Remi Direct Indexing Case Study: Dividend Income
Clients looking for a better dividend income solution? Learn how direct indexing may be the answer.
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5/12/2026
7 min read
Topic
Direct Indexing
Key takeaways
- Moving from an active dividend strategy to a tax-managed direct indexing SMA may significantly reduce realized taxes.
- Direct indexing can allow for customized dividend exposure, broader diversification, and lower fees compared to traditional active dividend strategies.
- In kind transfers and phased transitions may help balance tax savings, tracking error, and alignment with client goals.
Executive Summary
Transitioning an Active Dividend‑Focused Strategy to Direct Indexing
The case study illustrates an investor holding an actively managed, dividend‑focused separately managed account (SMA) that offered limited diversification, higher costs, and no embedded tax management. A direct indexing SMA transition was evaluated as one potential approach to better align the portfolio with stated objectives such as improving tax efficiency, increasing diversification, and adding personalization while maintaining dividend exposure.
Tax‑Managed Dividend Tilt Direct Indexing Portfolio Design
A tax‑managed dividend tilt portfolio was constructed using a personalized individual stock indexing approach, incorporating eligible legacy positions transferred in‑kind. This custom indexing solution was designed to seek enhanced dividend yield while managing tracking error relative to a representative benchmark and accommodating portfolio‑level customization preferences.
Systematic Transition Planning and Tax Efficiency Considerations
The transition analysis considered multiple implementation approaches, including options that emphasized minimizing tax liability, managing tracking error, or balancing both objectives. By evaluating alternatives to full liquidation and incorporating systematic tax‑loss harvesting strategies, the approach demonstrates how disciplined transition planning may help support more tax‑efficient portfolio management and the potential for improved after‑tax outcomes over time.
Related insights
Explore the ins and outs of direct indexing, why it matters, and how it can be used to create personalized, tax-smart investment strategies.
All investing involves risks, including the possible loss of principal. There can be no assurance that any investment strategy will be successful. Investments fluctuate with changes in market and economic conditions and in different environments due to numerous factors, some of which may be unpredictable. Each asset class has its own risk and return characteristics.
This material is provided for informational purposes only and is intended for investment professional and/or institutional investors use only. Not for retail public use.
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