Intelligent Investments, Independent Ideas

AAM Transformers ETF (NYSE:TRFM)

TRFM Description

The AAM Transformers ETF (NYSE: TRFM) seeks to track the investment results of the Pence Transformers Index. The Pence Transformers Index follows a rules-based methodology that aims to target companies whose products and services show compelling potential to transform consumer behavior, technological innovation, and the global economy.

The TRFM Advantage

  1. Disruptive: TRFM targets companies that have the proven ability to develop transformative technologies.

  2. Evolving: Portfolio companies are specifically screened for spending towards research & development (R&D). R&D spending is a vital factor for a company striving to adapt and innovate for the future.

  3. Growing: TRFM screens for companies that are expected to sustain stronger sales and capex growth relative to their respective industries.

Performance (As of 12/30/2022)

 YTD1 yr3 yr5 yr10 yrSince Inception
TRFM NAV------8.85%
TRFM Share Price------8.92%
Pence Transformers Index------8.62%
S&P 500 Index-----0.19%
Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor’s shares, when redeemed, may be worth more or less than their original cost. Fund performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 800.617.0004.

Top Holdings (As of 01/27/2023)

NVIDIA CORPORATIONNVDA2379504Information Technology1,2242.03%--
BOEING COBA2108601Industrials1,1302.01%--
SALESFORCE INCCRM2310525Information Technology1,4261.97%--
BROADCOM INCAVGOBDZ78H9Information Technology3821.91%--
AMAZON COM INCAMZN2000019Consumer Discretionary2,1881.82%--
INTUITINTU2459020Information Technology5081.75%--
ADVANCED MICRO DEVICES INCAMD2007849Information Technology2,7521.73%--
APPLE INCAAPL2046251Information Technology1,3981.68%--
MICROSOFT CORPMSFT2588173Information Technology8111.68%--
ALPHABET INCGOOGLBYVY8G0Communication Services2,0521.67%--
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Sector Allocation (As of 01/27/2023)

Holdings By Country (As of 01/27/2023)

United States73.31%
South Africa1.18%
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The fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The statutory and summary prospectus contains this and other important information about the investment company, and it may be obtained by calling 800.617.0004 or visiting Read it carefully before investing.

Risks: Investing involves risk, including the possible loss of principal. Shares of any ETF are bought and sold at market price (not NAV) and may trade at a discount or premium to NAV. Shares are not individually redeemable from the Fund and may only be acquired or redeemed from the fund in creation units. Brokerage commissions will reduce returns. Information Technology Sector Risk: Market or economic factors impacting information technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments. The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs. Stocks of information technology companies and companies that rely heavily on technology, especially those of smaller, less-seasoned companies, tend to be more volatile than the overall market. Information technology companies are heavily dependent on patent and intellectual property rights, the loss or impairment of which may adversely affect profitability. Market Capitalization Risk: The fund invests in large- and mid-capitalization companies. The securities of mid-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large-capitalization companies. ADR Risk: ADRs involve risks similar to those associated with investments in foreign securities, such as changes in political or economic conditions of other countries and changes in the exchange rates of foreign currencies. Models and Data Risk: The composition of the Index is heavily dependent on proprietary quantitative models as well as information and data supplied by third parties (“Models and Data”). New Fund Risk: The Fund is a recently organized investment company with no operating history. As a result, prospective investors have no track record or history on which to base their investment decision. Portfolio Turnover Risk: The Fund may trade all or a significant portion of the securities in its portfolio in connection with each quarterly rebalance and reconstitution of its Index.

Diversification does not assure a profit or protect against a loss in a declining market. Holdings and allocations are subject to change at any time.

Past performance does not guarantee future results.

Definitions: Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. The price-to-book value (P/BV) ratio is calculated by dividing the current closing price of the stock by the latest quarter’s book value per share. The price-to-cash flow (P/CF) ratio measures the value of a stock’s price relative to its operating cash flow per share, which adds back non-cash expenses such as depreciation and amortization to net income. P/CF is especially useful for valuing stocks that have positive cash flow but are not profitable because of large non-cash charges. The price/earnings (P/E) ratio is the ratio of a company’s stock price to the company’s earnings per share. The price/sales (P/S) ratio is calculated either by dividing the company’s market capitalization by its total sales over a 12-month period, or on a per-share basis by dividing the stock price by sales per share for a 12-month period. Pence Transformers Index is a rules-based index that measures the performance of U.S.-listed common equity securities, including American Depositary Receipts (“ADRs”) for foreign securities, of companies poised to benefit from a significant disruption and/or transformation of consumer behavior and technological innovation. Examples of significant disruptions and/or transformation of consumer behavior and technological innovation include, but are not limited to, (i) advancements in autonomous driving capabilities and electric vehicle technology disrupting the automobile manufacturers and trucking sub-industries; (ii) changes in consumer behavior shifting retail sales from brick and mortar businesses to digital channels transforming the internet and digital marketing retail sub-industry; (iii) recent developments in cellular data speeds and improvements in mobile technologies disrupting the interactive media and services sub-industry; and (iv) new technologies that provide carbon offsets for existing business models or the development of greener alternatives to existing energy production transforming the renewable electricity producers sub-industry. The Index is reconstituted quarterly. The 30-day SEC dividend yield is based on the most recent 30-day period covered by the fund’s filings with the SEC. CAPEX: Capital expenditures (capex) are the investments that companies make to upgrade, grow or maintain their business operations. 30-Day Median Bid/Ask Spread is computed by: identifying the Fund’s national best bid and national best offer as of the end of each 10 second interval during each trading day of the last 30 calendar days; dividing the difference between each such bid and offer by the midpoint of the national best bid and national best offer; and identifying the median of those values, expressed as a percentage rounded to the nearest hundredth. S&P 500 Index is an unmanaged capitalization-weighted index (weighted by the market value of the companies) of 500 stocks listed on various exchanges. It is not possible to invest directly in an index.

Advisors Asset Management, Inc. (AAM) is an SEC-registered investment advisor and member FINRA/SIPC. AAM ETFs are distributed by Quasar Distributors, LLC. Quasar and AAM are not affiliated.