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Separately Managed Accounts (SMA) versus a Mutual Fund or Exchange Traded Fund (ETF)

Separately Managed Accounts (SMA) versus a Mutual Fund or Exchange Traded Fund (ETF)

March 21, 2023


´╗┐Separately Managed Accounts (SMA) versus a Mutual Fund or Exchange Traded Fund (ETF)´╗┐

´╗┐Many investors have no knowledge of the separately managed account (SMA).  There are several advantages to investing in one versus your traditional mutual fund or ETF.

  1. Customization: SMAs offer greater customization and personalization in investment management.  Unlike mutual funds or ETFs, which are pooled investment vehicles, an SMA is managed separately for each client based on their individual goals and objectives.

  2. Transparency: SMAs provide greater transparency and control over the underlying securities in the portfolio.  Clients can see exactly what securities are held in their account and can have greater visibility into the investment decisions made by the manager.

  3. Tax-Efficiency: SMAs offer greater tax efficiency compared to mutual funds or ETFs.  Because an SMA is managed on a per-client basis, the manager can take into account the client's specific tax situation when making investment decisions

  4. Flexibility: SMA's offer greater flexibility in terms of investment options.  The manager can invest in individual securities, including stocks, bonds, and other assets, and can tailor the portfolio to the client's specific needs and goals.

  5. Personalized Service: SMAs offer a higher level of personalized service and attention from the investment manager or advisor.  Because the account is managed separately for each client, the manager can provide more individualized attention and support.

Overall, SMAs offer a number of advantages over mutual funds or ETFs, particularly in terms of customization, transparency, tax efficiency, flexibility, and personalized service. 

When considering an SMA account, it is important to discuss the fee structure and account minimums.  

If you would like to discuss the SMA accounts that we offer, please contact us.