Fidelity® Continues to Deliver Industry-Leading Value with Launch of Some of the Lowest Cost Model Portfolios

November 12, 2018

BOSTON--(BUSINESS WIRE)--Nov 12, 2018--Fidelity Investments ®, one of the largest and most diversified global financial services firms with more than $7 trillion in client assets 1, today launched the Fidelity ® Target Allocation Index-Focused Model Portfolios, an expansion of the model portfolios Fidelity announced earlier this year. These low cost portfolios help advisors scale their businesses and deliver professional, institutional-quality investment management for their clients.

The Fidelity Target Allocation Index-Focused Model Portfolios will offer five different asset allocation mixes, aligned across a spectrum of risk profiles, primarily invested in Fidelity index mutual funds. The inclusion of Fidelity index funds, which are some of the most competitively priced in the industry with expense ratios as low as 0.015 percent, makes these some of the lowest cost models available with an average expense ratio as low as 0.03 percent.

Fidelity has a long-standing commitment to use its leadership and scale to consistently deliver enhanced value to investors. For example, as Fidelity has increased its index mutual fund assets to nearly $450 billion 2, the firm systematically reduced index mutual fund pricing by nearly 50 percent to provide greater value to investors. Notably, as Fidelity passed on the benefit of its scale to investors, its stock and bond index funds and sector ETFs have total net expenses lower than most of Vanguard’s comparable funds. 3

“When we first launched Fidelity Model Portfolios, we wanted to help advisors manage their investments more efficiently so they can spend more time on what clients value most – including one-on-one financial planning,” said Matt Goulet, senior vice president, Fidelity Institutional Asset Management ®. “With the majority of advisors using some form of models to construct their portfolios, this offering gives advisors more options in the model portfolios space – at a lower cost.”

According to Cerulli data, the managed accounts market is estimated at $6 trillion and is expected to grow at a 14.5 percent annual rate over the next few years. 4 Research reveals that eight in 10 advisors use models in their portfolios and that they use them to provide better investment outcomes, help efficiently scale their businesses, and enable them to focus more on providing planning services to their clients. 5

Fidelity Model Portfolios offer access to Fidelity’s 70 years of investing and portfolio management experience and 25 years of experience managing models. They also include the Fidelity Target Allocation Model Portfolios, announced earlier this year, which seek to combine Fidelity active and passive mutual funds to enhance potential for excess return while achieving a specific level of risk.

These portfolios are available on Envestnet’s platform as well as through Fidelity’s Managed Account Solutions platform, offering advisors an efficient way to implement models and manage individual clients’ accounts. They also enhance Fidelity’s current line-up of portfolio capabilities, which include insights from the Capital Markets Strategy team, a robust thought leadership program on portfolio construction, portfolio evaluations with the Portfolio Quick Check diagnostic tool and consultation from the Portfolio Construction Guidance team.

“The expansion of Fidelity Model Portfolios reflects the deep, diverse capabilities that Fidelity has to offer -- including methodologies using active, passive and a combination of both,” continued Goulet.

Fidelity Model Portfolios are available to advisors at broker-dealers, registered investment advisors, banks, and insurance companies. For more information, please visit go.fidelity.com/models.

About Fidelity Investments Fidelity’s mission is to inspire better futures and deliver better outcomes for the customers and businesses we serve. With assets under administration of $7.4 trillion, including managed assets of $2.6 trillion as of September 30, 2018, we focus on meeting the unique needs of a diverse set of customers: helping more than 28 million people invest their own life savings, 23,000 businesses manage employee benefit programs, as well as providing more than 13,000 financial advisory firms with investment and technology solutions to invest their own clients’ money. Privately held for 70 years, Fidelity employs more than 40,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about.

This document does not make an offer or solicitation to buy or sell any securities or services, and is not investment advice. FIAM does not provide legal or tax advice and we encourage you to consult your own lawyer, accountant or other advisor before making an investment.

Information provided in this document is for informational and educational purposes only. To the extent any investment information in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for you or your client’s investment decisions. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.

Fidelity Model Portfolios are made available to financial intermediaries on a non-discretionary basis by FIAM LLC, a registered investment adviser. The information presented herein is for discussion and illustrative purposes only and is not investment, legal or tax advice, nor an offer or a solicitation to buy or sell any securities or services.

