Keep Up with Asset Management Trends

Separately Managed Accounts (SMAs) have emerged as one of the fastest-growing investment vehicles in recent years, driven by their ability to offer personalized portfolio management, tax efficiency, and direct ownership of underlying securities. As investors increasingly seek tailored solutions to meet their financial goals, SMAs are becoming a preferred choice across various investor segments, including wealth managers, financial advisors, asset managers, trust professionals, and Registered Investment Advisors (RIAs).

Why SMAs Are Gaining Popularity

1. Personalization and Customization: SMAs allow investors to customize their portfolios based on individual preferences, such as excluding specific sectors or companies. This level of personalization is particularly appealing to high-net-worth individuals and institutional investors who value bespoke investment strategies.

2. Tax Efficiency: One of the most significant advantages of SMAs is their ability to optimize tax outcomes. Features like tax-loss harvesting enable investors to offset gains with losses, reducing overall tax liabilities. This is especially relevant in a market environment where tax management is a priority.

3. Direct Ownership: Unlike mutual funds or ETFs, SMAs provide direct ownership of securities, giving investors greater control and transparency over their investments. This structure also facilitates better alignment with individual financial goals.

4. Operational Advancements: The adoption of model delivery systems, where asset managers communicate portfolio changes for execution by platforms, has made SMAs more operationally efficient and cost-effective. This innovation has further fueled their growth.

Market Growth and Projections

According to industry research, SMA assets are projected to exceed $5.1 trillion by 2026, reflecting a compound annual growth rate (CAGR) of 15.4%. This growth rate outpaces other investment vehicles, such as mutual funds and collective investment trusts. The increasing demand for SMAs is driven by their ability to address complex financial needs, including concentrated stock positions and tax management.

Additionally, SMAs are becoming more innovative, with asset managers offering features like direct indexing and option overlay strategies. Major players in the industry, such as Goldman Sachs and BlackRock, have expanded their SMA offerings through acquisitions and partnerships, further solidifying their position in this growing market.

The Role of Zephyr and PSN in Supporting SMA Growth

Zephyr, a leading provider of investment analysis tools, plays a crucial role in helping financial professionals evaluate and optimize SMA strategies. By leveraging Zephyr’s robust analytics, wealth managers, financial advisors, and RIAs can gain insights into portfolio performance, risk management, and asset allocation.

PSN, a comprehensive database of investment managers, complements Zephyr by providing detailed information on SMA managers and their strategies. This combination enables investors and advisors to make informed decisions and identify top-performing managers in the SMA space.

The rising popularity of SMAs reflects a broader shift in investor preferences toward personalized, tax-efficient, and transparent investment solutions. As the market continues to grow, tools like Zephyr and PSN will remain essential for financial professionals seeking to navigate this dynamic landscape. By integrating advanced analytics and data-driven insights, these platforms empower investors to maximize the benefits of SMAs and achieve their financial objectives.

Why Choose PSN?

1. Rich Historical Data:

PSN SMA Data has a history dating back to 1984, PSN has pioneered nearly 40 years of valuable insights. This historical data includes net and gross-of-fee returns, ensuring that subscribers can analyze trends and patterns over an extended period. Firms, products and data fields are consistently added and updated, contributing to the richness of the historical dataset.

2. Integration of Both Quantitative and Qualitative Industry Excellence:

PSN SMA Data combines the best of both quantitative and qualitative data fields. This platform's extensive dataset covers each data field with precision, providing valuable insights into separately managed accounts. Narrative fields allow investment managers to share their unique investment philosophies and qualitative information in their own words, while also gaining insight from industry leaders.

3. Comprehensive Firm Data:

PSN is host to data from more than 2,800 firms, offering a comprehensive understanding of the market landscape. This data includes information such as asset breakdowns, compliance records, key personnel details, ownership diversity, ESG considerations, objectives and strategies.

4. Diverse and Comprehensive Product Data:

Encompassing over 21,000 products. PSN data encompasses asset breakdowns, style categorization, ESG considerations, fee structures, GIC sectors, fixed-income ranges and complete holdings information.

5. Universes Galore:

PSN's data spans across 285 universes, ensuring a comprehensive view of the market. PSN stands out on its commitment to updating, verifying and refreshing data daily. PSN SMA Data does not suffer from survivor bias, as it includes information on inactive firms and products, providing a more accurate representation of the market landscape.

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