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Fidelity® Expands Its Model Portfolios Lineup to Help Advisors Meet a Wider Range of Client Needs

07/14/2021

Fidelity Target Allocation (Class I) Model Portfolios Collectively Outperformed an Average of 88% of Peers as of May 2021*

BOSTON--(BUSINESS WIRE)-- Fidelity Institutional℠ today announced four new target allocation mixes in its Fidelity Target Allocation, Fidelity Target Allocation Blended and Fidelity Target Allocation Index-Focused Model Portfolio lineups, including equity and fixed income mixes of 10/90, 30/70, 50/50 and 100/0i. The expansion gives advisors the ability to address a wider range of investor risk profiles and adds to Fidelity’s already diverse offering of business cycle, income, equity and bond models, giving advisors even more ways to use models to meet their practices’ needs as the use of model portfolios continues to growii.

Since their launch three years ago, the Fidelity Target Allocation (Class I) Model Portfolios have collectively outperformed an average of 88% of peers, as of May 31, 20211. The three-year net return of the Fidelity Target Allocation 60/40 (I) Model – the most widely-used model in Fidelity’s lineup – was 12.19%, outperforming 95% of peers as of May 31, 2021.

“The consistent performance of our models shows that we’re achieving the primary goal we’ve had since launch – helping advisors manage investments more efficiently so they can spend more time on their client relationships and helping clients achieve long-term goals,” said Matt Goulet, senior vice president for portfolio solutions at Fidelity Institutional. “As the marketplace continues to evolve, we’re leveraging Fidelity’s investment experience, deep understanding of advisor needs, robust technology platforms, and relationships with other industry leaders to enhance the advisor experience and empower them to better serve clients through diversified offerings, flexibility and customization.”

Advisors can access Fidelity’s broad range of model portfolios across more than 20 platforms, making it easy for them to leverage the models wherever they do business. Direct integration with a growing number of third-party platforms, such as Envestnet, Orion, 55ip and more, delivers flexibility to advisors and enables them to maximize the value of their platforms’ functionality, as well as to work more seamlessly across platforms. Fidelity Model Portfolios are also available through Fidelity platforms including the managed account platform FMAX, and integrated into the Wealthscape℠ Modeling & Rebalancing tool, making it simpler for advisors to view, customize and allocate to the portfolios.

Customized Models Further Help Clients Deliver on Investors’ Unique Needs

In 2020, Fidelity began rolling out customized model portfolios at both the advisor and firm levels. These customizations can include vehicle replacements (e.g., ETF or mutual fund), preferences for certain managers, custom risk profiles and more.

“Customized model portfolios help us further differentiate our firm and meet a wide range of client needs more efficiently, so that our advisors have more time to focus on helping clients work towards their goals and plan for the future,” said James M. Beale, head of Managed Solutions & Capital Markets at Rockefeller Capital Managementiii.

Fidelity Will Continue to Evolve Its Model Portfolios Offering

As part of its continued commitment to meeting client needs, Fidelity will continue to enhance its model manufacturing capabilities to streamline advisors’ ability to accommodate a range of investors. This includes exploring ESG and tax-aware capabilities, as well as continuing to make it easier for advisors to leverage Fidelity Model Portfolios as building blocks within a larger UMA (Unified Managed Account).

More than 7,000 wealth management advisors are now subscribed to Fidelity Model Portfolio updates. Subscribers receive periodic updates on model reallocation rationales, market and model performance commentaries, and investing insights from Fidelity. Advisors can also access marketing collateral on the models that they can easily share with clients, helping them explain the value of models and where they fit into a client’s overall portfolio.

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 $10.8 trillion, including discretionary assets of $4.1 trillion as of May 31, 2021, we focus on meeting the unique needs of a diverse set of customers: helping more than 35 million people invest their own life savings, 22,000 businesses manage employee benefit programs, as well as providing more than 13,500 wealth management firms and institutions with investment and technology solutions to drive growth. Privately held for 75 years, Fidelity employs more than 47,000 associates who are focused on the long-term success of our customers. For more information about Fidelity Investments, visit https://www.fidelity.com/about-fidelity/our-company.

1 Past performance is no guarantee of future results. The % of Peers Beaten is an average for the aggregate of the 5 Fidelity Target Allocation (I) Model Portfolios. See Disclosure section for important details and individual Target Allocation portfolio rankings.

The content provided herein is general in nature and is for informational purposes only. This information is not individualized and is not intended to serve as the primary or sole basis for your decisions as there may be other factors you should consider. Fidelity Institutional℠ does not provide financial or investment advice. You should conduct your own due diligence and analysis based on your specific needs.

*Source: Morningstar Direct. Since Fidelity Target Allocation models launched in June 2018 they have outperformed, on average, 88% of peers as defined by their respective Morningstar Model Categories. Fidelity has not verified and cannot verify the accuracy of information from outside sources, which are self-reported by participating investment managers. Rankings data of the Fidelity Target Allocation Model Portfolios for the time period shown were retrieved on 06/24/2021 and reflect all model peers with reported performance for the dates used, 06/01/2018 - 05/31/2021. The universe that the products are shown against is defined by Morningstar. The % of Peers beaten over the stated time frame is based on the percentile rank against each model peer group, displayed as the % of peers beaten for the Fidelity Target Allocation (I) Model Portfolios and stated as a collective average. Number of models per category listed in the chart. Past performance is no guarantee of future results. Multiple share classes of a fund have a common portfolio but impose different expense structures.

