Should You Invest in the AAM Transformers ETF (TRFM)?
Designed to provide broad exposure to the Technology - Broad segment of the equity market, the AAM Transformers ETF (TRFM) is a passively managed exchange traded fund launched on July 11, 2022.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
Sector ETFs are also funds of convenience, offering many ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Technology - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 2, placing it in top 13%.
Index Details
The fund is sponsored by Advisors Asset Management. It has amassed assets over $227.79 million, making it one of the average sized ETFs attempting to match the performance of the Technology - Broad segment of the equity market. TRFM seeks to match the performance of the PENCE TRANSFORMERS INDEX before fees and expenses.
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.
Costs
Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 0.14%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, 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 55.3% of the portfolio. Industrials and Utilities round out the top three.
Looking at individual holdings, Sandisk Corp (SNDK) accounts for about 1.91% of total assets, followed by Marvell Technology Inc (MRVL) and Micron Technology Inc (MU).The top 10 holdings account for about 13.85% of total assets under management.
Performance and Risk
Year-to-date, the AAM Transformers ETF return is roughly 19.64% so far, and was up about 29.26% over the last 12 months (as of 07/27/2026). TRFM has traded between $43.18 and $63.17 in this past 52-week period.
The ETF has a beta of 1.38 and standard deviation of 24.83% for the trailing three-year period. With about 261 holdings, it effectively diversifies company-specific risk.
Alternatives
AAM Transformers ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, TRFM is an outstanding option for investors seeking exposure to the Technology ETFs segment of the market. There are other additional ETFs in the space that 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 $114.68 billion in assets, Vanguard Information Technology Index Fund ETF Shares has $138.65 billion. XLK has an expense ratio of 0.08%, and VGT charges 0.09%.
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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This article originally published on Zacks Investment Research (zacks.com).
