Quarterly Market Perspective - Fidelity Investments...FIDELITY INVESTMENTS / QUARTERLY MARKET...

Quarterly Market Perspective

Fourth Quarter / 2019

FIDELIT Y INVESTMENTS / QUARTERLY MARKET PERSPECTIVE / FOURTH QUARTER 2019 2

SUMMARY

The following pages provide greater detail into some of the themes discussed

in the Quarterly Market Perspective video:

MARKET SUMMARY:

Stocks rose strongly despite ongoing concerns about slowing global growth1.

BUSINESS CYCLE:

U.S. economy remains in late-cycle expansion driven by resilient consumer spending

2.

STAYING INVESTED:

Economic expansions have had a far greater impact on stocks than recessions4.

DIVERSIFICATION:

Diversification can help temper short-term market fluctuations 5.

INVESTMENT STRATEGY:

We have gradually reduced risk in well-diversified accounts as the business cycle matured

3.

https://www.fidelity.com/managed-accounts/quarterly-market-perspective


Stocks and bonds rose strongly for the year despite ongoing concerns about economic growth and trade uncertaintyA key driver for stock and bond returns in 2019 was a shift in U.S. Federal Reserve Bank policy that included three interest rate cuts.

• For the markets, this policy reversal was a positive because lower rates can provide a boost to borrowing and spending, potentially extending U.S. economic expansion.

• Within bonds, both U.S. Treasuries and corporate bonds performed well, as interest rates fell and fears of a more significant slowdown receded.

• Following a down 2018, both U.S. and international stocks posted strong returns. While the U.S. outperformed for the year, international stock returns accelerated in the final months of 2019.

This chart illustrates the performance of a hypothetical $100,000 investment made in the indexes noted. Index returns include reinvestment of capital gains and dividends, if any, but do not reflect any fees or expenses. This chart is not intended to imply any future performance of the investment product.Past performance is no guarantee of future results. It is not possible to invest directly in an index. All indexes are unmanaged. Please see Important Information for index definitions. Source: Fidelity Investments, as of 12/31/2019. U.S. Stocks — Dow Jones U.S. Total Stock Market Index; International Stocks — MSCI All Country World Index ex USA (Net MA); Bonds — Bloomberg Barclays US Aggregate Bond Index.

1. MARKET SUMMARY

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While U.S. growth stocks led, investors began to reward value stocks into year-end

Past performance is no guarantee of future results. Source: Fidelity Investments and Bloomberg Finance LP as of 12/31/2019.

1. MARKET SUMMARY

Improving investor sentiment was key driver for this shiftGrowth continued to lead, but value made strong gains near year-endU.S. stocks were positive in 2019,

but certain investment styles began to diverge as investor sentiment improved.

• Growth stocks continued their multi-year outperformance given investor preference for companies with higher growth potential, a typical trait of late cycle.

• While value stocks lagged, they outpaced growth stocks in the final four months of the year as investors became more optimistic about economic conditions.

• Conversely, since late August, conservative segments of the market, like minimum volatility stocks, slowed. These stocks had performed exceedingly well earlier in 2019, as investors sought more defensive stocks when the growth outlook was less clear.


The U.S. economy remains firmly in late-cycle expansion

For more than a year, the U.S. economy has been in late-cycle expansion, but recession is no closer today than it was in late 2018.

• Strong consumer spending continues to drive the U.S. economy, helped by low unemployment and solid wage growth.

• Higher wages, weaker manufacturing activity, and slowing global growth have weighed on corporate profit margins.

• However, interest rates remained low and the U.S. Federal Reserve provided more pro-growth support by cutting interest rates three times in 2019.

Please see Important Information for the Business Cycle Framework methodology. Note: This is a hypothetical illustration of a typical business cycle. There is not always a chronological progression in this order, and there have been cycles when the economy has skipped a phase or retraced an earlier one. Source: Fidelity Investments (AART), as of December 2019.

