The utility sector was under pressure due to the higher rate environment but is an area that looks particularly attractive moving forward. Cohen & Steers Infrastructure Fund and Reaves Utility Income Trust invest not only in the utility sector, but general infrastructure-related investments more broadly. Both funds deliver attractive monthly distributions to investors of over 8% since they've been depressed with the higher rate environment.
Cohen & Steers Infrastructure Fund offers investors a monthly dividend with a diverse portfolio of utility and infrastructure investments. UTF's portfolio includes top utility companies and REITs like American Tower Corporation, Southern Company, and NextEra Energy. We explore potential demand drivers that could benefit UTF's portfolio over the next five years.
Cohen & Steers Infrastructure Fund (UTF) offers attractive current income with a focus on infrastructure assets and a consistent distribution history since 2004. Improved interest rate predictability and cost of debt conditions should support UTF's market cap and cash generation levels from here. UTF's leverage profile and exposure to growth sectors like electric infrastructure and midstream assets provide also a strong foundation for future distribution growth and price appreciation.
2024 presents unique opportunities for infrastructure investors due to macroeconomic factors. Infrastructure fundraising faced challenges in 2023, but the outlook is more positive for 2024. Cohen & Steers Infrastructure Fund may not be the best choice for income investors compared to other high-yield options.
Nvidia's Q1 revenue increased by 262.12% YoY, driven by the growing demand for AI chips. Elon Musk estimates that Tesla will spend up to $4 billion on AI chips with Nvidia in 2024. The demand for AI infrastructure, including data centers, grid capacity, and oil and gas, will create opportunities for companies like Cohen & Steers Infrastructure Fund.