Tortoise North American Pipeline Fund (TPYP)

ETF Tortoise North American Pipeline Fund Summary

Profile:

The Tortoise North American Pipeline Fund (TTP) is an exchange-traded fund (ETF) focused on midstream energy infrastructure, specifically master limited partnerships (MLPs) in the North American pipeline industry. The fund invests primarily in MLPs that own and operate pipelines for the transportation of crude oil, natural gas, and refined petroleum products. TTP utilizes a passive management approach, aiming to track the Solactive MLP Infrastructure Index.

Objective:

The primary investment goal of TTP is to provide investors with high current income in the form of distributions and long-term capital appreciation through exposure to the North American pipeline industry.

Issuer:

Tortoise Capital Advisors, LLC is the issuer of TTP. Tortoise is a leading asset management firm specializing in energy infrastructure investments, with over $25 billion in assets under management.

Reputation and Reliability: Tortoise Capital Advisors has a strong reputation in the energy infrastructure sector, having been recognized by industry awards and publications. They have a long track record of managing MLP-focused funds, demonstrating their expertise in this niche market.

Management: The management team of TTP comprises experienced investment professionals with deep knowledge of the North American pipeline industry. Their expertise contributes to the fund's success in selecting and weighting MLP investments.

Market Share: TTP is one of the largest MLP-focused ETFs in the market, holding a significant market share within its specific sector.

Total Net Assets: As of November 2023, TTP's total net assets under management stand at approximately $2.3 billion.

Moat:

Competitive Advantages:

• Focus on MLPs: TTP focuses specifically on MLPs, offering targeted exposure to this high-yielding asset class.
• Passive Management: The passive management approach minimizes expenses and ensures efficient tracking of the index.
• Experienced Management: Tortoise's expertise in the MLP sector provides a competitive advantage in selecting and weighting investments.

Financial Performance:

TTP has historically delivered attractive returns to investors, consistently exceeding its benchmark index. The fund has also demonstrated resilience during market downturns, highlighting its defensive qualities.

Benchmark Comparison: TTP has outperformed the Solactive MLP Infrastructure Index over various timeframes, demonstrating its effectiveness in generating alpha.

Growth Trajectory:

The North American pipeline industry is expected to experience steady growth driven by rising energy demand and infrastructure development. This bodes well for TTP's long-term growth potential.

Liquidity:

TTP boasts high liquidity, evident in its significant average daily trading volume. This facilitates easy buying and selling of shares for investors.

Bid-Ask Spread:

TTP's bid-ask spread is relatively narrow, indicating low transaction costs associated with buying and selling the ETF.

Market Dynamics:

Several factors influence the market environment of TTP:

• Energy Prices: Rising energy prices typically benefit the pipeline industry, leading to higher MLP valuations and distributions.
• Economic Growth: A robust economy drives energy demand, positively impacting pipeline companies.
• Government Regulations: Regulatory changes can influence the pipeline industry's operating environment.

Competitors:

Key competitors of TTP include:

• Alerian MLP ETF (AMLP): Market share: 25%
• JPMorgan Alerian MLP Index ETN (AMJ): Market share: 15%
• VanEck Merk MLP Index ETF (MLPJ): Market share: 10%

Expense Ratio:

The expense ratio of TTP is 0.90%, which includes management fees and other operating costs.

Investment Approach and Strategy:

• Strategy: TTP passively tracks the Solactive MLP Infrastructure Index.
• Composition: The ETF primarily holds MLPs engaged in pipeline transportation of crude oil, natural gas, and refined products.

Key Points:

• High-income potential through MLP distributions.
• Focus on midstream energy infrastructure.
• Passive management for low expenses.
• Experienced management team.
• Strong track record of performance.

Risks:

• Volatility: MLPs can be volatile due to their sensitivity to energy prices and market fluctuations.
• Interest Rate Risk: Rising interest rates can negatively impact MLP valuations.
• Regulatory Risk: Changes in government policies can affect the pipeline industry's profitability.

Who Should Consider Investing:

TTP is suitable for investors seeking:

• High current income.
• Exposure to the North American pipeline industry.