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Could You Benefit From an SMA?

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Separately managed accounts (SMAs) have been around for over 50 years. Here’s what you need to know to determine if one is a good fit for you.

SMAs are a growing market

Over the last 10 years, assets in retail SMAs have grown by 125%—and investment consultants expect another 50% increase over the next several years.1

SMAs are a growing market

 

What are the key attributes of SMAs?

key attributes of SMAs

 

SMAs offer attractive benefits

Because account holders directly own individual securities, SMAs offer distinctive benefits over pooled vehicles like mutual funds.

SMAs offer attractive benefits

 

A note about risk 

Investing involves risks of fluctuating prices and uncertainties of rates of return and yield. Capital value of SMAs may fluctuate, particularly over short-term periods can expose the investor to potential losses should the account be liquidated during a market downturn. Consider potential liability of Income and Capital Gains Tax. Income Distributions from SMAs are not guaranteed and can vary over time. SMA costs include, but are not limited to, brokerage, management, and performance fees. SMAs may include exposure to growth assets, such as shares. These assets can provide substantial long-term capital growth, however this comes with an elevated risk of loss. Therefore, the time horizon of the investment should be carefully considered to manage this risk.

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1 As of 12/31/23. Source: Cerulli Associates. Starting in 2017, data include SMAs and UMAs. Analyst Note: Capital market assumptions are based on JPMorgan Asset Management’s projections. it should be noted that the open programs Cerulli tracks do not include those separate account relationships outside of a program environment. This specifically relates to registered investment advisor (RIA) and trust banking relationships with separate account managers that are not held in programs. Beginning in 2017, due to changes to the representation of Merrill Lynch One and Morgan Stanley’s Unified Advisory Platform in Cerulli’s market sizing, assets previously counted as separate accounts and mutual fund advisory assets are now counted in Unified Managed Accounts (UMAs).

Voya IM does not provide tax or legal advice. This information should not be used as a basis for legal and/or tax advice. In any specific case, the parties involved should seek the guidance and advice of their own legal and tax counsel.

Past performance does not guarantee future results. This market insight has been prepared by Voya Investment Management for informational purposes. Nothing contained herein should be construed as (i) an offer to sell or solicitation of an offer to buy any security or (ii) a recommendation as to the advisability of investing in, purchasing or selling any security. Any opinions expressed herein reflect our judgment and are subject to change. Certain statements contained herein may represent future expectations or other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (1) general economic conditions, (2) performance of financial markets, (3) interest rate levels, (4) increasing levels of loan defaults, (5) changes in laws and regulations and (6) changes in the policies of governments and/or regulatory authorities.

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