ETF Education Report: Cohen & Steers REIT & Preferred Income Fund Inc (RNP)

What this ETF is trying to do

The RNP ETF is an investment fund listed on the NYSE. Based on its name, it focuses on Real Estate Investment Trusts (REITs) and preferred income assets. Investors often look at these types of funds to find regular cash payments.

What the numbers show

It is important to understand that "price return" and "total return" tell different stories. Price return only tracks how the share price moves. Total return includes both the price movement and the cash distributions paid out to investors.

• Year-to-Date (YTD): The price return is approximately -2.82%. However, the total return is positive at about 3.10%.

• One Year: The price return was approximately -13.99%, while the total return was approximately -6.94%.

• Three Year: The price return was approximately 4.10%, but the total return was much higher at approximately 31.67%.

To visualize the price change over the last year, we can look at an estimated price from roughly one year ago, which was $22.44. The current price is $19.30.

Income and distribution explanation

This ETF has a distribution yield of approximately 8.46%. This means the fund pays out a significant amount of cash relative to its share price. These distributions usually happen monthly, with 12 payments made over the last year. Most of these payments have occurred on Tuesdays.

While a high yield provides cash income, it is not the same as total return. You should always look at the total return to see how the investment performed overall after including those cash payments.

NAV erosion explanation

"NAV erosion" is a term used to describe when the value of the underlying assets in a fund decreases over time. StockValueFinder uses an "erosion-risk score" to measure this risk.

RNP has an erosion score of 75, which is labeled as "mild price erosion." This is a measurement of risk, not a guarantee that the fund's value has collapsed. There is no severe erosion-risk flag for this ETF.

Pros

• The fund provides a high distribution yield of approximately 8.46%.

• The three-year total return has been strong at approximately 31.67%.

Cons

• The one-year price return has shown a decline of approximately -13.99%.

• The fund shows a "mild" erosion-risk score.

Beginner takeaway

When looking at RNP, it is helpful to distinguish between the share price and the cash income. While the share price has dropped over the last year, the total return (which includes distributions) tells a different story. Always remember that a high distribution yield provides cash, but it does not guarantee that the share price will stay stable.