• Vanguard personalized indexing

Vanguard Personalized Indexing - Custom Direct Indexing

Offer clients the chance for more after-tax alpha and
customization—at scale.

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Overview

Help more clients reach their goals

You’re constantly looking for innovative ways to grow your business, to find fresh ideas that can improve investment outcomes for your clients and prospects. That's where a direct indexing strategy like Vanguard Personalized Indexing comes in.

We make it simple for you to build the tax-efficient, customized portfolios today’s investors expect¹—at scale and on demand. You’ll gain the extra edge you need to stay ahead in today’s rapidly-evolving world while giving your clients the personalized investing experience they deserve.

By choosing Vanguard Personalized Indexing, you’re leveraging nearly 50 years of investing expertise from one of the most trusted financial companies in the world.²

Add more value for your clients

Effortless tax optimization

Using advanced tax-loss harvesting technology, we can help you save time and potentially capture up to 1%—2% or more annually in after-tax alpha for your high-net-worth clients.³ You’ll get:

  • Daily automated scanning for tax-loss harvesting opportunities.
  • Automated rebalancing.
  • Real-time tax transition analyses.

Discover the power of daily TLH
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Fast, easy customization

Build separately managed accounts in minutes that reflect each client's tax situation, preferences, and existing positions. Gain the flexibility to:

  • Diversify concentrated portfolios.
  • Apply ESG screens and tilts and factor tilts.
  • Exclude or include specific industries, sectors, or individual securities.
Explore customization options
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On-demand reporting

Analyze accounts in an instant. Monitor key metrics and generate easy-to-understand reports that show clients the impact you’re making, including:

  • Pre- and post-tax performance reports.
  • ESG impact reports.
  • Transition analysis scenarios.

Want a first-hand look at how Vanguard Personalized Indexing can help your clients and grow your business?

Request a demo
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Diversify and grow your business

Vanguard Personalized Indexing offers you a scalable investment management process. Our technology manages thousands of investor accounts while automatically scanning portfolios every day for tax-loss harvesting opportunities—optimizing tax alpha generation for your clients.

You’ll gain added flexibility to address your clients’ unique tax needs, investment preferences, and existing positions, helping you deepen relationships with existing high-net-worth clients and attract new ones.

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Direct indexing managed accounts are expected to grow 12.3% annually and reach $825B in assets by 2026.4

Let us show you how our personalized direct indexing technology could help deliver additional value to you and your clients.

Contact us for a demo

Tap into real-time technology

Enjoy a user-friendly advisor portal backed by powerful data management. Easily access analysis and reporting that can help make your decisions easier. At the touch of a button, you’ll get:

  • On-demand portfolio analysis.
  • Data updated daily by direct API feeds.

Quickly unlock a broad array of customization options to tailor direct indexing portfolios to your clients’ preferences—and get instant analysis of the potential impact of those customizations on tracking error. Your clients will have 
access to:

  • Multiple smart-beta factor definitions and access to an array of country markets, sectors, and industries.
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Get answers on direct indexing

In a direct indexing portfolio, investors directly own the individual stocks in a separately managed account that represents a chosen market-capitalization-weighted benchmark. Typically, it's not necessary to own every stock in an index in approximate order to its performance.

Direct ownership of individual securities in their portfolios gives investors unique opportunities for tax efficiency and personalization that may not be possible with ETFs and mutual funds.

Ultra-high-net-worth investors have been using separately managed accounts for years. But recent developments—such as software innovations that automate tax-loss harvesting and commission-free trades from brokers—have made direct indexing accessible to a wider range of investors.

How frequently the direct indexing technology scans a portfolio for tax-loss harvesting opportunities—quarterly, monthly, or even daily (as with Vanguard Personalized Indexing)—is key to maximizing investors' tax alpha. Direct indexing with daily tax-loss harvesting has boosted certain investors' after-tax returns by 1%–2% or more.³

Direct indexing is not for every investor, but it can provide a variety of benefits for the right clients, including:

  • Automated tax-loss harvesting for higher-net-worth clients with taxable accounts and lots of capital gains to offset.
  • Expressing ESG preferences.
  • Applying factor exposures.
  • Diversifying concentrated or locked positions.

