F/m Investments Launches High Yield ETF Focused on Top 100 Issuers (ZTOP)

New ETF Targets Largest and Most Liquid U.S. High Yield Issuers to Deliver Quality, Income, and Mitigate Risk

WASHINGTON--(BUSINESS WIRE)-- F/m Investments ("F/m"), a $17 billion investment firm and innovative provider of exchange-traded funds (ETFs), today announced the launch of the F/m High Yield 100 ETF (Ticker: ZTOP). This passively managed ETF is designed to provide investors with a more precise, high-quality exposure to U.S. high-yield corporate bonds by targeting the 100 largest and most liquid issuers in the market, with lower volatility than traditional products.

ZTOP is the first ETF to invest exclusively and continuously in the 100 largest and most liquid issuers in the U.S. high-yield bond market. While legacy high-yield ETFs rely on broad market sampling, which can lead to exposure to smaller, riskier issuers that are more vulnerable during economic downturns, ZTOP seeks to replicate the Bloomberg U.S. High Yield Top 100 Quality Select Equal Weighted Index, seeking to deliver a portfolio favoring higher credit quality, better liquidity, and consistent income.

"ZTOP was created in direct response to what we've heard from advisors and allocators for years: existing high-yield ETFs underperform the benchmarks they claim to track," said Alex Morris, CEO of F/m Investments. "Our goal was to develop a high yield strategy that mirrors how institutional portfolios are actually built: focused, rules-based, and biased toward higher quality and greater liquidity. In volatile markets, precision matters, and ZTOP was built for that."

ZTOP enters the market at a time when investors continue to seek ways to generate yield without taking on unnecessary credit or liquidity risk. The high-yield market has evolved, but many legacy ETFs remain over-diversified and under-optimized. ZTOP's index methodology screens for liquidity and prioritizes issuers with deeper access to capital markets, which historically translates to lower default rates and more consistent performance through market cycles.

"We're proud of the partnership we've developed with F/m, particularly focusing on delivering customized index solutions that meet the unique needs of investors,” said Nick Gendron, Global Head of Fixed Income Index Product, Bloomberg Index Services Limited. “The Bloomberg U.S. High Yield Top 100 Quality Select Equal Weighted Index is an innovative solution providing an efficient, liquid, and diversified exposure to the high-yield bond markets."

"In a credit environment where size and stability matter, ZTOP offers a smarter way to allocate to high yield," shared John Han, CFA, Portfolio Manager for ZTOP. "The portfolio is built for income and resilience. We believe it will capture the upside when markets are strong and better mitigate the impacts of difficult market environments when spreads widen."

F/m Investments has earned a reputation for developing innovative solutions to common sense issues investors and advisors face. The firm's growing suite of ETFs includes the recently launched F/m Ultrashort Treasury Inflation-Protected Security ETF (Ticker: RBIL), the $6 Billion U.S. Benchmark Series ETFs (which includes the extremely popular TBIL), and the U.S. Credit Series ETFs. The launch of ZTOP marks a continuation of the collaborative partnership between F/m Investments, Nasdaq, and lead market maker Jane Street. ZTOP is launching on Nasdaq with $50 million in seed capital.

About F/m Investments

F/m Investments is a $17 billion investment firm providing diversified investment strategies to advisors and institutional investors across asset classes, markets, and styles. For more information, please visit www.fminvest.com.

Investors should consider the investment objectives, risks, charges, and expenses before investing. For a prospectus or summary prospectus with this and other information about the Fund, please call 1-800-617-0004 or visit our website at www.fminvest.com. Read the prospectus or summary prospectus carefully before investing.

Investing involves risk. Principal loss is possible.
Call Risk. During periods of falling interest rates, an issuer of a callable bond held by the Fund may "call" or repay the security before its stated maturity, and the Fund may have to reinvest the proceeds in securities with lower yields, which would result in a decline in the Fund's income, or in securities with greater risks or with other less favorable features.
Concentration Risk. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund's investments more than the market as a whole, to the extent that the Fund's investments are concentrated in a particular issue, issuer or issuers, country, market segment, industries, project types, or asset class. Fixed-Income Market Risk. The market value of a fixed-income security may decline due to general market conditions that are not specifically related to a particular issuer, such as real or perceived adverse economic conditions, changes in the outlook for corporate earnings, changes in interest or currency rates or adverse investor sentiment generally. High Portfolio Turnover Risk. In seeking to track the Underlying Index, the Fund may incur relatively high portfolio turnover. High Yield Securities Risk. Securities that are rated below investment-grade (commonly referred to as "junk bonds," including those bonds rated lower than "BBB-" by S&P or "Baa3" by Moody's), or are unrated, may be deemed speculative and may be more volatile than higher rated securities of similar maturity with respect to the issuer's continuing ability to meet principal and interest payments. Liquidity Risk. Certain securities held by the Fund may be difficult (or impossible) to sell at the time and at the price the Adviser would like. New Fund Risk The Fund is a newly organized, management investment company with a limited operating history. In addition, there can be no assurance that the Fund will grow to, or maintain, an economically viable size, in which case the Board of Directors (the "Board") of The RBB Fund, Inc.

Bloomberg U.S. High Yield Top 100 Quality Select ("High Yield 100") The Index is comprised of 100 below investment-grade corporate bonds selected by the Index Provider that (i) are included in the Parent Index and (ii) have at least $300 million of outstanding face value. In composing the Underlying Index, the Index Provider excludes from the Parent Index pay-in-kind (PIK) bonds, zero-coupon bonds and enhanced equipment trust certificates. Of the remaining qualifying securities in the Parent Index, the Index Provider selects the 100 largest issuers of high-yield debt based on market capitalization. Next, the Index Provider selects one bond per issuer for inclusion in the Underlying Index based on the priority of (1) credit rating (ranked from best to worst), (2) coupon (ranked from highest to lowest), and (3) time since issue (ranked from most recent to oldest). The Underlying Index is reconstituted and rebalanced by the Index Provider at each month-end and holds 100 constituents weighted equally. As of 11/29/2024, the Underlying Index was most concentrated in securities of companies in the consumer cyclical sector, based on the Level 3 Bloomberg Fixed Income Classification, which comprised approximately 21.00% of the Underlying Index as of that date. Because the Underlying Index is reconstituted and rebalanced monthly, the components of the Underlying Index are likely to change over time.

Quasar Distributors, LLC distributes F/m Investments ETFs.

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Media Contact:

Tucker Slosburg

Lyceus Group

fmpr@lyceusgroup.com

(206) 635-4196

Source: F/m Investments

FAQ

What makes ZTOP ETF different from other high-yield bond ETFs?

ZTOP exclusively invests in the 100 largest and most liquid U.S. high-yield issuers, unlike traditional ETFs that use broad market sampling. This focused approach aims for higher quality and better liquidity.

How much seed capital was raised for the ZTOP ETF launch?

ZTOP launched on Nasdaq with $50 million in seed capital.

What index does the ZTOP ETF track?

ZTOP tracks the Bloomberg U.S. High Yield Top 100 Quality Select Equal Weighted Index.

What is the investment strategy of ZTOP ETF?

ZTOP employs a passive management strategy focusing on the largest and most liquid high-yield bond issuers, aiming for quality exposure, consistent income, and lower volatility than traditional products.

How does ZTOP ETF aim to manage risk in volatile markets?

ZTOP screens for liquidity and focuses on issuers with stronger capital market access, which historically shows lower default rates and more consistent performance through market cycles.