4 min readBy Beqa Bumbeishvili ETF Insider
How does the TRFM ETF work?
The TRFM ETF is a specialized investment fund that focuses on a specific sector. This exchange-traded fund offers investors exposure to a range of companies in this sector.
The TRFM issuer, AAM, employs a passive management approach to oversee the Fund, which utilizes the Pence Transformers Index as its benchmark. This index is meticulously designed to capture the total return performance of U.S.-listed common equity securities, including ADRs, across various industries poised for substantial disruption and technological innovation. AAM meticulously screens eligible securities based on regulatory filings, investor presentations, and industry-specific publications to ensure alignment with the index's criteria. The index's methodology focuses on quantitative factors such as R&D spending, projected sales, and sales growth to identify companies at the forefront of transformative trends. The Fund primarily adopts a replication strategy, mirroring the index's composition, but may resort to representative sampling under specific circumstances deemed beneficial. While the Fund generally invests in index constituents, it may also include securities outside the index to enhance tracking efficiency, adapting to corporate actions and changes within the index. Additionally, the Fund maintains a strategy aligned with the index's industry concentration, reflecting its focus on sectors such as software, semiconductors, and information technology, in line with the index's composition as of December 31, 2023.
TRFM Dividend, as managed by AAM, is structured to cater to investors seeking income alongside exposure to transformative trends. Leveraging the Pence Transformers Index as its benchmark, TRFM Dividend emphasizes companies demonstrating potential for significant disruption and technological innovation while also providing dividend income. This approach allows investors to capitalize on both capital appreciation driven by market trends and regular dividend payments from established companies within the index. By adhering to a passive management strategy, TRFM Dividend aims to track the total return performance of the index before fees and expenses. The fund's investment strategy encompasses a diverse range of U.S.-listed common equity securities, including ADRs for foreign securities, carefully selected based on rigorous screening criteria. This holistic approach offers investors the dual benefits of potential capital growth and steady income, making TRFM Dividend an attractive option for those seeking to align their investment goals with transformative market forces while generating income.
TRFM Tracking, managed by AAM, is engineered to provide investors with precise exposure to the transformative trends identified by the Pence Transformers Index. Employing a meticulous passive management strategy, TRFM Tracking endeavors to replicate the performance of the index before fees and expenses. By investing in a comprehensive array of U.S.-listed common equity securities, including ADRs for foreign securities, TRFM Tracking aims to mirror the index's composition and weightings closely. This replication strategy ensures that investors can capture the full spectrum of potential returns generated by companies positioned to benefit from significant disruptions and technological advancements. With a focus on maintaining alignment with the index's industry concentration and risk characteristics, TRFM Tracking offers investors a straightforward yet effective way to participate in the growth potential of transformative market forces while minimizing tracking error and maximizing transparency.
TRFM Correlation, managed by AAM, is designed to provide investors with a tool to hedge against market volatility by offering a low correlation with traditional market indices. Leveraging the Pence Transformers Index as its benchmark, TRFM Correlation employs a passive management strategy to replicate the index's performance before fees and expenses. By investing in U.S.-listed common equity securities and ADRs for foreign securities, carefully selected based on their potential for significant disruption and technological innovation, TRFM Correlation aims to offer investors a diversified portfolio that exhibits minimal correlation with broader market indices. This strategic approach allows investors to potentially reduce overall portfolio risk by gaining exposure to companies poised to benefit from transformative trends while maintaining a low correlation with traditional market movements. With a focus on mitigating downside risk and enhancing portfolio diversification, TRFM Correlation provides investors with an effective tool to navigate uncertain market conditions while seeking to capture the potential long-term growth opportunities offered by transformative market forces.
TRFM Sector, managed by AAM, is tailored to provide investors with targeted exposure to specific industries poised for significant disruption and technological innovation. Anchored by the Pence Transformers Index, TRFM Sector adopts a passive management strategy, aiming to track the total return performance of the index before fees and expenses. This specialized approach allows investors to concentrate their investments in sectors primed for transformation, such as software, semiconductors, and information technology, as identified by the index's rigorous screening criteria. By focusing on U.S.-listed common equity securities and ADRs for foreign securities within these selected sectors, TRFM Sector offers investors the opportunity to capitalize on the growth potential of companies at the forefront of innovation. With a commitment to maintaining alignment with the index's sector concentration and risk characteristics, TRFM Sector provides investors with a targeted and efficient means of accessing the potential upside of transformative market trends while managing sector-specific risks.
TRFM Exposure, managed by AAM, is crafted to provide investors with broad exposure to transformative market trends through the Pence Transformers Index. Employing a passive management strategy, TRFM Exposure aims to replicate the total return performance of the index before fees and expenses. By investing in a diverse array of U.S.-listed common equity securities, including ADRs for foreign securities, TRFM Exposure seeks to capture the full spectrum of companies positioned to benefit from significant disruptions and technological innovations across various industries. This comprehensive approach allows investors to access a portfolio that reflects the dynamic landscape of transformative trends, from advancements in autonomous driving and renewable energy to shifts in consumer behavior and digitalization. With a focus on maintaining alignment with the index's composition and weightings, TRFM Exposure offers investors a straightforward and efficient way to gain exposure to the potential long-term growth opportunities presented by transformative market forces while minimizing idiosyncratic risks.
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