MutualFundWire.com: With 2 New ETFs, Morris Teams Up to Fight Dividend Tax Drag, And ...
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Wednesday, August 13, 2025

With 2 New ETFs, Morris Teams Up to Fight Dividend Tax Drag, And ...


Alex Morris and his team are partnering up to fight "dividend tax drag" with a pair of new ETFs. Watch for them to roll out a third such index fund, too.

Alexander Robert "Alex" Morris
 F/m Investments
CEO, Chief Investment Officer
Yesterday, Morris, CEO of F/m Investments, and David Littleton, president of F/m, unveiled the debut of the F/m Compoundr Series of ETF and of the series' first two funds: the F/m Compoundr High Yield Bond ETF (CPHY on the Nasdaq) and the F/m Compoundr U.S. Aggregate Bond ETF (CPAG). The F/m team also filed to launch the F/m Compoundr U.S. Treasury 10-Year Note ETF (CPX).

Washington, D.C.-based F/m Investments LLC will serve as investment advisor to CPX, CPHY, and CPAG. And a new shop, Compoundr, LLC, serves as index provider.

CPAG and CPHY's inception date was yesterday, while CPX is not yet available. CPHY comes with an expense ratio of 59 basis points, CPX's expense ratio will be 50bps, and CPAG's expense ratio is 45bps. CPAG and CPHY have $1 million each in AUM*.

CPX, CPHY, and CPAG have overlapping, but distinct, teams of F/m portfolio managers. CPAG's PM team includes:
  • Peter Baden, managing director, director of fixed income strategy;
  • Kevin Conrath, vice president; and
  • Marcin Zdunek, managing director, head of capital markets.

    • CPHY's F/m PM team includes:
  • John Han, vice president, head of leveraged credit;
  • Conrath; and
  • Zdunek.

    • CPX's F/m PM team will include:
  • Baden;
  • Morris; and
  • Zdunek.

    • CPX, CPHY, and CPAG are powered by a trio of Compoundr indexes whose inception date was July 16.
  • CPAG tracks the Nasdaq Compoundr U.S. Aggregate Bond Index;
  • CPHY tracks the Nasdaq Compoundr High-Yield Corporate Bond Index; and
  • CPX tracks the Nasdaq Compoundr 10-Year U.S. Treasury Note Index.

    • "The ETF structure often assumes that dividends are always desirable, but for many investors — particularly trusts and tax-sensitive accounts — they're not," states David Cohen, partner at Compoundr. "Compoundr provides access to the exposures investors want, without the tax inefficiencies they don't. This is a transparent, rules-based dividend deferral strategy built to preserve the investment thesis while eliminating unnecessary taxable income."

    "With Compoundr, we're targeting one of the most underappreciated frictions in the market: dividends that some investors would rather avoid," Morris states.

    Littleton describes the F/m Compoundr ETFs as offering investors "more control over when and how they realize income — within the inherently efficient structure of an ETF." And he hints at future expansion of the F/m Compoundr ETFs lineup.

    "High-yield and investment-grade bonds were ideal starting points, but this strategy has broad applicability across many asset classes going forward," Littleton states.

    CPX, CPHY, and CPAG are each passively managed series of the RBB Fund, Inc.. The three ETFs' other service providers include:
  • Cohen & Company, Ltd. as independent accounting firm;
  • Securities Finance Trust Company (aka eSecLending) as securities lending agent;
  • Faegre Drinker Biddle & Reath LLP as counsel;
  • ACA Foreside's Quasar Distributors, LLC as distributor and underwriter;
  • U.S. Bancorp Fund Services, LLC (dba U.S. Bank Global Fund Services) as administrator, dividend disbursing agent, and transfer agent.

    • Susquehanna International Group serves as lead market maker to CPAG. Mischler Financial's GTS Mischler serves as lead market maker to CPHY.

    *As of yestrday (August 12, 2025.)


    Printed from: MFWire.com/story.asp?s=70281

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