2. BUSINESS CYCLE

Early Mid Late Recession

CONTRACTIONEXPANSIONRECOVERY

+Economic

Growth–

• Activity rebounds (GDP, IP, employment, incomes)

• Credit begins to grow• Profits grow rapidly• Policy still stimulative• Inventories low; sales

improve

• Growth peaking• Credit growth strong• Profit growth peaks• Policy neutral • Inventories, sales grow;

equilibrium reached

• Growth moderating• Credit tightens• Earnings under pressure• Policy contractionary• Inventories grow; sales

growth falls

• Falling activity• Credit dries up• Profits decline• Policy eases• Inventories, sales fall

Signs ofEach Cycle

Phase

Source: Bloomberg Finance L.P., Fidelity Investments (AART), as of 6/30/19.

U.S. remains in the more mature phase of mid-cycle growth

Four phases of an economy’s business cycle

U.S.

View supported by:

• Healthy employment

• Stable consumer spending

• Slowing corporate profits

• Weak manufacturing activity

%

The long U.S. economic expansion persisted as employment and consumption remained resilient


U.S. Federal Reserve cut rates three times to help extend the current economic expansionGiven a slowing economy and benign inflation, the Federal Reserve (Fed) cut interest rates three times in 2019 to help extend the current economic expansion.

• When economic conditions deteriorate, or when inflation is muted, the Fed has historically cut interest rates in an attempt to restore growth.

• Over the last 30 years, the Fed has seen mixed results after rate cuts. The economy further weakened in 1991, 2001, and 2008, but reaccelerated in 1995 and 1998.

• It remains to be seen if the 2019 interest rate cuts will help extend the current economic expansion, but lower rates could provide a boost to borrowing and spending.

2. BUSINESS CYCLE

Shading represents U.S. economic recession as defined by the National Bureau of Economic Research (NBER). Federal Funds Target Rate refers to the upper bound. The federal funds rate is the short-term interest rate targeted by the Federal Reserve’s Federal Open Market Committee (FOMC) as part of its monetary policy. In December 2008, the target rate was replaced by a target range. The above visual highlights the upper bound of that range. Source: Bloomberg Finance L.P., as of 12/31/2019.

Interest rate cuts in 1995 and 1998 helped extend the U.S. economic expansion

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With a strong jobs market and rising wages, U.S. consumer spending remains healthyHealthy U.S. consumer spending is critical given that it drives roughly 70% of U.S. economic growth.

• Despite the slowing global economy and ongoing trade uncertainty in 2019, U.S. consumer spending remained resilient, supported by a strong jobs market and rising wages.

• Looking ahead, we are keeping a close eye on jobs, wages, and other factors that may impact consumer spending patterns.

• For example, a consistent increase in weekly jobless claims or rising credit card payment delinquencies can alert us to early signs of consumer stress.

Shading represents U.S. economic recession as defined by the National Bureau of Economic Research (NBER). Source: Real Personal Consumption Expenditures, Percent Change from One Year Ago, Quarterly, Seasonally Adjusted; St. Louis Federal Reserve Bank, as of 12/31/2019.

Spending typically drops significantly heading into and during recessionsConsumer spending has remained resilient in recent years

2. BUSINESS CYCLE


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U.S. corporate profit margins have fallen, but remain at healthy levels Over the last several years, corporate profits have declined from record levels due to rising wages and weaker global trade.

• Historically, consistently falling corporate profits have preceded economic contractions.

• This typically occurs in late cycle because various costs, like worker wages, are rising, eroding corporate profits.

• While we have seen profits weaken over the last few years, they still remain at healthy levels. Furthermore, worker wages are growing at a slower pace, which could help corporate margins in the near term. Wage and profit trends will be key areas of focus in 2020.

Shading represents U.S. economic recession as defined by the National Bureau of Economic Research (NBER). Source: Bureau of Economic Analysis, NBER, Haver Analytics, Fidelity Investments (AART), as of 6/30/2019.

