Changes
accounting stub
{{Unreferenced|date=December 2009}}
A '''separate account''' is a [[segregated account]]ing and reporting [[account (accountancy)|account]] held by an [[insurance]] company not in, but rather "separate" from its [[general account]]. A separate account allows an investor to choose an investment category according to his individual risk tolerance, and desire for performance. An account may be a generic conservative or aggressive investment allocation, or a specific [[mutual fund]]-type account. Some [[offshore company|offshore companies]] allow the account owners to specify the type of separate account to open.
Separate accounts in the U.S. markets are often characterized as either managed or non-managed. A managed separate account is synonymous to a mutual fund in the sense that the investments of the separate account are actively managed (such as stocks, bonds or other debt instruments, loans, derivative instruments, etc.). A non-managed separate account is one that invests more "passively" in that it typically owns shares of other managed pools of investments such as mutual fund shares. This is similar to a "[[fund of funds]]" whereby the separate account ("fund") simply invests in shares of one or more mutual funds. This arrangement is sometimes more efficient and cost-effective rather than the insurance company maintaining many separate accounts with similar baskets of securities.
Separate accounts are sometimes confused with [[separately managed account]]s (SMAs), which are privately managed investment accounts opened through a brokerage or financial adviser that uses pooled money to buy individual assets. These differ from mutual funds because the investor directly owns the securities instead of owning a share in a pool of securities. Most SMAs require a minimum investment of $100,000 or more.
== References ==
{{Reflist}}
{{DEFAULTSORT:Separate Account}}
[[Category:Insurance]]
{{accounting-stub}}
A '''separate account''' is a [[segregated account]]ing and reporting [[account (accountancy)|account]] held by an [[insurance]] company not in, but rather "separate" from its [[general account]]. A separate account allows an investor to choose an investment category according to his individual risk tolerance, and desire for performance. An account may be a generic conservative or aggressive investment allocation, or a specific [[mutual fund]]-type account. Some [[offshore company|offshore companies]] allow the account owners to specify the type of separate account to open.
Separate accounts in the U.S. markets are often characterized as either managed or non-managed. A managed separate account is synonymous to a mutual fund in the sense that the investments of the separate account are actively managed (such as stocks, bonds or other debt instruments, loans, derivative instruments, etc.). A non-managed separate account is one that invests more "passively" in that it typically owns shares of other managed pools of investments such as mutual fund shares. This is similar to a "[[fund of funds]]" whereby the separate account ("fund") simply invests in shares of one or more mutual funds. This arrangement is sometimes more efficient and cost-effective rather than the insurance company maintaining many separate accounts with similar baskets of securities.
Separate accounts are sometimes confused with [[separately managed account]]s (SMAs), which are privately managed investment accounts opened through a brokerage or financial adviser that uses pooled money to buy individual assets. These differ from mutual funds because the investor directly owns the securities instead of owning a share in a pool of securities. Most SMAs require a minimum investment of $100,000 or more.
== References ==
{{Reflist}}
{{DEFAULTSORT:Separate Account}}
[[Category:Insurance]]
{{accounting-stub}}
