Fidelity® Equity-Income Strategy

A separately managed account that seeks to deliver long-term growth of capital and dividend income, with the potential for less volatility than the US stock market

Investment strategy: Focuses on higher-quality dividend-paying stocks that have the potential to sustain and grow dividends over time


Types of investments: Primarily higher-quality dividend-paying equity stocks1 within the S&P 500® Index

Investment minimum: $200,000


Gross annual advisory fee: 0.30% – 0.90%2 (varies based on total assets invested)

Strategic Advisers LLC (Strategic Advisers) will actively manage the strategy in an effort to deliver long-term capital growth and dividend income greater than the S&P 500® Index.



Stocks that pay dividends have been a key contributor to the S&P 500's total return


As shown below, dividends have produced approximately 40% of the S&P 500's total return over time, with the remainder coming from price appreciation (the increase in a stock's value). This powerful combination of income and growth may help provide increased long-term returns.


Bar chart depicts the role that dividends have played in the S&P 500 Index's total return on a decade-by-decade basis, starting with the decade beginning in 1930 and ending in the decade beginning in 2010. Individual bars represent, in order, the index's total return, the role that dividends played in that return, and the role that price appreciation played in that return. During different decades, dividend return, and price appreciation played different roles in the index's total return. Between the years 1930 and 2018 dividends produced approximately 40% of the S&P 500 index's return.

Source: Fidelity Management & Research Company. Data as of 12/31/2018.

Past performance and dividend rates are historical and do not guarantee future results. The index performance includes the reinvestment of dividends and interest income. An investment cannot be made in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts. This chart is for illustrative purposes only and is not intended to represent the actual or future performance of any investment option or strategy. Keep in mind that investing, including investing in dividend paying stocks, involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

For each decade, the total return for the S&P 500 was calculated and then converted into an average annual return number. The total return for each decade was also decomposed into its two constituent parts: price appreciation and dividend income. The bars for each decade represent annualized total return, annualized return from price appreciation only, and annualized return from dividends (which are assumed to be reinvested in the index).

S&P 500 is a registered service mark of Standard & Poor's Financial Services LLC. It is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.


A history of weathering down markets


Historically, high-dividend-paying stocks* have delivered competitive overall returns by performing reasonably well in strong markets while outperforming both non-dividend-paying stocks and the S&P 500® Index during weak markets. These stocks also tended to experience less volatility than stocks that did not pay dividends.†


Bar chart shows a comparison of how three classifications of stocks — the S&P 500 Index, non-dividend-paying stocks, and high dividend paying stocks — have performed in three types of markets between 12/31/1994 and 12/31/2018. Returns are shown for three types of markets: strong markets, weak markets, and overall for the time period. During strong markets returns for the S&P 500 Index were 11.4%, for non-dividend paying stocks 16.2%, and for high-dividend paying stocks 10.8%. During weak markets returns for the S&P 500 Index were negative 1.6%, for non-dividend paying stocks negative 3.5%, and for high-dividend paying stocks 0.1%. Overall returns for the S&P 500 Index were 9.8%, for non-dividend paying stocks 12.1%, and for high-dividend paying stocks 10.9%.

Source: Fidelity Management & Research Company. Analysis included annual total return of non-dividend-paying and high-dividend-paying stocks in the S&P 500® from 12/31/1994 to 12/31/2018, rebalanced monthly. High-dividend-paying stocks represent the top third of S&P 500® stocks by dividend yield. Note: This strategy will not focus exclusively on high-dividend-paying stocks and will include other stocks. Returns for the S&P 500® Index, non-dividend paying stocks, and high-dividend-paying stocks can deviate and have historically deviated significantly from the average returns over the period displayed above.

Strong markets correspond to time periods of the equity market when the National Bureau of Economic Research and Fidelity Investments' Asset Allocation Research Team place a high probability on the economy being in either early or mid cycle. Weak markets correspond to time periods of the equity market when the National Bureau of Economic Research and Fidelity Investments' Asset Allocation Research Team place a high probability on the economy being in either late cycle or outright recession. "Overall" is the entire period of equity market returns encompassing both strong and weak markets.

* High-dividend-paying stocks represent the top third of S&P 500® stocks by dividend yield.

† Source: Fidelity Management & Research Company. Analysis includes annual total return and standard deviation of non-dividend-paying and high-dividend paying stocks in the S&P 500® Index from 12/31/1994 to 12/31/2018, rebalanced monthly. High-dividend-paying stocks represent the top third of S&P 500® stocks by dividend yield. Volatility as measured by standard deviation. Standard deviation is a measure of the dispersion of a set of values from its mean. It is an annualized figure that measures how much a return varies over an extended period of time. The more variable the returns, the larger the standard deviation. A higher standard deviation indicates a wider dispersion of past returns and thus greater historical volatility. Standard deviation indicates the volatility of the index return over time, not the actual performance of the index.

Past performance is no guarantee of future results. The index performance includes the reinvestment of dividends and interest income. An investment cannot be made in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts. This chart is for illustrative purposes only and is not intended to represent the actual or future performance of any investment option or strategy.

The power of Fidelity's active management

Experienced and reliable with deep investment and research capabilities


Strategic Advisers LLC (Strategic Advisers) provides portfolio management capabilities for this strategy and has partnered with FMR Co., Inc. (FMR) to leverage their investment research capabilities. FMR provides model holdings and Strategic Advisers executes the trades and provides ongoing active management of the portfolios, including the use of tax-sensitive investment management techniques.3


FMR leverages its in-depth experience, access to corporations, and proprietary tools to identify stocks they believe to be consistent with the investment strategy.


Pyramid depicts the elements of the power behind Fidelity's active management. At the top of the pyramid is reliability; the firm has $2.6 trillion in global assets under management. Next is Deep, Diverse Capabilities; there are currently 1,800+ stocks covered by the equity research team and 23,700 research notes published by equity analysts in 2018. Next level down is experience; Fidelity Management and Research Company has a 70+ year of investing and portfolio management experience, 25+ years of managing models that seek to align to risk profiles, and 180+ portfolio managers across Fidelity Asset Management.

Source: Global assets under management, Fidelity Investments as of 9/30/18. Research notes and Stocks covered, Fidelity Management & Research Company (FMR Co.). As of 12/31/18.

* FMR Equity Analysts

† Not all resources and Fidelity Funds are available to the Fidelity Equity-Income Strategy.

We take a disciplined and thoughtful approach to building and maintaining a portfolio focused on capital appreciation and dividend income, with the potential for less volatility than the US stock market, in an effort to help you achieve your financial goals.


Displays the five elements of our investment process for this SMA — Investment Universe, Quantitative Analysis, Fundamental Analysis, Portfolio Construction, and Your SMA a. In reviewing the universe of potential investments, we research roughly 1,000 US and non-US stocks, focusing on companies that pay, or have the potential to pay dividends. b. When performing quantitative analysis, we utilize our in-depth research and analysis capabilities to looking for stocks that may provide above average dividend yields, focusing on those that have historically attractive valuations when compared to their peers. c. When performing fundamental analysis, we analyze and evaluate the potential for stocks to sustain and grow dividends over time, while looking to balance yield and risk. d. When building portfolios, we generally use 85 to 100 stocks, focusing on higher quality stocks that have the potential to pay, or increase, dividends over time. e. When managing your SMA, we look for a level of risk that's right for you, making modest adjustments to your account as needed to help you reach your financial goals.