AAM Transformers ETF

AAM Transformers ETF (TRFM) is an index fund that tracks the Pence Transformers Index. The index is a rules-based mix of about 310 U.S.-listed stocks and ADRs (U.S.-traded shares of foreign companies) whose companies are expected to gain from shifts in technology and consumer behavior. It doesn't weight stocks by company size. Instead it spreads money equally within five size groups, so no holding topped 1% as of July 31, 2026. Its 0.49% expense ratio is well above the 0.18% average for similar funds.

• Over the year to Oct 27, 2026, TRFM returned +10.4%, 7th of 9 among similar funds.
• Its worst full calendar year was 2024 (+20.0%); its best was 2023 (+44.7%).
• The deepest fall in its price history was 28.4% (Feb 18, 2025 to Apr 8, 2025), recovered by Jun 24, 2025.

As of Jul 31, 2026, the fund held 310 securities; the ten largest made up 8.05% of assets. It also reported 8.04% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

By sector

• Over the three months to Jul 31, 2026, investors added a net $82.8M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +11.25%, +3.94%, -8.72%.

TRFM is passively managed. It tries to match the Pence Transformers Index, which Pence Capital Management created in 2021. The index starts with a list of eligible industry groups under GICS (the Global Industry Classification Standard, a common system for sorting companies). The list is wide: semiconductors and application software, but also aerospace and defense, restaurants, electric utilities and copper. Pence screens companies using their filings, investor presentations and analyst reports. It also looks at research and development spending as a share of sales, projected sales and projected sales growth.

To qualify, a company needs a float-adjusted market value of at least $2 billion. Its shares must trade at least $2 million a day on average over three months. It also needs a consensus analyst rating above 3.0 on a 1-to-5 scale from at least five analysts, with exceptions for some ADRs and new listings.

Stocks are then split into five buckets: U.S. companies over $150 billion (20% of the fund), $20 billion to $150 billion (30%) and $2 billion to $20 billion (25%), plus international companies over $30 billion (15%) and $2 billion to $30 billion (10%). Each stock in a bucket gets the same weight. The index resets after the third Friday of March, June, September and December, and weights drift in between. Portfolio turnover was 79%. The fund held no derivatives as of July 31, 2026.

• TRFM charges 0.49% a year, versus an average of 0.18% for the similar funds below (9th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $50 in the first year and $616 over 10 years (assuming a 5% annual return).

TRFM swings much more than the broad market, pays almost no income and costs more than similar funds, so it fits better as a small add-on than as a core holding.

TRFM could add a widely spread bet on growth companies to a core stock fund. It moves harder than the market. Its beta (how much it tends to move when the market moves) was 1.81 for the year to October 27, 2026. Its three-year volatility was 25.4%. The fund launched in July 2022, so it has no record through the 2008 or 2020 crashes or the full 2022 bear market. Its deepest drop was 28.4%, from February 18 to April 8, 2025. It recovered by June 24, 2025, about 2.5 months later. Every full calendar year has been positive, and 2024's 19.9% gain was the weakest. That's a short record from a mostly rising market. Someone who has to cash out shares in a slump could lock in losses. The yield is 0.14%, paid once a year. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.