Sean O’Hara has been talking about artificial intelligence infrastructure longer than most advisors have been thinking about it. As President of Pacer ETF Distributors, O’Hara helped develop what Pacer ETFs calls its “AI three-pack”—a suite of funds designed not to chase the hyperscalers but to own the physical backbone that keeps AI running.
Central to the framework is the Pacer American Energy Infrastructure ETF (ticker: USAI), a midstream energy fund that targets the companies moving and producing the natural gas powering data centers across the country. The fund goes back to the most basic consideration in the AI buildout: for any of it to work, someone has to keep the lights on.
“So, you can follow AI from end to end here with three different products. This would be the first,” O’Hara says. “They can’t turn on the lights without power. That’s really where USAI fits.”
The answer to the question of where that power comes from, at least for now, is natural gas.
The Three-Pack, Explained
Before diving into USAI specifically, it helps to understand the broader AI scaling–related framework the firm has constructed. Pacer considers USAI the third leg of a strategy that approaches AI infrastructure from end to end. Pacer’s Data and Infrastructure Real Estate ETF (ticker: SRVR) covers the publicly traded real estate names that build and manage data centers, along with a sleeve of onsite power generation—primarily gas turbines and, in early stages, small modular nuclear reactors. The Pacer Data and Digital Revolution ETF (ticker: TRFK) focuses on everything inside the data center itself: the hardware, software, networking, cooling systems, and cybersecurity that keep AI operational.
USAI addresses the question neither of those funds answers directly. The data centers are built, the equipment is installed, but someone has to deliver the fuel. O’Hara frames the dynamic around a simple distinction between spenders and receivers. The hyperscalers—massive cloud service providers such as Google, Microsoft, Amazon that provide scalable, on-demand computing, storage, and networking—are the spenders, committing trillions in capital expenditure to build out AI infrastructure. “The receivers are the ones, like for example, in SRVR, the data centers or the equipment, and now the pipelines and the gas,” O’Hara explains. “They’re going to be the ones on the receiving end of those dollars. And it’s not insignificant. I mean, you’re talking about $3 trillion to $5 trillion worth of investment over the next three or four or five years.”
That’s the engine USAI aims to sit inside—and rather than picking winners among the companies doing the spending, Pacer’s goal with the three-pack is to tap into the infrastructure those dollars have to flow through. “There’s a massive amount of money that’s going to get poured in here,” adds O’Hara. “And we’re just trying to own all of the necessary components of that.”
Midstream, Updated
At its core, USAI is a midstream energy fund—the kind of vehicle most advisors associate with master limited partnerships (MLPs) and pipeline networks. The fund seeks to track the American Energy Infrastructure Index, which draws from U.S. and Canadian companies generating the majority of their cash flow from midstream energy infrastructure activities. Top holdings as of March 31, 2026, included Energy Transfer, Enbridge, Enterprise Products Partners, Williams Companies, and Cheniere Energy, with roughly 80% U.S. exposure and 20% Canadian.
What makes the fund more than a standard pipeline play is a recent structural addition. Pacer added a sleeve of natural gas producers to the fund, broadening the story beyond pure midstream. O’Hara sees the combination as directly tied to AI demand. “It goes a little bit beyond just your traditional MLP story and gets into some of the natural gas production, which again, we think is critical to this AI infrastructure,” he says.
AI data centers require enormous amounts of energy, and the growing consensus in the industry holds that the power will come primarily from behind-the-meter, onsite generation rather than the public grid. Natural gas is the near-term fuel of choice. Pipeline companies move it. Gas producers supply it. USAI aims for exposure to both.
The K-1 Problem, Solved
One of the practical headaches with traditional MLP investing is the K-1 tax form—a challenge any advisor who has managed a book of MLP clients knows all too well. Many MLP-focused ETFs still carry K-1 reporting requirements, creating administrative friction at tax time and, frankly, pushback from clients.
Pacer structured USAI to eliminate the K-1 issue. O’Hara notes that many MLP names have already converted from partnership structures to corporate stock, which naturally reduces the K-1 universe. USAI builds around those conversions.
“So, if any of the advisors out there are all in AMLP, for example, USAI can be a nice alternative replacement where you don’t have those nasty K-1s at the end of the year,” he points out.
Across a large client book, that difference may mean fewer complications, cleaner year-end reporting, and less explaining to do.
Growth First, Income Second
The fund carried a dividend yield of 3.61% as of March 31, 2026, which may catch the eye of income-oriented clients. But O’Hara is clear about where he thinks the best opportunity lies over the next decade. The pipeline networks that move natural gas around North America are, in his words, not easy to replicate. Permitting hurdles, right-of-way issues, and capital requirements mean the existing infrastructure carries durable value.
“We think that the next five to 10 years, the value of these pipelines is going to continue to go up,” he says. “It’s not easy to build any new ones, so the infrastructure’s there.”
