Fidelity® Tax-Managed International Equity Index Strategy

A separately managed account that seeks to provide long-term growth of capital from international developed-market equity securities while leveraging Fidelity's tax-sensitive investment management1 capabilities in an effort to enhance after-tax returns

Investment strategy: Seeks index-like performance with enhanced after-tax returns


Types of investments: Primarily American Depository Receipts (ADRs) and Exchange Traded Products (ETPs)

Investment minimum: $200,000


Gross annual advisory fee: 0.20% – 0.65%2 (varies based on total assets invested)

Your account will be managed in an effort to harness the long-term growth potential of non-US developed market companies while seeking to enhance after-tax returns through active tax management.1


For example, with tax-loss harvesting, even when the market's up there may still be pockets of volatility within certain countries/regions or industry/sectors around the world. This volatility creates potential opportunities to harvest losses in an effort to offset gains. Knowing when to act can dramatically impact an investor's plan.


Understanding the optimal time to realize gains and losses can often mean monitoring up to hundreds of different tax lots on a daily basis. Our investment managers are continuously on the lookout for potential opportunities for each investor in light of their particular situation.


This chart shows the dispersion of monthly returns for the Fidelity Developed ex North America Focus Index (Net), showing that owning individual securities may provide increased tax-loss harvesting opportunities versus owning a mutual fund or ETF.


Taking advantage of market volatility

Graphic demonstrates how investing over time can provide potential tax-loss harvesting opportunities by showing the performance of the Fidelity Developed ex North American Focus Fund Index between December 2010 and December 2018. It also shows how much returns varied within each month during that time period, without showing specific amounts that returns varied. The intent is to show that in any given month index highs and lows will vary, sometimes significantly. This variation demonstrates that during different time periods there will generally be opportunities to harvest tax losses.


This illustration is not intended to represent performance of any Fidelity account. Investing in this manner involves risk, including the risk of loss, and will not ensure a profit. Past performance does not guarantee future results. Dispersion of monthly returns of Fidelity Developed ex North America Focus Index (Net) securities depicts the standard deviation of the individual stock returns, and the bar is a graphical representation centered on the level of the index (solid line) and scaled to show +/- 1 standard deviation (i.e., the high/low of the bar). Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation. Standard deviation is calculated as the square root of the average of squared differences between each data point and the data set mean. The calculation is based on the 1 month returns of stocks in the Fidelity Developed ex North America Focus Index (Net) at a point in time and is displayed on a quarterly basis. ETF is an Exchange-Traded Fund. Source: FactSet, Bloomberg, and Strategic Advisers Investment R&D, as of 6/30/19.

How we manage your account for taxes


Your account will be managed in an effort to boost your after-tax returns throughout the year—not just at year end. Your account is evaluated each business day and uses one or a combination of the following techniques to seek enhanced after-tax returns


Four techniques we use to manage taxes are tax loss harvesting which looks to offset gains in order to save on taxes over time; managing tax lots, when possible, in an effort to build a more tax-efficient portfolio; deferring realizing short-term gains when possible; and possibly transitioning your existing holdings when you fund your account.

We take a disciplined and thoughtful approach to building and maintaining your portfolio by applying a number of tax-sensitive techniques designed to help reduce the impact of taxes and enhance after-tax returns in an effort to help you achieve your financial goals.


Graphic depicts the elements that go into the portfolio construction of your SMA. a. We start by reviewing the investment universe. This involves conducting a broad search across a universe of about 900 stocks issued by companies outside of North America, which represents approximately 85% of the market cap of the developed international equity market. This can be customized, based on your preferences, to restrict certain positions. b. In constructing your portfolio, we generally select 250 to 350 securities, drawing on a subset of the Fidelity Developed ex-North America Focus Index. The portfolio seeks similar risk characteristics to that index, including similar market capitalization, growth valuation, and sector/industry exposure. c. On an ongoing basis, we apply year-round tax-sensitive investment management to your account, utilizing strategies such as tax-loss harvesting and short-term deferral of capital gains when appropriate.

Source: Fidelity Investments, *Fidelity Developed ex North America Focus Index (Net) methodology document.