ETF Evaluator: F/M 2-Yr Invmt Grd Corp Bd ETF () Follow This ETF

F/M 2-Yr Invmt Grd Corp Bd ETF Overview

F/M 2-Yr Invmt Grd Corp Bd ETF (ZTWO) is a passively managed Taxable Bond Short-Term Bond exchange-traded fund (ETF). F/m investments, LLC launched the ETF in 2024.

The investment seeks investment results that correspond (before fees and expenses) generally to the price and yield performance of the Bloomberg U.S. Liquid Corporate 2 Year Maturity Index (I39297US). Under normal market conditions, F/m Investments LLC (the “Adviser”) seeks to achieve the fund’s investment objective by investing at least 80% of the fund’s net assets (plus any borrowings for investment purposes) in investment grade corporate bonds that have at least 1.5 years, but less than 2.5 years, remaining to maturity. The underlying index is comprised of selected investment-grade corporate bonds of both U.S. and non-U.S. issuers.

About F/M 2-Yr Invmt Grd Corp Bd ETF (ZTWO)

There are 3 members of the management team with an average tenure of 2.20 years: Richard Scargill (2025), Marcin Zdunek (2024) and John Han (2024). Management tenure is more important for actively managed ETFs than passive index ETFs.

The ETF has 1 primary benchmark: Bloomberg US Liquid Corp 2Y Mat TR USD index with a weighting of 100%. F/M 2-Yr Invmt Grd Corp Bd ETF has 457 securities in its portfolio. The top 10 holdings constitute 2.3% of the ETF’s assets. The ETF meets the SEC requirement of being classified as a diversified fund. The ETF is not considered to have an ESG focus with its investment selection and management.

F/M 2-Yr Invmt Grd Corp Bd ETF is part of the Fixed Income global asset class and is within the Taxable Bond ETF group. F/M 2-Yr Invmt Grd Corp Bd ETF has 10.2% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 0.0% There is 0.0% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 98.7% (88.5% domestic bond, 10.2% foreign bond and 0.0% convertible bond). F/M 2-Yr Invmt Grd Corp Bd ETF has 0.1% of the portfolio in cash.

Assets Under Management

The fund has $18 million in total assets, which is below the $3 billion average for the Short-Term Bond category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

ZTWO Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The F/M 2-Yr Invmt Grd Corp Bd ETF expense ratio is low compared to funds in the Short-Term Bond category. F/M 2-Yr Invmt Grd Corp Bd ETF has an expense ratio of 0.15%, which is 47% lower than its category average, making the fund expense ratio grade a B. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. F/M 2-Yr Invmt Grd Corp Bd ETF has a portfolio turnover rate of 35%, which indicates that it holds its assets around / 0.0 years. By way of comparison, the average portfolio turnover is 77% for the Short-Term Bond category.

Recently, in the month of July 2026, F/M 2-Yr Invmt Grd Corp Bd ETF returned 0.2%, which earned it a grade of A, as the Short-Term Bond category had an average return of -0.1%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all ETFs in that category.

F/M 2-Yr Invmt Grd Corp Bd ETF has a trailing yield of 4.45%, which is below the 4.54% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

F/M 2-Yr Invmt Grd Corp Bd ETF Grades

Year to date, the ETF has returned 1.3%, 0.3 percentage points better than the category, which translates into a grade of B. The fund has returned 3.7% over the past year (grade of B).

For more ETF grades, analysis and screening tools to help your investment discovery, join AAII for a $2, full-access trial. Learn more here: https://invest.aaii.com/membership.

Otherwise, for more information about F/M 2-Yr Invmt Grd Corp Bd ETF, including its riskiness, submit your email to unlock the rest of the article.