Harnessing the Energy Value Chain: TPZ ETF

How the TPZ ETF Works

This fund prioritizes a dual objective: generating consistent income and pursuing potential capital appreciation. It achieves this by strategically investing in companies within the power and energy infrastructure sector. These companies play a vital role in our economy, providing essential services such as electricity generation, energy transmission, and utility services.

Recognizing the importance of stability and reliable returns, the fund carefully selects companies with a proven track record of consistent dividend payments. This focus on dividend income is designed to provide a steady stream of returns, even during periods of market volatility.

To enhance income generation and portfolio flexibility, the fund employs a diversified investment approach. It strategically allocates capital across various asset classes, including dividend-paying stocks, income-generating bonds, and up to 25% in Master Limited Partnerships (MLPs) – known for their attractive yield potential.

Furthermore, the fund incorporates a covered call strategy. By selectively selling options on portfolio holdings, the fund aims to generate additional income while potentially mitigating downside risk.

While primarily focused on U.S.-based companies, the fund incorporates a limited portion of international investments to enhance diversification and potentially capture growth opportunities beyond domestic markets.

As of December 27, 2024, the fund comprises 35 holdings, led by top names such as Energy Transfer LP (6.88%), MPLX LP (6.74%), Targa Resources Corp. (6.56%), ONEOK (6.55%), Kinder Morgan (4.70%), Williams Companies (4.57%), Hess Midstream LP (4.55%), and Enbridge (4.53%), among others.

Why Consider TPZ ETF

The Tortoise Power and Energy Infrastructure Fund (TPZ) offers a comprehensive approach to the energy sector, including electricity, energy infrastructure, oil and gas producers, and renewable energy driven by emerging AI and data center energy demands.

• Broad Energy Universe: TPZ invests across the entire $3 trillion energy landscape, providing unmatched access to diverse income and growth opportunities beyond traditional equity strategies.
• Consistent Income Focus: The fund is designed to generate steady monthly income through its active management of fixed income and option overlays, optimizing income opportunities within the energy sector.
• Dynamic Market Positioning: With a flexible allocation strategy, TPZ adjusts to market conditions, dynamically shifting between equities, bonds, and MLPs. This enables it to capture upside potential while providing downside protection, aligning with investors’ needs across full market cycles.

This total return-oriented approach makes TPZ a robust choice for those seeking exposure to the energy sector with a focus on income, growth, and risk management.

About Tortoise Capital

With approximately $9.9 billion in assets under management as of Nov. 30, 2024, Tortoise Capital’s record of investment experience and research dates back more than 20 years. As an early investor in midstream energy, Tortoise Capital believes it is well- positioned to be at the forefront of the global energy evolution that is under way. Based in Overland Park, Kansas, Tortoise Capital Advisors, L.L.C. is an SEC-registered investment adviser who manages funds that invest primarily in publicly traded companies in the energy and power infrastructure sectors—from production to transportation to distribution.

Tortoise Capital Suite of ETFs

TPZ: As an actively managed total return solution, TPZ strives to uncover high quality opportunities and capture growth potential in the energy sector.

TPYP: A passive midstream energy ETF that invests in North American pipeline companies.

TBLU: A passive ETF that invests in companies across the globe and throughout the water cycle that we believe are positioned to benefit from the pursuit of solving the water supply/demand imbalance.

Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.