Direct indexing involves holding the individual stocks of an index directly in a separately managed account rather than through an ETF or mutual fund. This approach provides greater customization and tax management flexibility. Investors can harvest tax losses at the individual security level, apply personalized investment screens (such as ESG or sector exclusions), and gradually diversify concentrated stock positions in a tax-efficient manner. For High-net-worth investors, direct indexing may generate additional after-tax returns, often referred to as tax alpha — which can range from 0.5% to 2% annually depending on market conditions and investor’s tax situation. Minimums usually start around $250,000. Direct indexing is generally most effective in taxable accounts where the tax benefits can compound over time.
We exist so you don’t have to worry about money. For more than 40 years, we’ve taken the sophisticated, time-tested approach that many ultra-high net worth individuals use to help manage their financial lives and made it accessible to more families.
