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Cohen & Steers Reit and Preferr Message Board

  • joelndll joelndll Feb 6, 2012 8:18 AM Flag

    Don't be fooled about the dividend!

    RNP distributes $ .30 per quarter or $1.20 per
    year for a yld.of 8.32%. But this distribution
    is comprised of $ .8144 of NII and $ .3856 of ROC.
    The true dividend is $ .8144 or 5.65% yield. The
    balance of $ .3866 or 2.68% is ROC ( return of
    your invested capital. ) So, this part is not to
    be included on your IRS dividend report as income.

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    • Thanks,

    • RNP is a mutual fund that invests in various REITs and preferred shares. Some REITs own real estate which generate return of capital due mainly to depreciation and other non-cash charges. When these REITs pay dividends to RNP, some of that cash is going to be classified as a ROC since depreication reduced their earnings. I wouldn't worry about a ROC but would welcome it.

    • I'm not exactly sure about the nature of the ROC since it can be tricky with REITs but the main thing is that it doesn't seem to affect the total return and that's what's important. So,with the distribution, the total return is 13% for the last year and over 60% for the last 3 years. The most notable thing with this fund is that it has fully recovered its value (counting distributions) over the last 5 years including the RE crash. Most REITs are still down from 5 years ago.

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