F/m Investments is expanding its ETF lineup with the launch of a new fund, which the firm claims is the first in its new Accumulator Series. The actively managed F/m Accumulator Ultrashort Treasury ETF (NASDAQ:SGVA) is designed to provide exposure to ultrashort U.S. Treasuries while eliminating recurring distributions, allowing returns to compound within the fund rather than being paid out as taxable income.

Key Features of SGVA and the Accumulator Series

  • Strategy: Actively managed ultrashort Treasury ETF
  • Asset exposure: U.S. Treasury securities with maturities ranging from 0 to 12 months
  • Objective: Deliver total return without recurring distributions
  • Tax-aware approach: Rotates among underlying Treasury ETFs to avoid receiving dividend distributions
  • Potential benefit: Returns remain inside the ETF, reducing current taxable income and allowing gains to compound within the fund
  • Active management advantage: Portfolio managers can select underlying Treasury ETFs based on cost and execution considerations
  • Not index-based: The fund is not tied to a benchmark rebalancing schedule, which F/m believes can improve efficiency and reduce implementation costs
  • Holdings: A invests primarily in iShares 0-3 Month Treasury Bond ETF (NYSE:SGOV) which holds “short maturity U.S. Treasuries in a structure designed to avoid receiving their distributions.”
  • Expense ratio: 0.22%

The launch marks a new direction for the $19 billion fixed-income manager, which says many investors seeking Treasury exposure are primarily focused on total return rather than periodic income payments.

According to F/m CEO Alexander Morris, the Accumulator structure aims to improve compounding efficiency. How? By keeping investment gains inside the ETF. SGVA is the first product in a broader planned lineup. It will eventually target additional income-oriented asset classes using the same framework.

"The goal is simple: deliver the asset class exposure cleanly and let compounding do the rest," said Peter Baden, portfolio manager of the SGVA ETF.

Read Also: Nvidia Millionaires Can't Afford To Sell, ETFs May Be Their Escape Route

Photo: Jason Raff on Shutterstock