F/m Investments, a boutique investment firm with USD 18 billion in AUM and an ETF provider, announced in a statement the launch of the F/m Compoundr ETF series, a set of tax-advantaged fixed income ETFs developed in collaboration with Compoundr LLC.
These ETFs are the first to implement an investment index specifically designed to address the impact of the tax burden on dividends.
Both funds employ Compoundr’s rules-based dividend rotation strategy, powered by the newly launched Nasdaq Compoundr™ indexes. This approach allows investors to gain exposure to income-generating asset classes while gaining greater control over the timing and nature of the taxable income they recognize.
“With Compoundr, we address one of the market’s most underappreciated frictions: dividends that some investors would rather avoid,” said Alexander Morris, CEO of F/m Investments.
Compoundr’s strategy works by rotating between economically equivalent portfolio investments just before their ex-dividend dates, shifting the return profile toward deferred capital gains instead of current income. This tax-efficient exposure to high yield and aggregate bonds, based on indexes in collaboration with Nasdaq, helps investors more effectively capitalize on their after-tax returns over time.
“The ETF structure often assumes dividends are always desirable, but for many investors—particularly trusts and tax-sensitive accounts—they are not,” said David Cohen, partner at Compoundr LLC.
“Compoundr provides access to the exposures investors want, without the tax inefficiencies they don’t. It’s a transparent, rules-based dividend deferral strategy designed to preserve the investment thesis and eliminate unnecessary taxable income,” he added.
“We offer investors greater control over when and how they receive income, within the inherently efficient structure of an ETF,” added David Littleton, President of F/m Investments. “High yield and investment-grade bonds were ideal starting points, but this strategy has broad applicability across many asset classes in the future,” he concluded.
Both ETFs are listed on Nasdaq.
The F/m Compoundr High Yield Bond ETF (CPHY) is managed by John Han, Marcin Zdunek, and Kevin Conrath, while the F/m Compoundr U.S. Aggregate Bond ETF (CPAG) is managed by Peter Baden, Marcin Zdunek, and Kevin Conrath. Each fund tracks its respective Nasdaq Compoundr™ index and rotates monthly, offering exposure without performance-based tax liability.
