Cohen & Steers Infrastructure Fund: Attractive 7.8% Yield and Growth Potential

Cohen & Steers Infrastructure Fund offers a 7.8% dividend yield and diversified portfolio of infrastructure sectors. The fund is poised to benefit from expected surge in infrastructure spending and potential interest rate cuts in 2025.

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Nitish Verma
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Cohen & Steers Infrastructure Fund: Attractive 7.8% Yield and Growth Potential

Cohen & Steers Infrastructure Fund: Attractive 7.8% Yield and Growth Potential

The Cohen & Steers Infrastructure Fund (NYSE:UTF) offers investors an enticing 7.8% dividend yield while providing exposure to a diversified portfolio of infrastructure sectors. The fund invests in utilities, pipelines, roads, and real estate, with a primary focus on generating attractive income and total returns for shareholders.

Why this matters: The expected surge in infrastructure spending has significant implications for economic growth and job creation, making investments in this sector crucial for the overall health of the economy. As infrastructure investments yield economic returns of 5-25%, they can have a profound impact on the global economy and individual investors' portfolios.

UTF is well-positioned to benefit from the expected surge in infrastructure spending over the coming years. According to a PwC research study, infrastructure investments are projected to total more than $9 trillion by the end of 2025. This influx of capital is anticipated to drive economic growth, with each dollar allocated to infrastructure projects potentially yielding an economic return of 5-25%.

The fund's portfolio is diversified across various infrastructure-related sectors, with the majority of its exposure in the electric sector (33%), followed by corporate bonds (15%), midstream C Corp companies (11%), and gas distribution (7%). UTF's top ten holdings account for 30.5% of its total assets, and the majority of its portfolio is concentrated in North America, with 59% exposure to the United States, 10% to Canada, and 2.2% to Mexico.

In addition to the favorable infrastructure spending outlook, UTF is also expected to benefit from potential interest rate cuts in 2025. Lower rates could provide a tailwind for infrastructure investments, making the fund's high-yielding portfolio even more attractive to income-seeking investors.

The Cohen & Steers Infrastructure Fund has delivered relatively stable price movement over the past decade, generating a total return of 127%. While the fund's total annual expenses of 3.97% are higher than some of its peers, its experienced management team and targeted investment strategy have proven effective in navigating the complex infrastructure landscape.

As infrastructure spending continues to ramp up and the potential for rate cuts looms on the horizon, the Cohen & Steers Infrastructure Fund presents an attractive opportunity for investors seeking a combination of high income and growth potential. With its diversified portfolio, monthly dividend distributions, and focus on total returns, UTF is well-positioned to capitalize on the evolving infrastructure landscape in the years ahead.

Key Takeaways

  • Cohen & Steers Infrastructure Fund (UTF) offers a 7.8% dividend yield.
  • UTF invests in diversified infrastructure sectors, including utilities and pipelines.
  • Expected surge in infrastructure spending to drive economic growth and job creation.
  • UTF well-positioned to benefit from $9 trillion in infrastructure investments by 2025.
  • Lower interest rates in 2025 could boost UTF's high-yielding portfolio.