Cohen & Steers Infrastructure Is Worth A Look


Cohen & Steers Infrastructure has compelling total returns and is one of the few closed-end funds that has consistently beaten the S&P.

Its long-term record of excellence has been driven by the same management team since its inception.

With a healthy distribution rate and solid total returns, this closed-end fund is worth considering for income and total return investors.

Cohen & Steers Infrastructure (NYSE:UTF) is a closed-end fund that was established on March 30, 2004. Here is its objective, taken from the fact sheet provided by Cohen & Steers:

The primary investment objective of the Fund is high current income through investment in securities issued by infrastructure companies. Infrastructure companies typically provide the physical framework that society requires to function on a daily basis and are defined as utilities, pipelines, toll roads, airports, railroads, marine ports and telecommunications companies.

The same team, Robert Becker and William F. Scapell, has managed UTF since it's inception. Given the excellent long-term returns, I consider this a huge positive.

Long-Term Total Return

Click to enlarge image.

As illustrated in the data above from Fidelity Closed End Fund Screener, UTF has provided excellent total returns over the ten, five, three and one year time periods. The SPY total return over the same time periods are shown below:

10 Year TR

5 Year TR

3 Year TR

1 Year TR






The above data is from Morningstar.

UTF has beaten the SPDR S&P 500 in each of these time periods. There are only four CEFS that have beat the S&P over all these time periods, as of the close April 7.

Recent Returns

The year-to-date market price total return has been 11.34% (annualized) in 2014. This again is an excellent return that handily beats the SPY. (The year to date total return is given based on price rather then NAV.) The current yield for UTF is 6.46%. Distributions dropped during the great recession, a fate suffered by almost every equity CEF, but have risen nicely since.

Over the last few years the distribution contains some return on capital. The inclusion of return on capital in distributions is something to be watched. But any concern should be mitigated by the continued rise in NAV.


There has been a lot of debate here on Seeking Alpha and else where on how to measure risk. I've chosen to use the Sharpe Ratio because it is widely used and well understood.




1 Year



3 Year



UTF has a better Sharpe ratio then the SPX over three years and a worse Sharpe Ratio over one year. This indicates UTF provided better compensation for the level of risk then owning SPX over the three-year period, but the relationship is reversed over the one-year period. So the comparison of the risk/reward of UTF to the risk/reward of S&P based on the Sharpe Ratio is a mixed bag.


UTF has consistently been priced at a discount to NAV. The table below shows the current discount and the average discount over the specified time periods.


One Year

Three Year

Five Year





The discount is higher this year then it has been historically. This could boost the total return on price if UTF was to revert to it's historical average. The bigger benefit of the discount is buying the dividends of a dollar worth of stock for 88 cents.


UTF uses leverage; its effective leverage is about 30%. Leverage is a double-edged sword as it boosts returns on the way up and boosts losses on the way down. Generally, I prefer my funds to be less leveraged, but given UTFs excellent track record and decent risk/reward characteristics, I believe this level of leverage is acceptable.


UTFs adjusted expense ratio (excluding interest) is 1.46%. This is higher then I would like (I would like 0%), but within the normal range compared to similar funds. Management has consistently provided excellent total return and lower expenses would be better, but it's hard to complain too much.


When I buy a fund I'm buying the management and as long as the management has been getting results I trust it to manage the portfolio. My main interest in looking at the underlying portfolio is to see how it contributes to the diversity of my holdings.

UTF invests domestically and internationally, 48% of it's investments are outside the USA. Over 80% of investments are in common equity. It maintains 10%-20% in preferred shares and very small amounts of bonds and cash. It invests heavily in regulated and unregulated electric, towers and toll roads.

Top Holdings


Percent of total


American Tower Corp. Cl A

4.79 %


Crown Castle Intl Corp

4.46 %


Vinci SA

4.28 %

Toll Roads

Dominion Resources Inc./Va

2.43 %

Integrated Electric

NextEra Energy Inc.

2.32 %

Integrated Electric

National Grid PLC

2.20 %

Regulated Electric

Enbridge Inc.

2.18 %

Pipelines- C-Corp

Enel SPA

2.13 %

Integrated Electric


2.09 %

Toll Roads

Central Japan Railway

2.06 %


For more portfolio details, see CefConnect and the complete list of holdings from Cohen & Steers.


Based on UTF's excellent long-term results, established management and consistent and growing distributions, I have started a small position. As I continue to do due diligence, I expect I will add to my position. I believe UTF is worth further investigation for both income and total return.

Disclosure: I am long UTF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Corrected a slight error in the article regarding why I chose to display the YTD as return on price rather then return on nav.

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