Trillions Sep 17, 2026 19m 9m saved
With Isabel Lee, cross-asset reporter at Bloomberg News
The Yorkville America Mangoes Plus Index ETF, ticker FRUT, holds OpenAI and Anthropic through special purpose vehicles, which are separate legal entities set up to own a stake and pass the exposure through. Two of the six companies in its index are not publicly traded.
New funds normally track things that already exist. This one is built on an acronym that has not entered anyone's vocabulary yet, alongside a second product whose entire $600 million of assets arrived in a single tax transaction and will probably never see another inflow.
"I have not heard it outside of these ETF filings."
Isabel Lee covers cross-asset markets for Bloomberg News and has reported on which families are using ETFs to defer capital gains. Eric Balchunas and Joel Weber walked her through three new launches: the one with the most assets, the wild card, and the one they do not expect to survive.
The full episode is covered here so you can skip it. 19 minutes of audio, 10 minutes of reading.
Here are the 9 calls that matter.
Key Takeaways
ETFs are launching at six or seven a day, with 128 in August alone
A fund nobody had heard of topped the month's flows with about $600 million, all from one tax conversion
Balchunas puts the 351 conversion business at $17 billion and says it is now open through Schwab accounts
He argues the accurate word is defer, not dodge, because the basis carries over
MANGO is Meta, Anthropic, Nvidia, Google, OpenAI and SpaceX, and two of those are private
FRUT charges 50 basis points, which Balchunas called reasonable for the category
He expects the hedged Bitcoin fund not to exist in two years
1. Six or Seven a Day
Weber opened with the count: 128 launches in August. Balchunas has stopped trying to follow all of them, and does not think the market needs more.
"But in August, there's been 128 new launches last month. We need more." — Joel Weber
"No, there's too many, honestly." — Eric Balchunas
"Yeah, there are six or seven launching a day this year. That's the pace we're at. It's mind-numbing. And I can't keep up with them. But yeah, it's pouring right now." — Eric Balchunas
2. $600M From Nowhere
Balchunas picks the month's biggest launch by assets, and this month the answer was a fund he had never encountered: the Investment House ETF, ticker TIH, issued under the white-label platform ETF Architect. The size told him what it was before he checked.
"So I just sort them by assets and I look, okay, what was the one with the most assets so far this month? And the answer is kind of a shocker, the investment house ETF, TIH." — Eric Balchunas
"But it has, I believe, 600 million." — Eric Balchunas
"So when you look at the holdings of this, it just looks like the S&P. It's nothing special. Nobody's bought it since this." — Eric Balchunas
The flows were a single event rather than a business. Balchunas said the issuer was not launching it to gather assets at all.
3. What a 351 Is
A 351 conversion lets a holder move concentrated stock positions into a diversified ETF without triggering the capital gains tax at the moment of the swap. The cost basis carries across, so the tax is postponed rather than erased.
"So if you have, let's say you have a stock or two and they've had so much gains and you just don't want to realize those gains now, there's a way to work with an ETF issuer to diversify your portfolio and move those stocks into a diversified ETF and defer your tax on that." — Eric Balchunas
"And this is a growing business. I believe $17 billion worth of these." — Eric Balchunas
Balchunas said the same trade has existed for decades for the very wealthy, who could call a banker and use an exchange fund. What is new is the distribution.
"So this is just democratizing that move." — Eric Balchunas
"Now, what's interesting is they actually open these up. So in a Schwab account, you can get in on these." — Eric Balchunas
Lee has been reporting on who is actually doing it, and said the users are getting harder to identify. Melvin Capital's Gabe Plotkin, known from the GameStop episode, appeared in her reporting.
"It's not illegal, but it's just to Eric's point, I think you just don't want to get any attention when it comes to lots of money and lots of taxes." — Isabel Lee
"And I looked into this ETF and they hold all the big tech companies that you can imagine." — Isabel Lee
Balchunas expects the Treasury to draw a line eventually, around how many stocks a holder may bring in and how the resulting fund has to be diversified. He said he attended ETF Architect's annual event, where roughly a third of the sessions were about tax strategy.
4. Dodge or Defer
Balchunas objected to the word used in coverage of these funds, and made an argument about definitions rather than about ethics.
"So therefore, I looked at the word dodge and it means to avoid completely. So I just think definitionally defer is more accurate." — Eric Balchunas
He conceded the commercial logic of the other word, saying "deferment" reads as investor repellent and that he has put unappealing words in his own book titles. Lee agreed on the substance and reminded listeners what deferral means in practice.
"And I saw it, that it's tax deferral. It's not really like you're never going to pay taxes anymore. And I think that's the important thing that people just need to remember." — Isabel Lee
"Thank you for that GRE lesson, Eric." — Isabel Lee
5. The Fee Question
Weber asked whether the fund is at least cheap. It is not, and Balchunas could not explain the price.
"It's 100 basis points, Joel. So I'm not sure if you'd want to do that." — Isabel Lee
"I don't totally understand the high fee, to be honest with you." — Eric Balchunas
"If you look at the stocks, I mean, you can get that for three bips now, too." — Eric Balchunas
His explanation is that some conversions are not products at all. He contrasted it with a bespoke fund State Street launched with CalPERS as the seed investor, priced low in case outside money followed.
"ETFs are just so damn benefit rich that people convert a lot of things into them." — Eric Balchunas
"You know, normally I would go to the top of the list and see like a BlackRock or Vanguard ETF. And now you never know what you're going to see up there." — Eric Balchunas
6. MANGO and FRUT
The wild card is an index built on a new acronym. Lee spelled it out and identified the part that makes it structurally unusual.
