an affiliated company. Fidelity Brokerage Services LLC, Member NYSE, SIPC., 900 Salem Street, Smithfield, RI 02917. Fidelity Investments Institutional Services Company, Inc., 500 Salem Street, Smithfield, RI 02917. 2017 FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. 656869.16.0