Take personal control
Money Magazine Australia|April 2022
Just as it’s possible to create your own music playlist, you can create a personalised share index that aligns with your aims and values
CHLOE WALKER
Take personal control

By nature, humans love to customise things. From personalised recommendations on Netflix and Stan to suggested playlists on Spotify or iTunes, everyone craves to have things that serve them by knowing them.

An interaction with a device, person or thing that is personal and customised leaves us feeling as if our needs and interests are being considered, as if we have a little more control.

However, in the world of financial services, investors don’t often receive that same bespoke treatment. Until now, that is. Enter direct indexing.

In its simplest form, direct indexing involves directly investing in the actual securities that make up an index.

This approach is dissimilar from investing in exchange traded funds (ETFs) that track an index or mutual funds that follow a benchmark index.

Direct indexing allows investors to own the securities that make up an index and hold them in a separately managed account (SMA).

For example, if replicating the S&P500, the investor would directly own all the stocks in the index.

The concept has gained traction in the US in recent years, with total assets under management in 2020 sitting at around $US350 billion ($482 billion). According to a 2021 report from Oliver Wyman and Morgan Stanley, this could grow to about $US1.5 trillion by 2025, drawing flows that would otherwise be snapped up by ETFs or mutual funds.

To explain direct indexing further, Vanguard senior investment strategist Inna Zorina uses the analogy of going to the gym.

Diese Geschichte stammt aus der April 2022-Ausgabe von Money Magazine Australia.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der April 2022-Ausgabe von Money Magazine Australia.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS MONEY MAGAZINE AUSTRALIAAlle anzeigen
An outrageous, beautiful monopoly
Money Magazine Australia

An outrageous, beautiful monopoly

Telstra's mobile business is a cash machine with few competitors, giving it the highest returns in the world.

time-read
4 Minuten  |
July 2024
Drop the anchor to judge value
Money Magazine Australia

Drop the anchor to judge value

Buying and selling decisions should be based on where a stock price is going, not where it has been.

time-read
3 Minuten  |
July 2024
Powering the AI boom
Money Magazine Australia

Powering the AI boom

Beyond the software and chipmakers, where will the energy come from?

time-read
3 Minuten  |
July 2024
Get into life
Money Magazine Australia

Get into life

Tucked inside super are products that can protect you from life's inevitable uncertainties.

time-read
5 Minuten  |
July 2024
Paths to home ownership
Money Magazine Australia

Paths to home ownership

Taking the road less travelled can sometimes deliver unexpected benefits.

time-read
5 Minuten  |
July 2024
Sold! Quick ways to add value
Money Magazine Australia

Sold! Quick ways to add value

Small, strategic changes can have a big impact on the look and feel of your home. And get you a better price on auction day.

time-read
5 Minuten  |
July 2024
Money lessons the kids need to know
Money Magazine Australia

Money lessons the kids need to know

Your children can learn a lot from your past money mishaps. Here are eight financial conversations I have had with mine.

time-read
4 Minuten  |
July 2024
Property-investing rules: are they likely to change?
Money Magazine Australia

Property-investing rules: are they likely to change?

The pressure for the government to curb the tax benefits of tax concessions, such as negative gearing and the capital gains tax discount, is unrelenting. Most recently, independent senators David Pocock and Jacqui Lambie proposed five options for paring back investment property tax concessions, with savings to the Federal budget of up to $60 billion over the next decade.

time-read
3 Minuten  |
July 2024
What's love got to do with it?
Money Magazine Australia

What's love got to do with it?

A rollercoaster of emotions could be driving poor crypto behaviour.

time-read
3 Minuten  |
July 2024
Are we ready to be cash-free?
Money Magazine Australia

Are we ready to be cash-free?

Saying goodbye to our piggy banks too soon could leave small businesses in the dark when problems arise.

time-read
2 Minuten  |
July 2024