Direct Indexing
topic on 3 shows · 4 statements across 3 episodes
In Depth 
We Live to Build 
My First Million
4 statements about Direct Indexing, every show
Fallows: Direct indexing generates tax losses to offset concentrated position gains
“A third option is what's called direct indexing. And indexing, as I'm sure you're familiar, is basically, if you want to own the S&P 500, you're getting exposure to 500 companies, as is in the name, or the FTSE 100 in England's roughly a hundred companies. Now…”
Nagpal: Direct indexing generates 30% to 40% of capital as usable tax losses
“I've started to do something called direct indexing, where instead of buying a Vanguard fund, it buys each and every one of the 500 companies individually. And the advantage with that is you have more positions, so more volatility. At any given point, more com…”
Nagpal: Direct index tax-loss harvesting exhausts after three years without new contributions
“So if you do a lump sum investment, after three years, you'll harvest most of your losses. But if you're investing X amount per year, that kind of infinitely goes long.”
Wealthfront pioneered automated ETF tax-loss harvesting and launched direct indexing in 2013
“Wealthfront was the first to do ETF tax loss harvesting automated. And then we did direct indexing. Direct indexing is so hot right now in the industry. It's 20, 24. Direct indexing is so hot. We launched it the end of 2013, my first year there, because it was…”