Infrastructure is getting a fresh look. Investors are questioning whether the classic 60/40 portfolio still holds up in an environment with inflation.
Key Takeaways:
- A 10% infrastructure allocation can improve inflation sensitivity by 18% with little impact on returns.
- Global infrastructure fundraising reached a record of nearly $200 billion in 2025.
- ELFY targets electricity demand growth from AI, EVs, and grid modernization with a 0.50% expense ratio.
A May research report from SS&C ALPS Advisors argues that carving out even a small allocation to global infrastructure can improve how a portfolio handles inflation without giving up much in returns — a finding that maps directly onto what the ALPS Electrification Infrastructure ETF (ELFY ) is built to do.
With inflation back on investors’ radar, bonds are struggling to play their traditional cushioning role, according to Richard Baker, director of research, real assets and alternatives at SS&C ALPS Advisors, the report’s author. That pressure is pushing advisors to look beyond the standard stock-and-bond mix.
Physical assets like power generation, transmission grids, and pipelines offer stable, contracted income and pricing power that holds up when prices rise, the report notes. Infrastructure also carries long asset lives and high barriers to entry, making it harder for competitors to erode those cash flows.
See more: Tide Is Turning in Favor of Clean Energy Stocks
The scale of demand ahead adds weight to the case. A 2026 PwC report cited by Baker estimates the world will need to invest $151.1 trillion in infrastructure between 2025 and 2050, including a 121% increase in power spending.
Institutional investors have already taken notice. Global infrastructure fundraising hit a record of nearly $200 billion in 2025, topping the prior high of $180 billion in 2022, according to a McKinsey report cited by SS&C ALPS Advisors.
Portfolio Data Makes the Case
Using 10 years of index data, SS&C ALPS Advisors modeled several portfolio combinations. A modest 10% infrastructure sleeve, shifting from a standard 60/40 to a 55/35/10 split, improved inflation beta by 18% while keeping returns nearly unchanged, according to the report. Inflation beta measures how well a portfolio holds up when prices rise.
A 20% allocation improved inflation beta by 44% and reduced the portfolio’s maximum drawdown, the report found. At a 30% weighting, annualized returns climbed 75 basis points above the standard 60/40, and inflation beta improved by 86%.
For investors looking to act on those numbers, ELFY offers a targeted entry point into the physical assets behind them. The fund launched in April 2025 and has gathered $191.7 million in assets, according to ETF Database.
ELFY focuses on companies tied to rising U.S. electricity demand from artificial intelligence, electric vehicles, reshoring, and grid modernization. It carries a 0.50% expense ratio and has returned 21.18% year-to-date, according to ETF Database.
Its largest holding is Sterling Infrastructure, Inc. (STRL) at 1.55% of assets, followed by Bloom Energy Corp. (BE) at 1.43%, according to ETF Database. Utilities make up the largest sector at 36.77% of the portfolio, as of March 31.
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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.
