CEG - UTG: Utility Fund With 8% Plus Income For The Long Term

2024-07-21 09:00:00 ET

Summary

• Reaves Utility Income Trust is a Utility sector-specific closed-end fund that invests in a fairly diversified portfolio of common stocks of utilities and communication companies, as well as other income-generating companies.
• It currently provides a reasonable yield of 8.0% plus; however, it uses a moderate level of leverage, roughly 20% of total assets. Currently, shares are trading at a minimal premium of under 1%.
• UTG has a decent long-term record of over 20 years for a Utility-focused fund. However, it has performed poorly recently, which is in line with the performance of the utility sector. Going forward, there are certain tailwinds that should help utilities in general.

Introduction:

Reaves Utility Income Trust ( UTG ) is a closed-end fund, or CEF, that was incepted over 20 years ago in Feb. 2004. The fund seeks to invest in utility companies of all kinds in different segments, such as electric, gas, and water utilities. In addition, it has major investments in the communication sector, as well as some industrial and mid-stream companies. The fund uses a moderate amount of leverage, which is currently at 20% of the total assets. It has minimal amounts invested in preferred securities....

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