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Overview
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The
Portfolio Analysis tool helps you examine and understand your portfolio's
diversification.
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What does the Portfolio
Analysis tool do?
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Fidelity's
Portfolio Analysis tool categorizes your investments to give you a better
understanding of your portfolio's diversification. The goal is to give
you a more transparent view of the securities within your accounts
including the underlying holdings in your mutual funds and pooled
investments like variable annuities. Please note that annuities in the
payout phase are not shown in this analysis.
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Note
for Fidelity NetBenefits Customers:
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Since
this tool provides a more detailed view of the holdings in your
portfolio, you may notice discrepancies in the asset classifications
between the information provided here versus what is shown on
NetBenefits. The discrepancy is a result of two different methods of
categorizing assets. One method is to categorize an investment in its
entirety. The other is to use "look through" technology to
break down the holdings within each investment and categorize the
individual holdings. Additionally, some NetBenefits accounts may hold
certain investments for which details are unavailable. In this situation,
the investment will be classified as "unknown."
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Additional
analysis determines each equity investment's stock sectors, domestic
stock style, and foreign vs. domestic stock exposure. This analysis is
applied to all accounts that you checked in the control panel.
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What is a well-diversified
portfolio?
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A
well-diversified portfolio is one that has the potential to give you a
good opportunity for returns while minimizing your risks. Asset
allocation, industry sector holdings, investment style, and exposure
(domestic versus foreign) all measure the diversification of your
portfolio.
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For which type of accounts
can I use the Portfolio Analysis tool?
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The
Portfolio Analysis tool examines Fidelity Personal Investing Accounts,
Authorized Accounts, NetBenefit Accounts, and Full View Accounts. Of
these accounts, only Authorized Accounts and Full View Accounts are not
automatically included in the initial analysis performed by the Portfolio
Analysis tool unless you specifically include them.
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An
Authorized Account includes those accounts for which you have been
provided inquiry authorization. The person who provided authorization to
you is either an individual (not a corporation, trust, or other entity)
or an owner, trustee, custodian, fiduciary, joint, or beneficial owner of
a Fidelity mutual fund or brokerage account accessible through
Fidelity.com.
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A Full
View account is an account held at another financial institution for
which you have authorized Fidelity to import data electronically. If you
decide to include a Full View account in a Portfolio Analysis tool
analysis, Fidelity representatives will be able to view the information
in that account in order to furnish and support the tool. Your use of the
tool constitutes your consent for Fidelity representatives to view Full
View Account information.
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What kind of data does the
Portfolio Analysis Tool use?
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The
Portfolio Analysis tool uses holdings data from independent sources to
classify financial assets. Compustat provides individual stock data.
Morningstar, Inc., an independent third-party vendor, supplies monthly
data for publicly available mutual funds, including asset allocation,
equity industry sector, and equity style data and forforeign versus
domestic classifications. This data is only as current as the information
supplied to Morningstar by third parties and may be up to 12 months old.
In some cases (e.g. newer funds), the third-party vendor may not have
holdings information and therefore such funds are classified as
"unknown." In other cases, the third-party vendor may not
recognize all of the holdings within a mutual fund. In these cases, the
vendor provides analysis only on the recognized portion of the fund. In
this case, the unrecognized holdings are classified as
"unknown."
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Fidelity
affiliates, plan sponsors, or external money managers provide quarterly
data for proprietary mutual funds and other pooled investment options
unique to certain retirement plans, such as commingled pools or separate
accounts. If current quarterly holdings are unavailable, the latest
available data is used. In the case of individual securities held within
an account, the tool determines the industry sector of the individual
security using the same parameters as the third-party vendor providing
underlying holdings data for publicly available mutual funds. In the rare
instance where such data is unavailable from the third-party vendor,
Strategic Advisers, Inc., a registered investment advisor and a Fidelity
Investments company, determines the industry sector using publicly
available information. If the information is unavailable, the holdings
will be classified as "unknown." Data for the underlying
holdings in Fidelity mutual funds is provided by Fidelity affiliates. If
this data is not available for a fund, the assets will be categorized
based on a previously assigned Fidelity asset class. In the event this
data is also unavailable, the assets will be classified as
"unknown."
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Standard
& Poors, Moody's, and Fitch provide credit rating and duration
information on individual bonds. Morningstar provides credit rating and
duration information on bond funds. Lipper, Inc., provides sector
information on bond funds. Investment information provided to Strategic
Advisers, Inc. is not based on contemporaneous data. Strategic Advisors,
Inc. is not responsible for the accuracy of data provided by third
parties.
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What is asset allocation?
