Reaves Utility Income Fund Rated Cautious Hold After Pullback
Reaves Utility Income Fund is rated as a cautious hold following a 25% pullback and a strategic shift toward AI infrastructure assets.
The Reaves Utility Income Fund is currently rated as a cautious hold following a pullback of approximately 25%. The closed-end fund has shifted its portfolio focus toward regulated utilities and companies involved in AI infrastructure buildouts, a move that has increased the fund's reliance on capital appreciation over traditional income generation.
While multiples have compressed for merchant power holdings, valuations for assets exposed to AI remain elevated. The fund currently offers a yield of approximately 7.4%, but this return is offset by the risk of net asset value erosion and flat total returns. The use of leverage further increases the risk profile for investors in the absence of a positive outlook.
