BNY Mellon Precision Direct IndexingSM
Direct Indexing Solutions: Precision & Personalization
With direct indexing, clients can hold the underlying securities of an index, rather than accessing them through pooled vehicles such as mutual funds. The structure enables a client’s direct ownership, which then allows for customized tax management and personalized portfolios.
Effectively, investors gain exposure to a traditional benchmark and maintain the power to customize the underlying holdings to pursue a range of goals—both financial and personal.
Understanding Direct Indexing:
The Key to Personalized Portfolios and Tax Efficiency
Learn how direct indexing and personalization can be valuable in meeting financial goals.
What is Direct Indexing?
Changing attitudes and technological advancement have pushed direct indexing into the investment mainstream.
Why Direct Indexing?
Direct indexing offers a level of personalization and tax efficiency that may not be possible with traditional investment vehicles.
Tax-Efficient Investing Through Direct Indexing
While direct indexing is known as a way to customize portfolios for investors, tax management typically is the No. 1 reason investors turn to direct indexing.
Index Your Way: Features of BNY Mellon Precision Direct Indexing
Our direct indexing solution powers a simplified, integrated client experience while providing access to an institutional-quality index manager.
Tax-Managed Investments
Manage tax implications and seek tax alpha in a cost-effective manner through tax-loss harvesting, tax-gains harvesting and tax transitioning.1
Personalized Portfolios
Shape direct indexing strategies to align with clients’ diverse needs, preferences and values.2
Efficient Portfolio Management
Create efficient but tailored portfolios with direct asset holdings while preserving the diversification associated with a broad-based index.
Precision by Mellon. Powered by Pershing X.
Leveraging Mellon’s investment management expertise and the power of Pershing X’s technology, we are proud to provide advisors and clients with institutional-quality, personalized index solutions. Discover Your Direct Indexing X Factor
Mellon
With 40 years of indexing experience, Mellon is a global leader in index investment management. Their deep understanding of markets powers the precision required to navigate rebalances and build solutions that meet clients’ unique needs.
Pershing X
Pershing X is building an interconnected suite of financial applications that will work together, so that you can spend more time focusing on helping your clients thrive.
Additional Resources
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1Tax loss harvesting is a process designed to reduce capital gains taxes owed from selling profitable investments. Tax gain harvesting, as opposed to tax loss harvesting, is a process of turning unrealized long term capital gains into realized capital gains at a specific time for tax purposes. Tax transitioning is designed to spread out and help mitigate the tax consequences of the phased transitioning of an account to the target strategy over a period of time.
There’s no guarantee that a particular investor will realize significant tax benefits from harvesting gains or losses. Investment strategies that seek to employ tax management may be unable to fully realize strategic gains or harvest losses due to various factors. Market conditions and/or client account holdings may limit the ability to generate tax losses. Tax-loss harvesting involves the risks that the new investment could perform worse than the original investment and that transaction costs could offset the tax benefit. Also, a tax-managed strategy may cause a client portfolio to hold a non-benchmark security in order to achieve more favorable tax treatment or to sell a benchmark security in order to create tax losses. The ability to minimize tax consequences for a specific account may decrease as gains have the potential to accumulate over a period of time. Investors in lower tax brackets generally will not derive the same level of potential tax benefits from tax-managed strategies than those in higher tax brackets. Tax considerations, while important, are just one factor to consider before making any investment decision. Tax-managed investing and tax transitioning do not equate to comprehensive tax advice, are limited in scope and not designed to eliminate taxes in an account. Please consult your own tax advisor or financial professional for more detailed information on tax issues as they relate to your specific situation.
2As of October 2023, the only target index available is the S&P 500® Index.
3BNY Mellon Precision Direct Indexing accounts are not available to retirement plans covered under the Employee Retirement Income Security Act of 1974 (ERISA).
DISCLOSURE
For professional use only. Not intended for use by the general public. Pershing LLC and Pershing X, Inc. do not provide investment advice. Mellon is a division of Mellon Investments Corporation (MIC), a registered investment adviser. MIC provides day-to-day investment advisory services in connection with the product. Pershing LLC, Pershing X, Inc. and MIC are affiliated BNY Mellon companies. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the corporation as a whole or its various subsidiaries generally.