F/m Investments rolls out five new single-bond US Treasury ETFs

Apr 2nd, 2023 | By | Category: Fixed Income

Washington-based investment adviser F/m Investments has added five new ETFs to its suite of fixed income funds comprising just a single underlying US Treasury bond.

Alexander Morris, President and CIO of F/m Investments

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

The newest additions to the suite hold the most current (on-the-run) issue for the three-year, five-year, seven-year, 20-year, and 30-year tenors of the Treasury yield curve.

Listed on Nasdaq, the new funds are the US Treasury 3 Year Note ETF (UTRE US), US Treasury 5 Year Note ETF (UFIV US), US Treasury 7 Year Note ETF (USVN US), US Treasury 20 Year Bond ETF (UTWY US), and US Treasury 30 Year Bond ETF (UTHY US).

The suite also includes a further five single-bond ETFs that target the three-month, six-month, 12-month, two-year, and ten-year tenors of the Treasury yield curve.

Those funds are the US Treasury 3 Month Bill ETF (TBIL US), US Treasury 6 Month Bill ETF (XBIL US), US Treasury 12 Month Bill ETF (OBIL US), US Treasury 2 Year Note ETF (UTWO US), and US Treasury 10 Year Note ETF (UTEN US). Collectively, they have accumulated around $1 billion in assets.

Each of the ten ETFs always holds its respective tenor’s latest issue, trading out of the previous issue as soon as a new on-the-run issue is released.

According to F/m Investments, its single-bond ETFs are helping to revolutionize how investors access Treasury markets. The firm notes that the funds allow institutional investors to avoid custody issues related to holding actual US Treasuries, while most retail investors are for the first time able to access single-bond trading, a useful tool for precise duration management.

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

Each fund comes with an expense ratio of 0.15%.

Commenting on the new listings, Alexander Morris, President and CIO of F/m Investments, said: “These ETFs have proven to work well on the short end of the yield curve, and the additional five we’re launching today will allow investors to access, in the same efficient manner, additional distinct points along the curve. Considering the current macro-economic environment, investors are asking for these tools for precise duration management for their portfolios as the yield curve normalizes over time.”

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