A $300 Billion Twist on Indexing Is Enticing Picky Investors
- Direct indexing allows investors to own companies outright
- By avoiding index funds, individuals can control what they buy
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A strategy blurring the lines between benchmark-hugging and stock picking is attracting choosy investors.
Those who appreciate the lower costs and simplicity of passive investing can make their own edits to a benchmark with an approach called direct indexing. Rather than owning an exchange-traded fund or mutual fund that tracks a gauge like the S&P 500, the strategy allows you to buy shares of the companies in an index, while tailoring the portfolio to your needs.