What is sma finance?

What is sma finance?

What is sma finance?



SMA finance, also known as Socially Managed Accounts, is a type of investment strategy that combines the benefits of professional portfolio management with the ability to align investments with personal values and social impact. This approach allows individuals to invest in companies that align with their social, environmental, and governance goals, while still benefiting from the expertise of professional money managers. In this article, we will dive deeper into the concept of SMA finance, exploring its features, benefits, and how it differs from traditional investment strategies.

Features of SMA Finance

Alignment with personal values: One of the key features of SMA finance is the ability to align investments with personal values. Investors can choose to exclude or include specific industries or companies based on their own ethical, social, or environmental criteria. This allows individuals to invest in companies that are making a positive impact or avoid those that conflict with their beliefs.

Customization: SMA finance offers a high level of customization. Investors have the flexibility to create a portfolio that reflects their specific values and preferences. They can select from a wide range of investment options and tailor their portfolio to meet their financial goals while staying true to their values.

Professional portfolio management: SMA finance combines the benefits of personal values with professional portfolio management. Money managers with expertise in sustainable investing and social impact analyze investment opportunities and construct portfolios that align with the investors’ objectives. This ensures that the investment strategy is well-informed and optimized for financial performance.

Benefits of SMA Finance

Alignment with personal values: SMA finance allows investors to have a direct impact on the companies they invest in. By excluding or including specific industries or companies, investors can support businesses that align with their values and promote positive change.

Enhanced risk management: SMA finance takes into account environmental, social, and governance (ESG) factors when constructing portfolios. By considering these non-financial factors, investors can potentially identify and mitigate risks associated with companies that have poor ESG practices. This approach can lead to more resilient portfolios and better risk-adjusted returns.

Long-term performance: Studies have shown that companies with strong ESG practices tend to outperform their peers over the long term. By incorporating ESG factors into investment decisions, SMA finance can potentially generate competitive financial returns while also making a positive impact.

Differences from Traditional Investment Strategies

Focus on social impact: SMA finance places a greater emphasis on social impact compared to traditional investment strategies. While traditional strategies primarily focus on financial returns, SMA finance aims to generate both financial and social returns by investing in companies that align with specific values and impact goals.

Customization and flexibility: SMA finance offers a higher level of customization and flexibility compared to traditional investment strategies. Investors have the ability to tailor their portfolios to their specific values and preferences, allowing for a more personalized investment approach.

Increased transparency: SMA finance often provides greater transparency compared to traditional investment strategies. Investors can have a clear understanding of the companies they are investing in and the impact their investments are making. This transparency can foster trust and confidence in the investment process.


SMA finance is a powerful investment strategy that allows individuals to align their investments with their personal values and social impact goals. By combining professional portfolio management with customization and flexibility, SMA finance offers a unique approach to investing that goes beyond traditional financial considerations. With its focus on social impact, risk management, and long-term performance, SMA finance provides investors with an opportunity to make a positive difference while achieving their financial objectives.


– Investopedia: www.investopedia.com/terms/s/sma.asp
– Morningstar: www.morningstar.com/articles/1014961/what-is-an-sma
– The Wall Street Journal: www.wsj.com/articles/what-is-a-socially-managed-account-11628159743