PWRD ETF amasses $1.5B on U.S. grid bottlenecks

TCW’s actively managed PWRD ETF has reached $1.5 billion by concentrating on companies that supply and install physical transmission and distribution equipment. The portfolio typically holds 20 to 30 stocks and targets firms that managers say are positioned to benefit from limits in U.S. grid capacity and labor.

Eli Horton, managing director and senior portfolio manager at TCW Group, frames demand around three forces: heightened energy security concerns after recent geopolitical shocks, expanding electrification across manufacturing, electric vehicles and buildings, and a long-term shift to lower-carbon power sources. Horton points to aging equipment, long lead times and a shortage of trained workers as constraints on that buildout.

Fund figures show PWRD produced double-digit returns year-to-date and recorded meaningful inflows this year, including roughly $332.8 million in net new money. The fund launched in February 2022, charges a 0.75% expense ratio and operates as an actively managed, non-diversified ETF, allowing larger stakes in selected names.

The fund focuses on companies that make or install transformers, high-voltage transmission gear and related engineering services rather than on speculative clean-energy technologies. Horton notes the average U.S. high-voltage transformer is about 35 years old, beyond a typical 30-year peak performance window, and that new high-voltage transformers often take two to three years to procure. He also says natural-gas turbine deliveries are largely booked out through 2029 and 2030, and that engineering, procurement and construction firms lack enough trained workers to scale transmission and plant builds.

Horton described artificial intelligence expansion as “gasoline on the fire,” saying rapid growth in compute capacity increases incremental power needs that the current grid may not be able to meet. He also noted renewed bipartisan interest in nuclear power for baseload reliability and expects conventional reactor projects and early deployments of small modular reactors in the early 2030s.

Top holdings reflect the infrastructure focus, with GE Aerospace among the largest positions, followed by equipment and power specialists including Vertiv, Safran, Broadcom, Powell Industries and GE Vernova. Managers reduced the fund’s exposure to oil and gas from about 25% of assets in 2022 to roughly 3% and increased allocations to power and grid companies to about half the portfolio.

Horton says active stock selection lets the fund reallocate quickly as market conditions change and allows concentration on companies with earnings tied to physical infrastructure spending. Analysts and industry participants have identified aging equipment, long lead times for key components and technician shortages as obstacles to scaling electrification, and both policymakers and private investors have announced plans for large grid upgrades and new generation capacity over the coming decade.

PWRD’s asset growth to $1.5 billion reflects investor interest in companies that supply transformers, transmission gear and the engineering workforce needed for an expanded electric system.