FAQs: Fidelity Managed FidFolios^®

Fidelity Managed FidFolios^® are a type of digital separately managed account designed for clients who are looking to own a professionally managed portfolio of stocks. When you enroll in Fidelity Managed FidFolios^®, you're hiring a team of experienced professionals to take care of the day-to-day investment decisions, based on the strategy you select that's personalized around your investment preferences.
Here's some of what this team of professionals will do for you:

• Build your portfolio, based on an approach you've selected and certain investment preferences you've provided. Note that you can exclude up to five individual stocks or two industries in your account.
• Buy and sell investments in your account to maintain the investment approach you've chosen.
• Use fractional shares to build a portfolio which seeks to meet a specific investment objective, which will vary by strategy.
• Invest any money you add to your account over time according to the investment approach you've chosen.
• Apply tax-smart investing techniques where it makes sense.
• Keep you informed as to how your account is performing.

All of your experience with Fidelity Managed FidFolios^® takes place online—including providing information about yourself, communicating your investment preferences, opening your account, and tracking the holdings in your account.

Fidelity Managed FidFolios^® strategies do not come with an advisor. All account activities, including opening your account and making updates to your preferences, take place online.

The fee for Fidelity Managed FidFolios^® is based on the value of the assets in your account and an annual advisory fee rate of the strategy you choose, for which you will be billed quarterly in arrears. Note that when we make trades in your account you will not be charged any commissions.

The fee for Fidelity Managed FidFolios^® is calculated quarterly in arrears and automatically deducted from your account each quarter.

Fidelity Managed FidFolios^® will send regular electronic communications to keep you informed as to what we're doing on your behalf. These include notifications whenever we buy or sell stocks in your portfolio. We'll also provide monthly statements that summarize all account activity for the prior month and a summary of your account balance.

Fidelity Managed FidFolios^® are a type of digital separately managed account designed for clients who are looking to own a professionally managed portfolio of stocks. When you enroll in Fidelity Managed FidFolios^®, you're hiring a team of experienced professionals to take care of the day-to-day investment decisions, based on the strategy you select that's personalized around your investment preferences.
Here's some of what this team of professionals will do for you:

• Build your portfolio, based on an approach you've selected and certain investment preferences you've provided. Note that you can exclude up to five individual stocks or two industries in your account.
• Buy and sell investments in your account to maintain the investment approach you've chosen.
• Use fractional shares to build a portfolio which seeks to meet a specific investment objective, which will vary by strategy.
• Invest any money you add to your account over time according to the investment approach you've chosen.
• Apply tax-smart investing techniques where it makes sense.
• Keep you informed as to how your account is performing.

All of your experience with Fidelity Managed FidFolios^® takes place online—including providing information about yourself, communicating your investment preferences, opening your account, and tracking the holdings in your account.

Fidelity Managed FidFolios^® strategies do not come with an advisor. All account activities, including opening your account and making updates to your preferences, take place online.

Fidelity Managed FidFolios^® offers 2 different types investment strategies:

Direct indexing strategies
The investment team seeks to provide investment results similar to a benchmark index, such as the Fidelity U.S. Large Cap Index℠. They do this by building and managing a portfolio of a portion of the stocks contained in that index.

Actively managed strategies
The investment team builds a portfolio in pursuit of a specific investment objective, such as outperforming a benchmark index or generating income. They do this by building and managing a portfolio of stocks that they believe will help them achieve that objective.

Learn more about our available strategies

The Fidelity U.S. Large Cap Index℠ is a float-adjusted market capitalization–weighted index designed to reflect the performance of the stocks of the largest 500 U.S. companies based on float-adjusted market capitalization. Indexes are unmanaged. It is not possible to invest directly in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts or investment funds.

Portfolios can fluctuate in value. The investments that the investment team uses to build Fidelity Managed FidFolios^® portfolios are subject to the ups and downs of the market. When markets decline, or the investments in your account decline in value, you may lose money.

In addition to a website where you can check on your account, Fidelity Managed FidFolios^® will also send monthly emails to the email address we have on file for you. These emails will contain a summary of account information, including your balance, plus a summary of any activity that's taken place in your account.

Fractional shares are portions of full shares.

We use fractional shares when building Fidelity Managed FidFolios^® because they give us the ability to invest your money across a larger number of stocks.

