Looking for broad exposure to the Energy - Broad segment of the equity market? You should consider the Global X U.S. Electrification ETF (ZAP), a passively managed exchange traded fund launched on December 17, 2024.
While an excellent vehicle for long term investors, passively managed ETFs are a popular choice among institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency.
Additionally, sector ETFs offer convenient ways to gain low risk and diversified exposure to a broad group of companies in particular sectors. Energy - Broad is one of the 16 broad Zacks sectors within the Zacks Industry classification. It is currently ranked 15, placing it in bottom 6%.
Index Details
The fund is sponsored by Global X Management. It has amassed assets over $294.12 million, making it one of the average sized ETFs attempting to match the performance of the Energy - Broad segment of the equity market. ZAP seeks to match the performance of the GLOBAL X U.S. ELECTRIFICATION INDEX before fees and expenses.
The Global X U.S. Electrification Index tracks the performance of U.S. listed companies domiciled in developed markets and involved in electrification.
Costs
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.5%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.73%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Utilities sector -- about 72.1% of the portfolio. Industrials and Energy round out the top three.
Looking at individual holdings, Ametek Inc (AME) accounts for about 4.75% of total assets, followed by National Grid Plc-sp Adr (NGG) and American Electric Power (AEP).
The top 10 holdings account for about 41.28% of total assets under management.
Performance and Risk
Year-to-date, the Global X U.S. Electrification ETF has added roughly 4.99% so far, and it's up approximately 23.9% over the last 12 months (as of 02/03/2026). ZAP has traded between $22.7 and $31.25 in this past 52-week period.
With about 52 holdings, it effectively diversifies company-specific risk.
Alternatives
Global X U.S. Electrification ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, ZAP is a sufficient option for those seeking exposure to the Energy ETFs area of the market. Investors might also want to consider some other ETF options in the space.
Vanguard Energy ETF (VDE) tracks MSCI US Investable Market Energy 25/50 Index and the State Street Energy Select Sector SPDR ETF (XLE) tracks Energy Select Sector Index. Vanguard Energy ETF has $7.87 billion in assets, State Street Energy Select Sector SPDR ETF has $31.66 billion. VDE has an expense ratio of 0.09%, and XLE charges 0.08%.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Global X U.S. Electrification ETF (ZAP): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
