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Separately Managed Accounts vs. Pooled Funds


Separately Managed Accounts

A Separately Managed Account (“SMA”) is the approach used by many pension funds, other institutions, and high net worth individuals to achieve desired results. In an SMA, each client’s assets are held completely separate from the assets of other clients. The primary benefits of an SMA are:

• Direct relationship with the manager
At Cardinal, we pride ourselves on the access our clients have to all members of our team. As a Cardinal client, you are able to communicate directly with the Portfolio Managers who are making important investment decisions. It is your money, after all, and you deserve the peace of mind that such a direct relationship can provide. 

• Direct ownership of securities
When you own securities directly, you have transparency, protection, and peace of mind. All private client assets are held by a third-party custodian with Cardinal acting as the discretionary manager through a trading authorization provided by our clients.

• Customization of holdings and timing of trades can be managed to reflect your individual needs.

The combination of these factors means that SMA investors can get portfolios individually tailored to their situation using Cardinal’s quality oriented, value based process. We are proud of our track record in using SMAs to help our clients succeed.

Pooled Funds

A pooled fund is a separate legal entity where clients’ assets are pooled together to acquire an interest in a basket of securities. Each client owns units in the fund, and the fund itself owns the securities. All clients - unit owners - are treated exactly the same. If a trade is made for one client, it is made for all clients. A pooled fund still offers the same excellent diversification of a larger separately managed account, but is better suited to those accounts that are below the minimum portfolio size for our separately managed accounts. 

Cardinal has currently has two pooled funds – the Cardinal Canadian Equity Pool and the Cardinal Foreign Equity Pool. The fundamental investment objective of these Pools is to generate long term growth through the increase in the value of its holdings, and through the receipt and reinvestment of dividend income from its holdings. The Canadian Equity Pool is invested primarily in common shares of Canadian companies and is managed in the same style as accounts within our Canadian Equity Composite.  The Foreign Equity Pool is invested primarily in common shares of non-Canadian companies, making it an excellent pairing for clients that have Canadian equity portfolios are  interested in gaining some international exposure.