A separately managed account (SMA) is a portfolio of assets managed by a professional manager or investment firm. The manager uses their resources and skill to manage the portfolio to achieve the intended investment objective. The investor appoints the manager to manage their portfolio of assets in accordance with a portfolio construction and objective that is common to a group of other investors seeking the same outcome or investment experience from that particular manager. Each investor’s account is separate from the others and, due to the timing and amount invested or redeemed, performance will be similar, but not the same, as other investors in that managed account.
Managed accounts can have a number of advantages over other approaches to portfolio management such as doing it yourself or via a managed fund. The level of benefit received from using an SMA will depend on may factors, though the key reasons for considering an SMA are:
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