The difference between US Direct Indexing and Smart Beta

US Direct Indexing (formerly known as Stock-level Tax-Loss Harvesting) uses individual stocks to track the movement of the broad U.S stock market instead of a single ETF. By doing so, it can take advantage of movements in individual stocks to harvest investment losses and may lower your tax bill. US Direct Indexing is an enhanced form of our Tax-Loss Harvesting strategy.

Smart Beta also uses individual stocks to track the movement of the broad US stock market instead of a single ETF. However, rather than hold the individual securities solely in proportion to their market capitalization, the individual securities are weighted across multiple investment factors to increase the expected after-tax return of the portfolio.

US Direct Indexing is available for all taxable Investment Accounts with balances of $100,000. Once your account balance reaches $500,000, our software will automatically weight your investments using Smart Beta.

For more details, see the Smart Beta white paper and US Direct Indexing white paper.

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