FIAM LLC is not acting as a fiduciary or in any advisory capacity in providing this information. The information is designed to be utilized by you solely as a resource, along with other potential sources, in providing advisory services to your clients. You are solely responsible for determining whether the Fidelity Model Portfolios (the “Models”), the Fidelity funds included in that portfolio, and the share class of those funds, are appropriate and suitable for you to base a recommendation or provide advice to any end investor about the potential use of the Models.

The Models consist solely of Fidelity mutual funds and are available only in the share class designated by FIAM when made available through the Models. FIAM does not seek to offer mutual funds or share classes through the Models that are necessarily the least expensive. In some cases, the Fidelity funds in the Models may have a lower cost share class available on a stand-alone basis for purchase outside of the Models, or that may be available to other types of investors. Use of the Models will result in the payment of fees to the Fidelity funds in the Models as provided for in the prospectus to each such fund. The fees received from investment in the funds will be shared by various affiliates, including FIAM LLC, involved in distributing and advising both the Models and the Fidelity funds in the Models.

FIAM does not have investment discretion and does not place trade orders for any of your clients’ accounts. Information and other marketing materials provided to you by FIAM concerning the Models may not be indicative of your client’s actual experience from investing in one or more of the funds included in the Models. The Models’ allocations and data are subject to change.

Past performance is no guarantee of future results. An investment may be risky and may not be suitable for an investor’s goals, objectives and risk tolerance. Investors should be aware that an investment’s value may be volatile and any investment involves the risk that you may lose money. Investment performance of the Models depends on the performance of the underlying investment options and on the proportion of the assets invested in each underlying investment option over time. The performance of the underlying investment options depends, in turn, on their investments. The performance of these investments will vary day to day in response to many factors. Asset allocation strategies are subject to the volatility of the financial markets, including that of the underlying investment options’ asset class.

Capital Markets Strategy insights, and portfolio construction capabilities including, Portfolio Quick Check and Portfolio Construction Guidance, are provided to advisors by Fidelity Investments Institutional Services Company, Inc., a registered broker/dealer that is affiliated with FIAM LLC.

Mutual funds are offered by Fidelity Investments Institutional Services Company, Inc. and Fidelity Brokerage Services LLC, Member NYSE/SIPC.

“Fidelity Investments” and/or “Fidelity” refers collectively to FMR LLC, a U.S. company, and its subsidiaries, including but not limited to Fidelity Management & Research Company (FMR Co.) and FIAM.

Managed Account Solutions (“MAS”) is a service offered by National Financial Services LLC (“NFS”). Investment advisory and platform management services available through MAS are provided by Envestnet Asset Management Inc. (“Envestnet”) which is a third party registered investment advisor and is not a corporate affiliate of Fidelity Investments or NFS (the “Fidelity Companies”). The Fidelity Companies assume no responsibility and make no warranties, express or implied, regarding services provided by Envestnet. NFS does not provide investment advisory services of any kind in connection with MAS. Custody, clearing and other services are provided by NFS.

Fidelity Clearing & Custody Solutions ® provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.

The registered trademarks and service marks appearing herein are the property of FMR LLC.

Before investing, consider the funds’ investment objectives, risks, charges, and expenses. Contact your investment professional or visit institutional.fidelity.com for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

865125.1.0 © 2018 FMR LLC. All rights reserved.

1 As of June 30, 2018. 2 As of September, 2018. 3 Fidelity beats Vanguard on expenses on 18 of 18 comparable stock and bond index funds, across all Vanguard share classes with a minimum investment of less than $3 billion. Total expense ratios as of November, 2018. 4 The Cerulli Report “U.S. Managed Accounts 2017”. 5 The Model Portfolios survey was conducted in April and May of 2018 in collaboration with FUSE Research and WealthManagement.com, independent firms not affiliated with Fidelity Investments. 417 advisors participated in the survey, which was an online, blind survey. The advisors are from a mix of banks, independent broker-dealers, insurance companies, regional broker-dealers, RIAs, and national brokerage firms (commonly referred to as wirehouses).

View source version on businesswire.com:https://www.businesswire.com/news/home/20181112005376/en/

CONTACT: Fidelity Investments

Corporate Communications, 617-563-5800



Nicole Abbott, 201-915-7548




SOURCE: Fidelity Investments

Copyright Business Wire 2018.

PUB: 11/12/2018 09:00 AM/DISC: 11/12/2018 09:01 AM


Update hourly