Simon Lack, Portfolio Manager

Real assets that can raise prices either on commercial terms or because their regulatory framework ensures a minimum return on invested capital can be an effective way to maintain the purchasing power of savings.

Income-seeking investors often compare midstream energy infrastructure with utilities. Both own long-lived infrastructure assets dedicated to delivering energy to customers. Both tend to be regarded as yield-generating investments and are subject to considerable regulatory oversight on rate-setting.

When the final energy production figures for 2023 are in, the US will have set numerous records.

When the final energy production figures for 2023 are in, the US will have set numerous records.

Bonds had a great month in November. Indications that the Fed will pause again were extrapolated into easing expectations as soon as next quarter. Lower yields help the relative valuation of equities, although Factset earnings forecasts are no longer trending upwards.

Media coverage of reliable energy tends to focus on oil and gas. Oil comes in hundreds of different grades of complex hydrocarbon molecules. Natural gas, methane, is the simplest hydrocarbon of them all with a molecular formula of CH4. In between methane and crude oil lie Natural Gas Liquids (NGLs) – successively more complex combinations of carbon and hydrogen. Methane, also known as “dry” gas, is measured in cubic feet or BTUs. NGLs are measured in Millions of Barrels per Day (MMB/D). When NGLs are found with methane, it’s called “wet” gas.

Media coverage of reliable energy tends to focus on oil and gas. Oil comes in hundreds of different grades of complex hydrocarbon molecules. Natural gas, methane, is the simplest hydrocarbon of them all with a molecular formula of CH4. In between methane and crude oil lie Natural Gas Liquids (NGLs) – successively more complex combinations of carbon and hydrogen. Methane, also known as “dry” gas, is measured in cubic feet or BTUs. NGLs are measured in Millions of Barrels per Day (MMB/D). When NGLs are found with methane, it’s called “wet” gas.

It’s been hard to beat the S&P500 so far in 2023. And yet, midstream energy infrastructure continues to close in on a third successive calendar year of outperformance.