August 2026
Market Overview
August marked a rebound in broader U.S. equities following two consecutive months of declines, with the S&P 500 Index returning 2.7%. Better-than-expected second-quarter earnings, continued AI infrastructure investment and a recovery in semiconductor stocks supported the broader market, while midstream energy infrastructure benefited from favorable energy fundamentals and attractive cash yields.
Within the energy sector, heightened geopolitical tensions and supply risks surrounding crude flows through the Strait of Hormuz contributed to a 1.3% increase in WTI crude oil, which ended the month at $85.76 per barrel. The S&P 500 Energy sector gained 7.0% in August and was up 44.2% year to date, providing a supportive backdrop for midstream equities. Expectations for continued growth in natural gas and power infrastructure, including demand associated with AI data centers, also remained supportive.
Macro attention remained focused on the Federal Reserve. At Jackson Hole, Chair Kevin Warsh emphasized that inflation remained elevated and questioned whether recent softer inflation data represented a sustained improvement. This contributed to higher Treasury yields and pressure on rate-sensitive sectors.
Midstream and Broader Energy Sector
Midstream equities benefited from favorable energy fundamentals, attractive cash yields and continued expectations for growth in natural gas and power infrastructure. Natural gas pipeline operators remained supported by rising electricity demand and the long-term infrastructure requirements associated with AI data center development.
Geopolitical uncertainty also supported energy equities during the month, as supply risks surrounding crude flows through the Strait of Hormuz contributed to higher oil prices. Against this backdrop, the broader energy sector gained 7.0%, while midstream infrastructure continued to benefit from its combination of stable cash flows, energy exposure and attractive income characteristics.
Composite Performance
The composite returned 4.0% on both a gross and net basis in August, compared to the Tortoise MLP Index’s 4.0% return.
Sector and Security Performance (gross of fees)
- Subsector performance was broadly positive across nearly all categories as constructive fundamental tailwinds and favorable market conditions lifted midstream equities, with Propane (-3.9%) standing as the sole exception in negative territory
- Top Performer – Other (+13.4%): Driven by outperformance in both of its constituents. NGL Energy Partners (+15.7%) rallied following strong fiscal first-quarter results and continued momentum in its Water Solutions business, while Dorchester Minerals (+9.9%) benefited from strong second-quarter results and the announcement of an acquisition of additional mineral and royalty interests
- Worst Performer – Propane (-3.9%): Driven by its sole constituent, Suburban Propane, which declined following third-quarter results that showed a wider net loss and lower adjusted EBITDA.
Notable drivers of relative performance for the composite during August 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| Targa Resources | Overweight | Outperformed as record Q2 results and a new 20-year agreement with ExxonMobil reinforced expectations for continued Permian growth, with three new processing plants and expanded gathering, processing and NGL commitments providing additional long-term earnings visibility. |
| Delek Logistics | Zero weight | Underperformed after Q2 results missed bottom-line expectations, as weakness in wholesale marketing and terminalling, combined with higher interest expense, offset solid growth in Gathering and Processing. |
| Suburban Propane | Zero weight | Underperformed following fiscal Q3 results, as unusually warm spring weather reduced retail propane volumes 1.8%, while higher operating expenses contributed to a 33% decline in Adjusted EBITDA. |
Detractors from relative performance for the composite during August 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| NGL Energy Partners | Zero weight | Outperformed following strong fiscal Q1 results, driven by continued growth in Water Solutions, where produced-water volumes increased 12.4% year over year, reinforcing expectations for continued EBITDA growth. |
TC Energy | Overweight | Underperformed as rising bond yields pressured rate-sensitive, capital-intensive pipeline operators, despite a strong Q2 earnings beat and continued expansion project momentum. |
| Dorchester Minerals | Zero weight | Outperformed following strong Q2 results, with higher production and commodity prices driving a 73% increase in revenue. Additional Williston Basin mineral and royalty interests also supported expectations for future production growth. |
Your individual composite performance, taking fees into account, is available upon request. Client returns will be reduced by advisory fees and other expenses incurred as a client. Net returns are reduced by the model fee rate using the strategy’s standard annual fee of 75 basis points in the last month of the calendar quarter.
If you have any questions, please do not hesitate to contact the client relations team at clientrelations@tortoisecapital.com.
Disclosures
Source: Bloomberg and Tortoise as of 8/31/2026. Inception date: 2/1/2003. Annualized for periods over one year. It is not possible to invest directly in an index. Gross results are presented before management fees but are inclusive of transaction costs.
PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS
This strategy is advised by Tortoise Capital Advisors, L.L.C. The Tortoise Select MLP Composite is a composite of Tortoise managed accounts focused on investments in publicly traded MLPs predominately comprised of U.S. energy infrastructure assets. The Tortoise MLP Index® is a float-adjusted, capitalization weighted index of energy master limited partnerships (MLPs). The S&P 500 Index® is an unmanaged, market-value weighted index of stocks that is widely regarded as the standard for measuring large-cap U.S. stock market performance. Alerian MLP Index: The Alerian MLP Index is the leading gauge of energy infrastructure master limited partnerships (MLPs). The capped, float-adjusted, capitalization-weighted index, whose constituents earn the majority of their cash flow from midstream activities involving energy commodities, is disseminated real-time on a price-return basis (AMZ) and on a total-return basis (AMZX).
Index returns do not include the impact of fees, transaction costs, or other expenses. It is not possible to invest directly in an index. It is not possible to invest directly in an index. Investing involves risk, including possible loss of principal. Although information found in this commentary is derived from sources we believe to be accurate, we do not guarantee the accuracy of such information. The views expressed represent our assessment of the strategy and market environment as of the month end above and should not be considered a recommendation to buy, hold, or sell any security, and should not be relied on as research or investment advice. Holdings are as of the month end above and are subject to change without notice. The top three drivers and top three detractors are presented for informational purposes. A full list of drivers and detractors is available upon request. See Part 2A of Tortoise’s Form ADV for additional fee disclosures. A complete list of Tortoise Performance Composites is available upon request.
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