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Stock impact report

RA: NAV Erosion Will Continue Even When Interest Rates Decline [Seeking Alpha]

Brookfield Real Assets Income Fund Inc. (RA) 
Company Research Source: Seeking Alpha
RA's net investment income consistently fails to cover distributions, forcing reliance on net realized gains and return of capital, which undermines NAV stability. The fund's heavy allocation to below-investment-grade, floating-rate credit and use of leverage heighten risk, especially in a high-rate environment. I maintain a sell rating on RA, advocating a substantial distribution cut to preserve capital and improve long-term earnings potential. NataKor/iStock via Getty Images Overview When I previously covered the Brookfield Real Assets Income Fund ( RA ), I downgraded my rating to a sell because of the poor dividend coverage at the time. Despite my pessimism at the time, the RA's overly generous dividend policy leads to persistent NAV erosion, as distributions consistently exceed earnings, resulting in capital destruction and undermining long-term capital preservation. RA faces limited growth opportunities, tighter operating spreads, and increased risk from leverage d Show less Read more
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