As business cycles mature, various rising costs can erode corporate profitsWeaker corporate profit margins are a typical sign of late-cycle expansion

2. BUSINESS CYCLE


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Above 50 = Expansion

Below 50 = Contraction

Weaker manufacturing activity in China has weighed on much of the global economyChina’s industrial production slowdown, as seen in 2015 and 2018, negatively impacted many export-oriented economies, such as Germany, Japan, and South Korea.

• The Purchasing Managers’ Index (PMI) is a measure of manufacturing activity, with readings above or below 50 reflecting expansion or contraction, respectively.

• In late 2017 and throughout 2018, China’s PMI data fell, reflecting a slowing global economy. More recently, data has stabilized, helping to allay fears of a recession.

• While China’s industrial activity has stabilized, credit growth is subdued and U.S. trade negotiations persist. Developments in all of these areas will be critical to the global economy in 2020.

*PMI: Purchasing Managers’ Index, where readings above 50 reflect positive economic activity. Source: ISM, Bloomberg Finance, as of 12/31/2019.

A move higher could help reignite global economic growthChinese Purchasing Managers’ Index rose above 50, which usually indicates growth

2. BUSINESS CYCLE


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Strategic U.S. Stocks Non-U.S. Stocks (Developed) Non-U.S. Stocks (Emerging) Bonds Short-Term

Opportunistic Commodities High-Yield Non-U.S. Bonds Alternatives

We have gradually reduced risk in well-diversified accounts as the business cycle has maturedOver the last few years, we have gradually decreased the amount of stocks and high-yield bonds, because they tend to experience more frequent periods of volatility as the cycle matures.

• Today, most well-diversified client accounts have U.S. and international stock allocations that are neutral with long-term asset allocation mixes.

• As can be seen on the chart to the right, we have increased allocations toward investment-grade bonds, such as U.S. Treasuries, as they tend to provide stability in late-cycle expansions. Within high-yield bonds, we have sought to own funds with a more defensive focus.

• Within stocks, we are emphasizing funds and managers that focus on higher quality stocks. (Please see next page for more detail.)

Diversification does not ensure a profit or guarantee against loss. This chart represents the relative asset class weights over time versus the long-term asset allocation mix of a PAS Total Return Growth with Income Blended preference. Strategic refers to those asset classes that comprise the long-term asset allocation mix, including U.S. stocks and non-U.S. stocks (developed, emerging), bonds (investment-grade bond), and short-term investments (money market funds, short duration bonds). Opportunistic refers to those asset classes not within the long-term asset allocation mix, including high yield bonds, commodities, non-U.S. bonds, alternatives and others. Allocations to these asset classes may not always be owned throughout an investors time horizon.” The Growth with Income strategy has a long-term asset allocation mix of 42% domestic stock (Dow Jones U.S. Total Stock Market Index), 18% foreign stock (MSCI All Country World ex-U.S. Index (net MA)), 35% bonds (Bloomberg Barclays US Aggregate Bond Index), 5% short-term investments (Bloomberg Barclays 3-Month Treasury Bill Index). As of 12/31/2019. Current composition may differ, perhaps significantly. Please refer to client recommendation for current information.

Asset Class Positioning, December 2016 through December 2019

3. INVESTMENT STRATEGY

Relative weight versus long-term asset allocation mix (%)


EarlyActivity rebounding

MidGrowth peaking

LateGrowth moderating

RecessionFalling activity

Four phases of an economy’s business cycle

All Weather

Deep Value

Valuation-focused

Aggressive Growth

Momentum

Smaller Cap Larger Cap

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High Quality

Within stocks, emphasizing funds and managers that focus on high-quality companiesBased on our business cycle framework, we have increased allocations to funds and managers that emphasize high-quality stocks.

• Our research has shown that certain types of stocks perform better than others depending on the phase of the business cycle. For example, we believe companies with high-quality characteristics, like low debt levels and stable earnings, perform well in late cycle.

• However, at times over the last few years, defensive stocks, like utilities, have performed best as investors sought safer investments given rising recession fears. We believe these areas of the market are expensive and slow growing.

• In our view, high-quality stocks are more reasonably priced and have higher long-term growth rates. Higher allocations to these areas have benefited client accounts, as the quality factor outpaced the broad market over the last year.

