Andrew Hill Investment Fund Adds ONEOK Amid Rising U.S. Energy Demand

Andrew Hill Investment Advisors disclosed in its third-quarter 2026 investor letter that it favors ONEOK, Inc. (NYSE: OKE) as a strategic holding. The fund highlighted the midstream energy company's infrastructure-based model, which generates returns from the volume of natural gas and liquids moving through its network rather than from commodity price speculation. The firm noted that recent acquisitions have expanded ONEOK's footprint across the U.S. energy value chain, increasing the scale of its asset base.

In its assessment, Andrew Hill stated that ONEOK is well positioned to benefit from long-term trends, including continued growth in domestic energy production. The firm pointed to natural gas demand supported by liquefied natural gas exports and rising power consumption as key drivers for the company. This thesis mirrors the fund's approach to Cheniere, where infrastructure stability is preferred over exposure to volatile commodity prices.

The investment decision comes against a mixed macroeconomic backdrop described in the letter. Andrew Hill reported that rising oil prices, higher interest rates, and persistent inflation created headwinds for both equities and bonds in the third quarter. Despite these pressures, strong corporate earnings and continued investment in artificial intelligence helped support the broader stock market. The S&P 500 gained 3.54% through September 22, while the Bloomberg U.S. Aggregate Bond Index declined 2.8%. During this period, the Federal Reserve increased the federal funds rate to 3.75%-4.00%, marking its first rate hike in more than three years.

Performance for client accounts was driven by exposure to software and AI hardware, with the average equal-weight basket of AI stocks returning 13.0% during the quarter. This stood in contrast to an 8.3% decline for the traditional-economy basket, though losses in other areas and rising bond yields offset some gains. Looking ahead, the firm expects the AI investment cycle to continue but remains cautious on the broader equity market due to geopolitical risks, tight consumer spending, and election uncertainty.

Consequently, Andrew Hill is favoring earnings-focused investing and higher cash balances while gradually increasing fixed-income exposure. The firm specifically noted that high-grade corporate bonds currently offer yields above 6%. Regarding ONEOK's market position, the stock closed at approximately $88.06 per share on October 7, 2026, with a market capitalization of about $56.75 billion. Over the preceding month, shares returned -6.08%, trading within a 52-week range of $64.02 to $99.85.

Database records indicate that 43 hedge fund portfolios held ONEOK at the end of the second quarter, a decrease from 50 in the prior quarter. While acknowledging the potential of ONEOK, Andrew Hill's broader conviction remains centered on AI stocks, which the firm believes offer greater promise for higher returns within a shorter timeframe.