Performance data through March 31, 2026, supports the framing. USAI returned 19.82% over one year on a NAV basis, 27.72% over three years, and 23.12% over five years—against a five-year return of 12.06% for the S&P 500. The fund has been live since December 2017, well before AI infrastructure became a mainstream investment theme, giving it a track record that has been tested through rate cycles, energy volatility, and a global pandemic.
A Geopolitical Wildcard
O’Hara raises one additional angle worth keeping in mind: global liquid natural gas (LNG) supply disruption. With a major LNG facility in Kuwait recently targeted and expected to be offline for an extended period, global supply is tightening. The U.S., with its vast natural gas reserves and growing export infrastructure, stands to benefit from filling that gap. “There’s a little hedge there if you want to benefit from maybe some of the reorganization of where the LNG is going to come from,” he notes. “There’s a side story there.”
The geopolitical angle is secondary to the AI thesis, but that potential opportunity reinforces the same underlying position—U.S. natural gas producers and pipeline operators are in demand from multiple directions. Even so, “the main story for us is that this is how AI is going to get its power,” O’Hara emphasizes.
Why Now
The hyperscaler trade has become crowded. Many AI-themed funds are heavily concentrated in a handful of megacap names that advisors can access through broad index exposure anyway. USAI offers a different entry point into the same macro theme—one that doesn’t require a view on whether Google or Microsoft will earn a return on their spending.
“I don’t know whether Google or Microsoft or Amazon’s going to make money based on the capex that they’ve projected to build out the AI infrastructure,” O’Hara says, “but I do know that they’re going to buy a lot of stuff from the companies that essentially we are in with USAI.”
The fund’s total expense ratio was 0.75% as of March 31, 2026, when it was trading on the New York Stock Exchange with implied daily liquidity of $208 million. USAI is accessible, liquid, and structurally clean.
Most importantly, this ETF fills a gap. Advisors building diversified exposure to the AI buildout need more than semiconductor and hyperscaler names. They need the roads, the buildings, and the fuel lines. USAI aims to be the fuel line—and the companies running it aren’t waiting on AI to prove itself. They’re already collecting the tolls.
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Additional Resources
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Disclosures
Pacer American Energy Infrastructure ETF (ticker: USAI)
Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus. A copy may be obtained by visiting www.paceretfs.com or calling 1-877-337-0500. Please read the prospectus carefully before investing.
An investment in the Funds is subject to investment risk, including the possible loss of principal. Pacer ETF shares may be bought and sold on an exchange through a brokerage account. Brokerage commissions and ETF expenses will reduce investment returns. There can be no assurance that an active trading market for ETF shares will be developed or maintained. The risks associated with this fund are detailed in the prospectus and could include factors such as concentration risk, currency exchange rate risk, ETF risks, equity market risk, foreign securities risk, geographic concentration risk, index provider risk, large-capitalization investing risk, MLP risk, non-diversification risk, passive investment risk, sector risk, small and mid-sized company stock risk, tax risk, tracking error risk and/or special risks of exchange traded funds.
The American Energy Infrastructure Index is a trademark of SL Advisors, LLC and has been licensed for use by Pacer Advisors, Inc. The Pacer American Energy Infrastructure ETF is not sponsored, endorsed, sold or promoted by SL Advisors, LLC and SL Advisors, LLC makes no representation or warranty regarding the advisability of investing in this Pacer American Energy Infrastructure ETF. The American Energy Infrastructure ETF has been reorganized into the Pacer American Energy Infrastructure ETF, a newly created series of Pacer Funds Trust with the same investment objective and same fees and expenses. The Reorganization will shift management responsibility from SL Advisors, LLC and its sub-adviser, Penserra Capital Management LLC, to Pacer Advisors, Inc., the investment adviser to Pacer ETFs. The American Energy Infrastructure Index is the property of SL Advisors, LLC which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Index. The Index is not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices”). S&P Dow Jones Indices will not be liable for any errors or omissions in calculating the Index. “Calculated by S&P Dow Jones Indices” and the related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by SL Advisors, LLC. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).
Weighted average market cap is the sum of each company’s weight multiplied by its market cap.
Dividend yield is calculated using annual dividends per share divided by share price. There is no guarantee dividends will be paid.
Price to Funds from Operations is a measure of the cash generated by a business operation. FFO is calculated by adding depreciation and amortization to earnings and then subtracting any gains on sales.
Price to Distributable Cash Flow the cash generated by the business operations before accounting for capital expenditures.
Master Limited Partnership (MLP) is a publicly traded entity taxed as a partnership, which combines the tax benefits of a partnership with the liquidity of publicly traded securities. In order to qualify for the tax benefit, MLPs must generate at least 90% or more of their income from qualifying sources such as from production, processing, storage, and transportation of depletable natural resources and minerals.
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© 2026, Pacer Financial, Inc., All rights reserved.
