Actively Managed Equity Separately Managed Accounts
(SMAs)

What is active management


In Fidelity's actively managed SMAs, portfolio managers seek to outperform their strategy's specific benchmark index or achieve a specific investment objective. Dedicated portfolio managers work with the investment team to actively research and select stocks that they believe will help them reach these objectives. This collaborative approach helps portfolio managers uncover investment opportunities and adapt to changing market environments.


In taxable accounts, we'll also look for opportunities to apply personalized, tax-smart investment management to your account. Our tax-smart approach may help enhance after-tax returns, keeping more of your money invested and working for you.1


The investment team


While each portfolio manager takes a unique approach based on the strategy they manage, all active SMA strategies tap into Fidelity Management and Research Co's (FMR) 70+ years of experience to inform security selection, including in-depth research across sectors, proprietary tools, and discussions with corporate leaders.


Pyramid depicts the elements of the power behind Fidelity's active management. It includes reliability, deep, diverse capabilities, and experience.

Source: Fidelity Investments, as of 12/31/23. Data is unaudited.
* FMRCo equity analysts.
** These figures reflect the resources of Fidelity Management & Research Company, a U.S. company, and its subsidiaries. Not all resources are available to the Fidelity Dividend Income Strategy.

Fidelity has a long history of investing in equity markets in the U.S. and across the globe. Our offices and investment professionals around the world provide extensive local research and market insights to the portfolio managers overseeing each strategy, helping them to make educated decisions based on our experience, rigorous fundamental analysis, and deep understanding of market trends.


Fractional shares at Fidelity


Fidelity's equity SMAs also benefit from our unique technology and trading capabilities, like our ability to buy and sell fractional shares of stocks in your account. Using fractional shares in an actively managed SMA may help to improve how closely the investment manager can achieve the strategy's objective.


In taxable accounts, we'll also look for opportunities to apply personalized, tax-smart investment management to your account. Fractional shares may also enhance our ability to apply certain tax-smart investing techniques, such as tax-loss harvesting.1 Our tax-smart approach may help enhance after-tax returns, keeping more of your money invested and working for you.

What happens after you fund your account


Once your account has been funded, you'll start to see us making trades, usually within 5 business days. There are a number of factors that could impact this timeline, including the amount of your initial investment, the strategy you've chosen, and whether you’re funding with securities or cash. For instance, if you fund your account with eligible stocks that don’t fit the strategy and that are carrying large capital gains or represent concentrated positions within your overall portfolio, we will first determine what may need to be sold first, versus what can be sold over time to help mitigate the tax impact of building portfolios for taxable accounts.2


Graphic shows an image of the account funding webpage experience when a new account is funded.

Example account funding tracking screen for Fidelity® Strategic Disciplines equity strategies.

Once your portfolio has been built, the number of positions will vary based on the strategy you selected. This number may fluctuate over time. The use of fractional shares allows us to build portfolios using relatively small positions, with many potentially making up less than 1% of your portfolio. Fractional shares can create the opportunity for more precise exposures within portfolios.


Account transparency


With a Fidelity SMA, you'll always know which stocks, and how much of each, you own in your account. Each time you log into your account, you will see your holdings, real-time performance updates, and any activity in your account. You'll also receive rationales for the trades we make on your behalf and will have access to quarterly insights from the portfolio manager in charge of the strategy you select.


Tax-loss harvesting and wash sales


Within taxable equity accounts, we look for tax-loss harvesting opportunities throughout the year, as opposed to waiting until year-end. However, it's important to note that while we focus on tax-smart investment management throughout the year, our first priority is risk management and adherence to the strategy you choose. This is why, as you review trades we make on your behalf, you may see some wash sales. The wash-sale rule states that any tax loss will be disallowed if you buy the same security, a contract or option to buy the security, or a "substantially identical" security, within 30 days before or after the date you sold the loss-generating investment (it's a 61-day window). This is normal and reflects our commitment to prioritizing risk management over potential tax savings.