Investing in smart grid technologies is gaining momentum, but stock picking in this space is tricky. The ALPS Disruptive Technologies ETF (CBOE: DTEC) is a prime example of an ETF that eases that burden.
Data confirm DTEC is an ideal ETF for investors to consider today because the smart grid market is on the cusp of epic growth.
“MarketsandMarkets forecasts the smart grid market to grow from USD 23.8 billion in 2018 to USD 61.3 billion by 2023, at a Compound Annual Growth Rate (CAGR) of 20.9% during the forecast period,” according to the research firm. “The major factors that are expected to be driving the smart grid market are modernization of aging grid infrastructure and increasing awareness about carbon footprint management.”
Understanding Smart Grid Opportunity
No question: the U.S. electrical grid needs a serious upgrade, and ETF investors could stand to benefit as the changes take place.
Smart Grid consists of controls, computers, automation, and new technologies and equipment working together, but in this case, these technologies will work with the electrical grid to respond digitally to quickly changing electric demand brought on by increased variability due to solar and wind power. The Smart Grid represents an unprecedented opportunity to move the energy industry into a new era of reliability, availability, and efficiency that will contribute to our economic and environmental health.
The nation’s ambitious “Smart Grid” program is in its incipient stages but the potential windfall for technology giants, along with technology ETFs, could be great. Moreover, DTEC is one of just a few technology ETFs providing adequate exposure to smart grid ideas. Smart grid is one of 10 equally weighted themes found in the fund.
DTEC tracks the Indxx Disruptive Technologies Index, which identifies companies using disruptive technologies across ten thematic areas, including Healthcare Innovation, Internet of Things, Clean Energy and Smart Grid, Cloud Computing, Data and Analytics, FinTech, Robotics, and Artificial Intelligence, Cybersecurity, 3D Printing, and Mobile Payments.
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 DTEC. With increased adoption of renewable energy, there’s long-term opportunity with DTEC.
Other technology funds to consider include the Technology Select Sector SPDR ETF (NYSEArca: XLK) and the Fidelity MSCI Information Technology Index ETF (FTEC).
For more on cornerstone strategies, visit our ETF Building Blocks Channel.
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.
