Investment management tailored to your priorities and preferences

Work with an advisor to personalize your account

In designing an investment solution for you, we follow a multi-faceted approach designed to fit your goals and the way you want to invest.

As a starting point, we suggest a mix of investments, or asset allocation, that's appropriate for your goal.


Establishing your risk-return profile


Choosing a mix of investments starts with establishing what is known as a "risk-return profile." To help determine your profile, we work with you to understand your unique circumstances and suggest a mix of investments based on your time horizon, current financial situation, and risk tolerance. This profile will help inform the investment strategy we suggest for you.

Graphic shows the factors that go into establishing your risk-return profile. The first is horizon. Short-term goals generally lend themselves to a more conservative profile, while long-term goals generally lend themselves to a more aggressive profile. The second is your current financial situation. No emergency fund, decreasing future income, and large amounts of debt generally indicates a more conservative profile, while an adequate emergency fund, the potential for increasing future income and small amount of debt generally indicates a more aggressive profile. When it comes to risk tolerance, a more conservative risk profile generally aligns with someone for whom market changes cause anxiety, while a more aggressive profile aligns with someone who is comfortable with market changes.


Aligning your risk-return profile to an investment strategy

Each strategy aligns to a specific risk-return profile based on its allocations to major asset classes—stocks, bonds, and short-term investments. Generally, the potential difference in returns—either positive or negative—increases as risk increases. It is important to note that all strategies offered within Portfolio Advisory Services accounts, including the most conservative strategies, are subject to volatility and the risk that your account may lose money.

The above example is for illustrative purposes only and does not reflect actual PAS data. Asset mix performance figures are based on the weighted average of annual return figures for certain benchmarks for each asset class represented. Historical returns and volatility of the stock, bond, and short-term asset classes are based on the historical performance data of various indexes from 1926 through 12/31/18 data available from Morningstar.
Domestic stocks represented by S&P 500® 1926–1986, Dow Jones U.S. Total Market 1987—12/31/18; international stock represented by S&P 500 1926–1969, MSCI EAFE 1970–2000, MSCI ACWI Ex USA 2001—12/31/18; bonds represented by U.S. intermediate-term bonds 1926–1975, Bloomberg Barclays U.S. Aggregate Bond 1976—12/31/18; short term represented by 30-day U.S. Treasury bills 1926—12/31/18. Although past performance does not guarantee future results, it may be useful in comparing alternative investment strategies over the long term. Performance returns for actual investments will generally be reduced by fees and expenses not reflected in these investments' hypothetical illustrations.
Dow Jones Industrial Average, published by Dow Jones & Company, is a price–weighted index that serves as a measure of the entire US market. The index comprises 30 actively traded stocks, covering such diverse industries as financial services, retail, entertainment, and consumer goods. S&P 500 Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent US equity performance.
MSCI EAFE Index is a market capitalization-weighted index that is designed to measure the investable equity market performance for global investors in developed markets, excluding the US & Canada.
MSCI ACWI (All Country World Index) ex USA Index is a market capitalization-weighted index designed to measure the investable equity market performance for global investors of large and mid-cap stocks in developed and emerging markets, excluding the United States.
Bloomberg Barclays US Aggregate Bond Index is a broad-based, market-value-weighted benchmark that measures the performance of the investment grade, US dollar denominated, fixed-rate taxable bond market. Sectors in the index include Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS.
Indexes are unmanaged. It is not possible to invest directly in an index.
Past performance is no guarantee of future results.

Once you choose a mix of investments, we help you select from our two investment approaches—total return and defensive.


Total Return
For investors looking for risk-adjusted returns over the long run and who are likely to stay invested during market downturns, our Total Return approach seeks to improve return potential while maintaining an appropriate level of risk to help you reach your goals.


We believe there's a strong connection between the current place of the economy in the business cycle and various asset class returns. This is why we seek to understand where the US economy is in the business cycle, so that we can make adjustments to your investments as the economic environment changes and emphasize investments that have historically performed well during each phase of the business cycle.


Graphic shows a depiction of the business cycle that is used as a framework for our investment decisions. As the economic cycle goes through recovery, expansion, and contraction, it can be divided into four phases as follows: Early phase, with activity rebounding, which generally lasts about 1 year. Mid phase, with growth peaking, which generally lasts about 3 years. Late phase, with growth moderating, which generally lasts about 1.5 years. And Recession phase with activity falling, which generally lasts less than one year.

