TCW Transform Systems ETF

PWRD

Market cap $995M

Energy markets around the world have been shaken up by geopolitical volatility, most notably in Venezuela and Iran. However, there's much more to the story beyond just those two countries.

TCW Transform Systems ETF has delivered top-percentile returns in 2024 and 2025, earning a five-star Morningstar rating. PWRD targets companies driving energy transformation, with heavy industrial exposure and 25% international allocation, but currently trades at elevated valuations. The ETF has outperformed the S&P 500 by over 6% annualized since inception, though it has lagged in the last six months and faces near-term volatility risks.

TCW Transform Systems ETF offers focused exposure to next-generation power distribution and energy transition, with a strong tilt toward industrials and AI data centers. PWRD's portfolio is concentrated, with the top 10 holdings comprising over 60%, and includes leaders in power infrastructure, AI chips, and traditional energy transitioning to renewables. Despite a higher expense ratio, PWRD has outperformed peers and provides diversified access to the energy lifecycle but carries concentration and sector-specific risks.

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The global energy transition is driving a massive transformation in investment opportunities, requiring unprecedented levels of spending and debt. The TCW Transform Systems ETF focuses on companies leading the move to clean energy, with a high-conviction, actively managed strategy. The fund's holdings include companies like Republic Services, General Electric, Microsoft, Safran, and Vistra Corp., with a major sector allocation to Industrials.