Fidelity Investments Expands SMA Offerings with New Strategies

Recently, Fidelity Investments added six new strategies to its lineup of separately managed accounts (SMA), focusing on fixed income and equities. This brought the total number of Fidelity SMAs up to 14, meeting the growing needs of their investors.

Personalized Investment Solutions

According to Peter (Skip) Wiemeyer, Head of Managed Solutions at Fidelity, SMAs are customizable and appeal to clients who desire asset management on a single asset class basis. The new SMAs seek to close the gaps in the existing offering and answer to customers’ specific needs. The firm plans to increase the number of its SMAs to provide customized investment solutions for its client base.

New Fixed-Income and Equity Strategies

These new fixed-income SMAs require a minimum investment of $350,000, focusing on limited-duration investment-grade municipal bonds and investment-grade taxable and securitized bonds. These strategies comprise the Breckinridge Limited Duration Municipal Strategy, Fidelity Limited Duration Municipal Strategy, and Fidelity Limited Duration Bond Strategy.

On the equity side, minimum investments have been set at $100,000 for Wealth SMAs and $5,000 for Digital SMAs. The Digital SMAs, designed for self-directed investors and individuals with relatively low wealth, are managed by Fidelity’s investment managers using a completely digital client experience. These equity strategies are designed to track their underlying indices’ performance and risk profiles, including active tax management for higher after-tax returns.

Rising SMAs Demand

A recent study by Escalent found that advisors plan to boost their average SMA allocations to 26% by 2025, citing low fees, diverse investment options, and features that make them customizable as key SMAs advantages over model portfolios. Similarly, Cerulli Associates projects that assets managed under SMAs will reach $2.2 trillion by the end of 2024, reflecting a growing trend toward personalized investment solutions.

Continued Growth at Fidelity

As of March, Fidelity managed $175 billion in custom SMAs, direct indexing, active equity, and fixed-income strategies—demonstrating the firm’s commitment to offering a range of investment options to its clients. With the addition of new SMA strategies, Fidelity continues to lead the field in providing personal and innovative investment solutions necessary to meet the changing needs of investors.