The InvestSMART Professionally Managed Accounts (PMAs) operate off model portfolios. For example within your InvestSMART PMA you could choose to invest in the InvestSMART High Growth Portfolio. The InvestSMART High Growth Portfolio has an ideal weighting to each holding. No matter if someone invests $10K or $1M, they will have the same percentage exposure to each holding. Transactions occur when a client’s account gets out of sync with the model or when the investment manager decides to change the model.

As cash is added to the model, the cash holding percentage will increase while all other asset classes will decrease as a percentage. The change in asset percentages will bring the client’s account out of sync with the model, and transactions will need to take place to realign it. Whether or not we transact will depend on how out of sync the account is compared to the model. For example, adding $1,000 to a $1M account will not move the needle but adding that amount to a $10K account will.

We will use the funds to buy more holdings. Please remember that what you can view on your InvestSMART account is always one day behind, e.g. yesterday’s close and yesterday’s transactions.