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 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 2.7% on a gross basis and 2.5% on a net basis in June, compared to the Alerian Midstream Energy Index’s 2.1% return.
Sector and Security Performance (gross of fees)
- Subsector performance was broadly positive, with all subsectors except Other (-6.8%) and Crude Oil Pipelines (-0.7%) posting gains. Midstream benefited from a rotation out of mega-cap technology stocks and into cyclical and value-oriented sectors, while lower crude oil prices weighed on crude pipeline operators as easing U.S.-Iran tensions reduced supply risk premiums.
- Top Performer – Oilfield Services (+11.4%): Driven by Select Water Solutions (+11.4%), the sector’s sole constituent, as investors rewarded its differentiated water infrastructure platform and improving operating fundamentals amid rising demand for produced water services.
- Bottom Performer – Other (-6.8%): Driven by NGL Energy Partners (-6.8%), the sector’s sole constituent, as investors favored higher-quality midstream operators with stronger balance sheets and greater earnings visibility.
Notable drivers of relative performance for the composite during June 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| Enbridge | Underweight | Underperformed as investors rotated toward higher-growth midstream companies, while Enbridge’s more defensive profile lagged peers benefiting from natural gas infrastructure and volume growth. |
| Kodiak Gas Services | Overweight | Outperformed on record EBITDA, higher guidance, and expanding power generation opportunities, reinforcing its natural gas infrastructure growth outlook. |
| DT Midstream | Overweight | Outperformed on strong first-quarter results, contracted expansion projects, and growing demand for reliable natural gas infrastructure. |
Detractors from relative performance for the composite during June 2026:
| Company | Positioning | Performance Driver |
|---|---|---|
| Plains All American | Overweight | Underperformed as investors favored natural gas infrastructure companies with stronger secular growth drivers. Despite improved guidance and solid crude volumes, its oil-focused asset base lagged. |
| Kinder Morgan | Underweight | Outperformed as investors recognized its growing natural gas opportunities, supported by strong earnings, LNG demand, power generation growth, and a robust project backlog. |
| Enterprise Products | Overweight | Underperformed as investors favored higher-growth natural gas infrastructure names, while its diversified asset base lagged peers with stronger near-term growth catalysts. |
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: 2/28/2016. 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 Strategic Energy Infrastructure Composite is a composite of Tortoise managed accounts focused on midstream energy infrastructure assets and invests across the listed midstream energy space in both c-corporations and MLPs. The Alerian Midstream Energy Total Return Index is a broad-based composite of North American energy infrastructure companies. 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 (AMNA) and on a total-return basis (AMNAX). 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 Energy Select Sector Index is a modified market capitalization-based index of S&P 500 companies in the energy sector that develop and produce crude oil and natural gas and provide drilling and other energy related services. Returns include reinvested dividends. 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).
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. Index returns do not include the impact of fees, transaction costs, or other expenses. 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. 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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