Personalized investment management

Investment management tailored to your priorities and preferences

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.

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 in an effort to help keep you on track to achieve your goals.

This table provides an overview of how different asset classes may be used in a Defensive investment approach. Low volatility stocks may offer potential for capital growth and lower volatility than broad-market stocks. Dividend growth stocks may provide high current income and moderate long-term capital growth. Each is used in an effort to temper portfolio volatility and to provide income and growth with lower volatility than broad-market stocks. Medium-term and long-term US Treasury bonds may provide stable, high-quality returns and are used in an effort to provide positive returns during periods of falling stock markets. Inflation protected securities, such as Treasury-Inflation Protected Securities and Commodities, may provide stable, high-quality inflation-protected returns and stability and protection against higher-than-expected inflation. Liquid Alternatives may offer return patterns that differ from stocks and bonds and may provide positive returns and diversification away from stocks and bonds.



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 that's appropriate for your goal, 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



    Table is designed to show how the emphasis of certain types of assets may adjust from that of the model portfolio as economic and market conditions shift. Exposure to conservative stocks may increase during periods of low growth, low inflation and periods of low grow, high inflation. Exposure to broad market stocks may increase during periods of low growth, low inflation and decrease during periods of low growth, high inflation. Exposure to US Treasuries may increase during periods of low growth, low inflation and decrease during periods of low growth, high inflation. Exposure to Treasury inflation protected securities may decrease during periods of low growth, low inflation and increase during periods of low growth, high inflation. Exposure to floating rate securities may decrease during periods of low growth, low inflation and increase during periods of low growth, high inflation. Exposure to commodities may decrease during periods of low growth, low inflation and increase during periods of low growth, high inflation. Exposure to liquid alternatives may decrease during periods of low growth, low inflation and increase during periods of low growth, high inflation. Exposure to short-term investments may decrease during periods of low growth, low inflation and increase during periods of low growth, high inflation.



    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



    This table is designed to communicate how we define economic and inflationary environments. Low growth, high inflation is defined as growth below the 10-year trailing average and inflation above the 10-year trailing average. High growth, high inflation is defined as both growth and inflation above the 10-year trailing average. Low growth, low inflation is defined as both growth and inflation below the 10-year trailing average. High growth, low inflation is defined as growth above the 10-year trailing average and inflation below the 10-year trailing average.

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.

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