UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-22690

Tortoise Energy Independence Fund, Inc.
(Exact name of registrant as specified in charter)

6363 College Boulevard, Suite 100A, Overland Park, KS 66211
(Address of principal executive offices) (Zip code)

P. Bradley Adams

Diane Bono

6363 College Boulevard, Suite 100A, Overland Park, KS 66211
(Name and address of agent for service)

913-981-1020

Registrant’s telephone number, including area code

Date of fiscal year end: November 30

Date of reporting period: May 31, 2023

   

 

Table of Contents

 

Item 1. Report to Stockholders.

 

(a) The Report to Shareholders is attached herewith. 

 

Semi-Annual Report | May 31, 2023

2023 Semi-Annual Report
Closed-End Funds

 

Tortoise
2023 Semi-Annual Report to Stockholders

This combined report provides you with a comprehensive review of our funds that span essential assets.

   
Closed-end Fund Comparison 1
Letter to Stockholders 2
TYG: Fund Focus 7
NTG: Fund Focus 10
TTP: Fund Focus 13
NDP: Fund Focus 16
TPZ: Fund Focus 19
TEAF: Fund Focus 22
Financial Statements 27
Notes to Financial Statements 62
Additional Information 80
   

TTP and TPZ distribution policies

Tortoise Pipeline & Energy Fund, Inc. (“TTP”) and Tortoise Power and Energy Infrastructure Fund, Inc. (“TPZ”) are relying on exemptive relief permitting them to make long-term capital gain distributions throughout the year. Each of TTP and TPZ, with approval of its Board of Directors (the “Board”), has adopted a managed distribution policy (the “Policy”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. In accordance with its Policy, TTP distributes a fixed amount per common share, currently $.59, each quarter to its common shareholders. TPZ distributes a fixed amount per common share, currently $.105, each month to its common shareholders. Prior to February 2022, the monthly distribution rate was $.06. These amounts are subject to change from time to time at the discretion of the Board. Although the level of distributions is independent of TTP’s and TPZ’s performance, TTP and TPZ expect such distributions to correlate with its performance over time. Each quarterly and monthly distribution to shareholders is expected to be at the fixed amount established by the Board, except for extraordinary distributions in light of TTP’s and TPZ’s performance for the entire calendar year and to enable TTP and TPZ to comply with the distribution requirements imposed by the Internal Revenue Code. The Board may amend, suspend or terminate the Policy without prior notice to shareholders if it deems such action to be in the best interests of TTP, TPZ and their respective shareholders. For example, the Board might take such action if the Policy had the effect of shrinking TTP’s or TPZ’s assets to a level that was determined to be detrimental to TTP or TPZ shareholders. The suspension or termination of the Policy could have the effect of creating a trading discount (if TTP’s or TPZ’s stock is trading at or above net asset value), widening an existing trading discount, or decreasing an existing premium. You should not draw any conclusions about TTP’s or TPZ’s investment performance from the amount of the distribution or from the terms of TTP’s or TPZ’s distribution policy. Each of TTP and TPZ estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in TTP or TPZ is paid back to you. A return of capital distribution does not necessarily reflect TTP’s or TPZ’s investment performance and should not be confused with “yield” or “income.” The amounts and sources of distributions reported are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon TTP’s and TPZ’s investment experience during their fiscal year and may be subject to changes based on tax regulations. TTP and TPZ will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.

Tortoise

 

2023 Semi-Annual Report | May 31, 2023

Closed-end Fund Comparison
  Name/Ticker  Primary
focus 
Structure Total
investments
($ millions)(1)
Portfolio mix
by asset type(1)
Portfolio mix
by structure(1)

Tortoise Energy Infrastructure Corp.

NYSE: TYG
Inception: 2/2004

Energy Infrastructure C-Corp(2) $502.2

Tortoise Midstream Energy Fund, Inc.

NYSE: NTG
Inception: 7/2010

Natural Gas Infrastructure C-Corp(2) $260.6

Tortoise Pipeline
& Energy Fund, Inc.

NYSE: TTP
Inception: 10/2011

North
American
pipeline
companies
Regulated investment company $81.3

Tortoise Energy Independence
Fund, Inc.

NYSE: NDP
Inception: 7/2012

North
American
oil & gas
producers
Regulated investment company $64.0

Tortoise Power
and Energy Infrastructure
Fund, Inc.

NYSE: TPZ
Inception: 7/2009

Power
& energy infrastructure companies
(Fixed income
& equity)
Regulated investment company $117.4

Ecofin Sustainable and Social Impact Term Fund

NYSE: TEAF
Inception: 3/2019

Essential
assets
Regulated investment company $238.7

(1) As of 5/31/2023

(2) TYG and NTG intend to qualify as regulated investment companies. See Note 2.E. to the financial statements for further disclosure.

(unaudited)

Tortoise 1
 

Tortoise
2023 Semi-Annual Report to closed-end fund stockholders

Dear stockholder

The first half of the 2023 fiscal year proved to be a volatile environment for energy infrastructure and the renewable and power infrastructure sectors, yet different attributes drove performance. Energy infrastructure displayed strong earnings fundamentals while navigating recessionary concerns, declining commodity prices, and a macro environment favoring growth stocks over value stocks. Renewable and power infrastructure sector messaged additional growth backlogs driven by the Inflation Reduction Act (IRA) while simultaneously navigating headwinds around higher interest rate concerns and rising costs. Social impact investments continued to make progress with demand increasing for educational solutions and improvements along with an increased aging population and slower pace of new senior living inventory supply.

Energy and power infrastructure

The broad energy sector, as represented by the S&P Energy Select Sector® Index returned -14.2% for the first half of 2023 fiscal year. The first half of 2023 saw the energy sector pressured by lower prices in both crude oil (-14.3%) and natural gas (-57.5%) on recession concerns and warmer-than-expected winter weather. On the contrary, long-term supply concerns remained as 2022 was the eighth consecutive year of underinvestment in oil and gas. The opportunity for North American energy infrastructure remains as the U.S. energy industry focuses on maximizing shareholder returns. Global underinvestment resulting from environmental, social and governance (ESG) commitments and energy transition is likely to keep global stock balances extremely tight for the foreseeable future.

The global energy markets remained dynamic to start 2023. Most notable was OPEC+ twice cutting crude oil production. The production cuts (April 2023 for 1.6mm b/d and June 2023 for 1mm b/d) are intended to tighten the market as short-term demand concerns remain. These followed a production cut from OPEC+ of 2mm b/d in October 2022. We believe OPEC+ is sending a clear message to the market it is focusing on profits over market share. This is a marked change from past messaging and is aligned with U.S. shale prioritizing profits over market share. Russian crude, despite Western sanctions, remained more resilient than expected, yet volumes are projected to decline and/or face longer transit times to their end market. In the physical markets, U.S. production remained steady. For 2023, the Energy Information Agency (EIA) forecasts that U.S. crude production will increase 0.7 mm b/d to 12.6 mm b/d, up from 11.9 mm b/d average in 2022. On the demand side, the International Energy Agency (IEA) projects world crude consumption will increase by 2.2 million b/d in 2023 to a record 102 million b/d. Global demand is being driven by China after the country lifted its Covid restrictions. Finally, U.S. & global inventories are projected to decline as we head into the summer driving months.

With lower commodity prices during the period, the midstream sector proved to be defensive, outperforming exploration and production companies (E&Ps) and other energy subsectors. Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. The banking crisis in March provided another opportunity to highlight the resiliency of the asset class. Energy infrastructure credit facilities were and remain largely undrawn with an average utilization of 10%. With significant free cash flow today and expectations for growing free cash flow in future years we believe there is limited need for credit facilities.

Recession concerns weighed on investor psyche highlighted by the banking crisis in March. While there were several recessions in the last 40 years, energy demand increased in 38 out of the last 40 years (2008 and 2020 decreased). Due to actions taken during the 2020 recession, we believe the energy sector, and specifically midstream, is well prepared to deal with another potential recession. The world remains undersupplied in energy, and we believe sector balance sheets are in much better shape than in past recessions including 2001, 2008 and 2020.

The balanced return of capital story continued for investors via debt reduction, share buybacks and increased distributions. Debt paydown across the sector continued to be paramount led by Enterprise Product Partners which lowered its targeted leverage to 3.0x. In March, S&P upgraded EPD’s credit rating to A- by S&P. This is the first time we recall a midstream company with A rated debt! Western Midstream and Cheniere Energy are other midstream companies which saw improvement in their debt ratings during the first half of the fiscal year. Distribution growth continued in Q1 2023 as companies targeted a return to pre-COVID levels and midstream companies ended 2022 with a total of $4.8 billion in stock repurchased.

The significant free cash flow is increasingly making midstream assets and companies’ attractive merger & acquisition (M&A) targets. In May, ONEOK announced plans to acquire Magellan Midstream Partners (MMP) at a 22% premium. The deal is contingent upon shareholder vote and could close in the second half of 2023. DCP Midstream was also acquired by Phillips 66 at a significant premium during the first

(unaudited)

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2023 Semi-Annual Report | May 31, 2023

half of 2023. In both instances, we believe the companies being acquired operate critical energy infrastructure assets and are undervalued due to their high free cash flow generation potential over the next decade and beyond. Dealmaking is also happening in the private markets. In March, Energy Transfer announced the acquisition of privately owned Lotus Midstream. Management expects this transaction to deliver immediate accretion to free cash flow per unit driven by significant overlap of existing assets. Importantly, companies are controlling energy volumes throughout their value chain. Increasing volumes helps incumbent midstream companies maintain a competitive advantage.

Another continuing theme for energy infrastructure companies is the focus on export related infrastructure. With energy security a higher priority and concern around natural gas inventories, Europe is increasingly importing U.S. liquefied natural gas (LNG). Throughout 2022, LNG exporters contracted almost 6 billion cubic feet per day (Bcf/d) of new contracts, signing 15-25-year contracts with European and Asian counterparties. The first half of the 2023 fiscal year saw two Final Investment Decisions (FIDs) proceed to construction at Sempra’s Port Arthur LNG project and Venture Global’s Plaquemines LNG project. Additionally, Cheniere made progress with counterparties for the company’s Sabine Pass Liquefaction Expansion Project. The U.S. remains on track to roughly double LNG export capacity by the end of the decade.

Despite all the positives, risks to our outlook remain. In 2023, we expect a more mixed setup for natural gas, as supply outpaces demand. Unseasonably warm winter lessened the gas demand for Europe and North America. Further, the delayed restart of Freeport LNG, offline since the second half of 2022 through February 2023, kept more gas inventories from being exported globally. While supply remains abundant in the short-term, we expect more demand pull for natural gas in the back half of the decade. This demand will come from LNG facilities coming online and increased demand for natural gas through power generation. Gas and its reliability and affordability is a key resource for utilities. An example of this is the recent Texas law passed with anti-renewables provisions in ERCOT coupled with low-cost loans for new conventional generation.

