Frec, the innovative investment platform making direct indexing accessible to investors, has reached the significant milestone of accumulating $100 million in customer assets nine months after launching.
The firm also announced the launch of four new direct indices; Russell 1000, Russell 2000, Russell 3000, and CRSP ISS US Large Cap ESG. This expansion increases Frec's total offering to nine indices, establishing it as the first and sole consumer investment platform providing such a diverse range of direct indexing options.
Direct indexing, an investment strategy that allows investors to directly purchase the individual components of an index, has been gaining traction among mainstream investors. It enables investors to track the returns of an index while benefiting from the ability to offset capital gains with any losses. In the past, this strategy was available via wealth advisors at high minimums and fees. However, advancements in technology, such as fractional shares and commission-free trading, have lowered the barriers to investing and reduced the complexity of the strategy. Frec has seized this opportunity to deliver the greatest choice and flexibility for these investors.
According to industry projections, direct indexing is set to outpace the growth of ETFs, mutual funds, and SMAs, potentially reaching $800 billion in assets by 2026. Frec CEO Mo Al Adham says: “Reaching this $100 million milestone in less than a year is an indication of the underlying demand for direct indexing. We’re on a mission to bring it to every investor.”
“We launched with the popular S&P 500 and S&P 500 Information Technology indices. While we’ve seen significant growth, the number one request from customers has been the addition of more indices. I see a lot of customers wanting to switch from ETFs to direct indexing, so we are scaling up the variety,” says Al Adham. “Ultimately, I see us offering a direct index for every version of the most popular ETFs. I’m especially pleased to partner with Russell, whose indices serve as leading benchmarks for institutional investors. We believe that direct indexing will do to ETFs what ETFs did to mutual funds. In our view, it’s simply a better way to passively invest in the market.”
Frec’s commitment to providing a wide range of indices underscores its mission to democratize investment opportunities and offer more personalized and tax-efficient investment strategies. Frec is based out of San Francisco and funded by Greylock, among other venture firms.
