Separate account fund

Separate Account Fund

1. An investment account, bought through a brokerage, in which the investor buys a pool of securities and directly owns them. A separate account fund operates much like a mutual fund, the main difference being that in a separate account fund, one owns the securities directly. In a mutual fund, one owns shares in a pool of securities. In both cases, however, ones closes the position by trading his/her shares for the net asset value per share. Most separate account funds require a minimum investment of $100,000.

2. In variable annuities, an account in which one places money to invest in securities. A single variable annuity may contain several separate account funds, depending on the investor's specific portfolio needs. Money in these funds must be kept separate from each other, and from the annuity's general funds.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

Separate account fund.

Each variable annuity contract offers a number of separate account funds.

Each of those funds owns a collection of individual investments chosen by a professional manager who is striving to achieve a particular objective, such as long-term growth or regular income.

You allocate your variable annuity premiums among different separate account funds offered in your contract to create a diversified portfolio of funds, sometimes called investment portfolios or subaccounts.

If you're comparing different contracts to decide which to purchase, among the factors to consider are the variety of funds each contract offers, the past performance of those funds, the experience of the professional manager, and the fees.

In evaluating the past performance and other details of the funds a contract offers, or the funds you are using in the contract you selected, you can use the prospectus the annuity company provides for each separate account fund. You may be able to find independent research on the funds from firms such as Morningstar, Inc., Standard & Poor's, and Lipper.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
Voya IM also will continue to manage the separate account funds associated with the variable annuities, representing approximately USD 20 billion of AUM as of March 31, 2018.
Although it is hard to forecast how clients react to markets, some clients may have kept money in a money market option and then moved it into separate account funds as the market rebounded, the spokesperson adds.