Indexes are collections of stocks that are used as a tool to represent certain market sectors. You may also hear these referred to as "benchmarks." Indexing investing is the practice of trying to track the performance of one of these indexes by holding all or a portion of the companies in the index. Most people do this by holding an index fund or exchange-traded fund. With direct indexing, which we use when building and managing the U.S. Large Cap Index, the International Index, the U.S. Total Market Index, the U.S. Low Volatility Index, and the Environmental Focus strategies, you directly own a subset of the stocks in the index, or benchmark, in an effort to approximate its risk and return characteristics.

Fidelity Managed FidFolios^® accounts use a series of tax-smart techniques that are designed to help reduce the impact of taxes on your account. Here's a sample of the techniques we use throughout the year:

Transition management
When it makes sense, we may search for ways to integrate your existing eligible holdings into your Fidelity Managed FidFolios^® account as opposed to selling all of your existing investments in order to "start from scratch." This can help reduce the potential tax consequences of building your portfolio.

Tax-loss harvesting
When one of your holdings has decreased in value it can be sold at a loss. Known as tax-loss harvesting, this loss can then be used to offset gains in either your Fidelity Managed FidFolios^® account or elsewhere in your overall investment portfolio.

Manage capital gains
When selling investments in your account, we'll generally first look to sell those that you've held for a longer time period, allowing us to take advantage of lower long-term capital gains tax rates.

Tax-smart withdrawals
If you take money from your account, we'll seek to reduce the tax consequences of that. If withdrawals are planned, we'll seek to keep sufficient cash in your account. If they're unplanned, and we have to sell securities to fund them, we'll work to reduce the tax impact of those sales.

Note that these techniques are used in accounts with taxable registrations only.

When one of your holdings has decreased in value it can be sold at a loss, we then replace it with a stock of similar characteristics. Known as tax-loss harvesting, this loss can then be used to offset gains in either your Fidelity Managed FidFolios^® account or elsewhere in your portfolio. We believe that tax-loss harvesting is more than a year-end exercise, so we look for opportunities throughout the year, which has the potential to produce better long-term investment results for our clients.

Note that this technique is only applied in accounts with taxable registrations. Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.

The fee for Fidelity Managed FidFolios^® is based on the value of the assets in your account and an annual advisory fee rate of the strategy you choose, for which you will be billed quarterly in arrears. Note that when we make trades in your account you will not be charged any commissions.

The fee for Fidelity Managed FidFolios^® is calculated quarterly in arrears and automatically deducted from your account each quarter.

There are no fees specifically charged for closing or withdrawing money from your Fidelity Managed FidFolios^® account. However, closing your account by withdrawing your entire balance may result in a termination of the managed account service, at which time you will be charged a prorated portion of the advisory fee for the time your account was managed during the current quarterly billing period. Also note that for tax-advantaged accounts like IRAs there may be early withdrawal penalties for any withdrawals taken prior to age 59½. Within taxable accounts, any securities you sell may result in capital gains, which would be taxed.

Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.

Fidelity Managed FidFolios^®, like all financial products, comes with a certain level of risk. These risks will be more pronounced given that it invests entirely in stocks. Prior to your opening this account we're required to make sure you're properly positioned to assume this kind of risk, as not all financial products are suitable for all investors.

The following types of accounts are available through Fidelity Managed FidFolios^®:

• Taxable (individual)
• Traditional IRA
• Roth IRA
• Rollover IRA

There are no restrictions on the number of accounts you can have open. However, Fidelity Managed FidFolios^® accounts must be funded with the minimum investment amount of $5,000 within 6 months of being opened or the accounts may be subject to closure.

You can fund your account with any amount. However, we won't start buying stocks in your account until your balance reaches $5,000. For balances under $5,000, your money will be invested in a money market mutual fund, Fidelity Government Cash Reserves Fund (FDRXX). Note that prior to our buying stocks on your behalf, you will not be charged any Fidelity Managed FidFolios^® advisory fees.

You could lose money by investing in the fund. Although the fund seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. An investment in the fund is not a bank account and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Fidelity Investments and its affiliates, the fund's sponsor, are not required to reimburse money market funds for losses, and you should not expect that the sponsor will provide financial support to the fund at any time, including during periods of market stress. Interest rate increases can cause the price of a money market security to decrease. A decline in the credit quality of an issuer or a provider of credit support or a maturity-shortening structure for a security can cause the price of a money market security to decrease. Fidelity's government and U.S. Treasury money market funds will not impose a fee upon the sale of your shares.