For illustrative purposes only

Defensive

Sticking to a plan and staying consistently invested, even when things get rocky, is crucial to investment success. That's why we offer an alternative investment approach to help you invest in a way that may be more comfortable for you. If you're an investor who finds the market's ups and downs stressful, or if you're nearing or already in retirement, we offer an approach specifically designed to temper market swings.


With a defensively managed approach, market conditions and asset allocation are just two of the many factors we consider when managing your account. We’ll also look at the types of stocks in your allocation, often focusing on stocks that have a history of lower volatility, as well as your fixed-income exposure, often focusing on higher-quality government bonds. The intention of this approach, as shown below, is to help temper the impact of sharp movements in the markets.


A defensive approach may help you stay invested over the long term


Line graph shows the hypothetical difference between our Total Return and Defensive approaches. During sustained market corrections, a defensive approach may experience losses that are less severe than a total return approach. However, during short-term market declines losses for the two approaches may be similar. During periods where equities are strong, gains in a defensive approach may be lower than in a total return approach to your account's defensive positioning.


*In this scenario, your losses refers to the value of your portfolio. For illustrative purposes only. Not indicative of any investment

For investors who may find it harder to stay the course during volatile markets, a defensive approach may offer a good alternative. While you may give up some potential returns during rising markets, your account values may fluctuate less during periods of market instability.

Business cycle above is a hypothetical illustration of a typical business cycle. There is not always a chronological progression in this order, and there have been cycles when the economy has skipped a phase or retraced an earlier one.
The Typical Business Cycle depicts the general pattern of economic cycles throughout history, though each cycle is different. In general, the typical business cycle demonstrates the following:

During the typical early-cycle phase, the economy bottoms and picks up steam until it exits recession and then begins the recovery as activity accelerates. Inflationary pressures are typically low, monetary policy is accommodative, and the yield curve is steep. Economically sensitive asset classes such as stocks tend to experience their best performance during the early-cycle phase.

During the typical mid-cycle phase, the economy exits recovery and enters into expansion, characterized by broader and more self-sustaining economic momentum but a more moderate pace of growth. Inflationary pressures typically begin to rise, monetary policy becomes tighter, and the yield curve experiences some flattening. Economically sensitive asset classes tend to continue benefiting from a growing economy, but their relative advantage narrows.

During the typical late-cycle phase, the economic expansion matures, inflationary pressures continue to rise, and the yield curve may eventually become flat or inverted.

Eventually, the economy contracts and enters recession, with monetary policy shifting from tightening to easing. Less economically sensitive asset categories tend to hold up better, particularly right before and upon entering recession.
Past performance is no guarantee of future results.

Once you've chosen an asset allocation and investment approach, we'll help you choose the universe from which your investments will be selected.


Depending on the investment approach you choose, you'll have up to 3 investment options available to you:


Available investment options


index-focused-invstmnts


Blended—In this open architecture approach, the investment manager has the flexibility to choose from a wide range of either Fidelity or non-Fidelity funds.


Fidelity focused—Where available and appropriate, we'll prioritize investments managed by Fidelity.*


Index focused—Where available and appropriate, we'll select index funds, which are designed to track market indexes.*



*This option is not available with the defensive approach.

In addition to investing in mutual funds and ETFs we may also use separately managed account sleeves1 (SMAs) as a portion of the domestic equity allocation for accounts with taxable registrations. SMAs can hold hundreds of individual securities, creating more opportunities for your investment team to leverage tax-sensitive techniques that can help reduce the impact of taxes on your investment returns. In addition to tax efficiency, SMAs allow you to directly own securities, giving you greater transparency into individual positions, as well as the ability to further customize your account.


How integrating SMAs into your account could boost after-tax returns2

As the graphic below shows, integrating SMAs into the equity portion of different asset allocations could enhance returns.


3 Year Returns as of 3/31/2019
Bar chart shows the potential return benefits of including separately manage accounts in your investment strategy. It shows how returns for portfolios with different equity allocations have increased over a recent 3-year period with the inclusion of SMAs. Return differences are as follows: For a 40% equity portfolio, the difference was .46%. For a 50% equity portfolio, the difference was .42%. For a 60% equity portfolio the difference was .43%. For a 70% equity portfolio the difference was .47%. For an 85% equity portfolio the difference was .50%. For a 100% equity portfolio the difference was .65%.



