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Cohen & Steers REIT and Preferred and Income Fund Updates

Cohen & Steers REIT and Preferred and Income Fund, Inc. (RNP) recently provided significant updates to its shareholders regarding the distribution sources set to be paid on August 29, 2025. This information is essential for investors looking to understand the components that contribute to their returns, especially in the context of the managed distribution policy initiated by the Fund back in December 2017.

The managed distribution policy was designed to offer shareholders a predictable income stream by allowing for regular monthly distributions assigned at a fixed rate per common share. This policy not only facilitates more strategic capital management but also provides shareholders with potential for long-term capital gains throughout the fiscal year. However, it is worth noting that the Fund's Board of Directors retains the authority to modify, suspend, or terminate this policy, which may subsequently impact the market price of the Fund's shares.

Key Distribution Components

The monthly distributions from the Fund are derived from various sources including long-term capital gains, short-term capital gains, net investment income, and returns of capital for tax purposes. Returns of capital signify that the distributions being allocated to shareholders exceed the Fund’s net investment income and net realized capital gains—a part of the total returns that can be attributed back to the initial investment. Investors should understand that such a return of capital is not necessarily taxable; instead, it reduces the overall taxable liability on their shares in the Fund.

Additionally, the Fund highlights that the distributions it receives from its investments in Real Estate Investment Trusts (REITs) may be classified variably as either capital gains or return of capital. This classification hinges on the nature of the dividends reported to the Fund by the REITs at the end of each fiscal year.

The dynamics of the monthly distributions can fluctuate based on numerous factors, including market conditions and changes in the Fund's investment portfolio. Consequently, at each payment date, detailed information about the sources of distributions will be made available on the official Cohen & Steers website and communicated directly to shareholders. However, this information may be subject to adjustments post-fiscal year-end, once all necessary evaluations are completed.

Distributions and Investment Strategies

For August 2025, the distribution analysis shows that the total current distribution per share amounts to $0.1360. Breaking it down further, $0.0554 (or 40.74%) stems from net investment income, while $0.0806 (59.26%) originates from capital or other related sources. As of the fiscal year ending August 31, 2025, cumulative distributions have been clocked at $1.0880 per share.

It's critical for shareholders to differentiate between the yield or income from their investments and return of capital distributions. A return of capital does not reflect the Fund's performance directly and should not be misconstrued as a sign of profit or growth in their investment value. Rather, shareholders should keep abreast of their own tax implications, as detailed records relating to these distributions will be formally issued on a Form 1099-DIV at year-end.

Year-to-Date Performance Insights

The Fund's performance this year-to-date (from January 1 to July 31, 2025) shows a cumulative total return of 4.52%. When viewed against the cumulative distribution rate, which stands at 5.17%, shareholders can assess how distribution payouts relate to the overall value of their investments. Additionally, the average annual total return over the past five years is pegged at 7.36%, with a current annualized distribution rate of 7.75%.

In conclusion, Cohen & Steers REIT and Preferred and Income Fund's structured approach to distribution and transparent reporting provides its shareholders with critical insights vital for informed financial decision-making. Investors are encouraged to thoroughly review the periodic reports and stay updated on any changes to the Fund's policies to optimize their investment strategies.