Research

Fidelity Institutional Wealth Adviser (FIWA)’s approach to portfolio construction

Proprietary research and synthesized insights from investment leaders across Fidelity underpin our portfolio design and customized solutions.

By: Darby Nielson Stephen Beck Nicolas Brunetti Faith Tsao Rahul Handoo Rajat Seth
Updated: 9/10/2024
Key Takeaways
  • FIWA portfolio construction is based on three core components: proprietary research inputs from across Fidelity; appropriately defined strategic asset allocations based on investment objectives; and a systematic rebalancing and risk management process.
  • The proprietary inputs, which underpin all facets of our portfolio construction framework, include manager research, capital market assumptions, and risk analytics based on simulated, forward-looking, non-normally distributed returns.
  • We develop long-term strategic asset allocations based on rigorous research of asset classes, strategies, and vehicle structures that align with investment objectives, and we believe that incorporating additional asset classes can enhance the risk/return tradeoff.
  • We construct and systematically rebalance portfolios leveraging FIWA portfolio optimization capabilities and monitor risk utilizing multiple metrics such as CVaR, volatility, and tracking error.
  • These components, taken together, enable FIWA’s portfolio construction team to provide research-driven insights and practical implementation expertise supported by appropriate investment governance and oversight.
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