SEPARATELY MANAGED ACCOUNTS Flexibility to pursue complex tax and investing needs

FREQUENTLY ASKED QUESTIONS

Your SMA questions, answered

We share the latest questions our specialists are answering for financial professionals.

Back to basics

New to SMAs? Discover the potential of this powerful vehicle.

Ryan Gundrum

Director of ETF and SMA sales

2 MIN VIDEO

A separately managed account (SMA) is a professionally managed portfolio of securities selected by an investment manager and owned by the end investor.

The primary difference is that with an SMA, your client directly owns the stocks and bonds. With a mutual fund or ETF, your client owns shares of the fund, which in turn invests in stocks and bonds.

Minimums differ by sponsor firm, but Capital Group minimums are typically $100K for equity SMAs and $250K for fixed income SMAs.

  • Customization and control: Your client can request that specific companies or business sectors be excluded from the portfolio (as agreed to by the investment manager). 
  • Transparency:  Portfolio holdings can be viewed at all times, because your client owns the underlying securities. 
  • Tax efficiency: Your client has more opportunities to reduce the impact of federal tax on investment returns.

It’s a technique to manage capital gains and losses to help limit tax liability. If an investment that’s lost value is sold, that realized loss can be used to offset gains at another time or in a different investment. In certain cases, holdings that have appreciated in value can also be harvested — for example, to take advantage of embedded losses elsewhere, increase cost basis or reduce concentrated positions.

Yes. Speak with your home office representative to understand how to pursue your client’s desired tax gain/loss harvesting objectives. Discretionary services may be offered by the financial intermediary, depending on the platform.

  • Equity SMAs: Your client can request exclusion of specific securities or business involvement in certain industries. Industries differ by sponsor firm but may include abortion, adult entertainment, alcohol, defense and weapons, firearms, fossil fuels, gambling and tobacco. 
  • Municipal bond SMAs: A range of state-focused portfolios are available. In addition, subject to approval and/or account minimums, your client can request directed sales/transitions, exclusionary requests and extended transition times.

In many cases, yes. If your client is considering this option, Capital Group offers an in-kind portfolio analysis to identify which securities would be kept (because they align with the investment strategy) and which would be liquidated. Contact your sales representative for more information.

Fees differ by sponsor firm, asset class and other factors. Your sales representative can help you understand the fee structure for your client. 

To get started, contact your sales representative or call (800) 421-0180, option 1.

 

†Industry exclusion availability and other customization options vary by sponsor and program. Please check with your home office.

**Holdings may fall below these amounts due to various factors including, but not limited to, market conditions, availability of the securities and investment conviction.

***The Morningstar Medalist Rating™  is the summary expression of Morningstar's forward-looking analysis of investment strategies as offered via specific vehicles using a rating scale of Gold, Silver, Bronze, Neutral, and Negative. The Medalist Ratings indicate which investments Morningstar believes are likely to outperform their Morningstar Category average on a risk-adjusted basis over time. Investment products are evaluated on three fundamental pillars (People, Parent, and Process) and the Medalist Rating Price Score, which forms the basis for Morningstar's conviction in those products' investment merits and determines the Medalist Rating they are assigned. Pillar ratings take the form of Low (-2), Below Average (-1), Average (0), Above Average (+1), and High (+2). Pillars may be evaluated via an analyst's qualitative assessment (either directly to a vehicle the analyst covers or indirectly when the pillar ratings of a covered vehicle are mapped to a related uncovered vehicle) or using algorithmic techniques. The cost of an investment product is evaluated using the Medalist Rating Price Score, which is a continuous score running from negative 2.5 to positive 2.5 based on the percentile rank of a vehicle's expense ratio within its Morningstar Category. Morningstar combines the pillar scores and Medalist Rating Price Score using predetermined weights for actively and passively managed vehicles to calculate a weighted score. The weighted score is then compared to a set of fixed numeric thresholds employed consistently across Morningstar Categories and regions, with separate thresholds for actively and passively managed investments. Rating thresholds are reviewed at least annually. Buffers and ratings caps are employed to prevent frequent ratings changes. When analysts directly cover a vehicle, they assign the fundamental pillar ratings based on their qualitative assessment, subject to the oversight of the Analyst Rating Committee, and monitor and reevaluate them approximately once a year. When vehicles are covered either indirectly by analysts or by algorithm, the ratings are assigned monthly. The Morningstar Medalist Ratings are not statements of fact, nor are they credit or risk ratings. The Morningstar Medalist Rating (i) should not be used as the sole basis in evaluating an investment product, (ii) involves unknown risks and uncertainties which may cause expectations not to occur or to differ significantly from what was expected, (iii) is not guaranteed to be based on complete or accurate assumptions or models when determined algorithmically, (iv) involves the risk that return targets will not be met due to unforeseen changes in management, technology, economic development, interest rate development, operating and/or material costs, competitive pressure, supervisory law, exchange rates, tax rates, or political and social conditions, and (v) should not be considered an offer or solicitation to buy or sell the investment product. A change in the fundamental factors underlying the Morningstar Medalist Rating may result in the rating no longer being accurate. Analysts do not have any other material conflicts of interest at the time of publication. Users wishing to obtain further information should contact their local Morningstar office. Capital Group did not compensate Morningstar for the ratings and comments contained in this material. However, the firm has paid Morningstar a licensing fee to access and publish its ratings data.

