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Overview of Cohen & Steers REIT and Preferred and Income Fund, Inc. (RNP)

Cohen & Steers REIT and Preferred and Income Fund, Inc., listed on NYSE under the symbol RNP, is a notable player in the investment landscape, focusing on real assets and delivering income through a disciplined portfolio of investments. Recently, the fund made headlines with a notification regarding the distribution sources to be paid out on December 31, 2024. This article aims to delve into the details of this notification, the fund's managed distribution policy, and its implications for shareholders.

Managed Distribution Policy

In December 2017, the fund established a managed distribution policy designed to provide shareholders with consistent and regular monthly distributions. This policy is facilitated by the exemptive relief granted by the Securities and Exchange Commission and aims to enhance the fund’s long-term return potential. By declaring a fixed monthly distribution rate per common share, the fund can better manage the timing of capital gains and regular cash flows, offering stability and predictability to its investors.

However, it is crucial to note that the Board of Directors retains the authority to modify, suspend, or terminate this managed distribution policy at any time. Such changes could significantly impact the market price of the fund's shares and should be closely monitored by the shareholders.

Distribution Structure and Sources

The evaluation of the sources of the fund’s distributions is pertinent to understanding how these distributions are derived and what they might mean for tax purposes. As per the notification provided, the current distribution of $0.1360 per share, slated for payment on December 31, includes:

• - Net Investment Income: $0.1360 (100%)
• - Net Realized Short-Term Capital Gains: $0.0000 (0%)
• - Net Realized Long-Term Capital Gains: $0.0000 (0%)
• - Return of Capital: $0.0000 (0%)

For the fiscal year-to-date as of December 31, 2024, the cumulative distribution from those sources similarly reflects total distributions of $1.6320 per share, entirely sourced from net investment income. Notably, any return of capital distributed goes beyond the net investment income and gains, reducing the shareholder’s tax basis for the shares held.

At the end of each month, the distribution details will be accessible on the official Cohen & Steers website and will be communicated directly to shareholders through official notices. It's essential for shareholders to remain informed, as the final tax characterization of these distributions won't be established until after December 31, 2024, and will be communicated later via Form 1099-DIV.

Investment Performance Insights

Understanding the relationship between the fund’s distribution rates and its investment performance can assist shareholders in making informed decisions. As of November 30, 2024, the Year-to-date Cumulative Total Return for the fund stood at 16.95%, with a Cumulative Distribution Rate at 7.21%. Over the past five years, an Average Annual Total Return of 6.74% was reported, with a Current Annualized Distribution Rate similarly positioned at 7.21%. This information is crucial for investors to gauge the fund's financial health and the sustainability of ongoing distributions.

It is essential to highlight that the distribution amount profiles provided only serve as estimates in the current context and may be influenced by various market conditions and portfolio adjustments throughout the fiscal year.

Conclusion

Cohen & Steers REIT and Preferred and Income Fund, Inc. continues to illustrate its commitment to delivering value to shareholders through a structured distribution approach and ongoing investments in real assets. Investors should carefully consider the implications of the managed distribution policy and the tax characteristics associated with their distributions to optimize their investment strategies. Shareholders can maintain a proactive role in understanding their investment by regularly checking the fund’s updates and statements directly from Cohen & Steers’ resources, ensuring alignment with their investment goals and tax planning strategies.