Managing portfolios is the top concern of many financial advisors in this volatile market, says the Fidelity Advisor Investment Pulse for the third quarter.
Managing portfolios was the biggest concern of 33 percent of advisors, jumping ahead of concern about interest rates, which held the top spot in the second quarter, Fidelity says.
Fidelity Institutional Asset Management, a newly formed distribution and client service organization to help advisors manage complex investments, released the survey of 250 financial advisors Tuesday.
Market volatility, interest rates, managing fixed income, and yields and income were the other concerns of advisors in that order.
“With no movement on interest rates in September, significantly fewer financial advisors are making Fed-watching their pastime,” says Scott E. Couto, head of distribution, Fidelity Institutional Asset Management. “With greater market volatility, advisors are focused on adding value by helping clients smooth out the ride, positioning portfolios not only for turbulent times but for the long term.”
Couto says advisors should make sure clients’ portfolios are diversified across asset classes and within the asset classes as well. Advisors should consider asset allocation funds. Within the funds, they can make small shifts to the portfolio to respond to the changing market environment.
Advisors also should consider sector investing as a way to manage risk. A portfolio that is tilted toward historically less-volatile equity sectors, such as utilities, consumer staples, health care and telecommunications, may demonstrate lower volatility and drawdown risk compared with the broader domestic equity market, he says.