eparately managed accounts (SMAs) generally carry a higher fee structure than standard mutual funds, but managers tout the ability to customize accounts as being worthy of this higher cost. This customization may increase returns, or it may simply allow for more personalized tax management or control over other unique circumstances. • Very little research exists on the relative return benefit of SMAs compared with actively managed mutual funds. We fill this gap by examining firms that offer concurrently managed funds-SMAs as well as matching mutual funds run by the same manager(s) and following the same general strategy. • We find that large-cap SMAs provide no significant improvement in performance compared with the mutual funds concurrently offered by these managers. In contrast, we find that there does appear to be a positive relative return (at least on average) for small-cap SMAs compared with their mutual fund counterparts. • We also document that the SMAs (particularly small cap) most likely to outperform mutual funds are those offered by older firms and those that have experienced larger SMA asset growth through returns; those with large net inflows from new accounts tend to underperform. •Although customization may be necessary for some, for most investors an "off the rack" approach offered by mutual funds may be the simplest tactic.