The US Manufacturing and Electrification Megatrends Are Here and They’re Way More Than AI | Chris Semenuk
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US manufacturing has essentially been in a recession for three straight years, and we have only just emerged now. The ISM PMI survey just reached above 50 in the last three months, And that's after three consecutive years of sub-fifty. It's the longest contraction period in the survey, three straight years, and we are only three to four months into a recovery. While everyone is trying to chase hyperscalers, semiconductor companies, space companies, there is an enormous investment opportunity happening right now underneath everyone's nose that involves just basic US industrial champions that ar
Hello, and welcome to Other People's Money. I'm Max Sweetie, and I'm joined today by Chris Semenuk. He's an investment partner at Tema ETFs where he manages two funds, one focused on manufacturing and reshoring, RSHO, and the other focused on electrification, V O L T, Volt. Both have performed very well compared to the market since their inception and year to date. Chris, thank you for joining me today.
Hi, Max. Thanks for having me on.
Manufacturing, reassuring, electrification. I might argue that they're tied to a broader trend of reindustrialization. We could argue about whether we're reindustrializing or this is a new wave of industrialization that's very different than the industrialization that this country had before. I'm sure we're gonna get into those nitty gritty details. But I wanna just start out with a with a question more broadly about this is something that we've been hearing about from multiple administrations. It broadly has bipartisan support that we should be re industrializing here in The United States. An
I get that question all the time. I think reindustrialization, or deglobalization, you know, in terms of a world scale, are both extremely real. And where do you see that most? Just look at the unprecedented size of backlogs within household multi industrial businesses, whether that's GE, GE Vernova, companies like Caterpillar. I mean, we're looking at backlogs here that have historically never been recorded. Backlog at Caterpillar is north of $60,000,000,000 The backlog at Vernova is north of almost $90,000,000,000 So the notion that this is some kind of fantasy that we don't really see this
People have an idea of it in their head. Right? Where all the jobs that went overseas are gonna come back, and we're gonna be making the same things. Manufacturing is gonna look the exact same, and and that's not how it's gonna work out. That's not how it's working out right now. And so my question would be, what is the reindustrialization image that people have in their head and how does the reality differ this time around?
That's a great question. Look, we industrializing or rebuilding The US industrial capacity to make things, if you will, is not about taking a factory out of China or out of Thailand or out of Bangladesh and moving it to Louisiana. That's not what's going on here. What's going on here is that The US is the epicenter for the incremental dollar being spent capital investment. So it's about when a company faces the decision to expand a footprint for production abroad or whether we have the ability to do it here in The US, The US is the first choice for incremental capital investment being done aro
So my question from that would be, why has the train left the station? There's so many factors. You hear people talk about the energy advantage of of production here in The US. You hear people talk about there's a push and a pull. Right? Obviously, the the tariff policy has since been reversed. But, you know, that's that's clearly
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