Direct Indexing Is Taking Off...
Jason Escamilla, co-founder of ImpactAdvisor, who built his own direct-indexing platform for his ESG-focused and high-net-worth clients in California: It’s a long-term commitment to reap the compounding benefit of tax-loss harvesting, and it’s best for investors who will likely always have high capital gains to write off.
Investors who don’t have the long-term time frame to enjoy the tax benefits of direct indexing should stick to ETFs, Escamilla suggests.
Nate Geraci of the ETF Store says direct indexing is a better option versus ESG ETFs for those investors who hold very strong beliefs because the strategy is so targeted. “It does offer a very elegant solution to allow investors to express their personal preferences,” he says.