F/m Investments, a $4 billion investment adviser based in Washington, D.C., has made its ETF debut by launching the world’s first fixed income ETFs comprising just a single underlying US Treasury bond.

Alexander Morris, President and CIO of F/m Investments.

Listed on Nasdaq, the initial suite consists of three funds, each holding the most current (on-the-run) issue for the three-month, two-year, and ten-year tenors of the Treasury yield curve.

They are the US Treasury 3 Month Bill ETF (TBIL US), US Treasury 2 Year Note ETF (UTWO US), and US Treasury 10 Year Note ETF (UTEN US).

The funds will always hold their respective tenor’s latest issue, trading out of the previous issue as soon as a new on-the-run issue is released.

F/m Investments is hoping the ETFs will revolutionize how investors access Treasury markets. The firm notes that institutional investors may be attracted to the ability to avoid custody issues related to holding actual US Treasuries, while the ETFs will be opening up single-bond trading to most retail investors for the first time.

The funds distribute dividends monthly, providing a more frequent and regular interest payment than holding actual US Treasuries, while they also benefit from the liquidity, convenience, and potential tax benefits inherent in the ETF structure.

Finally, F/m Investments notes that investors will be able to short the ETFs, and are expected in time to be able to enact option positions on the ETFs, facilitating the expression of a variety of views on US interest rates.

Each ETF comes with an expense ratio of 0.15%.

Alexander Morris, President and CIO of F/m Investments, said: “We believe our US Benchmark Series will revolutionize financial markets, making the most liquid securities (US Treasuries) accessible to everyone in a simplified way. We are equitizing the yield curve, giving investors low-friction access to US Treasuries as well as the ability to short or potentially use equity options to express views on rates.”