The Real Estate Income Fund invests in short-term loans secured by residential real estate, generally with terms of less than three years. The Fund targets a dividend rate of 2–3% above short-term Treasury yields, net of fees and expenses. Because that target is tied to short-term rates, interest rate changes can affect the Fund's dividends over time.
If interest rates fall: The interest rates on new loans may decline, and the Fund's dividend rate may decline along with them. Because the Fund's loans are short-term, it repays existing loans over time and reinvests the capital in new loans at then-current rates. Lower rates can also change how much capital flows into real estate lending versus property ownership, which may affect loan pricing. The size and timing of these effects are uncertain.
If interest rates rise: New loans may carry higher interest rates. However, higher borrowing costs can also put pressure on borrowers and slow property sales, which may increase the risk of late payments, extensions, or defaults.
How the Fund manages this: The Fund generally holds loans until they are repaid rather than trading them, and it reinvests repaid capital in new loans that meet its underwriting standards. Loans may be repaid early, extended, or not repaid in full.
Dividends can vary over time based on the performance of the Fund's loans and market conditions, and they are not guaranteed. Historical performance does not guarantee future results. For more on the Fund's strategy and risks, see the Offering Circular.
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