Wealthfront‘s new S&P 500 Direct portfolio combines the performance of the S&P 500 with the benefit of tax savings and is available for just 0.09% – the same price as the “most popular” ETF that tracks the S&P 500.
Wealthfront, a tech-driven financial platform, announced a product that combines the performance of the S&P 500 with the added tax benefits of automated tax-loss harvesting for the “same price as the most popular ETF that tracks the S&P 500.”
Wealthfront’s S&P 500 Direct portfolio is available for a 0.09% fee – the same expense ratio “as the leading SPDR S&P 500 ETF Trust – and investors can get started with $20,000.”
Wealthfront’s S&P 500 Direct is a new way to “invest in the S&P 500 and save on taxes.”
Dave Myszewski, VP of Product at Wealthfront said:
“Today’s launch combines our powerful Tax-Loss Harvesting expertise with the performance of the S&P 500® index, and is another example of how we use software to lower costs and deliver more value to the next generation of investors.”
Wealthfront’s S&P 500 Direct portfolio offers more tax benefits than investing in a single ETF that tracks the performance of the S&P 500 because it allows clients to directly “hold shares of companies in the index, and uses automated Tax-Loss Harvesting to capture losses from daily price movements in those stocks even when the index is up overall.”
This portfolio is for investors who want exposure to the S&P 500 and have gains from stock compensation because it is “designed to generate enhanced tax savings.”
Harvested losses can be used to offset capital gains, and any “remaining losses can offset up to $3,000 in ordinary income.”
Any unused losses carry over “indefinitely to future years.”
Wealthfront’s S&P 500 Direct product is based on the S&P 500] Index, which is licensed “by S&P Dow Jones Indices (S&P DJI).”
Brandon Hass, Head of Direct Indexing and Model Portfolios at S&P DJI:
“As an independent index provider with more than a century of experience in creating iconic and trusted market benchmarks, S&P DJI is excited to provide its market-leading index and related data to Wealthfront for the first time. Through this licensing arrangement, S&P DJI will be able to deliver the S&P 500® index, widely known as the best single gauge of the U.S. equity market, on the Wealthfront platform to market participants interested in tax-loss harvesting solutions, which continue to become increasingly popular in the digital wealth solutions space due to their enhanced tax benefits and highly customizable nature.”
Wealthfront‘s growth strategy continues to pay off and the company currently oversees “nearly $80 billion for over 1 million clients.”
This launch caps off a year of product expansions, including an Automated Bond Ladder that makes it easy to invest in “a ladder of US Treasuries and lock in a competitive yield with zero state taxes.”
The company made available free, instant withdrawals and removed wire fees for its Cash Account offering “4.25% APY and up to $8M FDIC insurance, on deposits through partner banks.”
