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?
While a direct indexing strategy is a great addition to an investor’s portfolio, you’ll want to ensure your clients are properly diversified and also poised to reap the benefits of active management, while recognizing that active management doesn’t generate as many tax losses as tracking the index does.
The term direct indexing is somewhat of a misnomer.
