{"id":322,"date":"2019-07-01T08:00:45","date_gmt":"2019-07-01T12:00:45","guid":{"rendered":"https:\/\/buymuni.com\/?p=322"},"modified":"2019-07-01T08:57:57","modified_gmt":"2019-07-01T12:57:57","slug":"bank-of-america-data-evidence-increasing-dominance-of-smas","status":"publish","type":"post","link":"https:\/\/buymuni.com\/?p=322","title":{"rendered":"Bank of America Data Shows Increasing Dominance of SMAs"},"content":{"rendered":"\n<p>July 1, 2019 &#8211; In a report issued on June 28, 2019, Bank of America Merrill Lynch (&#8220;BAML&#8221;) said, based on a review of internal bank data, tax-exempt bond holders&#8217; utilization of Separately Managed Accounts (&#8220;SMAs&#8221;) is showing strong growth and increasingly dominant as an alternative to direct holdings of tax-exempt securities.<\/p>\n\n\n\n<p>Notably, during the period of 2Q2017 through 3Q2018, direct holdings of tax-exempt bonds declined every quarter, while holdings through SMA structures grew in every quarter except for one (1Q2018). <\/p>\n\n\n\n<p>Between the two year period of 1Q2017 and 1Q2019, BAML estimated that SMA tax-exempt accounts grew by an average 2.2% quarter over quarter.  As shown in the chart below, the share of SMAs within BAML individual tax-exempt holdings has grown from 33% to 40%.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"734\" height=\"318\" src=\"https:\/\/buymuni.com\/wp-content\/uploads\/2019\/07\/20190701-BM-BAMLSMAData.png\" alt=\"\" class=\"wp-image-326\" srcset=\"https:\/\/buymuni.com\/wp-content\/uploads\/2019\/07\/20190701-BM-BAMLSMAData.png 734w, https:\/\/buymuni.com\/wp-content\/uploads\/2019\/07\/20190701-BM-BAMLSMAData-300x130.png 300w, https:\/\/buymuni.com\/wp-content\/uploads\/2019\/07\/20190701-BM-BAMLSMAData-480x208.png 480w\" sizes=\"auto, (max-width: 734px) 100vw, 734px\" \/><\/figure>\n\n\n\n<p> Unsurprisingly, the bulk of SMA holdings are in the 3-10 year maturity range, which is the typical SMA offering that often caps mandates to maturities within 10 years.  BAML noted that in recent quarters, holdings over 10 years have grown.<\/p>\n\n\n\n<p>BuyMuni interviewed a few large brokerage teams in New York City, some of whom expressed concern that a continuing shift of municipal holdings into professionally-managed SMAs could negatively impact the broker-holder relationship and diminish advisors&#8217; investment recommendations. There were also a few advisors who were sanguine about the development, noting that SMAs offered increased transparency compared to third party, and even internal, bond fund structures.  <\/p>\n\n\n\n<p>To obtain a copy of the report, contact your BAML sales representative or investment banker.<\/p>\n\n\n\n<p>Contact Jim Doe at JimDoe@BuyMuni.com.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>July 1, 2019 &#8211; In a report issued on June 28, 2019, Bank of America Merrill Lynch (&#8220;BAML&#8221;) said, based&#8230;<\/p>\n","protected":false},"author":7,"featured_media":323,"comment_status":"open","ping_status":"open","sticky":true,"template":"template-full-width-post.php","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[8,7,11,19],"tags":[10,78],"class_list":["post-322","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","category-investor-outlook","category-sell-side-research","category-technicals","tag-baml","tag-sma","wpcat-8-id","wpcat-7-id","wpcat-11-id","wpcat-19-id"],"jetpack_featured_media_url":"https:\/\/buymuni.com\/wp-content\/uploads\/2019\/06\/2019-BOA.jpg","jetpack_sharing_enabled":true,"jetpack_likes_enabled":false,"_links":{"self":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=322"}],"version-history":[{"count":3,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/322\/revisions"}],"predecessor-version":[{"id":327,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/posts\/322\/revisions\/327"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=\/wp\/v2\/media\/323"}],"wp:attachment":[{"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buymuni.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}