Stories

Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

Article news.ycombinator.com

Launch HN: Double (YC W24) – Index Investing with 0% Expense Ratios

Hi HN, we’re JJ and Mark, the founders of Double (https://double.finance). Double lets you invest in 50+ broad stock market indexes with 0% expense ratios. We handle all the management, including rebalancing and tax-loss harvesting—proactively selling losing stocks to potentially save on taxes—for $1/month.

Our goal is to bring the low fee trend pioneered by Robinhood to ETFs and mutual funds. We posted a Show HN about 3 months ago (https://news.ycombinator.com/item?id=41246686) and since then have crossed $10M in AUM (Assets Under Management) [1].

Here’s a demo video: https://www.loom.com/share/10c9150ce4114f278e8c249f211e7ec8. Please note that none of this content should be treated as financial advice.

Everyone knows that fees eat into your investing returns. Financial advisors generally charge 1% of AUM per year, and ETFs have a weighted average expense ratio of about 0.17%, although some go as low as 0.03% for VOO. Over a 30-year period on a $500k portfolio with $2k invested monthly, the money lost to those fees would be $1.30M for the financial advisor and $244k for the average ETF and even $42,951 for the low fee VOO.

Double lets you index invest without paying any percentage-based fees - we charge just $1/month. It works by buying the individual stocks that make up popular indexes. By buying the individual positions, we can also customize and tax-loss harvest your account, something ETFs or Mutual Funds cannot do.

Most ETFs and mutual funds today are not that complicated - they can be expressed as a CSV file with 2 columns - a ticker and a share number. You can find these holding csv files on most ETF pages (VOO[2], QQQ[3]). Right now there are about $9.1T of assets in ETFs[4] and $20T in Mutual Funds[5] in the US, with estimated revenue of $100B per year. We think this market is ripe for disruption.

We offer 50+ strategies that track popular ETFs and are updated as stocks merge and indexes change. You can customize these by weighting sectors or stocks differently, or even build your own indexes from scratch using our stock/etf screening tools. Once you've chosen your strategy, simply set your target weights and deposit funds (we also support transferring existing stocks). Our engine then checks your portfolio daily for potential trades, optimizes for tax-loss harvesting, portfolio tracking, and redeploys any generated cash.

I (JJ) started working on this after selling my last company. After using nearly every brokerage product out there and working with a financial advisor, I noticed a huge gap between the indexing capabilities of financial advisors and what individual investors could access. We wanted to bridge that gap and provide these powerful tools to everyone in a simple, low-cost way.

There are a number of robo-advisor products out there, but none that we know of offer direct indexing without expense ratios or AUM fees. One similar product is M1 Finance, but Double is more powerful. We offer tax-loss harvesting, a wider range of indexes, and greater customization. For example, when building your own index, you can set weights down to 0.1% (compared to M1's 1%) and even weight by market cap.

We also compete with robo-advisors like Wealthfront, but offer more control over your investments. And did I mention we don't charge AUM fees? You can see our strategies and play with the research page https://double.finance/p/explore without creating an account.

Over the past year we’ve learned a lot about the guts of building portfolio software. For example, stocks don’t really have persistent identifiers that are easy to model and pass around. We trade CUSIPs with our custodian Apex*, but these change all the time for stock splits or re-org’s that you would not think would lead to a new “stock”.

We’ve also learned a lot about how tax loss harvesting (TLH) is best implemented on large direct index portfolios using a factor model as opposed to pairs based replacements which I initially thought might be the way to execute these. We do use a pairs strategy on smaller sized strategies. And how TLH and portfolio optimization generally is best expressed as a linear optimization problem with competing objectives (tracking vs. tax alpha vs. trading costs for example).

If you have any thoughts on the product or our positioning as the low fee alternative I’d love to hear it. I think Robinhood has proved that you can build a strong business by getting rid of an industry wide cost (in their case commissions, in our expense ratios). We aim to do the same.

[1] https://www.axios.com/pro/fintech-deals/2024/12/10/direct-in... [2] https://investor.vanguard.com/investment-products/etfs/profi... [3] https://www.invesco.com/qqq-etf/en/about.html [4] https://fred.stlouisfed.org/series/BOGZ1LM564090005Q [5] https://fred.stlouisfed.org/series/BOGZ1LM654090000Q

* Edit to add a note on risk: If Double goes out of business, your assets are safe and held in your name at Apex Clearing. They have processes in place for these scenarios to help you access and transfer those assets. See more at https://news.ycombinator.com/item?id=42379135 below.

