Direct indexing through a smart-beta lens offers a compelling framework for the investor interested in capital preservation. It’s a best-of-both-worlds approach that boosts investing performance without taking on more risk. As such, it seeks to break the trade-offs at the heart of modern portfolio theory (i.e., greater returns come from greater risk). Investors who want to access smart-beta direct indexes have several options, including direct-to-investor solutions that can be bought off the shelf or customized to investor preferences. Such approaches can also be combined into a larger, more comprehensive portfolio that includes alternatives and even such non-securities instruments as annuities and cryptocurrency.

Companies Mentioned:

Capital Group, Charles Schwab, Fidelity Investments, Robinhood, SoFi, Vanguard, Wealthfront