 

For registered investment advisors only.

Important investment disclosure

 

Source: Capital Group. ACWI = All Country World Index; EAFE = Europe, Australasia, Far East. For Global Growth SMA vs. benchmark comparison, previous to 9/30/11, benchmark returns reflect MSCI World Index. For International Growth SMA vs. benchmark comparison, previous to 3/31/07, returns reflect MSCI EAFE Index.

 

Total returns (%)1,2,3,4,5,6
as of December 31, 2025

  Cumulative Average annual
  1 year 5 years 10 years
Capital Group U.S. Conservative Growth and Income
"Pure" gross 16.59 12.10 11.78
Net of fees 13.18 8.81 8.50
Capital Group U.S. Core
"Pure" gross 22.19 16.40 14.78
Net of fees 18.63 13.00 11.42
Capital Group U.S. Equity
"Pure" gross 17.92 13.29 14.37
Net of fees 14.48 9.97 11.02
Capital Group U.S. Flexible Growth
"Pure" gross 17.71 11.41 15.40
Net of fees 14.27 8.14 12.02
Capital Group U.S. Flexible Growth and Income
"Pure" gross 23.85 15.44 14.84
Net of fees 20.25 12.07 11.48
Capital Group U.S. Growth
"Pure" gross 18.66 11.51 13.63
Net of fees 15.20 8.24 10.30
Capital Group U.S. Income and Growth
"Pure" gross 19.82 14.66 13.94
Net of fees 16.32 11.30 10.60
Capital Group International Equity
"Pure" gross 27.87 7.38 9.49
Net of fees 24.16 4.22 6.27
Capital Group International Growth
"Pure" gross 24.67 5.37 9.31
Net of fees 21.05 2.26 6.09
Capital Group Global Equity
"Pure" gross 25.65 10.90 12.51
Net of fees 22.00 7.64 9.21
Capital Group Global Growth
"Pure" gross 22.09 10.15 14.05
Net of fees 18.53 6.91 10.71
Capital Group World Dividend Growers
"Pure" gross 24.39 10.69 10.51
Net of fees 20.77 7.44 7.26

Index total returns (%)4
as of December 31, 2025

  Cumulative Average annual
  1 year 5 years 10 years
S&P 500 Index
  17.88 14.42 14.82
MSCI EAFE Index
  31.22 8.92 8.18
MSCI ACWI ex USA
  32.39 7.91 8.41
MSCI World Index
  21.09 12.15 12.17
MSCI ACWI
  22.34 11.19 11.72

Figures shown are past results and not predictive of results in future periods. Current and future results may be lower or higher than those shown. Investing for short periods makes losses more likely.

 

There have been periods when the results lagged the index(es) and/or average(s). The indexes are unmanaged and, therefore, have no expenses. Investors cannot invest directly in an index.

 

Source: MSCI. The MSCI information may only be used for your internal use, may not be reproduced or redisseminated in any form and may not be used as a basis for or a component of any financial instruments or products or indices. None of the MSCI information is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such. Historical data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or prediction. The MSCI information is provided on an “as is” basis and the user of this information assumes the entire risk of any use made of this information. MSCI, each of its affiliates and each other person involved in or related to compiling, computing or creating any MSCI information (collectively, the “MSCI Parties”) expressly disclaims all warranties (including, without limitation, any warranties of originality, accuracy, completeness, timeliness, non-infringement, merchantability and fitness for a particular purpose) with respect to this information. Without limiting any of the foregoing, in no event shall any MSCI Party have any liability for any direct, indirect, special, incidental, punitive, consequential (including, without limitation, lost profits) or any other damages. Please visit the data provider's website for more information.

 

Each S&P Index ("Index") shown is a product of S&P Dow Jones Indices LLC and/or its affiliates and has been licensed for use by Capital Group. Copyright © 2026 S&P Dow Jones Indices LLC, a division of S&P Global, and/or its affiliates. All rights reserved. Redistribution or reproduction in whole or in part is prohibited without written permission of S&P Dow Jones Indices LLC.

 

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

 

Investment results assume all distributions are reinvested and reflect applicable fees and expenses.

 

Results and results-based figures shown are preliminary and subject to change.

