A company called Cohen & Steers Infrastructure Fund has a policy to give some money every month to the people who own their shares. This is called a "managed distribution" and it helps them make more profit in the long run. The policy can change anytime, which might affect how much the shares are worth. Read from source...
1. The title of the article is misleading and does not accurately reflect the content. It should be something like "Cohen & Steers Infrastructure Fund, Inc. (UTF) Notification of Sources of Distribution Under Section 19(a)" instead of "Notification of Sources of Distribution Under Section 19(a)".
2. The article does not provide any context or background information about the fund, its objectives, or its performance. It assumes that the reader is already familiar with the fund and its managed distribution policy.
3. The article uses technical jargon and acronyms without explaining them to the audience. For example, it mentions "exemptive relief" issued by the SEC, but does not explain what it means or why it is relevant to the fund's distribution policy.
4. The article contains factual errors and inconsistencies. For example, it states that the managed distribution policy was implemented in March 2015, but then contradicts itself by saying that the Board of Directors may amend, terminate or suspend the policy at any time. This implies that the policy is not fixed or consistent, which undermines its credibility and usefulness.
5. The article does not provide any analysis or insights into the fund's performance, strategy, or prospects. It merely reports on the sources of the distribution and the potential impact on the market price of the shares. This makes the article very bland and uninteresting to readers who are looking for more in-depth information.
6. The article does not address any potential risks or drawbacks associated with the fund's managed distribution policy. It only focuses on the benefits and advantages, which creates a biased and unbalanced presentation of the issue.
Possible investment recommendation 1: Buy UTF at its current market price of $60.75 per share and hold it for the long term, as it offers a stable and growing monthly distribution with a high yield of about 8.4% based on the current price and annualized net investment income of $2.93 per share. The Fund invests in a diversified portfolio of global infrastructure assets, such as utilities, energy, transportation, and real estate, which are essential services that generate steady and predictable cash flows. The managed distribution policy allows the Fund to allocate more capital to higher-yielding opportunities and reduce the risk of capital loss in a volatile market.
Risk 1: UTF is subject to market risk, meaning its share price may fluctuate due to changes in interest rates, inflation, economic growth, global events, or investor sentiment. In addition, the managed distribution policy may result in some months having higher than normal distributions, which could create tax implications for some shareholders. The Board of Directors may also modify or terminate the policy at any time, which could adversely affect the Fund's performance and share price.
Possible investment recommendation 2: Sell UTF short at its current market price of $60.75 per share and cover it when it reaches a lower level, such as $50 or $40 per share. This strategy is suitable for investors who are bearish on the global infrastructure sector or expect a decline in the demand for essential services due to changing consumer preferences, technological disruptions, environmental regulations, or geopolitical tensions. Short selling UTF involves borrowing shares from another investor and selling them at the current market price, with the expectation of buying them back at a lower price in the future and returning them to the lender. The profit is equal to the difference between the initial sale price and the lower purchase price, minus any interest or fees paid to the lender for borrowing the shares. However, short selling also involves higher risks, such as unlimited losses if the share price rises, margin requirements, and the possibility of being forced to cover the position if the lender recalls the shares.
Risk 2: Short selling UTF exposes investors to the risk of losing more than their initial investment, since there is no limit to how high the share price can go. In addition, short sellers may face margin calls from their brokers if the value of their portfolio declines and they do not have enough funds to maintain the minimum required equity level. Furthermore, the lender of the borrowed shares may decide to recall them at any time, forcing the short seller to buy them back at whatever price is available, which