On the regulatory front there continues to be hurdles for energy infrastructure mega-projects. During the period, projects faced mixed results around legislative and cost hurdles. On the positive side, the long-disputed Mountain Valley Pipeline received its required construction permits via the debt ceiling bill. The pipeline now expects to go into service in late 2023 or early 2024. On the negative side, TransCanada’s (TRP) Costal Gas Link, located on the west coast of Canada, is facing delays due to cost overruns, which TRP announced would increase 30%. These examples highlight the importance of cash flowing infrastructure already in the ground. Lastly, the Environmental Protection Agency (EPA) officially unveiled its latest proposal to stunt emissions from coal and gas power plants with most of the limitations appearing to take effect starting in 2035. The EPA projects that less than 20% of existing gas plants would be impacted, but for coal plants looking to run through 2040, the plants would need to switch to running on natural gas 40% of the time. This decision is likely to be litigated but is noteworthy in that the push towards natural gas is one we advocated for historically.

Sustainable infrastructure

Renewable energy

From a macro perspective the semi-annual period ending May 31, 2023, was generally characterized by influences stemming from stubborn inflation, elevated interest rates, and declining energy prices, in particular natural gas. In China, the magnitude of economic recovery following the post-COVID reopening ultimately did not come to fruition. From a policy perspective, we did see some further developments, albeit less potent, in a European response to the U.S.’s IRA.

2022’s clean energy ‘winners’, propelled by higher power prices and the growth catalysts inherent in the energy transition and the IRA, suffered profit taking in early 2023. Elevated borrowing costs were concerning for businesses which ‘borrow to grow,’ as were higher equipment costs, trade issues, permitting and transmission constraints. The period also saw banking turmoil triggered primarily by Silicon Valley Bank in early March, which presented both opportunities and challenges to the energy transition space. As such, some companies in our investment universe could not escape these varying impulses even if their secular growth remains intact.

Generally, companies participating in the energy transition tend to benefit at the margin from higher power prices in the short-term. Even if electricity prices are well above pre-2022 levels, as they have peaked and come down from very high levels, companies with some exposure to merchant prices face lower results in 2023 versus 2022, which reduces their appeal.

Looking ahead: Over the course of the next months we anticipate either a slowdown in inflation or in some cases deflation in certain areas of the energy transition space such as solar and car prices (internal combustion engines and electric vehicles). Wind turbine prices may, however, see more resistance to deflation.

(unaudited)

Tortoise 3
 

With respect to renewables, a key component to solar panel manufacturing, polysilicon, has come down massively year-to-date in China. Declining equipment costs provides a tailwind to the deployment of renewables that should fuel faster and more profitable growth.

Policy will have an important role to play in the coming months as certain protectionist policies have material implications for pricing power, market share and profitability in wind, solar, battery storage and electric vehicles industries. We expect the EU and countries within the EU to unveil a variety of measures and subsidies to counteract the IRA and encourage more domestic production and installation of key clean technologies such as manufacturing along the solar value chain and key industries serving the electric vehicle sector — potentially favorable for local champions.

While decelerating global inflation and the potential impact this may have on the rate cycle might start to provide an improved backdrop for duration businesses such as utilities and renewable developers, declining power prices are a headwind to those asset owners with elevated merchant power exposure –additionally, we are also closely monitoring the risks in certain regions globally to grid congestion and the knock on effects this may have on large utility scale renewables installations. As such, we are cautiously optimistic as we head further into 2023.

Waste transition

One of the recent highlights was the release of the final “SET-Rule” by the United States Environmental Protection Agency. The EPA’s SET-Rule establishes the Renewable Volume Obligations, known as RVO’s, that oil and gas producers must meet annually under the Renewable Fuel Standard program. In delineating these obligations, the SET-Rule is a critical component in establishing market demand, and therefore price support, for renewable fuel credits in the U.S. The new SET-Rule contains several positive features regarding waste transition, including:

A longer 3-year RVO term through 2025, providing market participants with better demand visibility;
The final RVO’s include an annual growth rate of 27-33% for renewable natural gas production, which is far higher than the 13-14% growth rate included in the Environmental Protection Agency’s (EPA’s) initially-proposed SET-Rule;
The SET-Rule does not contain cellulosic waiver credit availability for obligated parties, which historically has acted as a cap on Renewable Identification Number (RIN) pricing;
The SET-Rule contains a new methodology for apportioning RINs when utilizing food waste as a blended feedstock, enabling project owners to receive a higher percentage of more-valuable D3 RINs as opposed to less-valuable D5 RINs; and
The SET-Rule allows greater flexibility for biogas to be utilized as an intermediate fuel to produce or decarbonize non-transportation fuels, such as hydrogen.

Market reaction has been swift and positive, with D3 RIN prices rising nearly 30% within 1 week of the EPA’s announcement. D3 RINs may represent 25% or more of an RNG project’s revenue base, so a 30% increase in RIN pricing may be economically meaningful.

One of the few negative aspects of the SET-Rule is that it did not include provisions for e-RINs, as had been expected. e-RINs would have provided additional revenue to biogas projects that generate electricity. The EPA indicated that it paused the initiation of e-RINs due to implementation complexities. Market expectations are that the EPA will re-consider e-RINs when the next SET-Rule is proposed.

In the waste-to-value sector, recent news suggests that recycling rates have been going down, landfill tipping fees have been rising, and pollution settlement costs are becoming dramatically expensive.

The Circularity Gap Report 2023, published by Circle Economy in collaboration with Deloitte, determined that the global circularity rate was 9.1% in 2018, before declining to 8.6% in 2020, and 7.2% in 2022. So, even as recycling efforts have increased, the usage of virgin materials has risen at a faster rate. This fact underscores the need for enhanced recycling efforts to promote better overall sustainability.

In June, the Environmental Research and Education Foundation published its annual analysis, finding that U.S. landfill tipping fees increased 11% from 2021 to 2022, up substantially from annual increases in the 1-5% range during the 3 prior years. Industry experts believe such fees will continue to rise, thereby encouraging the diversion of waste away from landfill introduction and toward recycling facilities.

Finally, in June, 3M and DuPont separately agreed to pay over $11 billion to settle pollution claims involving per-and polyfluoroalkyl substances (PFAS), also known as “Forever Chemicals,” that are present in community water systems. This outcome, in conjunction with extended producer responsibility laws introduced in several states, is expected to encourage producers to take circularity and recycling efforts more seriously going forward.

(unaudited)

4Tortoise
 

2023 Semi-Annual Report | May 31, 2023

Social impact

Education

The public bond market for new issuance of K-12 charter school and private school revenue bonds in Q2 2023 continued to decline, with only 29 new issues for a par value of $664,315,000, a 54.8% decrease from the same period in 2022. Year to date, there have been 46 new issues with par value totaling $1,044,778,000 as compared to 94 new issues at par value of $2,334,820,000 for the first 6 months of 2022.1

While the cost of borrowing for charter and K-12 private schools has increased significantly over the past 12 months, it is Ecofin’s assessment that cumulative outflows of nearly $7 billion from municipal bond funds in the first half of 2023 are the primary driver of the slowdown.2 The specialty investor segment of the charter and K-12 bond market, which includes Ecofin, remains strong. Specialty investor transactions have made up nearly a quarter of market (par value) for both Q2 and the first 6 months of 2023 as opposed to 15.7% for the same quarter and less than 14% for the first half of 2022.

Education research and assessments featured prominently in the news during the quarter. Results for the National Assessment of Education Progress (NAEP), often referred to as the nation’s report card, were made public and confirmed the disastrous effects of the COVID pandemic on student learning. The education news organization, Chalkbeat, reported, “Scores were substantially lower in the fall of 2022 compared to the last time the test was administered three years earlier. Making matters worse, even before the pandemic hit, 13-year-olds had lost ground on the National Assessment of Educational Progress or NAEP. That adds up to a striking collapse in achievement scores since 2012, after decades of progress in math and modest gains in reading. In reading, 13-year-olds scored about the same as those who took the test in 1971, when it was first administered. Math scores were now comparable to those in 1992.”3

The second quarter also saw the release of “The National Charter School Study III, 2023” by Stanford University’s Center for Research on Education Outcomes (CREDO). The report is the third of its kind and offers the most rigorous assessment of the effect of charter schools on student learning. It offers a direct comparison of the results for students in district and charter public schools, including results by race, income, English language learner and special education status, while controlling for other factors that could skew results. The study found that, on average, brick and mortar (non-virtual) charter schools provided the equivalent of 22 additional days of learning in reading and 15 additional days in math based on a typical 180 day school year. For low-income, minority students the effect was even more dramatic: African-American students achieved the equivalent of 37 additional days of academic growth in reading and 36 additional days growth in math, while Hispanic students showed 30 additional days of academic growth in both reading and math.4

In other “school choice” news, Florida, Arkansas, Iowa and Utah passed new laws to provide funding for families choosing to send their children to accredited K-12 private schools. Additionally, expansion of the Indiana Choice Scholarship program makes 97% of all families in the state eligible to participate. Finally, North Carolina expanded its existing Opportunity Scholarship program to apply to all families, which based on their financial means, will provide $3,000 to $7,000 for use at private schools of their choice.5 All of these new and expanded programs are expected to dramatically increase the demand for private school facilities over the next decade.

Senior Living

In the first quarter of 2023, the for-profit senior living sector recorded its seventh quarter in a row of occupancy gains. Statistically, nationwide occupancy for independent living and assisted living is 85.2% and 81.2%, respectively. Recovery has been slightly stronger in the higher acuity and needs based assisted living setting; however, independent living is not far behind. As of the fourth quarter, senior living occupancy including independent and assisted living occupancy had recovered 5.4% from the pandemic lows in 2021, but still has 4.0% to reach the pre-pandemic occupancy of 87.2%.6

Non-profit senior living has fared better than their for-profit brethren since the pandemic hit. As of Q1 2023, non-profit continuing care retirement communities (“CCRC’s”) were 89.3% occupied.6

Occupancy recovery has been fueled by almost three years of slowing construction starts which as of the first quarter 2023 recorded the lowest primary market inventory growth since 2005, when NIC started recording the data. Rising interest rates, elevated construction costs and tight lending conditions will continue to propel occupancy in the months to come. Given the incredibly low number of units under construction, the market is setting up for a severe supply and demand imbalance just as the baby boomer population is knocking on the doorstep.

(unaudited)

Tortoise 5
 

From now until 2030, an average of 10,000 baby boomers will turn 65 every day.7 With the combination of increased population and a slower pace of new senior living inventory supply, we remain confident in the senior living industry’s ability to rebound and prepare for the upcoming “Silver Tsunami” as our population continues to age.

Concluding thoughts

We continue to stand by our positive long-term outlook for the energy and power and sustainable infrastructure sectors. Opportunities for investing in education and senior living continue to expand for many reasons positioning the sectors well for continued growth.

 

The S&P Energy Select Sector® Index is a capitalization-weighted index of S&P 500® Index companies in the energy sector involved in the development or production of energy products. The Tortoise North American Pipeline IndexSM is a float adjusted, capitalization-weighted index of energy pipeline companies domiciled in the United States and Canada. The Tortoise MLP Index® is a float-adjusted, capitalization-weighted index of energy master limited partnerships.

