Designed to provide broad exposure to the Technology ETFs category of the market, the AAM Transformers ETF (TRFM) is a smart beta exchange traded fund launched on 07/11/2022.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Advisors Asset Management. TRFM has been able to amass assets over $260.59 million, making it one of the average sized ETFs in the Technology ETFs. Before fees and expenses, this particular fund seeks to match the performance of the PENCE TRANSFORMERS INDEX .
The Pence Transformers Index is rules-based index that measures the performance of U.S.-listed common equity securities, including American Depositary Receipts for foreign securities, of companies poised to benefit from a significant disruption and transformation of consumer behaviour and technological innovation.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 0.14%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Information Technology sector - about 52.2% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Roblox Corp (RBLX) accounts for about 0.86% of total assets, followed by Credo Technology Group Holding Ltd (CRDO) and Doordash Inc (DASH).
TRFM's top 10 holdings account for about 7.72% of its total assets under management.
Performance and Risk
The ETF has gained about 25.77% and was up about 36.05% so far this year and in the past one year (as of 08/07/2026), respectively. TRFM has traded between $43.58 and $63.17 during this last 52-week period.
The ETF has a beta of 1.40 and standard deviation of 24.92% for the trailing three-year period. With about 311 holdings, it effectively diversifies company-specific risk .
Alternatives
AAM Transformers ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
State Street Technology Select Sector SPDR ETF (XLK) tracks Technology Select Sector Index and the Vanguard Information Technology Index Fund ETF Shares (VGT) tracks MSCI US Investable Market Information Technology 25/50 Index. State Street Technology Select Sector SPDR ETF has $122.04 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $146.96 billion. XLK has an expense ratio of 0.08% and VGT changes 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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AAM Transformers ETF (TRFM): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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