This ETF Targets the Electrification Megatrend

Well, as you know, global electricity demand is dramatically increasing and impacting all business sectors.

What does this mean for investors and how does the Alps Electrification Infrastructure ETF, ticker ELFY, otherwise known as Elfie, provide investors with exposure to this important mega trend? >> The companies who stand to benefit from the rising electricity demand coming from AI data center investment aren't the companies that you own a lot of in your equity portfolio.

Certainly not in a cap weighted manner.

And beyond the AI data center story, which is again dominating headlines, their consumer level trends, whether it be switching from ICE to EVs and then switching from things like gas stoves to induction stoves, that also is driving rising electricity demand at the margin.

And then you add another layer from a policy perspective of the reshoring, the massive investment from foreign companies to build manufacturing capabilities or bring back manufacturing capabilities to the United States.

That's going to put additional strain on our electricity networks and our electricity grid.

And so you add all of these things up and your forecast depending on what you look at is for an increase of electricity demand of 3% annually over the course of the next decade and beyond at coming off of a period where we grew electricity at point4% annually.

So you're talking about a meaningful increase in electricity demand coming from all of these different sources.

And getting back to the idea that utilities, for example, which are the the way in which most people get access to electricity, unless they're doing a behind the meter deal or they're off the grid, that's a segment of the market that's 2 and a half, 3% of the S&P 500.

The companies who are mining for copper and the other metals who are critical to the implementation of this massive infrastructure buildout, material sector is 2 or 3% of the S&P 500.

And then you think about energy infrastructure.

The companies who own the pipelines who ensure that natural gas gets from where it's produced to where it's consumed, which is increasingly at utilities and at gas turbines built by companies like GE Vernova.

Those aren't companies that dominate your equity portfolio.

So in many ways, it's about distinguishing between who's driving rising electricity demand and who stands to benefit from it and then ensuring that the portfolio that you build of beneficiaries is textured.

And that's what Elfie does.

It pulls from 18 different subindustries, five different sectors of the market, including materials, utilities, industrials, as well as energy and technology.

But it does so focused specifically on companies with more than 5 billion in market cap, a minimum ADV or average daily dollar volume.

So that you're not just buying pre-p profofitability companies necessarily.

You're buying companies of a certain scale pulled from industries specifically earmarked to benefit from rising electricity demand.