Insights on direct indexing

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    • Resources

    DOWNLOAD

    • Personalized indexing practitioner's guide

      How does personalized direct indexing work? When might clients benefit from using it in lieu of a mutual fund or ETF? Get answers in this practical guide.

    • Equity investment menu

      Tailor individual accounts to reflect client ESG preferences and specific factors using this detailed form.

    Request a demo

    Let us show you how Vanguard Personalized Indexing could help you find your edge by offering your clients a tax-efficient, customized investing experience.

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    Disclosures and footnotes

    1 Though some clients will benefit from personalized equity portfolios, many find that pooled products such as mutual funds and ETFs meet their needs.

    2 Investor’s Business Daily, 2022. IBD’s 25 Most Trusted Financial Companies.

    3 Kevin Khang, Alan Cummings, Thomas Paradise, and Brennan O'Connor. Personalized indexing: A portfolio construction plan. Vanguard, 2021.

    4 Cerulli Associates, 2022. The Case for Direct Indexing: Differentiation in a Competitive Marketplace.

    Vanguard Personalized Indexing Management, LLC ("Vanguard Personalized Indexing Management"), formerly Just Invest, LLC, an SEC registered investment advisor, is an independently operated wholly-owned subsidiary of The Vanguard Group, Inc. ("Vanguard"). Vanguard Personalized Indexing is an asset management technology that has been developed and is offered solely by Vanguard Personalized Indexing Management.

    For more information on Vanguard Personalized Indexing Management and Vanguard Personalized Indexing, and to access Vanguard Personalized Indexing Management's Form CRS and Form ADV Part 2A disclosure brochure, please visit Vanguard Personalized Indexing page.

    All investing is subject to risk, including possible loss of principal. Be aware that fluctuations in the financial markets and other factors may cause declines in the value of your account. There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. Diversification does not ensure a profit or protect against a loss.

    The information contained herein does not constitute tax advice and cannot be used by any person to avoid tax penalties that may be imposed under the Internal Revenue Code. Each person should consult an independent tax advisor about their individual situation before investing in any security.

    Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could have higher costs than the original investment and could introduce portfolio tracking error into your accounts. There may also be unintended tax implications. Prospective investors should consult with their tax or legal advisor prior to engaging in any tax-loss harvesting strategy. Neither Vanguard Personalized Indexing Management nor Vanguard provide tax or legal advice.

    ESG portfolios are subject to ESG investment risk, which is the chance that the stocks or bonds screened by the data provider for ESG criteria generally will underperform the market as a whole or, in the aggregate, will trail returns of other portfolios screened for ESG criteria. The data provider's assessment of a company, based on the company's level of involvement in a particular industry or the data provider's own ESG criteria, may differ from that of other portfolios or of the advisor's or an investor's assessment of such company. As a result, the companies deemed eligible by the data provider may not reflect the beliefs and values of any particular investor and certain screens may not exhibit positive or favorable ESG characteristics. The evaluation of companies for ESG screening or integration is dependent on the timely and accurate reporting of ESG data by the companies. Successful application of the customized investment strategy will depend on the data provider's proper identification and analysis of ESG data.

    The Factor Funds are subject to investment-style risk, which is the chance that returns from the types of stocks in which a Factor Fund invests will trail returns from U.S. stock markets. The Factor Funds are also subject to manager risk, which is the chance that poor security selection will cause a Factor Fund to underperform its relevant benchmark or other funds with a similar investment objective, and sector risk, which is the chance that significant problems will affect a particular sector in which a Factor Fund invests, or that returns from that sector will trailreturns from the overall stock market.

    For financial advisors only. Not for public distribution.