---
title: Direct indexing fees
description: Learn how Frec calculates and bills direct indexing fees, including the annual fee, financing costs, and hard-to-borrow stock costs for leveraged strategies.
---
[Skip to content](https://help.frec.com/en-us/direct-indexing-fees#main-content)
[](https://frec.com/)
- [Contact help](https://help.frec.com/contact-help)
- [Login](https://frec.com/app/login)
Open main navigation
Close main navigation
- [Contact help](https://help.frec.com/contact-help)
- [Login](https://frec.com/app/login)
This is a search field with an auto-suggest feature attached.
- There are no suggestions because the search field is empty.
1. [Frec Help Center](https://help.frec.com/en-us?hsLang=en-us)
2. [Classic direct indexing](https://help.frec.com/en-us/classic-direct-indexing?hsLang=en-us)
September 28, 2026
# Direct indexing fees
### Overview of direct indexing fees
Depending on your strategy, your direct index may include up to three types of fees.
| **Fee** | **Classic direct indexing** | **Long short** | **Diversify** |
| --- | --- | --- | --- |
| Annual fee | Yes | Yes | Yes |
| Financing cost | No | Yes | Yes |
| Hard-to-borrow stock costs | No | May apply | May apply |
### Annual fee
All of Frec’s direct indexing strategies (Classic, Long short, Diversify) have an annual fee. The annual fee is billed monthly on the first of the following month. Each day's fee is calculated by taking your portfolio value at the end of the market day (or on non-trading days, the previous market close is used), multiplying it by the annual fee, and dividing by 365 (366 in leap years). The fee is charged directly from your direct index cash balance.
### Financing cost
Long short and Diversify strategies borrow to fund a portion of the portfolio, so they have a financing cost for the borrowed amount. Like the annual fee, the financing cost is calculated on each day's balance and billed monthly with your other fees. Because your exact leverage can shift slightly from day to day, this cost may fluctuate along with that exposure.
### Hard-to-borrow stock costs
Long short and Diversify strategies may have hard-to-borrow stock costs. Lenders may charge an additional fee to borrow certain stocks that are scarce. This rate is set by the market for each stock and can change daily.
Frec currently covers these costs, so you don't pay them. However, we reserve the right to pass hard-to-borrow costs on to customers in the future.
Frec's algorithm is designed to close hard-to-borrow positions while keeping your portfolio closely tracking its benchmark.
### Where to find your fees
You can see your fees in two places:
- **In your direct index:** Open your direct index and go to the **Tax losses harvested** tab. The underlined number next to fees shows your total. Click it to see a detailed breakdown.
- **In your activity:** Go to the **Activity** tab and filter by **Fees**.
[](https://frec.com/)
FREC © 2026 Frec Markets, Inc. All rights reserved.