UTF: A Strategic Income Play in a Low-Rate World

In a low-rate environment where traditional income assets struggle to keep pace with inflation, the Cohen & Steers Infrastructure Fund (UTF) emerges as a compelling option for investors seeking high yields and long-term stability. With a forward dividend yield of 7.21% and a trailing yield of 8.49% as of December 2025, UTF offers a rare combination of income generation and exposure to infrastructure sectors poised for secular growth. Here's why this closed-end fund (CEF) deserves a closer look-and how it stacks up against the Dividend Kings in a world starved for yield.

A High-Yield Powerhouse with Infrastructure's Edge

UTF's 7.70% distribution rate is a standout in today's market, especially when compared to the modest yields of Dividend Kings, which average between 0.8% and 4.2% according to analysis. While these elite stocks have built their reputations on decades of dividend growth, UTF's appeal lies in its focus on infrastructure-a sector inherently designed to generate stable cash flows.

As of September 30, 2025, utilities account for 42.85% of UTF's portfolio, while energy infrastructure represents 13.83%. This allocation positions the fund to benefit from the global shift toward digital infrastructure, where data centers and renewable energy projects are driving capital expenditures.

What's more, UTF trades at a -6.79% discount to its net asset value (NAV) of $25.93, offering a potential margin of safety for investors. This discount, combined with the fund's 29.50% effective leverage, amplifies returns in a low-rate climate where debt costs remain favorable. While leverage introduces risk, UTF's debt-to-equity ratio of $1.05 billion is manageable given the sector's predictable cash flows.

Compounding vs. Consistency: UTF vs. Dividend Kings

The Dividend Kings' strength lies in their compounding potential. These companies, such as Fortis and Consolidated Edison, have raised dividends for over 50 years, delivering 5–6% annual growth. UTF, by contrast, has maintained a flat dividend growth rate of 0% over the past five years according to data. However, this doesn't diminish its value-it simply reflects a different strategy. UTF's high yield and monthly payouts make it ideal for investors prioritizing immediate income over long-term growth.

The key distinction is in the sectors. While Dividend Kings operate in stable but mature industries like consumer staples and financials, UTF's focus on infrastructure-particularly energy and utilities-aligns with structural trends. The rise of AI and cloud computing is fueling demand for power and data-center infrastructure, a tailwind that could enhance UTF's relevance as capital flows into these projects.

Risks and Recovery Prospects

No investment is without risk. UTF's leverage and concentration in utilities expose it to interest rate volatility and regulatory shifts. Additionally, the fund's 7.70% distribution rate relies on its ability to maintain coverage, which could be challenged if infrastructure valuations falter. However, the current discount to NAV suggests the market is pricing in pessimism. If the fund's management can stabilize its leverage and capitalize on the AI-driven infrastructure boom, the discount could narrow, unlocking value for shareholders.

The Bottom Line

UTF isn't for everyone. Income-focused investors who prioritize compounding growth may still favor the Dividend Kings. But for those seeking a high-yield, infrastructure-anchored CEF in a low-rate world, UTF's 7.70% distribution rate, strategic exposure to energy infrastructure, and discounted valuation make it a compelling case. As the market grapples with the next phase of digital transformation, UTF's portfolio is uniquely positioned to deliver both income and resilience.