The closed-end funds seeks a high level of total return, with an emphasis on income, by investing primarily in securities of publicly traded infrastructure companies that are stable, long-lived assets essential to the global economy, says Bryan Perry, dividend expert and editor Cash Machine.
Brookfield Global Listed Infrastructure Income Fund (INF) has paid the same $0.1167 monthly dividend since its initial public offering dating back to September 2011.
The fund trades at a very appealing10.26% discount to Net Asset Value and is comprised of a nice concentration of 39 holdings.
The growing need for infrastructure spending and the significant cost of funding such projects has led to significant growth in global listed infrastructure as an asset class.
Historically, supply-and-demand characteristics have been compelling, driven by the combination of supply that has been constrained by high barriers to entry and relatively stable demand from essential services.
The fund’s portfolio makeup is the United States (55.11%), European Developed (21.07%), Canada (11.38%), Asia ex-Japan (8.74%), United Kingdom (4.11%) and Latin America (1.69%).
When looking at the distribution, the item of ‘return of capital’ will show up as a significant portion of the distribution.
But this is misleading because most of the top holdings within the fund are master limited partnerships (MLPs), whose distributions are considered a ‘return of capital’ for tax purposes.
The return-of-capital portion of the dividend will lower one’s cost basis of shares for tax purposes by the amount of that portion per share. But as of 2015, it was only 1.79%, which is nominal and the fund does a nice job of reporting year-end tax information.
Shares of INF have posted a 17.39% year-to-date gain for 2016 and tend to be more volatile because of the higher exposure to the energy sector.
But of late, the fundamentals of the energy sector have improved and this is a nice way to capture a huge current yield of 11.44% as the sector continues to recover.
The next ex-dividend date will be around Jan. 15. Global infrastructure is right in the wheelhouse of the Brookfield management team, which has extensive experience in this space. I think we are buying this fund at the right time on a good upswing.
The fund is leveraged 26% to achieve its big yield, which makes the stock suitable only for our Aggressive High-Yield Portfolio.
