Written by Nick Ackerman, co-produced by Stanford Chemist
In the closed-end fund space, there are a number of infrastructure-related funds. Some focus on broader infrastructure-related exposure, and some are more specifically tilted toward energy. Demand in the infrastructure space has been growing thanks to the drive to build out artificial intelligence. While technology names have been seeing some impressive gains, it takes power being produced, stored, and moved to power the AI infrastructure.
Today, we’re going to be giving two of these funds a look. Both appear attractive given their current discounted valuations. That’s a key characteristic when considering CEFs: looking for funds that are trading at relatively wide discounts. They also both pay monthly, which can be beneficial to income-focused investors who may look to these investments to help fund their expenses. Even better, both of these funds have fairly recently lifted the payouts to their investors on the back of strong results.
#1 Cohen & Steers Infrastructure Fund (UTF)
- 1-Year Z-score: -1.44
- Discount/Premium: -8.78%
- Distribution Yield: 7.80%
- Expense Ratio: 1.36%
- Leverage: 29.71%
- Managed Assets: $4.5 billion
- Structure: Perpetual
UTF’s objective and general strategy is:
“Total return, with an emphasis on income through investment in securities issued by infrastructure companies.” They define infrastructure companies as those that “typically provide the physical framework that society requires to function on a daily basis and are defined as utilities, pipelines, toll roads, airports, railroads, marine ports, telecommunications companies, and other infrastructure companies.”
UTF is one of my favorite infrastructure plays today, though it had some disruptions last year when the fund went through a rights offering. At that time, I sold out of the name and then reentered into a position, as we always do with these corporate events. This was another example of that working out in our favor. We were able