1. Clients must meet certain eligibility requirements to leverage the benefits of SMAs.

2. Performance shown represents past performance, which is no guarantee of future results. Investment return and principal value of investments will fluctuate over time. Returns for individual clients may differ significantly from the composite returns and may be negative. A client's underlying investments may differ from those of the accounts included in the composite. Composite performance is asset weighted and is net of applicable advisory fees and the underlying investments' own management fees and operating expenses.

After-tax composite returns represent the composite performance of Fidelity® Wealth Services ("FWS") accounts managed using the Blended preference and tax-sensitive investment strategies ("Tax-Sensitive accounts"). Performance information is presented for those asset allocation strategies and time periods for which composite information is available separately for accounts managed with and without the use of SMAs. Please note that not all SMAs are eligible for use in Tax-Sensitive accounts managed using the Blended preference; see the FWS Program Fundamentals for more information. Performance for periods prior to July 2018 includes performance of Fidelity® Personalized Portfolios and Fidelity® Personalized Portfolios for Trusts accounts. Composite performance is based on the returns of the managed portion of Tax-Sensitive accounts; assets in a liquidity sleeve are excluded from composite performance. In limited circumstances, accounts with nonstandard characteristics are excluded from composites. Accounts with less than one full calendar month of returns, accounts subject to significant investment restrictions, accounts with balances of less than $50,000, and accounts for which clients provided short term and long term tax rates of zero are also excluded from composites. Accounts with a do not trade restriction are removed from the composite once the restriction has been on the account for thirty days.

Account performance is calculated using time-weighted methodology which minimizes the effect of cash flows in and out of accounts and related impacts to account returns during the period. Composite returns are calculated using asset-weighted methodology which takes into account the differing sizes of accounts (i.e. considers larger and smaller accounts proportionally). Performance shown is net of the actual investment management fees paid by each client, including net of any fee credits, any underlying fund's own management fees and operating expenses, and fees attributable to SMAs, and reflects reinvestment of any interest, dividends, and capital gains distributions. Non-fee paying accounts may be included in composites. This may increase the overall composite performance with respect to the net-of-fees performance. Mutual fund redemption fees that would otherwise apply are currently paid by the Fidelity. Returns shown are not load adjusted and include changes in share price and reinvestment of dividends and capital gains, if applicable.

All distributions of qualified dividend income are assumed to meet the required holding period. In most cases, specific ID cost-basis methodology rather than average cost basis is applied when managing accounts. Performance includes accrued interest for the following securities: fixed-rate bonds, fixed-rate government bonds, and commercial paper. Other securities are computed on a cash basis only. For accounts with individual bonds, amortization and accretion for bonds are not included in performance calculations. After-tax composite returns are calculated based on a daily valuation time-weighted methodology estimating the impact of federal ordinary income taxes, Medicare surtaxes, and the alternative minimum tax where customers have indicated this applies. Returns are calculated by adjusting for actual transactions (sales, dividend earnings, etc.) that have taken place in the accounts, and by assuming that (i) each category of income is taxed at individual marginal rates in effect for the period in which the taxable transaction took place and is computed based on long-term capital gains rate and marginal income tax rate information provided by the client, and (ii) cost-basis and holding period information provided by the client is accurate. Such after-tax returns take into account the effect of federal income taxes only.

Any realized short-term or long-term capital gain or loss retains its character in the after-tax calculation. The gain/loss for any account is applied in the month incurred and there is no carryforward. We assume that losses are used to offset gains realized outside the account in the same month, and we add the imputed tax benefit of such a net loss to that month's return. This can inflate the value of the losses to the extent that there are no items outside the account against which they can be applied. We assume that taxes are paid from outside the account. Taxes are recognized in the month in which they are incurred. This may inflate the value of some short-term losses if they are offset by long-term gains in subsequent months. After-tax composite returns do not take into account the tax consequences associated with income accrual, deductions with respect to debt obligations held in accounts, federal income tax limitations on capital losses, or any year-end adjustments for dividends with respect to classifications as qualified versus non-qualified. After-tax composite returns may exceed pretax returns as a result of an imputed tax benefit received upon realization of tax losses. Withdrawals from accounts during the performance period result in adjustments to take into account unrealized capital gains across all securities in such account, as well as the actual capital gains realized on the securities.