The Tortoise indices are the exclusive property of Tortoise Index Solutions, LLC, which has contracted with S&P Opco, LLC (a subsidiary of S&P Dow Jones Indices LLC) to calculate and maintain the Tortoise MLP Index® and Tortoise North American Pipeline IndexSM (the “Indices”). The Indices are not sponsored by S&P Dow Jones Indices or its affiliates or its third party licensors (collectively, “S&P Dow Jones Indices LLC”). S&P Dow Jones Indices will not be liable for any errors or omission in calculating the Indices. “Calculated by S&P Dow Jones Indices” and its related stylized mark(s) are service marks of S&P Dow Jones Indices and have been licensed for use by Tortoise Index Solutions, LLC and its affiliates. S&P® is a registered trademark of Standard & Poor’s Financial Services LLC (“SPFS”), and Dow Jones® is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”).

It is not possible to invest directly in an index.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost.

1Electronic Municipal Market Access ( https://emma.msrb.org/ ) & MuniOS ( https://www.munios.com/ )
2Refinitiv Lipper US Fund Flows ( https://www.lipperusfundflows.com/ )
3Latest National Test Results Show Striking Drop in 13-year-olds’ Math and Reading Scores, Matt Barnum, “Chalkbeat”, June 20, 2023
4The National Charter School Study III 2023, Center for Research on Education Outcomes (CREDO), June 19, 2023.
5Edchoice.org
6NIC
7census.gov
6Tortoise
 

2023 Semi-Annual Report | May 31, 2023

Tortoise
Energy Infrastructure Corp. (TYG)

 

Fund description

TYG seeks a high level of total return with an emphasis on current distributions paid to stockholders. TYG invests primarily in equity securities in energy infrastructure companies. The fund is positioned to benefit from growing energy demand and accelerated efforts to reduce global CO2 emissions in energy production. Energy infrastructure companies generate, transport and distribute electricity, as well as process, store, distribute and market natural gas, natural gas liquids, refined products and crude oil.

Fund performance

With lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors. Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. Renewable and power infrastructure sector messaged additional growth backlogs driven by the Inflation Reduction Act (IRA) while simultaneously navigating headwinds around higher interest rate concerns and rising costs. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -15.7% and -10.7%, respectively (including the reinvestment of distributions). The Tortoise MLP Index® returned -1.8% during the same period.

2023 mid-fiscal year summary  
Distributions paid per share $0.7100
Distribution rate (as of 5/31/2023) 10.5%
Year-over-year distribution increase (decrease) 0.0%
Cumulative distributions paid per share to stockholders since inception in February 2004 $42.4275
Market-based total return (15.7)%
NAV-based total return (10.7)%
Premium (discount) to NAV (as of 5/31/2023) (19.7)%

Key asset performance drivers

Top five contributors Company type
Magellan Midstream Partners, L.P. Refined products pipeline company
Enterprise Products Partners L.P. Natural gas pipeline company
DCP Midstream LP Natural gas pipeline company
Energy Transfer LP Natural gas pipeline company
MPLX LP Refined products pipeline company
Bottom five contributors Company type
Williams Companies Inc. Natural gas pipeline company
AES Corp. Power company
NextEra Energy Partners LP Diversified infrastructure company
Clearway Energy, Inc. Diversified infrastructure company
ONEOK, Inc. Natural gas pipeline company

Unlike the fund return, index return is pre-expenses and taxes.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

Tortoise 7
 

Tortoise
Energy Infrastructure Corp. (TYG) (continued)

 

Value of $10,000 vs. Tortoise Energy Infrastructure Fund – Market (unaudited)

From May 31, 2013 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year 3-Year 5-Year 10-Year Since Inception(1)
Tortoise Energy Infrastructure Fund - NAV -6.68% 18.41% -13.48% -7.49% 2.02%
Tortoise Energy Infrastructure Fund - Market -12.93% 21.46% -18.46% -10.21% 0.63%
Tortoise MLP Index® 5.15% 25.94% 5.78% 2.16% 8.32%
Tortoise Decarbonization Infrastructure IndexSM (2) -12.46% N/A N/A N/A N/A
(1)Inception date of the Fund was Feburary 25, 2004.
(2)The Tortoise Decarbonization Infrastructure Index was added to reflect the inclusion of a broader scope of energy infrastructure equities including midstream, utilities, and renewables in TYG effective November 30, 2021.

Fund structure and distribution policy

The fund intends to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. See Note 2E to financial statements for further disclosure.

The fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November.

Leverage

The fund’s leverage utilization decreased $33.3 million during the six months ended May 31, 2023, compared to the six months ended November 30, 2022, and represented 22.8% of total assets at May 31, 2023. During the period, the fund was in compliance with its applicable coverage ratios, 93.8% of the leverage cost was fixed, the weighted-average maturity was 2.4 years and the weighted-average annual rate on leverage was 3.79%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed. During the six month period ended May 31, 2023, $9.7 million of Senior Notes were paid in full upon maturity.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage, taxes and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

8Tortoise
 

2023 Semi-Annual Report | May 31, 2023

TYG Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)

 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

    2022     2023  
    Q1(1)     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)  
Selected Financial Information                                                
Distributions paid on common stock   $ 8,469     $ 8,469     $ 8,469     $ 8,045     $ 8,045     $ 8,046  
Distributions paid on common stock per share(2)     0.7100       0.7100       0.7100       0.7100       0.7100       0.7100  
Total assets, end of period(3)     612,536       640,253       638,068       623,319       577,524       504,066  
Average total assets during period(3)(4)     589,709       626,150       621,364       607,430       595,508       547,380  
Leverage(5)     146,087       144,987       144,587       147,993       146,213       114,713  
Leverage as a percent of total assets     23.8 %     22.6 %     22.7 %     23.7 %     25.3 %     22.8 %
Operating expenses before leverage costs and current taxes(6)     1.11 %     1.07 %     1.05 %     1.16 %     1.11 %     1.22 %
Net unrealized appreciation (depreciation), end of period     (311,995 )     (268,736 )     (270,982 )     9,330       (34,286 )     (65,512 )
Net assets, end of period     436,770       469,005       467,109       446,618       416,799       380,323  
Average net assets during period(7)     413,334       459,626       442,939       435,678       429,315       409,946  
Net asset value per common share(2)     36.62       39.32       39.16       39.41       36.78       33.56  
Market value per share(2)     30.25       33.84       34.14       33.54       30.89       26.95  
Shares outstanding (000’s)     11,928       11,928       11,928       11,332       11,332       11,332  
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020.
(3)Includes deferred issuance and offering costs on senior notes and preferred stock.
(4)Computed by averaging month-end values within each period.
(5)Leverage consists of senior notes, preferred stock and outstanding borrowings under credit facilities.
(6)As a percent of total assets.
(7)Computed by averaging daily net assets within each period.
Tortoise 9
 

Tortoise
Midstream Energy Fund, Inc. (NTG)

 

Fund description

NTG seeks to provide stockholders with a high level of total return with an emphasis on current distributions. NTG invests primarily in midstream energy equities that own and operate a network of pipeline and energy related logistical infrastructure assets with an emphasis on those that transport, gather, process and store natural gas and natural gas liquids (NGLs). NTG targets midstream energy equities, including MLPs benefiting from U.S. natural gas production and consumption expansion, with minimal direct commodity exposure.

Fund performance

With lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors. Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -12.5% and -11.7%, respectively (including the reinvestment of distributions). The Tortoise MLP Index® returned -1.8% during the same period.

2023 mid-fiscal year summary  
Distributions paid per share $0.7700
Distribution rate (as of 5/31/2023) 9.8%
Quarter-over-quarter distribution increase (decrease) 0.0%
Year-over-year distribution increase (decrease) 0.0%
Cumulative distributions paid per share to stockholders since inception in July 2010 $22.5800
Market-based total return (12.5)%
NAV-based total return (11.7)%
Premium (discount) to NAV (as of 5/31/2023) (15.5)%

Key asset performance drivers

Top five contributors Company type
Enterprise Products Partners L.P. Natural gas pipelines company
Plains GP Holdings, L.P. Crude oil pipeline company
DCP Midstream LP Natural gas pipeline company
Energy Transfer LP Natural gas pipeline company
Magellan Midstream Partners, L.P. Refined products pipeline company
Bottom five contributors Company type
Williams Companies Inc. Natural gas pipeline company
Kinder Morgan Inc. Natural gas pipeline company
Cheniere Energy Inc. Natural gas pipeline company
ONEOK, Inc. Natural gas pipeline company
DT Midstream Inc. Natural gas pipeline company

Unlike the fund return, index return is pre-expenses and taxes.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

10Tortoise
 

2023 Semi-Annual Report | May 31, 2023

Tortoise
Midstream Energy Fund, Inc. (NTG) (continued)

 

Value of $10,000 vs. Tortoise Midstream Energy Fund – Market (unaudited)

From May 31, 2013 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year 3-Year 5-Year 10-Year Since Inception(1)
Tortoise Midstream Energy Fund – NAV -8.53% 21.66% -19.15% -10.64% -6.19%
Tortoise Midstream Energy Fund – Market -9.56% 23.10% -23.12% -12.53% -7.75%
Tortoise MLP Index® 5.15% 25.94% 5.78% 2.16% 5.73%

(1) Inception date of the Fund was July 27, 2010.

Fund structure and distribution policy

The fund intends to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. See Note 2E to the financial statements for further disclosure.

The fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November.

Leverage

The fund’s leverage utilization decreased approximately $5.4 million during the six months ended May 31, 2023 compared to the six months ended November 30, 2022, and represented 21.7% of total assets at May 31, 2023. During the period, the fund was in compliance with its applicable coverage ratios, 84.4% of the leverage cost was fixed, the weighted-average maturity was 3.6 years and the weighted-average annual rate on leverage was 3.86%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed. During the six month period ended May 31, 2023, $3.8 million of preferred stock was paid in full upon maturity.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage, taxes and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

Tortoise 11
 

NTG Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)

 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

    2022     2023
    Q1(1)     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)  
Selected Financial Information                                                
Distributions paid on common stock   $ 4,345     $ 4,345     $ 4,345     $ 4,128     $ 4,128     $ 4,128  
Distributions paid on common stock per share(2)     0.7700       0.7700       0.7700       0.7700       0.7700       0.7700  
Total assets, end of period(3)     307,035       328,526       316,411       323,122       296,682       261,858  
Average total assets during period(3)(4)     289,590       317,967       312,932       308,008       304,884       281,520  
Leverage(5)     63,069       66,369       64,169       62,369       66,120       56,920  
Leverage as a percent of total assets     20.5 %     20.2 %     20.3 %     19.3 %     22.3 %     21.7 %
Operating expenses before leverage costs and current taxes(6)     1.22 %     1.07 %     1.11 %     1.29 %     1.16 %     1.36 %
Net unrealized appreciation (depreciation), end of period     129,068       154,849       145,148       27,611       6,856       (11,572 )
Net assets, end of period     231,856       250,913       240,864       237,022       221,555       200,046  
Average net assets during period(7)     212,000       244,906       231,908       230,297       226,098       215,743  
Net asset value per common share(2)     41.09       44.46       42.68       44.21       41.33       37.32  
Market value per common share(2)     34.81       37.99       36.79       37.69       35.28       31.53  
Shares outstanding (000’s)     5,643       5,643       5,643       5,361       5,361       5,361  
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Adjusted to reflect 1 for 10 reverse stock split effective May 1, 2020.
(3)Includes deferred issuance and offering costs on senior notes and preferred stock.
(4)Computed by averaging month-end values within each period.
(5)Leverage consists of senior notes, preferred stock and outstanding borrowings under the credit facility.
(6)Computed as a percent of total assets.
(7)Computed by averaging daily net assets within each period.
12Tortoise
 

2023 Semi-Annual Report | May 31, 2023

Tortoise
Pipeline & Energy Fund, Inc. (TTP)

 

Fund description

TTP seeks a high level of total return with an emphasis on current distributions paid to stockholders. TTP invests primarily in equity securities of North American pipeline companies that transport natural gas, natural gas liquids (NGLs), crude oil and refined products and, to a lesser extent, in other energy infrastructure companies.

