Fidelity Debuts All-ETF Model Portfolios for Advisors
The target risk and target allocation models are in response to financial advisor demand.
Fidelity Investments is rolling out two new suites of model portfolios made up entirely of exchange-traded funds and designed for financial advisors.
The Target Risk and Target Allocation models, which extend the model portfolio business that Fidelity first entered in 2018, blend both Fidelity and non-Fidelity ETFs in portfolios of about a dozen ETFs each, the Boston-based company said in a statement.
Amanda Robinson, vice president of portfolio solutions at Fidelity Institutional, said the impetus for the all-ETF models was the success of some customized versions of all-ETF portfolios that Fidelity started building for financial advisors last April.
“We started to see big demand, more broadly, for all-ETF portfolios,” she said in an interview. Financial advisors are drawn to ETFs' costs and tax efficiencies, she said, and model portfolios permit them to spend more time on activities like wealth planning and talking with clients.
Fidelity All-ETF Model Portfolios
According to Fidelity’s data, financial advisors continue to increase their ETF allocations, with 53% of advisors’ portfolios leveraging the vehicle as of the end of 2024, up from 44% in 2023.
Further, Fidelity reports the number of investments in unique ETFs within Fidelity Custom Portfolios more than doubled between 2022 and 2024.
Since launching its first model portfolio in 2018, Fidelity has grown its turnkey model portfolio lineup by 120% in response to advisor demand, the company said.
Except for an all-ETF factor investing model portfolio that was launched in 2019, Fidelity’s model business has included a blend of mutual funds, ETFs and separately managed accounts.
The Fidelity Target Allocation ETF Model Portfolios include five portfolios designed for specific levels of risk-adjusted returns.
The Fidelity Target Risk ETF Model Portfolios include nine portfolios with equity exposure ranging from 10% to 100%.
Robinson said the ETF models have a $25,000 investment minimum and no manager overlay fee, meaning investors are only paying the fees of the underlying ETFs.
According to etf.com data, Fidelity has 71 ETFs that combine for approximately $77 billion. It's among the top-10 US ETF issuers and its largest fund is the $20.5 billion Fidelity Wise Origin Bitcoin Fund (FBTC).
