Understanding Direct Indexing: A Personalized Investment Approach

Executive summary:

  • Direct indexing seems to be all the rage these days, and for good reason. It gives investors flexibility and allows them to create a personalized portfolio
  • Direct indexing has become increasingly popular in recent years as a number of new products has made this strategy available to a wider swath of investors
  • One of the main advantages of a direct indexing strategy is that the investor owns their capital gains and losses, allowing them to use the latter to offset the former and reduce their tax liability
  • Direct indexing can help advisors solve a variety of investor problems

You’ve probably heard the term “direct indexing.” It seems like everyone is talking about it. You’ve probably also read that sales of direct indexing products are booming. But what exactly is direct indexing?