facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause

Advisors and Direct Indexing:

Compact DI... A Better Way of Investing for You and Your Client

Investing in Index funds, ETFs, and Direct Index portfolios offer the following advantages:

  • Diversification - Lower risk
  • Lower costs - Lower expenses than actively managed portfolios
  • Lower turnover - lower trading costs (commissions and bid-ask spreads) 
  • Lower taxes - Resulting from lower turnover, and possible tax-loss harvesting mean better after-tax returns
  • Attractive Returns - Only about 7% of actively managed funds have outperformed the S&P 500 over the last fifteen years, according to research by Standard & Poor's

Which is the best? 


Until now, if one wanted to enjoy the advantages of Direct Indexing, it could take a minimum of 100 securities. That is why we developed the Compact Index. Five hundred securities may be acceptable for the $90 billion IBM pension plan under a mandate to dedicate a portion of their portfolio to the S&P 500 exactly. But is that granular level of index tracking necessary for the average investor and Advisor? Compact DI delivers similar results to the chosen Index but is more understandable, manageable, and client-friendly. And the construction of the Compact Index arguably provides better diversification than the larger indexes. An added benefit for the institutional investor is there is no need to worry about the manager drifting from their benchmark.

Even the most sophisticated investor... 

A friend who is an Advisor to a $10 million Family Office recently had a call from his retired business owner client asking, "Why do I own so damn many stocks?"

Our answer is you don't need to own "so damn many stocks."

Global Macro Asset Management's Compact Index Series of indices, and the corresponding Compact DI's, contain 22 or fewer stocks, diversified among 11 economic sectors. Technically elegant - yet client friendly portfolios easily managed and explained to your clients.