BNY Mellon Launches Direct Indexing Solution for Financial Advisors

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Jun 06, 2023, 15:30 ET

Institutional-quality investment solution available on BNY Mellon Pershing X's new Wove platform provides low-cost portfolio customization and tax optimization benefits

NEW YORK, June 6, 2023 /PRNewswire/ -- BNY Mellon (NYSE: BK) today announced a new direct indexing solution to financial advisors, managed by Mellon¹, BNY Mellon Investment Management's indexing specialist. BNY Mellon Precision Direct Indexing^SM S&P 500^® seeks to match the performance and overall characteristics of the S&P 500^® Index with an investment minimum of $250,000.

BNY Mellon Precision Direct Indexing is designed to provide tailored strategies, portfolio customization and cost-effective tax management. The end-to-end direct indexing solution is powered by Mellon's 40 years of index investment expertise and tax management experience, available through Pershing X's new advisory platform, Wove, and includes BNY Mellon Pershing's clearing and custody services.

Financial advisors will be able to offer customized direct indexing to their clients, including tax-loss harvesting, capital gains harvesting and tax transitioning within a diversified US equity index strategy. Mellon's experienced portfolio management team will leverage Pershing X's automated tax optimizer to identify potential opportunities through short- and long-term wash sale trade-offs, tracking error budgets and capital gains.

"We brought this comprehensive offering onto our Wove platform to provide clients with the full depth and breadth of solutions across the BNY Mellon enterprise," said Ainslie Simmonds, President of Pershing X. "With Mellon's institutional expertise in portfolio management and indexing, financial advisors, broker-dealers and RIAs can now focus on growing and scaling their business."

The demand and interest for direct indexing is projected to lead to a surge in assets, with direct indexing assets growing at a five-year compound annual growth rate (CAGR) of 12.3%, which equates to $825 billion in assets by 2026.²

"Investors are continually looking to grow the value of their portfolios and have the ability to customize their underlying holdings to achieve a range of goals, both financial and personal," said Stephanie Hill, Head of Index at Mellon. "BNY Mellon Precision Direct Indexing is designed to help them achieve this through tax alpha generation and exposure that seeks to balance after-tax returns while maintaining market exposure and investment preferences."

Initially available through BNY Mellon Pershing's managed accounts platform, BNY Mellon Precision Direct Indexing is expected to be available through BNY Mellon Investment Management in the future.

For more information on BNY Mellon and Mellon's indexing capabilities, visit: https://www.pershing.com/what-we-provide/managed-account-solutions/direct-indexing.

About BNY Mellon

Established in 1784, BNY Mellon is America's oldest bank and the first company listed on the New York Stock Exchange (NYSE: BK). Today, BNY Mellon powers capital markets around the world through comprehensive solutions that help clients manage and service their financial assets throughout the investment life cycle. BNY Mellon had $46.6 trillion in assets under custody and/or administration and $1.9 trillion in assets under management as of March 31, 2023. BNY Mellon has been named among Fortune's World's Most Admired Companies and Fast Company's Best Workplaces for Innovators. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.

This Press Release is issued by BNY Mellon to members of the press and media and the information contained herein should not be construed as investment advice or a recommendation of any investment strategy. It does not constitute an offer or solicitation of securities or investment services or an endorsement thereof in any jurisdiction or in any circumstance in which such offer or solicitation is unlawful or not authorized.

¹ Mellon is a division of Mellon Investments Corporation (MIC).

² The Case for Direct Indexing: Differentiation in a Competitive Marketplace, Cerulli Associates, December 2022.

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SOURCE BNY Mellon