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Asset
Allocation is the diversification of investments across categories of
assets (asset classes), such as short-term investments, stocks and bonds,
real estate, precious metals, and collectibles. Different asset classes
tend to offer different return and risk tradeoffs. Generally the greater
the stock allocation, the greater the potential for long-term returns and
the greater the risk of volatility and losses, especially over the short
term. Conversely, short-term assets such as CDs or money markets carry
less risk but generally yield lower return.
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What does the Asset
Allocation chart show?
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The
Asset Allocation chart shows you how your assets are distributed among
several major asset classes: "domestic stocks," "foreign
stocks," "bonds," "short-term securities," (cash
equivalents, CDs, money market funds, etc.) "other," and
"unknown." The "other" category includes non-asset
class holdings (e.g. derivative securities, options, warrants, precious
metals, REITs) in some of your investments as well as 529 plan college investment
trust holdings. The "unknown" category represents investments
you may have whose details are unknown or unavailable to Fidelity. In
order to manage risk, your portfolio should contain a mix of investments
consistent with your financial situation, your investment objectives, your
risk tolerance and other factors, such as how soon you'll need access to
cash. You should also take into consideration any unique circumstances
that might apply to your situation when deciding upon an appropriate
asset allocation. Understanding where you stand on these factors will
help you develop an appropriate investment strategy.
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This
chart shows you how much of your investments that are classified as
equity stock investments are in the U.S. stock market and how much are
overseas in foreign markets. Your foreign exposure is the proportion of
your portfolio comprised of equity securities issued outside the US.
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In
general, portfolios holding more assets overseas face greater risk due to
uncertain political and economic conditions abroad. Diversified
portfolios may typically hold up to 15 to 20 percent of their assets in
foreign markets.
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What is the Equity Style
Profile?
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This
Equity Style Profile chart and table show you the overall
"style" of the assets classified as domestic stock investments
in your portfolio using two common measures: size and valuation. Size,
shown on the vertical axis, refers to the market capitalization of
companies whose stocks you own in your portfolio: Large-cap ($5 billion
and over), Mid-cap ($1 billion to $5 billion) and Small-cap (less than $1
billion). Valuation style, shown on the horizontal axis, measures the
price of the stock against the value of the company and the value other
investors have placed on the company's future earnings. Valuation is
determined by adding the stock's price/earnings ratio (stock price
divided by the company's earnings per share) and the stock's price/book
ratio (stock price divided by the company's book value, which refers to
the company's assets minus its liabilities). The sum of these two ratios
determines whether a stock is a growth, value or blend stock.
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In
addition to showing you the valuation style of the investments in your
portfolio, the chart also compares your portfolio's style to that of the
broad domestic equity market. The chart uses the Wilshire 5000 Equity
Index (generally characterized by a size of large and a valuation of
blend) as a proxy representation for the broad domestic stock market. The
closer your portfolio is to the blue square on the chart, the closer your
portfolio is to the style of the U.S. broad market. In general, a
well-diversified portfolio tends to mirror the style of the broad market.
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Stocks
whose size and valuation are unavailable are excluded from this chart.
The top of the graph tells you the percentage of your domestic stock
holdings included in this chart.
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How are relative
Price/Earnings (P/E) and Price/Book (P/B) values determined?
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Relative
Price/Earnings (P/E) and Price/Book (P/B) are determined by calculating
the Price/Earnings (P/E) ratio for the domestic stock portion of the
portfolio as compared to the S&P 500® Index. This figure is then
added to the Price/Book P/B) ratio for the domestic stock portion of the
portfolio compared to the S&P 500 Index. The result, the sum of the
relative (P/E) and relative (P/B) ratio, determines whether a stock is classified
as growth, value, or blend.
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What are growth stocks?
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Growth
stocks are stocks of companies whose earnings per share are expected to
grow significantly faster than the market average. These stocks tend to
trade at higher than average P/E ratios, because investors are willing to
pay more for these stocks in the belief that company earnings will grow
faster than the market average. (Relative (P/E) + Relative (P/B) greater
than 2.25)
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What are value stocks?
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Value
stocks are stocks that are priced lower in relation to the company's
earning potential. These stocks often trade at below-average P/E ratios.
In general, stocks are considered "value" stocks when their
potential growth has yet to be recognized by the market. (Relative (P/E)
+ Relative (P/B) less than 1.75).
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What are blend stocks?
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Blend
stocks have valuations close to that of the S&P 500 Index. (Relative
(P/E) + Relative (P/B) less than or equal to 2.25, but greater than or
equal to 1.75)
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What is the Equity Industry
Sector chart?
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The
Equity Industry Sector chart classifies your domestic stock investments
into ten major industry sectors: Consumer Durables, Consumer Non-Durables
(staples), Energy, Financials, Health, Industrial Cyclicals, Retail,
Services, Technology, Utilities and Unknown. You can see how your
domestic stock investments in different industries compare against the
Wilshire 5000 Equity Index, a proxy representation of the broad domestic
market. In simplest terms, the broad domestic market is the U.S. stock
market as a whole.
