Displaying items by tag: smas

Separately managed accounts (SMAs) are quietly transforming asset management, offering a personalized alternative to mutual funds and ETFs. With 30% growth over the past two years, SMAs are projected to reach $3.6 trillion by 2027, driven by tax advantages and lower investment minimums. 

Unlike mutual funds, SMA investors hold individual securities, allowing for tailored portfolios based on specific preferences. Customizations, such as tax optimization and covered call strategies, can enhance returns for certain investors.

While fees may be higher, SMAs offer flexibility and control, especially for high-net-worth individuals. As technology evolves, the accessibility and customization options of SMAs are expanding rapidly.

Finsum: We have seen how the technology has really lowered the fees of these more customizable asset classes and we expect this trend to continue. 

With persistently high interest rates, investors are increasingly turning to fixed-income separately managed accounts (SMAs) for their potential tax advantages and personalized portfolio options. SMAs give investors direct ownership of underlying securities, offering greater control over capital gains, tax-loss harvesting, and tax-efficient investment selection. 

Fixed-income SMAs can minimize tax liabilities through strategies like low portfolio turnover, selective tax-loss harvesting, and investment choices based on location-specific tax exemptions. 

While tailoring portfolios for various client types, portfolio managers must balance customization with operational efficiency to meet expectations and maintain consistent performance. The key is to achieve tax efficiency without compromising on investment goals or client-specific outcomes.

Finsum: Investors should think of the tax advantages as additional returns their accounts can optimize for their portfolio.

Separately Managed Accounts (SMAs) offer notable advantages for institutional investors looking to invest in cryptocurrencies compared to ETFs. While ETFs have become popular among new crypto investors, SMAs provide direct ownership of assets, allowing for greater customization of portfolios and tailored risk management. 

This direct control also facilitates more effective tax strategies and access to a broader range of digital assets beyond just Bitcoin or Ether. Unlike ETFs, which are passive, SMAs benefit from active management, enabling investors to adjust their portfolios in response to market changes and potentially achieve higher returns. 

Additionally, SMAs operate in the 24/7 crypto market, avoiding the limitations of traditional market hours and minimizing the risk of price gaps. For high-net-worth individuals and institutions, the flexibility, personalized approach, and potential for outperformance make SMAs an increasingly appealing option over ETFs.

Finsum: Being able to have access to a cryptocurrency 24/7 is a critical advantage because their markets react overnight with great frequency. 

SEI has expanded its suite of Separately Managed Accounts (SMAs) and Unified Managed Accounts (UMAs) by introducing new strategies focused on direct indexing and factor-based investments. These additions include fixed income strategies, such as the Systematic U.S. Aggregate Bond Core and the Systematic Municipal Bond Core, as well as equity options like the Systematic U.S. Dividend Yield Core and the U.S. Dividend Yield Multi-Factor SMA. 

These offerings aim to help advisors serve mass-affluent, high-net-worth, and ultra-high-net-worth clients with tailored solutions that offer flexibility and tax optimization.

The move comes as UMAs gain popularity, with assets growing at an annual rate of 34% over the past five years, according to Cerulli. SEI’s expansion aligns with broader industry trends, as other major players like Envestnet and Dimensional.

Finsum: An SMA makes a lot of sense for direct indexing options given the tax implications.

The asset management industry is seeing a significant shift towards Separately Managed Accounts (SMAs), with assets growing by 30% over the past two years, according to Cerulli Associates. This growth is expected to continue, with projections suggesting SMAs will reach $3.6 trillion in assets by 2027, up from $2.4 trillion today. 

SMAs offer tax advantages and personalization options that are appealing to investors, allowing them to hold individual securities and tailor portfolios to their specific needs. SMAs are particularly useful for strategies that benefit from direct ownership of securities, such as tax-loss harvesting and options overlays, which can enhance after-tax returns and generate additional income. 

The rapid innovation in this space means that SMAs are becoming an increasingly attractive option for investors looking for a personalized approach to asset management.

Finsum: We expect the SMA boom to continue with trends in both demographics and wealth management in the US, so familiarity is key.