Targa Resources Becomes 4th Midstream C-Corp in S&P 500 | ETF Trends

Targa Resources Corp (TRGP) joined the S&P 500 prior to the opening of trading on Wednesday. 

The Houston, TX-headquartered midstream energy infrastructure corporation moved up from the S&P MidCap 400 to replace Nielsen Holdings plc (NLSN). Nielsen was acquired by a group of private-equity investors led by Elliot Management Corp and Brookfield Asset Management in a deal that closed on October 11.

S&P SmallCap 600 constituent Lantheus Holdings Inc. (LNTH) will replace Targa Resources in the S&P MidCap 400, and Payoneer Global Inc. (PAYO) will replace Lantheus Holdings in the S&P SmallCap 600 effective before the opening of trading on Wednesday, October 12, according to a statement from S&P Dow Jones Indices.

According to Bloomberg, energy stocks comprise 5.2% of the S&P 500 Index as of October 12. Energy was the best-performing sector in the S&P 500 in 2021 and remained the top performer year to date through the third quarter. 

With the addition of Targa, there are four midstream companies included in the S&P 500 as of October 12: Kinder Morgan Inc (KMI), ONEOK (OKE), Williams Companies (WMB), and Targa.  

Investors who want exposure to midstream firms structured as C-corps can’t get it in an MLP-only product. The Alerian Midstream Energy Select Index (AMEI), a composite of North American energy infrastructure companies, comprises MLPs and C-corps. Targa (weighted at 4.9% as of October 7) and the three other midstream names included in the S&P 500 are constituents in AMEI.

AMEI can be accessed with the Alerian Energy Infrastructure ETF (ENFR) and the ALPS Alerian Energy Infrastructure Portfolio (ALEFX), which deliver exposure in ETF and VIT wrappers. 

For more news, information, and strategy, visit the Energy Infrastructure Channel.

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