Fund performance

With lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors. Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -9.3% and -9.5%, respectively (including the reinvestment of distributions). The Tortoise North American Pipeline IndexSM returned -8.2% for the same period.

2023 mid-fiscal year summary  
Distributions paid per share $0.5900
Distribution rate (as of 5/31/2023) 9.5%
Year-over-year distribution increase (decrease) 0.0%
Cumulative distributions paid per share to stockholders since inception in October 2011 $18.4775
Market-based total return (9.3)%
NAV-based total return (9.5)%
Premium (discount) to NAV (as of 5/31/2023) (17.6)%

Please refer to the inside front cover of the report for important information about the fund’s distribution policy.

Key asset performance drivers

Top five contributors Company type
Magellan Midstream Partners, L.P. Refined products pipeline company
Plains GP Holdings, L.P. Crude oil pipeline company
Enterprise Products Partners L.P. Natural gas pipeline company
Equitrans Midstream Corporation Gathering & processing company
Energy Transfer LP Natural gas pipeline company
Bottom five contributors Company type
Williams Companies Inc. Natural gas pipeline company
Cheniere Energy Inc. Natural gas pipeline company
Kinder Morgan Inc. Natural gas pipeline company
ONEOK, Inc. Natural gas pipeline company
Enbridge Inc. Crude oil pipeline company

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

Tortoise 13
 

Tortoise
Pipeline & Energy Fund, Inc. (TTP) (continued)

 

Value of $10,000 vs. Tortoise Pipeline and Energy Fund – Market (unaudited)
From May 31, 2013 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year 3-Year 5-Year 10-Year Since Inception(1)
Tortoise Pipeline and Energy Fund – NAV -8.15% 21.68% -9.80% -5.34% -2.33%
Tortoise Pipeline and Energy Fund – Market -9.31% 20.97% -11.92% -7.31% -4.33%
Tortoise North American Pipeline Index -9.52% 17.28% 6.20% 5.36% 6.97%
   
(1)Inception date of the Fund was October 26, 2011.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization decreased approximately $2.4 million during the six months ended May 31, 2023, compared to the six months ended November 30, 2022, and represented 21.3% of total assets at May 31, 2023. During the period, the fund maintained compliance with its applicable coverage ratios, 57.6% of the leverage cost was fixed, the weighted-average maturity was 1.1 years and the weighted-average annual rate on leverage was 5.31%. These rates will vary in the future as a result of changing floating rates, utilization of the fund’s credit facility and as leverage matures or is redeemed.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

14Tortoise
 

2023 Semi-Annual Report | May 31, 2023

TTP Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)

 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

    2022     2023
    Q1(1)     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)  
Selected Financial Information                                                
Distributions paid on common stock   $ 1,314     $ 1,314     $ 1,314     $ 1,249     $ 1,248     $ 1,249  
Distributions paid on common stock per share(2)     0.5900       0.5900       0.5900       0.5900       0.5900       0.5900  
Total assets, end of period(3)     92,230       100,901       97,010       93,907       87,895       81,736  
Average total assets during period(3)(4)     86,730       96,706       96,086       93,079       90,503       86,135  
Leverage(5)     20,143       20,943       21,343       19,843       20,143       17,443  
Leverage as a percent of total assets     21.8 %     20.8 %     22.0 %     21.1 %     22.9 %     21.3 %
Operating expenses before leverage costs(6)     1.00 %     1.90 %     1.05 %     1.32 %     1.28 %     1.37 %
Net unrealized appreciation, end of period     11,927       20,208       17,286       19,117       13,950       9,483  
Net assets, end of period     71,653       79,443       75,181       73,509       67,264       63,730  
Average net assets during period(7)     66,721       76,749       73,287       71,609       69,939       66,399  
Net asset value per common share(2)     32.16       35.66       33.75       34.73       31.78       30.11  
Market value per common share(2)     26.44       29.76       29.18       28.58       27.09       24.81  
Shares outstanding (000’s)     2,228       2,228       2,228       2,116       2,116       2,116  
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Adjusted to reflect 1 for 4 reverse stock split effective May 1, 2020.
(3)Includes deferred issuance and offering costs on senior notes and preferred stock.
(4)Computed by averaging month-end values within each period.
(5)Leverage consists of senior notes, preferred stock and outstanding borrowings under the revolving credit facility.
(6)Computed as a percent of total assets.
(7)Computed by averaging daily net assets within each period.
Tortoise 15
 

Tortoise
Energy Independence Fund, Inc. (NDP)

 

Fund description

NDP seeks a high level of total return with an emphasis on current distributions paid to stockholders. NDP invests primarily in equity securities of upstream North American energy companies that engage in the exploration and production of crude oil, condensate, natural gas and natural gas liquids that generally have a significant presence in North American oil and gas fields, including shale reservoirs.

Fund performance

The first half of 2023 saw the energy sector pressured by lower prices in both crude oil and natural gas on recession concerns and warmer-than-expected winter weather. On the contrary, long-term supply concerns remain as 2022 was the eighth consecutive year of underinvestment in oil and gas. The opportunity for North American energy infrastructure remains as the U.S. energy industry focuses on maximizing shareholder returns. Global underinvestment resulting from environmental, social and governance (ESG) commitments and energy transition is likely to keep global stock balances extremely tight for the foreseeable future. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -12.7% and -13.9%, respectively (including the reinvestment of distributions).

2023 mid-fiscal year summary  
Distributions paid per share $0.6300
Distribution rate (as of 5/31/2023) 9.3%
Year-over-year distribution increase (decrease) 31.3%
Cumulative distributions paid per share to stockholders since inception in July 2012 $16.0725
Market-based total return (12.7)%
NAV-based total return (13.9)%
Premium (discount) to NAV (as of 5/31/2023) (14.1)%

The fund utilizes a covered call strategy when appropriate, which seeks to generate income while reducing overall volatility. No covered calls were written during the period.

Key asset performance drivers

Top five contributors Company type
Plains All American Pipeline, L.P. Crude oil pipeline company
DCP Midstream LP Natural gas pipeline company
Magellan Midstream Partners, L.P. Refined products pipeline company
Energy Transfer LP Natural gas pipeline company
TXO Partners LP Oil & gas production company
   
Bottom five contributors Company type
Devon Energy Corporation Oil & gas production company
Cheniere Energy Inc. Natural gas pipeline company
EQT Corp. Oil & gas production company
EOG Resources Inc. Oil & gas production company
Marathon Oil Corp. Oil & gas production company

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance: past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

16Tortoise
 

2023 Semi-Annual Report | May 31, 2023

Tortoise
Energy Independence Fund, Inc. (NDP) (continued)

 

Value of $10,000 vs. Tortoise Energy Independence Fund – Market (unaudited)

From May 31, 2013 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year 3-Year 5-Year 10-Year Since Inception(1)
Tortoise Energy Independence Fund − NAV -11.84% 31.27% -13.11% -8.30% -6.93%
Tortoise Energy Independence Fund − Market -9.80% 37.35% -16.11% -9.74% -8.62%
S&P 500 Energy Select Sector Index -8.23% 31.60% 5.34% 3.43% 4.78%

(1) Inception date of the Fund was July 26, 2012.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund’s gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November.

Leverage

The fund’s leverage utilization increased $5.1 million during the six months ended May 31, 2023 as compared to the six months ended November 30, 2022. The fund utilizes all floating rate leverage that had an interest rate of 6.44% and represented 13.7% of total assets at May 31, 2023. During the period, the fund maintained compliance with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along with changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

Tortoise 17
 

NDP Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)

 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

    2022     2023
    Q1(1)     Q2(1)     Q3(1)     Q4(1)     Q1(1)     Q2(1)  
Selected Financial Information                                                
Distributions paid on common stock   $ 886     $ 886     $ 1,034     $ 982     $ 1,105     $ 1,105  
Distributions paid on common stock per share(2)     0.4800       0.4800       0.5600       0.5600       0.6300       0.6300  
Total assets, end of period     62,500       75,288       72,928       71,059       68,060       64,422  
Average total assets during period(3)     55,216       67,737       69,811       71,651       69,055       67,241  
Leverage(4)     3,200       3,600       4,000       3,700       8,400       8,800  
Leverage as a percent of total assets     5.1 %     4.8 %     5.5 %     5.2 %     12.3 %     13.7 %
Operating expenses before leverage costs as a percent of total assets     1.23 %     1.46 %     1.24 %     1.34 %     1.28 %     1.35 %
Net unrealized appreciation, end of period     22,097       32,340       29,531       30,806       23,977       20,571  
Net assets, end of period     58,650       71,407       67,884       67,067       59,361       55,288  
Average net assets during period(5)     51,521       64,733       63,623       67,687       62,487       58,619  
Net asset value per common share(2)     31.77       38.68       36.77       38.24       33.85       31.53  
Market value per common share(2)     27.59       32.47       32.37       32.41       29.46       27.08  
Shares outstanding (000's)     1,846       1,846       1,846       1,754       1,754       1,754  
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Adjusted to reflect 1 for 8 reverse stock split effective May 1, 2020.
(3)Computed by averaging month-end values within each period.
(4)Leverage consists of outstanding borrowings under the revolving credit facility.
(5)Computed by averaging daily net assets within each period.
18Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
Tortoise
Power and Energy Infrastructure Fund, Inc. (TPZ)
 

Fund description

TPZ seeks to provide a high level of current income to stockholders, with a secondary objective of capital appreciation. TPZ seeks to invest primarily in fixed income and dividend-paying equity securities of power and energy infrastructure companies that provide stable and defensive characteristics throughout economic cycles.

Fund performance

With lower commodity prices during the period, the midstream sector proved to be defensive, outperforming E&Ps and other energy subsectors. Midstream’s strong fundamentals, attractive valuations, defensive characteristics in a higher rate and inflationary environment supported outperformance on a relative basis. The first half of 2023 underscored several 2022 themes in resilient quarterly earnings and return of capital to shareholders. The fund’s market-based and NAV-based returns for the fiscal period ending May 31, 2023 were -4.0% and -0.9%, respectively (including the reinvestment of distributions). Comparatively, the TPZ Benchmark Composite* returned 1.4% for the same period. The fund’s fixed income holdings outperformed its equity holdings for the period on a total return basis.

