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In designing an investment solution for you, we follow a multi-faceted approach designed to fit your goals and the way you want to invest.
Asset allocation
As a starting point, we recommend a mix of stocks, bonds, and short-term investments—sometimes referred to as an asset allocation—that we believe is appropriate for your goal and comfort level with risk.
How we align asset allocation and risk
Recommending an asset allocation for your goal is the result of a rigorous multi-step process. We start by looking at your time horizon, or when you're going to need the money you're investing. Then, we seek to understand your comfort level with risk and your willingness to assume it. Finally, we examine your financial situation and your ability to take on risk.
Time horizon
Time to and duration of goal
While we look at the amount of time until you’ll start taking withdrawals, we also consider a number of other factors, including assets assigned to your goal, the amount you’re saving toward your goal, and the possibility you may need to withdraw money early.
Risk tolerance
Emotional capacity to bear risk
We'll explore your comfort level with risk and willingness to take it on, as well as your investment experience, investing knowledge, and how you may react during a market decline.
Financial situation
Financial ability to bear risk
We assess your age, income, overall household financial situation, any funds you have set aside for emergencies, essential expenses, and any assets you have that are not assigned to this goal.
Understanding the relationship between risk and return
As the illustration below shows, asset allocation selection comes with its own set of trade offs. In general, the higher the percentage of stocks, the higher the potential return. However, as you can see, this higher potential return also comes with a higher risk that the account could fluctuate in value more—particularly in the short term. It's important to remember that all these options, including the most conservative ones, are subject to market volatility and the risk that your account could lose money.
Important information about performance returns. Performance cited represents past performance. Past performance, before and after taxes, does not guarantee future results and current performance may be lower or higher than the data quoted. Investment returns and principal will fluctuate with marketand economic conditions, and you may have a gain or loss when you sell your assets. Your return may differ significantly from those reported. The underlying investments held in a client’s account may differ from those of the accounts included in the composite. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment.
*The above example (of various asset allocations) is for illustrative purposes only and does not reflect actual PAS data. Asset mix performance figures are based on the weighted average of annual return figures for certain benchmarks for each asset class represented. Historical returns and volatility of the stock, bond, and short-term asset classes are based on the historical performance data of various indexes from 1926 through 12/31/23 data available from Morningstar.
Note: International stock represented by IA SBBI US Large Stock TR USD 1926–1969 (IA SBBI US Large Stock TR USD was used to represent international stocks prior to 1970), MSCI EAFE 1970–2000, MSCI ACWI Ex USA 2001–12/31/23. Domestic stocks represented by IA SBBI US Large Stock TR USD Ext 1926–1986,Dow Jones U.S. Total Market 1987–12/31/23. Bonds represented by U.S. Intermediate-Term Government Bond Index 1926–1975, Bloomberg U.S. Aggregate Bond 1976–12/31/23. Short term represented by 30-day U.S. Treasury bills 1926–12/31/23. Although past performance does not guarantee future results, it may be useful in comparing alternative investment strategies over the long term. Performance returns for actual investments will generally be reduced by fees and expenses not reflected in these investments' hypothetical illustrations.
† Standard deviation does not indicate how the securities actually performed but indicates the volatility of their returns over time. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. The chart does not represent the performance of any Fidelity fund. You cannot invest directly in an index. Stock prices are more volatile than those of other securities. Government bonds and corporate bonds have more moderate short-term price fluctuation than stocks but provide lower potential long-term returns. US Treasury bills maintain a stable value if held to maturity, but returns are generally only slightly above the inflation rate. The purpose of the asset mixes is to show how asset mixes may be created with different risk-and-return characteristics to help meet an investor’s goals. You should choose your own investments based on your particular objectives and situation. Remember that you may change how your account is invested. Be sure to review your decisions periodically to make sure they are still consistent with your goals.
Market indexes are included for informational purposes and for context with respect to market conditions. All indexes are unmanaged, and performance of the indexes includes reinvestment of dividends and interest income, unless otherwise noted. Review the definitions of indexes for more information. Please note an investor cannot invest directly into an index. Therefore, the performance of securities indexes do not incorporate or otherwise reflect the fees and expenses typically associated with managed accounts or investment funds.
IA SBBI US Large Stock Index tracks the monthly return of S&P 500®. The history data from 1926 to 1969 is calculated by Ibbotson. The S&P 500® Index 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.
Dow Jones US Total Stock Market Index is a float-adjusted market capitalization–weighted index of all equity securities of US headquartered companies with readily available price data.
MSCI EAFE Index is a market capitalization-weighted index that is designed to measure the investable equity market performance for global investors in developed markets, excluding the US & Canada.