Source: Strategic Advisers LLC, as of 12/31/2019. The above chart is for illustrative purposes only and does not necessarily predict or depict the investment manager’s use of different stock styles within a managed account during the different phases of the business cycle. Please see Important Information for Style Definitions.Diversification and/or asset allocation do not ensure a profit or protect against loss. Keep in mind, investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Late-cycle expansion is typically favorable for stocks with quality characteristics versus other styles


Quality refers to companies with strong financial characteristics, like low levels of debt and stable earnings


Over the last year, several stock market declines provided rebalancing opportunitiesA disciplined rebalancing process helps ensure that your mix of stock and bond investments remains aligned to your financial goals as markets change over time.

• Over the last several years, stocks have risen strongly. Without rebalancing, the overall risk in your account would be higher than where it started, leading to larger swings in performance during market declines.

• With rebalancing, we are able to restore the appropriate risk and return characteristics to your account.

• Furthermore, rebalancing provides the opportunity to buy investments, such as stocks, at lower prices following declines like we saw in late 2018, May 2019, and August 2019. Subsequent market recoveries benefited client accounts.

Past performance is no guarantee of future results.Source: Fidelity Investments, as of 12/31/2019.


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We continually take action in your portfolio as markets move down and up over time

PAS Total Return Blended Retirement Model Rebalance Activity


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Historically, stock market gains during expansions have far outpaced market volatility during recessionsStocks don’t always go up, but the trend over time is positive. Patience has generally been rewarded.

• Over previous decades, investors have experienced periods of strong gains during economic expansions, while recession periods have been briefer, leading to relatively modest detractors from performance.

• Although it is natural to worry about recessions, they have normally been much less frequent and shorter than economic expansions.

• Patient, long-term-oriented investors who stay invested through different market environments may benefit greatly from the growth that stocks can help provide, helping them achieve their financial goals.

This chart illustrates the cumulative percentage return of a hypothetical investment made in the S&P 500 Index during periods of economic expansion and recession. Index returns include reinvestment of capital gains and dividends, if any, but do not reflect any fees or expenses. This chart is not intended to imply any future performance of an investment product.Past performance is no guarantee of future results. It is not possible to invest directly in an index. All indexes are unmanaged. Please see Important Information for index information.Source: Bloomberg, S&P 500 Index total annual return, 1/1/1950–12/31/2019; recession and expansion dates defined by the National Bureau of Economic Research (NBER).

4. STAYING INVESTED

Recessions have been modest detractors from performance.Stocks have experienced significant gains during economic expansions


Diversification can help temper short-term market fluctuations

We expect various investment types to perform differently from one year to the next.

• Owning many different types of investments can help remove the urge to time the markets based on what has performed well most recently.

• For example, investors who sold stocks in favor of bonds or short-term investments after 2018 likely missed the strong returns associated with many different types of stocks in 2019.

• We carefully consider the risk and reward of each asset class and how they may behave relative to one another over time. We believe well-diversified investing can help provide a smoother return potential and a more balanced level of risk.

Past performance is no guarantee of future results. Diversification/asset allocation does not ensure a profit or guarantee against loss. It is not possible to invest directly in an index. All indexes are unmanaged. Please see Important Information for index definitions.Diversified Portfolio — 42% Dow Jones U.S. Total Stock Market Index, 18% MSCI EAFE Index, 35% Bloomberg Barclays US Aggregate Bond Index, 5% Bloomberg Barclays 3-Month Treasury Bill Index and is rebalanced monthly; Domestic Large Cap Stocks — S&P 500® Index; Domestic Small Cap Stocks — Russell 2000 Index; Domestic Growth Stocks — Russell 3000 Growth Index; Domestic Value Stocks — Russell 3000 Value Index; International Developed Stocks — MSCI EAFE Index (Net MA); Emerging Market Stocks — MSCI Emerging Markets Index (G); High-Yield Bonds — BofA Merrill Lynch US High Yield Constrained Index; Investment-Grade Bonds — Bloomberg Barclays US Aggregate Bond Index; Real Estate Income Stocks — FTSE Nareit Equity-Only Index; Commodities — Bloomberg Commodity Index (Price Return). Diversified Portfolio Benchmark — PAS Growth with Income Composite comprised of allocations to Dow Jones U.S. Total Stock Market Index (Domestic Stocks), MSCI ACWI (All Country World Index) ex USA Index (Net MA) (International Stocks), Bloomberg Barclays US Aggregate Bond Index (Bonds), Bloomberg Barclays US 3-Month Treasury Bellwether Index (Short-Term). Note that prior to August 2009 the composite benchmark included the Bank of America High Yield Master Constrained Index. Source: Fidelity Investments, as of 12/31/2019.

