An index fund gives you the return. Direct indexing gives you the return and a tax engine that works in your favor every day the market is open. Here is the whole idea in twenty seconds.
Most investors buy the box: a single S&P 500 fund that gives them the index return and nothing else. Direct indexing buys the stocks inside that box instead, in your own account. You get the same exposure, but now every position is yours to manage for taxes.
That distinction is the whole point. A fund is one line on a statement. Direct indexing is hundreds of individual lots, each one a candidate for tax-loss harvesting the moment it dips, even in a year the index finishes up.
Most firms offer direct indexing as an off-the-shelf product. At STQ, the index itself is constructed around your situation: your existing holdings, your sector views, your tax picture, your concentrated positions. You can exclude your employer stock, tilt away from what you already own, and gift the winners instead of selling them. No two clients hold the same portfolio.
Same market exposure as an index fund. A steady supply of harvested losses the fund can never give you. That is the difference between owning the return and owning the return with a tax engine attached.
We will look at your holdings, your concentrated positions, and your tax picture, and show you what a custom index could do.