MSCI ACWI (All Country World Index) ex USA Index is a market capitalization-weighted index designed to measure the investable equity market performance for global investors of large and mid-cap stocks in developed and emerging markets, excluding the United States.
Bloomberg US Aggregate Bond Index is a broad-based, market-value-weighted benchmark that measures the performance of the investment grade, US dollar denominated, 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.
Indexes are unmanaged. It is not possible to invest directly in an index.
More information
Before investing in any investment product, you should consider its investment objectives, risks, and expenses. This material has been prepared for informational purposes only and is not to be considered investment advice or a solicitation for investment. Information contained in this report is as of the period indicated and is subject to change. Please read the applicable advisory program’s Form ADV Program Fundamentals, available from a Fidelity advisor or at Fidelity.com/information.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Total return
We seek to maximize returns for a given level of risk, often referred to as risk-adjusted returns. This approach is designed for investors who are more likely to stay invested during market downturns.
As part of this, we pay particular attention to where the US economy is in the business cycle, as we believe there's a strong connection between the economy and the way certain asset classes perform. We use our understanding of this relationship, as well as our experience in asset valuation and market sentiment, to make adjustments to your investments. This helps us emphasize asset and sub-asset classes that have historically performed well during each phase of the business cycle. For instance, during a recession we may emphasize different types of stocks that historically tend to do better during an economic downturn.
How the business cycle informs asset class decisions
*Average annual returns are from 1950–2023, as of 12/31/23. For illustrative purposes only. Business cycle above is a hypothetical illustration of a typical business cycle. There is not always a chronological progression in this order, and there have been cycles when the economy has skipped a phase or retraced an earlier one. Past performance is no guarantee of future results. Fidelity Investments source: a proprietary analysis of historical asset class performance, which is not indicative of future performance. See asset class and index definitions below. Source: Fidelity Investments AART (Asset Allocation Research Team), Morningstar, Bloomberg.
Market indexes are included for informational purposes and for context with respect to market conditions. All indexes are unmanaged, and performance of the indexes includes reinvestment of dividends and interest income, unless otherwise noted. Review the definitions of indexes for more information. Please note an investor cannot invest directly into an index. Therefore, the performance of securities indexes do not incorporate or otherwise reflect the fees and expenses typically associated with managed accounts or investment funds.
U.S. Stocks = Dow Jones US Total Stock Market Index is a float-adjusted market capitalization-weighted index of all equity securities of US headquartered companies with readily available price data.
International Stocks = The MSCI All Country World Ex-U.S. Index (Net MA) is a market capitalization–weighted index designed to measure the investable equity market performance for global investors of large-and mid-cap stocks in developed and emerging markets, excluding the United States.
U.S. Bonds = Bloomberg U.S. Aggregate Bond Index is a market value–weighted index of investment-grade fixed rate debt issues, including government, corporate, asset–backed, and mortgage–backed securities, with maturities of one year or more.
High Yield Bonds = ICE BofAUS High Yield Index is market capitalization weighted and is designed to measure the performance of U.S. dollar denominated below investment grade (commonly referred to as “junk”) corporate debt publicly issued in the U.S. domestic market.
Short Term = Bloomberg 1-3 Month U.S. Treasury Bill Index measures the performance of public obligations of the U.S. Treasury that have a remaining maturity of greater than or equal to 1 month and less than 3 months.
Commodities = The Bloomberg Commodity Index Total Return Index measures the performance of the commodities market. It consists of exchange-traded futures contracts on physical commodities that are weighted to account for the economic significance and market liquidity of each commodity.
Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. This material is provided for informational purposes only and should not be used or construed as a recommendation for any security.
In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Any fixed income security sold or redeemed prior to maturity may be subject to loss.
The commodities industry can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.
The Typical Business Cycle depicts the general pattern of economic cycles throughout history, though each cycle is different. In general, the typical business cycle demonstrates the following:
• During the typical early-cycle phase, the economy bottoms and picks up steam until it exits recession and then begins the recovery as activity accelerates. Inflationary pressures are typically low, monetary policy is accommodative, and the yield curve is steep. Economically sensitive asset classes such as stocks tend to experience their best performance during the early-cycle phase.
• During the typical mid-cycle phase, the economy exits recovery and enters into expansion, characterized by broader and more self-sustaining economic momentum but a more moderate pace of growth. Inflationary pressures typically begin to rise, monetary policy becomes tighter, and the yield curve experiences some flattening. Economically sensitive asset classes tend to continue benefiting from a growing economy, but their relative advantage narrows.
