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OUR COMPANY AND AFFILIATES
CBRE GLOBAL INVESTORS

CBRE Global Investors, combined with CBRE Clarion Securities and CBRE Caledon, is one of the world’s leading real asset investment managers providing real estate and infrastructure investment solutions to over 500 clients worldwide.

CBRE GROUP

CBRE Global Investors is the investment management division of CBRE Group, Inc. the world’s premier commercial real estate services and investment firm.  The company’s shares trade on the New York Stock Exchange under the symbol “CBRE.”

REAL ESTATE SERVICES
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Hinds Howard

Principal, Associate Portfolio Manager, Infrastructure

Status Update: Midstream Green in September

Given the end of the month and quarter fell on a Monday, I wanted to get a quick post out with updated month and quarter end numbers.  I hope you’ll understand if the upcoming weekly post is a bit shorter as a result. 

After a rough end to the summer with back to back negative months, midstream bounced back in September with a 2.0% gain.  Canadian midstream was strong, while MLPs lagged, a trend that’s been persistent for about a year now.

For the full quarter that’s now in the books, the midstream index finished down 1.9%, including distributions, offsetting a slightly positive 2Q.  The SPDR S&P Oil & Gas E&P ETF (ticker XOP) dropped 17.7% in the quarter, so being down less than 2% with a group of stocks involved in the fossil fuel business should feel pretty good.  But by comparison, the UTY was up 8.4% without including dividends and the S&P 500 was positive. 

Looking ahead to October, the AMNA index has been down 4%+ in each of the last 3 years in October, including last year’s 6.8% pummeling that kicked off a horrible 4Q for the sector.

MLP Index: Less Buoyant, But Positive September

The MLP Index finished slightly positive for September (+0.7%), a small bounce back from sharp declines in August.  MLPs finished 3Q down 5.0%, including distributions, and are down 8.1% year over year.  MLPs are still up double digits YTD with 11.1% return. 

In recent years, 4Q has not been kind to MLPs, due to a combination of tax loss selling, weak commodity price action and risk-off mood in the broad market.  The AMZ has posted negative returns in 4 of the last 5 fourth quarters, with average returns of -6.3%.  2016 was the last positive 4Q for the AMZ, and that was just a 2% gain. 

MLPs have been negative in each of the last 3 Octobers, but even still October returns historically have been the best among the three months of the fourth quarter, with average returns over 23 years of 1.4%.  Last year’s -8.0% returns was the worst ever for MLPs.