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What is a Separate Account?

A separate account (SA) is an investment portfolio of stocks, bonds, cash, etc. following a defined strategy and managed by a professional money manager.  

The holdings in the portfolio are directly owned by the investor and have their own cost basis.  

Although the money manager may oversee hundreds –if not thousands- of SMAs, each is separate, distinct, and owned by one investor.

Morningstar covers both separate accounts (SA) and collective investment trusts (CIT)

For the sake of simplicity we refer to “separate accounts” but cover both: