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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XLE — Energy Select Sector SPDR

Tracks S&P 500 energy companies — oil, gas, pipeline, refining.

Expense ratio: 0.09%/yr

SPY QQQ VTI VXUS SCHD ITA XLV XLE HACK

Holdings

Ticker	Company	Sector	ETF Weight %
XOM	ExxonMobil	Oil & Gas	23.40%
CVX	Chevron	Oil & Gas	16.80%
EOG	EOG Resources	Exploration	5.20%
COP	ConocoPhillips	Oil & Gas	5.10%
SLB	SLB (Schlumberger)	Oilfield Services	4.80%
MPC	Marathon Petroleum	Refining	4.20%
OXY	Occidental Petroleum	Oil & Gas	3.80%
PXD	Pioneer Natural Resources	Exploration	3.50%
PSX	Phillips 66	Refining	3.30%
HES	Hess Corporation	Oil & Gas	2.90%
VLO	Valero Energy	Refining	2.80%
WMB	Williams Companies	Pipeline	2.40%
KMI	Kinder Morgan	Pipeline	2.10%
DVN	Devon Energy	Exploration	1.90%
HAL	Halliburton	Oilfield Services	1.80%

Basket Stats

Coverage100%

Est. R²0.990

✅ 15 stocks — good tracking (R² target met)

Portfolio size ($)

Annual savings$45

10-yr compounded$824

20-yr compounded$3,229

Buy List — $50,000 portfolio

Ticker	Company	Allocation %	Buy Amount
XOM	ExxonMobil	27.9%	$13,929
CVX	Chevron	20.0%	$10,000
EOG	EOG Resources	6.2%	$3,095
COP	ConocoPhillips	6.1%	$3,036
SLB	SLB (Schlumberger)	5.7%	$2,857
MPC	Marathon Petroleum	5.0%	$2,500
OXY	Occidental Petroleum	4.5%	$2,262
PXD	Pioneer Natural Resources	4.2%	$2,083
PSX	Phillips 66	3.9%	$1,964
HES	Hess Corporation	3.5%	$1,726
VLO	Valero Energy	3.3%	$1,667
WMB	Williams Companies	2.9%	$1,429
KMI	Kinder Morgan	2.5%	$1,250
DVN	Devon Energy	2.3%	$1,131
HAL	Halliburton	2.1%	$1,071
Total			$50,000

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