RNP's Discount Draws Buyers, Leverage Costs Risk Returns

The Cohen & Steers REIT & Preferred Income Fund (RNP) is trading at a discount to its net asset value, a setup that has attracted some buyers. The closed-end fund invests in REITs and preferred securities. Its leverage, however, raises borrowing costs that could eat into returns, an analyst on Seeking Alpha said.

The analyst argued that the discount creates a buying opportunity while warning that the fund's leverage costs are a risk. If rates stay high, the fund's net asset value may face pressure, the analyst said. The fund's expense ratio reflects those leverage costs.

The analyst's note did not include a specific price target. The fund's discount to NAV has widened in recent months, the analyst wrote.