Over the last two decades, U.S. electricity sales have grown at a modest rate of just 0.4% annually. However, that growth will likely accelerate. Electricity demand may likely surge more than 8% through 2029.
According to SS&C ALPS’s recent white paper, titled Investing for the Electrification of the United States, this surge is being driven by several factors. These include the popularity of AI and the continued rise of electric vehicles. It also includes the shift from fossil fuels to renewable energy sources, and manufacturing reshoring.
One of ALPS’ latest ETFs, the ALPS Electrification Infrastructure ETF (ELFY), can help you gain exposure to a diversified portfolio of companies set to benefit from the transformation of U.S. energy infrastructure.
See More: SS&C ALPS Advisors Adds New Electrification ETF
ELFY aims to mirror the performance of the Ladenburg Thalmann Electrification Index (LTELFYX), which tracks mid- and large-cap companies. ELFY employs a passive management strategy. The focus is on long-term investments that align with the growing demand for electricity. There are 80 holdings spanning a wide range of sectors, such as utilities, energy, industrials and information technology. So the ETF offers a well-balanced exposure to the future of U.S. energy.
The Case for ELFY
The white paper also notes the U.S. power grid and energy infrastructure are poised for massive upgrades. Annual grid investment are expected to hit $100 billion by 2030. Companies integral to this transformation are set to experience significant growth over the long term.
With its expense ratio of 0.50%, ELFY offers an efficient and cost-effective way for investors to tap into the rising tide of electrification early. The fund’s focus on mid- and large-cap companies ensures that investors can benefit from established leaders in the sector.
ELFY provides a unique opportunity to tap into a long-term investment strategy that is well-positioned to benefit from the widespread push for electrification.
VettaFi LLC (“VettaFi”) is the index provider for ELFY, for which it receives an index licensing fee. However, ELFY is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of ELFY.
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