when mutual funds began to be marketed in earnest in the 1950s they were touted as a way for the little guy that is small retail investors to experience and benefit from professional money management previously this was a service available only to high net worth individuals 
customized managed accounts address the account holder s needs mutual funds invest according to the fund s objectives managed account trades can be timed to minimize tax liability mutual fund investors have no control when a fund realizes taxable capital gains managed account holders have maximum transparency and control over assets mutual fund holders don t own the fund s assets only a share of the fund s asset value some managed accounts require six figure minimum in funds mutual funds demand much lower initial investment amounts it may take days to invest or de vest managed account assets mutual fund shares are more liquid and can be bought or sold daily managed account managers tend to charge high annual fees that impact overall returns mutual funds expense ratio fees tend to be lower both managed accounts and mutual funds are overseen by professional managers managed accounts are personalized investment portfolios customized to the specific risks goals and needs of the account holder management of the mutual fund is on behalf of the many mutual fund holders and all about meeting the fund s investment and return objectives with a managed account the investor allocates funds and the manager purchases and places physical shares of securities into the account portfolio the account holder owns the securities and may direct the manager to trade them as desired in contrast mutual funds are classified by investors risk tolerance and the funds investment objectives not by individual preferences also investors purchasing shares of a mutual fund own a percentage of the value of the fund not the fund itself or the actual assets in the fund on the transactional side events might move more slowly in a managed account days may pass before the manager has the money fully invested also depending on the holdings selected managers may be able to liquidate securities at specific times only conversely shares of mutual funds may typically be purchased and redeemed as desired daily however some mutual funds may carry penalties if redeemed before holding for a specified period the professional guiding a managed account may attempt to offset gains and losses by buying and selling assets when it is the most tax beneficial to the account s owner in doing so it could result in little or no tax liabilities on a significant profit for the individual in contrast mutual fund shareholders have no control over when portfolio managers sell the underlying securities so they may face tax bites on capital gains special considerationsin july 2016 managed funds were in the news as several institutional investors simultaneously opted for them over the hedge funds that had been handling a portion of their portfolios the investors wanted broader platforms customized strategies full control over their separate accounts daily valuation significantly lower fees and full transparency when it came to those fees as well as to the nature of the holdings themselves 5pensions investments claimed that the state managed alaska permanent fund corp in juneau redeemed us 2 billion in hedge funds to invest in a managed account so that investment decisions would be in house it was also reported that the 28 2 billion iowa public employees retirement system set up plans for moving 700 million in investments to managed accounts with seven firms in 2016 5