> This loophole now results in investors only being subject to taxation when they actually sell their stake in the fund. IE the same way as how ETFs are designe

> This loophole now results in investors only being subject to taxation when they actually sell their stake in the fund. IE the same way as how ETFs are designed to work. Your phrasing is slightly misleading. The only reason under tax law that EFTs are taxed this way is because EFTs have always used this same tax dodge. So it's not as if Vanguard has patented (and used) a legal loophole for getting EFT tax treatment on a mutual fund, it is that Vanguard has patented (and used) the same loophole for their mutual fund that everyone uses for their EFTs.