What Is a Separately Managed Account?
A Separately Managed Account (SMA) is a professionally managed portfolio of individual securities, such as stocks or bonds, that is owned directly by an investor. Unlike Mutual Funds or ETFs, where many investors pool their money together, an SMA is your personal portfolio, tailored to your needs.
The Key Advantages of SMAs
1. Personalized Portfolio Management
SMA Advantage: Your investments are selected specifically for you. This means your portfolio can reflect your goals, risk tolerance, time horizon, and personal values.
Compared to Mutual Funds & ETFs:
• These offer one-size-fits-many strategies.
• Investors own shares of the fund not the underlying securities.
• Limited ability to customize.
What This Means for You: You get a portfolio built around your situation, not everyone else’s.
2. Tax Efficiency & Control
SMA Advantage: Because you own the individual securities, your financial advisor and manager can proactively:
• Harvest tax losses,
• Manage gains,
• Avoid unwanted capital-gain distributions, and
• Build around your tax situation.
Compared to Mutual Funds & ETFs:
• Mutual Funds often distribute capital gains even if your investment lost value.
• ETFs are relatively tax-efficient but still cannot personalize tax decisions for individual investors.
What This Means for You: Better control over taxes and the potential to improve after-tax returns.
3. Transparency You Can See
SMA Advantage: You can see exactly which securities you own at any time, no hidden layers.
Compared to Mutual Funds & ETFs:
• Funds disclose holdings infrequently (monthly or quarterly).
• You may not always know what you own day-to-day.
What This Means for You: You always know where your money is invested.
4. Flexibility to Accommodate Your Preferences
SMA Advantage: You can request specific guidelines or restrictions such as:
• Avoiding certain industries or companies
• Aligning with ESG or faith-based goals
• Concentration limits or risk preferences
Compared to Mutual Funds & ETFs:
• Custom restrictions are not possible in pooled vehicles.
• Fund managers must manage for the entire group.
What This Means for You: Your investments can reflect your values and priorities—not someone else’s.
5. Professional Management
SMA Advantage: Experienced portfolio managers analyze markets, select securities, monitor risk, and make adjustments on your behalf.
Compared to Mutual Funds & ETFs:
• Mutual Funds: actively managed, but not personalized.
• ETFs: generally passive and designed to mirror a benchmark.
What This Means for You: You receive hands-on portfolio management that is both active and customizable.
How SMAs Fit Into Your Financial Plan
SMAs can be a great fit for investors who value:
• Personalized attention
• Tax-aware investing
• Transparency
• Direct ownership of securities
• Long-term planning with professional oversight
SMAs are commonly used for:
• High-net-worth individuals or families
• Trusts and estates
• Retirement accounts
• Charitable foundations
• Taxable investment portfolios
Why Financial Advisors Recommend SMAs
Financial advisors often view SMAs as a valuable tool because they allow them to:
• Build tailored portfolios for each client
• Align investments with tax planning strategies
• Provide greater visibility into holdings
• Coordinate better with estate, trust, and charitable goals
Is an SMA Right for You?
SMAs can offer meaningful benefits, particularly if you:
• Prefer a personalized approach
• Want better tax control
• Value transparency and flexibility
• Have a longer-term investing mindset
• Have a portfolio large enough to benefit from customization
Your financial advisor can help determine whether an SMA aligns with your investment objectives and overall financial plan. Past performance is no guarantee of future results.
James Sindelar
Senior Vice President, Strategic Relationships
Important Disclosure
JAG Capital Management, LLC (“JAG” or “Firm”) is a Missouri company and a wholly owned subsidiary of J.A. Glynn & Co., registered (not implying a certain level of skill or training) as an Investment Advisor with the Securities and Exchange Commission under the Investment Advisors Act of 1940, as amended. Please refer to the Firm’s Form ADV 2A Brochure for more information about the Firm, services and fees on file with the SEC, www.adviserinfo.sec.gov. Firm CRD #159227. You may also contact us at 314.997.1277 or visit our website at www.jagcap.com. Past performance is not to be considered indicative of future performance. Any investment contains risk including the risk of total loss. There is no assurance that the objectives or strategies offered by the Firm will be achieved or successful. Asset allocation and diversification do not guarantee a profit or protect against a loss.