The latest news in investment offerings, financial products and other services relative to wealth advisors and their clients.

Envestnet
Envestnet is launching a direct indexing solution for the Canadian market, which it said is a ground-breaking move. The solution will be held inside a Unified Managed Account.

Direct indexing is a strategy that seeks to replicate an existing stock index, such as the S&P 500, through direct ownership of individual stocks. One benefit is tax-loss harvesting, which may help reduce tax bills by offsetting capital gains with losses from other positions. It can be used to customize portfolios and tweak exposure to specific stocks or sectors.

The new offering is being managed through Envestnet’s asset management unit, QRG Capital Management. 

"Since 2013, QRG has been a pioneer in delivering model-based direct indexing solutions in a UMA format, and with strong growth in this area, we've become the largest broadly distributed SMA [separately managed account] manager on the Envestnet platform," Brandon Thomas, co-chief investment officer for Envestnet, said. 

According to Cerulli Associates, direct indexing is the fastest-growing segment in managed accounts, with assets expected to grow at a 12.3 per cent compound annual growth rate from 2022 to 2026, outpacing exchange-traded funds and mutual funds. By 2026, DI assets are projected to reach $800 billion (the figures are largely based on the US market). Envestnet said it predicts a similar growth path in Canada.