Episode summary
Fueling the Future: ETFs, Energy, and AI
ETF Prime
· · Guests: Rob Thummel, Stacey Morris
Summary
Energy has lagged the broader market this year because oil has been pulled in conflicting directions by tariffs, OPEC+ supply increases, geopolitics, and seasonally softer demand. Stacey Morris argued that the sector’s weak start was driven first by oil’s strong first quarter, then by the April selloff and subsequent new barrels from OPEC+, with more supply still coming in September. She said investors should not treat energy as a single trade: MLPs have outperformed broad energy, while oil services have struggled as rig counts fall and producers push for more efficiency.
Morris also made the case that energy deserves attention in portfolios because it is only about 3% of the S&P 500 yet offers high dividends, strong free cash flow, and, in some cases, better total-return potential than a plain-vanilla energy benchmark. She highlighted policy support for oil and gas in the new tax law, plus favorable signals for midstream and LNG projects.
Rob Thummel framed Tortoise’s ETFs around the idea that AI, electricity, and energy infrastructure are converging. He said TCAI focuses on the hardware and utility backbone of AI, TNGY emphasizes exports and natural gas rather than oil, TPZ targets electrification and power demand growth, and TPYP remains the pure pipeline vehicle.
Key takeaways
- Morris said oil’s 2025 volatility reflects OPEC+ supply growth, tariff shocks, geopolitics, and weaker winter demand expectations.
- Morris argued that energy’s 3% weight in the S&P 500 can justify a targeted allocation, especially for investors seeking dividends and free cash flow.
- Morris said MLPs have outperformed broad energy by a wide margin since the end of 2022, while oil services have been hurt by falling rig counts.
- Thummel said Tortoise’s AI infrastructure ETF, TCAI, is designed to capture the infrastructure behind AI rather than the mega-cap technology names themselves.
- Thummel said TNGY, TPZ, and TPYP each target different parts of the energy value chain, from exports and natural gas to electrification and pipelines.
Notable quotes
“oil um had I think a surprisingly strong first quarter”
“energy currently represents only 3% of the S&P 500”
“there's been a lot of tailwinds from growing distributions, growing dividends”
“oil field service stands to benefit. But in the meantime, you know, it's it's kind of a tough environment for those companies”
“there is no AI without infrastructure”
How the episode opens
We're building more and more the US is going to be AI dominant. And so when you think about it, uh AI infrastructure is really going to be the foundation. Um and it's going to be the foundation for the future economy.
And there is no AI without infrastructure. All right. Joining me will be Rob Thumbl, managing director and senior portfolio manager at Tortois Capital, who currently offers five ETFs, about one half billion dollars in assets.
That includes an ETF that just launched last week, the Tortoise AI Infrastructure ETF, ticker symbol TCAI, which that does exactly what it says. It offers exposure to the underlying infrastructure critical to the growth of artificial intelligence. They would refer to this as an energy adjacent investment strategy.
And then they have three what I would say are much more directly focused energy ETFs including a launch from back in June, the Tortoise Energy Fund, ticker TNGY, which has over a half billion dollars in assets. So this was a mutual fund to ETF conversion. And then they uh offer a global water ETF as well.
But Tortoise clearly focuses on the energy sector. That's their expertise. And so we're going to look at several of those ETFs.
And I'm going to have Rob lay out why you may want to consider energy exposure in a portfolio to begin with. But I'll tell you, Rob uh is one of the sharpest minds you'll find in the energy space. Over 30 years of experience in the industry.
He oversees some $9 billion dollars in publicly traded securities focused on energy and infrastructure. You'll also frequently find him appearing on places like CNBC, Bloomberg, Fox News. Again, he knows his face inside and out.
And so, should be an excellent conversation. Now, to start this week, I have another one of the sharpest minds you're going to find in the energy space.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- energy etfs
- ai infrastructure etf
- oil price outlook
- natural gas price outlook
- etf inflows and trends
Companies and tickers mentioned
- TCAI
- Tortoise Capital
- VettaFi
- Tortoise AI Infrastructure ETF
Watch the episode
Watch “Fueling the Future: ETFs, Energy, and AI” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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