The Essential Midstream Energy Trade | Rob Thummel

In this episode of Behind the Ticker, Brad Roth sits down with Rob Thummel, Senior Portfolio Manager at Tortoise Capital Advisors, to dive into the firm’s active ETF, the Tortoise Essential Energy Fund (Ticker: TPZ). Rob shares his decades-long journey in the energy sector—from working in gas stations and oilfields as a teenager to helping lead one of the most focused energy investment firms in the country. Tortoise Capital is devoted entirely to energy, aiming to deliver superior risk-adjusted returns by investing across the full spectrum of the sector, including infrastructure, utilities, and renewables—not just traditional oil and gas producers.TPZ, which recently transitioned from a closed-end fund to an active ETF, offers investors a dynamic approach to the evolving energy landscape. Rob explains how the fund is positioned to capture opportunities stemming from electrification and increased U.S. energy exports, with particular focus on natural gas and liquid infrastructure. He emphasizes that energy is no longer just about oil—natural gas and electricity are central to powering data centers and AI advancements, and TPZ is designed to align with that megatrend.The portfolio maintains an active share of 86%, reflecting its substantial divergence from traditional benchmarks like the S&P Energy Index or ETFs like XLE. TPZ typically holds 80-90% in equities and 10-20% in fixed income, with additional option overlays to generate income and reduce volatility. Rob describes the fund’s hybrid approach—combining top-down macro analysis with bottom-up fundamental research—to find undervalued names with strong cash flows and management quality.With a current dividend yield of about 5% and one-year performance exceeding 40%, TPZ has outpaced many passive energy benchmarks by leaning into secular shifts and tactically avoiding cyclical pitfalls. Rob positions TPZ as a core energy allocation for diversified portfolios, not just for total return potential, but for its robust income stream and long-term exposure to the energy-AI convergence. Get Brad's daily market research: Subscribe to The Signal at thorft.com/newsletterMore episodes: thorft.com/podcast