For decades, ETFs have been the workhorse of contemporary investing. They’re accessible to trade, inexpensive, and track everything from the S&P 500 to specialized themes such as artificial intelligence and clean energy. But investor expectations continue to shift. Now, advisers are exploring portfolios that suit the individual goals, values, and tax scenarios of each client, without compromising efficiency or scale.
This is where direct indexing comes in. Rather than purchasing shares of a pooled fund, investors own individual stocks of an index. That allows for customization, removing particular sectors, inserting personal themes, or using the framework to more effectively handle taxes.
