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Multiple-discipline accounts
If you choose a multiple-discipline managed account,
your investment is allocated among several investment managers
or management teams, each pursuing a different investment objective.
While there are a number of variations, most of these accounts
resemble a
lifecycle
mutual fund,
which invests in a diversified combination
of equities and bonds to suit a particular investor profile, whether
conservative, moderate, or aggressive.
Weighing in
Multiple-discipline accounts may automatically
rebalance the weighting of their components. The advantage is
that rebalancing can help keep your portfolio allocation on track
as the performance of the various components increases or decreases
the percentage of your account committed to each
asset
class.
As valuable as internal rebalancing may be, however,
you may find it occurs as often as every quarter. Such frequent
rebalancing may add more to the cost of owning the account than
to its performance.
Stretching your investment
A multiple-discipline account may be an appropriate choice if
you don't have the money to invest in a diversified portfolio
of managed accounts and individual securities, which may require
hundreds of thousands of dollars. There is a potential complication,
though. The combination of managers may be prepackaged. If you’re
pleased with some elements of a multiple-discipline account, but
not as happy with others, your only alternative may be to look
for a totally different account from a different investment management
firm.
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