Which should you use for your financial goals? Mutual funds have been long been the choice for investors seeking professional money management. When you buy shares of a mutual fund, your assets are pooled with those of other fund shareholders, lowering costs and taking advantage of economies of scale. You gain professional money management, but be aware that a fund manager cannot tailor its portfolio to meet your individual requirements — it’s more one-size-fits-all. For investors who want or need a more customized approach — for example, in order to better manage tax liability or control individual stock holdings — separately managed accounts (SMAs) have become popular. This is especially true of those investors looking for additional investment categories like real estate, international, or small-company stocks. What is an SMA? An SMA is a personal investment account that is customized and managed for you by one or more professional money managers. In an SMA, your assets are not commingled with those of other investors. With a mutual fund, you buy and sell shares of the fund. Even though each fund share represents a proportionate ownership of individual securities within the fund, your share of each of those securities is tiny.