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1 tagged with "Direct Indexing"

Separately managed account strategies for tracking an index by owning the underlying stocks directly, enabling per-security tax-loss harvesting, customization, and tax-alpha generation beyond what ETFs can deliver

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Direct Indexing for Tax-Loss Harvesting in 2026: The Loss Machine ETFs Cannot Build
·mike

Direct Indexing for Tax-Loss Harvesting in 2026: The Loss Machine ETFs Cannot Build

A 2026 guide to direct indexing — how owning the 500 underlying stocks of an index in a separately managed account harvests $18,281 of losses per year on average versus $4,808 for ETF investors, why the §1091 wash-sale rule and Rev. Rul. 2008-5 IRA trap can destroy your tax alpha, the platforms (Frec, Wealthfront, Schwab, Vanguard, BlackRock Aperio) competing at 9–40 bps with $5K–$1M minimums, and the loss-exhaustion problem that limits the strategy to a 5–10 year shelf life.

direct-indexing
tax-loss-harvesting
tax-planning
portfolio-management
+3