At a glance
UTWO charges 0.15% a year, above the 0.12% average of the 7 funds most like it (the 4th cheapest of 8). It has $491.6M in assets, the 8th largest of that group; it paid 4.03% of its price in distributions over the past 12 months, monthly. Over the past year it returned +1.5% with distributions reinvested, 7th of those 8 funds; over three years it returned +3.8% a year.
The short version
The F/m US Treasury 2 Year Note ETF (UTWO) tracks the Bloomberg US Treasury Bellwether 2Y Index. In practice, it holds just one bond: the newest two-year US Treasury note. When a newer note is issued, the fund swaps into it. That keeps it fixed at one point on the interest-rate curve, while other short-term Treasury funds hold a spread of maturities. It charges 0.15% a year, the same as SHY but well above VGSH's 0.03%.
Price history
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UTWO +1.5% over the year to Oct 27, 2026, total return with distributions reinvested.
How it has behaved
| YTD | 1 yr | 3 yr | 5 yr | 10 yr | Since start | |
|---|---|---|---|---|---|---|
| UTWO official prospectus, to Dec 31, 2024 | — | +3.72% | — | — | — | +2.59% |
| Bloomberg US Treasury Bellwether 2Y Total Return USD Unhedged Index (BTB2TRUU) (reflects no deduction for fees, expenses or taxes) index, same period | — | +3.79% | — | — | — | +2.72% |
| ICE Bof A Current 2-Year US Treasury Total Return Index (reflects no deduction for fees, expenses or taxes) index, same period | — | +3.74% | — | — | — | +2.60% |
| FM Treasury Index65 index, same period | — | +0.70% | — | — | — | -0.14% |
| UTWO price data to Oct 27, 2026 | +0.8% | +1.5% | +3.8% | — | — | +2.8% |
- Over the year to Oct 27, 2026, UTWO returned +1.5%, 7th of 8 among similar funds.
- Its worst full calendar year was 2023 (+3.4%); its best was 2025 (+4.8%).
- The deepest fall in its price history was 2% (Aug 15, 2022 to Nov 7, 2022), recovered by Mar 13, 2023.
Show as a table
| Year | Price data | Prospectus (official) |
|---|---|---|
| 2026 (to date) | +0.8% | — |
| 2025 | +4.8% | — |
| 2024 | +3.7% | +3.72% |
| 2023 | +3.4% | +3.47% |
| 2008 financial crisis stocks fell Oct 9, 2007 – Mar 9, 2009 | Before this security existed |
|---|---|
| 2020 COVID crash stocks fell Feb 19, 2020 – Mar 23, 2020 | Before this security existed |
| 2022 bear market stocks fell Jan 3, 2022 – Oct 12, 2022 | Before this security existed |
Dividends and income
Show as a table
| Year | Per share | Change |
|---|---|---|
| 2026 (to date) | $1.5100 | |
| 2025 | $1.7500 | -12.9% |
| 2024 | $2.0100 | -4.3% |
| 2023 | $2.1000 |
What's inside
As of Aug 31, 2026, the fund held 1 securities; the ten largest made up 100% of assets.
| Holding | Weight | |
|---|---|---|
| US TREASURY N/B Bonds and notes | 100.00% |
By country
United States 100%By issuer
US Treasury 100%The bonds mature in 2 years on average (weighted by size), with an average coupon of 4.13%.
Source: N-PORT holdings report as of Aug 31, 2026. Cash, money-market funds and derivatives are shown separately from the securities list.What changed recently
- Over the three months to Aug 31, 2026, investors added a net $56.2M (creations minus redemptions, per the N-PORT report).
- Monthly total returns reported for that quarter: +0.02%, +0.12%, +0.21%.
How it works
UTWO is an index fund managed by F/m Investments LLC. It aims to match, before fees, the Bloomberg US Treasury Bellwether 2Y Total Return USD Unhedged Index. That index tracks one bond: the newest, or "on-the-run," 2-year Treasury note. Bloomberg prices it daily, rolls into each new note the day after its auction, and rebalances on the last day of each month.
The fund holds almost nothing but that note. As of August 31, 2026, one Treasury note made up nearly 100% of net assets, with an average coupon (fixed interest rate) of 4.13% and about two years to maturity. The fund must keep at least 80% of net assets in the index's bond, or in the newest 2-year note if the index omits it. Rolling into fresh notes keeps the fund's sensitivity to interest rates roughly steady. The trade-off is heavy trading: the prospectus lists yearly portfolio turnover of 1,301%, which can add costs.
The prospectus also allows up to 20% of total assets in other investments meant to aid tracking, including other ETFs that may pay fees to the adviser, a potential conflict. The fund may lend securities, backed by at least 100% collateral, and borrow through reverse repurchase agreements (selling bonds and agreeing to buy them back) of up to one-third of total assets.
What it really costs
- UTWO charges 0.15% a year, versus an average of 0.12% for the similar funds below (4th of 8, cheapest first).
