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Cost structure comparison across providers
Table of Contents:
Direct indexing allows investors to own individual securities within an index, offering benefits like tax-loss harvesting and customization. However, costs and minimum investment requirements vary among providers. Below is a comparison of several direct indexing offerings, including Alphathena.
– Alphathena
- Fees: 10–20 basis points (0.10%–0.20%) of AUM, with customizable pricing models based on selected services
- Minimum Investment: Not publicly specified; contact Alphathena for details
- Features: Over 40 index customizations (including ESG factors) across more than 1,200 ETFs and indexes; built-in household support with virtual sleeves for efficient portfolio management
– Fidelity FidFolios
- Fees: 0.40% AUM
- Minimum Investment: \$5,000
- Features: Managed by Fidelity advisors; focuses on tax-loss harvesting and portfolio customization
– Wealthfront
- Fees: 0.25% AUM
- Minimum Investment: \$100,000
- Features: Automated direct indexing with tax-loss harvesting and customization options
– Schwab Personalized Indexing
- Fees: 0.40% AUM (reduced to 0.35% for accounts over \$100,000)
- Minimum Investment: \$100,000
- Features: Personalized direct indexing with tax optimization and the ability to incorporate individual investment preferences
– Frec
- Fees: 0.10%–0.27% AUM, depending on the selected index
- Minimum Investment: Not specified
- Features: Low-cost direct indexing solutions emphasizing tax efficiency and customization
– Parametric
- Fees: ~0.20% AUM, plus additional fees for direct indexing and other assets
- Minimum Investment: Not specified
- Features: Offers various direct indexing solutions with ESG and other customization options
Considerations When Choosing a Direct Indexing Provider
- Fees: Lower fees can enhance net returns over time
- Minimum Investment Requirements: Ensure the required capital aligns with your resources
- Customization Options: Factor in ESG preferences, sector exclusions, etc.
- Tax Management Features: Evaluate the provider’s tax-loss harvesting and optimization tools
- Technology and User Experience: Look for a user-friendly platform with robust integration and support
Selecting the right direct indexing provider depends on your individual investment goals, preferences, and the specific features offered by each platform. It’s best to contact providers directly for detailed, tailored information.
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