June 2026
Market Overview
Broader equity markets pulled back in June, with the S&P 500 Index declining 1.0% and the Nasdaq Composite falling 2.8%, as renewed scrutiny over AI infrastructure capital spending weighed on mega-cap technology companies. The resulting rotation out of hyperscalers broadened market leadership toward cyclical and value-oriented sectors, providing a supportive backdrop for midstream equities.
Markets also navigated the highly anticipated first Federal Open Market Committee (FOMC) meeting under newly appointed Fed Chair Kevin Warsh, where policymakers adopted a more hawkish tone by raising inflation forecasts and debating the potential need for future rate hikes. Meanwhile, geopolitical tensions eased as crude oil prices declined into the low-$70 per barrel range following an initial memorandum between the U.S. and Iran aimed at advancing a diplomatic resolution to the ongoing conflict, reducing supply risk premiums in energy markets.
Midstream and Broader Energy Sector
Midstream fundamentals remained constructive during the month, supported by continued investor interest in stable, fee-based infrastructure assets. Fitch Ratings upgraded its outlook for the North American midstream sector to Improving from Neutral, reflecting strengthening industry fundamentals and balance sheets.
Natural gas infrastructure companies continued to benefit from growing commercial demand as pipeline operators secured additional opportunities tied to the significant electricity requirements of AI-driven data center development. The combination of improving sector fundamentals, resilient cash flows, and long-term demand growth continued to support investor sentiment despite broader market volatility.
Composite Performance
The composite returned 2.3% on a gross and 2.1% on a net basis in June, compared to the Tortoise MLP Index’s -0.7% return.
Sector and Security Performance (gross of fees)
- Subsector performance was mixed, with areas tied to growing domestic AI-driven power demand outperforming, led by Natural Gas Pipelines (+0.8%), while crude-sensitive segments lagged, led by Crude Oil Pipelines (-1.3%), as easing geopolitical tensions and the U.S.-Iran Islamabad Memorandum reduced crude oil prices and global supply risk premiums.
- Top Performer – Refined Product Pipelines (+2.4%):Benefited from favorable downstream pricing dynamics, as declining crude oil prices expanded fuel marketing margins by lowering wholesale costs ahead of retail price adjustments.
- Worst Performer – Propane (-11.9%): Declined as Suburban Propane (-11.9%), the sector’s sole constituent, faced seasonal inventory builds and a lack of meaningful near-term catalysts.
Notable drivers of relative performance for the composite during June 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| Targa Resources | Overweight | Outperformed following strong May earnings, as record Permian inlet and fractionation volumes drove higher full-year Adjusted EBITDA guidance and reinforced confidence. |
| Suburban Propane | Zero weight | Underperformed as muted year-over-year EBITDA growth and weather-related demand variability limited near-term catalysts despite solid operating results. |
| Williams Companies | Overweight | Outperformed following record first-quarter results, supported by strong natural gas demand, EBITDA growth, and increasing power generation needs. |
Detractors from relative performance for the composite during June 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| Blackstone Minerals | Zero weight | Outperformed on strong production growth, improving natural gas sentiment, and solid distribution coverage, reinforcing the strength of its royalty business. |
Delek Logistics | Zero weight | Outperformed following solid operating results, reaffirmed 2026 EBITDA guidance, and continued growth in third-party cash flows and distributions. |
| CrossAmerica | Zero weight | Outperformed as continued progress on its turnaround strategy improved retail margins, strengthened distribution coverage, and reduced leverage. |
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 6/30/2026. 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. The S&P 500® Energy Index comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector. Returns include reinvested dividends.
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.
FOR CURRENT CLIENT USE ONLY