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Insight into Cohen & Steers Closed-End Opportunity Fund, Inc.

On January 29, 2025, Cohen & Steers Closed-End Opportunity Fund, Inc. (NYSE: FOF) released an important update regarding its distribution strategy under Section 19(a) of the Securities Exchange Act. This notification aims to inform shareholders about the distribution source scheduled for January 31, 2025, alongside cumulative distributions for the current fiscal year.

Distribution Background

The Fund has implemented a managed distribution policy since December 2021, a move sanctioned by the Securities and Exchange Commission. This policy was designed to enhance the Fund’s ability to deliver stable long-term total returns to shareholders, achieved through monthly distributions at a fixed rate per common share. By enabling more flexible management of long-term capital gains, the Fund can ensure regular income flow to investors throughout the year.

However, it is important to note that the Board of Directors retains the right to make amendments, terminate, or suspend this managed distribution policy at any time. Such actions could influence the share market price negatively, adding an element of caution for investors. The Fund typically varies the amount of monthly distributions based on changing market conditions and portfolio performance.

Breakdown of Distributions

According to the latest notification, the following breakdown of the January 2025 distribution is outlined:

• - Net Investment Income: $0.0301 (34.59% of current distribution)
• - Return of Capital: $0.0569 (65.41% of current distribution)
• - Total Current Distribution: $0.0870

It is crucial for shareholders to comprehend that a return of capital reflects funds disbursed from the Fund’s assets exceeding its net investment income and realized capital gains. While this type of distribution is not taxable, it effectively reduces a shareholder's basis in the Fund shares.

Year-to-Date Cumulative Distribution

As of January 31, 2025, shareholders should be aware that the cumulative distributions year-to-date relate directly to the Fund’s income performance. The report indicates the actual amounts disbursed thus far and stresses the importance of not overestimating the Fund's investment performance merely from the distribution figures. Investors often misinterpret returns of capital for yield or actual income, leading to misconceptions regarding the Fund's performance metrics.

The cumulative distribution rate established for the Fund’s current fiscal year is approximately 0.73%, marking a cautious but steady rate for income generated for shareholders. Meanwhile, the average annual total return for the five-year period ending December 31, 2024, stands at 6.40%, with the current annualized distribution rate reaching 8.72%.

Investors’ Considerations

Before making investment decisions, shareholders should assess the Fund's investment objectives, associated risks, charges, and expenses. Important documents, including periodic reports and regulatory filings, can be accessed on the Fund’s website or through the Securities and Exchange Commission’s EDGAR database. Reading these materials is critical for informed investment decisions.

In conclusion, Cohen & Steers Closed-End Opportunity Fund continues to prioritize shareholder transparency through comprehensive distribution notifications. Understanding these distributions, their nature, and underlying implications is vital for shareholders seeking both regular income and long-term capital appreciation from their investments. By being well-informed, investors are better equipped to manage their expectations and investment strategies moving forward.