ETF Advisors, LP announced that its four Treasury Fixed Income Trust Receipts (FITR) exchange-traded funds have begun trading.
Treasury FITRS (pronounced “fighters”) are designed to track the returns, before fees and expenses, of US Treasury securities with one, two, five and 10-year maturities, the company said.
At least 95% of the underlying assets of Treasury FITRS are debt obligations of the US Treasury or federal agencies. Like any other exchange-traded fund, Treasury FITRS are baskets of securities that trade like ordinary stocks.
The four Treasury FITRS are trading on the American Stock Exchange under the following ticker symbols:
- Treasury 1 FITR (TFT)
- Treasury 2 FITR (TOU)
- Treasury 5 FITR (TFI)
- Treasury 10 FITR (TTE).
Because Treasury FITRS are held in securities accounts like stocks, they don’t create any custody challenges to increase administrative costs, the company said.
For US residents, the monthly income from treasury interest is exempt from state and local income taxes. Because Treasury FITRS are constructed to mirror an index, the management fees of 0.15% per year are lower on average than those associated with actively-managed bond funds, the company said.
Like most exchange-traded funds, FITRS shares are expected to trade at prices very close to their underlying value throughout the trading day thanks to a dual trading process.
Fund shares are created or redeemed in large blocks through the deposit of securities to, or delivery of securities from, the fund’s portfolio. Secondary trading, in lots as small as a single fund share, takes place on a stock exchange, the company said.
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