Smart Grid Infrastructure

This basket targets the smart grid infrastructure theme by investing in companies that enable the modernization, resilience, and intelligence of electricity and utility networks amid surging power demand from AI data centers, electrification, and renewable integration. The 20-name portfolio spans sectors including electronic equipment and instruments, utilities technology, and specialized electrical protection and automation systems. With an effective N of 16.1, it maintains concentrated yet diversified exposure. The investment logic rests on structural tailwinds: global smart grid market expansion from approximately $73 billion in 2025 to a projected $197 billion by 2035 at a 10.5% CAGR, driven by grid capital spending exceeding $470 billion annually for the first time and U.S. electricity demand accelerating at a 2.5% CAGR through 2035 versus 0.5% historically.

Key risks include execution delays on large utility contracts, supply chain volatility for components such as semiconductors and metals, and potential shifts in regulatory or incentive frameworks that could slow deployment timelines. There are no specific warnings attached to the basket. The highest-conviction position is BMI at 11.7% weight with an 80 exposure score, as the company leads in advanced metering infrastructure and data analytics for utility water and energy systems, capitalizing on early-stage AMI penetration of roughly 40% in the U.S. and a shift toward higher-margin recurring software revenue that directly supports grid-edge intelligence and efficiency gains.