Services

Personal Index Portfolios

Personal Index Portfolios combine the best features of low-cost indexing and the inclusion of your personal views. Instead of buying an index fund, you own a sample of the stocks in the index, which lets us apply exclusions position by position and, for taxable accounts, manage taxes the same way.

Last reviewed September 28, 2026

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Who this is for

Investors with taxable accounts of roughly $500,000 or more, where tax-loss harvesting has room to work
People with concentrated stock or industry exposure (for example, oil and gas employees) who need the rest of the portfolio to offset it
Faith-based and ESG investors who want exclusions without paying for a specialty fund
Anyone transitioning an existing portfolio, employer stock, or an inheritance who wants to control the capital gains they realize
High earners in the top federal bracket, where each harvested loss is worth more

Problems it solves

Index-fund simplicity, but no way to harvest losses inside the fund or exclude companies you object to
A large, appreciated position you cannot sell without a big tax bill
A one-size-fits-all risk score instead of an allocation built from both your preference and your capacity for risk
Capital gains distributions from funds you did not sell, and a portfolio nobody is watching daily for harvesting opportunities

What makes it different

Our starting point is the same low-cost index ETFs anyone can buy. We then replace the U.S. large-cap sleeve with a portfolio of individual stocks that tracks the index, which lowers the internal expense ratio to roughly 3.5 basis points and creates the tax and customization opportunities. Values screens are included in the advisory fee; active tax management is an optional, separately priced service for taxable accounts.

Why we don't try to beat the market

Research has long shown that trying to beat an index through active portfolio management is a "loser's game," and that taxes and other costs dramatically reduce performance over time compared with index investing. Instead of spending effort on outcomes we can't control, we focus on what we can: costs, taxes, risk, and fit with your life. We document those in a written Investment Policy created specifically for you. We are not stock pickers or market timers; our role is to manage your portfolio according to a written plan, as your fiduciary.

The 5-step process

Step 1. Discover your financial personality

Our scientifically backed financial personality assessment for investing (think of a Myers-Briggs® type indicator for money) draws the strongest positive connection between you and your investments. Before we invest, we take time to understand what drives your financial decisions along four dimensions:

Purpose: having a positive impact through ethical and socially responsible investing
Security: your need for stability and peace of mind
Touch: linking your investing to meaningful relationships
Viewpoint: exposure to themes you believe are changing the world

Step 2. Data-driven asset allocation

The mix of stocks, bonds, and cash is the largest driver of your portfolio's return, and it is too often set by emotion. Many advisors assign a single risk number. We develop a data-driven allocation range with your risk preference at one end and your risk capacity at the other. Your portfolio is built to fall between those two scores.

Step 3. Personalized portfolio construction

Rather than investing only in index ETFs, index tracking portfolios let us own individual stocks that track an index, providing more control, customization, and tax-management opportunities. We can exclude stocks, sectors, or asset classes to balance risks you face outside the portfolio, from other investments, your employment, or even where you live.

Step 4. Active tax management (optional, taxable accounts)

For taxable accounts, tax decisions are made in the context of the whole portfolio, and tax savings are always weighed against keeping your recommended risk and investment mix. We take a three-part approach:

Tax budget: we formulate an annual tax budget for each client.
Asset location: we put the right securities in the right account types.
Tax management strategies: long-term versus short-term gain recognition, loss harvesting, offsetting gains with losses, wash-sale monitoring, and tax-lot management.

Step 5. Customized risk management

We tailor risk management to your tolerance using fixed asset allocation, comprehensive risk-based rebalancing, and portfolio hedging where appropriate.

How we manage taxes

Active tax management is an optional service for taxable accounts, priced separately from the advisory fee; tax-deferred accounts such as IRAs are managed without it because harvesting creates no benefit there. It is portfolio-level tax planning, not tax preparation: we do not prepare tax returns, and your preparer receives the realized gain and loss detail they need. Where it applies, tax management is not a year-end exercise. Portfolios are monitored every trading day, harvesting is executed against a written tax budget, and the value is measured and reported to you.