You start by providing some information about yourself, such as the year you were born, your household income and financial situation, when you'll need the money you're investing, and your risk tolerance for your account. Once you do that, we'll check to make sure this type of product, which is not diversified across different asset classes, is suitable for you. Once we determine this type of investment is appropriate for you, you open your account online.

Once your account is open, you can add money to it. You can set up an initial deposit, as well as subsequent ongoing deposits. Don't worry if you're not ready to set those up when you open your account. You can do it later.

Fidelity Managed FidFolios^® use an online account application, which should only take a few minutes to complete. Assuming everything is in good order, once you successfully complete the application, your new account number will be generated.

If you have an eligible Fidelity brokerage or retirement account, you can convert it to Fidelity Managed FidFolios^®. When converting an account, you will retain your existing account number, along with other features like beneficiary designations, automatic deposits, and automatic withdrawals, if applicable.

If you choose to open an account, we'll display any Fidelity accounts that are eligible to be converted. Only certain accounts can be converted at this time.

If you transfer cash directly from a self-directed Fidelity brokerage account into your Fidelity Managed FidFolios^® account, that money should appear in your account immediately, provided the transfer request was received in good order by Fidelity prior to 9:00 p.m. ET. For transfers from an external bank, transfer requests submitted by 4:00 p.m. ET are generally received by Fidelity on the next business day, although times may vary, due to conditions outside of our control. If you send us a check, the money will generally appear in your Fidelity Managed FidFolios^® account on the same day we receive that check.

For monthly transfers, money will appear in your account on the next business day after the transfer was scheduled. In other words, if your monthly transfer is scheduled for the 15th of each month, the money will appear in your account on the 16th, assuming that date doesn't fall on a Saturday, Sunday, or bank holiday.

When you're asked to add money to your Fidelity Managed FidFolios^® account online, you'll be given the option of doing it in the form of securities you already own instead of cash. The investment team will review these securities, and in cases where they fit into the strategy you've selected, these securities will become part of the portfolio. We'll let you know which securities meet this criteria. Otherwise, the securities will be sold, with the proceeds being used to purchase stocks to build your Fidelity Managed FidFolios^® portfolio. In some cases, we're not able to accept certain stocks for funding. In these cases, we can help you sell these, at which time you can add the cash proceeds to your account. Please note that any securities we sell on your behalf that have unrealized gains may result in tax consequences.

Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.

You can deposit as much as you'd like into your Fidelity Managed FidFolios^® account. However, online contributions are currently limited to $250,000 per day. If you'd like to start with an amount greater than this, please contact an investment professional by calling 800-343-3548.

For tax-advantaged accounts, such as IRAs, the amount of your contribution is subject to IRS annual contribution limits. Rollover and IRA transfer amounts are not subject to those limits.

Fidelity Managed FidFolios^® accounts can be funded with cash or eligible securities. Please see the Form ADV, Part 2A Brochure for more information about which securities are eligible for funding.

Fidelity Managed FidFolios^® are built using fractional shares, so there are certain limitations when it comes to transferring assets. If fractional shares are transferred to another Fidelity account, we're able to accommodate those transfers. However, fractional shares may not be transferred outside of Fidelity to an account at another firm and will be liquidated prior to the transfer.

When you initially fund your Fidelity Managed FidFolios^® account, you'll also have the option of adding money from another account on a regular basis. This money will be invested according to the strategy you've selected. When you decide you need to access the money in your account, you can set up automatic monthly withdrawals using the same link.

1. Transfer cash from a Fidelity or non-Fidelity account. Simply use the "Add money" button on your dashboard, or "Transact" if you are using the Fidelity mobile app, then choose how you'd like to fund your account.
2. Deposit a check into your account. You can deposit it using our mobile application or send it via US Mail. Be sure to write your account number in the memo field and make the check payable to Fidelity Brokerage Services LLC.
   
   To deposit rollover checks, please use this address:
   Fidelity Investments ATTN: Direct Rollovers PO Box 770001 Cincinnati, OH 45277-0037
   All other check deposits can be mailed using one of the following addresses.
   US Mail: Fidelity Investments PO Box 770001 Cincinnati, OH 45277-0003
   Overnight/Certified Mail: Fidelity Investments 100 Crosby Parkway KC1H Covington, KY 41015.

If you already have a bank account linked to Fidelity then you can use it to fund your Fidelity Managed FidFolios^® account, although you will have to establish a link between that account and your new Fidelity Managed FidFolios^® account. To link a bank account to your Fidelity account, log in to Fidelity.com and go to Manage BanksLog In Required. Select the Link a New Bank Account button. You will need the routing and account number for your bank account to complete the setup.

