ALPS Electrification Infrastructure ETF

ELFY

Market cap $140M

Data center developers plan to reduce their reliance on utility grids by investing in onsite power for rapidly scaling facilities. The shift creates opportunities for electrification infrastructure providers as energy independence takes on new urgency.

Energy is among the smallest sectors in the S&P 500, representing only about 3.5% of the benchmark's sector allocations, and yet, it's energy that's capturing investor attention this year. A big part of the story centers on oil and natural gas, now in sharp focus due to an ongoing conflict in the Middle East.

Infrastructure lies at the intersection of investing and government spending. This includes electrification infrastructure.

ALPS Electrification Infrastructure ETF (ELFY) offers diversified exposure to electrification across utilities, industrials, and energy, but remains unproven after only 10 months. ELFY's equal-weighted, 100-stock structure provides discovery potential but limits concentrated upside; utilities currently dominate with 40% allocation. Valuation at 4.4x sales and 30x earnings is neither compelling nor cheap, with sub-5% ROI and mediocre sales growth for a growth-themed ETF.

During a recent interview, Paul Baiocchi, head of fund sales and strategy at SS&C ALPS Advisors, explained why thematic ETFs and active fixed income are experiencing renewed interest as investors look beyond the Magnificent Seven's dominance.

The ALPS Electrification Infrastructure ETF (ELFY) is drawing investor attention as U.S. electricity demand heads for its fastest growth in decades, driven by artificial intelligence data centers, manufacturing reshoring, and expanding electric vehicle infrastructure. The fund has pulled in $79.9 million over the past six months and $37.

The central question facing investors heading into 2026 is whether market performance will finally extend beyond the handful of megacap technology companies that have dominated returns for the past three years.

Active ETFs pulled in nearly $400 billion in net inflows during 2025. That has industry veterans calling the adoption “remarkable.

Rapid advancements by artificial intelligence (AI) and soaring demand for that technology are creating a host of infrastructure demands. With that comes a set of new, potentially compelling investment opportunities.

AI investing may be one of the top market narratives this year, but under the hood may be a theme that's just as exciting: electrification. All of those data centers helping ChatGPT and other AI software revolutionize the economy require huge amounts of electricity.