2023 mid-fiscal year summary  
Distributions paid per share $0.3150
Monthly distributions paid per share $0.105
Distribution rate (as of 5/31/2023) 10.1%
Year-over-year distribution increase (decrease) 0.0%
Cumulative distribution to stockholders since inception in July 2009 $20.2650
Market-based total return (4.0)%
NAV-based total return (0.9)%
Premium (discount) to NAV (as of 5/31/2023) (16.7)%
*The TPZ Benchmark Composite includes the BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA Merrill Lynch U.S. Electricity Index (CUEL) and the Tortoise MLP Index® (TMLP). It is comprised of a blend of 70% fixed income and 30% equity securities issued by companies in the power and energy infrastructure sectors.

Please refer to the inside front cover of the report for important information about the fund’s distribution policy.

Key asset performance drivers

Top five contributors Company type
Magellan Midstream Partners, L.P. Refined products pipeline company
NextEra Energy, Inc. 4.800%, 12/1/2077 Diversified infrastructure company
Plains GP Holdings, L.P. Crude oil pipeline company
Enterprise Products Partners L.P. Natural gas pipeline company
Blue Racer Midstream LLC 6.625%, 7/15/2026 Gathering & processing company
   
Bottom five contributors Company type
Williams Companies Inc. Gathering & processing company
Kinder Morgan Inc. Natural gas pipeline company
Targa Resources Corp. Natural gas pipeline company
Sempra Energy Diversified infrastructure company
DT Midstream Inc. Natural gas pipeline company

Unlike the fund return, index return is pre-expenses.

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

Tortoise 19
 
 
Tortoise
Power and Energy Infrastructure Fund, Inc. (TPZ) (continued)
 

Value of $10,000 vs. Tortoise Power and Energy Infrastructure Fund – Market (unaudited)

From May 31, 2013 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year  3-Year  5-Year  10-Year  Since Inception(2) 
Tortoise Power and Energy Infrastructure Fund – NAV   0.68%  15.26%    1.25%  1.70%  5.54% 
Tortoise Power and Energy Infrastructure Fund – Market -3.03%  16.52%  -0.36%  0.39%  4.16% 
TPZ Benchmark Composite(1)   0.94%    5.69%    3.73%  2.91%  5.69% 
(1)The TPZ Benchmark Composite includes the BofA Merrill Lynch U.S. Energy Index (CIEN), the BofA Merrill Lynch U.S. Electricity Index (CUEL) and the Tortoise MLP Index® (TMLP).
(2)Inception date of the Fund was July 29, 2009.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a distribution policy which is included on the inside front cover of this report. To summarize, the fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 7% to 10% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November. The fund may designate a portion of its distributions as capital gains and may also distribute additional capital gains in the last quarter of the year to meet annual excise distribution requirements. Distribution amounts are subject to change from time to time at the discretion of the Board.

Leverage

The fund’s leverage utilization decreased $0.6 million during the six months ended May 31, 2023 as compared to the six months ended November 30, 2022, and represented 21.3% of total assets at May 31, 2023. During the period, the fund maintained compliance with its applicable coverage ratios. At May 31, 2023, 94.9% of the leverage cost was fixed, the weighted-average maturity was 0.7 years and the weighted-average annual rate on leverage was 3.49%. These rates will vary in the future as a result of changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

20Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
TPZ Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

   2022   2023 
   Q1(1)   Q2(1)   Q3(1)   Q4(1)   Q1(1)   Q2(1) 
Selected Financial Information                              
Distributions paid on common stock  $1,468   $2,056   $2,056   $2,021   $1,953   $1,953 
Distributions paid on common stock per share   0.2250    0.3150    0.3150    0.3150    0.3150    0.3150 
Total assets, end of period   128,994    132,902    128,405    124,715    120,791    118,705 
Average total assets during period(2)   126,282    131,028    127,458    125,149    122,422    120,322 
Leverage(3)   24,000    25,600    25,800    25,900    24,900    25,300 
Leverage as a percent of total assets   18.6%   19.3%   20.1%   20.8%   20.6%   21.3%
Operating expenses before leverage costs as a percent of total assets   1.30%   1.19%   1.37%   1.65%   1.42%   1.42%
Net unrealized appreciation, end of period   10,439    14,292    11,392    12,878    10,915    9,116 
Net assets, end of period   104,493    106,782    102,077    98,245    95,368    92,800 
Average net assets during period(4)   101,888    105,651    99,912    98,208    96,730    94,512 
Net asset value per common share   16.01    16.36    15.64    15.85    15.38    14.97 
Market value per common share   14.08    14.15    13.66    13.63    13.00    12.47 
Shares outstanding (000's)   6,526    6,526    6,526    6,200    6,200    6,200 
(1)Q1 is the period from December through February. Q2 is the period from March through May. Q3 is the period from June through August. Q4 is the period from September through November.
(2)Computed by averaging month-end values within each period.
(3)Leverage consists of outstanding borrowings under the revolving credit facility.
(4)Computed by averaging daily net assets within each period.
Tortoise 21
 
 
Ecofin
Sustainable and Social Impact Term Fund (TEAF)
 

Fund description

TEAF seeks to provide a high level of total return with an emphasis on current distributions. TEAF provides investors access to a combination of public and direct investments in essential assets that are making an impact on clients and communities.

Fund Performance

TEAF NAV return was -0.9% in the first fiscal half of 2023, the period ranging from November 30, 2022 through May 31, 2023. The primary negative drivers for the period were TEAF’s energy infrastructure investments including both listed and private investments. The fund saw positive performance from its social infrastructure and private sustainable investments, while its public sustainable infrastructure company investments were flat for the period.

Despite underperformance relative to equity markets, we continue to be pleased by the performance of private social and sustainable infrastructure investments that take advantage of structured offerings with positive risk and reward. These investments continue to provide uncorrelated returns and income generation in a time of macroeconomic uncertainty. Overall, TEAF’s private assets continued to perform in-line with our expectations generating stable current income for investors.

We continue to progress on transitioning the portfolio to the targeted allocation of 60% direct investments. As of May 31, 2023, TEAF’s total direct investment commitments were approximately $124 million or approximately 52% of the portfolio.

Market Overview

In early 2023, with China’s anticipated post-COVID reopening and still high inflation, expectations re-emerged for central bank rate hikes. Concurrently, due to an unusually warm winter, energy prices continued a steep decline with U.S. natural gas prices returning to 2021 levels. European gas prices also fell significantly from 2022 averages (due to weather and conservation), although remained much higher than prior year levels. This provided an improved backdrop for economies and corporate profitability, particularly in Europe where 2022’s energy crisis presented the biggest threat and resulted in another ‘risk-on’ growth-oriented rally for equities, which notably excluded utilities, except in the UK. As mentioned above, TEAF’s private investments (social and sustainable infrastructure) performed in-line with our expectations during the period.

Despite macroeconomic uncertainty, we hold a positive outlook for the underlying assets in the TEAF portfolio entering the second half of 2023. We believe TEAF’s current portfolio is largely invested in sectors that will provide stability during the current equity market volatility. We also believe the listed sustainable equities are positioned to benefit from favorable policy supports for decarbonization and electrification, relative cost positions and competitiveness of renewables, and ever-rising demand for energy price stability and decarbonization. Our focus on essential assets and asset-backed services should continue to do relatively well in many market environments. Additionally, for the next two years, generators are broadly hedged so sensitivity to power prices will be limited in most cases. Lower natural gas prices translate into lower customer bills, which calms discussions with stakeholders (and lessens the risk of clawback from power producers by governments seeking to immunize customer bills), which is a positive. Our focus on quality of earnings and balance sheet strength is not new but maybe worth reiterating.

Listed Energy Infrastructure

Steady operational performance from companies that operate essential energy infrastructure assets resulted in increased dividends and stock buybacks.
Global demand for energy from reliable supply sources is growing. The U.S. has established itself as a reliable supplier of low-cost energy. As a result, many of our investments are setting records related to the amount of energy exports. We expect demand for U.S. energy to continue to increase so U.S. energy infrastructure (pipelines and liquefied natural gas (LNG) export facilities) will be critical in supplying the rest of the world with low-cost U.S. energy.
As a reminder, TEAF’s listed energy infrastructure allocation is levered to U.S. natural gas pipeline and LNG export facility operators. We expect the valuation of these companies to be rewarded by the equity markets as these companies operate essential assets and generate significant free cash flow that is being returned to shareholders in the form of higher dividends and stock buybacks.

Listed Sustainable Infrastructure

From a macro perspective the period was generally characterized by influences stemming from stubborn inflation, elevated interest rates, and declining energy prices, in particular natural gas.
Generally during the period, we saw a mean-reversion with last year’s underperformers rallying. Similarly, pan-European utility and other infrastructure stocks provided positive returns whereas US utilities declined, lagging significantly. In such a context TEAF’s sustainable listed sleeve responded similarly with the period’s top contributors largely comprised of European names, while the periods bottom contributors generally were North American domiciled names.
Electric utilities were the best performing sub-sector while renewable electricity names were the worst performing sector, primarily due to the rising need for capital to fund the strong demand growth, at the time the cost of capital has risen substantially.
Amidst these varying macro impulses, overall, TEAF’s sustainable listed sleeve did reasonably for the period; outperforming energy infrastructure.

(unaudited)

22Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued)
 

Social Infrastructure

TEAF completed eight direct investments in the social infrastructure portfolio during the period.
In December, the team completed a debt investment in a to-be-constructed senior living community located in Albuquerque, New Mexico, an area that has a demonstrated need for additional senior housing with existing occupancy levels exceeding 90%. The facility will offer 142 market rate units consisting of 45 independent living units, 75 assisted living units, and 22 memory care units. Four of the memory care units will be shared, thus there will be 148 beds in the facility. Construction is scheduled to begin in January 2023 and be completed in the Fall of 2024.
The team completed another debt investment in December, this one for a waste-to-energy project located in Bethel, PA that will gasify wastewater biosolids and poultry waste, while using energy produced through the gasification process to help circularly power the facility. These waste products would have otherwise been dumped in landfills or land applied, both of which are known to have negative effects on the environment due to the generation of methane gas as well as the leeching of other contaminants into surrounding areas and farm fields. The project will also produce biochar, which can be sold for various uses—including environmental remediation.
In January, the team completed a debt investment in an existing classical charter school in Toledo, Ohio that currently has students in grades K-11. This expansion will allow the charter school to grow from its current capacity of 500 students to 750, and to expand its program offerings, including adding 12th grade.
In February, the team completed a debt investment in an existing private school located near Fort Lauderdale, Florida that allowed the school to execute on a succession plan to continue its operations under new management while expanding its capacity. The school currently serves 526 students in grades PK-12, with over 90% of its students using State scholarships for underserved and marginalized students to attend the school at minimal cost. With the investment, the school expects to serve up to 750 students within a few years.
In March, the team completed a debt investment in an existing charter school in Maryland (Washington, DC area) that offers an International Baccalaureate program to an economically disadvantaged population in grades K-8. The school currently serves 348 students, but with this investment providing funds for a new facility, the school expects to be able to educate up to 600 students within 3 years.
The team completed another debt investment in March, this one for a waste-to-energy project located in North Carolina that uses anaerobic digestion to convert animal byproducts and food waste into renewable natural gas. The State of North Carolina has mandated that a portion of all energy in the State come from swine and poultry processing waste to help reduce soil and water contamination. The company has a contract with the regional utility to sell all of the gas that is produced.
In April, the team completed a debt investment in a new charter school near Spartanburg, SC. The school will open with temporary modulars on the site next door in the fall of 2023, serving 600 children in grades K-6. The school will move next door to its permanent facility in the following school year serving the same grades, eventually expanding to its full capacity of 900 students in grades K-8 by the 2026-2027 school year. There are no other charter schools within five miles of the school’s site, and the district schools are at or near capacity in this growing area. This will be the third school in South Carolina for this successful operator and developer partnering together.
The final debt investment of this period also occurred in April to an existing charter school in Belton, SC that has been operating since 2018 in a temporary location while it seeks its permanent home. The school offers a classical education curriculum to an underserved population, with great success--as it was recognized as the top academic Title 1 school in the state of South Carolina. The school currently serves approximately 250 students in grades K-6, and will expand to serve K-8 while increasing enrollment over the next 4 years to reach nearly 700 students enrolled.

