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Celebrating a Year of Innovation in the HVAC Sector

In a remarkable celebration, AdvisorShares has officially marked the first anniversary of its pioneering HVAC and Industrials ETF (Ticker: HVAC). Introduced to the market on February 3, 2025, this ETF stands out as the first and only exchange-traded fund dedicated specifically to the heating, ventilation, and air conditioning (HVAC) industry. Over the past year, HVAC has demonstrated exceptional performance compared to traditional market benchmarks.

Strong Performance in a Growing Sector

As of January 31, 2026, the HVAC ETF has impressively returned 10.47% year-to-date, contrasted with a mere 1.37% for the S&P 500 Index. Since its inception, the fund has seen a cumulative return of 24.13%, significantly outpacing the S&P 500, which returned 15.56% in the same timeframe. This impressive performance highlights the increasing demand for HVAC solutions as the infrastructure needs surrounding data centers and various construction projects swiftly grow.

Noah Hamman, CEO of AdvisorShares, emphasized the importance of HVAC infrastructure within the rapidly evolving AI economy. According to Hamman, “Cooling infrastructure has become as essential to the AI economy as the chips themselves—data centers cannot operate without it.” The growing reliance on data centers for artificial intelligence and computing technologies places HVAC companies at the forefront of this industry transformation, providing investors with significant opportunities.

The Demand for Cooling Solutions

The urgency for cooling systems continues to rise, with the U.S. Department of Energy estimating that these systems account for approximately 40% of a data center's total energy consumption. Projections indicate that electricity demand for U.S. data centers will soar from 147 terawatt-hours in 2023 to over 600 terawatt-hours by 2030. This exponential growth aligns with the massive expansion of thermal management solutions required to support this trajectory.

Beyond the tech sector, the HVAC industry generates consistent revenue from residential, commercial, and institutional markets. With service and installation responsible for about 60% of total industry revenue, the average lifespan of HVAC systems—ranging from 10 to 20 years—creates a recurring demand for replacements and upgrades. Notably, a staggering 87% of U.S. households are equipped with air conditioning, presenting a golden opportunity in contrast to the 8% in the world’s hottest areas, where 2.8 billion individuals remain without.

Market Insights and Active Management

AdvisorShares' approach entails active management, strategically targeting companies occupying leadership positions within the HVAC ecosystem. This strategy aims to exploit inefficiencies found in broader industrial funds, which often dilute performance specific to HVAC stocks. Dan Ahrens, Managing Director at AdvisorShares, expressed that “HVAC stocks have historically outperformed, but that performance gets buried inside broad industrial funds. This ETF isolates the opportunity, and active management lets us concentrate on what we view as the strongest companies.”

The unique structure of the HVAC ETF permits daily portfolio transparency and intraday trading, giving investors the flexibility to use limit orders—benefits not typically available through passive index funds.

In conjunction with the anniversary celebration, AdvisorShares has introduced an educational resource titled "Cooling the Future: How Are HVAC Systems Powering Data Centers and the Next Wave of Energy Infrastructure?" This resource explores the driving forces of demand emerging from technology advancements and data center developments within the HVAC industry.

Complementing the new publication is AdvisorShares' existing whitepaper titled, "The Heat Is On: Innovation, Stability, and Growth in the HVAC Industry." This research piece evaluates historical performance trends, regulatory influences, and the underlying demand trends impacting the HVAC sector.

The Road Ahead

The last year has showcased the HVAC industry not just as a component of the broader economic landscape, but as a bullish sector ripe with opportunity. As the interplay between energy infrastructure, efficiency, and long-term growth continues to evolve, HVAC stocks remain a promising area for investors seeking specialized exposure.

For investors looking to capitalize on the growing momentum within the HVAC sector, the AdvisorShares HVAC and Industrials ETF represents an innovative approach tailored to the distinct needs and dynamics of this essential industry. For further information regarding the HVAC ETF, including performance data, fund holdings, and more educational resources, visit AdvisorShares.com.

Disclaimer: Past performance is not indicative of future results. This content is intended for informational purposes only and does not constitute investment advice.