Financial Dictionary
Managed Account
An investment account that is owned by an individual investor and looked after by a hired professional money manager. In contrast to mutual funds (which are professionally managed on behalf of many mutual-fund holders), managed accounts are personalized investment portfolios tailored to the specific needs of the account holder.
Investopedia Commentary
For example, if an investor buys ABC Mutual Funds, which invests in Company 1 and Company 2, and that investor wants to reduce the weighting of Company 1 in the fund, the fund company wouldn't allow it since the money manager looking after the fund cannot make investment decisions based on one investor's preferences.
On the other hand, with managed accounts, investors are given the freedom and ability to do what they want with the investments within the portfolio, and any decision made by the money manager is based on the individual investor's goals and objectives. Thus, if an investor holds a managed account and wants to reduce holdings in Company 1, he or she could do so.
Related Links
Mutual Fund Basics Tutorial
The Alphabet Soup Of Financial Certifications
Separately Managed Accounts: A Boon For All
A Primer On Managed Futures
See also: Advisor, Financial Planner, Managed Money, Mutual Fund, Separate Account, Variable Annuity
