Strategic Advisers Multi-Manager Funds

Transcription

1 Strategic Advisers Multi-Manager Funds Information on the funds and the investment professionals who manage them What are the Strategic Advisers Multi-Manager Funds? The Multi-Manager funds are mutual funds managed by Strategic Advisers, Inc. (SAI). SAI manages the funds using a combination of affi liated and unaffi liated (Fidelity and third-party) subadvisers, mutual funds, and exchange-traded funds (ETFs). Who are subadvisers and what do they do? Subadvisers are professional money managers. The Strategic Advisers Multi-Manager Funds can engage both Fidelity and non-fidelity managers as subadvisers. These investment professionals are selected by SAI to manage a portion of the mutual fund s assets consistent with a specifi c investment mandate or area of expertise. The sub advisers make the day-to-day investment decisions for the portion of the fund they manage. How do I benefi t? You benefi t from SAI s ability to choose from an expanded group of money managers, some of whom were previously available only to large institutional investors, and take advantage of Fidelity s scale to provide the potential for improved pricing relative to other retail investors. How does the use of subadvisers impact Strategic Advisers Multi-Manager Funds fees? The use of subadvisers does not create an additional layer of fees, because any fees paid to subadvisers are paid out of the applicable Strategic Advisers Multi-Manager Fund s management fee. As always, when SAI buys a mutual fund, clients pay an expense ratio set by the fund company. For additional information on fees, see the fund s prospectus. How does SAI manage the subadvisers? SAI attempts to select the most appropriate money managers and investment vehicles within each of these funds. SAI also determines what it believes to be the appropriate mix or allocation of assets within each fund. The portfolio managers at SAI manage each Strategic Advisers Multi-Manager Fund by allocating the fund s assets among one or more of the following: Fidelity and non-fidelity subadvisers, mutual funds, and ETFs. When it hires a subadviser, SAI provides ongoing oversight of the subadviser s activities. Where do I go for more information? For more information on the investment strategies employed by the Strategic Advisers Multi-Manager Funds, please see the prospectuses for the funds. You may also obtain fund information, including a full list of holdings, on NetBenefi ts.com or Fidelity.com.

2 Strategic Advisers Core Multi-Manager Fund BENCHMARK: S&P 500 Index 1 First Eagle Investment Lazard Asset Phillip Marriott Colin Morris Andrew Lacey Ronald Temple Richard Tutino 12.5% High risk/high potential return manager attempts to focus on pricing ineffi ciencies related to corporate and/or global events such as corporate restructuring, M&A, and consolidation. Due to the investment characteristics of this strategy, SAI expects to have a modest allocation. Morris has managed U.S. Equity institutional accounts for First Eagle since % Concentrated (35 55 holdings), bottom-up, valuation-based selection process focused on large- and mega-cap companies. Tracing its history back to 1848, Lazard has long maintained a pre-eminent position in the world s fi nancial marketplace. Their team-based approach to portfolio management helps them to deliver consistent performance over time. They have been an adviser to investors of all types including large institutional investors. Pyramis Global Advisors 2 Lawrence Rakers 10% Expected to provide a more opportunistic approach to investing, with a high risk/high potential return profi le. Employing a relative value approach, the portfolio manager diversifi es across more than 500 holdings, often with a basket approach to industries where he perceives a near-term catalyst to unlock fair value. Expected to maintain a mid-cap bias in most market environments. T. Rowe Price Anna Dopkin I use a core satellite approach, combining what I believe are lower-risk, or core, strategies with higher-risk, or satellite, higher opportunity managers. FLAUX Ann Holcomb Jennifer O Hara Martin 60% Portfolio is constructed with roughly 30 industry sleeves, each managed by a sector analyst; the overall portfolio is designed to be beta, sector, market-cap, and style neutral relative to the S&P 500, with the analysts stock picking within their sector intended to drive performance. Since its characteristics are close to the benchmark, it will serve as a core holding. Varied 7.5% This represents ETFs, mutual funds, cash, and other assets in

3 Strategic Advisers Growth Multi-Manager Fund ClariVest Asset Pyramis Global Advisors 2 Waddell & Reed Investment Company Winslow Capital I leverage the depth of SAI s research department to select what I believe are the best growth-at-a-reasonable-price (GARP), quality growth, aggressive growth, and opportunistic growth strategies, and combine them using a risk-managed approach. BENCHMARK: Russell 1000 Growth Index 3 FMELX Frank Feng David J. Pavan Stephen Balter Christopher Galizio Daniel P. Becker Philip J. Sanders Justin H. Kelly R. Bart Wear Clark J. Winslow 20% Quantitative portfolio that provides core set of exposure to Russell 1000 Growth universe. SAI believes the portfolio should deviate less from benchmark compared to the other managers. Manager attempts to construct a risk-controlled portfolio of companies believed to be undergoing fundamental change. Founded in 2006 by a team that formerly managed money at a competitor, the fi rm only manages money for institutional investors. 20% Expected to provide a more valuation-sensitive approach to growth, investing through its growth-at-a-reasonable-price (GARP) investment process. Pyramis is the institutional asset management investment arm of Fidelity and does not provide retail access to their strategies. 25% There is a clear focus on identifying companies believed to have established competitive advantages and sustainable growth levels. These fi rms historically have tended to outperform during a late cycle environment. Philosophy: the market undervalues long-term earnings power. 25% Opportunistic manager that diversifi es by identifying companies with different sources of growth that they believe will beat consensus estimates; the intent is to build an all-weather portfolio. The fi rm, which is solely focused on large-cap growth stock management, has employed the same portfolio management team and has used the same investment process since April Varied 10% This represents ETFs, mutual funds, cash, and other assets in

4 Strategic Advisers Value Multi-Manager Fund BENCHMARK: Russell 1000 Value Index 4 Brandywine Global Investment Cohen & Steers Capital LSV Asset I leverage the depth of SAI s research department to select what I believe are the best relative value, traditional value, and deep value managers, and combine them in a riskmanaged approach. FKMOX Joseph J. Kirby Henry F. Otto Steven M. Tonkovich 32% Traditional value approach, providing core exposure to the largecap value asset class; focuses on valuation, momentum, and risk control; SAI considers their process complementary to other relative value subadvisers in the portfolio. Brandywine has been running value strategies for 20 years. Rick Helm 31% Diversifi ed relative value strategy focusing on large-cap companies with sustainable cash fl ow and high dividend growth; valuation is based on a dividend discount model. Cohen & Steers believes that companies with high-quality business models have superior longterm earnings power and that rising dividends (a direct cash outlay) are the clearest signal from management that a company s outlook is favorable. This is the only manager in the fund that specifi cally targets dividend growers. Josef Lakonishok Puneet Mansharamani Menno Vermeulen 28% Quantitatively run, deep-value process contrarian approach attempts to focus on statistically undervalued stocks. Deep-value managers tend to be volatile. However, SAI believes LSV has appropriate risk controls somewhat muting this volatility. LSV Asset, as a fi rm, is focused on value investing through quantitative models. They are primarily focused on the institutional market. It is diffi cult for retail investors to gain access to their strategies. Varied 9% This represents ETFs, mutual funds, cash, and other assets in

5 For more information or to set up an appointment, please contact your Fidelity representative. For Plan Sponsor Use Only. Diversification/asset allocation does not ensure a profit or guarantee against loss. 1 S&P 500 Index: The S&P 500 Index is a registered service mark of The McGraw-Hill Companies, Inc., and has been licensed for use by Fidelity Distributors Corporation and its affiliates. It is an unmanaged index of the common stock prices of 500 widely held U.S. stocks that includes the reinvestment of dividends. 2 Pyramis Global Advisors; Fidelity Money, Inc. (FIMM); and Strategic Advisers, Inc., are affiliates of each other and of Fidelity. 3 Russell 1000 Growth Index: The Russell 1000 Growth Index is an unmanaged market capitalization weighted index of those stocks of the 1,000 largest U.S.-domiciled companies that exhibit growth-oriented characteristics. 4 Russell 1000 Value Index: The Russell 1000 Value Index is an unmanaged market capitalization weighted index of those stocks of the 1,000 largest U.S.-domiciled companies that exhibit value-oriented characteristics. Past performance is no guarantee of future results. The securities of smaller, less well known companies can be more volatile than those of larger companies. In general, the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so holding them until maturity to avoid losses caused by price volatility is not possible. Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Foreign securities are subject to interest rate, currency exchange rate, and political risks, all of which are magnified in emerging markets. These risks are particularly significant for funds that focus on a single country or region. ETFs may trade at a discount to their NAV and are subject to the market fluctuations of their underlying investments. You cannot invest directly in an index. Turn here, the Fidelity Pyramid design and logo, Strategic Advisers, and NetBenefits are registered service marks belonging to FMR LLC. Before investing, consider the fund s investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully. Fidelity Brokerage Services LLC, Member NYSE and SIPC, 900 Salem Street, Smithfield, RI FMR LLC. All rights reserved