QUARTERLY FUND REVIEW AS OF MARCH 31, 2018 Fidelity Freedom 2055 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 2055 Fund Gross Expense Ratio: 0.75% 2-0.29% -0.29% 14.49% 8.60% 9.92% 8.77% S&P 500 Index -0.76% -0.76% 13.99% 10.78% 13.31% 13.12% Fidelity Freedom 2055 Composite Index -0.81% -0.81% 13.33% 8.33% 10.28% 9.90% Morningstar Fund Target-Date 2055-0.52% -0.52% 13.61% 7.61% 9.23% -- % Rank in Morningstar Category (1% = Best) -- -- 23% 9% 21% -- # of Funds in Morningstar Category -- -- 208 159 105 -- 1 Life of Fund (LOF) if performance is less than 10 years. Fund inception date: 06/01/2011. 2 This expense ratio is from the most recent prospectus and generally is based on amounts incurred during the most recent fiscal year. It does not include any fee waivers or reimbursements, which would be reflected in the fund's net expense ratio. 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: FDEEX Start Date: June 01, 2011 Size (in millions): $4,385.11 Morningstar Category: Fund Target-Date 2055 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 highyield, small-cap, commodity-linked, and foreign securities. Leverage can increase market exposure, magnify investment risks, and cause losses to be realized more quickly. 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 Asset markets started the year the same way they ended 2017 exhibiting remarkably low levels of volatility. During the first quarter, however, a number of crosscurrents catalyzed an abrupt return of asset-price volatility, particularly in foreign developed-markets (DM) equities. Emerging-markets (EM) equities stayed in the black. Also, with the outlook for inflation and economic growth solidifying, and the U.S. Federal Reserve signaling intent for a sustained tightening cycle, 10-year Treasury yields rose to their highest level in four years. Against this backdrop, the MSCI World Index of global DM equities returned -1.18% for the three months ending March 31, 2018, with most markets performing roughly in line with the index. Japan (+1%) proved a notable outlier, overcoming yen strength to finish far ahead of the rest of the Asia Pacific group (-4%). Canada (-7%) fared poorly amid a February rout among its financials, materials and energy stocks. With a slight positive, growth- well outpaced valueoriented stocks in the MSCI World Index, and small-caps outpaced large-caps, though both size segments were negative. Meanwhile, the MSCI Emerging Markets Index rose 1.47%, despite tensions over global trade, especially between the U.S. and China. EM stocks were supported by a weaker U.S. dollar and broadly stable macroeconomic trends. The U.S. remained on a gradual progression through its business cycle, exhibiting solid mid-cycle dynamics and a few hints of latecycle trends, including tighter employment markets. For the quarter, the large-cap S&P 500 equity index returned -0.76%. Information technology (+4%) and consumer discretionary (+3%) buoyed the S&P 500, but all other sectors finished below breakeven. Notable laggards included telecommunication services (-7%), consumer staples (-7%), materials (-6%) and energy (-6%). Meanwhile, the small-cap Russell 2000 Index was essentially flat, returning -0.08%. In fixed income, U.S. taxable investment-grade bonds declined for the quarter, as yields moved higher amid tax-reform legislation, rising interest rates and signs of faster inflation. The Bloomberg Barclays U.S. Aggregate Bond Index returned -1.46% this period. The Fed hiked policy rates a quarter-point rate in March and signaled the likelihood of at least two additional rate hikes in 2018. Within the Bloomberg Barclays index, corporate bonds declined most, returning -2.32%; Treasury and asset-backed securities held up better. Among non-core fixed-income segments, U.S. corporate high-yield bonds slightly outperformed Treasuries, returning -0.86%, according to Bloomberg Barclays, while emerging-markets debt lost modest ground. Elsewhere, inflation-protected and commodity securities both posted a modestly negative result for the quarter. BROAD ASSET CLASS RETURNS (%) PERIOD ENDING MARCH 31, 2018 Calendar-Year Returns Average Annual Cumulative P e r f o r m a n c e Best Worst Dispersion of Returns* 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 5 Year 3 Year 1 Year 6 Mos 3 Mos 5.2 79.0 19.7 8.9 18.6 33.5 16.9 4.1 17.5 37.8 13.0 10.2 25.4 9.1 1.5 2.2 58.1 19.2 8.7 18.5 21.2 12.5 1.2 12.6 24.5 6.2 9.2 14.2 5.7 1.5-2.4 53.5 17.5 8.5 16.6 7.4 7.0 0.5 11.8 21.2 5.4 5.5 13.8 4.3 0.4-10.9 52.5 16.8 7.8 16.4 5.4 6.0 0.4 11.6 9.3 5.0 5.5 4.6 2.7-0.4-25.5 33.9 15.1 4.4 15.5 0.1 5.5 0.2 10.4 8.3 4.8 5.2 3.7 2.2-0.4-26.1 28.6 12.0 1.5 12.7-1.8 2.5 0.1 10.2 7.5 4.2 4.6 3.7 0.6-0.6-29.3 28.2 10.4 1.1 9.8-2.0 1.8 0.1 5.3 4.7 3.9 3.5 3.3 0.3-0.7-35.6 18.9 9.1 0.1 5.0-2.3 0.9-0.5 4.9 4.3 1.8 2.4 2.7 0.1-0.9-37.2 12.0 6.5-12.1 4.2-5.6 0.1-2.9 4.0 3.5 0.4 1.2 1.3-0.5-1.5-43.4 5.9 5.2-13.3 0.1-6.6-1.8-4.6 3.0 1.9-0.1 1.2 1.2-1.1-1.8-53.2 0.2 0.2-18.2-1.1-9.5-4.2-14.6 2.6 1.7-8.3 0.5 1.1-1.3-2.0 -- -- -- -- -- -- -17.0-24.7 0.3 0.9 -- -3.2 0.4-2.4-3.5 58.4 78.8 19.5 27.1 19.7 43.0 33.9 28.8 17.1 36.9 21.3 13.4 24.9 11.5 5.0 U.S. Equities Non-U.S. Developed-Markets Equities Emerging-Markets Equities Commodities High-Yield Debt Floating-Rate Debt International Debt Emerging-Markets Debt Real Estate Debt Investment-Grade Debt Inflation-Protected Debt Short-Term Debt 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, International Debt - Bloomberg Barclays Global Aggregate Credit Ex U.S. Index Hedged (USD), 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 2 For definitions and other important information, please see Definitions and Important Information section of this Fund Review.
