When a significant new investment theme captures the market’s attention like artificial intelligence, advisors are right to ask: who’s truly positioned to capture the opportunity?
It’s a fair question. Thematic ETFs often come with big promises but little track record. Hype without discipline. Trend-chasing without experience. That’s why experience and execution matter, especially for a theme as ambitious as AI infrastructure.
Tortoise Capital brings something different to the table: a history of navigating and capitalizing on large-scale infrastructure transitions. We’ve seen this movie before, and understand the patterns that tend to emerge.
Infrastructure Always Follows Innovation
In the early 2000s, a seismic shift hit the U.S. energy sector. The shale revolution triggered unprecedented demand for new pipelines, processing facilities, and export infrastructure. Tortoise recognized the signal early and responded with targeted investments across the infrastructure ecosystem.
The result? Years of steady income and capital appreciation for investors who understood that behind every innovation lies the opportunity for an extended buildout phase of real assets, where the long-term value can compound.
Today, we see a familiar inflection point. AI is catalyzing a new wave of infrastructure demand, only this time it’s bigger, faster, and more urgent. Data centers, electrical grids, fiber-optic networks, and cooling technologies are all under pressure to scale rapidly. And once again, Tortoise Capital is early to the cycle, with a proven playbook to guide the way.
Experience You Can Count On—Through Every Market Cycle
The team managing and leading this effort has deep experience leading portfolios through multiple complex macro environments, including:
- The 2008 financial crisis
- The 2014 oil price collapse
- The 2020 COVID demand shock
- Ongoing geopolitical disruptions such as the Russia–Ukraine conflict
That kind of experience is essential. Especially when you’re allocating to real assets, where understanding capital cycles, regulatory structures, and cash-flow dynamics is critical. Our portfolio managers are skilled at sector rotation, risk management, and identifying stable income-producing assets in volatile markets.
Tortoise Capital’s Process Reflects Our Core Strengths
Our perspective on the potential of the AI infrastructure buildout isn’t simply an overlay across a growth theme. It’s a fully integrated extension of Tortoise Capital’s long-standing infrastructure investment process.
We apply a dual-lens approach:
- Top-down analysis of macro trends and sectoral growth, like identifying regulated utilities operating in regions with AI data center clusters
- Bottom-up selection of companies with strong fundamentals, ranked using a proprietary risk-scoring framework.
Our investment process is designed to rotate as capital expenditure trends evolve, shifting its exposure toward companies such as electrical component suppliers, power distributors, and data center operators as demand dictates.
For example, we’ve made strategic decisions to increase exposure at times to regulated utilities such as Evergy, whose service area includes key data center corridors. We’ve also allocated to firms like Digital Realty, a global leader in hyperscale data center construction, and to companies such as Vertiv, a company enabling critical power and thermal management solutions. These examples are used for illustrative purposes and should not be considered investment advice.
Most Thematic ETFs Overlook the Complexities
Many AI-focused ETFs are heavily weighted toward megacap tech stocks, such as Nvidia, Microsoft, and Meta. And while those companies are undeniably important, they don’t represent the whole ecosystem.
What’s often missing is sector expertise. Understanding regulated businesses, REIT capital structures, or global supply chains for electrical components isn’t easy. But it’s exactly where Tortoise Capital excels. We don’t dabble in infrastructure; we live in it.
AI Infrastructure Isn’t New to Us. It’s What’s Next.
For over two decades, we’ve invested at the intersection of innovation and infrastructure, from energy transition assets to utility-scale development projects. AI infrastructure is simply the next chapter in that same story.
AI infrastructure is an emerging theme with distinctive risks and opportunities. For a deeper look at the factors shaping this trend, download “The AI Revolution: Why Infrastructure is Critical to Ongoing Innovation”.
For investors interested in strategies focused on this theme, Tortoise offers the AI Infrastructure ETF (TCAI). Explore the fund here.
Important Information
Click here for TCAI’s full holdings.
Nothing contained in this communication constitutes tax, legal, or investment advice. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation. This communication contains certain statements that may include “forward-looking statements.” All statements, other than statements of historical fact, included herein are “forward-looking statements.” Although Tortoise Capital believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Actual events could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors. You should not place undue reliance on these forward-looking statements. This communication reflects our views and opinions as of the date herein, which are subject to change at any time based on market and other conditions. We disclaim any responsibility to update these views. These views should not be relied on as investment advice or an indication of trading intention. Discussion or analysis of any specific company-related news or investment sectors are meant primarily as a result of recent newsworthy events surrounding those companies or by way of providing updates on certain sectors of the market. Tortoise Capital, through its family of registered investment advisers, does provide investment advice to Tortoise-related funds and others that include investment into those sectors or companies discussed in this communication. As a result, Tortoise Capital does stand to beneficially profit from any rise in value of the sectors broadly discussed, including individual companies contained within.
Tortoise Capital Advisors, LLC is the advisor to the Tortoise AI Infrastructure ETF.
Before investing in the funds, investors should consider their investment goals, time horizons and risk tolerance. The funds’ investment objective, risks, charges and expenses must be considered carefully before investing. The statutory prospectuses and the summary prospectuses (click here) contain this and other important information about the funds. Copies of the funds’ prospectus may be obtained by calling 855-994-4437 or by emailing info@tortoisecapital.com. Read it carefully before investing.
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Investing involves risk. Principal loss is possible. Because the fund is “non-diversified” and may invest a greater percentage of its assets in the securities of a single issuer, a decline in the value of an investment in a single issuer could cause the fund’s overall value to decline to a greater degree than if the fund held a more diversified portfolio. The fund’s strategy of emphasizing investments in AI infrastructure companies means that the performance of the fund will be closely tied to the performance of one or more industries that are expected to benefit from the growth of AI-capable data centers and related technology and energy infrastructure. Investing in companies that are expected to benefit from the same macro theme means that some of the fund’s investments may be similarly affected by certain market, economic, political, or social developments. Companies in the energy infrastructure sector are subject to many risks that can negatively impact the revenues and viability of companies in this sector, including, but not limited to risks associated with companies owning and/or operating pipelines, gathering and processing assets, power infrastructure, propane assets, as well as capital markets, terrorism, natural disasters, climate change, operating, regulatory, environmental, supply and demand, and price volatility risks. Companies in the technology infrastructure sector are subject to many risks that can negatively impact the revenues and viability of companies in this sector, including, but not limited to risks associated with emerging technology that renders existing products or services obsolete, reliance on outdated technology, intellectual property theft, supply chain disruption, vulnerabilities to third-party vendors and suppliers, business interruption, difficulty in retaining skilled talent, and regulatory compliance. Companies in the industrial sector face a variety of risks, including commodity price volatility, supply chain disruptions, potential obsolescence of technologies, economic downturns, and increasing competition.
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