Best direct indexing providers for 2026

Direct indexing used to be limited to institutions and wealthy clients. With zero-commission trading and fractional shares, US retail investors can now get a managed direct indexing portfolio from $1,000, for its main benefits: tax-loss harvesting, environmental, social and governance (ESG) or values-based exclusions, and a portfolio you can personalize.

Our top picks in 2026 are Fidelity for its range of options, Wealthfront for low-cost automated S&P 500 direct indexing at 0.09%, and Public for the lowest minimum of the managed services, at $1,000.

What is direct indexing?

Direct indexing refers to the method of replicating an index, such as the S&P 500 or the Nasdaq-100, by holding the underlying shares directly in your own account, rather than buying a single index fund or exchange-traded fund (ETF) that holds them on your behalf.

Instead of relying on a fund provider to simply track an index with no adjustments (whether for tobacco companies, fossil fuels, or any other exclusion you might want), direct indexing enables you to:

1. Selectively deviate from the underlying index by excluding or overweighting specific securities or sectors.
2. Control when you buy or sell each individual position, opening up systematic tax-loss harvesting at the security level rather than only at the fund level.
3. Adjust the position size of each holding to reflect your own preferences or constraints (concentration limits, sector tilts, factor exposures).
4. Choose automatic dividend reinvestment or exclude dividend-paying securities altogether, depending on your tax situation and income needs.

Best direct indexing providers

Fidelity is one of the largest financial services firms in the world, with $19.9 trillion in assets under administration at the end of June 2026, according to its second-quarter update. It charges nothing for US stock and ETF trades, offers over 10,000 mutual funds, many without transaction fees, and has extensive research and the Active Trader Pro platform.

Fidelity’s direct indexing comes in three levels:

1. Fidelity Basket Portfolios: build your own basket of 2 to 50 stocks and ETFs, or start from a theme, investing as little as $1 per position. It costs $4.99 a month after a 30-day free trial, and tax-loss harvesting is up to you, with a tax-efficient rebalancing option.
2. Fidelity Managed FidFolios: Fidelity manages the portfolio from $5,000, at 0.40% a year for its five index strategies (US Large Cap, International, US Total Market, US Low Volatility and Environmental Focus) or 0.70% for active ones. You can exclude up to five stocks or two industries. Tax-loss harvesting is applied at the portfolio manager’s discretion rather than systematically.
3. Separately managed accounts: through Fidelity’s wealth management arm, with minimums of $100,000 to $250,000 depending on the strategy and fees of 0.20% to 0.70%.

Fidelity’s range, from a $1 basket to a full managed account, is why it is our pick overall. Its weak point is harvesting: in the managed tier it is applied at the manager’s discretion, so if systematic tax-loss harvesting is your main goal, Wealthfront, Public or Schwab automate it more fully.

Wealthfront is an established robo-advisor, an online service that invests automatically using algorithms instead of human advisors. It has been listed on Nasdaq (ticker: WLTH) since December 2025, after an earlier agreement to be bought by UBS was terminated in 2022. At the end of July 2026 it had $99.0 billion in platform assets and 1.51 million funded clients, according to its latest results. Our Wealthfront statistics cover the numbers in more detail.

Wealthfront offers direct indexing in two ways:

1. S&P 500 Direct and Nasdaq-100 Direct: standalone portfolios from $5,000, at 0.09% and 0.12% a year respectively. S&P 500 Direct launched in December 2024 with a $20,000 minimum, cut to $5,000 in June 2025, and Nasdaq-100 Direct followed in October 2025.
2. US Direct Indexing inside the Automated Investing Account: from $100,000, included in the standard 0.25% fee, Wealthfront replaces the US stock ETF with up to 100 individual stocks. Since May 2026, accounts above $500,000 hold up to around 600.

Rebalancing and tax-loss harvesting are fully automated, and at 0.09% S&P 500 Direct is one of the cheapest ways to get direct indexing on the S&P 500.