3 Year (Since Inception)

1 Year

Group/Investment

 

Inv.
Ranked

Avail
Universe2

%
Reported

% Peers
Beaten

Inv.
Ranked

Avail
Universe1

%
Reported

% Peers
Beaten

US Model Allocation--15% to 30% Equity

 

102

134

76%

 

164

206

80%

 

Fidelity Target Allocation 20/80 (I)

 

 

 

 

70%

 

 

 

21%

US Model Allocation--30% to 50% Equity

 

147

189

78%

 

201

262

77%

 

Fidelity Target Allocation 40/60 (I)

 

 

 

 

94%

 

 

 

35%

US Model Allocation--50% to 70% Equity

 

164

218

75%

 

216

289

75%

 

Fidelity Target Allocation 60/40 (I)

 

 

 

 

95%

 

 

 

27%

US Model Allocation--70% to 85% Equity

 

116

147

79%

 

165

209

79%

 

Fidelity Target Allocation 70/30 (I)

 

 

 

 

89%

 

 

 

9%

US Model Allocation--85%+ Equity

 

77

107

72%

 

121

164

74%

 

Fidelity Target Allocation 85/15 (I)

 

 

 

 

93%

 

 

 

11%

Total

 

606

795

76%

88%3

867

1,130

77%

21%3

1 The available universe is based on the number of Model Portfolios that have an inception date prior to 06/01/2020. For each category, any models that have not historically reported any performance data have been removed from the “Available Universe” figure.
2 The available universe is based on the number of Model Portfolios that have an inception date equal to or earlier than the Fidelity Target Allocation (I) model portfolios, as of 06/01/2018. For each category, any models that have not historically reported any performance data have been removed from the “Available Universe” figure.
3 The % of Peers Beaten for the “Total” is an average for the aggregate of the 5 Fidelity Target Allocation (I) Model Portfolios.

As of 3/31/21: Fidelity Target Allocation 60/40 (I) Model

Cumulative Returns (%)

Average Annual Total Returns (%)

3-Month

YTD

1-Year

3-Year

5-Year

Life^

1.69

1.69

33.67

11.46

^Since model portfolio inception, 6/1/18.

Past performance is no guarantee of future results. The Models’ allocations and data are subject to change. Investment return and principal value of an investment will fluctuate, resulting in a gain or loss upon liquidation of shares. The model returns above are the aggregated total returns of the underlying mutual funds based on each model’s attributed weighting, and reflect performance achieved by a Fidelity Institutional Wealth Adviser LLC (“FIWA”) affiliate who has invested proprietary capital in the amount of $2,000 into each of these portfolios. The model returns include quarterly rebalancing. Total returns are historical and include changes in share price and reinvestment of dividends and capital gains, if any. Investment in model portfolios through a financial advisor or other party will differ due to fees and expenses (platform and/or advisory) not reflected here, timing of deposits and withdrawals, market movements between model reallocation and when the model is purchased, and the decision on whether or not to reinvest dividends, interest, or capital gains payments.

This document does not make an offer or solicitation to buy or sell any securities or services and is not investment advice. Fidelity 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, and Fidelity Custom Model Portfolios are made available to financial intermediaries on a non-discretionary basis by Fidelity Institutional Wealth Adviser LLC (“FIWA”), a registered investment adviser, or by Fidelity Distributors Company LLC (“FDC”), a registered broker-dealer, (collectively “Fidelity”). Fidelity 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 Models, the investment products included in the Models, and the share class of those products, are appropriate and suitable for you to base a recommendation or provide advice to any end investor about the potential use of the Models.

© Morningstar, Inc. All Rights Reserved. The Morningstar ranking information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete, or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Morningstar is a registered trademark of Morningstar, Inc., and is not affiliated with Fidelity Investments.

Third party marks are the property of their respective owners; all other marks are the property of FMR LLC. Third parties referenced herein are independent companies and are not affiliated with Fidelity Investments. Listing them does not suggest a recommendation or endorsement by Fidelity Investments Fidelity trademarks and service marks are the property of FMR LLC or its affiliated companies.

Fidelity Institutional℠ provides investment products through Fidelity Distributors Company LLC; clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC; and institutional advisory services through Fidelity Institutional Wealth Adviser LLC. 245 Summer St., Boston, MA 02210.

987084.1.0

© 2021 FMR LLC. All rights reserved.

__________________________

i Allocation of Fidelity Target Allocation 10/90 is 10% equity/90% fixed income; allocation of Fidelity Target Allocation 30/70 is 30% equity/70% fixed income; allocation of Fidelity Target Allocation 50/50 is 50% equity/50% fixed income; and allocation of Fidelity Target Allocation 100/0 is 100% equity/0% fixed income.
ii Source: Aite “At Your Discretion: The Increasing Adoption of Model Portfolios” Report; May 2021
iii The experience of this client may not be representative of the experiences of all clients and is not indicative of future success.

Corporate Communications
(617) 563-5800
fidelitycorporateaffairs@fmr.com

Rachel Shaffer
(201) 915-8098
rachel.shaffer@fmr.com

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Source: Fidelity Investments

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