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Fidelity Investments is expanding its lineup of investment strategies available to brokers and advisors on its platform as separately managed accounts, or SMAs. With these actively managed accounts, clients directly own the underlying securities, rather than investing in a pooled structure in which they own shares of a fund.
SMAs are often paired with technology that allows advisors to tailor portfolios to match the needs of individual clients and take advantage of tax-loss harvesting opportunities, while outsourcing security selection and portfolio construction to third-party asset managers.
Fidelity’s six new SMAs offer exposure to large-cap core, growth, and value strategies, offered within the Fidelity Tax-Managed Enhanced SMA and the Fidelity Institutional Tax-Managed Fundamental groups. Fidelity says the enhanced SMA group is focused on long-term drivers of equity growth. The fundamental lineup of SMAs taps into “high-conviction” stock-picking ideas from Fidelity’s managers.
Fidelity says these strategies allow brokers and investment advisors on its platform to start with a framework for their clients’ portfolios that they can then customize to match distinctive features such as risk tolerance or time horizon. Fidelity says its SMA offerings are particularly appealing to the growing segment of clients at the top of the wealth spectrum. The accounts have a $250,000 minimum investment requirement. Fees vary by the strategy and the amount invested.
“Demand for a personalized investing experience continues to grow, particularly among ultrahigh-net-worth investors, a population that has grown by more than 40% in the past decade,” says Amanda Robinson, head of wealth advisory managed solutions distribution at Fidelity. “We’ve consistently expanded the range of investment capabilities available to advisors serving those who are looking for a more bespoke experience.”
Fidelity says its institutional SMA lineup, which it debuted in 2022, now includes 50 strategies, as well as custom blends that advisors can use to target allocations to multiple indexes or strategies.
Fidelity also on Tuesday announced two model SMAs that advisors and brokers on its platform can incorporate into their clients’ unified managed accounts, umbrella accounts that include clients’ holdings in various SMAs, mutual funds, and exchange-traded funds.