Direct Indexing 1.0

Improve your portfolio's tax efficiency and reduce your portfolio's costs with Chicago Partner's Direct Indexing 1.0 investment strategy

Direct Indexing 1.0: Benefits to Investors

Eliminate Index & Mutual
Fund Expenses

Mutal Fund and ETF expenses drag a portfolio's performance down. Eliminating these expenses unshackles a portfolio from excess fees and improves its efficiency.

Reduce Capital Gains
Tax Liability

Investors using a direct index strategy can harvest capital losses on the individual positions within an index, which are used to offset capital gains realized throughout the year. 

Customized to Fit a
Portfolio's Investment Strategy

A direct index strategy is tailored to the investor's unique risk profile in the same way we  recommended investments only when it is in an investor's best interest.

What is Direct Indexing?

Direct Indexing is the practice of holding shares or fractional shares in a similar proportion to an index.

By directly owning the shares (as opposed to owning shares of an ETF or Mutual Fund), the investor unlocks a range of benefits that gives them both greater customization and reduced expenses associated with third-party fund managers.

Below are some of the benefits an investor can expect from a direct indexing strategy:

  • Eliminated fund expense fees
  • The ability to tax-loss harvest
  • Customization to their risk profile

Within the portfolio, direct indexes are carefully monitored to make sure they are maintaining the right allocation. When the direct index's allocation falls outside the bounds of the target allocation, an investor or advisor rebalances the direct index to keep it on target.

Used correctly, direct indexes can be a strong investment strategy to add to a portfolio.

Traditional Indexing


Direct Indexing


How Direct Indexing 1.0 Works

At Chicago Partners, our first level of Direct Indexing strategies is Direct Indexing 1.0 (D.I. 1.0). 

As the first quadrant in our 4-Quadrant Equity Approach, D.I. 1.0 focuses on index replication to bypass the fund management fees charged by fund managers. 

To the investor, this strategy helps the overall portfolio  by reducing the downward effect fees have on performance. 

Our team has a dedicated subset of advisors specialized in creating, managing, and monitoring direct indexes for clients. 


How our Direct Indexing Approach is Different

Input your text here! The text element is intended for longform copy that could potentially include multiple paragraphs.
Learn More