U.S. electricity sales growth has been relatively slow over the past 20 years, averaging around 0.4% annually. However, many expect electricity demand will rise more significantly in the coming years, with projections suggesting growth exceeding 8% through 2029.
As global electricity demand surges, ALPS Electrification Infrastructure (ELFY ) stands out as a promising investment opportunity for those looking to capitalize on the ongoing energy transformation.
Since its inception in April, ELFY has delivered a robust 15.96% year-to-date return according to YCharts data.
Fund Composition and Strategy
ELFY focuses on companies positioned to benefit from the increasing demand for electricity and related infrastructure. The fund invests in publicly traded mid- and large-cap companies with market capitalizations of at least $5 billion. ELFY follows a passive management strategy, aiming to replicate the performance of its underlying index, the Ladenburg Thalmann Electrification Index (LTELFYX).
Geographically, ELFY predominantly focuses on the U.S. 87.90% of its holdings are based in the country. Followed by Canada (7.68%), Ireland (2.76%), and Great Britain (1.54%).
Current sector allocations reflect the diversified nature of electrification infrastructure. The largest weightings are represented in utilities (41.00%), industrials (29.13%), and energy (13.76%). Along with allocations to Information Technology (13.35%) and materials (2.75%) are also included.
Top holdings include Coherent Corp, Comfort Systems USA Inc, Constellation Energy Corp, and Zebra Technologies Corp.
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ELFY’s future growth depends on the shift toward electrification across industries. As the U.S. and global economies increasingly rely more electric power the demand for infrastructure and technology that supports this transition will likely accelerate.
ELFY launched earlier this year and has accumulated $19.21 million in assets under management. It has an expense ratio of 0.50%
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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