“Eager to give the public what it wants, and to keep shareholders from walking out the door with their assets,” some fund providers have begun converting stock mutual funds to ETFs, according to a recent article in The New York Times, which reports that it could lead to a broader trend.

Morningstar data shows that over the past ten years, $900 billion has flowed out of stock mutual funds and 1.8 trillion has flowed into stock ETFs. “E.T.F.s are simpler and cheaper for managers to run than mutual funds,” the article notes, adding, “Investors benefit when the savings and convenience are passed on to them, and from other inherent advantages that drove the rise in E.T.F.s in the first place.”

Investors also like the favorable tax treatment available through ETFs, the article notes. “Mutual funds generally have to distribute capital gains each year, whereas an E.T.F., like a stock, incurs tax liability only when the owner sells at a profit.”

From a legal perspective, converting a mutual fund to an ETF is a merger of the old fund with the new, and therefore does not represent a taxable event.