TPYP vs USAI

Key Takeaways

• Both TPYP and USAI are passively managed ETFs focused on North American midstream energy infrastructure, but they differ meaningfully in breadth, cost, and thematic tilt.
• TPYP is the lower-cost option at a 0.40% expense ratio, while USAI charges 0.75%.
• TPYP offers broader diversification with roughly 44 holdings, including a notable utilities sleeve; USAI is more concentrated at roughly 35 holdings.
• USAI tilts more aggressively toward liquefied natural gas (LNG) exporters and natural gas producers, reflecting its "energy independence" mandate.
• Both funds share core pipeline giants, but their relative positioning diverges on diversification versus thematic conviction.

Introduction

Energy infrastructure has re-emerged as a focal point for investors as North American production, pipeline utilization, and LNG export capacity have expanded across recent market cycles. TPYP and USAI sit at the center of this theme, but they are not interchangeable. While both provide exposure to the pipelines that move oil and natural gas across the continent, they differ in index construction, cost, concentration, and exposure to the natural gas value chain. This ETF comparison examines their structural differences, sector exposure, and relative positioning to help investors determine which fund better aligns with a given portfolio objective.

Tortoise North American Pipeline ETF (TPYP) Overview

The Tortoise North American Pipeline ETF is a passive fund that seeks to track the Tortoise North American Pipeline Index, a float-adjusted, capitalization-weighted benchmark of pipeline companies headquartered in the United States or Canada. The fund holds roughly 44 securities and includes master limited partnerships (MLPs), which are pass-through structures that distribute the bulk of their cash flow to unitholders, as well as MLP affiliates, limited liability companies, and traditional corporations.

Top holdings are concentrated in large-cap midstream operators, including KMI, ENB, LNG, TRP, WMB, OKE, TRGP, ET, and EPD. The portfolio's sector allocation is predominantly energy, with a meaningful utilities sleeve (roughly 10–15%) driven by gas local distribution companies such as NI and ATO. This utilities exposure is a distinguishing feature, adding regulated, fee-based cash flows that can temper commodity-price sensitivity. The fund's expense ratio is 0.40%.

Pacer American Energy Independence ETF (USAI) Overview

The Pacer American Energy Independence ETF is a passive fund that tracks the American Energy Independence Index, a benchmark of U.S. and Canadian companies engaged in midstream energy infrastructure and related activities. The fund holds roughly 35 securities and applies fixed percentage allocations across defined categories, which gives it a distinct construction profile compared with a purely cap-weighted competitor.

Top holdings overlap considerably with TPYP but are weighted differently, including LNG, ET, EPD, WMB, TRP, ENB, TRGP, and OKE. Notably, USAI also holds natural gas producers such as EQT and LNG exporters such as VG, giving the fund more direct exposure to the upstream and export segments of the gas value chain. Its expense ratio is 0.75%, and it carries a smaller asset base and trading footprint than its larger peer.

Industry and Thematic Backdrop

Both ETFs operate within a North American energy landscape shaped by record natural gas production, expanding pipeline capacity, and rising LNG export demand. Regulators, particularly in the United States, have gradually eased permitting bottlenecks for new infrastructure, while electricity demand from data centers and industrial electrification has strengthened the long-term outlook for natural gas as a bridge and baseload fuel. These structural tailwinds support the fee-based, contract-driven revenue models common across midstream operators.

Key risks include commodity-price volatility, interest rate sensitivity for the capital-intensive and often highly leveraged MLP sector, and regulatory or environmental challenges to new projects. The thematic environment favors both funds, but the degree of direct exposure to gas producers and LNG exporters varies, which can influence sensitivity to natural gas price swings and global export dynamics.

Performance and Positioning Comparison

Across recent market cycles, both funds have generally tracked the broader energy infrastructure recovery, with performance driven by steady distribution growth, deleveraging across the midstream sector, and investor appetite for income-oriented equities. TPYP's broader holdings base and utilities sleeve have historically contributed to somewhat lower relative volatility, while USAI's more concentrated, gas-levered portfolio has shown a tendency toward greater sensitivity to natural gas prices and LNG-related news flow.

From a cost standpoint, TPYP's 0.40% expense ratio provides a structural advantage over USAI's 0.75% fee, a meaningful consideration for long-term, buy-and-hold investors. In terms of relative positioning, TPYP functions as a broad, diversified core holding for energy infrastructure exposure, whereas USAI represents a more thematic, conviction-driven vehicle for investors specifically targeting North American energy independence and the gas export story.

AI Screener

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Tickeron AI Verdict

Based on observable structural factors, Tickeron's AI would likely favor TPYP for most long-term investors. The fund combines a materially lower expense ratio, a broader and more diversified holdings base, and a utilities component that may dampen volatility relative to a more concentrated gas-levered peer. While USAI offers stronger thematic exposure to natural gas producers and LNG exporters—an attractive tilt during periods of robust export momentum—its higher fee and narrower portfolio introduce additional concentration risk. The AI's preference is probabilistic rather than absolute: investors prioritizing cost efficiency and diversification may favor TPYP, while those seeking targeted gas and energy-independence conviction may still find USAI a suitable tactical complement.

Disclaimer

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