In addition to the potential lower cost of an SMA, owning individual securities gives you a clear understanding of the securities owned, as well as the market-weighted value of each—not limited to just cost basis, capital gains/losses or number of shares. This ownership and transparency allows for additional benefits through tax harvesting.

Yes, because SMA accountholders own the underlying portfolio securities, you can request the exclusion of specific securities or social sectors to personalize the holdings. Simply request to have these customizations applied to the SMA through your financial advisor. For equity SMAs, the customization cannot change the underlying portfolio by more than 10% of market value based on when the restriction is initiated.

Some investors receive stocks from inheritance or compensation and don’t want to further invest in those stocks through the SMA. Other investors may choose to exclude specific stocks or social sectors that conflict with their personal or religious views or values. Investors can also customize Municipal SMAs by tax bracket and state preferences.

AB offers a range of equity, fixed-income and multi-asset SMAs. These include ESG-themed Portfolios with Purpose, for investors who want to combine financial objectives and investing for purpose.

SMAs may have a higher investment minimum, but the fees are typically lower compared with a mutual fund. For example, the average management fee for the AB Large Cap Growth SMA is 0.34% versus 0.61% for the advisor share class of the AB Large Cap Growth Mutual Fund (APGYX).