| |
Mutual Funds |
Separately Managed Accounts |
| General Features |
|
|
| Typical account minimum |
Often as little as $1,000 |
Often at least $100,000 |
| Access to professional money managers |
Yes |
Yes |
| Number of holdings |
Varies depending on investment approach and strategy. |
Varies depending on investment approach and strategy. |
| Portfolio customization |
Not available |
Available. Investors can restrict
specific securities or industries from their accounts. |
| Withdrawals/redemptions |
Allowed. However, mutual funds may
have restrictions and some may charge related fees. |
Unlimited |
| Ready Liquidity |
Typically, money is available next business day.
|
Depending on the securities redeemed, trades may take up to three business days to complete. |
| Reporting/Communications |
|
|
| Frequency of investment performance reports |
Investment performance is available
monthly, quarterly and typically daily as well. |
Investors typically receive in-depth
quarterly performance reports. In addition, investors have access to their own financial advisor periodically. |
| Tax-Related Features |
|
|
| Security ownership |
Investors own shares in a fund,
which in turn owns the individual securities. Significant redemptions or high turnover activity can potentially produce unexpected taxable distributions at year end. |
Investors own each individual security
within an account. Selling decisions (and possible capital
gains consequences) are based on the investor's personal investment
strategies and goals, and are not affected by the redemption needs of anyone except the individual account owner. |
| Unrealized capital gains |
By law, mutual funds must pass on 98% of all
realized capital gains to investors (or pay a 4% federal excise
tax) each year. |
Capital gains may be realized or else
harvested for future realization, depending on the investor's
needs and the manager's strategy. |
| Tax-efficient portfolio customization |
Not available, although some funds are specifically managed
for tax efficiency. |
Investors can sell securities, creating specific tax consequences; for example, to offset capital gains with capital losses. |
| Costs/Fees |
|
|
| Total expenses |
Fund level management fees and may be subject to sales charges and separate distribution and servicing fees. |
One asset-based fee covers all separate
account program services (including asset management, trading custody and servicing).
|
| Shareholder discounts |
Not available. All mutual fund investors
in the same fund/share class pay the same expense ratio. |
Larger investors may be eligible for breakpoint fee levels. |
