RQI - RQI: A Stellar Closed-End Fund Currently Overvalued (Rating Downgrade)

2024-02-12 04:54:49 ET

Summary

• Cohen & Steers Quality Income Realty Fund is a leveraged, REIT-based closed-end fund.
• The Federal Reserve has hinted at near-term rate cuts, leading to a rebound in REITs.
• RQI is historically expensive relative to the ten-year treasury.

For the decade following the financial crisis, REITs capitalized on a perpetually low interest rate environment to fire up the commercial real estate engine. Declining yields and capitalization rates supported rising REIT valuations and property values. REITs shined during this period. The situation changed dramatically following the pandemic era. Many perceived the Federal Reserve's low interest rate policy as permanent....

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