You're not able to fund your Fidelity Managed FidFolios^® account with stocks that have been purchased on margin.

You can roll over cash or securities from a 401(k) account to a Fidelity Managed FidFolios^® rollover IRA. Please see the Form ADV, Part 2A Brochure for more information about which securities are eligible for funding.

Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

In order for the investment team to build your portfolio, your Fidelity Managed FidFolios^® account balance must reach $5,000. Once your account reaches a balance of at least $5,000, we'll begin purchasing stocks in order to build your portfolio, usually over the next few business days. When you fund your account from external sources (i.e., a transfer from an external bank or a check) that money may take up to 10 business days before it can be invested. Note that any money you add below that account minimum of $5,000 will be kept in short-term investments, with no advisory fee charged, until such time your account balance reaches $5,000.

Fidelity Managed FidFolios^® will send regular electronic communications to keep you informed as to what we're doing on your behalf. These include notifications whenever we buy or sell stocks in your portfolio. We'll also provide monthly statements that summarize all account activity for the prior month and a summary of your account balance.

When you log in to your Fidelity Managed FidFolios^® account and view your account dashboard you'll be able to see information about your holdings, any trades we've made in your account, as well as any advisory fees you were charged. Note that you'll also receive statements and trade confirmations via email. If you've selected the Environmental Focus Strategy, you'll also be able to see environmental reporting related to your strategy.

When you want to withdraw money from your Fidelity Managed FidFolios^® account, you can visit our transfers pageLog In Required, which provides instructions on initiating withdrawals. At that time the investment team will sell securities in your account to cover those withdrawals. That money can then be sent to the address we have on file for you via check, transferred to another Fidelity account, or transferred to a non-Fidelity account.

The processing time for your withdrawal depends on the method you use to withdraw your money. If you choose to transfer your money electronically to another account, such as a checking or savings account, your withdrawal should process within 1 to 3 business days if you submit your request by 4 p.m. ET. If you choose to wire your money to another account, the transfer should process immediately as long as you submit your request by 4 p.m. ET. If you request to have a check sent to you, the check takes about 5 to 6 business days to process before it's mailed to you.

When you open your Fidelity Managed FidFolios^® account, you can specify up to 5 companies or 2 industries you'd like us to leave out of your portfolio. At any time after you open your account, you'll be able to change these preferences. On your account dashboard, under the section About your account, you can click on the link"Exclude companies or industries." From there, you'll be able to add or change your personalization preferences. Note that it may take several business days for these new preferences to be reflected in your portfolio.

When you first open your Fidelity Managed FidFolios^® account, it may take a few days for all the information about your holdings to properly display. If you've already had your account opened and you're not seeing your information, this may be due to a technical issue that we're working to resolve.

You can close your Fidelity Managed FidFolios^® account or terminate your service online by processing a full withdrawal request. There is no cancellation fee should you decide to terminate your participation in Fidelity Managed FidFolios^®. If you do terminate the service, you will be charged a prorated portion of the advisory fee for the time your account was managed and based on your account balance during that period. Should you elect to close your account you'll have 2 options. The first is to request that all holdings in your portfolio will be liquidated, with the cash proceeds sent to you. This could result in tax consequences for you. Also, if you own a tax advantaged account, like an IRA, there may be early withdrawal penalties if you elect to take any withdrawals prior to age 59½ without reinvesting the money in another account with a tax-advantaged registration. To close your account, visit our transfer page, and select your Fidelity Managed FidFolios^® account and the account into which you want to transfer money. Make sure you select an amount that is equal to the transaction limit shown (you'll have to be very accurate, down to the penny), then select "Close account." The second option is to have the securities in your account transferred to another Fidelity account. To do this, please call (800) 544-4442. Your third option is to have your shares transferred to an outside firm. However, should you choose this option be aware that fractional shares may not be transferred outside of Fidelity to an account at another firm and will be liquidated prior to transfer. In cases where you have one or more positions that are comprised of both whole and fractional shares the whole shares will be transferred and the fractional shares will be liquidated, with the proceeds being transferred to that outside account.

Fidelity does not provide legal or tax advice, and the information provided is general in nature and should not be considered legal or tax advice. Consult an attorney, tax professional, or other advisor regarding your specific legal or tax situation.

