Separately Managed Accounts are share portfolios that allow the underlying assets (the shares) to be owned by the investor rather than by the investment fund.
With a traditional managed fund style of investment, the investor does not own any of the underlying assets and instead own units in the fund. With a separately managed account (SMA) the investor owns the underlying assets.
There are a number of benefits to investing in an SMA over a managed fund. One of the main benefits is that you (or your advisers) are able to manage the tax position yourself rather than being at the mercy of the managed fund.
You can invest in an SMA in various ways, including via your personal name, self managed super fund, company name or trust.
Separately managed funds have been around since the early nineties, but have become far more popular in recent years as the minimum investment amount has come down from around $500,000 to a much more accessible $5,000 in some cases.
Whether or not an SMA is right for you really depends on your own personal needs and objectives. For more information please contact your financial adviser.
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