Finally, the fund had two realizations to-date in 2023.

The first was in January from a school that was able to successfully refinance into a new debt transaction with a third party under more favorable terms. The original investment was made in October 2019 to allow the school to acquire a larger campus with significantly better amenities than its previous facility. The school was able to grow and, as a result, found less expensive financing. The investment was eligible to be called at par starting on 10/1/22.
The second realization was in April from a waste-to-energy project that was able to attract additional equity investment to support and grow the project, but a condition of that equity injection was the retirement of all subordinated debt. Although this investment was made n April 2021 and was not eligible to be called until 2026, the team negotiated a $108 price in exchange for the ability to retire this debt.

(unaudited)

Tortoise 23
 
 
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued)
 

Private Energy Infrastructure

No deals were completed in the private energy infrastructure portfolio during the period.

Private Sustainable Infrastructure

TEAF completed one direct investment in the private sustainable infrastructure portfolio during the period.
In April, the team completed a debt investment in One Energy, based in Findlay, Ohio who develops, builds, owns, and operates capital-intensive, on-site power solutions for large industrial power users. This investment will enable the company to commence the land and equipment purchase required for recently signed NetZero projects which will represent the largest industrial microgrid in the U.S.
The team has continued to experience a delay in one solar project in the private sustainable infrastructure portfolio. While the project is mechanically complete, it has experienced a delay in the interconnection with the local utility delaying in-service of the asset. We continue to work diligently to resolve the issue and maintain our expectation for the project to be online at which point all assets will be fully operational.
Operating assets held at TEAF continue to operate as expected with stable cash flow generation profiles driven by long-term contracts with highly rated counterparties.
2023 mid-fiscal year summary  
Distributions paid per share $0.2700
Monthly distributions paid per share $0.0900
Distribution rate (as of 5/31/2023) 8.8%
Year-over-year distribution increase (decrease) 0.0%
Cumulative distribution to stockholders since inception in July 2009 $4.3505
Market-based total return (7.6)%
NAV-based total return (0.9)%
Premium (discount) to NAV (as of 5/31/2023) (21.1)%

Performance data quoted represent past performance; past performance does not guarantee future results. Like any other stock, total return and market value will fluctuate so that an investment, when sold, may be worth more or less than its original cost. Portfolio composition is subject to change due to ongoing management of the fund. References to specific securities or sectors should not be construed as a recommendation by the fund or its adviser. See Schedule of Investments for portfolio weighting at the end of the fiscal quarter.

(unaudited)

24Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
Ecofin
Sustainable and Social Impact Term Fund (TEAF) (continued)
 

Value of $10,000 vs. Ecofin Sustainable and Social Impact Term Fund – Market (unaudited)

Since inception on March 29, 2019 through May 31, 2023

The chart assumes an initial investment of $10,000. Performance reflects waivers of fee and operating expenses in effect. In the absence of such waivers, total return would be reduced. Performance data quoted represents past performance and does not guarantee future results. Investment returns and principal value will fluctuate, and when sold, may be worth more or less than their original cost. Performance current to the most recent month-end may be lower or higher than the performance quoted and can be obtained by calling 866-362-9331. Performance assumes the reinvestment of capital gains and income distributions. The performance does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.

Annualized Rates of Return as of May 31, 2023

  1-Year   3-Year   Since Inception(1)  
Ecofin Sustainable and Social Impact Term Fund – NAV -2.19%  9.83%  1.44% 
Ecofin Sustainable and Social Impact Term Fund – Market -8.54%  12.41%  -4.17% 
S&P Global Infrastructure Index -6.72%  9.10%  4.06% 

(1) Inception date of the Fund was March 29, 2019.

Fund structure and distribution policy

The fund is structured to qualify as a Regulated Investment Company (RIC) allowing it to pass-through to shareholders income and capital gains earned, thus avoiding double-taxation. To qualify as a RIC, the fund must meet specific income, diversification and distribution requirements. Regarding income, at least 90 percent of the fund gross income must be from dividends, interest and capital gains. The fund must meet quarterly diversification requirements including the requirement that at least 50 percent of the assets be in cash, cash equivalents or other securities with each single issuer of other securities not greater than 5 percent of total assets. No more than 25 percent of total assets can be invested in any one issuer other than government securities or other RIC’s. The fund must also distribute at least 90 percent of its investment company income. RIC’s are also subject to excise tax rules which require RIC’s to distribute approximately 98 percent of net income and net capital gains to avoid a 4 percent excise tax.

The fund has adopted a managed distribution policy (“MDP”). Annual distribution amounts are expected to fall in the range of 6% to 8% of the average week-ending net asset value (“NAV”) per share for the prior fiscal semi-annual period. Distribution amounts will be reset both up and down to provide a consistent return on trailing NAV. Under the MDP, distribution amounts will normally be reset in February and August, with no changes in distribution amounts in May and November.

Leverage

The fund’s leverage utilization remained flat during the six months ended May 31, 2023, as compared to six months ended November 30, 2022. The fund utilizes all floating rate leverage that had an interest rate of 6.16% and represented 12.3% of total assets at as of May 31, 2023. During the period, the fund maintained compliance with its applicable coverage ratios. The interest rate on the fund’s leverage will vary in the future along with changing floating rates.

Please see the Financial Statements and Notes to Financial Statements for additional detail regarding critical accounting policies, results of operations, leverage and other important fund information.

For further information regarding the calculation of distributable cash flow and distributions to stockholders, as well as a discussion of the tax impact on distributions, please visit www.tortoiseecofin.com.

(unaudited)

Tortoise 25

 
 
TEAF Key Financial Data (supplemental unaudited information)
(dollar amounts in thousands unless otherwise indicated)
 

The information presented below is supplemental non-GAAP financial information, is not inclusive of required financial disclosures (e.g. Total Expense Ratio), and should be read in conjunction with the full financial statements.

   2022   2023 
   Q1(1)   Q2(1)   Q3(1)   Q4(1)   Q1(1)   Q2(1) 
Selected Financial Information                              
Distributions paid on common stock  $3,238   $3,642   $3,643   $3,643   $3,642   $3,643 
Distributions paid on common stock per share   0.2400    0.2700    0.2700    0.2700    0.2700    0.2700 
Total assets, end of period   255,662    264,262    254,726    251,239    246,004    240,640 
Average total assets during period(2)   257,415    260,960    256,749    246,494    248,950    246,215 
Leverage(3)   22,900    30,400    28,800    29,500    30,800    29,500 
Leverage as a percent of total assets   9.0%   11.5%   11.3%   11.7%   12.5%   12.3%
Operating expenses before leverage costs as a percent of total assets   2.01%   1.25%   1.56%   1.85%   1.58%   1.63%
Net unrealized appreciation (depreciation), end of period   11,274    8,712    993    824    (912)   (1,269)
Net assets, end of period   231,553    232,699    225,064    220,798    214,163    210,062 
Average net assets during period(4)   230,747    233,287    225,251    214,321    218,352    214,413 
Net asset value per common share   17.16    17.25    16.68    16.38    15.87    15.57 
Market value per common share   15.00    14.55    14.74    13.85    12.97    12.28 
Shares outstanding (000's)   13,491    13,491    13,491    13,491    13,491    13,491 
(1)Q1 represents the period from December through February. Q2 represents the period from March through May. Q3 represents the period from June through August. Q4 represents the period from September through November.
(2)Computed by averaging month-end values within each period.
(3)Leverage consists of outstanding borrowings under the margin loan facility.
(4)Computed by averaging daily net assets within each period.
26Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
TYG Consolidated Schedule of Investments (unaudited)
May 31, 2023
   Shares   Fair Value 
         
Common Stock — 101.3%(1)          
United States Crude Oil Pipelines — 2.1%(1)          
Plains GP Holdings LP   581,526   $7,908,754 
           
United States Natural Gas Gathering/Processing — 3.7%(1)          
EnLink Midstream LLC   403,520    3,938,355 
Hess Midstream Partners LP   291,849    8,139,669 
Kinetik Holdings, Inc.   54,924    1,786,678 
         13,864,702 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 43.7%(1)          
Cheniere Energy, Inc.   142,849    19,966,005 
Excelerate Energy, Inc.   57,737    1,071,599 
Kinder Morgan, Inc.   1,443,949    23,262,018 
New Fortress Energy, Inc.   176,000    4,623,520 
NextDecade Corp.(2)   485,271    2,693,254 
ONEOK, Inc.   405,263    22,962,201 
Targa Resources Corp.   597,815    40,681,311 
The Williams Companies, Inc.   1,773,712    50,834,586 
         166,094,494 
           
United States Renewables and Power Infrastructure — 51.8%(1)          
AES Corp.   707,555    13,967,136 
Ameren Corp.   188,059    15,245,943 
American Electric Power Co., Inc.   222,506    18,494,699 
Atlantica Sustainable Infrastructure Plc   473,463    11,443,601 
Clearway Energy, Inc.   774,641    22,255,436 
Constellation Energy Corp.   69,230    5,816,704 
DTE Energy Co.   209,387    22,530,041 
NextEra Energy, Inc.   240,583    17,673,227 
NextEra Energy Partners LP   355,048    21,274,476 
Sempra Energy   208,336    29,902,466 
Xcel Energy, Inc.   284,655    18,585,125 
         197,188,854 
           
Total Common Stock          
(Cost $442,145,859)        385,056,804 
           
Master Limited Partnerships — 24.8%(1)          
United States Natural Gas Gathering/Processing — 3.9%(1)          
Western Midstream Partners LP   583,326    14,723,148 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 12.7%(1)          
Energy Transfer LP   1,984,281    24,605,084 
Enterprise Products Partners LP   937,827    23,755,158 
         48,360,242 
           
