Fidelity Direct Indexing Alternatives: Test the Index Before You Fund It
Fidelity Managed FidFolios is the most accessible of the big-brokerage direct-indexing products. The minimum is $5,000 rather than the $100,000 that Schwab and Wealthfront ask for their flagship direct-indexing tiers, and the 0.40% advisory fee on index-tracking strategies buys you real ownership of the underlying stocks plus tax-loss harvesting.
Last updated July 2026
Educational only · Never places a trade
In short
Fidelity Managed FidFolios is Fidelity direct indexing: a managed account that buys the individual stocks of an index for you in fractional shares. Index-tracking strategies cost 0.40% a year and actively managed ones 0.70%. Fidelity states there is no minimum to open the account, but your balance must reach $5,000 before it is invested in the strategy you chose. One detail buyers routinely miss: Fidelity applies tax loss harvesting "on a limited basis, at the discretion of the portfolio manager", which is a weaker commitment than Wealthfront or Frec make at a lower price. Indexes does not manage money. It is the step before: design a weighted index from stocks and crypto, backtest it against real market history, and track it against the S&P 500 or BTC, with no account and no minimum.
Side by side
Indexes vs Fidelity
| Capability | Indexes | Fidelity |
|---|---|---|
| Design a custom weighted index yourself | Fidelity strategies | |
| Stocks and crypto in one index | US equities only | |
| Backtest against real market history | ||
| Track versus benchmarks over time | Partial | |
| Owns the shares for you | ||
| Automated tax-loss harvesting | Limited basis, manager's discretion | |
| Account minimum | None | $5K to be invested |
| Annual fee model | Flat software fee | 0.40% AUM (index strategies) |
| Self-directed basket you pick yourself | Any members, any weights | Basket Portfolios, 2 to 50 positions, $4.99/mo |
| Analyze-only, never places trades |
Comparison reflects general product positioning and is provided in good faith. Verify current capabilities with each vendor.
Where each one fits
Indexes and Fidelity, without the sales pitch
Fidelity Managed FidFolios is the most accessible of the big-brokerage direct-indexing products. The minimum is $5,000 rather than the $100,000 that Schwab and Wealthfront ask for their flagship direct-indexing tiers, and the 0.40% advisory fee on index-tracking strategies buys you real ownership of the underlying stocks plus tax-loss harvesting. If your priority is to own the index in a taxable account and let Fidelity handle the tax work, it is a good fit.
What you do not get is authorship. You pick from Fidelity strategies, the universe is US equities, and there is no crypto and no backtest of an index you invented. Indexes is deliberately the opposite.
It is informational and educational, track-and-analyze not trade: you design the index, weight stocks and crypto together, backtest it against real market history, and track it over time versus benchmarks. No account to fund, no minimum, no trade ever placed.
Questions
Fidelity direct indexing, answered
What is Fidelity direct indexing?
Fidelity direct indexing is delivered through Fidelity Managed FidFolios, a managed account that buys the individual stocks making up an index rather than a single fund. Owning the shares lets Fidelity harvest tax losses on individual positions and apply personal preferences such as excluding a sector.
What is the difference between Managed FidFolios and Fidelity Basket Portfolios?
They are two different products and people searching for Fidelity direct indexing often want the second one. Managed FidFolios is the managed, professionally run direct-indexing account: a $5,000 minimum, a 0.40% annual advisory fee on index strategies, and automated tax-loss harvesting. Fidelity Basket Portfolios is self-directed: you choose 2 to 50 stocks or ETFs, set the weights yourself, and buy or rebalance the whole basket in one action for $4.99 a month after a 30-day free trial, with no account minimum and fractional shares from $1. One outsources the decisions, the other gives you the controls. Verified against Fidelity's own pages in July 2026.
Is Fidelity Basket Portfolios a good alternative to building an index?
