Transferring stocks and ETFs to Wealthfront accounts with US Direct Indexing and Smart Beta

If you add US Direct Indexing to your Automated Index Investing Account and your account balance is at least $100,000, we will incorporate your US stocks and ETFs into the portfolio using the following rules:

• Any stocks or ETFs not employed by your chosen portfolio (either in the Direct Indexing portion or otherwise) will be sold as long as they are not being held at short-term gains and not on your list of restricted stocks. If a position is currently trading at a short-term gain, we will hold it until it reaches long-term gain status, or declines in price and can be sold at a loss. Read more about how we tax-efficiently handle your transferred assets here.
• For stocks or ETFs that are in the index for the Direct Indexing portion of your portfolio, we calculate the target position for the instrument by multiplying its index weight by the balance in the US Direct Indexing or Smart Beta portion of your portfolio, and allow up to twice this amount into the portfolio. Any excess will be sold as soon as it is not trading at a short-term gain. As an example, let’s assume you have a portfolio with a 20% allocation to US Direct Indexing, and that you fund this portfolio with a mix of $190,000 in cash and $10,000 in a single stock that has a 5% target weight in the US Direct Indexing strategy. The target position for this stock in your portfolio would be $2,000 ($200,000 account balance * 20% allocation to US DI * 5% weight on the stock). In this case, we would allow $4,000 of the stock into the portfolio, and sell the remaining $6,000.
• ETFs used to represent other asset classes in your portfolio will be incorporated at up to approximately their target value in the portfolio. See this article for more details.

Remember that you’ll automatically get Smart Beta if your balance reaches $500,000. If you’re going to fund your account with a transfer, we suggest that you add US Direct Indexing to your portfolio allocation from your account page before you initiate the transfer. 

If your account balance is under $100,000, we will sell all individual stocks (as well as any ETFs employed in our Direct Indexing strategies) you transfer into Wealthfront and replace them with the ETFs used in your selected portfolio, with the exception of those that are at a short-term gain. We’ll hold those stocks until they’re at a long-term gain or a loss. Read more about how we tax-efficiently handle your transferred assets here.