Oil prices have been climbing steadily through early 2026, driven by a combination of OPEC+ production discipline, geopolitical disruption in key producing regions, and supply infrastructure that has not kept pace with the recovery in global demand. The conversation in energy markets has turned increasingly to whether $100 a barrel is a ceiling or a floor. For investors trying to position ahead of that question, the most obvious trade is a direct oil ETF, though the better trade may be something less obvious.
Three funds capture energy’s upstream momentum through downstream and infrastructure exposure that tends to be more durable and less volatile than crude prices themselves: the Tema Electrification ETF (NASDAQ:VOLT), the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (NASDAQ:GRID | GRID Price Prediction), and the First Trust Utilities AlphaDEX Fund (NYSE:FXU). Each benefits from elevated energy prices through a different mechanism, and none requires oil to remain above any particular level to remain a sound long-term position.
The case for investing in all three of these funds is pretty convincing, as energy scarcity and price volatility will accelerate investment in the kind of infrastructure that produces, distributes, and stabilizes power at scale, something that doesn’t stop even if oil prices pull back.
The Tema Electrification ETF: The Electrification Buildout
The Tema Electrification ETF has returned 32.76% year-to-date and 82.62% over the past year, making it the strongest performer of the three by a wide margin. Its yield is 0.26%, reflecting the growth orientation of its holdings rather than an income mandate.
The fund’s top five positions include Powell Industries, NextEra Energy, Bel Fuse Inc., American Electric Power, and Eaton Corporation. With nearly 48% in industrials and 31% in utilities, the Tema Electrification ETF is essentially a bet on the companies building and equipping the electrical grid as energy demand accelerates.
The First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund: Grid Modernization as a Direct Beneficiary
Returning 19.87% year-to-date and 64.76% over the past year, the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund is well worth consideration. Carrying a yield of 0.92% and a beta of 1.38 means that it will move with more intensity than the broader market in either direction.
Its top five holdings are Eaton Corporation, Johnson Controls International, National Grid plc, ABB Ltd, and Schneider Electric, giving it a more international character than the other two funds. With over 61% in industrials and 22% in utilities, the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund profits directly from grid modernization spending, which surges when energy price volatility makes grid reliability a financial priority for utilities and governments alike.
High oil prices make that argument easier to fund politically and commercially.
The First Trust Utilities AlphaDEX Fund: Utilities With Pricing Power
The First Trust Utilities AlphaDEX Fund is the most conservative of the three, with a YTD return of 11.09%, a yield of 2.11%, and a beta of 0.70. It holds over 93% in utilities, led by Edison International, National Fuel Gas Company, Consolidated Edison, Exelon Corporation, and OGE Energy Corp.
The connection to oil is more indirect but equally real, utilities with natural gas exposure benefit from higher energy commodity prices through improved pricing power, and the AlphaDEX selection methodology screens specifically for utilities showing stronger fundamental momentum.
It’s this momentum that tends to identify those best positioned to pass higher input costs through to customers. The First Trust Utilities AlphaDEX Fund also provides the most income of the three, offering a buffer that the growth-oriented funds do not.
Why Not Just Buy a Crude Oil ETF?
Direct oil ETFs track spot prices, capturing the full upside when oil surges and absorbing the full downside when it reverses. They also carry structural issues around futures contract rolling that erode returns over time. The three funds covered here benefit from the energy environment rather than directly tracking it, which gives them more durable upside.
The Risk That Matters
If oil reverses sharply, demand for electrification infrastructure does not disappear, but the pace of capital spending can slow, and utility earnings can compress. The First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund’s 1.38 beta means it would feel a broad market pullback more acutely than the others. Investors treating these as short-term oil plays should be cautious, but investors treating them as infrastructure positions that happen to benefit from elevated energy prices are in a more defensible spot over time.
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