Personalization is everything—even when it comes to investing. Investors today are seeking new ways to tailor their strategies to meet specific goals, needs, and risk tolerances. Separately Managed Accounts (SMAs) are the solution that promises a higher level of customization compared to traditional mutual funds or EFTs.

In 2022, 22% of US households that invested had SMAs, up from 13% two years prior. The bottom line? SMAs are here to stay and offer more advantages than ever. So what does this mean for you and your financial future? How can Separately Managed Accounts kickstart a better path to investing? Read on to find out.

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Customization to the Core

Unlike pooled investments, SMAs allow for personalization that aligns with each investor’s values, investment goals, and tax considerations. This level of customization is a smart approach to wealth management and can result in:

  • Direct ownership of securities, offering transparency and control.
  • Ability to work with a portfolio manager to tailor the investment strategy.
  • Personalized tax management strategies, including tax-loss harvesting.
  • Flexibility to exclude specific securities or sectors based on personal values or risk considerations.

A More Ethical Choice

Say, for example, you’re an investor who prioritizes sustainable and ethical investing. You could customize separately managed accounts to specifically include companies with strong ESG practices. By tailoring your investment portfolio, you could exclude industries or companies that don’t align with your personal values, like fossil fuels or arms manufacturing companies.

An investor deeply concerned about climate change could tailor their SMA to prioritize investments in companies that are leaders in the development and deployment of renewable energy technologies, such as solar and wind power. 

They might look specifically at companies involved in the manufacturing of photovoltaic panels, wind turbines, and those operating large-scale renewable energy projects. The investor might also use their SMA to invest in businesses making strides in energy efficiency, reducing greenhouse gas emissions, and participating in reforestation projects.

These are just some of the ways you can customize your plan to align with your unique needs and values. Alpha Wealth Funds recognizes the growing importance of responsible investing and ensures that SMAs can be tailored to reflect any ethical considerations you may have. 

Professional Management and Expertise

SMA investors benefit from the dedicated attention of professional portfolio managers. These experts don’t just construct and maintain the investment portfolio—they also offer ongoing monitoring and adjustment to keep the strategy in line with the client’s objectives.

Financial professionals boast extensive knowledge of markets and products. They can guide you through these products and help you decide which ones are right for your plan. These professionals are also adept at recognizing market trends and are thus known for giving informed advice.

Separately Managed Accounts for Strategic Tax Efficiency

No one likes taxes, but they are part and parcel of any financial plan. The good news is that separately managed accounts are incredibly tax-efficient. They make it easy for investors to minimize tax implications through strategies like tax-loss harvesting, where you can offset capital gains by strategically realizing losses.

In addition, SMA managers can help you identify highly appreciated securities when you want to make a donation. When you need to withdraw money, your manager can help reduce capital gains by selling high-cost securities. 

How Separately Managed Accounts Work in Action

Imagine for a moment you’re a high-net-worth individual facing a considerable capital gains tax bill due to substantial investment gains acquired throughout the fiscal year. You want to mitigate your bill without compromising your investment objectives, so you seek ways to utilize your SMA more efficiently.

With separately managed accounts, you have the advantage of direct ownership of individual securities, which allows for a granular level of control over each security within your portfolio. This little “trick” can be especially useful during years when your investments have performed well, as it can significantly lower your taxable income. 

Together with your manager or advisor, you can assess your portfolio to find securities that have appreciated greatly. Rather than selling all those assets in a single tax year, you can plan a staggered sale approach. That way, you spread the capital gains across multiple years and remain in a lower tax bracket.

Your manager will aim to ensure that securities poised for long-term growth are held for at least a year before selling so that they’re qualified for long-term capital gains tax rates. This careful planning is truly the hallmark of leveraging SMAs for maximum tax efficiency.

Alpha Wealth Funds Offers a Gateway to Personalized Wealth Management

SMAs are a compelling option for anyone seeking to tailor their financial journey and enjoy greater tax savings. Alpha Wealth Funds is proud to stand at the forefront of delivering personalized investment management services that fully harness the benefits of SMAs.

From unparalleled customization to expert tax-efficient strategies and the ability to invest with your values, SMAs make it easy to create a personalized portfolio. 

Ready to see how SMAs can enhance your investment experience while driving wealth growth? Get in touch with us today to learn more and access resources such as The Insiders Fund, Alpha Low Volatility Fund, Volatility Advantage Fund, and Alpha Diversified Fund. 


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Founded in 2010, our services include boutique hedge funds, separately managed accounts, financial planning, estate & trust services, private placements, life insurance and annuities, and in-house concierge services for high-net-worth individuals, families, and businesses. To find out more about our services or reach a registered investment advisor, please fill out the Contact form.


PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All investments involve risk, including the loss of principal.