One of the strong growth areas in the wealth industry over the past few years has been the sale of separately managed accounts. It is a product that has been sold through the adviser market but now it is opening up to self-directed investors.
Clime Investment Management has moved into the market for separately managed accounts, launching a series of portfolios through its Clime Direct service for self-directed investors.
Separately managed accounts are similar to traditional managed funds but instead of purchasing units in a trust, with legal ownership of the assets in the hands of a trustee, investors directly own and control the portfolio of underlying securities.
This difference brings with it a number of advantages for investors, including a different tax treatment, the potential for lower costs, and scope for more transparency and engagement.
Clime Direct is a subscriber service offering share analysis. It has 3000 subscribers. Clime also sends out a daily newsletter, The View, to 50,000 people.
Clime has added four SMAs: Multi Asset Balanced Portfolio, with around 35 per cent defensive assets and an income focus; Multi Asset Growth Portfolio, with around 78 growth assets; Multi Asset High Growth Portfolio, with over 90 per cent growth assets; and Clime Australian Equities Model Portfolio, an Australian share portfolio with 20 to 40 stocks.
Separately managed accounts have the benefit of allowing investors to manage their tax position. As the investor owns the underlying assets, they do not inherit existing tax positions like in a managed fund.
There is the flexibility for the investor to see which tax parcels they would like to sell and to take into account capital gain and loss positions. In the case of changing managers, investors do not have to sell all their holdings to move which saves greatly in transactions costs.
Clime will manage all the assets. The minimum investment is $10,000.
Clime CEO Rod Bristow says: “Clime Direct subscribers and readers of The View have been telling us for some time they love our market insights and share research but wanted the opportunity for Clime to take on the management of their investment portfolios.
“The key message for a lot of self-directed investors is that they should be more diversified. That is why we have launched our SMA range with three multi-asset portfolios, as well as an Australian equity portfolio.” Bristow says.
Clime manages a total of more than $1 billion of assets.
The Clime Australian All Cap Equities Fund returned 28.9 per cent over the 12 months to the end of January, compared with the 24.7 per cent return of the S&P/ASX 200 over the same period.
The fund has returned an average of 9.7 per cent a year since it was launched in 2002, compared with 8.8 per cent a year for the index.
The Clime Smaller Companies Fund returned 50.7 per cent over the 12 months to the end of January and has returned an average of 24.3 per cent a year since it was launched in 2017.