Any thoughts on the investment strategy behind TCAI (Tortoise AI Infrastructure)ETF managed by Tortoise Capital Advisors? AI technology seems more than a little overrrated to me right now but it is estimated that AI companies will invest $5.2 trillion in AI infrastructure by 2030. TCAIs strategy is being referred to as a "Picks and Shovels" approach which focuses on the the essential physical requirements& infrastructure for any AI company to function and expand, a necessity regardless of which specific AI software companies make it in the long run.
Overall, it sounds like the investment strategy itself is plausibly sound and potentially very profitable but wondering what else I might be overlooking. I wonder if it is too much of a risk with its reliance on a concentrated investment in small and mid-cap companies? Or maybe just take a chance & YOLO?
80% of the TCAI portfolio assets are invested in 3 main areas. One is based on energy needs like the huge increase in demand for electricity requiring more power generation, utilities, and pipelines & overall energy infrastructure. Second is real estate and construction for data centers and third is hardware and internal components like cooling infrastructure, cabling & switched, electrical equipment, data storage systems, etc.
Tortoise Capital Advisors has a pretty decent track record since 2002, primarily as a specialist in energy and power infrastructure investing. But they have also faced some litigation several years ago claiming mismanagement of funds and a significant restructuring in 2024. The expense ratio also is above average at 0.65.
What do you think?