It is the best retail execution venue for a self-built basket, and it is not a design tool. Once you know the members and the weights, a basket portfolio holds them cleanly and rebalances in a single action, which beats placing fifty orders by hand. What it does not do is test the construction: it will faithfully hold a badly weighted basket for years without comment. Indexes covers that earlier step, letting you backtest the exact weighted combination and compare weighting methods before any money moves, then you execute wherever your account already lives.
What is the minimum for Fidelity Managed FidFolios?
It is not quite the flat $5,000 most articles report. Fidelity says there is no minimum required to open the account, but your balance must be at least $5,000 before it will invest the money according to the strategy you chose. So you can open early and fund gradually, though nothing tracks the strategy until you cross the line. Even with that caveat it is the lowest entry point among the major brokerage direct-indexing programs. Fidelity separately managed accounts run far higher, generally from $100,000 to $350,000, so check which product you are being quoted.
How much does Fidelity direct indexing cost?
Index-tracking strategies inside Managed FidFolios carry a 0.40% annual advisory fee, which Fidelity quotes as $20 a year for every $5,000 invested. Actively managed strategies cost 0.70%, or $35 per $5,000. Five of the eight strategies are index tracking at 0.40% and three are actively managed at 0.70%, so the rate depends on which one you pick rather than on your balance. These are the published rates as of August 2026, so confirm them with Fidelity.
Does Fidelity Managed FidFolios do tax loss harvesting?
Partly, and the exact wording is the most decision-relevant thing on this page. Fidelity says tax-smart techniques including tax-loss harvesting "are applied in managing certain taxable accounts on a limited basis, at the discretion of the portfolio manager." Certain accounts, limited basis, manager discretion: that is a description of occasional judgment rather than a systematic engine. Frec quantifies its harvesting ceilings and Wealthfront publishes a backtest of its harvesting yield, both at a fraction of Fidelity's 0.40%. If tax alpha is the reason you want direct indexing, weigh that difference carefully.
What strategies does Fidelity Managed FidFolios offer?
Eight in total. The five direct indexing strategies priced at 0.40% are U.S. Large Cap Index, U.S. Total Market Index, International Index, U.S. Low Volatility Index and Environmental Focus. The three actively managed strategies at 0.70% are U.S. Large Cap, Dividend Income and International. There is no S&P 500 strategy by name, no small cap and no sector strategies, so the menu is broad on US large cap and thin everywhere else.
Can I exclude stocks from Fidelity Managed FidFolios?
Within a published ceiling: Fidelity states "you may exclude up to five individual stocks or two industries in your account." That covers the common cases, such as screening out your employer's stock or an industry you would rather not hold. What it does not give you is weighting control or the ability to add a name that is not already in the strategy, so it is personalization rather than authorship.
Is Fidelity direct indexing better than an ETF?
It is better only if the harvested tax losses are worth more than the extra fee. An S&P 500 ETF can cost 0.03% a year, while Managed FidFolios costs 0.40%, so you are paying roughly 0.37% more for the chance to harvest losses. That trade works in a large taxable account with gains to offset and does almost nothing in a retirement account.
Can I build my own index at Fidelity?
Not in the sense of authoring your own weighting rules and backtesting them. FidFolios lets you choose from Fidelity strategies and apply preferences. To design a weighted index from scratch, backtest it on real history and track it, you need a dedicated index builder, which is what Indexes provides on the analysis side.
New to the strategy? Start with our guide to direct indexing, what it costs and who it suits, or see direct indexing fees compared across providers. If you are still deciding which category of tool you need, the portfolio analyzer comparison sets out the difference between account aggregators, modeling tools and construction tools. To see every provider's published minimum and annual fee in one table, including the advisor-only firms, compare direct indexing platforms on fees and minimums.
Going deeper on Fidelity: the full Managed FidFolios fee and strategy breakdown, Fidelity FidFolios vs Frec .
Other comparisons
Build your index and see how it backtests
Bundle stocks or crypto into your own weighted index, backtest it against real market history, and track it against the S&P 500 or BTC. Prosumer pricing, no brokerage account. Indexes is educational and informational only, and it never places a trade. Decide for yourself.