- Using the prospectus's standard example, $10,000 invested would cost about $15 in the first year and $192 over 10 years (assuming a 5% annual return).
| Cost of $10,000 (SEC example) | 1 yr | 3 yrs | 5 yrs | 10 yrs |
|---|---|---|---|---|
| UTWO | $15 | $48 | $85 | $192 |
Structure and tax notes
- Bond prices move opposite to interest rates; the longer the maturities it holds, the more its price reacts to rate changes.
In a retirement portfolio
It holds a single short-term US Treasury note, so its price swings have been small and its income comes from US government debt.
UTWO has a short history. It launched in August 2022, so it missed the 2008 crisis, the 2020 COVID crash and most of the 2022 bear market. Its deepest drop was 2%, from August 15 to November 7, 2022, and it recovered by March 13, 2023, about four months later. It hasn't had a losing calendar year. Its weakest was 2023, at 3.4%. For someone who may need to sell shares in a bad year, its swings have been small. It pays income monthly. The trailing yield was 4.03% as of October 27, 2026, but that income falls if interest rates fall. In the SEC's $10,000 example, costs come to $15 after one year and $192 after 10 years. VGSH charges 0.03%. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.
Who it may suit — and who should look elsewhere
May suit
- Investors who want exposure to one fixed two-year Treasury maturity, rolled into the newest note, rather than a mix of maturities.
- People who want monthly income from US government debt; the trailing yield was 4.03% as of October 27, 2026.
- Savers holding money for a few years who can accept small price swings; the fund's deepest drop has been 2%.
Look elsewhere if
- Cost-focused investors: Vanguard's VGSH charges 0.03% versus UTWO's 0.15% and has a similar average maturity.
- Investors who want a larger fund with a longer record; at $491.6 million, UTWO was the smallest of eight similar funds.
- People who want growth or protection against inflation; regular two-year Treasury notes aren't designed to provide either.
Close alternatives
Matched by bond funds with the closest average maturity and issuer mix (N-PORT).
| Fund | Avg. maturity | Cost | Net assets | 1 yr | 3 yr |
|---|---|---|---|---|---|
| UTWO this fund | 2 yrs | 0.15% | $491.6M | +1.5% | +3.8% |
| SHY iShares 1-3 Year Treasury Bond ETF | 1.9 yrs | 0.15% | $25.91B | +1.7% | +3.9% |
| VGSH Vanguard Short-Term Treasury ETF | 1.9 yrs | 0.03% | $39.20B | +2.2% | +4.2% |
| USFR WisdomTree Floating Rate Treasury Fund | 1.5 yrs | 0.15% | $18.76B | +4.1% | +4.6% |
| SHV iShares Short Treasury Bond ETF | 0.3 yrs | 0.15% | $20.97B | +3.3% | +4.3% |
| BIL SPDR Bloomberg 1-3 Month T-Bill ETF | 0.2 yrs | 0.1356% | $47.08B | +3.3% | +4.3% |
| SGOV iShares 0-3 Month Treasury Bond ETF | 0.1 yrs | 0.09% | $105.98B | +3.4% | +4.4% |
| IEI iShares 3-7 Year Treasury Bond ETF | 4.7 yrs | 0.15% | $17.68B | -0.4% | +4.0% |
Questions investors ask
Is UTWO good for retirement?
UTWO may suit the defensive part of a retirement portfolio, but it isn't built for growth. It holds one two-year US Treasury note and pays income monthly. Its trailing yield was 4.03% as of October 27, 2026. Its deepest drop has been 2%, and it hasn't had a losing calendar year since it launched in 2022. Its one-year return of 1.5% as of October 27, 2026 trailed similar funds such as SHY and VGSH.
What's the difference between UTWO and VGSH?
UTWO holds a single two-year Treasury note and rolls into each new one. Vanguard's VGSH holds a spread of short-term Treasurys, with an average maturity of 1.9 years. VGSH costs 0.03% a year against UTWO's 0.15%. VGSH is also much larger, with about $39.2 billion in net assets compared with UTWO's $491.6 million. VGSH returned 2.2% over one year as of October 30, 2026. UTWO returned 1.5% as of October 27.
Does UTWO pay monthly dividends?
Yes, UTWO pays distributions monthly. Over the trailing 12 months, it paid $1.91 per share, a yield of 4.03% as of October 27, 2026. The money comes from interest on the Treasury note it holds. The amount isn't fixed. If interest rates fall, each new two-year note the fund buys will pay less, and its income will fall too.
Why is UTWO's portfolio turnover so high?
UTWO's turnover was 1,301% because its index keeps switching to the newest two-year Treasury note. Each time a new note is auctioned, the fund sells the old one and buys the new one. That steady trading keeps the fund close to an exact two-year maturity. The trading has costs, such as dealer markups, that aren't included in the 0.15% expense ratio and can reduce returns.
Can UTWO lose money?
Yes. Bond prices fall when interest rates rise, so UTWO's share price can drop even though it holds US Treasurys. Its two-year maturity limits how much prices react. Its worst quarter was a 0.92% loss in the quarter ended June 30, 2023. Its deepest drop was 2%, from August to November 2022, and it recovered by March 2023. Bigger losses are possible in the future.