• During the typical late-cycle phase, the economic expansion matures, inflationary pressures continue to rise, and the yield curve may eventually become flat or inverted.
• Eventually, the economy contracts and enters recession, with monetary policy shifting from tightening to easing. Less economically sensitive asset categories tend to hold up better, particularly right before and upon entering recession.
Investment universes
As part of the traditional total return investment approach, you'll have three universes to choose from, which will help guide how the investments in your account will be selected.1
Fidelity Focused
We'll prioritize investments managed by Fidelity, when they’re available and we believe they're appropriate for your goal and financial situation.
Blended
The investment manager has the flexibility to choose from a wide range of either Fidelity or non-Fidelity funds.
Index Focused
We'll prioritize investments that are designed to track market indexes, when they’re available and we believe they're appropriate for your goal and financial situation.
1. Depending on the investment approach and universe selected, a substantial portion of a Program Account could be invested in funds offered by FPWA affiliates.
More information
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Defensive
If you're an investor who finds the market's ups and downs stressful, or if you're nearing or already in retirement, we believe this approach may provide a less volatile investing experience. With our Defensive approach, we try to focus on investments that have a history of lower volatility. While our investment team is still guided by our understanding of the business cycle and how that cycle impacts different asset classes, we also focus on providing a smoother investment experience over the long term.
A defensive approach is designed to help reduce the impact of market volatility on your account
The intention of this approach, as shown below, is to help temper the impact of sharp movements in the markets. While you may give up some potential returns during rising markets, your account values may fluctuate less during periods of market instability.
*In this scenario, your losses and gains refers to the value of your portfolio. For illustrative purposes only. Not indicative of any investment.
How this approach influences the way we manage your account
Certain types of investments can help reduce the impact of volatility and rising inflation on client accounts. During periods of market volatility, we may increase allocations to asset classes that have historically provided steadier returns to keep you on track to achieve your goals.
FOR ILLUSTRATIVE PURPOSES ONLY
-
How it Works
As part of our effort to soften the impact of market volatility on client accounts while maintaining an appropriate asset allocation, we monitor economic trends and market conditions. Our focus is not just to maintain a mix of stocks and bonds, but to help ensure you're invested in the types of stocks and bonds that we believe are most appropriate for the current economic and market conditions.
For example, during periods of low economic growth and high inflation, market volatility is likely to rise. In an effort to help reduce the impact of this volatility, we may turn to investments whose prices have historically kept pace with inflation, such as commodities or Treasury Inflation Protected Securities (TIPS).
Defensive portfolios are actively managed to temper the impact of volatility as economic conditions shift
FOR ILLUSTRATIVE PURPOSES ONLY
The explanation (shown in the above table) of the relationship between economic growth and rate of inflation represents the current thinking of Strategic Advisers. Note that this approach may change in response to market conditions or over time.
Various economic conditions to which our Defensive approach can adapt
Investment universe
The investment universe determines how the investments in your portfolio are selected. Investments within the Defensive approach are selected from the Blended investment universe.
Blended
The investment manager has the
flexibility to choose from a wide range
of either Fidelity or non-Fidelity funds.
More information
*We may invest in funds that uses investment techniques that are different from the risks ordinarily associated with investments such as stock, bonds and short-term, and are considered complex trading strategies. Such techniques and strategies include the use of derivatives. Derivatives may be more volatile than other investments and may magnify or reduce the Fund's gains or losses. Investments in derivatives entail significant risk and is not appropriate for all investors.
1. This refers to a neutral Growth with Income model asset allocation in the growth and inflation economic regime framework matrix.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
1. This refers to a neutral Growth with Income model asset allocation in the growth and inflation economic regime framework matrix.
Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Account holdings
We believe that one of the best ways to achieve your financial goals is through a well-diversified portfolio that reflects your comfort with risk and time horizon. In choosing appropriate holdings for Portfolio Advisory Services accounts, we evaluate hundreds of investment options. Your account will usually have exposure to a wide range of securities of different market capitalizations, sectors, and investment styles.
Your PAS accounts may be comprised of:
Mutual funds
By either Fidelity or non-Fidelity managers, which may also include funds that are exclusive to Fidelity® Wealth Services clients.
Exchanged traded funds (ETFs)
Individual stocks
Through separately managed account (SMA) sleeves.1 We offer both direct indexing and actively managed SMA sleeves for accounts with taxable registrations.
What is a separately managed account (SMA) sleeve?
