Wednesday, 20 March 2024 04:52

The SMA Advantage: Why Transparency Matters

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Have you ever wondered exactly what stocks and bonds make up your mutual fund? While diversification and professional management are huge benefits, you may want a timelier picture of your investments than these vehicles allow. This is where separately managed accounts (SMAs) offer a distinct advantage.


Unlike mutual funds, SMAs provide direct ownership of the underlying securities in your portfolio. This transparency lets you see exactly what you're invested in, empowering you to adjust more quickly if desired.


For instance, making informed and timely decisions is particularly useful when aligning your values to your portfolio. SMAs, with their immediate transparency and ability to customize holdings, allow for quicker adjustments if needed.


On the other hand, mutual funds typically update their holdings lists every quarter, which may be too much of a delay for your liking. And, by the time you see that report, the fund may have already bought or sold securities. With an SMA, you and your advisor have real-time access to your holdings, enabling you to stay on top of your investments and adjust as market conditions or your personal preferences evolve.

Finsum: The timely transparency of separately managed accounts is important to investors seeking to align their portfolio to their values.


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