4. DIVERSIFICATION

Periodic Table of Returns


4. DIVERSIFICATION

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Investing in global stocks has provided compelling returns

When combined, U.S. and international stocks may help provide strong return potential and a potentially smoother investment experience.

• Looking at the chart, year to year, there are times when international stocks outperform U.S. stocks, or vice versa.

• However, over the last 20 years, U.S. and international stocks have both provided long-term growth.

• The table below the chart shows that, over the long run, a globally allocated portfolio has had returns similar to U.S. stocks, but with more modest ups and downs.

This chart illustrates the performance of a hypothetical $100,000 investment made in the indexes noted. Index returns include reinvestment of capital gains and dividends, if any, but do not reflect any fees or expenses. This chart is not intended to imply any future performance of the investment product.Past performance is no guarantee of future results. It is not possible to invest directly in an index. All indexes are unmanaged. Please see Important Information for index information. Source: Fidelity Investments, as of 12/31/2019. Domestic Stocks: S&P 500® Total Return Index; International Stocks: MSCI ACWI (All Country World Index) ex USA Index (Net MA).*Hypothetical “globally balanced portfolio” is rebalanced annually in 70% U.S. and 30% International Stocks. U.S. Stocks: S&P 500 Total Return Index; International Stocks: MSCI ACWI ex USA Index. Source: Bloomberg Finance L.P., Fidelity Investments (AART), as of 04/30/2019.

5. DIVERSIFICATION

1950–2019* U.S. Portfolio International Portfolio Globally Balanced Portfolio 70% U.S./30% International

Annualized Returns 11.3% 10.3% 11.3%

Standard Deviation 14.3% 15.1% 12.8%

Hypothetical growth of $100,000Both U.S. and international stocks have grown meaningfully over the long term


KEY TAKEAWAYS

1. Despite ongoing economic growth concerns, stocks around the globe rose strongly, partly driven by a shift in U.S. Federal Reserve Bank policy that included three interest rate cuts.

2. The U.S. economy remained in late-cycle expansion, supported by healthy employment and consumer spending, while corporate profits continued to slow.

3. We continued to reduce risk in well-diversified client accounts by owning fewer stocks and more bonds. Also, we emphasize funds and managers that invest in higher-quality stocks and bonds.

For more information, please call your Fidelity associate at 800-544-3455 or visit Fidelity.com.


http://www.Fidelity.com


Important Information

The Business Cycle Framework depicts the general pattern of economic cycles throughout history, though each cycle is different; specific commentary on the current stage is provided in the main body of the text. In general, the typical business cycle demonstrates the following: During the typical early-cycle phase, the economy bottoms out and picks up steam until it exits recession, then begins the recovery as activity accelerates. Inflationary pressures are typically low, monetary policy is accommodative, and the yield curve is steep. Economically sensitive asset classes such as stocks tend to experience their best performance of the cycle. During the typical mid-cycle phase, the economy exits recovery and enters into expansion, characterized by broader and more self-sustaining economic momentum but a more moderate pace of growth. Inflationary pressures typically begin to rise, monetary policy becomes tighter, and the yield curve experiences some flattening. Economically sensitive asset classes tend to continue benefiting from a growing economy, but their relative advantage narrows. During the typical late-cycle phase, the economic expansion matures, inflationary pressures continue to rise, and the yield curve may eventually become flat or inverted. Eventually, the economy contracts and enters recession, with monetary policy shifting from tightening to easing. Less economically sensitive asset categories tend to hold up better, particularly right before and upon entering recession.

