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Sm–Co nanoparticles with 7 nm mean diameter have been obtained by gas condensation in a cluster gun. By absorbing light from quartz halogen bulbs, the nanoparticles are annealed during their flight from the cluster gun to the substrate and are embedded in a carbon matrix by cosputtering. This in situ annealing results in nanoparticles with moderate coercivity. The moderate coercivity and its strong temperature dependence imply a strong effect of the thermal fluctuations, which can be partly overcome by embedding the nanoparticles in an antiferromagnetic matrix (CoO) rather than in a paramagnetic C. © 2003 American Institute of Physics.