Tomorrow is tax day in the United States. It may be hard to believe but paying taxes is a privilege, i.e. you have enough been lucky enough to generate enough income for the IRS to take notice. Then again, there aren’t many people who want to pay more than their fair share of taxes. In the past few years interest in tax loss harvesting, via custom or direct indexing, has gained a fair amount of attention and investment.*

In the past few weeks I have come across a number of items on direct indexing. Below you can find them organized by category.


How wealth managers generate short term capital losses for clients while skirting wash sale rules – ProPublica

The rules on wash sales have not been updated in 100 years – ThinkAdvisor

The tax code is hackable, just like any other human-derived set of rules – Slate

ETFs vs. SMAs

A Tax-Loss Harvesting Horserace: Direct Indexing vs. ETFs (Israelov & Lu) – SSRN

You can tax-loss harvest using ETFs and lower your costs – Mark Hulbert

Why direct indexing is trumped by broad based index investing – Allan Roth

John Rekenthaler

Direct indexing is coming your way – 2022

Should you direct index? – 2022

Could direct indexing lower your taxes? – 2023

Direct indexing for the masses – 2023

When direct indexing truly pays – 2023


The direct indexing landscape – Morningstar

Personalized indexing: a portfolio construction plan – Vanguard

Ten years of tax-loss harvesting – Wealthfront


What is direct indexing? – Peter Lazaroff

Custom indexing with Ehren Stanhope of OSAM – Excess Returns Podcast

There is more to custom indexing that just tax-loss harvesting. These tools can be used to express a values-based, i.e. ESG, approach to portfolio construction. They can help individuals with large, concentrated positions, whether they be in public or private stock, build a more risk-appropriate portfolio. So not unlike a Swiss army knife

By no means is custom indexing a one-size fits all or set-it-and-forget-it type approach. It requires a substantial work on the front end and ongoing adjustments and monitoring. Learning more about custom indexing is the very first step you need to take before moving forward. So is it for you? As with most questions in personal finance is – it depends.

*Ritholtz Wealth Management is actively involved in direct indexing for its clients through the Canvas platform. You read more about the topic in this Barry Ritholtz post.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Please see disclosures here.

Please see the Terms & Conditions page for a full disclaimer.