United States Refined Product Pipelines — 8.2%(1)          
Magellan Midstream Partners LP   154,476    9,301,000 
MPLX LP   662,040    22,072,414 
         31,373,414 
           
Total Master Limited Partnerships          
(Cost $66,573,101)        94,456,804 
           
Private Investment — 3.9%(1)          
United States Renewables — 3.9%(1)          
TK NYS Solar Holdco LLC(3)(4)(5)          
(Cost $50,141,470)   N/A   14,712,980 
           
Preferred Stock — 2.0%(1)          
United States Natural Gas Gathering/Processing — 1.1%(1)          
EnLink Midstream Partners   51,000    4,216,935 
           
United States Renewable Infrastructure — 0.9%(1)          
NextEra Energy, Inc.   72,016    3,506,459 
(Cost $8,599,978)        7,723,394 
           
Money Market Fund — 0.1%(1)          
United States Investment Company — 0.1%(1)          
Invesco Government & Agency Portfolio — Institutional Class, 5.044%(6)          
(Cost $271,050)   271,050    271,050 
           
Total Investments — 132.1%(1)          
(Cost $567,731,458)        502,221,032 
Liabilities in Excess of Other Assets — (1.9)%(1)        (7,185,881)
Line of Credit — (1.9)%(1)        (7,100,000)
Senior Notes — (19.0)%(1)        (71,952,000)
Mandatory Redeemable Preferred Stock at Liquidation Value — (9.3)%(1)        (35,660,610)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)       $380,322,541 
(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)Non-income producing security.
(3)Restricted securities have a total fair value of $14,712,980 which represents 3.9% of net assets. See Note 6 to the financial statements for further disclosure.
(4)Securities have been valued by using significant unobservable inputs in accordance with fair value procedures and are categorized as level 3 investments.
(5)Deemed to be an affiliate of the fund. See Note 7 to the financial statements for further disclosure.
(6)Rate indicated is the current yield as of May 31, 2023.

See accompanying Notes to Financial Statements.

Tortoise 27
 
 
NTG Schedule of Investments (unaudited)
May 31, 2023
   Shares   Fair Value 
         
Common Stock — 103.3%(1)          
Canada Crude Oil Pipelines — 11.9%(1)          
Enbridge, Inc.   331,589   $11,671,933 
Pembina Pipeline Corp.   402,120    12,172,172 
         23,844,105 
           
Canada Natural Gas/Natural Gas Liquids Pipelines — 2.5%(1)          
TC Energy Corp.   128,700    5,011,578 
           
United States Crude Oil Pipelines — 8.9%(1)          
Plains GP Holdings LP   1,315,066    17,884,898 
           
United States Natural Gas Gathering/Processing — 6.1%(1)          
EnLink Midstream LLC   579,030    5,651,333 
Hess Midstream Partners LP   204,144    5,693,576 
Kinetik Holdings, Inc.   27,692    900,821 
         12,245,730 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 61.6%(1)          
Cheniere Energy, Inc.   85,147    11,900,996 
DT Midstream, Inc.   250,211    11,374,592 
Excelerate Energy, Inc.   70,562    1,309,631 
Kinder Morgan, Inc.   1,550,051    24,971,321 
New Fortress Energy, Inc.   109,719    2,882,318 
NextDecade Corp.(2)   245,685    1,363,552 
ONEOK, Inc.   225,624    12,783,856 
Targa Resources Corp.   411,380    27,994,409 
The Williams Companies, Inc.   998,338    28,612,367 
         123,193,042 
           
United States Renewables and Power Infrastructure — 12.3%(1)          
Atlantica Sustainable Infrastructure Plc   222,743    5,383,698 
Clearway Energy, Inc.   327,370    9,405,340 
NextEra Energy Partners LP   163,701    9,808,964 
         24,598,002 
           
Total Common Stock          
(Cost $231,367,474)        206,777,355 
         
Master Limited Partnerships — 24.4%(1)          
United States Natural Gas Gathering/Processing — 5.1%(1)          
Crestwood Equity Partners LP   103,306   2,650,832 
Western Midstream Partners LP   298,724    7,539,794 
         10,190,626 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 12.8%(1)          
Energy Transfer LP   1,019,748    12,644,875 
Enterprise Products Partners LP   514,325    13,027,852 
         25,672,727 
           
United States Refined Product Pipelines — 6.5%(1)          
Magellan Midstream Partners LP   50,825    3,060,173 
MPLX LP   297,246    9,910,182 
         12,970,355 
           
Total Master Limited Partnerships          
(Cost $35,221,269)        48,833,708 
           
Preferred Stock — 2.4%(1)          
United States Natural Gas Gathering/Processing — 1.4%(1)          
EnLink Midstream Partners   34,000    2,811,290 
           
United States Renewables and Power Infrastructure — 1.0%(1)          
NextEra Energy, Inc.   39,095    1,903,536 
(Cost $5,300,017)        4,714,826 
           
Money Market Fund — 0.1%(1)          
United States Investment Company — 0.1%(1)          
First American Government Obligations Fund, Class X, 4.965%(3)          
(Cost $233,888)   233,888    233,888 
           
Total Investments — 130.2%(1)          
(Cost $272,122,648)        260,559,777 
Liabilities in Excess of Other Assets — (1.8)%(1)        (3,593,791)
Credit Facility Borrowings — (4.5)%(1)        (8,900,000)
Senior Notes — (16.0)%(1)        (32,149,733)
Mandatory Redeemable Preferred Stock at Liquidation Value — (7.9)%(1)        (15,870,450)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)       $200,045,803 
(1)Calculated as a percentage of net assets applicable to common stockholders.
(2)Non-income producing security.
(3)Rate indicated is the current yield as of May 31, 2023.

See accompanying Notes to Financial Statements.

28Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
TTP Schedule of Investments (unaudited)
May 31, 2023
   Shares    Fair Value  
         
Common Stock — 98.9%(1)          
Canada Crude Oil Pipelines — 17.6%(1)          
Enbridge, Inc.   187,587   $6,603,062 
Gibson Energy, Inc.   50,815    820,152 
Pembina Pipeline Corp.   124,957    3,783,229 
         11,206,443 
           
Canada Natural Gas/Natural Gas Liquids Pipelines — 8.6%(1)          
Keyera Corp.   73,152    1,632,785 
TC Energy Corp.   98,117    3,820,676 
         5,453,461 
           
United States Crude Oil Pipelines — 11.5%(1)          
Plains GP Holdings LP   538,729    7,326,714 
           
United States Natural Gas Gathering/Processing — 10.8%(1)          
Antero Midstream Corp.   141,044    1,440,059 
Equitrans Midstream Corp.   307,343    2,621,636 
Hess Midstream Partners LP   91,698    2,557,457 
Kinetik Holdings, Inc.   8,934    290,623 
         6,909,775 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 43.1%(1)          
Cheniere Energy, Inc.   27,983    3,911,184 
DT Midstream, Inc.   13,180    599,163 
Excelerate Energy, Inc.   8,917    165,500 
Kinder Morgan, Inc.   389,508    6,274,974 
NextDecade Corp.(2)   76,197    422,893 
ONEOK, Inc.   79,099    4,481,749 
Targa Resources Corp.   56,422    3,839,517 
The Williams Companies, Inc.   271,251    7,774,054 
         27,469,034 
           
United States Renewables and Power Infrastructure — 7.3%(1)          
Clearway Energy, Inc.   22,000    632,060 
NextEra Energy Partners LP   29,030    1,739,478 
Sempra Energy   16,121    2,313,847 
         4,685,385 
           
Total Common Stock          
(Cost $60,791,581)        63,050,812 
         
Master Limited Partnerships — 28.2%(1)          
United States Crude Oil Pipelines — 1.2%(1)          
NuStar Energy LP   48,386   790,143 
           
United States Natural Gas Gathering/Processing — 3.3%(1)          
Western Midstream Partners LP   82,032    2,070,488 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 12.1%(1)          
Energy Transfer LP   317,099    3,932,028 
Enterprise Products Partners LP   148,325    3,757,072 
         7,689,100 
           
United States Other — 0.2%(1)          
Westlake Chemical Partners LP   4,940    106,161 
           
United States Refined Product Pipelines — 11.4%(1)          
Magellan Midstream Partners LP   56,630    3,409,692 
MPLX LP   115,871    3,863,139 
         7,272,831 
           
Total Master Limited Partnerships          
(Cost $10,704,500)        17,928,723 
           
Money Market Fund — 0.5%(1)          
United States Investment Company — 0.5%(1)          
Invesco Government & Agency Portfolio — Institutional Class, 5.044%(3)          
(Cost $312,166)   312,166    312,166 
           
Total Investments — 127.6%(1)          
(Cost $71,808,247)        81,291,701 
Liabilities in Excess of Other Assets — (0.2)%(1)        (118,767)
Credit Facility Borrowings — (11.6)%(1)        (7,400,000)
Senior Notes — (6.2)%(1)        (3,942,857)
Mandatory Redeemable Preferred Stock at Liquidation Value — (9.6)%(1)        (6,100,000)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)       $63,730,077 

(1) Calculated as a percentage of net assets.

(2) Non-income producing security.

(3) Rate indicated is the current yield as of May 31, 2023.

See accompanying Notes to Financial Statements.

Tortoise 29
 
 
NDP Schedule of Investments (unaudited)
May 31, 2023
   Shares    Fair Value  
         
Common Stock — 90.7%(1)          
Canada Crude Oil Pipelines — 1.5%(1)          
Enbridge, Inc.   23,865   $840,048 
           
Canada Natural Gas/Natural Gas Liquids Pipelines — 1.4%(1)          
TC Energy Corp.   19,745    768,870 
           
Canada Oil and Gas Production — 2.1%(1)          
Suncor Energy, Inc.   40,528    1,134,784 
           
United States Natural Gas Gathering/Processing — 0.3%(1)          
Kinetik Holdings, Inc.   5,678    184,705 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 18.4%(1)          
Cheniere Energy, Inc.   37,456    5,235,225 
Excelerate Energy, Inc.   6,209    115,239 
Kinder Morgan, Inc.   56,165    904,818 
NextDecade Corp.(2)   58,114    322,533 
Targa Resources Corp.   37,880    2,577,734 
The Williams Companies, Inc.   36,175    1,036,776 
         10,192,325 
           
United States Oil and Gas Production — 60.7%(1)          
Chevron Corp.   19,314    2,909,075 
ConocoPhillips   21,747    2,159,477 
Coterra Energy, Inc.   21,071    489,901 
Devon Energy Corp.   90,404    4,167,624 
Diamondback Energy, Inc.   37,179    4,727,310 
EOG Resources, Inc.   23,070    2,475,180 
EQT Corp.   117,402    4,082,068 
Exxon Mobil Corp.   30,377    3,103,922 
Marathon Oil Corp.   81,694    1,810,339 
Occidental Petroleum Corp.   43,302    2,496,793 
PDC Energy, Inc.   9,914    680,299 
Pioneer Natural Resources Co.   22,350    4,457,484 
         33,559,472 
           
