How do Fidelity Freedom Funds® work?
The fund manager sets the target asset allocation mix for all of the Freedom Funds. Each fund is comprised of as many as 23 carefully chosen underlying Fidelity funds. The fund manager goes through a rigorous process of selecting the funds, based on an analysis of performance, risk, style consistency, and how the funds would work together. Although our fund manager takes a long-term approach to key asset allocation decisions, he also reviews the portfolio on a daily basis and makes adjustments and rebalances if needed. One of the greatest benefits of this approach is that it’s disciplined, so it doesn’t factor in the emotion of trying to benefit from a short-term fad. It doesn’t try to time the market. Once again, as each Freedom Fund nears its target date, the investment mix gradually becomes more conservative.