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By
seeing how your investments in different industries compare against the
distribution of capital in the broad market, you can see whether your
portfolio is overweighted or underweighted in a particular industry
relative to the broader domestic equity market. In general, a
well-diversified portfolio tends to mirror the distribution of capital in
the broad market.
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Why does the Portfolio
Analysis tool use the Wilshire 5000 Equity Index?
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The
Portfolio Analysis tool uses the Wilshire 5000 Equity Index as a proxy
representation of the broad domestic market. Unlike the S&P 500
Index, which includes only 500 major U.S. stocks, the Wilshire 5000
Equity Index includes over 7,000 securities of publicly traded U.S.
companies, encompassing a broader swath of the U.S. stock market.
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What is the Bond Style
Profile?
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The
Bond Style Profile chart shows you the overall "style" of the
assets classified as domestic bond investments in your portfolio using
two common measures: credit quality and duration. Credit Quality, shown
on the vertical axis, refers to the average credit rating of bonds in
your portfolio. Credit Quality is divided into Investment Grade (BBB or
higher rated bonds, including Government bonds) and Non-Investment Grade
(bonds rated below BBB). Government bonds are not rated by any rating
agencies. They are backed by the full faith and credit of the U.S.
Government, and therefore, their credit quality is the highest among all
bonds.
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Duration,
shown on the horizontal axis, is a composite measure of the bond's
maturity and coupon payments. Duration measures the average time it takes
you to fully recover the principal and interest payments. Duration allows
bonds of different maturities and coupon rates to be compared directly.
Duration is measured in years. It is also a measure of the bond's
interest rate risk. The greater the duration, the more interest rate risk
the bond has. The bonds in your portfolio will fall into the following
three groups: Short (durations of less than 2.7 years), Intermediate
(durations between 2.7 and 7.1 years), and Long (durations over 7.1
years).
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In
addition to showing you the style of the bonds in your portfolio, the
chart also compares your portfolio's style to that of the broad domestic
bond market. The chart uses the Lehman Brothers Universal Bond Index as a
proxy representation for the broad domestic bond market. The closer your
portfolio is to the blue square on the chart, the closer your portfolio
is to the style of the U.S. bond market. In general, a well-diversified
portfolio tends to mirror the style of the bond market.
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Under
the "Bonds" tab, the "Unknown" category includes
bonds held by you individually or through a mutual fund for which
investment details are not known or available. The "Other
Munis" category includes municipal bonds that are neither Revenue nor
General Obligation bonds. Bonds whose credit quality and duration are
unavailable are excluded from this chart.
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What is the Bond Ratings
Profile?
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The
Bond Ratings Profile is a detailed breakdown by credit rating of the
bonds in your portfolio. Credit ratings are designations used by
investors' services to give relative indications of a bond's credit
quality. The chart shows the percentage of the bonds in your portfolio
that have a Government & Agency, AAA, AA, A, BBB, BB, B, Below B, or
Other rating. Government bonds are not rated by any rating agencies. They
are backed by the full faith and credit of the U.S. Government, and
therefore, their credit quality is the highest among all bonds.
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Portfolio
Analysis uses Standard & Poors, Moody's, and Fitch to provide credit
ratings. The credit ratings shown for the individual bonds analyzed are
an average of the ratings from these agencies. The credit rating for Bond
funds are provided by Morningstar. For purposes of comparison, you can
use the Lehman Brothers Universal Bond Index (see below for descriptions
of indices) as a "benchmark." You will see a detailed breakdown
by credit rating of the holdings in that bond index.
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What is the Taxable Bond
Sector chart?
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The
Taxable Bond Sector chart classifies your taxable bond investments into
the following sectors: Government and Agency, Mortgage and Asset-Backed,
Investment Grade Credit, Non-Investment Grade Credit, and Others. You can
see how your taxable bond investments in different sectors compare
against the Lehman Brothers Universal Bond Index. This index is a proxy
for the broad market for taxable bonds. The Lehman Brothers Universal
Bond Index includes over 10,400 taxable bonds. By seeing how your bond
investments in different bond sectors compare against the distribution of
capital in the broad market, you can see whether your portfolio is
overweighted or underweighted in a particular bond sector relative to the
broader domestic bond market.
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What is the Municipal Bond
Sector chart?
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The
Municipal Bond Sectorchart classifies your municipal bond investments
("Munis") into General Obligation Munis, Revenue Munis, and
Other Munis. You can see how your municipal bond investments in different
sectors compare against the Lehman Brothers Municipal Bond Index. This
index is a proxy for the broad market for municipal bonds. The Lehman
Brothers Municipal Bond Index includes over 43,000 individual municipal
bonds. By seeing how your bond investments in different bond sectors
compare against the distribution of capital in the broad market, you can
see whether your portfolio is overweighted or underweighted in a
particular bond sector relative to the broader domestic bond market.