"I'm going to drop a new Wall Street acronym on you." — Eric Balchunas
"Get ready for mangoes, okay? The Yorkville America Mangoes Plus Index ETF, ticker FRUT, F-R-U-T." — Eric Balchunas
"Mango stands for Meta, Anthropic, Nvidia, Google slash Alphabet, OpenAI, and SpaceX. And I think the noteworthy thing there is that there are two companies there that are private." — Isabel Lee
Other issuers have filed mango-themed funds, and a leveraged version does not hold the private names at all. This one does, through special purpose vehicles.
"Anyway, this one is legit, though, because now it does hold the OpenAI and Anthropic through special purpose vehicles." — Eric Balchunas
Lee raised the obvious problem with the design, and Balchunas did not have a structural answer so much as a directional one.
"And then when they go public, those two companies, then what makes this special? It's just going to be like any other." — Isabel Lee
"Well, AI is not going away." — Eric Balchunas
On whether the acronym itself will stick, he was honest about its current reach, and said the fee is fair.
"I have not heard it outside of these ETF filings." — Eric Balchunas
"50 bips. Not bad. I mean, it's reasonable for a hot saucy type product." — Eric Balchunas
7. The Parabolic 7
The "plus" in the fund's name is a second basket, and Balchunas compared the naming convention to 1950s westerns before reading the list.
"The Parabolic 7. SanDisk, Marvell, Micron, Intel, Dell, AMD, and Broadcom." — Eric Balchunas
"So, I mean, these are some hot, highfalutin stocks here, Joel." — Eric Balchunas
Weber's read was that these are the suppliers behind the six MANGO names.
8. Hedged Bitcoin
The "good luck with that" slot went to the Hedgeye Hedged Bitcoin ETF, HBIT. Balchunas gave two reasons it faces trouble: it is late to a crowded category, and the hedge is the opposite of what Bitcoin buyers want.
"The real one is the Hedgeye Hedged Bitcoin ETF HBIT." — Eric Balchunas
"They want to experience the pure melt-up." — Eric Balchunas
"And so a lot of the buffers and the hedging ones just don't take off anyway." — Eric Balchunas
The design is a dynamic hedge driven by market signals rather than a permanent buffer, which Balchunas said fits Hedgeye's other products better than it fits this asset.
"It is so hard to time the market over and over." — Eric Balchunas
"I'll eat my words if this thing gets asset. But if I had to bet, this thing won't be around." — Eric Balchunas
"This ETF, I think the expense ratio is 70 BIPs." — Isabel Lee
9. Why Funds Hold IBIT
Lee asked why a fund would hold a Bitcoin ETF rather than Bitcoin itself. Balchunas said the arithmetic favors the ETF even for professionals, because the spread is narrower than what a crypto exchange charges and the options market on the ETF is deep.
"I mean, I bet, to be honest with you, even a professional investor who goes to like a Bitcoin exchange, you'd get a better price just trading IBIT at a one or two basis point spread." — Eric Balchunas
"It's honestly a better deal than going direct." — Eric Balchunas
The one hedged structure he thinks can work is selling far out-of-the-money call options to turn Bitcoin's volatility into income, keeping most of the upside.
Bonus Insights
Balchunas flagged the Aura AI Photonics ETF, ticker PHOX, as too small and too late in a crowded category, then admitted he only raised it because of the name: his 15-year-old uses "aura" constantly, and has told him his own is negative and permanent
On the income approach to Bitcoin, Balchunas said: "So that company Goldman bought Neos, they have a Bitcoin premium income ETF." His point was that a covered-call structure can be mildly successful where a hedge cannot
Bitcoin fell about 1.3% after the run-up that preceded the launch, and Balchunas estimated the hedge saved holders roughly 30 basis points, which he called not much of a buffer
The episode's longest digression was about cleaning before the cleaners arrive. Lee sided with Balchunas's wife: "We don't want the cleaners to think that this client is the messiest."
Weber's mango trivia produced the other dispute of the episode. Lee said the Philippines grows the best; Weber said India would object; Lee's husband is Indian and she confirmed it is a live argument at home
Balchunas opened by saying the world needs more restaurants with children's play areas, and credited Chick-fil-A with keeping them
The pair's bottom line is that the ETF wrapper is now being used for things that have nothing to do with attracting investors, and that the most interesting new fund of the month exists mainly to give retail buyers a slice of two companies they cannot otherwise own.
Products, Companies & Tools Mentioned
Investment House ETF (TIH) (Topped the month's flows with about $600 million from a single 351 conversion; holdings resemble the S&P and it charges 100 basis points)
ETF Architect (The white-label issuer behind TIH; a third of the sessions at its annual event were about tax strategy)
Yorkville America Mangoes Plus Index ETF (FRUT) (Holds OpenAI and Anthropic through special purpose vehicles plus the "Parabolic 7" suppliers, at 50 basis points)
OpenAI, Anthropic and SpaceX (The private names inside the MANGO index; two are held through special purpose vehicles)
Hedgeye Hedged Bitcoin ETF (HBIT) (70 basis points for a dynamic hedge; Balchunas expects it to close within two years)
iShares Bitcoin Trust (IBIT) (What professionals use instead of buying Bitcoin directly, on spread and options liquidity)
Melvin Capital (Gabe Plotkin's firm, named in Lee's reporting on who is using 351 conversions)
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