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Freedom Funds


The Fidelity Freedom Funds are lifecycle funds, offering the power of a diversified set of mutual funds in a single fund, with the added benefit of professional asset allocation. Freedom Funds have an asset allocation mix among stocks, bonds, and short-term instruments that is more aggressive when you're younger and get more conservative as you near retirement.
There are a lot of benefits of Freedom Funds. Fidelity was one of the first mutual fund firms to launch lifecycle fund solutions that were specifically designed to meet retirement needs. The funds reflect some of Fidelity's best stock ideas and are managed by their most experienced mutual fund managers. Monitor one fund instead of several. Fidelity Freedom Funds offer a blend of stocks, bonds and short-term investments within a single fund. The fund is designed for investors who don’t want to go through the exercise of picking several funds from the three asset classes but still want to diversify among stocks, bonds and short-term investments. Remember that investing in one investment option is not a complete or diversified retirement program. Strategic Advisers, Inc., an affiliate of Fidelity Management & Research Co., manages the Fidelity Freedom Funds..
 
Each Freedom Fund deliberately invests in a combination of underlying Fidelity stock, bond, and money market mutual funds for the sake of safety. Fidelity Freedom 2040, with the longest time horizon, invests mainly in stock mutual funds to take maximum advantage of the potentially greater growth opportunities. The asset mix of each Freedom Fund with a retirement horizon will gradually become more conservative over time so investors can stay with the same fund before and after retirement. After reaching the target retirement horizon year, these Freedom Funds continue to be managed more conservatively for 5-10 years until their asset mix is approximately the same as Freedom Income Fund. Ultimately, the funds will be merged. Fidelity Freedom Income Fund is designed for those who have already retired. The fund is invested more conservatively with a larger percentage in bond and money market funds and has a smaller percentage of equity mutual funds. The Fund Managers must invest in the group of specified underlying funds found in the prospectus and will aim for the projected target asset allocation percentages announced in the fund’s annual and semi-annual reports. Share price and return of each fund will vary.
 

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