According to a recent study by ABI Research, cumulative global investment in smart grids will total over $45 billion in the next five years, as both governments and utilities repair, upgrade and transform their aging infrastructure. Much of the developed world relies on energy transmission technology and infrastructure that was built between 60 and 80 years ago, and it's beginning to show its age.

The report says that the "lion's share" of this spending will go towards "Transmission and Distribution" investments, which will attract $41 billion through 2015. Smart grids give utilities real-time, two-way communications with each segment of the electrical grid, assessing loads, usage, and efficiency twenty-four hours a day.

Major companies like Cisco (CSCO), Siemens AG (SI), and General Electric (GE) have taken stakes in the smart grid market. Echelon [Echelon] Corporation (ELON) and Itron (ITRI) are dedicated smart-grid and data-systems companies that could benefit from this flood of investment.

In addition, to respond to the demand for smart grid investment opportunities, First Trust has created the First Trust NASDAQ Clean Edge Smart Grid Infrastructure Index Fund (GRID), which tracks the performance of stocks in the grid and electric energy infrastructure sector.