ETF Trends
ETF Trends

As billions go into updating and fixing the nation’s aging infrastructure, investors now have the opportunity to capitalize on the ambitious “smart grid” revolution with the use of a new sector-specific exchange traded fund (ETF).

A new “smart grid” industry is coming about and First Trust/Clean Edge Smart Grid ETF (NasdaqGM: GRID) aims to be the first to target the emerging sector, according to Maureen Brody for Ignites. GRID seeks to reflect the NASDAQ OMX Clean Edge Smart Grid Infrastructure Index, which includes companies engaged in all components of the smart grid. (More plays for Obama’s energy plan).

The fund will have a higher weighting, around 80%, for companies that are smart grid “pure plays” and a lower weighting, about 20%, for big companies that only have a smaller vested interest in the smart grid enterprise.

The ETF is made up of 29 companies. Companies are required to have a minimum float-adjusted market capitalization of $100 million and a three-month average daily trading volume of $500K.

The top 10 holdings include: SMA Solar Technology AG, 11.6%; Schneider Electric S.A., 9.0%; NGK Insulators, 7.4%; ITC Holdings Corp. (NYSE: ITC), 7.3%; Quanta Services Inc. (NYSE: PWR), 7.2%; Itron Inc. (NasdaqGS: ITRI), 4.3%; Echelon Corporation (NasdaqGM: ELON), 3.9%; EnerNOC, Inc. (NasdaqGM: ENOC), 3.8%; American Superconductor Corporation (NasdaqGS: AMSC), 3.6%; Power-One Inc. (NasdaqGM: PWER), 3.6%. (“Smart Grid” plans power up tech sector).

For more information on utilities, visit our utilities category. The evolution of the smart grid can also be played with other utility ETFs, including:

  • iShares Dow Jones U.S. Utilities (NYSEArca: IDU): up 4.2% year-to-date

  • Vanguard Utilities ETF (NYSEArca: VPU): up 3.4% year-to-date

  • iShares S&P Global Utilities (JXI): up 2.0% year-to-date

Max Chen contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.