Managed Account

AAA

DEFINITION of 'Managed Account'

An investment account that is owned by an individual investor and looked after by a hired professional money manager. In contrast to mutual funds (which are professionally managed on behalf of many mutual-fund holders), managed accounts are personalized investment portfolios tailored to the specific needs of the account holder.

INVESTOPEDIA EXPLAINS 'Managed Account'

For example, if an investor buys ABC Mutual Funds, which invests in Company 1 and Company 2, and that investor wants to reduce the weighting of Company 1 in the fund, the fund company wouldn't allow it since the money manager looking after the fund cannot make investment decisions based on one investor's preferences. On the other hand, with managed accounts, investors are given the freedom and ability to do what they want with the investments within the portfolio, and any decision made by the money manager is based on the individual investor's goals and objectives. Thus, if an investor holds a managed account and wants to reduce holdings in Company 1, he or she could do so.

RELATED TERMS
  1. Trading Authorization

    The level of power entrusted to a broker or agent granting specific ...
  2. Advisor Account

    A type of investment account where an investment advisor works ...
  3. High Net Worth Individual - HNWI

    A classification used by the financial services industry to denote ...
  4. Limited Power Of Attorney - LPOA

    An authorization form used in the professional money management ...
  5. Advisor

    1. The person or company responsible for making investments on ...
  6. Variable Annuity

    An insurance contract in which, at the end of the accumulation ...
RELATED FAQS
  1. What are the disadvantages of an index fund over an actively managed fund?

    An actively managed fund – more commonly referred to as a mutual fund – has a higher risk versus reward value, is much less ... Read Full Answer >>
  2. What types of accounts are available for forex trading?

    There are many different types of forex accounts available to the retail forex trader. Demo accounts are offered by forex ... Read Full Answer >>
  3. How are American Depository Receipts (ADRs) exchanged?

    American depositary receipts (ADRs) are bought and sold on regular U.S. stock exchanges, either in the over-the-counter market ... Read Full Answer >>
  4. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
  5. What action is the SEC likely to take on 12b-1 fees?

    The Securities and Exchange Commission (SEC) may take action to impose greater regulation on how 12b-1 fees are used, or ... Read Full Answer >>
  6. What is considered a reasonable 12b-1 fee?

    A reasonable 12b-1 fee is generally considered to be 0.25% of the assets of the mutual fund. The maximum amount allowed for ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Separately Managed Accounts: A Mutual Fund Alternative

    It takes a hefty minimum investment to get in in on an SMA, but these offer some distinct advantages.
  2. Mutual Funds & ETFs

    Separately Managed Accounts: A Boon For All

    We provide an explanation of individual cost basis and the advantages it brings to these accounts.
  3. Options & Futures

    An Introduction To Managed Futures

    Their inverse correlation with stocks and bonds make these alternative investments worth getting to know.
  4. Personal Finance

    3 Alternative Ways To Assess Your Investment Manager

    Find out whether your funds are being managed according to your goals.
  5. Mutual Funds & ETFs

    The Quest To Build A Unified Managed Account

    Find out why the convenient, customizable UMA should be the next big thing in managed money.
  6. Professionals

    Why ETFs Often Edge Out Mutual Funds

    A deep look reveals why — in most instances — ETFs beat out mutual funds.
  7. Professionals

    Value or Growth Stocks: Which is Best?

    The answer to the age-old growth versus value debate depends on a number of factors. Here's what to consider.
  8. Mutual Funds & ETFs

    Top 3 ETFs For Investing in Brazil

    Discover information and analysis of some of the most popular and best performing exchange-traded funds that offer investors exposure to Brazil.
  9. Mutual Funds & ETFs

    How Private Equity and Hedge Funds are Taxed

    Private equity and hedge funds offer an appealing tax structure for those who can afford to invest in them. Here's why.
  10. Mutual Funds & ETFs

    Citadel And Bernanke, The Perfect Relationship?

    How does Bernanke's relationship with investment firms impact Wall Street and Main Street?

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!