Growth in the SMA market is being driven by consistency, diversification, and a sharper focus on tax efficiency.

At the MMI Annual Conference in Washington, DC, Steve Otto of Federated Hermes shared with FundFire how performance across quantitative and dividend-focused strategies has fueled strong demand over the past year. From income-oriented portfolios to expanding international and municipal bond capabilities, diversification remains central to the firm’s SMA evolution.

Looking ahead, he highlighted growing platform adoption, increased interest in municipal strategies, and the role of tax optimization – particularly tax-loss harvesting – as a key driver of future growth. As tax-aware solutions become more embedded across portfolios, SMAs continue to evolve as a powerful vehicle for delivering differentiated value to clients.