Fidelity Bond Income Model Portfolio and Fidelity Multi-Asset Income Model Portfolio, available for financial advisors, are designed to maximize risk-adjusted yield
BOSTON, February 7, 2019 —Fidelity Investments®, one of the largest and most diversified global financial services firms with $6.7 trillion in client assetsi, today launched the Fidelity® Bond Income Model Portfolio and Fidelity Multi-Asset Income Model Portfolio, the first models offered by Fidelity to include ETFs, along with active and passive mutual funds.
The new models aim to generate a high level of income while focusing on managing risk
through fixed income and multi-asset class investing. They expand upon Fidelity’s existing model portfolios launched in 2018, which offer total return solutions within specific levels of risk.
According to the Social Security Administration, individuals will be responsible for the majority of their income in retirement, with 62 percent of income expected to come from their own sources versus 38 percent coming from outside sources, such as social security or pensions.ii With these new models, Fidelity provides financial advisors with the ability to help their clients who are approaching retirement or already retired to address the challenge of planning for income before and during retirement.
“We’re always looking for new ways to help advisors serve their clients. These income models are designed to address an even broader range of clients’ investment needs,” said Matt Goulet, senior vice president, Fidelity Institutional Asset Management®. “It’s a natural extension of Fidelity’s expertise as a retirement leader, serving more than 30 million retirement accounts.”
The Fidelity Bond Income Model Portfolio uses fixed income, investing primarily in debt securities, allocating across four general investment categories: high yield securities, preferred stock, U.S. Government, and emerging market securities. The Fidelity Multi-Asset Income Model Portfolio uses different asset classes for additional diversification and total return benefits. It invests primarily in income-producing securities, allocating among equity and debt securities, including common and preferred stock, U.S. Government debt, high yield debt securities, emerging market debt, and floating rate securities.
These new income model portfolios build on Fidelity’s heritage of fixed income and multi-asset class investing, in addition to Fidelity’s 70 years of investing and portfolio management experience and 30 years of experience managing models. Fidelity’s other model portfolios include the Fidelity Target Allocation Model Portfolios, which seek to combine Fidelity active and passive mutual funds to enhance potential for excess return, and the Fidelity Target Allocation Index-Focused Model Portfolios, primarily invested in Fidelity index mutual funds, making them some of the lowest cost models available.
The models 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.
Fidelity Model Portfolios are available to advisors at broker-dealers, registered investment advisors, banks, and insurance companies. Nearly 100 advisory firms have access to Fidelity Model Portfolios through turnkey platforms. Advisors can also receive model updates
directly from Fidelity. 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 $6.7 trillion, including managed assets of $2.4 trillion as of December 31, 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 more than 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 and other products included in that portfolio, and the share class of those funds or expense structure of those other 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.
The Fidelity Target Allocation Models consist solely of Fidelity mutual funds and are available only in the share class designated by FIAM when made available through the Models. The Fidelity Income Models consist of Fidelity mutual funds and third-party ETFs. 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 mutual funds in the Models. For certain accounts custodied on Fidelity's brokerage platform that elect to invest in Fidelity Models that include third-party ETFs, Fidelity may receive compensation from the third-party and/or its affiliates. Additional information about the sources, amounts, and terms of compensation is described in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice.
FIAM does not have investment discretion and does not place trade orders for any client accounts. Information and other marketing materials provided by FIAM concerning the Models may not be indicative of a 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.
Fidelity Clearing & Custody Solutions® provides clearing, custody, or other brokerage services through National Financial Services LLC or Fidelity Brokerage Services LLC, Members NYSE, SIPC.
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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.
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i As of December 31, 2018.
ii Social Security Administration, Income of the Aged Chartbook, 2014 (released April 2016), based on highest quintile of $72,129.
“30 million retirement accounts”: Analysis based on 22,600 corporate defined contribution plans and 16.2 million participants as of December 31, 2018. These figures include the advisor-sold market, but exclude the tax-exempt market. Excluded from the behavioral statistics are non-qualified defined contribution plans and plans for Fidelity’s own employees.