Investment Product and Service Launches
Fidelity Investments releases bond model suite, and BlackRock announces sustainability as new standard for investing.
Fidelity Investments Releases Bond Model Suite
Fidelity Investments launched a suite of bond model portfolios for financial advisers—Fidelity Short Multi-Sector Bond Model Portfolio, Fidelity Core Bond Model Portfolio, Fidelity Core Plus Bond Model Portfolio, and Fidelity Dynamic Bond Model Portfolio.
The new model portfolios are designed to maximize risk-adjusted total return as well as accommodate a range of risk preferences, including duration and credit risk.
“Think of model portfolios as a recipe—they can serve as a starting point for advisers but allow for a level of customization based on their clients’ needs,” says Matt Goulet, senior vice president, Fidelity Institutional Asset Management. “We’re excited to offer bond model portfolios with a range of risk profiles for advisers who are looking for strategies that can serve as—or complement—the fixed income allocations in their clients’ portfolios.
Fidelity Short Multi-Sector Bond Model Portfolio is 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 is designed to provide a core bond portfolio focused on a diversified allocation to investment grade mutual funds/ETFs.
Fidelity Core Plus Bond Model Portfolio is 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.
Fidelity Dynamic Bond Model Portfolio is designed to provide a diversified bond portfolio of fixed income mutual funds/ETFs while offering greater investment flexibility through duration and credit allocation.
BlackRock Announces Sustainability as New Standard for Investing
BlackRock will be accelerating efforts to deepen the integration of sustainability into technology, risk management and product choice.
In a client letter, the firm says, “Over the past few years, more and more of our clients have focused on the impact of sustainability on their portfolios. This shift has been driven by an increased understanding of how sustainability-related factors can affect economic growth, asset values, and financial markets as a whole.”
The firm says the most significant of these factors today relates to climate change, not only in terms of the physical risk associated with rising global temperatures, but also transition risk—namely, how the global transition to a low-carbon economy could affect a company’s long-term profitability.
“We believe that sustainability should be our new standard for investing,” BlackRock says.
It announced it is accelerating efforts to deepen the integration of sustainability into technology, risk management and product choice.
This year it will begin to offer sustainable versions of its flagship model portfolios, including its Target Allocation range of models. These models will use environmental, social, and governance (ESG)-optimized index exposures in place of traditional market cap-weighted index exposures. “Over time, we expect these sustainability-focused models to become the flagships themselves,” BlackRock says.
The firm also plans to launch sustainable versions of its asset allocation iShares this year, in order to provide investors with a simple, transparent way to access a sustainable portfolio at good value in a single exchange-traded fund (ETF).
BlackRock is working to develop a sustainable LifePath target-date strategy, which would provide investors with an all-in-one, low-fee, sustainable retirement solution, and it is working to expand its sustainable cash offerings as well.
Other initiatives announced by BlackRock include:
- Strengthening sustainability integration into the active investment processes
- Reducing ESG risk in active strategies
- Exiting thermal coal producers
- Putting ESG analysis at the heart of Aladdin, its risk management and investment technology platform
- Enhancing transparency of sustainable characteristics for all products
- Doubling its offerings of ESG ETFs
- Simplifying and expanding ESG iShares, including ETFs with a fossil fuel screen
- Working with index providers to expand and improve the universe of sustainable indexes
- Expanding sustainable active investment strategies