The Alerian MLP Infrastructure Index (AMZI), the underlying index for the Alerian MLP ETF (AMLP), gained 12.59% in July on a total return basis, outperforming the S&P 500’s 9.22% increase during the same period.
After a challenging June, MLPs rallied last month as strong earnings results and announcements of steady or growing distributions helped shift the performance momentum for midstream after a weak start to the month.
AMZI notably outperformed the broader energy sector, represented by the Energy Select Sector Index (IXE), which gained 9.53% in June. Midstream MLPs and equities across the energy sector have significantly outperformed the broader market in 2022. The AMZI has gained 23.59% on a total-return basis year to date through July, while the S&P 500 (SPX) has fallen -12.58% on a total-return basis during the same period.
WTI oil fell for the second consecutive month, declining by -6.75% in July as demand concerns continued to weigh on prices, according to Bloomberg. Natural gas prices at Henry Hub rose by 51.2% to their second-largest monthly gain on record amid higher than usual temperatures in the US, which increased natural gas demand for power generation.
All sub-sectors included in the index saw double-digit percentage gains last month. The gathering and processing sub-sector, which tends to be more sensitive to commodity prices, led the way with a 13.59% rebound. Natural gas transportation and liquefaction constituents followed with gains of 12.47% and 12.46% fueled by firm demand for natural gas and U.S. LNG exports.
In July, Energy Transfer LP (ET), Hess Midstream LP (HESM), DCP Midstream LP (DCP), and Enterprise Products Partners LP (EPD) all announced increases in their distributions for the second quarter, VettaFi previously reported.
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