Neither asset allocation nor diversification assures a profit or protects against a loss.

Past performance does not guarantee future results.

This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation would be unlawful. Nothing contained herein constitutes investment, legal, tax or other advice, nor is it to be relied on in making an investment or other decision. No assumptions should be made regarding the manner in which a client’s account should or would be handled, as appropriate investment strategies will depend upon each client’s investment objectives. None of the information contained herein takes into account the particular investment objectives, restrictions, tax, or financial situation, or other needs of any specific client. Certain strategies discussed herein give rise to substantial risks and are not suitable for all investors. The information contained in this material is only as current as the date indicated, and may be superseded by subsequent market events or for other reasons. The information provided by third parties has been obtained from sources believed to be reliable, but Strategic Advisers LLC makes no representation as to its accuracy or completeness. Statements concerning financial market trends are based on current market conditions, which will fluctuate.

Stock markets, especially foreign markets, are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. This material is provided for informational purposes only and should not be used or construed as a recommendation for any security.

Foreign markets can be more volatile than U.S. markets due to increased risks of adverse issuer, political, market, or economic developments, all of which are magnified in emerging markets.

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, liquidity risk, call risk, and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

The commodities industry can be significantly affected by commodity prices, world events, import controls, worldwide competition, government regulations, and economic conditions.



Style Definitions

• All-Weather: benchmark aware, research-focused, and seek to outperform their benchmark through stock selection, rather than sector or factor/style tilts.

• Deep Value: focused on the statistically cheapest part of the market, as determined by valuation metrics such as price/book and price/earnings.

• Traditional Value: reliant primarily on valuation techniques (e.g. price/earnings, price/cash flow) to identify companies that may be attractive relative to their own history, industry peers, and the broader market.

• Aggressive Growth: focused on high growth, as determined by earnings and revenue growth metrics.

• Momentum: reliant on price and fundamental trends to identify companies that may outperform the market.

• Quality: focused primarily on stable, profitable companies with recurring revenues and earnings.

• Defensive Equity: focused primarily on a combination of lower volatility and high dividend yielding stocks.

• Smaller Cap: focused on smaller market capitalization stocks.

• Larger Cap: focused on larger market capitalization stocks.

• Opportunistic: benchmark agnostic, higher risk/reward approach, resulting in large sector, stock, and market cap tilts

Bloomberg Barclays US Aggregate Bond Index is a broad-based, market value–weighted benchmark that measures the performance of the investment grade, U.S. dollar–denominated, fixed-rate taxable bond market. Sectors in the index include Treasuries, government-related and corporate securities, MBS (agency fixed-rate and hybrid ARM pass-throughs), ABS, and CMBS.

Dow Jones U.S. Total Stock Market Index is an all-inclusive measure composed of all U.S. equity securities with readily available prices. This broad index is sliced according to stock-size segment, style and sector to create distinct sub-indexes that track every major segment of the market.

MSCI ACWI (All Country World Index) ex USA Index (net MA tax) is a market capitalization–weighted index designed to measure the investable equity market performance for global investors of large- and mid-cap stocks in developed and emerging markets, excluding the United States.

S&P 500® Index is a market capitalization–weighted index of 500 common stocks chosen for market size, liquidity, and industry group representation to represent U.S. equity performance.

Russell 2000 Index is a market capitalization–weighted index designed to measure the performance of the small-cap segment of the U.S. equity market. It includes approximately 2,000 of the smallest securities in the Russell 3000 Index.

Russell 3000 Growth Index is a market capitalization–weighted index designed to measure the performance of the broad growth segment of the U.S. equity market. It includes those Russell 3000 Index companies with higher price-to-book ratios and higher forecasted growth rates.

Russell 3000 Value Index is a market capitalization–weighted index designed to measure the performance of the broad value segment of the U.S. equity market. It includes those Russell 3000 Index companies with lower price-to-book ratios and lower forecasted growth rates.

