Cohen & Steers Tot Ret Realty Stock Price, News & Analysis
Company Description
Cohen & Steers Total Return Realty Fund, Inc. (NYSE: RFI) is a diversified, closed-end management investment company. According to available information, its stated investment objective is to achieve a high total return through investment in real estate securities. Under normal circumstances, the Fund invests a majority of its total assets in the equity securities of real estate companies, which can include common shares, real estate investment trusts (REITs), rights or warrants, convertible securities and preferred shares.
The Fund’s shares trade on the New York Stock Exchange under the symbol RFI. As a closed-end fund, it has a fixed number of shares that are bought and sold on an exchange, and its market price is influenced by supply and demand in the open market. The Fund’s net asset value (NAV) is calculated as the total market value of all securities and other assets it holds, minus total liabilities, divided by the number of shares outstanding.
Investment objective and strategy
The Fund’s investment objective, as stated, is to achieve a high total return through investment in real estate securities. To pursue this objective, it focuses on equity securities of real estate companies. These holdings may include REITs and other real estate-related issuers, as well as rights or warrants, convertible securities and preferred shares issued by such companies.
Information in recent shareholder notices explains that the Fund’s performance statistics are typically discussed in terms of NAV total return, which reflects the percentage change in NAV over a given period, including distributions paid and assuming reinvestment of those distributions. These notices also describe how distribution rates are measured as a percentage of NAV for specified periods.
Managed distribution policy
In December 2011, the Fund implemented a managed distribution policy in accordance with exemptive relief issued by the U.S. Securities and Exchange Commission. According to repeated shareholder notices, this policy seeks to deliver the Fund’s long-term total return potential through regular monthly distributions declared at a fixed rate per common share. The policy is intended to give the Fund greater flexibility to realize long-term capital gains throughout the year and to distribute those gains on a regular monthly basis to shareholders.
The Board of Directors of the Fund may amend, terminate or suspend the managed distribution policy at any time, and the Fund’s disclosures note that such changes could have an adverse effect on the market price of the Fund’s shares. The Fund also emphasizes that shareholders should not draw conclusions about investment performance solely from the amount of a distribution or from the terms of the managed distribution policy.
Distribution sources and tax characterization
Shareholder notices describe how the Fund’s monthly distributions may include one or more of the following components for U.S. federal income tax purposes:
- Net investment income
- Net realized short-term capital gains
- Net realized long-term capital gains
- Return of capital (or other capital source)
Return of capital is defined in these notices as distributions paid by the Fund in excess of its net investment income and net realized capital gains, with such excess distributed from the Fund’s assets. A return of capital is described as not taxable when received; instead, it reduces a shareholder’s tax basis in his or her shares. The Fund also notes that distributions from its investments in REITs may later be characterized as capital gains and/or return of capital, depending on how the REIT dividends are reported to the Fund after year-end.
The Fund highlights that the amounts and sources of distributions reported in interim notices are estimates and are likely to change over time. The final tax characteristics of all distributions are determined after the end of the calendar year and reported to shareholders on Form 1099-DIV. The Fund explicitly cautions that the information in these notices is not provided for tax reporting purposes and should not be used to prepare tax returns.
Performance and NAV-based metrics
In its regular Section 19(a) notices, the Fund presents several NAV-based performance and distribution measures, including:
- Year-to-date Cumulative Total Return – described as the percentage change in the Fund’s NAV over the year-to-date period, including distributions paid and assuming reinvestment of those distributions.
- Cumulative Distribution Rate – described as the dollar value of distributions in the year-to-date period as a percentage of the Fund’s NAV as of a specified date.
- Average Annual Total Return – described as the compound average of the Fund’s annual NAV total returns over a stated multi-year period.
- Current Annualized Distribution Rate – described as the current fiscal period’s distribution rate annualized as a percentage of the Fund’s NAV as of a specified date.
The Fund notes that while NAV performance may be indicative of its investment performance, it does not measure the value of an individual shareholder’s investment, which is based on the market price of the shares. Market price is determined by supply and demand for the Fund’s shares on the exchange.
Relationship with Cohen & Steers
The Fund is associated with Cohen & Steers, an investment manager that describes itself in the Fund’s notices as specializing in real assets and alternative income. According to these disclosures, Cohen & Steers focuses on listed and private real estate, preferred securities, infrastructure, resource equities, commodities and multi-strategy solutions. Cohen & Steers is described as having been founded in 1986 and headquartered in New York City, with additional offices in London, Dublin, Hong Kong, Tokyo and Singapore.
Shareholder communications for the Fund direct investors to obtain the Fund’s most recent periodic reports and other regulatory filings through financial advisors or through public sources such as the Securities and Exchange Commission’s EDGAR database. These materials are described as important for understanding the Fund’s investment objectives, risks, charges and expenses.
Risk and disclosure emphasis
The Fund’s recurring notices emphasize that investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. They also note that there are important factors that could cause actual outcomes or results to differ materially from forward-looking statements and that the company has no obligation to publicly update or review such statements.
Overall, Cohen & Steers Total Return Realty Fund, Inc. is presented as a closed-end fund focused on real estate-related equity securities, using a managed distribution policy and providing detailed periodic information on the estimated sources of its distributions, NAV-based performance metrics and the tax characterization of its payouts.