Direct Indexes
Index Strategies to Help Address Volatility
Direct Indexing is a valuable tool for advisors looking to emulate returns of indices that are not directly investable. Our track record with the Adhesion Investable Index Series shows how you may be able to take advantage of these index strategies to provide clients with the precise, consistent performance and diversification they demand.
Experienced Direct Indexing on Your Side
Real-Time Risk Monitoring
With Adhesion Wealth acting as overlay manager, you can leverage our Investable Index Series to fully replicate major market indexes and provide your clients with real-time risk mitigating tools that seek to achieve minimum deviation from the underlying index.
Efficient, Index-like Returns
By seeking to replicate exposure to the economic risks and payoffs of a benchmark index, this can be a more efficient investable substitute to generate similar return profiles.
Tax Management Focus
When combined with Adhesion Wealth’s tax management capabilities, our Direct Indexes give your clients the ability to tax-loss harvest individual positions that they normally would not be able to with mutual funds or ETFs.
A Holistic, Customizable Process
Our integrated platform empowers you to combine Direct Indexes with other customized services related to account opening, proposal generation, rebalancing, and tax-loss harvesting—all through a single interface.
Direct Indexing – Not Only a Customized Solution, but a Potential Revenue Stream and Hiring Incentive for RIAs
Many registered investment advisors are not proactively offering direct indexing to clients, but it could be a potential new source of revenue and may be an incentive when trying to attract advisor recruits.
Direct indexing gives clients broad exposure to an asset class, such as large-capitalized equities. But rather than buy a mutual fund or exchange-traded fund, investors own the individual stocks that comprise an index. The customization comes in when advisors tweak which index components they buy — or don’t buy — and in what proportions.
The Power of Direct Indexing Within a UMA
Direct indexing has become a bit of a buzzword in the financial press. It sounds interesting, but do you really understand the power and potential applications of Direct Indexing for your clients? Why could Direct Indexing be a viable option for your clients?
A History of Keeping Pace with Major Market Index Performance
Our Adhesion Investable Index Series has demonstrated a track record seeking to replicate the results of the Russell 1000, Russell 3000 and S&P 500. By distilling holdings using a factor-based model, we’ve been able to maintain a high correlation and high fidelity (low tracking error) to the underlying index.
Investing with Purpose
With the ongoing trend of fee compression in the industry today, Direct Indexing is an effective way for advisors to help reduce overall product costs for clients in a meaningful fashion. Advisors can also utilize the Adhesion Wealth Investable Index Series to serve several other portfolio construction objectives, including:
- As a core module inside of a larger core/satellite portfolio
- To adhere to a client’s lifestyle or religious preferences that could not be achieved through an ETF or mutual fund
- As a tax-loss harvesting module within a portfolio that also demonstrates index-like tracking characteristics
