| Scorecard |
|---|
|
3 / 5 Stars
|
|
Lipper
3
3
2
5
1
|
|
Zacks Investment Research
4
(Sell)
|
|
Standard & Poor's
3 / 5 Stars
|
|
TheStreet.com
C
(Hold)
|
#17 in Target Date 2016-2020
U.S. News evaluated 46 Target Date 2016-2020 Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
See all Fidelity Investments funds
Performance
The fund has returned 14.44 percent over the past year, 9.88 percent over the past three years, 3.23 percent over the past five years, and 6.49 percent over the past decade.
| Trailing Returns | Updated 05.31.2013 |
|---|---|
| Year to date | 5.6% |
| 1 Year | 14.4% |
| 3 Years (Annualized) | 9.9% |
| 5 Years (Annualized) | 3.2% |
| 10 Years (Annualized) | 6.5% |
Summary
The Fidelity Freedom 2020 fund can be a conservative addition to a retirement portfolio.
As of June 05, 2013, the fund has assets totaling almost $13.60 billion invested in 28 different holdings. Its portfolio consists of multiple Fidelity funds investing in a mix of stocks, bonds, and cash.
The fund invests in underlying Fidelity domestic and international stock funds as well as bond funds, including a wide range of value and growth stocks, in addition to high-yield bonds. Like investments in other target-date funds, the fund’s asset allocations gradually change to more conservative asset classes as the investor nears the target retirement date—in this case, the year 2020.
Recently, all Freedom fund products increased their 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 longer-dated portfolios underperformed the returns of their underlying benchmarks, according to the fund. The fund has returned 14.44 percent over the past year and 9.88 percent over the past three years.
The Fidelity Freedom 2020 fund was among the first group of target-date funds Fidelity launched in 1996. While critics note that the fund’s holdings have excluded some of the best-performing Fidelity names, such as Fidelity Contrafund or Fidelity Low-Priced stock, holdings can include more funds created especially for Fidelity’s target-date offerings that are not open to outside investors, such as the Fidelity Series Large Cap Value fund. Morningstar calls it a “serviceable choice for investors with limited options.” Morningstar gives the Fidelity Freedom Target-Date series an “average” overall rating, because of the fund’s poor 2008 performance and slightly above average performance over the past five years. The fund has returned 3.23 percent over the past five years and 6.49 percent over the past decade.
Investment Strategy
The fund seeks a high total return until its target retirement date. Thereafter, the fund’s objective will be to seek high current income, followed by the secondary objective of pursuing capital appreciation. Correspondingly, the fund’s asset allocation strategy becomes more conservative over time, reducing its allocations to equity funds and increasing its allocations to fixed-income funds. It eventually reaches 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 (10 to 15 years after 2020), according to the supplement to the 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.”
Management
Jonathan Shelon and Christopher Sharpe are comanagers of the Fidelity Freedom funds. Shelon has managed the Fidelity Freedom 2020 fund since March 2005 and has worked with Fidelity Investments since 2001 as a portfolio manager. Sharpe has managed the Fidelity Freedom 2020 fund since September 2007. He also manages other Fidelity funds. Since joining Fidelity Investments in 2002, he has worked as an asset allocation director and portfolio manager.
Risk
Fidelity Freedom Target-Date funds have struggled on occasion because many underlying Fidelity funds can contain overlapping holdings, which have weakened returns when bets popular among those funds fade, Morningstar says. Common management of the underlying funds remains a risk as well.
Fund Opinions
The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 3 on a scale of 1 to 5, with 1 being the best and 5 the worst.
Value Line 2013-06-11
The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 4 for one year, 3 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.
Value Line 2013-06-11
The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.
Value Line 2013-06-11
In the annual Lipper/Barron’s Fund Families Survey for 2009, Fidelity ranks 26th out of 61 fund families surveyed.
Lipper
Morningstar gives this fund a stewardship rating of C on a scale of A to F, saying, “This fund has some good things going for it on the stewardship front, including low fees, at least one of its managers with skin in the game, and a generally attractive culture. However, other factors, including an insufficiently independent board, keep its overall grade from being higher.”
Morningstar 2011-02-02
In the annual Lipper/Barron’s Fund Families Survey for 2009, Fidelity ranks 26th out of 61 fund families surveyed.
Lipper
Morningstar gives this fund a stewardship rating of C on a scale of A to F, saying, “This fund has some good things going for it on the stewardship front, including low fees, at least one of its managers with skin in the game, and a generally attractive culture. However, other factors, including an insufficiently independent board, keep its overall grade from being higher.”
Morningstar 2011-02-02
