Should You Invest in the Global X U.S. Electrification ETF (ZAP)?

Core Insights - The Global X U.S. Electrification ETF (ZAP) was launched on December 17, 2024, and aims to provide broad exposure to the Energy - Broad segment of the equity market [1] - The ETF has accumulated over $200.08 million in assets, positioning it as an average-sized ETF in its category [3] - ZAP has gained approximately 23.55% this year, with a trading range between $22.7 and $29.823 since inception [7] Fund Details - ZAP is a passively managed ETF, which is gaining popularity among both institutional and retail investors due to its low cost, transparency, flexibility, and tax efficiency [1] - The fund seeks to match the performance of the GLOBAL X U.S. ELECTRIFICATION INDEX, which tracks U.S. listed companies involved in electrification [3] - The annual operating expenses for ZAP are 0.5%, and it has a 12-month trailing dividend yield of 0.94% [4] Sector Exposure and Holdings - The ETF has a significant allocation in the Utilities sector, comprising about 76.2% of the portfolio, followed by Industrials [5] - Vistra Corp. (VST) is the largest holding at approximately 6.23% of total assets, with Constellation Energy (CEG) and Quanta Services Inc (PWR) also among the top holdings [6] - The top 10 holdings account for about 43.46% of total assets under management [6] Performance and Alternatives - ZAP has a Zacks ETF Rank of 2 (Buy), indicating favorable expected asset class return, expense ratio, and momentum [8] - Other alternatives in the energy ETF space include the Vanguard Energy ETF (VDE) and the Energy Select Sector SPDR ETF (XLE), with VDE having $7.23 billion in assets and XLE $26.66 billion [9]