(Nasdaq) - Schwab made a splash when they announced they were tossing their hat into the direct indexing ring, but details are coming surrounding what the final products will look like. Schwab is going to limit investors to eliminate up to 3 stocks from their Direct Indexing, which means it's only use will really be for tax purposes.
Even starting with a relatively green index, if investors want to eliminate greenwashing their options are limited. Fidelity will offer more options to investors when it comes to custom indexing, and also has much lower minimum investments. Specific ESG focus portfolios are in production and can eliminate two more stocks or an entire industry providing more flexibility.
Finsum: Fidelity has an ESG edge and lower minimum investments. Schwab will need to develop more options if it wants to compete with ESG options.
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April 15, 2022
