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I'd be worried about the costs. if i buy an 'index' of stocks weighed a certain way, then i guess you guys would be buying those stocks. except the number of st

I'd be worried about the costs. if i buy an 'index' of stocks weighed a certain way, then i guess you guys would be buying those stocks. except the number of stocks in an index is much larger than a typical portfolio. indexes fix this with economies of scale however you do not have the scale as everyone is creating their own indexes. wouldn't the client ultimately have to pay a lot of total transaction costs (even if its no-commission, there is still bid-ask spread) to the point of making the entire exercise inadvisable?

abanayev 6y ago
This was my thought immediately upon reading the title. Would love to see what the team says.
govg 6y ago
"The ubiquity of zero-commission and fractional-share trading means that diversification and customization is easier than ever" I think what they are relying on is the fact that nowadays you can own fractional shares (so you don't have to spend that much money to own an index since you no longer care about owning whole number units) as well as zero cost trading (so you don't really have costs to maintaining a portfolio or creating one). Note that in most cases the bid-ask spreads are low (since for major indices there is enough liquidity in their constituents), and as such won't meaningfully contribute to your gains / losses unless you are rebalancing often enough to factor this in(in which case, making an index is pointless).