Investment concepts - What is a Separately Managed Account (SMA) ?
Written and accurate as at: Nov 08, 2022 Current Stats & Facts
A Separately Managed Account (SMA) provides investors beneficial interest in a professionally constructed and managed portfolio of investments that may consist of Australian shares, listed securities (such as shares, ETFs, ETCs, LICs, etc.), managed funds and cash.
How it works
An SMA is a registered managed investment scheme that allows you to access a number of professionally constructed and managed investment portfolios (model portfolios) comprising Australian listed investments, managed funds, and cash in which beneficial ownership is retained by you (or the trustee in the case of a superannuation investment).
An SMA can be accessed via an eligible platform (for both investment and superannuation) or in some
cases directly from the provider.
Features
Some features of investing in an SMA may include:
- Individual accounts - Unlike a unitised managed fund in which investors collectively have an
interest in the pool of fund assets, the SMA investor has absolute beneficial ownership in the
investment options held in their account. - Transparency - You can view the assets that you hold within your chosen Model Portfolio through
your platform reports and facilities. - Portability - You can generally transfer Australian securities and units in managed funds that are
held by (or for) you into the platform before transfer into the SMA and still retain the beneficial
interest in those assets. You can also generally transfer your securities and units in managed funds between your Model Portfolios within the SMA. - No inherited capital gains - When you transfer assets into your account, or assets are acquired on your behalf and held as part of your account, an individual cost base is established in relation to that Model Portfolio. For listed securities, this means there are no tax consequences for you as a result of other investors’ transactions. For SMA’s with holdings in managed funds, each managed fund involves investors in that fund having a collective interest in the pool of fund assets.
- Professional investment management - The SMA provides you with access to leading experienced professional investment managers who ensure each model portfolio is continually monitored and managed
- Consolidated reporting - SMAs are typically integrated with the technology systems of a platform
through which you access the SMA, meaning you may be able to have a comprehensive view of
your Model Portfolio. This means you can:- view the breakdown of investments in your Model Portfolio
- keep track of your investments, and transact between an SMA and other investments on
your platform easily