Custom Indexing

Custom Indexing

ADVISOR TOOLS

Custom Indexing

Build Customizable Stock Portfolios Modeled on Index ETFs

The IBKR Advantage

  • Create and customize direct index models based on a wide variety of US based ETFs.
  • Modify target weights or use a customized rules module that supports ESG-related exclusion lists.
  • Overweight or underweight stocks related to benchmark weights on a variety of financial metrics.
  • Unlike traditional ETF investing, Custom Indexing does not have an expense ratio, allows you to customize and personalize investing to your client’s needs and comes with low minimums.

Our Custom Indexing tool makes it easy for advisors to build portfolios that are modeled after Index ETFs and easily customizable for client investment goals. Unlike ETFs, clients own fractional shares of each component stock, so advisors can adjust weightings and exclude stocks or sectors in accordance with client needs.

Learn and Earn education

How It Works

As an illustrative example, the SPY ETF, which tracks the SPDR S&P 500, is comprised of over 500 stocks, each with its own weighting. Using Custom Indexing, advisors can copy a list of SPY’s individual holdings and weightings, save the list as a customized index and deploy it as a model that can be tailored to your strategy or client needs.

Custom Indexing offers several advantages over ETFs:

  • No expense ratio
  • Low commissions
  • Low minimums
  • Customize and personalize models to suit client needs

In addition, advisors can:

  • Set cash targets
  • Exclude any selected stocks
  • Apply ESG-related exclusion lists (e.g., “Fossil fuels”)
  • Set custom rules (e.g exclude small cap stocks; overweight stocks where PE is within a certain range and stock is in a particular sector; and so on)
  • Swap stocks in the model for stocks you want to own with a single click.

Tiered Commissions

Basket Value Minimum Commission
≤ USD 700 USD 0.35
> USD 700 and ≤ USD 10,000 Min (0.0005 * Basket Value OR USD 0.35 * Number of orders)
> USD 10,000 and less than 15 orders USD 0.35 * Number of orders
> USD 10,000 and 15 or more orders USD 5.00
Maximum per order 1% of Basket Value

Fixed Commissions

Basket Value Minimum Commission
≤ USD 2,000 USD 1.00
> USD 2,000 and ≤ USD 10,000 Min (0.0005 * Basket Value OR USD 1.00 * Number of orders)
> USD 10,000 and less than 5 orders USD 1.00 * Number of orders
> USD 10,000 and 5 or more orders USD 5.00
Maximum per order 1% of Basket Value

Custom Indexing is currently available in Trader Workstation (TWS).

Interactive Brokers’ Custom Indexes for Advisors

Interactive Brokers’ Custom Indexes for Advisors

Use Interactive Brokers' Custom Indexing feature to create models from a wide selection of popular index-based ETFs. Advisors may replicate the actual weights and holdings in a variety of popular broad-based ETFs and then customize the selection by changing individual sector weights or by excluding stocks based upon fundamental financial criteria.

Video Tutorial Read Notes
Investing Clients and Rebalancing in a Custom Index

Investing Clients and Rebalancing in a Custom Index

The Interactive Brokers Custom Indexing tool allows advisors to invest their client’s money into portfolios modeled after Index ETFs and easily rebalance them using weights calculated from a variety of choices.

Video Tutorial Read Notes

Disclosures

  • Any discussion or mention of an ETF is not to be construed as a recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Interactive Brokers Canada Inc. is a member of the Canadian Investment Regulatory Organization (CIRO) and Member - Canadian Investor Protection Fund. Know Your Advisor: View the CIRO AdvisorReport. Trading of securities and derivatives may involve a high degree of risk and investors should be prepared for the risk of losing their entire investment and losing further amounts. Using borrowed money to finance the purchase of securities involves greater risk than using cash resources only. If you borrow money to purchase securities, your responsibility to repay the loan and pay interest as required by its terms remains the same even if the value of the securities purchased declines. Interactive Brokers Canada Inc. is an order execution-only dealer and does not provide investment advice or recommendations regarding the purchase or sale of any securities or derivatives. Our registered office is located at 1800 McGill College Avenue, Suite 2106, Montreal, Quebec, H3A 3J6, Canada.


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