The electrification of the U.S. economy is straining power grid infrastructure from multiple directions. State renewable mandates, fossil fuel plant retirements, manufacturing reshoring, and AI data centers are all bearing down on a system struggling to keep up.
Key Takeaways:
- ELFY’s equal-weight design trims top performers quarterly, avoiding the mega-cap drift common in rival funds.
- The index behind ELFY was built before the AI data center boom, originally designed around utility infrastructure demand.
- Since launching in April 2025, ELFY has gathered $201 million in assets and posted a year-to-date return of nearly 30%.
SS&C ALPS Advisors built the ALPS Electrification Infrastructure ETF (ELFY ) to capture that buildout. Speaking during a Bloomberg ETF IQ interview in May, Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, said rival thematic funds have a built-in flaw: they let mega-cap tech stocks balloon so large that they crowd out the infrastructure names investors intended to buy.
See more: Play the Electrification Infrastructure Moment With This ETF
Mark McLean, a utility finance veteran at Ladenburg Thalman with roughly 20 to 25 years in the category, developed the index behind ELFY. According to Baiocchi, McLean built the methodology before the AI data center boom began.
McLean designed it in response to state-mandated renewable portfolio standards that followed the U.S. exit from the Paris Agreement. Those standards forced utilities to spend on renewables and retire fossil fuel generation. AI data centers and manufacturing reshoring later added pressure to an already-building demand curve, Baiocchi said.
An Equal-Weighted Approach to Electrification
ELFY uses an equal-weighted structure. At each quarterly rebalance, the fund trims top performers and redistributes across its holdings. McLean calls that process “feeding your fishes,” according to Baiocchi. He described it as introducing “a natural mean reversion element” into the strategy.
The index also sets a $5 billion minimum market cap for inclusion and screens for minimum daily trading volume. Those screens keep the portfolio from drifting toward smaller or less-liquid names, Baiocchi said.
Since its April 2025 launch, the fund has gathered $201 million in assets, according to ETF Database. It has also posted a year-to-date return of nearly 30%. Net inflows topped $19 million over the past month.
Baiocchi described ELFY as a comprehensive real asset anchor. Because the fund holds equity infrastructure without using futures contracts, it can serve as a core position. For advisors wanting to lean into specific areas, he pointed to other ALPS funds. The Nautilus SMR, Nuclear & Technology ETF (SMRF) targets nuclear exposure, while the USCF SummerHaven Dynamic Commodity Strategy No K-1 Fund (SDCI ) covers commodity exposure the fund does not provide.
Most investors already hold the large tech companies driving electricity demand through broad market index funds, he said. ELFY offers access to the companies they likely do not.
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VettaFi LLC (“VettaFi”) is the index administrator and calculation agent for ELFY, for which it receives a 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.
