Understanding Fidelity's Designated Investments Agreement

The Fidelity Designated Investments Agreement (DIA) is a legal document that investors must agree to before investing in certain complex and risky products, such as the Fidelity® Wise Origin® Bitcoin Fund (FBTC) and the ProShares Short VIX Short-Term Futures ETF. The DIA outlines the terms and conditions of investing in these products, and investors must have a most aggressive risk tolerance registered on Fidelity.com to proceed with the investment. The DIA is a one-time agreement, and subsequent trades of designated investments will not require the same process.

Fidelity's Designated Investments Agreement (DIA) is required for complex and risky products

When investing in certain complex and risky products, Fidelity requires its customers to execute its Designated Investments Agreement (DIA). This is a one-time agreement that applies to subsequent trades of the same security or other designated investments.

The DIA is required for products such as the Fidelity® Wise Origin® Bitcoin Fund (FBTC) and the ProShares Short VIX Short-Term Futures ETF, which are considered highly volatile and could result in investors losing their entire investment.

To complete the DIA, customers must first place an initial trade for the FBTC and then set up recurring investments. After entering the initial order details and clicking "Preview Order," customers will be prompted to review the agreement and update their investment objective. The investment objective for the account holding the FBTC shares must be "Most Aggressive."

Fidelity's DIA is designed to protect customers from outsized risk and ensure that they are investing in products that align with their investment objectives, time horizon, and tolerance for risk.

The DIA must be executed before recurring investments can be set up

Before diving into the specifics of why "The DIA must be executed before recurring investments can be set up", let's first understand what Fidelity Designated Investments Agreement (DIA) is and what recurring investments entail.

Fidelity Designated Investments Agreement (DIA) is a one-time customer agreement that needs to be accepted before trading in certain complex and risky products. An example of such a product is the Fidelity® Wise Origin® Bitcoin Fund (FBTC). When customers attempt to set up a recurring buy for FBTC, they receive an error message directing them to Fidelity.com to review and sign the DIA. This is a necessary step to ensure customers are aware of the risks associated with the investment product.

Recurring investments, on the other hand, are a convenient way to automate your investing strategy. They allow you to set up automatic purchases of a particular stock, ETF, or crypto asset on a schedule that you choose. You can specify the dollar amount, frequency, and timing of your recurring investments, and easily modify or cancel them if needed. This helps to mitigate market timing risk and build a lasting investment routine.

Now, coming back to the topic at hand, why "The DIA must be executed before recurring investments can be set up", it is because certain complex and risky investment products require customers to acknowledge and accept the associated risks. By executing the DIA, customers confirm that they understand the nature of the investment product and agree to take on the potential risks. This is a necessary step to protect customers and ensure they are making informed investment decisions.

Once the DIA is executed, customers can then proceed to set up recurring investments in the eligible investment products. It is important to note that the DIA is a one-time agreement, so once it is completed, customers don't need to go through the process again for subsequent trades in the same or other designated investments.

The DIA is a one-time agreement

The Designated Investments Agreement (DIA) is a one-time agreement that must be completed before investing in certain complex and risky products. It is a requirement for investors to execute the DIA when placing an order for the Fidelity Wise Origin Bitcoin Fund, the Fidelity Ethereum Fund, and similar spot crypto ETP products. These products are considered high-risk investments and are only suitable for investors with a high-risk tolerance.

The DIA is a legal agreement between the investor and Fidelity, outlining the terms and conditions of the investment. It is designed to protect investors from potential risks associated with complex and volatile investments. By signing the DIA, investors confirm that they understand the risks involved and agree to abide by the terms set forth by Fidelity.

Completing the DIA is a straightforward process and can be done entirely online through the Fidelity website or mobile app. Investors will be prompted to review the agreement and provide their electronic signature after entering their initial trade details. It is important to note that the DIA is only required for the initial investment, and subsequent trades of the same or other designated investments can be made without repeating the agreement process.

While the DIA is a one-time agreement, investors should carefully consider their investment objectives, time horizon, and risk tolerance before signing. It is crucial to understand the potential risks and volatility associated with complex investments, such as cryptocurrencies, and ensure that they align with an investor's financial goals and risk appetite.

The investment objective of the account must be Most Aggressive

The Fidelity Designated Investments Agreement (DIA) is a one-time agreement that must be completed before placing an initial trade for the Fidelity Wise Origin Bitcoin Fund (FBTC). It is required for certain complex and risky products. After agreeing to the DIA, you will be prompted to select your investment objective, which must be "Most Aggressive" for the FBTC shares. This article will focus on what it means to have an investment objective of "Most Aggressive".

The Investment Objective of the Account Must Be "Most Aggressive"

An aggressive investment strategy is one that carries a high degree of risk but has the potential to generate significant returns. It is suitable for investors with a long-term investment horizon and a high-risk appetite, typically young adults with smaller portfolio sizes. This is because a lengthy investment period allows them to ride out market fluctuations, and losses early in one's career have less impact than if they occur later.

Aggressive investment strategies focus on capital appreciation as the primary investment objective, rather than income or safety of principal. As such, an aggressive investment portfolio will have a substantial weighting in stocks and possibly little to no allocation to bonds or cash.

For example, a portfolio with an asset allocation of 75% equities, 15% fixed income, and 10% commodities would be considered quite aggressive. However, it would still be less aggressive than a portfolio with 85% equities and 15% commodities.

Aggressive investment strategies may also include a high turnover approach, chasing stocks that show high relative performance over a short time period. While this can lead to higher returns, it can also increase the risk of poor performance due to higher transaction costs.

Advantages and Disadvantages of Aggressive Investment Strategies

Aggressive investment strategies offer the potential for significant financial gains and are suitable for individuals seeking capital appreciation. They also allow investors to use multiple investing techniques, such as value and growth investing, to maximize their portfolio returns. Additionally, investors can benefit from the power of compounding.

However, aggressive investment strategies carry high risk and are only suitable for investors with a high-risk appetite. Managing an aggressive investment portfolio can be challenging, as it requires extensive research and analysis. Growth and value stocks may take a significant amount of time to generate high returns.

In summary, an aggressive investment strategy involves taking on a high degree of risk to maximize returns. While it offers the potential for significant gains, it is important to carefully consider your risk tolerance and investment objectives before adopting such a strategy.

The DIA is required for the Fidelity® Wise Origin® Bitcoin Fund and similar spot crypto ETP products

The Designated Investments Agreement (DIA) is a requirement for investors who want to place an order for the Fidelity® Wise Origin® Bitcoin Fund and similar spot crypto ETP products. This is because Fidelity requires the DIA for certain complex and risky products, and investors should only invest in products that align with their investment objectives, time horizon, and tolerance for risk.

The DIA is a one-time agreement that must be completed before setting up recurring investments in the Fidelity® Wise Origin® Bitcoin Fund (FBTC). To complete the DIA, investors must first place an initial trade for the FBTC and enter their order details before being prompted to review the agreement and update their investment objective. The investment objective of the account that will hold the FBTC shares must be set to "Most Aggressive".

The FBTC is an exchange-traded product that seeks to track the performance of bitcoin, providing investors with exposure to the price of bitcoin in a familiar investment structure. It is competitively priced with an expense ratio of 25 basis points, waived for the first six months. FBTC is not a registered investment company, so shareholders do not have the same protections as those investing in a registered company.

As with any investment, investors should carefully consider the fund's investment objectives, risks, charges, and expenses before investing. Digital assets like bitcoin are highly volatile and difficult to predict, and investors could lose their entire investment.

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