United States Other — 4.6%(1)          
Baker Hughes Co.   38,763    1,056,292 
Darling Ingredients, Inc.(2)   1,957    124,035 
Denbury, Inc.(2)   15,079    1,359,673 
         2,540,000 
           
United States Renewables and Power Infrastructure — 1.7%(1)          
American Electric Power Co., Inc.   2,921    242,794 
Constellation Energy Corp.   8,071    678,125 
         920,919 
           
Total Common Stock          
(Cost $33,265,898)        50,141,123 
         
Master Limited Partnerships — 24.6%(1)          
United States Crude Oil Pipelines — 4.4%(1)          
Plains All American Pipeline LP   189,849   2,452,849 
           
United States Natural Gas Gathering/Processing — 3.3%(1)          
Western Midstream Partners LP   72,535    1,830,784 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 12.4%(1)          
DCP Midstream LP   50,351    2,094,098 
Energy Transfer LP   293,256    3,636,374 
Enterprise Products Partners LP   43,433    1,100,158 
         6,830,630 
           
United States Oil and Gas Production — 1.9%(1)          
TXO Partners LP   50,000    1,073,500 
           
United States Refined Product Pipelines — 2.6%(1)          
Magellan Midstream Partners LP   12,744    767,316 
MPLX LP   19,475    649,297 
         1,416,613 
           
Total Master Limited Partnerships          
(Cost $9,908,591)        13,604,376 
           
Money Market Fund — 0.6%(1)          
United States Investment Company — 0.6%(1)          
Invesco Government & Agency Portfolio — Institutional Class, 5.044%(3)          
(Cost $353,399)   353,399    353,399 
           
Total Investments — 115.9%(1)          
(Cost $43,527,888)        64,098,898 
Liabilities in Excess of Other Assets — (0.0)%(1)        (11,078)
Credit Facility Borrowings — (15.9)%(1)        (8,800,000)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)       $55,287,820 

(1) Calculated as a percentage of net assets applicable to common stockholders.

(2) Non-income producing security.

(3) Rate indicated is the current yield as of May 31, 2023.

See accompanying Notes to Financial Statements.

30Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
TPZ Schedule of Investments (unaudited)
May 31, 2023
   Principal
Amount/Shares
 
   Fair Value  
         
Corporate Bonds — 61.2%(1)          
           
Canada Crude Oil Pipelines — 6.6%(1)          
Enbridge, Inc.
5.500%, 07/15/2077
  $7,042,000   $6,153,595 
           
United States Natural Gas Gathering/Processing — 21.9%(1)          
Antero Midstream Partners LP
5.750%, 03/01/2027(2)
   3,800,000    3,635,383 
Blue Racer Midstream LLC
6.625%, 07/15/2026(2)
   5,900,000    5,832,397 
EnLink Midstream LLC
5.375%, 06/01/2029
   4,000,000    3,789,688 
Hess Corp.
5.625%, 02/15/2026(2)
   4,160,000    4,082,000 
The Williams Companies, Inc.
4.550%, 06/24/2024
   3,000,000    2,962,834 
         20,302,302 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 22.1%(1)          
Cheniere Corp.
5.875%, 03/31/2025
   2,000,000    2,002,410 
Cheniere Energy, Inc.
4.625%, 10/15/2028
   1,000,000    938,449 
DT Midstream, Inc.
4.375%, 06/15/2031(2)
   2,000,000    1,682,147 
NGPL PipeCo LLC
3.250%, 07/15/2031(2)
   1,500,000    1,239,515 
ONEOK, Inc.          
7.500%, 09/01/2023   2,000,000    2,000,000 
6.350%, 01/15/2031   3,000,000    3,088,186 
Rockies Express Pipeline LLC
4.950%, 07/15/2029(2)
   3,000,000    2,685,000 
Tallgrass Energy LP
5.500%, 01/15/2028(2)
   3,250,000    2,934,327 
Targa Resources Corp.
5.200%, 07/01/2027
   4,000,000    3,949,844 
         20,519,878 
           
United States Other — 4.8%(1)          
New Fortress Energy, Inc.
6.500%, 09/30/2026(2)
   5,000,000    4,431,292 
           
United States Refined Product Pipelines — 1.6%(1)          
Buckeye Partners LP
5.850%, 11/15/2043
   2,000,000    1,485,200 
           
United States Renewables and Power Infrastructure — 4.2%(1)          
NextEra Energy, Inc.
4.800%, 12/01/2077
   4,500,000    3,870,155 
           
Total Corporate Bonds          
(Cost $60,954,428)        56,762,422 
         
Common Stock — 34.6%(1)          
Canada Crude Oil Pipelines — 2.0%(1)          
Enbridge, Inc.   53,741   1,891,683 
           
Canada Natural Gas/Natural Gas Liquids Pipelines — 2.0%(1)          
TC Energy Corp.   48,667    1,895,093 
           
United States Crude Oil Pipelines — 5.7%(1)          
Plains GP Holdings LP   389,094    5,291,678 
           
United States Natural Gas Gathering/Processing — 4.4%(1)          
EnLink Midstream LLC   90,965    887,818 
Equitrans Midstream Corp.   108,596    926,324 
Hess Midstream Partners LP   66,901    1,865,869 
Kinetik Holdings, Inc.   11,954    388,864 
         4,068,875 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 16.6%(1)          
DT Midstream, Inc.   24,885    1,131,272 
Excelerate Energy, Inc.   11,787    218,767 
Kinder Morgan, Inc.   190,405    3,067,424 
NextDecade Corp.(3)   104,516    580,064 
ONEOK, Inc.   32,054    1,816,180 
Targa Resources Corp.   69,258    4,713,007 
The Williams Companies, Inc.   135,347    3,879,045 
         15,405,759 
           
United States Refining — 0.3%(1)          
PBF Energy, Inc.   8,275    304,603 
           
United States Renewables and Power Infrastructure — 3.6%(1)          
Atlantica Sustainable Infrastructure Plc   16,523    399,361 
NextEra Energy Partners LP   8,013    480,139 
Sempra Energy   16,927    2,429,532 
         3,309,032 
Total Common Stock          
(Cost $28,793,015)        32,166,723 

See accompanying Notes to Financial Statements.

Tortoise 31
 
 
TPZ Schedule of Investments (unaudited) (continued)
May 31, 2023
   Principal
Amount/Shares
 
   Fair Value  
         
Master Limited Partnerships — 30.3%(1)          
United States Crude Oil Pipelines — 1.6%(1)          
NuStar Energy LP   90,687   $1,480,919 
           
United States Natural Gas Gathering/Processing — 3.7%(1)          
Western Midstream Partners LP   135,715    3,425,446 
           
United States Natural Gas/Natural Gas Liquids Pipelines — 12.7%(1)          
DCP Midstream LP   37,985    1,579,796 
Energy Transfer LP   407,632    5,054,637 
Enterprise Products Partners LP   202,757    5,135,835 
         11,770,268 
           
United States Refined Product Pipelines — 12.3%(1)          
Holly Energy Partners LP   30,993    532,150 
Magellan Midstream Partners LP   73,459    4,422,966 
MPLX LP   195,684    6,524,105 
         11,479,221 
           
Total Master Limited Partnerships          
(Cost $18,225,981)        28,155,854 
         
Money Market Fund — 0.4%(1)          
United States Investment Company — 0.4%(1)          
Invesco Government & Agency Portfolio — Institutional Class, 5.044%(4)          
(Cost $325,396)   325,396   325,396 
           
Total Investments — 126.5%(1)          
(Cost $108,298,820)        117,410,395 
Other Assets in Excess of Liabilities — 0.8%(1)        690,031 
Credit Facility Borrowings — (27.3)%(1)        (25,300,000)
Total Net Assets Applicable to Common Stockholders — 100.0%(1)       $92,800,426 

(1) Calculated as a percentage of net assets applicable to common stockholders.

(2) Restricted securities have a total fair value of $26,522,061, which represents 28.6% of total net assets.

(3) Non-income producing security.

(4) Rate indicated is the current yield as of May 31, 2023.

See accompanying Notes to Financial Statements.

32Tortoise
 
 
2023 Semi-Annual Report | May 31, 2023
 
TEAF Consolidated Schedule of Investments (unaudited)
May 31, 2023
   Principal
Amount/Shares
 
   Fair Value 
         
Common Stock — 47.4%(1)          
Australia Natural Gas/Natural Gas Liquids Pipelines — 1.4%(1)          
APA Group   442,606   $2,890,441 
           
Australia Other — 2.0%(1)          
Atlas Arteria Ltd.   992,726    4,132,592 
           
Canada Renewables — 2.9%(1)          
Innergex Renewable Energy, Inc.(2)   294,405    3,049,233 
TransAlta Renewables, Inc.(2)   330,845    3,073,264 
         6,122,497 
           
France Renewables — 1.3%(1)          
Transition SA(3)   250,000    2,658,892 
           
Germany Power — 1.4%(1)          
RWE AG(2)   68,204    2,851,979 
           
Hong Kong Transportation/Storage — 1.3%(1)          
China Suntien Green Energy Corp. Ltd.   7,408,484    2,800,492 
           
Italy Power — 5.6%(1)          
ENAV SpA(2)   649,850    2,743,771 
Enel SpA   459,980    2,880,222 
Iren SpA   1,215,003    2,422,110 
Terna SpA   447,937    3,749,965 
         11,796,068 
           
Portugal Power — 2.8%(1)          
EDP — Energias de Portugal SA(2)   1,209,999    5,900,353 
           
Spain Other — 1.8%(1)          
Ferrovial SA(2)   121,999    3,775,222 
           
Spain Power — 3.8%(1)          
Endesa SA   154,955    3,350,728 
Iberdrola SA(2)   371,053    4,521,457 
         7,872,185 
           
United Kingdom Power — 5.4%(1)          
National Grid Plc   300,253    4,130,911 
SSE Plc(2)   309,113    7,234,772 
         11,365,683 
           
United Kingdom Renewable Infrastructure — 1.3%(1)          
Greencoat UK Wind Plc(2)   1,482,753    2,748,264 
           
United States Natural Gas Gathering/Processing — 0.1%(1)          
Hess Midstream Partners LP(2)   10,644    296,861 
         
United States Natural Gas/Natural Gas Liquids Pipelines — 7.1%(1)          
Cheniere Energy, Inc.(2)   30,700   4,290,939 
Excelerate Energy, Inc.(2)   13,710    254,458 
NextDecade Corp.(3)   140,518    779,875 
ONEOK, Inc.(2)   2,469    139,893 
Targa Resources Corp.(2)   85,858    5,842,637 
The Williams Companies, Inc.(2)   125,859    3,607,119 
         14,914,921 
           
United States Power — 3.0%(1)          
American Electric Power Co., Inc.(2)   53,287    4,429,215 
Atlantica Sustainable Infrastructure Plc(2)   75,263    1,819,107 
         6,248,322 
           
United States Renewables — 3.7%(1)          
Dominion Energy, Inc.(2)   48,224    2,424,703 
NextEra Energy, Inc.(2)   45,491    3,341,769 
NextEra Energy Partners LP(2)   33,729    2,021,042 
         7,787,514