Public, the US investing app, launched direct indexing on 1 October 2025 with the lowest minimum of the managed services on this list: $1,000, at 0.19% a year per index.

You can pick from over 100 indices from S&P and Solactive, including the S&P 500 and sector indices, or build your own, and choose which companies to leave out. You own each stock directly, and tax-loss harvesting is automated: it starts 14 days after the account is created and runs whenever the account rebalances or money moves in or out. The service is managed by Public Advisors LLC, an SEC-registered investment adviser, with brokerage through Open to the Public Investing, Inc.

Public has the lowest entry point for automated direct indexing. At 0.19% it costs more than Wealthfront’s S&P 500 Direct, but covers far more indices.

Schwab combines a discount broker with a large advisory arm. It held $13.41 trillion in client assets and 40.1 million active brokerage accounts at the end of August 2026, according to its monthly activity report. US stock and ETF trades are free, thousands of funds carry no transaction fee, and its trading platform is thinkorswim, inherited from TD Ameritrade, which replaced the retired StreetSmart platforms.

Schwab Personalized Indexing is a separately managed account run by Charles Schwab Investment Management and opened through a Schwab financial consultant. You choose from six strategies: Schwab 1000 Equity, US 500 Large Cap, US 3000 Broad Market, S&P SmallCap 600, MSCI EAFE International and MSCI KLD 400 Social, then exclude stocks or industries. Tax-loss harvesting is automated, although wash sales are only monitored inside the account itself, not across your other accounts.

The minimum is $100,000, with fees of 0.40% on the first $2 million and 0.35% above that. It suits investors with a large taxable portfolio who want Schwab to run the harvesting for them.

E*TRADE has been owned by Morgan Stanley since October 2020. As a self-directed broker it offers $0 stock and ETF commissions, no account minimum, over 5,000 mutual funds without commissions and the Power E*TRADE platform for options and active trading.

Direct indexing is not available in the E*TRADE app itself. E*TRADE describes it as a separately managed account through a Morgan Stanley financial advisor, delivered by Parametric Custom Core. Parametric, part of Morgan Stanley Investment Management, built its first custom index portfolio in 1992. According to Morgan Stanley’s profile of the Custom Core S&P 500 strategy, the minimum is $25,000, with a manager fee of up to 0.75% a year plus a Morgan Stanley advisory fee of up to 2%.

With an advisory fee of up to 2% on top, it can be the most expensive route here, but also the most personal: exclusions, ESG tilts and tax-loss harvesting are all set up with a human advisor who can see the rest of your finances.

Vanguard is best known for low-cost index funds and ETFs such as VOO, VTI and BND, and serves more than 50 million investors. Its brokerage account has no minimum and no commissions on US stocks and ETFs. Vanguard’s own funds trade free, while funds on its transaction-fee list cost $20 per online trade for clients with less than $1 million at Vanguard.

Vanguard’s direct indexing, Vanguard Personalized Indexing, comes from Just Invest, which Vanguard bought in 2021. It supports tax-loss harvesting, ESG preferences and other customization, but it is sold only through financial advisors: none of Vanguard’s own retail advice services include it. Minimums are generally $250,000 through an advisor, with fees from 0.20% plus the advisor’s own fee.

Vanguard therefore works best if you already have an advisor who uses it. Without an advisor, Fidelity, Wealthfront and Public are the providers on this list you can use directly.

Direct indexing versus index funds

With a conventional index fund, you own the whole index as it is and cannot choose the underlying securities. Standard index mutual funds and ETFs fall into that category, and many professional advisors build portfolios by combining several of these funds into a single allocation.

Passive fund investing comes with several limitations, however, and is generally best suited to investors who don’t want individual control over their holdings or who have no significant tax considerations to manage.

