Separately Managed Accounts (SMA's)

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Posts: 47
Joined: Mon Jul 23, 2018 7:58 am

Separately Managed Accounts (SMA's)

Post by Bern »

Hello everyone,

Any advice on which brokerage firm is best able to provide a municipal bond ladder? (Access to the highest rated and highest return munis.)

I was reading how brokerage firms partner to provide specialized services. Like Schwab utilizes Pimco, ML uses BoA. ..... (this info could be false or outdated, I don't know).

I really know nothing about this but would like to know which brokerage firm is best to approach to find out more.

Any advice, experience or recommendation would be appreciated if so inclined.

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Joined: Fri Oct 12, 2012 3:55 pm

Re: Separately Managed Accounts (SMA's)

Post by 123 »

It would be hard for a brokerage firm to buy and maintain a muni bond ladder cheaper than what a bond fund could do. The bond fund has the assets to get the best bonds available at the best prices. Typically bonds that the "big guys" don't want are sold off to retail accounts, often at a comparatively high mark-up. Of course they will always be presented as "great opportunities" by the broker/salesperson to the small investor.

A retail investor could achieve a zero expense cost if he bought new muni bonds at original issue and they were held them to maturity. For a portfolio of any significant size and diversity (of maturity dates) that is unlikely to be the case.

A key element of muni bond portfolio management is evaluation of credit risk of the various issues.
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