Once a year, Fidelity Managed FidFolios^® will ask you to review the information you provided regarding your financial situation to help us make sure this type of investment remains suitable for you. When it's time for your review, you'll be prompted to go back to the original questions you answered when you opened your account, review the answers you provided, and make changes where necessary. If nothing has changed, you can confirm that. However, if something significant changes prior to your annual review, it's important that you let us know.

When it's time for your annual strategic review for your Fidelity Managed FidFolios^® account, we'll provide a link at the top of your account summary to make it easier to find your information. We'll also send you a reminder email 30 days prior to the date we need you to review your information.

All investment decisions regarding your Fidelity Managed FidFolios^® account will be made by Strategic Advisers LLC, a registered investment advisor.

The number of stocks or American depository receipts (ADRs) will vary based on thestrategy you choose. Please review each individual strategy summary to learn moreabout the approximate number of holdings in each strategy.

You may not direct the purchase or sale of individual investments in your Fidelity Managed FidFolios^® account. By enrolling in a managed account service like Fidelity Managed FidFolios^® you turn the day-to-day management of your investments over to a team of investment professionals. However, you are entitled to place reasonable restrictions on the management of your account, such as limiting up to 2 industries or 5 individual companies from the stocks we'll consider when building your portfolio.

In general, the investment team will purchase US common stocks or American Depository Receipts (ADRs) for Fidelity Managed FidFolios^® accounts, depending on the strategy you select. In the case of the International Strategy, a no-fee mutual fund is used to access markets where ADRs are either not available or inappropriate. There may also be short-term investments which the investment team uses to meet any expected withdrawal needs.

Strategic Advisers LLC will make investment decisions for Fidelity Managed FidFolios^® accounts based on a range of factors, including a particular security's risk and return characteristics and a desire to build a aligned to your selected strategy.

Dividends for Fidelity Managed FidFolios^® accounts will be held in a money market fund, known as your core position, until the investment team reinvests them in line with your chosen strategy. The only exception to this are dividends valued at less than $0.01. Because of the challenges involved with handling amounts of that size, different treatment may apply to any amount smaller than that, or nondivisible amounts (based on the .001 share limitation). Please see the Form ADV, Part 2A Brochure for additional information.

An ADR is a security that trades in the U.S. and in U.S. dollars, but represents claims to shares of a foreign stock. The ADR is created by a bank that purchases foreign stock and then issues receipts of that company in the U.S. for trading on an exchange or over the counter (OTC) market. ADR dividends are paid in U.S. dollars, but are subject to foreign tax withholding. ADRs are subject to minimal periodic service fees to compensate the intermediary bank for providing custodial services. These fees typically average from $0.01 to $0.03 per share but may be higher in some cases. These fees are industry standard and subject to be charged no matter what firm or what type of account an ADR is held.

With both direct indexing and actively managed strategies, you always directly own the individual securities in the accounts. Where the two types of strategies differ is in their investment approach. Direct indexing strategies seek to approximate the risk and return characteristics of a specific benchmark index, such as the Fidelity U.S. Large Cap Index℠. In an actively managed strategy, the portfolio manager picks specific securities in an effort to achieve a specific investment objective, such as outperforming a specific benchmark.

The Fidelity U.S. Large Cap Index℠ is a float-adjusted market capitalization–weighted index designed to reflect the performance of the stocks of the largest 500 U.S. companies based on float-adjusted market capitalization. Indexes are unmanaged. It is not possible to invest directly in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts or investment funds.

The investment team starts by looking at all the companies in the Fidelity U.S. Large Cap Index℠ (the strategy's benchmark) and removing those that don’t fit our filtering criteria, such as companies that engage in certain industries or product lines or that own oil & gas or coal reserves. We then evaluate companies based on a number of environmental factors, filtering out those we believe have the worst environmental practices within each sector. You can also eliminate up to 5 companies or 2 industries, and we’ll account for that as well. Finally, we build a portfolio, containing about 150 companies, that seeks to reduce exposure to stocks whose environmental ratings are less favorable relative to their sector, while working to provide investment results similar to the benchmark.

The Fidelity U.S. Large Cap Index℠ is a float-adjusted market capitalization– weighted index designed to reflect the performance of the stocks of the largest 500 U.S. companies based on float-adjusted market capitalization. Indexes are unmanaged. It is not possible to invest directly in an index. Securities indices are not subject to fees and expenses typically associated with managed accounts or investment funds.