SMA players predict that the altered dividend and capital gains tax rates may result in some minor tweaking of investment strategies, but they don't expect any dramatic changes.

When President George Bush signed into law the Tax Relief Reconciliation Act on May 28, reaction was mixed. But whatever the long-term impact of the new tax laws on the economy, one thing is certain today. Whenever taxes are lowered on investment income, that's a great thing for investors. Still, though the players in the separately managed account industry agree that there won't be dramatic changes, and that there will be no investor rush to the asset class, they do foresee some extra perks to the reduced rates on dividends and capital gains.

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