RLTY - RLTY: High Beta Reit CEF 9% Yield

2024-05-28 23:31:53 ET

Summary

• Cohen & Steers Real Estate Opportunities and Income Fund is a high beta closed-end fund that focuses on REIT equities and has a 30% fixed income sleeve.
• The fund's portfolio is concentrated, with its top five holdings making up over 27% of the fund, while the top-10 holdings represent 44% of the CEF.
• RLTY has outperformed its leveraged CEF and unleveraged ETF competitors in the past year, but it also has the highest beta and can experience significant drawdowns in down markets.
• The fund IPO-ed at an inopportune time, and the CEF has sported a large discount to NAV ever since.
• The CEF comes from a very reputable manager in the REIT space and has a very low cost of leverage.

Thesis

Cohen & Steers Real Estate Opportunities and Income Fund ( RLTY ) is an equities closed end fund. The CEF focuses on REIT equities, but also sports a 30% fixed income sleeve made up of preferred equities. The fund comes with a high leverage ratio of 35% and has a high beta versus the unleveraged peers in the ETF world....

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