Fidelity Introduces DIY Platform for Building Custom Index Portfolios

News June 21, 2022 at 02:52 PM

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Fidelity Investments on Tuesday announced a digital brokerage platform that will allow do-it-yourself retail investors to design customized index portfolios based on fractional shares.

The product, Fidelity Solo FidFolios, allows investors to build their own index from scratch or choose from 13 thematic models developed by the firm's analysts, then customize it by changing weights or adding or removing stocks.

These thematic models include cloud computing, cybersecurity, electric vehicles and future transportation, clean energy, fintech, digital health, biotech and drug discovery, real estate investment trusts, and robotics and artificial intelligence, among other choices.

Clients will be able to rebalance portfolios and buy and sell shares easily through the platform, according to Fidelity, which plans to roll it out in the coming weeks.

Like the recently launched Fidelity Managed FidFolios, a digital, professionally managed direct indexing product with tax management features, the new option will allow retail investors to use fractional share trading.

Investors using Fidelity Solo FidFolios can start with $1 per stock and pick up to 50 stocks in each portfolio. After a 90-day free trial, customers will pay a $4.99 flat monthly fee; those using Fidelity Managed FidFolios can start with a $5,000 minimum investment, with a 40-basis-point management fee.

"Now more than ever, investors want the peace of mind of trading, monitoring and rebalancing custom stock portfolios in a simple way," Robert Mascialino, head of Fidelity's retail brokerage business, said in a statement.

"When markets are volatile, we know tax management and easy rebalancing are important to investors," he added. "We've created these offerings to help deliver additional choice for self-directed investors as they build diversified stock portfolios."