Performance Review In a difficult market for stocks and bonds, the Retail Class shares of each Freedom Fund declined slightly for the quarter ending March 31, 2018. Returns ranged from -0.25% for Freedom 2060 to -0.61% for Freedom Income Fund. All Funds outperformed their respective Composite benchmarks, most by about half a percentage point. The bulk of the relative outperformance derived from successful security selection among underlying funds especially among U.S. equity investments. Top-down asset allocation decisions also helped. Versus Composites, our overall equity allocation strategy of overweighting foreign developed-markets (DM) and emergingmarkets (EM) equities while underweighting U.S. stocks added value. In particular, the EM equity asset class posted a positive result, rare this quarter. Our allocation to commodity securities contributed at the margin, as Fidelity Series Commodity Strategy Fund (-0.4%) outperformed U.S. equities overall. Positioning within the overall equity asset class detracted slightly. In the U.S., the benefit from our large-cap growth and smaller-cap strategies was more than offset by detractions from large-cap value and income-oriented holdings. Underlying managers delivered positive selection effects, though, led by Fidelity Series Growth Company Fund (+6%), which outperformed its specific benchmark by roughly 4 percentage points. Conversely, Fidelity Series Growth & Income Fund (-3%) detracted: versus its broad-market benchmark, the fund's performance was shaped by an investment environment that favored highly priced growth stocks, a headwind for the manager's valuation-conscious strategy. Positive allocation effects from our non-u.s. DM growth-oriented and small-cap equity investments, as well as from the allocation to Fidelity Series Emerging Markets Fund (+2%), overcame the U.S. segment's net deficit. Also, we are pleased to report that all of the Funds' actively managed non-u.s. investments outperformed their specific targets. In fixed income, underweighting investment-grade bonds contributed to our relative performance. Here, despite a negative absolute result, Fidelity Series Investment Grade Bond Fund (-1.4%) topped its asset class benchmark for another quarter, again largely due to favorable security selection and sector allocation. Allocations to non-core fixed-income portfolio diversifiers proved a mixed bag: a couple lagged but most outperformed the Bloomberg Barclays U.S. Aggregate Bond Index. For example, Fidelity Series High Income Fund (-0.2%) outperformed both its specific high-yield reference benchmark and the broader bond market. 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. Also, we take a "gradual contrarian" approach often seeking to be ahead of anticipated trends in the intermediate term. 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." Overall, we have moved to an underweight position in equities. Within the equity asset class, our positioning here emphasizes emerging markets based on improving fundamentals and what we see as stronger growth prospects there than for DM economies. We think EM equities remain favorably valued and less exposed to latecycle risks relative to U.S. equites. In our view, inflation-sensitive assets are attractively valued and sentiment is bearish following a long period of low inflation. As latecycle pressure builds in developed economies against the backdrop of accommodative monetary and fiscal policy, we think market participants may be mispricing the potential for inflation. Yields on sovereign bonds remain at historic lows, and we think the distribution of potential outcomes supports an underweighting versus Composites. We also have moved to a more neutral duration with an increase in long-bond exposure. Tighter spreads have reduced credit's "margin of safety." As ever, 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. Similar to the case with commodities, our allocation to inflationprotected debt added at the margin. Fidelity Series Inflation- Protected Bond Index Fund (-0.4%) held up better than the Bloomberg Barclays index. We believe out-of-index exposure to portfolio diversifiers helps reduce volatility and guard against inflation in the long run. 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 Equities 61.84% Equities 59.84% Commodities 2.00% International Equities 30.32% Developed-Markets Equities 21.20% Emerging-Markets Equities 9.12% Bonds 6.21% Investment-Grade Bonds 2.72% Inflation-Protected Bonds 0.81% High-Yield Bonds 1.36% Floating-Rate Debt 0.23% International Debt 0.04% Emerging-Markets Debt 0.62% Real Estate Debt 0.43% Short-Term Investments & Net Other Assets 1.63% 3-YEAR RISK/RETURN STATISTICS Portfolio Index Beta 1.02 1.00 Standard Deviation 9.76% 9.48% Sharpe Ratio 0.83 0.83 Tracking Error 1.21% -- Information Ratio 0.24 -- R-Squared 0.99 -- 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. For illustrative purposes only. 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 Global Aggregate Credit Ex US Index Hedged (USD) is a market value weighted index that measures the performance, hedged in USD, of the global non-us dollar denominated investment-grade corporate fixed-rate debt issues with maturities of one year or more. 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 broadbased, 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, government-related 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. 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 2055 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. 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 5
RANKING INFORMATION 2018 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 topperforming 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. 2018 FMR LLC. All rights reserved. Not NCUA or NCUSIF insured. May lose value. No credit union guarantee. 656869.18.0