4 / 5 Stars
4 4 4 4 2
Zacks Investment Research
Standard & Poor's
3 / 5 Stars
#7 in Target Date 2000-2010
U.S. News evaluated 42 Target Date 2000-2010 Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 7.34 percent over the past year, 6.06 percent over the past three years, 11.90 percent over the past five years, and 5.19 percent over the past decade.
|Trailing Returns||Updated 01.31.2014|
|Year to date||-1.2%|
|3 Years (Annualized)||6.1%|
|5 Years (Annualized)||11.9%|
|10 Years (Annualized)||5.2%|
Fidelity Freedom 2010 can be a core investment in a retirement portfolio.
As of February 05, 2014, the fund has assets totaling $5.43 billion. Its portfolio consists of multiple Fidelity funds that invest in a mix of stocks, bonds, and cash.
The fund invests in underlying Fidelity domestic and international stock funds as well as bond and short-term funds. Like other target-date funds, Fidelity Freedom’s asset allocations gradually shift to more conservative investments as the target retirement date, which is 2010 for this fund, approaches. Recently, the Fidelity Freedom fund products increased their target exposure to international equity funds from approximately 20 percent to 30 percent, as these foreign markets hold less risk now than in the past. During 2009, within the Fidelity Freedom Target-Date series, the shorter-dated funds outperformed the returns of their benchmarks, and the longer-dated portfolios underperformed the returns of their underlying benchmarks, according to the fund. The fund has returned 7.34 percent over the past year and 6.06 percent over the past three years.
While critics note the fund’s holdings have excluded some of the best-performing Fidelity names, like Fidelity Contrafund or Fidelity Low-Priced Stock, holdings can include funds created especially for Fidelity’s target-date offerings. One example is the Fidelity Series Large Cap Value Fund. Morningstar gives the Fidelity Freedom Target-Date series an “average” overall rating, due to the funds’ poor 2008 performance and slightly above-average performance over the past five years. The fund has returned 11.90 percent over the past five years and 5.19 percent over the past decade.
The fund seeks a high total return until it reaches its target retirement date. Thereafter, the fund’s objective will be to seek high current income, followed by the secondary objective of capital appreciation. It will eventually (10 to 15 years after 2010) reach allocations of 15 percent in domestic equity funds, 5 percent in international equity funds, 40 percent in bond funds, and 40 percent in short-term funds, according to the supplement to the fund’s prospectus.
Role in Portfolio
Morningstar calls the fund a core player in a portfolio, saying, “This broadly diversified fund is designed to be an all-in-one holding.”
Jonathan Shelon and Christopher Sharpe are comanagers of the Fidelity Freedom funds.
Fidelity Freedom 2010 Fund has an expense ratio of 0.00 percent.
The fund includes a large number of Fidelity funds, which can result in overlapping holdings. There is also risk involved with the common changes of management within the underlying Fidelity funds, according to Morningstar.