An SMA sleeve is a portfolio of individual stocks held within an eligible taxable Portfolio Advisory Services account that can help enhance your after-tax returns. You can own one or more stock SMA sleeves within your Portfolio Advisory Services account instead of a stock mutual fund or ETF. Investing in SMA sleeves allows for:
- Direct ownership of stocks gives you the ability to personalize your holdings and can help with capital gains management, which can help add to your portfolio's tax efficiency.
- Increased potential for tax-loss harvesting3 opportunities, which can be a good way to offset capital gains.
- If you fund your account with stocks you currently own, it may be possible to build around those holdings, which could reduce the tax impact of building your portfolio.
Past performance is no guarantee of future results.
1. Clients must meet certain eligibility requirements to leverage the benefits of SMAs. Please note that you will be charged an additional fee for any SMAs held in your account. These fees are in addition to the basic advisory fees for Fidelity® Wealth Services. Please refer to your Client Agreement for detailed fee information.
2. The sample portfolio is presented for illustrative purposes only. It is not a recommendation by Fidelity Personal and Workplace Advisors LLC ("FPWA") of a specific asset allocation that is appropriate for your accounts, and investments currently used in its managed account products may differ significantly from the investments included in this sample portfolio. This sample portfolio should not be construed as an offer to sell, a solicitation of any offer to buy, or a recommendation of any investment strategy or security by FPWA, any other Fidelity Investments company, or any third party. The portfolio recommended to you (and the associated fees) should you choose to enroll in FWS may differ substantially from the sample portfolio and associated fee information. This sample portfolio is not intended to be reflective of your specific goals or circumstances. This baseline portfolio may change over time and may differ considerably based on individual client situations.
*This sample portfolio includes the Strategic Advisers Tax-Managed U.S. Large Cap Separately Managed Account (SMA) sleeve, the Strategic Advisers Equity Value SMA sleeve, and the Strategic Advisers Equity Growth SMA sleeve. Separate SMA fees may apply. These SMA sleeve(s) are not invested in mutual funds. They are separately managed portions of your account, which are made up of individual securities as part of your overall investment portfolio managed by Strategic Advisers LLC.
Please refer to the FWS Program Fundamentals for details.
‡ The SMA sleeve(s) used in the Foreign Stock portion of your account are not invested in mutual funds. They are separately managed portions of your account, which are made up of individual non-U.S. stocks (available typically as American Depository Receipts (ADRs) and may include exchange-traded products (ETPs) and a completion fund). ADRs are traded on U.S. markets and offer investors investment exposure to non-U.S. stocks. A completion fund is a mutual fund designed for use in separately managed accounts and is used to achieve certain exposures across foreign countries/regions where ADRs may not be available or appropriate, at the discretion of Strategic Advisers.
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at$1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, have no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time.
Fidelity’s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.
Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, an offering circular, or, if available, a summary prospectus containing this information. Read it carefully.
3. Tax-smart (i.e., tax-sensitive) investing techniques (including tax-loss harvesting) are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager, primarily with respect to determining when assets in a client's account should be bought or sold. As the discretionary portfolio manager, Strategic Advisers LLC ("Strategic Advisers") may elect to sell assets in an account at any time. A client may have a gain or loss when assets are sold. There are no guarantees as to the effectiveness of the tax-smart investing techniques applied in serving to reduce or minimize a client's overall tax liabilities or as to the tax results that may be generated by a given transaction. Strategic Advisers does not currently invest in tax-deferred products, such as variable insurance products, or in tax-managed funds, but may do so in the future if it deems such to be appropriate for a client. Strategic Advisers does not actively manage for alternative minimum taxes; state or local taxes; foreign taxes on non-U.S. investments; federal tax rules applicable to entities; or estate, gift, or generation-skipping transfer taxes. Strategic Advisers relies on information provided by clients in an effort to provide tax-sensitive investment management and does not offer tax advice. Except where Fidelity Personal Trust Company (FPTC) is serving as trustee, clients are responsible for all tax liabilities arising from transactions in their accounts, for the adequacy and accuracy of any positions taken on tax returns, for the actual filing of tax returns, and for the remittance of tax payments to taxing authorities.
1. Clients must meet certain eligibility requirements to leverage the benefits of SMAs. Please note that you will be charged an additional fee for any SMAs held in your account. These fees are in addition to the basic advisory fees for Fidelity® Wealth Services. Please refer to your Client Agreement for detailed fee information.