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What is the Historical Asset
Allocation tool?
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Analysts
use historical data to determine the potential risk and returns of
various asset classes, industry sectors and investment styles. This
Historical Asset Allocation tool analyzes how a hypothetical portfolio
with an asset mix (of stocks, bonds, and short term) similar to your
portfolio might have performed in a hypothetical portfolio during
previous market rallies and downturns to show you how a hypothetical
portfolio such as yours may have performed in real bear and bull markets
of the past. Once you've viewed the historical information, you can
decide if you're comfortable with the range of best and worst case
scenarios presented to better understand your risk exposure and your risk
tolerance.
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Note:
Historical performance figures do not represent the actual or
hypothetical performance of your actual holdings. They are based only on
the mix of asset classes in your current accounts. Assets classified as
"unknown" or "other" are included in the stock, bond,
or short-term categories based on your current asset allocation
percentages.
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A
hypothetical asset allocation scenario is presented below.
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Stocks
40%
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Bonds
20%
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Short-Term
15%
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Other
10%
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Unknown
15%
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Fidelity
Portfolio Analysis combines the percentages of Other and Unknown to
calculate historical market performance figures. It then takes the
percentage of each known classification (stock, bond, short term) and
divides it by the total percentage of (stock, bond, and short term). This
calculation results in a normalized mix percentage adding up to 100%.
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Other
+ Unknown = 25%
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Stock
+ Bond + Short Term = 75% { or 100% - total for other and unknown (25%)}
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Stock
% (40%) / 75%= 53%
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Bond
% (20%) / 75% = 27%
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Short
Term (15%) / 75% = 20%
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The
historical returns reflect average annual returns of that hypothetical
asset mix for the period indicated within the 1926 to 2001 window for the
combination of stocks, bonds and short-term holdings represented in the
asset mix. Historical returns for the various asset classes are based on
performance numbers provided by Ibbotson Associates in the Stocks, Bonds,
and Inflation (SBBI) 2001 Yearbook (annual update work by Roger G.
Ibbotson and Rex A. Singquefield). Stocks are represented by the S&P
500; bonds are represented by the 20-year U.S. Government Bond; and
short-term assets are based on the 30-day U.S. Treasury Bill. Average
annual returns are hypothetical, and, if achieved annually, would have
produced the same cumulative total return if performance had been
constant over the entire period. Average annual total returns simply
smooth out variation in performance; they are not the same as actual
year-by-year results.
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There
is historical risk associated with market declines. As of December 31,
2001, the period from 1929 to 1932 has been the worst decline since 1926.
Following World War II, 1972 to 1974 has been the worst decline. The most
recent three market declines reported represented at least a 20 percent
decrease in the stock market as measured by the daily change in the
S&P 500. Keep in mind that your current portfolio may still indicate
a positive return for any of the market declines reported here if it
would have outperformed the stock market during the period reported.
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The
market decline scenario table shows the hypothetical returns of the asset
mix (stocks, bond, and short-term) for five selected stock market
declines from 1926 through 2001.
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What additional information
should I keep in mind about the Portfolio Analysis tool?
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Retirement
investors should note that the information provided in this tool should
not be considered as investment advice under the Employee Retirement
Income Security Act of 1974 (ERISA), or serve as the primary basis for
any investment decision. Instead, it should be considered together with
all other information that investors deem important in making their
investment choices. This is an educational tool. A decision to invest in
a particular investment option may be based on a number of factors
including an investor's needs, savings through work and outside a
workplace savings plan, goals and comfort with risk.
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Full
View information is provided by Fidelity and Yodlee (Yodlee is not
affiliated with Fidelity). Neither Fidelity nor Yodlee is responsible for
the validity, legality, copyright compliance, or decency of content
gathered by the Full View service. Fidelity and Yodlee cannot always
foresee or anticipate technical or other difficulties that may result in
a loss of data, or other service interruptions. Fidelity and Yodlee do
not assume responsibility for the timeliness, accuracy, deletion, or
mis-delivery or failure to store any user data. You are solely
responsible for the validity of the information you enter about your Full
View accounts.
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Balances
of Full View accounts represent the most recent update and may not be
accurate if an update was not successfully completed or the information
obtained during the refresh from the institution is otherwise not
accurate or current. The "Refresh" date may not be the same as
the "As Of" date, which is available directly through the
financial institutions. Data and information is provided for
informational purposes only, and is not intended for trading or
transactional purposes. Neither Fidelity nor Yodlee shall be liable for
any errors or lack of timeliness in the content, or for any actions taken
in reliance thereon.
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