Asset manager Fidelity plans to roll out a direct indexing tool in the US that will require investment of as little as $1 per stock, in a significant move to open up the concept to small investors. The direct indexing concept, which allows investors to create bespoke portfolios tailored to their personal preferences, is widely seen as a long-term threat to traditional pooled vehicles such as mutual and exchange traded funds.
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Fidelity to open direct indexing to the masses
“The introduction of mutual funds was a game changer for the average investor, allowing them to gain access to financial markets once only the wealthy had access to,” Fidelity said. “Then ETFs came along and helped with diversification and potential tax efficiencies with intraday trading. What’s next? Direct indexing.”
