What is direct indexing?

Direct indexing is an investment strategy where you buy the individual stocks that make up an index or ETF instead of buying the fund itself. This eliminates the fund's annual expense ratio and gives you full control over which stocks you hold, enabling tax-loss harvesting and portfolio customization.

Is direct indexing better than ETFs?

It depends on your situation. Direct indexing is better if you have $25K+ invested, pay more than 0.20%/yr in ETF fees, want tax-loss harvesting, or need portfolio customization. ETFs are better for smaller portfolios, ultra-low-cost funds like VTI (0.03%), or investors who prefer zero maintenance.

How much does ETF expense ratio cost over time?

ETF fees compound against you over time. On a $100,000 portfolio at 7% annual growth, a 0.40% expense ratio costs over $81,000 in lost returns over 30 years. Even a 0.09% fee (SPY) costs about $19,000 over the same period. Direct indexing eliminates this cost entirely.

What is tax-loss harvesting and how does it work?

Tax-loss harvesting is selling investments at a loss to offset capital gains taxes. With direct indexing, you own stocks individually, so you can sell losers to harvest losses while keeping winners. ETF holders cannot do this because they own one bundled security. High-income investors in taxable accounts benefit most.

Who is direct indexing suitable for?

Direct indexing is best suited for investors with $25,000 or more in taxable brokerage accounts, those paying 0.20%+ in ETF expense ratios, high-income earners who benefit from tax-loss harvesting, and anyone who wants to exclude or overweight specific stocks for personal or ESG reasons.

What is the difference between an index fund and direct indexing?

An index fund (ETF or mutual fund) pools investor money to buy all stocks in an index, charging an annual expense ratio. Direct indexing means you buy the individual stocks yourself, paying no ongoing fees. You get similar market exposure but with added benefits: zero expense ratio, tax-loss harvesting on individual positions, and full control to customize holdings.

← All ETFs

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VXUS — Vanguard Total International Stock ETF

Tracks international stocks — developed and emerging markets ex-US.

Expense ratio: 0.07%/yr

SPY QQQ VTI VXUS SCHD ITA XLV XLE HACK

Holdings

Ticker	Company	Sector	ETF Weight %
ASML	ASML Holding	Technology	1.80%
TSM	Taiwan Semiconductor	Technology	1.60%
SAP	SAP SE	Technology	1.20%
SHEL	Shell plc	Energy	1.10%
NVO	Novo Nordisk	Healthcare	1.00%
NESN	Nestle SA	Consumer	0.90%
TM	Toyota Motor	Consumer	0.90%
RHHBY	Roche Holding	Healthcare	0.80%
HSBC	HSBC Holdings	Financials	0.80%
LVMUY	LVMH	Consumer	0.70%
BP	BP plc	Energy	0.70%
RY	Royal Bank of Canada	Financials	0.60%
BABA	Alibaba Group	Technology	0.60%
SNY	Sanofi	Healthcare	0.50%
SONY	Sony Group	Technology	0.50%

Basket Stats

Coverage100%

Est. R²0.990

✅ 15 stocks — good tracking (R² target met)

Portfolio size ($)

Annual savings$35

10-yr compounded$642

20-yr compounded$2,516

Buy List — $50,000 portfolio

Ticker	Company	Allocation %	Buy Amount
ASML	ASML Holding	13.1%	$6,569
TSM	Taiwan Semiconductor	11.7%	$5,839
SAP	SAP SE	8.8%	$4,380
SHEL	Shell plc	8.0%	$4,015
NVO	Novo Nordisk	7.3%	$3,650
NESN	Nestle SA	6.6%	$3,285
TM	Toyota Motor	6.6%	$3,285
RHHBY	Roche Holding	5.8%	$2,920
HSBC	HSBC Holdings	5.8%	$2,920
LVMUY	LVMH	5.1%	$2,555
BP	BP plc	5.1%	$2,555
RY	Royal Bank of Canada	4.4%	$2,190
BABA	Alibaba Group	4.4%	$2,190
SNY	Sanofi	3.6%	$1,825
SONY	Sony Group	3.6%	$1,825
Total			$50,000

💡 Use fractional shares at brokers like Fidelity, Schwab, or Interactive Brokers to hit these exact allocations.