The Trap of Wealthfront’s Direct Indexing
Wesley Walser

I think you left out the main reason for direct indexing… tax efficiency via tax loss harvesting. For example if the etf is up on the year, there are no tax loss harvesting opportunities. But if you replicate the index in individual stocks, some will be up, some will be down and you can offset the tax gains by selling the losers…

the question isn’t who can build a better index — the question is who can deliver the best tax adjusted returnm and direct indexing has a clear advantage

Like what you read? Give Dan Spier a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.