2. The sample portfolio is presented for illustrative purposes only. It is not a recommendation by Fidelity Personal and Workplace Advisors LLC ("FPWA") of a specific asset allocation that is appropriate for your accounts, and investments currently used in its managed account products may differ significantly from the investments included in this sample portfolio. This sample portfolio should not be construed as an offer to sell, a solicitation of any offer to buy, or a recommendation of any investment strategy or security by FPWA, any other Fidelity Investments company, or any third party. The portfolio recommended to you (and the associated fees) should you choose to enroll in FWS may differ substantially from the sample portfolio and associated fee information. This sample portfolio is not intended to be reflective of your specific goals or circumstances. This baseline portfolio may change over time and may differ considerably based on individual client situations.
*This sample portfolio includes the Strategic Advisers Tax-Managed U.S. Large Cap Separately Managed Account (SMA) sleeve, the Strategic Advisers Equity Value SMA sleeve, and the Strategic Advisers Equity Growth SMA sleeve. Separate SMA fees may apply. These SMA sleeve(s) are not invested in mutual funds. They are separately managed portions of your account, which are made up of individual securities as part of your overall investment portfolio managed by Strategic Advisers LLC.
Please refer to the FWS Program Fundamentals for details.
‡ The SMA sleeve(s) used in the Foreign Stock portion of your account are not invested in mutual funds. They are separately managed portions of your account, which are made up of individual non-U.S. stocks (available typically as American Depository Receipts (ADRs) and may include exchange-traded products (ETPs) and a completion fund). ADRs are traded on U.S. markets and offer investors investment exposure to non-U.S. stocks. A completion fund is a mutual fund designed for use in separately managed accounts and is used to achieve certain exposures across foreign countries/regions where ADRs may not be available or appropriate, at the discretion of Strategic Advisers.
You could lose money by investing in a money market fund. Although the fund seeks to preserve the value of your investment at$1.00 per share, it cannot guarantee it will do so. An investment in the fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund’s sponsor, have no legal obligation to provide financial support to money market funds and you should not expect that the sponsor will provide financial support to the fund at any time.
Fidelity’s government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares, nor temporarily suspend your ability to sell shares if the fund's weekly liquid assets fall below 30% of its total assets because of market conditions or other factors.
Before investing in any mutual fund or exchange-traded fund, you should consider its investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus, an offering circular, or, if available, a summary prospectus containing this information. Read it carefully.
3. Tax-smart (i.e., tax-sensitive) investing techniques (including tax-loss harvesting) are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager, primarily with respect to determining when assets in a client's account should be bought or sold. As the discretionary portfolio manager, Strategic Advisers LLC ("Strategic Advisers") may elect to sell assets in an account at any time. A client may have a gain or loss when assets are sold. There are no guarantees as to the effectiveness of the tax-smart investing techniques applied in serving to reduce or minimize a client's overall tax liabilities or as to the tax results that may be generated by a given transaction. Strategic Advisers does not currently invest in tax-deferred products, such as variable insurance products, or in tax-managed funds, but may do so in the future if it deems such to be appropriate for a client. Strategic Advisers does not actively manage for alternative minimum taxes; state or local taxes; foreign taxes on non-U.S. investments; federal tax rules applicable to entities; or estate, gift, or generation-skipping transfer taxes. Strategic Advisers relies on information provided by clients in an effort to provide tax-sensitive investment management and does not offer tax advice. Except where Fidelity Personal Trust Company (FPTC) is serving as trustee, clients are responsible for all tax liabilities arising from transactions in their accounts, for the adequacy and accuracy of any positions taken on tax returns, for the actual filing of tax returns, and for the remittance of tax payments to taxing authorities.
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Keep in mind that investing involves risk. The value of your investment will fluctuate over time, and you may gain or lose money.
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
Diversification and asset allocation do not ensure a profit or guarantee against loss.
Generally, among asset classes stocks are more volatile than bonds or short-term instruments and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Although the bond market is also volatile, lower-quality debt securities including leveraged loans generally offer higher yields compared to investment grade securities, but also involve greater risk of default or price changes. Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market or economic developments, all of which are magnified in emerging markets.
Fidelity does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Fidelity cannot guarantee that the information herein is accurate, complete, or timely. Fidelity makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.
Other than with respect to assets managed on a discretionary basis through an advisory agreement with Fidelity Personal and Workplace Advisors LLC, you are responsible for determining whether, and how, to implement any financial planning recommendations presented, including asset allocation suggestions, and for paying applicable fees. Financial planning does not constitute an offer to sell, a solicitation of any offer to buy, or a recommendation of any security by Fidelity Investments or any third party.
Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser. Discretionary portfolio management services provided by Strategic Advisers LLC (Strategic Advisers), a registered investment adviser. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers, FBS, and NFS are Fidelity Investments companies.
Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917
866043.8.0
