ELFY ETF targets U.S. grid buildout with equal-weighting

SS&C ALPS Advisors launched the ALPS Electrification Infrastructure ETF (ELFY) in April 2025 to invest in U.S. companies that build and supply electrical grid and utility infrastructure. The fund has gathered $201 million in assets and posted a year-to-date gain of about 30 percent.

The ETF tracks an equal-weighted index developed by Mark McLean, a utility finance veteran at Ladenburg Thalman. The index was constructed before the recent rise in demand from AI data centers and was created in response to state renewable portfolio standards and the retirement of fossil-fuel generation.

ELFY uses an equal-weighted structure that trims top performers at each quarterly rebalance and redistributes capital across the remaining holdings. The methodology applies a $5 billion minimum market-cap requirement and screens for minimum daily trading volume to limit exposure to smaller or less-liquid names. Fund staff describe the quarterly trimming as “feeding your fishes,” an approach intended to introduce a mean-reversion element to the strategy.

The ETF holds equity infrastructure securities rather than using futures contracts, which allows it to serve as a core real-asset allocation in a portfolio. Net inflows into ELFY exceeded $19 million over the most recent month.

Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, argued that rival thematic funds can let a few mega-cap technology stocks dominate allocations and reduce exposure to infrastructure companies investors intend to own. He added that many investors already hold large tech companies through broad market index funds and that ELFY provides access to other infrastructure firms.

SS&C ALPS identifies other products for complementary exposure, including an ETF focused on nuclear technology and a commodity fund. The ETF’s construction and screening rules are intended to limit concentration and liquidity risk while targeting companies tied to electrification demand.

Drivers cited for increased utility and transmission spending include state renewable mandates, the phase-out of older fossil-fuel plants, reshoring of manufacturing and rising load from AI data centers. ELFY targets companies involved in building and supplying the equipment and services for those projects.