What is a Unified Managed Account?
A unified managed account (UMA) is a professionally managed “umbrella” account which can encompass diverse investment vehicles in an investor’s portfolio. A UMA can include an overlay portfolio along with a wide variety of other investments, including hedge funds, traditional third party separate accounts, and other assets (e.g. real estate, gold coin collections, etc.).
Overlay is “UMA ready” in two senses:
- Overlay accounts can combine internal research, external research, equities, mutual funds, ADR’s and ETF’s in a single account. If a portfolio contains only equities, mutual funds, ADR’s and ETF’s, then the overlay account is a UMA account, without the need for a separate monitoring and rebalancing process.
- When an overlay account is only one component of a UMA, an overlay manager is ideally suited to act as the UMA manager, responsible for monitoring and rebalancing among the disparate holdings — using the overlay portfolio as a core holding from which cash transfers take place.