The Patent That Helped Vanguard Clients Pocket Big Gains Expires

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vnatale
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The Patent That Helped Vanguard Clients Pocket Big Gains Expires

Post by vnatale » Thu May 18, 2023 9:51 am

Seems unclear what effect this will have on Vanguard?

Currently all my investment money is with Vanguard. I've yet to ever buy an ETF but that may change relatively soon.

Is this of concern to any of you?

Vinny


The Patent That Helped Vanguard Clients Pocket Big Gains Expires
Fund structure gave the Bogle-founded firm an edge since 2001
Only one mutual fund issuer has filed with SEC to copy firm

https://www.bloomberg.com/news/articles ... ify%20wall

The patent that’s given Vanguard Group an edge over competitors for the past 20 years — and helped its clients pull in more than $100 billion worth of additional investment gains — expired today.

Rival fund managers are now free to replicate a unique but controversial fund structure created by the Jack Bogle-founded firm in 2001 that allows mutual funds to act like exchange-traded funds by generating returns for investors while minimizing taxes.

It’s unclear if the expiration marks a minor footnote in history or a pivotal moment for fund managers looking for a fresh edge in an increasingly cutthroat market. The answer in large part is riding on the US Securities and Exchange Commission and the stance it takes. Just because it allowed Vanguard to start using the tactic two decades ago doesn’t mean it will allow others to do the same now.

“The SEC is the clear lynchpin here,” said Nate Geraci, president of The ETF Store, an advisory firm. “If they green-light this structure, I expect a number of traditional mutual fund companies to seriously explore using it.”
Above provided by: Vinny, who always says: "I only regret that I have but one lap to give to my cats." AND "I'm a more-is-more person."
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