This Transformative ETF Just Got 5-Stars on Morningstar

And we focus mainly here at AAM on income generating solutions, but we know how important it is to have growth strategies as well and the role they play in a diverse asset allocation model. And we're awfully excited to talk about Transformers and the fact that as you alluded to just a few days ago, after three years of a live performance track record, it has been awarded a five-star rating by Morning Star. And the performance has been exceptional.

I would say through 1031, TRFM is up nearly 34% year-to-date, and more impressively, it's returned over 31% on an annualized basis over the last three years. Now you may be saying, okay, most likely you are capturing that alpha through mag 7 exposure. Many large cap growth strategies have 40 to 50 or even 60% allocation to the mag 7 exposure, and I will say that is not the case with transformers.

One of the major talking points around TRFM is the fact that it does not have that much mag 7 exposure. In fact, it's right around 6%. There are over 200 holdings in transformers, and that's what makes the performance quite honestly astounding, is that we are able to return that without having a tremendous amount of mag seven exposure. So the question becomes, how does TRFM achieve that?

I will start off by saying TRFM is a rules-based strategy. Its underlying index is the Pence transformers index. And again, this is an index that really focuses on R&D, it focuses on capex and sales growth. And in doing so, the goal of TRFM is to identify those big or brilliant companies that are transforming the world around us.

And we say big or brilliant because if you're big, you are generally spending a lot of money on R&D and coming up with something exceptional. If you're brilliant, you have a very good concept or a product and then you get bigger and bigger. And what we are trying to do through our rules-based index is trying to capture those arenas. And luckily, we've been able to do that. The performance has been fantastic. And lastly, I will say this, transformers is not a domestic-only strategy. If you invested in S&P 500 or Q's, you are essentially omitting a large arena of international equities that provide a lot of growth opportunity.