Capital Gains Vanish Into ‘Black Holes’ in Latest ETF Tax Trick

Officially, the Twin Oak Active Opportunities ETF exists to seek “long-term capital appreciation.” Unofficially it has a second, more cunning, purpose.

TSPX, to use the fund’s ticker, debuted in February without much marketing. Yet it launched with nearly $450 million in assets and almost immediately received a $99 million inflow — amazing numbers for a virtually unknown ETF.

The day after that big inflow, there was an almost identical outflow. A similar pattern repeated in the next two trading days, and then again in the two days after that. And as all that capital rushed in and out, a change ...