Distributor: Pacer Financial, Inc., member FINRA, SIPC, an affiliate of Pacer Advisors, Inc.
Pacer Data and Infrastructure Real Estate ETF (ticker: SRVR)
Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus. A copy may be obtained by visiting www.paceretfs.com or calling 1-877-337-0500. Please read the prospectus carefully before investing.
An investment in the Funds is subject to investment risk, including the possible loss of principal. Pacer ETF shares may be bought and sold on an exchange through a brokerage account. Brokerage commissions and ETF expenses will reduce investment returns. There can be no assurance that an active trading market for ETF shares will be developed or maintained. The risks associated with this fund are detailed in the prospectus and could include factors such as calculation methodology risk, concentration in real estate risk, currency exchange rate risk, equity market risk, ETF risks, foreign securities risk, geographic concentration risk, international operations risk, large and midcapitalization investing risk, non-diversification risk, passive investment risk, real estate companies risk, REIT investment risk, sector risk, small-capitalization companies risk, tax risk, tracking risk, and/or special risks of exchange traded funds.
Solactive AG (“Solactive”) is the licensor of the Solactive GPR Data & Infrastructure Real Estate Index (the “Index”). The financial instruments that are based on the Index are not sponsored, endorsed, promoted or sold by Solactive in any way and Solactive makes no express or implied representation, guarantee or assurance with regard to: (a) the advisability in investing in the financial instruments; (b) the quality, accuracy and/or completeness of the Index; and/or (c) the results obtained or to be obtained by any person or entity from the use of the Index. Solactive reserves the right to change the methods of calculation or publication with respect to the Index. Solactive shall not be liable for any damages suffered or incurred as a result of the use (or inability to use) of the Index.
Weighted average market cap is the sum of each company’s weight multiplied by its market cap.
Dividend yield is the weighted average of each underlying holdings dividend yield. There is no guarantee dividends will be paid.
Price to funds from operations is a measure of the cash generated by a REIT; real estate companies use FFO as an operating performance benchmark. FFO is calculated by adding depreciation and amortization to earnings and then subtracting any gains on sales.
The FTSE Nareit All Equity REITs Index is a free-float adjusted, market capitalization-weighted index of U.S. equity REITs. Constituents of the index include all tax-qualified REITs with more than 50 percent of total assets in qualifying real estate assets other than mortgages secured by real property.
The GPR 250 Index is composed of the 250 most liquid listed property securities in the world.
The GPR Pure Infrastructure Index Series includes companies that derive over 50% of their revenues by facilitating the movement of people, goods, energy and information by owning or operating a real asset.
Power Generation Companies are global companies in the Small Modular Reactors, Nuclear Power, Power Infrastructure & Energy Systems, and Digital Infrastructure & Connectivity Systems sectors.
Data and Infrastructure Real Estate Companies are global companies that generate earnings or revenues from real estate operations in the data and infrastructure real estate sectors.
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© 2026, Pacer Financial, Inc., All rights reserved.
Distributor: Pacer Financial, Inc., member FINRA, SIPC, an affiliate of Pacer Advisors, Inc.
Pacer Data and Digital Revolution ETF (ticker: TRFK)
Before investing you should carefully consider the Fund’s investment objectives, risks, charges, and expenses. This and other information is in the prospectus. A copy may be obtained by visiting www.paceretfs.com or calling 1-877-337-0500. Please read the prospectus carefully before investing.
An investment in the Funds is subject to investment risk, including the possible loss of principal. Pacer ETF shares may be bought and sold on an exchange through a brokerage account. Brokerage commissions and ETF expenses will reduce investment returns. There can be no assurance that an active trading market for ETF shares will be developed or maintained. The risks associated with this fund are detailed in the prospectus and could include factors such as associated risks of data and digital revolution companies, calculation methodology risk, concentration risk, currency exchange rate risk, equity market risk, ETF risks, foreign securities risk, geographic concentration risk, international operations risk, large-capitalization investing risk, mid-capitalization investing risk, non-diversification risk, passive investment risk, sector risk, tracking error risk, and/or special risks of exchange traded funds.
The Pacer Data Transmission and Communication Revolution Index is the property of Index Design Group, LLC which has contracted with Solactive AG to calculate and maintain the Index.
The financial instrument is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trade mark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the Issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the financial instrument. Neither publication of the Index by Solactive AG nor the licensing of the Index or Index trade mark for the purpose of use in connection with the financial instrument constitutes a recommendation by Solactive AG to invest capital in said financial instrument nor does it in any way represent an assurance or opinion of Solactive AG with regard to any investment in this financial instrument.
S&P Global 1200 Index captures approximately 70% of global market capitalization.
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© 2026, Pacer Financial, Inc., All rights reserved.
Distributor: Pacer Financial, Inc., member FINRA, SIPC, an affiliate of Pacer Advisors, Inc.