MSCI EAFE Index is a market capitalization–weighted index that is designed to measure the investable equity market performance for global investors in developed markets, excluding the U.S. & Canada.



MSCI Emerging Markets Index is a market capitalization–weighted index that is designed to measure the investable equity market performance for global investors in emerging markets.

The BofA Merrill Lynch US High Yield Constrained Index is a modified market capitalization–weighted index of U.S. dollar–denominated below-investment-grade corporate debt publicly issued in the U.S. domestic market. Qualifying securities must have a below investment grade rating (based on an average of Moody’s, S&P, and Fitch). The country of risk of qualifying issuers must be an FX-G10 member, a Western European nation, or a territory of the U.S. or a Western European nation. The FX-G10 includes all Euro members, the U.S., Japan, the U.K., Canada, Australia, New Zealand, Switzerland, Norway, and Sweden. In addition, qualifying securities must have at least one year remaining to final maturity, a fixed coupon schedule, and at least $100 million in outstanding face value. Defaulted securities are excluded. The index contains all securities of The BofA Merrill Lynch US High Yield Index but caps issuer exposure at 2%.

The FTSE Nareit All Equity REITs Index is a free-float adjusted, market capitalization–weighted index of U.S. equity REITs. Constituents of the index include all tax-qualified REITs with more than 50 percent of total assets in qualifying real estate assets other than mortgages secured by real property.

Bloomberg Commodity Index measures the performance of the commodities market. It consists of exchange-traded futures contracts on physical commodities that are weighted to account for the economic significance and market liquidity of each commodity.

Bloomberg Barclays US 3-Month Treasury Bellwether Index is a market value-weighted index of investment-grade fixed-rate public obligations of the U.S. Treasury with maturities of three months, excluding zero coupon strips.

The Fidelity SAI U.S. Low Volatility Index Fund Linked Index represents the performance of the MSCI USA Minimum Volatility Index for periods prior to February 18, 2019, and the Fidelity U.S. Low Volatility Focus Index beginning February 18, 2019.

The Fidelity SAI International Low Volatility Index Fund Linked Index represents the performance of the MSCI ACWI ex USA Minimum Volatility Index for periods prior to February 18, 2019, and the Fidelity International Low Volatility Focus Index beginning February 18, 2019.

Views expressed are as of December 31, 2019, and are subject to change at any time based on market and other conditions. Data is unaudited. Information may not be representative of current or future holdings.

All indexes are unmanaged, and performance of the indexes includes reinvestment of dividends and interest income, unless otherwise noted. Indexes are not illustrative of any particular investment and it is not possible to invest directly in an index.

Information provided in this document is for informational and educational purposes only. To the extent any investment information in this material is deemed to be a recommendation, it is not meant to be impartial investment advice or advice in a fiduciary capacity and is not intended to be used as a primary basis for your or your clients’ investment decisions. Fidelity and its representatives may have a conflict of interest in the products or services mentioned in this material because they have a financial interest in them, and receive compensation, directly or indirectly, in connection with the management, distribution, and/or servicing of these products or services, including Fidelity funds, certain third-party funds and products, and certain investment services.

This material may not be reproduced or redistributed without the express written permission of Strategic Advisers LLC.



Fidelity® Wealth Services provides non-discretionary financial planning and discretionary investment management through one or more Portfolio Advisory Services accounts for a fee. Advisory services offered by Fidelity Personal and Workplace Advisors LLC (FPWA), a registered investment adviser, and Fidelity Personal Trust Company, FSB (FPTC), a federal savings bank. Nondeposit investment products and trust services offered through FPTC and its affiliates are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency, are not obligations of any bank, and are subject to risk, including possible loss of principal. Brokerage services provided by Fidelity Brokerage Services LLC (FBS), and custodial and related services provided by National Financial Services LLC (NFS), each a member NYSE and SIPC. FPWA, Strategic Advisers LLC, FPTC, FBS, and NFS are Fidelity Investments companies.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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