Direct Indexing
Meet your clients’ demand for personalization, speed, convenience, and transparency with direct indexing.
Set a new standard for customization with direct indexing
Mutual funds and ETFs pool investors’ money together to build portfolios, which means the investor owns a share of the fund rather than the fund’s securities. In contrast, direct indexing strategies, also known as direct index investing, enables investors to create their own index fund by investing directly in the stocks that make up a benchmark index. Because investors own the individual securities, they can work with their advisor to: Implement a values overlay to align investments with their personal values Enact a tax overlay to potentially minimize capital gains when shifting their investment strategy Layer on a factor tilt in an effort to capture historical performance advantages Address complicated and layered client needs
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Customize portfolios with Envestnet direct indexing solutions
Tax overlay
Help meet holistic needs around tax management and values screening while maintaining portfolio performance strategies.
Proposal
Use Envestnet’s proposal tool to set up account restrictions around individual securities, industries, years to maturity, and more.
Tax loss harvesting
Submit a service request to harvest short-term and long-term losses within non-qualified accounts within Envestnet’s advisor experience.
Break
More options to personalize client portfolios are here
Take advantage of new personalized solutions offering greater flexibility and choice, in partnership with direct indexing providers Envestnet, BlackRock, Fidelity, Franklin Templeton, and State Street Global Advisors1.
Explore new ways to personalize portfolios with direct indexing
Connect with usRelated Resources
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Blog
Direct indexing as a core element in ActivePassive strategy
Direct indexing enhances portfolio customization in an ActivePassive strategy. It combines passive core stability with active investment opportunities, offering personalization, tax optimization, and more.
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Blog
3 popular direct indexing strategies advisors need to know
Learn how direct indexing with beta, factor-based, and fixed income strategies can customize portfolios to align with specific goals, risk preferences, and market conditions.
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Blog
Achieve a new level of customization with direct indexing
Direct indexing can empower advisors to deliver personalized, tax-efficient, and values-driven portfolios, setting a new standard for customization.
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Brochure
Direct Indexing and Personalized Portfolios
While the term “direct indexing” may have been coined only recently, the strategy underlying it isn’t a new approach to investing—in fact, it traces its roots to the introduction of the first index fund.
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Blog
Direct indexing 101
Direct indexing is expected to grow faster than ETFs, mutual funds, and separate accounts over the next five years and is poised to reach more than $800 billion in assets by 2026.
Disclosures
The information, analysis, and opinions expressed herein are for general information only. Nothing contained in this website is intended to constitute legal, tax, securities, or investment advice, nor an opinion regarding the appropriateness of any investment, nor a solicitation of any type. Investing carries certain risks and there is no assurance that investing in accordance with the portfolios or strategies mentioned will provide positive performance over any period of time. Investors could lose money if they invest in accordance with the portfolios or strategies discussed herein. Past performance is not indicative of future results.
An investment in these portfolios is subject to market risk and an investor may experience loss of principal. Investments that utilize a direct indexing strategy carry specific risks that investors should consider before investing in QP portfolios. In certain market conditions, passive direct indexing investment strategies may lose value or underperform active strategies. Direct indexing strategies have the risk of not closely tracking the performance of the underlying index they seek to replicate. While attempting to track an index, passive investments often do not consider a company’s profitability, financial health, or growth potential in their investment selection criteria.
Neither Envestnet, Envestnet | PMC™ nor its representatives render tax, accounting or legal advice. Any tax statements contained herein are not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties. Taxpayers should always seek advice based on their own particular circumstances from an independent tax advisor.
Sources
1Disclaimer: Envestnet has entered into strategic partnerships with BlackRock, State Street, Fidelity, and the affiliated registered investment advisers of Franklin Templeton (each a “Premier Partner. For more information regarding these partnerships and related conflicts of interest, please see Envestnet’s Form ADV Part 2A.
*70% Statistic is found in a whitepaper titled Unlocking Personalization at Scale to Better Help Serve Clients Today and Tomorrow.