Fidelity Investments further broadened its lineup of portfolio construction capabilities for advisors in the fixed income space with a new suite of bond model portfolios including four strategies using mutual funds and exchange-traded funds.
The new model portfolios were “designed to maximize risk-adjusted total return as well as accommodate a range of risk preferences, including duration and credit risk,” the company said. They also supplement Fidelity’s Bond Income Model Portfolio, launched in 2019, that “aims to maximize risk-adjusted yield,” it noted.
The newcomers are: Fidelity Short Multi-Sector Bond Model Portfolio, with a net expense ratio of 0.32% for Class I and 0.30% for Class Z (designed to provide a lower duration bond portfolio with a focus on investment-grade mutual funds/ETFs complemented by a limited allocation to non-investment grade); Fidelity Core Bond Model Portfolio, with a net expense ratio of 0.37% for Class I and 0.31% for Class Z (designed to provide a core bond portfolio focused on a diversified allocation to investment-grade mutual funds/ETFs); Fidelity Core Plus Bond Model Portfolio, with a net expense ratio of 0.38% for Class I and 0.33% for Class Z (designed to provide a diversified bond portfolio with a focus on investment-grade mutual funds/ETFs complemented by a limited allocation to non-investment grade); and Fidelity Dynamic Bond Model Portfolio with a net expense ratio of 0.37% for Class I and 0.36% for Class Z (designed to provide a diversified bond portfolio of fixed income mutual funds/ETFs while offering greater investment flexibility through duration and credit allocation), the company said.
The additions to Fidelity’s line come as “demand for model portfolios continues to grow among advisors,” it said, pointing to Cerulli data that indicated 95% of advisors said they always or sometimes used asset allocation models for specific strategies or objectives.
Envestnet, Invesco Join Forces for 7 New Model Portfolios
Envestnet and Invesco teamed to introduce seven new model portfolios on the Envestnet platform that the companies said “optimize the advantages of both active and passive fund management.”
The Invesco PMC ActivePassive Portfolios were “designed for a variety of investor objectives and risk profiles, from capital preservation to moderate growth to aggressive,” the firms said. They include: Invesco PMC ActivePassive — Aggressive with a net expense ratio of 0.52%; Invesco PMC ActivePassive — Capital (0.51%); Invesco PMC ActivePassive — Conservative (0.51%); Invesco PMC ActivePassive — Conservative Growth (0.52%); Invesco PMC ActivePassive — Growth (0.51%); Invesco PMC ActivePassive — Moderate (0.52%); and Invesco PMC ActivePassive — Moderate Growth (0.51%)
Each portfolio includes a combination of actively managed mutual funds from Invesco and low-cost, tax-efficient index funds that Envestnet PMC has identified as “best in breed,” they said.
The Invesco PMC ActivePassive Portfolios are the only Envestnet PMC-managed ActivePassive portfolios available with liquid alternatives, and they are an “evolution” of the ActivePassive suite of portfolios built in partnership between Envestnet PMC and OppenheimerFunds, the companies said.
Following Invesco’s purchase of OppenheimerFunds, completed last year, Envestnet PMC’s portfolio managers now have additional funds and capabilities to select from, “giving them more flexibility in how they express their investment views,” the companies said.
FTSE Russell Adds New Government Bond Index
FTSE Russell launched its first government bond index designed to adjust country weights based on climate risk consisting solely of European Monetary Union (EMU) countries, it said.
The FTSE Climate Risk-Adjusted European Monetary Union Government Bond Index expands the global index, data and analytics provider’s lineup of climate risk-adjusted government bond indexes and follows the launch of its “Climate WGBI” in July.
The new index was developed in response to customer demand and “applies a robust methodology by providing a forward-looking assessment of the climate risks faced by sovereigns within the EMU,” the company said.