 

1. Equity SMA composite net results annual fee - 3% (Capital Group Global Equity, Capital Group Global Growth, Capital Group International Equity, Capital Group International Growth, Capital Group U.S. Conservative Growth and Income, Capital Group U.S. Core, Capital Group U.S. Equity, Capital Group U.S. Flexible Growth and Income, Capital Group U.S. Flexible Growth, Capital Group U.S. Growth, Capital Group U.S. Income and Growth, Capital Group World Dividend Growers)

 

2. SMA composite net returns are calculated by deducting from the monthly "pure" gross returns a model fee equivalent to an annual fee, as noted. For Capital Group Core Plus SMA and Capital Group Municipal Income SMA, composite net returns are calculated by deducting from the monthly gross returns a model fee equivalent to an annual fee, as noted. Actual fees will vary. For information concerning program sponsor fees, contact your financial professional.

 

3. For certain SMA composites, the composite includes all SMA portfolios applicable to its strategy beginning on the composite's inception date.

  • Capital Group U.S. Conservative Growth and Income SMA Composite inception: 10/1/2020 (U.S. Conservative Growth and Income strategy)
  • Capital Group U.S. Flexible Growth SMA Composite inception: 10/1/2020 (U.S. Flexible Growth strategy)
  • Capital Group International Equity SMA Composite inception: 7/1/2012 (International Equity strategy)
  • Capital Group U.S. Income and Growth SMA Composite inception: 9/1/2016 (U.S. Income and Growth strategy)
  • Capital Group Global Equity SMA Composite inception: 9/1/2011 (Global Equity strategy)
  • Capital Group U.S. Equity SMA Composite inception: 9/1/2009 (U.S. Equity strategy)
  • Capital Group Global Growth SMA Composite inception: 7/1/2017 (Global Growth strategy)
  • Capital Group International Growth SMA Composite inception: 9/1/2017 (International Growth strategy)
  • Capital Group U.S. Growth SMA Composite inception: 8/1/2016 (U.S. Growth strategy)
  • Capital Group World Dividend Growers SMA Composite inception: 9/1/2013 (World Dividend Growers strategy)
  • Capital Group U.S. Core SMA Composite inception: 3/1/2017 (U.S. Core strategy)
  • Capital Group U.S. Flexible Growth and Income SMA Composite inception: 10/1/2020 (U.S. Flexible Growth and Income strategy)

 

For certain strategies, results prior to the SMA composite's inception date are based on a different composite since no SMA portfolios were managed according to their investment strategies. Results presented for those are based on returns which contain non-SMA similar strategy portfolios and are described below.

  • U.S. Conservative Growth and Income strategy: Capital Group American Mutual Composite inception 2/28/1950 through 9/30/2020
  • U.S. Flexible Growth strategy: Capital Group Growth Fund of America Composite inception 11/30/1973 through 9/30/2020
  • International Equity strategy: Capital Group Private Client Services International Equity Composite inception 12/31/1986 through 6/30/2012
  • U.S. Income and Growth strategy: Capital Group Washington Mutual Composite inception 7/31/1952 through 8/31/2016
  • Global Equity strategy: Capital Group Private Client Services Global Equity Composite inception 3/31/1992 through 8/31/2011
  • U.S. Equity strategy: Capital Group Private Client Services U.S. Equity Composite inception 9/30/1974 through 8/31/2009
  • Global Growth strategy: Capital Group New Perspective Composite inception 3/31/1973 through 6/30/2017
  • International Growth strategy: Capital Group EUPAC Growth Composite inception 4/30/1984 through 8/31/2017
  • U.S. Growth strategy: Capital Group AMCAP Composite inception 5/31/1967 through 7/31/2016
  • World Dividend Growers strategy: Capital Group World Dividend Growers Composite inception 6/30/2012 through 8/31/2013
  • U.S. Core strategy: Capital Group Investment Company of America Composite inception 12/31/1933 through 2/28/2017
  • U.S. Flexible Growth and Income strategy: Capital Group Fundamental Investors Composite inception 7/31/1978 through 9/30/2020

 

As of 1/1/2019, all equity SMA composites include only unrestricted portfolios. As of 6/1/2019, all fixed income SMA composites include only unrestricted portfolios. Prior to these dates, both restricted and unrestricted portfolios may have been included.

 

4. Prior to 1989, results were calculated on an equal-weighted basis. (Capital Group International Equity, Capital Group U.S. Equity)

 

5. Returns are in USD, are asset weighted, and reflect the reinvestment of dividends, interest and other earnings (net of withholding taxes).

 

6. "Pure" gross composite returns do not reflect the deduction of any trading costs, fees or expenses; results would have been lower if they were subject to fees and expenses. (Capital Group Core Bond, Capital Group Global Equity, Capital Group Global Growth, Capital Group International Equity, Capital Group International Growth, Capital Group U.S. Conservative Growth and Income, Capital Group U.S. Core, Capital Group U.S. Equity, Capital Group U.S. Flexible Growth and Income, Capital Group U.S. Flexible Growth, Capital Group U.S. Growth, Capital Group U.S. Income and Growth, Capital Group World Dividend Growers)

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investing outside the United States involves risks, such as currency fluctuations, periods of illiquidity and price volatility. These risks may be heightened in connection with investments in developing countries.
This material does not constitute legal or tax advice. Investors should consult with their legal or tax advisors.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.
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