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$UTG - A Solid CEF with a 7.0% Yield

Reaves Utility Income Fund (UTG) is a closed-end fund that invests in a portfolio of utility stocks. The fund has a long history of paying reliable dividends, and it offers a current yield of 7.0%.


Why Invest in UTG?

There are several reasons why investors might want to consider investing in UTG. First, the utility sector experiences inelastic demand, which means that demand for utilities remains relatively stable even during economic downturns. This is because people still need electricity, water, and other utilities regardless of the state of the economy.


Second, UTG has a long track record of success. The fund has been paying dividends since its inception in 2004, and it has never cut its distribution. In fact, the fund has increased its distribution by nearly 100% since it began trading.

Third, UTG is a relatively safe investment. The fund is modestly leveraged at ~17%, and it has a low expense ratio of 1.2%. This means that investors can feel confident that their money is safe in UTG.



What is the Fear of Higher Interest Rates and Higher Inflation?

Some investors are concerned about the impact of higher interest rates and higher inflation on UTG. However, it is important to remember that utilities are able to pass on increased costs to their customers. This means that UTG will be able to maintain its dividend even if interest rates and inflation continue to rise.


Why is Now a Good Time to Buy UTG?

UTG is modestly leveraged at ~17%, which means that it is well-positioned to increase leverage if prices begin to recover.

Overall, UTG is a solid and relatively safe CEF that offers a 7.0% yield. Investors who are looking for high safe income that grows some over time should consider adding UTG to their portfolio. THIS IS NOT FINANCIAL ADVICE


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