For example, the Vanguard 500 Index Fund Admiral Shares (VFIAX) tracks the S&P 500 with an expense ratio of just 0.04% and a $3,000 minimum investment. It’s an excellent low-cost way to own the S&P 500, but you own the entire index as it is, with no ability to exclude individual stocks, harvest losses at the security level, or tilt the portfolio toward (or away from) anything specific.

If you’re concerned about your overall tax bill, or simply don’t want to hold particular sectors: alcohol, tobacco, firearms, fossil fuels, or anything else you choose to exclude, then a standard index fund may not be the best fit. Direct indexing gives you that level of control.

How much can tax-loss harvesting save you?

Tax-loss harvesting means selling shares that have fallen below what you paid, to realize a loss, and buying something similar so your market exposure barely changes. Holding the stocks individually creates far more of these opportunities than holding one fund, because some stocks fall even in a year when the index rises.

Say you harvest $10,000 of losses in a year:

• Against long-term gains taxed at 15%, the loss saves $1,500 this year, or $1,880 if you also pay the 3.8% Net Investment Income Tax;
• Against short-term gains, which are taxed at ordinary income rates, it saves more: $2,400 in the 24% bracket, or $3,500 in the 35% bracket;
• With no gains to offset, you can deduct up to $3,000 a year against ordinary income ($1,500 if married filing separately) and carry the rest forward until it is used up.

You can’t simply pick which gains a loss offsets: short-term losses first offset short-term gains, and long-term losses long-term gains, before any excess crosses over. In a new account, most harvested losses are short-term.
Four caveats matter:

• It defers tax rather than cancelling it: the replacement shares have a lower cost basis, so more gain is taxed when you eventually sell. The deferral becomes permanent only if you hold until death, when heirs get a stepped-up basis, or donate the shares;
• The benefit fades: in AQR’s research, without new money going in, the extra tax benefit of direct indexing falls to about zero after roughly five years, as most stocks end up above their purchase price;
• The wash sale rule: the loss is disallowed if you buy substantially identical securities within 30 days before or after the sale, including in your individual retirement account (IRA), where the loss is lost for good. Providers usually only police wash sales inside their own account;
• Tracking error: Vanguard’s research puts the typical tracking error of a personalized index at 0.75% to 2.75% a year against its benchmark, so your returns will not match the index exactly.

How big is the benefit in practice? The best-known study, by Chaudhuri, Burnham and Lo in the Financial Analysts Journal (2020), found tax-loss harvesting on the 500 largest US stocks from 1926 to 2018 added 1.08% a year before costs, or 0.82% once the wash sale rule was applied, assuming 15% long-term and 35% short-term tax rates. It worked best in volatile, falling markets. Expect more in the first years of a new account and far less once it matures.

Your long-term capital gains rate depends on your taxable income. The 2026 brackets are:

Should I go for direct indexing?

Direct indexing works best with a helping hand, whether from an automated provider, your investment advisor or your tax consultant. It tends to benefit the tax-sensitive investor with a sizeable taxable portfolio, a high marginal tax rate (since the value of each harvested loss rises with your tax bracket), and other income streams that can absorb investment losses. All the better if that investor also has specific values-based preferences: ESG, climate, fossil-fuel exclusions, fair governance, or simply wanting to avoid a particular sector or stock.

The traditional $100,000 threshold has come down sharply. Public starts at $1,000, Wealthfront’s S&P 500 Direct and Fidelity Managed FidFolios at $5,000, and Frec, a direct indexing specialist, at $20,000, so direct indexing is now within reach of ordinary investors, not just wealthy ones.

However, if most of your investing happens in tax-advantaged retirement accounts, such as workplace 401(k) plans and IRAs, a simple ETF portfolio is usually enough. The tax-loss harvesting benefit disappears inside those accounts, and only the customization remains, which an ESG ETF provides for less. Some investors use direct indexing only for the US large-cap part of their taxable account, alongside low-cost globally diversified ETFs for the rest.

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