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
The Vanguard Group headquarters in Malvern, Pennsylvania.
Photographer: Mike Mergen/Bloomberg
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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.