Discussion 413 comments · 443 points · jjmaxwell4 · 2024-12-10
Open on HN
Loading the discussion…

Domain filters

Stories from these domains are hidden from every list. Subdomains match too: blocking substack.com also hides danluu.substack.com.

    New collection

    Delete this collection?

    About YAVCHN

    YAVCHN is a reader for Hacker News and Lobsters, with articles and discussions in separate windows or Classic pages.

    Created by Paul Parks and built with PUDL.

    YAVCHN source code on GitHub

    Privacy policy · Terms of use

    Help

    Keyboard

    j / k
    Move down and up the story list. The arrow keys scroll whatever has focus.
    Enter
    Read the marked story in the article reader.
    ]
    Read the next story in the same article-reader applet. Back returns to the previous story.
    p
    Pin or unpin the marked story, which keeps it in Pinned.
    n / N
    Move to the next or previous top-level comment in the window in front.
    c
    Collapse or expand that comment.
    f
    Hide or show the story list.
    Esc
    Close a menu or this help.
    Access key m
    Go to the menu bar. Most browsers take it with Alt on Windows and Linux, and Safari with Control and Option.
    ?
    Show this help.

    Windows

    Each story opens in a window holding its article above its discussion; drag the bar between them to share the room differently. A window can be moved by its title bar, resized from any edge, snapped to a half or a corner by dragging it there, maximised, or minimised to the bar at the foot of the page. Use Window > New reader window to open an empty reader, or Story > Open in new reader window to open another reader for the current article. Docked readers keep their articles when you select another story from the sidebar. Minimized readers can be restored and reused for their site. A window's Next story link reads on down the list in the same window.

    A link in a comment or an article to another Hacker News or Lobsters thread opens that thread in a window too. A link to a single HN comment opens the comment above its replies.

    While a story's window is in front, the Story and Discussion menus in the menu bar hold its commands: pinning, Next story, sorting, collapsing every thread, jumping to the first new comment. Each window also remembers where you were in its article and discussion, so a reload, or Back to a story that Next took you past, finds your place again. Closing a window forgets it.

    The whole arrangement lives in the address, so a bookmark or a shared link brings it back, and Back undoes the last change. Moving between Hacker News, Lobsters, their lists, Pinned and Find changes only the list, and leaves the windows open.

    The list

    The pin at the start of a row keeps the story in Pinned, and the cross at its end hides it. Pinned can be narrowed by words in the title, site or author, by source, and to the stories you haven't opened yet, and ordered by when you pinned them, by points or by comments; the filters are part of the address, so a filtered view can be bookmarked. Scroll past the end of the list to load more. Domain filters, in the View menu, hide every story from a site.

    Collections are named lists of stories. Story > Add to collection files the story in front into one or more of them, and the Collections feed shows them all or one at a time; the menu that chooses collections also creates, renames, and deletes them. A note is your own text on a story. Choose Add note in a story's toolbar to write one; it saves as you type. Rows with a note carry the note mark, and the Notes feed lists every noted story and searches the text of your notes.

    Browsing view

    View > Windowed and View > Classic select the browsing view and save your default in this browser. Window view reuses a reader for each feed. Classic view opens stories and applets as pages. Open as a page is a one-off action that does not change your saved default. Use the Windowed selector to return an article to a window. Direct page links always open as pages.

    Applets

    The Applets menu in the menu bar holds three tools, each a window of its own. Replies to me takes your Hacker News user name and lists the replies to your last thirty comments and stories, checking again every three minutes while it is open, and marking what is new since you last marked them read. Look up a user opens a profile on Hacker News or Lobsters, with their submissions and recent comments, as a commenter's name in any discussion does; the bar at the top of a profile looks up someone else in the same window, and Back returns to the one before. Who is hiring? filters the posts of HN's monthly hiring threads by the words you type.

    They read only what the sites publish to everyone, so none of them asks for a login, and your user name stays in this browser anonymously and is included in retained applet state when signed in.

    Find

    Find takes any link and lists every time it was submitted to Hacker News and Lobsters, so you can read each discussion of it.

    About

    YAVCHN never sees your Hacker News or Lobsters login. The discussion is fetched from each site's public API; to vote or reply, follow the link above the discussion, or the arrow beside a comment, to the source's own site. Without a YAVCHN account, your data stays in this browser. When signed in, pins, collections, notes, blocked domains, and retained reading state are stored with your account and synchronized across devices. Hidden stories and layout stay in this browser. The privacy policy has the details.

    Open source: github.com/paulmooreparks/yavchn. Built with PUDL.