worked on story i with zach snyder and our database team looking at ,anguard's mutual fund and etf andow he uses the etf reduce capital gains in its mutual fund. share class of the mutual fund. it is something vanguard patented in the early 2000's. some of the tax advantages etf can realize using heartbeat trades actually apply to the mutual funds, as well because of this connection. it has been a huge win for the investors and man guards -- vanguard's mutual fund to have these advantages in capital gains taxes. this patent will expire in a couple of years. the question is whether other issuers may want to copy that strategy, as well. eric: i have heard 2 sides of this. if someone says you have to pull money out of the click, it will be bad. then the side says i love this, it would be not to do. where do you fall? >> it is brilliant. not -- it makes the mutual fund investors more tax friendly and the investors more friendly. when it expires, we may see multiple launches of etf share classes so they can take the tax benefit and translate it into their mutual fund. it would be great if w

so this is a story i worked on with zach snyder and our database team looking at vanguard mutual fund and etf's, and how it uses the etf's to reduce capital gains taxes in its mutual fund. so the way that it works is the etf's are share class of the mutual fund. this is a format that vanguard patented back in the early 2000's. so some of the tax advantages etfs can realize using heartbeat trades actually apply to the mutual funds as well because of this connection. it has been a huge win for the investors in vanguard's mutual fund to have these advantages in capital gains taxes. one interesting thing to note is that these patents will expire in a couple of years. so the question is whether other issuers might want to copy that strategy, as well. eric: i have heard 2 sides of this. one says well, if you pull money out of vanguard quickly, that will be a lot of capital gains for the etf, that is that. the other side says i love this. you would be crazy not to do it. where do you fall? phil: it is brilliant. it makes the mutual fund investors more tax friendly and the mutual fund investm