(Bloomberg) — Asset manager F/m Investments is launching a mutual fund share class of its most popular ETF with an eye on the American retirement system.
Starting Thursday, the $6.4 billion US Treasury 3-Month Bill ETF (ticker TBIL) will also have mutual fund share classes available to buy and sell under the ticker TBFMX, the company said in a statement. With the launch, $18 billion manager F/m becomes the first to utilize the dual-share class structure since Vanguard Group’s patent expired on the blueprint nearly three years ago.
The move is aimed at expanding the fund’s reach into American retirement plans and the 401(k) system, according to F/m Chief Executive Officer Alexander Morris. While ETFs have become ubiquitous in nearly every facet of the US investment landscape, retirement accounts rely on mutual funds and separately managed accounts. Tacking on a mutual fund share class option to TBIL — which wouldn’t alter the fund’s portfolio, track record or management team — provides an avenue into that market, Morris said.
“The retirement marketplace is entirely off-limits to us. That’s a mutual-fund only community,” Morris said in an interview. “TBIL is super liquid. It’s the liquidity profile of it, the simplicity of what it does, that makes it a great place to start this process.”
F/m’s roll-out comes after the Securities and Exchange Commission mid-December allowed dozens of asset managers to use the multi-share class fund structure. While most were seeking permission to launch ETF share classes of their existing mutual funds, F/m was one of just a handful looking to go in the reverse direction.
TBIL’s straightforward portfolio of short-term US Treasury bills made it the ideal candidate for F/m to start with, Morris said. While F/m is open to creating mutual fund share classes of its other ETFs, the plan is to let client demand guide that decision, he said.
“Once we get the process working, the industry is ready, everyone is understanding how this works, we’ll let capitalism dictate which products to do this with next,” Morris said.
