Vanguard Wannabe Faces SEC Battle to Mimic Tax-Slashing Funds

Vanguard Group’s best-of-both-worlds stranglehold over the money-management industry is facing a new kind of challenger.

This week Washington, DC-based F/m Investments filed to create mutual funds as a share class of its ETFs, in a bold bid to mirror the tax-saving hybrid investing vehicles pioneered by Jack Bogle’s firm more than two decades ago.

In the process, the investment boutique has opened up a new front in the quest among issuers to secure Securities and Exchange Commission approval to replicate a unique fund structure that helped Vanguard become the industry’s second-biggest manager after BlackRock Inc.

At stake: the ability to ...