Content and data provided by various third parties and Fidelity − Terms of Use | Help/Glossary
Research > ETFs > ETF / ETP Commentary > 

How Utilities Exposure Impacts Energy Infrastructure ETFs

BY | ETF Database
9:32 am ET 10/15/26 | 23 VIEWS
Energy infrastructure ETFs delivered varying returns for investors in the third quarter of 2026, driven largely by underlying exposure to the utilities sector. Utilities was the worst-performing S&P 500 sector in the third quarter, falling 12.4%. Consequently, energy infrastructure ETFs with notable weightings in utilities faced headwinds compared to peers focused primarily on midstream energy exposure.Key Takeaways Utility exposure dragged down performance for certain energy infrastructure ETFs as the S&P 500 Utilities sector dropped -12.4% in Q3 2026. The First Trust North American Energy Infrastructure ETF (EMLP B-) holds a 51.4% utilities allocation and charges 95 basis points, resulting in a YTD return of 15.6% through October 13. Midstream-focused funds like the Alerian Energy Infrastructure ETF (ENFR ) delivered a stronger YTD return of 26.6%, strengthened by a lower expense ratio and no utility drag. Analyzing the Sector Split & Fee Impact of Energy Infrastructure ETFsUtilities tend to underperform significantly in a rising rate environment, as it’s a capital-intensive industry and higher borrowing costs weigh on heavy balance sheets. Furthermore, rising bond yields diminish the relative appeal of utility dividend yields. Sector allocation is one differentiator across the energy infrastructure ETF space. The First Trust North American Energy Infrastructure ETF (EMLP B-) carries heavy utilities exposure, with 51.4% of its portfolio in utilities as of October 13. Additionally, the fund has an expense ratio of 95 basis points, making it more expensive than category peers. Bound by these sector headwinds and higher fees, EMLP generated a year-to-date total return of 15.6% through October 13 and fell 5.0% in the third quarter. In contrast, funds with lower or zero utility allocations captured more upside from strength in the energy sector this year. The Tortoise North American Pipeline ETF (TPYP B+) maintains roughly 14.9% utilities exposure and a 40-basis-point fee, delivering a year-to-date return of 22.8% and losing 4.1% in the third quarter. Meanwhile, the Alerian Energy Infrastructure ETF (ENFR ) — which charges 35 basis points and focuses on midstream oil and gas companies with no allocation to utilities — achieved a segment-leading total return of 26.6% YTD, falling 2.9% in the third quarter. Furthermore, ENFR is the lowest-fee ETF in the energy infrastructure category. For investors evaluating energy infrastructure ETFs, underlying sector exposure and fee drag remain critical metrics to monitor. See more: Midstream Free Cash Flow Drives Growth & Capital Returns Looking for midstream insights in your inbox? Subscribe here to keep a pulse on midstream investing through our weekly updates. For more news, information, and analysis, visit the Energy Infrastructure Content Hub. vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for ENFR for which it receives an index licensing fee. However, ENFR is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of ENFR.

More Commentary

AAPL & MSFT Outside the Top 10: How Tech ETF TTEQ Wins
BY | ETF Database
6:12 am ET 10/15/26 | 35 VIEWS
Novel ETFs: New Milestones for Crypto, Leverage & Sports
BY | ETF Database
5:43 am ET 10/15/26 | 24 VIEWS
IBUY ETF Rebounds in October as Core Holdings Rally
BY | ETF Database
8:24 am ET 10/15/26 | 22 VIEWS
View more Commentary

Search Commentary

Enter Keyword(s)
Filter Results

Performance data shown is past performance and is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. Yield and return will vary, therefore you have a gain or loss when you sell your shares. For standard quarterly performance, go to the fund's Snapshot page by clicking on the ETF/ETP's symbol.

ETFs may trade at a premium or discount to their NAV and are subject to the market fluctuations of their underlying investments.

For iShares ETFs, Fidelity receives compensation from the ETF sponsor and/or its affiliates in connection with an exclusive long-term marketing program that includes promotion of iShares ETFs and inclusion of iShares funds in certain FBS platforms and investment programs. Please note, this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral. Additional information about the sources, amounts, and terms of compensation can be found in the ETF's prospectus and related documents. Fidelity may add or waive commissions on ETFs without prior notice. BlackRock and iShares are registered trademarks of BlackRock, Inc. and its affiliates.

FBS receives compensation from the fund's advisor or its affiliates in connection with a marketing program that includes the promotion of this security and other ETFs to customers ("Marketing Program"). The Marketing Program creates incentives for FBS to encourage the purchase of certain ETFs. Additional information about the sources, amounts, and terms of compensation is in the ETF's prospectus and related documents. Please note that this security will not be marginable for 30 days from the settlement date, at which time it will automatically become eligible for margin collateral.

News, commentary (including "Related Symbols") and events are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.

Any data, charts and other information provided on this page are intended to help self-directed investors evaluate exchange traded products (ETPs), including, but limited to exchange traded funds (ETFs) and exchange traded notes (ETNs). Criteria and inputs entered, including the choice to make ETP comparisons, are at the sole discretion of the user and are solely for the convenience of the user. Analyst opinions, ratings and reports are provided by third-parties unaffiliated with Fidelity. All information supplied or obtained from this page is for informational purposes only and should not be considered investment advice or guidance, an offer of or a solicitation of an offer to buy or sell a particular security, or a recommendation or endorsement by Fidelity of any security or investment strategy. Fidelity does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating ETPs. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use. Determine which securities are right for you based on your investment objectives, risk tolerance, financial situation and other individual factors and re-evaluate them on a periodic basis.

Before investing in any exchange traded product, you should consider its investment objective, risks, charges and expenses. Contact Fidelity for a prospectus, offering circular or, if available, a summary prospectus containing this information. Read it carefully.