RBC Dominion Securities, through our partnership with Envestnet, now enables access to Direct Indexing. Direct indexing is a passive investing approach that uses statistical modeling to directly own the underlying equities required to track a particular equity index while minimizing tracking error. Direct Indexing provides two compelling advantages over Exchange Traded Funds when facilitating passive investment strategies. First, there is less counterparty risk and greater transparency as you own the underlying equities directly in your investment account with your primary brokerage firm. Second, there is greater flexibility around tax loss harvesting. One can crystallize losses on the specific equities that are trading below their adjusted cost base while keeping unrealized gains intact. This ability to isolate the tax loss harvesting can materially increase tax efficiency.
The fixed cost of implementing a Directing Indexing strategy is 0.10%, plus the advice fee negotiated with your portfolio manager or investment advisor. With our Unified Managed Account platform Direct Indexing can be employ on a stand alone basis or it can be combined with other actively managed investment models in a single account.
The following Direct Indexing strategies are currently available on our platform with more to be launched in the future.
- S&P/TSX Composite Index Total Return Index - Canadian Equity
- CRSP US Total Market Total Return Index USD - United States All Cap Core
- CRSP US Large Cap Total Return USD - United States Large Cap Core
- CRSP US Small Cap Total Return USD - United States Small Cap
- BNYM Developed Market Classic ADR Index - International Equity
- Capital Market Series US Large Cap Core - Canadian Dollar (via Canadian Depository Receipts) – Currency Hedged to CAD
- MSCI United States Islamic NR USD - Large Cap Core Islamic Values strategy