It starts with the transition

Tax management begins with the accounts you already have. Our tax- and risk-sensitive transition process navigates to your target portfolio while balancing taxes, transaction costs, and risk. You see the scenarios and choose the pace.

The four tools

Tax budget. You set the maximum capital gains tax you are comfortable paying per year. We look across your portfolio to determine how best to spend that budget.
Tax-loss harvesting. If a security declines in value, we can sell it, buy a substitute, and use the loss to offset gains elsewhere. If you have no gains to offset today, the loss is banked for the future. We monitor daily.
Capital gains deferral. When we hold an overweight appreciated position to avoid tax, we counterbalance the risk by underweighting similar securities, so deferring the gain does not distort the portfolio.
Wash-sale discipline. To keep the tax benefit, the security cannot be repurchased within 30 days (or have been bought in the 30 days before). We reinvest proceeds in similar securities to keep you on track and revisit the original position after the window closes.

Measured, not assumed

Clients who elect active tax management receive an annual report documenting estimated taxes saved or deferred. See a sample report.

What it costs

Personal Index Portfolios are billed as a percentage of assets under management. Financial planning and values screens are included as part of the fee; active tax management for taxable accounts is optional and separately priced. Full details are on the fees page.

Questions about personal index portfolios

What is personal indexing?

Personal indexing (often called direct indexing) buys a subset of the individual stocks that make up an index with the intent of closely tracking the index, instead of buying an index mutual fund or ETF. It can provide greater control and tax advantages to certain investors.

What is the difference between a Personal Index Portfolio and an ETF portfolio?

Both start from low-cost index building blocks. An all-ETF 70/30 portfolio has an internal expense ratio of a little under 5 basis points. When we swap the U.S. large-cap ETF for a stock tracking portfolio, the blended expense ratio falls to about 3.5 basis points, and we gain the ability to harvest losses and apply exclusions at the stock level.

How much does active tax management improve returns?

Studies suggest an average improvement in after-tax returns on the order of 1 percentage point per year. One study of the 500 largest U.S. stocks from 1926 to 2018 found tax-loss harvesting improved after-tax returns by 1.08 percentage points annually, assuming 15% long-term and 35% short-term rates. Results vary with your tax rates, market path, and contributions.

How does the transition from my current holdings work?

We model several scenarios that trade off portfolio drift against realized capital gains, from high gains and low drift to low gains and high drift. The result is a written transition plan and an annual tax budget, so you control how much gain is realized each year.

Can you exclude specific companies or industries?

Yes. We can exclude individual stocks, sectors, or asset classes, whether for faith-based or ESG reasons or to offset risk you already carry through your employer or other holdings.

How often do you review my portfolio?

Daily. We look for drift from your allocation, tax-loss harvesting opportunities, and any exclusions that need to be enforced.

What is a tax budget, and how is it used?

A tax budget is the maximum net realized capital gain you are comfortable recognizing in a year. It is set with you as an annual dollar amount and is used only for taxable accounts. We look across your portfolio to decide how best to spend it.

How do you handle the wash-sale rule?

IRS rules disallow the loss if you buy the same or a substantially identical security within 30 days before or after the sale. When we harvest, we reinvest in similar (not identical) securities and, after the 30-day window, look to move back to the original position where appropriate.

Is active tax management included?

It is optional. It applies to taxable accounts only, since IRAs and other tax-deferred accounts do not benefit from harvesting, and it carries a separate fee that we quote in your advisory agreement. See our fees.

How will I know how much tax management has saved me?

Clients who elect active tax management receive an account-level estimated Taxes Saved report every year. You can review a sample report.

Talk with a CFA and a CPA/PFS, CFP® about your situation

A free introductory meeting, no obligation. Financial planning is included as part of the investment management fee, so there is no separate planning charge.

Schedule a meeting See our fees